Changes in Tax Audit Report- Exhaustive Analysis (Vide notification no 33/2018 dated 20/07/2018)
The Tax Audit in India relates its history back to year 1984 when it was introduced with a view to check the accuracy of the books of accounts which are infact the basis while assessing the income of the assesses belonging to business class. During past so many years a lot of changes have been done in the methodology of the Tax Audit along with numerous amendments in the statutory provisions as well as in the Guidance Note of tax Audit issued by ICAI.
The Central Board of Direct Taxes has recently issued a notification no 33/2018 dated 20th July 2018 wherein amendments have been done in the For 3 CD of the Tax Audit Report as contained in the Appendix II of the Income Tax Rules 1962. The amendments made will be effective from 20th August 2018. These are Income Tax (8th Amendment Rules) 2018.
At the outset it is to be understood that there are approx. 6 amendments in the existing clauses of the form 3CD and 9 different new insertions/ additional clauses for disclosure purposes. Form 3CD Revised – Tax Audit Report- Summary of Amendments
Part A-Amendments in existing clauses of Income Tax Audit Report Form No. 3CD
| Sr no of Appendix II of Form 3 CD | Existing Clause | Amendment made |
| 4 | Whether the assessee is liable to pay indirect tax like excise duty, service tax, sales tax, customs duty, etc.
if yes, please furnish the registration number or any other identification number allotted for the same |
GSTIN & GSTIN number to be mentioned
• after the words “sales tax,”, the words “goods and services tax,” shall be inserted; • after the words “registration number or”, the words “GST number or” shall be inserted |
| 19 | Amounts admissible under sections:
32 AC 33 AB …….. 35 DDA 35 E |
Allowances under Section 32 AD to be reported(Additional Depreciation, Investment Allowance etc)
• the row with entry “32AD” shall be inserted |
| 24 | Amounts deemed to be profits and gains under section 32AC or 33AB or 33ABA or 33AC. | Deemed Gains under section 32 AD to be reported
• after the words “32AC or”, the words “32AD or” shall be inserted |
| 26 | In respect of any sum referred to in clauses (a),(b), (c), (d), (e) or (f) of section 43B | Reporting of any sum payable to Railways under section 43 B(g) which is not allowable as deduction for non payment
• for the words “or (f)”, the words “, (f) or (g)” shall be substituted |
| 31 (c ), (d) & (e)
|
(v) in case the repayment was made by cheque or bank draft, whether the same was taken or accepted by an account payee cheque or an account payee bank draft. | for the words “taken or accepted”, the word “repaid” shall be substituted
|
| (ii) amount of loan or deposit or any specified advance received otherwise than by a cheque or bank draft or use of electronic clearing system through a bank account during the previous year. | after the words “amount of”, the words “repayment of” shall be inserted | |
| (ii) amount of loan or deposit or any specified advance received by a cheque or a bank draft which is not an account payee cheque or account payee bank draft during the previous year. | after the words “amount of”, the words “repayment of” shall be inserted | |
| 34 (b) | Whether the assessee has furnished the statement of tax deducted or tax collected within the prescribed time. If not, please furnish the details | Reporting details of transactions no disclosed / specified in form 61/ 61 A/ 61 B
(b) whether the assessee is required to furnish the statement of tax deducted or tax collected. If yes, please furnish the details: |
Part B- Insertion of New Clauses in Income Tax Audit Report Form No. 3CD
| Sr no of Appendix II of Form 3 CD | New Clause
|
| After serial number 29 and the entries relating thereto | Reporting of Amount Chargeable under section 56(2)(ix) as income from other sources |
| (29a) Whether any amount is to be included as income chargeable under the head ‘income from other sources’ as referred to in clause (ix) of sub-section (2) of section 56? (Yes/No)
(b) If yes, please furnish the following details: (ii) Amount thereof: |
|
| Reporting of Amount Chargeable under section 56(2)(x) as income from other sources | |
| 29B.
(a) Whether any amount is to be included as income chargeable under the head ‘income from other sources’ as referred to in clause (x) of sub-section (2) of section 56? (Yes/No) (b) If yes, please furnish the following details: (i)Nature of income: (ii) Amount (in Rs.) thereof:”; |
|
| After serial number 30 and the entries relating thereto | Reporting details of Primary Adjustment to Transfer Price under Sec 92 CE(1) |
| 30A.
(a) Whether primary adjustment to transfer price, as referred to in sub-section (1) of section 92CE, has been made during the previous year? (Yes/No) (b) If yes, please furnish the following details:- (i) Under which clause of sub-section (1) of section 92CE primary adjustment is made? (ii) Amount (in Rs.) of primary adjustment: (iii) Whether the excess money available with the associated enterprise is required to be repatriated to India as per the provisions of sub-section (2) of section 92CE? (Yes/No) (iv) If yes, whether the excess money has been repatriated within the prescribed time (Yes/No) (v) If no, the amount (in Rs.) of imputed interest income on such excess money which has not been repatriated within the prescribed time: |
|
| Reporting details of interest expenditure incurred exceeding one crore rupees as referred u/s 94B(1) | |
| 30B.
(a) Whether the assessee has incurred expenditure during the previous year by way of interest or of similar nature exceeding one crore rupees as referred to in sub-section (1) of section 94B? (Yes/No) (b) If yes, please furnish the following details:- (i) Amount (in Rs.) of expenditure by way of interest or of similar nature incurred: (ii) Earnings before interest, tax, depreciation and amortization (EBITDA) during the previous year (in Rs.): (iii) Amount (in Rs.) of expenditure by way of interest or of similar nature as per (i) above which exceeds 30% of EBITDA as per (ii) above: (iv) Details of interest expenditure brought forward as per sub-section (4) of section 94B: |
|
| Reporting of impermissible avoidance arrangements as referred in Section 96 | |
| 30C.
(a) Whether the assessee has entered into an impermissible avoidance arrangement, as referred to in section 96, during the previous year? (Yes/No) (b) If yes, please specify:- (i) Nature of the impermissible avoidance arrangement: (ii) Amount (in Rs.) of tax benefit in the previous year arising, in aggregate, to all the parties to the arrangement:”; |
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| in serial number 31, after clause (b) | Reporting details of each cash receipt or payment in excess of the limit specified under section 269 ST |
| (ba) Particulars of each receipt in an amount exceeding the limit specified in section 269ST, in aggregate from a person in a day or in respect of a single transaction or in respect of transactions relating to one event or occasion from a person, during the previous year, where such receipt is otherwise than by a cheque or bank draft or use of electronic clearing system through a bank account:–
(bb) Particulars of each receipt in an amount exceeding the limit specified in section 269ST, in aggregate from a person in a day or in respect of a single transaction or in respect of transactions relating to one event or occasion from a person, received by a cheque or bank draft, not being an account payee cheque or an account payee bank draft, during the previous year:— (bc) Particulars of each payment made in an amount exceeding the limit specified in section 269ST, in aggregate to a person in a day or in respect of a single transaction or in respect of transactions relating to one event or occasion to a person, otherwise than by a cheque or bank draft or use of electronic clearing system through a bank account during the previous year (bd) Particulars of each payment in an amount exceeding the limit specified in section 269ST, in aggregate to a person in a day or in respect of a single transaction or in respect of transactions relating to one event or occasion to a person, made by a cheque or bank draft, not being an account payee cheque or an account payee bank draft, during the previous year |
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| Clause 42 | Reporting details of transactions not disclosed/ specified in Form No. 61/ 61A/ 61B |
| Clause 43 | Reporting whether assessee or its parent entity or alternate reporting entity is liable to furnish the report (CBCR) u/s 286(2) |
| Clause 44 | Reporting Break-up of total expenditure into expenditure with registered or not registered entities under the GST |
Author Bio
Finally CBDT differ the applicability of clauses 30C and 44
For the newly inserted clause on “Reporting Break-up of total expenditure into expenditure with registered or not registered entities under the GST” we need to understand whether we are doing tax audit or GST audit.
Good one keep going