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PLANNING
AND
MANAGEMENT
Module-1
Assessment of
Corporate
Dr R Soundararajan
.
Corporate Taxation and Management
OBJECTIVES
To impart students with
knowledge on tax, types of
tax and their modalities.
To give insight on the taxes
influencing a corporate
entity - both direct and
indirect.
To orient the students on
the procedures and
formalities to be adhered,
with regard to tax matters.
OUTCOMES
Syllabus
MODULE 3:
Excise Duty
Module 4:
Customs Duty
Part-2
Indirect
Taxation
MODULE
6:
Central
Sales Tax
MODULE 1:
Assessment
of Corporate
Assesses
MODULE 5:
Service Tax
MODULE 2:
Tax Planning
and
Management
Part-1
Direct
Taxation
MODULE 1: Assessment of
Corporate Assesses
.Types
Class- 1
.
Definitions
ng
i
k
as
B y n s.
s? tio
i
t h es
A Filter screens ,
do Qu
u ht
o
rejects, takes in
y ig
r
o
d
e
what it wants and w th
o
H
what is useful
i on
t
ina
m
xa
Define Duty:[2]
is the compulsory payment, but no proportionate return, not
related to revenue. Example: excise duty, customs duty
Define Cess:[2]
is the compulsory payment, but no proportionate return, used
only for the purpose for which it is collected. Example: Education
cess
Corporate Taxation and Management
i on
t
ina ype
am y T
x
E ssa
E
Particula
rs
Nature
of
payment
Utilizati
on of
amount
Based
on
Example
Tax
Duty
Cess
compulsory
compulsory
General
purpose
of
government
Revenue
General
Special
purpose of
purpose
government
Production
Revenue
IT,
compulsor
y
Corporate Taxation
and Management
Wealth
Excise
duty, Education
2.
IT rules 1962
3.
Finance Act
4.
Case Laws
5.
i on
t
ina ype
m T
xa
a
ss
Raising revenue
2.
Economic development
3.
Reduction of unemployment
4.
5.
Capital accumulation
6.
7.
inflation atione
i n yp
m
T
a
x
E
a
ss
Ex
2.
3.
4.
5.
6.
i on
t
ina ype
m T
xa
a
ss
Assignment Questions:
1.
2.
3.
4.
5.
6.
t1
n
e
1.
2.
3.
t2
n
e
Class- 2
.
Objectives
Learning Objectives:
Understand
Ex
n
Assesse (S2 (7)): A person liable to pay tax. A person against
whom any proceedings under this act has been taken. A person who
is representative assesse (example guardian). Assesse in default
under any provision of this act
Deemed Assesse:
m
a
Ex
n
io
t
in a
An individual or
Company or
Local authority or
Person
of Indian origin
A person is said to be of Indian origin if he/ she or his/ her parents or grandparents
were born in un- divided India
Corporate Taxation and Management
io
t
in a
m
a
Ex
n
m
a
Ex
n
io
t
in a
Any
Indian company, or
foreign company, or
1.
2.
Domestic Company S
2[22A]
3.
Foreign Company S
2[23A]
4.
Domestic
Company
Indian
Company
Closely
Held
1.
Company in which
public is
Company[
2(23A)
S2[26]S2[22A]substantially
interested
Companies
1.
Incorporated
under
Indian
1.
Not
Domestic
or Indian
Indian
2.
Owned
byCompany
Government
or
RBI in
Earlier
A Companies
company
in
which
which
at least Act
40% or
shares
are held
company
2. companies
Any other Act
company
3.
S 25 Company
public
is not
[Non Indian
Company]
2.
Established
4. Or
Company
declaredby
by central,
CBDT to be
the
income
liable to be
substantially
so
State
Act
taxed
in India
5.
Nidhi company
or mutual benefit
interested
6.
5.
3.
io
t
in a
Business
1. Any trade ,
commerce, or
manufacture
2. Any adventure in the
nature of trade ,
commerce, or
manufacture
Profession
An occupation ,
requiring pure
intellectual and manual
skill gathered through
past training or
qualification
Can you
explain
Business
and
profession
and
Vocation? Is
hobby same
as Vocation?
Vocation
Natural ability of a
person to undertake
some particular work.
Must have earning
feature.
EW
I
RV
E
T
IN am
Ex
&
deemed dividend
1.
Carry
Do
not forward
apply in Loss
case of
Death of U/S79
shareholder
Un
of a
Gift absorbed
to relativeslosses
by shareholder
closely
held company can be
3.
Amalgamation /Demerger of
carry
forward only if 51% of
foreign company subject to 51%
voting
power are
same as
of shareholders
continues
to be
thethe
last
day
of
previous
year
shareholder of amalgamated
2.
company
Corporate Taxation and Management
Determine
the
income
status
of
the
IZ
U
Q
following:
[8]
A.An Individual
A.
Dr Muniraju a lecturer in BU
B.
Bharatidasan University
C.
D.
BHEL
E.
F.
G.
LIC of India
H.
I.
Co-Operative Society
J.
K.
L.
M.
io
t
in a
m
a
Ex
n Assessment year (S2(9))- It is the period of 12
Class- 3
TYPES OF TAXES
We Resolve
That
Perquisite Tax
Perquisite Tax:-
Corporate Tax
Sales Tax :
Sales tax charged on the sales of movable goods. Sale tax on Inter
State sale is charged by Union Government, while sales tax on intraState sale (sale within State) (now termed as VAT) is charged by State
Government.
Service Tax:
Most of the paid services you take you have to pay service tax
on those services. This tax is called service tax. Over the past
few years, service tax been expanded to cover new services.
Government
Other Taxes
Professional Tax
Stamp Duty, Registration Fees,
If you are earning professional you need to pay
Toll
Tax:
Entertainment
Tax:Transfer
Education
Cess
,Tax:Surcharge:Dividend
distribution
Tax:professional Municipal
tax. Professional tax
is
imposed
by
Tax:
Gift
Tax: At
respective
Municipal
Corporations.
in
some
of
places
you
need
to
pay
tax
inMost
order
to the
use
If
you decide
to
purchase
property
than
in
addition
to of
cost
paid
to seller.
Education
cess
is
deducted
and
for
Education
of States
poor
Tax
is also applicable onused
Entertainment;
this
tax
You
Dividend
distribution
taxis
thetaximposed
by theIndian
must
consider
additional
cost
to
transfer
that
property
on
your
name.
India
charge
this
tax.
infrastructure
(road,
bridge
etc.)
build
from
your
money
given
to
If
you receive
giftAll
fromsomeone
is clubbed
your
income
people
in INDIA.
taxes in Indiaitare
subject with
to an
education
Municipal
Corporation
in every city
imposed
is
imposed
by
state
government
on
every
government
asto
Tax.
tax
istax
called
as
toll
tax.
This
tax
and
That
cost
include
registration
fees,
stamp
duty
and
transfer
tax.
This
is ais
you
need
pay
tax
on
it.
This
tax
isworking
called
as
gift
tax.
cess,
which
is
3%
ofThis
the
total
payable.
The
education
cess
Governmenton
companies
according
to
thedividendpaid
to
This
tax
is
paid
by
every
employee
in
Private
tax
in
terms
of
property
tax.
Owner
of
every
FINANCIAL
transaction
that
isfor
related
to
required
for
preparing
legal
document
of
property.
amount
is
very
small
amount
but,
to
be
paid
maintenance
mainly
applicable
on if
Income
tax, excise
duty
and
service
tax.
organizations.
The
tax
is
deducted
by
the
Employer
This
tax
is
applicable
gift
amount
or
value
is
more
than
50000
companys
investors.
Dividend
amount
toThis
investor
is major
tax
free.
At
entertainment
such
as
movie
tickets,
and
good
up
keeping.
work
property
has
to
pay
this
tax.
tax
rate
In
simple
sense
this
tax
is
imposed
on
the
handing
over
of
the
title
of
every
remitted
to that
the added
Municipal
Corporation
Rs/in amonth
year.
Surcharge
is anand
extra
tax or fees
to your
existing tax
commercial
shows
exhibition,
broadcasting
property
ownership
by
one
person
totaxes
another.
It incorporates
a legal
So
present
dividend
distribution
tax
is
15%.
and
it
is
mandatory
like
income
tax.
in
total
you
pay
20
different
in
direct
or
indirect
way.
calculation.
This
tax
is
applied
on
tax
amount.
varies
in
every
city
transaction
fee & stamp
duty.
This amount
varies
from property
to
service,
DTH
service
and
cable
service.
The rate on which this tax is applicable is not same in all
property based on cost.
states.
Corporate Taxation and Management
Capital Gain
Securities Transaction Tax:Example: A lot of people do not declare their profit and avoid paying
Similarly
if you purchase
property
after
two share)
year if and
you
If
you
purchase
share
at
say
1000
Rs/(per
capital gain tax, as government can only tax those profits, which
find
price
in which
you INVESTED
has
afterthat
two property
months by
this
price
increased
Rs/-(per
have
been
declared
people.
To
fight with to
this1200
situation
increased
you to
decide
to(Securities
sale
it you
need
pay
Government
has
introduced
Transaction
Tax ) of
share) youand
decide
saleSTT
this
STOCK
and
earntoprofit
short
term
capital
gain
tax.
which
is
applicable
on
every
at to
STOCK
200 Rs/- per share. If youtransaction
do so youdone
have
pay Short
Thatitmeans
if you buy as
or sell
equity
shares,
derivative
exchange.
For
property
is
considered
long
term
capital
gainon
if
term
CGT
(capital
gain
tax)
@
10%
+Education
cess
instruments, equity oriented Mutual Funds this tax is applicable.
you
hold
property
for
3 years
orgain.
above..
profit
as
it
is
short
term
capital
If you
same
This tax is added to the price of security during
thehold
transaction
sharehence
for 1 you
year
or above
is considered
as amount
long term
itself,
cannot
avoid it
(save)
it. As this tax
is
very
low gain
people
do you
not notice
much.
capital
and
needitnot
to pay capital gain tax.it
is considered as tax free.
Corporate Taxation and Management
Class- 4
Part 2
MODULE 1:
Assessment of Corporate Assesses
Corporate Taxation and Management
Computation
of
taxable
income and tax liability
according to Income Tax
Provisions, Book Profits,
Corporate Taxation and Management
m
a
Ex
n
io
t
in a
Control and
management of the
affairs of the
company
Indian Company
Wholly In India
Resident
Resident
Resident
Non- Resident
Resident
Non- Resident
m
a
Ex
n
io
t
in a
Non-Resident in India
Indian Income
Taxable in India.
Taxable in India
Foreign Income
Taxable in India
Non-taxable in India
in
m
a
Any of the
following 3 is
Indian Income
Ex
n
Indian Income
io
t
a
During the PY
Income received or
deemed to be
received
Income accrue or
deemed to accrue
during PY
In India
In India
In India
Outside India
Outside India
In India
Foreign Income
During the PY
Income received or
deemed to be
received
Income accrue or
deemed to accrue
during PY
Outside India
Outside India
AL
C
TI
C
A
PR
am
x
E
2.Rs:
3.Rs.
4.Rs.
50,000
from
Keshoram, a non-resident
under
Indian
tax
I
I
F
I
F
Nature of Income
Rs
Amount
taxable
50000
100000
Not
taxable
05:02:19 AM
50000
Not
taxable
Reason
50
Class- 5
Part 2
MODULE 1:
Assessment of Firms
Corporate Taxation and Management
5.
Study Skills
Anything that
Progress tracked by
competes
with your study
quizzes
and test
Pay attention to what
For
attention is
instructor
stress your
in class
Saying it aloud or writing
sucking
outline help to grass
better
Away
your
power
to
learn
Group and remember
Partnership
Meaning As assigned
Firm
shall
have
An association of two
Meaning assigned
or more
persons
in Indian
Partner
Ship
the
LLP meaning
is a body CorporateAct
under
Act 2008 as per act and
1932 LLP
and shall
There should be an include:
agreement
assigned
to
it
in
include LLP
LLP has a separate legal entity
the
Indian to carry
on some business or profession
Agreement
Minor
Perpetual succession
admitted
Actto be carried
Partnership
The
business
on Act
by
all or by any one of
to the benefits
of the
Not covered by Indian Partnership
1932
partnership
1932 and
shallon behalf
acting
ofof
all Incorporation
and for the Document
benefit of with
all the
them
Incorporated by registration
include
as
registraraofLLP
the
in which
office of the
Agreement
tostate
share
profit the
andregistered
loss of business
orLLP is
defined
situated in the
profession
act 2008
LLP
Liability
of partner is limited
Corporate Taxation and Management
Pay Tax
same manner as per S184
under all provisions of4. the
act
Corporate Taxation and Management
Book Profit
The profit calculated after taking into
account all provisions provided in sections
28 to 44D
1.
2.
3.
4.
Examination
Book
Profit
Rs 30,000
-30,000
Rs
Remuneration
to Partner
Partner Rs
Rs 1,80,000
1,80,000
Remuneration to
Book
Book Profit
Profit
am
in
a
tio
n
Rs
Rs -30,000
30,000
Rs
Rs-1,50,000
1,50,000
Rs[-1.80,000]
[-1.20,000]
Rs
Disallowed
Disallowed
Book
Book Loss
Loss
Dis
Dis allowed
allowed ::
Remuneration
Remunerationto
toPartner
Partner
Rs1,80,000
1,80,000oror
Rs
90%
is is
higher
90% of
of 30000
30000or
orstatutory
statutoryLimit
LimitRs
Rs1,50,000
1,50,000whichever
whichever
higher
Corporate Taxation and Management
Sec
Description
80G
Donations
80GG
A
80
GGC
Donation to Politics
Infra projects
80IA
80IC
Backward area
80ID
80IE
80JJA
Bio Waste
Long Term
capital gain
20%
Short Term
capital gain on
securities
covered under
STT 15%
Education Cess
3%
Lotteries
gambling
Crossword
puzzles, @30%
Corporate Taxation and Management
Surcharge
@10% if exceed
Rs 1 crore
Class- 6
Part 2
MODULE 1:
Assessment of Firms
Corporate Taxation and Management
Jot
What are
down
soon as
understanding
your
possible
after
the Note down key
reactions?
pointsMeaningful facts class
Any
keyemphasized by
Notes taken
Significant
details examples?
from various
points instructor
Any
5-R
Concept
Record
HOW
To
Take
Notes
Reasons for
doubts
Reduce
position
1
3 Recite
Reflect
5 Review
books should
contain source
2.
3.
4.
Proprietor salary,
Business Income and expenditure
interest to proprietor
5.
6.
7.
8.
9.
10. Income
11. Business
Proprietor withdraws
goods costing Rs 100000for personal use at agreed
value of 1,40,000.The
Market Value is 1,50,000.
The profit of Rs 40000 is
notional income hence not
taxable
Hence provision or
reserves shall not be
allowed as expenditure
Profession carried on by
assesse
Expenses to be allowed from
deduction from gross receipt
provided incurred in the PY
General rule the expenses
incurred for earning that income
is allowed as deduction
Corporate Taxation and Management
Expenses allowed
7. Contribution to PF [43B]
1.
2.
3.
Depreciation
4.
Scientific Research
5.
Bad debts
6.
8. Contribution to approved
Gratuity Fund
9. Animals used for business other
than stock in trade
10.Any bonafide Revenue
expenditure for business 100%
allowed in the year incurred and
Capital Expenditure in 5
years[ 1/5 in each PY]
11.Security transaction Tax if
income from taxable securities
computed under the head
Income
Disallowances of unpaid
statutory and other
liabilities [43B]
No deduction
is allowed in
respect of
Deductions are
interest ,
allowed only on
Any sum payable Bonus ,
royalty or fees
payment basis for
by way Leave
for technical
commission
the following
encashment
to employees Services or
even though the
other sums
Books of
payable to any
Any
sum
payable
Any sum payable by
accounts
person outside
Interest
on
loan
way
of
contribution
maintained on
India or in
to
PF
or
Welfare
of
or
advances
to
Mercantile
India to a Non
employees
Banks
or
FI
system
resident on
The expenditure should not be capital in Nature, Not personal, incurred
which TDS is
in the PY, Incurred for the business, and expended wholly for the
not deducted
business and specifically not disallowed
Corporate Taxation and Management
Rs 1,50,000 or 90% of
book profit whichever is
more
On the balance
60% Corporate
of book
profit
Taxation
and Management
Class- 7,8,9
Part 2
MODULE 1:
Computation of taxable income and tax
liability according to Income Tax
Provisions
Corporate Taxation and Management
Rememberi
ng
Registrati
on
Rehearsal
Recall
New
facts
Retentio
n
NoRehearsal
Short Term
Memory
Long Term
Memory
Forgettin
g
Remember
Computational Format
Particulars
Net profit as per accounting P/L
Add Expenditure dis allowed but debited to accounting P/L
Capital Expenditure
Personal Expenditure
Advertisement with political Party
Any Provision / Reserve
Add income taxable under the head but not credited to accounting P/L
Sales proceeds of assets for deduction has been claimed u/s 35 AD
less income taxable but credited to P/L
Dividend U/S 10[34]
Income from units of UTI U/S 10[35]
less income taxable but credited to P/L
Rent from house property
Interest on income tax refund
Less expenditure allowed but not debited to P/L
Asset purchased for specified business35 AD
Adjustment to stock
Add closing under valued / opening over valued
Less closing over valued / opening under valued
Profit and gain from business
Corporate Taxation and Management
Amount
Amount
xxxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxx
xxxxx
xxxxx
xxxxx
xxxxx
xxxxxx
XXX
XXX
XXX
XXX
XXX
Rs !,20,00
0
1,60,0
00
1,60,0
00
Salary B
1,40,0
00
1,40,0
00
Commission to A
1,20,0
00
1,20,0
00
30,000
In admissible Expenses
Salary A
Rs
1,20,00
0
Interest Excess of
12%[45000x3/100]
9,000
4,29,000
Book Profit
5,49,00
0
Remuneration Allowed as per
Less Remuneration
40[b]
Allowed
Salary + Commission
Taxable Business Profits
90% book
profit{549000x.9=}
4,20,000
4,94,
000
4,20,0
4,20,000
00
1,29,000
Lower
1.
2.
Profit as per the P/L Account for year ended March 2014 is Rs
1,17,360 after debiting inter-alia the following amounts:
Rs
Salary paid to C
Rent paid to A
for the portion
owned
Interest @10%
A
B
C
Commission on
sale to B
4,000
9,000
1000
2000
3000
1000
Rs
Expense on
current repairs
agreement does
not contain
provision
1000
Donation
5,000
Net Profit
10,4000
Includes interest
on government
security
Corporate Taxation and Management
The deed
was
submitted
along with
return and
provides
salary to C
Rs 4000
and
interest
@10% for
capital to
Firms Profit
Profit from other sources : Interest on
Income
Government Security
In admissible
Expenses
Gross
Total Income
Salary
C
Less
Deduction
under 80 G Donation Rs 50% of
5000
Commission
Total
Income to
of Bthe firm
Expenses on Repairs
Tax @ 30% of 1,21,860
Donation
Education Cess @3% of 36558
Tax Payable rounded to nearest 0 rupees
Less income not taxable under this head
Rs
Rs
Rs 1,13,960
Rs
1,17,3
10,400
60
1,24,360
4,00 2,500
0
1,00
01,21,8
60
1,00
36,5 0
58
5,00 11,00
0
1,09 0 37,65
7
1,28,3
5
60
37,66
10,40
00
II.
III.
Partner A
Rs
Salary
1,60,0
00
Commission
1,20,0
00
Interest
@12%[30,000x12/15
24,000
Partner A
Salary
Interest
@12%[30,000x12/1
5
Rs
1,40,00
0
24,000
Particulars
Cost of goods
Sold
Remuneration to
partners
Interest to
partners @20%
pa
Municipal Taxes
of house
property
Other expenses
Net profit
Amount Particulars
10,00,00 Sales
0
1,45,000 Rent to house
property
40,000 Dividend
Amount
15,00,000
60,000
1,70,000
25,000
2,40,000
2,80,000
17,30,00
0
17,30,000
Other information
a. Out of other
expenses Rs 18,400
is not deductible
under S 36,37[1]
and 43 B
th January
b. On 15th
2013, the firm pays
an outstanding sales
tax liability of Rs
54,700 for the
previous year 200809 and not debited
l
o
S
t
u
n
io
Amount
Amount
2,80,000
1,45,000
16,000
25,000
18,400
2,04,400
4,84,400
54,700
60,000
1,70,000
-284700
1,99,700
Company
Dr R Soundararajan
Agricultural Income
79
Conditions on
agriculture income
Certain Income as
Agricultural Income
Certain
income
which is
not
treated
as
Agricult
ural
Income;
Practicals [8]
Particulars
Agricultural
Business
Rubber as per
Rule 7A
65% Agriculture
3,25,000
35% Business
1,75,000
Coffee as Per
rule 7B
75% agriculture
2,62,500
25% Business
87,500
4,20,000
40% business
Sale of plants
from nursery
Total
2,80,000
1,00,000
11,07,500
5.42,500
Particulars
Amount
Particulars Amount
Opening stock
400000
Sales
16200000
Purchases
5200000 Closing stock
480000
Income from
Salaries
800000 House property
80000
Rent & Rates and
Indian company
taxes
120000
Dividend
9000
Legal Charges
40000
Misc Expenses
20000
Depreciation
40000
Net Profit
10023000
Amoun
Particulars
t
Amount
16200 1,00,23,0
Net profitsales
as per P&L 000 00
Add
48000 1668000
Provision
for bad
0
0
Add Closing
stockdebts 30,000
Provision for gratuity
20,000
52000
Provision
I Tax
40,000
00
Less
expendituresfor
as per
IT Act
Dep as per account
40,000
80000 1,30,000
Less
0
Opening
stock
12000Dep Purchases
as per I Tax
60,000
0
Dividend
-9,000
40000
Salaries
Income
from House
16769
167690
20000Rent & Rates and taxes
property
80,000 -1,49,000
000
00
40000
Legal Charges
100040
Indirect method
00
2.
3.
4.
5.
6.
1.
2.
Expenditure on repairs of
rental premises and
plumbing work shall not
be allowed under S 30
2,00,00
1620000
0
0
Sales
31,00,0
00
480000
Closing stock
5,00,00 Income from House
0
80000
property
1,00,00
0 Indian company Dividend
9000
60,000
80,000
20,000
1,50,00
0
Car expenses
Provision for bad debts 30,000
40,000
Dep on car
Securities transaction
Tax
Agricultural expenditure
Net profit
10,000
50,000
124,70,
000
167,69,
000
167,69,0
00
1,24,70,
000
50,000
30,000
16,000
60,000
24,000
50,000
Less
-50,000
1,00,000
1,23,40,
000
Computation of Depreciation
(Block of Assets Method)
Additional Depreciation
c. Office appliances
If put to use for less than 180 days, then 10% of the
Corporate Taxation and Management
cost
From the following figures you are required to ascertain the depreciation
admissible
Particulars
Machine
ry
Building
Opening WDV
Rs
5,00,000
Rs 20,00,000
Rs
6,00,000
NIL
Rs
12,00,000
Rs 4,00,000
15%
10%
Rate of depreciation
Particulars Building
Amount
Opening WDV
Rs
20,00,000
Add Additions
------------
-Rs
4,00,000
Closing WDV
Depreciation @10%
Rs
16,00,000
Particulars Machinery
Opening WDV
Rs
5,00,000
Add Additions
Rs
6,00,000
-Rs
12,00,000
Closing WDV
Rs1,00,00
0
1,60,000
Amount
From the following profit & Loss Account of Ronie for the year ended 31-3- 2013, Compute
his gross total income for the assessment year 2013-14.
Particulars
Opening Stock
Purchases
Salaries
Rent, Rates and Taxes
Legal Charges
Miscellaneous Expenditure
Provision for bad debts
Provision for gratuity
Provision for income tax
Salary to Mrs Ronie
Depreciation
Net Profit
Amount
4,00,000
1,30,00,000
8,00,000
Particulars
Sales
Closing stock
Income from
Property
Amount
1,40,00,000
4,80,000
House
80,000
9,000
1,45,69,000
Additional Information:
Purchase include Rs 1,00,000 paid in cash to cultivator for purchase of an agriculture
produce
Purchase also include Rs 1,00,000 paid by way of compensation to supplier as the
assesse was not able to take the delivery of goods due to lack of storage space and
finance.
Opening stock was overvalued by 25% and closing stock was undervalued by 25%
Salary includes Rs 15000 paid as the customary bonus on the occasion of Diwali over
and above the bonus payable under payment of bonus Act 1956.
Rent Rate and taxes include Rs 10,000 on account of disputed ST demand, Rs 3000 on
account of municipal taxes, for property let out. It also includes Rs 5000 as Customs duty
penalty.
.An amount of Rs 20,000 from a customer was written off from the provision for bad
debts.
An employee retired on 28-3-13. Gratuity payable to him was Rs 20,000. A provision was
created for the same this year and was paid on 2-4-13.
a.
Mrs Ronie is a law graduate and actively working in the assessees firm.
Particulars
Profits and Gains of business or Profession
Add Expenditure disallowed but debited in P/L
Disputed Sales Tax
Municipal Tax
Customs Penalty
Provision for bad debts
Provision for Income Tax
Less Expenditure allowed but not debited in P/L A/c Bad Debts
Less Income not taxable but credited
Dividend received from companies
Less Income taxable under other heads but credited to P/L account- income from house
property
Adjustment of stock
Add under valuation of Closing Stock
Add Over Valuation of opening Stock
Amount
10,000
3,000
5,000
30,000
40,000
20,000
9,000
23,000
88,000
1,11,000
80,000
1,09,000
1,60,000
2,000
80,000
80,000
3,000
77,000
23,100
2,40,000
2,42,000
53,900
Nil
Rs
8,950
68,50
0
20,00
0
Particulars
Rs
--------
Interest received on
government securities
Less collection charges @2%
10,00
0
200
20,000
1,00,00
0
10,00
0
Family pension
48,00
0
Family pension
48,00
0
3,000
15,00
0
9,800
33,000
1,72,80
0
Rs
Director fee
10,000
3,000
12,000
27,760
Director fee
Interest on bank
Particulars
Interest on bank
Particulars
8000
5,000
40,174
3592
8000
500
3,000
12,000
7000
10,000
Rs
7000
5,000
7000
4,004
8000
-----
Class- 10
1o
Part 2
MODULE 1: Book Profits
20% of
what
you
READ
Only
30% of
what
you
HEAR
only
40% of
what you
SEE only
50% of
what
you SAY
Only
60%
What
you DO
only
90%
Of what You
learn with
many
sensory
learning
activities
READ
HEAR
SEE
SAY
DO
Ref:Kevin Paul ;Study Smarter not harder ; Jaico Publishing House pp57 Fig 3 Remembering Graph
Remember
Class- 11
Part 2
MODULE 1:
Minimum Alternate Tax under section 115JB,
Tax Credit under MAT, Dividend Distribution
Tax u/s 115-0.
Corporate Taxation and Management
Particulars
Amount Rs Amount Rs
34 lacs
30.9 %
Amoun
t of
Total Income
as per IT Act
XXXXX
In order
to preserve
tax
base vis profit linked deductions, provisions
Tax Liability
10,50,600
as assessed by AO
Total
Income
of LLP
asintroduced
per
40
levy
of
A
lternate
M
inimum
T
ax
{
AMT}
have
been
w.e.f
AY
As
per
new
provisions
U/s
115
J
being
18.5%
on
adjusted
income
Add Deductions claimed
XXXXX Books of accounts
lakhs
2012-13
under Chapter
VI A of LLP as assessed by AO
Total Income
34 lacs
Total Income
per
Applicable
to all Corporate
assesse
. Earlierofit LLP
was as
applicable
to only 30
Add Deductions
claimed
XXXXX
Add Deductions U/s 80IB Return
Claimed
18 lacs
Lakhs
under S LLP
10 AA if any
Add
Deductions U/sXXXXX
10 AATotal
claimed
15
lacs
Income
LLP
as
per
IT
Act are not 34
Adjusted
total Income
Exceptions:
HUF AOP, BOI or Artificial or Judicial persons [AJP]
as
assessed
by
AOnot exceed
Lakhs
Total
Income
67As
lacs
liable toAdjusted
AMT if their
adjusted
total
income
does
Rs 20 Lacs
Particulars
As Claimed
allowed
by
Tax
Tax Payable:
rate 18.5%
+ education
cess i.e.by assesse19.055%
AO
Higher
of
Tax payable
Alternate
Minimum
67 lacs
* 19.055%
under
normal
provisions
of IT Act
Deductions
u/s
80
IB Tax[
Rs 18 12,76,685
lacs
Rs12,76,685
16 lacs
Tax
Liability
being higher
of
Deductions
under
10AA
Or 18.5%
of adjusted
total income
10,50,600
Rs 15 lacs
Rs12,76,685
13 lacs
Rao Ltd a domestic ltd company provides the following P & L Account for 1. Additional Information:
computation of tax liability for AY 2015-16
Purchase includes a bill of
Amount
Amount
Rs 60000 paid in cash.
Rs
Rs
As per As per
Salaries
850000
Gross Profit
4902500
IT Act Books
General expenses 435000
Dividends
of a/c
Sales Expenses
215000
Director
B/F Loss
2.80,0 1,40,0
Remuneration
822000
00
00
Income Tax
180000
Un
1,70,0 50,000
Penalty Excise
10000
absorbed
00
Proposed Dividend 320000
Depreciati
Provisions for
on
losses of
subsidiary
Company
200000
Net Profit
1888000
4920000
4920000
Corporate Taxation and Management
Calculation
as per
Calculation
MATAct
Net Profit as per P&L
Proposed
Dividend
Income
Tax
Penalty Exempt]
Less Dividend[
Less Un absorbed
Proposed Dividend
depreciation[1,40,000]
or
losses[50,000] whichever
less
Provisions
for Losses
18,88,0 Particulars
18,88,0
Particulars
00
00
1,80,000
60,000
Taxable
TaxableIncome
Income
Tax@
@30%
18.5%
Tax
15,000
2,00,000
1,80,00
AddSurcharge
Surcharge
3,20,000 25,88,0 Add
00
0
Add
AddCess
Cess2%
2%Education
EducationCess
Cess
10,000
Add
17,500
AddSHE
SHETax
Tax1%
1%
3,20,00
Total
TotalTax
Tax
0
25,20,5
2,00,00 7,85,00
50000
00
0
0
Tax as per IT Act
Tax as Per MAT
26,73,0
00
Higher of
25,20,5
00
26,
6,81,500
Amount
Amount
Rs
Rs
22,05,5
25,20,5
00
00
6,61,65
4,66,29
03
NIL
NIL
13,233
9,326
6,617
4.663
6,81,50
4,80,28
02
= 6,81,500
= 4,80,282
these
References
1.
ANS Vijay,Tharun Raj and Divya Mittal; Only this much Module-3 KW
Publishers Limited New Delhi
2.
Singhania, Vinod, and Singhania, Kapil, "Direct Taxes - Law and practice",
Taxmann.
3.
Ahuja, Girish and Gupta, Ravi, "Direct Taxes - Law and Practice", Bharat
Publications.
4.
Manoharan, T. N and Hari, G.R., "Direct Tax Laws", Snow White Publications.
5.
6.
7.