TAX LAWS AND PRACTICE - dl4a.org

1 ISTUDY MATERIALEXECUTIVE PREXECUTIVE PREXECUTIVE PREXECUTIVE PREXECUTIVE PROGRAMMEOGRAMMEOGRAMMEOGRAMMEOGRAMMETAX LAWSANDPRACTICEMODULE IPAPER 4 ICSI House, 22, Institutional Area, Lodi Road, New Delhi 110 003tel 011-4534 1000, 4150 4444 fax +91-11-2462 6727email website THE INSTITUTE OF COMPANY SECRETARIES OF INDIATIMING OF HEADQUARTERSM onday to FridayOffice Timings to Dealing TimingsWithout financial transactions to financial transactions to , Typesetting by AArushi Graphics, Prashant Vihar, New Delhi, andPrinted at M P Printers/10000/February 2013iiiiiEXECUTIVE PROGRAMME TAX laws AND PRACTICEThis study material has been published to aid the students in preparing for the Tax laws and PRACTICE paper ofthe CS Executive Programme.

2 It is part of the educational kit and takes the students step by step through eachphase of preparation stressing key concepts, pointers and procedures. Company Secretaryship being aprofessional course, the examination standards are set very high, with emphasis on knowledge of concepts,applications, procedures and case laws , for which sole reliance on the contents of this study material may not beenough. Besides, as per the Company Secretaries Regulations, 1982, students are expected to be conversantwith the amendments to the laws made upto six months preceding the date of examination.

3 The material may,therefore, be regarded as the basic material and must be read alongwith the original Bare Acts, Rules, Orders,Case laws , Student Company Secretary bulletin published and supplied to the students by the Institute everymonth as well as recommended readings given with each study subject of Tax laws is inherently complicated and is subjected to constant refinement through new primarylegislations, rules and regulations made thereunder and court decisions on specific legal issues. It thereforebecomes necessary for every student to constantly update himself with the various changes made as well asjudicial pronouncements rendered from time to time by referring to the Institutes journal Chartered Secretary and bulletin Student Company Secretary as well as other law/professional journals on tax purpose of this study material is to impart conceptual understanding to the students of the provisions of theDirect Tax laws (Income Tax and Wealth Tax) and Indirect Tax laws (Service Tax, Value Added Tax and CentralSales Tax)

4 Covered in the Syllabus. The study material contains all relevant amendments made by Finance Act,2012 and is applicable for the Assessment Year 2013-14 relevant for December 2013 examination. However, itmay so happen that some developments might have taken place during the printing of the study material and itssupply to the students. The students are therefore, advised to refer to the Student Company Secretary bulletinand other publications for updation of the study students may note that Assessment Year for December 2013 examination is 2013-14. Besides all otherchanges made through Notifications etc.

5 And made effective six months prior to the examination will also the event of any doubt, students may write to the Directorate of Academic and Professional Development inthe Institute for care has been taken in publishing this study material yet the possibility of errors, omissions and/ordiscrepancies cannot be ruled out. This publication is released with an understanding that the Institute shouldnot be responsible for any errors, omissions and/or discrepancies or any action taken in that there be any discrepancy, error or omission noted in the study material, the Institute shall be obliged ifthe same are brought to its notice for issue of corrigendum in the Student Company Secretary study material has been updated upto 1st January (I) PAPER 4: TAX laws AND PRACTICEL evel of Knowledge: Working KnowledgeObjective.

6 To acquire expert knowledge of practical and procedural aspects relating to Direct Tax laws , ServiceTax and A: INCOME TAX AND WEALTH TAX (70 MARKS)1. Basics and Definitions Income Tax Act , 1961 Background, Concept and Mechanism of Income Tax Definitions, Concept of Income, Previous Year, Assessment Year, Distinction between Capital andRevenue Receipts and Expenditure, Residential Status Basis of Charge and Scope of Total Income2. Incomes which do not form part of Total Income3. Computation of Total Income under Various HeadsSalaries, Income from House Property, Profit and Gains of Business or Profession, Capital Gains, Incomefrom Other Sources4.

7 Clubbing Of Income, Set-off and Carry-Forward of Losses and Deductions from Total IncomeIncome of Other Persons included in Assessee s Total Income; Aggregation of Income and Set Off or CarryForward of Losses; Various Deductions to be made in Computing Total Income, Rebates and Relief s;Applicable Rates of Taxes and Tax Liability5. Taxation of different kinds of personsTaxation of Individuals including Non-Residents, Hindu Undivided Family, Firms, LLP, Association of Persons,Cooperative Societies, Trusts, Charitable and Religious Institution6.

8 Classification and Tax Incidence on CompaniesComputation of Taxable Income and Assessment of Tax Liability, Dividend Distribution Tax, Minimum AlternateTax and Other Special Provisions Relating to Companies7. Collection and Recovery of TaxTax Deduction at Source, Tax Collection at Source, Recovery and Refund of Tax; Provisions of AdvanceTa x8. Procedure for Assessment, Appeals, Revisions, Settlement of Cases and Penalties & OffencesProvisions concerning Procedure for Filing Returns, Signatures, E-Filing, Assessment, Reassessmentand Settlement of Cases, Special Procedure for Assessment of Search Cases, E-CommerceTransactions, Liability in Special Cases, Refunds, Appeals and Revisions; Penalties Imposable, Offencesand Tax Planning & Tax ManagementConcept of Tax planning, Tax planning with reference to setting up a New Business; Location; Nature ofBusiness; Tax Holiday, etc.

9 Tax Planning with regard to Specific Management Decisions such as Mergersand Takeovers; Employees Remuneration; Voluntary Retirement Tax Planning with reference to FinancialManagement Decisions such as Borrowing or Investment Decisions; Reorganization or Restructuring ofCapital10. Wealth Tax Act, 1956 Background, Concept and Charge of Wealth Tax Assets, Deemed Assets and Assets Exempt from Tax Valuation of Assets, Computation of Net Wealth Return of Wealth Tax and Provisions concerning Assessment11. Basic Concepts of International TaxationResidency Issues; Source of Income; Tax Havens; Withholding Tax, Unilateral Relief and Double TaxationAvoidance Agreements, Controlled Foreign Corporation, Advance Rulings and Tax Planning, Authority forAdvance Rulings,12.

10 Transfer Pricing Concepts, Meaning of International Transactions Computation of Arm s Length Price & Methods Documentation and Procedural Aspects13. General Anti Avoidance Rules (GAAR)PART B - SERVICE TAX & SALES TAX (30 Marks)14. An Overview of Service TaxBackground, Negative List Approach, Taxable Services, Administrative Mechanism, Registration andProcedural Aspects, Rate and Computation of Tax, Levy, Collection and Payment of Service An Overview of Value Added TaxLegislative Background, Concept of VAT, Declared Goods, Administrative Mechanism, Registration andProcedural Aspects, Rate and Computation of Tax, Levy, Collection and Payment of Central Sales TaxTax on Inter- State Trade and Exports - Registration, Preparation and Filing of E-Returns.