Tax Audit has to be conducted by all the Assessees (Tax Payers) whose turnover is more than Rs.60 Lakhs (Professional Gross Receipts are more thanRs.15 Lakhs) and any person not covered U/s44AD, 44AE. The Tax Audit Report in Form No. 3CA/3CB along with Form No. 3CD has to be certified by a practicing Chartered Accountant.
Requirements for Tax Audit:
- Name of the Assessee as per PAN card
- Address of Head Office and Number of Branches.
- PAN No.
- Proprietor/ Partnership Firm/ Company/ Others
- Profit & Loss Account for the year from 01-04-2010 to 31-03-2011
- Balance Sheet for the year ended 31-03-2011
- The said Profit & Loss Account, Balance Sheet has to be in agreement with Books of Accounts maintained by the Tax Payer.
- Truthfulness and correctness of the Information and explanation for receipts, payments, expenditure debited, incomes credited to the Profit Loss Account along with evidences for the assets, liabilities mentioned in the Balance Sheet.
- Names of Partners, members along with their profit sharing ratios, PAN Nos.
- Any change in the names of partners, members and changes in their sharing ratios during the year.
- Nature of all Businesses/ Professions if more than one. Any changes in business/ profession
- List of Books Accounts prescribed, maintained, examined
- Presumptive income included in Books of Accounts, Profit & Loss Account.
- Method of accounting followed, any changes compared to the last year,
- If there is change in method of account, its effect on profit/ loss, accounting standards U/s 145.
- Stock valuation method, any change when compared to the last year.
- Effect of change of stock valuation due to deviation from last year and method prescribed U/s 145A.
- Conversion of capital asset into stock in trade, the details of nature of asset, date of acquisition, cost of acquisition, value taken as stock in trade.
- Refund of Govt. taxes Credited to the Profit & Loss Account.
- Claims received, Deemed Incomes, capital receipts, other income not pertaining to the Business carried on by the tax payer.
- Depreciation on assets depending upon period of use Cost of acquisition, Rate of Depreciation, Depreciation allowable, WDV at year end.
- Acquisition/ Sale of any asset, difference between Sale consideration and WDV/ Purchase value.
- Amounts allowable specifically which are not debited to the Profit & Loss Account.
- Amounts paid to employees otherwise than share in profits, dividends.
- Amounts received from employees towards Provident Fund, Superannuation fund, or any other fund with due date and actual date of payment.
- Capital expenditure, personal expenditure, penalty, fines, any payments made for prohibited offences, contingent liability, Expenditure towards exempted Incomes
- Inadmissible amounts U/s 40(a), 40(b), 40(ba) 40A(9), 36(1)(iii)
- Payments in excess of amounts mentioned in 40A(3) read with Rule 6DD.
- Certificate for payments in excess of amounts mentioned U/s. 40A(3) made through Account payee cheques/ Drafts.
- Provisions for Gratuity not allowable U/s. 40A(7)
- Interest not allowable under MSME Development Act. 2006.
- Payments made to persons covered U/s 40A(2)(b)
- Deemed Profit U/s. 33AB, 33ABA, 33AC
- Profits chargeable to Tax U/s.41along with computation.
- Statutory Liabilities not allowed outstanding as on 01-04-2010, paid during the year, unpaid, incurred and paid before 30-09-2011 due date for filing the Return of Income U/s.139(1), not paid before 30-09-2011
- Prior period income/ expenditure disclosed in Profit & Loss Account.
- MODVAT Adjustment for credits availed, utilized and treatment in Profit & Loss Account.
- Hundi borrowals, repaid otherwise than Account payee Cheque U/s.69D.
- Amounts borrowed on Hundi/ repaid otherwise than Account payee cheque. U/s.69D.
- A. Loan or Deposit accepted exceeding the limit specified U/s 269SS :
The details of the lender – name and address, PAN,Amount accepted
Whether the loans is squared up in the year
Maximum amount outstanding at any time during the year.
The mode of acceptance of loan or deposit – Account payee Cheque/ Bank Draft
B. Repayment of loan or deposit U/s 269T
The details of the payee – name and address, PAN,
Amount repaid
Maximum amount outstanding at any time during the year.
The mode of acceptance of loan or deposit – Account payee Cheque/ Bank Draft
C. Certificate from the assessee regarding acceptance of loans /deposit, repayment through Account payee cheque or Bank Draft.
- Brought forward Loss/ Depreciation : Asst. Year, Nature of loss/ depreciation, Amount returned, Amount assessed.
- Changes in shareholding of the company U/s. 79 which prohibits setoff.
- Deductions admissible – Chapter VIA.
- TDS – compliance : Chapter XVII-B, Deduction, Credit to the Govt. Filing of Returns. If the TDS provisions are not complied, the details of Non- deduction, lesser deduction, late deduction, not paid to the credit of the Govt.
- Trading Concern : The quantity details of Opening Stock, Purchases, Sales, Closing Stock, Shortages/ excess.
- Manufacturing concern : The quantitative details of raw materials, finished products, by- products with regarding of Opening Stock, Purchases, Consumption, Sales, Closing Stock, Yield of finished products, percentage of yield, quantity, manufactured, Shortages/ excess.
- Domestic Company: Dividend distribution Tax U/s. 115-O, details of profits distributed, tax thereon, date of payment.
- Cost Audit: Cost audit report copy, if done U/s.139(9)
- Audit under Central Excise Act. 1944, if done
- Ratios with calculations: Gross profit/ turnover, Net profit/ turnover, stock-in-trade to turnover, material consumed/ finished goods produced.
- Annexure – I : Code of every business/ profession
- Details of Balance Sheet of Current year / Previous year: Capital, Share Application, Current account of partners, Reserves & Surplus, Profit & Loss Account, Secured Loans, Unsecured Loans, Current Liabilities, Provisions, Total of Balance Sheet.
- Details of Profit & Loss Account : Gross turnover/ gross receipts, gross profit, commission received, commission paid, interest received, interest paid, Depreciation, Net profit/ Loss, Taxes on Income paid or provided.
