Introduction:

Indian tax laws cover all aspects of business income and require business owners to have a thorough knowledge of tax procedures. Failure to submit accurate forms and returns can result in fines, penalties and legal consequences for your company. It is therefore important for business owners to be aware of these regulations to ensure compliance and for smooth operations. In India, Form 29 B is required to be filed with the government for disclosure of book benefits in the mandatory filing obligations. Here are detailed instructions for successfully filing Form 29B.

Form 29B:

Form 29B is a detailed report that tax auditors are obliged to compile and submit to the Income Tax Department (ITD) subsequent to conducting an audit of a taxpayer’s financial records. This comprehensive document encompasses pertinent details regarding the taxpayer’s income, deductions, and adherence to the regulations outlined in the Income Tax Act (ITA).

According to Section 115JB of the Income Tax Act, Form 29 B is indispensable for evaluating your company’s book profits. This form facilitates the precise calculation of book profit necessary for claiming Minimum Alternate Tax (MAT) credit. If your company falls under the purview of Section 115JB, it is mandatory for a Chartered Accountant to furnish this form.

Eligible to File Form 29B:

Taxpayers whose gross receipts or turnover surpass a designated threshold limit are mandated to undergo an audit as per the provisions of the Income Tax Act (ITA). The threshold limit varies based on the nature of the business. For instance, individuals engaged in business activities are subject to an audit if their gross receipts exceed INR 1 crore. Conversely, professionals are required to undergo an audit if their gross receipts exceed INR 50 lakhs.

Applicability of Form 29B:

• Company owners are advised to review the following information to understand the operation of Form 29 B.
• Both the Chartered Accountant (CA) and the taxpayer should have access to the e-filing portal through their respective IDs and passwords. In addition, the appointed CA must have a valid Digital Signature Certificate (DSC), which must be registered on the IT e-Filing portal.
• As a company owner, it’s advisable to engage a chartered accountant . The appointed CA will furnish you with an audit report using Form 29 B, in accordance with the Income Tax Act. While the appointed CA may not always agree to your request for an audit report, if they do, it’s imperative that they file Form 29 B.
• While submitting Form 29 B, ensure that you have filled the important details like your name, address, company PAN number and year of survey correctly. Additionally, it is important to include your company’s book profit margin when completing this form.
• When submitting Form 29B, companies must adhere to the government-approved format to prevent any errors that could lead to penalties.
• Company ownership requires a certificate from an Authorized Chartered Accountant (CA) for Form 29 B. Under the Income Tax Act, 1961, this certificate is necessary to verify the estimated book value.

Required  Information in Form 29B:

• The tax auditor is required to incorporate the following information in Form 29 B:
• The tax audit details, such as date of audit, date of issuance of audit report and audit period should be included in Form29B.
• Details of the taxpayer’s income, encompassing the source of income, gross receipts, and taxable income, should be provided in Form29B.
• The taxpayer has to furnish in Form29B the details of tax paid including advance tax, personal income tax, deduction at source and additional tax.
• Compliance with the provisions of the ITA, such as withdrawal of tax at source, collection of tax at source and international transactions must be reported in Form 29B
• Details of deductions claimed by the taxpayer, encompassing depreciation, expenses, and other allowances, should be provided in Form29B.
• Form29B should include details of the book of accounts including the method of computation of the taxpayer and the nature of the accounts maintained.
• Particulars of the taxpayer, such as name, address, PAN, and status, should be included in Form 29B.

Steps to File Form 29B:

• To know how to file Form29B online, explore the following steps:
• Visit the official website of Income Tax India by visiting www.incometaxindia.gov.in.
• Enter your ID and password to access the income tax e-filing portal.
• Navigate to the dashboard and locate the e-File link.
• Click on ‘Income Tax Forms’, then select ‘File Income Tax Forms’.
• Choose ‘Form 29B’ from the list of form titles and input the assessment year.
• Access My CA service and appoint a CA by logging in.
• Attach the required documents, then click ‘Continue’.
• Your form will be forwarded to the appointed Chartered Accountant (CA).
• Upon submission, you will receive a receipt. Remember to save this ID for future reference.

Benefits of  Form 29B:

• Form29B requires the tax accountant to provide details of the taxpayer’s income, expenses and deductions. This information is necessary to accurately determine the taxpayer’s tax liability.
• Filing a Form29B reduces the scrutiny by ITD. When the taxpayer’s books of accounts are audited and Form29B is filed, the chances of ITD auditing the taxpayer’s income tax returns are reduced.
• The information provided on Form 29B can help taxpayers improve their financial planning. Using this information, taxpayers can identify areas where costs can be reduced to increase profits.
• Form29B enhances transparency in the audit process by accurately documenting the tax auditor’s findings, providing taxpayers with access to crucial information.
• Filing Form29B ensures taxpayer compliance with the provisions of the ITA, mitigating the risk of legal consequences stemming from non-compliance.

Points to remember  About Form 29B:

• Form 29B is documentation that the book interest of the company complies with section 115JB. This identification must be submitted or reported electronically before the company submits the rest of its IT documentation.
• Form 29B should contain important details like name, address, type and PAN of the company. In addition, it must indicate the year of the submitted survey and the estimated book value of benefits.
• All companies subject to Section 115JB are obligated to submit a Form 29B report. To fulfill this requirement, the company must engage a qualified Chartered Accountant to complete and submit the form to the Income Tax department.
• Companies are required to submit Form 29B in a format prescribed by the government, making it prudent to seek professional assistance to prevent errors and potential penalty.

Form 29B PDF:

• You can download Form 29B in PDF format from the official Income Tax India website. This form consists of three sections and an audit report. Part A applies to any business organization in India, while the applicability of Part B and Part B depends on specific circumstances.
• Explore the various sections of the Form 29B under the Income Tax Act:
• Part A:This section provides information on the book profitability of the company.
• Part B: Part B includes details of the amount required to be increased/decreased as per sub-section (2A) of Section 115JB.
• Part C: Part C provides the amount required to be increased/decreased as per sub-section (2C) of the same section.

Due Date:

• As per Section 115JB of the Income Tax Act, 1961, every company is obliged to use Form 29B to declare its book profits for a particular assessment year. However, this report must be certified by a Chartered Accountant (CA). Depending on your preference and convenience, you have the option to submit this form online or offline.
• The due date for Form 29B depends on the notice you receive under Section 142(1). Additionally, you have the option to submit the form along with your income returns up to one month before the return filing deadline specified under Section 139(1).

Penalty :

As per section 271BA, failure to receive the audit report and file Form 29B before the due date may result in substantial penalties. Penalty for late filing of Form 29B can be up to Rs 100,000 in some cases. However, Section 273B provides relief, stating that if you can give a reasonable excuse for the delay in filing the form, you are exempt from penalty under Section 271BA.

Conclusion:

Form 29B is an important form to be filed by a taxpayer who exceeds a certain threshold for gross receipts or sales. It provides detailed insights into the taxpayer’s income, deductions and compliance with ITA provisions. Filing Form 29B brings compliance, accuracy, transparency, reduced scrutiny, and improved budgeting Taxpayers should ensure that their tax accountant files Form 29B by the due date to avoid penalties or legal consequences.