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Webcast lecture on direct taxes

AASHA (ACCOUNTS OFFICER) (362 Points)

17 August 2013

Friends please spare one hour 46 minutes to watch webcast lecture by

C.A. R. Bupathy on direct taxes.

It will help you a lot in preparing direct taxes study strategy.

Here is the link

https://icaitv.com/?p=3531

Best of Luck

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4 Replies

anubha singh (article) (135 Points)
Replied 17 August 2013

thank u so much i missed this webcast after half an hour due to power cut at my place .thanx for sharing

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AASHA (ACCOUNTS OFFICER) (362 Points)
Replied 17 August 2013

Friends i have made brief notes on the points advised by

Bupathy sir in his webcast lecture .

I am giving the same hereunder and one point I would like

to clear that I have tried my level best to put on paper the points of

lecture even if anybody feels it wrong i have no words to say for that.

Try if you feel it good otherwise just ignore

Brief Note on Important points said by CA R. Bupathy webtelecast on site of ICAI on 10.08.2013 :

MANNER TO APPROACH DTL SUBJECT :

Crucial and most important chapters : [total 10]

1. Scope of total income and definition of income deemed to accrue in India

[Section 9 specially]

2. Profits and gains of business/profession

3. Capital Gains

4. Book Profit tax [MAT/AMT]

5. Assessment Procedures

6. Special taxation procedures

7. Wealth tax

8. Charitable Trusts

9. Salary income [ESOPS]

10. Amendments and Case Laws

Advance knowledge is required.

Important sections should be remembered

RTP reading and case laws reading compulsory

While preparing taking down notes will help a lot in revision

Section 115JB : Two computations

1. Compute income As per provisions of Income tax law calculate tax liability

2. Calculate 18.50% of book profits and calculate tax liability

Calculation of Book Profits :

Net profit as per profit and loss account : xxxx

Additions :

1. Income tax paid/payable/provision

2. Any transfer of current year’s profit to Reserves

3. Provision for uncertained liabilities :

A] Provision for Warranty [Adhoc Provision which quantum of which cannot be justified]

B] Gratuity [if not based on accturial calculations]

C] Leave Encashment [If quantum cannot be justified]

4. Provision for losses of subsidiary Companies.

5. Dividend proposed or paid

6. Expenses related to exempted income.

7. Depreciation

8. Deferred tax and provisions

9. Provision for dimminusion in value of assets [e.g. provision for bad debts] if

Debited to profit and loss account.

10. Balance in Revaluation Reserve relating to revaluation of assets on retirement or

Disposal of asset [Very Important point amended by Finance Act 2012]

11.Diminusion in value of asssets if it is not credited to profit and loss account.

Deductions :

1. Transfer from reserves to profit and loss account.

2. Incomes Exempted 10, 11, 12 except 10[38] i.e. long term capital gain

3. Depreciation debited to profit and loss account excluding depreciation on

Revaluation part of assets.

4. Brought forward of losses and unabsorbed depreciation whichever is lower

5. Profits of sick industrial unit till the year net worth becomes equal to or less than accumulated losses.

6. Deferred tax credited to profit and loss account.

Income tax includes dividend distribution tax, interest under income tax act , surcharge and cess.

Foreign companies are liable to book profit tax or not : If foreign company have permanent establishment in India and if their profits are chargeable to tax in India then these companies are liable to book profit tax.

Except deemed business taxes e.g. 44AD,44AE, oil exploration business

Section 25 companies are liable to book profit tax or not : They are not liable for book profit tax as section 25 companies are exempted for payment of tax.

CASE LAWS : [Karnataka High court case law on book profit very important]

1. If question ask assesses is justified or if question asks officer is justified then answer in the same fraction not otherwise.

2. If question is debatable means where two views then write as option I and option II.

3. Supreme courts judgments which involves principles of law have to read only not all judgements.

4. No need to write full citation of the case.

5. Remebering section is important rather than remembering case laws.

Theory Questions :

While answering Theory question we should keep in mind :

If alternate answers are given and we have to choose appropriate one then instead of jumping answer that particular alternate is most appropriate write analysis why other options are not appropriate and then write why the selected option is most appropriate.

Practical Questions :

While answering practical questions we have to be precise enough means if questions ask about computation of business income then our answer should end on computation of business income no need to compute gross total income.

Gift : [section 49[4] to be read carefully

Period of holding is to be considered from the date on which donor acquired the assets and indexation is allowed from the year on which done has acquired the asset but there are some judgments which says that indexation is allowed from the date of holding by previous owner i.e. donor.

Transfer pricing :

1. Try to understand meaning of associated enterprises

2. Identify nature of transaction

Important topics in wealth tax :

1. Computation of Net Wealth

2. Valuation of property

3. Responsibilities of valuation officer.

What is to be read done before 48 hours of appearing exam:

On this question Sir answered that at that moment you have to read only notes prepared by youself while studying the subject he has advised not to read any text book as it will create fear in your’s mind due to lengthy explanations.

Finally he concluded with wishing best of luck to all of us.

Regards

AASHA KUKREJA