Professional Opportunities for Chartered Accountants CA in the Direct Taxes domain

Audit of Accounts

The provisions relating to tax audits were introduced in the statute book in the year 1984, marking a milestone in the history of chartered accountancy profession in the realm of professional opportunity in direct taxes. Since tax audit was introduced to ensure the accuracy of books of accounts maintained, which forms the basis of computation of income, the responsibility entrusted to chartered accountants. The disclosure requirements under the notified income computation and disclosure standards (ICDSs) also have to be captured in the tax audit report.

Special audit, directed by the Assessing Officer owing to nature and complexity of accounts, the volume of accounts, doubts about the correctness of the accounts, multiplicity of transactions in the accounts, and interest of revenue, is another important responsibility entrusted to chartered accountants.

Audit of trusts and institutions whose total income without giving effect to the exemption provisions exceeds the maximum amount not chargeable to income-tax in any previous year has also been entrusted to chartered accountants. The exemption available to electoral trusts is also subject to the condition that their accounts are audited by a chartered accountant.

Further, the profit-linked tax deductions from gross total income [Section 80-IA to 80-ID] shall not be admissible unless the accounts of the undertaking eligible for such deductions have been audited by a chartered accountant and the audit report is furnished along with the return of income.

Certification

In addition to the audit, there are certain provisions under the Income-tax Act, 1961 which require certification by a chartered accountant. For instance, every company to which the provisions of minimum alternate tax applies have to furnish a report by a chartered accountant certifying the correctness of computation of book profit. There is a similar requirement for every person to whom the provisions of alternate minimum tax are applicable.

Verification

Besides audit and certification, certain requirements under the Income-tax Act, 1961 necessitate statements/returns to be duly verified by a chartered accountant.

For instance, a non-resident having liaison office in India set up in accordance with RBI guidelines has to submit a statement duly verified by a chartered accountant in respect of its activities in a financial year to the jurisdictional Assessing Officer.

Advisory and Compliance Services

In addition, CAs also render advisory and compliance services in the field of direct taxes.