TAX Base as per IND AS-12

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TAX Base as per IND AS-12

Suggestion That can change the Assurance Services Future

 

Idea to Change the shape of the CA profession with respect to assurance services

Disclaimer: The idea will not be acceptable to the established and well reputed CA firms and Chartered Accountants

 

Objectives:

1.       Increasing the real level of Independence

2.       Eliminating back-end solicitation

3.       Equal Opportunity to every Chartered Accountant

4.       Uniform Audit Pricing with no scope for undercutting

5.       Better reporting and statutory compliance

6.       Establishing the reputation of the profession

Method to be used for Auditor Appointment:

Blind Appointment Method where neither the auditor or the appointor does not know each other till the appointment materializes.

 

Procedure to apply the method:

1.      Website: Create a website for appointment of statutory auditors for all audits mentioned in any Act like companies act, income tax act, gst act etc.

2.      Database of Auditors: Maintain a database of the Auditors in that website. The data may be extracted from the MEF

3.       Application by the Appointor for appointment of auditor:

a.      Any person requiring an auditor should require to submit a request for such appointment within a given time period. The time period may be different for each type of audit or based on the category of the Appointor.

b.      Fine should be levied on the Appointor if it fails to submit request within a given period.

c.       The Appointor should provide its various address throughout the world in that form

d.      The Appointor should mention its important financial information like Revenue, Profit, Stock, Fixed Assets, Net worth etc. in that form

e.      The Appointor should mention one unique thing to differentiate it from others like PAN, CIN etc.

f.   The appointor should mention the MRN/FRN of the Chartered Accounts who are already associated with the appointor so as to exclude those Chartered Accountants as auditor of that entity.

4.      Auto calculation of Audit Fees:

a.      Based on the address and financial information submitted by the Appointor an audit fees before taxes would be displayed to the Appointor

b.      The Fees once displayed it is non negotiable and should be accepted by the Appointor before final submission of the request form.

 

5.      Communication to Auditor:

a.      Based on the data submitted by the Appointor an artificial intelligence will decide the Auditor

b.      Basic things to be remember while choosing the auditor is local auditor should be given priority so as to minimize the cost and each auditor in the data base should be given an opportunity to do the audit.

c.       While running the Artificial Intelligence biased things like the auditor should have prior audit experience in those like companies should be avoided, so as to give opportunity to the newcomer.

d.      At the time of communication to the auditor the auditor should only know the area and fees for the audit and not the client’s name.

e.      The auditor should accept or reject each list of audits submitted to him

6.      Final Acceptance by the Appointor:

a.      After the acceptance by the auditor the Appointor should be prompted to deposit the audit fees

b.      After depositing the audit fees the name of the client and auditor will be communicated to each other. Prepayment of audit fees will remove the chances of undercutting and increase the level of independence.

c.       Once done the appointment should be valid for 3,4,5 years as may be suitable

7.      Maintenance of the server:

a.      A fee should be collected both from the Appointor and auditor for the maintenance of the server based on the audit fees

b.      The server should also be required to be audited so as to check its effectiveness

 

Whether to deduct TDS or collect TCS on payment made to " Foreign Tour Operators" in Income Tax for Overseas Tour Packages

 TCS on payment to Foreign Tour Operators for Overseas Tour Packages under Section 206C(1G)(b)

> The Seller/Tour Operator should collect TCS @ 5%

> If PAN/AADHAR of buyer is not available TCS @ 10% as per Section 206CC

> No minimum threshold, meaning, TCS will be applicable irrespective of the value of the tour package

TDS on payment to Foreign Tour Operators for Overseas Tour Packages under Section 194C

> The payer should collect TDS @ 1% or 2% based on the payee category

> If PAN/AADHAR of buyer is not available TCS @ 10% as per Section 206AA

> If payment likely to exceed Rs.1,00,000/- during the current financial year deduct TDS

Now question arises whether the buyer should deduct TDS U/s 194C or Seller should Collect TCS U/s 206C(1G)(b)? For answer it is the TDS which overrides the TCS provisions, meaning, TDS U/s 194C will be applicable in that case as per Section 206C(1G)(b) 5th Proviso which reads as under:

"Provided also that the provisions of this sub-section shall not apply, if the buyer is,—

 (i)  liable to deduct tax at source under any other provision of this Act and has deducted such amount;"

Decoding the above proviso:

> Is the buyer liable to deduct TDS? meaning, check the applicability of TDS U/s 194C

> The buyer must have deducted TDS. Meaning, the word used in the proviso is " and" so if the buyer not deducted TDS it is the responsibility of the seller to collect TCS

Important Point to remember 

      The buyer should deduct TDS based on the above provisions as otherwise the buyer will lose the benefit of claiming expenditure as otherwise available to him in accordance with the Income Tax Act further he may face the penalty in accordance with law. So, it is the onus of the buyer to deduct TDS and if he fails to deduct TDS it is the onus of the seller to collect TCS

Thanking You:

CA Kanhu Charan Samal 

Ind As 32 Financial Instruments: Presentation (Summary)

https://drive.google.com/open?id=1Ldj39t66nTsp7XkrjA7PSdtvaa8-3DwO

My path of becoming a Chartered Accountant

Born in a lower middle class family, perhaps this is the best achievement which I ever achieved. Thanks to my parents, brother & sisters, god, teachers, friends & well-wishers.

Special thanks to my father & mother

My Father (My spiritual guide)

 One who imparted in me the knowledge of devotion, hardworking, innocence, truth & love.

My Mother (My first teacher)

One who imparted in me the knowledge of patience, management, self-belief, independence & love.

Herewith I’m writing 10 memorable events of my life:

1.       12^th august 1990, the most important day of my life, because on this date I saw this beautiful world for the first time.

                                                         Thanks to my parents for giving me the best gift i.e.my life.

2.       In class-vi exam I answered a question by copying it from my friend, when I returned to home my brother asked me have you answered this question? I said yes, then, my brother asked, tell me the answer, I said the actual fact. Then he scolded me and said are you not able to answer the question without asking it to others? From that date I promised to study hard and answer the entire question in examination with my own ability.   

           Thanks to my brother for making me self-dependent.

3.       In class-vii exam I slipped to 34^th position from 5^th position and got 2^nd class in board examination while my friends who never read for an hour in any single day got 1^st class. When I admitted to class-viii in our high school there are other students from 2 more primary school other than my own primary school. I asked myself what the position I’m expecting at this school. Then my heart answered, I’m actually a good student, and if all the students perform as per their potential, I may be positioned in between 10^th to 15^th rank and I got 5^th position in class-viii examination.

                            Thanks to god for giving me self-confidence.

4.       In class-ix half yearly examination I got the 3^rd position and I was just one mark behind the 2^nd position. After declaration of result I rushed to office room and told to my teacher, sir my mark in science paper-ii is 2 numbers less than the actual which I supposed to get, my teacher said if you are so eligible then show your talent in final examination. I returned home and studied hard and eventually I got the 2^nd position in final examination.

                   Thank to my teacher for making me determined.

5.       After completing  class-x  I was planning to study science so as to become a scientist, but my brother  told me to study commerce because our family can’t afford the cost of education and I said yes.

                                                               Thanks to my brother for the decision which changed my future.

6.       When I was in +2 & +3 my tuition fees was just Rs.150p.m, still this amount is bigger for my family and I was unable to pay the fees timely, at that time my teacher said don’t worry for my fees concentrate on your study and pay my fees when you can, then I decided to study hard to get 1^st position in my college so as to please my teacher and god blessed me that also, I became the topper of my college.

Thanks to my teacher for his kindness & faith.

7.       In the year 2009, I mistakenly filled the CPT examination form by pen rather than in pencil and I was unaware about the mistake, one of my friends (BIJAY)  who is also preparing for the CPT examination noticed that and brought it to my knowledge. When I knew the mistake I started crying, because the cost of the form was Rs.800/- which my parents had arranged by selling grains. Now from where I will arrange the money? My preparation was good and I was confident but without money my total effort may go waste! At that time one of my friends (SONU) who is also preparing for the said examination gave me the required amount by lying to his parents. Now I have the money but how to get the form? because for the form I had to go to Bhubaneswar and which is not possible for me because there was my internal examination of +3 on the  very next day, what to do? By god’s grace my friend (ALOK) was there at Bhubaneswar for bringing CPT form for him and I made a call to him, he replied that he had already left the institute and on his way to return to Banki (where we lived). After sometime he called me back and said doesn’t worry deposit the amount in my uncle’s bank account and I will bring the form for you on the next day. I said what about the internal examination? He replied I can clear it in next attempt, but there should not be any obstacles in your way.  We appeared for the CPT examination in the month of December, 2009 and only I was able to clear the examination. My friend’s don’t even try for the 2^nd time; perhaps god sent them for me.

Thanks to my friends for their sacrifice.

8.       When I was preparing for my CA final I felt the necessity of a laptop and asked god, I have no money to purchase it, from where I can arrange it? three or four days after one of my friend  told me that he had arranged a laptop for me! again I talked to god, that I want to live alone in my rented house till I became a Chartered Accountant (because my strength is, I'm best in study when I'm alone) and, fourteen or fifteen days after my roommate left the room!

                                                                       Thanks to god for being present at the time of need.

9.       When I cleared my Group-II of IPCC, one of my teacher distributed sweets on behalf of me and coincidentally when I cleared my Group-II of FINAL, one of my friend distributed sweets on behalf of me.

                                                                                               Thanks a lot for their love & affection.    

10.   16^th July 2015 the day on which I achieved my dream of becoming a Chartered Accountant.

                         When I needed something, whether monetary or non-monetary support, apart from my family, my friends are always there to support me, every friend who came in my life had contributed towards my success. From the blessing of elders & love of youngers I proudly say I’m a Chartered Accountant.

                  Thanking you All.

CA KANHU CHARAN SAMAL