Icai Tax Audit Checklist

General Instructions
(To be read in conjunction with the Checklist)
1. This document is a joint effort of the Direct Taxes Committee and the Taxation Audit Quality Review Board of
ICAI. This checklist is designed to assist the members in enhancing the quality of tax audit under section
44AB of the Income tax Act, 1961. This document is only recommendatory in nature.
2. This checklist has been broadly based on the text of the Guidance Note on Tax Audit under section 44AB of
the Income tax Act, 1961/ Implementation Guide w.r.t. Notification No. 33/2018 dated 20.7.2018 effective from
20.8.2018/ Technical Guide on Income Computation and Disclosure Standards. The detailed guidance given
in these publications of Direct Taxes Committee of ICAI should be duly referred while conducting the tax
audit. This document is not to be considered as a replacement / gist of these publications but should be read
along with them.
3. The above-mentioned publications may be revised from time to time depending on the changes in the Act/
Tax Audit Report Format. In case, there is any conflict between the text of the above mentioned publications
of ICAI and this document, the text mentioned in publications Guidance Note on Tax Audit under section
44AB of the Income tax Act, 1961/ Implementation Guide w.r.t. Notification No. 33/2018 dated 20.7.2018
effective from 20.8.2018/ Technical Guide on Income Computation and Disclosure Standards shall prevail.
4. While giving the tax audit report the tax auditor will have to use his professional skill and expertise and apply
such audit tests as the circumstances of the case may require, considering the contents of the audit report.
The tax Auditor will have to conduct the audit by applying the generally accepted auditing procedures which
are applicable for any other audit. He is advised to refer to the Standards on Auditing (SAs) as may be
relevant, issued by ICAI. In case, there is any conflict between the texts of the Standards on Auditing (SAs)
issued by ICAI and this document, the text mentioned in SAs issued by ICAI shall prevail.
5. Where the auditor issues Form No. 3CB, as the audit of financial statements is being done under section
44AB of the Income tax Act, 1961, the auditor should in relation to audit of the financial statements ensure
compliance of:
 Accounting Standards issued by ICAI
 Standards on Auditing
 Framework for presentation of Financial Statements issued by ICAI
6. Commonly found Errors
The Taxation Audits Quality Review Board of ICAI has come across certain commonly found errors/ non-
compliances while conducting review of Tax Audit Reports. Some of them, which need specific attention of
2 APPROACH TO TAX AUDIT UNDER SECTION 44AB OF THE INCOME TAX ACT, 1961
members, have been mentioned, below for reference:
a) Revised SA 700, Forming an Opinion and Reporting on Financial Statements (Para 11.9 of the Guidance
Note on Tax Audit under Section 44AB of the Income-Tax Act, 1961)
ICAI had pursuant to the issuance of the Revised SA 700, Forming an Opinion and Reporting on Financial
Statements, prescribed a revised format of the auditor’s report on financial statement. Since Form No. 3CA
and Form No. 3CB are required to be filed online in a preset form and the same are not in line with the
requirements of SA 700, there is no specifically allocated field for providing information relating to the
respective responsibilities of the assessee and the tax auditor as required in terms of the principles laid out in
SA 700. However, having regard to the importance of these respective responsibility paragraphs from the
perspective of the readers of the tax audit report, it is suggested that these respective responsibility
paragraphs relating can be provided in the space provided for giving observations, etc., under clause (3) of
Form No.3CA or Clause (3) and Clause (5) of Form No.3CB as the case may be.
The illustrative Assessee’s responsibility paragraph and Tax Auditor’s responsibility paragraphs in respect of
Form No.3CB has been given in the Guidance Note. The same are to be suitably reworded to meet the
situation envisaged in Form No.3CA.
Commonly Found Errors:
a) Many of the Tax Audit reports do not have the paragraphs relating to Assessee’s responsibility and
Tax Auditor’s responsibility as required by the Guidance Note in respect of SA 700.
b) Some of the tax audit reports contained a reference about the attached physically signed tax audit
reports which mention these Paragraphs thereby complying with the requirement of SA 700.
However, as per the Guidance Note on Tax Audit the same are specifically required to be
mentioned / reported under clause (3) of Form No.3CA or Clause (5) of Form No.3CB, as the case
may be.
b) Observations/Comments/ Discrepancies/Inconsistencies by Auditor (Para 14.5 of the Guidance Note on Tax

Audit under section 44AB of the Income-tax Act,1961 )
“Where any of the requirements in this form is answered in negative or with qualification, the report shall state
the reasons thereof. The tax auditor should state this qualification in the audit report so that the same
becomes a comprehensive report and the user of the audited statement of particulars can realize the impact
of such qualifications.”
Also as per Para 15.5 of the Guidance Note on Tax Audit under section 44AB of the Income-tax Act, 1961 :
Under clause (a) of paragraph 3 of Form No.3CB, the tax auditor has to report his “observations/comments/
discrepancies/inconsistencies,” if any. The expression “Subject to above” appearing in clause (b) makes it
clear that such observations/comments/ discrepancies/ inconsistencies which are of qualificatory nature relate
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to necessary information and explanations for the purposes of the audit or the keeping of proper books of
accounts or the true and fair view of the financial statements, respectively to be reported on in paragraphs
(A), (B) and (C) under clause (b) of paragraph 3. While reporting on clause (a) of paragraph 3 of Form No.
3CB the tax auditor should report only such of those observations/comments/ discrepancies/ inconsistencies
which are of qualificatory nature which affect his reporting about obtaining all the information and
explanations which were necessary for the purposes of the audit, about the keeping of proper books of
account by the head office and branches of the assessee and about the true and fair view of the financial
statements. Further, only such observations/comments/ discrepancies/inconsistencies which are of a
qualificatory nature should be mentioned under clause (a). Any other observations/comments/
discrepancies/inconsistencies, which do not affect the reporting on the matters specified above may form part
of the notes to accounts forming part of the accounts. In case the tax auditor has no observations/comments/
discrepancies/ inconsistencies to report which are of qualificatory nature, “NIL” should be reported in this part
of paragraph 3.The tax auditor may then give his report as required by sub-paragraphs (A), (B), and (C) of
paragraph 3 and paragraph 4.
Commonly Found Error:
In certain tax audit reports that were examined, it has been observed that the qualification paragraph i.e.
clause (3) of Form No.3CA or Clause (5) of Form No.3CB, as the case may be, contained a reference to
Notes to Form No. 3CD. These notes did not mainly contain the qualifications but also contain general
additional information.
As per the Guidance Note (paragraphs mentioned above) only qualifications/ observations should be
reported in the space provided in the form No. 3CA/3CB itself while the additional information which are
not in the nature of qualification could be attached as notes.
7. Tax Audit and UDIN
While issuing the tax audit report under section 44AB of the Income tax Act, 1961, the Auditor should
generate appropriate UDIN and refer the same in its Report. For detailed Frequently Asked Questions (FAQs)
on UDIN kindly refer: https://udin.icai.org/faqs
8. Code of Ethics
A member of the Institute in practice shall not accept, in a financial year, more than the “specified number of
tax audit assignments” under Section 44AB of the Income Tax Act, 1961. For details the Tax Auditor may
refer to Chapter VI Tax Audit Assignments under Section 44 AB of the Income Tax Act, 1961 in Volume-II of
Code of Ethics 2020 at: https://resource.cdn.icai.org/60018code-of-ethics-2020vol2.pdf
X-X-X
CHECKLIST FOR TAX AUDIT U/S 44AB OF THE INCOME TAX ACT, 1961
Sr. No. Clause Reference to the Particulars Yes No NA Remarks Document/ File
GN on tax Audit / Reference
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1. 1 17.1 Name of the assesse
(i) Whether name of the assessee Permanent
whose accounts are being File
audited under section 44AB
has been reported?
(ii) If the tax audit is in respect of a Permanent
branch, whether name of such File
branch has been mentioned
along with the name of the
assessee?
2. 2 17.2 Address
(i) Whether the address reported Permanent
under this clause is same as File
has been communicated by the
assessee to the Income-tax
Department for assessment
purposes or that of the principal
place of business?
(ii) Whether addresses of all the Permanent
branches have been obtained File
and reported?
(iii) Whether the address Permanent
mentioned tallies with the File +
address mentioned in PAN? If Current year
not, whether address change File
application filed?
3. 3 17.3 Permanent Account

Number/Aadhaar
(i) Whether the permanent Permanent

account number (PAN) as File
allotted to the assessee has
been indicated?
(ii) Where the assessee (being Permanent
individual) does not have PAN, File
whether the AADHAAR no. has
been mentioned?
4. 4 17.4 to 17.8 GN Whether the assessee is liable

to pay indirect tax like excise
duty, service tax, sales tax,
goods and services tax,
customs duty, etc. If yes,
please furnish the registration
number or GST number or any
other identification number
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allotted for the same.
(i) 4 Cont. Pg.3-4 Imp. Whether the auditor has Permanent

Guide obtained from the assesse File
details of all indirect tax’s
registration (applicable to the
assessee)?
GST
VAT
Sales Tax
Excise
Local Entry Tax
Others (Specify)
(ii) Where an assessee has Permanent
multiple GSTIN numbers, being File
registered under different
states as well as under Central
GST, whether all the GSTIN
numbers allotted to the
assessee have been
mentioned?
5. 5 17.9 Status
(i) Whether the correct status of -
the assesse as included in the
definition of “person” in section
2 (31) of the Act is mentioned?
6. 6 17.10 Previous Year

(i) Since the previous year under -
the Act now uniformly begins
on 1st April and ends on 31st
March, whether the relevant
previous year is mentioned?
(ii) In case of amalgamations, Permanent
demergers, conversions, File
reconstitution, new business,
closure of existing business
etc. the date of beginning/
ending of the previous year
may be different, whether the
auditor accordingly mentions
the relevant date of beginning
and ending of the previous year
in this clause?
7. 7 17.11 Assessment Year

(i) Whether the assessment year -
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relevant to the previous year
for which the accounts are
being audited has been
mentioned?
8. 8 17.12 Indicate the relevant clause of

section 44AB under which the
audit has been conducted
(i) Check whether the relevant -
clause of 44AB has been
reported or not?
(ii) In the case where audit is -
being conducted in any other
law, whether “ Third proviso to
sec 44AB” is considered while
reporting under this clause?
(a) Whether the assessee has
opted for taxation under section
115BA/115BAA/115BAB?*
*Inserted vide CBDT
Notification No. 82/2020 dated
01.10.2020 from AY 2020-21
(iii) Check whether the assesse is Permanent
a company. File
(iv) If yes, whether the company Permanent
has opted for taxation regime File
under section 115BA/ 115BAA/
115BAB and report
accordingly?
(v) If yes, whether the copy of Permanent
Form 10-IB / 10-IC /10-ID filed File +
online has been obtained from Current year
the assessee? File
9. 9 18.1 to 18.6 (a) If firm or Association of

Persons, indicate names of
partners/members and their
profit sharing ratios.
In case of AOP, whether

shares of members are
indeterminate or unknown?
(i) Whether the tax auditor has Permanent
obtained certified copies of the File
deeds, agreement (in case of
LLP), documents,
understanding, notice of
changes etc. including certified
copies of the acknowledgment,
if any?
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Implementation
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(ii) 9 Cont. Whether the names of partners -
of the firm or members of the
association of persons or body
of individuals and their profit (or
loss) sharing ratios (%) have
been stated?
(iii) 9 Cont. Where the partner of a firm or -

the member of AOP/ BOI acts
in a representative capacity,
whether the name of the
beneficial partner/member has
been stated?
(iv) In certain cases of association -
of persons or body of
individuals, where it is possible
that the shares of the members
are not precisely ascertainable
during the previous year
resulting in a situation whereby
the shares of the members are
indeterminate or unknown. In
such circumstances, whether
the relevant fact has been
stated?
(b) If there is any change in the
partners or members or in their
profit sharing ratio since the
last date of the preceding year,
the particulars of such change.
(v) Whether the particulars of all Permanent
the changes occurred during File
the entire previous year relating
to partners of the firm or
members of the association of
persons/ body of individuals or
their profit or loss sharing ratio
since the last date of the
preceding year have been
stated?
(vi) Whether the tax auditor has Permanent
obtained latest certified copies File
of the deeds, agreement (in
case of LLP), documents,
understanding, notice of
changes etc. including certified
copies of the acknowledgment,
if any?
10. 10 19.1 to 19.6 of 10(a) Nature of business or

GN profession (if more than one
Implementation
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business or profession is
carried on during the previous
year, nature of every business
or profession)
(i) 10 Cont. Pg. 4 to 8 (Impl. In regard to the nature of Permanent
Guide) business, whether the principal File+ Current
line of each business is year File
determined and stated in this
clause along with relevant
code?
10 cont. 10(b) If there is any change in

the nature of business or
profession, the particulars of
such change.
(ii) Whether the tax auditor has Permanent
obtained a declaration from the File
assessee regarding change in
the nature of business, if any?
11. 11 20.1 to 20.10 (a) Whether books of account

are prescribed under section
44AA, if yes, list of books so
prescribed.
(i) Whether books of account have -

been prescribed for the
assessee under section 44AA?
The list so prescribed should
be stated against this clause.
(b) List of books of account
maintained and the address at
which the books of account are
kept
(In case books of account are

maintained in a computer
system, mention the books of
account generated by such
computer system. If the books
of account are not kept at one
location, please furnish the
addresses of locations along
with the details of books of
account maintained at each
location.)
(c) List of books of account and

nature of relevant documents
examined. [Clause 11(a) to (c)]
(ii) Whether complete list of books Current year
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Implementation
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of account and other file
documents maintained by
assesse have been obtained
along with the address and
examined?
(iii) Whether list of books of Current year
account generated by file
assessee’s computer system
have been obtained?
12. 12 21.1 to 21.9 Whether the profit and loss

account includes any profits
and gains assessable on
presumptive basis, if yes,
indicate the amount and the
relevant sections (44AD,
*44ADA, 44AE, **44AF, 44B,
44BB, 44BBA, 44BBB, Chapter
XII-G, First Schedule or any
other relevant section).
* To be included once included
in the notified form
** To be deleted once deleted
from the notified form
(i) Whether assessee has opted Current year
for any presumptive Taxation file
Scheme as per section referred
in above clause?
If yes, whether the amount and
the section have been
obtained?
(ii) Whether such profits and gains -
(as per scheme) have been
included in the profit and loss
account?
13. 13 22.1 to 22.10 (a) Method of accounting

employed in the previous year
(i) Whether the method of -
accounting employed in the
previous year under audit is
cash/mercantile is ascertained?
(ii) Whether any management Current year
letter has been received in this file
regard?
(b) - Whether any change in the

method of accounting
(iii) Whether ascertained any Current year
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change in the method of file
accounting employed by the
assessee? If yes, whether the
same been reported?
(c) - Effect of change in method

of accounting
(iv) If yes in clause 13(b), whether -
the details of change in the
method of accounting
reported?
- Details of such change; and -
13 Cont. - The effect thereof on the -
profit or loss.
13 Cont. Refer TG on (d) - Whether any adjustment is
ICDS required to profit or loss to
comply with the ICDSs notified
u/s 145(2)
(e) If answer to (d) above is in
the affirmative, give details of
such adjustments:
(f) Disclosures as required by
ICDSs
(v) Whether the applicability of Current year
ICDS has been checked? file
(vi) Whether the statement of Current year
adjustments required to profit file
or loss as per P&L in the
tabular format given in clause
13(e) has been obtained?
(vii) In your opinion, for a particular Current year
ICDS, if no adjustment is file
required, whether the
management representation in
this regard has been obtained?
(viii) Whether the accounting -
policies followed by the
assessee have been tested to
see any divergence vis-a-vis
ICDS?
(ix) Whether disclosures as Current year
required by ICDS have been file
given in tabular form in clause
13(f)?
14. 14 23.1 to 23.24 (a) Method of valuation of

closing stock employed in the
previous year.
(i) Whether the procedure -

followed by the assesse for the
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Implementation
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valuation of inventory of closing
stock in respect of every item
has been checked and verified
(like raw material, WIP, finished
goods, etc)?
(b) Details of deviation, if any,
from the method of valuation
prescribed under section 145A,
and the effect thereof on the
profit or loss, please furnish:
(ii) 14 Cont. Whether there has been any Current year

change in the method of file
valuation from the method as
prescribed under section
145A?
(iii) 14 Cont. Whether the adjustments in Current year

effect of difference between file
generally accepted accounting
principles and section 145A
has been made only in the
statement of computation of
total income accompanying the
return and not been made in
the books of account has been
verified?
(iv) Whether deviation, if any, from Current year
from the method of valuation file
prescribed under section 145A
has been ascertained and its
impact on profit and loss has
been reported?
(v) Whether adjustments under Current year
section 145A have been made file
in all cases where “exclusive
method” is followed?
15. 15 24.1 to 24.12 Give the following particulars of

the capital asset converted into
stock-in-trade:
(a) Description of capital asset;
(i) Whether details of all capital Current year

assets converted into stock-in- file
trade has been obtained and
checked?
(b) Date of acquisition
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(ii) Whether the tax auditor has -
ascertained the correct date of
acquisition from the records of
the financial year in which the
asset was acquired and stated
the same against sub-clause
(b)?
(c) Cost of acquisition
(iii) Whether the original costs of -

acquisition as per books of
account have been reported?
(d) Amount at which the asset
is converted into stock-in-trade
(iv) 15 Cont. Whether the amount recorded -

in books of account in respect
of the converted asset is stated
under this clause?
(v) 15 Cont. Whether the necessary -

accounting entries have been
passed in the books of account
at the time of conversion or
treatment of capital asset into
stock-in-trade?
16. 16 25.1 to 25.3 Amounts not credited to the

profit and loss account, being,-
(a) the items falling within the
scope of section 28
(i) Whether a management letter Current year
with regard to the amount of file
income falling under the scope
of section 28 and not credited
to profit and loss account has
been obtained?
(ii) Whether income as reflected in Current year
Form No. 26AS is fully file
accounted for or reconciled for
in Profit and Loss account? In
case of items appearing in
Form 26AS does not belong to
the assessee, whether the
necessary representation in
this regard has been obtained?
25.4 to 25.7 (b) the proforma credits,
drawbacks, refund of duty of
customs or excise or service
tax, or refund of sales tax or
value added tax, where such
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credits, drawbacks or refunds
are admitted as due by the
authorities concerned
(iii) Whether all relevant -
correspondence, records and
evidence have been examined
in order to determine that any
particular refund/claim has
been admitted as due and
accepted during the relevant
financial year?
(iv) Whether Management Current year
representation has been file
obtained in this regard?
25.8 to 25.9 (c) escalation claims accepted
during the previous year
(v) 16 Cont. Whether there is any escalation -
claim made/ accepted during
the year has been checked and
reported accordingly?
16 Cont. 25.10 to 25.11 (d) any other item of income

(vi) Whether any management Current year
letter has been obtained to the file
effect of any other income not
credited to profit and loss
account?
25.12 to 25.15 (e) capital receipt, if any
(vii) Where auditor finds that certain Current year
income (e.g. income referred to file
in section 41(1)) has not been
credited to profit and loss
account, whether the
particulars of the same along
with the amount have been
reported under this clause?
17. 17 26.1 to 26.7 Where any land or building or

both is transferred during the
previous year for a
consideration less than value
adopted or assessed or
assessable by any authority of
a State Government referred to
in section 43CA or 50C, please
furnish:
(i) Whether the assesse has -
transferred any land or building
or both during the year under
consideration?
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(ii) Whether the copy of registered Current year
sale deed has been obtained? file
(iii) Whether the consideration -
shown in the registered sale
deed is in accordance with the
provisions of section 43CA or
50C?
18. 18 27.1 to 27.23 Particulars of depreciation

allowable as per the Income-
tax Act, 1961 in respect of each
asset or block of assets, as the
case may be, in the following
form:-
(a) Description of asset/block of
assets.
(b) Rate of depreciation.
(i) 18 Cont. Whether the reconciliation has Current year
been obtained in respect of file
addition to fixed assets of the
preceding year as per books
and as per Income tax Act,
1961?
(ii) 18 Cont. Whether the list of additions/ Current year

deletions made during the year file
has been obtained?
(iii) Whether management Current year
representation letter has been file
obtained in respect of the
additions of assets which have
been put to use during the
year?
(iv) Whether bifurcation has been Current year
made and verified in respect of file
purchases made during of the
year for a period of less than
180 days from the end of the
financial year?
(v) Whether the classification of -
asset into Tangible and
Intangible Assets and its
addition to an appropriate block
as per the rate of depreciation
has been checked, verified,
and made in consonance with
legal principles?
(vi) Whether suitable disclosure -
depending upon the facts and
circumstances of the earlier
disputes between the assessee
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and the Department regarding
classification, rate of
depreciation etc. has been
given?
(c) Actual cost or written down
value, as the case may be
(ca) Adjustment made to the

written down value under
section 115BAA (for
assessment year 2020-21
only)*
(cb) Adjusted written down

value*
*Inserted Vide CBDT

01.10.2020 from AY 2020-21
(vii) 18 Cont. Check whether the assessee Permanent

company has opted for special File
taxation under section 115BAA
during the AY 2020-21? If yes,
calculate the adjusted WDV
and report.
18 Cont. (d) Additions/deductions during

the year with dates; in the case
of any addition of an asset,
date put to use; including
adjustments on account of –
(i) Central Value Added Tax
credits claimed and allowed
under the Central Excise Rules,
1944, in respect of assets
acquired on or after 1st March,
1994,
(viii) Whether details of additions Current year
(purchases/ acquisitions) and file
deductions (sale, scrapping
etc.) during the year have been
obtained?
(ix) Whether these details have -
been verified with records and
documentary evidence such as
supplier's invoice, purchase
order, sale bill etc.?
(x) Whether a certificate has been Current year
obtained from technical person file
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regarding the dates when
assets acquired during the year
were put to use?
(xi) Whether verified that cashless Current year
mode of payment is adopted file
where expenditure for
acquisition of an asset involves
payment of Rs. 10,000 or more
to a person in a day?
(xii) Whether it is verified with -
respect to input tax claimed in
returns that the amount of input
tax credit is deducted from cost
of capital goods claimed as
addition during the year under
Income tax schedule?
(xiii) Whether the amount of credit -
claimed and allowed and
reported under this clause has
been cross checked with the
data furnished in clause 27(a)
of Form No. 3CD?
(ii) change in rate of exchange
of currency
(xiv) 18 Cont. Whether the adjustments to the Current year
cost of fixed assets on account file
of changes in the rate of
18 Cont. exchange of currency in the
schedule of fixed assets
prepared for computation of
depreciation as per Income-tax
Rules are in accordance with
the provisions of section 43A?
(xv) Whether a reconciliation Current year
statement has been prepared file
for any different treatment
followed for difference of
currency exchange for the
purpose of books of account as
per applicable accounting
treatment under Accounting
Standards?
(iii) subsidy or grant or
reimbursement, by whatever
name called
(xvi) Whether the provisions of -
section 43(1) have been
followed in deducting subsidy
or grant or reimbursement from
the cost of asset?
(e) Depreciation allowable.
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(f) Written down value at the
end of the year.
(xvii) Whether the depreciation and Current year
additional depreciation (if any) file
calculated as per the
Depreciation rates under the
Income tax Act has been
checked?
19. 19 28.1 to 28.8 GN Amounts admissible under

sections:
Pg.4 to8 (Impl. Section 32AC - Investment in
Guide) new Plant & Machinery
(i) No amount is admissible w.e.f. -
AY 2018-19
Section 32AD - Investment in
new plant and machinery in
notified backward areas in
certain states.
(ii) Check whether there is a new Current year
investment in plant and file
machinery?
(iii) 19 Cont. If yes, whether management Current year
letter has been obtained with file
regard to investment made in
the notified backward area?
(iv) 19 Cont. Check whether all the -

conditions for deduction under
the relevant section are
satisfied?
(v) Check whether the assessee Current year
has obtained a separate audit file
report for claiming such
exemption (if any).
Section 33AB - Tea
development account, coffee
development account and
rubber development account.
(vi) Whether the Assessee is -
engaged in business of growing
and manufacturing tea or
coffee or rubber in India?
(vii) If yes, whether management Current year
regard to the deposited amount
in the NABARD or Tea
Board/Coffee Board/Rubber
Board in accordance with and
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for the purpose as specified in
the scheme?
(viii) Check whether all the -
satisfied?
(ix) Check whether the assessee Current year
exemption (if any).
Section 33ABA- Site
Restoration Fund
(x) Whether the assessee has Current year
entered into an agreement with file
the Government, for
prospecting, or extraction or
production of petroleum or
natural gas or both?
(xi) If yes, whether management Current year
regard to the deposited amount
in the special account or site
restoration account and for the
purpose of the specified
scheme?
(xii) Check whether all the -
satisfied?
(xiii) 19 Cont. Check whether the assessee Current year
exemption (if any)?
19 Cont. Section 35(1)(i) - Expenditure

on Scientific Research
(xiv) Whether the assessee has Current year
incurred expenditure on file
scientific research (not be in
the nature of capital
expenditure) related to the
business?
(xv) Whether any such expenditure Permanent
has been incurred as per File
Explanation to sub-section (1)
before the commencement of
business?
(xvi) Whether the certificate has Permanent
been obtained from the Director File
General (Income Tax
Exemptions) in concurrence
CHECKLIST 19
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
with the Secretary, Department
of Scientific and Industrial
Research, Government of
India?
(xvii) Section 35(1) (ii)-Whether the -
assessee has been paid any
amount to the research
association?
(xviii) If yes, whether management Current year
regard to the same?
(xix) Check whether all the -
satisfied?
(xx) Section 35(1) (iia)- Whether the -
sum paid to a company to be
used by it for scientific
research?
(xxi) If yes, whether management Current year
regard to the same?
(xxii) Check whether all the -
satisfied?
(xxiii) Section 35(1) (iii)-Whether the -
sum paid to a research
association which has as its
object the undertaking or
research in social science or
statistical research or to a
university?
(xxiv) If yes, whether management Current year
regard to the same?
(xxv) 19 Cont. Check whether all the -
satisfied?
(xxvi) 19 Cont. Section 35(1)(iv)- Whether the -
assessee has incurred
expenditure of capital nature on
scientific research? If yes, the
deduction shall be allowed as
per the provisions of sub-
section (2).
(xxvii) Section 35(2AA)- Whether the -
assessee has paid any sum to
national laboratory or university
or IIT under this section with
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
specific direction for the use of
such sum?
(xxviii) If yes, whether management Current year
regard to the same?
(xxix) Check whether all the -
satisfied?
(xxx) Section 35(2AB)- Whether the -
company is engaged in the
business of bio-technology or
in any business of manufacture
of article or things?
(xxxi) If yes, whether the assessee -
has incurred expenditure on
scientific research towards
inhouse research as approved
by the Secretary, Department
of Scientific and Industrial
Research, Government of
India?
(xxxii) If yes, whether management Current year
regard to the same?
(xxxiii) Check whether all the -
satisfied?
Section 35ABB - Expenditure
for obtaining license to operate
telecommunication services
(xxxiv) Whether the assessee is in the Permanent
operation of telecommunication File
services?
(xxxv) If yes, whether the assessee -
has incurred any capital
expenditure for acquiring right
to operate telecommunication
services?
(xxxvi) 19 Cont. If yes, whether management Current year
regard to the same?
(xxxvii) 19 Cont. Check whether all the -

satisfied?
Section 35AC -Expenditure on
eligible projects and schemes.
CHECKLIST 21
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Guide/ TG on
ICDS (Para No./
Page No.)
(Not applicable from 1 st April -
2018.)
Section 35AD - Deduction in
respect of expenditure on
specified business.
(xxxviii) Whether the expenses incurred -

is of capital nature?
(xxxix) If yes, whether the expenses -
incurred are wholly and
exclusively for the purpose of
specified business as given in
sub-section (8) (a)?
(xl) Whether the expenditure -
incurred prior to its operation?
(xli) If yes, whether the amount is -
capitalized in the books of
accounts of the assessee as on
the date of commencement of
its operations?
(xlii) If yes, whether management Current year
regard to the same?
(xliii) Check whether all the -
satisfied?
Section 35CCA -Expenditure by
way of payment to association
and institution for carrying out
rural development programme.
(xliv) Whether the assessee has -

incurred expenditure by way of
payment to association or
institution as specified in sub-
section (1)?
(xlv) Whether the assessee has Current year
obtained the certificate from the file
association or institution as per
sub-section (2), (2A) or (2B) as
the case may be?
(xlvi) 19 Cont. Check whether all the -
satisfied?
19 Cont. Section 35CCB - Expenditure

by way of payment to
association and institutions for
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
carrying out programmes of
conservation of Natural
resources.
(xlvii) Whether the assessee has -
incurred expenditure by
payment to an Association of
institution which is undertaking
a programme on natural
resources or for afforestation
as notified by Central
Government?
(xlviii) If yes, whether management Current year
regard to the same?
(xlix) Check whether all the -
satisfied?
Section 35CCC - Expenditure
on agricultural extension
project.
(l) Whether the assessee has -
incurred an expenditure on
agriculture extension project as
notified by NOTIFICATION NO.
15/2015 [F. NO.
203/30/2014/ITA.II], DATED
16-2-2015?
(li) If yes, whether management Current year
regard to the same?
(lii) Check whether all the -
satisfied?
Section 35CCD- Expenditure
on skill development project.
(liii) Whether the assessee has -
incurred an expenditure on skill
development project as notified
in accordance with the
guidelines a prescribed in Rule
6AAF to Rule 6AAH?
(liv) If yes, whether management Current year
regard to the same?
(lv) 19 Cont. Check whether all the -

satisfied?
CHECKLIST 23
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Guide/ TG on
ICDS (Para No./
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19 Cont. Section 35D- Amortisation of

certain preliminary expenses.
(lvi) Whether the assessee is an -
Indian Company? If yes,
whether the expenses incurred
by the assessee before the
commencement of business or
after the commencement, in
connection with extension or
setting up of an undertaking?
(lvii) If yes, whether management Current year
regard to the same?
(lviii) Check whether all the -
satisfied?
Section 35DD - Amortisation of
expenditure in case of
amalgamation or demerger.
(lix) Whether the assessee is an -
Indian company? If yes,
by the company is wholly and
exclusively for the purpose of
amalgamation or demerger?
(lx) Whether management letter Current year
has been obtained with regard file
to the same?
(lxi) Check whether all the -
satisfied?
Section 35DDA- Amortisation
of expenditure under voluntary
retirement scheme.
(lxii) Whether the expenses incurred -

by the company are related to
payment of any sum to an
employee in connection with
his voluntary retirement?
(lxiii) Whether the assessee has Current year
claimed any deduction under file
this section? If yes, check
whether the same has not been
claimed as deduction under
any other provision of this Act
in respect of such expenditure?
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
(lxiv) 19 Cont. Section 35E - Deduction for
expenditure on prospecting etc.
for certain minerals.
(lxv) 19 Cont. Whether the assessee is an -

Indian Company or a person
other than company who is
resident of India? If yes, check
by the assessee are in relation
to prospecting for, or extraction
or production of any minerals?
(lxvi) If yes, whether management Current year
regard to the same?
(lxvii) Check whether all the -
satisfied?
20. 20 29.1 to 29.7 (a) Any sum paid to an

employee as bonus or
commission for services
rendered, where such sum was
otherwise payable to him as
profits or dividend. (Section 36
(1)(ii))
(i) Whether the detail of Current year

commission or bonus paid/ file
payable during the year has
been obtained?
(ii) Whether such -
commission/bonus includes
commission paid/payable to
employee(s)?
(iii) If yes, whether such -
commission/bonus was paid/
payable to the employee in
terms of employment
agreement or it is paid/ payable
to him as profits or dividends?
If yes, Report accordingly.
(b) Details of contributions
received from employees for
various funds as referred to in
section 36(1)(va):
(iv) Whether the assessee has -

made any deduction from the
salaries/wages paid to
CHECKLIST 25
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
employees for the purpose of
any fund or funds as specified
under section 36(1)(va)?
(v) 20 Cont. If yes, whether the list of such Current year
funds has been obtained? After file
verification, report accordingly.
(vi) 20 Cont. Whether copies of evidences Current year

i.e. challans etc. have been file
obtained for record purposes?
21. 21 30.1 to 30.27 (a) Please furnish the details of

amounts debited to the profit
and loss account, being in the
nature of capital, personal,
advertisement expenditure etc.
i) Capital Expenditure:
(i) Check whether a management Current year

obtained mentioning the details
of any capital expenditure /
expenditure incurred on
installation or acquisition of
capital asset has been charged
to P& L account/ Manufacturing
account/ Trading account/
Income and expenditure
account? If yes, report
accordingly.
ii) Personal Expenditure:
(ii) Whether all expenditure heads -

of Trading/Manufacturing, P&L
or I&E account (including
purchase account) have been
examined to check any
Personal expense has been
charged/ debited to it? If yes,
report accordingly.
iii) Advertisement expenditure
in any souvenir, brochure, tract,
pamphlet or the like published
by a political party:
(iii) Whether all expenditure heads -

of P&L or I&E account has
been examined to verify if any
advertisement expenditure in
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
any souvenir, brochure, tract,
pamphlet or the like published
by a political party has been
charged/debited to it? If yes,
report accordingly.
21 Cont. iv) Expenditure incurred at
clubs being entrance fees and
Subscriptions:
(iv) 21 Cont. Whether all expenditure heads -

expenditure is incurred at clubs
being cost for entrance fees
and subscriptions? If yes,
report accordingly.
v) Expenditure incurred at
clubs being cost for club
services and facilities used:
(v) Whether all expenditure heads -
expenditure is incurred at clubs
being cost for club services and
facilities used? If yes, report
accordingly.
vi) Expenditure by way of
penalty or fine for violation of
any law for the time being
force:
(vi) Whether all expenditure heads -
of P&L or I&E account have
expenditure by way of penalty
or fine for violation of any law
for the time being in force has
been charged/debited to it? If
yes, report accordingly.
(vii) Whether all the orders/notices Current year
received during the year under file
consideration under various
laws like FEMA, GST, Custom
and Excise etc. have been
verified?
(viii) Whether electronic cash ledger Current year
of GST Portal for payment of file
any fine or penalty has been
verified?
(ix) Whether TDS returns/ Traces Current year
portal/ Form No. 26AS for any file
fine/penalty have been
CHECKLIST 27
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
verified?
vii) Expenditure by way of any
other penalty or fine not
covered above:
(x) 21 Cont. Whether all expenditure heads -
expenditure by way of any
other penalty or fine not
covered above has been
charged/debited to them? If
(xi) 21 Cont. Whether list of pending Current year

litigations has been obtained file
from the management?
(xii) Whether all the orders/notices Current year
received during the year under file
consideration issued by any
court or any other forum have
been obtained?
viii) Expenditure incurred for
any purpose which is an
offence or which is prohibited
by law:
(xiii) Whether all expenditure heads -
expenditure is incurred for any
purpose which is an offence or
which is prohibited by law? If
(xiv) Whether the necessary Current year
documents in this regard have file
been obtained?
31.1 to 31.18 21 (b) Amounts inadmissible
under section 40(a):-
(i)-as payment to non-resident
referred to in sub-clause (i)
(xv) Whether any payment of -
interest, royalty and fee for
technical services or any other
sum chargeable under Income
Tax Act, 1961 (other than
salary) is paid/ payable outside
India to any person or to non-
resident/ foreign company in
India?
(xvi) If yes, whether TDS has been Current year
deducted on said payments as file
per chapter XVII-B of Income
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
Tax Act, 1961?
(xvii) Whether TDS deducted has Current year
been paid on said payments as file
per chapter XVII-B of Income
Tax Act, 1961?
(xviii) Whether Form no. 15CA/15CB Current year
filed during the year has been file
obtained?
(xix) Whether TDS challans and Current year
TDS returns in form no. 26Q file
and form no. 27Q has been
obtained?
(xx) 21 Cont. Whether TDS payable account Current year
has been verified from the file
books of account and
reconciled with TDS challans
and returns?
21 Cont. (ii) -as payment referred to in
sub-clause (ia)
(xxi) Whether TDS challans, TDS Current year
returns, and Form 26AS has file
been obtained?
(xxii) Check whether there has been -
any sum paid / payable to a
resident on which tax is
deductible, but no tax has been
deducted and if deducted, has
not been paid on or before due
date as section 139(1)? If yes,
report accordingly.
(xxiii) In case, if TDS not deducted or Current year
after deduction not deposited, file
then whether assessee has
obtained Form 26A along with
annexure A (CA certificate)
from the recipient? If yes,
report accordingly.
(iii)- under sub-clause (ic)
[Wherever applicable]
(xxiv) Whether any old demand of -
FBT has been paid during the
year? If yes, report accordingly.
(iv) -under sub-clause (iia)
(xxv) Whether any old demand of Current year
wealth tax has been paid file
during the year? If yes, report
accordingly.
(v)- under sub-clause (iib)
(xxvi) Check whether assessee is a -
State Government
Undertaking?
CHECKLIST 29
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Guide/ TG on
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Page No.)
(xxvii) Whether such State Current year
Government undertaking has file
paid any royalty, license fee,
service fee, privilege fee,
service charge or any other fee
or charge to State
Government? If yes, report
accordingly.
(vi) -under sub-clause (iii)
(xxviii) Whether the assessee has paid -
any sum chargeable under the
head salary to any person
outside India or to any non-
resident?
(xxix) 21 Cont. If yes, whether the TDS under Current year
chapter XVII-B has been file
deducted and paid?
21 Cont. (vii) -under sub-clause (iv)
(xxx) Whether the assessee has Permanent

established a provident fund or File
any other fund for the benefit of
its employees?
(xxxi) Whether the assessee has -
appointed any person
responsible for deduction of tax
at source from any payments
made from the fund which are
chargeable to tax under the
head salaries?
(xxxii) Whether the assessee has Current year
made any payments from the file
funds which are chargeable to
tax under the head salaries
during the year and tax has
actually been deducted at
source?
(viii)- under sub-clause (v)
(xxxiii) Whether the assessee has paid -

and debited the P&L/I&E
account, on account of any
income tax on non-monetary
perquisites accrued to
employees during the year as
referred to in section
10(10CC)? If yes, report
accordingly.
32.1 to 32.9 21(c) Amounts debited to profit
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
and loss account being,
interest, salary, bonus,
commission or remuneration
inadmissible under section
40(b)/40(ba) and computation
thereof;
(xxxiv) Whether the latest duly Permanent

attested copy of partnership file
deed applicable to related
financial year has been
obtained?
Whether the clauses of -
interest, salary, bonus,
commission or remuneration in
the partnership deed has been
checked & verified?
(xxxv) 21 Cont. Check whether such payments -
are allowable under the Income
tax Act, 1961? If not, report
accordingly.
(xxxvi) 21 Cont. Whether any interest, salary, Current year

bonus, commission or File
remuneration has been paid to
member in representative
capacity and charged to
P&L/I&E account of an
assessee being AOP/ BOI? If
33.1 to 33.6 21(d) Disallowance/deemed
income under section 40A(3):
(xxxvii) (A) Check whether there is any -
payment or aggregate
payments for any expenditure
to a person by mode otherwise
than by account payee cheque
or bank draft or through other
such electronic mode in excess
of Rs. 10,000/- (or Rs. 35,000/-
in case of transportation), in a
day?
(xxxviii) If yes, check whether such -
payments are falling under
Rule 6DD?
(xxxix) If such payments are not falling -
under rule 6DD, the same are
not deductible and whether the
same has been reported?
(xl) Where the payments in excess Current year
of Rs. 10,000/- (or Rs. 35,000/- file
in case of transportation), has
CHECKLIST 31
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
been made by account payee
cheque or draft or through
electronic mode, whether the
same has been verified with
available evidence?
(xli) Where the reporting has been -
done on the basis of the
certificate of the assessee,
whether the fact has been
reported as an observation in
clause (3) of Form No. 3CA
and clause (5) of Form
No.3CB, as the case may be?
(xlii) 21 Cont. (B) Check whether there is any -
payment or aggregate
payments for any liability
incurred during any earlier
previous year, as referred to in
section 40A(3A) were made
otherwise than by account
payee cheque or bank draft or
through other such electronic
mode in excess of Rs. 10,000/-
(or Rs. 35,000/- in case of
transportation), in a day?
(xliii) 21 Cont. If yes, check whether such -
payments are falling under
Rule 6DD?
(xliv) Where the payments in excess Current year
of Rs. 10,000/- (or Rs. 35,000/- file
in case of transportation), has
been made by account payee
cheque or draft or through
electronic mode, whether the
same has been verified with
available evidence?
(xlv) Whether certificate from the Current year
assessee to the effect that the file
payments for expenditure
referred to in section 40A(3)
and section 40A(3A) were
made by account payee
cheque drawn on a bank or
account payee bank draft, as
the case may be has been
obtained?
(xlvi) Where the reporting has been -
done on the basis of the
certificate of the assessee,
whether the fact has been
reported as an observation in
clause (3) of Form No. 3CA
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ICDS (Para No./
Page No.)
and clause (5) of Form
No.3CB, as the case may be?
34.1 to 34.3 21(e) Provision for payment of
gratuity not allowable under
section 40A(7);
(xlvii) Whether the assessee has -
made provision for the purpose
of payment to any contribution
towards approved gratuity
fund?
(xlviii) Whether order of the Permanent
Commissioner of Income-tax File
granting approval to the
gratuity fund has been obtained
and its validity has been
examined?
(xlix) Whether the assessee has -
made any provision (other than
referred above i.e. approved
fund) for payment of gratuity to
its employees during the year
and charged in P&L/I&E
account?
(l) 21 Cont. If yes, whether the same has -
been reported under this clause
(except those provision which
has actually become payable
during the year)?
21 Cont. 35.1 to 35.2 21 (f) Any sum paid by the
assessee as an employer not
allowable under section 40A(9);
(li) Whether the assessee has paid Current year
any sum by way of setting up or file
formation of or a contribution to
any fund, trust, company, AOP,
BOI, Society or other
institution?
(lii) Whether such sum paid is -
covered under the provisions of
clauses (iv), (iva) or (v) of
section 36(1)?
(liii) If no, whether the same has -
been reported as not
allowable?
361.1 to 36.3 21(g) Particulars of any liability
of a contingent nature;
(liv) Whether assessee has debited Current year
the P&L/I&E account for any file
liability of contingent nature?
(lv) Whether the accounting -
policies followed and disclosed
CHECKLIST 33
Implementation
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ICDS (Para No./
Page No.)
in financials has been
examined for ascertaining and
verifying details?
37.1 to 37.12 21 (h) Amount of deduction
inadmissible in terms of section
14A in respect of the
expenditure incurred in relation
to income which does not form
part of the total income;
(lvi) Whether the assessee has any -
income which does not form
part of total income (i.e. exempt
income)?
(lvii) If yes, whether the assessee Current year
has debited the P&L/I&E file
account with the expenditure in
relation to earning the income
which does not form part of
total income?
(lviii) Whether amount of -
inadmissible expenditure as
estimated by the assessee with
reference to established
principles of allocation of
expenditure based on logical
parameters, has been verified?
(lix) 21 Cont. If yes, whether the expenditure -
so debited to P&L/I&E has
been disallowed?
(lx) 21 Cont. Whether Management Current year
Representation has been file
obtained in this regard in
accordance with Standard on
Auditing (SA) 580, Written
Representations?
38.1 to 38.7 21(i) Amount inadmissible
under the proviso to section
36(1)(iii)
(lxi) Whether the assessee has paid -
any interest on borrowed
capital for acquisition of an
asset or for extension of
existing business or profession
(whether capitalized in the
books of account or not)?
(lxii) If yes, whether there is time Current year
gap between date of borrowing file
and date of asset being put to
use? If yes, report accordingly.
22. 22 39.1 to 39.11 Amount of interest inadmissible

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ICDS (Para No./
Page No.)
under section 23 of the Micro,
Small and Medium Enterprises
Development Act, 2006.
(i) Whether the assessee is -
obtaining goods or services
from the persons who are
registered as Micro and Small
Enterprises under MSME Act?
(ii) Whether the auditor has Current year
collected the list of suppliers file
registered under MSME Act or
not?
(iii) Whether the auditor has Current year
obtained ageing analysis of file
such suppliers so as to
ascertain the delay in payment
beyond appointed date to
ascertain interest liability?
(iv) Whether the copies of Current year
arrangement from such file
suppliers have been obtained?
(v) Whether the interest amount -
inadmissible under section 23
MSMED Act, 2006 has been
verified from agreements and
account statement? Report
accordingly.
(vi) If no interest is paid/ provided -
in statement of profit and loss,
whether appropriate
qualification has been given?
23. 23 40.1 to 40.4 Particulars of payments made

to persons specified under
section 40A (2)(b).
(i) Check whether the auditor has Current year
obtained the list of all the file
specified persons as
contemplated in this section?
(ii) Check whether assessee has -
incurred any expenditure
(including purchases) as
contemplated in section 40A(2)
(b)? Report accordingly.
(iii) In case of corporate assessee, Current year
whether the copies of the file
Ledger Accounts related to
such parties has been obtained
and examined the same with
AS-18 transactions as reported
in audited financial statements?
CHECKLIST 35
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24. 24 41.1 to 41.5 GN Amounts deemed to be profits

and gains under section 32AC,
32AD, 33AB or 33ABA or 33AC
(i) Pg. 8 to 9 Section 32AC Current year
(Impl. Guide) Whether any asset (Plant & file
Machinery) has been sold
during the year?
(ii) If yes, whether the assessee -
has claimed deduction under
section 32AC in respect of such
asset in preceding five previous
years?
(iii) If yes, whether the amount of -
deduction allowed in preceding
year(s) in respect of such asset
has been reported under this
clause?
(iv) Section 32AD Current year
Whether any asset (Plant & file
Machinery) has been sold
during the year?
(v) If yes, whether the assessee -
has claimed deduction under
section 32AD in preceding five
previous years in respect of
such asset?
(vi) 24 Cont. If yes, whether the amount of -
deduction allowed in preceding
year(s) in respect of such asset
has been reported under this
clause?
(vii) 24 Cont. Section 33AB Permanent

Whether the Assessee is File
engaged in the business of
growing and manufacturing
Tea, Coffee or Rubber in India?
(viii) If yes, whether the Assessee Current year
has claimed deduction under file
section 33AB in earlier years
(by depositing amount in
special account or deposit
account with NABARD or
Tea/Coffer/Rubber board)?
(ix) If yes, whether any amount is Current year
withdrawn during the year, for file
the purposes as specified in
clause (a) and (d) of sub-
section (3) of section 33AB?
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ICDS (Para No./
Page No.)
(x) If yes, whether the amount -
which is relatable to the
deduction claimed earlier has
been reported under this
clause?
(xi) Whether the amount -
released/withdrawn has been
utilized for purchase of assets
specified under clause (a), (b),
(c) or (d) of section 33AB(4)?
(xii) If yes, whether the amount -
clause?
(xiii) Whether any asset is sold -
during the year which was
acquired with the amount
standing in the special
account/deposit account within
preceding eight preceding year
in accordance with the
specified scheme?
(xiv) If yes, whether the amount -
deduction claimed earlier under
section 33AB(1) has been
(xv) Whether there is any amount Current year
which has been released/ file
withdrawn from Special
Account / Deposit account and
remained unutilized?
(xvi) 24 Cont. If yes, whether the amount -
clause?
(xvii) 24 Cont Section 33ABA Permanent
Whether the Assessee is File
engaged in business of
prospecting for or extraction or
production of, petroleum or
natural gas or both in India?
(xviii) If yes, whether the Assessee Current year
has claimed deduction under file
section 33ABA in earlier years
(by depositing amount in
special account)?
(xix) If yes, whether any amount is Current year
withdrawn during the year for file
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the purposes other than
specified in the scheme?
(xx) If yes, whether the amount -
relatable to the deduction
claimed earlier has been
(xxi) Whether the amount -
released/withdrawn has been
utilized for purchase of assets
specified under clause (a), (b),
(c) or (d) of section 33AB(4)?
(xxii) If yes, whether such amount is -
reported under this clause
deduction claimed earlier?
(xxiii) Whether any asset is sold -
during the year which was
acquired with the amount
standing in the special account
within preceding eight
preceding year in accordance
with the specified scheme?
(xxiv) If yes, whether the amount -
deduction claimed earlier under
section 33ABA(1) has been
(xxv) Whether there is any amount Current year
which has been file
released/withdrawn from
Special Account and remained
unutilized?
(xxvi) If yes, whether such amount is -
reported under this clause
deduction claimed earlier?
25. 25 42.1 to 42.9 “Any amount of profit

chargeable to tax under section
41 and computation thereof
Section 41(1)- Recovery
against any Allowance or
Deduction Allowed earlier
(i) Whether a statement of trading Current year
liabilities written back (including file
unilateral act of remission or
cessation of liability) during the
year which was claimed as a
deduction in any earlier
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assessment year has been
obtained?
(ii) If yes, whether any amount or Current year
benefit was received by the file
assessee during the year for
loss or expenditure which was
claimed as allowance or
deduction in tax returns of any
earlier assessment year?
(iii) Check whether the successor Current year
of business has also been file
taxed on the above referred
amount.
Balancing Charge on
sale/discard of Fixed Assets of
an undertaking engaged in
Generation and/or Distribution
of Power
(iv) Section 41(2) Current year
Whether the assessee has sold file
any building, machinery, plant
or furniture used for the
purpose of business and on
which depreciation is claimed
under section 32(1)(i) and any
money payable on the Fixed
Assets sold, discarded,
demolished or destroyed
became due?
(v) Whether the amount of money -
payable in respect of such fixed
assets along with scrap value
in excess of WDV of such fixed
assets subject to maximum of
difference between actual cost
and WDV of such fixed assets
reported?
25 Cont. Profit on sale of capital assets
used in scientific research
(vi) 25 Cont. Section 41(3) -

In case of sale of capital assets
used for scientific research
within the meaning of 35(1)(iv)
or 35(2B)(c) read with section
43(4) report in this clause the
least of the following if assets
was not used for any other
purpose:
(i) Sum total of sale proceeds
of such assets and the amount
CHECKLIST 39
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of deduction allowed under
section 35 in excess of the
capital expenditure;
(ii) (iii) The amount of deduction
allowed under section 35,
(vii) Whether management Current year
representation that such sold file
asset was not used for any
other purposes is obtained?
Recovery out of Bad Debts
allowed earlier as a deduction
(viii) section 41(4) -
Whether assessee has
recovered any bad debt which
was claimed as deduction in
earlier years?
(ix) Whether a statement of Current year
recovery of debts, which were file
earlier allowed as deduction,
for write off as bad debts has
been obtained?
Amount withdrawn from special
reserve
(x) Section 41(4A) Current year
Whether the assessee has file
withdrawn any amount from
special reserve created under
section 36(1)(viii) on which
deduction was allowed in
earlier years?
Adjustment of loss
(xi) Section 41(5) Current year
Whether the assessee has any file
income as mentioned in section
41(1), (3), (4) and (4A) from a
business or profession which is
no longer in existence and for
that business there are
business losses which could
not be set off during the
previous year in which the
business or profession ceased
to exist?
26. 26 46.1 to 43.15- In respect of sum referred to in

GN clause (a),(b),(c), (d), (e), (f) or
Pg.9 to 11- (g) of section 43B, the liability
Impl. Guide for which
A) Pre-existed on the first day
of the Previous year but was
Implementation
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not allowed in the assessment
of any preceding previous year
and was:
a) Paid during the previous
year
b) Not paid during the previous
year
B) Was incurred in the previous
year and was
a) Paid on or before the due
date for furnishing the return of
income of the previous year
under section 139(1);
b) Not paid on or before the
aforesaid date.
(i) Section 26(i)(A)(a)- Whether -

there are any dues pertaining
to clause (a) to (g) of section
43B on the first day of previous
year, which was not allowed in
the assessment for any
preceding previous year?
(Reference can be made to
clause 26(i)(A)(b) and 26 (i)(B)
(b) of the form no. 3CD of last
year)
(ii) Whether any amount is paid Current year
towards such dues during the file
previous year?
(iii) If yes, whether the same has -
been reported in clause 26(i)
(A)(a)?
(iv) Whether proof of payments -
pertaining to above has been
verified?
(v) Section 26(i)(A)(b)-Whether Current year
there are any dues pertaining file
to clause (a), (b), (c), (d), (e),
(f) or (g) of section 43B that
preexisted on first day of the
previous year which are still
pending for payment on the last
day of the previous year?
(vi) 26 Cont. If yes, whether the same have -
been reported in clause 26 (i)
(A)(b)?
(vii) 26 Cont. Section 26(i)(B)(a)- -

Whether there are any dues
pertaining to clause (a), (b), (c),
(d), (e), (f) or (g) of section 43B
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incurred during the previous
year and are due at the last
day of the previous year
(Section wise details to be
checked)?
(viii) If yes, whether the said amount Current year
was paid on or before the due file
date for furnishing the return of
income of the previous year
under section 139(1)?
(ix) If yes, whether same has been -
reported in clause 26(i)(B)(a)?
(x) Whether proof of payments -
pertaining to above taken has
been verified?
(xi) Whether outstanding balances Current year
have been mapped with file
Balance Sheet on the closing
date?
(xii) Section 26(i)(B)(b)- Current year
Whether there are any dues file
pertaining to clause (a), (b), (c),
(d), (e), (f) or (g) of section 43B
which were incurred and due
on the last day of the previous
year, not paid on or before the
due date for furnishing the
return of income of the
previous year under section
139(1)?
(xiii) If yes, whether same has been -
reported in clause 26(i)(B)(b)?
(xiv) Section 26 (ii)-Whether, goods Current year
& service tax, customs duty, file
excise duty or any other
indirect tax, levy, cess, impost
etc. has been passed through
the profits and loss account?
(xv) If yes, whether the same has -
been reported?
27. 27 44.1 to 44.9 Amount of Central Value Added

Tax credits availed of or
utilized during the previous
year and its treatment in the
profit and loss account and
treatment of outstanding
Central Value Added Tax
credits in the accounts.
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27 Cont. (Not applicable after enactment -
of GST Acts. Separate details
are required in clause 44 of
Form 3CD regarding GST)
45.1 to 45.5 Particulars of income or
expenditure of prior period
credited or debited to the profit
and loss account.
(i) Whether assessee is following -

mercantile system of
accounting?
(ii) . If yes, whether any expenditure Current year
or income of any earlier year file
debited or credited to the profit
and loss account of the
relevant previous year?
(iii) If yes, whether the same is -
(iv) In case of company, whether Current year
disclosure of prior period items file
in financial statements has
been tallied?
28. 28 46.1 to 46.6 Whether during the previous

year the assessee has received
any property, being share of a
company not being a company
in which the public are
substantially interested, without
consideration or for inadequate
consideration as referred to in
section 56(2)(viia), if yes,
please furnish the details of the
same.
This clause is not applicable -

from the Assessment year
2018-19. Reporting is required
under clause 29B (a).
29. 29 47.1 to 47.8 Whether during the previous

year the assessee received any
consideration for issue of
shares which exceeds the fair
market value of the shares as
referred to in section 56(2)
(viib), if yes, please furnish the
details of the same.
CHECKLIST 43
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(i) 29 Cont. Whether the assesse is a Current year

company, not being a company file
in which the public are
substantially interested,
receives, in any previous year,
from any person being a
resident, any consideration for
issue of shares that exceeds
the face value of such shares?
(ii) Whether Share capital Permanent
schedule and ROC records File+ Current
such as Forms PAS-3, MGT-14 year File
and MGT-01 have been
obtained and verified?
(iii) Whether the Valuation report Current year
as per Rule 11U/ 11UA has file
been obtained?
30. 29A Pg. 11 to 14 (a) Whether any amount is to

Impl. Guide be included as income
chargeable under the head
'income from other sources' as
referred to in section 56(2)(ix)?
(i) Whether any change in the -
balances of the advances
received against sale of capital
assets has been verified?
(ii) Is there any sum of money Current year
forfeited which is received as file
an advance or otherwise in the
course of negotiations for
transfer of a capital asset?
(iii) Whether the Management Current year
representation letter explaining file
in details of the nature of the
forfeiture has been received?
(iv) 29A(b) If yes, please furnish
the following details: (i) Nature
of income : (ii) Amount thereof:
31. 29B Pg. 14 to 19 (a) Whether any amount is to

Impl. Guide be included as income
chargeable under the head
'income from other sources' as
referred to in section 56(2)(x)?
(i) 29B Whether Assessee is in receipt Current year
Cont. of money other than from the file
relatives (as per section 56(2))
which exceeds Rs. 50,000?
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(ii) 29B Whether there is an addition to Current year

Cont. the immovable properties or file
investments (being immovable
property) in the books of
account? If so, check the mode
of acquisition and consideration
paid. Also, whether the same
has been cross examined with
SFT details in Form 26AS?
(iii) Whether the mode of Current year
acquisition of the assets is file
provided in the exceptions such
as will, gift from relatives, on
occasion of marriage, from
trust registered U/s 12A etc as
mentioned in Fourth Proviso to
Section 56(2)(x)?
(iv) Whether there is any addition Current year
to property being capital asset file
such as shares and securities,
jewellery, archaeological
collections, drawings,
paintings, sculptures, any work
of art or bullion is present in the
books of Accounts?
(v) Whether the necessary Current year
agreement and sale deeds file
have been obtained for
verification?
(vi) Whether the assesee has Current year
disputed the stamp duty file
valuation and report
accordingly?
(vii) Whether the FMV valuation Current year
report as per Rule 11U/11UA file
been obtained in the case of
other assets other than
immovable property?
(viii) Whether the fair value of the -
amount chargeable to tax, if
such money/property received
is in excess of Rs 50,000/- from
the fair value has been
computed? Report accordingly.
(ix) Whether the Management Current year
representation letter explaining file
in detail of all the transactions
relating to receipt of
money/property has been
received?
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32. 30 48.1 to 48.4 Details of any amount

borrowed on hundi or any
amount due thereon (including
interest on the amount
borrowed) repaid, otherwise
than through an account payee
cheque. [Section 69D]
(i) Whether a complete list of Current year
borrowings on Hundi and its file
repayment (including interest)
by the assesse has been
obtained? (Obtain Management
Representation as regards
details & compliance.)
(ii) Whether the loan balances Current year
confirmations has been file
obtained? Also check the bank
book and bank statements.
(iii) Whether the evidence of Current year
acceptance/repayment through file
an account payee cheque has
been obtained?
(iv) In the absence of conclusive or Current year
satisfactory evidence whether file
the auditor has obtained
suitable certificate/
management representation in
this regard?
33. 30A Pg. 20 to 25(a) (a)Whether primary adjustment

Impl. Guide to transfer price, as referred to
in sub-section (1) of section
92CE, has been made during
the previous year?
(b) If yes, please furnish the
following details:
(i) Under which clause of sub-
section (1) of section 92CE
primary adjustment is made?
(ii) Amount (in Rs.) of primary
adjustment:
(i) Whether the primary transfer -

pricing adjustments are in
relation to international
transactions or in respect of
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specified domestic
transactions?
(ii) 30A Whether the amount of primary -
Cont. adjustment made in any
previous year exceeds Rs. 1
crore?
(iii) 30A Whether a certificate from the Current year

Cont. assessee, as to what transfer file
pricing adjustments have been
made in the return/(s) of
income filed during the
previous year has been
obtained?
(iv) Whether any advance pricing Permanent
agreement was entered into File+ Current
during the previous year? year File
(v) Whether any transfer pricing Current year
adjustment was made/ file
confirmed in an assessment
order/appellate authority order
passed during the previous
year?
(vi) Whether any agreement has Permanent
been arrived at under a Mutual File+ Current
Agreement Procedure during year File
the previous year?
(iii) Whether the excess money
available with the associated
enterprise is required to be
repatriated to India as per the
provisions of sub-section (2) of
section 92CE? (Yes/No)
(iv) If yes, whether the excess
money has been repatriated
within the prescribed time
(Yes/No)
(vii) Whether the excess money Current year
received within the prescribed file
time has been verified?
(v) If no, the amount (in Rs.) of
imputed interest income on
such excess money which has
not been repatriated within the
prescribed time:
(viii) Whether the certificates of the Current year
relevant SBI/LIBOR interest file
rates, and the computation of
the imputed interest income
has been obtained from
taxpayer?
CHECKLIST 47
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(ix) Whether correctness of such -
calculation of interest, on the
basis of the certificates
regarding the SBI/LIBOR rates
plus the incremental interest,
as per rule 10CB has been
verified?
(x) 30A Whether the amount of interest Current year
Cont. imputed till the end of the file
previous year has been
furnished?
(xi) 30A In case the interest up to the Current year

Cont. date of filing of the tax audit file
report is given, whether a
break-up of the amount of
interest imputed till end of the
relevant previous year and for
the period post the end of the
relevant previous year ending
with the date of filing tax audit
report has been provided?
(xii) Whether the interest income -
arising from primary adjustment
made in earlier year has been
furnished by the taxpayer to the
tax auditor, and the information
pertaining to such primary
adjustments in respect of
interest income which is
chargeable u/s. 92CE(2) has
been verified and reported?
34. 30B Pg. 26 to 30 (a) Whether the assessee has

Impl. Guide incurred expenditure during the
previous year by way of
interest or of similar nature
exceeding one crore rupees as
referred to in sub-section (1) of
section 94B?
(i) Check whether interest -
expenditure incurred exceeds
Rs. 1 crore? If yes, report
accordingly in part (b) of the
clause.
following details: -
(i) Amount (in Rs.) of
expenditure by way of interest
or of similar nature incurred:
(ii) Whether details of expenditure -
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by way of interest or of similar
nature that needs to be
provided in this sub- clause has
been verified?
(ii) Earnings before interest,
tax, depreciation, and
amortization (EBITDA) during
the previous year (in Rs.)
(iii) 30B Whether while computing the -
Cont. EBITDA, the figures as per the
final audited stand-alone
accounts of the company have
been considered?
30B (iii) Amount (in Rs.) of

Cont. expenditure by way of interest
or of similar nature as per (i)
above which exceeds 30% of
EBITDA as per (ii) above:
(iv) Check whether the EBITDA is -
negative? If yes, the entire
interest and other similar
expenditure as per item (i)
need to be given here.
(iv) Details of interest
expenditure brought forward as
per subsection (4) of section
94B:
(v) Check whether brought forward -
excess interest has been
disallowed in earlier
years(which has not been
allowed as a deduction, and
which is available for deduction
during the year under audit)?
(v) Details of interest
expenditure carried forward as
per subsection (4) of section
94B:
(vi) Check whether there is carried -
forward excess interest? If yes,
report accordingly.
35. 30C (a) Whether the assessee has

entered into an impermissible
avoidance arrangement, as
referred to in section 96, during
the previous year?
(b) If yes, please specify: —

CHECKLIST 49
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(i) Nature of impermissible
avoidance arrangement:
(ii) Amount (in Rs.) of tax

benefit in the previous year
arising, in aggregate, to all the
parties to the arrangement:
This clause is not applicable for

Assessment Year 2020-21 vide
Circular no. 10/2020 dated
24.04.2020.
36. 31 49.1 to 51.6-GN Acceptance/Repayment of

Loan/Deposit / Specified Sum
under Sections 269SS / 269ST
and 269T
(i) Pg. 30 to 41 Check whether there are new -
Impl. Guide acceptance/ repayment of any
Loan/ deposit and transactions
of specified sum during the
year under consideration.
(ii) Whether the complete list of Current year
borrowings and repayments as file
envisaged under Sec.269SS
and 269T & 269ST has been
obtained from the Assessee?
(iii) Whether Certificate/ Current year
Declaration (MRL) obtained file
from the Assessee in respect of
sum exceeding the limit as
specified in the above
sections?
(iv) Whether advance against -
property received or repaid
during the year has been
checked from the Fixed Assets
or investments or stock in trade
& Advance related ledgers?
(v) Check whether the assesse Current year
has received an amount of file
Rs.2 Lakhs or more in
aggregate from a person in a
day or in respect of a single
transaction or in regard to one
event or occasion from a
person in violation of the
provisions of section 269ST? If
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(vi) Whether Loan confirmations Current year
from parties of Secured/ file
Unsecured loans, obtained or
not?
(vii) Whether Auditor has suitably -
commented in his report about
non-availability of evidences, if
circumstances require?
(Suggested comment as per
Guidance Note : “It is not
possible for me/us to verify
whether the receipts/payments
have been accepted/made
otherwise than by an account
payee cheque or an account
payee bank draft, as necessary
evidence is not in the
possession of the assessee”)
37. 32 52.1 to 52.6 (a) Details of brought forward

loss or depreciation allowance,
in the following manner, to the
extent available:
(i) Whether there is any brought -
forward loss or unabsorbed
depreciation allowance?
(ii) If yes, whether the same has Current year
been examined and reconciled file
with previous Income tax return
(ITR), Assessment orders, ITD
website and Form 3CD?
(iii) Whether the management Current year
representation letter/ file
assessment orders/ appeal
orders, if any has been
obtained? Report accordingly.
(iv) Whether there is any loss other -
than Depreciation that cannot
be carried forward for more
than 8 years/ 4 years as the
case may be, has been
checked?
(v) Whether all the conditions -
referred to in section 115BAA
has been fulfilled?*
(vi) Whether there is any amount -
as adjusted by withdrawal of
additional depreciation on
account of opting for taxation
under section 115BAA and
accordingly reported?*
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*Inserted Vide CBDT
01.10.2020 from AY 2020-21
53.1 to 53.5 (b) Whether a change in

shareholding of the company
has taken place in the previous
year due to which the losses
incurred prior to the previous
year cannot be allowed to be
carried forward in terms of
section 79
(vii) Whether the list of Current year
shareholders and Annual report file
of the last year and preceding
year has been obtained?
(viii) 32 Cont. If yes, whether the brought Current year
forward losses not eligible for file
claim are reduced and reported
accordingly?
32 Cont. 54.1 to 54.8 (c) Whether the assessee has

incurred any speculation loss
referred to in section 73 during
the previous year, If yes,
please furnish the details of the
same.
(ix) Check whether there is any Current year

speculation loss in terms of file
section 73? If yes, report
accordingly.
55.1 to 55.4 (d) Whether the assessee has
incurred any loss referred to in
section 73A in respect of any
specified business during the
previous year, if yes, please
furnish details of the same.
(x) Check whether there is any Current year

loss in terms of section 73A? If file
56.1 to 56.3 (e) In case of a company,
please state that whether the
company is deemed to be
carrying on a speculation
business as referred in
explanation to section 73, if
yes, please furnish the details
of speculation loss if any
incurred during the previous
year
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(xi) Is the company, deemed to be -

carrying on any speculation
business as referred in
explanation to section 73?
(xii) If yes, whether the relevant Current year
information and carried forward file
of eligible losses and report in
clause (e) has been obtained
and reported accordingly?
38. 33 57.1 to 57.7 Section-wise details of

deductions, if any, admissible
under Chapter VIA or Chapter
III (Section 10A, Section 10AA)
(i) 33 Cont. Whether the eligibility of Current year

deduction as per the provisions file
of the relevant section has
been checked, verified from
relevant evidence and reported
accordingly?
(ii) 33 Cont. Where independent certificates/ Current year
reports as required for claiming file
the deduction, whether a copy
of the same along with
necessary evidence has been
obtained from the assesse?
(iii) Check whether the same have
been filed online with Income
Tax Department?
(iv) Whether the Management Current year
obtained from the client in
respect of full and complete
details and documentary
evidences and the eligibility
criteria of the client regarding
the claim of deductions made
by the client?
(v) Check Whether the Income tax -
return of the client is filed
within the due date specified
u/s. 139(1) of the I.T. Act for
the eligibility of the claim of
deduction in respect of Part-C -
Deductions in respect of certain
Incomes under Chapter-VIA?
39. 34 58.1 to 58.13 (a) Whether the assessee is

required to deduct or collect tax
as per the provisions of
CHECKLIST 53
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Chapter XVII-B or Chapter
XVII-BB, if yes please furnish:
(i) Whether the copies of all TDS / Current year
TCS returns / Challans and file
management representation
letter regarding deductibility/
collectability and deposit of
TDS/ TCS have been
obtained?
(ii) Whether various heads of -
expenses from the books of the
assessee where there is a
likelihood of TDS liability has
been identified and scrutinized
those accounts to ensure that
wherever TDS was liable to be
deducted, is deducted and
deducted correctly?
(iii) 34 Cont. Whether the TDS/ TCS -
deduction/ collection have been
checked and verified from
relevant vouchers/challans /
copy of accounts etc?
(iv) 34 Cont. Whether the ledger to obtain -
instances where tax is
deductible, but it is not
deducted or there is short
deduction/ not deposited has
been scrutinized? Report
accordingly.
(v) If there is any default in -
collection/ deposit whether the
same have been checked in
terms of section 40(a)(ia).
(vi) In case of non- deduction/ non- -
deposit, whether assessee has
obtained Form 26A from the
deductee? If yes, report
accordingly.
59.1 to 59.2 - (b) Whether the assessee is
GN required to furnish the
statement of tax deducted or
tax collected. If yes, please
furnish the details:
(vii) Pg. 41 to 43 Whether the receipts/ Current year
Impl. Guide acknowledgements of the file
various TDS returns/ correction
statements filed by the
assessee during the year have
been obtained?
(viii) Whether the returns are filed -
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within the due dates specified
under the Act?
60.1 to 60.2 (c) Whether the assessee is
liable to pay interest under
section 201(1A) or section
206C(7). If yes, please furnish:
(ix) Whether the returns and Current year

challans have been obtained file
and interest calculation been
checked? Report accordingly.
(x) If there is a difference in Current year
calculation vis-a-vis the amount file
reflected in Form. No. 26AS,
whether the observation and
reason of difference have been
reported accordingly.
40. 35 61.1 (a) In the case of a trading

concern, give quantitative
details of the principal items of
goods traded:
(i) 35 Cont. Whether the details in the Current year

format specified in clause 35(a) file
for items which constitute 10%
of the aggregate value of
purchases, has been obtained?
(ii) Whether the details given -
above have been cross
checked with the Books of
account and any deviation
noticed?
(iii) In case of shortage, whether Current year
the reason for shortage has file
been checked? Whether the
insurance claims made, stock
lost, theft etc., have been
correlated with GST returns for
the period?
(iv) Whether Management Current year
Representation has been file
obtained in this regard?
62.1 to 62.5 (b) In the case of a
manufacturing concern, give
quantitative details of the
principal items of raw materials,
finished products and by-
products:
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(A) Raw materials:
(B) Finished products/By-

products:
(v) Whether the details in the Current year
format specified in clause 35(b) file
A & B for items which
constitute 10% of the
aggregate value of purchases,
Turnover, Consumption, and
production has been obtained?
(vi) Whether the details given -
above has been cross checked
with the Books of account,
Consumption records,
production records and closing
stock and any deviation
noticed?
(vii) Whether the consumption and -
yield details has been checked
with production records and
yields obtained for the Finished
Goods, Raw materials, By-
products, Scrap etc. has been
41. 36 63.1 to 63.5 In the case of a domestic

company, details of tax on
distributed profits under section
115-O in the following form
(a) total amount of distributed
profits;
(i) Whether the company has Current year
declared or distributed any file
dividend before 31.03.2020?
(ii) Whether the gross amount of -
dividend distributed is reported
here without any deductions?
(iii) Whether Dividend represented -
by section 2(22)(e) included
here?
(iv) Whether the Resolution has Current year
been passed for the proposing file
and payment of Dividend
obtained?
(v) Whether disclosure has been -
made in the financial
statements about the proposed
dividend?
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
(vi) Whether the Bank statement of Current year
the escrow account for dividend file
obtained and verified?
(vii) Whether Company’s internal -
MIS for the said transaction
has been checked?
(b) amount of reduction as
referred to in section 115-
O(1A)(i)
(viii) Whether the amount of Current year
reduction as referred to in file
section 115-O(1A)(i) i.e
dividend received by the
company from its subsidiary
which is also domestic and
have paid the tax on such
dividend has been checked?
(ix) If the subsidiary is foreign Current year
company whether the tax is file
paid by the domestic company
U/s 115BBD?
(c) amount of reduction as
referred to in section 115-
O(1A)(ii)
(x) 36 Cont. Whether the amount of Current year
dividend, if any, paid to any file
person for, or on behalf of, the
New Pension System Trust
referred to in clause ( 44)
of section 10 has been
reported?
(xi) 36 Cont. Whether the working papers of Current year
how such reduction has arrived file
have been kept in the file by
the auditor?
(d) total tax paid thereon; Or
(e) dates of payment with
amounts.
(xii) Whether the date of payment of Current year
tax has been ascertained from file
the duly received challan and
books of account etc?
(xiii) Check whether DDT amount is -
correctly calculated as per
section 115-O?
(xiv) Check whether DDT amount Current year
has been deposited within 14 file
days of declaration, distribution
or payment of dividend
whichever is the earliest?
(xv) Whether TDS U/s 194 has Current year
CHECKLIST 57
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
been deducted if dividend file
declared after 01.04.2020?
42. 36A Pg. 43 to 49 (a) Whether the assesse has

Impl. Guide received any amount in the
nature of dividend as referred
to in section 2(22)(e)?
(Yes/No.)
following details:—
(i) Amount received (in Rs.):
(ii) Date of receipt:
(i) Whether the assesse is a Permanent
company in which public is not File
substantially interested?
(ii) Whether assessee has Current year
received any payment, by way file
of advance or loan from a
company in which the assesse
is a shareholder/ member/
partner having a substantial
interest? Whether shareholder
is registered shareholder
having more than 10% shares
in the said company?
(iii) Check whether company -
possessed accumulated profits
on the date of payment of such
loan/ advance to the assessee
and report accordingly.
43. 37 64.1 to 64.3 Whether any cost audit was

carried out, if yes, give the
details, if any, of
disqualification or
disagreement on any
matter/item/value/
quantity as may be
reported/identified by the cost
auditor.
(i) Check whether cost audit -
provisions are applicable to the
assessee during the year as
per provision of section 148 of
Companies Act, 2013?
(ii) Check whether a copy of cost Current year
audit report have been file
obtained from the assessee?
(iii) Check, is there any -
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
disqualification or
disagreement on any
matter/item/value/quantity
reported/identified by the cost
auditor in above report?
(iv) If yes, check what further Current year
information is available with the file
assessee with regard to above
till the date of tax audit report
and incorporate that
subsequent information in the
report.
44. 38 65.1 to 65.3 Whether any audit was

conducted under the Central
Excise Act, 1944, if yes, give
the details, if any, of
disqualification or
disagreement on any
matter/item/value/quantity as
may be reported / identified by
the auditor.
(i) Whether any audit was Current year

conducted under the Central file
Excise Act, 1944 for any year
has been ascertained from the
management? If yes, whether
copy of the report from the
assesse has been obtained and
(Not applicable now as Central
Excise Act, 1944 has been
replaced by Goods and Service
Tax.)
45. 39 66.1 to 66.3 Whether any audit was

conducted under section 72A of
the Finance Act, 1994 in
relation to valuation of taxable
services, if yes, give the
details, if any, of
disqualification or
disagreement on any
matter/item/value/ quantity as
may be reported/identified by
the auditor
(i) Whether any audit conducted Current year
under the section 72A of the file
Finance Act 1994, in relation to
value of taxable service of any
year has been ascertained from
CHECKLIST 59
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
the management? If yes,
whether copy of the report from
the assesse has been obtained
and reported accordingly?
(Not applicable now as Service
Tax have been replaced by
Goods and Service Tax.)
46. 40 67.1 to 67.9 Details regarding turnover,

gross profit, etc., for the
previous year and preceding
previous year
(i) Whether the details of turnover, Current year

gross profit etc for the file
preceding year and the
previous year have been
obtained. Whether the same
have been checked, verified
and accordingly calculated the
ratios to report under this
clause?
(ii) Check whether relevant Current year
previous year figures are taken file
from previous year’s audit
report?
(iii) In case the preceding previous -
year is not subject to audit,
whether the reporting has been
done as per Guidance note in
Para 3 or Para 5 of Form
3CA/3CB, as the case may be?
47. 41 68.1 to 68.3 Please furnish the details of

demand raised or refund issued
during the previous year under
any tax laws other than Income
Tax Act, 1961 and Wealth tax
Act, 1957 along with details of
relevant proceedings.
(i) Whether the List of Applicable Permanent
Tax Laws other than Income File
tax Act and Wealth tax Act has
been prepared? Whether a
management representation
has been obtained in this
regard?
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
(ii) Whether copies of all the Current year
demand/ refund orders issued file
by the governmental authorities
during the previous year under
any tax laws other than Income
Tax Act and Wealth Tax Act
have been obtained?
(iii) Whether the bank statements Current year
of the assesse have been file
checked to ascertain any
refund has been received
under any tax laws?
(iv) Whether the details provided by -
the assesse have been verified
with the relevant portal of the
tax law?
(v) Whether the demand/refund -
order issued during the
previous year is reported under
this clause?
(vi) If the demand / refund is -
actually paid/ received, whether
the fact is mentioned in the
report?
48. 42 Pg. 49 to 68 (a) Whether the assessee is

Impl. Guide required to furnish statement in
Form No.61 or Form No.61A or
Form 61B? (Yes/No)
(b) If yes, please furnish :
(i) Whether the books of account -
have been verified and
transactions which are required
to be reported under the rules
114B, 114E, 114F, 114G and
114H have been identified?
(ii) 42 Cont. Whether the returns have been
checked and matched with the
ITDREIN of the assessee on
the Income Tax Portal?
(iii) 42 Cont. Whether copy of Form Current year
61/61A/61B filed with the file
Department have been
obtained and the transactions
reported in such forms have
been reconciled with books of
accounts?
(iv) If any transaction has not been -
reported in the prescribed form
and manner, whether the same
have been reported under this
clause?
CHECKLIST 61
Implementation
Guide/ TG on
ICDS (Para No./
Page No.)
49. 43 Pg. 68 to 73 (a) Whether the assessee or its

Impl. Guide parent entity or alternate
reporting entity is liable to
furnish the report as referred to
in section 286(2)? (Yes/No)
following details : (i) Whether
report has been furnished by
the assessee or its parent
entity or an alternate reporting
entity (ii) Name of parent entity
(iii) Name of alternate reporting
entity (if applicable) (iv) Date of
furnishing of report
(i) Whether the ownership Permanent
structure of the assessee has File
been verified and the
applicability of section 286 of
the Income Tax Act, 1961 has
been ensured?
(ii) If section 286 is applicable to Current year
the assessee, whether details / file
information in respect of an
international group duly
supported with the relevant
documents have been
obtained?
50. 44 Break-up of total expenditure of

entities registered or not
registered under the GST
(The reporting under this
clause has been dispensed
with till FY 2019-20.)
(i) Head of Expense wise details Current year
to be prepared. file
(ii) Reconcile with the expense Current year
claimed in the Profit & Loss file
Account in the format.
(iii) Expense details also to be Current year
reconciled with the GST returns file
filed during the year.
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General Instructions

(To be read in conjunction with the Checklist)

 Accounting Standards issued by ICAI

 Framework for presentation of Financial Statements issued by ICAI

6. Commonly found Errors

Commonly Found Errors:

b) Observations/Comments/ Discrepancies/Inconsistencies by Auditor (Para 14.5 of the Guidance Note on Tax

Commonly Found Error:

7. Tax Audit and UDIN

3. 3 17.3 Permanent Account

(i) Whether the permanent Permanent

4. 4 17.4 to 17.8 GN Whether the assessee is liable

(i) 4 Cont. Pg.3-4 Imp. Whether the auditor has Permanent

6. 6 17.10 Previous Year

7. 7 17.11 Assessment Year

8. 8 17.12 Indicate the relevant clause of

9. 9 18.1 to 18.6 (a) If firm or Association of

In case of AOP, whether

(iii) 9 Cont. Where the partner of a firm or -

10. 10 19.1 to 19.6 of 10(a) Nature of business or

10 cont. 10(b) If there is any change in

11. 11 20.1 to 20.10 (a) Whether books of account

(i) Whether books of account have -

(In case books of account are

(c) List of books of account and

12. 12 21.1 to 21.9 Whether the profit and loss

13. 13 22.1 to 22.10 (a) Method of accounting

(b) - Whether any change in the

(c) - Effect of change in method

14. 14 23.1 to 23.24 (a) Method of valuation of

(i) Whether the procedure -

(ii) 14 Cont. Whether there has been any Current year

(iii) 14 Cont. Whether the adjustments in Current year

15. 15 24.1 to 24.12 Give the following particulars of

(i) Whether details of all capital Current year

(iii) Whether the original costs of -

(iv) 15 Cont. Whether the amount recorded -

(v) 15 Cont. Whether the necessary -

16. 16 25.1 to 25.3 Amounts not credited to the

16 Cont. 25.10 to 25.11 (d) any other item of income

17. 17 26.1 to 26.7 Where any land or building or

18. 18 27.1 to 27.23 Particulars of depreciation

(ii) 18 Cont. Whether the list of additions/ Current year

(ca) Adjustment made to the

(cb) Adjusted written down

*Inserted Vide CBDT

(vii) 18 Cont. Check whether the assessee Permanent

18 Cont. (d) Additions/deductions during

19. 19 28.1 to 28.8 GN Amounts admissible under

(iv) 19 Cont. Check whether all the -

19 Cont. Section 35(1)(i) - Expenditure

(xxxvii) 19 Cont. Check whether all the -

(xxxviii) Whether the expenses incurred -

(xliv) Whether the assessee has -

19 Cont. Section 35CCB - Expenditure

(lv) 19 Cont. Check whether all the -

19 Cont. Section 35D- Amortisation of

(lxii) Whether the expenses incurred -

(lxv) 19 Cont. Whether the assessee is an -