New Delhi: Businesses and professionals can now revise their tax audit reports, with the Central Board of Direct Taxes (CBDT) introducing new rules to ease procedural hurdles in claiming deductions for spending.
In cases where the taxpayer makes certain payments such as taxes, duties, or cess or provident fund contribution of employees after the tax audit report has been submitted in an assessment year, a revised audit report signed by the accountant can be given to claim relief for that spending or payment, CBDT said in a notification.
The Income Tax Act does not allows certain spending such as interest, royalty, or fee for technical services as a deduction while computing the taxable income of an assessee if the tax is not deducted at source and paid to the government. Also, spending such as provident fund contribution and leave encashment are
allowed as an expenditure only in the year that it is spent.
After the tax report has been submitted if the taxpayer makes payments, recalculation to the extent of expenditure eligible for deduction may become necessary. The new rule helps an assessee easily file a revised report and claim deductions.
At the same time, the need on part of the taxpayer to explain the mismatched audit report and the claim for deduction also gets eliminated. Businesses with sales of Rs 1 crore or more and professionals with income more than Rs50 lakh have to file tax audit reports.