Businesses and professionals are now allowed to revise their tax audit reports before submission. The Central Board of Direct Taxes (CBDT) has introduced new rules on Friday to cut out all the procedural complexities in claiming deductions for certain spending.
The taxpayer makes several specific payments like taxes, duties, cess or provident fund contribution of the employees and that tax audit report must be submitted in that specific assessment year. Now, according to the notification by CBDT, those taxpayers can get their hands on a revised audit report signed by the accountant and it can be used to claim relief for that spending or payment.
The Income Tax Act restricts certain spending like royalty, interest, or fee for technical services as a deduction while calculating the taxable income of an assessee in case the tax is not deducted at source and paid to the government. Meanwhile, provident fund contribution and leave encashment expenses are allowed for only the year that it’s spent.
The new rule introduced by the CBDT makes it quite easier fot the taxpayers to claim deduction who must file tax Ufiy reports. It clears up the path for the taxpayers to explain the mismatch between an audit report and the claim for deduction. This new rule is in line with the government’s efforts to make it a lot easier to conduct business.
The national leader of international tax and transaction services at EY, Pranav Sayta said, “The notification allows revision of the tax audit report till the end of the relevant assessment year. It removes an administrative difficulty and streamlines the procedure for claiming certain deductions while computing taxable income.”
Businesses with minimum sales of Rs 1 crore and professionals with income more than Rs 50 lakh must file the tax audit reports.