Tax Audit Checklist on Clause 16 of Form 3CD Under Income Tax Act, 1961

Clause 16 of Form 3CD, requires the tax auditor to report amounts not credited to the profit and loss account, being, —

• the items falling within the scope of section 28;
• the proforma credits, drawbacks, refund of duty of customs or excise or service tax, or refund of sales tax or value added tax or Goods & Services Tax where such credits, drawbacks or refunds are admitted as due by the authorities concerned;
• escalation claims accepted during the previous year;
• any other item of income;
• capital receipt, if any. [Clause 16(a) to (e)]

Section 28 items falling under this category are to be reported under clause 16(a). Clauses 16(b), (c), and (d) necessitate reporting on items that may overlap with section 28, yet items reported under clauses 16(b), (c), and (d) should not be reiterated under clause 16(a). This story provides a detailed discussion of the tax audit checklist pertaining to clause 16 of Form 3CD.

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