Property deals must be disclosed in audit report

New Delhi, July 6: Auditors will now have to disclose details of transactions exceeding ` 20,000 in connection with immovable property in reports which they file with the I- T authorities on behalf of their clients.

Under the Income- Tax Act, professionals earning gross receipts of more than ` 50 lakh and companies with a turnover of over ` 1 crore are required to get their accounts audited. The turnover limit for companies has been increased to ` 2 crore from AY19.

So far, auditors in their report had to mention details of loans, and repayment exceeding ` 20,000 in the tax audit report filed along with I- T returns. Hence forth, all transactions exceeding ` 20,000 relating to property will have to be mentioned in a specified format in the report.

The move will increase transparency in financial dealings and help check tax evasion.

As per the notification by the I- T department, auditors will have to furnish details of transactions regarding “each specified sum” exceeding ` 20,000 from FY17.

These would include money paid or received with regard to immovable property.

The auditor report will also have to specify details of the mode of payments whether account payee or bearer cheque, or through electronic system.

Through the notification, the tax department has revised the form 3CD for tax audit report under section 44AB of Income Tax Act.

The amended rules will come into effect from July 19, 2017 and will apply for AY18 for which the returns would be filed in the coming months.