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When is a chartered accountant really required?

Gautam Jain (Others) (36 Points)

14 July 2014

Hello,

I am a beginner. And my question may sound really funny.

I am running a proprietorship software business with turnover that does not require auditing.

For many years I gave my papers to my auditor (print out from tally software) and he used to do the filing for all my accounts (business, personal, HUF etc).

Isn't it possible to directly file my papers instead of giving my papers to my auditor?

When exactly would a "chartered accountant" be useful to me? What kind of scenarios would require me to take help of "chartered accountant"?

There are several people who do direct e-filing of ITR. When would they need a CA to check their books?

Please solve my confusion.

Regards,
Gautam Jain

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7 Replies

CA Dauzi Pathan Imran Khan (Chartered Accountant in Practise) (1678 Points)
Replied 14 July 2014

In simple terms according to Income Tax Act, you need a CA to audit your accouts when your turnover exceeds One Crore rupees. Apart from this if you need to submit any certificate/ declaration to Income Tax dept., most of them should be verified by a CA. These are as per Statutary requirements.

You can avail his services for maintenance of Accounts/ book keeping, filing returns, internal audit, to incorporate proper accounting system in your concern. Because a CA has vast knowledge on Accounting, Taxation etc., than so called Income Tax Practioners/ auditors. Also provisions relating to Tax Deductions at source (TDS)/ Tax Collections at Source (TCS) are much important in your business (as per my knowledge). Your auditor should be well updated about all those TDS/TCS provisions. If you have that confidnce on him you can continue with your current auditor.

And you can file your own returns online/ off line provided you have enough knowledge about forms you are about to file and provisions of such statutes. Please keep in mind that a wrong information/ insufficient information furnished in returns can attract Scrutiny assessment/ penalty etc., which you again need a service of a CA. So, please ensure you have sufficient practice/ knowledge in filing the returns.

One suggestion is please maintain file of all original returns you (your auditor) filed.

Regards.

CA Keval desai (Transaction advisory service) (231 Points)
Replied 14 July 2014

Hi Gautam,

You will need a CA for following reasons

1 Since you are in software Business , you wiil need to fullfill complince with Service tax.

2 CA can help you in preparing your books as per your future business plans. he can guide you to prepare your Balancesheet so that it becomes easier whenever you need bank finance.

3 apart from filing ITR , he can also provide you service regarding TDS return filing.

4 There are many more services you can take from CA.

Keval Desai.

For more details you can contact me @ keval2947 @ rediff.com

CA SONIYA AGARWAL (self practice) (3005 Points)
Replied 14 July 2014

FOR AUDIT ONLY TURNOVER IS NOT THE FACTOR ,SECTION 44AD IMPLICATIONS TOO IS TH ITS GOOD YOU LET YOUR INCOME TAX FILING GET DONE MY A CHARTERED ACCOUNTANT , FOR THEY HAVE A BETTER UNDERSTANDING OF TAX LAWS AND ITS IMPLICATIONS ON BUSINESS , THEY CAN GUIDE YOU WELL .HOWEVER WITH YOUR CHARTERED ACCOUNTANT YOU SHOULD HAVE REGULAR TALK AND ASK FOR A COPY OF EVERY ITR FILING HE DOES , KEEP ASKING YOUR CA ABOUT YOUR QUERIES .

Jaya Sankar Kumar Veluguri (Articles Student) (51 Points)
Replied 14 July 2014

It is better to continue with ur existing auditor if he has sufficient knowledge. Bcoz without that knowledge he and u same. If he is capable it is advisable to continue bcoz u don't know about all acts & provisions which will applicable to u. Also u don't know how to do such things also. So plz continue with a CA 1 & Only requirement for u is nthng but u should have a capability to pay his remuneration. Plz don't mind it I'm not criticizing u.

VIKASH KUMAR JAIN (Audit Executive) (711 Points)
Replied 14 July 2014

Above replies are all enough.

athar ali (Sr. Audit Manager) (25 Points)
Replied 15 July 2014

So many persons think that what can a ca do which we could not.... I would like to simply say to those people who think like that.... Ca is like a doctor, if somebody falls ill and he take medice from chemist, but after sometime he may be feels more uncomfortable, now he is ready to rush to the doctor... same thing happen with the clients... pls take my words in positive manner.

CA Shivshankar Gupta (B.Com CS FCA LLB DISA ) (325 Points)
Replied 15 July 2014

Chartered Account and Auditor can be assumed differently.....All Auditor need to be a CA but All CA need not be an Auditor.....CA can help u in Tax Planning....Can guide u in liasioning with various department for compliance....he can save time so that you can focus on growth of your business...rather than saving the fees of a CA by sacrificing or missing good business opportunities