Full last day revision notes on taxation for CA-IPCE

Suggested Pattern of Studying Taxation

Paper 4: Taxation
Also refer the amendment in DT & IDT & lecture on ICDS

CA – IPCE – Taxation
Direct Tax – 50 Marks

Basic Concepts Income Tax Act, 1961 came into force on 1st April, 1962 PERSON [Section 2(31)] Person includes:

1. An individual;
2. A Hindu Undivided Family (HUF);
3. A Company;
4. A Firm;
5. An Association of Persons (AOP) or a Body of Individuals (BOI),
6. A local authority;
7. Artificial juridical person.

TOTAL INCOME [Section 2(45)]:

Net Total Income/ Net Taxable Income = GTI (-) Deductions

Rates of Tax for A.Y.2016-17:

In case of Individuals (both male & female) (age<60 years),HUF, AOP, BOI & every other artificial judicial person & NON RESIDENT (irrespective of age)

Total income ≤ 2,50,000 - Nil
2,50,001 – 5,00,000 - 10%
5,00,001 – 10,00,000 - 20%
> 10,00,001 - 30%

1) In case of Individuals (age 60 - 79 years)

Total income ≤ 3,00,000 - Nil
3,00,001 – 5,00,000 - 10%
5,00,001 – 10,00,000 - 20%
> 10,00,001 - 30%

2) In case of Individuals (age ≥ 80 years)

Total income ≤ 5,00,000 - Nil
5,00,001 – 10,00,000 - 20%
> 10,00,001 - 30%

3) In the case of every co-operative society 
≤10,000 - 10%
10,001 – 20,000 - 20%
>20,001 - 30%

4) In the case of every firm/Limited Liability Partnership (LLP)/ local authority/domestic company
On the whole of the total income - 30%

5) In the case of a foreign company:

(i) On certain specified income (royalty or technical fees) - 50%
(ii) On other income - 40%

SURCHARGE ON INCOME – TAX

• Individual, HUF, BOI, AOP, AJP, Firm, LLP, Co-operative Soc. Or LA
– 12% if net income exceeds Rs. 1 Crore

• Domestic Company -

If net Income exceeds 1 crore but does not exceed Rs. 10 crore
- 7% Net income exceeds Rs. 10 crore – 12%

• Foreign Company

Net Income exceeds 1 crore but does not exceed Rs. 10 crore - 2%
Net income exceeds Rs. 10 crore – 5%

CESS @ 3% is applicable to all types of persons.

Provisions relating to rounding off :

Rounding off of income [Sec.288A]
Rounding off of tax [Sec.288B]
New Section 115BBE - Unexplained money, investments etc. to attract maximum marginal rate of tax @30%
Rebate of up to Rs. 2,000 for resident individuals having total income of up to Rs 5lakh [Section 87A]

Certain cases when income of a previous year will be assessed in the previous year itself

(i) Shipping business of non-resident [Section 172]
(ii) Persons leaving India
(iii) AOP / BOI / Artificial Juridical Person formed for a particular event or purpose
(iv) Persons likely to transfer property to avoid tax
(v) Discontinued business

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