16 November 2007
GUIDANCE NOTE ON TAX AUDIT UNDER SECTION 44AB OF THE INCOME-TAX, 1961 (FIFTH REVISED EDITION, 2005)
The fifth revised edition of the Guidance Note on Tax Audit under section 44AB of the Income-tax Act, 1961 incorporates all the amendments made till date including those made by the Finance Act, 2005. It also explains the requirements of the newly introduced Statement of Particulars to be annexed to Form 3CD. The portion relating to appendices have been revised and enlarged extensively to make the Guidance Note a fully comprehensive document on tax audit.
HIGHLIGHTS OF THE FIFTH REVISED EDITION
1. Detailed guidance for determining turnover in the case of transactions in shares and securities.
2. More examples added to illustrate gross receipts.
3. Principles enshrined in a number of Auditing and Assurance Standards incorporated.
4. List of Accounting Standards updated.
5. Applicability of Accounting Standards to Small and Medium Level Enterprises explained.
6. Form NO.3CD – Significant additions.
Clause Additions 8 Reference to the Part B of the new annexure to Form No.3CD in regard to nature of business. 9 Amendments in Rule 6F incorporated 13 Thoroughly updated 14 Portion relating to adjustment of actual cost of plant and machinery for the purposes of claiming depreciation under the Income-tax Act in respect of CENVAT Credit claimed and allowed under the Central Excise Act, - revised. New section 43A inserted by the Finance Act, 2002 – Legal position at variance with AS 11 – Tax Auditor’s duty explained. Mandatory depreciation and additional depreciation – Tax Auditor’s duty explained. 17(f) Implications of the new section 40(a)(ia) in regard to inadmissible expenses like interest, commission or brokerage fees for professional services etc. where tax has not been deducted at source or after having been deducted has not been remitted to the Government – explained. Tax auditor’s duty in respect of STT explained. 21 Significance of amendments made by Finance Acts, 2001 and 2003 explained. 27 Tax auditor’s duty vis-à-vis TDS and E-TDS explained. New annexure to Form No.3CD Detailed guidance to the members.
Price of the publication Rs.250.
Arrangements will be made to despatch copies to all the Regions/Branches immediately on receipt of the copies.