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Embrace Accurate and Fair Auditing of Accounting Records with us!
Our auditing process ensures compliance with the statute and provides a clear and honest representation of your accounting records, tailored to your unique legal situation.
Basically, this means we’re going to be checking all your accounting records to make sure they’re accurate and fair. It’s like a reality TV show for your financial statements – we’ll be looking for any hidden drama or shady deals.
But seriously, auditing is important stuff. To make sure your company’s books are in order and playing by the rules, a Chartered Accountant (CA) will be reviewing your reports. They’ll make sure everything is on the up-and-up and follows the Indian Company Act.
Well, because everyone’s watching! Your debtors, creditors, bankers, shareholders, and even the government all want to know that they can trust your company’s financial statements. So, let’s make sure we give them something to believe in!
Statutory audits have become more complex lately. The rules and regulations that auditors have to follow, along with the different accounting standards and the expectations of various stakeholders, have made it harder for them to perform their job effectively.
If you’re looking to gain a fresh perspective on your organization’s functional efficiency— WELCOME! You’re at the right place.
Our specialty lies in conducting internal and management audits that provide a comprehensive and unbiased analysis. We’ll help you identify areas for improvement and optimize your operations for maximum success!
“We believe that Internal Audits should add value to your organization and not just be a compliance exercise.”
Our team of professionals is committed to providing high-quality services with the utmost integrity. We offer customized Internal Audit services tailored to your specific needs, helping you to achieve your business goals, overcome operational challenges, comply with regulatory norms and manage reporting requirements.
To ensure effective risk management, we use a “Risk-Based Audit” (RBA) approach and other advanced tools and techniques to accomplish audit objectives.
So you can Relaxxx, while we work dedicatedly to help you enhance your business performance and maximize your potential.
Our team has extensive experience in conducting all types of audits for large and medium-sized business entities. Not only that, we can also prepare financial statements in compliance with international accounting standards (IAS) and generally accepted accounting principles (GAAP), including the US-GAAP. Our Internal/Management audits are tailored to your specific needs and aim to identify areas of improvement for your business especially focusing on:
We place great emphasis on establishing robust internal control systems to prevent any mishaps, intentional or otherwise—From safeguarding assets to ensuring compliance with internal operating policies and guidelines, we leave no stone unturned.
We’re here to make your resources work smarter, not harder, so you can seize every opportunity that comes your way.
GST – the one tax to rule them all.
GST, the ultimate tax, will absorb all others, bringing forth a unified “One Nation, One Tax” system. However, to ensure the accuracy of payments and refunds, some taxable individuals will undergo GST audits.
But don’t worry!— we ensure that your business stays compliant and your hard-earned money stays in your pocket where it belongs.
Under the present GST regulations, individuals with a turnover greater than Rs 1 crore must have their financial statements audited by a CA or CMA. These individuals must also electronically file a reconciliation document (GSTR 9B) and the audited consolidated reports by December 31 of the following financial year. In addition, a comparison of the recorded supplies with the audited financial document and other specified information must also be submitted.
If someone realizes they made a mistake or left out important information after submitting their tax return, they can still fix it, but they’ll need to pay interest. However, they can’t make any changes after the deadline for filing the return for September or the second quarter of the financial year, or after the actual date they filed the return, whichever comes earlier.
For instance, if X made a mistake on his Oct 2017 return and submitted the annual return for FY 2017-18 on Aug 31, 2018, —he can rectify the mistake until the earlier of two dates:
However, If the results of the tax authorities’ scrutiny or audit reveal any errors, then taxpayers won’t be allowed to make any further corrections.
Taxpayers may be audited by the CGST/SGST Commissioner or an appointed officer, and the method and pace of the audit will be determined at a later date.
“For those subject to audit, we’ll leave no stone unturned, ensuring refunds are claimed, and correct payments confirmed.”
The taxable individual shall:
The auditor has the right to check a taxable individual’s records, but the individual must cooperate by providing access to their books and other documents. If there are any issues discovered during the audit, the individual will be notified within 30 days.
If there are unpaid taxes or inaccuracies in the tax return, the appropriate procedures will be followed to resolve the issue. It is important for the individual to provide assistance and support during the audit to ensure a smooth process.
When can a special audit be initiated?
Under certain circumstances, a special audit may be initiated by the Assistant Commissioner to investigate cases of incorrect value declaration or incorrect credit availing. This can happen during any stage of scrutiny, enquiry, or investigation. The decision to conduct a special audit is based on the nature and complexity of the case, as well as the revenue interest.
Note: Even if a taxpayer’s books have been audited previously, a special audit may still be initiated.
The Assistant Commissioner (with approval from the Commissioner) can order a special audit in writing. A chartered accountant or cost accountant appointed by the Commissioner will conduct the audit.
Time limit for special audit:
The auditor will be expected to deliver the report within 90 days, but this can be extended for an additional 90 days if requested by the taxpayer or auditor.
Price
The Commissioner will calculate and charge the costs of the investigation and report, as well as the remuneration of the inspector.
Findings of special audit
The taxable person will have the opportunity to be heard during the findings of the special audit. If the audit detects unpaid or shortpaid tax, incorrect refunds, or wrongly availed input tax credit, demand and recovery actions will be initiated.
GST as a new tax regime that has already made an impact in India. Businesses may face challenges during the transition and application of GST. To learn more about GST, please visit our blogs.
GST is a single indirect tax system for the entire nation that aims to create a unified and common market in India.
GST provides relief to Indian industry, trade, and agriculture by allowing a more comprehensive and wider coverage of input and service tax set-off. This is achieved through the involvement of several Central and State taxes in the GST and the phasing out of CST.
Exporters can benefit from GST implementation as major Central and State taxes will be involved, allowing for complete and comprehensive setoff of input goods and services. Additionally, phasing out of Central Sales Tax would reduce the cost of locally manufactured goods and services.
India has a federal system where both the Center and the States have the powers to impose and collect taxes through appropriate legislation. Therefore, Dual GST is required in India.
Under the prevailing State VAT system, there is an edge prescribed in different State VAT Acts below which VAT is not applicable, varying from State to State. GST will simplify this by providing a uniform edge of goods, making it easier for small entrepreneurs and traders to comply with tax laws.
GST implementation will result in the removal of cascading effects of CENVAT and service tax with a continuous chain of set-off from the producer’s end to the retailer’s end. This will reduce the overall tax burden on consumers.
For the introduction of GST, suitable legislation for the levy of GST (Central GST Bill, Integrated GST Bill, and State GST Bills) drawing powers from the Constitution must be passed by the Parliament and the State Legislatures. The GST Bills require a simple majority to pass, unlike the Constitutional Amendment, which requires a 2/3rd majority. The levy of the tax can commence only after the GST law has been enacted by the Parliament and respective Legislatures.
The Goods and Services Tax Council will establish a mechanism to adjudicate disputes between the Government of India and one or more states, or between two or more states, arising from the recommendations or implementation of the GST Council ( as per the 101 amendment act 2016)
GSTN, or Goods and Service Tax Network, is a Special Purpose Vehicle that provides a shared IT infrastructure and services to central and state governments, taxpayers, and other stakeholders for the implementation of GST.
GSTN facilitates registration, forwarding returns, computation and settlement of IGST, matching of tax payment details with banking network, providing various MIS reports to the governments based on taxpayer return information, providing analysis of taxpayer profiles, running the matching engine for matching, reversal, and reclaim of input tax credit, developing a common GST portal and applications, and integrating GST front-end systems with back-end systems for a smooth transition.
Small taxpayers with an aggregate turnover of up to Rs. 50 lakhs in a financial year will be eligible for the composition scheme. Under this scheme, taxpayers will pay tax as a percentage of their turnover during the year, without the benefit of Input Tax Credit (ITC). The floor rate of tax for CGST and SGST will not be less than 1%, and taxpayers who opt for this scheme will not collect any tax from their customers. Taxpayers making inter-state supplies or paying tax on reverse charge basis will not be eligible for this scheme.
Under GST, exports will be considered as zero-rated supplies. Exporters will not have to pay any tax on the goods or services they export, and they will be eligible to claim input tax credit. The credit of input tax will be available as a refund to the exporters.
In the GST regime, imports of goods and services will be treated as inter-state supplies, and IGST will be levied on imported goods and services. The tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. The GST paid on import of goods and services will be eligible for a full and complete set-off.
The classification of goods under the GST regime is based on the HSN code. Taxpayers with different turnovers will use a different number of digits in the code:
Small taxpayers with an aggregate turnover up to Rs. 10 lakhs (Rs. 5 lakhs for NE States and Sikkim) are exempt from tax. Taxpayers eligible for threshold exemption have the option to pay tax with input tax credit benefits. Taxpayers making inter-State supplies or paying tax on reverse charge basis are not eligible for threshold exemption.
The taxable person is responsible for paying tax on the supply of goods and/or services. The liability to pay tax arises when the taxable person crosses the threshold exemption of Rs. 10 lakhs (Rs. 5 lakhs for NE States and Sikkim). CGST/SGST is payable on intra-state supplies and IGST is payable on inter-state supplies at the rates specified in the respective Acts. However, there are some specified cases where the taxable person is liable to pay GST even though they have not crossed the threshold limit.
As per the Constitution (one hundred and first amendment) Act, 2016, decisions of the GST Council will be made—
The GST Council’s mechanism ensures harmonization of different aspects of GST among the Centre and States, as well as between States. The Constitution (one hundred and first amendment) Act, 2016 mandates that the GST Council be guided by the need for a harmonized structure of GST and the development of a harmonized national market for goods and services while discharging its various functions.
The GST Council will be established with the Union Finance Minister as the Chairperson and the State Finance/Taxation Ministers and the Minister of State (Revenue) as members. The council will recommend:
The Centre and States will jointly decide the rates for CGST and SGST. The GST Council will recommend the rates, which will then be notified.
In the GST regime, the Integrated GST (IGST) would be imposed and collected by the Central government on inter-state supplies of goods and services. According to Article 269A of the Constitution, the GST on supplies during inter-state trade or commerce will be levied and collected by the Government of India, and the tax will be divided between the Union and the States as suggested by the Goods and Services Tax Council and provided by Parliament by law.
The implementation of GST will be a major reform in the field of indirect taxation in India.
The Constitution of India was amended recently to enable both the Centre and States to levy and collect the Goods and Services Tax (GST). Prior to the amendment, the Centre had the power to tax the manufacture of goods while States had the power to tax the sale of goods. The GST required changes to be made in the Constitution to allow for the concurrent powers of both the Centre and States to levy and collect the tax. Article 246A of the Constitution was added by the Constitution (one hundred and first amendment) Act, 2016 for this purpose.
The Centre will administer and collect CGST and IGST, while the respective states will be responsible for administering and collecting SGST.
A dual GST model is proposed, where both the Centre and States will levy it on a common tax base. The Centre will levy the CGST on intra-state supply of goods and/or services, while the States will levy the SGST. The Centre will also administer and collect IGST on every inter-state supply of goods and services.
Tobacco and tobacco products will be subject to GST, and the Centre will also have the power to levy Central Excise duty on these products.
The current taxation system (VAT & Central Excise) will continue for tobacco and tobacco products.
Alcohol for human consumption, petroleum products like petroleum crude, motor spirit (petrol), high-speed diesel, natural gas and aviation turbine fuel, and electricity will not be covered under GST.
In order to identify which taxes could be subsumed under GST, the different Central, State, and Local levies were evaluated based on several principles.
The GST is proposed to replace various existing taxes, which are currently levied and collected by the Centre and the States.
The taxes to be subsumed under the GST are:
State taxes that would be subsumed under the GST include:
The GST Council will recommend to the Union and States which taxes, cesses and surcharges levied by the Centre, the States and the local bodies can be subsumed in the GST.
It refers to a tax that is collected by the jurisdiction over the place where the goods or services are consumed.
GST is a tax on consumption of goods and services levied at all stages from manufacture to final consumption with a credit of taxes paid at previous stages available as set off. It aims to tax only value addition and be borne by the final consumer.
The GST common portal will inform the applicant of the grant or rejection of their registration application through an email and SMS, along with jurisdictional details.
A non-resident taxable person is a taxable person who occasionally undertakes transactions involving the supply of goods and/or services, with no fixed place of business in India.
A taxable person residing outside of India, who occasionally conducts business transactions in India, without a fixed place of business in the country is considered a non-resident taxable person according to the MGL.
A Casual Taxable Person refers to a person who occasionally undertakes transactions in a taxable territory where they have no fixed place of business, as per Section 2(21) of MGL.
Government authorities/PSUs not making outward supplies of GST goods but making inter-state purchases will be given a unique identification number (ID) by the respective state tax authorities through the GST portal, even though they are not liable to obtain GST registration.
A taxable supplier who supplies to UN organizations is expected to mention the UIN on the invoices and treat such supplies as supplies to another registered person (B2B). The invoices will be uploaded by the supplier.
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Before we dive into the world of tax audits, let’s take a moment to appreciate the term “audit” itself. To audaciously define it, audit is like a formal inspection of an organization’s financial innards.
Think of it as a thorough checkup, like when you go to the dentist and they poke around your mouth with sharp tools – but instead of teeth, they’re examining your money matters. It’s like an x-ray for your accounting, revealing any hidden cavities or decay. But fear not, for with the right preparation, a tax audit can be as painless as a trip to the spa.
Taxes and audits – two words that can strike fear in the hearts of even the most seasoned business owners. But fear not, for tax audits aren’t as scary as they sound! In fact, they can be quite helpful.
Simply put, a tax audit is an examination of a business’s financial records from an income tax perspective. It’s just one of the many types of audits conducted under different laws. While some audits may cause stress and headaches, tax audits can actually make the process of computing income for tax returns a breeze. So, no need to sweat it – embrace the tax audit!
When a business’s sales, turnover or gross receipts exceed Rs 1 crore in a financial year, a tax audit is mandatory. But there are other situations where a taxpayer might need to have their accounts audited. Check out the tables below for more information:
Category of person | Threshold |
---|---|
Business | |
Operating a business (excluding those who choose presumptive taxation) | Criteria for tax audit requirement: ● Total sales, turnover or gross receipts exceeding Rs.1 crore in FY ● Cash transactions limited to 5% of total gross receipts and payments, threshold turnover limit for tax audit is increased to Rs.10 crores (from FY 2020-21 onwards) |
Business qualifying for presumptive taxation scheme under Section 44AE, 44BB or 44BBB | Claims profits or gains below the prescribed limit under the presumptive taxation scheme |
Eligible business for presumptive taxation under Section 44AD. | Reports income below prescribed limit for presumptive tax scheme and exceeds basic threshold limit |
Business opting out of presumptive taxation under Section 44AD in any one financial year during the lock-in period of 5 consecutive years | If income exceeds the maximum tax-free limit in the subsequent 5 consecutive tax years from the financial year when opting out of the presumptive taxation scheme. |
Business declaring profits under Section 44AD’s presumptive taxation scheme | If the income exceeds the maximum amount not chargeable to tax in the subsequent 5 consecutive tax years from when the presumptive taxation was not opted for. |
Carrying on business eligible for presumptive taxation under Section 44AD | Businesses carrying on with total sales, turnover, or gross receipts not exceeding Rs 2 crore in the financial year are exempt from tax audit. |
Profession | |
Carrying on profession | Carrying on profession with total gross receipts exceeding Rs. 50 lakh in the financial year. |
Eligible for presumptive taxation under Section 44ADA while carrying on a profession | ● Claims profits or gains below the prescribed limit under the presumptive taxation scheme ● Income exceeds the maximum amount not chargeable to income tax. |
Business loss | |
In case of loss from business when sales, turnover or gross receipts exceed 1 crore, the taxpayer is subject to tax audit under 44AB | If the total sales, turnover, or gross receipts are more than Rs 1 crore. |
If the taxpayer’s total income is above the basic threshold limit, but they have experienced a loss from conducting their business (without opting for the presumptive taxation scheme). | If the business incurs a loss and the sales, turnover or gross receipts exceed 1 crore, the taxpayer is liable for a tax audit under section 44AB. |
If the taxpayer is carrying on a business and has opted for presumptive taxation scheme under Section 44AD, and incurs a business loss, but their income is below the basic threshold limit. | Tax audit not applicable |
If a taxpayer carries on a business and is eligible for the presumptive taxation scheme under Section 44AD, but incurs a loss and their income exceeds the basic threshold limit, then they are not eligible for the presumptive taxation scheme and will have to file their tax return as per the regular provisions. | The taxpayer declares income below the limits specified under the presumptive tax scheme, but their total income for the year exceeds the basic threshold limit |
As per the Finance Act of 2020, taxpayers with a turnover exceeding Rs. 1 crore were required to undergo a tax audit, unless their cash receipts and payments were limited to 5% of gross receipts/turnover. However, from the Assessment Year 2020-21 (Financial Year 2019-20), this threshold limit was increased to Rs. 5 crores.
Further, the Finance Act of 2021 raised the threshold limit to Rs. 10 crores, effective from April 1, 2021, provided that cash transactions do not exceed 5% of the total transactions.
What happens if a person is required to get his accounts audited under any other law for eg. statutory audit of companies under company law provisions?
If the taxpayer’s accounts have already been audited under any other law, then there is no need to conduct a separate audit for income tax purposes. As long as the audit is completed before the deadline for filing the return, the taxpayer can submit the required audit report under the Income Tax Act.
What constitutes an Audit report?
The tax auditor has to submit a report in a specific format, either Form 3CA or Form 3CB, depending on whether the taxpayer is required to have their accounts audited under other laws. If a taxpayer is required to have their accounts audited under other laws, Form No. 3CA is used, and if not, Form No. 3CB is used. The audit report must also include prescribed information in Form No. 3CD.
How and when tax audit reports shall be furnished?
The tax auditor must submit the tax audit report online using his CA login credentials. The taxpayer must also add the CA’s details in their login portal. Once the report is uploaded, the taxpayer must either accept or reject it through their login portal. In case of rejection, the audit process must be repeated until the report is accepted.
Remember to file the tax audit report by the due date for filing the income tax return. The deadline is 30th November of the following year for taxpayers engaged in international transactions and 30th September of the following year for others. The assessment year is the subsequent year itself.
Failure to comply with the requirement of tax audit may result in a penalty of either 0.5% of the total sales, turnover, or gross receipts or Rs 1,50,000, whichever is lower. However, if there is a reasonable cause for such failure, no penalty will be imposed under section 271B.
Some of the reasonable causes accepted by Tribunals/Courts are:
natural calamities:
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