Tax Audit: Clause 11 of Form 3CD

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By Taxmann
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Last Updated on 28 November, 2022

Form No. 3 CD is the format of Tax Audit Report to be filed by Tax Auditors. It is divided into 44 clauses that provide disclosure of different financial as well as non-financial items. Clause No. 11 of form 3CD requires the information regarding the maintenance of Books of Accounts by the assessees covered under section 44AA.

Disclosure required under clause 11:

1. Disclosure required only when assessee covered under Section 44AA:

Clause 11(a):-

Disclosure of the list of Books of account prescribed under Rule 6F is to be made under this clause

2. Disclosure to be made in case of all assessees:

Clause 11(b):-

Disclosure regarding following are to be made under this sub-clause:-

- List of books of account maintained
- Address at which the books are kept

In case books are kept in Computer system, disclose all the books of account generated by such computer system.

If the books of account are maintained at more than one place disclosures are to be made regarding such locations as well as details of all books of account maintained at such places.

Clause 11(c):-

Following disclosures are to be made under this sub-clause

List of books of account and their locations thereof;
Nature of relevant documents examined;
Nature of all the relevant documents on the basis of which such audit was conducted

Applicability of Sec 44AA:

The following table enlists the cases wherein maintenance of books of accounts is mandatory.

Nature of Business or Profession	Category of Taxpayer	Threshold Limits for Income	Threshold Limits for Gross Turnover or Receipts
Specified Professions*	Any	–	Mandatory in every case except when presumptive taxation scheme under Sec. 44ADA is opted by the assessee
Non-Specified Professions	Individual or HUF	Rs. 2,50,000	Rs. 25 lakhs in any of the 3 years immediately preceding the previous year
Non-Specified Professions	Others	Rs. 1,20,000	Rs. 10 lakhs in any of the 3 years immediately preceding the previous year
Business	Individual or HUF	Rs. 2,50,000	Rs. 25 lakhs in any of the 3 years immediately preceding the previous year
Business	Others	Rs. 1,20,000	Rs. 10 lakhs in any of the 3 years immediately preceding the previous year
Presumptive Tax Scheme under Sec. 44AD	Resident Individual or HUF	Rs. 2,50,000	Taxpayer opted for scheme in any of last 5 previous years but does not opt for in current year.
Presumptive Tax Scheme under Sec. 44AD	Resident Partnership Firm	–	Taxpayer opted for scheme in any of last 5 previous years but does not opt for in current year.
Presumptive Tax Scheme under Sec. 44AE	Any Assessee engaged in plying, hiring or leasing goods carriage	–	Taxpayer claims that his profits are lower than the deemed profits.
Presumptive Tax Scheme under Sec. 44BB	Non-resident assessee engaged in exploration of mineral oil	–	Taxpayer claims that his profits are lower than the deemed profits.
Presumptive Tax Scheme under Sec. 44BBB	Foreign Co. engaged in civil construction	–	Taxpayer claims that his profits are lower than the deemed profits.

* List of Specified professions:-

1. Legal
2. Medical
3. Architectural
4. Accountancy
5. Technical consultancy
6. Interior decoration
7. Engineering
8. Film artist
9. Company secretary
10. Authorized representative
11. Or any other profession that is notified

Any other profession that is not notified or is not in the list of specified profession are covered under non-specified profession.

List of books of account to be maintained under Rule 6F:-

Rule 6F prescribes maintenance of following books of account for the persons carrying out any specified profession whose gross receipts exceed Rs. 1,50,000/-

1. Cash Book: Book recording all the cash transactions for the period.

2. Journal: Journal should be maintained recording day to day transactions of the assessee as per the mercantile accounting system.

3. Ledger: Ledger where all entries flow from the journal, has detailed accounts, this can be used to prepare financial statements.

4. Original bills and xerox copy thereof. Following are the additional requirements in case of a person carrying on medical profession:-

Daily cash register in Form 3C which records details of patients, services rendered, fees received and date of receipt.
An inventory as on the first and last day of the previous year, of the drugs, medicines and other consumable used.

Tenure to maintain Books of Account:

These books are required to be maintained and kept for a period of 6 years from end of Assessment year to which the accounts belong.

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The statutory material is obtained only from the authorized and reliable sources
All the latest developments in the judicial and legislative fields are covered
Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
Every content published by Taxmann is complete, accurate and lucid
All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
The golden rules of grammar, style and consistency are thoroughly followed
Font and size that's easy to read and remain consistent across all imprint and digital publications are applied

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Disclosure required under clause 11:

1. Disclosure required only when assessee covered under Section 44AA:

2. Disclosure to be made in case of all assessees:

Applicability of Sec 44AA:

List of books of account to be maintained under Rule 6F:-

Tenure to maintain Books of Account:

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Tax Audit: Clause 11 of Form 3CD

Recent Posts

IBBI Proposes Changes in Liquidation Regulations to Ensure Transparency in Compromise or Arrangement Schemes

IBBI Proposes to Strengthen the Regulatory Framework Governing Monitoring Committees Under IBC

Latest from Taxmann

Disclosure required under clause 11:

1. Disclosure required only when assessee covered under Section 44AA:

2. Disclosure to be made in case of all assessees:

Applicability of Sec 44AA:

List of books of account to be maintained under Rule 6F:-

Tenure to maintain Books of Account:

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