Accounting Policies

DISCLOSURE OF ACCOUNTING POLICY

                                                                 

Accounting policies are the specific accounting principles and the methods of applying those principles adopted by an enterprise in the preparation and presentation of financial statements.

-          All significant accounting policies should be disclosed.

-          Such disclosure form part of financial statements.

-          All disclosures should be made at one place.

-          Specific disclosure for the adoption of fundamental accounting assumptions is not required.

-          Disclosure of accounting policies cannot remedy a wrong or inappropriate treatment of the item in the accounts.

Any change in accounting policies which has a material effect in the current period or which is reasonably expected to have material effect in later periods should be disclosed.

In the case of a change in accounting policies, which has a material effect in the current period, the amount by which any item in the financial statements is affected by such change should also be disclosed to the extent ascertainable. Where such amount is not ascertainable, the fact should be indicated.

Fundamental Accounting Assumption: (GCA) :

1] Going Concern

2] Consistency

3]  Accrual

Major considerations governing the selection of accounting policies:

1]  Prudence

2]  Substance over form (Logic over Law)

3] Materiality

The following are examples of the areas in which different accounting policies may be adopted by different enterprises:

-                                  Methods of depreciation

-                                  Methods of translation of foreign currency

-                                  Valuation of inventories

-                                  Valuation of investments

-                                  Treatment of retirement benefits

-                                  Treatment of contingent liabilities etc.

F11: Audit Features

The Auditor needs to set the following Tax Audit Rules and Payment Due dates for various clauses:

• Tax Audit Rules for Amounts inadmissible u/s 40A (3) - (Clause 17(h)
• Statutory Payment Due Dates for Value Added Tax and Central Sales Tax
• Statutory Payment Due Dates for Service Tax
• Statutory Payment Due Dates for Tax Collected at Source
• Statutory Payment Due Dates for Provident Fund, ESI and Professional Tax

Tax Audit Rules for Amounts inadmissible u/s 40A (3) - (Clause 17(h)

To set the Tax Audit Rules for Amounts inadmissible u/s 40A (3) (Clause 17(h))(Cash Payments),

Go to Gateway of Tally > Audit & Compliance > 44AB Audit

• Click on F11: Features or Press F11

 Under Inadmissible Cash Payments U/s 40A (3),

• Show Aggregate for the Day : This option should be set to Yes if the Auditor wants to view the Payment Vouchers with Aggregate amount more than specified in Show Aggregate Amounting More than field
• Show the Aggregate Amounting more than :
• When Show Aggregate for the Day is set to Yes, this will display only those Payment Vouchers belonging to a Ledger, which exceeds the aggregate amount as entered in this field for a day.
• When Show Aggregate for the Day is set to No, this will display only those Payment Vouchers belonging to a Ledger, which exceeds the aggregate amount entered in this field for the Period.
• Ignore Vouchers having Amount less than : Enter the required amount in this field. The Payments Vouchers having the amount less than entered in this field will be ignored while displaying the Cash Payments report.

• Press Enter to Accept and save the changes.

Statutory Audit

To enable Audit Working Paper, tab down to Audit Documentation section

• Set the option Enable Audit Working Paper to Yes

• Set the option Enable Audit Working Paper? to Yes. On enabling the option Enable Audit Working Paper, a menu option Audit Working Paper will be displayed in Audit Documentation Menu.
• Set the option Enable Audit Priorities and Categories? to Yes to assign priorities and categories while seeking clarification from users of the company in Tally.ERP 9.

Statutory Payment Due Dates for Value Added Tax and Central Sales Tax

To specify the Due Dates for Value Added Tax and Central Sales Tax,

• Tab down to Value Added Tax & Central Sales Tax section
• Enter No. of Days within which the payment is to be made against the Value Added Tax field and Months payment cycle from Period drop down
• Similarly enter the No. of Days within which the payment is to be made against the Central Sales Tax field and Months payment cycle from Period drop down

Note: The system will check the Challan date with the date entered in the F11: Audit Features screen and display the status as:

On Time: When Payment is made on or before the due date.

Late: When the Payment is made past the due date.

Late (Partially): When atleast one payment is made past the due date.

Due / Late (Partially): When one payment is made past the due date and another payment is due.

Due (Partially): When at least one payment is not made and other payments are made on time.

Due: When the Payment is not made past the due date.

Statutory Payment Due Dates for Service Tax

To enter the due date for Service Tax Payments,

• Tab down to Service Tax section
• Enter No. of Days within which the payment is to be made against the Payment Period field

Note: The system will check the Challan date with the date entered in the F11: Audit Features screen and display the status as:

On Time: When Payment is made on or before the due date.

Late: When the Payment is made past the due date.

Late (Partially): When atleast one payment is made past the due date.

Due / Late (Partially): When one payment is made past the due date and another payment is due.

Due (Partially): When atleast one payment is not made and other payments are made on time.

Due: When the Payment is not made past the due date.

Statutory Payment Due Dates for Tax Collected at Source

To enter the Due date for TCS Payments,

• Tab down to Tax Deducted at Source & Tax Collected at Source section
• Enter No. of Days within which the payment is to be made against the Tax Collected at Source field. By default 7 is prefilled.

Note: The system will check the Challan date with the date entered in the F11: Audit Features screen and display the status as:

On Time: When Payment is made on or before the due date.

Late: When the Payment is made past the due date.

Late (Partially): When atleast one payment is made past the due date.

Due / Late (Partially): When one payment is made past the due date and another payment is due.

Due (Partially): When atleast one payment is not made and other payments are made on time.

Due: When the Payment is not made past the due date.

Statutory Payment Due Dates for Provident Fund, ESI and Professional Tax

To enter the Due dates for Payroll related Payments,

• Tab down to Payroll section
• For Provident Fund payments, enter No. of Days within which the payment is to be made against the Provident Fund field.
• For ESI, payments, enter No. of Days within which the payment is to be made against the Employee State Insurance field.
• For Professional Tax payments, enter No. of Days within which the payment is to be made against the Professional Tax field.

Note: The system will check the Challan date with the date entered in the F11: Audit Features screen and display the status as:

On Time: When Payment is made on or before the due date.

Late: When the Payment is made past the due date.

Late (Partially): When atleast one payment is made past the due date.

Due / Late (Partially): When one payment is made past the due date and another payment is due.

Due (Partially): When atleast one payment is not made and other payments are made on time.

Due: When the Payment is not made past the due date.

Computer Accessories

Tax Audit Dashboard

To view the Tax Audit Dashboard,

Go to Gateway of Tally > Audit & Compliance > 44AB Audit

The Tax Audit dashboard screen shows total number of Vouchers available for Audit, which are checked by the user, which need clarification from the Audit team or client, those to be re-audited and Audit Complete information for each Clause.

• Clause No.: Displays the Clause number as it appears in Form 3CD.
• Audit Type: Provides brief description on the respective Clause.
• Total: Displays the total number of vouchers for each clause.

• Audited: Displays the total number of Audited Vouchers for each clause.
• Internal Observation: Displays the total number of Vouchers marked as Internal Observation for each Clause. Internal Observation column is divided into Pending and Clarified.
• Pending: Pending column displays all those vouchers marked as Internal Observation under each clause and those not clarified.
• Clarified: Clarified column displays all the vouchers clarified which are marked for Internal Observation for each clause.   

• External Clarification: Displays the total number of Vouchers marked for Clarification from the Client.
• Pending: Pending column shows the total number of Vouchers that are pending for Clarification from the Client.
• Clarified: Clarified column shows all those vouchers that are clarified from the client's side.  
• Altered (To be re-audited): Displays the total number of Vouchers that are Altered by the Client post Audit. The Auditor can highlight the respective column to view the Re-Audit Summary for the respective Clauses.
• Audit Complete?: Displays the Audit completion status for each Clause as entered by the Auditor using the F9: Save Audit button.

Note: If the Client alters any Audited Vouchers after the Audit Complete is set to Yes. The Audit Complete status will automatically change to blank for the respective Clause.

Button options in the Tax Audit Dashboard screen

F2: Period

To change the financial year selected, click on F2: Period or press F2 key.

F9: Save Audit

To save the Audit Status for the required Clause, click on F9: Save Audit or press Alt+F9 key to mark the Audit Complete status to Yes. The same will appear in the Audit Complete Column.

Note: The Clause for which the Audit Status needs to be saved, should be selected first by using Space Bar key.

C: Clarification List

To view all the Vouchers which are marked for Client's Clarification (with Audit Status as External Clarification) and the Vouchers which are Clarified (Audit Status as Clarified)  by the Client in a single report,

• Click on  C: Clarification List or press Alt+C keys

The Clarification List report displays all the External Clarification and Clarified Vouchers in a single screen for Auditors' reference.

F10: Audit Reports

Click on F10: Audit Reports or press Alt+F10 keys to navigate to Audit & Analysis (Statutory Audit) Reports.

F12: Configure

To view the Last Audit Details, click on F12: Configure or press F12 key.

• Set option Show Last Audit Details to Yes

The Tax Audit Dashboard displaying the Last Audit Details will appear as shown:

The above screen displays the Last Audit details for each Clause.

• Last audited By: Displays the User name (login name) of the Auditor who performed the last Audit
• Date & Time: Displays the date and time for the last Audit
• Date of Last audited voucher: Displays the Voucher Creation date of the Voucher that was audited last.

Tax Audit in Tally.ERP 9

The Tax Audit feature in Tally.ERP 9 enables the user to compile information in comparatively less time with the required accuracy to form the right opinion. From the vast data available, the required information that needs to be reported can be identified and extracted precisely.

While conducting Tax Audit in Tally.ERP 9, the Auditor and other users can examine, review, analyse the books of accounts and other records with a view to compile information and data required to be reported in Form 3CD, and thereupon express an opinion wherever required.

In Tally.ERP 9, the following clauses are available as Annexures with respect to Form 3CD:

• Bonus, PF, ESI Recoveries (Clause 16)
• Amounts debited to P&L a/c  (Clause 17)
• Payments to Specified Persons (Clause 18)
• Payments u/s 43B (Clause 21)
• Employer’s Contribution
• Tax Collected at Source
• Service Tax
• Value Added Tax
• Loans / Deposits Accepted (Clause 24(a))
• Loans / Deposits Repaid (Clause 24(b))
• Tax Deducted at Source (Clause 27)

Apart from these Annexures to Form 3CD, a separate section - Verification of Vouchers is provided in Tax Audit Dashboard that covers Clauses not covered in the list specified above. 

Printing Form 3CD

To Print the Form 3CD from Tally.ERP 9,

Go to Gateway of Tally > Audit & Compliance > Form 3CD

• Press Alt+P or click on P: Print
• In the Print screen of Form 3CD,

• Set the option Print Form 3CD to Yes, to print Form 3CD
• Set the option Print with Signatures to Yes, to print the Form 3CD with signatures.
• Set the option Print along with Annexures to Yes, to print all the Annexures along with Form 3CD
• Specify the Auditor's CA Firm Name in the Firm Name field
• Specify the Firm Registration Number in the FRN field
• Specify the Auditor's name in the Name of Chartered Accountant field
• In the Salutation filed specify Auditor's salutation
• Specify the membership number of Auditor in the MRN No field
• Specify the address of CA Firm in the Address field
• Specify the city name in the Place field
• In Date field enter the date of generating the Form 3CD
• Specify the Company signatory details on the right side if required

Note: The empty fields in the Print Configuration screen will not be printed in the Form 3CD.

• Press Enter to print Form 3CD and Annexures.

The printed Form 3CD Annexure I  appears

Filling Form 3CD

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The Auditor can enter the required information for the Clauses not available in Tally.ERP 9 in Form 3CD and save the details. This information will be saved against the respective Clauses and will be available for future references.

To enter the Required information in Form 3CD,

Go to Gateway of Tally > Audit & Compliance > Form 3CD

The Form 3CD screen appears as shown below:

The Form 3CD screen is divided into four columns.

• Clause No. : Displays the Clause numbers as stated under the Income Tax Act, 1961.
• Particulars:  Displays brief description of Clauses.
• Applicability: Option to mark a clause as Applicable or Not Applicable.
• Additional Details: Details regarding Annexures or any reports to be attached.

The Auditor can press Enter on the respective clause, specify the required information and save it.

Clause Applicability Details:

A Clause may be relevant or irrelevant to the companies policies and nature of business. If a particular clause is applicable or not applicable to a business, a provision to update the applicability status is provided in Form 3CD screen.  

To mark a clause as Applicable or Not Applicable:

• Press Spacebar to select the clause.
• Press F5 or click on the button F5:Update.

A Clause Applicability Details screen appears.

• Select the required status from the list.
• If, Not Applicable is selected, provide Remarks, if any.

• Press Enter to save the details.

On saving the details, the respective clause will appear with the status selected as shown below:

Note: If a Clause mentioned under 44AB of the Income Tax Act, 1961 is marked as Not Applicable in the Form 3CD screen, then the respective clause will not appear in the Tax Audit Dashboard under 44AB.

In the above screen, Clause 17 (a-m) is marked as Not Applicable.

Therefore, the same Clause 17 (a-m) will not appear in 44AB Tax Audit screen as shown below:

Filling Clause No. 1-6

To enter the information required for Clause No. 1-6,

• Highlight the Clause No. 1-6 in the Form 3CD screen and press Enter.
• In the Particulars of Assessee screen,

• Enter the Company Name in the Name of Assessee field.
• Enter the Company address in the Address field.
• Enter the Company PAN number in the Permanent Account Number field.
• Enter the type of organisation (Company, Individual, firm etc) in the Status field.
• Enter the last date for previous financial year (e.g. 31-March-2012) in the field Previous Year Ended field
• Enter the details of Tax Audit Assessment Year (2012-2013)details in the Clause No. 6

Note: The details for Clause No. 1, 2, 3, 5 and 6 are pre-filled with the information provided in the Company Masters.

If the Auditor alters the default information for these Clauses in this screen, then the same will be stored against these clauses in Form 3CD for future reference. This will not overwrite the Company Master details.

• Press Enter to save the details.

Filling Clause No. 7 (a & b)

To enter the information required for Clause No. 7 (a & b),

• Highlight the Clause No. 7 (a & b) in the Form 3CD screen and press Enter
• In the Particulars of Members/Partners screen,

• Specify the required details for Clause No. 7 (a) in the text field provided

Tally.ERP 9 provides the facility of using the pre-defined text templates to fill the repetitive information viz, Not Applicable, Nil etc.

To use the default text templates available in Tally.ERP 9,

• Press Alt+T or click on T: Select Text button

• A list of text templates appears. The Auditor can select the predefined text or provide User Defined text as required.

For example:

• Select As per Annexure from the text templates.
• The text As per Annexure gets filled in the Clause as shown below:

• Similarly, fill in details for Clause 7 (b).

• Press Enter to save the details

Likewise, an Auditor can enter all the relevant details for each Clause as per the process explained.

Provision of User Defined Text templates:

Tally.ERP 9 provides the Auditor an option to provide User Defined Text Templates.

To add an User Defined Text

• Select Add User Defined Text from the list of text templates by pressing Alt+T or clicking on the button T: Select Text in the respective clause.
• Specify the text in Add User Defined Text sub-screen as shown below:

• Press Enter to save.

The user defined text added will now appear in the list of text templates.

To Remove User Defined Text

• Select Remove User Defined Text from the list of texts by pressing Alt+T or clicking on the button T: Select Text in the respective clause..

• On selection, a Remove User Defined Text sub-screen appears with the list of User Defined Texts mentioned earlier.

• Select the User Defined Text created earlier to remove. For example: In the above screen, the user defined text already created is Not applicable as per the Company Policies.

Filling Annexure I

To enter the information required for Annexure I,

• Highlight the Annexure I in the Form 3CD screen and press Enter
• In the Particulars of Annexure -I screen, enter the required details as shown:

• Press Enter to save the details entered in Annexure I.

Button Options in Form 3CD screen

F1 : Detailed

Press Alt+F1 or F1 : Detailed button to view detailed Form 3CD.

Ctrl+O: Copy From

To copy the data from Form 3CD of a different Company (or same Company for previous year), the Auditor can use Copy From button available in the Form 3CD screen.

Tally.ERP 9 provides the option to copy the information for all the Clauses or selective Clauses from one Company to another.

Note: The Form 3CD information can be copied from the previous Company in the same data or in a different data folder.

Copying entire Form 3CD

To Copy the entire Form 3CD from one Company to another, follow the steps give below:

• Ensure that both the Companies are loaded in Tally.ERP 9 and the Company in which the information has to be copied should be the Active Company.

Go to Gateway of Tally > Audit & Compliance > Form 3CD

• Press Ctrl+O or click on Ctrl+O: Copy From button
• In the Data Configuration screen,

• In the Copy From Company field select the Company in which filled Form 3CD is available

• In the Copy from Financial Year select the year for which filled Form 3CD is available

• Press Enter to Copy and save the details of Form 3CD

Copying individual Clauses in Form 3CD

To Copy the information Clause by Clause from one Company to another, follow the steps give below:

• Ensure that both the Companies are loaded in Tally.ERP 9 and the Company in which the information has to be copied should be the Active Company.

Go to Gateway of Tally > Audit & Compliance > Form 3CD

• Highlight the Clause for which the information needs to be copied and press Enter (e.g. Clause 11 (a-d) and press Enter

• Press Alt+R or click on R: Copy From button.
• In the Data Configuration screen,

• In the Copy From Company field select the Company in which filled Form 3CD is available.
• In the Copy From Financial Year select the year for which filled Form 3CD is available.

• Press Enter to Copy and save details for the selected Clause

 Similarly, the user can copy all the Clauses one by one.

X: 44AB Audit

While filling Form 3CD, an option X: 44AB is provided. On pressing Alt+X or clicking on X: 44AB, the list of vouchers audited under this clause will be listed or the 44AB Audit screen pertaining to this clause will appear.

Note: However, this button appears only if the pertaining Statutory feature is enabled and is covered under 44AB Audit of Tally.ERP 9.

A: Annexure

If a particular clause in Form 3CD has Annexures, then the same can be viewed by clicking on A: Annexure or pressing Alt+A.

The list of Annexures appear as shown below:

• Press Enter to view the Annexure.

The Annexures can be printed from here.

If statutory features are disabled in Tally.ERP 9, then instead of Annexures, A: Report is provided. Click on A: Report or press Alt+A to view the list of Vouchers audited under the clause.

C: View Clause Ref

Clause References are the information or notes provided for a voucher or at the company level. This will act as a reference in future while filling Form 3CD. This will help an auditor in better decision making. While filling Form 3CD, the user can view the Clause references provided at the Company level and voucher level.

To view Clause references from Form 3CD,

• Click on C: View Clause Ref or press Alt+C

A Clause Reference Details screen appears. The Clause Reference details screen contains Clause references specified both at the company level and the voucher level.

Company Note:

Clause References provided at the company level, i.e. those mentioned against a clause by selecting Company, appear in Company Notes.

• Notes: The Clause Reference mentioned against a specific clause is displayed here.  
• Note By: The name of the user who has added the note is shown here.

Voucher Note:

Clause References provided for a specific voucher against a particular clause is shown here.

• Date: The date on which the clause reference is provided is displayed here
• Particulars: The ledger against which the clause reference is given is shown here
• Voucher No.: The Voucher no. containing the ledger for which the clause reference is provided is given here
• Note By: The name of the user who has added the note is shown here.
• Note: The clause reference provided is shown in this column.

Button Options in Clause Reference Details screen

D: Delete

The Clause Reference provided can be deleted.

To delete,

• Press Spacebar to select the clause reference
• Press Alt+D key or click on D: Delete button
• Press Enter to delete the clause reference.

F12: Configure

Press F12 or click on F12: Configure to change the default display.

• Show Clause Reference of: The Clause Reference details screen can be filtered on the basis of notes specified for Company or Vouchers or both as shown below:

• Show Date and Time: To display the date and time of the clause reference given, set this option to Yes.
• Sorting Method: The Clause reference details screen can be sorted on the basis of Date and Time (Increasing or Decreasing) or Audit/Note by (Increasing or Decreasing)

Note: Show Date and Time, Sorting Method options will appear in Configurations only if Company or Voucher is selected in Show Clause Reference of field.

• Show Transaction Value: Set this option to Yes to view the value of the transaction against which clause reference is stated.

Note: This option will be available only if Vouchers is selected in Show Clause Reference of.

Tax Audit in Tally.ERP 9

Tax Audit process helps in ensuring that the books of accounts and other records reflect the true income of the assessee and is maintained in accordance with the provisions of the Income Tax Act, 1961.

The key features of Tax Audit tool in Tally.ERP 9 comprises of:

• Printing of Form 3CD with Annexure I
• Generate Annexures to Form 3CD
• Printing of Form 3CA and Form 3CB
• Extracting financial and quantitative information required for Tax Audit (under Sec. 44AB)
• Displaying relevant data for Audit based on Clause requirement
• Instant Statistics on Audit Listings (Audited Vouchers &  Unaudited Vouchers)
• Facility to record Audit Remarks using Audit Note
• Provision to mark Vouchers for Internal Observation within the Audit Team
• Provision to mark Vouchers for Verification from Clients
• Facility to post corrections and reviews remotely
• Tracking any alteration / modification to vouchers post Audit
• Availability of ready references - Clause Reference while filling Form 3CD
• Provision for Clause References at the Company or Voucher Level
  
  

  Form 3CD

  Tally.ERP 9 provides the facility of printing Form 3CD with the required Annexures to file the Tax Audit returns under section 44AB.
• Form 3CD
• Annexure I

To complete Form 3CD refer to Filling Form 3CD section.

To print Form 3CD refer to Printing Form 3CD section.

The additional Forms i.e. Form 3CA and Form 3CB can also be printed from Tally.ERP 9.

Annexures to Clause 16, 17(a-m), 18, 21, 24(a), 24(b) can be generated as explained in Printing Tax Audit Annexures section

Auditor/Firm Profile in Control Centre

Chartered Accountants who are registered as BAP users of Tally.ERP 9 can now create and maintain their profile as well as the firm's profile in the Control Centre. The details provided here will be automatically captured in reports that require them, like Form 3CD.

To create auditor/firm profile,

• In the Control Centre screen that appears, click on Ctrl+K: Control Centre or press Ctrl+K and log in with the Tally.NET Auditor ID

• Click on Account Profile Management or press Alt+Y

The Profile Management screen appears:

• Fill in the relevant details for Account ID, Firm Number, Account Nature, Name of the Firm, Account Type, Address, etc.
• Under Partner Detail(s), fill in details of partners of the Firm.
• Under Contact Person(s), fill in the details for the contact persons for the firm

• Press Enter or Y to Accept (save) the profile details.

Audit Remotely (Anywhere)

To use Audit & Compliance features remotely from anywhere, the Auditor should get authenticated on Tally.NET to obtain the Auditors’ Edition License.

The Client should authorise the Auditor to perform Audit remotely for the given company. For information on Authorisation process, refer to Authorising Tally.NET Auditors section. Or else, the main auditor should have delegated the authorised Company to the article.

To obtain Auditors’ Edition License and perform Audit remotely,

• Start Tally.ERP 9  
• Press Alt+F1 to Shut any company that is running
• Press Login as Remote User

• Enter the BAP user name and Password in the Name of User and Password fields respectively

• Select Remote Company screen appears displaying the Companies connected to Tally.NET for different Clients which are available for Remote Audit.

• Press Enter to start the Company remotely

• Press on Audit & Compliance menu
• Press Enter on either Tax Audit, Statutory Audit or Statutory Compliance to use the required tool remotely.

Note: The Remote Auditing will work even in Educational version of Tally.ERP 9

Audit at Client's Office with Local Data

To use the Audit & Compliance features at Client’s place, the Auditor should get authenticated on Tally.NET to obtain the Auditors’ Edition License.

The Client should authorise the Auditor to perform Audit for the relevant company. For information on Authorisation process which Client needs to follow, refer to Authorising Tally.NET Auditors. Or else, the main auditor should have delegated the authorised Company to the article.

To obtain Auditors’ Edition License and perform Audit or Compliance from Client’s place,

Go to Gateway of Tally > Click on F3: Company Info  or press Alt+F3 > Select Company

Or

Go to Gateway of Tally > Press F1

• Select the company to be audited from the List of Companies

• Press Enter to display the Company Login screen
• Provide the BAP Username (or sub-user) and Password in the Company Login screen

• Press Enter to Load the Company

Once the Company is loaded, you will be able to view the Audit & Compliance menu in the Client’s Tally.ERP 9 itself and start using the same.

• Press on Audit & Compliance

• Press Enter on the required menu to use the required tool at Client's place.
• Tax Audit
  • Form 3CD
  • 44AB Audit
  • Form 3CA
  • Form 3CB
• Statutory Audit
  • Audit Documentation
  • Audit & Analysis
  • Audit Journals
  • Financial Statements

Audit Tools of Tally.ERP 9

Tally.ERP 9 offers Audit Tools, which provide various Audit and Compliance capabilities for Auditors and other Users. Audit Tools comes with the following tools for Users:

• Tax Audit
• Statutory Audit

AuditReady

Now you can not only maintain financial data on Tally.ERP 9, you can also make it ready for audit - AuditReady!

Tally.ERP 9 offers auditing tools which will help you ensure that your books of accounts are maintained as per statutory requirements:

• Compare your business' previous year and current year data to ensure that the information you provide to your auditor is error-free
• Spot and rectify data entry errors with ease
• Obtain reports on receivables and payables with just a few clicks
• Schedule VI Financial Statements (Balance Sheet and Profit & Loss Account) have been provided, and you don't have to switch between applications to ensure your financial reports are complete
• Generate Forms to be filed with the Income Tax Department – Form 3CD, Form 3CA, and Form 3CB

AuditReady is a complete package which enables you to perform internal checks, and ensure a simplified audit cycle for your business.

Account-based capturing of Audit Details

Tally.ERP 9 Audit Tools are now available for Non-BAP customers (users who are not registered as BAP users of Tally.ERP 9) too, which means they can prepare their financial data before it is used for auditing.

With Audit Tools, users can perform internal scrutiny on their data, and audit the data with their own teams within the organisation, before the same is presented to auditors.

This way, the amount of checks to be done by the organisation's internal/external auditors is reduced, and the entire auditing process is simplified.

The audit details recorded by users while scrutinising their data will be captured and stored for their respective Account IDs. Likewise, audit details recorded by CAs who are registered as BAP Users will be captured and stored for their respective BAP Account IDs. Audit Details recorded by the customer and the BAP user will therefore, be stored separately.

Illustration 1: One customer (Non-BAP User) and one CA (BAP user)

• Mr. A, a non-BAP user, uses Tally.ERP 9's Audit Tools to prepare his data which is to be audited his CA, Mr. B
• Mr. A logs in with his Account ID, audits his data, and records Audit Note for a Payment Voucher.
• Mr. B logs in with his BAP Account ID and audits the data provided to him by Mr. A, and records an Audit Note for the same Payment Voucher.

Here, Mr. A will be able to view the Audit Note he has recorded, but not the Audit Note Mr. B, his Auditor has recorded. Similarly, Mr. B will not be able to view the Audit Note recorded by Mr. A.

Illustration 2: One customer (Non-BAP User) and two CAs (BAP users)

If, in the above scenario, two CAs, Mr. B and Mr. C,  having BAP Account IDs are involved in auditing Mr. A's data,

• Mr. A logs in with his Account ID, audits his data, and records Audit Note for a Payment Voucher
• Mr. B logs in with his BAP Account ID and audits the data provided to him by Mr. A, and records an Audit Note for the same Payment Voucher
• Mr. C, the other Auditor, logs in with his BAP Account ID and records an Audit Note for the Voucher.

Here, Mr. A will be able to view the Audit Note he has recorded, but not the Audit Note Mr. B or Mr. C, his Auditors have recorded. Similarly, Mr. B and Mr. C will not be able to view the Audit Note recorded by Mr. A.

Illustration 3: One customer (Non-BAP User),  two BAP users, and one article (BAP user)

If, in the above scenario, two CAs, Mr. B and Mr. C,  having BAP Account IDs are involved in auditing Mr. A's data, and Mr. D, an article who is a part of the audit teams of both Mr. A and Mr. B,

• Mr. A logs in with his Account ID, audits his data, and records Audit Note for a Payment Voucher
• Mr. B logs in with his BAP Account ID and audits the data provided to him by Mr. A, and records an Audit Note for the same Payment Voucher
• Mr. C, the other Auditor, logs in with his BAP Account ID and records an Audit Note for the Voucher.
• When Mr. D logs in with his BAP Account ID,

The Account IDs of both Mr. B and Mr. C will be in the List of Accounts for selection:

• If Mr. D selects Mr. B's Account, he will be able to view the Audit Details recorded by Mr. B, and not the Audit Details recorded by Mr. A or Mr. C.
• If Mr. D selects Mr. C's Account, he will be able to view the Audit Details recorded by Mr. C, and not the Audit Details recorded by Mr. A or Mr. B.
  
  

  Audit & Compliance Scenarios

  Chartered Accountants can use Tax Audit, Statutory Audit and Statutory Compliance tools to Audit the Client's data in one of the following scenarios:

  • At CA’s office with Local Data  (using Auditors’ Edition and local data)  
  • At Client’s Place with Local Data (by Remotely getting Auditors’ Edition License)
  • From Any where (Access data and Auditors’ Edition License Remotely)

  Note: Tax Audit, Statutory Audit & Statutory Compliance are default features available with Auditors’ Edition of Tally.ERP 9.

  
  

  Audit at CA’s Office with Local Data

  The Auditors’ Edition includes Tax Audit, Statutory Audit and Statutory Compliance capabilities as default features without any dependency on Tally.NET subscription for authentication to perform Audit or Compliance services on Local data. The Auditor can open Auditors’ Edition of Tally.ERP 9 and access his client's data available locally and start Audit using Audit & Compliance features.

  To use Audit & Compliance features locally,

  Go to Gateway of Tally > Click on F3: Company Info  or press Alt+F3 > Select Company

  Or

  Go to Gateway of Tally > Press F1

  • Select the company to be audited from the List of Companies

  
  

  • Press Enter to load the selected company

  • Enter the Client’s Username and Password

  Note: If the Client’s Company is not Password protected, then you need to enable the security features by going to Company Alteration screen as the Audit & Compliance Features will be available only when Company is password protected.

  • Press Enter to Load the Company

  The Gateway of Tally screen with the Audit & Compliance options appears:

  • Press Enter on Audit & Compliance menu

  • Press Enter on the required menu:
  • Tax Audit
    • Form 3CD
    • 44AB Audit
    • Form 3CA
    • Form 3CB
  • Statutory Audit
    • Audit Documentation
    • Audit & Analysis
    • Audit Journals
    • Financial Statements

   

  
  

TDS (Tax Deducted at Source) - Tally.ERP 9

Introduction

TDS refers to Tax Deducted at Source. The concept of TDS was introduced in the Income Tax Act, 1961, with the objective of deducting tax on income, from the source of the income. It is one of the methods of collecting Income Tax, which ensures a regular flow of income to the Government.

Example: Universal InfoTech is making the payment towards Rent to the owner of the building. TDS is supposed to be deducted by Universal InfoTech from the rent that is to be given to the owner. If the rent amount is Rs.10,000/- & the TDS amount is Rs.1,000/-, Universal InfoTech deducts Rs.1,000/- and pays the owner Rs.9,000/-

TDS Certificate

TDS certificate is a proof that deductor has deducted the tax and paid the same to the government. This proof is essential to the deductee to claim the credit of tax in his Income Tax returns.

U/s 203 of Income Tax Act, any person deducting the tax as per the provisions of:

• Section 192 (Salary) shall furnish a certificate of Deduction of tax in Form 16 or Form 16AA within one month from the close of Financial year in which such deduction was made.

 Example: For the Financial Year 2007-2008, the TDS certificate must be issued on or before 30th April, 2008

• Section 193, 194, 194A, 194B, 194BB, 194C, 194D, 194E, 194EE, 194F, 194G, 194-I, 194J, 194K, 194LA, 195, 196A, 196B, 196C and 196D shall furnish a certificate of Deduction of tax in Form 16A with one month from the end of the month during which the credit has been given or the payment has been made, as the case may be.
• In case of a deductee to whom more than one TDS certificate was issued for the deductions made during the year, may on request from such deductee, a consolidated certificate in Form 16A may be issued within a period of one month from the close of such financial year.
  
  

  e-TDS Returns

  The Income Tax department has now notified ‘Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003’. It is applicable to all deductors furnishing their TDS return in electronic form. As per this scheme,
  • It is mandatory for corporate deductors to furnish their TDS returns in electronic form (e-TDS return) with effect from June 1, 2003.
  • For government deductors it is mandatory to furnish their TDS returns in electronic form (e-TDS return) from financial year 2004-2005 onwards.
  • Deductors (other than government and corporates’ ) may file TDS return in electronic or physical form.
  Deductors furnishing TDS returns in electronic form (e-TDS) have to furnish Form 27A. Form 27A is a control chart to be furnished in physical form along with CD/ Floppy containing the e-TDS returns. Form No 27A is required to be furnished separately for each TDS return.
  Form 27A is a summary of e-TDS returns which contains control totals of ‘Amount paid‘ and ‘Income tax deducted at source’. The control totals mentioned on Form 27A should match with the corresponding control totals in e-TDS returns.
  Returns and Timelines
  
  The following Returns are required to be filed under TDS:

  Financial Year	Form No.	Particulars	Periodicity
  2008-09	Form 26	Annual return of deduction of tax in respect of payments other than salary	Annual
  	Form 27	Annual return of deduction of tax in respect of payments other than salary made to Non-residents	Annual
  	Form 27A	Physical control charts containing control totals mentioned in TDS returns furnished electronically. Form 27A in physical form to be submitted along with e-TDS annual return forms. With each e-TDS returns Form 26 and/ or Form 27.	With each e-TDS returns Form 26 and/ or Form 27.
  2008-09	Form 26 Q	Quarterly return of deduction of tax in respect of payments other than salary	Quarterly
  	Form 27Q	Quarterly return of deduction of tax in respect of payments other than salary made to Non-residents.	Quarterly
  	Form 27A	Physical control charts containing control totals mentioned in TDS returns furnished electronically. Form 27A in physical form to be submitted along with e-TDS quarterly return forms	With each e-TDS returns Form 26Q and/or Form 27Q.

  
  
  
  
  Changes in Finance Act (02) 2009
  As per Finance Act (02) 2009
  
  • Surcharge and Cess is not applicable for the Financial Year 2009-10 with effect from 1-4-2009. For tax deduction only the specified TDS rates are considered.
  • For some of the Nature of Payments TDS rates have been changed. The changed tax rates are applicable form 1-10-2009
  Changed tax rates are as follows
  
  
  
  
  
  
  
  
  
  
  NEW E-TDS FVU VERSION 3.6 PERTAINING TO FY 2012- 13 AND ONWARDS
  
  
  From 16-10-2012 onwards all e-TDS/TCS regular returns would have to be filed in the modified data structure using E-TDS FVU Version 3.6 
  
  
  
  
  Below is the screen shot of the new FVU (ver 3.6) with its field description.
  
  
  
  
  
  
  
  1. TDS / TCS Input File Name with Path
  
  
  Specify the name (with the .txt extension) of the input file (including the path) i.e. the name of the e-TDS/TCS statement generated as per file format to be validated by the FVU 3.6
  
  
  2. Challan Input File name with Path 
  
  
  • This is a field provided to specify the challan Input File Details.
  • Challan Input File will be available as download from NSDL’s website https://tin.tin.nsdl.com/oltas/index.html. The downloaded file will have the extension “.csi”
  • Downloaded Challan Input File contains the challan status inquiry for the verification of challan in TDS/TCS statement.
  • Challan Input file Name is a 16 Digit TAN based Alpha Numeric Number with the file extension .csi
  Example: MUMM10001A051010.csi ( First 10 digits is Tax Assessment Number (TAN) and Next 6 digits indicate the date on which the file is downloaded)
   
  
  3. Error/Upload & Statistics Report File Path
  • Specify the path where either an 'error' or 'upload & statistics report files' generated by the FVU on completion of validation should be saved. The path can be same as the input file path or different. Do not specify any filename, only provide the path
  • In case of an 'invalid file', an 'error file' will be generated. This will be an html file with the same filename as the input file with err appended after the file name and html as extension
  4. Consolidate File Name with Path:
  • Specify the name (with the .txt extension) of the file (including the path) to import consolidated file for validating correction statement.