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Tax Audit

Posted on 26 September, 2015 at 9:30 Comments comments (0)
Tax Audit

According to section 44AB of Income Tax Act 1961 every assessee falling in the scope of this section is required to get its books of accounts audited by a Chartered Accountant. This audit is completely different from the General Audit from which we are regularly exposed. The scope of Tax Audit is to check whether the assessee has correctly complied with all the rules and regulations or not. The concept of Tax Audit has been introduced to prevent Revenue Authorities from major Tax Loss.

However the system of Tax Audit was not so strong in the earlier years. Major Changes were bought by the appropriate authorities from the A.Y. 2013-14. Previously Tax Audit Reports were not required to be filed electronically however from A.Y. 2013-14 it was made mandatory to file Income Tax Returns Online too. This bought a radical change in the system of Tax Audit & the responsibilities of CAs suddenly grew up numerous times. Moreover to increase the quality of work & bring transparency The ICAI restricted maximum the number of Tax Audit Report to be signed by one Chartered Accountant in a single assessment year to 45 however it was increased to 60 by The ICAI in its 331st Meeting held from 10th to 12th February 2014.

One CA is allowed to sign 60 Tax Audit Reports in one Assessment Year. It is often confused with the limit of firm. It is clearly mentioned by The ICAI that one CA can sign maximum up to 60 Tax Audit Reports hence the maximum limit of firms is the combined limit of all the CA partners of that firm. Hence if a CA firm has 3 partners then the total number of Tax Audit the Firm can take is 3X60=180.

If we discuss about the applicability of Tax Audit then section 44 AB read with section 44AD & 44AE states that An Assessee is required to get his Tax Audit done by a Chartered Accountant if the Assessee satisfies any of the fallowing criteria:-

1) Total Turnover from one or more business severally or jointly is more then Rs 1 Crore in case of Business Person.
2) The Gross Receipt from the Profession is more then Rs 25 Lakhs in case of Professional Person or
3) The deemed profit of the business or profession is less then the deemed profit as specified in section 44AD (Lesser then 8% profit of the Turnover/Gross Receipt comes in the ambit of Tax Audit) or 44AE (Only Applicable in the case of Hiring, Plying & Leasing Goods carriage business)

Several Changes in the Tax Audit Report has been introduced by ministry of finance vide Income Tax Rules 2014 (7th Amendment) which are applicable from A.Y. 2014-15 onward. Form 3CA, 3CB & 3CD has been amended by CBDT & now they require specific mention of the observations & Qualifications if any.

Tax Audit Report Efiling
As per notification no.34 dated 1st of May 2013 efiling of Tax Audit Report is mendatory from A.Y. 2013-14 onwards. Tax Audit Report is to be furnished form 3CA or 3CB & the allied information with them is to be furnished in form 3CD as per rule 6G.

3CA & 3CD - These forms should be used only if the accounts of the assessee has already been audited according to any othe law of the land. However Internal Audit, Management Audit, Social Audit or any such audit do not make these forms applicable on the assessee. These forms are generally used for companies as their accounts are audited as per The Companies Act 2013.

3CB & 3CD - These forms are to be used if the books of accounts of the assessee has not been audited in any other law.

Penalty for Non Compliance of the provisions of Section 44AB
Non Compliance of the provisions of section 44AB attracts a penalty of 0.5% of Turnover/ Gross Reciept maximumupto Rs 1,50,000.00. The penalty u/s 271B of Income Tax Act will be attracted. However section 273B states that no penalty u/s 271B shall be imposed if there is resonable cause for such failure. Some of the acceptable causes of reasonable failure by courts & Tribunals are:-
a) Strikes, Labour Problems etc. for long period
b) Death or physical inability of of Chartered Accountants, Managing Person of the business, or the accountant.
c) Resignation of Tax Auditor
d) Loss of Accounts by Natural Calamities beyond the control of the assessee.

Proud to be an Indian???

Posted on 15 February, 2015 at 14:10 Comments comments (0)

It is very well said by our former Prime Minister Shri Atal Bihari vajpayee ji;


एक नया भारत बनाने का इरादा मन में है;

एक नया भारत की जिसमे एक नया विश्वास हो,

जिसकी आँखों में चमक हो, हर्ष हो, उल्लास हो।

हो जहाँ सम्मान हर एक जाति; हर एक धर्म का;

तत समर्पित हो सभी, यह लक्ष्य जिसके पास हो।

एक नया भारत बनाने का इरादा मन में है।


Our former prime minister wanted to re-create our country. Can we guess 'Why'??? I am sure any body and every body including a child can guess the reason. Is it the same India for which our freedom fighters fought the long war of freedom of almost 100 years? Is it the same India about which our ancestors dreamed in 1947 after winning a long fight of freedom? Is it the same India on which u can say proudly that " India is my country and I am proud to be an Indian"?

I am very sure that the answer is going to be a big 'NO'. Its not because we lack in resources or technology. If I talk about resources, India is the 2nd richest country in the world at present in Human Resources. The total cultivable area in India is 12,69,219 km². India's major mineral resources include Coal (fourth-largest reserves in the world), Iron ore, Manganese, Mica, Bauxite, Titanium ore,Chromite, Natural gas, Diamonds, Petroleum, Limestone and Thorium (world's largest along Kerala's shores). India also have Oil resources which fulfills almost 25% of the country's oil demand. It is also rich in certain energy resources which promise significant future potential - clean / renewable energy resources like solar, wind, bio-fuels (jatropha, sugarcane). It also has sufficient amount of water resources.

Now if we look into the technical field the we can easily find hundreds of examples where Indians have proved themselves. Then where do we lack? The answer is simple 'We lack nowhere and we lack everywhere'.

It is definitely a very strange statement but its a complete truth. Let me put it like this; we have the fourth largest reserve in the world of coal and we have corrupt politicians too to use that in the most improper way and waste all its benefits like they wasted 1.86 lakh crores, we have the 2nd largest population in the world and also we have lots of sectors which are not running properly because of lack of workers. I am not saying that everything in our country is going wrong. I am just saying that most of the things in our country is going wrongly.

Our country is the largest depositor of illegal foreign money in Swiss Banks but till now no action has been taken to access the names of such account holders from the bank. Our government is saying that its the policy of the Swiss bank not to give any information related to their account holders and so they are unable to do any thing. Perhaps they are forgetting that America not only forced Swiss bank to give all the information about the american account holders but also punished guilty persons and made them pay all the taxes with penalty and interest. If American government can do it then why can not Indian government? After all its a matter of $1.4 trillion.

Today wherever we see we feel something wrong. Rich people are busy in making more and more money and powerful people are busy in gaining more and more power. Its truly strange that even a peon need to have some educational qualification to get any job but those who have the most responsible job of developing our India needs no educational qualification. It is only possible in our great India to become chief minister for an woman who even do not know how to write her name. Wherever we see we find Indians in grief because of this sick system. But where is the solution???

The solution actually lies in us, "The youth of the country". We are the future of the country. We have the power not just to change but also create the future. We need to think about it from the very root level. We are educated, civilized and better then our past generation. Now its the time to prove it right. After all we also want to say proudly, " I am proud to be an Indian".