Under section 469 of the company act, the central government has made it mandatory for every company/business to use only such accounting software that has the feature of recording the audit trail of each and every transaction, on or after 1st April 2021. Also, companies are mandated to create an edit log of each change made in account books with the proper dates. As per the amendments, companies must ensure that the audit trail feature in the software they use is not disabled.
In the notification released by the Ministry of Corporate Affair, it’s been further notified in rule 8 that the board reports must contain the details of an application made or any proceeding pending under insolvency and bankruptcy code, 2016 (31 of 2016) during a year along with their status as at the end of the financial year.
With these amendments, the income tax department can track all the transactions/invoices/bills made by companies/enterprises. Consequently, the cases of tax evasion can be minimized and in proportion, a significant amount of tax can be collected. Furthermore, Companies Amendment Rules will help responsible taxpayers to pay the requisite amount of tax and file the return for all expenses they have made. It too can be beneficial for the companies/enterprises/ to show their exact expenses and claim the maximum refund. This will reduce the ITC claimable issue which is one of the biggest problems in the GST system and hence will reduce the pains of the honest taxpayers.
HostBooks is an all-in-one cloud-based business and compliance management software, which helps you from managing/controlling business account to keeping a record of your every transaction. Its intuitive and automated features such as auto e-Invoice generation, view/track payment status, automated payment reminders, and automated audit trail record render great benefits to the customers. With HostBooks, customers can explore more like easy GST return filing, TDS/TCS return, E-way bill, and E-invoice generation at a single platform.
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