Summer InternShIp project report

on

Taxation and Audit Aspects of A Company

In CA Firm
Towards Partial Fulfillment of
BACHELOR OF COMMERCE
Affiliated to

unIVerSItY oF LucKnoW
Submitted To- Submitted by-
UNIVERSITY OF LUCKNOW Navya Raj Yadav
LUCKNOW Roll No.-
[Link] Vth Semester

KALIchArAn p.G coLLeGe

LucKnoW
 tABLe oF content
PARTICULAR PAGE NO.
Cover Page

Internship Offer Letter

Certificate of Internship

Declaration

Acknowledgement

Table of Content

About Internship Organization

About work Profile

Work Experience

Key Learnings

Challenges Faced during internship

Conclusion

Future Scope
 compAnY proFILe
CHAKRAVARTI GHOSH GUHA & COMPANY
(Chartered Accountants)

FIRM NAME- Chakravarti Ghosh Guha & Company

CA FIRM STATUS- Partnership Firm.
MAIN PARTNER NAME- Harendra Kumar Tripathi.
TOTAL NO. OF PARTNERS- 5
NO. OF BRANCHES AND DETAILS- Mumbai & Kolkata Head Office Lucknow.
YEAR OF ESTABLISHMENT- 1949
SERVICES OFFERED BY FIRM- Chakravarti Ghosh Guha & Company is the 68
years old well established firm with multidicipliary assignments all round
exposure.
OTHER DETAILS OF THE FIRM
ADDRESS- III Floor New Janpath Complex Hazratganj, Lucknow Uttar Pradesh.
E-MAIL- [Link]@[Link]
PHONE NO.- 9450658813
 ABout InternShIp orGAnISAtIon
VISIon AnD mISSIon

Chakravarti Ghosh Guha & Company is a Team of individuals that collects,

interprets, and maintains Financial Information while providing quality
customer service and training. We strive to protect the financial integrity of
the university in a changing regulatory and technical environment. A
department recognized for providing excellent customer service, including
training, and reliable, accurate financial information.

Our goal is to provide a full range of financial information from detailed

information.
SerVIceS oFFereD BY chAKrAVArtI GoSh GuhA
& compAnY
Account & Advisory Services-
• CHAKRAVARTI GOSH GUHA & COMPANY Accounting Advisory Services
can help you plan and complete acquisition or divestiture transaction
and it also provides you with accountability of a single rupee.
Tax Compliance-
• Our team of Tax Professionals draws on their diverse experiences and
knowledge to provide seamless services through the entire spectrum of
challenges pertaining to planning, financial accounting and tax
compliance.
Social Security Consulting-
• At present, various social security schemes are in operation for different
categories of employees. All these schemes are formed after
considering the benefits of employees and their future.
Audit and Assurance-
• Chakravarti Ghosh Guha & Company aims to be at the cutting edge of
the evolution of the best practices in the Audit domain. Our
contemporary Audit Processes enable Effectiveness and Efficiency in
our methodology.
Company Law-
• The firm provide all the necessary services to existing and prospective
clients to facilitate Business Formation in India.
Business Advisory-
• Our company takes care of all the payroll process requirement. We
provide simple and convenient way to pay salary to the employees and
file Tax return in time.
 IntroDuctIon
Income tax is a financial and legal obligation in India. All individuals earning
above a certain amount are required to pay income tax on their earned
income. The income tax rates, income slabs, and rules are regulated by the
government and are subject to change from time to time. However, all
taxpayers are responsible for accurately reporting their income and filing their
taxes on time. Failure to do so can result in penalties and fines.

DeFInItIon oF Income tAx

Income tax is a tax charged on the annual income of an individual or business
earned in a financial year. The Income Tax system in India is governed by The
Income Tax Act, 1961, which lays out the rules and regulations for income tax
calculation, assessment, and collection. All taxpayers are mandated to submit
an Income Tax Return (ITR) every year by respective due dates as per the law
to report their income and claim a tax refund if applicable. An income tax
return can be filed online or offline on the Income Tax Department's official
website or through verified third-party websites.
The Indian Income Tax system also includes various deductions and
exemptions that can be used to lower the tax liability for a given financial
year.

ABout Income tAx DepArtment,

InDIA
The Income Tax Department is a Ministry of Finance, Government of India
organisation. It administers the collection, computation, and refund of direct
taxes, such as income tax, in the country. The department works under the
Central Board for Direct Taxes (CBDT).
 Income tAx Act
The Income Tax Act, 1961 is the primary law governing the collection,
computation, and administration of income tax in India. The act lays down all
the rules and regulations as well as the rights and responsibilities of
taxpayers. It also underlines the Income Tax Department's role in the
collection of tax and tax returns.
The Income Tax Act, 1961 includes various sections and sub-sections,
like Section 80C, Section 80D, Section 80G, Section 10(10D), and several
others highlighting the exemptions, deductions, as well as limits to help
taxpayers reduce their taxable income and compute their tax liabilities
accurately.

Income tAx return (Itr)

The ITR is a document that all taxpayers are required to file with the Income
Tax Department of India. It consists of details on the income earned during a
financial year and the taxes owed to the government. It is mandatory to
submit the tax return each year under Section 139 of The Income Tax Act,
1961. Failure to file the return on time can result in a late fees under Section
234F of The Income Tax Act, 1961.
There are two ways to file a tax return in India - offline or online.

e-FILInG Income tAx

The government allows taxpayers to file their returns online from the comfort
of their homes and offices. Electronically filing (e-filing) tax returns offer several
advantages. It takes less time. The computation of tax becomes simpler as
the process is straightforward and streamlined. Taxpayers also do not
necessarily need to hire tax professionals or chartered accountants to file
their returns but can do so themselves. This helps save money too. Moreover,
 e-filing is a 24x7 service, and taxpayers can easily track the status of their
claims/ refunds online.

Income tAx cALcuLAtIon

Income tax calculation can be done manually by taxpayers. Alternatively, they
can also use an online income tax calculator. The calculation of income tax is
done on the basis of the tax slab, the individual falls into. Additionally,
taxpayers can also claim tax deductions and exemptions, such as on life
insurance premiums, investments in the Public Provident Fund (PPF),
National Pension Scheme (NPS), House Rent Allowance (HRA), Leave Travel
Allowance (LTA), and more. The government also offers a standard deduction
of up to ₹ 50,000.

Who IS requIreD to pAY Income

tAx?
Any individual earning more than ₹ 2.5 lakh annually in a financial year is
required to pay income tax to the Government of India. Here are the different
types of taxpayers in India:
• Individuals: (Further divided as individuals under 60 years, individuals
between the ages of 60 and 80 years, and individuals aged over 80
years)
• Hindu Undivided Family (HUF)
• Association of Persons (AOP)
• Artificial Juridical Person
• Firms
• Companies
❖ For the purpose of Income-tax Law, an individual may have any one of
the following residential statuses:
• Resident and ordinarily resident in India (ROR)
• Resident but not ordinarily resident in India (RNOR)
• Non-resident (NR)
❖ Under Indian tax laws, the scope of taxation differs as per the
residential status of an individual:
• RORs are subject to tax in India on their global income, wherever
received
• RNORs are subject to tax in India only in respect to income that
accrues/arises or is deemed to accrue/arise in India, or is received or
deemed to be received in India, or is from a business controlled from
India or from a profession set up in India
• NRs are subject to tax in India only in respect to income that
accrues/arises or is deemed to accrue/arise or is received or deemed
to be received in India.
Nature of Income Residential status
ROR RNOR NR

Income which accrues or arises in India Taxed Taxed Taxed

Income which is deemed to accrue or Taxed Taxed Taxed
arise in India
Income which is received in India Taxed Taxed Taxed
Income which is deemed to be received Taxed Taxed Taxed
in India
Income accruing outside India from a Taxed Taxed Not
business controlled from India or from a taxed
profession set up in India
Income other than above (i.e., income Taxed Not Not
which has no relation with India) taxed taxed
 tAxABLe heAD oF Income tAx
The Total Income of a person is divided into Five Heads, viz., Taxable.
1. Income from Salary.
2. Income from House Property.
3. Income from profits and gains of business and profession.
4. Income from Capital Gain.
5. Income from Other source.

• Salary Income :-
In certain cases, an employ can claim both HRA (House
Rent allowance) as well as interest on Housing loan.

• House Property Income :-

If interest paid for property given on rent is
less than taxable rent (after standard deduction – 30%). Such loss can
be set off against income from other heads including income from
salary.

• Income from Capital Gain :-

Surplus from derivatives contracts is non-
speculation Archaeological collection, Drawings, paintings, Sculptures,
Any other work of Art. Thus, now any surplus received From sale of
these articles would be liable to tax under the head capital gain.

• Business Income :-
Any type of income received from business.

• Income from Other Sources :-

Dividend, commission, lotteries,
crossword puzzles, races, card games, any sort or from gambling or
betting.
 Income tAx FormS LISt
There are different ITR forms to pay income tax in India that taxpayers
can choose from, based on the type of income and nature of
employment.
Itr 1
For individuals being a resident (other than not ordinarily resident) having
total income upto ₹ 50 lakh, having Income from Salaries, one house
property, other sources (Interest etc.), and agricultural income upto ₹ 5,000/-

Itr 2
For individuals and HUFs having total income more than ₹ 50 lakh. Also,
Individuals and HUFs not having income from profits and gains of business or
profession can opt for this form. Individuals and Non-Resident Indians (NRIs)
not having income from profits and gains of business or profession can also
use this form.

Itr 3
For individuals and HUFs having total income more than ₹ 50 lakh. Also,
Individuals and HUFs not having income from profits and gains of business or
profession can opt for this form. Individuals and Non-Resident Indians (NRIs)
not having income from profits and gains of business or profession can also
use this form.

Itr 4
For Individuals, HUFs and Firms (other than LLP) being a resident having total
income upto ₹ 50 lakh and having income from business and profession
which is computed under sections 44AD, 44ADA or 44AE and agricultural
income upto ₹ 5,000/-

Itr 5
For persons other than individual, HUF, company and person filing Form ITR-7
 Itr 6
For companies that have not claimed a tax exemption under Section 11 need
to use ITR 6.

Itr 7
For Persons including companies who need to file their tax returns under
Section 139(4A), Section 139(4B), Section 139(4C), Section 139(4D), Section
139(4E), and Section 139(4F) must use ITR 7.

Itr V
ITR V is the acknowledgement form that is used for the verification of a tax
return. This should be duly e-verified In case e-verification is not possible, it is
to be signed and sent to the Income Tax Department, Centralized Processing
Centre (CPC) in Bangalore.
 InVeStment optIonS For Income
tAx SAVInG In 2023
FIxeD DepoSIt
Tax-saving fixed deposits are a low-risk savings tool with a guaranteed return.
Fixed deposits are time deposits that have a lock-in period of five years. The
rate of interest can also differ from bank to bank. Five-year fixed deposits are
the only type of savings deposit that is covered under Section 80C for
tax* deductions.

puBLIc proVIDent FunD

The Public Provident Fund is a government-backed savings scheme. It has a
maturity period of 15 years. However, account owners are allowed to make
withdrawals every year from the seventh financial year onward. It is suitable
for long-term goals because of the lock-in periods. Moreover, it offers low risk
and can be ideal for conservative investors. It also offers tax* deductions
under Section 80C.

unIt-LInKeD InSurAnce pLAn (uLIp)

A Unit-Linked Insurance Plan is a type of insurance product. However, apart
from life insurance, it also allows investors to invest their money in the funds
of their choice. This unique product secures the life insured financially while
enabling them to fulfil various financial goals by investing in equity, debt, and
hybrid funds. ULIPs have a five-year lock-in period, and their returns can vary
based on the choice of funds and prevailing market conditions. However, they
can be the most suitable for long-term goals like your child's higher
education, your retirement, and more. ULIPs offer tax* deductions under
Section 80C and proceeds are exempt subject to conditions under Section
10(10D).

nAtIonAL SAVInGS certIFIcAte

The National Savings Certificate is another one of the Government of India-
backed savings schemes. However, it can only be opened in a post office. It is
primarily aimed at encouraging small to mid-income investors to save for
their future needs. It is a low-risk plan with a guaranteed return and tax*
deductions under Section 80C.
Senior Citizen Savings scheme
The Senior Citizen Savings Scheme is a special savings scheme for senior
citizens. Only people over the age of 60 can use it to save for their retirement
needs. Since it is aimed at senior citizens, it contains low risk. It also offers
deductions subject to conditions prescribed under Section 80C*.

LIFe InSurAnce
Life insurance is a financial tool that offers financial protection against loss of
life during the policy tenure. Life insurance offers guaranteed payouts to the
insured's beneficiary in the case of an unfortunate event. There are several
types of life insurance plans, such as term insurance, endowment insurance,
annuity insurance, ULIPs, and more. All of these offer tax* benefits subject to
conditions prescribed under Section 80C* and Section 10(10D)*.

penSIon pLAnS
Pension plans are a type of life insurance tool that offers dual benefits. These
plans offer financial protection against loss of life during the policy term while
allowing investors to build a retirement nest egg for their future needs.
Pension plans also offer a guaranteed return and can be used to create an
assured stream of income after retirement. Additionally, they offer deductions
subject to conditions prescribed under Section 80C* & 80CCC.

heALth InSurAnce or meDIcLAIm

Health insurance is a type of insurance that offers financial protection against
the treatment of illnesses and injuries. It can also be used to cover
supplementary costs like ambulance expenses, pre- and post-hospitalisation
care, preventative health check-ups, medicines, room rent at the hospital, and
more. The premiums paid towards a life insurance plan qualify for deductions
subject to conditions prescribed under Section 80D*. These deductions can be
made for a policy for self, spouse, dependent children, and parents.

neW penSIon Scheme

The New Pension Scheme is a voluntary defined pension plan. The scheme
has two accounts- Tier 1 and Tier 2. Tier 1 is mandatory for all government
servants who joined the service on or after January 1, 2004. Tier 2 is an
optional account. The scheme qualifies for deductions subject to conditions
prescribed under Section 80C* and Section 80CCD*.

tAx-SAVInG mutuAL FunDS

Some mutual funds, like the Equity-Linked Savings Scheme (ELSS), also
qualify for deductions subject to conditions prescribed under Section 80C*.
ELSS funds invest in equity and equity-related securities and have lock-in
period of three years. They can be ideal for high-risk investors with a long
investment horizon as they are subject to market volatility. There is no
guarantee of a return. However, they have delivered high gains over the long
term.
Income tAx DeDuctIon SectIon LISt
SectIon 80c
Section 80C* of The Income Tax Act, 1961 allows for tax deductions on
several types of investments and expenses, such as contributions to fixed
deposits, PPF, NPS, life insurance premiums, and more. The section allows a
deduction of up to a maximum limit of ₹ 1.5 lakh per annum.

SectIon 80ccc
Section 80CCC offers tax deductions of up to ₹ 1.5 lakh per annum for
contributions towards pension funds offered by a life insurance company.
Taxpayers can claim the money spent on the purchase, renewal, and
continuation of such pension plans.

SectIon 80ccD
Section 80CCD offers tax deductions on contributions made to the National
Pension Scheme (NPS) and Atal Pension Yojana (APY). Taxpayers can claim a
tax deduction of up to ₹ 1.5 lakh in a financial year under Section 80CCD(1)
and an additional deduction of ₹ 50,000 under Section 80CCD(1B) per
annum.
The aggregate amount of deductions under Section 80C, Section 80CCC &
Section 80CCD(1) shall not be more than ₹ 1.5 lakh per annum.

SectIon 80D
Section 80D* pertains to tax deductions for medical insurance premiums. It
offers a deduction of up to a maximum limit of ₹ 25,000 in a financial year
for a policy bought for self, spouse, and dependent children. It further offers a
tax deduction up to ₹ 50,000 per annum if any of the insured is a senior
citizen. Hence, the maximum tax deduction under this section can be
extended to ₹ 1 lakh in a financial year.

SectIon 80DDB
This section offers a tax deduction on the expenses incurred on the treatment
of specified diseases and ailments. It includes neurological diseases where
the disability level is 40% and above, malignant cancers, chronic renal failure,
haematological disorders, and others. The section offers a tax deduction of ₹
40,000 per annum, or the amount actually spent, whichever is less. For senior
citizens, the amount is increased to ₹ 1,00,000 per annum, or the amount
actually spent, whichever is less.

SectIon 80e
This section offers tax deductions on interest paid for education loans. The
deductions are available for a maximum period of 8 years or till the interest is
paid, whichever is earlier. There is no limit on the amount of tax deduction.

SectIon 80ee
Section 80EE* of The Income Tax Act, 1961 offers a tax deduction on the
interest paid for a loan for a residential property. The maximum tax deduction
can be up to ₹ 50,000 in a financial year.

SectIon 80rrB
Residents in India earning income from royalty from a patent registered on or
after April 1, 2003, under the Patents Act, 1970, can claim a tax deduction of
up to ₹ 3 lakh per annum or the whole income earned from royalty, whichever
is less.

SectIon 80ttA
Section 80TTA* of The Income Tax Act, 1961 offers a tax deduction of up to ₹
10,000 per annum on the income earned from interest on savings accounts
deposits of a bank, post office, or co-operative society.

SectIon 80u
Section 80U* offers tax deductions to disabled persons with at least 40%
disability, as declared by a certified medical authority. The maximum tax
deduction limit is ₹ 75,000 or ₹ 1,25,000 in a financial year if the disability is
certified as 80%.

SectIon 24
This section allows house owners to claim a tax deduction of up to ₹ 2 lakh in
a financial year on the interest paid for a home loan.