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Auditors' to disclose property related transactions above Rs 20,000 to I-T

The move will increase transparency in financial dealings and help check tax evasion

Press Trust of India  |  New Delhi 

Auditors' report to I-T should have property dealing details

Auditors will now have to disclose details of transactions exceeding Rs 20,000 in connection with immovable property in reports, which they file with the (I-T) authorities on behalf of their clients.

Under the Act, professionals earning gross receipts of more than Rs 50 lakh and companies with a turnover of Rs one crore and above are required to get their accounts audited. The turnover limit for companies has been increased to Rs two crore from Assessment year 2018-19.

So far, auditors in their report had to mention details of loans, and repayment exceeding Rs 20,000 in the tax audit report filed along with returns. Henceforth, all transactions exceeding Rs 20,000 relating to immovable property will have to be mentioned in a specified format in the report.

The move will increase transparency in financial dealings and help check

As per the notification by the I-T department, auditors will have to furnish details of transactions regarding "each specified sum" exceeding Rs 20,000 from financial year 2016- 17. These would include money paid or received with regard to immovable property.

The will also have to specify details of the mode of payments whether payee or bearer cheque, or through electronic system.

Through the notification, the tax department has revised the form 3CD for tax audit report under section 44AB of Income Tax Act.

The amended rules will come into effect from July 19, 2017 and will apply for assessment year 2017-18 for which the returns would be filed in the coming months.

Nangia & Co Associate Director Shalu Kedia said the notification mandates "enhanced reporting" as disclosure now needs to be given with bifurcation into -- all transactions, cheque, bank draft transactions, and cheque and bank draft transactions which are not payee.

Before amendment, the disclosure requirement was to report whether or not transactions are through payee cheque or bank draft, she said.

"By doing this, the tax department has ensured greater transparency in modes of transaction," Kedia said.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, July 06 2017. 14:29 IST