Frequently Asked Questions (FAQ)

Tax and e-Filing

What is TDS?

TDS means Tax Deducted at Source.

Is TDS relevant for a businessman?


The banker wants to deduct tax on my deposits, whereas my Income is not taxable. What do I do?

You can file a self-declaration to the banker in form 15H stating that your income is below taxable limit.

I have deducted tax from payments made but not deposited in Government Account. What are the consequences?

It is an offence to misuse the tax deducted at source.

What can I do if I don’t get the TDS certificate?

Please inform the department.

My employer does not provide TDS certificate. Can I claim TDS deducted from my salary?


If neither employer deducts tax nor employee pay his due tax, who is accountable for tax payment?

The Employee to pay tax.

The employer to pay interest and penalty for failure to deduct tax.

Can I use PAN to pay the TDS deducted into government account?

No. You are required to take a separate Tax Deduction Account Number [TAN].

Is there TDS on reimbursement of actual expenses?

No, there is no TDS on reimbursement of Expenses.

Can a duplicate certificate be issued?


What is e-TDS Return?

e-TDS return is a TDS return prepared in form in electronic media.

Who is required to file e-TDS returns?

All corporate and government deductors.

What are TDS Certificates?

A TDS certificate is to be issued by the person deducting tax at source.

What is OLTAS?

OLTAS means – Online Tax Accounting System.

What is PAN?

Permanent Account Number (PAN) is a ten-digit alpha-numeric number, issued by the Income Tax Department.

Deductee is foreigner and does not have PAN. Do I need to deduct TDS?

Yes. In case the person does not have PAN, tax should be deducted at the rate of 20% or higher.

Can a foreign citizen apply for a PAN?


What is Service Tax?

It is an indirect tax levied on the transaction of certain specified services by the Central Government under the Finance Act.

What is the rate of service tax?

At present, the rate of service tax is payable at 12% on the “Gross value of taxable service”. In addition to this educational cess is charged at 3% on the service tax amount. A total of 12.36% is charged on the value of the taxable service.

What is CFC?

CFC refers to Certified Facilitation Centre.

What is a balance sheet?

Balance Sheet is a statement showing financial position of the business on a particular date.

Why is balance sheet prepared?

It is prepared to know the exact financial position of the business on the last date of the financial year.

What is an asset?

An asset is anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value.

What is a liability?

A liability is an obligation or debt of your business from past transactions or events.

What is equity?

Equity is the owners claim on the assets of the business.

What are fixed assets?

A long-term asset owned by firm for production of its income and is not expected to be consumed or liquidated in next 12 months.

What is accounts payable?

Accounts payable are debts are payable in a given period.

What are long term liabilities?

Long term liabilities are liabilities with a tenure of over one year.

What is trial balance?

Trial Balance is a list of closing balances of ledger accounts on a certain date.

What are retained earnings?

Retained earnings are non-distributed profit earmarked for creative investments.

What do you mean by prepaid expense and outstanding expense?

Prepaid expense is making payment in the current financial year for expenditure related to next financial year.

Outstanding expense is making provision for the expenses relating to current year for payment in the next financial year.

What is Capital Expenditure?

Capital Expenditure is an amount incurred for acquiring the long term assets such as land, building, equipment which are used for the purpose of earning revenue.

What is Revenue Expenditure?

Revenue Expenditure is the expenditure incurred in an accounting year, the benefits of which are enjoyed in the same accounting period.

What is Deferred Revenue Expenditure?

Deferred Revenue Expenditure is a revenue expenditure incurred in an accounting year, the benefit of which is extended to a number of years.

What are the rules of double entry book keeping for various types of accounts?

Following are the basic rules of double entry book keeping for various types of accounts:

•Personal Account: Debit the Receiver, Credit the Giver
•Real Account: Debit what comes in, Credit what goes out
•Nominal Account: Debit all the Expenses, Credit all the Incomes

What is depreciation?

Depreciation is a permanent, gradual and continuous reduction in the book value of the fixed asset.

Why are Profit and Loss Accounts prepared?

Profit and Loss Account is a periodic statement which is prepared to show the profit or loss incurred by the Organization in a specific period.

What is audit?

The dictionary meaning of the term “audit” is check, review, inspection, etc.

What is the due date to get the accounts audited?

For an assesse covered by section 44AB, on or before 30th September of the relevant assessment year

For an assesse, who is required to furnish a report in Form No. 3CEB under section 92​  the due date is 30th November of the relevant assessment year.

In case of e-filing of audit reports what is the date of audit report?

Date on which the report is physically signed by the Auditor shall be the date of audit report.

Is it possible to e-file the ITR first and then e-file the audit report?

e-filing of ITR and Tax Audit report are independent actions.

What is the difference between statutory audit and internal audit?

Statutory audits are conducted in order to report the state of a company’s finances and accounts to the Indian government.

Internal audits are conducted for internal management in order to assess the financial and operational health of the organization.

What is the difference between Tax audit and Company audit?

Tax Audits
Tax audits are required under Section 44AB of India’s Income Tax Act 1961.

Company Audits
Every company, irrespective of its nature of business or turnover, must have its annual accounts audited each financial year, which is known as Company Audit.