PKC’s Tax Audit Services for Section 8 Company | Reliable and Efficient

The nature of Section 8 Companies, focused on promoting charitable objectives, require adherence to regulatory standards. Tax audit services for Section 8 Company play a vital role in ensuring financial integrity and transparency. 

These services help verify that the organization’s financial practices align with legal requirements which builds trust and accountability. Delve deeper with us in understanding the requirements of these tax audits, their scope and the advantages of having accountable firms like PKC Management Consulting by your side. 

Section 8 Company Eligibility & Requirements for Tax Audit

Section 8 companies in India are required to get their annual accounts audited by a qualified Chartered Accountant. Here’s what you need to know about these audits:

Tax Audit Requirements

• As in the case of regular businesses, there’s no specific turnover limit for mandating a tax audit under Section 44AB of the Income Tax Act for Section 8 companies.
• The company’s tax audit report must be filed along with its annual income tax return.
• Tax audits can cover- Income Tax Audit and Transfer Pricing Audit (if international transactions are involved).
• The company must comply with TDS, GST, and other tax-related obligations if applicable. 
• Failure to comply with audit requirements can result in penalties and fines imposed by the Registrar of Companies (ROC).

Audit Report Requirements

The audit report for a Section 8 company must follow the following :

• Auditor is appointed for a maximum of 5 financial years
• Audit report must be filed with the Income Tax Department along with the annual income tax return
• Form 10BB is to be submitted with the audit report. It contains details of funds received and activities carried out by the Section 8 Company.
• Accounting Standards and Schedule III of Companies Act need to be followed while preparing financial statements
• Secretarial audit is required if the company meets the criteria under Section 204 of Companies Act

Scope of Tax Audit Services for Section 8 Company

Tax audit services for Section 8 company cover a broader spectrum than a regular business due to its unique nature and objectives. Here’s a quick breakdown of the scope:

Verification of Financial Statements

• Accuracy and completeness of income, expenditure, and balance sheet figures.
• Verification of accounting policies and methods used.
• Ensuring compliance with accounting standards applicable to non-profit organizations.

Compliance with the Income Tax Act

• Verification of exemption under Section 12A and 80G (if applicable).
• Examination of income from various sources including donations, grants, investments, etc. to ensure correct tax treatment.
• Verification of deductions and exemptions claimed.
• Assessment of transfer pricing implications if applicable in the case of Section 8 companies.
• Ensuring compliance with provisions related to TDS/TCS.

Compliance with Section 8 Objectives 

• Verification that the company’s activities are in line with its stated objectives.
• Examination of expenditure to ensure it is directly related to the company’s objectives.
• Assessment of the utilization of funds for the intended purposes.
• Verification of income-generating activities (if any) and their alignment with the main objectives.

Related Party Transactions

• Scrutiny of transactions with related parties to ensure arm’s length pricing.
• Verification of proper disclosure of related party transactions.

Documentation and Records

• Verification of the adequacy and accuracy of accounting records and supporting documents.
• Checking the maintenance of registers and books of accounts as per statutory requirements.

Compliance with Other Laws 

• Verification of compliance with other relevant laws such as Foreign Contribution Regulation Act (FCRA), if applicable.

What Makes PKC Management Consulting Stand Out As Tax Audit Services for Section 8 Company?

PKC Management Consulting positions itself as a specialized service provider for Section 8 companies for the following series:

Quality Assurance

PKC’s team comprises qualified and experienced professionals who can ensure high-quality tax audit services for Section 8 companies. Our experts implement robust quality control procedures that help maintain consistency and accuracy.

Deep Understanding of Section 8 Companies 

Having helped businesses across different sectors and segments, we have gathered a strong grasp of the specific tax laws, rules, and regulations applicable to Section 8 companies. This puts us in a position to conduct tax audits of Section 8 companies in different sectors.

Expertise in Non-Profit Accounting

Understanding the nuances of non-profit accounting is crucial for accurate financial reporting and tax compliance. At PKC Management Consulting we have CAs and other experts who specialize in just that and more.

Proven Track Record of Tax Savings 

We boast a strong history of delivering substantial tax savings for our Section 8 company clients. These savings range from a few lakhs to several crores. This track record is a testament to our expertise in navigating the complex tax regulations applicable to Section 8 companies.

Technology and Efficiency

Our experts leverage technology to streamline the audit process, improve efficiency, and enhance data analysis. We make use of data analytics to help identify trends, anomalies, and potential areas of concern.

Specialized Services 

We offer a customized audit process designed specifically for Section 8 companies. Beyond audit, we also provide tax planning, compliance, and advisory services to help Section 8 companies optimize their tax position.

Schedule a Call with PKC’s experts Today!