Understanding Tax Audit, Investigation, and Transfer Pricing Audit

After spending time🙂↕️researching the latest tax compliance updates, I've compiled an all-encompassing guide that covers everything you need to know about the tax audit requirement for businesses with turnover of 1 crore or more, with the due date set for 31st October: LinkedIn ⚓Introduction: - Understanding the mandatory tax audit obligations for businesses exceeding the turnover threshold of 1 crore, along with the upcoming due date of 31st October. 🛞Step-by-Step Process: 1. Confirm if your business's turnover exceeds 1 crore during the financial year. 2. Ensure proper accounting and documentation are maintained for audit purposes. 3. Appoint a qualified chartered accountant to conduct the audit. 4. Complete the audit process by the prescribed deadline. 5. File the tax audit report and return before 31st October to remain compliant. 🛑Common Pitfalls: - Missing the deadline of 31st October, leading to penalties or notices. - Inadequate documentation or incomplete accounts, risking audit rejection or scrutiny. 🎗️Pro Tips: - Start preparing your accounts well before the audit deadline to avoid last-minute rushes. - Double-check all entries and reports with your CA to ensure accuracy and compliance. 📢FAQs: - Who needs to get a tax audit if the turnover exceeds 1 crore? 🎯 Any business whose gross turnover or gross receipts exceed 1 crore during the financial year must undertake a tax audit. - What is the consequence of missing the 31st October deadline? 🎯 Failure to file the tax audit report and returns by the deadline can result in penalties, interest, or notices from tax authorities. ✨Whether you're a small business owner or a Chartered Accountant, this guide is designed to help you navigate the tax audit process efficiently and meet the 31st October deadline confidently. 🤔Have questions or want to share your experiences? Drop them below! 📬 #TaxAudit #TaxCompliance #TaxPlanning #AuditPreparation #FinancialAudit #TaxConsulting #TaxStrategy #IRSCompliance #BusinessTax #TaxAdvisory #TaxRegulations #AuditRisk #TaxProfessionals #TaxLaw #CorporateTax #TaxFiling #TaxManagement #TaxUpdates #AuditInsights #TaxEducation

We are pleased to announce the expansion of our Tax Practice at Habib Al Mulla and Partners with the appointment of two distinguished professionals: Zubair C. and Salwa Adeel. Mohamed El Baghdady, Partner, Head of Tax & Financial Crimes, commented: “We’re pleased to welcome Zubair Chaudhry and Salwa Adeel to our growing tax team at Habib Al Mulla and Partners. Their extensive experience and deep knowledge across corporate tax, international tax, and tax policy development will significantly strengthen our capabilities. As tax laws continue to evolve rapidly across jurisdictions, having professionals of this caliber ensures we remain at the forefront of delivering strategic and compliant solutions to our clients. I look forward to the valuable contributions they will bring.” With their addition, we continue to enhance its ability to provide clients with strategic, compliant, and forward-looking tax advisory and dispute resolution services.

𝗨𝗻𝗱𝗲𝗿𝘀𝘁𝗮𝗻𝗱𝗶𝗻𝗴 𝘁𝗵𝗲 𝗔𝘀𝘀𝗶𝗴𝗻𝗺𝗲𝗻𝘁 One critical thing relating to any instruction is to understand the assignment for which you vie to be instructed. The initial meeting is the first opportunity you have to understand the tax problem which confronts the taxpayer. You need to ask all the right questions. Try to obtain from the taxpayer the full background which has led to the problem. Start from the beginning and ask how it all started. If the aggrieving tax decision was triggered by a tax audit or a tax investigation ask to see TRA's notification of audit. This will tell you the objective of the audit and its scope. Ask to see the record of the entry interview and the exit interview. These documents will tell you how the audit was conducted and what preliminary findings TRA emerged with. The more critical document though is TRA audit report because this is the basis upon which any action or tax decision is taken by TRA. It is also useful to request to see correspondence between TRA and the taxpayer relating to the problem. The letters usually reveal the thinking of TRA on the dispute points. Then you need to examine the document containing the tax decision. This may be contained in a letter by TRA, a certificate of taxation, an assessment or a notification of tax liability. Studying fully these documents will give the tax practitioner the critical understanding he requires to begin talking about what needs to be done, the fee to charge and the additional documents required to formulate a definitive dispute resolution strategy. 𝗤𝘂𝗼𝘁𝗲𝗱 𝗳𝗿𝗼𝗺 𝗽𝗮𝗴𝗲 𝟯 "𝗧𝗮𝘅 𝗗𝗶𝘀𝗽𝘂𝘁𝗲 𝗥𝗲𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻 (𝗔 𝗠𝗮𝗻𝘂𝗮𝗹 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗧𝗮𝘅 𝗣𝗿𝗮𝗰𝘁𝗶𝘁𝗶𝗼𝗻𝗲𝗿).":𝗕𝗼𝗼𝗸 𝗯𝘆 𝗞𝗶𝗯𝘂𝘁𝗮, 𝗞𝗶𝗹𝗲𝗼, 𝗠𝘂𝗸𝗲𝗯𝗲𝘇𝗶 𝗮𝗻𝗱 𝗚𝗼𝗻𝗱𝘄𝗲.

Subsequent Events in Taxation — The Overlooked Link in Statutory Audits In the world of statutory audits, “Subsequent Events” often grab attention for financial reporting — but their taxation impact is equally critical and frequently under-discussed. Let’s take a closer look What are Subsequent Events? In audit terms, these are events occurring after the balance sheet date but before the signing of financial statements. They can be: Adjusting events – providing evidence of conditions existing at the balance sheet date (e.g., outcome of a tax litigation pending as on 31 March but settled before audit sign-off). Non-adjusting events – indicating new conditions arising after the year-end (e.g., introduction of a new tax amendment or retrospective circular). From a Taxation Perspective Subsequent events can influence: Provision for tax liabilities – especially where tax assessments, appellate orders, or advance rulings are received after the year-end. Recognition of deferred tax assets/liabilities – when new information confirms or reverses earlier assumptions. Disclosure of contingent liabilities – if the outcome of a pending tax case becomes known before financial statements are approved. Reporting under CARO & SA 560 – auditors must evaluate whether such events require adjustment or disclosure to present a true and fair view. Example Imagine an income-tax demand under dispute as on 31 March 2025. If an appellate order reducing or confirming the demand is received in May 2025 — before the financials are approved — it becomes a subsequent event. Depending on the result, it may warrant adjustment in books, revised provisioning, or at least enhanced disclosure in the notes. Why It Matters Ensures fair presentation of tax exposures. Avoids material misstatements in financials. Strengthens audit documentation and professional judgment under SA 560 (Subsequent Events). Reflects management’s proactive stance on transparency and compliance. Taxation is no longer just a year-end computation — it’s a continuous assessment shaped by evolving events even after books close. Recognising and documenting subsequent events diligently ensures both audit integrity and stakeholder confidence. In statutory audits, the story doesn’t end on 31 March — sometimes, the most crucial tax chapters are written after that date.

🚨 MSME Payment Compliance under Section 43B(h) – Key Update for Tax Audit FY 2024-25🚨 From FY 2024-25 onwards, one of the most crucial aspects of Tax Audit reporting will be compliance with **Section 43B(h)** of the Income-tax Act. 🔹 What does Section 43B(h) say? Any payment due to Micro or Small Enterprises (MSMEs) will be allowed as deduction only if paid within the time limit specified under the MSME Act (generally 15 days if no agreement, or maximum 45 days if agreement exists). 🔹 Implication for Tax Audit FY 2024-25 * Auditors will need to verify outstanding MSME dues as on 31st March 2025. * Payments beyond the permissible time will not be deductible in computing taxable income, unless actually paid within the time limit. * This brings MSME compliance to the core of audit reporting, similar to TDS, PF, ESI disallowances. 🔹 Key Point to Remember 👉 Disallowances made in FY 2023-24 (AY 2024-25) due to Section 43B(h) will be allowed as deduction in FY 2024-25 (AY 2025-26), if such payments are made during FY 2024-25. 🔹 Why this matters? * Businesses must track vendor classification (MSME or not). * Timely payments are not only a legal obligation but also essential for tax efficiency. * Non-compliance can impact both cash flows & profitability due to disallowances. ✅ Action Points for FY 2024-25 1. Identify and update list of MSME creditors. 2. Ensure all payments to MSMEs are made within due dates. 3. Revisit agreements to align with MSME Act timelines. 4. Maintain robust documentation for audit & tax compliance. 📌 As we step into Tax Audit season, Section 43B(h) will be a hotspot of scrutiny. Businesses and auditors alike need to prepare in advance. 👉 How is your organization gearing up for Section 43B(h) compliance? #MSME #TaxAudit #Section43B #Compliance #Finance #CharteredAccountant

Tax governance isn’t just compliance—it’s a trust builder. EY’s latest article shows why strong governance is now a strategic advantage: ✅ Builds credibility with tax authorities ✅ Reduces risk and complexity ✅ Unlocks preferential programs My take: Moving from reactive compliance to proactive governance is key. It’s about transparency, accountability, and long-term value. 👉 How is your organization evolving its tax governance to stay ahead?

⚠️ Tax Compliance Risks: What They Are — and How to Control Them 📣 For most business owners, tax compliance feels like background noise… until it isn’t. Missed deadlines. Misclassified workers. Unfiled sales tax. These aren’t just small mistakes — they’re the reason the IRS issued $7 billion in penalties last year. 🔗 Link to my article is below 👇 #TaxStrategy #Compliance #SmallBusiness #RiskManagement #WestonTax

Dear ,Nigerians and those sharing information on the new tax law, please desist. There is alot of misconception about the new tax law going round and most of the people sharing it do not even understand it. If Taxation is that simple, we wont have professional bodies like ICAN, ACCA, CITN and ANAN to train professionals on Taxation. If big corporations with established finance departments still have external tax consultants, you should know that it's not enough to just search online or ask AI agents for tax advice. (Even the AI will ask you to consult a tax expert or legal consultant for advice) As it stand now, FIRS(NRS) staff are undergoing training on the new staff law because the new tax law and the transition to NSR is a complete overhaul, stop sharing everything you see ignorantly, there's a reason some of us who studied accounting, who have some knowledge in Taxation are yet to say anything about it. We have chartered accountants like my coursemate Mohammed Obashola (AAT, ACA) , David Olawaye (AAT) and my senior colleague Bashir Abubakar Gazaki who are yet to make comments on it. We are still reading it and trying to understand it. We are not saying someone can not read the tax law and understand on their own o, or they can't have an opinion, that's not true, but your opinion should be an informed opinion. Gazaki inspired me to share this this morning Good morning. Al-mare

"Confused between Form 3CA and 3CB while filing a Tax Audit Report? Here’s a simple breakdown 👇" 🔹Form 3CA When used? If the taxpayer’s accounts are already audited under any other law (e.g., Companies Act, LLP Act, Co-operative Societies Act). Who generally files? Companies LLPs Entities that mandatorily get their accounts audited under another statute. What it contains? The CA refers to the statutory audit report (already done under that law) and adds tax audit-specific observations. --- 🔹 Form 3CB When used? If the taxpayer’s accounts are not audited under any other law. Who generally files? Proprietorships Partnership firms (not LLPs) Professionals / Individuals What it contains? The CA does a full audit and gives an independent report specifically for income tax purposes. --- 🔹 Common Annexure – Form 3CD Both 3CA and 3CB are always filed with Form 3CD, which contains detailed financial and tax particulars (44 clauses). --- 👉 In short: 3CA → For entities already audited under another law. 3CB → For entities not audited under any other law. 👉 Which one applies to you? comment down