Changes in form 3CD. DK Bholusaria

Transcription

1 Changes in form 3CD DK Bholusaria

2 Highlights of changes

3 Major Changes Annexure I and Annexure II removed. Many details will have to be furnished in comprehensive, tabular and analytical forms (formats as per e-utility given legal force) Elaborate information and analysis in various tables will have to be furnished. Adverse reports, qualifications from various other audit reports will have to be given by the tax auditor, instead of merely annexing such reports till now. TDS compliance reporting has been totally revamped and made comprehensive. Certain provisions of IT Act which are in force but were not covered in earlier format, have been covered now (clause 17) 3

4 Major Changes ITR forms also synced in tune with new 3CD 4 Now you can easily identify if audit has been done pursuant to 44AD/44AF Long pending demand of profession. Specific provision for qualifications in form 3CA introduced

5 New v/s old Bird eye view of changes

6 New v/s old clause Clause 1 ~ 12 6 Brief description of clause New Clause # Old Clause # Changes Name 1 1 No Change Address of assessee 2 2 No Change PAN of assessee 3 3 No Change Registration under indirect taxes 4 - New clause* Status 5 4 No Change Previous year 6 5 Cosmetic Assessment year 7 6 Relevant clause of 44AB 8 - New clause* Firm / AOP / Partner s details 9 7 Clarificatory Change in sub clause (b)* Nature of business 10 8 No change Books of accounts / other records and addresses 11 9 Lots of changes* Presumptive Income in P&L Practically no change (Chapter XII-G and First Schedule specifically added to list.)

7 New v/s old clause Clause 13 ~ 20 7 Brief description of clause New Clause # Old Clause # Changes Method of accounting No Change Method of valuation of closing stock No Change Conversion of capital asset into stock in trade Amounts not credited to the profit and loss account 15 12A No Change No Change Assets covered u/s 43CA and 50C 17 - New clause* Depreciation allowable No Change Amounts admissible under various sections Payment of bonus/commission u/s 36(1)(ii) and Employee s contribution to various funds u/s 36(1)(va) List of sections enlarged* Change in the way transactions are reported in subclause (b).*

8 New v/s old clause Clause 21 8 Brief description of clause Amounts debited to the profit and loss account in the nature of capital, personal, advertisement expenditure etc. Amounts inadmissible under section 40(a) Amount inadmissible under section 40(b) / 40(ba) & computation thereof Amount inadmissible under section 40A(3) and 40A(3A) Gratuity u/s 40A(7), sum u/s 40A(9), Contingent nature liability, Section 14A and Section 36(1)(iii) New Clause # 21(a) 21(b) Old Clause # Changes 17(a~e) Clubbed in one subclause. 17(f) & 27 (b)(i) & 27 (b)(iv) 21(c) 17(g) No change Each sub-clause of section 40(a) to be separately reported* 21(d) 17(h) Certificate from assessee dispensed with. 40A(3A) reporting is new requirement* 21 (e~f) 17 (i ~ m) No change

9 New v/s old clause Clause 22 ~ 30 9 Brief description of clause New Clause # Old Clause # Changes Interest inadmissible under MSMED 22 17A No change Particulars of payments made to persons specified u/s 40A(2)(b) Amounts deemed to be profits and gains u/s 32AB, 32AC or 33ABA or 33AC Any amount of profit chargeable to tax u/s 41 and computation thereof No change New section 32AC added No change Sums u/s 43B No change CENVAT and prior period income/expenditures MODVAT renamed as CENVAT Deemed income u/s 56(2)(viia) 28 - New clause* Deemed income u/s 56(2)(viib) 29 - New clause* Amount borrowed on hundi u/s 69D 30 23

10 New v/s old clause Clause Brief description of clause Loans or deposits taken/accepted u/s 269SS Loans or deposits repaid u/s 269SS Whether assessee certificate obtained regarding account payee cheque or an account payee bank draft Whether the taking or accepting loan or deposit, or repayment of the same were made by account payee cheque drawn on a bank or account payee bank draft based on the examination of books of account and other relevant documents. New Clause # Old Clause # Changes 31(a) 24(a) No change 31(b) 24(b) No change - 24(c) Assessee certificate no more required. 31(c) - Now responsibility shifted to auditor.

11 New v/s old clause Clause 32 & Brief description of clause Details of brought forward loss / unabsorbed depreciation Carry forward of loss due to change in shareholding of a closely held company u/s 79 New Clause # Old Clause # Changes 32 (a) 25 (a) No change 32 (b) 25 (b) No change Details of speculation loss u/s (c) - New clause Details of loss u/s 73A for specified businesses u/s 35AD In case of a company, please state that whether the company is deemed to be carrying on a speculation business as referred in explanation to section 73, if yes, please furnish the details of speculation loss if any incurred during the previous year Deduction under chapter VI-A and Chapter III (section 10A and 10AA) 32 (d) - New clause (read clause 19 also) 32 (e) - New clause Chapter III added.

12 New v/s old clause Clause Brief description of clause Whether the assessee is required* to deduct or collect tax as per the provisions of Chapter XVII-B or XVII- BB. If yes, Tax auditor to provide kind of TDS compliance statement in a specified table format New Clause # Old Clause # 34 (a) 27(a) & 27 (b)(ii) Changes TCS also added Back door entry of form 24C after 5 years*. If the assessee has not furnished the TDS/TCS return within the due date, provide complete list of all such returns If assessee is liable to pay interest u/s 201(1A) or section 206C(7), tax auditor to furnish details of interest and its payment 34 (b) - New clause* 34 (c) 27 (b)(iii) Stringent requirements of reporting New clause*

13 New v/s old clause Clause 35 ~ Brief description of clause Quantitative details of principal items of traded goods, raw materials, finished products etc. Details of tax on distributed profits under section 115-O If any cost audit / audit under CEA / Service tax audit u/s 72A of FA 1994 was carried out during the year, then tax auditor have to give details of disqualification or disagreement on any matter / item / value / quantity as may be reported / identified by the respective special auditor. New Clause # Old Clause # Changes No change Amount of reduction as referred to in section 115-O(1A)(i)/(ii) to be additionally given 37, 38 and 39 (new clause) 30 and 31 Instead of copy of report, now auditor has to provide all qualified / adverse aspects of cost audit / excise audit / service tax audit report.

14 New v/s old clause Clause 40 ~ Brief description of clause New Clause # Old Clause # Changes Major ratios Computation no more required Previous year figures also to be given Only for Principal Items Details of demand raised or refund issued during the previous year under any tax laws other than Income tax Act, 1961 and Wealth tax Act, 1957 along with details of relevant proceedings 41 - New clause

15 Clause by clause discussion (key clauses)

16 Icons for reference in succeeding slides 16 Icon Represents What clause says? What to look for? What to collect / documentation? What / how to report? This is a new requirement

17 Clause 4 Registration under indirect tax laws

18 Clause 4 Registration under indirect tax laws 18 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.

19 Clause 4 Example of indirect taxes 19 a. Central VAT - Service Tax & Service Tax b. Custom duty c. State VAT / Central Sales Tax / State Excise d. Professional tax e. Luxury Tax

20 Clause 4 Registration under indirect tax laws 20 a. Ascertain if any business activity of assessee is liable to any kind of Central or State Indirect Tax b. Auditor to at least have basic knowledge of various indirect tax laws as to when such laws become applicable. c. In case of doubts suggest assessee to take proper legal opinion. d. Check applicability of respective tax laws to each division/location/branch, if applicable.

21 Clause 4 Registration under indirect tax laws 21 a. Management representation letter. b. Written legal opinion(s) of lawyer / Chartered Accountant. c. Copy of registration certificates / any other documentary proof of registration

22 Clause 4 Registration under indirect tax laws 22 Sample reporting SL # Type of Indirect Tax or Name of statute Name of branch/unit, if applicable Registration / Identification Number, if taken Remarks 1 Service Tax Corporate office AAACA9999A SD001 2 Service Tax X Division AAACA9999A SD002 3 Service Tax Y Division AAACA9999A SD003 4 Central Excise Duty X Division AAACA9999A XD001 5 Central Excise Duty Y Division AAACA9999A XD002 6 Delhi Value Added Tax Y Division Haryana Value Added Tax X Divison Custom Duty Corporate office AAACA9999A FT001 In case the auditee is registered with more than one department or have more than one identification number allotted for the same, all such numbers are to be mentioned.

23 Clause 8 Relevant clause of section 44AB under which audit conducted

24 Clause 8 Relevant clause of section 44AB 24 Indicate the relevant clause of section 44AB under which the audit has been conducted. The relevant clauses of section 44AB are as follows: Section 44AB(a) Business > 1 cr turnover Section 44AB(b) Profession > 25 lakh turnover Section 44AB(c) 44AF / 44B / 44BB Section 44AB(d) 44AD You just need to ascertain relevant clause and report it.

25 Clause 9 (b) Change in Profit sharing ratio

26 Clause 9 (b) Change in Profit sharing ratio 26 If there is any change in the partners or members or in their profit sharing ratio since the last date of the preceding year, the particulars of such change. Change cosmetic and clarificatory in nature. For the purpose of above reporting, the auditor needs to examine the instrument of partnership i.e. Partnership Deed for firms. In case of LLPs, LLP Agreement as well as LLP-form 3, 4 and 4A also needs to be checked and documented.

27 Clause 11 Books of accounts and other records

28 Clause 11 Books of accounts and other records 28 (a) (b) Whether books of account are prescribed under section 44AA, if yes, list of books so prescribed. (old clause) List of books of account maintained and the address at which the books of accounts are kept. {In case books of account are maintained in a computer system, mention the books of account generated by such computer system}. {If the books of accounts are not kept at one location, please furnish the addresses of locations along with the details of books of accounts maintained at each location.} a) List of books of account and nature of relevant documents examined.

29 Clause 11 Books of accounts and other records 29 Section 2(1)(12A) - Books or Books of account (1) ledgers, (2) day-books, (3) cash books, (4) account books (5) and other books, For certain professions, Board has prescribed Form C vide Rule 6F of the Rules

30 Clause 11 Books of accounts and other records 30 If an auditor: refers to and examine for the purpose of the audit any document which is not covered in the above definition of books of account / prescribed books of accounts, he shall be obliged to report the nature of such document which is relevant for the audit

31 Clause 11 Books of accounts and other records 31 a. Take a list of all locations / branches / businesses covered by audit of assessee. You may also refer to various registration certificates to ascertain this information. b. Check if assessee is maintaining centralised accounting or branch accounting. c. If assessee has more than one businesses and separate books of accounts are maintained for each business, prepare a list of each such business(es) and its location. d. Prepare an index of each key type of documents / records, which has been relied by you in support of the particulars given in clauses 12 to 41 for Form No. 3CD

32 Clause 11 Books of accounts and other records 32 List of locations where books of accounts and other records are maintained. S. No. Location identifier Full address of Location 1 HO , Amba Towers, Sector 9, Rohini, Delhi After market division 3 Chassis Division , Amba Towers, Sector 9, Rohini, Delhi , Udyog Vihar, Phase - I, Gurgaon EoU Division 62, Chimes Building, Sector 44, Gurgaon

33 Clause 11 Books of accounts and other records Books of accounts maintained and examined S. No. Particulars Location at which maintained Whether maintained in a computer system? Whether Examined? 1 Cash book / Bank book All Yes Yes 2 General ledger / Journal All Yes Yes 3 Debtors and creditors All Yes Yes ledger 4 Fixed assets register All Yes Yes 5 Payroll records HO Yes Yes 33 Remarks Note: The books of account are maintained on a computer system. The books of account listed above and the other regular reports can be generated by the system by defining the fields based on the type of books, data, records and extent of details required. Other records examined: Such other registers, vouchers and relevant documents and records in support of the particulars given in clauses 12 to 41 for Form No. 3CD.

34 Clause 17 Assets covered u/s 43CA and 50C

35 Clause 17 Assets covered u/s 43CA and 50C 35 Where any land or building or both is transferred during the previous year for a consideration less than value adopted or assessed or assessable by any authority of a State Government referred to in section 43CA or 50C, please furnish: (1) Details of property (2) Consideration received or accrued (3) Value adopted or assessed or assessable. Corresponding changes carried out in ITR as well

36 Clause 17 Assets covered u/s 43CA or 50C 36 Section 43CA applicable from AY Assessee engaged in real estate business of sale and purchase (i.e. stock-in-trade) of land or building or both is covered by this section Date of transfer is the key to this clause, consideration actually received is not. Auditor should ascertain assessed/assess value as per respective authority/state govt. Where any advance/part consideration received (other than in cash) prior to date of agreement, only date of agreement is relevant for the purpose {Sec 43CA (3) / (4))}

37 Clause 17 Assets covered u/s 43CA or 50C 37 a. Take copy of agreement to sale and/or registered sale deed. b. If assessed value/ assessable value not mentioned on registered deed, appropriate evidence for value like money receipt issued by registration authority. c. In case of section 43CA(3), of any dispute arise on value, safer to take written opinion. d. Management representation is must in all cases e. While reporting, do give reference of document(s) on which reliance has been placed f. Reporting to be made in format specified in clause itself.

38 Clause 19 Amounts admissible under various section

39 Clause 19 Amounts admissible under various section 39 Section No. 32AC 33AB 33ABA 35(1)(i) 35(1)(ii) 35(1)(iia) 35(1)(iii) 35(1)(iv) 35(2AA) 35(2AB) 35ABB 35AC 35AD 35CCA 35CCB 35CCC 35CCD 35D 35DD 35DDA 35E Debited to P&L account Deduction admissible* *Deduction admissible as per the provisions of the Income Tax Act, 1961 and also fulfils the conditions, if any specified under the the 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. No more required to disclose amount not debited to the profit and loss account under above sections. Section 33AC deleted Section 35 divided into subclauses

40 Clause 20 Contribution to various funds u/s 36(1)(va)

41 Clause 20(b) Contribution to various funds u/s 36(1)(va) 41 (b) Details of contributions received from employees for various funds as referred to in section 36(1)(va): 1) Serial number 2) Nature of fund 3) Sum received from employees 4) Due date* for payment 5) The actual amount paid 6) The actual date of payment to the concerned authorities * As per explanation to the clause (va), the due date means the relevant date under the Act, rule, order, notification, standing order, award, contract of service or otherwise of the relevant fund

42 Clause 20(b) Contribution to various funds u/s 36(1)(va) 42 New reporting Fields Old reporting fields (e-filing utility) Remarks Nature of fund Sum received from employees The actual amount paid Due date for payment The actual date of payment to the concerned authorities Name of fund Amount Due Date Actual date Now we have to report both amount received and deposited

43 Clause 21

44 Clause 21(a) Amounts debited to the P&L. 44 (a) Please furnish the details of amounts debited to the profit and loss account, being in the nature of capital, personal, advertisement expenditure etc. Nature Capital Expenditure Personal Expenditure Advertisement Expenditure in any souvenir, brochure, tract, pamphlet or the like, published by a political party Expenditure incurred at clubs being entrance fees and subscription for club services and facilities used. Expenditure incurred at clubs being cost for club services and facilities used Expenditure by way of any other penalty or fine not covered above. Expenditure incurred for any purpose which is an offence or which is prohibited by law Serial Number Particula rs Amt (in )

45 Clause 21(b) Amounts inadmissible under section 40(a) 45 Amounts inadmissible under section 40(a):- i. as payment to non-resident referred to in sub-clause (i)* ii. as payment referred to in sub-clause (ia)* {TDS} iii. under sub-clause (ic) [Wherever applicable] {FBT} iv. under sub-clause (iia) {Wealth Tax} v. under sub-clause (iib) {Applies to state PSUs} vi. under sub-clause (iii) i. date of payment ii. amount of payment iii. name and address of the payee vii. under sub-clause (iv) viii. under sub-clause (v) {Tax paid on expat Salaries} * Separately discussed

46 Clause 21(d) Disallowance / deemed income u/s 40A(3) (A) On the basis of the examination of books of account and other relevant Documents / evidence, whether the expenditure covered under section 40A(3) read with rule 6DD were made by account payee cheque drawn on a bank or account payee bank draft. If not, please furnish the details :{old clause} (1) Serial number (2) Date of payment {New field} (3) Nature of payment (4) Amount (5) Name and Permanent Account Number of the payee, if available {New field} 46 (B) On the basis of the examination of books of account and other relevant Documents / evidence, whether the payment referred to in section 40A(3A) read with rule 6DD were made by account payee cheque drawn on a bank or account payee bank draft If not, please furnish the details of amount deemed to be the profits and gains of business or profession under section 40A(3A): (1) Serial number (2) Date of payment (3) Nature of payment (4) Amount (5) Name and Permanent Account Number of the payee, if available

47 Clause 21(d) Comparison with old clause 47 Earlier Now Whether a certificate has been obtained from the assessee regarding payments relating to any expenditure covered under section 40A(3) that the payments were made by account payee cheques drawn on a bank or account payee bank draft, as the case may be; On the basis of the examination of books of account and other relevant Documents / evidence, whether the expenditure covered under section 40A(3) read with rule 6DD were made by account payee cheque drawn on a bank or account payee bank draft. If not, please furnish the details

48 Clause 21(d) Guidance note of ICAI Edition when certificate was not required Quote there may be practical difficulties in verifying of payments made through crossed cheques or bank drafts. If no proper evidence for such verification of the payment by crossed cheque of draft is available, such a fact could be brought out by appropriate comments in the following manner: It is not possible for me/us to verify whether the payments in excess of Rs /- have been made otherwise than by crossed cheque or bank draft, as the necessary evidence is not in the possession of the assessee Unquote 2013 edition When certificate was required Since after obtaining certificate from assessee such disclaimer was no more required, thus ICAI withdrew the observations and guidance note from 2005 edition The observation and the guidance note of the 2005 edition should be followed in view of revised clause.

49 Clause 21(d) Suggested disclaimer 49 The assessee has not made any payment for expenses incurred covered by section 40A(3) read with Rule 6DD in excess of sums exceeding Rs /- or Rs /-, as the case may be, in cash, except as mentioned in Form 3CD.Though as per our examination of the books of account and relevant record such payments have been made by cheques or bank drafts, yet it could not be verified by us conclusively as to whether all such payments were made by account payee cheques or account payee bank drafts, as it is not practically possible, since there are no satisfactory evidence or material with the assessee for such verification except bank statements.

50 Clause 28 and 29 Deemed income u/s 56(2)(viia)/(viib)

51 Clause 28 and 29 Deemed income u/s 56(2)(viia)/(viib) Whether during the previous year - the assessee {firm and closely held company} - has received any property, being share of a company not being a company in which the public are substantially interested, - without consideration or for inadequate consideration - as referred to in section 56(2)(viia), if yes, please furnish the details of the same 29. Whether during the previous year - the assessee {closely held company} - received any consideration {basically share premium} - 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.

52 Clause 28 and 29 Suggested reporting format 52 Clause 28 Sl# Date of transaction / transfer Name of Transferor / Name of company of which equity shares are being transferred Value of transaction/ considerati on FMV of shares Clause 29 Sl# Date of transaction / allotment Name of share holder Value of transaction FMV of shares

53 TDS compliance reporting

54 TDS/TCS compliance tree TDS compliance tree and reporting 54 Default reporting Clause 34(a) Covered by TDS provisions Deduction part reporting TDS not deducted TDS deducted Clause 21 (b)(i)(a) or 21(b)(ii)(A) TDS Deducted / Deposited late Not paid before due date u/s 139(1) / 200(1) Clause 34(c) Clause 21(b)(i)(B) or 21(b)(ii)(B) TDS return reporting All returns filed on time Any return filed late Nothing to report Clause 34(b) Not Covered Nothing to report

55 Clause 21 (b)(i)(a) / 21(b)(ii)(A) TDS not deducted 55 (b) Amounts inadmissible under section 40(a):- (i) as payment to non-resident referred to in sub-clause (i) (A)Details of payment on which tax is not deducted: i. date of payment ii. amount of payment iii. nature of payment iv. name and address of the payee (ii) as payment referred to in sub-clause (ia) (A)Details of payment on which tax is not deducted i. date of payment ii. amount of payment iii. nature of payment iv. name and address of the payee

56 Clause 21 (b)(i)(b) / 21(b)(ii)(B) TDS deducted but not deposited 56 (b) Amounts inadmissible under section 40(a):- (i) as payment to non-resident referred to in sub-clause (i) (A) Details of payment on which tax has been deducted but has not been paid during the previous year or in the subsequent year before the expiry of time prescribed under section 200(1): i. date of payment ii. amount of payment iii. nature of payment iv. name and address of the payee v. amount of tax deducted (ii) as payment referred to in sub-clause (ia) (A) Details of payment on which tax has been deducted but has not been paid on or before the due date specified in sub- section (1) of Section 139 i. date of payment ii. amount of payment iii. nature of payment iv. name and address of the payee v. Amount of tax deducted vi. Amount out of (v) deposited, if any

57 Clause 34(b) TDS returns compliance 57 whether the assessee has furnished the statement of tax deducted or tax collected within the prescribed time. If not, please furnish the details: (1) Tax deduction and collection Account Number (TAN) (2) Type of Form (3) Due date for furnishing (4) Date of furnishing, if furnished (5) Whether the statement of tax deducted or collected contains information about all transactions which are required to be reported a. Make a list of all TANs assessee has. b. Make a list of all returns (for each TAN and quarter), assessee is required to file, with due date and actual date of filing. NIL returns are not required to be filed! c. Do not forget to take copy of all PRs from assessee as audit evidence. d. Wherever returns are filed late, report in clause 34(b)

58 Clause 34(b) TDS returns compliance 58 Sample reporting SL # TAN Type of Form Due date for furnishing Date of furnishing, if furnished Whether the statement of tax deducted or collected contains information about all transactions which are required to be reported 1 DELD01234F 24Q 15/12/ /12/2013 Yes 2 DELD01234F 26Q 15/12/ /12/2013 No. Transporter details on which TDS was not deducted u/s 194C (6) were not reported 3 RTKD9765X 27Q 15/05/ NA 4 MUMD9211F 27EQ 15/05/ /05/2014 Yes

59 Clause 34(c) Interest payable u/s 201(1A)/206C(7) 59 Whether the assessee is liable to pay interest under section 201(1A) or section 206C(7). If yes, please furnish: (1) Tax deduction and collection Account Number (TAN) (2) Amount of interest under section 201(1A) / 206C(7) is payable (3) Amount paid out of column (2) along with date of payment. a. All cases of late deduction as well late payments (and even nondeduction) are covered by reporting under this clause. b. Irrespective of payment of interest, reporting has to be made. c. You may download Aggregated TDS Compliance report from TRACE. Aggregated TDS Compliance report will list down all the TAN's with defaults mapped to a deductor's PAN. d. Special emphasis should be given to incorrect date of payments/deduction reported in TDS returns

60 Clause 34(c) Interest payable u/s 201(1A)/206C(7) 60 Sample reporting SL # TAN Amount of interest under section 201(1A) / 206C(7) is payable Amount paid out of column (2) along with date of payment. Remarks 1 DELD01234F DELD01234F dated 15/12/ dated 15/12/2013 For 26Q For 27Q 3 DELD01234F 2345 Not paid For 27Q 4 MUMD9211F Dated 14/11/2013 For 27EQ

61 Clause 34(a) TDS/TCS compliance statement 61 (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: (1) Tax deduction and collection Account No. (TAN) (2) Section (3) Nature of payment (4) Total amount of payment or receipt of the nature specified in column (3) (5) Total amount on which tax required to be deducted or collected out of (4) (6) Total amount on which tax was deducted or collected at specified rate out of (5) (7) Amount of tax deducted or collected out of (6) (8) Total amount on which tax was deducted or collected at less than specified rate out of (7) (9) Amount of Tax deducted or collected on (8) (10)Amount of Tax deducted or collected not deposited to the credit of the Central Government out of (6) and (8)

62 Clause 34(a) TDS/TCS compliance statement 62 In 2009 Government had made unsuccessful attempt to bring in form 24C TDS compliance statement through notification no. 31/2009 dated 25 th March 2009 read with circular no. 02/2009. This statement is exact copy of form 24C (except 1 field) This is the very statement which all TDS AO invariably demands during proceedings u/s 201 {TDS Survey} It s a more or less reconciliation of your PL with your TDS/TCS returns. If assessee is not covered by TDS/TCS provisions at all No need to jump into this clause.

63 Clause 34(a) TDS/TCS compliance statement Let s understand this with example: 63 Total Interest outgo Total amount paid below threshold limit Balance A Total amount for which 15G/15H recd Balance B Total amount covered by sec. 1% Balance C TDS not deducted Balance D TDS on 10% TDS on.20 1% Amount ( ) 1.00 cr 0.30 cr 0.70 cr 0.20 cr 0.50 cr 0.20 cr 0.30 cr 0.01 Cr 0.29 Cr 2.90 Lakhs 0.20 Lakhs

64 Clause 34(a) TDS/TCS compliance statement 64 TAN (1) DELD09763X Section (2) 194A Nature of payment (3) Interest other than interest on securities Total amount of payment or receipt of the nature specified in column (3) Total amount on which tax was required to be deducted or collected out of (4) (4) 1,00,00,000 (5) 70,00,000 Total amount on which tax was deducted or collected at specified rate out of (5) (6) 29,00,000 Amount of tax deducted or collected out of (6) (7) 2,90,000 Total amount on which tax was deducted or collected at less than specified rate out of (7) (8) 40,00,000 Amount of tax deducted or collected on (8) (9) 20,000 Amount of tax deducted or collected not deposited to the credit of the Central Govt. out of (6) and (8) (10) Nil

65 Suggested disclaimer on clause 34(a)

66 Clause 34(a) Suggested disclaimer # 1 66 In column (4) of Clause 34(a) of Form No. 3CD "total amount of payments of the nature specified in column (3)" has been mentioned to the extent it was possible; out of which the aggregate "amount on which tax was not required to be deducted" in view of any exemption / deduction allowable under the respective section or the payment being below the threshold provided or the assessee has obtained Permanent Account Numbers (PAN) of the payee u/s 194C(6) etc., as the case may be, has been reduced to derive the amount on which tax was required to be deducted for reporting in column (5) of Clause 34(a) of the Form No. 3CD.

67 Clause 34(a) Suggested disclaimer # 2 67 Though the assessee has made available the books of account, necessary records and relevant documents for the purpose of our examination for reporting the particulars in Clause 34(a) of Form No. 3CD, however, keeping in view the scope of section 194C of the Income Tax Act,1961 and considering the volume of payments covered in section194c it is not possible to prepare and compile the "total amount of payment of the nature specified in column (3)". It is not out of place to mention that on most of the payments made for carrying out "work' in pursuance of "a contract" no tax is required to be deducted in view of the threshold provided in subsection (5) and the provisions of sub-section (6) of section 194C. Therefore, in column (4) of Form No. 3CD the aggregate amount as declared in the quarterly statements of tax deducted at source furnished in Form No. 26Q has been reported.

68 Clause 40 Ratios 68 Details regarding turnover, gross profit, etc., for the previous year and preceding previous year: SL# Particulars 1 Total turnover of the assessee 2 Gross profit / turnover 3 Net profit / turnover 4 Stock-in-trade / turnover 5 Material consumed / finished goods produced Previous year Preceding previous year (The details required to be furnished for principal items of goods traded or manufactured or services rendered)

69 Clause 40 Guidance note of ICAI 69 a) Gross Profit: The excess of the proceeds of goods sold and services rendered during a period over their cost, before taking into account administration, selling, distribution and financing expenses. When the result of this computation is negative it is referred to as gross loss. b) Turnover: The aggregate amount for which sales are effected or services rendered by an enterprise. The terms gross turnover and net turnover (or gross sales and net sales) are sometimes used to distinguish the sales aggregate before and after deduction of returns and trade discounts. c) Net Profit: The excess of revenue over expenses during a particular accounting period. When the result of this computation is negative, it is referred to as net loss. The net profit to be shown here is net profit before tax. d) The term `stock-in-trade' used therein does not include stores and spare parts or loose tools. The term stock-in-trade would include only finished goods and would not include the stock of raw material and work-inprogress since the objective here is to compute the stock-turnover ratio

70 Credits This presentation would not have been possible without inputs from: 70 CA. Rajiv Kumar Jain

71 Thanks!