Tax Audit – Relevant Clauses in case of Bank Audit

Books of Accounts 

1. Clause 9 (b) and (c)- Books of Accounts Maintained and Examined – Generally printed list.
2. Clause 14- Particulars of Depreciation allowable –Details of Purchase, Sale, Transfer and Disposal/ Write-off of           Fixed Assets to be verified by Branch Auditor.- Depreciation calculation – generally at HO.
3. Clause 17(a)– Any amount of Capital Expenditure debited to Profit and Loss A/c.
4. Clause 17(e)– Expenditure by way of Penalty or Fine for violation of any law debited to Profit and Loss A/c.

Books of Accounts

NRI & Related Clauses

5. Clause 17(f)– Any amount inadmissible u/s 40(a):

(a) Amount inadmissible u/s 40(a)(i):
~ Any interest paid to a Non-Resident person or to a Foreign Company without TDS.
(b) Amount inadmissible u/s 40(a)(i)(a):
~Any interest, commission, brokerage, fees for Professional/ Technical Services or Contract Amount paid to a                Resident person without TDS.
(c) Amount inadmissible u/s 40(a)(i)(a):
~ Any tax, interest or penalty under Income Tax Act or Wealth Tax Act debited to P&L A/c.

6. Clause 17(h)– Section 40A(3) read with Rule 6DD:

Whether any amount is inadmissible u/s 40A (3) read with Rule 6DD – relating to disallowance of any expenditure paid otherwise than by A/c. Payee Cheque?
– Obtain a Certificate from the Branch Management relating to payments covered u/s 40A(3).

PF & TDS

7. Clause 21- Bank’s Contribution and Employees’Contribution to Provident Fund– Annexure details to be verified. Particulars of Income/ Expenditure of Prior Period credited or Debited to the Profit and Loss A/c. of the Current Year

8. Clause 27- Compliance of TDS provisions: – Verify TDS compliance under all relevant sections like Salary, Interest, Interest to NRI, Contract Payments, Technical & Professional Fees etc.
Provide Details of :
(a) Tax Deductible but not deducted at all.
(b) The shortfall on account of lesser TDS than required.
(c) Tax Deducted late
(d) Tax Deducted but not paid to the Central government

[frontpage_news widget=”2155″ name=”Income tax”]

[frontpage_news widget=”2157″ name=”Tax Update”]

Credit Insights

Credit Insights & Developer Financing- Indian Phenomena

1. Collateralized credit never did so badly in India. That does not mean that you will not have NPA in this segment. But NPA is not credit cost. Your credit cost is NPA minus recovery. There will be players who have 4-5% NPA & lower ROE and there will be efficient players with 0.5% NPA & high ROE.

Credit Insights & Developer Financing

2. Historically in India, NPAs are most common in project financing space due to the variety of reasons like undercapitalized/low equity funding, problems with execution risk etc. Until you get to operation stage, there is 50% chance for the projects to fail. Once it starts operating, projects are okay.

3. There are 2 structural changes that happened in developer financing:

Earlier, HDFC and Banks were doing developer financing. Now it is moved to NBFC for the variety of reasons.

Customer advances funded 75% of project costs (India & Brazil are 2 countries where construction happens with the help of customer advances. In other nations, you need to finish the project with higher developer finance & lower customer advances). Now it came down to 50% of project cost due to RERA. Hence structured credit from NBFC is funding the gap. So it is basically, one form of credit (i.e. customer advances) is getting replaced by another form of credit (i.e. structured credit).

 

Free tool to know Place of Supply

Free tool to know Place of Supply 

Taxmann.com has announced the launch of the ‘Supply Location Tool‘ that can be used to identify the place of supply for the purposes of the GST.

Free tool to know Place of Supply under GST
The tool requires the user to answer some questions related to the transaction that is being carried out. On the basis of user input, the tool quickly identifies the place of supply according to the provisions of the GST Law.

The GST is a tax based on destination, which means that goods and services will be taxed at the place where they are consumed. This brings the concept of the place of supply (POS) under the GST.

 

POS is an essential factor since it helps to know if the transaction is intrastate or interstate supply and, consequently, the tax will be applied, that is, CGST, SGST & amp; IGST.

CGST and SGST are charged if the provider and the recipient are in the same state as the place of supply within the state. However, the identification of POS becomes a challenging task in complex transactions as a seller and buyer, located in two different states, but the goods are delivered in the third state. This tool helps to accurately identify the place of supply in more than 125 different situations. It is absolutely free for users.

Clic Here to access the GST Location Finder Tool for Free

We have conceived this idea because it is very important that a supplier charges the correct tax on the invoice. If he charges CGST and SGST instead of IGST, there will be a deficiency in his IGST responsibility and an overpayment in CGST and SGST.

You will be asked to pay interest on the deficiency and you will not get any interest on the overpayments. Therefore, we have developed this tool that is easy to use and provides the instant result. In fact, this tool saves time, effort and money.

[frontpage_news widget=”879″ name=”Certicom – A Group of Chartered Accountants – Articles”]