NTA UGC NET - Commerce: Unit 10 _ Income tax and Corporate Tax Planning (part 01)

 

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“In this world nothing can be said to be certain, except death and taxes.”
Benjamin Franklin

 

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Unit 10

Income tax and Corporate Tax Planning

part 01

 

• Income-tax: Basic concepts; Residential status and tax incidence; Exempted incomes; Agricultural income; Computation of taxable income under various heads; Deductions from Gross total income; Assessment of Individuals; Clubbing of incomes

 

• International Taxation: Double taxation and its avoidance mechanism; Transfer pricing 

 

• Corporate Tax Planning: Concepts and significance of corporate tax planning; Tax avoidance versus tax evasion; Techniques of corporate tax planning; Tax considerations in specific business situations: Make or buy decisions; Own or lease an asset; Retain; Renewal or replacement of asset; Shut down or continue operations

 

• Deduction and collection of tax at source; Advance payment of tax; E-filing of income-tax returns 

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MCQ 01: An assessee satisfying any one of the basic conditions and both the additional conditions is called 

 

a. Ordinarily Resident 

b. Not Ordinarily Resident 

c. Non-Resident 

d. None of the above 

 

Answer: Ordinarily Resident

 

Types of Residents:
    •Resident:
        (a) Ordinarily Resident &
        (b) Not Ordinarily Resident
    •Non-Resident
 

Residential Status (Section: 6) ict 1961
Residential status is determined on the basis of the following conditions: 

 

i) Basic Conditions
    1.The assessee is in India during the PY for at least 182 days OR
    2.The assessee has been in India for at least 365 days during the 4        years preceding the PY and has been India for at least 60 days          during the PY.

 

ii) Additional Conditions
    1.The assessee has been in India (satisfying any one of the basic         conditions) for at least 2 out of 10 previous years preceding the         PY, AND
    2.The assessee has been in India for at least 730 days during the 7     previous years preceding the PY. 

 

Residential Status of an INDIVIDUAL

 

I. Resident (Ordinarily Resident):

An assessee satisfying any on     of the basic conditions and both        the additional conditions is      called     ‘Resident’

 

II. Not Ordinarily Resident (NOR): 

An assessee satisfying any        one of the basic conditions but not satisfying one or both the            additional conditions is called ‘Not Ordinarily Resident’
 

III. Non-Resident: An assessee not satisfying any one of the basic    conditions is called ‘Non-Resident’

 

Residential Status of HINDU UNDIVIDED FAMILY (HUF)

 

I. Resident: An HUF is said to be resident in India if (i) The control and management of its affairs is situated wholly or partly in India during the PY, AND (ii) the Karta (as an individual) is Resident satisfying both the additional conditions.
 

II. Not Ordinarily Resident: An HUF is said to be NOR if (i) The control and management of its affairs is situated wholly or partly in India during the PY, AND (ii) the Karta (as an Individual) is Not Ordinarily Resident in India.
III. Non-Resident: An HUF is said to be Non-resident if the control and management of its affairs is situated wholly outside India. 

 

Residential Status of PARTNERSHIP FIRM, AOP or Every Other Person (Local Authority & Artificial Juridical Person)

 

I. Resident: A Firm, AOP or Every Other Person is said to be resident in India if the control and management of its affairs is situated wholly or partly in India during the PY.
 

II. Not Ordinarily Resident: (A Firm, AOP, LA or AJP cannot be NOR).
 

III. Non-Resident: A Firm, AOP or Every Other Person is said to be Non-resident if the control and management of its affairs is situated wholly outside India. 

 

Residential Status of COMPANY

I. Resident: A Company is said to be resident in India during the PY,     if
    (i) It is an Indian company; OR
    (ii) During that PY, the control and management of its affairs is             situated wholly in India.
 

II. Not Ordinarily Resident: (A company cannot be NOR).
 

III. Non-Resident: A Company is said to be non-resident in India         during the PY, if
    (i) It is not an Indian company; OR
    (ii) During that PY, the control and management of its affairs is             situated wholly or partly outside India. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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