Audit - 4. page

Method of Accounting Many banks account for commission, exchange, brokerage, interest on bills, locker rent and other fees as income upon realisation. Section 145 of the Income-tax Act, 1961 provides, […]

Tax Refunds/Demands Where an assessment order is received during the year, the auditor should examine the assessment order and if any interest is determined on the amount of refund, the […]

Transactions with Foreign Banks/Foreign branches of Indian banks The applicability of any Double Taxation Avoidance Agreement is to be taken into account for the purpose of computation of tax in […]

Corporate Dividend Tax A holding company receiving dividend from its subsidiary company can reduce the same from dividends declared, distributed or paid by it. For this purpose, a holding company […]

Bad Debts and Provision for Bad and Doubtful Debts Section 36(1)(vii) of the Income-tax Act, 1961 deals with the allowability of bad debts and section 36(1)(viia) deals with the allowability […]

Special Reserve ; Deduction in respect of a special reserve created and maintained by a banking company – (a) Section 36(1)(viii) provides deduction in respect of any special reserve created […]

Interest on Non-Performing Accounts (NPAs) According to section 43D, read with Rule 6EA of the Income-tax Rules, 1962, the income of a scheduled bank by way of interest in relation […]

Income-tax   Some of the items which have an effect on the liability of a bank for income-tax and therefore, need to be specifically considered by the auditor are discussed […]

Provision for Taxation Provision for taxation relates to income-tax, (including corporate dividend tax). The auditor must ensure compliance with AS 22, “Accounting for Taxes on Income”.

Auditors’ Fees and Expenses This item includes the fees paid to the statutory auditors and auditors for professional services rendered and all expenses for performing their duties, even though they […]