CBDT has vide notification Dt. 01.04.2021 made various changes to Tax audit rules especially for incorporating the changes of Finance Act, 2020 and this tax audit rules will be implemented while doing tax audit for FY 2020-21. Let’s discuss all the changes one by one.
1. Option to Revise Tax audit report:
“In rule 6G, after sub-rule (2), the following sub-rule shall be inserted, namely:-
―(3) The report of audit furnished under this rule may be revised by the person by getting revised report of audit from an accountant , duly signed and verified by such accountant, and furnish it before the end of the relevant assessment year for which the report pertains, if there is payment by such person after furnishing of report under sub-rule (1) and (2) which necessitates recalculation of disallowance under section 40 or section 43B.”
The above rule provides that the audit report can be revised for any payment related to related to section 40 (disallowance related to non deduction of TDS etc) and section 43B (disallowance for non payment of various expense) after furnishing original return.
The due date for furnishing such report is before the end of relevant assessment year. Although earlier also people could revise the tax audit report but such instances were very low but now people could revise tax audit report specifically for section 40 and 43B.
This will solve a very common issue which the people were facing because now in coming year there will be a difference in due date for filing of tax audit report and filing of Income tax return and there are many payments between filing of tax audit report and income tax return and CPC would disallow any such difference while processing such return.
Now, with this option people could remove such difference in intimation.
2. Amendment with regard to new section 115BAC and 115BAD:
- First amendment in this regard is to include declaration of opting of new provision of tax rate for individuals i.e. section 115BAC and for co-operative society i.e. 115BAD while preparing tax audit report.
“in PART –A for clause 8A, the following clause shall be substituted, namely: –
―8A Whether the assessee has opted for taxation under section 115BA/115BAA/115BAB/ 115BAC/115BAD?”
- Next amendment is to adjust written down value of asset because of adjustment of additional depreciation by opting for section 115BAC and 115BAD and removing goodwill from definition of intangible asset.
“(iii) in clause 18, for sub-clauses (ca) and (cb), the following sub-clauses, shall be substituted namely:-
“(ca) Adjustment made to the written down value under section 115BAC/115BAD (for assessment year 2021-2022
only)……
(cb) Adjustment made to written down value of Intangible asset due to excluding value of goodwill of a business or profession…..
(cc) Adjusted written down value……….”
- Last amendment in this regard is to adjust value of brought forward losses due to opting of new provisions i.e. section 115BAC and 115BAD.
in clause 32, for sub-clause (a), the following sub-clause shall be substituted, namely:-
(a) Details of brought forward loss or depreciation allowance, in the following manner, to the extent available:
| Serial
Number |
Assessment
Year |
Nature of
loss/ allowance (in rupees) |
Amount
as returned* (in rupees) |
All
losses/allowances not allowed under section 115BAA/ 115BAC/115BAD |
Amount as
adjusted by withdrawal of additional depreciation on account of opting for taxation under section 115BAC/115BAD^ |
Amounts
as assessed (give reference to relevant order) |
Remarks |
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) |
*If the assessed depreciation is less and no appeal pending then take assessed.
^To be filled in for assessment year 2021-2022 only.’’
3. An amendment has been done to report any variance in valuation of sale of property as compared to section 43CA and section 50C.
4. Removing clause to report Dividend distribution tax:
Last amendment in the above rules is omitting clause 36 of Tax audit report which relates to Dividend distribution tax which has been omitted by Finance Act, 2020.
Thus, this are all the amendment incorporated in rules in relation to Tax audit report for FY 2020-21.
To read full notification CLICK HERE.
