Tally.ERP 9 Tax Audit Manual

Transcription

1 Tally.ERP 9 Tax Audit Manual

2 The information contained in this document is current as of the date of publication and subject to change. Because Tally must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Tally, and Tally cannot guarantee the accuracy of any information presented after the date of publication. The information provided herein is general, not according to individual circumstances, and is not intended to substitute for informed professional advice. This document is for informational purposes only. TALLY MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS DOCUMENT AND SHALL NOT BE LIABLE FOR LOSS OR DAMAGE OF WHATEVER NATURE, ARISING OUT OF, OR IN CONNECTION WITH THE USE OF OR INABILITY TO USE THE CONTENT OF THIS PUBLICATION, AND/OR ANY CONDUCT UNDERTAKEN BY PLACING RELIANCE ON THE CONTENTS OF THIS PUBLICATION. Complying with all applicable copyright and other intellectual property laws is the responsibility of the user. All rights including copyrights, rights of translation, etc., are vested exclusively with TALLY SOLUTIONS PRIVATE LIMITED. No part of this document may be reproduced, translated, revised, stored in, or introduced into a retrieval system, or transmitted in any form, by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Tally Solutions Pvt. Ltd. Tally may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written licence agreement from Tally, the furnishing of this document does not give you any licence to these patents, trademarks, copyrights, or other intellectual property Tally Solutions Pvt. Ltd. All rights reserved. Tally, Tally 9, Tally9, Tally.ERP, Tally.ERP 9, Shoper, Shoper 9, Shoper POS, Shoper HO, Shoper 9 POS, Shoper 9 HO, TallyDeveloper, Tally Developer, Tally.Developer 9, Tally.NET, Tally Development Environment, Tally Extender, Tally Integrator, Tally Integrated Network, Tally Service Partner, TallyAcademy & Power of Simplicity are either registered trademarks or trademarks of Tally Solutions Pvt. Ltd. in India and/or other countries. All other trademarks are properties of their respective owners. Version: Tally.ERP 9-Tax Audit Manual/3.0/September, 2009

3 Contents Contents Introduction Scope and objective of Audit...1 Requirements of Tax Audit...4 Salient features of Auditors Edition in Tally.ERP Benefits of Auditor s Edition of Tally.ERP Lesson 1: Configuring Tally.ERP 9 for Tax Audit Configuring Tally.NET features (To be done by the Client) Authorise Tally.NET Auditors (Client needs to do this)...8 Lesson 2: Accessing Data via Tally.NET 2.1 Audit at CA's office by accessing local data Audit at Client's place by accessing local data Audit from anywhere by accessing Client's data remotely...18 Lesson 3: Tax Audit using Tally.ERP Lesson 4: Amounts Inadmissible u/s 40A(3) - {Clause 17(h)} 4.1 Cash Payments Report Allowed Deductions under Rule 6DD Group Wise Cash payments Range Wise Cash payments Handling Bearer Cheque Payments Audit of Vouchers Audit Status Report Print Cash Payments Annexure...51 Lesson 5: Payments to Specified Persons u/s 40A(2)(b) 5.1 Identify Related Parties (Specified Persons) Payments to Specified Persons Group Wise Payments to Specified Persons report Ledger Vouchers Report Audit of Vouchers Audit Status Report Print Payments to Specified Persons Annexure...69 Lesson 6: Loans / Deposits Accepted {Clause 24(a)} 6.1 Loans & Deposits Accepted Report Ledger Classifications...74 i

4 Contents Ledger Balance Report for Loans/Deposits Accepted Loans / Deposits Accepted Group Wise Report Audit of Vouchers Audit Status Report Print Annexure under Sec. 269SS...91 Lesson 7: Loans / Deposits Repaid {Clause 24(b)} 7.1 Loans / Deposits Repaid Report Ledger Classifications Loans / Deposits Repaid Group Wise Report Audit of Vouchers Audit Status Report Print Annexure under Sec. 269T Lesson 8: Tax Deducted at Source (Clause 27) 8.1 TDS Summary Report Deducted on Time - Expenses Summary Deducted on Time - Party Summary Deducted on Time - Nature of Payment Summary Audit of TDS Bills Audit Status Report Print Annexure for Clause Lesson 9: Bonus, PF, ESI Recoveries - (Clause 16) 9.1 Bonus Paid (Clause 16(a)) Verification of Ledger Classifications Monthly Summary Report Payment Summary Report Print Bonus Payment Annexure Provident Fund Recoveries (Clause 16(b)) Verification of Ledger Classifications Monthly Summary Report Payment Summary Report Exception Report Audit of Vouchers Audit Status Report Print Annexure for Provident Fund Payments ESI Recoveries (Clause 16(b)) Verification of Ledger Classifications Monthly Summary Report Payment Summary Report Exception Report Audit of Vouchers ii

5 Contents Audit Status Report Print Annexure for ESI Payments Professional Tax Recoveries Lesson 10: Payments under Section 43B - (Clause 21) 10.1 Employer s Contribution (Clause 21) Tax Collected at Source (Clause 21) Verification of Ledger Classifications TCS Category Summary TCS Exception Report TCS Sales Summary TCS Party Summary TCS Payment Summary TCS Monthly Summary Audit of Vouchers Audit Status Report Print TCS Payments Annexure Service Tax (Clause 21) Service Tax Ledger Summary Service Tax Payment Summary Service Tax Monthly Summary Audit of Vouchers Audit Status Report Print Service Tax Payments Annexure Value Added Tax (Clause 21) Output VAT Summary Available Input Tax Credit Summary VAT Payment Summary Audit of Vouchers Audit Status Report Print VAT Payments Annexure Lesson 11: Audit of Fringe Benefit Tax 11.1 Fringe Benefits Tax Report Verification of Ledger Classifications FBT Ledger Summary FBT Category Summary Report FBT Exception Report FBT Payment Summary Audit of Vouchers Audit Status Report Print FBT Annexure - II iii

6 Contents Lesson 12: Audit Completion Process 12.1 Explanation from Clients on Need Clarification Vouchers Re-Auditing Clarified Vouchers Re-Auditing Altered Vouchers Auditing Under Observation Vouchers Audit Log Audit Completion Lesson 13: Printing Form 3CD 13.1 Filling Form 3CD Filling Form 3CD Copying options for Form 3CD Printing Form 3CD iv

7 Introduction The term audit generally implies auditing of financial statements. In such an Audit, the Auditor provides the expert opinion about the quality of such statements & merely attests the truth of the statements. Audit implies to non-financial matters as well, like audit of operations, efficiency etc. In simple terms, Audit means critical and intelligent examination of facts financial or otherwise, to give in the form of certificate or report an attestation, an expert opinion or advice. As per Auditing and Assurance standard: Basic Principles governing an Audit (AAS 1) published by the Institute of Chartered Accountants of India, Audit refers to the independent examination of financial information of any entity, whether profit oriented or not, and irrespective of its size or legal form, when such examination is conducted with a view to express an opinion thereon. Scope and objective of Audit The Auditing and Assurance Standard: Objectives and Scope of Audit of Financial Statements AAS 2 of the Institute of Chartered Accountants of India specifies that the main objective of an audit is to express an opinion about the truth and fairness of the financial statements. The expression emanates after performance of audit procedures i.e., to give the opinion about the financial statements, the auditor examines the financial statements to satisfy himself about the truth and fairness of the financial position and operating results of the enterprise. The secondary objectives are (i) detection and prevention of errors and (ii) detection and prevention of frauds. The scope of audit refers to the identification or delineation of audit related aspects with regard to the objective of audit, procedures, areas to be covered etc. It also relates the auditor s concern in the underlying accounting records and source documents. The scope of audit is governed by: the terms of engagement relevant statutory provisions relevant Institute pronouncement The auditor aims at checking the following during Audit: 1

8 Introduction 1. Sufficiency and relevance of information contained in underlying accounts records and source documents To check the sufficiency and relevance of information contained in the underlying accounting and source records, the auditor examines the existence of internal control and accounting system, and tests them to decide the nature, extent and timing of other audit procedures. 2. Proper disclosure of relevant information in financial statements To determine the proper disclosure of relevant information in financial statements, the auditor compares the transactions, events represented in the source documents and underlying accounting records with the financial statements and checks that they are properly summarized, carried down to the financial statements and adequately disclosed. In other words, the auditor checks that: i. The trial balance reflects the proper summary of balances and transactions, ii. The financial statements reflect the fair disclosure of events and transactions by proper grouping of balances, events, transactions, iii. Information reflected in the financial statements adequately convey the messages required by narration and notes as may be desired by statute, pronouncements or requirement of the context, iv. Judgement of the management is fairly made in matters where they are inherent and implied For example, estimation involved in making a provision, or selection of a particular accounting policy among available alternative policies (like in depreciation methods). The following evaluative factors are considered for selection of audit evidence: 1. Relevance 2. Reliability 3. Sufficiency 4. Cost effectiveness 5. Convenience 6. Preservation 7. Materiality of the assertion to be tested 8. Need for corroboration or resolution of inconsistency 9. Accepted Auditing standards / agreed upon procedures to obtain specified evidence. The auditor obtains sufficient and appropriate audit evidence through the performance of compliance and substantive procedure to enable him to draw reasonable conclusions, to base his opinion on financial information (AAS 1 Basic Principles Governing an Audit). Compliance procedures are tests designed to obtain reasonable assurance that internal controls on which audit reliance is based are in effect i.e., it tests the framework of internal control. Substantive procedures are designed to obtain audit evidence as to the completeness, accuracy and validity of the data produced by the accounting system i.e., it is test about the financial data. 2

9 Introduction The substantive tests are of two types: i. Testing details of transactions and balances ii. Analysis of significant ratios and trends including the resulting enquiry of unusual fluctuation and items. Following are the methods of obtaining audit evidences: Inspection Inspection consists of examination of documents, records or tangible assets. Observation Observation consists of witnessing a process or procedure without actually doing it, by the auditor. If inventory is counted by the client s staff, the auditor may witness physical counting. Inquiry and confirmation Inquiry consists of seeking appropriate information from sources inside or outside the entity, such as operational personnel or management or owners or experts or persons dealing with the entity. It also includes interacting with an electronic information system with a search and query language. And confirmation techniques consist of the response to an inquiry to substantiate the information. For example, the debtors may be requested to confirm the balance as per their records with the balances as per the entity s records; or the consignee may be asked to confirm that the stocks lying with him do belong to the concerned entity. Computation Computation consists of checking the arithmetical accuracy of the source data, or accounting data of the entity. It may include addition, subtraction, multiplication, division, checking the carry over, brought down, comparing the totals of two sides, checking the postings, checking extraction, reconciliation etc. Analytical Review Analytical review consists of Studying significant ratios, and trends Investigating unusual fluctuations and items 3

10 Introduction Requirements of Tax Audit The purpose of Tax audit is to ensure proper maintenance of books of accounts and other records, in order to reflect the true income of the assessee and to facilitate the assessing officer to carry out the verification. While conducting a tax audit, the following points need to be kept in mind: It is the primary responsibility of the assessee to give classified information for the purpose of tax audit. This is in the interest of an efficient conduct of tax audit. The Tax auditor has to ensure that the data he audits using Tally.ERP 9 is the final one. Audit Programme and the extent of Audit Procedures have to be planned according to the nature of business and operations of the client. Particulars given in Form 3CD have to be true and correct. The emphasis is on the accuracy of data extracted. The data extracted has to be further filtered to certain quantity / value limits as judged by the CA. The Concept of Materiality AAS 13 has to be referred to while preparing the particulars to be reported. Print outs of particulars reported in Form 3CD should be duly signed by the authorised signatory, and be kept as working papers. AAS 3 - Documentation - Working Papers Many of the particulars require exercise of judgment by the tax auditor. Tally.ERP 9 is used only to generate various reports and required information, reporting of such information or not is subject to tax auditor s judgment. The tax audit report is for an assessee. Details/ information should be consolidated where the enterprise has more than one division/ unit/ branch and accounts are maintained separately for each division/ unit/ branch. Where an auditor is required to furnish tax audit report only in respect of a division/ unit/ branch, details of the same should be mentioned in the Report. Salient features of Auditors Edition in Tally.ERP 9 The Auditors Edition of Tally.ERP 9 is designed to equip Chartered Accountants with the tools to analyse the operations of an enterprise and recommend steps to ensure better control and efficient functioning of business. It also addresses the practical Audit requirements and statutory compliances for businesses using exclusive tools available locally and remotely. Some of the salient features of Auditors Edition comprises of: IT assisted Audit services Improves delivery of compliance services Access the Reports/Data using Tally.ERP 9 Post corrections and reviews remotely Displays relevant data for Audit based on Clause requirement Track any alteration / modification to vouchers post Audit Audit related reports & annexures to assist CA in Auditing Allows column sorting & multi-selection of vouchers during Auditing 4

11 Introduction Instant Statistics on Audit Listings (Audited Vouchers & Unaudited Vouchers) Provides facility to record Audit Remarks using Audit Note Provision to mark Vouchers for clarification / Verification from Clients Identify and interpret errors in data and suggest remedial measures Benefits of Auditor s Edition of Tally.ERP 9 The Auditors edition of Tally.ERP 9 aims at providing the following benefits to Chartered Accountants: Increased Audit efficiency Extract financial and quantitative information required for Tax Audit (under Sec. 44AB) Allows CA to offer services to more clients Lower cost of delivery of services Additional avenues of billable services using Statutory Compliances 5

12 Lesson 1: Configuring Tally.ERP 9 for Tax Audit Tally.ERP 9 offers Auditors' Edition of Tally, which will help the Auditors to provide the Audit and Compliance Services in the following scenarios: Audit from CA s Office with Local Data Audit from Client s place with Local Data Audit Remotely from anywhere with Data residing at the Clients place Auditors Edition of Tally.ERP 9 be used in the last two cases with the help of Tally.NET framework. Tally.NET is an enabling framework which establishes a connection using which the remote user can access the Client's data without copying / transferring the data. In other words, the remote user can access the company data, provided the Company is open and connected on Tally.NET. Audit at CA s office by accessing local data The Auditors Edition includes the Audit/Compliance capabilities as a default feature without any dependency on Tally.NET for Authentication. When the Client s data is locally available at CA s office, the Auditor can perform the Audit or Verification as the Tax Audit and Statutory Compliance features are available by default. Audit at Client s place by accessing local data If the Auditor wants to use the Auditors License from Clients Office to provide the Audit or Compliance Service, an Internet Connection and Tally.NET subscription are required. The Client should have authorized the Chartered Accountant as Tally.NET Auditor for the Company. In this scenario, Tally.NET is used to Authenticate the Auditor and fetch the Auditors License on the Client s Tally.ERP 9. The Auditor can then open the Company and perform Audit or Verification in the same way as it is done in the Auditor s office with Local data using the Auditor s License. In this scenario, the Auditor should have a valid Tally.NET subscription to perform Audit. Audit Remotely by accessing Client s data from anywhere When the Auditor wants to access the Client s Data Remotely and provide Audit and Compliance services from his office (or from any other remote location), an internet connection and valid Tally.NET subscription are a must for both the Auditor and the Client. The Client should have authorized the Chartered Accountant as Tally.NET Auditor and Connect the Company to Tally.NET at the time of Audit/Verification process. 6

13 Configuring Tally.ERP 9 for Tax Audit The Auditor will Login as Remote User and provide the Auditor s Username and Password to view the Companies that are available for Audit (Connected) belonging to various Client s based on the Access provided. The Auditor can open the required Company to perform the Audit/Verification and save the Audit/Verification Notes Configuring Tally.NET features (To be done by the Client) To configure the Company for Tally.NET features, Go to Gateway of Tally > F11: Features > F4: Tally.NET Features In Registration Details, The Connect Name field is by default populated with the Company Name (in this case, Global Enterprises), which can be changed (Tally.ERP 9 allows the user to specify the Connect Name as per the user requirements) Enter other Registration Details (viz., Contact Person Name, Contact Number etc.) In Connect for Remote Access, Select Yes for Allow to Connect Company Select Yes for Connect on Load The completed Tally.NET Features screen is displayed as shown: Figure 1.1 Tally.NET Features screen Press Enter to accept 7

14 Configuring Tally.ERP 9 for Tax Audit Connect Name: The user can specify any Connect Name for the Company to be connect as per his requirements (in simple words, the Company Name and the Connect Names can be different). Allow to Connect Company: This option should be set to Yes, if the user wishes to Connect the Company to Tally.NET for remote access. Connect on Load: This option should be set to Yes to connect the Company to Tally.NET by default, when the company is loaded. It is mandatory to enable Security Controls in the Company Creation master for Tally.NET features to be available in Tally.ERP 9. If Security Controls feature is not enabled, go to Company Alteration (Alt+F3) screen and enable the same for proceeding further Authorise Tally.NET Auditors (Client needs to do this) Once the Tally.NET features are configured, the Client needs to provide the required access to the Auditors (Tally.NET Auditors) to perform Audit locally / remotely. To provide the required access to the Tally.NET Auditors for a company, the client needs to follow the steps given below: Authorisation of Tally.NET Auditors Assigning Security Levels for Tally.NET Auditors Step1: Authorization of Tally.NET Auditors (CA users) Go to Gateway of Tally > Press Alt+F3 > Security Control > Users and Passwords In the List of Users for Company screen, 8

15 Configuring Tally.ERP 9 for Tax Audit In the Security Level field, select Tally.NET Auditor from the Security List Figure 1.2 Authorising Tally.NET Auditor Specify the Auditors (CA s) username ( id which is a Tally.NET Auditor, e.g. tallybapuser@tallysolutions.com) in the field Name of User Figure 1.3 CA User Authorization screen The Password (if any) field will be skipped. Set Allow Remote Access to Yes, if you wish the Auditor to access the Company Remotely, when the Company is connected to Tally.NET. This option should be set to Yes for Remote Audit to function. 9

16 Configuring Tally.ERP 9 for Tax Audit Set Allow Local TDL to Yes, if you wish to allow the TDL s running at Client s Computer to be available for the Auditor during the remote access. Specify the Auditors contact number in the Mobile Number field if required The completed screen for Authorising Tally.NET Auditor is displayed as shown: Figure 1.4 Completed screen for CA user Authorisation Press Enter to accept and Authorise the selected CA User (Tally.NET Auditor) The registered CA User name (Tally.NET Auditor ID) will be provided to the customer/client from their Chartered Accountant/Auditor. Allow Remote Access should be set to Yes only if the Client wants the Auditor to access the Company data remotely for Auditing. Step 2: Assigning Security Levels for Tally.NET Auditors By default, a Tally.NET Auditor which is added under Users and Passwords option is Authorised with the capacity of an Administrator (Owner) and hence have the full access to the company data. However, the user/client can restrict the access for a particular menu/report by creating the Security Types for Tally.NET Auditor. To modify the Security Types, Go to Gateway of Tally > Press Alt+F3 > Security Control > Types of Security 10

17 Configuring Tally.ERP 9 for Tax Audit In the Security Levels for Company select Tally.NET Auditor Figure 1.5 Security Levels screen Press Enter and the Security Levels screen is displayed. In the Security Levels screen, Select the required Security Type (e.g. Tally.NET Auditor) in the field Use the Basic Facilities of Figure 1.6 CA Security Levels screen By default Days allowed for Backdated Vouchers is set to 0 The Cut-off date for Back Dated Vouchers is left empty 11

18 Configuring Tally.ERP 9 for Tax Audit Set Allow to Connect Company to Yes, if you want the Tally.NET Auditor to Connect the Company to Tally.NET for remote Audit Set Use Tally.NET Authentication to No Set Use Tally.NET Auditor Authentication to Yes In Disallow the Following Facilities: Select End of List from Type of Access In Allow the Following Facilities: Select Full Access from Type of Access Select Audit Listings from List of Reports Cut-off date for Back Dated vouchers field should be empty Under Disallow the following Facilities select End of List Under Allow the following Facilities, select Full Access from the Type of Access as shown Select Tax Audit from the List of Reports as shown: Figure 1.7 Security Levels screen Types of Reports Selection Press Enter to save and go back to the Security Levels screen Press Enter again to save the Security Levels screen 12

19 Configuring Tally.ERP 9 for Tax Audit The completed Security Levels screen is displayed as shown: Figure 1.8 Completed Security Levels screen 13

20 Lesson 2: Accessing Data via Tally.NET As discussed in the earlier section, using Tally.ERP 9 Auditors Edition, Audit and Compliance services can be provided in any one of the following scenarios using the Tally.NET framework: Audit at CA's office by accessing local data Audit at Client's place by accessing local data Audit at his place by accessing Client's data remotely In this section, each of these scenarios is explained in detail with the necessary information and steps. 2.1 Audit at CA's office by accessing local data The Auditor Edition includes Auditing and Compliances capabilities as a default feature without any dependency on Tally.NET subscription for authentication for access to Data. The CA may open Tally.ERP 9, access his client's data available locally and Audit using Tax Audit features as per the steps given below: Step 1: Select Company Go to Gateway of Tally > Company Info. > Select Company Tally.ERP 9 displays the List of Companies along with the Company number Figure 1.1 Company selection screen Select the required company to be audited and press Enter 14

21 Accessing Data Via Tally.NET Step 2: Company Login In the Company Login screen, Enter the Username as provided by the Client in the Name of User field Enter the password in the in the Password (if any) field Press Enter to open the company Figure 1.2 Company login screen Figure 1.3 Gateway of Tally (Auditors License) Tally.ERP 9 displays the Auditors License in the Version section of Information panel at the bottom. The Audit & Compliance menu is available by default with the Auditors Edition of Tally.ERP 9. 15

22 Accessing Data Via Tally.NET The Audit & Compliance menu will appear only if the Company is security enabled. If the Client s Company is not Security Enabled, the CA can do this from Company Alteration screen. Or alternately you can ask the Client to enable security before giving the data for Audit. 2.2 Audit at Client's place by accessing local data When the CA audits at Client's place, he is required to authenticate himself on Tally.NET and obtain his Auditors Edition license to perform Audit. Follow the steps given below to authenticate the Auditor and obtain the Auditors License: Both Client and CA should have valid Tally.NET subscription to obtain Auditors License on the Clients Computer. Internet connection is also required in this scenario. Step 1: Select Company Go to Gateway of Tally > Company Info. > Select Company Tally.ERP 9 displays the List of Companies along with the Company number Figure 1.4 List of Companies for Selection Select the company to be audited and press Enter Step 2: Auditor Login Tally.ERP 9 will prompt you for User Name and password 16

23 Accessing Data Via Tally.NET Specify the CA User Name (Tally.NET Auditor ID) and Password, as explained in the earlier chapter Figure 1.5 CA Login Screen Press Enter The Gateway of Tally screen with Audit & Compliance Menu is displayed as shown: Figure 1.6 Auditors Edition of Tally.ERP 9 (Remote Authentication) Once the Chartered Accountant logs in using his authorised user name (Tally.NET Auditor ID) and password, Tally.ERP 9 acquires the Auditors License remotely on the Client s Tally.ERP 9 and the Audit & Compliance menu is displayed in the Gateway of Tally screen. i. The Auditor can also login using his BAP User Name and Password in Education Mode of Tally.ERP 9 but Auditing capabilities will be restricted. ii. The Audit & Compliance features are exclusively available for Chartered Accountants, with valid Auditors Edition. 17

24 Accessing Data Via Tally.NET 2.3 Audit from anywhere by accessing Client's data remotely When the CA intends to Audit at his office or any other location by accessing Client's data remotely, the Client is required to authorise the CA (BAP) as a Tally.NET Auditor with permission for Remote access and the required company should be connected to Tally.NET at the time of Audit. Both Client and CA should have valid Tally.NET subscription for the successful Remote Audit process to work. Internet connection is also required in this scenario. Follow the steps given below for the Remote Audit process: Step 1: Remote Auditor Login Close any existing Companies that are loaded by pressing Alt+F1 In the Company Info. screen click on Login as Remote User as shown below: Figure 1.7 Company Info. screen with Remote Login option In the Remote Login screen, Specify the Tally.NET Auditor ID (e.g. tallybapuser@tallysolutions.com) in the Your E- Mail ID field Specify the Auditor s password in Your Tally.NET Password field as shown: Figure 1.8 Remote Auditor Login screen 18

25 Accessing Data Via Tally.NET Press Enter and the List of Remote Companies screen is displayed as shown: Figure 1.9 List of Remote Companies Select the required Company listed under Online Companies. The Offline Companies in the List of Remote Companies displays the list of Companies which are authorised and the Companies are not connected to Tally.NET. The user experience remains the same during the Remote login even in the Educational version of Tally.ERP 9. 19

26 Accessing Data Via Tally.NET The Gateway of Tally screen during remote audit is displayed as shown: Figure 1.10 Gateway of Tally - Remote screen The Auditor can click on the Audit & Compliance menu and start Auditing remotely. 20

27 Lesson 3: Tax Audit using Tally.ERP 9 The Auditors Edition of Tally.ERP 9 enables the auditor to compile information in comparatively less time with the required accuracy to form his opinion. From the vast data available, the information that requires to be reported can be identified and extracted precisely. Tally.ERP 9 also helps in effectively reducing the time spent on vouching by narrowing down the information to be reported and thereupon the auditor may exercise his judgment on whether the information is to be reported or not. In this Chapter, we shall emphasise on understanding how Tally.ERP 9 s Audit features exclusively available for Auditors, can be effectively used to generate information for Tax Audit under Section 44AB of the Income Tax Act, Let us take the example of M/s. Global Enterprises, (registered & connected for Audit using Tally.NET, as discussed in the earlier chapter) to illustrate the extraction of required information using Tally Auditors Edition. M/s. Global Enterprises, is a private limited company situated at Bangalore, carrying on the business of trading in computers and peripherals, assembling of computers on specific orders, transportation of goods & retail trading of consumer items. The company commenced it s business on 1st April The directors of the company are Mr. Mohan, Mr. Satish, Mrs. Priya Ganesh, Mr. Balasubramanian, Mr. Vijayakumar, Mr. Suresh & Mrs. Vijaya. The company exceeds monetary limits as prescribed under Sec. 44AB of Income Tax Act,1961. While conducting Tax Audit using Auditors Edition, the Auditor can examine, review, analyse the books of accounts and other records with a view to compile information and data required to be reported in Annexure to Form 3CD, and thereupon express an opinion wherever required. In Tally.ERP 9, the Annexure to the following clauses of Form 3CD can be generated: Bonus, PF, ESI Recoveries (Clause 16) Amounts inadmissible u/s 40A(3) (Clause 17(h)) Payments to Specified Persons u/s 40A(2)(b) (Clause 18) Payments u/s 43B (Clause 21) 21

28 Tax Audit using Tally.ERP 9 Employer s Contribution Tax Collected at Source Service Tax Value Added Tax Loans / Deposits Accepted (Clause 24(a)) Loans / Deposits Repaid (Clause 24(b)) Tax Deducted at Source (Clause 27) Fringe Benefits Tax (Annexure II) In addition to above, you can also generate the Form 3CD along with Annexure I and Annexure II. Go to Gateway of Tally > Tax Audit The Tax Audit dashboard is displayed as shown: Figure 3.1 Tax Audit Dashboard The Tax Audit dashboard displays the total number of vouchers under each Clause with different Audit Status along with the Audit Complete information for each Clause. The description for each column is given below: Unaudited: Displays the total number of unaudited vouchers for each clause. 22

29 Tax Audit using Tally.ERP 9 The Unaudited Count also includes the Vouchers which are Under Observation, Need Clarification, Clarified (to be reaudited) and Altered (to be reaudited). Audited: Displays the total number of Audited Vouchers for each Clause. Under Observation: Displays the total number of Vouchers marked as Under Observation for each Clause. The Auditor can mark a Voucher as Under Observation for further study or for his Superior's help. The Auditor or his superior can highlight the respective column to drill down to view the Under Observation Summary for each Clause. Need Clarification: Displays the total number of Vouchers marked for Clarification from the Client. This will help the Auditor to keep track of the total number of Vouchers that are pending for Clarification from the Client. The Auditor can highlight the respective column to view the Need Clarification Summary for each Clause. Clarified (To be re-audited): Displays the total number for Vouchers which are Clarified by the Client for each Clause. The Auditor can highlight the respective column to view the Clarified Vouchers. Altered (To be re-audited): Displays the total number of Vouchers that are Altered by the Client post Audit. The Auditor can highlight the respective column to view the Re-Audit Summary for the respective Clauses. Audit Complete?: Displays the Audit completion status for each Clause as entered by the Auditor using the F9: Save Audit button. If the Client alters any Audited Vouchers after the Audit Complete is set to Yes. The Audit Complete status will automatically change to blank for the respective Clause. Each of the above Clause is explained in detail in separate chapters, to understand how to use Tax Audit feature to extract, display, filter & print information & Annexures for the purpose of reporting in Tax Audit under Section 44AB of the Income Tax Act,

30 Lesson 4: Amounts Inadmissible u/s 40A(3) - {Clause 17(h)} As per Section 40A(3), a Payment or an aggregate of the Payments made to a person during a day exceeding Rs.20,000/ paid other than by crossed Account Payee Cheque or crossed Account Payee Bank draft are required to be reported. Such amounts in excess of Rs.20000/- are not allowed as business expenditure in computation of the profit/loss under the head income from business or profession. However, certain allowed deductions referred in Clause (a) to (l) of Rule 6DD are required to be considered by the Auditors while extracting such information. Using Tax Audit Features in Tally.ERP 9, the Auditor can precisely extract information required under Section 40A(3). All the cash payments made during the previous year are segregated and displayed under a separate report which can be navigated using Amounts inadmissible u/s 40A(3) menu. 24

31 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} 4.1 Cash Payments Report To view Cash Payments made as required under Clause 17(h): Go to Gateway of Tally > Tax Audit > Amounts inadmissible u/s 40A(3) Figure 1.1 Cash Payments The above report displays all the cash payments made during the previous year, irrespective of monetary limits, Highest and Lowest amount paid and the Audit Status showing the list of unaudited vouchers. To hide or unhide a particular column, press F12: Configure and specify Yes or No accordingly. In order to extract aggregate payments exceeding Rs. 20,000/- in a day, execute the following steps: Setup: Go to Gateway of Tally > F11: Company Features > F5: Audit Features In the Tax Audit Rules screen, Set Show Aggregate for the Day to Yes 25

32 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Specify the amount (viz., 20,000) against the field Show Aggregate Amounting more than as shown: Figure 1.2 F11: Tax Audit Rules screen Press Ctrl+A accept and save After, setting up the above criteria for the vouchers to be displayed in the Cash Payment report, go back to the report to view only Cash payments that exceeds the Aggregate of Cash Payments made to a party on a Day beyond monetary limits of Rs. 20,000/-. The option Ignore Vouchers having Amount Less than should be used to filter the Vouchers of higher amount (more than) than specified here. e.g. if the Auditor wants to view all the Vouchers with value equal to or more than 25000, than can be specified against this. If this field is left empty than all the Vouchers will be displayed. 26

33 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The updated Cash Payments screen is displayed as shown: Figure 4.3 Cash Payments screen The above configurations can also be configured from F12: Configure, by specifying the Amount against Show Aggregate Cash Payments Exceeding field as explained below: Press F12: Configure The Configuration screen is displayed as shown. Press Enter to skip the first two fields Specify 20,000 in the Show Cash Payments ignore Vouchers having Amount less than field Figure 1.4 F12: Configuration Screen 27

34 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Tally.ERP 9 allows you to display the Group details for the ledger listed in the report, by pressing F12: Configure and setting Show Group Details to Yes. Figure 1.5 F12: Configuration Screen Press Enter to go back to Cash Payments screen Configuration screen details: Show Group Details: To view the parent groups of the Ledgers set this option to Yes Show Voucher High/Low Values: To view the Highest and Lowest transaction amounts for the respective ledgers, set this option to Yes Show Aggregate Cash Payments Exceeding: Specify the minimum amount beyond which the (aggregate amount of) transactions belonging to a Ledger should be considered for Cash Payments report Ignore Vouchers having Amount less than: Specify the required threshold limit, to exclude vouchers less than such limit. Show Audit Details: To view Audit Status Report, set this option to Yes 28

35 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The Cash Payments screen with the Group details is displayed below: Figure 1.6 Cash Payments screen 4.2 Allowed Deductions under Rule 6DD As discussed earlier, certain expenses exceeding Rs. 20,000/- paid other than by Crossed Account Payee Cheque or Crossed Account Payee Demand Draft as referred in Clause (a) to (l) of Rule 6DD are allowed as deductions. Some of the expenses specified under Rule 6DD are Salaries paid to Employees, Payments made on Bank Holiday or Strike, Payments made to Government against Statutory dues, Payments made to RBI, SBI or subsidiary bank, LIC, UTI etc., Tally.ERP 9 provides the flexibility to skip ledgers which fall under any Clause under Rule 6DD. To exclude expenses which are allowed, follow the steps given below: Go to Gateway of Tally > Tax Audit > Amounts Inadmissible u/s 40A(3) Press Alt+F9 29

36 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Select the required Ledger (For e.g., VAT Payable) that needs to be skipped Figure 1.7 Ledger Selection screen Press Enter to select the Ledger 30

37 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The Ledger Alteration screen is displayed as shown: Figure 1.8 Ledger Alteration screen Select Amounts Inadmissible 40A(3) [clause 17(h)] in the Name of Audit Class field from the List of Reports drop down Specify in the Applicable From field 31

38 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Specify in the Applicable To field and press Enter Figure 1.9 Completed Ledger Alteration screen Press Enter to Accept In the Same way, the Auditor can configure any other ledger to be excluded from the Cash Payments report. When the dates are specified in Applicable From and Applicable To fields, the ledger is skipped for the specified period. However, if no dates are specified the ledger is skipped forever. 32

39 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The Cash Payments screen with updated information is displayed as shown: Figure 1.10 Cash Payments screen To view the skipped ledgers, F9: Show Skipped button can used from Cash Payments screen in the Group Wise view. 4.3 Group Wise Cash payments Tally.ERP 9 allows you to view the cash payments made under a particular group. By default, Tally.ERP 9 displays all the ledgers under primary groups. However, you can configure to view the Ledgers of a required Group. To View the Ledgers belonging to a Group, follow the steps given below: Go to Gateway of Tally > Tax Audit > Amounts Inadmissible u/s 40A(3) (clause 17(h))(Cash Payments) Press F4: Group 33

40 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} From the List of Groups, select the required Group Figure 1.11 Group Selection screen 34

41 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Press Enter to view the Cash Payments for the selected Group Figure 1.12 Cash Payments screen for a Group The above report displays the list of ledgers under the selected groups with Cash Payments made exceeding the specified limit, details of highest and lowest payments and the Audit Status. To drill down to Ledger Vouchers display, select the required ledger and press Enter. 35

42 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The Ledger Vouchers screen is displayed as shown: Figure 1.13 Ledger Vouchers screen Tally.ERP 9 allows you to Audit Vouchers from the above Ledger Vouchers report. The procedure to audit is explained in detail in the Audit of Vouchers section. To view narrations for the transactions and other Audit related configurations, Press F12: Configure In the Configuration screen, Set Payments Against Bills to Yes Set Show Other Payments to Yes Figure 1.14 F12: Configuration screen 36

43 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Set Show Narrations to Yes The F12: Configuration screen is displayed as shown: Figure 1.15 Completed Configuration screen F12: Configuration Show Payments Against Bills: This option should be set to Yes to show the Payments made against Bills Show Other Payments: This option should be set to Yes to show Payments without Bills Show Narrations also: This option should be set to Yes to show the Narrations entered at the time of Voucher entry Skip Disallowed Amount: This option should be set to Yes, to skip the cursor from the Disallowed field Show Audit Status: This option should be set to Yes to show the Audit status selected by Auditor Show Audit Note: This Options should be set to Yes to show the Audit Note as entered by the Auditor Show Vouchers of Audit Status: This option provides a drop down to view the Vouchers with a particular Audit status (Any, Unknown, Allowed, Altered, Clarified, Disallowed, Need Clarification, Unaudited or Under Observation) Show Client s Clarification: This option should be set to Yes to display the Clarification Note entered by the Client for the Need Clarification Vouchers. 37

44 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The updated Ledger Vouchers screen is displayed as shown. 4.4 Range Wise Cash payments Figure 1.16 Ledger Voucher screen with Narrations Tally.ERP 9 allows you to view the number of Cash payments within a specified limit/range or slab. To view range wise display of Cash payments made during previous year, follow the steps given below: Go to Gateway of Tally > Tax Audit > Amounts inadmissible u/s 40A(3), Press F10: Range Wise from the Cash Payment screen Press F6:Amount Wise to specify the Amount Ranges In the Cash Payment Range sub screen Specify the ranges based on the requirements as shown: Figure 1.17 Cash Payment Range screen 38

45 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Press Enter to save The Range Wise Cash Payment Summary Report is displayed as shown: Figure 1.18 Cash Payment Summary Report The above report displays the Cash Payments made within the prescribed Cash Payments Range, details of highest and lowest payments and the Audit Status. You can also configure to hide or unhide a particular column, press F12: Configure and specify Yes or No accordingly. To drill down to Ledger Vouchers display, Figure 1.19 F12: Configuration screen 39

46 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Highlight the required Range (Payments Between to 30000) and press Enter Figure 1.20 Ledger Voucher screen Range wise The Ledger Vouchers report displays the list of Cash Payments made under the selected Cash Payments Range. To view narrations for the transactions and other Audit related configurations, press F12: Configure. In the Configuration screen, Set Payments Against Bills to Yes Set Show Other Payments to Yes Set Show Narrations to Yes Figure 1.21 F12: Configuration screen 40

47 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The F12: Configuration screen is displayed as shown: Figure 1.22 Completed Configuration screen F12: Configuration Show Payments Against Bills: This option should be set to Yes to show the Payments made against Bills Show Other Payments: This option should be set to Yes to show Payments without Bills Show Narrations also: This option should be set to Yes to show the Narrations entered at the time of Voucher entry Skip Disallowed Amount: This option should be set to Yes, to skip the cursor from the Disallowed field Show Audit Status: This option should be set to Yes to show the Audit status selected by Auditor Show Audit Note: This Options should be set to Yes to show the Audit Note as entered by the Auditor Show Vouchers of Audit Status: This option provides a drop down to view the Vouchers with a particular Audit status (Any, Unknown, Allowed, Altered, Clarified, Disallowed, Need Clarification, Unaudited or Under Observation) Show Client s Clarification: This option should be set to Yes to display the Clarification Note entered by the Client for the Need Clarification Vouchers. 41

48 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The updated Ledger Vouchers screen with Narration details is displayed as shown: Figure 1.23 Ledger Vouchers screen with Narration details Tally.ERP 9 allows you to Audit Vouchers from the above ledger vouchers display. The procedure to audit is explained in detailed in the Audit of Vouchers section. 4.5 Handling Bearer Cheque Payments The Auditor can covert any Bank Payment into Bearer Cheque from the Bank Summary Report and the same will be available under the Cash Payments report for Audit. You can use this feature to convert the entries made though Bank by verifying the physical evidences or any other information collected during the Audit process. To convert a Bank payment into Bearer Cheque, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Amounts inadmissible u/s 40A(3) Click on B: Bank Summary button or press Alt+B keys 42

49 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The Bank Payments report is displayed as shown: Figure 1.24 Bank Payments report Select the required Bank Ledger and press Enter to view Ledger Payment Vouchers for the selected Bank Ledger 43

50 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Select the required Payment Voucher that needs to be converted into Bearer Cheque by pressing Spacebar as shown: Figure 1.25 Bank Summary - selecting Voucher for conversion as Bearer Cheque Press Ctrl+A or click on A: Mark/Unmark convert the Voucher as Bearer Cheque 44

51 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Go the respective Ledger Voucher report to see the Voucher which has been converted to Bearer Cheque as shown: Figure 1.26 Ledger Vouchers with Bearer Cheque 4.6 Audit of Vouchers The Auditor can commence Audit from the Ledger Vouchers display (drill down from Groupwise or Rangewise report, as discussed above). Follow the steps given below to Audit the Vouchers pertaining to Cash Payments made during a given year. Go to Gateway of Tally > Tax Audit > Amounts Inadmissible u/s 40A(3) Highlight the required ledger and press Enter 45

52 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The Ledger Vouchers is displayed as shown: Figure 1.27 Ledger Vouchers screen To commence Audit of vouchers displayed in the Cash Payments Report screen, Press Spacebar to select a particular transaction (you can also select multiple transactions by pressing Spacebar on the required transactions one-by-one). Press F9: Audit Tally.ERP 9 allows you to Audit the Vouchers from either Groupwise Report (by drilling down to the Ledger Voucher screen) or from Rangewise Report (by drilling down to Payment Details screen), and pressing F9 for Audit You can also user the Enter key to start Audit instead of F9. While using the Enter key there is NO need to exclusively select the Voucher by pressing the Spacebar 46

53 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Audit Shortcut Key Spacebar: This key is used to select a particular transaction for Audit. You can also select Multiple transactions, by pressing spacebar on the required transaction one by one. Spacebar: The Ctrl+Spacebar can be used to select all the transactions at one go and Audit. The Audit Details screen is displayed as shown: Figure 1.28 Audit Details screen In the Audit Details sub screen, Select Disallowed in the Audit Status field Enter the disallowed amount (30,000) in the Amount field Type the Audit remarks (i.e., Paid in Cash) in the Audit Note field. Audit Status: Unknown: For all other Audit status Unknown should be selected. Or re make a Voucher Unaudited after Audit is completed. Allowed: This option is used to Allow the selected transactions Disallowed: This option is used to Disallow the selected transactions completely or partially. Need Clarification: This option should be used to ask for more clarifications from the Client if the information in the Voucher or entries is not very clear. Under Observation: This option should be used to identify the Vouchers that needs Seniors help before the final audit decision can be taken. 47

54 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The completed Audit Details screen is displayed as shown: Figure 1.29 Completed Audit Details screen Press Enter to go back to Ledger Vouchers screen Figure 1.30 Ledger Voucher screen with Audit Details 48

55 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Press Ctrl+A to save the Audit Details as shown: Figure 1.31 Ledger Vouchers screen with saved Audit Details Press Escape to go back to Cash Payments Report screen Similarly, Cash Payments made to other parties can be scrutinised and Audited. 4.7 Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed to display the Audited Vouchers, Unaudited vouchers (also includes the Need Clarification, Under Observation, Clarified and Altered Vouchers) and Total Vouchers. To view the Audit Status, press Escape from the above screen to go back to Cash Payments Report screen, 49

56 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Press F7: Show All Vouchers Figure 1.32 Audit Status details To view the details of Allowed, Disallowed and the Unaudited Amount, 50

57 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} Press F8: Show Audit Amount Figure 1.33 Cash Payments with Audit Amount details The Vouchers which are marked as Unknown, Under Observation and Need Clarification during Audit are automatically listed as Unaudited in the Audit Status. The Vouchers which are Clarified or Altered by the Client are also listed under Unaudited in the above report. In the Tax Audit Dashboard, these Vouchers are listed under separate column based on the Audit Status. 4.8 Print Cash Payments Annexure Once the Audit is completed for vouchers falling under Clause 17(h), the Auditor can print Annexure for Amount Inadmissible Under section 40A(3). Go to Gateway of Tally > Tax Audit > Amount Inadmissible u/s 40A(3) Press Alt+P to Print 51

58 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The Annexure Printing screen is displayed as shown: Figure 1.34 Print Configuration for Cash Payment Summary Report Set Yes in the Print Annexure field and press Enter 52

59 Amounts Inadmissible u/s 40(A)(3) {Clause 17(h)} The printed Annexure to Clause 17(h) is displayed as shown: Figure 1.35 Annexure for Amount Inadmissible u/s 40A (3) The Annexure to Clause 17(h) displays the details of the amounts, which are Disallowed during Audit process. 53

60 Lesson 5: Payments to Specified Persons u/s 40A(2)(b) As per Section 40A(2)(b), the expenditure for which the payments have been made to certain specified persons listed under section 40A(2)(b) may be disallowed by the Assessing Officer if he/ she feels that the listed expenditure is excessive or unreasonable having regard to: the fair market value of the goods, services or facilities for which the payment is made or for legitimate needs of business or profession of the assessee or the benefit derived by or accruing to the assessee from such expenditure.. Using Tax Audit Features in Tally.ERP 9, the Auditor can identify the Related Party and precisely extract the required information Under Section 40A(2)(b). All the transactions during the previous year involving the identified Related Parties are displayed under a separate report which can be navigated to form an opinion on which transactions needs to be reported in the relevant annexure. 5.1 Identify Related Parties (Specified Persons) To identify the Related Parties (Specified Persons) from the list of Ledgers, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Payments to Specified Persons 54

61 Payments to Specified Persons u/s 40(A)(2)(b) Press on Alt+F9 or click on F9: Master Figure 1.1 Multi Ledger Display to Identify Related Parties Press Spacebar on the Related Party to select the Ledger Press Ctrl+A to mark the selected ledger into Related Party 55

62 Payments to Specified Persons u/s 40(A)(2)(b) Once the identified Ledger is marked as Related Party, the status for Is Related Party? will be set to Yes as shown: Figure 1.2 Multi Ledger Display screen showing the marked Related Parties Similarly, the other Ledgers can also marked as Related Party based on the information provided by the Client. 56

63 Payments to Specified Persons u/s 40(A)(2)(b) 5.2 Payments to Specified Persons Once the Related Parties are identified, press Escape twice to view the Payments to Specified Persons report as shown: Figure 1.3 Payments to Specified Persons The above report displays the Related Parties, Total Amount and Unaudited Vouchers for each party. To view the Group details for the selected Parties, Press F12: Configure In the Configuration screen, Set Show Group Details to Yes Press Ctrl+A to save the details Figure 1.4 Configuration screen 57

64 Payments to Specified Persons u/s 40(A)(2)(b) Configuration screen details: Show Group Details: To view the parent groups of the Ledgers set this option to Yes Show Audit Details: To view Audit Status Report, set this option to Yes The updated report for Payments to Specified Persons screen is displayed as shown: Figure 1.5 Payments to Specified Persons report with Group details You can press Enter on the selected Related Party to view the Ledger Vouchers Report for the selected party. 5.3 Group Wise Payments to Specified Persons report Tally.ERP 9 allows you to view the Payments to Specified Persons under a particular selected group. By default, Tally.ERP 9 displays the Related Parties belonging to all Groups under Primary. To View the Related Parties belonging to a specific Group, follow the steps given below: Go to Gateway of Tally > Tax Audit > Payments to Specified Persons 58

65 Payments to Specified Persons u/s 40(A)(2)(b) Press F4: Group From the List of Groups, select the required Group Figure 1.6 Group Selection screen 59

66 Payments to Specified Persons u/s 40(A)(2)(b) Press Enter to view the Payments made to the Related Parties belonging to the selected Group Figure 1.7 Payments to Specified Persons screen for a Group The above report displays the list of Related Parties under the selected group. To drill down to Ledger Vouchers display, select the required ledger and press Enter. 5.4 Ledger Vouchers Report To view the Ledgers Vouchers belonging to the selected Related Party, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Payments to Specified Persons Select the required Party and press Enter 60

67 Payments to Specified Persons u/s 40(A)(2)(b) The Ledger Vouchers belonging to the selected party is displayed as shown: Figure 1.8 Ledger Vouchers screen Tally.ERP 9 allows you to Audit Vouchers from the above Ledger Vouchers report. The procedure to audit is explained in detailed in the Audit of Vouchers section. To view narrations for the transactions and other Audit related configurations, Press F12: Configure Figure 1.9 F12: Configuration screen In the Configuration screen, Set Payments Against Bills to Yes 61

68 Payments to Specified Persons u/s 40(A)(2)(b) Set Show Other Payments to Yes Set Show Narrations to Yes Set Show Nature of Payment to Yes The F12: Configuration screen is displayed as shown: Figure 1.10 Completed Configuration screen F12: Configuration Show Payments Against Bills: This option should be set to Yes to show the Payments made against Bills. Show Other Payments: This option should be set to Yes to show Payments without Bills. Show Narrations also: This option should be set to Yes to show the Narrations entered at the time of Voucher entry. Skip Disallowed Amount: This option should be set to Yes, to skip the cursor from the Disallowed field. Show Audit Status: This option should be set to Yes to show the Audit status selected by Auditor. Show Audit Note: This option should be set to Yes to show the Audit Note as entered by the Auditor. Show Nature of Payment: This option should be set to Yes to show the Nature of Payment entered by the Auditor during the Audit process in the Audit Details screen. Show Vouchers of Audit Status: This option provides a drop down to view the Vouchers with a particular Audit status (Any, Unknown, Allowed, Altered, Clarified, Disallowed, Need Clarification, Unaudited or Under Observation). Show Client s Clarification: This option should be set to Yes to display the Clarification Note entered by the Client for the Need Clarification Vouchers. 62

69 Payments to Specified Persons u/s 40(A)(2)(b) The updated Ledger Vouchers screen is displayed as shown: Figure 1.11 Ledger Voucher screen with Narrations 5.5 Audit of Vouchers The Auditor can commence Audit from the Ledger Vouchers report as explained in the earlier section. Follow the steps given below to Audit the Vouchers pertaining to Payments to Specified persons during a given year. Go to Gateway of Tally > Audit & Compliance > Tax Audit > Payments to Specified Persons Highlight the required Party ledger and press Enter. 63

70 Payments to Specified Persons u/s 40(A)(2)(b) The Ledger Vouchers screen is displayed as shown: Figure 1.12 Ledger Vouchers screen To commence Audit of vouchers displayed in the above screen, Press Spacebar to select a particular transaction (you can also select multiple transactions by pressing Spacebar on the required transactions one-by-one). Press F9: Audit Alternately, you can also user the Enter key to start Audit instead of F9. While using the Enter key there is NO need to exclusively select the Voucher by pressing the Spacebar. 64

71 Payments to Specified Persons u/s 40(A)(2)(b) Audit Shortcut Key Spacebar: This key is used to select a particular transaction for Audit. You can also select Multiple transactions, by pressing spacebar on the required transaction one by one. Spacebar: The Ctrl+Spacebar can be used to select all the transactions at one go and Audit. The Audit Details screen is displayed as shown: Figure 1.13 Audit Details screen In the Audit Details sub screen, Select To be Reported in the Audit Status field The Amount field is prefilled with the Voucher amount, it can be changed by the Auditor Type the required details in the Nature of Payment field which will be printed in the Annexure Type the Audit remarks (i.e., Paid as professional fees) in the Audit Note field. Audit Status: Unknown: For all other Audit status Unknown should be selected. Or change the audit status for a voucher after Audit is completed. Need Clarification: This option should be used to ask for more clarifications from the Client if the information in the Voucher or entries is not very clear. Not to be Reported: This option is when the Auditor does not want the selected transaction to be reported in the Annexure to Clause 18. To be Reported: This option is used when the Auditor wants to Report a Transaction in the Annexure to Clause 18. Under Observation: This option should be used to identify the Vouchers that needs Seniors help before the final audit decision can be taken. 65

72 Payments to Specified Persons u/s 40(A)(2)(b) The completed Audit Details screen is displayed as shown: Figure 1.14 Completed Audit Details screen Press Enter to go back to the Ledger Vouchers screen Figure 1.15 Ledger Voucher screen with Audit Details 66

73 Payments to Specified Persons u/s 40(A)(2)(b) Press Ctrl+A to save the Audit Details as shown: Figure 1.16 Ledger Vouchers screen with saved Audit Details Press Escape to go back to Payments to Specified Persons report Screen Similarly, Payments made to other parties can be scrutinised and Audited. 5.6 Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed to display the Audited Vouchers, Unaudited vouchers (also includes the Need Clarification, Under Observation, Clarified and Altered Vouchers) and Total Vouchers. To view the Audit Status, press Escape from the above screen to go back to Payments to Specified Persons report screen, 67

74 Payments to Specified Persons u/s 40(A)(2)(b) Press F7: Show All Vouchers Figure 1.17 Audit Status details To view the details of Allowed, Disallowed and the Unaudited Amount, 68

75 Payments to Specified Persons u/s 40(A)(2)(b) Press F8: Show Audit Amount Figure 1.18 Audit Status with Audit Amount details The Vouchers which are marked as Unknown, Under Observation and Need Clarification during Audit are automatically listed as Unaudited in the Audit Status. The Vouchers which are Clarified or Altered by the Client are also listed under Unaudited in the above report. In the Tax Audit Dashboard, these Vouchers are listed under separate columns based on the Audit Status. 5.7 Print Payments to Specified Persons Annexure Once the Audit is completed for vouchers falling under Clause 18, the Auditor can print Annexure for Payments to Specified Persons Under Section 40A(2)(b). Go to Gateway of Tally > Tax Audit > Payments to Specified Persons Press Alt+P to Print 69

76 Payments to Specified Persons u/s 40(A)(2)(b) The Annexure Printing screen is displayed as shown: Figure 1.19 Print Configuration for Payment to Specified Persons report Set Yes in Print Annexure field and press Enter 70

77 Payments to Specified Persons u/s 40(A)(2)(b) The printed Annexure to Clause 18 is displayed as shown: Figure 1.20 Annexure for Payments to Specified Persons u/s 40A(2)(b) The Annexure to Clasue18 displays the details of the amounts, which are marked as To Be Reported during Audit process. 71

78 Lesson 6: Loans / Deposits Accepted {Clause 24(a)} As per Section 269SS, any loan or deposit taken or accepted by any person, otherwise than by an account payee cheque or account payee bank draft, if the amount of such loan or deposit or the aggregate amount of such loan and deposit or any loan or deposit taken accepted earlier by such person from the depositor is remaining unpaid is twenty thousand rupees or more, is required to reported in Clause 24(a). Further, if the total of all loans / deposits in a year exceeds Rs. 20,000/- but each individual transaction is less than Rs. 20,000/-, for even such cases, the information is required to be given in respect of all such related entries from the beginning till the balance hits Rs. 20,000/- or more and until the balance reduces down from Rs. 20,000/-. However, any loan or deposit taken or accepted from or by Government, a banking company, any corporation etc., are not required to be reported under the said section. For the purpose of reporting under Clause 24(a), the Tax Auditor is required to verify all loans / deposits taken or accepted where the balance is Rs. 20,000/- or more during the year. Using the Tax Audit Features in Tally.ERP 9, the Auditor can precisely extract information required under Section 269SS and to be reported in Clause 24(a). All transactions related to Loans or deposits are segregated and displayed in a separate menu Loans /Deposits Accepted. 72

79 Loans / Deposits Accepted {Clause 24(a)} 6.1 Loans & Deposits Accepted Report Go to Gateway of Tally > Tax Audit > Select Loans / Deposits Accepted The Loans & Deposits Accepted report is displayed as shown: Figure 1.1 Loans and Deposits Accepted screen Tally.ERP 9 allows you to display the Group details for the ledger listed in the report, by pressing F12: Configure and setting Show Group Details to Yes. The Configuration screen for Loans & Deposits Accepted is as shown: Figure 1.2 Configuration screen In the Configuration screen, Set Yes for Show Group Details Set Yes for Show Voucher Audit Details Press Ctrl+A to accept and go back to Loans & Deposits Accepted screen 73

80 Loans / Deposits Accepted {Clause 24(a)} F12: Configuration: Show Group Details: Set this option to Yes, to view the Primary Group and immediate Group for the Ledgers. Eliminate all cross Sales transactions: Set this option to Yes, to exclude entries against sales transactions. Show Voucher Audit Details: Set this option to Yes, to view Audit Status Report 6.2 Ledger Classifications During Audit, the auditor is required to check the Ledger Classifications to ensure that the ledgers are grouped appropriately under the relevant groups. And while extracting information in respect of Clause 24(a), the following transactions need to be kept in mind. Sale proceeds collected by the selling agent will not be considered as loan or deposit. The entries that relate to transactions with a supplier and customer will not be treated as loans or deposits accepted. Any transactions in Current Account exceeding Rs. 20,000/- to be considered. In case of mixed account, the transactions relating to loans and deposits (temporary advances) should be segregated from other accounts and the transactions relating to loans / deposits only to be stated. Advance received against agreement of sale of goods is not a loan or deposit. Loans taken free of interest will have to be given. Security deposits against contracts, etc.,have to be considered. Loans and deposits taken or accepted by means of transfer entries to be considered. In order to verify, exclude or include Ledgers related to Loans / Deposits Accepted under Clause 24(a), follow the steps given below: Go to Gateway of Tally > Tax Audit > Loans / Deposits Accepted 74

81 Loans / Deposits Accepted {Clause 24(a)} Press Alt+F9 Figure 1.3 Group Selection screen Select All Items and press Enter 75

82 Loans / Deposits Accepted {Clause 24(a)} The Multi Group Display screen is displayed as shown: Figure 1.4 Multi Group Alteration screen To include or exclude a particular group from the Loans / Deposits Accepted report, 76

83 Loans / Deposits Accepted {Clause 24(a)} Select the respective Group by pressing Spacebar Figure 1.5 Selection of Groups for Loans Report 77

84 Loans / Deposits Accepted {Clause 24(a)} To Consider the Group for Loans Accepted press Ctrl+A after selecting the Group(s) Figure 1.6 Multi Group Alteration screen 78

85 Loans / Deposits Accepted {Clause 24(a)} Press Escape twice to go back to the Loans & Deposits Accepted screen Figure 1.7 Loans & Deposits Accepted screen Once the groups are configured, Tally.ERP 9 displays the relevant groups (viz., Loans (Liability), Bank O/D A/c, Secured Loans, Unsecured Loans and Deposits etc.,) to be considered for verification and Audit under Clause 24(a). 79

86 Loans / Deposits Accepted {Clause 24(a)} You can drill down to Ledger Vouchers report, by pressing Enter on the required ledger. Figure 1.8 Ledger Vouchers screen Tally.ERP 9 allows you to Audit Vouchers from the above ledger vouchers display. The procedure to audit is explained in detail in the Audit of Vouchers section. To view narrations for the transactions and other Audit related configurations, press F12: Configure Set Yes for Show Narrations also Figure 1.9 Configuration screen 80

87 Loans / Deposits Accepted {Clause 24(a)} The completed Configuration screen is displayed as shown: Figure 1.10 Completed Configuration screen Press Enter to accept and go back to view the Ledger Vouchers screen with updated information. F12: Configuration Show Receipts Against Bills: Set this option to Yes, to display receipts which are made Against Bill References. Show Other Receipts: Set this option to Yes, to display receipts which are made On Account. Show Narrations also: Set this option to Yes, to display narrations for the transactions Show Audit Status: Set this option to Yes, to display the Audit Status (viz., Unknown, Accepted by Cash, Accepted by Cheque / DD, Need Clarification or Not a Loan). Show Audit Note: Set this option to Yes, to display Audit Remarks Eliminate all cross Sales Transactions: Set this option to Yes, to exclude entries against Sales Transactions in the Report Show Vouchers of Audit Status: Set this option to Yes, to display Audited vouchers having a particular Audit Status (viz., Any, Unknown, Accepted by Cash, Accepted by Cheque / DD, Altered, Clarified, Need Clarification, Not a Loan, Unaudited and Under Observation). Show Client s Clarification: Set this option to Yes, to view the Clarification Note entered by the Client for Need Clarification Vouchers. 81

88 Loans / Deposits Accepted {Clause 24(a)} The updated Ledger Vouchers screen is displayed as shown: Figure 1.11 Ledger Vouchers screen with Narrations Ledger Balance Report for Loans/Deposits Accepted From the above report the Auditor can view the details of all the transactions for the selected Ledger and Ledger Balances for the selected period. To view the this report, 82

89 Loans / Deposits Accepted {Clause 24(a)} Click on F8: Show Ledger button from the above report Figure 1.12 Ledger Vouchers and Balance display You can use the above report to view all the transactions including the transactions pertaining to Loans / Deposits. This report also displays the Ledger Opening Balance and Closing Balance details which will be useful for to find out the details of the Loans which are squared off during the given period and the Loans which are carried forward to the next year. 6.3 Loans / Deposits Accepted Group Wise Report Tally.ERP 9 allows you to view the Loans / Deposits taken or accepted under a particular group. By default, Tally.ERP 9 displays the all ledgers under primary groups. However, you can configure to view the Ledgers of a required Group. To View the Ledgers in a Group, follow the steps given below: Go to Gateway of Tally > Tax Audit > Loans / Deposits Accepted Press F4: Group 83

90 Loans / Deposits Accepted {Clause 24(a)} From the List of Groups, select the required Group Figure 1.13 Group Selection screen Press Enter to view the Loans & Deposits Accepted for the selected Group 84

91 Loans / Deposits Accepted {Clause 24(a)} The Loans & Deposits Accepted screen showing Loans for a particular group is displayed as shown: Figure 1.14 Loans & Deposits Accepted screen for a Group The above report displays the list of ledgers under the selected groups with Loan/ Deposit amount and primary group to which the ledgers under the selected group belong and the Audit Status. To drill down to Ledger Vouchers report, you can select the required ledger and press Enter. 6.4 Audit of Vouchers To commence Audit of vouchers in respect of Loans and Deposits accepted under Clause 24(a), Go to Gateway of Tally > Tax Audit > Loans / Deposits Accepted Select the required ledger and press Enter 85

92 Loans / Deposits Accepted {Clause 24(a)} The Ledger Vouchers screen listing all the Vouchers related to the respective ledger is displayed as shown: Figure 1.15 Ledger Vouchers screen 86

93 Loans / Deposits Accepted {Clause 24(a)} Press Space to select a particular transaction (if required, you can select multiple transactions by pressing the Spacebar on the required transactions one-by-one) Figure 1.16 Ledger Vouchers screen Press F9: Audit to Audit The Audit Details screen is displayed as shown: In the Audit Details screen, Figure 1.17 Audit Details screen Select Accepted by Cash under Audit Status 87

94 Loans / Deposits Accepted {Clause 24(a)} Audit Status Details: Accepted by Cash: Select this Audit Status option, if any loan is received in Cash Accepted by Cheque/DD: Select this Audit Status option, if any loan is received by Crossed Account Payee Cheque or Crossed Account Payee Demand Draft. Need Clarification: Select this option, if any clarifications are required on the selected transaction from the Client. When this Audit Status is selected, the Voucher is sent to the Client and is displayed under Gateway of Tally > Statement of Accounts > Tax Audit Info. Not a Loan: Select this option, if the Amount received is not actually a Loan according to Sec. 269SS. Under Observation: Select this Audit Status when you want to mark a Voucher for Seniors help. Unknown: Select this Audit Status in any other case. Enter 30,000 in the Amount field Specify the Audit remarks (i.e., Loans accepted by Cash) in the Audit Note field Figure 1.18 Completed Audit Details screen 88

95 Loans / Deposits Accepted {Clause 24(a)} Press Enter to go back to Ledger Vouchers screen Figure 1.19 Ledger Voucher screen with Audit Details Press Crtl+A to save Audit Details 89

96 Loans / Deposits Accepted {Clause 24(a)} The Ledger Vouchers screen with the Audit Details is displayed as shown: Figure 1.20 Ledger Voucher screen with saved Audit Details Similarly, the remaining Vouchers can be Audited and the necessary Audit remarks can be provided. 6.5 Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed to display the Audited Vouchers, Unaudited vouchers, Vouchers that needs to be re-audited (which were marked as Need Clarification). To view the Audit Status, press Escape from the above screen to go back to Loans & Deposits Accepted screen, 90

97 Loans / Deposits Accepted {Clause 24(a)} Press F7: Show All to view the Audit Status as shown: Figure 1.21 Loans & Deposits Accepted with Audit status The Vouchers which are marked as Unknown, Need Clarification and Under Observation during Audit, are automatically listed as Unaudited in the Audit Status. The vouchers which are Clarified or Altered (modified by the user, post audit) are also listed under Unaudited column in the above report. The Vouchers with Audit Status as Under Observation, Need Clarification, Clarified and Altered will be listed under the respective column in the Tax Audit Dashboard report. 6.6 Print Annexure under Sec. 269SS Once the Audit is completed for vouchers falling under Clause 24(a), the Auditor can print Annexure for Loans & Deposits Accepted as prescribed under Section 269SS. To print the Annexure, Go to Gateway of Tally > Tax Audit > Loans / Deposits Accepted Press Alt+P to Print 91

98 Loans / Deposits Accepted {Clause 24(a)} The Annexure Printing screen is displayed as shown: Set Yes in Print Annexure field Press Enter to print the Annexure Figure 1.22 Print Configuration Screen The Vouchers which are marked as Accepted by Cash or Accepted by Cheque/DD will be reported and printed in the Annexure to Clause 24(a). 92

99 Loans / Deposits Accepted {Clause 24(a)} The printed Loans & Deposits Accepted Annexure is displayed as shown: Figure 1.23 Loans & Deposits Accepted Annexure The Annexure for Loans & Deposits Accepted under Clause 24(a) displays the details of the Loans as specified in Section 269SS. 93

100 Lesson 7: Loans / Deposits Repaid {Clause 24(b)} Under Clause 24(b), the particulars of each repayment of loan or deposit made exceeding limits specified in section 269T during the previous year have to be given. Section 269T prescribes where any repayment of deposit or loan (alongwith Interest, if any) payable to a person is Rs. 20,000/- or more are required to be reported under this clause. However, the Auditor is required to verify all such amounts of repayment, where the repayment may be less than Rs. 20,000/-. For the purpose of reporting under Clause 24(b), the Tax Auditor is required to verify repayment of any loan / deposits where the balance is Rs. 20,000/- or more during the year. Using Tally.ERP 9 s Tax Audit Features, the Auditor can precisely extract information required under Section 269T and to be reported in Clause 24(b). All the transactions related to repayment of Loans or deposits are segregated and displayed in a separate menu Loans /Deposits Repaid. 94

101 Loans / Deposits Repaid {Clause 24(b)} 7.1 Loans / Deposits Repaid Report Go to Gateway of Tally > Tax Audit > Select Loans / Deposits Repaid Figure 1.1 Loans and Deposits Repaid screen Tally.ERP 9 allows you to display the Group details for the ledger listed in the report, by pressing F12: Configure and setting Show Group Details to Yes. The Configuration screen for Loans & Deposits Repaid is displayed as shown: Figure 1.2 Configuration screen In the Configuration screen, Set Show Group Details to Yes Set Yes for Show Voucher Audit Details to Yes Press Ctrl+A to accept and go back to Loans & Deposits Repaid screen 95

102 Loans / Deposits Repaid {Clause 24(b)} F12: Configuration: Show Group Details: Set this option to Yes, to view the Primary Group and immediate Group for the Ledgers. Eliminate all cross Purchase transactions: Set this option to Yes, to exclude entries against Purchase transactions. Show Voucher Audit Details: Set this option to Yes, to view Audit Status Report. 7.2 Ledger Classifications During Audit, the auditor is required to check the Ledger Classifications to ensure whether the ledgers are grouped appropriately under the relevant groups. And while extracting information in respect of Clause 24(b), the following transactions need to be considered. The details of repayment in case of Government companies and banking companies also need to be given. Deposits discharged by means of transfer entries constitute repayment of deposits otherwise than by account payee cheques or account payee bank drafts have to be reported. The entries that relate to transactions with a supplier and customer will be excluded from loans or deposits repaid. In order to verify, exclude or include Ledgers related to Loans / Deposits Accepted under Clause 24(b), execute the following steps. Go to Gateway of Tally > Tax Audit > Loans / Deposits Repaid 96

103 Loans / Deposits Repaid {Clause 24(b)} Press Alt + F9 Figure 1.3 Group Selection screen Select All Items and press Enter 97

104 Loans / Deposits Repaid {Clause 24(b)} The Multi Group Display screen is displayed as shown: Figure 1.4 Multi Group Alteration screen 98

105 Loans / Deposits Repaid {Clause 24(b)} To include or exclude a particular group from the Loans / Deposits Repaid report, select the required Group(s) by pressing Spacebar. Figure 1.5 Multi Group Alteration screen Press Ctrl+A to consider the Group for Loans / Deposits Repaid report 99

106 Loans / Deposits Repaid {Clause 24(b)} Press Escape twice to go back to the Loans/Deposits Repaid report Figure 1.6 Loans & Deposits Repaid screen Now, once the groups are configured, Tally.ERP 9 displays the relevant groups (viz., Loans (Liability), Bank O/D A/c, Secured Loans, Unsecured Loans and Deposits etc.,) to be considered for verification and Audit under Clause 24(b). 100

107 Loans / Deposits Repaid {Clause 24(b)} You can drill down to Ledger vouchers display, by pressing Enter on the required ledger. Figure 1.7 Ledger Vouchers screen Tally.ERP 9 allows you to Audit Vouchers from the above ledger vouchers display. The procedure to audit is explained in detail in the Audit of Vouchers section. Tally.ERP 9 allows you to Audit Vouchers from the above ledger vouchers display. The procedure to audit is explained in detail in the Audit of Vouchers section. To view narrations for the transactions and other Audit related configurations, press F12: Configure. Set Yes for Show Narrations also Figure 1.8 Configuration screen 101

108 Loans / Deposits Repaid {Clause 24(b)} The completed Configuration screen appears as shown: Press Enter to accept and go back to view the Ledger Vouchers screen with the updated information. F12: Configuration Show Payments Against Bills: Set this option to Yes, to display Payments which are made Against Bill References. Show Other Payments: Set this option to Yes, to display Payments which are made On Account. Show Narrations also: Set this option to Yes, to display narrations for the transactions Show Audit Status: Set this option to Yes, to display the Audit Status Show Audit Note: Set this option to Yes, to display Audit Remarks Eliminate all cross Purchase Transactions: Set this option to Yes, to exclude entries against Purchase Transactions in the Report Show Vouchers of Audit Status: Set this option to Yes, to display Audited vouchers having a particular Audit Note (viz., Any, Unknown, Repaid by Cash, Repaid by Cheque / DD, Need Clarification or Not a Loan). Show Client s Clarification: Set this option to Yes, to display the Clarification comment entered by the Client. 102

109 Loans / Deposits Repaid {Clause 24(b)} The updated Ledger Vouchers screen is displayed as shown: Figure 1.9 Ledger Vouchers screen with Narrations 7.3 Loans / Deposits Repaid Group Wise Report Tally.ERP 9 allows you to view the Loans / Deposits taken or repaid under a particular group. By default, Tally.ERP 9 displays the all ledgers under primary groups. However, you can configure to view the Ledgers of a required Group. To View the Ledgers in a Group, follow the steps given below: Go to Gateway of Tally > Tax Audit > Loans / Deposits Repaid Press F4: Group 103

110 Loans / Deposits Repaid {Clause 24(b)} From the List of Groups, select the required Group Figure 5.10 Group Selection screen Press Enter to view the Loans & Deposits Repaid for the selected Group 104

111 Loans / Deposits Repaid {Clause 24(b)} The Loans & Deposits Repaid screen showing Loans for a particular group is displayed as shown: Figure 5.11 Loans & Deposits Repaid screen for a Group The above report displays the list of ledgers under the selected groups with Loan/ Deposit amount and primary group to which the ledgers under the selected group belong and the Audit Status. To drill down to Ledger Vouchers display, select the required ledger and press Enter. 7.4 Audit of Vouchers To commence Audit of vouchers in respect of Loans & Deposits Repaid under Clause 24(b), Go to Gateway of Tally > Tax Audit > Loans / Deposits Repaid Select the required ledger and press Enter 105

112 Loans / Deposits Repaid {Clause 24(b)} The Ledger Vouchers screen is displayed listing all the Vouchers related to the respective ledger as shown: Figure 1.12 Ledger Vouchers screen 106

113 Loans / Deposits Repaid {Clause 24(b)} Press Spacebar to select a particular transaction (you can also select multiple transactions by pressing Spacebar on the required transactions one-by-one) Figure 1.13 Ledger Vouchers screen Press F9: Audit to Audit The Audit Details screen is displayed as shown: In the Audit Details screen, Figure 1.14 Audit Details screen Select Repaid by Cash under Audit Status 107

114 Loans / Deposits Repaid {Clause 24(b)} Audit Status Details: Need Clarification: Select this option, if any clarifications are required on the selected transaction from the Client. Not a Loan: Select this option, if the Amount repaid is not actually a Loan according to Sec. 269T. Repaid by Cash: Select this Audit Status option, if any loan is repaid in Cash Repaid by Cheque/DD: Select this Audit Status option, if any loan is repaid by Crossed Account Payee Cheque or Crossed Account Payee Demand Draft. Under Observation: Select this Audit Status option, to mark the Voucher for Senior s help. Unknown: Select this Audit Status in any other scenario. Enter 30,000 in the Amount field Specify the Audit remarks (i.e., Loans Repaid by Cash) in the Audit Note field. Figure 1.15 Completed Audit Details screen Press Enter to go back to Ledger Vouchers screen 108

115 Loans / Deposits Repaid {Clause 24(b)} Figure 1.16 Ledger Voucher screen with Audit Details Press Crtl+A to save Audit Details 109

116 Loans / Deposits Repaid {Clause 24(b)} The Ledger Voucher screen with saved Audit Details is displayed as shown: Figure 1.17 Ledger Voucher screen with saved Audit Details Similarly, the remaining Vouchers can be Audited and the necessary Audit remarks can be provided. 7.5 Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed to display the Audited Vouchers, Unaudited vouchers (also includes the Under Observation, Need Clarification, Clarified and Altered Vouchers) and Total Vouchers. To view the Audit status, press Escape from the above screen to go back to Loans & Deposits Repaid screen. 110

117 Loans / Deposits Repaid {Clause 24(b)} Press F7: Show All to view the Audit Status as shown: Figure 1.18 Loans & deposits Repaid with Audit status The Vouchers which are marked as Unknown and Need Clarification during Audit, are automatically listed as Unaudited in the Audit Status. The vouchers which are altered or modified by the user, post audit are automatically listed as To be Reaudited in the Tax Audit Dashboard. 7.6 Print Annexure under Sec. 269T Once the Audit is completed for vouchers falling under Clause 24(b), the Auditor can print Annexure for Loans & Deposits Repaid as prescribed under Section 269T. Go to Gateway of Tally > Tax Audit > Loans / Deposits Repaid Press Alt+P to Print 111

118 Loans / Deposits Repaid {Clause 24(b)} The Annexure Printing screen is displayed as shown: Set Yes in Print Annexure field Press Enter to print the Annexure Figure 1.19 Print Configuration Screen The printed Annexure for Loans & Deposits Repaid is displayed as shown: Figure 1.20 Loans & Deposits Repaid Annexure The Annexure for Loans & Deposits Repaid under Clause 24(b) displays the details of the Loans as specified in Section 269T. 112

119 Lesson 8: Tax Deducted at Source (Clause 27) Under Clause 27, the details of all the transactions should be verified to find out whether the assessee has complied with the provisions of Chapter XVII-B for the Tax Deducted at Source. The Auditor has to check the transactions Deduction of Tax at Source and Payment of Tax to the Central Government. For all the transactions where the provisions of Chapter XVII-B are not complied by the assessee, the Auditor has to report the following details in the Form 3CD along with the relevant Annexures: Tax Deductible and not deducted at all Lesser Tax is deducted than required to be deducted Tax was deducted late Tax is deducted but not paid to the credit of the Central Government For the purpose of tax Audit the Auditor is required to verify all the transactions for Tax Deduction and TDS payments to the credit of Central Government. The Tax Audit feature of Tally.ERP 9 extracts the required information and presents the same to the Auditor in the required format under a separate menu Tax Deducted at Source. 113

120 Tax Deducted at Source ( Clause 27) 8.1 TDS Summary Report To view the TDS summary report, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Select Tax Deducted at Source Figure 1.1 TDS Summary screen The TDS Summary screen displays the Tax Deduction and Payment status along with the Assessable Value, Tax Amount and Audit Status. Deduction Details: This section displays the TDS Deducted, Deductible and other related statuses. Deducted on Time: This section displays the details of the TDS Bills for which the Tax is deducted on time. Deductible: This section displays the details of the TDS Bills for which the Tax is not deducted either completely or partially. The estimated value of the Tax to be deducted is also displayed. Deducted Late: This section displays the details of the TDS Bills for which the Tax is deducted late. Deducted at Zero Rate: This section displays the details of the TDS Bills for which the Tax is not deducted as the party has produced the certificate to deduct the Tax at Zero Rate for the specific Nature of Payment. 114

121 Tax Deducted at Source ( Clause 27) Deducted at Lower Rate: This section displays the details of the TDS Bills for which the Tax is deducted at Lower rate then prescribed in the Act as the Party has produced the certificate to deducted the Tax at Lower Rate for a particular Nature of Payment. Under Exemption Limit: This section displays the details of the TDS Bills for which the Tax is not deducted at the Exemption Limit to Deducted the Tax for the respective Nature of Payment is not reached. Marked as Not Applicable: This section displays the details of the TDS Bills where the TDS is not deducted (Nature of Payment is selected as Not Applicable during the Voucher entry) even though the master is enabled for TDS. This can be either for part of the expense or complete expense. Payment Details: Displays the details of the TDS Paid on time, paid late and payable along with the Assessable Value, Tax Amount and Audit Status. Paid on Time: This section displays the TDS Bills for which the TDS amount is Paid to the Government on time i.e. TDS is Paid within the 7th of the subsequent month. Paid Late: This section displays the TDS Bills for which the TDS amount is paid late to the Government after the due date i.e. after the 7th of the subsequent month. Deducted but not Paid: This section displays the TDS Bills for which the TDS amount is deducted but not paid to the credit of the Central Government at all. You can press Enter on any of the Deduction or Payment Status to view the respective report in detail. The drill reports from all the above sections in the TDS Summary report is the same and for illustration purpose the complete drill down from the Deducted on Time is considered Deducted on Time - Expenses Summary To view the Deducted on Time - Expenses Summary, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Select Tax Deducted at Source 115

122 Tax Deducted at Source ( Clause 27) Select Deducted on Time and press Enter Figure 1.2 TDS Deducted on Time Summary - Expense wise The above screen displays the list of Expense Ledgers having TDS Bills for which the TDS is deducted on Time along with the Assessable Value, Tax Amount and Audit Status. You can click on the required Expense Ledger to view the respective TDS Bills. TDS Bills To view the TDS Bills for the Expenses for which the TDS is Deducted on Time, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Select Tax Deducted at Source Select Deducted on Time and press Enter 116

123 Tax Deducted at Source ( Clause 27) Select the required Expense Ledger and press Enter Figure 1.3 TDS Bills for Deducted on Time The TDS Bills screen displays the List of TDS Bills belonging to the selected Expense along with the Nature of Payment, Assessable Value, Tax Amount, Tax Rate, Audit Status and other Audit details. Each TDS Bill also displays the Other Status which will help you to form an opinion for the respective Bills by providing the information from all perspectives. Each TDS Bill can be viewed from more than one Deduction or Payment Status sections in the TDS Summary report. e.g. TDS is deducted on time but deducted at Lower Rate then prescribed and paid Late can be viewed from Deducted on Time, Deducted at Lower Rate and Paid Late reports. While the TDS Bills is viewed from one report the respective status from the other reports is also displayed as Other Status. The exceptional status is displayed in RED colour. 117

124 Tax Deducted at Source ( Clause 27) You can view the details of the Expense Entry, deduction entry and payment entry details by pressing Alt+F1 as shown: Figure 1.4 Detailed TDS Bills To view other details you can configure the TDS Bills by pressing F12: Configure button. The Configuration screen for TDS Bills is displayed as shown: Figure 1.5 TDS Configuration screen In the Configuration screen, Set Yes for Show Tax Details Set Yes for Show Narrations 118

125 Tax Deducted at Source ( Clause 27) The updated Configuration screen is displayed as shown: Figure 1.6 Completed configuration screen Press Ctrl+A to accept and go back to screen F12: Configuration: Show Audit Status: Set this option to Yes, to view the Audit Status selected by the Auditor. Show Audit Note: Set this option to Yes, to view Audit Note entered by the Auditor. Show Deduction Details: Set this option to Yes, to view the Deduction details viz., deduction Date and Deduction Due Date. Show Payment Details: Set this option to Yes, to view the Payment details viz., Payment Date, Payment Due Date and OVerdue by days. Show Tax Break-up: Set this option to Yes, to view the details of the Tax amount viz., Income Tax, Surcharge, Education Less, Secondary Education Less. Show Narration: Set this option to Yes, to view the Narrations for each transaction. Show Vouchers of Audit Status: Set this option to Yes, to display Audited vouchers having a particular Audit Status (viz., Any, Unknown, Altered, Audited, Clarified, Need Clarification, Unaudited and Under Observation). Show Client s Clarification: Set this option to Yes, to view the Clarification Note entered by the Client for Need Clarification Vouchers. 119

126 Tax Deducted at Source ( Clause 27) TDS Bills with the above configurations is displayed as shown: Figure 1.7 TDS bills with Narrations and Tax Break-up details Tally.ERP 9 allows you to Audit the TDS Bills from the above report. The procedure to audit is explained in detail in the Audit of TDS Bills section Deducted on Time - Party Summary To view the Party wise report for the TDS entries where TDS is deducted on Time, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Select Tax Deducted at Source Select Deducted on Time and press Enter 120

127 Tax Deducted at Source ( Clause 27) Press Alt+F4 or click on F4: Party button Figure 1.8 Party wise Deducted on Time summary You can click on any of the Parties to view the respective TDS Bills. 121

128 Tax Deducted at Source ( Clause 27) The TDS Bills where the TDS is deducted on time for the selected Party will be displayed as shown: Figure 1.9 Party wise - TDS Bills for Deducted on Time The Configuration and other options are the same as Expense wise - TDS Bills for On Time deduction report. Tally.ERP 9 allows you to Audit the TDS Bills from the above report. The procedure to audit is explained in detail in the Audit of TDS Bills section Deducted on Time - Nature of Payment Summary To view the Nature of Payment wise report for the TDS related transactions where TDS is deducted on Time, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Select Tax Deducted at Source Select Deducted on Time and press Enter 122

129 Tax Deducted at Source ( Clause 27) Press Alt+F5 or click on F5: NOP button Figure 1.10 Nature of Payment wise Deducted on Time summary You can click on any of the Nature of Payments to view the respective TDS Bills. 123

130 Tax Deducted at Source ( Clause 27) The TDS Bills screen where the TDS has been deducted on time for the selected Nature of Payment will be displayed as shown: Figure 1.11 Nature of Payment wise - TDS Bills for Deducted on Time The Configuration and other options are the same as Expense wise - TDS Bills for On Time deduction report. Tally.ERP 9 allows you to Audit the TDS Bills from the above report. The procedure to audit is explained in detail in the Audit of TDS Bills section. The drill down from the other Status in the TDS Summary screen is similar to the one explained in the above sections. 124

131 Tax Deducted at Source ( Clause 27) 8.2 Audit of TDS Bills To commence Audit of TDS Bills as per Chapter XVII-B for the Tax Deducted at Source, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Tax Deducted at Source Select the required Status (e.g. Deducted on Time) and press Enter Select the required Expense and press Enter The TDS Bills screen is displayed listing the Bills for the selected Expense as shown: Figure 1.12 TDS Bills screen 125

132 Tax Deducted at Source ( Clause 27) Press Spacebar to select a particular Bill (if required you can select multiple BIlls by pressing Spacebar on the required Bills one-by-one) Figure 1.13 TDS Bills screen Press F9: Audit to Audit The Audit Details screen is displayed as shown: In the Audit Details screen, Figure 1.14 Audit Details screen Select the required Audit Status (e.g. Audited) under Audit Status 126

133 Tax Deducted at Source ( Clause 27) Audit Status Details: Audited: Select this Audit Status option, to mark a TDS Bill as Audited. Need Clarification: Select this option, if any clarifications are required on the selected TDS Bill from the Client. Under Observation: Select this option to mark the TDS Bill for seniors help. Unknown: For all other scenarios, select this Audit Status. Specify the Audit remarks (i.e., TDS Deducted at Lower rate based on the certificate) in the Audit Note field. Figure 1.15 Completed Audit Details screen 127

134 Tax Deducted at Source ( Clause 27) Press Enter to go back to the TDS Bills screen Figure 1.16 TDS Bills screen with Audit Details Press Crtl+A to save Audit Details 128

135 Tax Deducted at Source ( Clause 27) The TDS Bills screen with the saved Audit Details is displayed as shown: Figure 1.17 TDS Bills screen with saved Audit Details Similarly, the remaining TDS Bills can be Audited and the necessary Audit remarks can be provided. 8.3 Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed to display the Total Bills, Audited Bills, Unaudited Bills (this also contains the bills marked as Need Clarification, Under Observation and Unknown). 129

136 Tax Deducted at Source ( Clause 27) To view the Audit Status, press Escape from the above screen to go back to the TDS Summary screen. Figure 1.18 TDS Summary with Audit status The TDS Bills which are marked as Unknown, Need Clarification and Under Observation during Audit, are automatically listed as Unaudited in the Audit Status. The TDS Bills which are Clarified or Altered by the user, post audit are also listed under Unaudited column. In the Tax Audit Dashboard these Bills will be listed under different columns based on the Audit Status. 8.4 Print Annexure for Clause 27 Once the Audit is completed for the TDS Vouchers falling under Clause 27, the Auditor can print Annexure for Tax Deducted at Source. Go to Gateway of Tally > Audit & Compliance > Tax Audit >Tax Deducted at Source Press Alt+P to Print 130

137 Tax Deducted at Source ( Clause 27) The Annexure Printing screen is displayed as shown: Set Yes in Print Annexure field Press Enter to print the Annexure Figure 1.19 Print Configuration Screen 131

138 Tax Deducted at Source ( Clause 27) The printed Annexure for Clause 27(b) is displayed as shown: Figure 1.20 Annexure to Clause 27(b) 132

139 Tax Deducted at Source ( Clause 27) The Annexure for Clause 27(b)(i) is displayed as shown: Figure 1.21 Annexure to Clause 27(b)(i) 133

140 Tax Deducted at Source ( Clause 27) The Annexure to Clause 27(b)(ii) is displayed as shown: Figure 1.22 Annexure to Clause 27(b)(ii) 134

141 Tax Deducted at Source ( Clause 27) The Annexure to Clause 27(b)(iii) is displayed as shown: Figure 1.23 Annexure to Clause 27(b)(iii) 135

142 Tax Deducted at Source ( Clause 27) The Annexure to Clause 27(b)(iv) is displayed as shown: Figure 1.24 Annexure to Clause 27(iv) 136

143 Lesson 9: Bonus, PF, ESI Recoveries - (Clause 16) 9.1 Bonus Paid (Clause 16(a)) As per Clause 16(a), any sum paid to an employee as bonus or commission for services rendered, where such sum was otherwise payable to him as profits or dividend [Sec. 36(1) (ii)] is required to be reported in Form 3CD. In Tally.ERP 9, the auditor will be able to examine, review, analyse books of accounts and other records with a view to compile information and data required to be reported under Clause 16. Using Tally.ERP 9 s Tax Audit features, the auditor can filter the transactions related to payments made to Employees. The payments made in respect of Bonus, PF, ESI etc., are displayed separately under Bonus, PF, ESI Recoveries under Tax Audit Menu. Go to Gateway of Tally > Audit & Compliance > Tax Audit 137

144 Bonus, PF, ESI Recoveries - (Clause 16) Select Bonus, PF, ESI Recoveries and press Enter Figure 1.1 Employees Deduction Details screen Shortcut Keys in Button Bar: F5: Masters - Press this button to view the Ledger/ Pay Head classifications F6: Payment Summary - Press this button to view the Payment Summary for a given period X: Exceptions - Press this option to display only the payments, which are not paid in time, due, partially due or late paid etc., The Bonus, PF, ESI Recoveries screen displays the amount paid to Employees in respect of Bonus during the relevant previous year. The Bonus details are by default displayed. However, you can configure to view the same, if not displayed. 138

145 Bonus, PF, ESI Recoveries - (Clause 16) Press F12: Configure, and set the required option to Yes Verification of Ledger Classifications Figure 1.2 Tax Audit Configuration During Audit, the auditor is required to check the Pay Heads / Ledger Classifications to ensure whether the ledgers are grouped properly under the relevant groups. To verify the Ledger/Pay Head classifications related to payment to Employees, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries Press F5: Masters The List of Pay Heads screen is displayed as shown: Figure 1.3 List of Pay Heads screen The above report displays all the relevant Ledgers viz., Pay Heads, Loans & Advances, Expenses & Current Liability ledgers with the relevant Statutory Pay Type for verification. 139

146 Bonus, PF, ESI Recoveries - (Clause 16) The above information will be displayed, only when the Payroll Features and Payroll Statutory features are enabled (in F11: Accounting Features and F11: Statutory & Taxation Features respectively) and used for processing Payroll, Payments to Employees & payment of Statutory contributions Monthly Summary Report To further drill down to the monthly summary of Bonus payments made to Employees, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries Select Bonus from the above display and press Enter Figure 1.4 Bonus Monthly Summary The Monthly summary report displays the monthwise Bonus paid and Audit Status showing the details of Audited & Unaudited vouchers. In order to view the Bonus Payment details for a required month, 140

147 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter to display the Payroll vouchers. Figure 1.5 Bonus Payment Details The Bonus Payable details report displays information regarding the date when it was processed, Payroll Voucher number and amount of Bonus paid Payment Summary Report To display the details of payment of Bonus to Employees, execute the following steps: Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries > Bonus Press F6: Payment Summary 141

148 Bonus, PF, ESI Recoveries - (Clause 16) Select Bonus from the from the List of reports Figure 1.6 Select Report screen Press Enter to view the Details of Bonus Payments Figure 1.7 Details of Bonus Payments You can select the required month and press Enter to view the Bonus Payroll Vouchers. To view all payment vouchers related to Bonus paid to Employees for the required period, press F2:Period from the above screen and specify the required period. 142

149 Bonus, PF, ESI Recoveries - (Clause 16) Print Bonus Payment Annexure Once the Audit is completed for vouchers falling under Clause 16(a) - Bonus, the Auditor can print Details of Bonus Payment. Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries > F6: Payment Summary > Bonus Press Alt+P to print The Annexure Printing screen is displayed as shown: Figure 1.8 Annexure Printing Configuration screen Set Yes in Print Annexure field 143

150 Bonus, PF, ESI Recoveries - (Clause 16) The printed Annexure to Clause 16 for Bonus Payments is displayed as shown: Figure 1.9 Annexure B - Details of Bonus Payments If Print Annexures is set to Yes in the Print Configuration screen while printing the Annexure B for Bonus, all the Annexures for PF, ESI, PT and Bonus will be printed. 144

151 Bonus, PF, ESI Recoveries - (Clause 16) 9.2 Provident Fund Recoveries (Clause 16(b)) As per Clause 16(b), any sum received from employees towards contributions to any provident fund or superannuation fund or any other fund [mentioned in Section 2(24)(x)] and due date for payment and the actual date of payment to the concerned authorities [u/s 36(1) (va)] is required to be reported in Form 3CD. In Tally.ERP 9, the auditor will be able to examine, review, analyse books of accounts and other records with a view to compile information and data required to be reported under Clause 16(b). Using Tally.ERP 9 s Tax Audit features, the transactions can be checked by means of vouching of transactions related to payments made to Employees. The payments made in respect of Bonus, PF, ESI etc., are displayed separately under Bonus, PF, ESI Recoveries under Tax Audit Menu. Go to Gateway of Tally > Audit & Compliance > Tax Audit Select Bonus, PF, ESI Recoveries and press Enter The Employees Deduction Details screen is displayed as shown: Figure 1.10 Employees Deduction Details screen The Bonus, PF, ESI Recoveries screen displays the amount of provident fund contributed by Employee s and Employer s for the respective period. The above report also comments on the payment status and audit status whether the vouchers are audited or unaudited. The above report facilitates scrutiny of the following reports separately: Employees Statutory Deductions Employer s Statutory Contributions Employer s Other Charges 145

152 Bonus, PF, ESI Recoveries - (Clause 16) Shortcut Keys in Button Bar: F5: Masters - Press this button to view the Ledger/ Pay Head classifications. F6: Payment Summary - Press this button to view the Payment Summary for a given period. X: Exceptions - Press this Button to view the exceptional Vouchers that needs the Auditors attention. As required by the above clause, the consistency of recovery and remittance is to be verified and the date of Contribution/deduction, due date and actual date of payment of Provident Fund, Super Annuation Fund, or Welfare Fund is required to be reported, for this purpose, it is essential to configure due dates for statutory dues. Setup Go to Gateway of Tally > F11: Features > F5: Audit Features In the Tax Audit Rules screen, Tab down to Payroll section Enter No. of Days within which the payment is to be made against the Provident Fund field Figure 1.11 Tax Audit Rules screen Press Enter to accept and save 146

153 Bonus, PF, ESI Recoveries - (Clause 16) Verification of Ledger Classifications During Audit, the auditor is required to check the Pay Heads / Ledger Classifications to ensure whether the ledgers are grouped properly under the relevant groups. To verify the Ledger/Pay Head classifications related to payment to Employees, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries Press F5: Masters The Pay Heads screen is displayed as shown: Figure 1.12 List of Pay Heads The above report displays all the relevant Ledgers viz., Pay Heads, Loans & Advances & Current Liability ledgers with the relevant Statutory Pay Type for verification. The above information will be displayed, only when the Payroll Features and Payroll Statutory features are enabled (in F11: Accounting Features and F11: Statutory & Taxation Features respectively) and used for processing Payroll, Payments to Employees & payment of Statutory contributions. 147

154 Bonus, PF, ESI Recoveries - (Clause 16) Monthly Summary Report As discussed above, Tally.ERP 9 provides separate monthly summary reports for the following: Employees Statutory Deductions Employer s Statutory Contributions Employer s Other Charges Employee s Provident Fund Contribution To display monthly summary of Employee s Provident Fund Contributions, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries Select Employee s Statutory Deductions as shown in Fig Figure 1.13 Payroll Statutory Details screen Press Enter 148

155 Bonus, PF, ESI Recoveries - (Clause 16) The Monthly Summary screen is displayed as shown: Figure 1.14 Monthly Summary - Employees Statutory Deductions screen The Monthly summary report displays the monthwise Employees Provident Fund Contribution deducted, any difference amount, interest and other payments, Payment Status (whether late paid, partially paid, On Time etc.,) and the Audit Status showing the details of Audited & Unaudited vouchers. Monthly PF Contribution Summary In order to view the Contribution details for a required month, 149

156 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter on the Contribution / Deducted column Figure 1.15 Details of PF Deducted/Contributed The Monthly Contribution report displays the details of date of deduction, voucher information and and the amount of contribution deducted. Tally.ERP 9 provides an option to view the Narrations entered at the time of processing the Payroll Vouchers. To view Narrations, Press F12: Configure and set Show Narrations also to Yes Monthly PF Payment Summary In order to view the Payment details for a required month, 150

157 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter in the Paid column Figure 1.16 Provident Fund Payment Details The Monthly payment report displays the details of date of payment, Voucher & Challan Date, actual due date of payment, payment status (whether paid on time, late paid or partially paid), amount of contribution paid and Audit status with the Auditor s remarks, if any. To view the Bank & other details for the Payment Cheque, Press F12: Configure and set the option Show Bank & Other Details to Yes Figure 1.17 Configuration screen 151

158 Bonus, PF, ESI Recoveries - (Clause 16) Press Enter to view the Payment Details screen Figure 1.18 PF Payment with Bank & other Details screen Employer s Provident Fund Contribution To view the Monthly Provident Fund Contribution for Employer, follow the steps given below: Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries Select Employer s Statutory Contributions and press Enter 152

159 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter on the Paid column Figure 1.19 Employer s Provident Fund Contribution Payment screen Similarly, you can display other reports for Employer s Statutory Contributions and Employer s Other Charges. Combined Monthly Summary (Employer & Employee combined) To view the Monthly Summary comprising of both Employer s and Employee s contributions collectively, follow the steps given below: Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries > Provident Fund 153

160 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter on the Contribution / Deducted column to drill down to view the relevant Payroll vouchers for the selected month. Figure 1.20 Payroll Audit for PF Press Escape to go back to Monthly Summary screen 154

161 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter on the paid column to drill down to view the relevant Payment details of the selected month. Figure 1.21 Provident Fund Payment Details Payment Summary Report To display details of payments made in respect of Employer s & Employees PF contributions, follow the steps given below: Go to Gateway of Tally > Tax Audit > Bonus, PF, ESI Recoveries (Clause 16) > Provident Fund Press F6: Payment Summary 155

162 Bonus, PF, ESI Recoveries - (Clause 16) Select Provident Fund from the List of Reports Figure 1.22 List of Reports Press Enter The Details of Provident Fund Payments is displayed as shown: Figure 1.23 Details of Provident Fund Payments As required under Clause 16(b), the amount of contributions deducted/paid by Employees and Employer s, Admin Charges, Due date and the actual date of payment. To view the Payment details for a required month, 156

163 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter Figure 1.24 Provident Fund Details screen The Provident Fund payment details screen displays the details of date of payment, Voucher & Challan number, actual due date of payment, payment status (whether paid on time, late paid or partially paid), amount of contribution paid and Audit status with the Auditor s remarks, if any. The Payment Summary can also be viewed directly from the Bonus, PF, ESI Recoveries (Clause 16), by pressing F6: Payment Summary. The Payment Summary displayed above by pressing F6: Payment Summary is the same as displayed by drilling on Paid column in the Monthly Summary Report (as discussed in the earlier section). 157

164 Bonus, PF, ESI Recoveries - (Clause 16) Exception Report Tally.ERP 9 provides exception reports displaying details of payment which are made Late or in partial or due. To display Exception reports, follow the steps given below: Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries Figure 1.25 Payroll Statutory Details screen Press Alt+X 158

165 Bonus, PF, ESI Recoveries - (Clause 16) The Exception Report is displayed as shown: Figure 1.26 Exception Report Audit of Vouchers Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries >Provident Fund > F6: Payment Summary Select a required month and press Enter 159

166 Bonus, PF, ESI Recoveries - (Clause 16) The Provident Fund Payment Details for the selected month is displayed as shown: Figure 1.27 Provident Fund Payment Details To commence Audit of vouchers displayed in the Provident Fund Payment Details screen, Press Spacebar to select a particular transaction (you can also select multiple transactions by pressing Spacebar on the required transactions one-by-one). Press F9: Audit Audit Shortcut Key Spacebar: This key is used to select a particular transaction for Audit. You can also select Multiple transactions, by pressing spacebar on the required transaction one by one. 160

167 Bonus, PF, ESI Recoveries - (Clause 16) The Audit Details screen is displayed as shown: Figure 1.28 Audit Details screen In the Audit Details screen, Select Paid on Time in the Audit Status field Type the Audit remarks (i.e., Allowed) in the Audit Note field. Audit Status: Disallowed: This option should be selected if the Auditor wants to disallow any payment from the Annexure. Late Paid: This option should be selected if the Payment is made after the due date. Need Clarification: This option should be to ask for more clarifications from the Client if the information in the Voucher or entries is not very clear. Paid on Time: This option should be selected if the Amount is paid on Time. Under Observation: This option should be selected if the Auditor wants to mark the Voucher for seniors help. Unknown: For all other Audit status Unknown can be selected. The completed Audit Details screen is displayed as shown: Figure 1.29 Completed Audit Details screen 161

168 Bonus, PF, ESI Recoveries - (Clause 16) Press Enter to go back to Provident Fund Payment Details screen Press Crtl+A to save the Audit Details Figure 1.30 PF Payment Details screen with Audit Details Tally.ERP 9 allows you to Audit the Vouchers from either Monthly Summary report (by drilling down to the Payment Details screen from Paid Column) or from Payment Summary Report (F6) (by drilling down to Payment Details screen), by pressing F9:Audit. 162

169 Bonus, PF, ESI Recoveries - (Clause 16) The Provident Fund Payment Details screen with the updated Audit Details is displayed as shown: Figure 1.31 PF Payment Details with saved Audit Details Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed to display the Audited Vouchers, Unaudited vouchers, Vouchers that needs to be re-audited (which were marked as Need Clarification). To view Audit status details, 163

170 Bonus, PF, ESI Recoveries - (Clause 16) Press Escape twice to go back the Monthly Summary Report Figure 1.32 Provident Fund Monthly Summary with Audit Status The Monthly Summary Report, by default displays the Audit status as shown above. To view only pending Vouchers for Audit, press F7: Show Pending. During Audit, the following vouchers are listed as Unaudited in the Monthly Summary Report Vouchers marked as Unknown Vouchers marked as Need clarification Vouchers marked as Under Observation The Vouchers which are Clarified by the Client or Altered by the Client after the audit completion will also be listed under Unaudited. 164

171 Bonus, PF, ESI Recoveries - (Clause 16) To view the Audit status, press Escape from the above screen to go back to the Tax Audit dashboard. Figure 1.33 Tax Audit screen The Vouchers which are marked as Unknown, Under Observation and Need Clarification will be listed under the respective Columns in the Dashboard. These VOuchers will also be part of the Count shown under Unaudited. Unaudited column also displays the count of Vouchers listed under Clarified and Altered Columns Print Annexure for Provident Fund Payments Once the Audit is completed for vouchers falling under Clause 16(b), the Auditor can print the Annexure for Provident Fund payments Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries >F6: Payment Summary > Provident Fund Press Alt+P to Print 165

172 Bonus, PF, ESI Recoveries - (Clause 16) The Annexure Printing screen is displayed as shown: Figure 1.34 Annexure Printing Configuration screen Set Yes in Print Annexure field If Print Annexures is set to Yes in the Print Configuration screen while printing the Annexure B for Provident Fund, all the Annexures for PF, ESI, PT and Bonus will be printed. 166

173 Bonus, PF, ESI Recoveries - (Clause 16) The printed Annexure to Clause 16 for Provident Fund Payments is displayed as shown: Figure 1.35 Printed Annexure for Provident Fund 167

174 Bonus, PF, ESI Recoveries - (Clause 16) 9.3 ESI Recoveries (Clause 16(b)) As per Clause 16(b), any sum received from employees towards contributions to any provident fund or superannuation fund or any other fund [mentioned in Section 2(24)(x)] and due date for payment and the actual date of payment to the concerned authorities [u/s 36(1) (va)] is required to be reported in Form 3CD. In Tally.ERP 9, the auditor will be able to examine, review, analyse books of accounts and other records with a view to compile information and data required to be reported under Clause 16(b). Using Tally.ERP 9 s Tax Audit features, the transactions can be checked by means of vouching of transactions related to payments made to Employees. The payments made in respect of Bonus, PF, ESI etc., are displayed separately under Bonus, PF, ESI Recoveries under Tax Audit menu. Go to Gateway of Tally > Audit & Compliance > Tax Audit Select Bonus, PF, ESI Recoveries and press Enter Figure 1.36 Employees Deduction Details screen The Bonus, PF, ESI Recoveries screen displays the amount of ESI contributed by Employee s and Employer s for the respective period. The above report also comments on the payment status and audit status whether the vouchers are audited or unaudited. The above report facilitates scrutiny of the following reports separately: Employees Statutory Deductions Employer s Statutory Contributions 168

175 Bonus, PF, ESI Recoveries - (Clause 16) Shortcut Keys in Button Bar: F5: Masters - Press this button to view the Ledger/ Pay Head classifications F6: Payment Summary - Press this button to view the Payment Summary for a given period X: Exceptions - Press this Button to view the exceptional Vouchers that needs the Auditors attention As required by the above clause, the consistency of recovery and remittance is to be verified and the date of Contribution/deduction, due date and actual date of payment of ESI are required to be reported, for this purpose, it is essential to configure due dates for statutory dues. Set up Go to Gateway of Tally > F11: Features > F5: Audit Features In the Tax Audit Rules screen, Use the Tab button to scroll down to the Payroll section Enter the No. of Days within which the payment is to be made against the Employees State Insurance field Figure 1.37 Tax Audit Rules screen Press Enter to save the changes 169

176 Bonus, PF, ESI Recoveries - (Clause 16) Verification of Ledger Classifications During Audit, the auditor is required to check the Pay Heads / Ledger Classifications to ensure whether the ledgers are grouped properly under the relevant groups. To verify the Ledger/Pay Head classifications related to payment to Employees, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries (Clause 16) Press F5: Masters The List of Pay Heads screen is displayed as shown: Figure 1.38 List of Pay Heads The above report displays all the relevant Ledgers viz., Pay Heads, Loans & Advances & Current Liability ledgers with the relevant Statutory Pay Type for verification. The above information will be displayed, only when the Payroll Features and Payroll Statutory features are enabled (in F11: Accounting Features and F11: Statutory & Taxation Features respectively) and used for processing Payroll, Payments to Employees & payment of Statutory contributions. 170

177 Bonus, PF, ESI Recoveries - (Clause 16) Monthly Summary Report As discussed above, Tally.ERP 9 provides separate monthly summary reports for the following: Employees Statutory Deductions Employer s Statutory Contributions Employee s ESI Contribution To display monthly summary of Employee s ESI Contributions, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries (Clause 16) Select Employee s Statutory Deductions under Employee State Insurance as shown: Figure 1.39 Payroll Statutory Details screen 171

178 Bonus, PF, ESI Recoveries - (Clause 16) Press Enter Figure 1.40 Monthly Summary - Employees Statutory Deductions screen The Monthly summary report displays the monthwise Employees Provident Fund Contribution deducted, any difference amount, interest and other payments, Payment Status (whether late paid, partially paid, On Time etc.,) and the Audit Status showing the details of Audited & Unaudited vouchers. Monthly ESI Contribution Summary In order to view the Contribution details for a required month, 172

179 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter in the Contribution / Deducted column Figure 1.41 Details of ESI Deducted/Contributed The Monthly Contribution report displays the details of date of deduction, voucher information and and the amount contribution / deducted. Tally.ERP 9 provides an option to view the Narrations entered at the time of processing the Payroll Vouchers. To view Narrations, Press F12: Configure and set Show Narrations also to Yes Monthly ESI Payment Summary In order to view the Payment details for a required month, 173

180 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter on the Paid column Figure 1.42 ESI Payment Vouchers The Monthly payment report displays the date of payment, Voucher & Challan number, actual due date of payment, payment status (whether paid on time, late paid or partially paid), amount of contribution paid and Audit status with the Auditor s remarks, if any. To view the Bank & Other details for the Payment Cheque, Press F12: Configure and set the option Show Bank & Other Details to Yes Figure 1.43 Configuration screen 174

181 Bonus, PF, ESI Recoveries - (Clause 16) Press Enter to view the Payment Details screen Figure 1.44 ESI Payment with Bank & other Details screen Similarly, you can view the reports for the Employer s ESI Contribution and Payments also by drilling down from Employer s Statutory Contribution under Employee State Insurance. Combined Monthly Summary (Employer & Employee combined) To view the Monthly Summary comprising of both Employer s and Employee s contributions collectively, follow the steps given below: Go to Gateway of Tally > Audit & Compliance > Tax Audit >Bonus, PF, ESI Recoveries > Employee State Insurance 175

182 Bonus, PF, ESI Recoveries - (Clause 16) The Monthly Summary for ESI is displayed as shown: Figure 1.45 Monthly Summary for ESI 176

183 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter on the Contribution / Deducted column to drill down and view the relevant Payroll vouchers of the selected month. Figure 1.46 Payroll Audit for ESI Press Escape to go back to Monthly Summary screen 177

184 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter on the paid column to drill down and view the relevant Payment details of the selected month. Figure 1.47 ESI Payment Details Payment Summary Report To display details of payments made in respect of Employer s & Employees ESI contributions, follow the steps given below: Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries > Employee State Insurance Press F6: Payment Summary Select Employee State Insurance from the list of Reports Figure 1.48 List of Reports 178

185 Bonus, PF, ESI Recoveries - (Clause 16) Press Enter The Details of Employee State Insurance Payments is displayed as shown: Figure 1.49 Details of Employee State Insurance Payments As required under Clause 16(b), the amount of contributions deducted/paid by Employees and Employer s, Due date and the actual date of payment are displayed. To view the Payment details for a required month, 179

186 Bonus, PF, ESI Recoveries - (Clause 16) Highlight the required month and press Enter Figure 1.50 ESI Payment Details screen The ESI payment details screen displays the details of date of payment, Voucher & Challan number, actual due date of payment, payment status (whether paid on time, late paid or partially paid), amount of contribution paid and Audit status with the Auditor s remarks, if any Exception Report Tally.ERP 9 provides exception reports displaying details of payment which are made Late or in partial or due. To display Exception reports, follow the steps given below: 180

187 Bonus, PF, ESI Recoveries - (Clause 16) Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries Figure 1.51 Payroll Statutory Details screen Press Alt+X 181

188 Bonus, PF, ESI Recoveries - (Clause 16) The Exception Report is displayed as shown: Figure 1.52 Exception Report Audit of Vouchers Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries >Employee State Insurance > F6: Payment Summary 182

189 Bonus, PF, ESI Recoveries - (Clause 16) Select a required month and press Enter Figure 1.53 Employee State Insurance Payment Details To commence Audit of vouchers displayed in the Employee State Insurance Payment Details screen, Press Spacebar to select a particular transaction (you can also select multiple transactions by pressing Spacebar on the required transactions one-by-one). Press F9: Audit (if you are already in Payment details screen, press F9 to start the Audit) Tally.ERP 9 allows you to Audit the Vouchers from either Monthly Summary report (by drilling down to the Payment Details screen from Paid Column or from Payment Summary Report (F6), by pressing F9:Audit 183

190 Bonus, PF, ESI Recoveries - (Clause 16) The Audit Details screen is displayed as shown: In the Audit Details screen, Figure 1.54 Audit Details screen Select Need Clarification in the Audit Status field Type the Audit remarks (i.e., Send the Challan for June) in the Audit Note field. The Completed Audit Details screen is displayed as shown: Figure 1.55 Completed Audit Details screen 184

191 Bonus, PF, ESI Recoveries - (Clause 16) Press Enter to go back to the Employee State Insurance Payment Details screen Figure 1.56 ESI Payment Details screen with Audit Details Press Crtl+A to save the Audit Details 185

192 Bonus, PF, ESI Recoveries - (Clause 16) The Employee State Insurance Payment Details screen with the updated Audit Details screen is displayed as shown: Similarly, the other Vouchers can also be audited. Figure 1.57 ESI Payment Details with saved Audit Details Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed to display the Audited Vouchers, Unaudited vouchers, Vouchers that need to be re-audited (which were marked as Need Clarification). To view Audit status details, 186

193 Bonus, PF, ESI Recoveries - (Clause 16) Press Escape twice to go back the Monthly Summary Report Figure 1.58 ESI Monthly Summary with Audit Status During Audit, the following vouchers are listed as Unaudited in the Monthly Summary Report Vouchers marked as Unknown Vouchers marked as Need clarification Vouchers marked as Under Observation The Vouchers which are Clarified by the Client or Altered by the Client after the audit completion will also be listed under Unaudited. 187

194 Bonus, PF, ESI Recoveries - (Clause 16) Press Escape from the above screen to go back to the Employees Deduction Details screen: Figure 1.59 Employees Deduction Details screen The Vouchers which are marked as unknown during Audit are automatically listed as To be Re-Audited in the Tax Audit Dashboard. The Vouchers which are marked as Need clarification or any audited Voucher which is altered by the user, are automatically listed as Unaudited in the Tax Audit Dashboard Print Annexure for ESI Payments Once the Audit is completed for vouchers falling under Clause 16(b), the Auditor can print the Annexure for Employee State Insurance payments. Go to Gateway of Tally > Audit & Compliance > Tax Audit > Bonus, PF, ESI Recoveries >F6: Payment Summary > Employee State Insurance Press Alt+P to Print 188

195 Bonus, PF, ESI Recoveries - (Clause 16) The Annexure Printing screen is displayed as shown: Figure 1.60 Annexure Printing Configuration screen Set Yes in Print as Annexure field If Print Annexures is set to Yes in the Print Configuration screen while printing the Annexure B for ESI, all the Annexures for PF, ESI, PT and Bonus will be printed. 189

196 Bonus, PF, ESI Recoveries - (Clause 16) The printed Annexure for Employee State Insurance Payments is displayed as shown: Figure 1.61 Printed Annexure for ESI 9.4 Professional Tax Recoveries The extraction of data and auditing process for Professional Tax is similar to PF & ESI, as explained earlier. 190

197 Lesson 10: Payments under Section 43B - (Clause 21) As per clause 21, any sum referred to in clause (a), (b), (c), (d), (e) or (f) of section 43B,viz., Any tax, duty (sales tax, excise duty, municipal tax, etc.), cess or fee payable Employer s contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees has to be reported Any bonus or commission payable by the assessee to its employees Interest on any loan or borrowing from the any public financial institution, a state corporation, or a state industrial investment corporation payable has to be reported Interest on any term loan from a scheduled bank in accordance with the terms and conditions of the agreement governing such loan has to be reported. and the liability for which pre-existed on the first day of the previous year but was not allowed in the assessment of any preceding previous year and to the extent was paid / not paid during the previous year or was incurred in the previous year and was paid on / not paid on or before the due date for furnishing the return of income of the previous year under section 139(1), is required to be reported in Form 3CD. In Tally.ERP 9, the auditor will be able to examine, review, analyse books of accounts and other records with a view to compile information and data required to be reported under Clause 21. Using Tally.ERP 9 s Tax Audit features, the transactions can be checked by means of vouching of transactions related to payments related to Section 43B. The payments made in respect of Sales Tax, Service Tax or any duty and Employer Contribution are displayed separately under Payments under Section 43B (Clause 21) under Tax Audit Menu. To extract the above information in Tally.ERP 9, the Auditor can scrutinize the following reports under selected menu: Employer s Contribution Tax Collected at Source Service Tax Value Added Tax 191

198 Payments Under Section 43B - (Clause 21) 10.1 Employer s Contribution (Clause 21) To view the Employer s Contribution, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Employer s Contribution Figure 1.1 Employer s Contribution Details. Shortcut Keys in Button Bar: F5: Masters - Press this option to display the classification of ledgers F6: Payment Summary - Press this option to view Payment Summary X: Exceptions - Press this option to display only those transactions where the payment is made beyond the due date. To display Bonus and Professional Tax details, execute the following steps. Press F12: Configure and set the following options to Yes Set Show PT Details to Yes 192

199 Payments Under Section 43B - (Clause 21) Set Show Bonus Details to Yes Figure 1.2 Configuration screen Press Enter to go back to Employer s Contribution screen The Employer s Contribution screen with other details is displayed as shown: Figure 1.3 Employer s Contribution Details To scrutinise and extract information in respect of Employer s Contribution for any sum paid in respect of Section 43B, refer to the detailed explanation in Bonus, PF, ESI Recoveries (Clause 16) Chapter. 193

200 Payments Under Section 43B - (Clause 21) 10.2 Tax Collected at Source (Clause 21) The TCS Report is divided into two sections (i.e., Output Tax and Tax paid) and displays TCS collected on sales and the actual tax paid precisely against the respective sections. To drill down further, press Enter on the required section. To view the TCS Payables, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Tax Collected at Source Figure 1.4 TCS Payables Screen As discussed, the TCS Payables screen displays Output Tax payable, Tax Paid and the Tax Amount and Audit Status respectively, the Balance Tax Payable is also shown. As required by the above clause, the consistency of recovery and remittance is to be verified and due date and actual date of payment of any sum referred under Section 43B needs to be reported, for this purpose, it is essential to configure due dates for statutory dues. Tally.ERP 9 allows you to specify the due dates for Statutory dues. Follow the steps given below to configure the same. Set up Go to Gateway of Tally > F11: Features > F5: Audit Features In the Tax Audit Rules screen, Tab down to Tax Deducted at Source & Tax Collected at Source section 194

201 Payments Under Section 43B - (Clause 21) Enter No. of Days within which the payment is to be made against the Tax Collected at Source field Figure 1.5 Tax Audit Rules setup Press Enter to accept the screen and go back to Tax Audit Dashboard. The payments in respect of Tax Collected at Source have to be remitted in the designated banks on or before 7th of the succeeding month Verification of Ledger Classifications During Audit, the auditor is required to check the Ledger Classifications to ensure whether the ledgers are grouped properly under the relevant groups. To verify the Ledger classifications related to payments under Section 43B. Go to Gateway of Tally > Audit & Compliance > Tax Audit > Tax collected at Source 195

202 Payments Under Section 43B - (Clause 21) Select Tax Paid in the TCS Payables screen Press Alt + F8: Masters Figure 1.6 Multi Ledger Display screen The above report displays all the relevant Ledgers viz., ledgers grouped under Duties & Taxes group with the respective TCS Category for verification. The above information will be displayed, only when the Tax Collected at Source Features are enabled in F11: Statutory & Taxation Features screen and the relevant Duties & Taxes ledgers are classified under the respective TCS Categories TCS Category Summary The TCS Category Summary displays the TCS categorywise Sales of goods subject to TCS, Assessable Value on which Tax was collected, TCS Payable and the TCS paid amount. Go to Gateway of Tally > Audit & Compliance > Tax Audit > Tax collected at Source 196

203 Payments Under Section 43B - (Clause 21) Select Output Tax and press Enter Figure 1.7 TCS Categories The RED colour indicates that the Assessable value and the sales value are not the same. This needs to be investigated further by the Auditor. The report by default displays the TCS Categorywise summary of TCS details. If you are in any other report under TCS, toggle to Category wise summary, by pressing Alt+F4. 197

204 Payments Under Section 43B - (Clause 21) To view TCS ledger details from the above screen, press Alt+F1. Figure 1.8 TCS Categories Detailed You can further drill down to TCS Billwise details screen, by pressing Enter on the Amount field under any Column. 198

205 Payments Under Section 43B - (Clause 21) Select Timber Obtained Under Forest Lease and press Enter Figure 1.9 TCS Bills Categorywise The above report displays the billwise details of TCS transactions with the Sales Value, Assessable Value, TCS Payable, TCS paid against each transaction and the Audit Status with the Audit Remarks, if any. In order to view any amount due or balance to be paid and narration, Press F12: Configure, and set the following option to Yes Figure 1.10 Configuration screen 199

206 Payments Under Section 43B - (Clause 21) Once the above configurations are activated, the TCS Billwise details screen displays the Balance tax amount and the Narration details. Figure 1.11 TCS Bills with Tax Balance and Narration You can commence the Audit from the above TCS Bills screen, by pressing F9: Audit. The Audit walk through is illustrated in the next section. Shortcut Keys in Button Bar: F1: Detailed - Press this option, to display party and tax ledger details for the listed transactions F4: Category - Press this option, to display TCS Categorywise summary of Sales Value, TCS Amount etc., F9: Audit - Press this option, to commence Audit X: Exceptions - Press this option, to display only those transactions for which the Assessable values are different from the Sales Value. 200

207 Payments Under Section 43B - (Clause 21) TCS Exception Report In Certain cases, if the Assessable Value of sales transactions are altered or different from the Sale Value (i.e., Qty x Rate) and results in short / excess computation of TCS on sales, then this needs to be filtered out from the report for verification by the Auditor. In Tally.ERP 9, such transactions are displayed in Red Colour for easy identification and verification. However, to view only the exception reports, In the TCS Categories screen Press Alt+X (X: Exceptions) Figure 1.12 TCS Exception Reports To revert back to regular screen, press Alt + X (X: Show All) again TCS Sales Summary The TCS Sales Summary report displays TCS ledgerwise sales of goods subject to TCS, Assessable Value on which Tax was collected, TCS Payable and the TCS paid amount. Go to Gateway of Tally > Audit & Compliance > Tax Audit > Tax collected at Source > Output Tax 201

208 Payments Under Section 43B - (Clause 21) Press Alt + F5 (F5: Sales Wise) Figure 1.13 TCS Sales Summary The above report displays the TCS Sales wise summary of TCS details alongwith the Audit status of such vouchers. If you are in any other report under TCS, toggle to Sales wise summary by pressing Alt+F5. You can further drill down to TCS Billwise details screen, by pressing Enter on the Amount field under any Column. Tally.ERP 9 allows you to Audit from the TCS Bills screen (drilled down from TCS Sales Summary report), by pressing F9: Audit. The Audit walkthrough is illustrated in the next section TCS Party Summary The TCS Partywise report displays customerwise sale of goods subject to TCS, Assessable Value on which Tax was collected, TCS Payable and the TCS paid amount. Go to Gateway of Tally > Audit & Compliance > Tax Audit > Tax collected at Source > Output Tax 202

209 Payments Under Section 43B - (Clause 21) Press Alt + F6 (F6: Party Wise) Figure 1.14 TCS Party Summary The above report displays the TCS partywise summary of TCS details alongwith the Audit status of such vouchers. If you are in any other report under TCS, toggle to Partywise summary by pressing Alt+F6. You can further drill down to TCS Billwise details screen by pressing Enter on the Amount field under any Column. Tally.ERP 9 allows you to Audit from the TCS Bills screen (drilled down from TCS Party Summary report), by pressing F9: Audit. The Audit walkthrough is illustrated in the next section TCS Payment Summary The TCS Payment summary displays the monthwise details of TCS collected, paid, Interest & Other Payments and difference amount payable, if any. To display the TCS Payment details: Go to Gateway of Tally > Audit & Compliance > Tax Audit > Tax Collected at Source > Output Tax > 203

210 Payments Under Section 43B - (Clause 21) Press Alt + F7 (F7: Payment Summary) Figure 1.15 TCS Payment Summary Payment Status: Due: appears when the payment is not made even after the due date Due (Partially): appears when atleast one payment is not made. Due / Late (Partially): appears when one payment is made after the due date and another payment is due. Late: is displayed when the payment is made past the due date. Late (Partially): appears when atleast one payment is made past the due date. On Time: appears when payment is made on or before the due date. As discussed, the above report displays the monthly summary of TCS collected on sales and paid alongwith the Audit status details. Tally.ERP 9 allows you to drill down to TCS Payments vouchers to facilitate Audit of Vouchers. To drill down, select the required month and press Enter 204

211 Payments Under Section 43B - (Clause 21) The TCS Payment Details screen is displayed as shown: Figure 1.16 TCS Payment Vouchers Tally.ERP 9 allows you to Audit from the TCS Payment Vouchers screen (drilled down from TCS Monthly Summary report), by pressing F9: Audit. The Audit walk-through is illustrated in the next section. Shortcut Keys in Button Bar: F9: Audit - Press this option to Audit the selected Vouchers X: Exceptions - Press this option to display only those transactions for which the Assessable values are different from the Sales Value. 205

212 Payments Under Section 43B - (Clause 21) TCS Monthly Summary The TCS Summary Report displays the monthwise details of TCS collected, paid, Interest & Other Payments and difference amount payable, if any alongwith the Audit Status details (viz., Due, late paid, partially due, paid on time etc.,). To display TCS monthly Summary report, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Tax Collected at Source > Tax Paid Figure 1.17 Monthly Summary The navigation steps and reports are similar to Alt + F7: Payment Summary, as discussed earlier. Tally.ERP 9 allows you to Audit from the TCS Payment Vouchers screen (drilled down from TCS Monthly Summary report), by pressing F9: Audit. The Audit walk-through is illustrated in the next section. 206

213 Payments Under Section 43B - (Clause 21) Shortcut Keys in Button Bar: F8: Masters-Press this option to display the classification of ledgers Audit of Vouchers To commence Audit of vouchers in respect of payments related to Tax Collected at Source; Go to Gateway of Tally > Tax Audit > Tax Collected at Source > Tax Paid Select the required month and press Enter Press Space to select a particular transaction (you can also select multiple transactions by pressing the spacebar on the required transactions one-by-one) Figure 1.18 TCS Payment Vouchers 207

214 Payments Under Section 43B - (Clause 21) Audit Shortcut Key Spacebar: This key is used to select a particular transaction for Audit. You can also select Multiple transactions, by pressing the spacebar on the required transaction one by one. Press F9: Audit Figure 1.19 Audit Details Select Late Paid in the Audit Status column and press Enter Audit Status: Disallowed: This option is used to Disallow the selected transactions completely or partially. Late Paid: This option should be selected if the Payment is made after the due date. Need Clarification: This option is to ask for more clarifications from the Client if the information in the Voucher or entries is not very clear. Paid on Time: This option should be selected if the Amount is paid on Time. Under Observation: This option should be selected if you want to mark the Voucher for seniors help. Unknown: For all other Audit status Unknown should be selected. Or re make a Voucher Unaudited after Audit is completed. 208

215 Payments Under Section 43B - (Clause 21) Specify Audit Remarks, if any (i.e., TCS Amount Partially Paid) in the Audit Note field Figure 1.20 Completed Audit Details Press Enter to go back to TCS Payment Voucher screen Figure 1.21 TCS Payments Voucher with Audit Note Press Crtl+A to save the Audit Details 209

216 Payments Under Section 43B - (Clause 21) Tally.ERP 9 allows you to Audit the Vouchers from the following report, by pressing F9:Audit F4: Categorywise Summary F5: Sales Wise Summary F6: Party Wise Summary F7: Payment Summary Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed to display the Audited Vouchers, Unaudited vouchers, Vouchers that needs to be re-audited (which were marked as Need Clarification). To view the Audit status, Press Escape to go back to TCS Monthly Payment Summary Report Figure 1.22 TCS - Audit Status Display Press Escape twice from the above screen to go back to Tax Audit dashboard. 210

217 Payments Under Section 43B - (Clause 21) During Audit, the following vouchers are listed as Unaudited in the Monthly Summary Report i. Vouchers marked as Unknown ii. Vouchers marked as Need clarification iii. Vouchers marked as Under Observation iv. Vouchers which are Clarified by the Client (which were marked as Need Clarification by the Auditor) v. Any audited Voucher which is Altered by the user Print TCS Payments Annexure Once the Audit is completed for vouchers falling under Tax Collected at Source, the Auditor can print Annexure to TCS Payments Go to Gateway of Tally > Tax Audit > Tax Collected at Source > Tax Paid Press Alt+P to Print The TCS Annexure Printing screen is displayed as shown: Set Yes in Print as Annexure field and press Enter Figure 1.23 TCS - Annexure printing screen 211

218 Payments Under Section 43B - (Clause 21) The printed Annexure to TCS Payments is displayed as shown: Figure 1.24 Annexures to TCS Payments 212

219 Payments Under Section 43B - (Clause 21) 10.3 Service Tax (Clause 21) Using Tally.ERP 9 s Tax Audit Features, the Auditor can precisely extract information required under Clause 21, in respect of payments made under Section 43B. All the transactions related to Service Tax made during the previous year are segregated and displayed in a separate menu Service Tax under Payments under Section 43B (Clause 21). To view the Service Tax Payables, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Service Tax Figure 1.25 Service Tax Payables Screen As discussed, the Service Tax Payables screen displays Output Tax payable, Available Input Tax Credit, Tax Payable after adjusting the available credit, Tax Paid and the Tax Amount and Audit Status respectively. As required by the above clause, the consistency of recovery and remittance is to be verified and the due date and actual date of payment of any sum referred under Section 43B need to be reported. For this purpose, it is essential to configure due dates for statutory dues. Tally.ERP 9 allows you to specify the due dates for Statutory dues. Follow the steps given below to configure the same. Setup Go to Gateway of Tally > F11: Features > F5: Audit Features In the Tax Audit Rules screen, 213

220 Payments Under Section 43B - (Clause 21) Tab down to Service Tax section Enter No. of Days within which the payment is to be made against the Payment Period field. Figure 1.26 Service Tax Rules setup Press Enter to accept the screen and go back to Tax Audit Dashboard. The payments in respect of Service Tax have to be remitted to the designated banks on or before 5th of the succeeding month Service Tax Ledger Summary The Service Tax ledger summary displays the Output Service Tax based on the service tax category and sale of service subject to Service Tax. The report broadly contains two sections namely the Billed Value and Realised Value for each service tax ledger. The Billed Value column displays the sale value of a service, Assessable value and the Service Tax that should be collected whereas the Realised Value column displays the Assessable Value on which Tax was collected and the Service Tax Payable. 214

221 Payments Under Section 43B - (Clause 21) Go to Gateway of Tally > Tax Audit > Service Tax Select Output Tax and press Enter Figure 1.27 Service Tax Ledger Summary The report by default displays the Service Tax Ledgerwise summary of Service Tax details. If you are in any other report under Service Tax, toggle to ledgerwise summary, by pressing F5. You can further drill down to Service Tax Billwise details screen, by pressing Enter on the Amount field under any Column. 215

222 Payments Under Section 43B - (Clause 21) Select Output ST - AMC Computers and press Enter Figure 1.28 Service Tax Billwise The above report displays billwise details of Service Tax transactions with the Sales Value, Assessable Value, Service Tax Payable against each transaction with the Audit Status and the Audit Remarks, if any. In order to view the audit status, audit note and narration, Press F12: Configure, set the following options to Yes Figure 1.29 Configuration screen 216

223 Payments Under Section 43B - (Clause 21) Once the above configurations are activated, the Service Tax Billwise details screen displays the Audit Status, Audit Note and the Narration details. Figure 1.30 Service Tax Billwise You can commence the Audit from the above Service Tax Bills screen, by pressing F9: Audit. The Audit walk-through is illustrated in the next section. Shortcut Keys in Button Bar: F1: Condensed - Press this option to change the period as required. F5: Input Credit - Press this option, to view the Input Credit Ledgers F6: Payment - Press this option to view the Payment Summary F9: Audit - Press this button to Audit the selected Vouchers. 217

224 Payments Under Section 43B - (Clause 21) Service Tax Payment Summary The Service Tax Payment summary displays the monthwise details of Service Tax collected, paid, Interest & Other Payments and difference amount payable, if any. To display the Service Tax Payment details, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Service Tax > Output Tax Press F6 (F6: Payment) Figure 1.31 Service Tax Payment Summary As discussed, the above report displays the monthly summary of Service Tax payable and Service Tax paid alongwith the payment status. Tally.ERP 9 allows you to drill down to Service Tax Payments vouchers to facilitate Audit of Vouchers. 218

225 Payments Under Section 43B - (Clause 21) Payment Status: Due: This Payment Status appears, when the payment is not made. Due (Partially): This Payment Status appears when the Payment is made partially and the balance is due. Due / Late (Partially): This Payment Status appears when a part payment is made past the due date and another payment is due. Late: This Payment Status appears, when the payment is made past the due date. Late (Partially): appears when atleast one payment is made past the due date. On Time: appears when payment is made on or before the due date. To drill down, select the required month and press Enter The Service Tax Payment Details screen is displayed as shown: Figure 1.32 Service Tax Payment Vouchers The above report displays the details of Service Tax payments alongwith the Challan Date, Due Date, Payment Status and the Total Tax Paid. 219

226 Payments Under Section 43B - (Clause 21) In order to view the Challan Details, Tax Details, Audit Status, Audit Note and Voucher with a particular Audit Status, Press F12: Configure, set the following option to Yes and select the required Audit Status. Figure 1.33 Configuring Payment Details. Press Enter to accept. The Monthly Summary screen with the Challan details is displayed as shown: Figure 1.34 Payment Details

227 Payments Under Section 43B - (Clause 21) Figure 1.35 Payment Details - 2 Tally.ERP 9 allows you to Audit from the Service Tax Payment Details screen (drilled down from Service Tax Payment Summary report), by pressing F9: Audit. The Audit walk-through is illustrated in the next section. Shortcut Keys in Button Bar: F9: Audit - Press this option to Audit the selected Vouchers X: Exceptions - Press this option to display only those transactions for which the Assessable values are different from the Sales Value. 221

228 Payments Under Section 43B - (Clause 21) Service Tax Monthly Summary The Service Tax Summary Report displays the monthwise details of Service tax collected, paid, Interest & Other Payments and difference amount payable, if any alongwith the Audit Status details (viz., Due, late paid, partially due, paid on time etc.). To display the Service Tax Monthly Summary report, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Service Tax > Tax Paid Figure 1.36 Service Tax Monthly Summary The navigation steps and reports are similar to F6: Payment, as discussed earlier. Tally.ERP 9 allows you to Audit from the Service Tax Payment Details screen (drilled down from Service Tax Monthly Summary report), by pressing F9: Audit. The Audit walk-through is illustrated in the next section. 222

229 Payments Under Section 43B - (Clause 21) Audit of Vouchers To commence Audit of vouchers in respect of payments related to Service Tax Go to Gateway of Tally > Audit & Compliance > Tax Audit > Service Tax > Tax Paid Select the required month and press Enter Press Spacebar to select a particular transaction (you can also select multiple transactions by pressing Spacebar on the required transactions one-by-one) Figure 1.37 Service Tax Payments Audit Shortcut Key Spacebar: This key is used to select a particular transaction for Audit. You can also select Multiple transactions, by pressing spacebar in the required transaction one by one. 223

230 Payments Under Section 43B - (Clause 21) Press F9: Audit Figure 1.38 Audit Status Select Need Clarification and press Enter Audit Status: Disallowed: This option is used to Disallow the selected transactions completely or partially Late Paid: This option should be selected if the Payment is made after the due date. Need Clarification: This option should be to ask for more clarifications from the Client if the information in the Voucher or entries is not very clear. Paid on Time: This options should be selected if the Amount is paid on Time. Unknown: For all other Audit status Unknown should be selected. Or re make a Voucher Unaudited after Audit is completed Specify Audit Remarks, if any (i.e., Provide Supporting Documents) in the Audit Note field Figure 1.39 Audit Details 224

231 Payments Under Section 43B - (Clause 21) Press Enter and return to Service Tax Payments voucher screen Figure 1.40 Service Tax Payments Voucher with Audit Note Press Crtl+A to save the Audit Details Similarly, the Audit details for Late Paid will be as shown: Figure 1.41 Audit Details for Late Paid Press Enter to return to the Service Tax Payments voucher screen Press Crtl+A to save the Audit Details Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed which will display the Audited Vouchers, Unaudited vouchers, and Total Vouchers. To view the Audit status, 225

232 Payments Under Section 43B - (Clause 21) Press Escape to go back to the Service Tax Payables Report Figure 1.42 Monthly Summary Audit Status. Press Escape twice in the above screen to go back to Tax Audit dashboard. During Audit, the following vouchers are listed as Unaudited in the Monthly Summary Report i. Vouchers marked as Unknown ii. Vouchers marked as Need clarification iii. Vouchers marked as Under Observation iv. Vouchers which are Clarified by the Client (which were marked as Need Clarification by the Auditor) v. Any audited Voucher which is Altered by the user Print Service Tax Payments Annexure Once the Audit is completed for vouchers falling under Service Tax, the Auditor can print Annexure to Service Tax Payments Go to Gateway of Tally > Audit & Compliance > Tax Audit > Service Tax > Tax Paid 226

233 Payments Under Section 43B - (Clause 21) Press Alt+P to Print The Service Tax Annexure printing screen is displayed as shown: Set Yes in the Print as Annexure field and press Enter Figure 1.43 Service Tax Annexures Set Yes in the Print as Annexure field and press Enter The printed Annexure to Service Tax Payments is displayed as shown: Figure 1.44 Annexures to Service Tax Payments 227

234 Payments Under Section 43B - (Clause 21) 10.4 Value Added Tax (Clause 21) Using Tally.ERP 9 s Tax Audit Features, the Auditor can precisely extract information required under Clause 21, in respect of payments made under Section 43B. All the transactions related to Value Added Tax made during the previous year are segregated and displayed under a separate menu Value Added Tax under Payments under Section 43B (Clause 21). The Value Added Tax Report is divided into three sections (i.e., Output Tax, Available Input Tax Credit and Tax paid. The VAT charged on the Sales, available Input Tax Credit and the Tax paid values are precisely shown against the respective sections. To drill down further, press Enter on the required section. Go to Gateway of Tally > Audit & Compliance > Tax Audit > Value Added Tax Figure 1.45 VAT Payments Screen As discussed, the VAT Payments screen displays Output Tax payable, Tax Paid, Input Tax Credit Available, Tax Payable after adjusting the available credit, the Tax Amount and Audit Status respectively and Balance Tax Payable is also shown. As required by the above clause, the consistency of recovery and remittance is to be verified and the due date and actual date of payment of any sum referred under Section 43B need to be reported. For this purpose, it is essential to configure due dates for statutory dues. Tally.ERP 9 allows you to specify the due dates for Statutory dues. Follow the steps given below to configure the same. 228

235 Payments Under Section 43B - (Clause 21) Set up Go to Gateway of Tally > F11: Features > F5: Audit Features In the Tax Audit Rules screen, Tabdown to Value Added Tax and Central Sales Tax section Enter No. of Days within which the payment is to be made against the Value Added Tax and select the required Periodicity from the list of Periods. Figure 1.46 Tax Audit Rules setup Press Enter to accept the screen and go back to Tax Audit Dashboard. The payments in respect of Values Added Tax are required to be to be remitted in the designated banks on or before 20th of the succeeding month in Karnataka State. For other state, configure the due date accordingly Output VAT Summary The Output VAT Summary displays the various rates of Output VAT available on the sale of goods and the Assessable Value on which Tax was collected. 229

236 Payments Under Section 43B - (Clause 21) Go to Gateway of Tally > Tax Audit > Value Added Tax Select Output Tax and press Enter Figure 1.47 Output Tax at different rates The above report by default displays Value Added Tax collected at various rates on sales made. To view the Output VAT ledgers for a specified period, press F2 and change the period. 230

237 Payments Under Section 43B - (Clause 21) You can further drill down to Output 12.5% ledger by pressing Enter on the Amount field under any Column. Figure 1.48 Output 12.5% Ledger The above report displays the billwise details of Sales transactions with the Assessable Value, Tax Amount, against each transaction and the Audit Status with the Audit Remarks, if any. In order to view transactions with narration. Press F12: Configure, set the following option to Yes Figure 1.49 F12 Configure 231

238 Payments Under Section 43B - (Clause 21) Once the above configurations are activated, the Sales Billwise details screen will display the transaction and the Narration details. Figure 1.50 Sales Bills with Narration You can commence the Audit from the above Sales Bills screen, by pressing F9: Audit. The Audit walk-through is illustrated in the next section. Shortcut Keys in Button Bar: F1: Detailed - Press this option, to view with party and tax ledgers for each transaction. F9: Audit - Press this option, to commence Audit. 232

239 Payments Under Section 43B - (Clause 21) Available Input Tax Credit Summary The VAT Input Summary displays the Input Tax Credit available and the Assessable Value on which Tax was paid for purchase of goods at different tax rates. Go to Gateway of Tally > Tax Audit > Value Added Tax Select Available Input Tax Credit and press Enter Figure 1.51 VAT / CST Payments Input Summary 233

240 Payments Under Section 43B - (Clause 21) The report by default displays the Input VAT paid at different rates. To view the Input VAT ledgers for a specific period, press F2 and change the period. You can further drill down to the Input 12.5% ledger by pressing Enter on the Amount field under any Column. Figure 1.52 Ledger Voucher Display The above report displays the billwise details of purchase transactions with the Assessable Value, Tax Amount, against each transaction and the Audit Status with the Audit Remarks, if any. In order to view any transaction with the narration., Press F12: Configure, set the following option to Yes Figure 1.53 F12:Configure 234

241 Payments Under Section 43B - (Clause 21) Once the above configurations are activated, the Purchase Billwise details screen displays the transaction and the Narration details Figure 1.54 Ledger Viceroys with Narrations You can commence the Audit from the above Purchase Bills screen, by pressing F9: Audit. The Audit walk-through is illustrated in the next section VAT Payment Summary The VAT Payment Summary displays the monthwise details of VAT collected, paid, Interest & Other Payments and difference amount payable, if any alongwith the Audit Status details (viz., Due, late paid, partially due, paid on time etc.,). To display VAT Payment Summary report, Go to Gateway of Tally > Tax Audit > Value Added Tax 235

242 Payments Under Section 43B - (Clause 21) Select Tax Paid and press Enter Figure 1.55 VAT Payment Summary 236

243 Payments Under Section 43B - (Clause 21) Select the required month and press Enter Figure 1.56 VAT Payment Details The VAT Payment details screen displays the details of Voucher Date, Challan Date, Due Date of payment, Payment Status and Total Tax Paid during the month alongwith the Audit Status & Audit Note. Tally.ERP 9 allows you to Audit from the VAT Payment Details screen (drilled down from VAT Payment Summary report), by pressing F9: Audit. The Audit walk-through is illustrated in the next section. Shortcut Keys in Button Bar: X: Exceptions: Press this option, to display only those transactions for which the Assessable values are different from the Sales Value. F9: Audit: Press this option, to commence Audit 237

244 Payments Under Section 43B - (Clause 21) Audit of Vouchers To commence Audit of vouchers in respect of payments related to Value Added Tax, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Value Added Tax > Tax Paid Select the required month and press Enter. Press Spacebar to select a particular transaction (you can also select multiple transactions by pressing the spacebar on the required transactions one-by-one) Figure 1.57 VAT Payment Summary Audit Shortcut Key Spacebar: This key is used to select a particular transaction for Audit. You can also select Multiple transactions, by pressing spacebar in the required transaction one by one. 238

245 Payments Under Section 43B - (Clause 21) Press F9: Audit Figure 1.58 Audit Status Select required Audit Status (e.g. Paid on Time) and press Enter Audit Status: Disallowed: This option is used to Disallow the selected transactions completely or partially Late Paid: This option should be selected if the Payment is made after the due date. Need Clarification: This option should be to ask for more clarifications from the Client if the information in the Voucher or entries is not very clear. Paid on Time: This options should be selected if the Amount is paid on Time. Under Observation: This option should be selected if you mark a Voucher for seniors help. Unknown: For all other Audit status Unknown should be selected. Or re make a Voucher Unaudited after Audit is completed Specify Audit Remarks, if any (i.e., VAT Paid on Time) in the Audit Note field Figure 1.59 Audit Details screen 239

246 Payments Under Section 43B - (Clause 21) Press Enter and return to the VAT Payment Vouchers screen Figure 1.60 VAT Payments Voucher with Audit Note Press Crtl+A to save the Audit Details Similarly, you can audit other transactions under the above clause Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed to display the Audited Vouchers, Unaudited vouchers, Vouchers that need to be re-audited (which were marked as Need Clarification). To view the Audit status, 240

247 Payments Under Section 43B - (Clause 21) Press Escape to go back to the VAT Payment Summary Report Figure 1.61 VAT Payment Summary Report Scroll using the Right Arrow to view the Audit Status Details 241

248 Payments Under Section 43B - (Clause 21) Figure 1.62 VAT Payment Summary with Audit Status Press Escape twice in the above screen to go back to the Tax Audit dashboard. During Audit, the following vouchers are listed as Unaudited in the Monthly Summary Report i. Vouchers marked as Unknown ii. Vouchers marked as Need clarification iii. Vouchers marked as Under Observation iv. Vouchers which are Clarified by the Client (which were marked as Need Clarification by the Auditor) v. Any audited Voucher which is Altered by the user Print VAT Payments Annexure Once the Audit is completed for vouchers pertaining to Value Added Tax, the Auditor can print the Annexure to VAT Payments Go to Gateway of Tally > Audit & Compliance > Tax Audit > Value Added Tax Press Alt+P to Print 242

249 Payments Under Section 43B - (Clause 21) The Printing VAT / CST Payments screen is displayed as shown: Set Yes in the Print as Annexure field and press Enter Figure 1.63 VAT - Payment Annexures The printed Annexure to Value Added Tax Payments is displayed as shown: Figure 1.64 Annexures to VAT Payments 243

250 Lesson 11: Audit of Fringe Benefit Tax As required in Annexure II, the particulars provided with respect to Fringe Benefits in terms of Section 115WC i.e., Amount of expenditure incurred or payment made, Debited to Profit & Loss Account, Accounted for in the balance sheet, Reimbursements, Any other head, deductions, if any, total amount of Fringe benefits and deductions, Percentage of expenditure subject to FBT and the value of Fringe Benefits etc., are required to be verified by the Auditor. For the purpose of Audit of Fringe Benefit Tax and reporting in Annexure II, the Auditor is required to verify the value of fringe benefits be calculated in accordance with the provisions of Sections 115WC read with provisions of Section 115WB. Using Tally.ERP 9 s Tax Audit Features, the Auditor can precisely extract information required to be reported in Annexure II. All the transactions related to Fringe Benefit Tax are segregated and displayed in a separate menu Fringe Benefit Tax (Annexure II). 244

251 Auditing of Fringe Benefit Tax 11.1 Fringe Benefits Tax Report To view the Fringe Benefit Summary, Go to Gateway of Tally > Audit & Compliance > Tax Audit Select Fringe Benefit Tax and press Enter Figure 1.1 FBT Audit Summary As discussed, the FBT Audit Summary screen displays Fringe Benefit Applicable, Tax Paid, Payment Disallowed details alongwith the Amount and the Audit Status details (i.e., Audited, unaudited and the total number of vouchers). During Audit of FBT, the consistency of FBT liability and remittance is to be verified and the due date and actual date of payment of any sum referred under 115WC needs to be reported. For this purpose, it is essential to configure due dates for statutory dues. Tally.ERP 9 allows you to specify the due dates for Statutory dues. Follow the steps given below to configure the same. Set up Go to Gateway of Tally > F11: Features > F5: Audit Features In the Tax Audit Rules screen, Tab down to Fringe Benefit Tax section 245

252 Auditing of Fringe Benefit Tax Enter No. of Days within which the payment is to be made against Each Quarter field Figure 1.2 Tax Audit Rules setup Press Enter to accept the screen and go back to the Tax Audit Dashboard. The payments with respect to Fringe Benefit Tax have to be remitted in advance on or before 15th of the succeeding month of the respective Quarter Verification of Ledger Classifications During Audit, the auditor is required to check the Ledger Classifications to ensure whether the ledgers are grouped under the relevant FBT category. To verify the Ledger classifications related to payments under FBT, follow the steps given below: Go to Gateway of Tally > Audit & Compliance > Tax Audit > Fringe Benefit Tax Select Fringe Benefit Applicable in the FBT Audit Summary Press Alt + F9 246

253 Auditing of Fringe Benefit Tax The List of FBT Ledgers is displayed as shown: Figure 1.3 FBT Ledger Display Screen By default, the above report displays all the Ledgers grouped under Indirect Expenses, direct Expenses, Direct / Indirect Incomes, Current Assets, Fixed Assets and Misc. Assets where the FBT is enabled, alongwith the FBT Category for verification. The above information will be displayed, only when the Fringe Benefit Tax Features are enabled in F11: Statutory & Taxation Features screen and the relevant Indirect Incomes, Indirect Expenses, Direct Incomes, Indirect Incomes, Fixed Assets and Misc. Expenses ledgers are classified under the respective FBT Categories FBT Ledger Summary The FBT Ledger Summary displays the FBT Ledger wise expenses subject to Fringe Benefit, Assessable Value of Fringe Benefits, Exempted Value of Fringe Benefits and the Audit Status Details with number of Audited, Unaudited and total vouchers. 247

254 Auditing of Fringe Benefit Tax Go to Gateway of Tally > Audit & Compliance > Tax Audit > Fringe Benefit Tax Select Fringe Benefit Applicable and press Enter Figure 1.4 FBT Ledger wise display The report by default displays the FBT Ledgerwise summary. If you are in any other report under FBT, toggle to Group wise summary, by pressing F5. 248

255 Auditing of Fringe Benefit Tax To view FBT Category details for the FBT Ledgers from the above screen, press Alt+F1. Figure 1.5 FBT Ledger wise Detailed Summary The above report displays groups and ledgers in Red Colour and are marked as Unknown, if any ledger under any group(s) is marked as Not Applicable as the FBT Category during Voucher entry. In the FBT Ledger summary, Press Enter on the FBT Category to display all vouchers pertaining to that category. Press Enter on the Fringe Benefits Exempted Column to display Vouchers containing the FBT Exempted Value. You can further drill down and view vouchers pertaining to a particular Expense Ledger, by pressing Enter on the Amount field under any Column. 249

256 Auditing of Fringe Benefit Tax Select Petrol Expense and press Enter Figure 1.6 FBT Voucher Details The above report displays FBT Ledger wise transactions with the Total Expenses, FBT Applicable Value and Value of Fringe Benefit for each transaction and the Audit Status with the Audit Remarks, if any. In order to view any FBT Expenses Details and narration, Press F12: Configure, set the following option to Yes Figure 1.7 Configuration screen 250

257 Auditing of Fringe Benefit Tax F12: Configuration Show Narrations also: Set this option to Yes, to display Narrations for the transactions. Show Expenses Details: Set this option to Yes, to display details of Exempt FBT Value. Show Audit Note: Set this option to Yes, to display Audit Remarks Show Audit Status: Set this option to Yes, to display Audit Status Details viz., Audited, Unaudited. Show Vouchers of Audit Status: Select the required Audit Status to view the vouchers of the selected Audit Status (i.e. Unknown, Altered, Audited, Clarified, Need Clarification, Unaudited, Under Observation or any). Show Client s Clarification: Set option to Yes to view the clarification note entered by the Client. Once the above configurations are activated, the FBT Ledger Voucher screen displays the FBT Exempted value and the Narration details. Figure 1.8 FBT Ledger wise Transactions with details and Narration 251

258 Auditing of Fringe Benefit Tax You can commence the Audit from the above FBT Ledger wise Transactions screen, by pressing F9: Audit. The Audit walk-through is illustrated in the next section. Shortcut Keys in Button Bar: F1: Detailed - Press this option, to view detailed report with ledgers under each FBT Category. F5: Categorywise - Press this option, to view FBT Categorywise summary Report F6: Payment - Press this option to display FBT Payment Summary report F9: Audit - Press this option to Audit the selected Vouchers. F9: Master - Press option to view the FBT Ledger Master report X: Exceptions - Press this option, to view the exception entries which needs auditors attention FBT Category Summary Report The FBT Category summary displays the Categorywise details of Total Expenses, Assessable Value of Fringe Benefits, Exempted value from FBT and Audit Status details. To view the Categorywise summary of Fringe Benefits, Go to Gateway of Tally > Audit & Compliance > Tax Audit > Fringe Benefit Tax > Fringe Benefit Applicable Press F5 Select All Items from the List of FBT Categories 252

259 Auditing of Fringe Benefit Tax Figure 1.9 FBT Category selection screen Press Enter to view the FBT Category Summary (Categorywise report) 253

260 Auditing of Fringe Benefit Tax The FBT Categorywise report is displayed as shown: Figure 1.10 FBT Groupwise 254

261 Auditing of Fringe Benefit Tax The view ledgerwise display of Expenses subject FBT under the respective Category, press Alt+F1 Figure 1.11 Category Summary Detailed To drill down to FBT Ledger Vouchers display, select the required Category from the above report and press Enter. 255

262 Auditing of Fringe Benefit Tax The FBT Ledger Vouchers screen is displayed as shown: Figure 1.12 FBT Ledger Vouchers screen The F12: Configuration settings for the above screen are similar to those in the FBT Ledger Summary report. Shortcut Keys in Button Bar: F1: Detailed - Press this option, to view detailed report with ledgers under each FBT Category. F4: Category - Press this option, to view details of expenses under the selected Category. F5: Groupwise - Press this option, to view FBT Ledgerwise summary Report F6: Payment - Press this option to display FBT Payment Summary report F7: Show Pending - Press this option, to display only the Vouchers which are pending for Audit (unaudited vouchers). A: All Ledgers - Press this option, to display all ledgers (i.e., Non-FBT Ledgers). F9: Master - Press this option, to verify the Ledger Classifications 256

263 Auditing of Fringe Benefit Tax You can commence the Audit from the above FBT Categorywise Transactions screen, by pressing F9: Audit. The Audit walk-through is illustrated in the next section FBT Exception Report In certain cases, the expenses ledgers created are not grouped under FBT Category or during Voucher Entry are marked as Not Applicable in the FBT Classifications field. Then in such cases the ledgers are marked as Unknown in the FBT Ledger Summary Report and the ledger with respective group appear in Red Colour for easy identification and verification by the Auditor. In order to view such ledgers, follow the steps given below: In the FBT Ledger Summary screen Press Alt + X Figure 1.13 FBT Exception Report Now, the FBT Ledger Summary report displays only the ledgers which are marked as Unknown. To revert back to regular screen, press Alt + X (X: All) again. Tally.ERP 9 also allows you to view all ledgers (other than FBT Ledgers) alongwith FBT ledgers in the FBT Ledger Summary report, by pressing Alt+A from the above report. 257

264 Auditing of Fringe Benefit Tax The FBT Ledger summary report with all Ledgers is displayed as shown: Figure 1.14 FBT Ledger Summary with All Ledgers To hide or unhide a particular column or ledger, press F12: Configuration and set the required option to Yes or No accordingly FBT Payment Summary The FBT Payment summary displays the estimated value of Fringe Benefits, To be paid and Paid amount with Shortfall / Excess (if any), Interest & Other Payments and Cumulative percentage of FBT paid for every quarter. To view FBT payment Summary report, follow the steps given below: Go to Gateway of Tally > Audit & Compliance > Tax Audit > Fringe Benefit Tax > Fringe Benefit Applicable 258

265 Auditing of Fringe Benefit Tax Press F6: Payment Figure 1.15 FBT Payment Summary As discussed, the above report displays the quarterly summary of Estimated Advance Tax, Paid, Shortfall/ Excess alongwith the Audit status details. Tally.ERP 9 allows you to drill down to FBT Payment Vouchers to facilitate Audit of Vouchers. To drill down, select the required Quarter and press Enter 259

266 Auditing of Fringe Benefit Tax The FBT Payment Details screen is displayed as shown: Figure 1.16 FBT Payment Vouchers You can view all the payment vouchers related to FBT for the required period, by pressing F2:Period from the above screen and specify the required period. To view the Tax Details, Challan Details, Audit Status and Audit Note for each transaction, press F12:Configure and set the required option to Yes. Figure 1.17 F12: Configuration 260

267 Auditing of Fringe Benefit Tax The FBT Payment Vouchers Report is displayed as shown: Figure 1.18 FBT Payment Vouchers Challan Details Tally.ERP 9 allows you to Audit from the FBT Payment Vouchers screen (drilled down from FBT Payment Summary report), by pressing F9: Audit. The Audit walk-through is illustrated in the next section. Shortcut Keys in Button Bar: F9: Audit - Press this option, to commence Audit F9: Master - Press this option, to verify the Ledger Classifications 261

268 Auditing of Fringe Benefit Tax 11.7 Audit of Vouchers To commence Audit of vouchers concerning payments related to Fringe Benefit Tax, follow the steps given below: Go to Gateway of Tally > Audit & Compliance > Tax Audit > Fringe Benefit Tax > Tax Paid Select the required Quarter and press Enter Press Spacebar to select a particular transaction (you can also select multiple transactions by pressing Spacebar on the required transactions one-by-one) Figure 1.19 FBT Payment Summary Audit Shortcut Key Spacebar: This key is used to select a particular transaction for Audit. You can also select Multiple transactions, by pressing the spacebar on the required transaction one by one. 262

269 Auditing of Fringe Benefit Tax Press F9 to commence Audit Figure 1.20 Audit Status Select Paid on Time and press Enter Audit Status: Disallowed: This option should be selected if the Auditor wants to disallow any Payment made. Late Paid: This option should be selected if the Payment is made after the due date. Need Clarification: This option should be selected to ask for more clarifications from the Client if the information in the Voucher or entries is not very clear. Paid on Time: This options should be selected if the Amount is paid on Time. Under Observation: This option should be selected when the Auditor wants to mark a voucher for senior s help. Unknown: For all other Audit status Unknown should be selected. Specify Audit Remarks, if any (i.e., Paid within the Due Date) in the Audit Note field Figure 1.21 Audit Details 263

270 Auditing of Fringe Benefit Tax Press Enter to return to the FBT Payment Vouchers screen Figure 1.22 FBT Payments Voucher with Audit Note Press Crtl+A to save the Audit Details Press Escape to go back to FBT Payment Summary Report 264

271 Auditing of Fringe Benefit Tax Figure 1.23 FBT Payment Details Tally.ERP 9 allows you to Audit the Vouchers from the following report, by pressing F9:Audit from both FBT Categorywise Summary and FBT Groupwise Summary Report. The Vouchers which are marked as Need clarification, Under Observation or Unknown are automatically listed as Unaudited in the Tax Audit Dashboard. The Vouchers which are Clarified by the Client or any audited Voucher which is altered by the user, are automatically listed as Unaudited Audit Status Report After the Audit is completed, the detailed Audit Status can be viewed to display the Audited Vouchers, Unaudited vouchers and Total Vouchers. 265

272 Auditing of Fringe Benefit Tax To view the Audit status, press Escape from the above screen to go back to the FBT Payment Summary Report. Figure 1.24 FBT Payment Summary with Audit status If you are in another report under Fringe Benefit Tax, press F7 to view the Audit Status. The Vouchers which are marked as Need clarification, Under Observation, Need Clarification Vouchers which are Clarified or audited vouchers altered by the user, are automatically listed as Unaudited in the above report Print FBT Annexure - II Once the Audit is complete for vouchers pertaining to Fringe Benefits Tax, the Auditor can print Annexure II in the prescribed form. Go to Gateway of Tally > Audit & Compliance > Tax Audit > Fringe Benefit Tax > Tax Paid Press Alt+P to Print 266

273 Auditing of Fringe Benefit Tax The FBT Annexure Printing screen is displayed as shown: Figure 1.25 FBT Annexure Printing screen Set Yes in Print as Annexure II field and press Enter Set Print All Sections to Yes if you want to print Annexure II with all the sections. The printed Annexure II is displayed as shown: Figure 1.26 Printed Annexure II 267

274 Auditing of Fringe Benefit Tax The FBT Annexure with all sections is displayed as shown: Figure 1.27 FBT Annexure with all sections - page 1 268

275 Auditing of Fringe Benefit Tax The page 2 of FBT Annexure II is displayed as shown: Figure 1.28 FBT Annexure with all section - Page 2 269

276 Lesson 12: Audit Completion Process After the Audit for each Clause is completed, the vouchers marked with different Audit Status will appear in the Tax Audit Dashboard under the respective columns. The Tax Audit Dashboard with vouchers of various audit status is displayed as shown: Figure 1.1 Tax Audit Dashboard Unaudited - displays the Voucher count for Unaudited Vouchers including the Vouchers marked as Under Observation, Need Clarification, Clarified (to be reaudited) and Altered (to be reaudited). Audited - displays the Voucher count for the Audited Vouchers 270

277 Audit Completion Process Under Observation - displays the count of the Vouchers which are checked by the Auditor and the audit decision was not taken. These vouchers can be kept aside for seniors help or for a decision at later stage. Need Clarification Vouchers - displays the count of the Vouchers which are sent to the Client to seek some clarification. Clarified - displays the count of the Vouchers which were sent to Client and now clarified by the Client. Altered - displays the count of the Vouchers which are altered by the Client after the auditing Explanation from Clients on Need Clarification Vouchers After the Audit is completed, the detailed Audit Status can be viewed to display the Audited Vouchers, Unaudited vouchers, Vouchers that need to be re-audited and were marked as Need Clarification. The vouchers which are marked as Need Clarification need to be presented with supporting explanation or documentary evidence by the client, as required by the Auditor. The Client will be able to view the Audit Comments and the vouchers which are marked as Need Clarification. To view Tax Audit information, execute the following steps. Go to Gateway of Tally > Display > Statement of Accounts > Tax Audit Info. 271

278 Audit Completion Process The Tax Audit information screen is displayed as shown: Figure 1.2 Tax Audit Info screen In the above screen the Client can view the Vouchers that are marked for Need Clarification. To view the required transaction, Select the particular Clause and press Enter to view the Vouchers that are marked as Need Clarification by the Auditor 272

279 Audit Completion Process The Audit Vouchers screen is displayed as shown: Figure 1.3 Audit Vouchers screen The Client can make necessary corrections to the voucher or provide clarifications or documentary evidence as required by the Auditor. To clarify any voucher marked as Need Clarification, the Client may follow the steps given below: 273

280 Audit Completion Process Use the Arrow keys to highlight the respective transaction as shown: Figure 1.4 Audit Vouchers screen 274

281 Audit Completion Process Press Spacebar to select Figure 1.5 Audit Vouchers screen with selected Ledger Press F9: Clarify The Audit Clarification screen is displayed as shown: Figure 1.6 Audit Clarification screen The Client can enter the required clarification in the Audit Clarification screen, Figure 1.7 Completed Audit Clarification screen Press Enter to go back to the Audit Vouchers screen Press Ctrl+A to save the Audit clarifications entered 275

282 Audit Completion Process After corrections / clarifications are made by the Client, the Vouchers will not appear in the Tax Audit Info. screen. The Tax Audit Info. screen after corrections is displayed as shown: Figure 1.8 Tax Audit Info. screen post correction Similarly the other Vouchers can also be altered or saved again by the Client. Once the Vouchers are Clarified by the Client the Voucher Count on the Tax Audit Dashboard will shift from Need Clarification column to Clarified (to be reaudited) Re-Auditing Clarified Vouchers The Vouchers which are Clarified by the Client be listed under Clarified (To be re-audited column of Tax Audit Dashboard in Auditors Edition of Tally.ERP 9. To preform audit for these vouchers, Go to Gateway of Tally > Audit & Compliance > Tax Audit 276

283 Audit Completion Process Highlight the respective Clarified (To be re-audited) column for the selected Clause (e.g. Bonus, PF, ESI Recoveries) and press Enter Figure 1.9 Tax Audit Dashboard 277

284 Audit Completion Process The Payroll Clarified Summary screen is displayed: Figure 1.10 Payroll Clarified Summary 278

285 Audit Completion Process Select the respective Voucher and press Enter Figure 1.11 Payment Voucher Clarified by Client The auditor can verify the Clarified Vouchers with the supplementary documents given by the Client and re-audit the vouchers. Press Space to select the Voucher and press F9 to Audit (follow the steps explained in the earlier chapters for auditing) Once the Audit status is saved, the Voucher disappears from the Clarified Summary screen. Similarly, other Clarified Vouchers can be reaudited. 279

286 Audit Completion Process Press Escape to go back to Tax Audit dashboard Figure 1.12 Tax Audit Dashboard From the Tax Audit Dashboard the Auditor can click on the C: Clarification List button to view the list of Vouchers which were marked as Need Clarification and also the Vouchers which are Clarified by the Client. Essentially this report will display all the Vouchers with Audit Status as Need Clarification and Clarified Re-Auditing Altered Vouchers The Voucher altered by the Customer post audit will be listed under Altered (To be re-audited) column of Tax Audit Dashboard in Auditors Edition of Tally.ERP 9. The Need Clarification Vouchers which are altered by the Client are also listed under the Altered (To be reaudited) column. For a detailed process of verifying and reauditing these vouchers, refer to the previous section of reauditing the Clarified Vouchers Auditing Under Observation Vouchers The Vouchers which are checked by the Auditor and the Audit comment is not entered due to the following reasons: Need some information to audit these vouchers Need senior auditors help in auditing these vouchers 280

287 Audit Completion Process To view the Under Observation Summary for the selected Clause, Highlight the Under Observation Column for the selected Clause (e.g. Bonus, PF, ESI Recoveries) using the arrow keys Figure 1.13 Tax Audit Dashboard 281

288 Audit Completion Process Press Enter to view the Payroll Under Observation Summary report Figure 1.14 Payroll Under Observation Summary Select the required Payment Voucher and press Enter Figure 1.15 Payment Vouchers (Under Observation) 282

289 Audit Completion Process Press Space to select the Voucher and press F9 to Audit (follow the steps explained in the earlier chapters for auditing) Similarly, other Under Observation Vouchers can be Audited. Once all the Vouchers are rechecked and reaudited, the Tax Audit Dashboard will be displayed as shown: 12.5 Audit Log Figure 1.16 Tax Audit Dashboard Tally.ERP 9 provides the complete information on the last Audit done and the Auditor(s) who have audited the Company data (under various clauses of Tax Audit). To view Audit Log, Go to Gateway of Tally > Tax Audit Press F12: Configure Set Show Last Audit Details to Yes as shown. Figure 1.17 F12: Configuration screen 283

290 Audit Completion Process Press Enter to view the Last Audit Log details in the Tax Audit dashboard The Tax Audit Dashboard with Audit Log is displayed as shown: Figure 1.18 Tax Audit screen with Audit log details 12.6 Audit Completion Once the Audit is completed, the Auditor can save the Audit from the Tax Audit Dashboard, as explained below Press Space bar to select the required Clause Press F9 to save Audit Set Audit Complete to Yes Figure 1.19 Save tax Audit screen Press Enter to save the Tax Audit status 284

291 Audit Completion Process The Tax Audit Dashboard is displayed as shown: Figure 1.20 Tax Audit dashboard Space bar can be used for selecting multiple Clauses and saving the Audit Status using F9: Save Audit button 285

292 Audit Completion Process Similarly, once the Audit is completed for other Clauses can be marked as Audit Complete from the Tax Audit Dashboard. The Tax Audit dashboard after successful Audit completion is displayed as shown: Figure 1.21 Tax Audit dashboard -Audit completed You can also print all the Annexures to Form 3CD from Tax Audit Dashboard after completing the Audit. To print all the Annexures from Dashboard, 286

293 Audit Completion Process Press Alt+P Figure 1.22 Annexure printing screen from Dashboard Press Yes to Print all the Annexures to Form 3CD in one go. The printed Annexures to Form 3CD will be the same as the ones shown in each chapter as per the Clause requirements. 287

294 Lesson 13: Printing Form 3CD Using the Auditors Edition of Tally.ERP 9, you can enter the required information and print Form 3CD directly from Tally.ERP 9 itself. Below are the salient features of Form 3CD in Tally.ERP 9: Dynamic copying capabilities: You can copy the complete Form 3CD or just selected clauses from Form 3CD of a different Company (or the same Company for the previous year) Using the Copy From option available in the Form 3CD screen. Export capabilities: Like any other Tally.ERP 9 report, you can export Form 3CD along with Annexure I & II to MS Excel and any other default format. 'Select Text' Key: While you fill Form 3CD there are certain texts have to be entered repeatedly. In Tally.ERP 9 Auditors Edition these repetitive texts have been provided in a drop down list. Additional text can be added along with the text selected from the drop down list, if required. Easy maintenance of data: Form 3CD prepared in Tally.ERP 9 - Auditors Edition is stored along with the corresponding company s data. This helps you to easily maintain client data and track Forms of clients, year-wise Filling Form 3CD You can enter the required information for the Clauses which are not available in Tally.ERP 9 in the Form 3CD and save the details. This information will be saved against the respective Clauses and will be available for future references. To enter the required information in Form 3CD, Go to Gateway of Tally > Audit & Compliance > Form 3CD 288

295 Printing Form 3CD The Form 3CD Dashboard is displayed as shown: Figure 1.1 Form 3CD Dashboard The Form 3CD Dashboard displays the Clause Nos and a brief description of the Clauses under Particulars column. In the above screen, similar Clauses are listed together for better navigation experience. e.g. Clause 1-6 are listed together as the information required is descriptive in nature and most of this is available from Company Master. Button Option in the Form 3CD Dashboard F1: Detailed - Use this button to view the detailed information filled for each Clause. F2: Period - Use this button to change the period for Form3CD. O: Copy From - Use this button to copy Form 3CD from the previous year of same company of a different company. 289

296 Printing Form 3CD Filling Form 3CD The Auditor can click Enter on the required Clause no. to fill/view the information for the selected Clause and save it. Filling Clause No. 1-6 The Auditor can click Enter on the required Clause no. to fill/view the information for the selected Clause and save it. To enter the information required for Clause No. 1-6, Highlight the Clause No. 1-6 in the Form 3CD Dashboard and press Enter Figure 1.2 Form 3CD Dashboard 290

297 Printing Form 3CD The Particulars of Assessee screen is displayed as shown: In the Particular of Assessee screen, Figure 1.3 Particulars of Assessee screen Enter the Company Name (e.g. Global Enterprises) in the Name of Assessee field Enter the Company address in the Address field Enter the Company PAN number in the Permanent Account Number field Enter the type of Company (e.g. Private Ltd.) in the Status field Enter the last date for previous financial year (e.g. 31-March-2009) in the field Previous Year Ended field Enter the details of Tax Audit Assessment Year (e.g )details in the Clause No. 6 The completed Particulars of Assessee screen is displayed as shown: Figure 1.4 Completed Particulars of Assessee screen Press Enter to save the changes made/information entered. 291

298 Printing Form 3CD The details for Clause No. 1, 2, 3, 5 and 6 are pre-filled with the information provided in the Company Master. If the Auditor alters the default information for these Clauses in this screen, then the same will be stored against these clauses in Form 3CD for future reference. This will not overwrite the Company Master details. Filling Clause No. 7 (a & b) To fill the information required in Clause 7(a) and 7(b), follow the steps given below: Highlight the Clause No. 7 (a & b) in the Form 3CD Dashboard and press Enter Figure 1.5 Particulars of Members Partners screen In the Particular of Members/Partners screen, Specify the required details for Clause No. 7 (a) in the text field provided Tally.ERP 9 provides the facility of using the pre-defined text templates to fill the repetitive information viz, Not Applicable, Nil etc. To use the default text templates available in Tally.ERP 9, Press Alt+T or click on T: Select Text button Figure 1.6 Select Text screen 292

299 Printing Form 3CD Select the required predefined Text string from the List of Text and press Enter to fill the details for Clause 7 (a) Figure 1.7 Particulars of Members Partners with 7(a) filled Similarly you can fill the details for Clause 7(b) also. The completed Clause 7 (a & b) screen is displayed as shown: Figure 1.8 Particulars of Members Partners - completed Filling Annexure I To enter the information required for Annexure I, Highlight the Annexure I to Form 3CD in the Form 3CD dashboard and press Enter 293

300 Printing Form 3CD In the Particulars of Annexure -I screen, enter the required details as shown: Figure 1.9 Completed Annexure I Press Enter the save the information entered in Annexure I Copying options for Form 3CD The Auditors Edition of Tally.ERP 9 provides dynamic copying options for Form 3CD. You can copy the entire Form 3CD from a previous Company or from a different Company having a filled Form 3CD. While filling Form 3CD, you can also Copy the values for a particular Clause alone from one Form 3CD to another Form 3CD. Copying entire Form 3CD To copy the entire Form 3CD, follow the steps given below: Copying entire Form 3CD from same Company To copy Form 3CD from previous year of the same Company, Press Ctrl+O (click on O: Copy From) 294

301 Printing Form 3CD The Data Configuration screen for copying the Form 3CD is displayed as shown: In the Data Configuration screen, Figure 1.10 Data Configuration screen to copy Form 3CD Copy From Company is defaulted with the Loaded Company name if only one Company is loaded Select the required previous year in the Copy From Financial Year field The Financial Year will be displayed for copying if the selected Company has got filled Form 3CD for the selected Company. Or else the Financial Year List will be empty to avoid copying the empty Form 3CD. Figure 1.11 completed Data Configuration screen Press Enter to Copy the Form 3CD from previous year ( ) to current year ( ) Copying entire Form 3CD from different Company To copy entire Form 3CD from different Company, load the other Company (can be the splitted Company for previous year). Press Ctrl+O (click on O: Copy From) 295

302 Printing Form 3CD The Data Configuration screen for selecting Company is displayed as shown: Figure 1.12 Selecting Companies for Copying Form 3CD Select the required Company from which Form 3CD needs to be copied Figure 1.13 Data Configuration screen Select the required Financial Year ( ) from which you want the Form 3CD to be copied in the Copy From Financial Year field Press to Copy the Form 3CD and save While Copying entire Form 3CD the Clauses 1-6 will not be copied. The Clauses from 7 to 32 for Form 3CD and Annexure I will be copied when the Copy From action is performed. 296

303 Printing Form 3CD Copying individual Clauses of Form 3CD To copy the individual Clause of Form 3CD follow the steps given below: From Form 3CD Dashboard, Select the required Clause for which information needs to be copied by pressing Enter and opening the Clause details screen (e.g. Clause 12- Details of Valuation of Closing Stocks) Figure 1.14 Copying of individual Clause Press Alt+R (click on R: Copy From) Figure 1.15 copying individual Clause - company selection 297

304 Printing Form 3CD Select the required Financial Year ( ) from which you want the respective Clause to be copied in the current Form 3CD in the Copy From Financial Year field Figure 1.16 Completed Data Configuration screen Press to Copy the Clause details and save Press Escape to refresh and come back to same Clause to view the information copied Figure 1.17 Copied Individual Clause details 298

305 Printing Form 3CD Similarly to view the copied Form 3CD, you can press Alt+F1 (F1: Detailed button). Figure 1.18 Detailed Form 3CD 13.2 Printing Form 3CD To print the Form 3CD from Tally.ERP 9, Go to Gateway of Tally > Audit & Compliance > Form 3CD Press Alt+P or click on P: Print In the Print Configuration screen for Form 3CD printing, Set the option Print Form 3CD to Yes, if you want to Print the Form 3CD Set the option Print Annexure-I to Yes, if you want to Print the Annexure I Set the option Print Annexure-II to Yes, if you want to Print the Annexure II Specify the Auditor's name in the Name of Chartered Accountant field Specify the membership number of Auditor in the MRN No field Specify the Auditor's CA Firm Name in the Firm Name field Specify the address of CA Firm in the Address field Specify the city name in the Place field Enter the date of generating the Form 3CD in the Date field 299

306 Printing Form 3CD The completed Print Configuration screen for printing Form 3CD is displayed as shown: Figure 1.19 Print Configuration screen for Form 3CD 300