1. Tally.ERP 9 Auditors’ Edition Tax Audit (Sec 44AB of IT Act)

2. Agenda Tax Audit under Sec 44AB using Tally.ERP 9 AE Benefits
Definition & Audit Objective
Audit & Analysis-Features
Clause 16, 17h, 18, 21, 24a, 24b & 27
Forms 3CD, 3CA & 3CB
In this slide the points that will be discussed in the presentation are mentioned.

3. Benefits The Tally.ERP 9 AE aids Auditors to perform a Tax Audit
Enables exceptional reporting – saves time and cost
Preform audit to generate annexures for 7 clauses supported under Sec 44AB with ease
Review / scrutiny of relevant cash and unusual transactions
Determine timely remittance of statutory dues
Aids in preparing Form 3CD, 3CA, 3CB
The advantages that an Auditor /BAP gets when the AE is used in auditing the accounts of a company under Sec44AB,are mentioned here.

4. Definition & Audit Objective
Audit of certain persons under Sec 44AB of the Income Tax Act
whose total sales, turnover or gross receipts, as the case
may be, exceed(s) the following limits:
Businesses : Profits and Gains more than Rs.40 lakhs per annum
Professionals : Gross receipts above Rs.10 lakhs per annum
(Note: The limits have been increased to Rs.60 lakhs for businesses
and Rs.15 lakhs for professionals from FY )
Audit Objective:
Verify compliance with provisions of Sec 44AB of the IT Act
Confirm accounting records are maintained properly and reflect
the true income of the assessee
This slide gives the coverage of the persons under Sec 44AB.
The old and proposed limits of incomes are also mentioned.
The audit objective of the entire audit is also mentioned.

5. Audit & Compliance Menu
Tally Main -> Gateway of Tally
Open Tally.ERP 9
Auditors’ Edition.
Select the required
Company to display
Gateway of Tally.
Select Audit &
Compliance under
Audit to access the
audit features.
The entry to audit features is through Audit & Compliance menu.

6. Access to Audit & Compliance Menu
When the Client activates the Security Control – Scenario 1
Click Alt+F3:Cmp Info in Gateway of Tally to display the Company Alteration screen.
Under Security Control:
Select Yes for Use Security Control
Enter details for Name of
Administrator &
Password fields
Accept and save the entries.
This slide gives the details of a scenario where the client activates the Security Control option for enabling the Auditor to audit. After activation when the Auditor loads the data in the AE , the Audit & Compliance menu is enabled for audit.

7. Access to Audit & Compliance Menu
When the Auditor provides the access details – Scenario2
Click Audit &
Compliance in Gateway of Tally screen to
display Company Alteration- Enable Security screen.
Enable access to use audit features by entering:
Name of
Administrator
Password
Accept and save the login details for access.
In this slide the Auditor is facilitated to enter the ID and Pwd details in the Company Alteration –Enable Security menu to enable the Audit & Compliance menu. The Enable Security menu is displayed when the Auditor clicks the Audit & Compliance menu in the AE.

8. Tax Audit Menu
Tally Main -> Gateway of Tally->Audit & Compliance
The Audit & Compliance Menu with the available features.
The menus under
Tax Audit are:
44AB Audit
Form 3CD
Form 3CA
Form 3CB
Note:
This is the main menu of the AE tool consisting of Tax Audit, Statutory Audit and Compliance menus.
The Tax Audit menus consists of:
44AB Audit
Form 3CD
Form 3CA
Form 3CB

9. Tax Audit Dashboard
Gateway of Tally > Audit & Compliance > Tax Audit
□ Clause No. in Form 3CD
□ Description of the clause under audit
□ No. of unaudited
Vouchers
□ No. of audited
Vouchers
□ No. of Vouchers under
observation
Note:
This is the dashboard of the clauses under the Sec 44AB Audit .
It provides a snapshot of the clauses to be audited
The current number of audited, unaudited vouchers
The number of vouchers:
Under Observation
Needing Clarification
Clarified (but to be audited again)
Altered by the Client after a preliminary audit (those again have to be audited)
Whether clauses are audited.
In addition we have the following buttons:
F2: Period: Choose the period of transactions for audit
Alt+F9: Save Audit- To save the audit of the clause.
Alt+C: Clarification List: This is the list of clarifications that have been sought
and the replies by the client
F11: Features: Displays the Audit Rules defined for the audit.
F12: Configure: The details of audits conducted of the previous year under
each clause.
□ No. of Vouchers requiring
clarifications from client
□ No. of clarified Vouchers
for re-audit
□ No. of altered Vouchers
for re-audit
□ Audit Status

10. Cl. 16- Payment of Statutory Dues
Verify employee contributions towards statutory funds (PF,ESI,etc), employee bonus and commission payments.
To perform the audit under this clause, the Payroll option in F11:Features
in Tally.ERP 9 has to be enabled and the payroll transactions have to be accounted
Use the Bonus, PF ,
ESI Recoveries feature
to verify remittance
of statutory dues in time
to Government
Note:
In the Annexures to Form 3CD screen, click the Bonus, PF, ESI Recoveries feature to display the Employee Deduction screen
The screen displays the amounts of statutory deductions, the payment status and the current audit status
Select the desired statutory deduction and click to display the Payroll Monthly Summary screen for audit.
Drill further to payment voucher level details and select the required voucher(s) for audit. ( Press the spacebar to select any voucher)
Press F9 to perform the audit.

11. Cl. 16- Payment of Statutory Dues
Verify information in the Masters created in the Client payroll data.
Determine the pay heads created in payroll masters
Click F5: Masters to know these payroll masters
Note:
Verify the master information relating to the ledgers created in Tally.ERP 9 payroll menu. This gives the Auditor an information on the groupings of payroll ledgers, the various pay heads and the Statutory Information on PF, ESI & Prof Tax ledgers.

12. Cl. 16- Payment of Statutory Dues
Verify PF,Bonus & other Statutory dues- Employee & Employer, Charges, Payment Status.
View a snapshot of the monthly PF related payments, charges, due dates, etc.
Click F6: Payment Summary to know the monthly deductions and charges information.
Find if payments are made in time.
Note:
Check the due dates on which the statutory deductions are remitted to Govt Funds. Know about monthly deductions and know if the deductions are made in time as stipulated by the Statutory Authorities.

13. Cl. 16- Payment of Statutory Dues
Know the exceptions in Clause 16 – Dues paid late or partially paid.
View the late/partial payments of statutory dues to concerned authorities.
Click Alt+X: Exceptions to display
such exceptions.
Note:
Some employees are eligible to be paid Bonus/Commission in the place of share in profits/dividends. Find if such payments are accounted and paid to those employees.

14. Cl. 16- Payment of Statutory Dues
Configure report display under the clause as per requirements.
Configure display of details under Cl. 16 as per requirements:
Click F12: Configure to display details of: PF
ESI
Prof Tax
Bonus
Voucher Audits
Note:
Define what details should be displayed in the Employee’s Deduction screen by using the F12: Configure before audit.

15. Cl. 16- Payment of Statutory Dues
Audit transactions easily.
Values for Audit Status are:
Unknown
Disallowed
Late Paid
Need Clarification
Paid on Time
Under Observation
Tally MAIN> Gateway of Tally > Audit & Compliance >Tax Audit > Employees Deduction > Payroll Monthly Summary.
Execute above steps:
&
Select transaction(s)
by pressing Spacebar/Ctrl+Spacebar (To select all transactions) .
Click F9:Audit to perform the audit.
In the Audit Details screen:
Select required status under Audit Status
Enter remarks under Audit Note.
Note:
Audit ledger vouchers by drilling down to the voucher level.
Use F9: Audit feature to record your observations
The Audit Status currently available are”
Unknown: This status is chosen when the auditor has not decided about the outcome of the audit of the payment transaction or wants to change the decision taken earlier.
Disallowed: The amounts paid late or unpaid are not allowed as deductions in computing the taxable income.
Late Paid: The statutory deductions are paid late, not within the due dates laid down by the authorities.
Paid on Time: The statutory deductions are paid within the time as stipulated by the authorities.
Under Observation: The Auditor is yet to form an opinion on the transaction under audit and wants to collect more information/consult supervisors before taking a decision.

16. Printed Annexures to Form 3CD
Clause 16:
Click Alt+P in
Bonus, PF, ESI
Recoveries
Note:
Printed report- annexures for Clause 16.

17. Cl. 17h- Amounts inadmissible u/s 40A(3)
Verify and disallow payments aggregating and above prescribed cash limits
Click F11:Features in Cash Payments
screen.
The Company Operations Alteration screen is displayed.
Audit rule under Inadmissible Cash Payments
U/s 40A (3) is defined.
Define new value if required.
Under this clause the Auditor has to report on cash payments aggregating and exceeding Rs in a day ( increased to Rs30000 in the next FY).

18. Cl. 17h- Amounts inadmissible u/s 40A(3)
Exclude ledger account(s) for which cash payments aggregating to Rs in a day are allowed.
Click Ctrl+F9:Master button in Cash Payments screen.
Select the ledger account in Select Ledger screen.
Exclude the ledger account in Ledger Alteration screen from the scope of audit under Rule 6DD of IT.
The initial configuration before audit in F11: Features is defined in that screen.
Some payments are exempt from cash payment rule, for example, payments of taxes to Govt or payments in rural/moffusil places where banking facilities are not available or if the recipient of cash has no bank account or the local traditions demand payments by cash only.
For this purpose the Rule 6DD allows you to exclude such ledgers from the purview of the tax audit.

19. Cl. 17h- Amounts inadmissible u/s 40A(3)
Define amount range for selecting transactions for audit of cash payments in a day.
Define new amount range as per requirements.
Click F10: Range wise to display the Lowest and Highest ranges and
the numbers of cash payment vouchers.
Click F6: Amount wise to define new values for the Lowest and Highest range of cash payments.
The Auditor can generate reports on the lowest and highest values of payments. Further the Auditor can provide any values of ranges to generate a report on cash payments.
Notice the lowest and highest values of payments displayed for a ledger account.
Select any ledger account and drill down to the payment level for audit.

20. Cl. 17h- Amounts inadmissible u/s 40A(3)
Verify if the Client has issued Bearer Cheques to suppliers.
Click Alt + B: Bank Summary to display ledger payments through the bank account.
Specify payments made by bearer in consultation with client.
If the Auditor is concerned about the issue of Bearer Cheques, the AE provides a list of bank payment transactions for analysis. The Auditor can select such transactions for audit and satisfy if they are paid through A/c payee cheque/DD or the client has issued bearer/self cheques. For this exercise, the Auditor has to check the bank statements and cheque counterfoils to satisfy that the payments were made as per law.

21. Cl. 17h- Amounts inadmissible u/s 40A(3)
Configure the display of details in the feature.
Configure the following display details:
High/Low value vouchers
Limit for displaying cash payments
Display of low valued payments
The display of details in the Cash Payments to aid the Auditor in the audit work. The F12: Configure button allows the auditor to define the limits for cash payments, display high and low payment values,etc.

22. Cl. 17h- Amounts inadmissible u/s 40A(3)
Select the required Ledger Account’s cash payment for audit.
Click F9:Audit to audit
Transactions.
In the Audit Details screen:
Select required status under Audit Status
Enter the appropriate value under Amount
Enter remarks under Audit Note.
Values available for Audit Status are:
Unknown
Allowed
Disallowed
Need Clarification
Under Observation
The method of auditing is described here and the values for the Audit Status.
Drill down to the voucher level, select the transaction and use F9: Audit to perform the audit.
The status values for Audit Status are:
Unknown: This status is chosen when the auditor has not decided about the outcome of the audit of the payment transaction or wants to change the decision taken earlier.
Disallowed: The amounts paid late or unpaid are not allowed as deductions in computing the taxable income.
Need Clarification: The Auditor wants more information from the Client before deciding on the audit decision.
Under Observation: The Auditor is yet to form an opinion on the transaction under audit and wants to collect more information/consult supervisors before taking a decision.

23. Printed Annexures to Form 3CD
Clause 17(h):
Click Alt+P in Amounts Inadmissible under u/s 40A(3):
Note:
Printed report - Annexure for Clause 17h
Contd…

24. Cl. 18- Payments to Specified Persons
Verify and disallow expenses/payments made to specified persons if found to be excessive/unreasonable
Configure the ledger accounts in Related Party Configuration screen as per discussions with the Client.
Click F9:Update to configure.
Configure the display details under Other Information in Ledger Alteration screen.
Click F12: Configure.
Select Yes against Use Other Information for Ledger Accounts.
You can alternatively configure the ledger accounts as Specified Persons through ledger creation under Masters menu.
Configure the display details through F12: Configure.
-Sec 40A (2) (b)
The Payments to Specified Persons details display after related party configuration.
-Sec 40A (2) (b)
Use the Payments to Specified Persons feature to audit excessive and unreasonable payments made to specified persons.
Click Ctrl+F9: Master and select the appropriate ledger accounts in consultation with the Client from the Select Item screen.
Note:
Certain payments to persons who are closely related to the client and may be Directors, Partners, Relatives, etc. have to be reported in the Tax Audit. The Auditor before starting the audit consults the Client and obtains the information on such payments.
The other type of payments that the Auditor is interested if they are unusual and are excessive/unreasonable.
Ledger accounts created for such persons can be configured using the Ctrl+F9:Master feature or the Ledger Master creation screen.
The Auditor can also configure the display of information on the Payments to Specified Persons screen by using the F12: Configure button menu.

25. Cl. 18- Payments to Specified Persons
Auditing Payments to Specified Persons.
Select required ledger vouchers for audit.
Click F9 : Audit to audit.
Select required status under Audit Status.
Enter values under Amount, Nature of Payment.
Record appropriate remarks under Audit Note.
Values are available for Audit Status.
Unknown
Need Clarification
Not to be Reported
To be Reported
Under Observation
Note:
Audit of payments to Specified persons can be performed at the voucher level by using the F9:Audit feature.
The status values available for Audit Status are:
Unknown: This status is chosen when the auditor has not decided about the outcome of the audit of the payment transaction or wants to change the decision taken earlier.
Needs Clarification: The Auditor requires more information from the Client before concluding the audit.
Not to be Reported: The Auditor decides after verification that the cash payment is allowable as per law in certain cases, like payments to Govt, payments to persons having no bank account, etc.
To be Reported: The Auditor has found that the payment was made violating the clause 18 and hence had to be reported in Form 3CD report.
Under Observation: The Auditor is still not completed the audit and wants to refer to other sources/Superior for confirmation.

26. Printed Annexures to Form 3CD
Clause 18 :
Click Alt+P in Payments to Specified Persons u/s 40A(2)(b)
Note:
Printed report-Annexure for Clause 18.
Contd…

27. Cl. 21- Payments Under Section 43B
Verify if sums collected, referred in clauses (a-f) of Sec 43B (employer related statutory deductions/taxes), are remitted to the Funds/Govt before the due date of filing the tax return
To perform the audit under this clause, the Payroll option in F11:Features in Tally.ERP 9 has to be enabled and the payroll transactions have to be accounted
Use Payments
Under Section 43B feature to audit timely remittance of statutory dues to various Funds/Govt.
Note:
Certain statutory payments made by the assessee in the form of liabilities referred to Clauses a-f of Sec 43B are to be reported in the Tax Audit if they are paid/unpaid before filing the tax return under Sec 44AB. The payments are also relate to the preceding previous financial year which are paid/remain unpaid during the previous year.
The type of payments are defined under Sec43B of IT Act and relate to:
Taxes and duties – VAT, Service Tax, Tax Collected at Source , Customs Duty, CenVAT,etc.
Employer contributions to Statutory Funds
Leave salary
Interest on loans/borrowings
The Auditor has to verify if such payments have been accounted in the P&L Account.

28. Cl. 21- Payments Under Section 43B
Verify payments referred in clauses (a-f) of Sec 43B (employer related statutory deductions/taxes) are remitted in time.
Execute the steps: Tally MAIN > Gateway of Tally > Audit & Compliance > Tax Audit > Service Tax Payable Summary > Service Tax Monthly Summary > Service Tax Payment Vouchers to view the timely payment of Service Tax for the
selected month.
Enable the Service Tax/TCS and other tax features in F11:Features under F3; Statutory in default Tally.ERP 9 before auditing transactions
under Cl.21.
Execute the steps: Tally MAIN > Gateway of Tally > Audit & Compliance > Tax Audit > TCS Payable Summary > TCS Monthly Summary > TCS Payment Vouchers to view the timely payment of TCS for the
selected month.
Note:
The Auditor can drill down and ascertain the timely payment of dues mentioned in Sec 43B.
The AE version provides the facility to know about the timely/pending payments.

29. Cl. 21- Payments Under Section 43B
Audit of payments of statutory levies (e.g.TCS)under Sec 43B.
Values for Audit Status available are:
Unknown
Audited
Need Clarification
Under Observation
Select required ledger vouchers for audit.
Click F9 : Audit to audit.
Select required status under Audit Status.
Record appropriate remarks under Audit Note
Audit of payments under Sec 43B can be performed at the voucher level. The Auditor can drill down and use the F9:Audit feature to record the observations.
The status values available for Audit Status are:
Unknown: This status is chosen when the auditor has not decided about the outcome of the audit of the payment transaction or wants to change the decision taken earlier.
Audited: The Auditor has checked/verified the transaction and has taken a decision on its status, whether conforming/non conforming to the statutory requirements.
Needs Clarification: The Auditor requires more information from the Client before concluding the audit.
Under Observation: The Auditor is still not completed the audit and wants to refer to other sources/Superior for confirmation.

30. Printed Annexures to Form 3CD
Clause 21:
Click Alt+P in resp. screens(for e.g., Employer’s Contributions)
Note:
Printed report- Annexures for Clause 21.
Contd…

31. Cl. 24(a)- Loans / Deposits Accepted-Sec 269SS
Verify acceptance of loans and Deposits aggregating to and
exceeding prescribed cash limits during the previous year.
Use 24(a) – Loans / Deposits Accepted feature to find cash receipts (loans & deposits) accepted aggregating to and exceeding prescribed cash limits. Click F9:Master to configure the inclusion of any Ledger group for audit under the clause.
Select any Group for inclusion by pressing Spacebar.
Click Ctrl + A:Change to include the selected Group.
Press Ctrl+Q : Quit to return to Loans and Deposits Accepted screen.
Click F4: Group to select the required Group (e.g. Unsecured Loans).
Note:
Under Sec 269SS of the IT Act, loans and deposits aggregating to and exceeding Rs in a day should be accepted only through a crossed account cheque or demand draft. Cash receipts not satisfying this condition will be added to the income of the assessee in the tax return.
The Auditor can configure the inclusion of the ledger accounts under loans accepted by using the F9:Master button menu.
The F12:Configure is used to configure what information can be displayed on the Loans and Deposits Accepted screen.

32. Cl. 24(a)- Loans / Deposits Accepted-Sec 269SS
Configure the display of details in the report.
Click F12:Configure to define the display of details the Loans and Deposits Accepted screen.
Note:
Under Sec 269SS of the IT Act, loans and deposits aggregating to and exceeding Rs in a day should be accepted only through a crossed account cheque or demand draft. Cash receipts not satisfying this condition will be added to the income of the assessee in the tax return.
The Auditor can configure the inclusion of the ledger accounts under loans accepted by using the F9:Master button menu.
The F12:Configure is used to configure what information can be displayed on the Loans and Deposits Accepted screen.

33. Cl. 24(a)- Loans / Deposits Accepted-Sec 269SS
Audit transactions of Loans / Deposits Accepted – Sec 269SS.
Select required value under Audit Status.
Enter value under Amount
Record appropriate remarks under Audit Note
Audit Status Values are:
Unknown
Accepted by Cash
Accepted by Cheque/DD
Need Clarification
Not a Loan
Under Observation
Select required ledger vouchers for audit.
Click F9 : Audit to audit.
If there are large number of transactions, use the Alt + F12: Range to filter the display of ledger amounts greater than Rs
Note:
Audit of payments under Sec 269SS can be performed at the voucher level. The Auditor can drill down and use the F9:Audit feature to record the observations.
The audit status values are:
Unknown: This status is chosen when the auditor has not decided about the outcome of the audit of the receipt transaction or wants to change the decision taken earlier.
Accepted by Cash: These are transactions that are accepted by cash and will be disallowed while computing the income
Accepted by Cheque/DD: These transactions are accepted by a crossed account payee cheque/DD.
Need Clarification: The Auditor requires more information from the Client before concluding the audit.
Not a Loan: The transaction is not a loan and hence will be added to the income of the assessee.
Under Observation: The Auditor is still not completed the audit and wants to refer to other sources for confirmation.

34. Printed Annexures to Form 3CD
Clause 24(a): Click Alt+P in Loans & Deposits Accepted
-u/s 269SS
Note:
Printed report -Annexure for Clause 24a.

35. Cl. 24(b)- Loans / Deposits Repaid-Sec 269T
Verify repayments of Loans and Deposits aggregating to and
exceeding prescribed cash limits
Use the 24(b) – Loans / Deposits Repaid feature to find payments (loans & deposits) made by cash aggregating to and exceeding prescribed limits.
Click F9:Master to configure the inclusion of a ledger account under the clause.
Click F4:Group to select a Group.
Select any Group for inclusion by pressing Spacebar.
Click Ctrl + A:Change to include the selected Group.
Press Ctrl+Q : Quit to return to Loans and Deposits Repaid screen.
Note:
Under this clause any payment of loans/deposits as described under Sec269T are to be made through an account payee cheque/DD if the amount aggregates to and exceeds Rs.20000/- on a day.
Click F9:Master to configure the inclusion of any ledger account under Loans and Deposits Repaid for audit.

36. Cl. 24(b)- Loans / Deposits Repaid-Sec 269T
Configure the display of details in the report.
Click F12:Configure to define the display of details the Loans and Deposits Repaid screen.
Note:
Under this clause any payment of loans/deposits as described under Sec269T are to be made through an account payee cheque/DD if the amount aggregates to and exceeds Rs.20000/- on a day.
Click F9:Master to configure the inclusion of any ledger account under Loans and Deposits Repaid for audit.

37. Cl. 24(b)- Loans / Deposits Repaid-Sec 269T
Audit transactions of Loans / Deposits Repaid – Sec 269T.
Select status under Audit Status.
Enter value under Amount.
Record appropriate remarks under Audit Note.
Audit Status Values available are:
Unknown
Need Clarification
Not a Loan
Repaid by Cash
Repaid by Cheque/DD
Under Observation
Select required ledger vouchers for audit.
Click F9 : Audit to audit.
If there are large number of transactions, use the Alt + F12: Range to filter the display of ledger amounts greater than Rs
Note:
The Auditor can drill down to the voucher to perform the audit of the selected transaction. The audit is performed using the F9:Audit feature.
The status values available for Audit Status are:
Unknown: This status is chosen when the auditor has not decided about the outcome of the audit of the repayment transaction or wants to change the decision taken earlier.
Need Clarification: The Auditor requires more information from the Client before concluding the audit.
Not a Loan: The transaction is not a loan and hence will be disallowed as a deduction while computing the taxable income.
Repaid by Cash: These are transactions that are repaid by cash and will be disallowed while computing the income
Repaid by Cheque/DD: These transactions are repaid by a crossed account payee cheque/DD.
Under Observation: The Auditor is still not completed the audit and wants to refer to other sources for confirmation.

38. Printed Annexures to Form 3CD
Clause 24(b): Click Alt+P in Loans & Deposits Repaid -u/s 269T
Note:
Printed report -Annexure for Clause 24b.
Contd…

39. Cl. 27- Tax Deducted at Source
Verify remittance of taxes deducted at source have been made within
time to the Government
Use the Tax Deducted at Source feature to find whether tax deducted at source has been remitted within time to the Govt.
Verify details under:
Deduction Details
Payment Details
To use the Tax Deducted at Source feature, enable the TDS option in Statutory & Taxation under F11:Features in Tally.ERP 9 and account the TDS related transactions.
Examine any particular detail (e.g. Deducted on Time) in the TDS Summary screen.
Click Alt+F4:Party to display Party Summary details.
Click Alt+F5:NOP to display the Nature of Payment Summary attracting TDS.
Note:
NOP-Nature of Payments.
Note:
Under this clause the assessee has to report whether tax at source deducted has been paid to the account of the Govt as per Chapter XVII-B of the IT Act. The remittance of the tax deducted at source should be within the prescribed time as specified under the IT Act.
To perform this audit, the TDS option in Tally.ERP 9 has to be enabled.
The Auditor can view the party and payment details using the Alt+F4:Party and Alt+F5:NOP.
The TDS Payment Summary with the details of Deductions and Payments are displayed and also the expense summary.

40. Cl. 27- Tax Deducted at Source
Display the TDS expenses closing balance with the closing balances of other expenses (non-TDS).
expenses.
Verify non-TDS expenses to see if tax has to be deducted at source for them.
Compare TDS expenses with non TDS expenses in the TDS Summary screen.
Click F5: Expenses Analysis to generate the analysis report.
Note:
The Auditor can use the F5: Expenses Analysis to compare the TDS and non-TDS expenses.

41. Cl. 27- Tax Deducted at Source
Audit transactions of Tax Deducted at Source.
Values for Audit Status available are:
Unknown
Audited
Need Clarification
Under Observation
Select required ledger vouchers for audit.
Click F9 : Audit to audit.
Select required status under Audit Status.
Record appropriate remarks under Audit Note.
Note:
Select the required tax payment by drilling down to the voucher level and audit it by using F9:Audit key.
The three audit status values in this clause are:
Audited: This refers to the situation where the tax payment has been verified to the fact it has been remitted within time or not.
Needs Clarification: The Auditor requires more information from the Client before concluding the audit.
Under Observation: The Auditor is still not completed the audit and wants to refer to other sources for confirmation.

42. Printed Annexures to Form 3CD
Clause 27:
Click Alt+P in TDS Summary
Note:
Printed report -Annexures for Clause 27b.
Contd…

43. F11: Audit Features
Pre-define rules for performing audits under Sec 44AB (values under Sec 40A(3) can be re-configured by Auditor)
The value for inadmissible cash payment under Cl. 17h and the due dates defined for tax and statutory deductions are used in arriving at the exceptions in the tax audit.
For e.g., if the payment date for VAT is 15th of the month, then tax paid on or before 15th will show the status as Paid on Time. Payments after 15th will be marked as Paid Late in the report.
Note:
The F11: Features in the Tally.ERP 9 AE is an important feature. The rules regarding the clauses to be audited under Sec 44AB are defined here. Some rules can be altered while others cannot be altered. Exception reports in the AE are generated based on the parameters defined in this feature.

44. Forms 3CD Report
Generate the tax audit report in Form 3CD for assessee whose
accounts are audited under Sec 44AB for filing with IT Dept.
Prepare Form 3CD Audit Report with a provision to export in Excel
Gateway of Tally -> Audit & Compliance.
Click Form 3CD to generate the audit report.
Click Alt + F1: Detailed to view details of the report.
Note:
The Auditor furnishes a report in the Form 3CD format as required under the provisions of Sec 44AB.
Some details required in the report are picked from the Tally.ERP 9, while others have to be entered by the Auditor manually. However you can generate the annexures to support the audit activity.
The feature has user friendly short cuts like:
Alt+T: Select Text: Select a standard text to prepare the audit report.
Alt+ R: Copy From: Copy the static details of the audit report from the previous year. You can also copy the details to another company.

45. Form 3CD Report
The contents of the Form 3CD report are partly entered manually and the permanent information is taken from the master information in Tally.ERP 9 data, created during the Company creation phase.
Note:
The shortcut Alt+T avoids repeated entry of standard terms used in generating the audit report. This command cuts the time in entry of standard terms and is a user friendly feature.

46. Forms 3CD Report- short cut buttons
Click Alt+T: Select Text.
Select standard text for entering in the report. This saves time in report preparation.
Examples of standard text:
Add Text
Remove Text
As per Annexure
Cash System
Mercantile System NA
Nil
Not Applicable
Note:
The shortcut Alt+T avoids repeated entry of standard terms used in generating the audit report. This command cuts the time in entry of standard terms and is a user friendly feature.

47. Forms 3CD Report- short cut buttons
Copying of configuration data- Use this feature to copy data configuration from one year to another or current company to another.
Click Alt + R: Copy From to perform this operation.
Note:
The shortcut Alt+R is another user friendly feature to cut down entry time of details when the auditor is performing the tax audit of another assessee or another FY for the same assessee.

48. Forms 3CD Report The Form 3CD report after generation Note:
In the Form 3CD feature, click Alt+P to print the audit report. The Form 3CD is the audit report that is prepared by the Auditor for filing with the IT Dept.

49. Forms 3CD Report
The Form 3CD report after generation

50. Forms 3CA & 3CB Form 3CA-This report is prepared when
the accounts of the
business/profession have been audited under any other law. Refer clause (a) of Rule 6G
Form 3CB-This report is prepared in the case of a person who carries on business or profession, but not being a person referred to in clause (a) of Rule 6G.
Note:
The Form 3CA and CB are assertions/opinions made by the Auditor in respect to the conduct of the audit under Sec 44AB and reported by Form 3CD.
Form 3CA audit report is prepared for businesses audited under any other laws – partnership, proprietorship, Association of Persons,etc.
Form 3CB is an audit report prepared for an assessee who carries on a business other than mentioned under Form 3CA.

51. Thank You