🇮🇳 India Year‑End Close & Statutory Audit Playbook

✨ A step‑by‑step checklist with must‑haves, templates, and filings (company‑agnostic)

🔝 Executive Summary

A practical, company-agnostic India Year-End Close & Statutory Audit Playbook that walks finance teams from cut-off and data extraction to core reconciliations, adjustment entries, draft financials (P&L/BS/CF/Notes), trial balances, audit sign-off, and the post-audit filings (Companies Act, Income-tax, GST Annual). It includes data-source priorities (ERP-first), GST/TDS reconciliations, RCM handling, MSME and related-party disclosures, plus ready-to-use journal templates, deliverables checklist, and communication templates—all with emoji-enhanced headings for fast scanning.

📑 Table of Contents

1. 🧭 Prep & Cut-off (Day 0–2) — ERP-first data strategy, pulls, immediate recons, contingency if ERP is down
2. ✅ Core Reconciliations (Day 2–5) — Bank & cash, revenue/AR, purchases/AP & ITC, GST control, TDS, payroll, FAR/leases, inventory
3. 📘 Draft Financials (Day 7–9) — P&L (accrual), Balance Sheet (Schedule III), Notes to Accounts, Cash Flow (indirect)
4. 🧾 Trial Balances (Day 9) — Pre-close (for audit) & Post-close (BS-only) with mapping and checks
5. 🧑‍⚖️ Statutory Audit (Day 10–20) — Kick-off pack, typical requisitions, final deliverables (UDIN, CARO, signed FS)
6. 🏛️ Corporate & Tax Filings (Post-Audit) — AGM → AOC-4, MGT-7, ADT-1, DPT-3/MSME-1/BEN-2, DIR-3 KYC; ITR-6, 3CD; GSTR-9/9C
7. 🛡️ Controls, Policies & Disclosures — RevRec (AS-9/Ind AS-115), Ind AS-116 leases, related-party, ECL/impairment, MSME, GC & subsequent events, ICFR, Ind AS-19
8. 📦 Deliverables Checklist (Single-PDF Audit Pack) — FS, TBs, Bank Book, GST Book, Key Registers, supporting docs
9. ✉️ Communication Templates — Cover email + WhatsApp nudge for auditors
10. 🧰 Ready-to-Use Lists — Year-end JE quick reference & evidence binder list

This is a common‑business guide for Indian companies—usable every year, regardless of size/industry. It’s ordered end‑to‑end: prepare books → reconcile taxes → draft financials → audit → AGM/ROC/ITR filings. Sample entries are generic (no real data).

🧭 0) Prep & Cut‑off (Day 0–2) — with Data‑Source Priority & Pull List

🔒 0.1 Lock & Snapshot

• Freeze ledgers: lock back‑dated entries in ERP/accounting (period lock).
• Access control: restrict user roles to “view only” post cut‑off.
• Snapshot: export a Trial Balance (TB) and archive a “TB‑D0” version.
• Change log: enable audit trail; any post‑freeze JE needs approval.

🧭 0.2 Source‑of‑Truth Hierarchy (what to trust first)

🧾 A) Sales / Operating Revenue (ex‑GST)

1) Primary – ERP / e‑invoice system
What: Sales Register (invoice‑wise, ex‑GST), credit notes, advances applied, revenue recognition rules (unbilled/deferred).
Why: Legal invoices + product/service split; only place to apply AS‑9 / Ind AS‑115.

2) Secondary – GST returns (corroboration)
What: GSTR‑1 (B2B/B2C), e‑invoice IRP JSON/CSV, E‑way bills (goods).
Why: Confirms tax reporting; catches missed/extra invoices vs ERP.

3) Tertiary – Collections systems (cash proof, not revenue)
What: Payment‑gateway settlements, POS, bank credits (NEFT/IMPS/UPI).
Why: Reconcile cash; don’t derive revenue from cash unless reconstructing.

If ERP is incomplete: Rebuild from GSTR‑1 + IRP + credit notes, then validate coverage against gateway/bank; keep revenue ex‑GST.

🛒 B) Purchases / Direct Costs / Expenses

Primary – ERP/AP sub‑ledger (PO/GRN/Invoice): vendor‑wise invoice register, item/service codes, tax breakup.
Secondary – GSTR‑2B (vendor‑wise): monthly 2B (eligible vs ineligible ITC).
Specials:
• Foreign SaaS / import of services: no local GST; if RCM applies, book RCM Output & Input (if eligible).
• MDR / Bank charges: often GST‑inclusive—split net + ITC using provider tax invoice.

📥 0.3 Pull List (exact extracts to download)

📊 Sales / Revenue (ex‑GST)

• ERP: Sales Register (invoice no/date, customer GSTIN, POS, taxable value, CGST/SGST/IGST, total, item/service code, cost center, salesperson)
• ERP: Credit Notes (separate file)
• ERP: Advances & adjustment report
• ERP: Deferred/Unbilled revenue schedules (if applicable)
• GST: GSTR‑1 summary & B2B/B2C details (all months)
• GST: E‑invoice IRP JSON/CSV dump (if applicable)
• Collections: Gateway settlements (daily/weekly), Bank statements (PDF + CSV)

🧾 Purchases / COGS / Opex

• ERP/AP: Vendor invoice register (invoice‑wise with tax breakup)
• ERP/AP: GRN & 3‑way match reports (PO/GRN/Invoice) for goods
• GST: GSTR‑2B monthly (Excel) – vendor‑wise ITC, ineligible flags
• Foreign vendors / RCM: contract/invoice list, RCM JE list (tax codes)
• Bank & MDR: provider tax invoices; fee/charge schedules
• SaaS: domestic vs foreign split; domestic with GST; foreign without

📚 Others (early)

• Fixed Asset Register (FAR): additions, disposals, CWIP, capitalization dates, useful lives
• Inventory: stock valuation (FIFO/WAC), physical counts/roll‑forwards
• Payroll: monthly payroll registers, PF/ESI/PT challans, Form‑16 drafts
• TDS: challans (24Q/26Q), past returns, 26AS/AIS for TDS receivable
• Prior year: signed FS, CARO (if any), management letter & TB

🔁 0.4 Immediate Reconciliations (do now, not later)

💼 Sales side

• ERP Sales (ex‑GST) ↔ GSTR‑1 (month/section‑wise)
• ERP credit notes ↔ GSTR‑1 CN (timing/values)
• ERP invoices ↔ IRP e‑invoices (count & totals)
• Collections: Gateway totals + MDR + chargebacks ↔ Bank credits (cash control only)

🧾 Purchases / ITC side

• ERP vendor invoices ↔ GSTR‑2B (vendor‑wise) → mark eligible/ineligible (blocked credit, POS mismatch, missed invoices)
• RCM: confirm output tax booked and ITC (if eligible) mirrored
• MDR/Bank/SaaS domestic: ensure ITC and net‑expense split is correct

🧮 Taxes & Ledgers

• GST control: Opening + Output − ITC − Cash = Closing (month‑wise roll)
• TDS payable: deducted vs challans calendar; TDS receivable: books vs 26AS
• Bank rec: Opening + receipts − payments = closing; list uncleared items

📜 0.5 Policy Baseline (lock early)

• Framework: AS (SMCs) or Ind AS (thresholds/listed group)
• Revenue policy: delivery/activation, treatment of advances, refunds, chargebacks, deferred revenue
• Inventory: method (FIFO/WAC), NRV tests, shrinkage policy
• Depreciation: Schedule II lives (or componentization for Ind AS), capitalization threshold
• Foreign expenses: RCM applicability & documentation
• Materiality & rounding: document thresholds; no separate rounding ledgers—embed paise

🧯 0.6 Common Gaps (fix during Day 0–2)

• Using GSTR‑1 as revenue: use for corroboration, not as substitute for ERP (unless reconstructing; keep a rebuild memo)
• Missing credit notes in ERP or GSTR‑1 → timing mismatch
• Foreign SaaS treated as GST‑paid: usually no GST unless RCM
• MDR/Bank charges expensed gross: split net + ITC if invoice has GST
• 2B mismatches ignored: mark ineligible/short‑booked; plan reversals
• Advances not adjusted: ensure proper revenue cut‑off (unearned revenue)
• Unbilled revenue not accrued: set up contract asset if policy requires

🆘 0.7 If ERP Is Unavailable (Sales Rebuild Contingency)

1. Start with GSTR‑1 + IRP dumps → derive invoice list & taxable values
2. Pull gateway/bank to validate coverage (count/amount), not to set revenue
3. Create a reconstructed sales register (invoice/date/GSTIN/POS/taxable/CGST/SGST/IGST/CN)
4. Write a reconstruction memo (why, scope, controls, diffs vs 3B)
5. When ERP returns, back‑post invoices & lock

📦 0.8 Minimal “Day‑0” Outputs to Hand Auditors

• TB‑D0 (frozen snapshot)
• Sales pack: ERP sales register, CNs, GSTR‑1, IRP summary
• Purchases pack: AP register, GSTR‑2B, RCM summary, vendor tax invoices
• Bank pack: bank PDFs/CSVs, gateway settlement files, bank recs
• Policy note: revenue, inventory, depreciation, materiality, rounding
• Open issues list: 2B vs ERP mismatches, pending CNs, uncleared bank items + target fix dates

🗺️ Quick “Where to Get What” (copy‑paste cheat‑sheet)

✅ Core Reconciliations (Day 2–5)

Fast, audit-ready checks with clear outputs. Use these as mini-SOPs your team can follow and tick off.

🏦 1.1 Bank & Cash

Objective: Prove cash integrity and cut-off.

Do this:

• Reconcile Opening + Receipts − Payments = Closing to the bank statement.
• Identify uncleared cheques, gateway MDR, chargebacks, bank fees.
• Prepare a dated Bank Reco Statement with support (statement pages, settlement PDFs).

Outputs: Bank Reco PDF, list of uncleared items with expected clear dates.

Red flags: Old uncleared items, large “suspense”, MDR posted gross (no GST split).

🧾 1.2 Revenue & Receivables

Objective: Ensure revenue (ex‑GST) completeness & accuracy.

Do this:

• Tie ERP Sales Register (ex‑GST) ↔ GSTR‑1 (B2B/B2C), and match e‑invoices (if applicable).
• Run AR ageing; circularize top customers; document write‑off / ECL logic.
• Check credit notes (timing/values) and advances applied.

Outputs: Sales tie‑out sheet, AR ageing, customer confirmations, CN log.

Red flags: GSTR‑1 ≠ ERP, unbilled/over‑billed items, stale receivables without action.

🛒 1.3 Purchases, Vendors & Payables

Objective: Correct expense recognition and ITC eligibility.

Do this:

• Map purchases/expenses vendor‑wise; split domestic (GST) vs foreign (no GST) / RCM.
• Prepare AP ageing; seek top‑vendor confirmations.

Outputs: AP register, ageing, vendor confirmations; domestic/foreign/RCM split.

Red flags: Missing tax invoices; foreign SaaS treated as GST‑paid; RCM not recorded.

📊 1.4 GST Reconciliations

Objective: Lock monthly GST truth.

Do this:

• Output: Books ↔ GSTR‑1 ↔ GSTR‑3B (month‑wise).
• ITC: Books ↔ GSTR‑2B (vendor‑wise). Mark ineligible/blocked; apply Rule 42/43 if relevant.
• Control account: Verify Opening + Output − ITC − Cash = Closing payable.

Outputs: 1) GSTR‑1/3B vs books tracker, 2) 2B ITC matrix, 3) GST control roll‑forward.

Red flags: ITC claimed but not in 2B; POS mismatch; control not balancing.

🧾 1.5 TDS/TCS

Objective: No leakage or late fees.

Do this:

• TDS payable (24Q/26Q) vs challans; check due‑date compliance.
• TDS receivable (26AS/AIS) vs books; chase missing credits; collect Form 16A.

Outputs: TDS payable calendar, challan set, 26AS tie‑out, missing‑credit tracker.

Red flags: Deducted but not deposited; credits missing in 26AS.

👥 1.6 Payroll & Statutory

Objective: Payroll accuracy and statutory tie‑out.

Do this:

• PF/ESI/PT challans ↔ payroll registers month‑wise.
• Book bonus/gratuity/leave provisions as per policy/actuarial (if applicable).

Outputs: Monthly tie‑out sheet; provision workings; challan packet.

Red flags: Delayed challans; missing registers; no provision basis.

🏗️ 1.7 Fixed Assets & Leases

Objective: Correct capitalization & depreciation.

Do this:

• FAR: additions, disposals, WDV; useful lives per Schedule II.
• Leases (Ind AS 116): reconcile ROU assets & lease liabilities.

Outputs: FAR roll‑forward, depreciation schedule, lease reconciliation.

Red flags: Expenses that should be capitalized; missing disposals; lease omissions.

📦 1.8 Inventory (if applicable)

Objective: Accurate quantity & valuation.

Do this:

• Perform physical count / roll‑forward; reconcile differences.
• Value per AS 2 / Ind AS 2; assess obsolescence provision.

Outputs: Count sheets, valuation workings, obsolescence memo.

Red flags: Negative stocks; NRV below cost without provision.

⚙️ Adjustment Entries (Day 5–7)

Use these journal templates; replace with your numbers and attach the supporting document to each JE.

💳 MDR / Bank Charges (GST‑inclusive)

Dr Expense (net)              ₹X
Dr Input GST – ITC            ₹Y
    Cr Bank                   ₹(X+Y)

Tip: Use tax invoice from gateway/bank; don’t expense GST.

🧾 Domestic Purchase (GST‑inclusive)

Dr Expense/COGS (net)         ₹A
Dr Input GST – ITC            ₹B
    Cr Bank/Creditor          ₹(A+B)

Tip: Verify vendor & invoice in GSTR‑2B for ITC eligibility.

🌐 Foreign SaaS / Import of Services (no local GST)

Dr SaaS Expense               ₹M
    Cr Bank                   ₹M

RCM case:

Dr Expense/RCM Base           ₹R1
    Cr Output GST (RCM)       ₹R2
Dr Input GST – ITC (RCM)      ₹R2
    Cr Expense/Offset         ₹R2

🧾 TDS on Vendor (deduct now, remit next FY)

Dr Relevant Expense           ₹P
    Cr TDS Payable            ₹P

At remittance (next FY): Dr TDS Payable / Cr Bank.

🧹 Bad Debts (trade receivable actually written off)

Dr Bad Debts                  ₹R
    Cr Trade Receivables      ₹R

Tip: Keep ledger extract, ageing, recovery trail, approval note.

📌 Accruals (Audit fee, services received)

Dr Expense                    ₹Q
    Cr Expense Payable        ₹Q

Tip: Reverse next year if needed and book the actual bill.

🧮 GST Year‑Aggregate Set‑off (Monthly/Year‑end)

Dr Output GST                 ₹ITC
    Cr Input GST – ITC        ₹ITC

Dr Output GST                 ₹CashPaid
    Cr Bank                   ₹CashPaid

Control check: Opening + Output − ITC − Cash = Closing payable (month‑wise).

✅ Attachments Checklist for Each JE

• Source invoice/contract/tax invoice
• Reconciliation extract (e.g., 2B match, bank/gateway proof)
• Approver sign‑off (name/date)

Pro tip: Keep a “JE Register” with columns: Date • JE No • Account • Dr • Cr • Narrative • Attachment link • Prepared by • Reviewed by. This speeds up audit sampling and closes queries faster.

📘 3) Draft Financials (Day 7–9)

🧮 3.1 Statement of Profit & Loss (Accrual)

Structure: Revenue (ex‑GST) → COGS → Gross Profit → Operating Expenses → Finance Costs / Other Income / Depreciation → PBT / Tax / PAT.

Do this:

• Build a mapped trial balance → P&L heads (Revenue, COGS, People, Technology, Banking & Finance (net of GST), Sales/Admin/Other, Statutory/Compliance, Other).
• Split Technology: SaaS/hosting domestic (net + ITC) vs foreign (no GST); include RCM where applicable.
• Banking/MDR: ensure net expense (GST portion to ITC); attach provider tax invoices.
• Statutory/Compliance: GST interest/late fee, audit fee accrual, TDS gross‑ups.
• Other: bad debts written off (trade), provisions reversals, one‑offs with narratives.

Outputs: Draft P&L (with prior‑year comparatives if available), variance notes (>X% or materiality), and supporting schedules per head.

Red flags: Revenue including GST; expenses booked gross where GST is claimable; foreign SaaS treated as GST‑paid; missing accruals.

🧾 3.2 Balance Sheet (Schedule III)

Headings map (cheat‑sheet):

• Equity: Share capital; Retained earnings (after current‑year close).
• Non‑current liabilities: Borrowings, lease liabilities, provisions.
• Current liabilities: Trade payables (MSME disclosure), GST payable, TDS payable, expenses payable, current maturities.
• Non‑current assets: PPE/ROU/Intangibles, CWIP, deposits.
• Current assets: Cash/bank, trade receivables (ageing), inventories, advances, Input GST (if any closing ITC), prepaid, other.

Do this:

• Build a BS mapping from TB with sub‑schedules (AR/AP ageings, borrowings, accruals).
• Perform cut‑off tests (post‑year invoices/receipts) for classification.
• Ensure offsets (e.g., ITC vs GST payable) are not netted unless legally permitted.

Outputs: Draft Balance Sheet + schedules, ageing annexures, borrowings & OD confirmations.

Red flags: Negative cash; receivables with no ageing; GST/ITC netted improperly; MSME disclosure missing.

📚 3.3 Notes to Accounts (essentials)

Include:

• Significant accounting policies (framework: AS/Ind AS; revenue recognition; PPE/depreciation; inventory; leases; financial instruments if Ind AS; foreign currency; provisions/contingent liabilities; taxes).
• Related‑party list & transactions (board approvals where required).
• Contingent liabilities & commitments.
• MSME dues disclosure; ageing schedules (AR/AP/Inventory) per Schedule III.
• Reconciliation statements (GST Output/ITC/Cash; TDS payable/receivable vs 26AS/returns).
• CSR (if applicable), segments (if required), going concern and subsequent events.

Outputs: Notes draft (numbered), cross‑referenced to P&L/BS captions.

Red flags: Policy‑practice mismatches; missing related‑party approvals; contingent items left in email chains (not disclosed).

💧 3.4 Cash Flow Statement

Method: Indirect (Operating / Investing / Financing). Mandatory for most companies (check exemptions).

Do this:

• Start with PAT → non‑cash (depr/amort, bad debts, unrealized fx) → working capital (AR/AP/Inventory/Other) to get CFO.
• Investing: capex, intangibles, deposits, proceeds on disposals.
• Financing: share capital changes, borrowings, interest/lease payments, dividends.
• Reconcile opening & closing cash/bank to BS and bank statements.

Outputs: Cash flow statement + reconciliation note; variance commentary vs prior year.

Red flags: CFO not reconciling to bank/BS; lease payments misclassified; interest placement inconsistent with policy/Ind AS.

🧾 4) Trial Balances (Day 9)

🧪 4.1 Pre‑close Trial Balance (for audit)

Purpose: Provide auditors the full ledger view before year‑end closing entries.

Do this:

• Export TB with all income & expense accounts and all balance‑sheet accounts.
• Ensure Dr = Cr; investigate suspense/rounding; fix mispostings (GST gross vs net, ITC mapping, RCM).
• Tag each line with GL code, group, and schedule mapping (P&L/BS).

Outputs: Pre‑close TB (xlsx/pdf), mapping sheet, exceptions list.

Red flags: Imbalances; GST control not tying; large suspense; negative inventories/receivables.

✅ 4.2 Post‑close Trial Balance

Purpose: Show balance‑sheet‑only view after closing P&L to retained earnings.

Do this:

• Pass closing entry:
  Dr/Cr Revenue & Expense ledgers → Retained earnings (net result).
• Re‑export TB; confirm only BS accounts remain; Dr = Cr.

Outputs: Post‑close TB (xlsx/pdf) + JE copy for P&L closure.

Red flags: Income/expense accounts lingering; retained earnings not matching P&L; prior‑period items posted after close.

Pro tip: Maintain a TB Change Log from Pre‑close → Post‑close (JE no., preparer, reviewer, rationale, attachments). Auditors love this and it speeds sign‑off.

🧑‍⚖️ 5) Statutory Audit (Day 10–20)

Goal: achieve a clean sign‑off (UDIN) fast, with minimal queries.

🚀 5.1 Kick‑Off Pack to Auditors

Send in one email (single PDF pack + raw backups):

• ✅ Signed Trial Balances (Pre‑close & Post‑close)
• ✅ Draft Financials: P&L, Balance Sheet, Cash Flow, Notes to Accounts
• ✅ Ledgers & Books: Bank Book, GST Book (Control + ITC composition)
• ✅ Key Registers: Sales, Purchases/ITC, TDS
• ✅ Bank statements (PDF + CSV), payment‑gateway settlements
• ✅ Major contracts, Board/Committee minutes, related‑party list

Pro tip: Attach a Cover Index (page numbers) + a “Changes Since TB‑D0” log.

📋 5.2 Typical Requisitions (Be Ready)

• 🔎 GST tie‑outs: GSTR‑1 / 3B / 2B vs books (month‑wise)
• 📄 26AS / AIS copies; TDS challans/returns; Form 16/16A
• 📬 Vendor/Customer confirmations (balances/transactions)
• 🧾 FAR with invoices; inventory counts/valuation packs
• 📊 Ageing analyses (AR/AP/Inventory) as per Schedule III formats
• 👥 Related‑party matrix & board approvals
• 📝 MRL – Management Representation Letter draft

Pro tip: Maintain a Data Room (read‑only) with folders mirroring the list above.

🧾 5.3 Audit Outputs (What You Receive)

• 🧑‍⚖️ Independent Auditor’s Report (with UDIN)
• 📑 CARO report (if applicable)
• 🖊️ Signed Financial Statements (P&L, BS, CF, Notes & Policies)
• 📎 Annexures: schedules, confirmations, reconciliations as required

Sanity check before acceptance: names, dates, period, UDIN, and page tie‑outs.

🏛️ 6) Corporate & Tax Filings (Post‑Audit)

File in time to avoid penalties and director DIN/DSC complications.

🏢 6.1 Companies Act (Private Company — Typical)

• 🗓️ AGM: hold within statutory timeline; adopt audited FS
• 📤 AOC‑4: file financial statements within 30 days of AGM
• 🧾 MGT‑7 (Annual Return): within 60 days of AGM
• 📝 ADT‑1: auditor appointment/ratification (as required)
• 🧮 DPT‑3, MSME‑1, BEN‑2 etc., if applicable
• 🆔 DIR‑3 KYC (directors) by due dates

Pro tip: Prepare a filings calendar with responsible owner & backups.

💼 6.2 Income‑Tax (Company)

• 🧾 ITR‑6 filing
• 🧮 Tax Audit (Form 3CA/3CB‑3CD) if Sec 44AB thresholds apply
• 💸 TDS returns (24Q/26Q) on schedule; issue Form 16/16A in time
• 🧱 MAT/AMT review, depreciation as per IT Act vs books; Deferred Tax working (AS 22 / Ind AS 12)

Pro tip: Reconcile book profit vs taxable income and document one‑time adjustments.

🧾 6.3 GST Annual

• 📅 GSTR‑9 (annual return) & GSTR‑9C (reconciliation), if applicable
• 🧩 Vendor‑wise 2B reconciliation; track ineligible/blocked ITC & reversals
• 🗂️ Keep reconciliation statement and management note on methodology

Pro tip: Lock a GST Close Memo: Output, ITC, Cash, Closing Payable, exceptions & their treatment.

🛡️ 7) Controls, Policies & Disclosures (Often Missed)

Tighten governance and reduce audit queries by locking these early.

🧾 Revenue Recognition (AS‑9 / Ind AS‑115)

Do this: Document performance obligations, timing (delivery/activation), variable consideration (refunds, chargebacks, credits), and cut‑off tests. Align ERP rules to policy.
Outputs: Signed policy note + revenue memo (unbilled/deferred schedules).
Red flags: Revenue including GST; advances not deferred; CN timing mismatches.

🧩 Lease Accounting (Ind AS‑116)

Do this: Inventory leases; compute ROU assets & lease liabilities; split principal/interest; classify short‑term/low‑value exemptions.
Outputs: Lease register, discount rate memo, reconciliation.
Red flags: Off‑BS leases; rent expensed without 116 assessment.

👥 Related‑Party (AS‑18 / Ind AS‑24)

Do this: Update related‑party master; board approvals; arm’s‑length evidence; map GLs to disclosures.
Outputs: RPT register, approval minutes, disclosure table.
Red flags: Missing balances/terms; netting off without agreements.

💱 Financial Instruments (Ind AS‑32/107/109) – Larger Cos.

Do this: Classify instruments; EIR calculations; hedge docs; fair‑value hierarchy notes.
Outputs: Risk notes (credit/liquidity/market), FV table, ECL policy.
Red flags: No IFRS/Ind AS mapping for loans, guarantees, CCDs.

🧪 Impairment / ECL

Do this: Ind AS‑36 impairment tests where indicators exist; ECL matrix for trade receivables under 109.
Outputs: ECL working (ageing buckets, PD/LGD), impairment memo.
Red flags: Stale receivables with zero allowance; goodwill not tested.

🧵 MSME Disclosures

Do this: Flag MSME vendors; gather declarations; compute ageing & interest payable.
Outputs: MSME ageing and interest disclosure per Schedule III.
Red flags: MSME outstanding not disclosed; interest unprovided.

🧭 Going Concern & Subsequent Events

Do this: 12‑month cash‑flow outlook; covenant checks; board approval of going‑concern basis; capture post‑year events.
Outputs: GC memo; subsequent events note.
Red flags: Negative net‑worth/OD breaches without disclosure/plan.

🧱 Internal Controls over Financial Reporting (ICFR)

Do this: Map process → risk → control → test; log deficiencies and remediation dates.
Outputs: ICFR matrix, testing results, remediation tracker.
Red flags: No evidence of control operation; user access not reviewed.

🧓 Employee Benefits (Ind AS‑19) – As Applicable

Do this: Actuarial valuations for gratuity/leave; book gains/losses per standard.
Outputs: Actuarial report, JE, disclosure table.
Red flags: No actuarial for material plans; policy not matching practice.

📦 8) Deliverables Checklist (Single‑PDF “Audit Pack”)

• 📄 Balance Sheet (Schedule III)
• 📈 Statement of Profit & Loss (+ Cash Flow where required)
• 📚 Notes to Accounts & Policies
• 📊 Trial Balance – Pre‑close
• 📊 Trial Balance – Post‑close
• 🏦 Bank Book (summary + heads)
• 🧾 GST Book (control ledger + ITC composition)
• 🗂️ Key Registers: Sales • Purchases/ITC • TDS
• 📎 Supporting (separate): Bank statements PDF/CSV, major agreements, board minutes

Pro tip: Add a Cover Page + TOC and a “Changes since TB‑D0” log.

✉️ 9) Sample Communication Templates

📧 Cover Email (Short)

Subject: Submission for Statutory Audit – FY YYYY–YY (Urgent for AGM & ITR)
Dear Audit Team,
Please find attached the consolidated Audit Pack (FS, TBs, Bank Book, GST Book, Key Registers). Kindly acknowledge and share the initial requisitions and an ETA for the signed audit report.
Regards,
Finance Team

💬 WhatsApp Nudge

“Re: Statutory Audit FY YYYY–YY — Audit Pack emailed now (single PDF). Please confirm receipt and share query list & delivery ETA for AGM/ITR.”

🧰 10) Ready‑to‑Use Lists

🧾 10.1 Year‑End JEs (Quick Reference)

• 🇮🇳 Domestic expense with GST → net to P&L + ITC
• 🌐 Foreign expense → full to P&L (consider RCM where applicable)
• ✂️ TDS deducted → Cr TDS Payable (remit next FY)
• 🧹 Bad debts (trade) → write off in books
• 📌 Accruals (audit/others) → Cr Expense Payable
• 🧮 GST set‑off → Dr Output / Cr Input, Dr Output / Cr Bank

📂 10.2 Evidence to Keep on File

• 🏦 Bank reconciliations; confirmations (bank/loans)
• 🧾 GST: GSTR‑1/3B/2B recons, tax invoices, annual 9/9C pack
• 💸 TDS: 26AS/AIS, challans, returns, Form 16/16A
• 📊 AR/AP ageings; major party confirmations
• 🏗️ FAR, inventory counts, valuation workings
• 👥 Related‑party registers & approvals; MRL; board minutes
• 📃 Lease agreements; payroll registers; gratuity/leave actuarial (if needed)

Final tip: Maintain a living Closing Binder (folder tree mirrored to this checklist) and lock it at sign‑off. Future audits become copy‑paste easy.

📅 10.3 Compliance Calendar & Checklist — Indian Private Limited (SME/Small Company Focus)

Scope: Private Limited companies in India, especially those qualifying as Small Company (Paid‑up capital ≤ ₹4 Cr and Turnover ≤ ₹40 Cr). Add/modify for your state taxes and any industry‑specific laws.

🧭 A. Who must have a Company Secretary (CS)?

• Mandatory Whole‑time CS:
  • Private companies with paid‑up share capital ≥ ₹10 Cr (Rule 8A of Companies (Appointment & Remuneration of Managerial Personnel) Rules).
• Secretarial Audit (u/s 204): generally for listed and certain public companies meeting thresholds (not typical for small private companies unless they cross limits or are public subsidiaries).
• For Small Companies (≤ ₹4 Cr / ≤ ₹40 Cr): CS not mandatory unless you cross the ₹10 Cr paid‑up threshold above. Many still engage a Practising Company Secretary (PCS) for annual filings & board support.

✅ Recommendation: Even if not mandatory, appoint a PCS on retainer to vet board/AGM minutes, AOC‑4/MGT‑7, event forms, and maintain statutory registers.

🗓️ B. Annual Core Compliances & Due Dates (Companies Act)

*Cash Flow not mandatory for Small Company/OPC/Dormant; confirm applicability.

💰 C. Direct Tax (Income‑tax) — Key Due Dates

🔎 Tip: Track 26AS/AIS vs books for TDS receivable; follow up missing credits.

🧾 D. GST — Regular & Annual

🧮 Maintain a GST Control Roll‑forward: Opening + Output − ITC − Cash = Closing. Keep 2B vendor‑wise matrix and ineligible/blocked ITC log.

👷 E. Labour & Establishment (common items; state‑wise variations)

📌 Keep labour law registers updated; align payroll masters to challans.

🧱 F. Operational Compliance (good practice)

• IEC (DGFT) Annual Update: Apr 1 – Jun 30 each year (even no change).
• Data Protection & IT: Contracts with processors, backups, access reviews.
• POSH: Policy, ICC constitution & training; annual report to District Officer.
• Environmental/Industry Licences: As per your sector (renewals, returns).

✅ G. Master Checklist — Private Limited (Small Co.)

Board & Governance

• Board meetings as per category (Small Co.: 2/yr, ≥90‑day gap)
• Statutory registers & minute books updated
• Related‑party list, approvals, and disclosures readied

Financial Statements & Audit

• Books closed; TB Pre‑close & Post‑close
• P&L, BS (Schedule III), Cash Flow*, Notes
• Auditor’s Report (UDIN) & (if applicable) CARO

ROC Filings

• AGM by Sept 30
• AOC‑4 (30 days), MGT‑7 (60 days)
• ADT‑1 (15 days)
• DIR‑3 KYC (by Sept 30)
• DPT‑3 (by June 30)
• MSME‑1 half‑yearly (dues >45 days)
• Event forms (INC‑22, DIR‑12, PAS‑3, CHG‑1/4, SH‑7, MGT‑14 as needed)

Taxes

• TDS: deposit by 7th, returns on 31 Jul/31 Oct/31 Jan/31 May
• ITR‑6 by 31 Oct (or 30 Nov for TP); Tax Audit 3CD if 44AB
• GST: GSTR‑1/3B monthly or QRMP; GSTR‑9/9C annual

Labour & Others

• PF/ESI by 15th
• PT per state; Shops & Establishment renewals
• IEC update (Apr–Jun)
• POSH constitution/training/report

Cash Flow not required for Small Co./OPC/Dormant—confirm applicability.

📝 H. Notes & Caveats

• Small Company benefits (fewer board meetings; cash‑flow exemption) apply only while within thresholds.
• CARO generally not applicable to Small Companies/OPC/Section 8.
• State‑wise dates (PT/SE/industry licences) can differ—insert your state calendar.
• Always monitor MCA/CBDT/GST circulars for due date extensions.

📅 10.3 Compliance Calendar & Checklist — Indian Private Limited (SME/Small Company Focus)

Scope: Private Limited companies in India, especially those qualifying as Small Company (Paid‑up capital ≤ ₹4 Cr and Turnover ≤ ₹40 Cr). Add/modify for your state taxes and any industry‑specific laws.

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🧭 A. Who must have a Company Secretary (CS)?

• Mandatory Whole‑time CS:
  • Private companies with paid‑up share capital ≥ ₹10 Cr (Rule 8A of Companies (Appointment & Remuneration of Managerial Personnel) Rules).
• Secretarial Audit (u/s 204): generally for listed and certain public companies meeting thresholds (not typical for small private companies unless they cross limits or are public subsidiaries).
• For Small Companies (≤ ₹4 Cr / ≤ ₹40 Cr): CS not mandatory unless you cross the ₹10 Cr paid‑up threshold above. Many still engage a Practising Company Secretary (PCS) for annual filings & board support.

✅ Recommendation: Even if not mandatory, appoint a PCS on retainer to vet board/AGM minutes, AOC‑4/MGT‑7, event forms, and maintain statutory registers.

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🗓️ B. Annual Core Compliances & Due Dates (Companies Act)

Compliance	What	Due date / window	Who prepares
Board Meetings	Small co.: min 2 meetings/year, one per half‑year, ≥90 days gap (others: 4 meets; max 120‑day gap)	Throughout the year	CS/Director/PCS
AGM	Approve audited accounts, adopt reports, appoint/ratify auditor	By Sept 30 (typical for FY ending Mar 31; 6 months)	CS + Statutory Auditor
AOC‑4	File financial statements (BS, P&L, CF* if applicable, Notes)	Within 30 days of AGM	CS/PCS
MGT‑7	Annual Return	Within 60 days of AGM	CS/PCS
ADT‑1	Auditor appointment/ratification	Within 15 days of AGM	CS/PCS
DIR‑3 KYC	Director KYC (each DIN holder)	By Sept 30 every year	Director / CS
DPT‑3	Return of deposits/monies not considered deposits	By June 30 (as on Mar 31)	CS/PCS
MSME‑1	Half‑year return for dues >45 days to MSMEs	Apr–Sep: by Oct 31; Oct–Mar: by Apr 30	CS/Finance
BEN‑2	Significant Beneficial Owner declaration (event‑based)	Within 30 days of BEN‑1 receipt	CS/PCS
CHG‑1/CHG‑4	Creation/Satisfaction of charge	Within 30 days of event	CS/PCS
INC‑22 / DIR‑12 / MGT‑14 / PAS‑3 / SH‑7	Registered office change / Director change / Certain resolutions / Return of allotment / Capital changes	Event‑based statutory timelines	CS/PCS

*Cash Flow not mandatory for Small Company/OPC/Dormant; confirm applicability.

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💰 C. Direct Tax (Income‑tax) — Key Due Dates

Item	Periodicity	Due date
Advance Tax	Quarterly	15 Jun, 15 Sep, 15 Dec, 15 Mar
TDS Payment	Monthly	7th of next month (30 Apr for Mar)
TDS Returns (24Q/26Q)	Quarterly	31 Jul (Q1), 31 Oct (Q2), 31 Jan (Q3), 31 May (Q4)
Form 16/16A	As applicable	Per statutory timelines (e.g., 15 Jun for 16)
Tax Audit (3CA/3CB‑3CD)	If 44AB applies	Typically 30 Sep (check yearly CBDT circulars)
ITR‑6 (Company)	Annual	31 Oct (non‑TP); 30 Nov (TP cases with 3CEB)

🔎 Tip: Track 26AS/AIS vs books for TDS receivable; follow up missing credits.

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🧾 D. GST — Regular & Annual

Regime	Return	Due date
Monthly	GSTR‑1	11th of next month
	GSTR‑3B	Generally 20th (state‑based stagger may apply)
QRMP	IFF (Optional)	13th of next month
	GSTR‑3B	22nd/24th (as per state)
Annual	GSTR‑9	31 Dec following FY (often extended)
Annual	GSTR‑9C (if applicable)	31 Dec following FY (often extended)

🧮 Maintain a GST Control Roll‑forward: Opening + Output − ITC − Cash = Closing. Keep 2B vendor‑wise matrix and ineligible/blocked ITC log.

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👷 E. Labour & Establishment (common items; state‑wise variations)

Item	Due date
PF (EPF) payment & ECR	15th of next month
ESI payment & return	15th of next month
Professional Tax	State‑specific (monthly/quarterly/annual)
Shops & Establishment	Registration/renewal as per state rules
Gratuity/Bonus Registers	As per applicability & annual schedules

📌 Keep labour law registers updated; align payroll masters to challans.

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🧱 F. Operational Compliance (good practice)

• IEC (DGFT) Annual Update: Apr 1 – Jun 30 each year (even no change).
• Data Protection & IT: Contracts with processors, backups, access reviews.
• POSH: Policy, ICC constitution & training; annual report to District Officer.
• Environmental/Industry Licences: As per your sector (renewals, returns).

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✅ G. Master Checklist — Private Limited (Small Co.)

Board & Governance

• Board meetings as per category (Small Co.: 2/yr, ≥90‑day gap)
• Statutory registers & minute books updated
• Related‑party list, approvals, and disclosures readied

Financial Statements & Audit

• Books closed; TB Pre‑close & Post‑close
• P&L, BS (Schedule III), Cash Flow*, Notes
• Auditor’s Report (UDIN) & (if applicable) CARO

ROC Filings

• AGM by Sept 30
• AOC‑4 (30 days), MGT‑7 (60 days)
• ADT‑1 (15 days)
• DIR‑3 KYC (by Sept 30)
• DPT‑3 (by June 30)
• MSME‑1 half‑yearly (dues >45 days)
• Event forms (INC‑22, DIR‑12, PAS‑3, CHG‑1/4, SH‑7, MGT‑14 as needed)

Taxes

• TDS: deposit by 7th, returns on 31 Jul/31 Oct/31 Jan/31 May
• ITR‑6 by 31 Oct (or 30 Nov for TP); Tax Audit 3CD if 44AB
• GST: GSTR‑1/3B monthly or QRMP; GSTR‑9/9C annual

Labour & Others

• PF/ESI by 15th
• PT per state; Shops & Establishment renewals
• IEC update (Apr–Jun)
• POSH constitution/training/report

Cash Flow not required for Small Co./OPC/Dormant—confirm applicability.

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📝 H. Notes & Caveats

• Small Company benefits (fewer board meetings; cash‑flow exemption) apply only while within thresholds.
• CARO generally not applicable to Small Companies/OPC/Section 8.
• State‑wise dates (PT/SE/industry licences) can differ—insert your state calendar.
• Always monitor MCA/CBDT/GST circulars for due date extensions.

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🧾 TDS Deep‑Dive — Compliance, Due Dates, Quick Audit & Fix

⏱️ Due Dates & Forms (Quick Grid)

Item	Periodicity	Due date	Form
Deposit TDS	Monthly	7th of next month (30 Apr for March)	Challan ITNS‑281
Quarterly return – Salary	Q1/Q2/Q3/Q4	31 Jul / 31 Oct / 31 Jan / 31 May	24Q
Quarterly return – Non‑salary (domestic)	Q1/Q2/Q3/Q4	31 Jul / 31 Oct / 31 Jan / 31 May	26Q
Quarterly return – Non‑resident	Q1/Q2/Q3/Q4	31 Jul / 31 Oct / 31 Jan / 31 May	27Q
TCS return	Q1/Q2/Q3/Q4	15 Jul / 15 Oct / 15 Jan / 15 May	27EQ
Form 16 (salary)	Annual	15 June following FY	—
Form 16A (non‑salary)	Quarterly	After filing/processing of return	—

Keep TAN active, use OLTAS/NSDL for challans, manage certificates via TRACES.

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📚 Common TDS Sections (Cheat‑Sheet)

Section	Nature	Rate*	Threshold (typical)
192	Salaries	Slab‑wise	—
194C	Contractor/Sub‑contractor	1%/2%	₹30,000 (single) / ₹1,00,000 (FY)
194J	Professional/Technical	10% / 2% (tech)	₹30,000
194H	Commission/Brokerage	5%	₹15,000
194I	Rent (land/building / plant)	10% / 2%	₹2,40,000 p.a.
194IB	Rent by non‑audit indiv/HUF	5%	> ₹50,000 per month
194IA	Immovable property	1%	Consideration ≥ ₹50 lakh
194Q	Purchase of goods (buyer ≥ ₹10 Cr turnover; on purchases > ₹50 lakh from seller)	0.1%	> ₹50 lakh with a seller
195	Non‑resident payments	As per rates/DTAA	—
206AA	No PAN	Higher of rate or 20%	—
206AB	Specified non‑filers (higher TDS)	Higher of (2×rate, 5%, 20%)	—

*Check latest Finance Act/circulars & DTAA where applicable.

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✅ TDS Quick Audit Checklist

• Section mapping per vendor/expense nature (194C/194J/194H/194I/194Q/195 etc.)
• Thresholds breached? Start deduction from crossing month.
• PAN validated (206AA) & specified non‑filer status checked (206AB).
• Lower/Nil deduction certificates u/s 197 captured and applied.
• Timing: deduct at credit or payment, whichever earlier.
• Gross‑up considered where contract is “net of tax”.
• Challan 281 deposited by due date; challan details matched in return.
• Returns (24Q/26Q/27Q) filed correctly; Form 16/16A issued.
• 26AS/AIS matched for TDS receivable; follow‑up missing credits.
• Foreign remittances: 195 analysis, DTAA, PE risk, 15CA/CB as required.

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🧯 Missed TDS? Remediation Flow

1. Identify lapse type
   a) Not deducted or short‑deducted,
   b) Deducted but late deposit,
   c) Return filed late/incorrect.
2. Compute interest u/s 201(1A)
   • 1% p.m. from date deductible → date actually deducted (for non‑deduction).
   • 1.5% p.m. from date deducted → date deposited (for late deposit).
   (Count part of month as full.)
3. Deposit tax + interest via Challan 281; keep proof.
4. Late filing fee u/s 234E
   • ₹200/day from due date till filing, capped at TDS amount.
5. Penalty u/s 271H (10k–1L) may be leviable for late/incorrect statements;
   typically not levied if tax deducted/deposited, interest & 234E paid, and return filed within 1 year from due date.
6. File original/revised return (24Q/26Q/27Q) → download Conso from TRACES → issue/replace Form 16/16A.
7. Vendor/employee communication: share certificate & let them reconcile 26AS.

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🧠 Good Practices

• Vendor onboarding: capture section, PAN, MSME, residency, 197 certificate, and 206AB status.
• Monthly TDS tracker: invoice‑wise—base, section, rate, challan no./date, return status.
• Quarterly pre‑close: preview 26Q/24Q draft; fix PAN/name mismatches early.
• Contracts: include TDS clause & gross‑up terms.
• Internal controls: maker‑checker on section selection and challan mapping.

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📌 Remember: TCS (206C/206C(1H)) may apply alongside or instead of TDS for specific scenarios (sale of goods by seller above thresholds). Map both during scoping.

⚠️ Disclosures & Warnings (Read Before Use)

• Generic guidance only: This playbook is educational and company-agnostic. It does not constitute legal, audit, or tax advice.
• Standards & thresholds vary: Applicability of AS vs Ind AS, CARO, Tax Audit (44AB), GSTR-9/9C, and MSME disclosures depends on your facts and thresholds.
• Professional judgment required: Validate policies (revenue recognition, impairment/ECL, leases, ICFR) with your statutory auditor and tax advisor.
• Data integrity: Always prefer ERP/e-invoice as the source of truth; use GST returns for corroboration; don’t derive revenue directly from cash/collections except during documented reconstructions.
• Timelines matter: Missed due dates (AGM, AOC-4/MGT-7, ITR, TDS, GST) can trigger penalties and director compliance issues (e.g., DIN/DSC constraints).
• No real figures used: Any sample amounts or formats shown are for illustration only; replace with your own verified data.