New Income Tax Audit Forms introduced

The Central Board of Direct Taxes (CBDT) has introduced a new series of forms for the financial year 2015-16. The new forms of income tax should be made applicable for the assessment year 2015 -16.

New Income Tax Audit Forms introduced

A notification being No. 33 dated 25-07-2014 has been issued with new Form Nos. 3CA, Form No. 3CB and Form No. 3CD. These new forms shall be effective from the date of publication in the Official Gazette.

Consequences of using the old forms:

It is important to note that income tax department has advised the CAs and taxpayers on its official website stating that any filing with the help of the old forms will not be valid even for the previous Assessment Years. The Income Tax department will not accept the Tax Audit Report in old Format with immediate effect for the current financial year as well as for the earlier Assessment years.

New rules of filing:

E-filing of corporate returns has been a great success. As such, it is necessary to enhance this initiative. The new forms are specific. Presently the corporate taxpayers have the option to either file their return electronically with digital signature or to transmit the data of the return electronically and then file a verification form having a summary of the return. E-filing is mandatory for firms which are liable to tax audit as per section 44AB of the Act.

The new Forms have been designed so as to make them fit for electronic filing. The old Form No. 3CA, Form No. 3CB and Form No. 3CD have been substituted by the new ones with immediate effect for furnishing Tax Audit Report under section 44AB of the Income Tax Act, 1961. The taxpayers and CAs are advised to utilize the newly notified Forms.

The department has introduced many changes and is in need of more information from the tax auditor. The CBDT has the right to draft these forms and seek the information which they think is required for their job. But this sudden introduction of the said changes is crucial and at times also difficult to deal with.

As per new rules the tax payers have to furnish more information. As a result, fresh tax audit should be conducted in order to comply with the additional requirements prescribed in the new Forms.

The new format of audit reports as well as the scheme of E-filing should be introduced within 1st Day of April each year as if the same is introduced later it becomes impossible for the taxpayers and professionals to work accordingly as the number of taxpayers is very large and a lot of planning is required to regulate the system.

Features of the new forms:

1. Form 3 CA – In the new form the word ‘year’ has been substituted by the word ‘period’ for profit and loss account and expenditure account in clause (a). Moreover the words ‘31 st March’ have been deleted in clause (b) in connection with audited balance sheet.
2. Form 3 CB – In the new form the word ‘year’ has been substituted by the word ‘period’ for profit and loss account as well as expenditure account.
3. Form 3 CD – In the new form Registration number for indirect taxes like service tax, etc. ( in Clause 4) is required to be stated.