Table of Contents
Role of an Auditor in vouching Payment of Income Tax
The auditor should verify whether it is advance tax, self assessment tax or final payment of tax.
1. In the case of advance tax, the auditor should verify the statement prepared to calculate the advance tax to be paid.
2. He should also ensure that the advance tax is paid within the due date specified under the Income Tax Act.
3. The auditor should verify the statement of total income, the calculation of the self assessment, tax liability, date of payment of self assessment tax and the date of filing of returns of income.
4. The final payment of tax should be verified against the Assessment Order received from the I.T. Department.
5. For all payments of tax, the assessors’ copy of the payment challan bearing the ‘Received’ stamp of the bank should be verified.
6. In case any penalty or interest is paid along with tax, the same is to be verified.
If the tax demand is raised by the Income tax department, the auditor should examine the correspondence and documents relating thereto.
Vouching Payment of Sales Tax
An organization has to make deposits for the purpose of State and Central sales tax. Periodically, tax is to be paid and sales return is to be filed along with the tax payment challans.
Registers needed for verification
The auditor has to verify the following documents and registers while vouching payment of income tax by a firm.
1. Tax payment challan (receipts) of the bank (of SBI or RBI)
2. Sale tax returns.
3. Sale tax Register
4. Copies of Invoices.
Role of an Auditor in vouching payment of Sales tax
In this regard, the auditor has to ensure the following
1. that the amount is paid
2. that the amount of tax paid is in agreement with the return filed
3. that the sales tax is properly charged in the invoice, duly collected and deposited.
4. that the calculation shown in the sales tax return is correct as per the copies of the invoices.
5. that the sales tax paid/payable for each accounting period is duly recorded in the books.
6. in case of concession in sales tax, that the customer has declared the same in the proper form.
7. that any additional tax payable as per the assessment order is paid within the time allowed.
8. If the organization has opted for an appeal, the auditor has to check the revision order.
9. That the contingent liability in respect of sales tax is disclosed as a footnote to the balance sheet.