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Taxpayers Can Now Revise Audit Reports, Here’s How

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Business owners and professionals can now update their tax audit records, thanks to new regulations implemented by the Central Board of Direct Taxes (CBDT) on Friday to eliminate legal obstacles in seeking deductions for certain payments. In situations where the taxpayer renders certain payments such as taxes, duties, or cess or provident fund contribution of employees after the tax audit report has been filed in an assessment year, an updated audit report certified by the accountant can be provided to seek relief for that payment or transaction, according to a statement published by the CBDT.

 

Taxpayers Can Now Revise Audit Reports, Here’s How

The Income Tax Act does not authorise such expenditures, such as interest, royalty, or fees for technical services, to be deducted while calculating an assessee's taxable income if the tax is not deducted at source and paid to the government. Furthermore, payments such as provident fund contributions and leave encashment are only allowable in the year in which they are generated. If the taxpayer makes payments after filing the tax return, recalculation of the amount of expenditure available for deduction may be required. The new law makes it possible for an assessee to file a revised report and seek exemptions. Simultaneously, the taxpayer's responsibility to clarify the mismatched audit report and deduction claim is excised. Businesses with sales of Rs 1 crore or more, as well as professionals with income of Rs 50 lakh or more, are required to submit tax audit reports.

Read more about: tax
Story first published: Monday, April 5, 2021, 14:03 [IST]
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