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Dt ca final please help

Shree (.) (53 Points)

29 October 2014

Students of CA final referring DT practice manual please help me out with this doubt. In assessment of various entities chapter question no 52(T and Q problem) why is surcharge added while computing the taxable income of AOP even thought the total income didn't exceed Rs 1 crore?

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CA Parul Saxena (CA) (8438 Points)
Replied 29 October 2014

practice manual was not amended so dont be confuse.

Shree (.) (53 Points)
Replied 29 October 2014

But ma'am,the practice manual is relevant for November 2014 examinations(as amended by the finance act 2013).

Kishor Bhat (CA final CS executive (from Bangalore)) (1881 Points)
Replied 29 October 2014

@ shree, ya it is amended pm only. I wl tel once i check that..give me time till 3 pm.

Shree (.) (53 Points)
Replied 29 October 2014

Okay take your time

Rohit Kalani (Student CA Final ) (36 Points)
Replied 29 October 2014

Since one of the member of AOP has individual income > Basic exemption...maximum marginal rate is applied to AOP... Refer note no.1 of respective ques.

Shree (.) (53 Points)
Replied 29 October 2014

Okay.I had read it but thought maximum marginal rate is 30% + 3% if income is lessthan 1 crore and 30%+ surcharge 10%+3% only if income exceeds 1 crore. That's why I got this doubt So maximum marginal rate includes surcharge even if the income is below 1 crore is it?

Kishor Bhat (CA final CS executive (from Bangalore)) (1881 Points)
Replied 29 October 2014

Surcharge wil nt be applicable at all. In the given case, chargeable at MMR does nt mean inclusive of surcharge. For surcharge, as u knw that limit should cross. Chargeable at MMR does nt mean it has over ride the provisions of limit mentioned for applicability of surcharge.

Kishor Bhat (CA final CS executive (from Bangalore)) (1881 Points)
Replied 29 October 2014

@ shree..ur doubt is right so dont apply surcharge. Like this i found many mistakes in computions, so apply the correct provisions, dont go as per calculation. All the best.

Shree (.) (53 Points)
Replied 29 October 2014

So this particular problem in practice manual has a mistake right?

Shree (.) (53 Points)
Replied 29 October 2014

Okay. Thanks a lot for the replies

Kishor Bhat (CA final CS executive (from Bangalore)) (1881 Points)
Replied 29 October 2014

ofcourse, mistake in respect of surcharge. Tel me, u wil believe provisions of IT act or just PM?. U have to followe correct provisions rite. Then dont interpret ur understanding to match with practice manual. Once u knw the provision correctly, then make correction in PM only.

Shree (.) (53 Points)
Replied 29 October 2014

Yes I agree with you. IT provisions should be followed in case of any inconsistencies in any other books

ajay Srikanth (EA) (24 Points)
Replied 29 October 2014

Yes there is a mistake same question comes in exam mention current provisions by way of notes

Rohit Kalani (Student CA Final ) (36 Points)
Replied 30 October 2014

Maximum marginal rate means the rate of Income tax (including surcharge & edu cess) applicable to the highest slab of income in case of an individual I.e. 30% + 10% + 3% = 33.99%. This is clearly written in institute module..don't declare PM wrong. For this particular case of taxation of AOP/BOI ..MMR- 33.99%

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