Law of Taxation Important Questions 6th Sem

lOMoARcPSD|8924854
Law of Taxation Important questions - 6th SEM
3 year Law (Mahatma Gandhi Law College)
Studocu is not sponsored or endorsed by any college or university

Downloaded by Gulshan Kumar (Gr020799@gmail.com)
lOMoARcPSD|8924854
Taxation – 6th Semester
LAW OF TAXATION, 6th SEMESTER IMPORTANT QUESTIONS AND CASES

SL IMPORTANT SHORT & LONG QUESTIONS REP
NO
SYLLABUS
1 TAXATION POWER IS DERIVED FROM ARTICLE 265. EXPLAIN THE OBJECTS OF TAXATION 2
2 FINANCIAL YEAR / PREVIOUS YEAR AND ASSESSMENT YEAR 3
3 RESIDENTIAL STATUS AND TYPES OF RESIDENTIAL STATUS 5
4 PERSONS CHARGEABLE TO INCOME TAX 2
5 CAPITAL GAINS AND LONG TERM CAPITAL GAINS 3
6 PERQUISITES, TYPES OF PERQUISITES, EXEMPTED PERQUISITES FROM INCOME TAX. 4
7 SECTION 80 DDB EXEMPTION PROCEDURES (TREATMENT OF DEPENDENTS) 3
8 COMMUTATION OF PENSION 2
9 WHAT IS PAN? ITS IMPORTANCE AND PAN FOR OPENING A BANK ACCOUNT 2
10 ADVANCE TAX DUE DATES AND ITS APPLICABILITY 4
11 DOUBLE TAXATION AND ITS RELIEF 4
12 KINDS OF GST 3
13 INPUT TAX CREDIT UNDER GST AND ITS CONDITIONS 3
14 WRITE A NOTE ON TAX LIABILITY ON COMPOSITE AND MIXED SUPPLIES 2
15 ADMINISTRATIVE OFFICER UNDER GST ACT, WHAT ARE HIS POWERS? 2
IMPORTANT CASES
16 COMPUTATION OF INCOME FROM SALARY 2
17 PROFORMA OF STATEMENT OF INCOME 5
18 SENIOR CITIZEN AND ITS APPLICABILITY 2
19 NRI WANTS TO SELL HIS FATHER'S HOUSE, HOW TO TAX THE SALE PROCEEDS 2
Harinath Janumpally – 9440629864. 1

lOMoARcPSD|8924854
20 COMPUTATION OF INCOME FROM HOUSE PROPERTY {SECTION 23(1), 23(2) & 24} 2
21 CLUBBING OF INCOME (SECTIONS 60-65) 2
22 INTEREST CALCULATION FOR NON-PAYMENT OF ADVANCE TAX (SEC 234B & 234C) 2
LL.B.VI SEMESTER - PAPER-I: LAW OF TAXATION

Unit-I:
Constitutional basis of power of taxation — Article 265 of Constitution of India - Basic concept of Income
Tax — Outlines of Income Tax Law - Definition of Income and Agricultural Income under Income Tax Act —
Residential Status - Previous Year — Assessment Year — Computation of Income.
Unit-II:
Heads of Income and Computation — Income from Salary, Income from House Property, Profits and Gains
of Business or Profession, Capital Gains and Income from other sources.
Unit-III:
Law and Procedure — P.A.N. — Filing of Returns — Payment of Advance Tax -- Deduction of Tax at Source
(TDS) -- Double Tax Relief — Law and Procedure for Assessment, Penalties, Prosecution, Appeals and
Grievances -- Authorities.
Unit-IV:
GST ACT, 2017 – Goods and Services Tax Act, 2017: Introduction – Background - - Basic Concepts – salient
features of the Act – Kinds of GST - CGST, SGST & IGST – Administration officers under this Act – Levy and
collection of tax – scope of supply – Tax liability on composite and mixed supplies – Input tax credit –
Eligibility and conditions for taking input tax credit.
Unit-V:
GST ACT, 2017:- Registration – persons liable for registration – persons not liable for registration –
procedure for registration – returns – furnishing details of outward and inward supplies – furnishing of
returns – payment of tax, interest, penalty and other amounts – tax deducted at source – collection of tax
at source – Demand and Recovery – Advance Ruling – Definitions for Advance Ruling – Appeals and
revision – Appeals to Appellate Authority – Powers of revisional authority - Constitution of Appellate
Tribunal and benches thereof – offences and penalties.
Suggested Readings:
1. Vinod K.Singhania: Student Guide to Income Tax, Taxman, Allied Service Pvt. Limited.
2. Vinod K.Singhania: Direct Taxes Law & Practice, Taxman Allied Service Pvt. Limited.
3. Myneni S.R.: Law of Taxation, Allahabad Law Series.
4. Kailash Rai: Taxation Laws, Allahabad Law Agency.
5. Gurish Ahuja: Systematic Approach to Income Tax, Bharat Law House Pvt Ltd
6. V.S. Datey: GST Ready Recknor, Taxman Publications.
7. GST Acts with Rules & Forms (Bare Act), Taxman Publications.
8. GST – A Practical Approach, Taxman Publications.
9. Sweta Jain, GST Law and Practice – A Section wise commentary on GST, Taxmann Publications.
10. Shann V Patkar, GST Law Guide, Taxmann Publication.

lOMoARcPSD|8924854
ANSWERS TO IMPORTANT QUESTIONS
1. TAXATION POWER IS DERIVED FROM ARTICLE 265. EXPLAIN THE OBJECTS OF TAXATION.
Answer: The system of taxation is the backbone of a nation’s economy which keeps revenue consistent,
manages growth in the economy, and fuels its industrial activity. India’s three-tier federal structure
consists of Union Government, the State Governments, and the Local Bodies which are empowered with
the responsibility of the different taxes and duties, which are applicable in the country. The local bodies
would include local councils and the municipalities. The government of India is authorized to levy taxes on
individuals and organisations according to the Constitution. However, Article 265 of the Indian
constitution states that the right to levy/charge taxes hasn’t been given to any except the authority of
law. The 7th schedule of the constitution has defined the subjects on which Union/State or both can levy
taxes. As per the 73rd and 74th amendments of the constitution, limited financial powers have been given
to the local governments which are enshrined in Part IX and IX-A of the constitution.
Definition of Tax
A tax may be defined as a monetary burden rested upon individuals or people with property to help add
to the government’s revenue. Tax is, therefore, a mandatory contribution and not a voluntary payment or
donation which one decides on one’s own. It is a payment exacted by the legislative authority. It may be
direct tax or indirect tax. Revenue growth which may be a little faster than GDP (Gross Domestic Product)
can result from revenue mobilization with an effective tax system and measures.
The government uses this tax to carry out functions such as:
➢ Social welfare projects like schools, hospitals, housing projects for the poor, etc.
➢ Infrastructure such as roads, bridges, flyovers, railways, ports, etc.
➢ Security infrastructure of the country such as military equipment
➢ Enforcement of law and order
➢ Pensions for the elderly and benefits schemes to the unemployed or the ones below the poverty
line.
Article 265
Without the ‘authority of law,’ no taxes can be collected is what this article means in simple terms. The
law here means only a statute law or an act of the legislature. The law when applied should not violate
any other constitutional provision. This article acts as an armour instrument for arbitrary tax extraction.
In the case Tangkhul v. Simirei Shailei, all the villagers were paying Rs 50 a day to the head man in place
of a custom to render free a day’s labour. This was done every year and the practice had been continuing
for generations. The Court, in this case, held that the amount of Rs. 50 was like a collection of tax and no
law had authorized it, and therefore it violated Art 265. Article 265 is infringed every time the law does
not authorize the tax imposed.
In the case, Lord Krishna Sugar Mills v. UOI, sugar merchants had to meet some export targets in a
promotion scheme started by the government but if they fell short of the targets then an additional excise
duty was to be levied on the shortfall. The court intervened here and said that the government had no
authority of law to collect this additional excise tax. What this means in effect is that the government on
its own cannot levy this tax by itself because it has not been passed by the Parliament.
Here we will discuss the objectives of taxation in modern public finance:

1. Economic Development
2. Full Employment
3. Price Stability
4. Control of Cyclical Fluctuations
5. Reduction of BOP Difficulties
6. Non-Revenue Objective

lOMoARcPSD|8924854
7. Social and economic balance

8. It curbs inflation
9. Minimisation of Inequalities in Consumption Standard
10. Protection to domestic industry
1. Economic Development: One of the important objectives of taxation is economic development.

Economic development of any country is largely conditioned by the growth of capital formation. It is said
that capital formation is the kingpin of economic development. But Least Developed Countries usually
suffer from the shortage of capital.
To overcome the scarcity of capital, governments of these countries mobilize resources so that a rapid
capital accumulation takes place. To step up both public and private investment, government taps tax
revenues. Through proper tax planning, the ratio of savings to national income can be raised.
By raising the existing rate of taxes or by imposing new taxes, the process of capital formation can be
made smooth. One of the important elements of economic development is the raising of savings- income
ratio which can be effectively raised through taxation policy.
2. Full Employment: Second objective is the full employment. Since the level of employment depends on
effective demand, a country desirous of achieving the goal of full employment must cut down the rate of
taxes. Consequently, disposable income will rise and, hence, demand for goods and services will rise.
Increased demand will stimulate investment leading to a rise in income and employment through the
multiplier mechanism.
3. Price Stability: Thirdly, taxation can be used to ensure price stability—a short run objective of taxation.
Taxes are regarded as an effective means of controlling inflation. By raising the rate of direct taxes, private
spending can be controlled. Naturally, the pressure on the commodity market is reduced.
But indirect taxes imposed on commodities fuel inflationary tendencies. High commodity prices, on the
one hand, discourage consumption and, on the other hand, encourage saving. Opposite effect will occur
when taxes are lowered down during deflation.
4. Control of Cyclical Fluctuations: Fourthly, control of cyclical fluctuations—periods of boom and
depression—is considered to be another objective of taxation. During depression, taxes are lowered down
while during boom taxes are increased so that cyclical fluctuations are tamed.
5. Reduction of Balance of Payments Difficulties: Fifthly, taxes like custom duties are also used to control
imports of certain goods with the objective of reducing the intensity of balance of payments difficulties
and encouraging domestic production of import substitutes.
6. Non-Revenue Objective: Finally, another extra-revenue or non-revenue objective of taxation is the
reduction of inequalities in income and wealth. This can be done by taxing the rich at higher rate than the
poor or by introducing a system of progressive taxation.
7. Social and economic balance: Based on every individual’s earnings and overall economic situation, the
Government has well-defined tax slabs and exemptions in place so that the income inequalities can be
balanced out.
8. It curbs inflation: The Government often increases the tax rate when there is a monetary inflation which
in turn reduces the demand for goods and services and as a result of descending demand, the inflation is
bound to condense.
9. Minimisation of Inequalities in Consumption Standard: To minimise the inequalities in the standard of
consumption in the community by taxing items of conspicuous consumption and luxuries meant for the
rich classes, at a highly progressive rate and subsiding the essential goods meant for the poor sections of
the community.
10. Protection to domestic industry: To provide protection to the domestic industries, import duties are
usually devised in developing economies. India, for instance, has imposed heavy import duties on many
items with the object of encouraging the production of import substitutes and protecting the growing
domestic industries from cut-throat foreign competition and also to conserve valuable foreign exchange
reserves by curbing the propensity to import.

lOMoARcPSD|8924854
2. FINANCIAL YEAR / PREVIOUS YEAR AND ASSESSMENT YEAR.

Answer: What does Financial Year mean?
The financial year is the year in which you have earned the income. It starts from 1st April of calendar year
& ends on 31st March of the next calendar year. The term “Financial Year” is also commonly referred to as
F.Y.
An assessee is required to calculate and plan taxes for the financial year but income tax return is to be
filed in the next year or Assessment Year. For instance,
➢ The income you earned from 1st April 2020 to 31st March 2021 is the income earned in the current
Financial Year (FY) 2020-21. Also,
➢ Any income earned by you for the period starting from 1st April 2020 to 31st March 2021 can be
simply stated as income earned in Financial Year (FY) 2020-21.
What does Assessment Year mean?
Assessment year means the year (from 1st April to 31st March) in which income earned by you in a
particular financial year is taxed. You are required to file your income tax return in the relevant
assessment year. Assessment year is the year just succeeding the Financial Year. For e.g.
➢ Income earned in the current Financial Year 2020-21 (i.e. from 1st April 2020 to 31st March 2021)
will become taxable in Assessment Year 2021-22 (i.e. from 1st April 2021 to 31st March 2022).
➢ Income earned in Financial Year 2019-20 (i.e. from 1st April 2019 to 31st March 2020) will become
taxable in Assessment Year 2020-21 (i.e. from 1st April 2020 to 31st March 2021).
What does Previous Year mean?
For the purpose of income tax or income tax return, terms financial year and previous year are used
interchangeably. So, the financial year (FY) 2020-21 can also be termed as the preceding (previous) year
(PY) 2020-21 & the income of such year will become taxable in assessment year (AY) 2021-22.
Some examples of Assessment Year and Financial Year or Previous Year

Period Financial Year Previous Year Assessment Year
1 April 2018 to 31st 2018-19 2018-19 2019-20
March 2019
1 April 2019 to 31st 2019-20 2019-20 2020-21
March 2020
1 April 2020 to 31st 2020-21 2020-21 2021-22
March 2021
What is the difference between Assessment Year and Financial Year?

From the tax perspective, financial year is the year in which a person earns an income. Assessment year is
the year followed by the financial year in which the evaluation of the previous year’s income is done, tax
is paid on the same and ITR is filed.
For instance, if we consider the financial year starting from 1 April 2020 to 31 March 2021, then it is
known to be financial year 2020-21. The assessment year begins after the financial year ends, so the
assessment year of F.Y 2020-21 would be AY 2021-22.
3. RESIDENTIAL STATUS AND TYPES OF RESIDENTIAL STATUS.

Answer: Meaning and importance of residential status:
The taxability of an individual in India depends upon his residential status in India for any particular
financial year. The term residential status has been coined under the income tax laws of India and must
not be confused with an individual’s citizenship in India. An individual may be a citizen of India but may
end up being a non-resident for a particular year. Similarly, a foreign citizen may end up being a resident
of India for income tax purposes for a particular year.
Also to note that the residential status of different types of persons viz an individual, a firm, a company
etc. is determined differently.

lOMoARcPSD|8924854
Classification of Residential Status

As per the depending stay of the individual in India, Income Tax Law has classified the residential status
into three categories.
Residential status of an individual will cover the financial year of an individual and as well as his/her
previous years of stay.
There are the following categories which classified the residential status of an individual.
1. Resident (ROR)
2. Resident but Not Ordinarily Resident (RNOR)
3. Non Resident (NR).
1. Resident and Ordinarily Resident (ROR)
Under Section 6(1) of the Income Tax Act an Individual is said to be resident in India if he fulfils the
condition:
If he/she stay in India for a period of 182 days or more in a financial year, or He/ She is in India for a
period of 60 days or more in a financial year and If he/she stays in India for a period of 365 days or more
during the 4 years immediately preceding the previous year.
As per section 6(6) of Income Tax Act, 1961 there are following two conditions when an individual will be
treated as the “Resident and Ordinarily Resident” (ROR in India.
1. If He/ She stays in India for a period of 730 days or more during the 7 years of preceding previous
year.
2. If He/ She stays in India for at least 2 out of 10 previous financial years which is preceeding the
previous years.
If the individual doesn’t satisfy either of the condition, then he is not eligible to qualify as Resident and
Ordinarily Resident (ROR).
Points which are essential while calculating ROR
• It is not mandatory that assessed should stay at the same place and it is not mandatory that stay
should be a continuous period of time which means it shouldn’t be on a regular basis.
• Territorial of India includes territorial water, continental shelf, and airspace which are up to
twelve nautical miles.
• When any person visits India then their calculation of resident in India will be counted through
their physical presence in India. And these physical presences will be counted on an hourly basis. If
any dispute arises while calculating their physical presence, then the day on which he comes to
India and the day on which he leaves India shall be taken into consideration while calculating the
Residential status.
Let’s understand the ROR with an example:
Suppose Mr. Nayar who is a resident of India who went to another country in October 2018 while he had
stayed in India during the financial year (2018-19) is for a period of 250 days which is exceeding the 182
days and his stay in previous 7 financial years is more than 730 days then he is eligible for paying the tax in
India. That’s why the income of Mr. Nayar will be taxable in nature because he is fulfilling the condition of
ROR.
2. Resident but Not Ordinarily Resident (RNOR)
An individual will be treated as RNOR when an assessee fulfills the following basic conditions:
In a financial year if an individual stays in India for a period of 182 days or more; Or He/ she stays in India
for a period of 60 days in a financial year and 365 days or more during the 4 previous financial years.
However, an Assesse will be treated as a Resident but Not Ordinarily Resident (RNOR) if they satisfy one
of the basic conditions which are as follows:
1. If He/ She stays in India for a period of 730 days or more during the 7 preceding financial year or;
2. If He/ She was a resident of India for at least 2 out of 10 in the previous financial year.
Let’s understand Resident but Not Ordinarily Resident with an example:
Suppose Mr. Nayar who is in the Financial year 2017-18 stayed in India for a period pf 192 days so he was
fulfilling the condition No 1 but He didn’t stay in India for more than 730 days during the period of

lOMoARcPSD|8924854
1st April 2010 to 31st March 2011 which was immediately preceding the Financial Year 2017-18. So in this
situation, Mr. Nayar will be qualified for a Resident but Not Ordinarily Resident (RNOR).
3. Non – Resident (NR)
An individual satisfying neither of the conditions stated in (a) or (b) above would be an NR for the year.
Taxability
Resident: A resident will be charged to tax in India on his global income i.e. income earned in India as well
as income earned outside India. NR and RNOR: Their tax liability in India is restricted to the income they
earn in India. They need not pay any tax in India on their foreign income. Also note that in a case of
double taxation of income where the same income is getting taxed in India as well as abroad, one may
resort to the Double Taxation Avoidance Agreement (DTAA) that India would have entered into with the
other country in order to eliminate the possibility of paying taxes twice.
4. PERSONS CHARGEABLE TO INCOME TAX.

Answer: Who is an Assessee under ITA?
An assessee is a person who pays a certain amount to the government as tax in a financial year. This is
as per the Income Tax Act of 1961.
It contains every individual who has been assessed for his income, the income of another person, or the
profit and loss he has sustained.
It includes:
▪ The person who had done an assessment of his income or the income of any other person, or the
loss sustained / the amount of refund by him or by another person.
▪ A person who is considered to be an assessee under this Act.
▪ The person who is assumed to be an assessee in default under this Act.
Types of assessees
▪ Normal Assessee
▪ Representative Assessee
▪ Deemed Assessee
▪ Assessee-in-default
1. Normal Assessee
An individual who pays tax for the total income earned during a financial year is a normal assessee.
Every individual who had earned any income or had a loss during the previous financial years is
accountable to pay tax to the government in the current financial year.
All individuals who pay interest or who are supposed to get a refund from the government are
categorised as normal assessees.
For example, Mr A is a salaried individual who has been paying taxes on time over the past 5 years.
Then, Mr A can be considered as a normal assessee under the Income Tax Act, 1961.
2. Representative Assessee
A representative assessee is a person who is responsible to pay tax for the income or loss caused by a
third party.
It happens when the person liable for tax payment is a non-resident, minor, or lunatic. They cannot file
tax by themselves. Therefore, It can either be an agent or guardian.
For example, Mr X has been residing abroad for the past 7 years. However, he receives rent for two
house properties he owns in India. With the help of a relative Mr Y, he files tax in India. Here Mr Y is a
representative assessee.
When any investigation on the tax filing comes, Mr Y needs to provide the necessary documents as the
guardian of the property and he also represents Mr X.
3. Deemed Assessee

lOMoARcPSD|8924854
A deemed assessee is an individual who is responsible to pay the tax by the legal authorities. A deemed
assessee can be:
▪ The eldest son / a legal heir of a deceased person who had died without writing a will.
▪ The executor / a legal heir of the property of a deceased person who has passed on his property to
the executor in writing.
▪ The guardian of a lunatic, an idiot, or a minor.
▪ The representative of a non-resident Indian receiving income from India.
For example, Mr A owns a commercial building and he earns income by rent. He had a will stating that this
property is to be to his niece after his death.
So after his death, his niece is the deemed assessee and she needs to pay tax for the income earned by
the rent.
4. Assessee-in-default
Assessee-in-default is a person who failed to pay taxes to the government or did not file his income tax
return.
For example, an employer should deduct tax from the salary of his employees before giving the salary.
The employer pays deducted taxes to the government as per the due date. If the employer fails to deposit
this tax he is an assessee-in-default.
Who is a Person under ITA?

The term ‘person’ under the Income-tax Act includes natural as well as artificial persons.
It can be an association of persons or a body of individuals or a local authority or an artificial juridical
person.
Different types of Persons

The 7 categories of “persons” mentioned under the Income Tax Act.
1. An Individual
2. Hindu Undivided Family(HUF)
3. Company
4. Firm
5. Association of Persons (AOP) or a Body of Individuals (BOI)
6. Local Authority
7. Artificial juridical persons
5. CAPITAL GAINS AND LONG TERM CAPITAL GAINS.

Answer: What is Capital Gains Tax in India?
Simply put, any profit or gain that arises from the sale of a ‘capital asset’ is a capital gain. This gain or
profit is comes under the category ‘income’, and hence you will need to pay tax for that amount in the
year in which the transfer of the capital asset takes place. This is called capital gains tax, which can be
short-term or long-term. Capital gains are not applicable to an inherited property as there is no sale, only
a transfer of ownership. The Income Tax Act has specifically exempted assets received as gifts by way of
an inheritance or will. However, if the person who inherited the asset decides to sell it, capital gains tax
will be applicable.
Defining Capital Assets

Land, building, house property, vehicles, patents, trademarks, leasehold rights, machinery, and jewellery
are a few examples of capital assets. This includes having rights in or in relation to an Indian company. It

lOMoARcPSD|8924854
also includes the rights of management or control or any other legal right. The following do not come
under the category of capital asset:
1. Any stock, consumables or raw material, held for the purpose of business or profession
2. Personal goods such as clothes and furniture held for personal use
3. Agricultural land in rural India
4. 6½% gold bonds (1977) or 7% gold bonds (1980) or national defence gold bonds (1980) issued by
the central government
5. Special bearer bonds (1991)
6. Gold deposit bond issued under the gold deposit scheme (1999) or deposit certificates issued
under the Gold Monetisation Scheme, 2015
Types of Capital Assets:

1. STCG (Short-term capital asset) An asset held for a period of 36 months or less is a short-term capital
asset. The criteria of 36 months have been reduced to 24 months for immovable properties such as land,
building and house property from FY 2017-18. For instance, if you sell house property after holding it for a
period of 24 months, any income arising will be treated as long-term capital gain provided that property is
sold after 31st March 2017.
2. LTCG (Long-term capital asset) An asset that is held for more than 36 months is a long-term capital
asset. The reduced period of the aforementioned 24 months is not applicable to movable property such as
jewellery, debt-oriented mutual funds etc. They will be classified as a long-term capital asset if held for
more than 36 months as earlier. Some assets are considered short-term capital assets when these are held
for 12 months or less. This rule is applicable if the date of transfer is after 10th July 2014 (irrespective of
what the date of purchase is). The assets are:
A. Equity or preference shares in a company listed on a recognized stock exchange in India
B. Securities (like debentures, bonds, govt securities etc.) listed on a recognized stock exchange in
India
C. Units of UTI, whether quoted or not
D. Units of equity oriented mutual fund, whether quoted or not
E. Zero coupon bonds, whether quoted or not
When the above-listed assets are held for a period of more than 12 months, they are considered as
long-term capital asset. In case an asset is acquired by gift, will, succession or inheritance, the period for
which the asset was held by the previous owner is also included when determining whether it’s a short
term or a long-term capital asset. In the case of bonus shares or rights shares, the period of holding is
counted from the date of allotment of bonus shares or rights shares respectively.
How to Calculate Short-Term Capital Gains?

Step 1: Start with the full value of consideration Step 2: Deduct the following:
▪ Expenditure incurred wholly and exclusively in connection with such transfer
▪ Cost of acquisition
▪ Cost of improvement
Step 3: This amount is a short-term capital gain Short term capital gain = Full value consideration Less
expenses incurred exclusively for such transfer Less cost of acquisition Less cost of improvement.
How to Calculate Long-Term Capital Gains?

Step 1: Start with the full value of consideration Step 2: Deduct the following:
▪ Expenditure incurred wholly and exclusively in connection with such transfer
▪ Indexed cost of acquisition
▪ Indexed cost of improvement

lOMoARcPSD|8924854
6. PERQUISITES, TYPES OF PERQUISITES, EXEMPTED PERQUISITES FROM INCOME TAX.

Answer: Definition of 'Perquisites' as per [Section 17(2)]
Perquisite is a gain or profit incidentally made from employment in addition to regular salary or wages.
Thus, perquisite signifies some benefit in addition to the amount that may be legally due by way of
contract for services rendered. Perquisite may be defined as any casual emolument or benefit attached to
an office or position in addition to salary or wages. It also denotes something that benefits a man by going
into his own pocket. Perquisites may be provided in cash or in kind. However, perquisites are taxable
under the head “Salaries” only if they are
A. allowed by an employer to his employee;

B. allowed during the continuance of employment;
C. directly dependent upon service;
D. resulting in the nature of personal advantage to the employee; and
E. Derived by virtue of employer’s authority.
Classification of Perquisites:
Depending upon the tax that is levied on perquisites these can be classified into the following three heads.
Taxable Perquisites:
Some of the perquisites that are taxable in nature are rent-free accommodation, supply of gas, water and
electricity, professional tax of employee, reimbursement of medical expense, and salary of servant
employed by employee. Taxable perquisites also include any other fringe benefit provided by employer to
employee like free meals, gifts exceeding Rs. 5000, club and gym facilities etc.
Tax-free perquisites include:

▪ Leave travel concession subject to conditions and the only actual amount spent.
▪ Medical Facilities & Reimbursements
▪ Computer / Laptop for official / personal use.
▪ Initial fees paid for corporate membership
▪ Refreshment provided during working hours in office premises.
▪ Payment of annual premium on personal accident policy.
▪ Subscription to periodicals and journals required for the discharge of work.
▪ Provision of Medical Facilities.
▪ Gifts not exceeding Rs. 5000 per annum.
▪ Use of health club and sports facility.
▪ Child Education Allowance (Rs. 100 per month. per child – max. 2 children)
▪ Hostel Allowance (Rs. 300 per month per child – max. 2 children) is exempt.
▪ Transport Allowance: Rs. 800 per month – Rs. 1,600 per month. (If handicapped)
▪ Free meal provided during work hours or through paid non-transferable vouchers not exceeding
Rs. 50 per meal or free meal provided during work hours in a remote area.
Perquisites taxed by employees

Generally, this category of perquisites includes cars (owned by employers but is necessarily used by
employees), service of domestic help and education opportunities for children, among others.
7. SECTION 80 DDB EXEMPTION PROCEDURES (TREATMENT OF DEPENDENTS).

Answer: Who can Claim Deductions under Section 80DDB?
Under Section 80DDB of the Income Tax Act, 1961, taxpayers can claim deduction for medical treatment of
certain specified ailments for self or dependent. This type of deduction is covered in Chapter VIA of the
Income Tax Act, 1961. Individuals and HUFs, who are residents of India, can claim deduction under this
section. In order words, this means that tax deductions can be claimed, provided that the concerned

lOMoARcPSD|8924854
entity has been living within the country for that tax year and the expenses relating to medical treatment
are incurred on self or a family member, like spouse, parent or sibling, who is dependent on them.
How much Deduction can be Claimed under Section 80DDB?

Deductions amounting to the following figures can be claimed under Section 80DDB:
From Financial Year 2015-16 onwards (Assessment Year 2016-17)
▪ An assessee is eligible for tax deduction of Rs. 40,000 or the actual amount paid for medical
treatment, whichever is lower.
▪ Senior citizens, between the ages of 60 years and 80 years, can claim tax deduction of Rs. 60,000
or the actual amount spent on the medical treatment, whichever is lower.
▪ Super senior citizens, aged above 80 years, are eligible for tax deduction of Rs. 80,000 or the actual
amount paid for the medical treatment, whichever is lower. From Financial Year 2018-19 onwards
(Assessment Year 2019-20)
Diseases or Medical Ailments Specified under Section 80DDB

According to the Income Tax Department, following are the eligible diseases or ailments that are taken
into consideration for claiming tax deduction under section 80DDB:
(1) Neurological diseases, where the disability level is certified to be of 40% and more -
• Dementia
• Dystonia Musculorum Deformans
• Aphasia
• Motor Neuron Disease
• Ataxia
• Chorea
• Hemiballismus
• Parkinson’s Disease
(2) Malignant Cancers
(3) Full Blown Acquired Immuno-Deficiency Syndrome (AIDS)
(4) Chronic Renal failure
(5) Hematological disorders
• Hemophilia
• Thalassaemia
Documents Required to Claim Deduction under Section 80DDB

For claiming deduction under Section 80DDB of the Income Tax Act, 1961, the assessee has to provide
proof that the medical treatment has actually taken place. It is mandatory to obtain a certificate from a
prescribed authority, from whom the medical treatment has been availed, if one wish to claim deduction
under this section, the concerned specialist should issue the certificate.
8. COMMUTATION OF PENSION.
Answer: Introduction
Pension is taxable under the head salaries in your income tax return. Pensions are paid out periodically,
generally every month. However, you may also choose to receive your pension as a lump sum (also called
commuted pension) instead of a periodical payment. Generally, the employer and taxpayer contribute
together to an annuity fund, which pays the taxpayer pension out of the fund.
At the time of retirement, you may choose to receive a certain percentage of your pension in advance.
Such pension received in advance is called commuted pension. For example, at the age of 60 years, you
decide to receive 10% of your monthly pension in advance from the next 10 years’ worth Rs 10,000. This
will be paid to you as a lump sum. Therefore, 10% of Rs 10000x12x10 = Rs 1,20,000 is your commuted

lOMoARcPSD|8924854
pension. You will continue to receive Rs 9,000 (your un-commuted pension) for the next 10 years until you
are 70 and post 70 years of age, you will be paid your full pension of Rs 10,000.
Taxability of Commuted and Uncommuted Pension

➢ Uncommuted pension or any periodical payment of pension is fully taxable as salary. In the above
case, Rs 9,000 received by you is fully taxable. Rs 10,000, starting at the age of 70 years, are fully
taxable as well.
➢ TAXABILITY OF COMMUTED PENSION
The tax treatment of commuted pension is as follows-
▪ The commuted pension is fully exempt from income tax for government employees.
▪ For a non-government employee who receives pension along with gratuity, 1/3rd of the
100% of the commuted pension is exempt. The rest is taxed, like their salary.
▪ If a non-government employee only receives a pension and not gratuity, 50% of the 100% of
the commuted pension is exempt.
▪ Commuted pension received by family members of the employee is tax-exempt up to 1/3rd
of the pension amount or up to Rs. 15,000 in a financial year, whichever is lower
▪ Pension received by family members of armed forces or that by UNO employees is also tax-
exempt.
9. WHAT IS PAN? ITS IMPORTANCE AND PAN FOR OPENING A BANK ACCOUNT.
Answer: Permanent Account Number or PAN is a means of identifying various taxpayers in the country.
PAN is a 10-digit unique identification alphanumeric number (containing both alphabets and numbers)
assigned to Indians, mostly to those who pay tax.
The PAN system of identification is a computer-based system that assigns unique identification number
to every Indian tax paying entity. Through this method, all tax-related information for a person is recorded
against a single PAN number which acts as the primary key for storage of information. This is shared
across the country and hence no two people on tax paying entities can have the same PAN.
When PAN is allotted to an entity, PAN Card too is given by the Income Tax Department. While PAN is a
number, PAN Card is a physical card that has your PAN as well as name, date of birth (DoB), and
photograph. Copies of this card can be submitted as proof of identity or DoB. Your PAN Card is valid for
lifetime because it is unaffected by any change in address.
Importance and uses of PAN in Financial Transactions

❖ PAN needs to be quoted while paying direct taxes.
❖ Taxpayers need to input their PAN when paying income tax.
❖ While registering a business, PAN information needs to be furnished.
❖ A lot of financial transactions require PAN information. Some of these transactions are:
• Sale or purchase of property (immovable) which is valued at Rs.5 lakh or above
• Sale or purchase of a vehicle except a two-wheeler
• Payments made towards hotels and restaurants and which are above Rs.25,000

lOMoARcPSD|8924854
• Payments made in connection with travel requirements to other countries. The amount in
this case if it exceeds Rs.25,000, then you need to quote your PAN
• Payments of more than Rs.50,000 towards bank deposits
• Purchase of bonds worth Rs.50,000 or more
• Purchase of shares worth Rs.50,000 or more
• Purchase of insurance policy worth Rs.50,000 or more
• Purchase of mutual fund schemes
• Payments made for more than Rs.5 lakh towards purchase of jewellery and bullion
• To remit money out of India
• Transfer of funds from NRE to NRO account
General Uses/Advantages of Having PAN
❖ Since PAN Card contains information such as Name, Age and photograph, it can be used
throughout the country as a valid identity proof.
❖ PAN is the best possible way to keep track of your tax payment. Otherwise, you might be required
to pay it multiples times since your tax payment cannot be verified.
❖ Since PAN is unique for every entity, its misuse is almost impossible for purposes of tax evasion or
other devious means.
❖ PAN Card can be used to avail utility connections such as electricity, telephone, LPG, and internet.
10. ADVANCE TAX DUE DATES AND ITS APPLICABILITY.

Answer: Advance tax refers to the tax to be deposited by a taxpayer with the income tax department
during the year without waiting for the end of the year. This is to ensure that the government is able to
collect taxes more uniformly throughout the year.
Advance Tax Details
➢ Advance tax payment is mandatory for all assessee whose estimated tax liability is above ₹
10,000.
➢ The calculation of advance tax is made by applying the tax slab rate on the estimated income of an
individual for the concerned year.
➢ The payment of advance tax is to be done in 4 instalments.
➢ The deadlines of four instalments are 15 June, 15 September, 15 December, and 15 March.
➢ In case of late payment of advance tax, 1% of interest is applicable as late fee as per Section 234B
and 234C.
➢ If at the end of the year, your actual tax liability is less than the advance tax submitted by you,
then you are eligible to claim the refund.
Advance Tax Payment Due Dates for AY 2020-21

It is important to pay advance tax on or before the due dates to avoid paying interest and penalty at the
time of filing annual return of income. Advance tax due dates for self employed, businessman and
corporate taxpayers for FY 2019-20, AY 2020-21 are as follows:
Advance Tax due Dates Advance Tax Instalments Amount
On or before 15th June Not less than 15% of advance tax liability
On or before 15th September Not less than 45% of advance tax liability
On or before 15th December Not less than 75% of advance tax liability
On or before 15th March 100% of advance tax liability
Advance Tax Payment Criteria

If your total tax liability (after adjusting for TDS) exceeds ₹ 10,000 (Rupees Ten Thousand) in a financial
year, then you must pay advance tax. Advance tax applies to all tax payers including salaried, freelancers,
professionals and senior citizens. However, senior citizens who are above 60 years of age and do not run a

lOMoARcPSD|8924854
business are exempted from paying advance tax. While calculating the advance tax, you need to include
income from all sources for the current year under various income heads. Some of the common
exceptions for payment of advance tax are:
➢ Senior citizens (above the age of 60 years) who are not running any business are exempt from
paying advance tax.
➢ Salaried individuals under TDS net are not required to pay advance tax on income from salary.
However, they may still need to pay advance tax on income from other sources such as interest,
capital gains, rent and other non-salary income.
➢ If the TDS deducted is more than tax payable for the year, one is exempted from paying advance
tax.
11. DOUBLE TAXATION AND ITS RELIEF.

Answer: What Is Double Taxation?
Double taxation is a tax principle referring to income taxes paid twice on the same source of income. It
can occur when income is taxed at both the corporate level and personal level. Double taxation also
occurs in international trade or investment when the same income is taxed in two different countries.
How Double Taxation Works
Double taxation often occurs because corporations are considered separate legal entities from their
shareholders. As such, corporations pay taxes on their annual earnings, just like individuals. When
corporations pay out dividends to shareholders, those dividend payments incur income-tax liabilities for
the shareholders who receive them, even though the earnings that provided the cash to pay the dividends
were already taxed at the corporate level.
Double taxation is often an unintended consequence of tax legislation. It is generally seen as a negative
element of a tax system, and tax authorities attempt to avoid it whenever possible.
KEY TAKEAWAYS
➢ Double taxation refers to income tax being paid twice on the same source of income.
➢ Double taxation occurs income is taxed at both the corporate level and personal level, as in the
case of stock dividends.
➢ Double taxation also refers to the same income being taxed by two different countries.
➢ While critics argue that dividend double taxation is unfair, advocates say that without it, wealthy
stockholders could virtually avoid paying any income tax.
International Double Taxation

International businesses are often faced with issues of double taxation. Income may be taxed in the
country where it is earned, and then taxed again when it is repatriated in the business' home country. In
some cases, the total tax rate is so high, it makes international business too expensive to pursue.
To avoid these issues, countries around the world have signed hundreds of treaties for the avoidance of
double taxation, often based on models provided by the Organization for Economic Cooperation and
Development (OECD). In these treaties, signatory nations agree to limit their taxation of international
business in an effort to augment trade between the two countries and avoid double taxation.
How can double taxation be avoided?

While there is little that the individual taxpayer can do to avoid double taxation, the Income Tax act itself
offers certain provisions to give relief to an individual whose income is likely to be taxed twice. The
foundation of this relief measure lies in a Double Taxation Avoidance Agreement (DTAA).
What is a DTAA?

lOMoARcPSD|8924854
A Double Taxation Avoidance Agreement is a tax treaty that India signs with another country. An
individual can avoid being taxed twice by utilizing the provisions of this treaty. DTAAs can either be
comprehensive agreements, which cover all types of income, or specific treaties, targeting only certain
types of income.
For instance, there is a DTAA between India and Singapore under which income is taxed based on the
residential status of the individual. This streamlines the flow of taxation and ensures that the individual is
not taxed twice for the income earned outside India. Currently, India has DTAAs in place with more than
80 countries.
How is relief against double taxation provided under the Income Tax Act?
Relief against double taxation can be unilateral or bilateral.
1. Unilateral relief: Section 91 of the Income Tax Act, 1961 provides for unilateral relief against double
taxation. According to the provisions of this section, an individual can be relieved of being taxed twice
by the government, irrespective of whether there is a DTAA between India and the foreign country in
question or not. However, there are certain conditions that have to be satisfied in order for an
individual to be eligible for unilateral relief. These conditions are:
A. The individual or corporation should have been a resident of India in the previous year.
B. The income should have been accrued to the taxpayer and received by them outside India in the
previous year.
C. The income should have been taxed both in India and in the country with which there is no DTAA.
D. The individual or corporation should have paid tax in that foreign country.
1. Bilateral relief: Bilateral relief is covered under Section 90 of the Income Tax Act, 1961. It offers
protection from double taxation through a DTAA. This type of relief is offered in two different ways.
A. Exemption method: The exemption method offers full and complete protection from being taxed
twice. That is, if an income earned outside India has been taxed in the relevant foreign country, it
is not subject to tax in India.
B. Tax Credit method: According to this method, the individual or the corporation can claim a tax
credit (deduction) for the taxes paid outside India. This tax credit can be utilized to set-off the tax
payable in India, thereby reducing the assessee’s overall tax liability.
Thus, by utilizing the provisions of DTAAs and the relief measures offered under the Income Tax Act,
individuals earning income from other countries can minimize their tax liabilities and avoid the burden of
double taxation.
12. KINDS OF GST.

Answer: Goods and Services Tax, GST is an indirect tax for the entire nation, which makes India a common
united market by ensuring indirect taxes are replaced in the country. Passed in the Parliament on March
29, 2017, the Goods and Services Tax Act is a comprehensive and multi-stage tax levied on every value
addition. The GST Act came into effect on 1st July, 2017 and holds a great significance as both the Central
and State Government rely on the GST for their indirect tax revenue.
Types of GST
There are four different types of GST as listed below:
• The Central Goods and Services Tax (CGST)
• The State Goods and Services Tax (SGST)
• The Union Territory Goods and Services Tax (UTGST)
• The Integrated Goods and Services Tax (IGST)
1. The State Goods and Services Tax (SGST)
SGST is defined as one of the two taxes imposed on transactions of goods and services of every state.
Levied by State Government of every state, SGST replaces every kind of existing state tax that include
Sales Tax, Entertainment Tax, VAT, Entry Tax, etc. Under SGST, the State Government can claim the earned
revenue.

lOMoARcPSD|8924854
2. The Central Goods and Services Tax (CGST)

CGST is referred as the Central Tax levied on transactions of goods and services which take place within a
state. Imposed by the Central Government, CGST ensures to replace all other Central taxes inclusive of
State Tax, CST, SAD, etc. Prices of goods and services under CGST are charged in accordance with the basic
market price.
3. The Integrated Goods and Services Tax (IGST)
IGST is applied on the interstate transactions of goods and services. IGST is also applicable on the goods
being that are imported to distribute among the respective states. The IGST is levied when the movement
of products and services occur from one state to another.
4. The Union Territory Goods and Services Tax (UTGST)
Applicable on the Intra UT supply of goods and services, the aim to impose UTGST is to apply a collection
of tax to provide benefits as same as SGST. The UTGST is applicable to five Union Territories namely
Lakshadweep, Damn and Diu, Dadra and Nagar Haveli, Andaman and Nicobar Islands, and Chandigarh.
Benefits of GST
GST presents a transparent tax system imposed on the supply of goods and services. When an item is
bought, a common individual sees only the state taxes applicable on the product label and not the various
tax components embedded on the product.
The aim of imposing GST is to improve the ease of business operations by enhancing tax compliance,
boosting revenue receipts of both central and state government and accelerating economy growth.
Eradication of cascading of taxes result in lowered tax burden on many products.
Following are the few benefits of GST mentioned below:
• Eradicates the cascading tax effect
• Allows higher threshold to businesses for registration
• Composition scheme for small business operations
• Easy and Convenient online processes
• Lesser Tax Compliance
• Enhanced Efficiency of logistics
• One nation one tax.
13. INPUT TAX CREDIT UNDER GST AND ITS CONDITIONS.

Answer: Goods and Services Tax (GST) is considered the biggest reforms in India. However, one thing that
has become the talking point is – the mechanism of input credit under GST.
In simple words, Input Credit means at the time of paying tax on sales, you can reduce the tax you have
already paid on purchases.
In this article, we’ll cover all you need to know about Input Tax Credit (ITC) under GST, the time limit to
avail ITC, how to calculate Input Tax Credit, how to claim ITC, the situation where you can not avail ITC and
much more.
Meaning of ‘Input Tax & Input Tax Credit’
A tax charged on the tax invoice by a registered person on his outward supply of goods or services or both
is an “input tax” for the buyer of such goods or services or both. The tax charged by the supplier on the tax
invoice could be Central Tax (CGST) or State Tax (SGST) / Union Territory Tax (UT) or Integrated tax (IGST).
The taking of credit of the said input tax by the buyer is called as “Input Tax Credit”.
Conditions to Claim Input Tax Credit under GST –

A registered person would have to fulfil the following conditions to be eligible to claim Input Tax Credit –
1. One must have a tax invoice or debit note or document evidencing the said payment.
2. One must have the receipt of goods or services.

lOMoARcPSD|8924854
3. One must have the document of transfer of title of goods if the goods are directed by the registered
person to be delivered to the other person by the supplier.
4. One must have the furnishing of a return.
5. If the goods are to be received in lots or instalments then the ITC could be availed when the last lot
or instalment is received.
6. If the supplier failed to supply the goods or services within 180 days from the date of invoice and the
receiver has already claimed ITC, the amount will be added to output tax liability and interest will be
paid on the same. As soon as the payment to the supplier is made, ITC will be allowed to be claimed
again.
7. If depreciation has been claimed on a capital good’s tax component, then no ITC will be allowed in
such cases.
8. One must claim ITC against an Invoice or Debit Note before the below-mentioned dates:
• The due date of filing the GST Return for September of the next Financial year
OR
• The date of filing the Annual Returns for that financial year.
For instance, ED Corp, a buyer has a Purchase Invoice dated back to 8th July 2018( FY 2018-19), wants
to claim GST paid on that purchase. According to the criteria set down to reckon the time limit:
The due date of filing GST returns for September 2019( belonging to FY 2019-20) is 20th October 2019 and
the Date of filing GST Annual Return for FY 2018-19 is 31st December 2019, whichever is earlier will be the
time within which ED Corp will have to claim ITC. Therefore, the date is 20th October 2019 and ED Corp
can claim this ITC in any of the months between July 2018 and September 2019.
GST Tip: Above condition must be considered concerning Original Invoice Date for Debit Notes.
9. One must have the common credit of ITC used most commonly for
• Effecting exempted and taxable supplies
• Business and non-business related activities
10. Since 9th October 2019, a regular taxpayer can only claim provisional ITC in GSTR-3B up to the extent
of 20% of the ITC available in GSTR-2A. So, the amount of ITC reported in GSTR-3B from 9th October 2019
will be a total of Actual ITC in GSTR-2A and provisional ITC being 20% of actual ITC in GSTR-2A. But the
matching of purchase register or expense ledger with GSTR-2A is very crucial to claim ITC.
14. WRITE A NOTE ON TAX LIABILITY ON COMPOSITE AND MIXED SUPPLIES.

Answer: Introduction: The taxable event under GST is supply of goods or services or both. GST will be
payable on every supply of goods or services or both unless otherwise exempted. The rates at which GST
is payable for individual goods or services or both is also separately -notified. Classification of supply
(whether as goods or services, the category of goods and services) is essential to charge applicable rate of
GST on the particular supply. The application of rates will pose no problem if the supply is of ind ividual
goods or services which are clearly identifiable and the goods or services are subject to a particular rate of
tax.
But not all supplies will be such simple and clearly identifiable supplies. Some of the supplies will be a
combination of goods or combination of services or combination of goods and services both. Each
individual component in a given supply may attract different rate of tax. The rate of tax to be levied on
such supplies may pose a problem in respect of classification of such supplies. It is for this reason, that the
GST Law identifies composite supplies and mixed supplies Composite Supply and Mixed Supply and
provides certainty in respect of tax treatment under GST for such supplies.
Composite Supply under GST:

Under GST, a composite supply would mean a supply made by a taxable person to a recipient consisting
of two or more taxable supplies of goods or services or both, or any combination thereof, which are
naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of

lOMoARcPSD|8924854
which is a principal supply; Illustration: Where goods are packed and transported with insurance, the
supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a
principal supply. A works contracts and restaurant services are classic examples of composite supplies,
however the GST Act identifies both as supply of services and chargeable to specific rate of tax mentioned
against such services. (Works contract and restaurant).
Illustrations -
➢ A hotel provides a 4-D/3-N package with the facility of breakfast. This is a natural bundling of
services in the ordinary course of business. The service of hotel accommodation gives the bundle
the essential character and would, therefore, be treated as service of providing hotel
accommodation.
➢ A 5 star hotel is booked for a conference of 100 delegates on a lump sum package with the
following facilities:
▪ Accommodation for the delegates
▪ Breakfast for the delegates,
▪ Tea and coffee during conference
▪ Access to fitness room for the delegates
▪ Availability of conference room
▪ Business centre
Mixed Supply under GST:
Under GST, a mixed supply means two or more individual supplies of goods or services, or any
combination thereof, made in conjunction with each other by a taxable person for a single price where
such supply does not constitute a composite supply;
Illustration: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits,
aerated drinks and fruit juices when supplied for a single, price is a mixed supply. Each of these items can
be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are
supplied separately.
In order to identify if the particular supply is a Mixed Supply, the first requisite is to rule out that the
supply is a composite supply. A supply can be a mixed supply only if it is not a composite supply. As a
corollary it can be said that if the transaction consists of supplies not naturally bundled in the ordinary
course of business then it would be a Mixed Supply. Once the amenability of the transaction as a
composite supply is ruled out, it would be a mixed supply, classified in terms of a supply of goods or
services attracting highest rate of tax.
15. ADMINISTRATIVE OFFICER UNDER GST ACT, WHAT ARE HIS POWERS?
Answer: Appointment of Officers under GST
Section 4 of the CGST Act:
(1) The Board may, in addition to the officers as may be notified by the Government under Section 3,
appoint such persons as it may think fit to be the officers under this Act.
(2) Without prejudice to the provisions of sub-section (1), the Board may, by order, authorise any officer
referred to in clauses (a) to (h) of Section 3 to appoint officers of central tax below the rank of Assistant
Commissioner of central tax for the administration of this Act.
Powers of GST Officers

Every assessee must know about the powers of the GST officers as this will help them approach the right
officer at the right time. Also, this will help to save their valuable time that they might lose by approaching
the wrong GST officer including any wrongful exploitation by the GST officers. Here are some of the major
powers of GST officers delegated by the commissioner or additional commissioner:

lOMoARcPSD|8924854
1. Power to Enable Officers to Implement the Law: GST officers have various powers within their
hands to implement GST in India properly and to reduce tax evasion. But these powers are
sometimes misused and considering this we can say that absolute power to any one’s hand
corrupts him absolutely.
2. Power of Inspection: GST officer can inspect any business place of the taxable person, transporter,
business owner, warehouse operator or any other person. But the person inspecting the above
shall have written authorization from the officer not be below the rank of Joint Commissioner.
3. Search and Seizure Power: The GST officer has the power to search and seize any goods if he finds
that it will be helpful in any kind of legal proceedings. It shall be noted that search and seizure can
only be carried out by any officer who has authorization from the officer not below the rank of
Joint Commissioner.
4. Power to Arrest: If the commissioner finds that a taxpayer has committed an offence which is
punishable under the CGST Act then he may authorize any officer to arrest such person.
5. Power to Summon Persons to Give Evidence and Produce Documents: The commission may
authorize any GST officer on his behalf to summon any person whose attendance he considers
necessary so as to give evidence or to produce a document or any other thing in any proceedings
or inquiry that such officer is carrying out for any of the purposes of this Act.
6. Access to Business Premises: The GST officer authorized by the Additional/Joint Commissioner of
CGST shall have access to any place of business of a registered taxable person. This power is given
to GST officer to carry out an audit, scrutiny and checks to protect the interest of revenue. So as
per this, the GST officer can inspect books of account, computers, documents, computer programs
or software and other things as he may think necessary, available at such place.
7. Revisional Powers: The Chief Commissioner or Commissioner who may on suo-moto or upon
information received by him may call for and examine the record of any proceeding. And if he
considers that any decision or order passed under this Act by any officer subordinate to him is
erroneous may pass an order of inquiry or modify/revise the decision or orders. But before doing
so an opportunity of being heard will be given to such taxpayer.
8. Power to Collect Statistics: The GST officer authorized by the Commissioner may on his behalf
collect data if he finds it necessary for the administration of the Act. The authorized may call upon
all the concerned taxpayers to furnish all the information relating to GST such as GST returns.
9. General Power to Make Regulation: The Commissioner has the general power to make regulations
as per the Act or rules so as to smoothly carry out the purposes of this Act.
IMPORTANT CASES
16. COMPUTATION OF INCOME FROM SALARY.

A. prepare the draft pro-forma of computation of income from Salary, house property applying
appropriately the provisions of Sections 10(3), 16, 24, 80DDB, 80E, AND 80C. (Apr-2017).
B. Dheeraj is employed in RBI. His income details are basic pay 3500/- p.m., D.A. 1000 p.m. (20%
transferred to PF), education allowance Rs. 2800/- p.m. per three children, house rent allowance Rs.
1000/- p.m. Compute net salary income for the assessment year. (May-2016).

lOMoARcPSD|8924854
To solve the above cases we should know the meaning of salary and other related points.
What is Salary Income?
Salary is the remuneration paid by the employer to the employee for the services rendered for a certain
period of time. It is paid in fixed intervals i.e. monthly one-twelfth of the annual salary.
1. Salary includes:
• Basic Salary or the fixed component of salary as per the terms of employment.
• Fees, Commission and Bonus that the employee gets from the employer
• Allowances that the employer pays the employee to meet his personal expenses.
Allowances are taxed either fully, partially or are exempt.
2. Fully taxable allowances are:
• Dearness allowance paid to the employees to meet expenses due to inflation.
• City Compensatory allowance paid to those who move to big metros like Mumbai, Delhi,
Chennai, where the standard of living is higher.
• Overtime allowance paid to the employee who works over the prescribed hours.
• Deputation allowance and servant allowance.
3. Partly taxable allowances are:
• House Rent Allowance: If the employee stays in his own house then the allowance is fully
taxable. The allowance exemption is the least of
• The actual house rent allowance
• If he pays additional rent above 10% of his salary
• If the rent is equal to 50% of his salary (metros) or 40% (other areas).
• Entertainment allowance (except for Central and State Government employees).
• Special allowances like uniform, travel, research allowance etc.
• Special allowance to meet personal expenses like children’s education allowance, children
hostel allowance etc.
4. Fully exempt allowances are:
• Foreign allowance given to employees posted abroad.
• Allowances of High Court and Supreme Court Judges.
• United Nations Organisation employees allowances.
5. Perquisites are payments received by employees over their salaries. They are not reimbursement
of expenses. Some perquisites are taxable for all employees, they are:
• Rent free accommodation
• Concession in accommodation rent
• Interest free loans
• Movable assets
• Club fee payments
• Educational expenses
• Insurance premium paid on behalf of employees
Some are taxable only to specific employees like directors or those who have substantial interest in the
organisation, they are taxed for:
• Free gas, electricity etc. for domestic purpose
• Concessional educational expenses
• Concessional transport facility
• Payment made to gardener, sweeper and attendant.
Some perquisites are exempt from tax. The fringe benefits that are exempt from tax are:
• Medical benefits
• Leave travel concession
• Health Insurance Premium
• Car, laptop etc. for personal use.
• Staff Welfare Scheme
6. Retirement benefits are given to employees during their period of service or during retirement.

lOMoARcPSD|8924854
• Pension is given either on a monthly basis or in a lump sum. The tax is treated depending
on the category of the employee.
• Gratuity is given as appreciation of past performance which is received at the time of
retirement and is exempt to a certain limit.
• Leave salaries tax depends on the category of the employee. The employee may make use
of the leave or encash it.
• Provident fund is contributed by both employee and employer on a monthly basis. At the
retirement, employee gets the amount along with interest. Tax treatment is based on the
type of provident fund maintained by the employer.
Case B: Statement of Income

DETAILS RECEIVED TAX EXEMPTION TAXABLE
Basic Salary 3500 * 12 42000 -NIL- 240000
Dearness Allowance 1000 * 12 12000 -NIL- 12000
Provident Fund (in excess of 15%) 8400 6300 2100
Education Allowance 2800 * 12 33600 2400 31200
House Rent Allowance 1000 * 12 12000 -NIL- 12000
Total Gross Salary 108000 8700 99300
Children Education Allowance: If you are receiving children education allowance from your employer then
you are eligible to claim a tax exemption under the Income-tax Act. However, the maximum amount
exempted is Rs. 100 per month or Rs. 1200 per annum for a maximum of up to 2 children. Along with this,
you can also claim deductions for fees paid for your children under Section 80C.
House Rent Allowance (Section 10(13A): The exemption on HRA is calculated as per 2A of Income Tax
Rules. As per Rule 2A, the least of the following is exempted from salary under Section 10(13A) and does
not form part of the taxable income.
o Actual HRA received from employer
o For those living in metro cities: 50% of (Basic salary + DA + Commission)
For those living in non-metro cities: 40% of (Basic salary + DA + Commission)
o Actual rent paid minus 10% of (Basic salary + DA + Commission)
17. PROFORMA OF STATEMENT OF INCOME.

1. Prepare the proforma statement of income for the A.Y. 2017-18 of the assessee pertains to his heads of
income from salary, house property and long term capital gains (on sale of his house property), by
correctly applying the following Sections – Sec. 16, 10(13), 10(14), 80 DDB and 30% statutory deduction,
45(1A), 48, 54, deduction under Chapter VIA-80C, TDS and calculate tax liability. (July-2019 & May-19).
2. ‘A’ a Government employee draws Rs. 20000/- p.m., receives HRA of Rs. 24000/- and he resides in his
own house. He paid total house loan principal of Rs. 15000/- and interest Rs. 60000/-, P.F. 10000/-, LIC
5000/-, Tution Fee Rs. 30000/-. He has undergone treatment for renal failure in a private hospital where
he was treated by a general physician. He claimed deduction u/s 80 DDB. You as an assessing officer
calculate his taxable income. (Apr-2017).
3. Draft the proforma of statement of income showing the computation of income from salary, income
from house property, income from profession and income from other sources applying the following
Sections Sec. 10(13), 10(14), 19, 24, 80E, 80G, 80C at appropriate stage and calculate the tax after
deducting TDS and advance tax and self-assessment tax. (May-2015 & May-2014).

lOMoARcPSD|8924854
18. SENIOR CITIZEN AND ITS APPLICABILITY.

A. The assessee is a retired employee and he is having income from salary (pension), income from house
property, income from other sources. His, taxable income for the financial year 2017-18 was 285000/-. In
the month of April 2018 he became senior citizen. Since he has attained 60 years of age and since the
exempted income for senior citizen is Rs. 300000/-, he has filed nil return. The assessing officer assessed
the income and levied tax and interest. You as the consultant advise the assessee. (Jul-2019).
B. The assessee is a retired employee and he is having income from salary (pension), income from house
property, income from other sources. His taxable income for the financial year 2009-10 was 180000/-. In
the month of April 2010 he became senior citizen. Since he has attained age of 65 and his income is much
below the exempted income of Rs. 240000/- he has filed nil return. The assessing officer assessed the
income and levied tax interest. You, as the consultant advise the assessee. (May-2018).
Issue:
➢ What are the criteria for senior citizen? He must be a resident of India and be of the age of 60
years or above but less than 80 year at any time during the respective year.
➢ Criteria for very senior citizen: Must be of the age of 80 years or above at any time during the
respective year and must be resident of India.
Rule:
Section 80(4)(i) of the Income Tax Act: ‖senior citizen‖ means an individual resident in India who is of the
age of sixty years or more at any time during the relevant previous year;
Application:
Why should Senior Citizens enjoy Income Tax Benefits?
As per the rich cultural heritage of the country, elders are always respected. They are taken care of in
their old age with special care. Likewise, the Central government is working to keep the culture and moral
values intact by offering special income tax benefits to senior citizens.
Conclusion:
In the given cases the assessee is not eligible as a senior citizen because he attained age of 60 years after
the completion of the previous/accounting year (he became senior citizen in April month of the
Assessment year). The assessing officer’s assessment as non-senior citizen is correct.
19. NRI WANTS TO SELL HIS FATHER'S HOUSE, HOW TO TAX THE SALE PROCEEDS.
The assessee an NRI wants to sell the house property of his father who purchased forty years back and
died leaving behind his legal heirs i.e. his wife, son and his two daughters. The assessee needs your advice
on the following issues:
A. Does he have to pay tax on the amount that he receives?
B. How he can avoid paying tax?
C. Does his mother who is a senior need to pay any tax?
As tax consultant advise the party accordingly with explanation. (Jul-2019 & May-2019).
Issue:
Question A: Is the NRI need to pay Long Term Capital Gains (LTCG)? Yes @ 20% he needs to pay LTCG.
Question B: How he can avoid paying tax? He can avoid the paying LTCG by investing in specific bonds
within six months of the sale of property and before the return filing date.
Question C: Does his mother who is a senior citizen need to pay any tax? Yes, she has to pay @ 20% LTCG
tax.
Rule:
How much tax is payable?

lOMoARcPSD|8924854
➢ NRIs have to pay taxes on the capital gains made from selling house property. If they sell their
property within two years of its date of purchase, Short-Term Capital Gain tax (STCG) rates are
applicable. STCG rate is as per the applicable income tax slab rate of the NRI based on his taxable
income in India.
➢ And if they sell it after two years, Long-Term Capital Gains (LTCG) taxes @20% become applicable.
➢ If an NRI has inherited property, the cost (and date of its purchase) of property for the previous
owner becomes the basis for the calculation of capital gains taxes.
How to save tax on capital gains?

Invest in bonds:
NRIs can invest the capital gains into bonds issued by National Highway Authority of India (NHAI) or Rural
Electrification Corporation (REC) that are redeemable after five years. However, there is a maximum limit
of Rs 50 lakh. In order to claim exemption, you have to invest within six months of the sale of property
and before the return filing date.
Application:
Tax deducted at source (TDS)
When a resident buys property from an NRI, she/he must deduct TDS at 20% if the property has been held
for more than two years and at 30% if the property is being sold within two years. The deduction must
include TDS plus surcharge, health and education cess.
Ready reckoner for LTCG TDS rates
▪ Properties valued less than INR 50 lakh: Total tax 20.8% (including surcharge and cess)
▪ Properties valued between INR 50 lakh and INR 1 crore: Total tax 22.88%
▪ Properties valued above INR 1 crore: Total tax 23.92%
Once the NRI sell the property, he needs to get two certificates from a Chartered Accountant – Form 15A
(Declaration of remitter) and Form 15CB - if the money has to be repatriated abroad. It is to verify that
your money is from a legal source and all necessary taxes have been paid. Some banks might also ask for
your sales agreement or the will in case of inheritance of property.
Conclusion:
Calculation of LTCG:
Full value consideration
Deduct:
- Expenditure on transfer
- Indexed cost of acquisition
- Indexed cost of improvement.
Now you arrived at net taxable amount.
➢ Answer to Question A: The NRI has to pay 20% LTCG (TDS is applicable on sale proceeds) or he has
to invest the amount in aforesaid bonds within 6 months.
➢ Answer to Question B: He can avoid LTCG tax by investing in bonds.
➢ Answer to Question C: His mother who is a senior citizen, there is no concession for senior citizen,
has to pay LTCG tax @ 20% or she has to invest her share in purchasing a house property or
investing in bonds within 6 months.
20. COMPUTATION OF INCOME FROM HOUSE PROPERTY.

A. ‘A’ has a house property which was let out during the financial year 2016-17, at Rs. 25000/- p.m. He
paid municipal tax 6000/- p.a., premium on fire insurance Rs. 5000/- p.a., paid land revenue 3500/-. He
borrowed Rs. 350000/- from HDFC, and paid house loan principal 30000/- and interest Rs. 65000/- p.a.
Compute the net taxable income for the assessment year, 2017-18. (Apr-2017).

lOMoARcPSD|8924854
B. Amar owns a big house and its municipal valuation is Rs. 1200000/-. Half of the same was leased out
for Rs. 7600/- p.m. Rest is per his residence. He paid municipal tax 20000/-, interest on housing loan Rs.
60000/- and principal of Rs. 36000 assess his tax. (May-2016).
Solution:
Important Sections under the Income Tax Act, 1961:
1. Section 23(2): For the purpose of computing income from a house property which is partly let out
and partly self-occupied the following points should be remembered with reference to the
standard format suggested for a let out property –
A. The gross annual value has to be determined for the entire property as if the whole property
has been let-out throughout the previous year.
B. Municipal taxes actually paid can be claimed.
C. Net annual value attributable to the self-occupied portion and/or period should be excluded
(in proportion to time or portion).
2. Deductions – the following deductions are made under Section 24 from the net adjusted annual
value in order to arrive at taxable income –
A. Deduct Municipal taxes u/s 23(1).
B. A sum equal to 30% of the annual value u/s 24. Standard Deduction – Standard Deduction is
30% of the Net Annual Value calculated above. This 30% deduction is allowed even when your
actual expenditure on the property is higher or lower. Therefore, this deduction is irrespective
of the actual expenditure you may have incurred on insurance, repairs, electricity, water
supply etc. For a self-occupied house property, since the Annual Value is Nil, the standard
deduction is also zero on such a property.
C. Where the property has been acquired, constructed, repaired, renewed or reconstructed with
borrowed capital, the amount of any interest payable on such capital u/s 24.
Statement of income from house property
DETAILS CASE A CASE B
Gross annual Value (Rent paid- Monthly Rent*12) 300000 180000
Less: Municipal Taxes or Taxes paid to local authorities 6000 20000
Net Annual Value(NAV) 294000 160,000
Less: Standard Deduction(30% of NAV) 88200 48000
Less: Interest on Housing Loan 65000 60,000
Less: Pre-construction interest (1/5th of 3 Lakhs) -NIL- -NIL-
Income from House Property 140800 26000

(52000/2)
21. CLUBBING OF INCOME.

A. The assessee during the financial year has invested FD a sum of Rs. 500000/- in the name of his wife
who is a house wife having no income of her own and not an assessee. The assessee doesn’t want to

lOMoARcPSD|8924854
show the interest accrued on the FD and seeks your clarification and advice. As a Tax Consultant advise
your client. (May-2015).
B. Mr. Madhu is practicing advocate his wife ‘Roja’ works in his law firm and draws a salary of Rs. 25000/-
while computing the total income for Mr. Madhu the assessing officer clubbed the salary of his wife.
Discuss. (Sep-2020).
Issue:
Case A: Can the assessee avoid showing the income on the FD? No, he can’t, this interest income should
be added to his income u/s 64(1)(iv).
Case B: Can the assessing officer club the salary of Mr. Madhu’s wife to his income? Yes, he can club u/s
64(1)(ii).
Rule:
Section 64(1)(ii)- Remuneration of spouse from a concern in which the other spouse has substantial
interest;
In computing total income of such individual, there shall be included all such sums as arise directly or
indirectly to the spouse, of such individual by way of salary, commission or in any other form, whether in
cash or kind from a concern in which such individual has substantial interest.
Thus, income of a souse in any form from a concern shall be clubbed in the income of other spouse, which
have substantial interest in the concern.
No clubbing of income if remuneration received on the basis of any technical or professional qualification;
– if spouse has any technical or professional qualification and due to that he/she is earning any income
from a concern in which other spouse has substantial interest, then her/his income shall be clubbed. For
these two conditions to be fulfilled;
i) Income received on account of technical or professional qualifications possessed by the spouse, and
ii) The income is solely attributable to the application of his/her technical or professional knowledge or
experience.
Example: let’s consider Mr. X & Mr. Y is partners of XY Enterprises and sharing profit in the ration 50:50.
Mrs. X is also an employee of XY Enterprises and earning Rs. 40,000/- pm as salary. In this case salary of
Mrs. X will be clubbed in the income of Mr. X from firm as “Income from Salary’. If Mrs. X has technical or
professional qualification (Let’s suppose she is a CA), in this case her income will not be clubbed in income
of Mr. X.
Section 64(1)(iv)-Income from assets transferred to the spouse;
In computing the total income of an individual , all such income as arises directly or indirectly , subject to
the provision of section 27(i) , to the spouse of such individual from assets transferred directly or indirectly
to the spouse of such individual otherwise than for adequate consideration or in connection with an
agreement to live apart shall be included.
Application:
For Case A: Pratima Shaha (Smt.) Vs. CIT (1999) 239 ITR 570 (Gau): where the spouse was drawing salary
as nurse-cum-supervisor from a nursing home in which her husband was a partner, although she was BSc.,
in Bio-Science but did not possess any professional or basic qualification as nurse from any recognised
institute, it was held that in view of the nature of employment of the spouse, a degree, a certificate or
diploma in some cases may insisted upon.
For Case B: Tulsidas Kilachand Vs. CIT 42ITR(SC); natural love and affection may be good consideration but
that would not be adequate consideration for purpose of Section 64(1).
Conclusion:
Case A: As a tax consultant my advice is that the assessee should add the interest income on the FD to his
income, u/s 64(1)(iv) the interest income should be clubbed with the income of the husband.

lOMoARcPSD|8924854
Case B: The assessing officer’s decision to club the salary of Roja to the income of her husband Madhu is
correct u/s 64(1)(ii) of the Income Tax Act.
22. INTEREST CALCULATION FOR NON-PAYMENT OF ADVANCE TAX.

A. The assessee during the financial year 2016-17 estimated his income and calculated the tax which is
around Rs. 20000.00. The assessee did not pay any instalment of advance tax as envisaged under the
Income Tax Act, nor he had any TDS. He paid the assessing officer while assessing and passing the
assessment order how you will impose the tax as per the provisions of the Income Tax Act. (Jul-2019).
B. The Assessee during the financial year 2016-17 estimated his income and calculated the tax which is
around Rs. 20000/-. The assessee did not pay any instalment of advance tax as envisaged under the
Income Tax Act, nor he had any TDS. He paid the entire tax as self-assessment tax and filed the returns
before the due date. As an assessing officer while assessing and passing the assessment order how will
you impose the tax as per the provisions of the Income Tax Act. (May-2019).
Issue:
Is in this case the assessee needs to pay advance Tax? Yes.
When an assessee needs to pay advance tax? When the Income Tax is more than Rs. 10000/-.
Rule:
▪ Interest for default in payment of instalment(s) of advance tax [Section 234C]
Section 234C provides for levy of interest for default in payment of instalment(s) of advance tax.
▪ As per section 208, every person whose estimated tax liability for the year exceeds Rs. 10,000,
shall pay his tax in advance in the form of “advance tax” by following dates :
On or before 15th June Not less than 15% of advance tax liability
On or before 15th September Not less than 45% of advance tax liability
On or before 15th December Not less than 75% of advance tax liability
On or before 15th March 100% of advance tax liability
Application:
Here’s how you calculate the interest for late payment of advance tax: The interest on late payment is
calculated at 1% simple interest on the tax amount due, calculated from individual cut off dates shown
above, until the date of actual payment of outstanding taxes.
Calculation of Interest under section 234C: (in case of a tax payer other than opting for presumptive
income u/s 44AD).
Here’s how you calculate the interest:
Period Amount on which interest is

Period of Amount on which Rate of Interest
of Interest calculated
If Advance Tax paid on or before June 15 Simple interest 15% of Amount* less tax already
3 months
is less than 15% of the Amount* @1% per month deposited before June 15
If Advance Tax paid on or before

Simple interest 45% of Amount* less tax already
September 15 is less than 45% of the 3 months
@1% per month deposited before September 15
Amount*

lOMoARcPSD|8924854
If Advance Tax paid on or before

Simple interest 75% of Amount* less tax already
December 15 is less than 75% of the 3 months
@1% per month deposited before December 15
Amount*
100% of Amount* less tax

If Advance Tax paid on or before March Simple interest
3 months already deposited before March
15 is less than 100% of the Amount* @1% per month
15
*Amount = Tax on total income less TDS less relief u/s 90 or 91 less tax credit u/s 115JD.
Payment Advance Tax Total Advance Shortfall Penalties

Dates payable Tax paid (Cumulative) (Cumulative)
15th June 3000 -NIL- 3000 @1%*3*3000 = 90

15th Sep 9000 -NIL- 9000 @1%*3*9000 = 270
15th Dec 15000 -NIL- 15000 @1%*3*15000=450
15th March 20000 -NIL- 20000 @1%*3*20000=600
TOTAL Rs. 1410.00
Section 234B provides for levy of interest for default in payment of advance tax.
Interest under section 234B is levied in following two cases:
a) When the taxpayer has failed to pay advance tax though he is liable to pay advance tax; or
b) Where the advance tax paid by the taxpayer is less than 90% of the assessed tax.
Rate of interest:
Under section 234B, interest for default in payment of advance tax is levied at 1% per month or part of a
month. The nature of interest is simple interest. In other words, the taxpayer is liable to pay simple
interest at 1% per month or part of a month for default in payment of advance tax.
Amount liable for interest:
Interest under section 234B is levied on the amount of unpaid advance tax. If there is a shortfall in
payment of advance tax, then interest is levied on the amount by which advance tax is short paid.
Period of levy of interest:
Interest under section 234B is levied from the first day of the assessment year, i.e., from 1st April till the
date of determination of income under section 143(1) or when a regular assessment is made, then till the
date of such a regular assessment.
In this case, the tax liability is Rs. 20000 He has not paid any advance tax and hence, he will be liable to
pay interest under section 234B. Interest under section 234B will be levied at 1% per month or part of the
month. In this case, the assessee has paid the outstanding tax on 31st July (assuming that he filed the
return on this date) and hence, interest under Section 234B will be levied for the period from 1st April to
31st July i.e. for 4 months. Interest will be levied on unpaid tax liability of Rs. 20000. Interest at 1% per
month on Rs. 20000 for 4 months will come to Rs. 800.
Conclusion:
The assessee has to pay following interests:
Section 234C an interest of Rs. 1410.00 and Rs. 800 u/s 234B along with the tax liability of Rs. 20000/-.
Section Due Amount

Section 234C 1410.00
Section 234B 800.00
Total Interest 2210.00

lOMoARcPSD|8924854
*****


Law of Taxation Important Questions 6th Sem

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Law of Taxation Important Questions 6th Sem

Uploaded by

Copyright:

Available Formats

lOMoARcPSD|8924854

Law of Taxation Important questions - 6th SEM

3 year Law (Mahatma Gandhi Law College)

Studocu is not sponsored or endorsed by any college or university

Taxation – 6th Semester

LAW OF TAXATION, 6th SEMESTER IMPORTANT QUESTIONS AND CASES

Harinath Janumpally – 9440629864. 1

Taxation – 6th Semester

LL.B.VI SEMESTER - PAPER-I: LAW OF TAXATION

Harinath Janumpally – 9440629864. 2

Taxation – 6th Semester

ANSWERS TO IMPORTANT QUESTIONS

Here we will discuss the objectives of taxation in modern public finance:

Harinath Janumpally – 9440629864. 3

Taxation – 6th Semester

7. Social and economic balance

1. Economic Development: One of the important objectives of taxation is economic development.

Harinath Janumpally – 9440629864. 4

Taxation – 6th Semester

2. FINANCIAL YEAR / PREVIOUS YEAR AND ASSESSMENT YEAR.

Some examples of Assessment Year and Financial Year or Previous Year

What is the difference between Assessment Year and Financial Year?

3. RESIDENTIAL STATUS AND TYPES OF RESIDENTIAL STATUS.

Harinath Janumpally – 9440629864. 5

Taxation – 6th Semester

Classification of Residential Status

Harinath Janumpally – 9440629864. 6

Taxation – 6th Semester

4. PERSONS CHARGEABLE TO INCOME TAX.

Harinath Janumpally – 9440629864. 7

Taxation – 6th Semester

Who is a Person under ITA?

Different types of Persons

5. CAPITAL GAINS AND LONG TERM CAPITAL GAINS.

Defining Capital Assets

Harinath Janumpally – 9440629864. 8

Taxation – 6th Semester

Types of Capital Assets:

How to Calculate Short-Term Capital Gains?

How to Calculate Long-Term Capital Gains?

Harinath Janumpally – 9440629864. 9

Taxation – 6th Semester

6. PERQUISITES, TYPES OF PERQUISITES, EXEMPTED PERQUISITES FROM INCOME TAX.

A. allowed by an employer to his employee;

Tax-free perquisites include:

Perquisites taxed by employees

7. SECTION 80 DDB EXEMPTION PROCEDURES (TREATMENT OF DEPENDENTS).

Harinath Janumpally – 9440629864. 10

Taxation – 6th Semester

How much Deduction can be Claimed under Section 80DDB?

Diseases or Medical Ailments Specified under Section 80DDB

Documents Required to Claim Deduction under Section 80DDB

Harinath Janumpally – 9440629864. 11

Taxation – 6th Semester

Taxability of Commuted and Uncommuted Pension

Importance and uses of PAN in Financial Transactions

Harinath Janumpally – 9440629864. 12

Taxation – 6th Semester

10. ADVANCE TAX DUE DATES AND ITS APPLICABILITY.

Advance Tax Payment Due Dates for AY 2020-21

Advance Tax Payment Criteria

Harinath Janumpally – 9440629864. 13

15th June 3000 -NIL- 3000 @1%33000 = 90