Tax Presentation- KRISH

8/6/2019 Tax Presentation- KRISH

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State Bank of PatialaState Bank of Patiala

Balance Sheet DepartmentBalance Sheet Department

Welcomes Participants toWelcomes Participants toSeminarSeminar on Annual Closing 20on Annual Closing 201111

Taxation Issues


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TDS CompliancesTDS Compliances

Compliance / Non-compliance of TDSprovisions is an important part of TaxAudit Report.

Non-compliance of TDS provisions leadsto the disallowance of the entire amountof expenditure on which tax has not beendeducted.

Bank as a whole crores of rupees aredisallowed due to non-complaince of TDSprovisions.


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Filing of eFiling of e--TDS Return.TDS Return.

Filing of e-TDS Return at Quarterly

Intervals.

Qtr ending 30th June -By 15th July

Qtr ending 30th Sept. -By 15thOct.

Qtr ending 31st Dec. -By 15th January

Qtr ending 31st Mar- By 15th May of

the F.Y. Immediately following F.Y. in

which deduction made


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Issuance of TDS CertificateIssuance of TDS Certificate

TDS certificate are issued in Form 16A(for Salary payment in Form No. 16)

1. Form No. 16 is to be issued annually by

31st May ofF.Y immediately following theF.Y. in which income was paid and taxdeducted.

2. Form 16A is to be issued at Quarterlyintervals Within 15days from the due datefor furnishing the statement of taxdeducted at source.


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TDS InstructionsTDS Instructions

Detailed instruction in respect of TaxDeduction at source are contained in BSDmemo no. BSD/BST/5 dated 13.07.2010.

If during Tax Audit, some TDS non-compliances are observed by Auditors, thenbranches should make compliance of thesame before the conclusion of the Audit. i.e.

if tax short deducted/not deducted, thenbranch should rectify its position.

Compliance of the audit finding should alsobe reported.


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PAN Furnishing MandatoryPAN Furnishing Mandatory

w.e.fw.e.f 01.04.201001.04.2010 If deductee fails to furnish PAN todeductor, TDS shall be deducted at aflat rate of 20% (or Actual rate,

whichever is higher) Form 15G / 15H declaration for non

deduction of tax will become invalid ifPAN is not mentioned therein.

If deductee furnishes invalid PAN orsubmit PAN belonging to someoneelse, it will amount to non furnishing ofPAN


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Issues pertaining to Tax AuditIssues pertaining to Tax Audit

ReportReport Prior Period Expenses Tax Audit report requires quantification of Prior

period expenses/ incomes. Therefore, if at all thereis any Prior Period Expenses, the same be

quantified. No generic remarks will be accepted.

The Disputed Transactions, where settlement hasbeen reached in current year are not prior period

transactions. Donation in kind do not qualify for deduction u/s

80G. Such transactions should not be reported inTax Audit Report.


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Change in Accounting PolicyChange in Accounting Policy

Bank has revised the Accounting Policy inrespect of Recognition of income onLetter of Credit & bank Guarantee (otherthan DPG).

Accounting policy change from Accrualbasis to receipt basis.

Now the Adjusting account entries inrespect of comm. On LC & BG will not be

passed. The Adjusting Account entries relating to

Deferred Payment Guarantees will bevouched.


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Impact of change in AccountingImpact of change in Accounting

PolicyPolicy Bank is required to disclose the impact ofchange in accounting policy.

For this purpose an annexure has been

introduced in tax Audit Report wherebranches will quantify the impact(increase or decrease in profit) due tonon-vouching of adjusting account entries

relating to commission on letter of credit& bank Guarantees (other than Deferredpayment Guarantees)


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Service TaxService Tax

Important Issues relating to Service Tax Service Tax is paid on income actually

received. As in the books income is recognised on

accrual basis. Therefore, to convert theaccrued based income to receipt based,the effect of Adjusting Account entries isrequired to be reversed.

Cases have been observed where theeffect of Adjusting Account entries wasnot taken properly resulting into wrongService Tax payment.


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NonNon--taxable Income under Servicetaxable Income under Service

TaxTaxy Interest on Loan/ CC/Overdarfty Cross Selling Income As Service Tax

on this income is paid by Insurance

Co.y Recovery in written off accounts.

y Foreign Exchange Trading Profitreceived from Treasury Branch,Mumbai.

y Govt. Commission from Collection ofduties & taxes.


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Service TaxService Tax -- ComputationComputation

y As the amount of Service Tax is debited to

Commission A/c, therefore to find gross

commission on which S.Tax is to be paid,

Service Tax paid of last month is to be added.y Service Tax =

Comm. &Exch recd during month X Rate/

(100+Rate)


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y The Booking of Govt. commission will be

on accrual basis as done earlier.

Adjusting Account (BGL 98970) Dr

To Govt. Commission (BGL -98338) Cr

(Being amount of Govt. Commission

accrued)


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y Similarly, the accrued Service Tax on this

Commission is also to be provided for by

passing the entry as under

Govt. Commission (BGL -98338) Dr

Adjusting Account (BGL 98970) Cr

(Being amt. of service tax on accrued Govt.

commission)


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y Service Tax for the month of March is to

be paid by 31st March.

y For detailed instruction on availment of

Cenvat credit refer to BOD Circular. No.

BOD/4 dated 04.11.2008


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Thank You

Tax Presentation- KRISH

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