Abbas & co. Chartered Accountants CA Abbas Gulamhusainwala

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Transcript of Abbas & co. Chartered Accountants CA Abbas Gulamhusainwala

  • abbas & co.Chartered AccountantsCA Abbas Gulamhusainwala

  • COVERAGEIntroduction of New clauses in Form 3CA, 3CB and 3CDAmendment in Existing clauses to Form 3CA, 3CB and 3CDDeletion of the Existing clauses

  • AmendmentsWord for the year ended on 31st March,__________ is replaced with for the period beginning from __________ to ending on ___________ in case of audited profit and loss account or income and expenditure account.Word as at 31st March,_______ is replaced with as on________ in case of audited balance sheet. 3CBWord to examination of books of account including other relevant documents is added to clause 3 of the Form 3CA.Word Signed is replaces with Signature and stamp/Seal of the signatory and Full address is required Negative remarks and qualification are needs to reported with reasons.

    In case of Books of Accounts to be Audited under any other Act.Form 3CAForm 3CB

  • Renumbering of existing clauses.Addition of 15 New Clauses.Amendments in 7 Clauses.Deletion of one clause and ANNEXURE-I related to abstract of balance sheet and statement of profit and loss.Item-wise reporting for each clause/sub point, along with:DatesNatureNameAddressDescription of property etc.Reporting of obtained Certificates related to specific clauses removed.

    Form 3CDAmendments

  • Clause-4: Disclosure of information for Indirect Tax registration Whether the assessee is liable to pay indirect tax like Excise Duty, Service Tax, Sales Tax, Customs Duty, etc. If yes, furnish the registration number or any other identification number allotted for the same.

    Key point: What is the reporting responsibility of auditor and verification of the liability of the assesseeIf liable for registration and failed to register, still needs to report

  • Clause-8: Applicable provision of section 44AB(i) Indicate the relevant clause of section 44AB under which the audit has been conductedBusiness turnover exceeds Rs. 1 CroreProfessional receipts exceeds Rs. 25 LacsBusiness covered under deeming provisions under Section 44AE- Business of plying, hiring or leasing goods carriage not more than ten HGV Rs. 5,000 p.m. and LGV Rs. 4,500 p.m.Section 44BB Business of exploration, etc of mineral oils 10% of amount received by the assessee Section 44BBB Business of civil construction, etc,, in certain turnkey power projectsAnd the income is claimed to be lower than the profit or gain so deemed.Business covered under section 44AD And the income is claimed to be lower than the profit and gain so deemed and income exceeds the maximum amount which is not chargeable to tax

  • Clause-17: Transfer of land, building or both section 43CA/50C of the IT ActWhere any land or building or both is transferred during the previous year for a consideration less than value adopted or assessed or assessable by any authority of a State Government referred to in section 43CA or 50C, please furnish:

    Key point: How to report in case of percentage completion reportTransfer under the Act and actual date of transfer by sale deedIf the assessee has filed an appeal for challenging the valuationIf the assets is not a capital asset section 50C

    Details of property Consideration received or accrued Value adopted or assessed or assessable

  • Clause-21(b): Amounts inadmissible under section 40(a)(i) as payment to non-resident referred to in sub-clause (i)U/s 40(a)(i): Any interest (not being interest on a loan issued for public subscription before 01.04.1938), royalty, fees for technical services or other sum, which is payable:Outside India; orIn India to a Non-Resident, not being a company or to a Foreign CompanyDetails of payments with full particulars needs to be reported in following two cases:TDS is not deductedTDS is deducted but has not been paid during the P.Y. or in the subsequent year before the expiry of time prescribed u/s 200(1) of the Income Tax Act

    Key point: Certain amendment by Finance (No. 2) Act, 2014 applicable w.e.f. 01.04.2015If the assessee has claimed exemption under the treaty Business Income Vs FTS

  • Clause-21(b): Amounts inadmissible under section 40(a) (continued..)(ii) Under sub-clause (ia)U/s 40(a)(ia): Any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub contractor Details of payments with full particulars needs to be reported in following two cases:TDS is not deductedTDS is deducted but has not been paid during the P.Y. or in the subsequent year before the expiry of time prescribed u/s 139(1) of the Income Tax Act

    (iii) Under sub-clause (ic) [Wherever Applicable]U/s 40(a)(ic): Any sum paid on account of Fringe Benefit Tax under Chapter XIIHApplicable to assessee who pay such tax on demand of Income Tax Department and claim deduction during the previous year.

  • (iv) Under sub-clause (iia)U/s 40(a)(iia): Any sum paid on account of wealth-tax u/s 40a(iia)Applicable to Individual, HUF and Company whose Net Wealth exceeds 30 Lakhs.Reporting of Wealth Tax Assessment details as per New Schema

    (v) Under sub-clause (iib)U/s 40(a)(iib): Any amount paid by way of royalty, license fee, service fee, privilege fee, service charge or any other fee or charge, by whatever name called, which is levied exclusively on or which is appropriated directly or indirectly from a State Government undertaking by the State GovernmentReporting of details as per New Schema

    Clause-21(b): Amounts inadmissible under section 40(a) (continued..)

  • (vi) Under sub-clause (iii)U/s 40(a)(iii): Any payment which is chargeable under the head Salaries, if it is payable outside India or to a non-resident and if tax has not been paid thereon nor deducted there from under Chapter XVII-B.Applicable in cases where assessee has paid salaries to Non-Resident.Reporting of details regarding the date of payment, amount of payment and name, PAN(Optional) and address of the payee.

    (vii) Under sub-clause (iv)U/s 40(a)(iv): Any payment to a provident or other fund established for the benefit of employees of the assessee, unless the assessee has made effective arrangements to secure that tax shall be deducted at source from any payments made from the fund

    Clause-21(b): Amounts inadmissible under section 40(a) (continued..)

  • (viii) Under sub-clause (v)U/s 40(a)(v): Any tax actually paid by an employer referred to in section 10(10CC), i.e. Tax paid by Employer on perquisite referred u/s 17(2).

    Clause-21(b): Amounts inadmissible under section 40(a) (continued..)

  • (A) On the basis of the examination of books of account and other relevant documents/evidence, whether the payment referred to in section 40A(3) / 40A(3A) read with rule 6DD were made by account payee cheque\bank draft, If not, please furnish the details of amount deemed to be the profits and gains of business or profession under section 40A(3) / 40A(3A)(B) U/s 40A(3A): Where an allowance has been made in any year for any expenditure subsequently incurred during P.Y. and makes payment in Cash exceeding Rs. 20,000 or 35,000.

    Clause-21(d): Disallowance/deemed income under section 40A(3) / 40A(3A)Key point: Responsibility of the auditors to unearth such transaction. No need to obtain certificate from the assesseeHow to judge the transaction under Rule 6DD

    Sr. No.Date of paymentNature of payment AmountName and Permanent Account Number of the payee, if available

  • Whether during the previous year the assessee has received any property, being share of a company not being a company in which the public are substantially interested, without consideration or for inadequate consideration as referred to in section 56(2)(viia) of the IT Act, if yes, details of the same to be furnished.Applicable to Firm and Company (Public are not substantially interested) only.Receives from any one on or after 01.06.2010 in two modes, subject to certain clauses of Section 47:Without consideration, then Whole Aggregate FMV of such propertyFor a consideration less than Aggregate FMV, then Whole Aggregate FMV minus consideration paid for such property.Only if, Aggregate FMV is exceeding Rs. 50,000 or consideration less by the amount or more.

    Clause-28: Property received without/inadequate consideration as referred to in section 56(2)(viia)Key point: If the Shares have been issued as bonus or right shares Impact of qualification on audit report

  • Whether during the previous year the assessee received any consideration for issue of shares which exceeds the fair market value of the shares as referred to in section 56(2)(viib), if yes, please furnish the details of the same:

    Applicable to Company (Public are not substantially interested) only.Receives from any resident and Aggregate consideration exceeds the FMV of the Shares, but not apply to Venture Capital Undertaking or Venture Capital Fund.

    Clause-29: the assessee received any consideration for issue of shares which exceeds the fair market value of the shares as referred to in section 56(2)(viib),

  • Applicable to Assessee involved in Speculative Business activity.

    Clause-32(c): Whether the assessee has incurred any speculation loss referred to in section 73 during the previous year, If yes, please furnish the details of the same.Applicable to Assessee involved in Specified Business u/s 35AD i.e. Cold Chain Facility, Hotel of 2 Star or above, Hospital with at least 100 beds, etc Specified Businesses.

    Clause-32(d): Whether the assessee has incurred any loss referred to in section 73A in respect of any specified business during the previous year, if yes, please furnish details of the sameKey point: Duty of the auditor to find out the speculative nature of transaction

  • In case