CS Executive Tax Important Topics

CS Executive Tax Important Topics

CS Executive Tax Important Topics.In the previous post, we have given CS Executive Tax Laws and Practice Important Chapters. Today we are providing important topics of CS Executive Tax Laws and Practice.As students are well aware that this subject is MCQ based, it is completely impossible to predict the Question paper. Various questions are asked from different areas of Taxation. In this Article we will highlight the core areas which every student should prepare very well.This post contains important tips and point of every chapter of Taxation which should not be missed by students.Scroll Down

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CS Executive Tax Important Topics (Chapter Wise Important Points)

Residential Status
• In case of an individual, the number of days of his stay in India during the relevant previous year and/or the earlier previous years would determine his residential status.
• An individual/HUF can be either a:
o Resident and ordinarily resident
o Resident but not ordinarily resident
o Non-resident
• Persons, other than an individual and HUF, can be either resident or non-resident.
• An Indian company is resident in India.
• The determining factor for every other assessee is the place where the control and management of its affairs are situated during that year i.e., whether in India or outside India.
• The residential status of a person determines the scope of his taxable income.
• For example, income which accrues outside India and is received outside India is taxable in the hands of a resident and ordinarily resident but is not taxable in the case of a non-resident.
CS Executive Tax Important Topics :Income under the respective heads
• The income of a person should be identified and grouped under the respective head of income.
• Each head of income has a charging section (for example, section 15 for salaries, section 22 for income from house property) which should be on your finger tip.
• Deeming provisions are also contained under certain heads, by which specific items are sought to be taxed under those heads should be learned properly
• For example, if bad debts allowed as deduction in an earlier year is recovered in a subsequent year, then the amount recovered would be deemed as business income of the person in the year of recovery.
• The charging section and the deeming provisions would help you to determine the scope of income chargeable under a particular head.• Following points should be done properly to Assess the income under each head by:
o applying the charging and deeming provisions,
o excluding the specific exemptions provided for in section 10 relating to that head, subject to the limits specified therein,
o allowing the permissible deductions under that head, and
o disallowing the non-permissible deductions.
• For example, while computing net consideration for capital gains, brokerage is a permissible deduction from gross sale consideration but securities transaction tax paid is not permissible.

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CS Executive Tax Important Topics :Clubbing of Income
Apply clubbing provisions properly.Effective interpretation of provision will help you to score good marks.

• For example, income of a minor child (say, interest income) is includible in the hands of the parent whose total income is higher before including minor’s income. Such interest income will be included in the hands of the parent under the head “Income from other sources” after providing for deduction of up to `1,500 under section 10(32).
• However, if a minor child earns income on account of his or her special skills or talent, like music or dance, then such income is not includible in the hands of the parent

CS Executive Tax Important Topics :Set – Off and Carry forward of Losses
• Inter-source set-off of losses

o Set-off of loss from one source against income from another source within the same head of income is permissible, subject to certain exceptions, like long- term capital loss cannot be set-off against short- term capital gains though short-term capital loss can be set-off against long-term capital gains.

• Inter-head set-off of losses
o Likewise, set-off of loss from one head (say, loss from house property) against income from another head (say, Salaries) is also permissible, subject to certain exceptions, like business loss cannot be set- off against salary income.

• Carry forward and set-off of losses
o Unabsorbed losses of the current year can be carried forward to the next year for set-off only against the respective head of income.
o Here again, if there are any restrictions relating to inter- source set-off, the same will apply, like long-term capital loss which is carried forward can be set-off only against long-term capital gains and not short-term capital gains of a later year.
o The maximum number of years up to which any particular loss can be carried forward is also provided under the Act.
o For example, business loss can be carried forward for a maximum of 8 assessment years to be set-off against business income.

CS Executive Tax Important Topics :Computation of Total Income
• The income computed under each head, after giving effect to the clubbing provisions and provisions for set- off and carry forward and set-off of losses, have to be aggregated to arrive at the gross total income.
• The process of computing GTI is depicted hereunder :
o Add income computed under each head→Apply clubbing provisions →Apply the provisions for set-off and carry forward of losses

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CS Executive Tax Important Topics : Deductions
• Certain deductions are allowable from gross total income to arrive at the total income. These deductions contained in Chapter VI-A can be classified as –

• Deduction in respect of certain payments, for example,

o Section 80C : Payment of life insurance premium, tuition fees of children, deposit in public provident fund, repayment of housing loan etc.,
o Section 80D : Medical insurance premium paid by an individual/HUF for the specified persons
o Section 80E : Payment of interest on educational loan taken for self or relative

• Deduction in respect of certain income, for example,

o 80QQB : Royalty income of authors of certain books other than text books
o 80RRB : Royalty on patents
o 80TTA : Interest on Savings Account with Bank or Post Office

• Other Deductions – Deduction under section 80U in case of a person with disability

• There are limits in respect of deduction under certain sections. The payment/income are allowable as deduction subject to such limits. For example, the maximum deduction under section 80C is `1.5 lakhs.

CS Executive Tax Important Topics : Important points to note from other topics
Total income
• The gross total income as reduced by the above deductions under Chapter VI-A is the total income.
• Total income = GTI – Deductions under Chapter VI-A
• The total income is the taxable income of the assessee.Tax Liability• The rates of tax are specified in the Finance Act.
• For individuals and HUF, there is a basic exemption limit and slab rate of tax.
• Companies and firms are subject to a flat rate of tax, without any basic exemption limit.
• The rates of tax have to be applied on the total income to compute the tax liability.
• Rates of tax in respect of certain income are provided under the Income-tax Act, 1961 itself.For instance, casual income, like lottery income, is chargeable to tax at a flat rate of 30% and long-term capital gains is chargeable to tax at a flat rate of 20%. These are also to be considered while calculating the tax liability.
CS Executive Tax Important Topics : GST (Goods and Service Tax)
Due to introduction of GST, Service tax and Vat are removed from the syllabus. As GST is newly introduced it is hard to find important topics and points of GST.

However ICSI has published MCQ’s of GST for CS Executive Level 
Click here to download GST MCQ Sheet 

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Important Topics of CS Executive Exam

Here we are providing subject wise important topics to CS Executive students. See below How to prepare CS Executive Module – 1 and Module – 2. Click below links

Module – 1

CS Executive Company Law

CS Executive Cost and Management Accounting

CS Executive Economic and Commercial Laws

CS Executive Tax Laws and Practice

Module – 2

CS Executive Capital Market and Securities laws

CS Executive Company Accounts and Auditing Practices

CS Executive Industrial labour and General Laws

Best CS Executive Tax Laws Video Lectures

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