Académique Documents
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(INDIA)
Module
TAXATION
Semester-IV: Block-7
(2013-15)
Module Leader
CA. Dhaarna Singh Rathore
www.aurouniversity.edu.in
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Introduction
This module is prepared to explore key elements and concepts of the academic discipline of
Taxation. This Module has been designed to give you an overview of Taxation with special
orientation towards Income Tax and relevant provisions applicable to Companies. We will not only
try to go through the provisions of Indian Income Tax Law in depth but also try to get acquainted
with Tax Planning concepts and devices. With some knowledge, care and study, we can legitimately
reduce the Tax burden of our clients or the Company for which we are working or even ourselves!!
Benjamin Franklin identified tax as one of lifes two certainties. Albert Einstein is quoted as
saying, The hardest thing in the world to understand is income tax. Those two comments
provide good reason for us to be acquainted with this subject and break this myth. Knowledge
about the tax system helps students to understand the role of taxation in Indian economy and the
implications for them. It also enables them to become better informed citizens. Thus the primary
focus of this Module is to build an understanding of tax among students.
The aim of this Module is to equip you with relevant skills of this discipline so that you can not only
legitimately reduce the Tax burden of the Company for which you would be working but also
facilitate a Tax-saving strategy for it. The Main Tax Laws which are intended to be covered in this
Module are Income Tax, Value-Added Tax and Service Tax. The module has been designed to
build students knowledge and understanding, comprehension and application of their ideas to
Tax Planning in particularly these areas.
This is a Masters level module. As you should now be aware, the level of the material may well
be higher than anything you have encountered before. Certainly, the pace of the module will be
faster than you are used to. Naturally, this will require considerable work, including, of course,
much reading. This reading will be essential for you to be successful on the module. However, as
always, we think the work will be rewarded by the enjoyment of a stimulating and motivating
pedagogy. Lets make a resolve to keep the Learning process so interesting that the mental block
about presumed complication of Taxation never affects us adversely.
Important note
All elements of this module lecture, seminar exercises, workshops AND Self Study Exercises
will be assessed on a continuous basis through various parameters. If you miss anything, it is
likely that you will not be able to perform in some of the assessments.
If you fail to attend a seminar, or the workshops for whatever reason, your seminar tutor will
NOT give you copies of the hand-outs at a later seminar. Neither will back-copies be issued
during lectures. They would however be available on the VLE. Students who have a valid
reason for having missed a seminar or a workshop can print back copies of hand-outs from the
VLE.
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Contents
Introduction......................................................................................................................................2
Module objectives............................................................................................................................4
Course Prerequisites:.......................................................................................................................5
Student Experience:.........................................................................................................................5
Learning outcomes:.........................................................................................................................5
Semester Plan Synopsis...................................................................................................................6
Recommended Reading List............................................................................................................7
List of websites:...............................................................................................................................7
Assessment:.....................................................................................................................................8
Summary of Assessment Components...........................................................................................10
Weekly Coverage...........................................................................................................................11
Week I............................................................................................................................................11
Week II...........................................................................................................................................12
Week III.........................................................................................................................................13
Week IV.........................................................................................................................................14
Week V...........................................................................................................................................15
Week VI.........................................................................................................................................16
Week VII........................................................................................................................................17
Week VIII.......................................................................................................................................18
Student Assessment of Module......................................................................................................19
A Note on Equal Opportunities......................................................................................................20
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Taxation
Module objectives
The primary objective of the course is to familiarize the students with the basic aspects of
Income Tax, VAT and Service Tax. Although there are a plethora of Tax Laws in our country yet
these three have been chosen so as to be relevant for a student pursuing MBA in Finance
specialisation for application in Industry. The Tax system is undergoing significant changes and
it is my endeavour to provide an updated, contemporary and useful study material which will be
pertinent to Industry. Moreover it is assumed that the student will be well conversant with the
provisions applicable to Individuals and hence we take your knowledge to the next level i.e Tax
planning for Companies.
The specific objectives of this course are
In order to achieve these goals, and of course to pass this course at Auro University, you are
expected to follow these guidelines:
Obtain knowledge about Taxation, firstly through reading the compulsory core text.
Attend a series of weekly lectures/ seminars, workshops as part of your assessment,
where you will be asked to apply your knowledge and analyze case studies.
Read the Financial Dailies and magazines on a regular basis like Economic Times,
Business Standard, The Hindustan Times, and The Times of India
Devote enough time other than class hours to solve on your own problems and exercises
as recommended by the Module Leader.
Adhere to attendance rules and regulations and pass the various components of internal
assessments which will be conducted from time to time. None of the assessments will be
conducted on any other date or any other reason except those mentioned in this module
handbook.
Contrary to popular belief among students that Taxation is only for CAs, this module tries to
cater to the needs of an MBA student with Finance specialization who would be placed in the
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Course Prerequisites:
The course assumes a working knowledge or understanding of the five heads of Income under
Income Tax as applicable to Individuals.
Student Experience:
Students on this module will experience a range of learning opportunities. These will include
lectures, seminar work, workshops and Case Studies, and they will be able to demonstrate their
engagement with the module through participation in the presentation and discussion sessions.
Learning outcomes:
Knowledge and Understanding
By the end of this module, students should be able to
Demonstrate knowledge of the concepts, principles and rules of taxation of Corporates.
Understand meaning of Assesse, income, residential status, deduction, exemption,
assessment, appeal, revision etc.
Compute income tax from various sources of Income.
Compute income tax for Companies
Disciplinary and Professional
By the end of this module, students should be able to
Recognise tax planning opportunities and recommend appropriate tax strategies for
decision making.
Develop analytical reasoning tools to assess how taxes affect economic decisions for
business related taxpaying entities:
(a) Through the amount and timing of income recognition and deduction.
(b) Related to property transactions that generates recognized, deferred or no taxable
gains or losses.
(c) Related to organisations form decisions.
Communicate tax conclusions in a clear and concise manner to relevant stakeholders.
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Week
II
III
IV
Assignment/
Evaluation/Assessment/
Submission deadline
Workshop / Seminar
Activity
Definitions: Company,
Indian Company,
Domestic Company,
Report-I and PPT to be put
industrial Company etc.
in VLE dropbox in Week Group Presentation-1
Residential Status and
II 4:00 pm
Tax Incidence
Taxation of Companies
Business Restructuring:
Report-I and PPT to be put
Amalgamation
Group Presentation-2
Demerger
in VLE dropbox in Week
Conversion
III 4:00 pm
Business Tax Procedures:
Advance Payment Report-I and PPT to be put
of Tax
in VLE dropbox in Week Group Presentation-3
TDS/TCS
IV 4:00 pm
Return/Assessment
Income
of
VI
VII
Settlement of Cases
Search, Seizure and
Block Assessment
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VIII
Service Tax
Value Added Tax
Submission of Report II
Revision
List of websites:
www.icai.org
www.sebi.gov.in
www.incometaxindia.gov.in
www.mca.gov.in
www.capitaline.com
www.thehindubusinessline.com
www.business-standard.com
www.tmi.com
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You should also keep up to date with business-related current affairs. You are strongly
recommended to check out the business and economics sections of newspapers [Economic
Times, Business Standard, The Hindustan Times, The Times of India] and the Sunday
equivalents. You should also take a regular look at The Economist, Business India, Business
World and the Business Today. If you are systematic, making a note of key articles and,
ideally, building up a file of photocopies, this task should not take more than an hour or so each
week. [You might, for example, set yourself a target of identifying 6 key articles, or two key
topics per week]
Assessment:
Assessments for this course will consist of Formative (50% weightage) as well as Summative
(50% weightage) Components. The formative component will be conducted from time to time on
an internal basis whereas the Summative assessment will be conducted through an End term
Examination.
Students are instructed to work very diligently for these assessments as good performance will
not only help them in scoring good marks but also help them in thorough in-depth understanding
of the subject.
Students are also instructed to make submissions in time. Late submissions will not be accepted
under any circumstances. Students will not be allowed to take a repeat of any assessment under
any circumstances. Module leader reserves the right for allowing any student to submit an
assignment in lieu of any assessment component in extreme medical reasons duly verified by the
Program office.
Formative Assessments:
This will consist of three components:
I)
Report I: This is a Group Assignment. The class will be divided into three groups.
Each group, starting from Week II through Week IV will make a series of
presentations on various devices of Tax Planning with reference to specific business
decisions. The group is expected to cite the provision and sections related to the
specific Tax planning device, explain how the provision helps in reducing tax liability
and quote recent Cases. The group should also submit a Presentation and a Report
in the VLE Dropbox and also discuss the same during the Workshop. This component
will have a weightage of 10%. The purpose of this assessment is to help students
learn to work as a team as well as be able to critique the various Tax Planning
methods.
Following will be the topics of presentation for the various Groups:
Week
Week II
Group
Group I
Topic of Presentation
Tax Planning with reference to:
Location of Business
Nature of Business
Week III
Group II
Week IV
Group III
Form of Organization
Tax Planning with reference to:
Financial Management decisions
Managerial decisions
Employees remuneration
Sale of Scientific research Assets
Receipt of Insurance Compensation
During Liquidation of a company
Tax Planning in respect of:
Non Resident
II)
Mid term test: This will be conducted in Week V at 10:00 am with a duration of 2
hours. It will consist of numerical based questions and will cover the syllabi covered
in Week I to Week IV. It will have a weightage of 20%. The purpose of this
assessment is to help students revise whatever has been covered in class till that date
and identify weak areas so as to be properly prepared for the End term Exam.
III)
Report II: This is also Group Assignment. The class will be divided into two groups.
Group I is expected to prepare a short ready reckoner of VAT. The booklet should
contain following details:
Importance of VAT
Modes of Computation
Administrative Procedures - Kaizad
Group II is expected to prepare a short ready reckoner of Service Tax. The booklet
should contain following details:
Importance of Service Tax
Computation of Service Tax
Payment of Service Tax
Administration of Service Tax - Khushboo
This component will have a weightage of 20%. The purpose of this assessment is to help
students develop an elementary level understanding of these Tax Laws.
Summative Assessment:
This will be conducted through an End term Examination. The duration of the exam will be of 3
hours and it will be conducted out of 100 marks. It will consist of three sections; Section A will
be of 20 marks consisting of short notes; Section B will be a Case study of 20 marks; Section C
will consist of a combination of five numerical and theoretical questions of 20 marks each out of
which the student is expected to answer any three. The coverage for this component will be the
entire syllabi as covered in the class and as mentioned in the Weekly coverage in the Module
handbook. It will have a weightage of 50%. The purpose of this assessment is to ensure that
every student possesses a foundation level knowledge of this subject in order to move to the next
semester.
Due Date
Group I Week II
Group II - Week III
Group III Week IV
Weightage
10%
Week V
20%
Report II
Week VIII
20%
End Term
Schedule to be
provided by Program
Office
50%
Note:
Groups will be notified by Program Office
Weekly Coverage
Week I
Chapter covered:
Law of Income tax in Brief
Lecture Outline
The first session is an overview of the Income Tax Act. We deliberate upon basic
concepts with special emphasis on Five heads of Income and calculation of Tax liability
for an individual.
Learning Outcome
Week II
Topic covered:
Taxation of Companies
Lecture Outline
The second session is an overview of Corporate Tax in India. We deliberate
various types of Companies and computation of Tax payable by the Company
Learning Outcome
Week II Workshop
Exhaustive Practice of numericals on Taxation of Companies
Week II Seminar
Students will deliberate on various Tax planning methods that can be used by Companies to
reduce their Tax liability. This Week Gr.1 makes a presentation on Tax planning with reference to
specific business decisions.
Readings for Week II
Corporate Tax Planning & Business Tax Procedure by Dr. V.K. Singhania & Dr. Monica
Singhania: Taxmanns 16th Edition.: Ch.3,4,5
Week III
Topic covered:
Business Restructuring
Lecture Outline
This Session is a beginning towards understanding the way business enterprises
can rearrange their affairs and what will be the tax implications of the same. We discuss
Income Tax Provisions related to Amalgamation, Demerger and Conversion.
Learning Outcome
Week IV
Topic covered:
Business Tax Procedures
Lecture Outline
This session is explores various Procedures which Companies need to follow for
proper administration of Income Tax in India. In this session our main thrust will be
Advance Tax and TDS
Learning Outcome
To know when the liability for Advance Tax arises and what are the due dates.
To be aware of the scheme of TDS
To be aware of the scheme of TCS
To know when interest is payable by assesses
To be acquainted with miscellaneous provisions related to Refunds
Week IV Workshop
Student will be given a hands on experience of e-tds returns
Week IV Seminar
Students will deliberate on various Tax planning methods that can be used by Companies to
reduce their Tax liability. This Week Gr.3 makes a presentation on Tax planning with reference to
non residents.
Readings for Week IV
Corporate Tax Planning & Business Tax Procedure by Dr. V.K. Singhania & Dr. Monica
Singhania: Taxmanns 16th Edition.: Ch.26,27,28,29
Week V
Topic covered:
Return/Assessment of Income
Lecture Outline
This is a very important session from the point of view of how Income Tax returns
are filed and how assessment of Income is done.
Learning Outcome
Week VI
Topic covered:
Appeals,Revisions, References
Penalties and Prosecutions
Lecture Outline
This is a session to become aware of the redressal provisions that the Act provides
to the assessees in case they wish to appeal. We shall also discuss acts for which the Law
can penalise or prosecute the assesses.
Learning Outcome
To be acquainted with what is an appeal and who are the appellate authorities
To identify when the assesee should apply to which appellate authorities and how
To discern various penalties under different situations and other judicial norms associated
with the same
Week VII
Topic covered:
Settlement of Cases
Search, Seizure and Block Assessment
Lecture Outline
This session represents the culmination of study of the Income Tax Act. We continue with
discussions of the last week and try to understand how Cases are settled and provisions related to
Search, Seizure and Block Assessment.
Learning Outcome
To understand what is a case under Income Tax Act and how to apply for Settlement
To understand the Powers of various Income Tax Authorities with respect to settlement of
Cases
To understand the Powers of various Income Tax Authorities with respect Search and
Seizure
Week VIII
Topics covered:
Service Tax
Value Added Tax
Lecture Outline
This session will be carried on in Workshop mode. The Class will be divided into
two groups. One group will deliberate on the nuances of Service Tax and the other on the
nuances of Value Added Tax. They will prepare brief booklets to deliberate on the
provisions of these two tax laws and share their understanding in the Class with the help
of presentations.
Learning Outcome: Service Tax
Week II Seminar
REVISION/DOUBT CLEARING SESSION
Readings for Week II
Corporate Tax Planning & Business Tax Procedure by Dr. V.K. Singhania & Dr. Monica
Singhania: Taxmanns 16th Edition.: Ch.36, 37
2 = Agree
4 = Disagree
5 = Strongly Disagree
1
MODULE
as a whole: