Clause 34(a) - Reporting Tax Deduction and Collection at Source (TDS/TCS)
Clause 34(a) - Reporting Tax Deduction and Collection at Source (TDS/TCS)
This clause mandates the following actions:
Ascertaining whether the assessee is obligated to deduct or collect tax in line with the regulations stipulated in Chapter XVII-B or Chapter XVII-BB.
Providing section-wise details of TDS/TCS deductions/ collections along with payments made.
The auditor is also tasked with reporting specific details in the following columns:
- TAN of the Assessee
- Pertinent Section Applicability
- Nature of Payment
- Total Payment/Receipt Amount (from TDS/TCS statements)
- Amount Requiring TDS/TCS (from column 4)
- TDS/TCS at Less Rate (if applicable, consider rate as per certificate u/s 195/197)
- Total Tax Deducted/Collected (from column 6)
- Total Tax Deducted/Collected at Less Rate (from column 5)
- Total Tax Deducted/Collected (from column 8)
- Undeposited TDS/TCS Amount - Late deposits not included
For clarity, consider the following guidelines:
The auditor should secure a copy of the TDS/TCS statements filed by the assessee as the foundation for reporting in this clause.
In cases where the volume of transactions is substantial, the auditor can utilize test checks and compliance tests on the transactions reported in the TDS statements. The conclusion should be presented in the appropriate section of Form 3CA / 3CB, indicating that auditing standards, materiality, and tests were applied. No significant non-compliance was identified in accordance with the provisions of Chapter XVII-B / XVII-BB.
If there's a difference of opinion regarding the applicability of TDS/TCS provisions for a particular payment, the auditor should accurately express this divergence in observations within clause (3) of Form No. 3CA or clause (5) of Form No. 3CB, depending on the scenario.
It's important to reconcile the information provided in this clause with disallowances reported under section 40(a) / 40(a)(ia) in clause 21(b) of Form 3CD, as applicable. Capital payments/receipts subject to TDS/TCS requirements but not compliant should be reported under this clause, not clause 21(b).
This clause aids in comprehensive reporting of TDS and TCS activities. Given the dynamic nature of tax regulations, it's advised to stay updated on the latest forms and regulations. Consulting a qualified tax professional or Chartered Accountant is recommended to ensure compliance with the most current requirements.