Tax Filing Requirements

✨ Learning by doing hits differently ✨ Today, my Principal Mam gave me a task – to research about Tax Audit Report (TAR). And yes, you heard it right – TAR 😅 Since individual audits are done ✅, now it’s the turn of corporates 🏢, but before starting that, she wants us to understand TAR in detail. Here’s what I learned and realized: 🔹 Tax Audit under Section 44AB Compulsory if turnover/gross receipts cross prescribed limits: ✅ Business → ₹1 Cr (can go up to ₹10 Cr if cash receipts & payments ≤ 5%). ✅ Profession → ₹50 Lakhs. ✅ Presumptive taxation (Sec 44AD/44ADA/44AE) → If income declared is below presumptive rate and total income exceeds the basic exemption limit → Tax Audit becomes mandatory. Due date: 1 month before the due date of return filing. Form 3CA → For assessees already required to get audit under any other law. Form 3CB → For assessees not required to get audit under other law. Form 3CD → Common detailed statement with 44 clauses covering income, deductions, compliances, loans, TDS, GST, etc. 📅 Last date for furnishing TAR → 30th September (one month prior to ITR filing due date). 31st October is the due date for companies having transfer pricing transactions. 💡 Realization: this isn’t just office work, but also part of our CA Final DT syllabus. Linking theory with practical exposure makes learning so much more impactful. 🌟 The best part is that my Principal Mam never spoon-feeds us – and that pushes me to research, explore, and learn in depth. 🙌 📌 Double benefit of learning TAR: 1️⃣ Helpful in day-to-day work in Direct Tax domain. 2️⃣ Useful for CA Final preparation (practical + exam perspective). Here I’m attaching my detailed notes on TAR, including the breakup of all 44 clauses of Form 3CD. Hope it helps my peers too. Special thanks to Vyas Sir – his free YouTube lecture on this topic was truly helpful in simplifying such a vast area of audit. 🙏 --- #TaxAudit #DirectTax #CAArticleship #LearningByDoing #CAFinal #TaxAuditReport

In December while most of us were enjoying the holidays, 7 Bills were signed into law. These Bills contained some of the proposals that we previously rejected in the Finance Bill 2024. Here are 7 of the now-enacted Tax Laws: 1. Elimination of Tax Reliefs: The government has eliminated two key tax relief measures: Affordable Housing Relief and Post-Retirement Medical Fund Relief. This move reduces incentives for affordable housing and financial preparedness for medical expenses in retirement 2. Higher Excise Duty on Sugar, Alcohol, and Confectionery: Excise duty rates have been increased on imported sugar, with exceptions granted for pharmaceutical manufacturers and raw sugar intended for processing. Additionally, higher excise duties have been imposed on various alcoholic beverages and imported sugar confectionery. This is expected to increase the cost of these items, placing additional financial strain on consumers 3. Excise Duty on Tobacco and Nicotine Products: Cigarettes (both filtered and unfiltered) and nicotine products for inhalation, such as e-cigarettes, now face higher excise duty rates. This may discourage nicotine and tobacco products consumption and promote public health. 4. New Excise Duties on Electric Transformers and Printing Ink: Excise duties have been introduced at 25% on imported electric transformers and parts, and 15% on imported printing ink. This will likely raise the costs of infrastructure development, indirectly affecting industries and businesses reliant on these imports. 5. Additional Excise Duties on Imported Goods: The government has introduced new excise duties on imported goods, including 5% on ceramic sanitaryware and tiles, 35% on float glass, and 2.5% on coal imports, with specific rates based on custom value or weight. The higher taxes on these goods may lead to increased costs for construction and manufacturing, potentially slowing economic growth in these sectors. 6. Tax Exemption for MPs: MPs exempted themselves from paying Sh1 billion in car taxes. Each MP was initially expected to pay Sh2.5 million in taxes, but this cost will now be borne by Kenyan taxpayers. This exemption further widens the divide between the ruling class and its people, as taxpayers shoulder the financial burden while MPs benefit from exemptions. 7. Significant Economic Presence Tax: A new tax targeting foreign companies with a significant economic presence (SEP) in Kenya has been introduced. Non-resident companies providing services in Kenya will now pay a 6% SEP Tax. This change is likely to result in higher rates for services offered by companies such as Bolt and Uber, as they adjust their pricing to accommodate the increased tax burden. The rejected Finance Bill 2024 aimed to raise KES 344.3 billion, while these recently passed amendments aim to raise KES 162 billion—47% of the original target. It is safe to say that the Finance Bill is halfway back.

Audit Checklist Pre-Audit Preparation * Engagement letter signed * Understand client's business & industry * Review prior year's audit files & notes * Check legal & regulatory requirements (Companies Act, Income Tax, GST ,etc.) * Risk assessment plan Financial Records & Books * Trial balance reconciliation * Ledger scrutiny (sales, purchases, expenses, assets, liabilities) * Journal entries review (check unusual entries at year-end) * Cash book &. bank book verification * Compliance with accounting standards (ind AS/AS), Bank & Cash * Bank reconciliations for all accounts * Verify bank statements with books * Cash balance verfication (cash count, petty cash) * Review high -value/unusual cash transactions Fixed Assets * Verify Fixed asset register with books * Check additions/deletions during the year * Physical verification of assets * Depreciation calculation (Companies Act & Income Tax Act) * Review capital work-in-progress Inventory * Physical stock verification / reliance on stock reports * Reconcilation of stock records with financials * Valuation as per AS-2 (cost or NRV) * ldentify obsolete/slow-moving stock Debtors & Creditors * Debtors aging analysis * Balance confirmation from major debtors/creditors * Check doubtful debts & provisions * Review related party transactions *Creditors reconciliation &. overdue payments Revenue & Expenses * Cross-check sales invoices with GST returns * vouching of expenses (rent. salary, utilities, etc. * Verify TDS compliance on expenses * Cut-off testing (recorded in correct period) Statutory Compliance * GST returns vs. books reconcililation * TDS deducted & deposited timely * PF & ESI compliance * Income Tax advance tax/provisions * MCA flings (if applicable) Payroll & HR * Salary sheets & registers verification * Bonus, gratuity, leave encashment provisions * PF, ESI, Professional Tax compliance * Verify appointment letters & contracts Final Reporting * Draft audit report preparation * Notes to accounts & MRL (Management Representation Letter) * Report internal control weaknesses * Final sign-off

What if I said getting caught by tax officers is better than filing an updated ITR? 😆 Budget 2025 increased the timeline for filing updated ITR by 2 years. So if you missed adding any income to your ITR, you can now update till 4 years from the end of the assessment year. Here's the strange part: 1) After 2 years, taxpayers must pay more than 50% (60% in 3rd year | 70% in 4th year) of the tax payable plus interest in an updated ITR. However, if the IT dept opens reassessment under section 148, you may have to pay a 50% penalty only on the tax owed, in cases of underreporting. 2) In such cases, you can also file Form 86 and request a full waiver of penalty. If you're voluntarily disclosing higher income in an updated ITR, you have to pay the higher tax. 3) If the escaped income is less than Rs.50 lakh, an assessment under section 148 cannot be opened after 3 years. So the IT dept cannot question you even if they get to know about it. Still, there's now an option to voluntarily file an updated ITR and pay 70% higher on tax owed plus the interest. Note: In reassessment, if the income is treated as misreporting (not underreporting), then the penalty is 200%. It's uncertain what exactly falls under misreporting & underreporting. Disclaimer: Nothing I've said above is advice. This post only intends to point out the strange way the updated ITR and section 148 are structured. Story by Shipra Singh and me. Read: https://lnkd.in/dpD73zgr

AI can’t file your taxes -- but it can prep 90% of them Level up your tax preparation with these 10 prompts. Stop stressing about the April 15 tax due date in the US. Start here: 1. Tax Planning Calendar Create a month-by-month tax planning calendar for the current year. Include deadlines for estimated payments, contribution cutoffs (IRA, HSA), and helpful reminders for deductions. 2. Document Organizer What documents do I need to gather to prepare my taxes? Include both income (W-2, 1099) and deduction-related (mortgage interest, charitable donations) forms. 3. Freelancer Tax Prep Make a checklist of everything a freelancer should prepare before filing taxes. Include business income, deductions like home office, and quarterly payments. 4. Deduction Decoder Explain the difference between the standard deduction and itemized deductions. When does it make sense to itemize instead of taking the standard deduction? 5. Quarterly Tax Coach How do I calculate and pay estimated taxes as a self-employed person? Walk me through when payments are due and how to avoid underpayment penalties. 6. Tax Credits for Parents What tax credits are available for parents with children? Include the Child Tax Credit, Child and Dependent Care Credit, and the Earned Income Tax Credit. 7. Crypto & Taxes How do I report cryptocurrency transactions on my tax return? Explain capital gains treatment, taxable events, and how to track cost basis. 8. IRA Strategy Session Compare the tax advantages of a Traditional IRA vs a Roth IRA. When does it make sense to contribute to one over the other? 9. Filing Extension Help How do I file for a federal tax extension? Give me a step-by-step overview, including how much time it buys and what payments I still need to make. 10. Side Hustle Tax Tips What tax steps should I take if I earned side income from a gig or hobby? Help me understand how to track income, deduct expenses, and file correctly without setting up a full business. ♻️ Repost this to help your network with their tax preparation. ➕ Follow Kabir Sehgal for more like this.

As we race toward the April 15 tax filing deadline, I want to flag a serious risk I’m seeing too often: ➡️ Relying solely on crypto tax software reports — without proper reconciliation — can be a costly mistake. ➡️ And for tax preparers, blindly taking the crypto report a client provides you (without checking accuracy) could expose you to professional penalties and liability. Let’s be clear about the risks: 📌 For the Taxpayer: Crypto tax software is only as good as the data it receives. Missing wallet connections, untracked DeFi activity, misclassified NFTs, staking income errors, duplicate transactions — they happen all the time. 🔴 If your report is wrong, you could: - Overpay taxes because of overstated gains. - Underreport income and face audits, penalties, interest — and in severe cases, even civil fraud charges. - Face headaches down the road if you need to amend returns (and trust me, amending crypto tax returns is a painful process). 📌 For the Tax Preparer: If you simply accept a crypto tax report at face value: - You risk IRC §6694 preparer penalties. - You could be seen as failing due diligence under Circular 230. - You risk your professional reputation and even legal exposure if the return is materially inaccurate. 🚫 Beware of Bad Advice Some tax preparers (usually those unfamiliar with crypto) are telling clients: - “Just leave the crypto out for now.” - “Don’t file the tax return until you figure this out.” Both are risky paths. Failing to file is never the solution, and leaving crypto activity off the return only invites IRS scrutiny later. ✅ Here’s What You Should Do Right Now: - File an extension. This buys you time to properly reconcile your crypto activity and get the return right, rather than rushing to file an incorrect return and later having to amend. - Do not skip reconciliation. No matter how “complete” your crypto tax report looks, confirm every wallet, exchange, and transaction is properly accounted for. Also, make sure all the transactions are correctly categorized for tax purposes. - Tax preparers: Ask tough questions. If you’re not knowledgeable about crypto, work with crypto tax experts who know how to spot errors and fix them before filing. This will help keep both yourself and your clients out of trouble with the IRS down the road. 🧩 Crypto tax reporting is complex, and the IRS is watching. With new reporting rules like Form 1099-DA coming soon, accuracy matters more than ever. If you’re feeling unsure about your crypto tax report or want to double-check before filing, feel free to reach out! #CryptoTax #TaxDeadline #CryptoCPA #CryptoInvestors #TaxCompliance #IRS #DeFi #NFTs #TaxSeason #CryptoAccounting #TaxExtension #FilingDeadline

Client says: We don’t have old records. GST says: See you in court. Every professional has faced this: -"Sir, woh file toh milti hi nahi." -"Woh accountant chala gaya..." -"Invoice copy nahi mil rahi." That’s where the real audit begins. GST Audit: Just a Check or a Time Bomb? “One Nation, One Tax” – four words, yet the depth they carry in terms of compliance and litigation is massive. Let’s break down something that many still take lightly – GST Audits/Annual Returns/Reconciliation Statement. -->Section 65 – Departmental Audit: Audit conducted by GST officers at the taxpayer’s premises or department’s office to verify records, returns, and ITC; initiated by the department based on risk parameters or random selection. -->Section 66 – Special Audit: Ordered by the department during scrutiny or investigation when declared value or ITC is in doubt; conducted by a CA or CMA nominated by the Commissioner; expenses borne by the department. -->Section 35(5) – Audit by Registered Person (Omitted w.e.f. FY 2020-21): Earlier required taxpayers with turnover above the threshold to get their accounts audited and file GSTR-9C certified by a CA/CMA; no longer applicable after Finance Act, 2021. -->Section 44 – Annual Return (GSTR-9): Annual return to be filed by regular taxpayers; mandatory if turnover exceeds ₹2 Cr (subject to exemptions); summarizes outward and inward supplies for the financial year. -->Section 44 – Reconciliation Statement (GSTR-9C): Reconciliation between books of accounts and GST returns; mandatory for taxpayers with turnover above ₹5 Cr; must be certified by a CA or CMA. Mistakes done five years ago can knock today - even a small mismatch or a missing document. Pro Tip: Health Check Your GST Compliance -Do quarterly or at least annual health checks. -Maintain invoice-level support for ITC, reversals, and exemptions. -Download and save GST data monthly – don’t rely on portal history. -Reconcile GSTR-2B with purchases regularly. -And endless things to check In GST, ignorance today = litigation tomorrow. Don’t just file returns, build your defense file - especially when: -You’ve crossed turnover limits. -Claimed ITC on large capital purchases. -Done zero-rated/export with refund. -Been part of merger/branch transfer/sale. Takeaway: Don’t let GST become a silent risk on your balance sheet. Treat it with the seriousness it deserves. #gst #gstnotice #gstaudit #healthcheck #litigation #gstwithtarjani

The 2024 Autumn Budget changes every business owner should know. The budget introduced 10 key tax changes that will affect business owners starting April 2025. With rising costs, new taxes, and adjustments to reliefs, here’s what’s on the horizon: 1. Employer National Insurance Contributions (NICs) - NICs rise from 13.8% to 15% in April 2025. - Review payroll budgets to manage higher costs. 2. Employer NICs Threshold Reduction Threshold drops from £9,100 to £5,000, meaning more businesses will pay NICs. 3. National Living Wage Increase - A 6.7% rise brings the rate to £12.21/hour, increasing wage bills for many businesses. 4. Capital Gains Tax (CGT) Increase - Basic rate: 18%. Higher rate: 24%. Plan asset sales carefully to reduce tax exposure. 5. Vaping Tax Introduction - New tax on vaping products launches in October 2026. Prepare for price adjustments if you're in the sector. 6. Changes to Inheritance Tax (IHT) on Pensions - From April 2027, unused pensions become part of estates for IHT purposes. 7. Business Rates Relief for Hospitality & Retail - 75% discount extended for another year. Apply if eligible to cut costs. 8. Permanent Full Expensing for Investments - Deduct the entire cost of qualifying capital investments. A big win for growth-focused businesses. 9. VAT Registration Threshold Increase - Threshold rises from £85,000 to £90,000, reducing admin for small businesses. 10. End of Non-Domiciled Tax Status - Non-dom status phases out in April 2025. Individuals must prepare for UK taxation. What Should You Do? 1️⃣ Adjust budgets for higher NICs and wage costs. 2️⃣ Plan ahead for tax-efficient investments and asset sales. 3️⃣ Take advantage of reliefs like full expensing and business rates discounts. These changes might seem overwhelming, but proactive planning will keep your business on track.

𝐃𝐚𝐲 39/365: 𝐑𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐅𝐨𝐫𝐞𝐢𝐠𝐧 𝐈𝐧𝐜𝐨𝐦𝐞 𝐨𝐧 𝐈𝐑𝐒 𝐅𝐨𝐫𝐦 1120 Corporations with foreign income must report it on IRS Form 1120. This includes income from foreign subsidiaries, branches, and other foreign sources. Proper reporting ensures compliance with U.S. tax laws and helps avoid double taxation. 𝐊𝐞𝐲 𝐒𝐞𝐜𝐭𝐢𝐨𝐧𝐬 𝐚𝐧𝐝 𝐂𝐚𝐬𝐞 𝐋𝐚𝐰𝐬: Section 951: This section deals with the taxation of U.S. shareholders of controlled foreign corporations (CFCs). Section 960: This section provides rules for foreign tax credits, allowing corporations to offset U.S. tax liability with taxes paid to foreign governments. 𝐂𝐚𝐬𝐞 𝐋𝐚𝐰 - Bausch & Lomb Inc. v. Commissioner, 933 F.2d 1084 (2d Cir. 1991): This case addressed the allocation of income and expenses between domestic and foreign operations. 𝐏𝐫𝐚𝐜𝐭𝐢𝐜𝐚𝐥 𝐄𝐱𝐚𝐦𝐩𝐥𝐞: Consider VWX Corp, a U.S. corporation with a wholly-owned subsidiary in Germany. The subsidiary earns $500,000 in net income, and VWX Corp receives $200,000 in dividends from this subsidiary. VWX Corp must report the $200,000 in dividends on Form 1120. Additionally, if VWX Corp paid $50,000 in foreign taxes on this income, it can claim a foreign tax credit under Section 960 to reduce its U.S. tax liability. 𝐓𝐋;𝐃𝐑: Corporations must report foreign income on Form 1120, including income from foreign subsidiaries and branches. Key sections include IRC Sections 951 and 960, with relevant case law such as Bausch & Lomb Inc. v. Commissioner.

Update for Private Client #Practitioners: HM Revenue & Customs New #Tax Adviser Registration Requirements have been published and it doesn’t look good for us. In fact, I think it is frankly ridiculous. Once again noble aims but poor execution. "Sledgehammer" and "nuts" come to mind. #HMRC guidance confirms that professionals who provide tax advice must check if and when they need to register as a tax adviser. Two links to the guidance: ·     https://lnkd.in/eH9k6y-H ·     https://lnkd.in/ehhvwmYw While this is aimed broadly at those offering tax services, it has clear implications for private client solicitors, particularly those advising personal representatives of #estates and trustees of #trusts. In short, as a professional If you advise #PRs or #trustees on any aspect of completing or submitting #inheritance tax (#IHT) forms, (i.e. completing IHT400 and schedules, IHT100, income tax returns, calculating tax due or applying reliefs, or simply liaising with HMRC on valuations or compliance) you now fall within HMRC’s definition of a “tax adviser” for registration purposes. This is because HMRC explicitly includes those who get paid to “assist clients in submitting tax information” within the scope of required registration. For many private client solicitors this is an integral part of estate and trust administration. Under the new rules: 1.       Firms and individuals will need to assess whether this advice triggers mandatory tax adviser registration (If you guide executors or trustees on completing IHT forms, you’re within scope); 2.       Those registering must meet HMRC’s conditions (covering AML supervision, fitness, and propriety which is covered already by our regulators); and 3.       There may be new compliance, supervision, and record‑keeping responsibilities (oh joy more red tape, to increase costs to the client). The onus is all on the regulated sectors to be jolly good fellows and register. The unregulated and unregistered advisers will not be prevented from interacting with HMRC on clients’ tax matters, as HMRC aren’t going to turn down tax take as the advisor is not registered. This change is significant, and now is the moment for firms to ensure they are fully prepared for when it comes into force in April 2026.