Transcript Tally.ERP 9 Auditors’ Edition Tax Audit (Sec 44AB of IT Act) © Tally Solutions Pvt.

Tally.ERP 9 Auditors’ Edition
Tax Audit (Sec 44AB of IT Act)
© Tally Solutions Pvt. Ltd. All Rights Reserved
Agenda
Tax Audit under Sec 44AB using Tally.ERP 9 AE
• Benefits
• Definition & Audit Objective
• Audit & Analysis-Features
• Clause 16, 17h, 18, 21, 24a, 24b & 27
• Forms 3CD, 3CA & 3CB
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2
Benefits
The Tally.ERP 9 AE aids Auditors to perform a Tax Audit
• Enables exceptional reporting – saves time and
cost
• Preform audit to generate annexures for 7 clauses
supported under Sec 44AB with ease
• Review / scrutiny of relevant cash and unusual
transactions
• Determine timely remittance of statutory dues
• Aids in preparing Form 3CD, 3CA, 3CB
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Definition & Audit Objective
Audit of certain persons under Sec 44AB of the Income Tax Act
whose total sales, turnover or gross receipts, as the case
may be, exceed(s) the following limits:
Businesses
: Profits and Gains more than Rs.40 lakhs per annum
Professionals : Gross receipts above Rs.10 lakhs per annum
(Note: The limits have been increased to Rs.60 lakhs for businesses
and Rs.15 lakhs for professionals from FY 2011-12)
Audit Objective:
• Verify compliance with provisions of Sec 44AB of the IT Act
• Confirm accounting records are maintained properly and reflect
the true income of the assessee
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Audit & Compliance Menu
Tally Main -> Gateway of Tally
Open Tally.ERP 9
Auditors’ Edition.
Select the required
Company to display
Gateway of Tally.
Select Audit &
Compliance under
Audit to access the
audit features.
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Access to Audit & Compliance Menu
When the Client activates the Security Control –
Scenario 1
Click Alt+F3:Cmp
Info in Gateway of
Tally to display the
Company Alteration
screen.
Under Security
Control:
• Select Yes for Use
Security Control
• Enter details for
Name of
Administrator &
Password fields
Accept and save the
entries.
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Access to Audit & Compliance Menu
When the Auditor provides the access details –
Scenario2
Accept
and save
Click
Audit
&
the login details
Compliance
in for
access.
Gateway
of Tally
screen to
display Company
Alteration- Enable
Security screen.
Enable access to use
audit features by
entering:
• Name of
Administrator
• Password
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Tax Audit Menu
Tally Main -> Gateway of Tally->Audit & Compliance
The Audit &
Compliance Menu
with the available
features.
The menus under
Tax Audit are:
• 44AB Audit
• Form 3CD
• Form 3CA
• Form 3CB
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Tax Audit Dashboard
Gateway of Tally > Audit &
Compliance > Tax Audit
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□ Clause No. in Form 3CD
□ Description of the clause
under audit
□ No. of unaudited
Vouchers
□ No. of audited
Vouchers
□ No. of Vouchers under
observation
□ No. of Vouchers requiring
clarifications from client
□ No. of clarified Vouchers
for re-audit
□ No. of altered Vouchers
for re-audit
□ Audit Status
9
Cl. 16- Payment of Statutory Dues
Verify employee contributions towards statutory funds
(PF,ESI,etc), employee bonus and commission payments.
To
perform
the audit
Use
the Bonus,
PF ,
under
this clause, the
ESI Recoveries
Payroll
feature option in
F11:Features
to verify remittance
in Tally.ERP 9 has to
of statutory dues in
be enabled and the
time transactions
payroll
to Government
have
to be accounted
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Cl. 16- Payment of Statutory Dues
Verify information in the Masters created in the Client
payroll data.
Determine the pay
heads created in
payroll masters
Click F5: Masters
to know these
payroll masters
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Cl. 16- Payment of Statutory Dues
Verify PF,Bonus & other Statutory dues- Employee &
Employer, Charges, Payment Status.
View a snapshot
of the monthly PF
related payments,
charges, due
dates, etc.
Click F6:
Payment
Summary to
know the monthly
deductions and
charges
information.
Find if payments
are made in time.
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Cl. 16- Payment of Statutory Dues
Know the exceptions in Clause 16 – Dues paid late or
partially paid.
View the late/partial
payments of statutory
dues to concerned
authorities.
Click Alt+X:
Exceptions to display
such exceptions.
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Cl. 16- Payment of Statutory Dues
Configure report display under the clause as per
requirements.
Configure display of
details under Cl. 16 as
per requirements:
Click F12: Configure
to display details of:
•
•
•
•
•
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PF
ESI
Prof Tax
Bonus
Voucher Audits
14
Cl. 16- Payment of Statutory Dues
Audit transactions easily.
In theMAIN>
Audit
Details
Tally
Gateway
Values
for Audit
screen:
of
Tallyare:
> Audit &
Status
Compliance >Tax Audit
• Employees
Select required
•>
Unknown
status under
Audit
> Payroll
•Deduction
Disallowed
Status
Summary.
•Monthly
Late
Paid
• Need
Enter Clarification
remarks
under
above
steps:
•Execute
Audit
& Note.
• Paid
on
Time
transaction(s)
•Select
Under
Observation
by pressing
Spacebar/Ctrl+Spaceb
ar (To select all
transactions) .
Click F9:Audit to
perform the audit.
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Printed Annexures to Form 3CD
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Clause 16:
Click Alt+P in
Bonus, PF, ESI
Recoveries
16
Cl. 17h- Amounts inadmissible u/s 40A(3)
Verify and disallow payments aggregating and above
prescribed cash limits
Click F11:Features
in Cash Payments
screen.
The Company
Operations
Alteration screen is
displayed.
Audit rule under
Inadmissible Cash
Payments
U/s 40A (3) is
defined.
Define new value if
required.
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Cl. 17h- Amounts inadmissible u/s 40A(3)
Exclude ledger account(s) for which cash payments
aggregating to Rs.20000 in a day are allowed.
Click Ctrl+F9:Master
button in Cash
Payments screen.
Select the ledger
account in Select
Ledger screen.
Exclude the ledger
account in Ledger
Alteration screen from
the scope of audit
under Rule 6DD of IT.
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Cl. 17h- Amounts inadmissible u/s 40A(3)
Define amount range for selecting transactions for audit of
cash payments in a day.
Click F6:
Define
F10:
new
Amount
Range
wise to range
amount
displayas
define
the Lowest
new
per
requirements.
values and
for the
Highest and
Lowest
ranges
and
Highest
range of
the numbers
cash
payments.
of
cash payment
vouchers.
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Cl. 17h- Amounts inadmissible u/s 40A(3)
Verify if the Client has issued Bearer Cheques to suppliers.
Click Alt + B: Bank
Summary to display
ledger payments
through the bank
account.
Specify payments
made by bearer in
consultation with
client.
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Cl. 17h- Amounts inadmissible u/s 40A(3)
Configure the display of details in the feature.
Configure the following
display details:
• High/Low value
vouchers
• Limit for displaying
cash payments
• Display of low
valued payments
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Cl. 17h- Amounts inadmissible u/s 40A(3)
Select the required Ledger Account’s cash payment for audit.
Values
Click
F9:Audit
availableto
for
audit
Transactions.
Audit
Status are:
• Unknown
In
the Audit Details
•screen:
Allowed
• Disallowed
• Need
SelectClarification
required
• Under
status Observation
under Audit
Status
• Enter the appropriate
value under Amount
• Enter remarks under
Audit Note.
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Printed Annexures to Form 3CD
Clause 17(h):
Click Alt+P in
Amounts
Inadmissible
under u/s 40A(3):
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Contd… 23
Cl. 18- Payments to Specified Persons
Verify and disallow expenses/payments made to specified
persons if found to be excessive/unreasonable
You
The
Payments
alternatively
to to
Configure
the display
ledger
Use can
the
Payments
configure
Specified
through
the
Persons
ledger
F12:
accounts
details
under
in
Related
Other
accounts
details
Configure.
display
Specified
Party
Information
inafter
featureConfiguration
toas
audit
Persons
related
-Sec
40A
party
through
(2) (b)ledger
screen
Ledger
as
Alteration
per
excessive
and
creation
configuration.
under
Masters
discussions
screen.
with
the
unreasonable
payments
menu.
-Sec
(2) (b)
Client.
made40A
to specified
Click
F12: Configure.
persons.
Click F9:Update
Select
Yes against
toUse
configure.
Other
Information
Click Ctrl+F9:
Master
for
Accounts.
and Ledger
select the
appropriate ledger
accounts in consultation
with the Client from the
Select Item screen.
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Cl. 18- Payments to Specified Persons
Auditing Payments to Specified Persons.
Values required
are available
for
Select
ledger
Audit Status.
vouchers
for audit.
• Unknown
• Need
Click
F9 Clarification
: Audit to
• Not to be Reported
audit.
• To be Reported
• Under
Observation
Select
required
status
under Audit Status.
Enter values under
Amount, Nature of
Payment.
Record appropriate
remarks under Audit
Note.
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Printed Annexures to Form 3CD
Clause 18 :
Click Alt+P in
Payments to
Specified
Persons u/s
40A(2)(b)
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Contd… 26
Cl. 21- Payments Under Section 43B
Verify if sums collected, referred in clauses (a-f) of Sec 43B
(employer related statutory deductions/taxes), are remitted to
the Funds/Govt before the due date of filing the tax return
To
perform
the audit
Use
Payments
under
clause, 43B
the
Underthis
Section
Payroll
in timely
feature option
to audit
F11:Features in
remittance of statutory
Tally.ERP 9 has to be
dues to and
various
enabled
the payroll
Funds/Govt.have to be
transactions
accounted
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Cl. 21- Payments Under Section 43B
Verify payments referred in clauses (a-f) of Sec 43B (employer
related statutory deductions/taxes) are remitted in time.
Executethe
theService
steps:
Enable
Tally MAIN
Tax/TCS
and>other tax
Gatewayinof
Tally >
features
F11:Features
Audit F3;
& Compliance
>
under
Statutory in
Tax Audit
> Service
default
Tally.ERP
TCS9 before
Tax
Payable
auditing
Payable
transactions
Summary >
Summary
under
TCS Monthly
Cl.21.> Service
Tax
Monthly
Summary
> TCS
Summary
> Serviceto
Payment Vouchers
Tax
viewPayment
the timely
Vouchers
view
payment of to
TCS
forthe
the
timely
payment
selected
month. of
Service Tax for the
selected month.
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Cl. 21- Payments Under Section 43B
Audit of payments of statutory levies (e.g.TCS)under Sec 43B.
Select required
Values
for Auditledger
vouchers
for audit.
Status
available
are:
F9 : Audit to
•Click
Unknown
•audit.
Audited
• Need Clarification
required
status
•Select
Under
Observation
under Audit Status.
Record appropriate
remarks under Audit
Note
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Printed Annexures to Form 3CD
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Clause 21:
Click Alt+P in
resp. screens(for
e.g., Employer’s
Contributions)
Contd… 30
Cl. 24(a)- Loans / Deposits Accepted-Sec 269SS
Verify acceptance of loans and Deposits aggregating to and
exceeding prescribed cash limits during the previous year.
Use
24(a)
– Loans
/
Click
F4:
Select
anyGroup
Group to
for
Deposits
Accepted
select theby
required
inclusion
pressing
feature
to
find
Group (e.g. cash
Spacebar.
receipts
(loans
&
Unsecured
Loans).
deposits) accepted
Click Ctrl +
aggregating to and
A:Change to include
exceeding prescribed
the selected Group.
cash limits.
Press Ctrl+Q : Quit
Click F9:Master to
to return to Loans
configure the
and Deposits
inclusion of any
Accepted screen.
Ledger group for
audit under the
clause.
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Cl. 24(a)- Loans / Deposits Accepted-Sec 269SS
Configure the display of details in the report.
Click F12:Configure
to define the display
of details the Loans
and Deposits
Accepted screen.
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Cl. 24(a)- Loans / Deposits Accepted-Sec 269SS
Audit transactions of Loans / Deposits Accepted – Sec 269SS.
ledger
Select required value
vouchers
for Status.
audit.
under
Audit
Enter value under
Click F9 : Audit to
Amount
audit. appropriate
Record
remarks under Audit
If there are large
Note
number
of transactions,
Audit
Status
Values
use the Alt + F12:
are:
to filter the
•Range
Unknown
of ledger
•display
Accepted
by Cash
greater
•amounts
Accepted
by than
Rs.20000.
Cheque/DD
• Need Clarification
• Not a Loan
• Under Observation
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Printed Annexures to Form 3CD
Clause 24(a): Click
Alt+P in Loans &
Deposits Accepted
-u/s 269SS
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Cl. 24(b)- Loans / Deposits Repaid-Sec 269T
Verify repayments of Loans and Deposits aggregating to and
exceeding prescribed cash limits
Use the
24(b) –
Click
SelectF4:Group
any Grouptofor
Loansa/Group.
Deposits
select
inclusion by pressing
Repaid feature to
Spacebar.
find payments (loans
& deposits) made by
Click Ctrl +
cash aggregating to
A:Change to include
and exceeding
the selected Group.
prescribed limits.
Press Ctrl+Q : Quit
Click F9:Master to
to return to Loans
configure the
and Deposits
inclusion of a ledger
Repaid screen.
account under the
clause.
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Cl. 24(b)- Loans / Deposits Repaid-Sec 269T
Configure the display of details in the report.
Click F12:Configure
to define the display
of details the Loans
and Deposits
Repaid screen.
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Cl. 24(b)- Loans / Deposits Repaid-Sec 269T
Audit transactions of Loans / Deposits Repaid – Sec 269T.
Select status
required
ledger
under
vouchers
for audit.
Audit
Status.
Enter value under
Click F9 : Audit to
Amount.
audit. appropriate
Record
remarks under Audit
If there are large
Note.
number
of transactions,
Audit
Status
Values
use the Alt
+ F12:
available
are:
to filter the
•Range
Unknown
ledger
•display
Needof
Clarification
greater than
•amounts
Not a Loan
•Rs.20000.
Repaid by Cash
• Repaid by
Cheque/DD
• Under Observation
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Printed Annexures to Form 3CD
Clause 24(b): Click
Alt+P in Loans &
Deposits Repaid u/s 269T
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Contd… 38
Cl. 27- Tax Deducted at Source
Verify remittance of taxes deducted at source have been made within
time to the Government
Click
Alt+F4:Party
to
Use
the
Tax
To use
the
Tax
display Party
Deducted
at
Summary
details.to
Source
feature
feature,
find
whether
tax
enable
the TDS
Click Alt+F5:NOP to
deducted
at source
option in Statutory
display the Nature of
has
been Summary
remitted
& Taxation
under
Payment
within
time
to the
F11:Features
in
attracting
TDS.
Govt.
Tally.ERP 9 and
account the TDS
Note:
NOP-Nature
of
Verify
under:.
relateddetails
transactions
Payments.
any particular
•Examine
Deduction
Details
(e.g. Deducted
•detail
Payment
Details
on Time) in the TDS
Summary screen.
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Cl. 27- Tax Deducted at Source
Display the TDS expenses closing balance with the closing balances
of other expenses (non-TDS).
Compare
TDS
Verify non-TDS
expenses.
with
non
expenses to
see
if
TDShas
expenses
tax
to be in the
TDS Summary
deducted
at source
screen.
for
them.
Click F5: Expenses
Analysis to
generate the
analysis report.
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Cl. 27- Tax Deducted at Source
Audit transactions of Tax Deducted at Source.
Select required
Values
for Auditledger
vouchers
for audit.
Status
available
are:
F9 : Audit to
•Click
Unknown
•audit.
Audited
• Need Clarification
required
status
•Select
Under
Observation
under Audit Status.
Record appropriate
remarks under Audit
Note.
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Printed Annexures to Form 3CD
Clause 27:
Click Alt+P in
TDS Summary
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Contd… 42
F11: Audit Features
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Pre-define
For e.g., ifrules
the payment
for
th of
performing
date for VAT
audits
is 15under
Sec
the month,
44AB (values
then under
tax
th will
Sec
paid40A(3)
on or before
can be15
reconfigured
show the status
by Auditor)
as Paid
on Time. Payments
The value
for
after 15th will be marked
inadmissible cash
as Paid Late in the
payment under Cl. 17h
report.
and the due dates
defined for tax and
statutory deductions are
used in arriving at the
exceptions in the tax
audit.
43
Forms 3CD Report
Generate the tax audit report in Form 3CD for assessee whose
accounts are audited under Sec 44AB for filing with IT Dept.
Prepare Form 3CD
Audit Report with a
provision to export in
Excel
Gateway of Tally > Audit &
Compliance.
Click Form 3CD to
generate the audit
report.
Click Alt + F1:
Detailed to view
details of the report.
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44
Form 3CD Report
The contents of the
Form 3CD report are
partly entered
manually and the
permanent
information is taken
from the master
information in
Tally.ERP 9 data,
created during the
Company creation
phase.
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45
Forms 3CD Report- short cut buttons
Click Alt+T: Select
Text.
Select standard text
for entering in the
report. This saves
time in report
preparation.
Examples of standard
text:
• Add Text
• Remove Text
• As per Annexure
• Cash System
• Mercantile System
• NA
• Nil
• Not Applicable
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46
Forms 3CD Report- short cut buttons
Copying of
configuration
data- Use this
feature to copy
data configuration
from one year to
another or current
company to
another.
Click Alt + R:
Copy From to
perform this
operation.
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47
Forms 3CD Report
The Form 3CD report after generation
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48
Forms 3CD Report
The Form 3CD report after generation
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49
Forms 3CA & 3CB
Form 3CA-This report
is prepared when
the accounts of the
business/profession
have been audited
under any other law.
Refer clause (a) of
Rule 6G
Form 3CB-This report
is prepared in the
case of a person who
carries on business or
profession, but not
being a person
referred to in clause
(a) of Rule 6G.
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Thank You
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