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  In a much-awaited relief to banks and other taxpayers, the income tax department on Tuesday clarified that the recently introduced tax deducted at source (TDS) provisions will not apply to loans waived through one-time settlements and other schemes as well as bonuses and rights share issues. The Finance Act 2022 introduced a new section 194R in the Income Tax Act for withholding 10% TDS on benefits or perquisites from non-salary sources. However, banks have flagged the challenges in implementing the new TDS provisions on loans waived through one-time settlements or other schemes and sought relief on this front. The circular is for the removal of difficulties in interpretation of provisions of the section and does not impact the taxability of income in the hands of the recipients. Accordingly, TDS won't be applicable on one-time loan settlement with borrowers/waiver of loan granted on reaching settlement with the borrowers by institutions such as public financial institutions, sch...

Auditing and Assurance Standards Board | The Institute of Chartered Accountants of India | 7th September 2022: External Confirmations through Third Party Vendors External confirmations have been an important and integral part of audit procedure in order to obtain sufficient appropriate audit evidence in line with requirement prescribed in various Standards on Auditing (SAs). Over the years, auditors have been using external confirmations to obtain account balances confirmation from various parties (confirming parties) including banks. However, it has come to the notice of the Institute of Chartered Accountants of India (ICAI) that, in recent years, auditors are facing various difficulties in obtaining external confirmations from banks. One of the major concern in this regard is that some banks are using services of third-party vendors to provide confirmations on their behalf to auditors. Use of third-party vendors leads to the risk that the information provided by third-party vendors m...