Presentation-on-Tax-Audit-17-08-2018-SBS

Clause 24 – Deemed Profits & Gains Section 33AB The auditor is required to report  It allows deduction in respect of Tea  The auditor is required to report the Development Account, Coffee deemed income chargeable as profits and Development Account and Rubber gains of business under the circumstances Development Account. specified in sub-sections (4), (5), (7) and (8) of section 33AB.  It further provides that in case the amounts are drawn and not utilized  In case of respective industries where these for the purpose it is intended; are are applicable special deductions are withdrawn on account of closure of allowable. business etc., then such amounts are taxable in the year of withdrawal. 51 [email protected] www.sbsandco.com +91 9440883366

Clause 24 – Deemed Profits & Gains Section 33ABA The auditor is required to report  It allows deduction in respect of Site  The auditor is required to report the Restoration Fund. deemed income chargeable as profits and gains of business under  It further provides that in case the the circumstances specified in sub- amounts are drawn and not utilized sections (5), (7) and (8) of section for the purpose it is intended; are 33ABA. Where deduction has been withdrawn on account of closure of claimed with respect to interest business etc., then such amounts credited in Special Account or the are taxable in the year of Site Restoration Account, utilization withdrawal. of withdrawal thereof for purposes other than those specified shall be deemed to be income from business. 52 [email protected] www.sbsandco.com +91 9440883366

Clause 24 – Deemed Profits & Gains Section 33AC The tax auditor is required to report • It allows deduction in respect of • The deemed income as chargeable as profits and reserve created out of the profit gains of business under the circumstances of the assessee engaged in specified in sub-sections (3) and (4) of section shipping business to be utilized 33AC for the amount of reserves created on or in accordance with the provision before 31st March, 2004. However, consequent to of sub-section (2) of section the amendment made by the Finance (No. 2) Act, 33AC 2004, no deduction shall be allowed under section 33AC for any assessment year commencing on or after 1st day of April, 2005.  ICAI Guidance Note suggests that the tax auditor should maintain the following information in his working papers for the purpose of reporting in the format provided in the e-filing utility. Section Description Amount in Rs. 53 [email protected] www.sbsandco.com +91 9440883366

Clause 25 – Profit chargeable u/s 41 Clause 25 Tax auditor shall report Any amount of  Loss of the Previous Year in which business ceased to profit chargeable to exists can be set off from the above deemed profit u/s tax under section 41 41. and computation thereof  State Profit chargeable to Tax under this Clause, irrespective of the relevant amount credited to P&L A/c or not.  Any amount already credited in P&L A/c is to be reported in this Clause.  Computation of chargeable profit to be reported in this Clause. S.No. Name of the Person Amount of Income Section Description of Computation Transaction if any.; 54 [email protected] www.sbsandco.com +91 9440883366

Clause 26 - Reporting u/s 43B In respect of any sum referred to in Clause (a), (b), (c), (d), (e) or (f) (g) of Section 43B, the liability for which :- A. Pre-existed on the first day of the Previous Year but was not allowed in the assessment of any preceding Previous Year and was (a) Paid during the Previous Year; S.No. Section Nature of Liability Amount (b) Not paid during the Previous Year S.No. Section Nature of Liability Amount 55 [email protected] www.sbsandco.com +91 9440883366

Clause 26 - Reporting u/s 43B B. Was incurred in the Previous Year and was (a) Paid on or before the due date for furnishing the return of income of the previous year under section 139(1) S.No. Section Nature of Liability Amount (b) Not paid on or Before the aforesaid date S.No. Section Nature of Liability Amount 56 [email protected] www.sbsandco.com +91 9440883366

Clause 27 – Details of CENVAT Credits Clause 27(a): Verification & Reporting requirements: Amount of Central Value Added Tax  Verification of reconciliation statement of credits availed of or utilized during Balance of CENVAT in Account and relevant the previous year and its treatment records in the profit and loss account and treatment of outstanding Central  Reporting requirement under Clause Value Added Tax credits in the 14(b) of form no. 3CD (Valuation of accounts. Closing Stock) is a requirement distinct & separate from reporting requirement under this Clause. 57 [email protected] www.sbsandco.com +91 9440883366

Clause 28: Shares received without/inadequate consideration Nature of Item Response Whether during the previous year the This is applicable in case of Firms or Private Limited Company. assessee has received any property, The auditor has to report about any property received as a being share of a company not being a share from above assesse without consideration or inadequate company in which the public are consideration. substantially interested, without Section 56(2)(viia) consideration or for inadequate If the firm or Pvt Ltd Company (which stock not traded publicly consideration as referred to in Section on regular basis) receives shares without/ inadequate 56(2)(viia), if yes, please furnish the consideration then; details of the same. • If no consideration : FMV > 50,000 , then FMV is taxable • If inadequate consideration : Such consideration – FMV > 50,000 then such difference is taxable. 58 [email protected] www.sbsandco.com +91 9440883366

Clause 29 - Issues of shares > FMV  Whether during the previous year the assessee received any consideration for issue of shares which exceeds the fair market value of the shares as referred to in section 56(2)(viib), if yes, please furnish the details of the same. ✓ Auditor shall maintain the following Information: S.No Name & PAN of Nature of No. of Considera F.M.V. as Face Amount shares (quoted shares tion per rule value of taxable u/s (a) status of person, if in RSE/quoted issued received 11UA shares 56(2) (viib) in (e) (f) (1)( c)/ issued (report the person to available URSE/unquote 11UA (2) (h) difference (e)- d equity shares (f) only if (e) is whom (c) etc) (g) > than (g) else (d) report ‘N.A.’) shares (i) have been issued (b) 59 [email protected] www.sbsandco.com +91 9440883366

Clause 29- Issues of shares > FMV- Auditor Role  This clause applicable only to Private Limited Companies.  Obtain a list of shares issued to any person being a resident and verify the same from the books of account and other relevant documents.  Provisions of Rule 11UA(1) & 11UA(2) should be considered to determine FMV.  Reporting of Amount Chargeable u/s 56(2)(ix) as income from other sources.  Where the consideration of the share is greater than Face value of the share, the difference of aggregate consideration received for such shares & FMV of shares, shall be chargeable to income tax u/h ‘ income from other sources’.  Where for determining the fair market value of unquoted equity shares, a valuation report has been obtained by the assessee from a merchant banker or an accountant, the auditor should obtain a copy of the same. Here, attention is invited to the Standard on Auditing-620 “Using the work of an Auditor’s expert”.  Provisions of this Clause are not applicable where the consideration is received - by a venture capital undertaking from a venture capital co./fund - by a co. from a class/classes of persons as may be notified by the CG in this behalf. 60 [email protected] www.sbsandco.com +91 9440883366

Clause 29B - Income from other sources Clause29A (a) 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:  Nature of income  Amount thereof Clause 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:  Nature of income – Money, Immovable/Movable property  Amount thereof 61 [email protected] www.sbsandco.com +91 9440883366

Clause 30 – Amount borrowed on Hundi  Details of any amount borrowed on hundi or any amount due thereon (including interest on the amount borrowed) repaid, otherwise than through an account payee cheque. [Section 69D] S. No Name of the PAN of the Address Amount Date of Amount Amount Date of person from person, if with State Borrowe Borrowing due Repaid Repay available & Pin code ment whom d including amount interest borrowed or repaid on hundi 62 [email protected] www.sbsandco.com +91 9440883366

Clause 30A – Transfer Pricing Adjustments Clause 30A – new clause inserted vide CBDT notification w.e.f. 20.08.2018 (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)…  if Yes, Please provide the following details: Clause No. of Section 92CE Amount of Primary Adjustment • 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) • If Yes, whether the excess money has been repatriated within the prescribed time (Yes/No) • If No, the amount (in Rs.) of imputed interest income on such excess money which has not been repatriated within the prescribed time: 63 [email protected] www.sbsandco.com +91 9440883366

Clause 30B – Interest Expenditure >Crore Clause 30B – new clause inserted vide CBDT Notification w.e.f. 20.08.2018 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.)  If Yes, pleas furnish the following particulars Interest EBITDA % of Interest to EBITDA Amount of Interest Exceeding 30% to Expenditure EBITDA Details Assessment Year Amount Interest Expenditure Brought Forward Interest Expenditure Carried Forward 64 [email protected] www.sbsandco.com +91 9440883366

Clause 30 C – Impermissible Avoidance Agreement - GAAR Clause 30C (a) Whether the assessee has entered into an impermissible avoidance arrangement, as referred to in section 96, during the previous year? (Yes/No.)  If yes, please specify:— (i) Nature of impermissible avoidance arrangement: (ii) Amount (in Rs.) of tax benefit in the previous year arising, in aggregate, to all the parties to the arrangement GAAR Applicability : In case the Tax effect is > Rs.3.00crores  The above provision does not apply to a transactions on which ruling from AAR has obtained. 65 [email protected] www.sbsandco.com +91 9440883366

Clause 31 Nature of Item Response Reporting requirement: The changes in this clause includes the reporting about the a) Particulars of each loan/ deposit which exceeds the limit U/s amendments effected in section 269SS and 269ST vide 269SS. Notification vide No.58/2017 dated 3rd July, 2017 * b) Particulars of each “specified sum” which exceeds the limit U/s 269SS during previous year. It requires reporting by the recipient of such loan and c) Particulars of each repayment of loan/deposit ‘made’, deposits or specified advance which has been repaid exceeding the limit U/s 269T during previous year. d) Particulars of each repayment of loan/deposit ‘received’, It has increased the scope of reporting for section 269SS and exceeding the limit U/s 269T otherwise than by a cheque or 269T bank draft or use of electronic clearing system through a e. for the words “taken or accepted”, the word “repaid” shall bank account during previous year. be substituted e) Particulars of each repayment of loan/deposit ‘received’, exceeding the limit u/s 269T received by cheque or bank e. After the words “amount of”, the words “repayment of” draft which is not an account payee cheque or bank draft shall be inserted during the previous year. f. After the words “amount of”, the words “repayment of” shall be inserted. 66 [email protected] www.sbsandco.com +91 9440883366

Clause 31(b) Insertion of New Clauses in Income Tax Audit Report Form No. 3CD New Clause 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 67 [email protected] www.sbsandco.com +91 9440883366

Clause – 31 -Cash Receipts and Payments Particulars 269SS 269T 269ST Scope of the Receipt of loans, Payments of loans No person should receive in cash in section deposits and specified sum or deposits or relation to: specified sum • in aggregate from a person in a day; • in respect of a single transaction ; or • in respect of transactions relating to one event or occasion from a person Applicability of this Any Person taking or Any person paying Any person receiving any amount section accepting Monetary Limit INR 20,000 INR 20,000 INR 2,00,000 271DA Penalty U/s 271D 271E 100% 68 [email protected] www.sbsandco.com +91 9440883366

Examples of 269ST - Violation In aggregate from a • Mr. A transfers’ immovable property worth Rs.5,00,000 to person in a day Mr. B and generates 5 different bills of Rs.1,00,000 each and accepts cash in a single day at different times; a single transaction • Mr. A transfers’ immovable property worth Rs.5,00,000 to One event or Mr. B and generates one single bill for Rs.5,00,000. He occasion then receives cash Rs.1,75,000 on Day 1, Rs.1,75,000 on Day 2 and Rs.1,50,000 on Day 3 then; 69 [email protected] • Mr. A books a wedding party at a hotel and the hotel makes a bill of Rs.1,50,000 for Food and Rs.1,00,000 for Hall Charges and accepts cash Rs. 2,50,000 from Mr. A then; • Even if they are 2 different types of expenses but for the same wedding. www.sbsandco.com +91 9440883366

269ST may become apply Sale proceeds of Goods Advance against sale of Hospitals, Educational Institutions or Services; movable goods/provision of service etc., or immovable Withdrawal of capital/ Profit in Recovery of Loan and interest properties Firm Advance taken or Introduction of capital by partner in reimbursement of Firm; issue of share capital expenditure Gift in Cash and gift from a relative also covered. Donations received by Trust 70 [email protected] www.sbsandco.com +91 9440883366

Notional Income Where immovable property say land and building is received in form of Gift, the taxability is as follows : Particulars 56(2)(vii) 56(2)(x) Provision in force Till 31.03.2017 On or after 01.04.2017 Recipient Individuals and HUF All assesse TAXABILITY : If the asset is received Taxable Value : Without consideration i.e.,Stamp duty value > Rs. 50,000 • Stamp duty value With Consideration less than stamp duty value by an amount • Stamp duty value of property as exceeds exceeding Rs. 50,000 consideration as per the Act Gifts received from following are not taxable: ➢ Relative ➢ Under will / by Inheritance ➢ On occasion of marriage of individual ➢ Local Authority ➢ In contemplation of death of payer or donor ➢ Trust or Institution registered U/s12AA 71 [email protected] www.sbsandco.com +91 9440883366

Clause 32 – Brought Forward Loss/Depreciation Clause 32(a):Details of Brought forward loss or depreciation allowance to the extent available S. No Assessment Nature of loss/ Amount as Amount as assessed Remarks Year allowance returned Amount Order u/s & date (according to E- utility) 72 [email protected] www.sbsandco.com +91 9440883366

Clause 32 – Brought Forward Loss/Depreciation Clause 32(b):Whether a change in shareholding of the company has taken place in the previous year due to which the losses accrued prior to the previous year cannot be allowed to be carried forward in terms of section 79. Other Points:  This Clause is not applicable when 51% of the voting power is held by the same persons at the last day of P.Y. & the last day of P.Y. in which loss was incurred.  This provision also shall not apply to a change in the voting power consequent upon:  the death of a shareholder, or  on account of transfer of shares by way of gifts to any relative of the shareholder making such gift..  any change in the shareholding of an Indian company which is subsidiary of a foreign company arising as a result of amalgamation or demerger of a foreign company subject to the condition that 51 % of the shareholders of the amalgamating or demerged foreign company continue to remain the shareholders of the amalgamated or the resulting foreign company.  However, the overriding provisions of sec.79 do not affect the set off of unabsorbed depreciation (section 32(2)). [Refer CIT v Concord Industries Ltd. (1979) 119 ITR 458 (Mad)], CIT v. Shri Subbulaxmi Mills Ltd. 249 ITR 795 (SC)]. 73 [email protected] www.sbsandco.com +91 9440883366

Clause 32 – Brought Forward Loss/Depreciation  Clause 32(c) : Whether the assessee has incurred any The auditor shall report: speculation loss referred to in section 73 during the previous year, If yes, please furnish the details of the  Scrutinize the books of account and same. other relevant documents as to whether the assessee is carrying on  Clause 32 (d) : Whether the assessee has incurred any speculation business. any loss referred to in section 73A in respect of any specified business during the previous year, if yes,  Applicability of provisions of Sec. 73 please furnish details of the same. in case of loss in trading of derivatives being shares and stocks.  Clause 32 (e) : In case of a company, please state that  Whether the term “Speculative whether the company is deemed to be carrying on a Business” should be r.w. the term speculation business as referred in explanation to “Speculative Transactions” section 73, if yes, please furnish the details of speculation loss if any incurred during the previous year. 74 [email protected] www.sbsandco.com +91 9440883366

Clause 33 – Deductions u/c VI A or u/c III Section-wise details of deductions, if any, admissible under Chapter VIA or Chapter III (Section 10A, Section 10AA). Section under which Amounts admissible as per the provision of the Income Tax Act, 1961 and fulfils the deduction is claimed conditions, if any, specified under the relevant provisions of Income Tax Act, 1961 or Income Tax Rules,1962 or any other guidelines, circular, etc, issued in this behalf.  Chapter VIA of the Act deals with Deductions in respect of Certain Payments, deduction in respect of Certain Incomes, & Other Deductions which have to be given effect to by the way of allowance from gross total income of the assessee.  Chapter III relates to income which do not form part of total income, the reporting under this Clause is required only with respect to exemptions claimed :  u/s 10A (Special provision in respect of newly established undertakings in free trade zone, etc.) &  u/s 10AA (Special provisions in respect of newly established Units in Special Economic Zones)  W.e.f 01.04.2018, the amount of deduction under this section shall be allowed as Deduction from the total Income of the assessee instead of exemption. 75 [email protected] www.sbsandco.com +91 9440883366

Clause 34 – Tax deduction/collection at source  Clause 34(a)Whether the assessee is required to deduct or collect tax as per the provisions of Chapter XVII-B or Chapter XVII-BB, if yes please furnish: 76 [email protected] www.sbsandco.com +91 9440883366

Clause 34 – Tax deduction/collection at source Clause34(b) Tax Auditor shall report: Whether the assessee has  Such details are required to provide, even if the assessee does not furnished the statement of have any TDS defaults to show the assessee has complied with TDS tax deducted or tax wherever necessary. collected. If yes, please furnish the details.  The Tax Auditor cannot merely rely on information provided by the Reporting details of client but have to examine books of account to determine the transactions no disclosed / transaction on which provisions of Chapter-XVIIB and Chapter XIIBB specified in form 61/ 61 A/ apply. 61 B  Whether it is practically possible for the tax auditor to verify all the transactions to report compliance with provisions of Chapter XVII-B or XVII-BB, where the tax audit is time bound like in Banks.  Auditor is required to get a copy of justification report (downloaded from traces), when noticed that there are TDS defaults. Tax deduction and Type Due date Date of Whether statement of tax deducted or collection Account of Number (TAN) form of Furnishing , collected contains information about all Furnishing if Furnished transactions which are required to be reported 77 [email protected] www.sbsandco.com +91 9440883366

Clause 34 – Tax deduction/collection at source  Clause 34(c) Whether the assessee is liable to pay interest under Section 201(1A) or Section 206C(7). If yes, please furnish: Tax deduction and collection Amount of interest under section Amount paid out of column (2) Account Number (TAN) 201(1A)/206C(7) is payable along with date of payment Amount Date of Payment Detail in respect of interest u/s 201(1A) & 206C(7), if any to be provided:  (i) Levy of simple interest at 1% for every month or part of month on the amount of TDS from date of tax deductible to the actual date of TDS deducted (failure to deduct the TDS).  (ii) Levy of simple interest at 1.50% for every month or part of month on the amount of TDS from date of tax deducted to the date of TDS actually Paid (failed to pay the TDS within the due date).  Sec. 206C(7)- Levy of simple interest at 1% on amount of TCS actually collectible to the date on which tax actually paid (failure to collect). 78 [email protected] www.sbsandco.com +91 9440883366

Clause 35 – Trading Concern Quantitative Details Clause 35(a): Tax Auditor shall report In the case of a trading concern, give  The tax auditor should obtain certificates from the assessee quantitative details in respect of the principal items of goods traded, the of principal items of balance of the opening stock, purchases, sales and closing goods traded: stock and the extent of shortage/ excess/damage and the reasons thereof. Item Unit Opening name Name stock  As required by SA-501 “Audit Evidence - Additional considerations for specific items”, the tax auditor (if he is issuing Form No. 3CB also) should attend the physical stock- taking conducted by the management if the inventories are material unless such attendance is impracticable due to matters such as nature and location of the inventory. Purchases during Sales during the Closing Stock Shortage/ the previous year previous year excess, if any 79 [email protected] www.sbsandco.com +91 9440883366

Clause 35 – Trading Concern Quantitative Details  Clause 35(b):In the case of a manufacturing concern, give quantitative details of principal items of raw materials, finished goods, by-products (A) Raw Materials (B) Finished Goods (C )By-Products Item Unit Opening Purchases during Consump Sales Closing Yield of Percenta Shortage name name stock the previous year tion during Stock during the finished ge of / excess, the previous previous year products yield if any year “Principal Items” :- Items which constitute > 10% of the aggregate value of purchase, consumption or turnover. 80 [email protected] www.sbsandco.com +91 9440883366

Clause 36 – Tax on Distributed Profits  In the case of a domestic company, details of tax on distributed profits under section 115-O in the following form :- Total amount Amount of reduction Amount of reduction Total tax Date of payment with of distributed as referred to in sec. as referred to in sec. paid amounts profits 115-O(1A)(i) 115-O(1A)(ii) thereon Amount Date of payment Sec. 115O(1A)- Amount of dividend to be reduced by • (i) The amount of dividend, if any, received by the domestic company and/or foreign company being subsidiary during the financial year, provided such company has declared dividend under sections of the act. Also the reduction cannot be more than once. • (ii) The amount of dividend, if any, paid to any person for, or on behalf of, the New Pension System Trust referred to in Clause (44) of Section 10. 81 [email protected] www.sbsandco.com +91 9440883366

Clause 36 – Tax on Distributed Profits a) Whether the assessee has received any amount in the nature of dividend as referred to in sub-clause (e) of clause (22) of section 2? (Yes/No.) b) If yes, please furnish the following details:— o Amount received (in Rs.) o Date of receipt 82 [email protected] www.sbsandco.com +91 9440883366

Clause 37 – Cost Audit Clause 37 The auditor shall report: Whether any cost  The Auditor need not express any opinion if audit was carried out, such Audit is ordered and not conducted. if yes, give the details, if any, of  The Auditor should state the fact in his report disqualification or if such Audit which has been ordered is not disagreement on any completed by the time he issues his Audit matter/item/value/ Report. quantity as may be reported/identified by  Make note of any material observation made the cost auditor. in such Report.  Give information only for that Cost Audit Report which falls within the relevant Previous Year. 83 [email protected] www.sbsandco.com +91 9440883366

Clause 38 – Central Excise Audit Clause -38 Tax Auditor shall report Whether any audit  Tax auditor is not required to study the Central Excise was conducted under audit report in detail. However, he should take note the Central Excise Act, of any material observation made in such Central 1944, if yes, give the Excise audit report which may have relevance to the details, if any, of tax audit conducted by him. disqualification or disagreement on any  If excise audit ordered is not completed by the time matter/item/value/qu tax auditor gives his report, then he shall state the antity as may be same in his report. reported/identified by the auditor.  Auditor is supposed to furnish information in respect of excise audit report the time period of which falls within the relevant PY. 84 [email protected] www.sbsandco.com +91 9440883366

Clause 39 – Audit U/s 72A- Valuation of Taxable Services Whether any audit was conducted under section 72A of the Finance Act,1994 in relation to valuation of taxable services, if yes, give the details, if any, of disqualification or disagreement on any matter/item/value/quantity as may be reported/identified by the auditor. Special Audit (1) If the Commissioner of Central Excise, has reasons to believe that any person liable to pay service tax (herein referred to as \"such person”,)— i. has failed to declare or determine the value of a taxable service correctly; or ii. has availed and utilised credit of duty or tax paid— a) which is not within the normal limits having regard to the nature of taxable service provided, the extent of capital goods used or the type of inputs or input services used, or any other relevant factors as he may deem appropriate; or b) by means of fraud, collusion, or any wilful mis-statement or suppression of facts; or iii. has operations spread out in multiple locations and it is not possible or practicable to obtain a true and complete picture of his accounts from the registered premises falling under the jurisdiction of the said Commissioner, he may direct such person to get his accounts audited by a chartered accountant or cost accountant nominated by him, to the extent and for the period as may be specified by the Commissioner. 85 [email protected] www.sbsandco.com +91 9440883366

Form 3CD – Part B Additions/Am Nature of Item Response endments in The details required to be furnished for principal items of Now, preceding years’ data should also be clauses Clause 40 goods traded or manufactured or services rendered for provided in terms of ratios. Previous year and Preceding previous years. 1. Total turnover of the assessee In case, the earlier year’s form 3CD was 2. Gross profit/turnover prepared and signed by someone else then a 3. Net profit/turnover suitable note should be given, if relied on 4. Stock-in-trade/turnover that. 5. Material consumed/ finished goods produced Clause 41 Please furnish the details of demand raised or refund • The tax auditor shall obtain a copy of all issued during the previous year under any tax laws other the demand/ refund orders issued by than Income Tax Act, 1961 and Wealth tax Act, 1957 along Govt. authorities during the previous year with details of relevant proceedings under any other law apart from IT Act, Wealth Tax Act. • The cess /duty would not be covered. • Disclose the refund/demand orders received during PY, pertaining to PFY 86 [email protected] www.sbsandco.com +91 9440883366

Clause 42– Details of FORM 61/ 61A/61B (1/6)  Newly Inserted provisions vide CBDT Notification dated 33/2018  (a) Whether the assessee is required to furnish statement in Form No.61 or Form No.61A or Form 61B? (Yes/No) Income tax Type Due date Date of Whether the Form contains information Department Of Form for Furnishing about all details/ furnished transactions Reporting Entity which are required to be reported. If not, Identification furnishing please furnish list of the details/transactions Number(ITDREIN) which are not reported.  FORM 61: This is a form of declaration to be filled by a person who is responsible for filing information relating to a transactions mentioned in Rule 114B and receives from a person who does not have PAN in Form No. 60.( Please refer Rule 114C for complete details). 87 [email protected] www.sbsandco.com +91 9440883366

Clause 42– Details of FORM 61/ 61A/61B (2/6) Form 61 A: As per section 285BA of the Income-tax Act, 1961 (as substituted by Finance Act, 2014 w.e.f. 01- 04-2015), specified entities (Filers) are required to furnish a statement of financial transaction or reportable account (hereinafter referred to as ‘statement’) in respect of specified financial transactions or any reportable account registered/recorded/maintained by them during the financial year to the income-tax authority or such other prescribed authority. S.No. Nature and value of Transaction Class of Persons 1 (a) Payment made in cash for purchase of bank drafts or pay A banking company or a co- orders or banker’s cheque of an amount aggregating to Rs. operative bank 10 lakh or more in a financial year. (b) Payments made in cash aggregating to Rs. 10 lakh or more during the financial year for purchase of pre-paid instruments issued by Reserve Bank of India. (c) Cash deposits or cash withdrawals (including through bearer’s cheque) aggregating to Rs. 50 lakh or more in a financial year, in or from one or more current account of a person. 88 [email protected] www.sbsandco.com +91 9440883366

Clause 42– Details of FORM 61/ 61A/61B (3/6) S.No. Nature and value of Transaction Class of Persons 2 3 Cash deposits aggregating to Rs. 10 Lakh or more in a financial i) A banking company or a co- 4 year, in one or more accounts (other than a current account operative bank and time deposit) of a person. (ii) Post Master General One or more time deposits (other than a time deposit made (i) A banking company or a co- through renewal of another time deposit) of a person operative bank aggregating to Rs. 10 lakh or more in a financial year of a (ii) Post Master General person. (iii) Nidhi Company (iv) Non-banking financial company Payments made by any person of an amount aggregating to— A banking company or a co- (i) Rs. 1 lakh or more in cash; or operative bank or any other (ii) Rs. 10 lakh or more by any other mode, against bills raised company or institution issuing in respect of one or more credit cards issued to that person, in credit card. a financial year. 89 [email protected] www.sbsandco.com +91 9440883366

Clause 42– Details of FORM 61/ 61A/61B (4/6) S.No. Nature and value of Transaction Class of Persons Receipt from any person of an amount aggregating to Rs. 10 A company or institution issuing lakh or more in a financial year for acquiring bonds or bonds or debentures. 5 debentures issued by the company or institution (other than the amount received on account of renewal of the bond or debenture issued by that company). Receipt from any person of an amount aggregating to Rs. 10 A company issuing shares. 6 lakh or more in a financial year for acquiring shares (including share application money) issued by the company. Buy back of shares from any person (other than the shares A company listed on a recognised 7 bought in the open market) for an amount or value stock exchange purchasing its own aggregating to Rs. 10 lakh or more in a financial year. securities Receipt from any person of an amount aggregating to Rs. 10 A trustee of a Mutual Fund or such lakh or more in a financial year for acquiring units of one or other person managing the affairs 8 more schemes of a Mutual Fund (other than the amount of the Mutual Fund received on account of transfer from one scheme to another scheme of that Mutual Fund). 90 [email protected] www.sbsandco.com +91 9440883366

Clause 42– Details of FORM 61/ 61A/61B (5/6) S.No. Nature and value of Transaction Class of Persons 9 Receipt from any person for sale of foreign currency including Authorised person as referred to in 10 any credit of such currency to foreign exchange card or expense clause (c) of section 2 of the 11 in such currency through a debit or credit card or through issue Foreign Exchange Management of travellers cheque or draft or any other instrument of an Act, 1999 (42 of 1999). amount aggregating to Rs. 10 lakh or more during a financial year. Purchase or sale by any person of immovable property for an Inspector-General or Registrar or amount of Rs. 30 lakh or more or valued by the stamp Sub-Registrar appointed under the valuation authority referred to in section 50C of the Act at Registration Act, 1908 Rs.30 lakh or more Receipt of cash payment exceeding Rs. 2 lakh for sale, by any Any person who is liable for audit person, of goods or services of any nature (other than those under section 44AB of the Act. specified at Sl. Nos. 1 to 10 of this rule, if any.) 91 [email protected] www.sbsandco.com +91 9440883366

Clause 42– Details of FORM 61/ 61A/61B (6/6) S.No. Nature and value of Transaction Class of Persons 12 Cash deposits during the period 9th November, 2016 to 30th (i) A banking company or a co- 13 December, 2016 aggregating to— operative bank to which the (i) Rs. 12,50,000 or more, in one or more current account of a Banking Regulation Act, 1949 person; or applies (ii) Rs. 2,50,000 or more, in one or more accounts (other than (ii) Post Master General as referred a current account) of a person. to in clause (j) of section 2 of the Indian Post Office Act, 1898 Cash deposits during the period 1st of April, 2016 to 9th A banking company or a co- November, 2016 in respect of accounts that are reportable operative bank to which the under SI.No.12 because cash deposited in this account Banking Regulation Act, 1949 between 9th November, 2016 to 30th December, 2016 applies aggregating to— (i) Rs. 12,50,000 or more, in one or more current account of a person; or (ii) Rs. 2,50,000 or more, in one or more accounts (other than a current account) of a person. 92 [email protected] www.sbsandco.com +91 9440883366

Clause 43 – Furnishing of report in respect of International Group. - CBCR Newly Inserted provisions vide CBDT Notification dated 33/2018 Whether the assessee or its parent entity or alternate reporting entity is liable to furnish the report as referred to in sub-section (2) of section 286? (Yes/No) • If yes, please furnish the following details: (i)Whether report has been furnished by the assessee or its parent entity or an alternate reporting entity (ii) Name of parent entity (iii) Name of alternate reporting entity (if applicable) (iv) Date of furnishing of report 93 [email protected] www.sbsandco.com +91 9440883366

Clause 43 – Furnishing of report in respect of International Group. Who need to furnish report? • Every person, being a constituent entity of an international group. • If the consolidated group revenue of the international group, as reflected in the consolidated financial statement of the international group for the accounting year, exceeds Rs. 500 Crore & • The aggregate value of international transactions : o During the accounting year, exceeds Rs. 50 Crore, or o In respect of the purchase, sale, transfer, lease or use of intangible property, exceeds Rs. 10 Crore. Reporting • Reporting of CBC Report in Form 3CEAD • Reporting Master File in Form 3CEAA 94 [email protected] www.sbsandco.com +91 9440883366

Clause 44 – Total Expenditure Breakup - GST Newly Inserted provisions vide CBDT Notification dated 33/2018 • Break-up of total expenditure of entities registered or not registered under the GST: S.No. Total Expenditure in respect of entities registered under GST Expenditure Expendi relating to entities not ture registered during under GST year Relating to Relating to Relating to Total goods or Entities falling Other registered payment to Services Exempt under composition Entities registered from GST Scheme entities 95 [email protected] www.sbsandco.com +91 9440883366

Amendments and Detailed Analysis  CBDT issued a notification No.33/2018 on 20th July 2018 amending the Tax Audit Report for the AY 2018-19.  Notification effective date is 20th August 2018.  Implications: Tax Audits filed with Income Tax Department after 20th of August 2018 should be filed with revised TAR. 96 [email protected] www.sbsandco.com +91 9440883366

Income Computation Disclosure Standards Amended U/s 145(2), 10 ICDS notified vide notification 87/2016 dated 29th September, 2016 and Notified ICDS applicable from AY 2017-18. ICDS Name of the ICDS I Accounting Policies II Valuation of Inventories III Construction Contracts IV Revenue Recognition V Tangible Fixed Assets VI Changes in Foreign Exchange Rates VII Governments Grants VIII Securities IX Borrowing Costs X Provisions, Contingent Liabilities and Contingent Assets 97 [email protected] www.sbsandco.com +91 9440883366

Income Computation Disclosure Standards Applicability:  All assesses (other than an individual and HUF not required to get accounts audited U/s. 44AB) following mercantile system of accounting.  All partnership Firms and LLP following mercantile system; • irrespective of whether audit required u/s 44AB or not • having “Income from business or Profession” and “Income from Other Sources Non- Applicability:  To individual/HUF not carrying on business or profession.  Person with only income from other sources following Cash system of accounting.  Not applicable where books of accounts not maintained.  Persons following cash system of accounting.  Individual/HUF falling under presumptive tax not subject to audit u/s 44AB –CBDT Circular No. 10 of 2017 dated 23rd March 2017.  Other heads of income - computation of capital gain, House Property, etc.,  For Sections 68, 69, 69A and 69B, books of account are relevant. 98 [email protected] www.sbsandco.com +91 9440883366

Income Computation Disclosure Standards Other Points  Tax auditor is required to certify that the computation of total income is made in accordance with the provisions of ICDS – (accordingly the Form 3CD containing the details).  The net effect on the income due to application of ICDS is to be disclosed in the Return of Income.  Best judgment assessment is made when A.O is not satisfied about: U/s 144 1.Correctness or completeness of the accounts. is 2.Method of accounting is not regularly followed. attracted 3.Income not computed as per ICDS. 99 [email protected] www.sbsandco.com +91 9440883366

Income Computation Disclosure Standards  Disclosure Requirement w.r.t Form 3CD Under clause 13 ”New sub clause is added as under” (d) Whether any adjustment is required to be made to the profits or loss for complying with the provisions of income computation and disclosure standards. (e) If answer to (d) above is in the affirmative, give details of such adjustments: ICDS Name of ICDS Increase in Profit (Rs) Decrease in Profit (Rs) Net Effect (Rs) 100 [email protected] www.sbsandco.com +91 9440883366