Master of Business Administration

Session: 2009 - 11
Semester 4th

Faculty: Prof. Lata Rani Course: Tax Planning and Management (MBA FM04)

SRIRAM
Group of Institutions
Greater Noida

SRIRAM Institute of Management

Teaching Plan
Subject: Tax Planning and Management Code: - MBA FM04

Objectives of the course: The Basic objective of this course is to provide an in-depth insight into the concept of corporate tax planning and to equip the students with a reasonable knowledge of tax planning devices. The focus is exclusively on Corporate Tax Session wise coverage of topics: S. No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Topic Unit 1: - Nature, Objectives of Tax Management Tax Planning, Tax Avoidance & Tax Evasion Assessment Year, Previous Year, Assessee types. Residential status, Non-resident Indians Unit 2: Computation of tax under the heads of Salaries Income from House Property Profits & Gains of Business Capital Gains Income from Other Sources Tax deductible at source Unit 3: Corporate Income Tax: Tax concessions and incentives for corporate decisions Tax planning for depreciation Treatment of losses & unabsorbed items Carry forward and set off losses Tax and business reorganizations: merger and amalgamation Tax planning regarding Employees Remuneration Wealth tax on closely held companies; Valuation of assets Filing of returns; Assessment; Appeals; Review; Revision and Rectification. Unit 4: Central Excise Act 1994 and Excise planning Session Required 01 01 01 05 02 04 01 01 01 02 01 01 01 02 01 02 02 04 Cumulative Sessions 01 02 03 08 10 14 15 16 17 19 20 21 22 24 25 27 29 33

19 20

Customs Act and Customs Duties Planning Consumer Protection Act 1962 and Customers planning

03 04

36 40

Suggested Readings: 1. Gaur V.P, Narang D.B and Puri Rajeev, Corporate Tax Planning and Management Kalyani Publishers. 2. Ahuja Girish and Gupta Ravi, Corporate Tax Planning, Procedures and Management Flair Publication Pvt. Ltd. 3. Gaur V.P, Narang D.B, Ghai Puja and Puri Rajeev, Income Tax Law and Practice Kalyani Publishers. 4. Srinivasan E.A, A Handbook of Corporate Tax Planning Tata McGraw Hill 5. Ahuja G.K and Gupta, Systematic Approach to Income Tax Bharat Law House.

Sriram Institute of Management

Multiple Choice Quiz-1

MBA Fourth Semester

Tax Planning and Management (MBA FM04) Marks=7.5

1. Income from Rent of agricultural land is:

(i) Agricultural Income (ii) Business Income (iii) Casual Income (iv) None of the above 2. Income from sale of household furniture is: (i) Business Income (ii) Casual Income. (iii) Taxable Income (iv) None of the above. 3. In respect of income from house property, the collection charges are allowed up to maximum of: (i) 6% of the annual value (ii) The actual expenditure incurred (iii) Nil (iv) None of the above 4. Share of income received by a member of HUF out of HUF income is: (i) Taxable Income under section 66 (ii) Exempted income under section 10(2) (iii) Rebateable income under section 86 (iv) None of the above 5. Embezzlement of cash by a cashier is: (i) a revenue loss (ii) a capital loss (iii) a casual loss (iv) None of the above 6Proceeds of benefit match received by a cricket player are : (i) A Professional Income (ii) A casual Income (iii)An Exempted Income (iv) None of the above. 7. Dividend by an Indian company paid outside India is: (i) Income accruing in India (ii)Income deemed to accrue in India (iii) Income accruing outside India (iv) None of the above. 8. Unabsorbed depreciation can be carried forward for set off: (i) for a period of 4 years only (ii) for a period of 8 years only (iii) for An unlimited period (iv) None of the above. 9. A senior citizen female assessee can claim deduction u/s 80U up to:

(i) Rs. 50,000 (ii) Rs. 60,000 (iii) Rs. 75,000 (iv) Rs. 85,000 10. An individual who wants to be resident of India must stay in India for at least u/s 6(1) (a) (i) 182 days (ii) 180 days (iii) 365 days (iv) 730 days in four previous years. 11. The income-tax was introduced in India for the first time in: a) 1850 b) 1860 c) 1880 d) 1890 12. What will be the previous year in relation to assessment year 2010-11 if a newly started business commencing its operations on 1-1-2010? a) 1-4-2009 to 31-3-2020. b) 1-1-2010 to 31-3-2010. c) 31-12-2009 to 31-3-2010. d) None of the above 13. RFA stands for: a) Rent Free Accommodation. b) Rural Free Accommodation. c) Rent Fare Accommodation. d) None of the above. 14. While calculating house property income, deductions are allowed under section: (a) 21 of the Income Tax Act, 1961 (b) 22 of the Income Tax Act, 1961 (c) 23 of the Income Tax Act, 1961 (d) 24 of the Income Tax Act, 1961 15. Short-term capital asset is that which is held by an assessee for not more than: a) 24 months. b) 36 months. c) 38 months d) None of the above.

Sriram Institute of Management

Multiple Choice Quiz-II MBA Fourth Semester
Tax Planning and Management (MBA FM04) Marks=7.5

1. Income Tax Act is applicable to (a) Whole of India (b) Whole of India except State of J & K (c) Whole of India except the State of Sikkim (d) None of the Above 2. The amount of exemption for running allowance is: (a) 70% of such allowance or Rs. 3,000 p.m. (b) 70% of such allowance or Rs. 6,000 p.m (c) 70% of such allowance or Rs. 9,000 p.m (d) Fully Exempted. 3. Under the Income-tax Act, the incidence of taxation depends on: (a) the citizenship of the tax-payer (b) the age of the tax payer (c) the residential status of the tax payer (d) None of the above. 4. Salary received by a member of Parliament is: (a) taxable as salary income. (b) exempt from tax (c) taxable as income from other sources (d) taxable as casual income 5. A central university teacher is: (a) Govt. Employee (b) Semi Govt. Employee. (c) Private Sector Employee (d) None of the above 6. Commuted value of pension is fully exempted in case of: (a) A Govt. Employee. (b) Private Sector Employee (c) An employee of public sector undertaking. (d) All of the above. 7. Perquisites and allowances paid to Government employee posted abroad are (a) Fully Exempted (b) Fully Taxable (c)Exempted if consumed abroad (d) Exempted if deposited in his Indian Bank. 8. Bonus shares received by a dealer of shares is: (a) Capital Receipt (b) Revenue Receipt (c) Exempt income

(d) None of the above 9. Reduction admissible from tax liability is known as: (a) Exemption (b) Rebate (c) Deduction (d) None of the above 10. Unabsorbed speculation business loss can be carried forward for set off: (a) for a period of 4 years (b) for a period of 8 years (c) for a period of 6 years (d) for an unlimited period. 11. Income accruing outside India and received outside India is taxable for a) Resident only. b) Non-Resident Only c) Not-ordinary Resident only d) All of the above. 12. Income accruing outside India but received in India is taxable for a) Resident, Non-Resident, Not-ordinary Resident b) Resident and Not-ordinary resident only. c) Resident and Non-Resident only. d) None of the above. 13. Deemed Profits are covered under section a) 40 of the Income Tax Act, 1961 b) 41 of the Income Tax Act, 1961 c) 42 of the Income Tax Act, 1961 d) 43 of the Income Tax Act, 1961 14. Company is defined under section: a) 2(17) of the Income Tax Act, 1961 b) 3(17) of the Income Tax Act, 1961 c) 4(17) of the Income Tax Act, 1961 d) 5(17) of the Income Tax Act, 1961 15. A company in which the public are substantially interested is called a) Domestic Company b) Widely Held Company c) Closely Held Company d) Indian Company

Sriram Institute of Management

Multiple Choice Quiz-III

MBA Fourth Semester

Tax Planning and Management (MBA FM04) Marks=7.5

1. Loss under the head can be carried forward for: (i) 8 years (ii) 4 years (iii) 6 years. (iv) None of the above. 2. An assessee is holding shares as his stock in trade. Dividend received by him is taxable under the head: (i) Profits and gains of business (ii) Income from other sources (iii) Income from capital gains (iv) None of the above. 3. In case any dependent is suffering from a chronic disease the rate of deduction is: (i) 15,000 p.a (ii) 25,000 p.a (iii) 40,000 p.a (iv) Actual Expenditure 4. The benefit of senior citizen is available to an assessee who has attained the age of: (i) 60 years. (ii) 65 years (iii) 68 years (iv) None of the above. 5. Gratuity received by a Govt. employee is: (i) Fully taxable. (ii) Fully exempted. (iii) Exempted if spent fully. (iv) Exempted up to Rs. 3, 50,000. 6. Ground Rent as per section 24(I)(v) for computing income from house property is deduction on (i) Payment basis (ii) Accrual Basis (iii) Not allowed 7. Rate of standard deduction u/s 24 is: (i) 1/5th of NAV. (ii) 1/4th of NAV. (iii) 30% of NAV. (iv) None of the above. 8. In the case of employees covered by payment of Gratuity Act 1972, the maximum exemption for retirement gratuity is: (i) Rs. 50,000. (ii) Rs. 1, 00,000. (iii) Rs. 2, 50,000. (iv) Rs. 3, 50,000. 9. Subsidy received from Government under scheme for promotion of industry is a

(i) Revenue Receipt. (ii) Capital Receipt. (iii) Casual Income. (iv) None of the above. 10. The maximum amount of exemption of compensation received at the time of voluntary retirement under section 10(10 C) is: (i) Rs. 1, 00,000. (ii) Rs. 2, 00,000. (iii) Rs. 5, 00,000. (iv) Rs. 80,000. 11. The total amount of tax you pay divided by your total income is the: (i) marginal tax rate. (ii) average tax rate. (iii) total tax rate. (iv) proportional tax rate. 12. The marginal tax rate is: (i) the total amount of tax you pay divided by your total income. (ii) the additional tax you pay divided by your total income. (iii) the tax rate you pay on any additional income that you earn. (iv) your total income divided by the total amount of tax you pay. 13. A tax whose burden is the same proportion of income for all households is: (i) a proportional tax. (ii) an equal tax. (iii) a progressive tax. (iv) a regressive tax. 14. A tax whose burden, expressed as a percentage of income, falls as income increases is a: (i) proportional tax. (ii) benefits-received tax. (iii) regressive tax. (iv) progressive tax. 15. Tax incidence is the: (i) ultimate distribution of a tax's burden. (ii) behaviour of shifting the tax to another party. (iii) structure of the tax. (iv) measure of the impact the tax has on employment and output.

Sriram Institute of Management

Multiple Choice Quiz-IV MBA Fourth Semester
Tax Planning and Management (MBA FM04) Marks=7.5

1. The collection of central Sales-tax is effected by: (a) the state where the goods are produced (b) the state from where the movement of goods begins (c) the state where the goods are delivered (d) the Central Government directly from the dealer. 2. The levy of Central Sales-tax is on:

(a) purchase of goods; (b) sale of goods; (c) purchase or sale of goods; (d) None of the above 3. A dealer engaged in effecting inter-state sale is required to get himself registered where his turnover exceeds (a) Any amount (b) Rs. 1, 00,000 (c) Rs. 2, 50,000 (d) Rs. 3, 50,000. 4. The dealer aggrieved by an appealable order should normally file appeal within (a) 45 days. (b) 30 days (c) 40 days (d) 35 days 5. Wealth tax is charged if total wealth is more than: (a) Rs 15 Lakh (b) Rs 16 Lakh (c) Rs 17 Lakh (d) Rs 18 Lakh 6. Rate of wealth tax is (a) 1% on net wealth. (b) 2% on net wealth (c) 3% on net wealth (d) 4% on net wealth. 7. If asset is held by a minor child then (a) it will be deemed wealth (b) it will not be deemed wealth (c)Exempted from wealth tax (d) None of the above. 8. GAI Stands for: (a) Gross Average Income (b) Gross Amount Income (c) Gross Amount Incidence (d) None of the above 9. Where a tax can be shifted, the incidence depends on: (a) who is legally obliged to pay the tax. (b) whether there is perfect or imperfect information. (c) elasticities of demand and supply. (d) how many producers there are. 10. An example of an indirect tax is: (a) a tax on profits. (b) inheritance tax.

(c) income tax. (d) VAT. 11. VAT is a good example of which kind of tax? (a) Excise duty. (b) Specific. (c) Direct. (d) Ad valorem. 12. Advance Tax is payable during the year if a) Amount of tax exceeds from Rs. 5,000 b) Amount of tax exceeds from Rs. 10,000 c) Amount of tax exceeds from Rs. 15,000 d) None of the above. 13. If the transaction is Benami Transaction then tax will be imposed on: a) Real Person b) Benamider c) Both a) and b) d) None of the above 14. Loss from a source whose income is exempted a) cannot be set off out of taxable income b) can be set off out of taxable income c) can only be set off from exempted income d) none of the above. 15. MAT stands for a) Minimum Alternate Tax b) Maximum Alternate Tax c) More Alternate Tax d) None of the above.