Tax Audit – Relevant Clauses in case of Bank Audit

1. Clause 9 (b) and (c)*- Books of Accounts Maintained and Examined – Generally printed list.

2. Clause 14*- Particulars of Depreciation allowable –Details of Purchase, Sale, Transfer and Disposal/ Write-off of Fixed Assets to be verified by Branch Auditor.- Depreciation calculation – generally at HO.

3. Clause 17(a)*– Any amount of Capital Expenditure debited to Profit and Loss A/c.

4. Clause 17(e)*– Expenditure by way of Penalty or Fine for violation of any law debited to Profit and Loss A/c.

5. Clause 17(f)*– Any amount inadmissible u/s 40(a):

(a) Amount inadmissible u/s 40(a)(i):

– Any interest paid to a Non-Resident person or to a Foreign Company without TDS.

(b) Amount inadmissible u/s 40(a)(i)(a):

– Any interest, commission, brokerage, fees for Professional/ Technical Services or Contract Amount paid to a Resident

person without TDS.

(c) Amount inadmissible u/s 40(a)(i)(a):

– Any tax, interest or penalty under Income Tax Act or Wealth Tax Act debited to P&L A/c.

6. Clause 17(h)*– Section 40A(3) read with Rule 6DD:

– Whether any amount is inadmissible u/s 40A (3) read with Rule 6DD – relating to disallowance of any expenditure paid otherwise than by A/c. Payee Cheque?

– Obtain a Certificate from the Branch Management relating to payments covered u/s 40A(3).

7. Clause 21*- Bank’s Contribution and Employees’Contribution to Provident Fund- Annexure details to be verified.

Particulars of Income/ Expenditure of Prior Period credited or Debited to the Profit and Loss A/c. of the Current Year

8. Clause 27*- Compliance of TDS provisions:

– Verify TDS compliance under all relevant sections like Salary, Interest, Interest to NRI, Contract Payments, Technical & Professional Fees etc.

– Provide Details of :

(a) Tax Deductible but not deducted at all.

(b) Shortfall on account of lesser TDS than required.

(c) Tax Deducted late

(d) Tax Deducted but not paid to Central government

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