Fiscal Policy and Tax Management

Subject Credits: 3

The course would discuss the basic concepts of taxation and

its
computation, the proper compliance of various provisions of the direct
Summary/Overview tax laws and to help the students in understanding the tax planning
considering the pros and cons of various tax laws and business
functions.
1. To familiarize the student with the basic principles and concepts
of Direct Tax including income from salary, income from House
property, Profits and Gains from Business and Profession, Capital
Gains and Income from other sources.
Aims
2. To make the students to understand the various techniques of tax
planning.

Core Learning Outcomes

Learning Outcomes Assessment Criteria
On completion of this unit you should be To achieve the learning outcome you must
able to: demonstrate the ability to:
To make the students understand the Quiz and Theory Questions
1. Basic concepts and Principles of taxation

To help the students understand the Problems on determining the residential status
incomes exempt from tax and of individual and incidence of tax.
2. classification of resident Status and
incidence of Tax
To make the students understand the Problems on computation of Income from
various heads of Income Salary. House Property, Business, Profession,
a) Income from salary Capital Gains and Other sources Including cases
b) Income from House Property presented at supreme and High court
3.
c) Profits and gains from
business
d) Capital gains
e) Income from other sources
 In order to enable the students better understanding the subject the following
teaching methods will be used.
Approach to 1. Lecture Method
Learning 2. Problem solving Method
3. Case Analysis Method
4. Supervised Study Method

Outline Teaching Schedule

Sl.
Chapter Name Contents
No.
CONCEPT OF Tax – Meaning, Types, Principles of direct
TAXATION taxation, Administration of income tax collection process
Components of income tax law of the country, Basics concepts –
Income, Assesse, Deemed assesse / Representative assesse,
Assesse in default, Assessment, Person, Assessment year, Previous
1.
year, Exceptions to the general rule of previous year, Heads of
income, Gross total income, Total income, Agricultural
income, Casual income and Tax planning, Tax avoidance and Tax
evasion.

Incomes Exempted
Charge of income tax, Scope of total income, Classification of
from tax
Residential status assesse on the basis of their residential status or different types of
2.
of individuals assesse, Rules for determining the residential status of individual
(a) and companies, and Problem on residential status of individual
and companies
(theory and
computation)
Incidence of Tax
2 Computation of taxable income for different types of assessee,
(Theory and Indian income, foreign income and case study on incidence of
(b). Computation)
tax.
Heads of income, Definition of salary, Allowances- fully taxable allowances, partly
Computation of taxable allowances - HRA, EA, Education allowances, Hostel
Individual Income allowances, Traveling allowances, Conveyance allowances, Fully
3. Tax – Including exempted allowances, Leave salary or Encashment of leave salary,
Income from Gratuity, Pension, Provident fund, Perquisites - taxable perquisites
salary for all assesse (specified and unspecified) and computations.

Chargeability under the head income from

Income from
4. house property, Meaning of annual value, Different situations
House Property
under which income arises from house property, Let out property,
 Self -occupied property, Deemed to be let out property, Partly
self occupied and Partly let out, computation of income from a
let out house property, Determination of the Gross Annual Value
of the property, unrealized rent, Deductions u/s 24, Standard
deduction (u/s 24 (a), Interest on borrowed capital (U/S24 b),
Interest for current previous year, Interest on pre - construction
period and Computations.

Meaning of business: section 2(13),

Chargeability, Basic principles for arriving at business income,
Mercantile system of accounting, Computation of income from
Profits and gains
5. business under mercantile system of accounting, Expenses
from business
expressly disallowed section 40 and problems on taxable
income from business

Income from Meaning of profession and vocation, computation

6. of income from profession under cash system of accounting
profession
Meaning of capital asset, Chargeability, Kinds of capital
assets- specified assets and non – specified assets, Types of
capital assets - short term capital assets and long term capital
7. Capital gains assets, Transfer, Types of capital gain - short term capital gain
and long term capital gain, Computation of short term capital
gain long term capital gain and exemption u/s 54, 54B,
54D, 54EC, 54F, 54G, 54GA.

Income that are taxed under other sources,

Deduction can be claimed while calculating income from other
Income from
8. sources, Dividends, Casual incomes, Interest on securities and
other sources
Problems on income from other sources.

Recommended Resources
Essential Book:

Singhania, Vinod, “Direct Taxes – Law and Practice”, Taxmann Publications.

Reference books:

1. Singhania, Vinod, “Direct Taxes – Planning and Management”, Taxmann Publications.

2. Ahuja, Girish and Gupta, Ravi, “Professional Approach to Direct Taxes”, Bharat
Publications.
3. Mehrotra and Goyal, “Direct Taxes”, Sahitya Publishing.
4. U.S.Datey – Indirect Taxes Law & Practice – Taxman Publications
5. Compiled material – as distributed in class