Assignment/Project:

Ques.1.: Discuss the tax planning considerations while taking the undermentioned
managerial decisions:

(a) Decision regarding Location of Business-

Tax Planning Considerations while taking managerial decisions regarding location of business.
For a new business following questions related to tax planning arise –
(i) Form of the Organisation - The choice of the appropriate form of business organisation
will have to be thought of and decided by the person who intends to carry on business or
profession at the beginning itself, because a change in the form of business organisation
after the commencement of the business, may attract liability to tax.
A new business can be organised under any of the following forms:
1.Sole Proprietorship- The sole proprietorship is the simplest business form under which one can
operate a business. Sole proprietors must pay the entire amount themselves. The self-employment tax
rate is 15.3%. Deductions can be taken for himself and his family on health insurance, Retirement
Plans and Monthly Utilities.
2. Hindu undivided family- Large undivided families operate a single business Head of the business
is called “karta” he is also the head of the family Investments can be made from HUF’s income. Any
returns from these investments are taxable in the hands of the HUF. An HUF is taxed at the same rates
as an individual. Deductions under section 80 and other exemptions can be claimed by the HUF in its
income tax return. HUF can take an insurance policy on the life of its members.
3. Partnership firm - Tax rate will be 30%. Surcharge will be 10%(total income>1 crore). Further
educational cess 2%(primary education) and 1% cess on higher education .There will be no initial
exemption and the entire income will be taxed. The shared income of a firm in the hands of the
partners of the firm is fully exempt to avoid double taxation.
4. company- A company is a legal entity made up of an association of persons, be they natural, legal,
or a mixture of both, for carrying on a commercial or industrial enterprise. Types of companies-
a.) widely held company
b.) Closely held company
c.) Domestic company
d.) Foreign company

(ii) Nature of the business

(iii) Location
(iv) Financial Structure
(v) Acquisition of plant and machinery and other fixed assets
(vi) Setting up and commencement of business

7.  The selection of a particular form of organisation would depend not only on the tax aspect but on
other considerations also, e.g., financial requirements and resources, requirement of limited liability
and many other practical considerations.
11. 4. Company A company is a legal entity made up of an association of persons, be they natural,
legal, or a mixture of both, for carrying on a commercial or industrial enterprise. Types of companies-
1. widely held company 2. Closely held company 3. Domestic company 4. Foreign company

12.  'Closely Held Stock' A company whose common shares are owned by one individual owner or
by a small group of controlling stockholders.  This is in contrast to a widely held stock, in which
thousands or even millions of different investors may own shares in a large company.

13. Domestic company  domestic companies have to pay tax@15%  surcharge@10%  cess@3%

on dividend declared, distributed or paid except dividend under section 2(22)(e).

14. Foreign company The income-tax rate on foreign corporations is higher at 50% or 40%. 
surcharge 2% 5% surcharge if incom exceeds 10 crore This is so because distributions by the
foreign corporations are generally not liable to tax in India. Further, certain tax incentives available to
domestic corporations are not available to foreign companies.

15. Nature of the business:  Besides the form of organisation, the choice of the nature of the business
also calls for appropriate planning with reference to the various special benefits available under the
taxation laws to the particular kinds of industries which are not available to other kinds. Some of these
benefits are of such a substantial nature that they constitute one of the major factors in the
determination of the nature of the business.  Broadly, business for this purpose may be divided into
two categories—trading and manufacturing business. There could be a third category involving
combination of both. Deduction is available under section 10AA to newly established units in Special
Economic Zones.

16.  A taxpayer carrying on manufacturing or industrial activities would be in a position to avail of

the various concessions such as depreciation under Section 32, 35ABB, 35D and 35E, tax holiday
benefit under section 80-IA/IB/IC/ID/IE.  An important aspect that requires consideration in this
context is the decision regarding type of product to be manufactured. The manufacture of any of the
non-priority items specified in the Eleventh Schedule to the Income-tax Act, 1961 might disentitle the
assessees, excepting small-scale industrial undertakings, to the tax holiday benefit under the
provisions of section 80-IB. This is a major factor to be considered while deciding the nature of the
business that an assessee should engage in.

17.  While deciding the nature of the business, the benefit of tax exemption or concessional
treatment available in respect of certain types of income such as agricultural income, business income
from hotel business, new industrial undertakings, ships, business of repairs to ocean going vessels,
business of exploration, etc. of mineral oils, etc. should also be taken into account.

(b) Capital Structure decision

(c) Make or Buy decision

(d) Own or Lease decision

(e) Dividend decision

Ques.2.: PSDA
(a) ITR filing by companies in India: In this context, discuss in detail the process
of filing the ITR and give detailed formats(structure) of ITR-6 and ITR-7.

(b) Draw a comparative study between India and atleast two other developing
nations, as regards their Corporate taxation policy.

(c) Discuss in detail the policy changes brought through Union budgets or
otherwise, in last five years, in Indian Corporate Tax structure.

(d) Write a detailed note on filing of GSTR :

(i) Types of GST returns

(ii) Due dates of filing GST Returns

(iii) Interest/late fees to be paid under GST