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Subject: Auditing & Taxation Subject Code:304 Class: TY B.com

SECTION:1 AUDITING

Unit 1: Introduction Principles of Auditing and Audit Process.

Synopsis
 Auditing: Meaning, Objectives, Principles, Scope
 Errors and Frauds in Auditing: Types of error, Location of error, Types of
Fraud, Difference between Fraud and error
 Advantages of Auditing
 Limitation of Auditing
 Types of Audit.
 Audit Process.
 Internal control, Internal check and Internal Audit.

Auditing: Meaning
Auditing is a systematic examination of the books of records of business.

Meaning of Audit is a thorough inspection of the books of accounts of the organization.

The person who carries out an audit is the auditor

Audit is the examination or inspection of various books of accounts by

an auditor followed by physical checking of inventory to make sure that all departments
are following documented system of recording transactions. It is done to ascertain the
accuracy of financial statements provided by the organization.

Objectives

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Principles

1. Principles of competency.
2. Principles of Independence
3. Principles of Integrity.
4. Principles of Confidentiality.
5. Principles of Objectivity.
6. Principles of Documentation.
7. Principles of Planning.
8. Principles of Audit Evidence.
9. Principles of Accounting system and Internal control.
10.Audit conclusions and Report.

Scope
The amount of time and documents which are involved in an audit, is an important
factor in all auditing. The audit scope, ultimately, establishes how deeply
an audit is performed. It can range from simple to complete, including all company
documents

Errors and Frauds in Auditing

Types of error

TYPES OF ERRORS

Clerical Errors Errors of Principle Compensating Errors Errors of Duplication

Errors of
Commission

Errors of
Omission

Partial Omission

Complete
Omission

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Location of errors
The location of errors will be easier if the following steps are systematically taken.
* Check the total of the trial balance
* Compare the ledger account balances carried to the trial balance
* Check the total of debtors' and creditors' accounts and compare with the
balance of debtors' and creditors' amounts shown in the trial balance
* Verify the total of subsidiary books and their posting to ledgers
* Compare the items of trial balance of the current year with the items of trial
balance of the previous year to see if any balancing figure is omitted.
* Verify that all journal entries are posted into ledgers.

Types of Fraud

Employee Fraud Management Fraud

Internal
Embezzlement Misappropriation Manipulation Omission Misapplication control
System
of cash of Goods of Accounts of Events of accounting overridden
policies

Advantages of Auditing

 Audit Helps to Detect and Prevent Errors and Frauds.

 Audit Helps to Maintain Account Regularly.
 Audit Helps to Get Compensation.
 Audit Helps to Obtain Loan.
 Audit Facilitates the Sale of Business.
 Audit Helps to Assess Tax.
 Audit Facilitates to Compare.
 Audit Helps to Adjust Account of Deceased Partner.

Limitation of Auditing

 Rely on Experts − An Auditor has to rely on experts like engineers, valuers and lawyers for
estimation and valuation of fixed assets and estimation of contingent liabilities.

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 Efficiency of Management − An Auditor does not comment on the efficiency of management

working in client organization; no comments on future performance of an organization can be
made through audited financial statements.
 Checking of All Transactions − It is not possible for an Auditor to check all business transactions
especially in big organizations where the number of transactions is very high. An Auditor has to
rely on sampling and test checking.
 Additional Financial burden − An organization has to bear additional financial burden on account
of any fees and other such expenses for conducting an audit.
 Not Easy to Detect Some Frauds − It is not easy for an Auditor to detect deeply laid frauds like
forgery, misstatements and non-recording of transactions.

Types of Audit
Types of Audit

Employer
Ownership Periodicity Objectives Scope of Auditor Manner of
of
audit Checking
Privat Continuous Financial Complete Internal Standard
Audit

Annual Operational Partial External Balance sheet

Government
Audit
Interim Cash Audit Post and vouch
Audit
Statutory
Audit Occasional Management

Concurrent Tax

Social

Environment

Audit Process
The Audit process is a well-defined methodology for organizing an audit and is
adopted to accomplish audit objectives.

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An audit process may consist of the following steps:

1. Define Audit Objectives
2. Audit Announcement
3. Planning
4. Fieldwork
5. Reporting

Audit program
1.Audit program is nothing but a list of examination and verification steps to be applied
and set out in such a way that the inter-relationship of one step to another is clearly
shown and designed
2.An audit program consists of a series of verification procedures to be applied to the
financial statements and accounts of a given company for the purpose of obtaining
sufficient evidence to enable the auditor to express an informed opinion on such
statements
3.An audit program covers various steps of auditing in an audit program like the
assessment of internal control, ascertaining accuracy and reliability of books of
accounts, inspection, vouching and verification, valuation of assets and liabilities,
scrutiny of accounts, presentation of financial statements.

The following points should be kept in view:

(1) Stay within the scope and limitation of the assignment.

(2) Determine the evidence reasonably available and identify the best evidence for
deriving the necessary satisfaction.
(3) Apply only those steps and procedures which are useful in accomplishing the
verification purpose in the specific situation.
(4) Consider all possibilities of error.
(5) Co-ordinate the procedures to be applied to related items.

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Working paper
1.The audit working papers constitute the link between the auditor’s report and the client’s
records.
2.The objects of an auditor’s working papers are to record and demonstrate the audit work
from one year to another
3. Working papers are varied in nature. They may be recorded on paper or on electronic
or other media. Examples include:
 Audit programmes.
 Analyses.
 Issues memoranda.
 Summaries of significant matters.
 Letters of confirmation and representation.
 Checklists.

Internal control, Internal check and Internal Audit.

Internal control: Internal controls are the mechanisms, rules, and procedures
implemented by a company to ensure the integrity of financial and accounting information,
promote accountability, and prevent fraud. Besides complying with laws and regulations
and preventing employees from stealing assets or committing fraud, internal controls can
help improve operational efficiency by improving the accuracy and timeliness of financial
reporting.

Internal check: Internal Check is an integral function of the internal control system. It
is an arrangement of duties of the staff members in such a way that the work performed
by one person is automatically and independently checked by the other
Features of Internal check
1. This technique is an integrate part of the complete system of internal control.
2. This technique is related to the division of work among the people maintaining the
accounts.
3. In this technique, no single employee records any transaction from the beginning to
the end.
4. In this technique, the work done by every employee is examined independently by
another employee.
5. In this technique, the work done by one employee is complementary to the work done
by another employee.
The aim of this technique is to develop an automatic system for detection of frauds and
errors.
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In this technique, the work of book-keeping and accountancy is mechanised to the

maximum possible extent.

Internal Audit: Internal Audit is a department or an organization of people within a

company that is tasked with providing unbiased, independent reviews of systems,
business organizations, and processes
Distinguish between 'Internal check and Internal Audit
1. Meaning: Internal Check is an arrangement of duties allocated in such a way that
the work of one person is automatically checked by another.
Internal Audit is an independent appraisal of the operations and records of the
company.

2. Object: The purpose of Internal Audit is to detect the errors and frauds which have
already been committed.
The purpose of Internal Check is to prevent or minimize he possibilities of errors,
frauds or irregularities.

3. Need for separate staff: for Internal Audit, a separate staff of employees is
engaged for the purpose.
For internal check, no new appointment is made. It, in fact represents only the
arrangement of duties of the staff in a particular way.

4. Nature of work: The work involved in the Internal Audit is just like that of a watch
man. Internal auditor has to report, from time to time, to the management about the
various in efficiencies and suggest improvements. It is also his duty to see that the
internal check system does not become static.
Internal Check, on the other hand, represents a process under which the work goes on
uninterruptedly and the checking too is more or less automatic.

5. Timing of work: Internal Audit starts when the accounting process of different
transactions is finished.
Internal Check is an operation during the course of transaction.

6. Internal audit: It is a device for checking the work, whereas internal check is a
device for doing the work.

7. Scope of work: The scope of Internal Check is very limited. The scope of Internal
Audit is comparatively board.
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8. Involvement: A large number of employees are needed for the implementation of

Internal Check System.
Whereas, a much smaller number of persons are needed for implementing Internal
Audit implementation.

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Unit 2: Checking, Vouching and Audit report

Synopsis
 Test Checking
 Voucher
 Vouching
 Vouching of cash book.
 Audit report
 Audit certificate
 Auditing and Assurance standard

Test Checking
It is the examination of few transaction of business, instead of checking all
transaction.
Voucher
It is a documentary evidence supporting a business transaction. It may include:
 A receipt.
 An invoice.
 Bank Paying slip.
 Debit note.
 Credit note.
 Gatekeeper’s books of entry.
 Wage book.
 Order book.

Type of Voucher

Primary Secondary

Cash memo. Carbon copy of cash memo

Rent Receipts. counter foli of paying-slip
Wage Sheets.

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Vouching
Vouching can be described as the essence or backbone of auditing. Vouching is defined
as the "verification of entries in the books of account by examination of documentary
evidence or vouchers, such as invoices, debit and credit notes, statements, receipts, etc.
Vouching of cash book
In a business concern, cash book is maintained to account for receipts and payments
of cash. It is an important financial book for a business concern. Hence
the auditor should see whether all receipts have been recorded in cash book and no
fictitious payment appears on the payment side of cash book. To ensure this an auditor
should check debit side of cash book which represents as receipts and credit side which
contains payment details

Vouching of Cash Receipts (Debit Side of Cash Book)

 Opening Balance of Cash Book
 Cash Received from Debtors
 Repayment of Loan by Others
 Rent Received
 Sale of Investments
 Sale of Fixed Assets
 Interest and Dividend Received
 Commission Received
 Installments Received on Hire-Purchase Sale
Vouching of Cash Payments (Credit Side of Cash Book)
 Opening Balance
 Payment to Creditors
 Payment of Salaries
 Payment of Wages
 Purchase of Plant and Machinery
 Purchase of Land & Building
 Rent Paid
 Insurance Premium
 Income Tax
 Commission on Sale
 Director’s Fees
 Internal Control System for Cash Transactions.

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Valuation of Assets and Liabilities.

Verification of assets and liabilities. Verification means 'proving the truth' or 'confirmation
of the truth'. Verification of assets and liabilities means proving the truth about the
existence and the correctness of the money value of the assets and liabilities appearing
in the balance sheet of the business
Verification of assets and liabilities are done to confirm the following −

 Existence
 Ownership
 Proper valuation
 Possession
 Freedom from encumbrances
 Proper recording

Objectives of Verification

Following are the objectives of Verification −

 Confirmation about the existence of assets through physical verification.
 Legal and official documents relating to assets are checked to confirm the
ownership of assets.
 It is confirmed that assets are free from any charge of lien.
 Proof regarding proper valuation of assets.
 To confirm that assets are properly accounted for in the books of accounts.

Vouching and Verification

Both are considered to be same thing but there are lots of difference between vouching
and verification.
Vouching relates to confirmation of the correctness and authenticity of accounting entries
as appeared in the books of accounts whereas verification confirms the existence,
ownership and valuation of assets as appears in the balance sheet. The Auditor’s duty
is not only vouching the entries appearing in the books because vouching cannot prove
the existence of the related asset or liabilities at the balance sheet date.

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Verification of Liabilities

Following are the objectives of verification of liabilities −

 Creditors reflect a true position as to liabilities of the business.
 All liabilities are disclosed in the balance sheet whether recorded in the books or
not.
 Value of liabilities is according to the generally accepted accounting principles.
 Liabilities are properly classified and disclosed in the balance sheet.

Objectives of Verification

Following are the objectives of Verification −

 Confirmation about the existence of assets through physical verification.
 Legal and official documents relating to assets are checked to confirm the ownership of assets.
 It is confirmed that assets are free from any charge of lien.
 Proof regarding proper valuation of assets.
 To confirm that assets are properly accounted for in the books of accounts.

Vouching and Verification

Both are considered to be same thing but there are lots of difference between vouching
and verification.
Vouching relates to confirmation of the correctness and authenticity of accounting entries
as appeared in the books of accounts whereas verification confirms the existence,
ownership and valuation of assets as appears in the balance sheet. The Auditor’s duty
is not only vouching the entries appearing in the books because vouching cannot prove
the existence of the related asset or liabilities at the balance sheet date.

Verification of Liabilities

Following are the objectives of verification of liabilities −

 Creditors reflect a true position as to liabilities of the business.
 All liabilities are disclosed in the balance sheet whether recorded in the books or not.
 Value of liabilities is according to the generally accepted accounting principles.
 Liabilities are properly classified and disclosed in the balance sheet.


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Confirmation and Verification

Let us now understand what confirmation and verification is required by the auditor.
Auditor requires confirmation from third party and management about any fact or figure.
Few of the examples in which the Auditor requires confirmations are as follows
 Confirmation from debtors about balances.
 Confirmation from creditors about balances.
 Confirmation from banks about bank balances, fixed deposits, interest accrued, overdraft or
cash credit limit balance, etc.
 Confirmation from financial institutions about loan and interests.
 Confirmation from management about contingent liabilities, etc.
Verification
Verification means inspection of assets by the Auditor and it includes identification,
weighing and counting of assets. Following items require physical verification −

 Land and Building

 Plant and Machinery
 Stock-in-hand
 Stores and consumables
 Investments
 Securities
 Cash-in-hand
 Bills receivable
Thus, confirmation and verification are altogether different processes of audit and both
are equally important too.

Valuation of Assets and Liabilities

Valuation means estimation of various assets and liabilities. It is the duty of Auditor to
confirm that assets and liabilities are appearing in the balance sheet exhibiting their
proper and correct value. In the absence of proper valuation of assets and liabilities, they
will exhibit either overvalued or under-valued.
It is therefore required for an Auditor to exercise reasonable care and skill to analyze the
basis of valuation from technical experts and satisfy himself that assets shown in
Balance-sheet are properly valued accordance with the generally accepted conventions
and accounting principles.

Components of Valuation
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Methods of valuation of assets are as hereunder −

 Cost Price − This is the cost price paid at the time of acquisition of assets plus the freight
charges, octroi charges, and commissioning and installation charges, etc. to bring that asset
in usable condition.
 Book Value − This is the value as appearing in the books of accounts; the cost price less
depreciation.
 Realizable Value − A Value which can be realized from the sale of assets.
 Market Value − A value which the asset can fetch at the time of sale.
 Replacement Value − A value on which an asset can be replaced.
 Conventional Value − It means the cost price less depreciation written off ignoring any kind
of fluctuation in the price.
 Scrap Value − If the asset is not in working condition and sold as scrap, then the sale value
of asset is scrap value.

Audit report
An audit report should be clear, specific and complete, in order that anyone who has an
occasion to read it may know exactly what is wrong with the company. The auditor should
review and assess the conclusions drawn from the audit evidence obtained as the basis
for the expression of an opinion on the financial statements. This review and assessment
involve considering whether the financial statements have been prepared in accordance
with an acceptable financial reporting framework applicable to the entity under audit. It is
also necessary to consider whether the financial statements comply with the relevant
statutory requirements.
The auditor’s report should contain a clear written expression of opinion on the financial
statements taken as a whole.
Basic Elements of the Auditor’s Report:
1. Title
2. Addressee
3. Introductory Paragraph:
4. Management’s Responsibility for the Financial Statements:
5. Auditor’s Responsibility
6. Auditor’s Opinion:
7. Other Reporting Responsibilities:
8. Signature of the Auditor
9. Date of the Auditor’s Report
10. Place of Signature

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Types of Audit report

Unqualified report Qualified report Disclaimer report Adverse report

Unqualified report: An unqualified opinion should be expressed when the

auditor concludes that the financial statements give a true and fair view in
REPORT presentation of the financial statements.
An unqualified opinion also indicates that:
(a) the financial statements have been prepared using the generally accepted
accounting principles, which have been consistently applied
(b) the financial statements comply with relevant statutory requirements and
regulations
(c) there is adequate disclosure of all material matters relevant to the proper
presentation of the financial information, subject to statutory requirements, where
applicable.

Qualified report: The auditor shall express a qualified opinion when:

(i) The auditor, having obtained sufficient appropriate audit evidence,
concludes that misstatements, individually or in the aggregate, are
material, but not pervasive, to the financial statements
(ii) The auditor is unable to obtain sufficient appropriate audit evidence on
which to base the opinion, but the auditor concludes that the possible
effects on the financial statements of undetected misstatements, if any,
could be material but not pervasive.

Disclaimer report: The auditor shall disclaim an opinion when the auditor is
unable to obtain sufficient appropriate audit evidence on which to base the
opinion
the auditor concludes that the possible effects on the financial statements of
undetected misstatements, if any, could be both material and pervasive.
Thus, disclaimer report is issued when there is insufficient evidence to form an
opinion

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Adverse report: The auditor shall express an adverse opinion when the
auditor, having obtained sufficient appropriate audit evidence, concludes that
financial statement do not give a true and fair view, and the matter od
disagreement with management is material and pervasive.

Audit certificate
An Auditor's certificate is a written confirmation of the accuracy of the facts relating to
the accounts for a particular time or to a specific matter.

Auditor is called for issuing certificate for the following:

(a) Import and Export certificate.

(b) Bonus computation certificate.
(c) Deposit Return certificate.
(d) Newspaper circulation certificate

considered while preparing a certificate:

1. Limitations of the examination should be stated.

2. Indicate the specific record covered by the auditor.
3. Fundamental assumption made for certifying.
4. Manner of the conduct of audit.
5. The information and explanations obtained.
6. Title of the certificate should be mentioned.

7. Certificate should be a self-contained document.

8. If figures from audited statements are made, then it should be mentioned in the
9. certificate.
10. Auditor should address the certificate to the client or the public authority, or person
11. requiring it as the case may be.
Auditing and Assurance standard

Auditing and Assurance standard1 (SA200)

This SA explains basic rules for auditing of any organization. These rules are
very simple but it is needed for all type of examination of accounts. This standard
classifies these rules in 10 points.

1. Integrity, objectivity and independence: auditor should do his auditing work

independently. He should not be affected due to the any approach. Whether

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he is auditing of his relative or any other person, he should be impartial all the
time. Only then, his examination will be useful.
2. Confidentiality: Businessman shares many confidential information to the
auditor. It is the rule for auditor; he should not share it with other. He may only
share if as per any law, it is compulsory.
3. Skill and Competence: For solving auditing problem, auditor should use his
skills and competence.

4. Work Performed by Others: Sometime auditor has to depend on other

auditors and employees for completing his audit work. So, it is the duty of
auditor, he should appoint them as per their qualification and skill.

5. Documentation: Auditor should collect all the documents which is needed for
his audit. All document should be classified and keep in a direction that it can
easily be found when it is needed.

6. Planning: Auditor should make the plan of audit. He should complete the
audit on the time. Auditor will also make the plan about “How to audit ledger
accounts and financial statements?”

7. Audit Evidence: Audit evidence is the base of better audit. These evidence
are relating to financial information. If he has to give his opinion on the
financial information, he should obtain its all proofs.

8. Accounting System and Internal Control: Auditor should check

both accounting system and internal control system before accepting it as it is.
If there is the need of improvement in it, he can bring it in the notice.

9.Audit Conclusions and Reporting: Auditor should conclude in his reports:

 Financial information follows all statutory requirements.
 Financial information are prepared on the basis of accounting policies.
 Audit report must be in written and a clear opinion on the financial information.

10.Effective Date: All the auditing and assurance standard apply on or after
1st April 1985
Audit Evidence under AAS – 5 (SA500)
As per AAS - 5, audit evidence means the collection of important information for
checking of accounting reports. You know, this world is working on the basis of proofs.
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Following are the Main Ways for Collecting Audit Evidences:-

 Inspection
 Observation
 Inquiries and Confirmation
 Computation.
 Analytical Reviews

1. Inspection
Inspection is the main method of audit evidence. If any auditor says that
accounting reports are not showing true and fair views, then interested parities
will demand its proofs. At that time, he will explain that he did inspection and lots
of transactions which are recorded in the accounting records are without sources.
We also examined the records and found unreliable. So, auditor should come
physically to the office of company and check accounts one by one and write it in
inspection notes which will become his audit proof. He should also check the
assets physically.

2. Observation
In the observation way of collecting audit evidence, auditor will observe the process
of accounting records which are done by others. For example, there are large
quantities of stock in the store which were counted by store keeper. Auditor can take
sample and ask the quantity. Now, store keeper will count it. Auditor will observe
whether he is counting correctly or not. On this basis, he will make his observation
report and it will be his audit evidence for telling counting process is wrong or
correct.

3. Inquiries and Confirmation

Inquiries are the set of questions which are asked by auditor from inside personnel
and outside persons for knowing useful information regarding accounting records of
company. This inquiries may be written or oral. If it is oral, auditor will write the
responses of his inquiries when he will free in same day. Confirmation is also
response of auditor's query.

4. Computation
Computation is the calculation of figures which are showing in the accounting
records. Auditor can fix the duty of his assistant to calculate the total of bills and
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ledger balances and then he see whether there is difference or not in his calculation.
This audit evidence will be helpful for knowing arithmetical accuracy in the books of
accounts.

5. Analytical Reviews
In analytically reviews, auditor calculates different accounting ratios and analyse the
past financial statements for checking the variations in the figures of financial
statements.

Following Audit Evidence is Must :-

1. Existence of Asset : Whether an asset is exist in the company or not. Evidence

can get after physical checking only.

2. Right and Obligations on the Assets and Liabilities : Whether asset is of

company or not. Its proof shows its original buying bill. Whether an liability is the
obligation of company or not. Its proof will be the loan agreement document.

3. Correct Valuation: Whether valuation is correct or not, for confirming this, just go
to market and know the correct value of specific asset of company

4. Correct Measurement: Whether quantity is measure correctly or not depends on

the person who is responsible for this. Through above observation way, you can
check whether person is measuring correct or not.

5. Correct Presentation and Disclosure: To check whether all financial statements

are presented and disclosure on the basis of statutory requirement or not.

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Unit 3: Company Auditor.

Synopsis

 Auditors Qualification.
 Disqualification.
 Appointment of auditor
 Removal of an auditor.
 Rights and duties of a company auditor
 Liabilities of a company auditor

Auditors Qualification.

Qualification of a Company Auditor:

According to Section 226(1) and 226(2) of the Companies Act, the prescribed
qualifications of an auditor are as follows:

Qualification [sec226 (1)]:

1. The auditor of a co. may be either, an individual or a firm
2. In the case of an individual, he should be a Chartered Accountant within the meaning
of Chartered Accountants Act 1949 i.e. he should be holding certificate of practice.
3. In the case of firm of auditor’s all the partners of a firm shall be chartered accountants
practicing in India within chartered accountants Act1949.

Qualification [Sec 226(2)]:

A person holding a certificate issued by central govt. under restricted state auditors rules
prior to the enactment of part B state laws 1951 can also be auditor of the co.
The central government in empowered to frame rules relating to granting renewals,
suspension or cancellation of such certificates.

Disqualification of a Company Auditor

According to section 226(3) of the Companies Act, the following persons shall not be
appointed as auditors of a company:

1. A body corporate. A company cannot audit any other company,

2. An officer or employee of the company.

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3. A person who is either a partner or employee of an officer or employee of the

company.
4. A person who has taken debt from the company for amount exceeding Rs. 1,000.
5. A person who has taken guarantee of another person who has taken a loan
exceeding Rs. 1,000 from the company.
6. A person who holds shares or debentures of the company cannot audit that company.
Appointment of auditor

Particulars Non-Government co Listed/Specified co Government Company co

1. Application for 1st Auditor -Appointed by the Board Of -Appointed by Board Of -Appointed by the Comptroller
post Incorporation Directors. Directors. and Auditor General of India.
-This has to be done within 30 -This has to be done within -This has to be done within 60
days from the date of 30 days from the date of days from the date of
Registration. Registration. Registration.

-Appointment can also be done -Appointment can also be -Appointment can also be done
by Members at Extraordinary done by Members at by Board of Directors within 30
General Meeting within 90 Extraordinary General days of incorporation
days of information. Meeting within 90 days of
the information
2. Auditor at First AGM. The -The appointment is done by -The appointment is done by -The appointment is done by
written consent and a the members the members the Comptroller and Auditor
certificate. General of India
for a maximum term of 5/10 -He should be appointed within
consecutive years 180 days from the 1st of April
3. Appointment of -The appointment is done by -The appointment is done by -The appointment is done by
Subsequent Auditor the members the members the Comptroller and Auditor
General of India within 180 days
for a Maximum term of 5/10
from the 1st of April
consecutive years
4. Casual Vacancy due to -The appointment is by the The appointment is done by the
resignation and other reasons members within 3 months of : -CAG (Comptroller and Auditor
the recommendations of Board General) within 30 days
and he will hold office till the
next AGM
OR
-BOD within the next 30 days

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Removal of an auditor.
Removal of first auditor: The company can remove the first auditor appointed by the
directors, in a general meeting. The central government’s approval is not needed for the
removal of first auditor’s .
Removal of subsequent auditor: Any subsequent auditor can be removed from the
office before the expiry of his term only by the company in its general meeting , after
obtaining the prior approval of the central government and following the same procedure
as laid down for appointment of an auditor in the place of a retiring auditor.

Rights and duties of a company auditor

Rights:
 Rights to access the books and records: Company auditor has rights to access
the books and records of the company. He can refer to any book..
 Right to get explanations from company staff: Company auditor has right to get
explanations from company staff. If such explanations are not received he qualifies
his report.
 Right to receive notice of general meetings: Company auditor has right to
receive notice of general meetings. He can attend the general meetings.
 Right to visit branches: Company auditor has right to visit branches. But there
should be no separate auditors to those branches and it should be a home branch
 Right to seek legal and technical advises: Company auditor has right to seek
legal and technical advises. But, in his report, he should express his own opinion
but not that of experts concern.
 Right to claim remuneration: Company auditor has right to claim remuneration.
His remuneration will be fixed by appointing authority and it will be paid by
company.
 Right to refuse to commence the audit: Company auditor has right to refuse to
commence the audit. Till making the records up to date, he cannot start his work.
 Right to question the board: Company auditor has right to question the board.
Board also should give explanation to him.
 Right to qualify his report: Company auditor has right to qualify his report. If he
comes across any dis-satisfactory point, he can mention the same in his report.
 Right of indemnity: Company auditor has right of indemnity. He can reimburse
expenses incurred by him in connection with conduction of audit work.

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Duties:
Duties towards the shareholders:
1. Report shareholders about true and fair state of affairs of the company
2. State that balance sheet and profit and loss a/c give all information required by law
3. State that balance sheet and profit and loss a/c agree with the books of account
4. State that balance sheet and profit and loss a/c agree with accounting standards
5. State that he has obtained all the necessary information
6. State whether the company has maintained all books as required by law;
7. State the reasons of qualification in his report
8. State that he has received the audit report on the branch accounts audited by other
auditor and how he has dealt with the same in preparing his report
9. Auditor shall state in his report whether:
a) The loans taken are properly secured and the terms of loans are not against the
interests of the company
b) Loans given are shown as fixed deposits and the terms of loans are not against the
interests of the company
10. Transactions recorded as book entry are not against the interests of the company
11. Personal expenses of directors have not been charged to revenue a/c of company;
12. The company fulfils the requirements of CARO 2003.

Duties towards Company:

1. Prospectus: According to Sec 56, the auditor is required to certify profits or losses,
assets & Liabilities and dividend paid etc in the prospectus.

2. Statutory Report: Section 165 requires that the auditor has to certify the statutory
report.

3. Public Deposits: Section 58AA requires the auditor to report about whether the
company has followed all rules and guideline of RBI in regard to public deposits or not.

4. Signature on Audit Report: Section 229: It is duty of auditor to sign on his report.

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5. Insolvency (Section 488): If the company wants itself to be declared insolvent, it is

duty of auditor to prepare profit and loss a/c for the current period.

Duties towards Government:

1. CARO-2003: The auditor has to report para-wise that the company has fulfilled all the
requirements of CARO-2003.

2. Assist the Investigation u/s 237: It is duty of auditor to assist the investigation ordered
by the CG u/s 237.

Duties towards General Public:

1.His office is of confidence and faith. He must be reliable in all respects.

2. He should reveal all material information regarding the state of affairs of the company
to the company as well as to the general public.

3. While issuing prospectus u/s 56, he should see that the prospectus does not include
any misleading information or material.

Liabilities of a company auditor

Liability for Negligence: While conducting the work of audit, auditor should take proper
care and should show proper skills. Otherwise it amounts to negligence.
 For example: Mr. X is a sole trader and Mr. A is his auditor. A has conducted audit
work so negligently and therefore he could not find misappropriation of cash,

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amounting to Rs. 10000/-. Now A is liable to pay such amount to X, it is called

liability for negligence.
Contractual Liability: In case of optional audits rights, duties, liabilities etc of auditor
will be of contractual nature. So there may be terms between auditor and client
according to which auditor has to become liable on certain agreed occasions.
Contractual liability is agreed liability.

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Unit 4: Tax Audit

Synopsis
 Meaning.
 Scope of auditor’s role under the income tax act.
 Certificate of claiming exemptions.
 Selective tax audit.

Meaning.

A tax audit is a formal examination conducted by the IRS to verify information or

uncover fraud and inaccurate tax returns. The IRS selects tax returns to examine both
randomly and intentionally. If the audit is selected randomly, the IRS will simply take a
closer look to make sure all information are accurate. The IRS will intentionally audit
certain tax returns if there are issues, errors, or possible frauds in reporting the tax
return. Tax audits can be broken down into four different types:

1. Correspondence Audit: This is the least serious type of tax audit. A

correspondence audit refers to the IRS request of additional information to verify
the accuracy or details of your tax return.
2. Office Audit: An office audit refers to the in-person interview with an IRS
manager to process your audit. To avoid making statements that can be used
against you, it's highly advisable to consult with an attorney or a tax professional
before you attend the interview.
3. Field Audit: This is the most serious type of audit because the IRS agents will
visit you at home or business. They may ask to see things that are related to the
tax you've reported.
4. Random Audit: As mentioned above, tax returns can be randomly selected for
an audit. A random audit is made without any particular reason. The IRS auditor
will review the entire tax return to make sure the information was entered
correctly.

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Scope of auditor’s role under the income tax act.

Category of person Threshold

Business

Carrying on business (not opting Total sales, turnover or gross receipts exceed Rs 1 crore in
for presumptive taxation scheme*) the FY

Carrying on business eligible for

Claims profits or gains lower than the prescribed limit under
presumptive taxation under
presumptive taxation scheme
Section 44AE, 44BB or 44BBB

Carrying on business eligible for Declares taxable income below the limits prescribed under
presumptive taxation under the presumptive tax scheme and has income exceeding the
Section 44AD basic threshold limit

Carrying on the business and is not

eligible to claim presumptive
taxation under Section 44AD due to If income exceeds the maximum amount not chargeable to
opting out for presumptive tax in the subsequent 5 consecutive tax years from the
taxation in any one financial year financial year when the presumptive taxation was not opted
of the lock-in period i.e. 5 for
consecutive years from when the
presumptive tax scheme was opted

Carrying on business which is

If the total sales, turnover or gross receipts does not exceed
declaring profits as per
Rs 2 crore in the financial year, then tax audit will not apply
presumptive taxation scheme
to such businesses.
under Section 44AD

Profession

Carrying on profession Total gross receipts exceed Rs 50 lakh in the FY

1. Claims profits or gains lower than the prescribed limit

under the presumptive taxation scheme
Carrying on the profession eligible
for presumptive taxation under
Section 44ADA 2. Income exceeds the maximum amount not chargeable to
income tax

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Certificate of claiming exemptions

CA certificate in case of exemption or deduction claim by the assesse. CBDT

Should make it mandatory to obtain the CA certificate in case of exemption or
deduction claim by the assessees is in excess of certain amount for other than
audit and salaried assessees for verifying the correctness and genuineness
of claim.

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Unit 5: Audit of computerized system

Synopsis

 Meaning.
 Types of EDP accounting system.
 Problems of EDP environment.
 Controls in an EDP environment.
 Audit approach in an EDP environment
 Computer Assisted Audit techniques.

Meaning
It is the audit of all information system assets, to ensure that they are adequately
safeguarded against vulneraries of natural and manmade disasters. The type is
identified with reference to the risk exposure. It is performed by qualified information
system auditors. The detection of frauds and errors are by ensuring various safeguards
prescribed by the systems men, internal and external auditors qualified to perform
systems audit.

EDP Audit is an analysis of an organization's computer and information systems in order

to evaluate the integrity

Types of EDP accounting system

There are various methods of data processing but there are some very popular methods
when it comes to “electronic data processing”. These methods are widely adopted in
almost every industry. Depending on the nature of requirement of data processing,
some of the most popular methods of electronic data processing are explained below:
Time-sharing
Real-time processing
Online processing
Multiprocessing
Multitasking
Interactive processing
Batch processing
Distributed processing

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Problems of EDP environment.

1.Theft of Computer Time: Information created by one person may be easily copied by
another person who can claim that the data is his own and he is the actual creator. In
computers there is nothing like original copy and duplicate copy.

2. Manipulation of Programs: An intruder, rival or competitor can manipulate, modify

or delete one or more programs of a company making the complete software unusable

3.Theft of Data: Data stored in a computer can be copied into floppies and could be
delivered to competitors. With modern communication networks available, insiders of
the company may send confidential information of a company to another. Hackers can
connect to network and steal data.

4. Stealing Software: An intruder, rival or competitor can manipulate, modify or delete

one or more programs of a company making the complete software unusable.

5. Controlling Access: Controlling of hardware and software should be the first system
security. The system should be under lock and key to prevent hardware theft. Physical
and electronic access control techniques including keyboard locks, automatic logs,
restricted access to systems and limited after-hour use.

6. Passwords: Passwords should be provided at all levels of system. They should be

changed frequently or as and when needed so that unauthorized users cannot enter into
the system.

7. Backup Copies: It is necessary to take frequent backups of all software and keep
them separate from the usual media. Backups are often taken on tapes and are used to
restore data when the primary data from the system fails. Software programs should
also be taken if necessary.

8. Security for Backup: Backups should be kept in secure place. Loss of backups
means disaster for the company. Protection of backups includes fireproof containers
and away from the computer installation site to avoid any natural disaster.
9. Network Control: Most companies may have computers that exchange data with
each other using a networking architecture. In such cases, PC users can connect with
another person/users and access files or services from the machine.
Since outsiders [competitors] can also get connected to our network, special interest
should be shown on security of systems and data located on the internet

10. Data Encryption: It refers to the means of converting data into an unrecognizable
form, transmitting it over a network and decrypting it back so that the original contents

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can be revealed. If an unauthorized person taps into the file, could not go through its
contents.
Controls in an EDP environment
Internal Control in an Electronic Data Processing system
Internal controls in computer-based accounting system are of two basic types:
1) General controls or organization controls
2) Application or procedural controls
2)
General controls

Systems development and control Administrative controls

This control covers the environment in which computer processing is conducted. Some
of the objectives of general control include:
a) To ensure adequate segregation of duties, that is, division of functional
responsibilities
b) To protect information contained in computer records etc.

Systems development and control

This covers the following areas:
Standards: There should be standard procedures to be followed anytime an application
is introduced. This will include adequate feasibility studies covering investigation, fact
recording and analysis of gathered facts. It also covers the design of new systems,
implementation and most importantly systems change over procedure.
Documentation: There should be proper documentation using flow charts, decision
tables, structured English etc and all these should be incorporated in a manual for use.
Testing: The new system should be fully tested before being used operationally. Programs
should be checked with test and live data while the whole system should be tested using
parallel running or pilot operation technique.

File conversion: Before the new system becomes operational, master files should be
set up completely and accurately. This can be achieved by a complete print out of the
contents of master files and crosschecking the results with manually maintained
records. This process is referred to as conversion checks.

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Authorization: Each system development stage should be reviewed by a responsible

officer in the EDP department and it must be approved by the steering committee or
board of directors but most importantly, it must be acceptable to user department.

Conclusion.
It is important to consult with auditors because they would want to ensure that sufficient
control is present in the new system to maintain reliable accounting records.

Administrative Controls

a) Division or segregation of duties: Data processing staff should not initiate

transactions or authorize normal transactions while users should not operate the
computer by self to process transactions.

b) Control over computer operators: There should be control over computer

operators using manual with details of standard procedures to be followed always.
There should be frequent and independent review of computer usage by references to
clerical and machine logs.
There should be rotation of operators’ duty and a minimum of two operators per shift.

c) File control:

 File storage procedure

 File identification procedures:
 Protection
 File reconstruction procedures:
d) General security:

Application or procedural control This includes:

Input, processing, output and master file controls. These controls are to ensure the
completeness and accurate processing of data.

Input controls: There should be segregation of duties between users and EDP
functionals. For example, input should be originated by users only, and amendments
should be done by authorized personnel
Processing control: This relates to all arithmetic and logic operations or input carried
out by programmed procedures such as edit controls or data vet.
Output control: There should be reconciliation or matching of input totals established
prior to processing to computer generated output totals

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Computer Assisted Audit techniques.

Computer Assisted Audit Techniques (CAATs) is the tool which is used by the
auditors. This tool facilitates them to make search from the irregularities from the given
data. With the help of this tool, the internal accounting department of any firm will be
able to provide more analytical results
There are two broad categories of CAAT:
Audit software: Audit software is used to interrogate a client's system. It can be either
packaged, off-the-shelf software or it can be purpose written to work on a client's
system. The main advantage of these programs is that they can be used to scrutinize
large volumes of data, which it would be inefficient to do manually. The programs can
then present the results so that they can be investigated further
Test data: Test data involves the auditor submitting 'dummy' data into the client's
system to ensure that the system correctly processes it and that it prevents or detects
and corrects misstatements. The objective of this is to test the operation of application
controls within the system
Advantages of CAATs
CAATs allow the auditor to:
 Independently access the data stored on a computer system without dependence
on the client;
 Test the reliability of client software, i.e. the IT application controls (the results of
which can then be used to assess control risk and design further audit
procedures);
 Increase the accuracy of audit tests; and
 Perform audit tests more efficiently, which in the long-term will result in a more
cost effective audit.
Disadvantages of CAATs
 CAATs can be expensive and time consuming to set up, the software must either
be purchased or designed (in which case specialist IT staff will be needed);
 Client permission and cooperation may be difficult to obtain;
 Potential incompatibility with the client's computer system;
 The audit team may not have sufficient IT skills and knowledge to create the
complex data extracts and programming required;
 The audit team may not have the knowledge or training needed to understand the
results of the CAATs; and
 Data may be corrupted or lost during the application of CAATs.

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SECTION:2 TAXATION

Unit 1 Income Tax Act-1961(Meaning, Concept and Definitions)

Synopsis

 Income
 Person
 Assessee
 Assessment year
 Pervious year
 Agricultural Income
 Exempted Income
 Residential Status of an Assessee
 Fringe benefit Tax
 Tax deducted at Source
 Capital and Revenue Income and expenditure.

Income [sec.2(24)]

Income is a periodically monetary return with some sort of regularity. It may be recurring in
nature. It may be broadly defined as the true increase in the amount of income which comes to a
person during a fixed period of time. Income includes all the receipts in the form of cash /any
kind.

Profits & Gains,

Dividends,

Voluntary contributions received by a trust,

Perquisites in the hand of employee

special allowance or benefit

City compensatory allowance/dearness allowance

Any benefits or perquisites to a Director

Capital Gains

Any benefits or perquisite to a representative assessee

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Any sum chargeable

Insurance profit

Winnings from lottery

Employees contribution towards provident fund

As per definition the given list is not exhaustive. All sorts of receipts other than above
mentioned comes under the meaning of income.

Person

 The term “Person” Includes

 An individual
 A Hindu Undivided family(HUF)
 A company
 A firm
 An association of persons (AOP) or
 a body of individuals (BOI), whether incorporated or not
 A local authority; and
 Every artificial juridical person not felling within any of the preceding sub-
clauses are - An individual includes a natural person. I.e. a human being. It
includes a male, female, child or lunatic or idiot person also. However
income of a minor child is taxed in the hands of his parents, while income of
a lunatic or idiot person is taxable in the hands of a representative assessee
in accordance with the law.
A Hindu undivided family is the normal condition of Hindu Society. The members
of Hindu Undivided Family are living in a state of union unless the contrary is
stated. A Hindu Undivided Family (H.U.F.) is a unit of assessment under the
Income-Tax Act. It consists of all the persons lineally descended from a common
ancestor. Hindu Undivided Family consists of males and females.
A company is an artificial person.

Assessee
“Assessee” means a person by whom income tax or any other sum of money is payable
under the Act. It includes every person in respect of whom any proceeding under the Act
has been taken for the assessment of his income or loss or the amount of refund due to
him or a person who Is assessable in respect of income or loss of another person or
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who it deemed to an assessee, or an assessee in default under any provision of the Act.
This term includes the following persons : Every person in respect of whom any
proceeding under this act has been taken for the assessment of his income or of the
income of any other person in respect of which he is assessable, or of the loss
sustained by him or by such other person, or of the amount of refund due to is or to such
other person. Every person who is deemed to be an assessee under any provision this
Act. Every person who is deemed to be an assessee in default under any provision of
this Act. According to the above definition, it is not necessary that the assessee must
pay tax on his own income. He may also be liable to pay tax on the income of others,
e.g. the legal representative will be treated as an assessee for assessing the income of
the deceased person. A person, who is under a legal obligation to deduct tax at source
on payment of salary, dividend, interest etc. does not deduct tax or after deducting tax,
fails to deposit the same in the Govemment’s treasury, is treated as an assessee in
default. A person representing a non resident minor or lunatic Is treated as an assessee
for computing the income of that person.

Assessment year

Assessment Year means the period of 12 months commencing on the 1®* of April
immediately after the previous year [P.Y] Assessment is the year in which the income of
the previous year is assessed to tax. The Income earned during a particular year is
assessed to tax in the following year

Previous year
Previous Year means the Financial Year immediately preceding the Assessment Year.
But in some cases Previous Year may not be of 12 months period as in the case of
business or profession, newly setup or source of income newly coming into existence.
The Previous Year shall be the year beginning the date of setting up of the business of
quotation or the date on which the new source of income comes into existence.

Residential Status of an Assesses

The Indian Income Tax is a tax on a person in relation to his income. Assessee i.e.,
persons by whom the tax is payable, are classified as: individual, Hindu Undivided
family; companies; Local Authorities; Firms and Other Association of Person.
They are further divided in to three categories with reference to their residence viz.

Residents and Ordinarily Residents;

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(ii) Residents but not Ordinarily Residents; and

(iii) Non-residents in India.
The incidence of taxation varies with the residential status of an Assesses, while the
classification according to the legal status of assesses is necessary for the following
reasons : There are different rates of income tax for assesses of different legal status.
There are different maximum exemption limits in the case of different classes of
assesses, e.g. individuals. Hindu undivided families, companies, co-operative societies
etc. There are different provisions for allowances and investment. There are different
tests for residence. Basic conditions determining an individual is Resident: u/s 6(1) an
individual is said to be resident in India in any Previous Year, if he satisfies at least one
of the following basic conditions:
He is in India in the Previous Year for a period if182 days or more or
He is in India for a period of 60 days or more during the Previous Year and
365 days or more during 4 years immediately preceding the Previous Year.
Basic conditions to test as to when a Resident
Individual is ordinarily resident in India
a resident individual is treated as “Resident and ordinarily resident” in India if he
satisfies the following 2 additional conditions:
he has been resident in India in at least 2 out of 10 Previous Year [according to basic
conditions noted above] immediately preceding the relevant Previous Year; and
he has been in India for a period of 730 days or more during 7 years immediately
preceding the relevant Previous Year. Resident but not ordinarily resident.
An individual becomes resident but not ordinarily resident in India in any of the following
circumstance:
If he satisfies at least one of the basic conditions but none of the additional conditions; ii)
If he satisfies at least one of the basic conditions and one of the two additional
conditions

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Unit2. Computation of Taxable Income under the different Heads of

Income

Synopsis
 Income from Salary – Salient features, meaning of salary, Allowances and
tax Liability, Perquisites and their Valuation, Deductions from salary.
 Income from House Property -Basis of Chargeability, Annual Value, Self
occupied and let out property, Deductions allowed
 Income from Salary
 Profits and Gains of Business and Professions-Definitions, Deductions
expressly allowed and disallowed.
 Capital Gains-Chargeability-definitions-Cost of Improvement Short term
and long term gains-deductions.
 Income from other sources-Chargeability - deductions - Amounts not
deductible.
Income from Salary

1. Salary as defined u/s 17(1) of the Income Tax Act, 1961, which includes

wages
any annuity or pension
any gratuity
any fees
commission
perquisites or profits in lieu of or
in addition to any salary or wages
any advance of salary
any payment received by an employee in respect of any period of leave not availed by
him
The portion of the annual accretion in any previous year to the balance of the credit of
an employee participating in a recognized provident fund to the extent it is taxable, and
transferred balance in a recognized provident fund to the extent it is taxable. Basis of
charge of salary income : Basis of charge u/s 15. As per Section 15 salary consists if
any salary due from on employer (or a former employer) to on assessee in the previous
year, whether actually received or not . Any salary paid or allowed to him in the previous
year by or on behalf of an employer (or a former employer), though not due or before it
became due; and Any arrears of salary paid or allowed to him in the previous year by or
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on behalf of an employer (or a former employer), if not charged to income tax for an
earlier previous year.

ALLOWANCES:

Allowances is defined as a fixed quantity of money or other substance given regularly in

addition to salary for the purpose of meeting some particular requirement connected
with the services rendered by the employee or as compensation for unusual conditions
of that service. Under the Act, it is taxable under Section 15 on ‘due’ or ‘receipt’ basis,
irrespective of the fact that it is paid in addition to or in lieu of salary.

PERQUISITIES

The word ‘Perquisites’ in the ordinary sense means any casual emolument attached to
an office. Or position in addition to salary or wages. It may take various forms. It is a
gain or profit which incidentally arises from employment in addition to regular salary or
wages.

Taxability of various components of salary

S.
Section Particulars Taxability/Exemption
No.

1 17 Basic salary Fully taxable

Dearness
2 17 Fully taxable
Allowance

Bonus, fees or
3 17 Fully taxable
commission

House rent allowance

10(13A) read Least of the following is exempt:

with Rule 2A
a) Actual HRA Received

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b) 40% of Salary (50%, if house situated in Mumbai,

Calcutta, Delhi or Chennai)
House
rent c) Rent paid minus 10% of salary
allowance
* Salary = Basic + DA (if part of retirement benefit) +
Turnover based Commission

Section Particulars Taxability/Exemption

10(14) Children education allowance Up to Rs. 100 per month per child
up to a maximum of 2 children is
exempt
10(14) Hostel expenditure allowance Up to Rs. 300 per month per child
up to a maximum of 2 children is
exempt
10(14) Transport Allowance granted Rs. 3,200 per month granted to an
to an employee to meet employee, who is blind or deaf and
expenditure for the purpose dumb or orthopedically handicapped
of commuting between place with disability of lower extremities
of residence and place of
duty

LEAVE SALARY ENCASHMENT

As per service contract and discipline, normally, every employee is allowed
certain period of leave (with pay) every year. Such leave may be availed during
the year or accumulated by the employee. The accumulated leave lying to the
credit of an employee may be availed subsequently or encashed. When an
employee receives an amount for waiving leave lying to his credit, such amount is
known as leave salary encashment.
Case A: Leave salary received during continuation of service Leave salary
during continuation of service is fully taxable in the case of the Government
employee as well as other employees [Sec. 17(1)(va)].
Case B: Leave salary received by Government employee on termination of
service At the time of termination of service, leave salary received by the Central
or State Government employee is fully exempted u/s 10(10AA)(i). Taxpoint:

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Government employee here does not include employee of local authority or

public sector undertaking or foreign Government employee.

Case C: Leave salary received by non-Government employee on

termination of service At the time of termination of service, leave salary
received by a non-Government employee (including employee of foreign
Government, local authority, public sector undertaking) is exempted to the
minimum of the following u/s10(10AA)(ii):
a) Actual amount received as leave salary
b) ` 3,00,000/-
c) 10 × Average salary p.m.
d) To the maximum of 30 days (normally taken as 1 month) average salary1 for
every completed year of service2, subject to deduction for actual leave availed
during the tenure of service.
Academically: [{(1 × completed year of service) – leave actually taken in terms of
month} × average salary p.m.]
1. Average salary means Basic + DA# + Commission (as a fixed percentage on
turnover) being last 10 months average salary ending on the date of
retirement or superannuation. (e.g. if an employee retires on 18/11/2018 then
10 months average salary shall be a period starting from 19th Jan’ 2018 and
ending on 18th Nov’ 2018).
2. # If DA is not forming a part of retirement benefit then the same shall not be
included in salary for the above purpose. However, DA itself shall be fully
taxable.

While calculating completed year of service, ignore any fraction of the year. E.g.
10 years 9 months shall be taken as 10 years.
Notes
a) Leave encashment received from more than one employer: Where leave
encashment is received from more than one employer in the same previous year,
the aggregate amount exempt from tax shall not exceed the statutory deduction
i.e. ` 3,00,000.

b) Earlier deduction claimed for leave encashment: While claiming the

statutory amount (i.e. ` 3,00,000) any deduction claimed earlier as leave
encashment shall be reduced from ` 3,00,000.

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Section Particulars Taxability/Exemption

10(14) City Compensatory Fully Taxable
Allowance
10(14) Fixed Medical Allowance Fully Taxable
10(14) Tiffin, Lunch, Dinner or Fully Taxable
Refreshment Allowance
10(14) Servant Allowance Fully Taxable
10(14) Project Allowance Fully Taxable
10(14) Overtime Allowance Fully Taxable
10(14) Telephone Allowance Fully Taxable
10(14) Holiday Allowance Fully Taxable
10(14) Any Other Cash Allowance Fully Taxable

Perquisites

Section Particulars Taxability/Exemption

17(2)(i)/(ii) Rent free unfurnished License fees determined in
read with accommodation accordance with rules framed
Rule 3(1) provided to Central and by Government for allotment of
State Government houses shall be deemed to be
employees the taxable value of perquisites.
17(2)(i)/(ii) Unfurnished rent free Taxable value of perquisites
read with accommodation i. If house property is owned by
Rule 3(1) provided to other the employer, the taxable value
employees of perquisite shall be:

A. 15% of salary, if population of

city where accommodation is
provided exceeds 25 lakhs

B. 10% of salary, if population of

city where accommodation is
provided exceeds 10 lakhs but
does not exceed 25 lakhs

C. 7.5% of salary, if
accommodation is provided in
any other city

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ii. If house property is taken on

lease or rent by the employer,
the taxable value of perquisite
shall be:

i. Lease rent paid or payable by

the employer or 15% of the
salary, whichever is lower

Deduction from salary

S. No. Section Particulars Taxability/Exemption

1 16(ia) Standard Deduction Rs. 50,000 or the amount of salary,

whichever is lower (Any salaried person &
pensioners)
2 16 (ii) Entertainment Least of the following is exempt from tax:
Allowance received by
the Government a) Rs 5,000
employees (Fully
taxable in case of other b) 1/5th of salary (excluding any allowance,
employees) benefits or other perquisite)

c) Actual entertainment allowance received

3 16(iii) Employment Amount actually paid during the year.
Tax/Professional Tax. However, if professional tax is paid by the
employer on behalf of its employee than it
is first included in the salary of the
employee as a perquisite and then same
amount is allowed as deduction.

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Income from House Property

Income chargeable to tax under the head “house property” Rental income from a property being
building or land appurtenant thereto of which the taxpayer is owner is charged to tax under the
head “Income from house property”.

Rental income from sub-letting Rental income in the hands of owner is charged to tax under the
head “Income from house property”.

Rental income from a shop Rental income from a property, being building or land appurtenant
thereto, of which the taxpayer is the owner is charged to tax under the head “Income from house
property”.

Computation of gross annual value of a let out property

Gross annual value of a property which is let-out throughout the year is determined in the
following manner:

Step 1: Compute reasonable expected rent of the property (manner of computation is discussed
in later part)

Step 2: Compute actual rent of the property (manner of computation is discussed in later part).
Step 3: Compute gross annual value.

Profits and Gains of Business and Professions

Business is an activity of purchase and sell of goods with the intention of making profit.
Profession is an occupation requiring intellectual skill. E.g. Doctor, Lawyer etc. Vocation is an
activity, which requires a special skill, which is used to earn income. e.g. Painter, Singer etc. For
income tax purpose there is no difference between business income, profession income and
vocation income.

Section 2(13): Business includes any trade, commerce or manufacture or any adventure or
concern in the nature of trade, commerce or manufacture. Explanation: ‐ Thus business is any
activity carried out with the intention to earn profit, whether such an activity is continuous or
temporary is immaterial. In determining whether a particular transaction is an adventure in the
nature of trade or not, total impression and effect of all relevant facts and circumstances of the
transaction have to be seen. To bring a transaction within the term “business”, the transaction
must be a “trade” or in the nature of “trade”. Hence everything depends upon the facts and
circumstances of the case. E.g. A person making investment of surplus funds in shares or
debentures cannot be deemed to be carrying on the business of trading in shares although
occasionally he may be selling “some” shares or debentures and making gains thereon.

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METHODS OF COMPUTING TAXABLE INCOME

1. Gross Sales or Gross fees as the case may be are to be taken as the base if Receipt
and Payment A/c or cash Book is given. From this Gross income expenses which are
specifically allowed by the income tax act are deducted to arrive at taxable income.

2. If profit & loss a/c or income & expenditure a/c is given Net Profit or (Surplus) is taken
as the base and then following adjustments are made: ‐

1) Expenses, which are debited, to profit & loss a/c, but disallowed by the Income Tax
Act and either fully or partially are added back.

2) Expenses, which are not debited, to profit & loss a/c but which are allowed by the
Income Tax Act are deducted.

3) Income that is credited to profit & loss a/c but not taxable at all or taxable under some
different head is to be deducted.

4) Income that is not credited to profit & loss a/c, but which is chargeable to tax as
business income is to be added.

Under Section 28 following are the income chargeable to tax under the head Profits or
Gains from Business or profession: ‐

1) Profits and Gains of any business or profession that is carried on by the assessee at
any time during the previous year.

2) Any compensation or other payment due to or received by an assessee for loss of

agency due to termination or modification of terms.

3) Income derived by a trade, professional or a similar association for specific services

performed for its members.

4) Any profit on sale of a license granted under Imports (controls) Order 1955 made
under Imports & Exports (control) Act of 1947.

5) Any cash assistance (by whatever name called) received or receivable against
exports under any scheme of Government of India.

6) Any duty of customs or excise repaid or repayable as drawback to any person against
exports under the Customs and Central Excise Duty’s Drawback Rules 1971.

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7) Any profit on the transfer of the Duty entitlement pass book scheme under export
import policy.

8) Any profit on the transfer of the Duty free replenishment certificate under export
import policy.

9) The value of any benefit or perquisite whether convertible into money or not arising
from business or exercise of a profession e.g. A gift received by the lawyer from his
client.

10) Any interest, salary, bonus, commission or remuneration due to or received by

partner of a firm from such firm.

11) Sum received or receivable in cash or in kind under an agreement for not carrying
out any activity in relation to any business or not sharing any know how, patent,
copyright, trade mark, license franchise or any other business or commercial right of
similar nature or information or technique likely to assist the manufacture or processing
of goods or provision of services.

12) Any sum received including bonus under Keyman Insurance Policy.

13) Any sum received (or receivable) in cash or kind, on account of any capital asset
(other than land or goodwill or financial instrument) being demolished, destroyed,
discarded or transferred, if the whole of the expenditure on such capital asset has been
allowed as a deduction under section 35AD.

14) Income from a speculative business.

DEDUCTIONS FOR EXPENSES SPECIFICALLY ALLOWED SECTION 30 TO

SECTION 43D

1. Rent, rates, taxes, repairs and insurance of building (Section 30):

1) If assessee has occupied the premises as a tenant, rent of the premises and if he has
agreed to bear cost of repairs, such cost is allowed as deduction, provided it is not of
capital nature.

2) If assessee has occupied premises as the owner; repairs, land revenue, local taxes,
insurance premium etc. are allowed as deduction. However, no expenditure in form of
capital expenditure is allowed.

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2. Repairs & Insurance of machinery, Plant & Furniture (Sec.31): Amount paid on
account of repairs and insurance premium against risk of damage in respect of
machinery, plant & furniture are allowed as deduction provided they are not of capital
nature.

3. Depreciation u/s 32: Under Section 32 depreciation on assets is allowed as

deduction while computing income from business or profession. To claim this deduction
following conditions should be satisfied:

1) Assessee should be owner of the asset.

2) Asset must be used for the business.

3) Such use must be in the previous year. Depreciation is allowed not on individual
asset items, but on block of assets under following categories: ‐

1) Buildings

2) Plant & Machinery

3) Furniture

4) Intangible Assets acquired after March 31, 1998 such as know‐ how, Patents,
Trademarks, licenses, franchises or any other business or commercial rights of similar
nature. The term plant includes ships, vehicles, books, scientific apparatus and surgical
equipment used for the business but excludes tea bushes or live stock. If any asset
falling in block of assets is acquired during the year and put to use during the previous
year for less than 180 days depreciation on such asset shall be restricted to 50% of the
normal depreciation. No depreciation is allowed on motor car which is manufactured
outside India and acquired on or after 1st March 1975 but before 1st April 2001

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Unit3: Computation of Total Taxable Income of an Individual

Synopsis
 Gross total Income
 Deductions u/s- 80C, 80ccc to 80 U
 Income Tax calculation
 Rates applicable for respective Assessment year
 Education cess.

Gross total Income

During a specified period. According to Section 14 of the Income Tax Act 1961,
the income of a person or an assessee can be categorised under these five heads.

Gross income for an individual consists of income from wages and salary plus other
forms of income, including pensions, alimony, interest, dividends, and rental income.

Gross income for a business, also known as gross profit or gross margin, includes the
gross revenue of the firm less cost of goods sold, but it does not include all of the other
costs involved in running the business.

Individual gross income is part of an income tax return and—after certain deductions
and exemptions—becomes adjusted gross income and then taxable income.

DEDUCTIONS/EXEMPTIONS

Deductions available to senior citizens in respect of health insurance premium and

medical treatment [80D & 80DDB]

Section 80D, inter-alia, provides that a deduction upto Rs 30,000/- shall be allowed to
an assessee, being an individual or a Hindu undivided family, in respect of payments
towards annual premium on health insurance policy, or preventive health check-up, of a
senior citizen, or medical expenditure in respect of very senior citizen. It is proposed to
amend section 80D so as to raise this monetary limit of deduction from Rs 30,000/- to
Rs 50,000/.

Section 80DDB of the Act, inter-alia, provide that a deduction is available to an individual and Hindu
undivided family with regard to amount paid for medical treatment of specified diseases in respect of
very senior citizen up to Rs 80,000/- and in case of senior citizens up to Rs 60,000/- subject to

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specified conditions. It is proposed to amend the provisions of section 80DDB of the Act
so as to raise this monetary limit of deduction to Rs 1,00,000/- for both senior citizens
and very senior citizens. Further, it is proposed to omit the word very senior citizen.

Further, u/s 80D, in case of single premium health insurance policies having cover of
more than one year, it is proposed that the deduction shall be allowed on proportionate
basis for the number of years for which health insurance cover is provided, subject to
the specified monetary limit.

These amendments will take effect, from 1st April, 2019.

Deduction u/s 80TTB for interest income

is proposed to insert a new section 80TTB so as to allow a deduction upto Rs. 50,000/-
in respect of interest come from deposits held by senior citizens. However, no deduction
under section 80TTA shall be allowed in these cases.

This amendment will take effect from 1st April, 2019.

Deduction in respect of income of Farm Producer Companies [Sec.80P]

100% deduction u/s 80Pis proposed to be extended to Farm Producer Companies

(FPC), having a total turnover upto Rs 100 Crore, whose gross total income includes
any income from-

i. the marketing of agricultural produce grown by its members, or

ii. the purchase of agricultural implements, seeds, livestock or other articles intended for
agriculture for the purpose of supplying them to its members, or

iii. the processing of the agricultural produce of its members

The benefit shall be available for a period of five years from the financial year 2018-19.
This amendment will take effect from 1st April, 2019.

Measures to promote start-ups [Sec.80-IAC]

i. The benefit of deduction u/s 80-IAC would also be available to start ups incorporated
on or after the 1stday of April 2019 but before the1stday of April, 2021;

ii. The requirement of the turnover not exceeding Rs 25 Crore would apply to seven
previous years commencing from the date of incorporation;

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iii. The definition of eligible business has been expanded to provide that the benefit
would be available if it is engaged in innovation, development or improvement of
products or processes or services, or a scalable business model with a high potential of
employment generation or wealth creation.

The amendment will take effect from 1st April, 2018.

Incentive for employment generation [Sec. 80-JJAA]

- At present, a deduction of 30% is allowed u/s 80-JJAA in addition to normal deduction

of 100% in respect of emoluments paid to eligible new employees who have been
employed for a minimum period of 240 days during the year. However, the minimum
period of employment is relaxed to 150 days in the case of apparel industry. In order to
encourage creation of new employment, it is proposed to extend this relaxation to
footwear and leather industry.

Further, it is also proposed to rationalize this deduction of 30% by allowing the benefit
for a new employee who is employed for less than the minimum period during the first
year but continues to remain employed for the minimum period in subsequent year.

This amendment will take effect, from 1st April, 2019.

Extending the benefit of tax-free withdrawal from NPS to non-employee

subscribers [Sec.10(12A)]

Under Sec 10(12A), an employee contributing to the NPS is allowed an exemption in

respect of 40% of the total amount payable to him on closure of his account or on his
opting out. However, this option is not available to non-employee subscribers. In order
to provide a level playing field, it is proposed to amend Sec 10(12A) to extend the said
benefit to all subscribers w.e.f. AY 2019-20.

Deductions in respect of certain incomes not to be allowed unless return is filed

by the due date [Sec.80AC]

- Sec 80AC currently provides that no deduction would be admissible u/s 80IA, 80IB,
80IC, 80ID or 80IE unless the return of income by the assessee is furnished on or
before the due date specified u/s 139(1). This burden is not cast upon assesses
claiming deductions under several other similar provisions.

- Accordingly, it is proposed to extend scope of Sec 80AC to provide that the benefit of
deduction under the entire class of deductions under the heading “C.—Deductions in
respect of certain incomes” in Chapter VIA like Sec 80P [Deduction in respect of income
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of Co-operative Societies], Sec 80RRB [Deduction in respect of royalty on patents]etc.

shall not be allowed unless the return of income is filed by the due date.

Amendment to take effect from AY 2018-19

Income Tax Slab Rate for AY 2020-21 for Individuals

Individual (resident or non-resident), who is of the age of less than 60 years on the last
day of the relevant previous year:

Net income range Income-Tax rate

Up to Rs. 2,50,000 Nil

Rs. 2,50,000- Rs. 5,00,000 5%

Rs. 5,00,000- Rs. 10,00,000 20%

Above Rs. 10,00,000 30%

Resident senior citizen, i.e., every individual, being a resident in India, who is of the age
of 60 years or more but less than 80 years at any time during the previous year:

Net income range Income-Tax rate

Up to Rs. 3,00,000 Nil

Rs. 3,00,000 – Rs. 5,00,000 5%

Rs. 5,00,000- Rs. 10,00,000 20%

Above Rs. 10,00,000 30%

Resident super senior citizen, i.e., every individual, being a resident in India, who is of
the age of 80 years or more at any time during the previous year:

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Net income range Income-Tax rate

Up to Rs. 5,00,000 Nil

Rs. 5,00,000- Rs. 10,00,000 20%

Above Rs. 10,00,000 30%

Surcharge: - 10% of income tax where total income exceeds Rs. 50,00,000.

15% of income tax where total income exceeds Rs. 1,00,00,000.

Health and Education cess : - 4% of income tax and surcharge.

Note: - A resident individual is entitled for rebate under section 87A if his total income
does not exceed Rs. 5,00,000. The amount of rebate shall be 100% of income-tax or
Rs. 12,500, whichever is less.

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Unit4: Miscellaneous

Synopsis

 Tax deducted at source

 Return of Income
 Advance payment of Tax
 Methods of payment of tax
 Forms of Return
 Refund of Tax (Theory)

Tax deducted at source

Deduction in respect of interest income to senior citizen [Sec.194A]

It is proposed to amend section 194A so as to raise the threshold for deduction of tax at
source on interest income for senior citizens from Rs 10,000/- to Rs 50,000/-. This
amendment will take effect, from 1st April, 2018.

TDS on 7.75% GOI Savings (Taxable) Bonds, 2018 [Sec.193]

Government has decided to discontinue the existing 8% Savings (Taxable) Bonds,

2003 with a new 7.75% GOI Savings (Taxable) Bonds, 2018.The interest received
under the new bonds will continue to be taxable like in the case of the 2003 bonds.

Return of Income

ITR are forms that are mandatorily filled by individuals whose annual income greater
than a pre-set threshold limit set by the Finance Department.

These forms provides the details of individual’s gross income from various sources and
the tax paid by the individual taxpayer on the gross income. It also provides the details
of refund claims by the assesses as per the rules set by the Finance and IT Department.

In simple terms, ITR forms are taxpayers statement detailing his/her earnings Salary ,
interest, dividends, capital gains, or other profits, the total tax paid on earnings and the
appropriate refunds to be repaid to him/her by the Government.

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Form ITR-1

Also known as the Sahaj Form, ITR-1 has to be filed by individual taxpayers alone. ITR-
1 is filed by taxpayer’s having income up to Rs 50,00,000 from below mentioned
sources:-

If the source of Income is Salary or Pension .

If the source of income is from one housing property(the case where losses of previous
years are carried forward are not included in this ITR).

Individuals with income sources like fixed Deposits, Investments, Shares etc

ITR-1 can not be filed if taxpayer is a joint owner in House Property.

Individuals whose net agriculture income is less than Rs 5,000.

Income from other sources (excluding winning from lottery and income from race
horses, income tax under section 115BBDA or Income of nature referred to in section
115BBE)

If the clubbed income of minor or wife is shown, then ITR-1 can be filed only in case
their source of income as mentioned in the above points.

ITR-1 is not valid for assessee who has deposited more than Rs 1 Crore in Bank
Account or has incurred Rs 2 Lakh/ Rs 1 Lakh in foreign travel/ electricity expenses.

Form ITR-2

This form was introduced during the assessment year 2015-16 for use by Hindu
Undivided Family (HUF) or any individual. The following individuals/taxpayers can file
ITR-2 Form.

Those individuals who is not eligible to file ITR-1 and

Those taxpayer having no income under the head “profits or gains of business or
profession”.

Form ITR-3

ITR 3 Form is for use by a Hindu Undivided Family or an individual

Who claims income under the head “profits or gains of business or profession”

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Who work as a partner in a firm.

claims income under the head “profits or gains of business or profession”.

Who has presumptive income of greater than Rs 50,00,000

Form ITR-4

Also known as Sugam, ITR 4 Form is for use by HUF/ individual / Partnership Firm
whose total income consist of :-

Business income evaluated in reference with special provisions mentioned in section

44AD and section 44AE of the Act for computation of business income; or

Professional income evaluated in reference to special provisions of sections 44ADA; or

ITR-4 can not be filed if taxpayer is a joint owner in House Property.

Salary/ Pension; or

Income from One House Property (excluding cases where a loss is brought forward
from previous years); or

Income from other sources (excluding windfalls like lotteries or horse racing)

Form ITR-5

ITR-5 is for firms, LLPs, AOPs (Association of persons) and BOIs (Body of Individuals).
Further, it is also meant for an artificial juridical person referred to in section 2(31)(vii),
cooperative society and local authority.

Advance payment of Tax

What is Advance Tax?

Advance tax means income tax should be paid in advance instead of lump sum
payment at year end. It is also known as pay as you earn tax. These payments have to
be made in instalments as per due dates provided by the income tax department.

Who should pay Advance Tax?

Salaried, freelancers and businesses– If your total tax liability is Rs 10,000 or more in
a financial year you have to pay advance tax. Advance tax applies to all taxpayers,

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Due Date Advance Tax Payable

On or before 15th June 15% of advance tax

On or before 15th September 45% of advance tax less advance tax already paid

On or before 15th December 75% of advance tax less advance tax already paid

On or before 15th March 100% of advance tax less advance tax already paid

salaried, freelancers, and businesses. Senior citizens, who are 60 years or older, and do not
run a business, are exempt from paying advance tax.

Presumptive income for Businesses–The taxpayers who have opted for presumptive taxation
scheme under section 44AD have to pay the whole amount of their advance tax in one
instalment on or before 15 March. They also have an option to pay all of their tax dues by 31
March.

Presumptive income for Professionals– Independent professionals such as doctors, lawyers,

architects etc. come under the presumptive scheme under section 44ADA. They have to pay the
whole of their advance tax liability in one instalment on or before 15 March. They can also pay
the entire amount by 31 March.

Due Dates for payment of Advance Tax

For taxpayers who have opted for Presumptive Taxation Scheme under section 44AD &
44ADA – Business Income

Due Date Advance Tax Payable

On or before 15th March 100% of advance tax

Refund of Tax

A tax refund is a reimbursement to a taxpayer of any excess amount paid to the federal
government or a state government. Taxpayers tend to look at a refund as a bonus or a stroke of
luck, but it really represents an interest-free loan that a taxpayer makes to the government.

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Unit5: Income Tax Authorities

Synopsis

 Income Tax Authorities.

 Organization structure of Income Tax Authorities
 Administrative and Judicial Originations.
 Central board of direct tax.
 Functions and powers various Income Tax Authorities

Income Tax Authorities

There are seven income tax authorities, namely,

(1) Central Board of Direct Tax

(2) Directors of Inspection

(3) Commissioners and Additional Commissioners

(4) Appellate Assistant Commissioners

(5) Inspecting Assistant Commissioners

(6) Income-tax Officers

(7) Income-tax Inspectors

Organization structure of Income Tax Authorities

Administrative [ Income Tax Authorities] [ Sec. 116]

The Central Board of Direct Taxes constituted under the Central Boards of Revenue
Act, 1963 (54 of 1963),

Directors-General of Income-tax or Chief Commissioners of Income-tax,

Directors of Income-tax or Commissioners of Income-tax or Commissioners of Income-

tax (Appeals),

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(cc) Additional Directors of Income-tax or Additional Commissioners of Income-tax or

Additional Commissioners of Income-tax (Appeals),
(cca) Joint Directors of Income-tax or Joint Commissioners of Income-tax.
Deputy Directors of Income-tax or Deputy Commissioners of Income-tax or Deputy
Commissioners of Income-tax (Appeals),
Assistant Directors of Income-tax or Assistant Commissioners of Income-tax,
Income-tax Officers,
Tax Recovery Officers,
Inspectors of Income-tax.
(ii) Assessing Officer [ Sec. 2(7A)]
"Assessing Officer" means the Assistant Commissioner or Deputy Commissioner or
Assistant Director or Deputy Director or the Income-tax Officer who is vested with the
relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-
section (2) of section 120 or any other provision of this Act, and the Joint Commissioner
or Joint Director who is directed under clause (b) of sub-section (4) of that section to
exercise or perform all or any of the powers and functions conferred on, or assigned to,
an Assessing Officer under this Act;
(iii) Appointment of Income-Tax Authorities [ Sec. 117]
Power of Central Government: The Central Government may appoint such persons as
it thinks fit to be income-tax authorities. It kept with itself the powers to appoint
authorities upto and above rank of an Assistant Commissioner of Income-Tax [ Sec. 117
(1)]
Power of the Board and Other Higher Authorities : Subject to the rules and orders of
the Central Government regulating the conditions of service of persons in public
services and posts, the Central Government may authorize the Board, or a Director-
General, a Chief Commissioner or a Director or a Commissioner to appoint income-tax
authorities below the rank of an Assistant Commissioner or Deputy Commissioner. [
Sec. 117 (2)]
Power to appoint Executive and Ministerial Staff : Subject to the rules and orders of
the Central Government regulating the conditions of service of persons in public
services and posts, an income-tax authority authorized in this behalf by the Board may
appoint such executive or ministerial staff as may be necessary to assist it in the
execution of its functions.

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(iv) Control of Income-Tax Authorities [ Sec. 118]

The Board may, by notification in the Official Gazette, direct that any income-tax
authority or authorities specified in the notification shall be subordinate to such other
income-tax authority or authorities as may be specified in such notification.

Central board of direct tax.

The Central Board of Direct Taxes is a statutory authority functioning under the Central
Board of Revenue Act, 1963. The officials of the Board in their ex-officio capacity also
function as a Division of the Ministry dealing with matters relating to levy and collection
of direct taxes.

Functions and Organisation

The Central Board of Direct Taxes is a statutory authority functioning under the Central
Board of Revenue Act, 1963. The officials of the Board in their ex-officio capacity also
function as a Division of the Ministry dealing with matters relating to levy and collection
of direct taxes.

Historical Background of C.B.D.T.

The Central Board of Revenue as the apex body of the Department, charged with the
administration of taxes, came into existence as a result of the Central Board of Revenue
Act, 1924. Initially the Board was in charge of both direct and indirect taxes. However,
when the administration of taxes became too unwieldy for one Board to handle, the
Board was split up into two, namely the Central Board of Direct Taxes and Central
Board of Excise and Customs with effect from 1.1.1964. This bifurcation was brought
about by constitution of two Boards u/s 3 of the Central Board of Revenue Act, 1963.

Composition and Functions of CBDT

The Central Board of Direct Taxes consists of a Chairman and following six Members:

Chairman
Member (Income-tax)
Member (Legislation & Computerisation)
Member (Personnel & Vigilance)
Member (Investigation)
Member (Revenue)
Member (Audit & Judicial)

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Functions and powers various Income Tax Authorities

An Assessing Officer is a person who has the jurisdiction (rights) to make assessment of
an Assessee, who is liable under the Income-tax Act. An Assessing Officer is an
individual person appointed by the Income-tax department. He performs all powers
and functions as assigned to him under the Income-tax Act.
 Collection of information.
 Power of survey.
 Power to call for information.
 Power to possess book of accounts.
 Power of search and seizure.
 Power related to discover and produce evidences.

Reference’s
1. http://www.mastermindsindia.com/
2. www.caclubindia.com
3. https://taxguru.in/
4. http://newhorizonindia.edu/
5. http://www.svtuition.org/
6. https://accountlearning.com/
7. . Indian Income Tax -: Dr. Vinod Singhania.
8. Income Tax -: Manoharem.
9. Practical Auditing -: Spicer and Peglar.

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