CHAPTER NO INDEX PARTICULARS PAGE NO INTRODUCTION (ABOUT THE COMPANY) INTERNSHIP LEARNING AND SKILLS ACQUIRED 2-27 INTERNSHIP OUTCOMES 28-29 CONCLUSION AND SUGGESTIONCHAPTER 1: INTRODUCTION ABOUT THE COMPANY: P.M.BHOOT & CO is a chartered accountancy firm which was established in the year 2001 by Mr. Prem Prakash M Bhoot. The firm is officially registered under the Institute of Chartered Accountants of India. It is a small- sized Chartered accountancy firm operating in Chennai. The firm strives to provide quality services in the areas of Audit, Income tax, Management consultancy etc. The firm is managed by Mr. Prem Prakash who is a chartered accountant himself, The firm has its office located at Shop No: 6, 29, Rattan Bazaar, IV floor, Kumbhat Complex, Chennai-600003. The firm functions from 10:00 in the morning to 6:00 in the evening. The services provided by the firm ranges from filing Income Tax returns to conducting financial audits across the country. The day to day tasks are furnished by the accountant and the articles who are employed in the firm. The accountant of the firm gets Rs.20000 as monthly salary and their articles are provided Rs.8000 as stipend. For external audits accountants who specialize in the particular job are hired. The firm specializes in filing of Income Tax Returns, filing of VAT returns, filing of GST returns, conducting financial audits. They file returns for individuals as well as firms which are mostly indulged in wholesale businesses. The firm aspires to render sound professional services and importance to client’s satisfaction in terms of timely and effective delivery of services. The firm’s major incomes are derived from the filing of returns and audits conducted every year. The clients of the firm are expected to pay their fees at the time limit provided by the proprietor and they do not compromise on this aspect, any delay henceforth results in the firm cutting of the ties with the particular client. They have got separate storage shelf’s for maintaining files of Income tax and sales tax. Every file is given a series number and is arranged in that particular order (Example: If there is a firm named Ganshyam & co which wants their accounts to be maintained by the firm and approaches the firm for the same, their series number would start with G and if they are the 6’th firm in the G alphabet series they would get the series number G-6). They also maintain a separate index which consists of the details of all the clients right from their addresses, phone number etc, All the systems: of the firm are connected internally for time consuming purposes every file saved and work done in a particular system can be monitored by the main system which is at the disposable of the proprietor. The articles of the firm apart from doing the regular works are given case studies and concepts to work on by the proprietor.CHAPTER 2: INTERNSHIP LEARNING AND SKILLS ACQUIRED Basic Learning’s in the internship training: © Index maintenance of the firm. ¢ Filling up a bank challan and cheque. © Conduct to be maintained in the firm. © Managing customers of the firm. * Arrangement of files. Skills and works learnt in the internship training: © Procedure in applying for a PAN card. © Basic keyboard shortcuts. af 5 © Applying for income tax e-filing. * Basic tally works. © Income tax filing log in. ql Filing up of challan 280 flive «Filing up challan 281. Za eee «Basic MS Excel functions © Creating Vouchers. © Linking of aadhaar with pan for ITR e-filing. © Filing up details in ITR form. © Compliance of letter. «Pivot Table (MS Excel). © Reetifying mistakes in ITR filing. © Preparation of balance sheet for individuals firms. Arranging VAT report in order. © Power Point Presentation. ¢ Filing up details required in Form 3CA.© Filling up details required in Form 3CB. «Filing up Form 3CD. Preparation of provisional and projected balance sheet. Theoretical concepts learnt: « Classification of income tax return forms. «TDS slabs for different incomes earned. sf e Advance Tax. v GST and Types of returns filed by the tax payer. 5h | * Form26as. Ku a © Penalty for late payment of tax (Sec 234A). «Penalty for late payment of advance tax (Sec 234B). © Penalty for late payment of advance tax installments (Sec 234C)Basic Learning's in the internship training: Index Maintenance Of The Firm: The first day of the internship started with formal introduction after which I was provided a separate work space and the article assistants over there started explaining about the works that are done by the firm and their targets of the day. The first thing they thought me was the maintenance of the firm’s index. The firm’s index is nothing but a regular diary consisting of information about the clients of the firm and there is also a separate index in the system for noting down works completed for the client, If any new client approaches the firm for filing of returns or any other work we must enter the name of the client or firm in alphabetical order. Further, if the filing of return of a client is completed we must note it down in the index maintained in the system. The index also contains contact details and the PAN number of the firm. The index is given constant upgrades every now and then whenever there are changes in the above mentioned details. Whenever clients make fee payments we should note it down in the index maintained in the system. On the entire internship training, I had to maintain the index and untant and the article assistants over there. Rectification of provide necessary details to the contact details of old clients and adding contact details of new clients, updating the fee payments of clients, work completion data of the client are the various works I did in relation to maintaining the index of the firm. Filling and deposit of a bank challan and cheque: In the entire internship program my work guide was more focused in making me learn things that I was not familiar with before. They would enquire about things I am not familiar with both in general and work related, so the next learning in the program was how to fill a bank challan and a bank cheque. The accountant of the firm gave a practical explanation on how to fill a bank challan. The account number, date, amount both in numbers and in words, signature are some of the details which are to be furnished in a bank challan. Filling up of cheque was also thought as almost every transaction of the firm is done through cheques. I had to fill the pay in slips and deposit the same in the Central Bank branch in Broadway. If cheques which are to be transferred to another person is deposited then we must acquire seal of the bank for confirmation of the deposit made. For other cheques we can avoid the queue and deposit it in the deposit box which is available at almost every bank. 4Conduct to be maintained in the firm: The conduct and the rules to be followed in the firm were clearly mentioned at the first day of the training. All the employees of the firm are required to be in formal dress code so the same rule applied to interns and article assistants of the firm. The employees are required to be on time for the job @ 10:00 a.m, which the accountant will make sure of. None of the employees are allowed to go out during the lunch break, we must get prior permission from the proprietor for go out for lunch. There must be always someone in the office to attend the clients. Phones are permitted in the office and can be used only during leisure times and if someone uses phone during work they would be penalized by the proprietor. As I was an intern they made sure I abide by the rules of the firm. The firm has a wi-fi connection which should only used for the works in the system the employees are restricted from using the connection for personal purposes. The mail page of the company should always be open as the proprietor sends works and tasks to be completed during the day through mail. We can access financial information of any kind in the system, accessing of social media in the system is strictly prohibited in the firm. Managing customers of the firm: In case a client enters he must be greeted and given a seat. The purpose for which he/she has visited the office must be enquired. Clients who want to apply for PAN card or make corrections in PAN card can meet the accountant and provide details and documents to apply for the same. New clients who want their accounts maintained by the firm should meet the proprietor. For acquiring the sign of the CA they must be available at the firm by 4:00 clock at the office. Mostly the representatives of the clients would visit the office for getting finished VAT audit reports and other official letters from the CA relating to the turnover of the firm. Arrangements of files: ‘As stated earlier the firm maintains files in a particular order for time saving purposes. During my internship program they were mostly indulged in linking aadhaar with pan card for ITR purposes. For linking they would need user id and password which will be in the cover of the page. For the first 4 days I was rearranging the files which were used for the aadhar linking purposes, The files need to be arranged in the alphabetical order and in the particular number series, The work was simple as they have clearly divided space for arranging files.SKILLS AND WORKS LEARNT IN THE INTERNSHIP TRAININ Procedure in applying for a PAN card (Form 49A): PAN, or permanent account number is a unique 10-digit alphanumeric identity allotted to each taxpayer by the income tax department under the supervision of the central board of direct taxes. It also serves as an identity proof. PAN is mandatory for financial transactions such as receiving taxable salary or professional fees, sale or purchase of assets above specified limits, buy mutual funds and more. Applying PAN cards for clients or their close relatives is one of the services provided by the firm. PAN card can be applied both through online and offline methods. For both these we need to fill up Form 49 A. After furnishing the details such as name of the individual/firm, address of the home/office, postal code, source of income ete, 2 passport sized photos of the client must be affixed along the two spaces provided. The client must sign from the middle of the photograph in the left side and another sign must be applied in the space provided beneath the photo in right handed side. All the details must be written in block letters and should be mostly done using a black pen. Two documents must be provided as a proof with the application a aadhaar card Xerox and identity card of the client if available. Any mistakes can be corrected through PAN card correction form. The PAN card correction form must be filled carefully the mistake done must be rectified and sent along with the old PAN card Xerox and aadhaar card Xerox. The client should pay the required amount for applying for the PANcard to the firm. Basic keyboard shorteuts: Mr. Dhruv Davey one of the article assistant over there was well acquainted in shortcuts in keyboards, MS Excel, Ms word etc. So, he was the one to teach these keyboard shortcuts which helped in time consumption. Windows Key +R: Opens the Run menu. Msaccess: Microsoft Access. Windows Key + E: Opens Explorer Powerpnt: Microsoft PowerPoint. Alt + Tab: Switch between open programs, Winword: Microsoft Word. Ctrl + Shift + Ese: Open Task Manager. —_Frontpg: Microsoft Front Page. Excel: Microsoft Excel. Notepad: Notepad. WordPad. Cale: Calculator. WordpaCommand + X: Cut selected text and copy it. Command + F: Open window to search text. Command + C: Copy selected text Command + H: Hide windows of the front app Command + V: Paste copied text Command + N: Open a new document. Command + Z: Undo previous command, Command + O; Open a selected item. Command + A: Select all items: Command + P: Print current document. Applying for income tax e-filling: Income tax returns filing are almost done through online in today’s environment. For filing of ITR through internet one must register in e-filing website of www.incometaxindiaefiling.gov.in . Registration helps in creating a user account in the e-Filing portal. Taxpayer needs to register on the e-Filing website to leverage the services such as filing ITR, tax deducted details, refund status and so on. Briefly, taxpayer can track all tax-related activities on this website. The tax are divided into three categories such as Individual, HUF and other than individual & payel HUF. Individuals: They need to provide their name, PAN number and contact details in the “register yourself” tab in the website. They must set a password. After entering these details they would get a onetime password in their mobile and e-mail id. Once they enter the OTP they would complete registering for e-filing facility. Hindu united family: They need to provide the name of the HUF, date of incorporation etc. And all the proofs provided must be of their KARTA in the “register yourself” tab in the website. They must set a password. After furnishing these details they would get a onetime password in their mobile and e-mail id. Once they enter the OTP they would complete registering for e-filing facility. Other than individuals and HUF: At first they need to choose the status in register yourself tab according to the status given in the PAN card. After furnishing the details required they should provide their entities PAN card and in case of a company the type of company must be choosen, They must set their password for the portal. On completion of the above mentioned details they would get an OTP on their primary mobile number and email id. On clicking the register button they could easily file ITR returns through online portal provided by the income tax department of India.Basic Tally Works: Though a small glimpse of Tally software was given on the first day of the internship work by the work guide,it was just about opening a company’s account by copy pasting the file location to the search index in Tally software. As days were shorter they insisted just to learn a few basic functions in tally, Functions such as creation of company and some other shortcuts were taught. Creation of company: On opening the tally erp 9 software we would get a fresh page with a menu box called company info on the right hand side. In the company info menu box choose create company. Choose the directory i.e the storage location for this company data and then , contact details etc. After providing all these details choose the financial provide name, addre: year from which we need to maintain accounts. Shortcuts: Alt+E - To export the report in ASCII, Excel, HTML or XML format. Alt+X - To cancel a voucher in Day Book/List of Vouchers. Alt+M — To mail the report. Ctrl+L — To select the voucher. The shortcuts were taught as in tally mouse functions are not so effective. Though there were little to learn about tally, I was always given a company’s financial statements to look at and ask for any doubts in them. Income Tax e-filling log in: Once the firm registers an client for income tax e-filing they would obtain the user id and password and note it down in the file maintained for the client. To log-in into the e-filing potal the user id and password is necessary. This was the work which was majorly done during the internship program as most the tasks related to income tax filling can be done through the client’s profile. The step by step process of e-filing log in is slated below. Step!: Visit the e-filing portal www.incometaxindiaefiling.gov.in . Step2: Click on the “Login here” button located in the right comer of the page. Step3: Enter the User I.D which would be on the cover of the clients file. Step4: Enter the password which will also be present on the client’s file. StepS: Enter the captcha code displayed to enter the profile. After entering the client profile we can carry out other works such as linking of aadhar card with pan card which is anew mandatory set by the department of income tax for making the system more reliable.Filling up of challan 280: As stated earlier the company specializes in Income tax and most of the work related to income tax is done through both offline and online methods. Challan 280 is required to be used for the payment of income tax. This payment of income tax can be either in the form of Advance tax, essment tax, tax on regular assessment, surcharge, and tax on distributed profit. The sel challan can be downloaded from the e-tax payment site. We must first choose the type of tax applicable if it is for a company then the option 0020 must be ticked and if the tax applied on other than company then the option 0021 must be ticked. Then we must proceed by filling up the assessment year for the tax being paid, PAN number of the company or firm, name & address of the company/firm. Then the type of tax to be paid must be choose such as, Advance tax: If the tax is paid for the same financial year on the basis of estimated income then the advance tax option should be chosen. Self-assessment tax: Whereas if the tax is being paid after the end of the year then the self assessment option must be chosen. Tax on regular assessment: Tax on regular assessment is the tax that a taxpayer is required to pay against a notice of demand from the Income-tax department if that’s the case then the tax on regular assessment option should be chosen. The name of the bank where the company intends to make payment should be filled up. After furnishing all the details required we proceed to next step where the details we entered will be shown to us in a confirmation page. After this step we would be redirected to the bank page through which we intended to make payment. Once the tax amount is ascertained we should make payment through the bank page. We could track the status of the tax paid. Filling Up of challan 281: Challan 281 is the form required for payment of Tax deducted or collected at source. This challan is used for depositing TDS and TCS by corporate as well as non-corporate entities. TDS or Tax Deducted at Source is a mechanism introduced by the Government in which the person (deductor) before making the payment of specified nature (such as salary, rent, etc.) to the payee (deductee) shall deduct tax at specified percentage from such amount payable and deposit it to the Income Tax Department. TCS or Tax Collected at Source is the tax collected by the seller from the buyer at the time of sale of specified goods.ted below: The details to be furnished in the challan 281 are step!: Tax applicable: If TDS or TC is to be paid by a company then the option 0020 must be chosen or if the tax is to be paid by other than companies then the option of 0021 must be selected. Step2: ‘Assessment year: Assessment year is the year in which tax is to be paid in respect of the income earned during the previous year. Assessment year is the year next to previous year. We must enter the correct assessment year on which the tax is to be paid. step3: TAN No., Name and Address: The next step is to enter the TAN no. and name of the client company. TAN no. or Tax Deduction and Collection Account Number is a unique 10 digit alpha numeric number issued to the persons who are required to deduct or collect tax on the payments made/received by them under Income Tax Act, 1961. In case of online payment the data base would fill up the rest of the details such as name, address if it is already furnished. Step4: Type of payment: It relates to the TDS payment category. There are two types of payment «If the tax is paid by the tax payer on monthly basis on his own, then tick on “TDS/TCS payable _by the tax payer” «If the tax is paid by the tax payer based on the demand raised by Income Tax Department, then tick on “TDS/TCS regular assessment (Raised by IT Department)” Step 5: Nature of payment: There are various types of TDS payment types such a commission, dividend and each of them have a separate code such as 193,194 etc we must choose the correct code by referring to the classification provided by the income tax department Step 6: Details of Payment: Enter the details of payment, i.e. income tax, surcharge, etc. in amount as well in words. Details of cheque, DD, etc. also needs to be entered along with the date and bank branch. After finishing the steps above we shall make payment through our bank & finish the process Challan 280/281 can be downloaded from https://onlineservices.tin.egov- dl.com/etaxnew/tdsnontds.jsp Website. 10Basic MS Excel works: Ms excel works learnt from the article assistant is the major takeaway from the internship program. Every day a new shortcut or function in the MS Excel software is thought by a article assistant over there. For every ms excel shortcut we should start from the Alt + H key. Once we enter the Alt + H function we will be displayed a large number of options to be chosen from such as Applying border - Alt + H > b. From the options available such a bottom border, top border, full border etc can be chosen from. Alignment keys ~ Alt + H > AC or AR or AL can be chosen for aligning the words in the left of the cell or right of the cell or center of the cell. Various other ms excel shortcuts are given in the table below: Ctrl#PgDn Switches between worksheet tabs, from left-to-right. Ctrl+PgUp Switches between worksheet tabs, from right-to-left. Ctrl+Shiftt& — Applies the outline border to the selected cells. Ctrl+Shift_ Removes the outline border from the selected cells. Ctrl+Shift+~ Applies the General number format. Ctrl+Shift+$ Applies the Currency format with two decimal places. Creating Vouchers in Tally: Voucher creation in tally was the next work taught to me in the internship program. Voucher creation was one of the few things taught by the firm because the time limit, I was just demonstrated the steps involved in it and no practical learning were given. For creating vouchers in tally the following steps need to be followed Step 1: Go to Gateway of Tally > Accounts Info/Inventory Info. > Voucher Type > Create. Step 2: The Voucher Type Creation screen is divided into three sections depending on various settings: © General + Printing * Voucher Class 11Step 3: Choose voucher class and give the name of the new voucher type, e.g., Sales Invoice. Step 4: Then we need to choose the type of voucher and set an abbreviation for the voucher created incase we fail to choose an abbreviation Tally erp 9 would automatically choose a abbreviation for the voucher. Step 5: After choosing the abbreviation we need to set the voucher numbering either we can let software do it through clicking on automatic option or choose it manually do avoid duplicate vouchers. Linking of aadhaar with pan for ITR e-filing: Income tax department of India has made it mandatory for all the taxpayers to link their Aadhaar card with their PAN card in the official website. From the 5" day of the work, I was given the files of the clients whose aadhaar has to be linked with their PAN card. After loggin into e-filing site of the income tax department using the user I.D and the password of the client. We should click on the link aadhaar option given on the top right comer of the page. We need to enter the PAN number of the client and then proceed to entering the Aadhaar number and name of the client as in the aadhaar card. The next step in the linking is to enter the captcha code and click the link aadhaar option provided. The screen would show us the status of the linking, if the successfully linked message displays on the screen we should make an entry on the index maintained in the system stating “Linked”. If the screen displays pending for linking we should note the same down in the index of the clients. The firm had already completed a few linking before I started my internship over there, so I needed to be careful while updating the status of the linking in the index. Filling up of details required in the ITR Form: Another work which I learnt on the internship program is the process of filling up an Income Tax Return form. Each type of incomes earned as a separate ITR forms like ITR1, ITR2 etc. So, they gave a clarification on the types of ITR forms used for different types of income earned. Then they demonstrated the details to be filled in a ITR form by keeping ITR1 as a basic example. ITR1 has got 5 parts Part- A to Part-B. The ITR form should be downloaded from the e-filing website, it is a excel template containing the details to be filled by the tax payer. We need to fill the necessary information’s in the ITR form, once we finish furnishing the details we shall calculate tax by clicking on the “calculate tax” option provided on the Part- A of the Income Tax return form, The details to be furnished in each part of the ITR form are clearly given below: 12part A (General Information) ~ Name as provided in the PAN card, address, contact details of the client, aadhaar card details, type of return made should be specified part — B (Gross Total Income) ~ In case of a salaried person enter the salary details, allowances not exempted, deductions already made ete. Part — C (Deductions and taxable total income) — Various deductions such as deduction under sec 80c, 8Occe, 80ced, 80d etc should be clearly entered. Part — D (Computation of tax payable) — The slab within which our clients income comes under must be provided, after deducting all the education cess and adding the penalties under sec234 A, B, C must be entered in this part. Penalties are to be paid if we fail to pay the tax within the stipulated time by the client. The accountant stated that normally every client would at least get 234a as penalty on failing to pay taxes on time. Part — E (Other Information’s) — Should provide the details of all the savings and current accounts held by you at any time during the previous year. Other than these information’s TDS, TCS paid should be clearly mentioned in the parts requested, incase of any mistakes done in filling up these the firm would receive a intimation from the IT department and the firm will be required to correct it at the earliest. Apart from these there are various other details to be furnished but I could not remember those as, I was just given glimpse of these procedures by the accountant. Compliance of letter: On the 8" day of the internship there was a client who needed a letter from the CA stating the tumover of the client’s company in the last four years. As an article assistant was absent that day, the accountant assigned the work of complying the letter for the client with me. They clearly stated the format to be maintained by providing a letter of the same kind. The letter was directed towards the income tax department from the CA. I had to collect the turnover details of the client from their file. All the sentences, dates etc has to be made in justify alignment. After entering the details of the turnover in the excel sheet it had to copy pasted in the word format. The letter had the CA stating that the turnover of the client stated above was true and he had filed income tax "for the last 4 years whenever they reached the limit of paying taxes. The letter was latter signed by the CA and sealed with the office stamp and was sent to the client through the representative who had come to collect it. 13Pivot Table (MS excel): Pivot table is the most important tool used in the MS excel. It is one of Excel's most powerful features. A pivot table allows you to extract the significance from a large, detailed data set. To use the pivot table select the entire data and press Alt + N> V>T, press ok to use the pivot table feature. The system would display the pivot table with four options such as report filter (To filter particular set of data from the large source), row labels (here we should drag the data which are needed to be shown in the rows), column label (To enter data which are needed to be shown in the columns, values (drag the data which are in numbers into the values feature). The pivot table can be very useful to rank a large data file into a significant format. Rectifying mistakes in income tax filling: If there are any mistakes done during filling of income tax returns we would get a intimation from the income department for rectifying the mistake. Mistakes can be made while calculating TDS or while entering the TAN number or while calculating the TCS amount. For rectifying the mistake we must log into e-filing portal of income tax and enter the PAN number, assessment year and communication reference number and click the validate button. By doing so we would get three options to choose from 1.Taxpayer is correcting data for Tax Credit Mismatch only, 2. Tax Payer is correcting the data in rectification, 3. No further Data Correction required. Reprocess the case. The rectification to be made by my firm fell into the Ist case, they had mentioned wrong TDS amount while filing the return. As it was the 1“ case they had to just change the amount and click submit option and submit the rectified return and rectify the mistake made during the first return. Preparing and arranging VAT audit report: Value Added Tax (VAT) is a tax levied on the sales of goods in India. Manufactures and traders should obtain VAT Registration, if they have annual sales of more than Rs. 1 crore in Tamil Nadu. As we already know Goods and Services Tax (GST) has replaced Value Added Tax (VAT) in 2017 still VAT was in existence for some months in the accounting year of 2017-2018 so the firm had to file VAT audit report for their clients. The VAT audit report must be submitted to the concerned sales tax office. The WW form consists of 9 parts from Part A to Part _I. It was present in a excel template which the accountant had downloaded earlier. In Part . | “(General Information) of the WW form we have to fill the client’s (i.e business name), TIN old by the client, method of maintaining books of accounts, number, PAN number, commoditie: commodity codes, details of the partners, bank details, various accounts maintained must be filled up. In Part B of the WW form we must fill the details about the purchase value, stocks purchased, sales made, inter-state transfers and export made must be provide it would be Part C (Business Info) of the WW form consists of the details and finished goods. Part D (Ratios), in this part followed by Annexure 1, 2,3, 4 in. of stock like opening stock, work-in-progr were we need to calculate ratios such as Gross profit ratio, Net profit ratio, Stock turnover ratio and input/output ratios. Part E (Verifications) is where we need to answer questions related to input tax ineligibility. In Part F, we need to enter details about Tax deducted at source for work contract details. Part G contains details about compounding dealers the concept which I failed to understand. Part H consist summary of the additional tax liability where the details in the report and the return are compared and difference in such details are entered in a separate column in the same. Part I is the declaration part where the client gives a declaration that the above mentioned details are true to the best of his knowledge and belief. Copies of Trading and Profit and Loss account and Balance sheet must be enclosed along with the report. | was made to observe the work of the accountant in this entire process and was asked to seal the entire report after which the CA would sign at the end of the report. There were some corrections in part d of a clients report which was rectified by the CA while signing, it was rectified and replaced in all three copies of the report. Three copies of each client report will be taken and two copies will be submitted to the concerned department and the other copy will be withheld by the client. Power Point Presentation: There was no major work on 02/01/2019, so I was asked to choose a topic of my own choice and make a power point presentation on the same to be presented before the employees of the office. As I had little to no knowledge about power point presentation an article assistant over there helped me in making the power point presentation. Various uses in tools such as animations, ‘design are taught by the article assistant. I choose the topic of venture capital as I have already done a group presentation on the topic. I collected details from the internet and arranged them and completed my power presentation before the employees of the firm. 15Filling up details in form 3CA: Tax Audit as prescribed under section 44AB is required to be conducted by a Chartered Accountant holding full time Certificate of Practice. Tax Audit ensures the correctness of Books of Account maintained by taxpayer and income is computed as per the provisions of the Income- tax Act. Form 3CA is required to furnish audit reports in respect of a taxpayer carrying on a business or profession and who is already mandated to get his accounts audited under any other law (i.e. law other than income tax law). Details to be furnished in Form 3CA: ¢ Details of the Assessee such as Name, Address, PAN etc. © Date of Audit Report. ¢ Annexure (Audited Balance Sheet, Profit and loss Account, Form 3CD). ¢ A declaration by the auditor that all the ‘details filled in Form no. 3CA and annexure attached are true to his knowledge. * Audit observations and qualifications found in form 3CD. ¢ Auditor's name, Address, Membership No, FRN No. and signature of the auditor with seal/stamp. Form 3ca is not majorly used by this firm as they don’t have clients who want to be audited under any other law other than the Income tax act of 1961. Yet, they showed examples of Form 3CA from the internet. Filling up details in form 3CB: The audit of the accounts under section 44AB, in case of a person who carries on business or profession and who is not required under any other law to get his accounts the audited shall file audit report under form 3CB. Also in case the turnover of such a person’s business or profession exceeds Rs.2 crores they need to file tax audit under form 3CB by approaching a certified chartered accountant. Most of the clients under our firm get their tax audited as they fall under the category of persons to file a tax audit report. Details which are to be furnished under Form 3CB: ‘© Details of the Assessee i.e. Name, Address and Permanent Account Number (PAN). © Date of the audit report. * Annexure details (Balance sheet, Profit & Loss A/c, other documents and Form 3CD). 16the auditor that they have obtained all information is to be provided. + Reportung of the detailed observations, comments, discrepancies, and inconsistencies (if The Form includes the declaration made by the auditor that proper books of accounts are untained at the branch and head offices. * A declaration by the Chartered Accountant that all the details provided and the Annexure are true and correct subject to qualifications/observations if any. © end, the Form specifies the name, address, membership number, FRN no and signature of the auditor with stamp/seal. ‘Filling up of Form 3CD: | {: is 2 format in which the statement of particulars of tax audit is required to be furnished. This "forts has @ total of 41 detailed points where the auditor has to report on various matters contained “therein. The consists of two parts Part A and Part B. Part A covers the basic details about the “client and Part B covers the particulars of various compliances under the provisions of Income tux Law. In Part A we need to fill details such as name, address, PAN number, status of the business, previous year, and assessment year. Part B of the form 3CD is where we need to enter details like profit sharing ratio (in case of association of persons), any changes made to the nature of the business, details of capital asset turned into stock in the previous year, payments made to relatives, method of valuation of closing stock, method of accounting employed in the previous year, depreciation made on fixed assets details of cost audit if it was carried out by the client during the previous year, deductions which are made by the company should be provided in clause 25, gross profit ratio, net profit ratio, stock turnover ratio etc. The form needed to be sealed by the chartered accountant for confirmation purposes. Preparation of provision and projected balance sheet: We were given the work of preparing a provisional and projected balance sheet for a client who wanted to get his loan renewed in a bank. We needed to prepare the provisional balance sheet for % months and the projected balance sheet need to be prepared by doubling the particulars of previous year, These changes need to be made without affecting the profit ratio of the firm by which they bought a loan at the first place. After some changes by the proprietor both the balance sheets were mailed to the client. 17Theoretical concepts learnt in Internship program: All the concepts which are given below were concepts which I had gone through during my internship program. Classification of income tax return forms: Taxpayers filing their income tax returns are required to determine which type of income tax retum (ITR) form to file before actually filing their retums. The form required is entirely ‘dependent on the income that the taxpayer earns, or in some cases where the taxpayer holds assets in a country other than India or earns income from a country other than India. The following income tax returns forms are applicable to individuals who need to pay their Income taxes: TTR-1, ITR-2, ITR-2A, ITR-3, ITR-4S The following income tax retum forms are only applicable to companies and firms who need to pay their income taxes: ITR-S, ITR-6, ITR-7 ITR-1: This income tax return form is also called Sahaj form. The ITR-1 form is to be filed solely by an individual taxpayer. Any other assessee liable to pay tax will not be eligible to avail this form for the purpose of filing their returns. This form is applicable for the following: + Individuals who eam income through salary or through means such as pension + Individuals who earn income from a single housing property « Individuals who have no income from any other business or who have no income from the sale of any assets i.e.: capital gains. + Individuals who do not own any assets or property in countries other than India. * Individuals who do not earn income from any country outside India. ITR2: The ITR-2A form was introduced for the assessment year 2015-16 and is a new income tax return form that can be used by a Hindu Undivided Family (HUF) or an individual taxpayer. The ITR-2A form is applicable for the following: Individuals who earn income through salary or through means such as pension. Individuals who earn income through the sale of assets or property in India. Individuals who earn income from more than one housing property. + Individuals who do not earn income from any business venture, * Individuals who own assets in countries outside of India, 18_{TR-2A: The ITR-2A form was introduced for the assessment year 2015-16 and is a new income “tax return form that can be used by a Hindu Undivided Family (HUF) or an individual taxpayer. ' ‘The ITR-2A form’s applicability is same to that of ITR-1 Form. _JTR-3: The ITR-3 Form is to be used by a taxpayer who is either an individual or a Hindu Undivided Family (HUF) who solely operate as a partner in a firm but who do not conduct any pusiness under the firm or who do not earn any income from the business conducted by the firm. This form can be filed by those taxpayers whose taxable income eared from business is only in the form of the following received as a partner, such as salary, commission, bonus, interest and remuneration. ITR-4: The ITR-4 form is to be used by those individuals who conduct a business or who earn income through a profession. This form is applicable to any type of business, undertaking or profession, with no limit on the income eared. Any individual ranging from shopkeepers, doctors, designers, agents, retailers, contractors etc is eligible to file their income tax returns using this form. ITR-4S: The ITR-4S form is also known as the Sugam form and can be used by any individual or Hindu Undivided Family (HUF) for filing their tax returns. This form is applicable for the following: + Individuals who earn income from any business. + Individuals who do not earn income from outside of India. + Individuals who eam income from a single housing property. + Individuals who do not earn income through the sale of assets or property in India. ITR-5: Firms, limited liability partnerships, body of individuals, association of persons, cooperative societies, and artificial judicial persons are required to use this form. ITR-6: The ITR-6 form is to be used only by companies except those companies or organizations that claim tax exemption as per Section 11. Those organizations that claim tax exemptions as per Section 11 are organizations wherein the income received is accumulated from the property used for the purpose of religion or charity. This particular income tax return form can only be filed online. ITR-7: Institutions involved in scientific research, institution mentioned in secl0 (23A), news agency, any fund or medical institution, institutions under sections 139(4A), 139(4B), 139(4C) and section 139(4D) need to file their returns under ITR form 7. 19Tax Deducted at Source ( TDS) & and its Slabs: TDS stand: is for tax deducted at source. As per the Income Tax Act, any company or person making a payment is required to deduct tax at source if the payment exceeds certain threshold limits. TI person DS has to be deducted at the rates prescribed by the tax department. The company or n that makes the payment after deducting TDS is called a deductor and the company or _ person receiving the payment is called the deductee. It is the deductor’s responsibility to deduct ‘TDS before making the payment and deposit the same with the government. TDS is deducted imespective of the mode of payment-cash, cheque or credit-and is linked to the PAN of the deductor and deducted. The percentage of tax that is calculated is different for each kind of income. Since TDS is collected at source without the calculation of investment that is eligible for tax deductions, an individual, in that case, has an opportunity to declare and hand over his proof of investment while filing a return and claiming TDS refund, And payments such as the | commission, salaries, interest payment, fees to lawyers and freelancers are subject to TDS. TDS is deducted on the following types of payments: Salaries Interest payments by banks Commission payments Rent payments Consultation fees TDS is one kind of advance tax. It is tax that is to be deposited with the government periodically and the onus of the doing the same on time lies with the deductor. For the deductee, the deducted TDS can be claimed in the form of a tax refund after they file their ITR. A deductor has to deposit the deducted TDS to the government and the details of the same have to be filed in the form of a TDS return. A TDS return has to be filed quarterly. Different types of TDS deductions have to be filed using different TDS return forms. Some of the benefits which are part of Tax Deducted at Source: TDS reduces the chances of tax evasion (avoidance) as the tax is collected at source. It is one of the steadiest sources of revenue for the government. The tax collection base is widened as most of the people have to pay TDS in some or the other form. 20Slabs Of Tax dedudted at source: Nature of payment Cut Indian/HUF | Others Off(Rs) 192 _ | Salaries Nil ‘Average NA Tates [792A _| Premature withdrawal from EPF 50000 10% NA 193 Interest on securities 10000 10% 10% 194 | Dividends 2500 10% 10% 194A | Interest bank/other 10000/5000 | 10% 10% 194A | For senior citizens 50000 10% 10% 194B | Winnings from lotteries 10000 30% 30% 194BB | Winnings from horse race 10000 30% 30% 194C | Contractor-single/yearly 301kh/10Ikh | 1% 2% 194C | Transporter (44AE) Declaration with | As above | 0% 0% PAN 194D _ | Insurance Commission 15000 3% 5% 194DA | Life insurance policy 100000 1% 1% 194EE | NSS 2500 10% NA 194G | Commission/Lottery 15000 5% 5% 194H | Commission/Brokerage 15000 5% 3% 1941 | Rent, land & building, F&F 180000 10% 10% 1941B_ | Rent by (Individual/ HUF) 50000/m — | 5% NA 1941 | Rent (Plant/Machinery) 180000 2% 2% 194IA | Immovable property S0lkh 1% 1% 194 | Professional technical fees 30000 10% 10% 194 | Payment to call center 30000 2% 2% 194LA | Immovable property (Compensation) 2.5Ikh 10% 10% 194LA [Immovable property (TDS exempted | nil 0% 0% under RFCTLARR Act) 21‘Advance TAX: ‘Advance tax 1S simple words mean tax paid in advance to income tax department. It is process were in a tax payer liable to pay tax does so in advance basis without paying the entire amount at the end of a financial year. Every tax payer whose tax liability exceeds Rs. 10,000 is expected to pay advance taxes. If a tax payer’s total tax liability is Rs 10,000 or more in a financial year then they will have to pay their taxes in advance. Advance tax applies to all tax payers, salaried, freelancers, and businesses. Senior citizens, who are 60 years or older, and do not run a business, are exempt from paying advance tax. The due dates for paying advance taxes are listed below: Due Date Advance Tax Payable On or before 15th June 15% of advance tax On or before 15th September | 45% of advance tax On or before 15th December | 75% of advance tax On or before 15th March 100% of advance tax The above implies the percentage of amount which a tax payer should pay in every quarter. If the tax liability is 10000 he should have paid Rs.1500 on or before 15" June, if not he /she should pay Rs.4500 on or before 15" September, if not then he should pay Rs.7500 on or before 15" December still he fails to pay it he must pay the full tax liability ize, Rs. 10000 on or before 1S" March. For every delay in the payment of advance tax the income tax department would impose Penalty on the tax payer under the sections of 234B and 234C. The above mentioned Rs.10000 tax liability problem is one of the problems which I solved during my internship program done at P.M. Bhoot & CO. 22Goods and Services Tax: gst is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service ‘Act was passed in the Parliament on 29th March 2017. The Act came into effect on Ist July Tax 2017; Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based y value addition. GST has mainly removed the Cascading effect on the tax that is levied on ever) sale of goods and services. Removal of cascading effect has impacted the cost of goods. Since the GST regime eliminates the tax on tax, the cost of goods decreases. GST is also mainly technologically driven. The biggest benefit of GST is an elimination of multiple indirect taxes. ‘All taxes that currently exist will not be in picture. This means current taxes like excise, octroi, sales tax, CENVAT, Service tax, turnover tax etc will not be applicable and all that will fall under common tax called as GST. All activities like registration, return filing, application for refund and response to notice needs to be done online on the GST Portal; this accelerates the _ processes Components of GST: CGST: Collected by the Central Government on an intra-state sale (Eg: transaction happening within Maharashtra) SGST: Collected by the State Government on an intra-state sale (Eg: transaction happening within Maharashtra). IGST: Collected by the Central Government for inter-state sale (Eg: Maharashtra to Tamil Nadu). Benefits offered by GST: © GST is a single tax which will include various taxes, making the system efficient with very little chances of corruption and Tax Evasion. * As GST will reduce cost of product it is expected that demand of product will increase and to meet the demand, supply has to go up. The requirement of more supply will be addressed by only increasing employment. Types of GST returns that are filled by a normal Tax Payer: GSTR 1: The taxpayer records all his outward supplies of goods and services in details in this form. This has to be mandatorily done by the 10" of the next month, GSTR 1 is a detailed form containing 2313 different heads. Some of the details contained in it are the GST identification nui ber : mber, name, gross turnover of the last year, the period for which the return is filed, outward supplies to end g ? ies to en customer where the value exceeds Rs. 2.5 lakhs, GSTR 1A: The form shall be auto-populated after filing of GSTR-2 on the 15" of the next month, having all the correct or changed information. The supplier shall have the choice to accept or reject the changes made by the recipient. Following such acceptance, the GSTR-1 shall be revised to such extent. GSTR 2A: Itis available on the 11" of the next month for the recipients to see and validate the information therein. Recipients have time between 11" — 15" of the next month to change any information, delete or add, based on their books of accounts. GSTR 2: This form is the culmination of all inward supplies of goods and services as approved by the recipient of the services. The due date is 15" of the next month. GSTR 3: This form is auto prepared by 20" of the next month, It will have the details of all outward as well as inward supplies of goods and services as furnished in GSTR-I and GSTR-2. After considering both the details, GSTN will determine your input tax credit availability or the amount of tax payable. The form contains details relating to GST identification number, name, address of the person, the period for filing the retum etc. GSTR 9: This is the annual return, which the taxpayer has to file by 31% December of the coming financial year. It is nothing but the accumulation of all 12 monthly GSTR-3 of the taxpayer. It would also include the amount of tax paid during the year, including details of exports or imports. During my internship program the firm did not indulge in filing of GSTR, so there was no Practical experience on the GST filing. They just gave some articles to read about GST and &xplained about the various kinds of GST returns which are available for a taxpayer. 24Form 26AS: 368 is an official form which contains all the details ofthe tax deducted by the deductor. It also contains details of tax, which is deducted at source and details of advance tax. All this, along with refunds and high-value transactions is deducted on behalf of the taxpayer. Form 26AS is also known as the annual consolidated statement, which contains all tax related information of the taxpayer. I was made aware of the uses of the form, the way to download it and the details contained in the form. The form 26AS contains 9 parts from Part-A to Part-G. Part- A of the form contains details of Tax Deducted at Source. Part-Al of the form contains details of Tax Deducted at Source for Form 15G/Form 15H, incase we fail to present form 15g/1Sh the screen source (TCS) by the goods seller. Part-C of the form provides the details of advance tax as well as self- assessment tax. Additionally, it also contains details of the challan through which the tax was deposited. Part-D consists of the information regarding the clients refund. It provides information of an assessment year to which the refund pertains, along with the mode of payment, the amount paid, interest paid and the date of payment. Part-E contains details about Annual Information Return (AIR). Part-F of the form contains details of tax deducted on sale of immovable property. In case there are any defaults related to the processing of statements of TDS, they are mentioned in Part-G of the form. The form can be downloaded from the Income tax e-filing website by following the steps i | | would display ‘No transactions present’. Part-B gives information regarding Tax collected at mentioned below: Step 1: We must log into the income tax e-filing website using our login-I.D and password. "Step 2: The next step is to enter the PAN number, password and date of birth details of the client. Step 3: The web screen will appear where we need to click on ‘My Account’ option. Step 4: Then we must click on ‘View Form 26AS’ option in the dropdown. By clicking on confirm option we will be redirected to the TRACES website. Step 5: Click on the link~ ‘View Tax Credit (Form 26AS) to view the client's Form 26AS. Step 6: Choose the Assessment Year and the format in which we want to see the Form 26-AS. If We want to see it online, leave the format as HTML. You can also download the same as a PDF. After you have made your choice, enter the ‘Verification Code’ and click on ‘View/Download’. Step 7: To open the document you have to enter a password. Form 26AS password is the clients DOB on entering these details we can view the fom26AS. : 25penalty for late payment of tax (Sec 2344); When a tax payer fails to pay is tax liability within the time Specified by the income tax department he would be penalized by charging interest under Sec234A of the income tax act. The defaulter will be charged an interest amount of 1% per month or part of the month (simple interest) on the tax amount outstanding. This interest will be calculated from the due date applicable to you for filing of return of the relevant financial year till the date that you actually file your return. Even if there is a single day delay that will be taken as a whole month. Example: Say, the total tax liability of a client is Rs 1 lakh and he files his return on the 15th December instead of 31st July of the assessment year, the due date to file income tax return. He is now 5 months late in his tax payments. (The 15 day period in December is treated as a month). The interest will be calculated at one percent for every month delayed. Interest Calculation: 100000 * 1%*5 months = Rs.5000 This Rs.5000 is the interest which we have to pay above the initial tax liability of Rs.100000. In case the client fails to pay the tax liability even after December he will have to pay 1% interest till the end of the assessment year i.e. 31st March. In the example above, the clients liability would be 8% of Rs. I lakh, which is Rs 8,000. Penalty for late payment of advance tax (Sec 234B): All assesses including salaried employees, self-employed professionals, businessmen etc. are required to pay Advance Tax, where the tax payable even after reducing TDS already is Rs 10,000 or more. Interest under section 234B is applicable when: * Your tax liability after reducing TDS for the financial year is more than Rs 10,000 and you did not pay any advance tax. * You paid advance tax, but advance tax paid is less than 90% of “assessed tax’. In any one of the above cases, interest under section 234B shall be applicable. Interest is calculated @ 1% on Assessed Tax less Advance Tax. Part of a month is rounded off to a full ™onth. The amount on which interest is calculated is also rounded off in such a way that any fraction of a hundred is ignored. 26example at our clients total tax liability is Rs —. 48,000. And the client Paid this amount on {2th Jone wile filing her return. No tax was deducted at source for the client. The client's total ta jt s more than Rs 10,000, and hence he was liable to pay advance ax. Ay result, he i be liable to pay interest under section 234B. Jnterest Calculation: Rs 48,000 x 1% x3 (April, May, June) = Rs 1,440. Penalty for late payment of advance tax installments (See 234C): When a tax payer who is liable to pay his advance taxes fails to Cope up with the amounts to be paid in regular installments he would be charged interest under the section of 234C. That is he has to pay atleast 15% of the advance tax by 12" June, 45% of the advance tax by 15* September, 75% of the amount by 15" December and 100% of the advance tax by 15" March. Example: Assume that our client had a total tax payable of Rs. 72000 and he paid Rs. 8000 before 15th June and Rs. 15000 each in next three quarters. He had some shortfall in every instalment he paid. So by 31st of March he paid total Rs. 53000. The remaining Rs.19000 was paid on 10th of July next year while filing tax return. The interest calculation would be as below: Dueby | Amount of | Amount of | Quarterly _ | Default in | Interest Advance Tax | Advance Tax | Shortfall | months | payable | Due Paid @1% pm (till date) | 15th June | 10800 8000 2800 a 84 Ish} 32400 23000 9400 3 282 September ‘5th 54000 38000 16000 3 480 December 15th 72000 53000 19000 I ad March Total 1036 b 2