CA Intermediate PAPER 3: TAXATION Syllabus

PAPER 3: TAXATION syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for PAPER 3: TAXATION in CA Intermediate, not a summary of it.

1. 1

   SECTION A: INCOME TAX LAW

   7 topics

   • Basic Concepts
     • Income-tax law: An introduction
     • Significant concepts in income-tax law, including person, assessee, previous year, assessment year, income, agricultural income
     • Basis of Charge
     • Procedure for computation of total income and tax payable in case of individuals
   • Residential status and scope of total income
     • Residential status
     • Scope of total income
   • Heads of income and the provisions governing computation of income under different heads
     • Salaries
     • Income from house property
     • Profits and gains of business or professionCapital gains
     • Income from other sources
   • Provisions relating to clubbing of income, set-off or carry forward and set-off of losses, deductions from gross total income
   • Advance Tax, Tax deduction at source and tax collection at source
   • Provisions for filing return of income and self-assessment
   • Computation of total income and income-tax payable by an individual under the alternative tax regimes under the Income-tax Act, 1961 to optimize tax liability
2. 2

   SECTION B: GOODS AND SERVICES TAX (GST)

   9 topics

   • GST Laws: An introduction including Constitutional aspects
   • Levy and collection of CGST and IGST
     • Application of CGST/IGST law
     • Concept of supply including composite and mixed supplies
     • Charge of tax including reverse charge
     • Exemption from tax
     • Composition levy
   • Basic concepts of
     • Classification
     • Place of supply
     • Time of supply
     • Value of supply
     • Input tax credit
   • Computation of GST liability
   • Registration
   • Tax invoice; Credit and Debit Notes; Electronic way bill
   • Accounts and Records
   • Returns
   • Payment of tax

PAPER 3: TAXATION flashcards for CA Intermediate

24 of 50 cards from the PAPER 3: TAXATION deck — real questions with worked answers.

1. Under the Income-tax Act, 1961, what is the difference between 'Assessment Year' and 'Previous Year'?

   Previous Year (PY) is the financial year (1 April to 31 March) in which income is earned. Assessment Year (AY) is the following financial year in which that income is assessed and taxed. E.g., income of PY 2024-25 is taxed in AY 2025-26.

2. How is 'Person' defined under Section 2(31) of the Income-tax Act, 1961?

   Person includes: (1) an Individual, (2) a Hindu Undivided Family (HUF), (3) a Company, (4) a Firm, (5) an Association of Persons (AOP) or Body of Individuals (BOI), (6) a Local Authority, and (7) every Artificial Juridical Person not falling in the above.

3. What are the five heads of income under Section 14 of the Income-tax Act?

   (1) Salaries, (2) Income from House Property, (3) Profits and Gains of Business or Profession, (4) Capital Gains, and (5) Income from Other Sources.

4. What are the conditions to be a 'Resident' individual under Section 6(1)?

   An individual is resident if he satisfies any ONE basic condition: (a) in India for 182 days or more during the PY, OR (b) in India for 60 days or more in the PY AND 365 days or more in the 4 preceding PYs.

5. What additional conditions distinguish 'Resident and Ordinarily Resident' (ROR) from 'Resident but Not Ordinarily Resident' (RNOR)?

   An individual is ROR only if he is (a) resident in India for at least 2 out of the 10 preceding PYs, AND (b) in India for 730 days or more in the 7 preceding PYs. If either is not met, he is RNOR.

6. How does scope of total income (Section 5) differ for ROR, RNOR, and Non-Resident?

   ROR: taxed on global income (income received/accrued in India and outside). RNOR: taxed on Indian income plus foreign income from a business controlled or profession set up in India. Non-Resident: taxed only on income received or accrued/deemed to accrue in India.

7. What is the deemed-resident rule for an Indian citizen under Section 6(1A)?

   An Indian citizen with total income (other than foreign sources) exceeding Rs. 15 lakh during the PY is deemed resident in India if he is not liable to tax in any other country by reason of domicile/residence. Such a person is treated as RNOR.

8. What is the standard deduction available from salary income, and under which regimes?

   Standard deduction under Section 16(ia) is Rs. 50,000 (or salary, whichever is lower) under the old regime, and Rs. 75,000 under the default new regime (Section 115BAC) for AY 2025-26.

9. How is the annual value of a self-occupied house property computed under Section 23?

   The annual value of a self-occupied property (up to two such houses) is taken as NIL. No deductions for municipal taxes or standard deduction are allowed; only interest on borrowed capital is deductible (capped at Rs. 2,00,000 under old regime).

10. What is the standard deduction under Section 24(a) for House Property income?

    A flat 30% of the Net Annual Value (Gross Annual Value minus municipal taxes paid by owner) is allowed as standard deduction, irrespective of actual expenditure incurred.

11. What is the maximum deduction for interest on housing loan for a let-out vs self-occupied property?

    Self-occupied: maximum Rs. 2,00,000 (Rs. 30,000 if loan taken before 1.4.1999 or not for acquisition/construction). Let-out: full interest is deductible, but overall house property loss set-off against other heads is capped at Rs. 2,00,000 per year.

12. How are short-term and long-term capital assets classified for listed equity shares and other assets (post 23.7.2024)?

    Listed equity shares/equity-oriented units: long-term if held more than 12 months. Other assets (e.g., unlisted shares, immovable property): long-term if held more than 24 months. Otherwise short-term.

13. What are the tax rates on STCG and LTCG under Section 111A and 112A (for transfers on/after 23.7.2024)?

    STCG on listed equity (STT paid) under 111A: 20%. LTCG on listed equity/equity units under 112A: 12.5% on gains exceeding Rs. 1,25,000. Other LTCG under 112: 12.5% (without indexation, post 23.7.2024).

14. Which incomes of one spouse can be clubbed in the hands of the other under Section 64(1)?

    Income arising to a spouse from assets transferred without adequate consideration, and remuneration from a concern in which the individual has substantial interest (unless the spouse has technical/professional qualifications and the income is attributable to it).

15. How is a minor child's income clubbed under Section 64(1A), and what exemption applies?

    A minor's income is clubbed with the parent whose total income is higher. Exemption under Section 10(32) of up to Rs. 1,500 per minor child is allowed. Income from the minor's own skill, talent, or manual work is not clubbed.

16. What is the basic rule for inter-head set-off of losses under Section 71?

    Loss under one head can generally be set off against income under another head in the same year, EXCEPT: (1) speculation/specified business losses, (2) capital losses (only against capital gains), (3) house property loss set-off against other heads capped at Rs. 2,00,000.

17. For how many years can business loss and unabsorbed depreciation be carried forward?

    Business loss (non-speculative): carried forward for 8 assessment years and set off only against business income. Unabsorbed depreciation: carried forward indefinitely (no time limit) and set off against any head except salary.

18. What is the carry-forward period for capital losses and house property losses?

    Capital losses: carried forward for 8 AYs (STCL against STCG or LTCG; LTCL only against LTCG). House property loss: carried forward for 8 AYs and set off only against house property income.

19. What is the deduction limit under Section 80C and what qualifies?

    Section 80C allows deduction up to Rs. 1,50,000 (combined with 80CCC and 80CCD(1)). Eligible: LIC premium, PPF, EPF, ELSS, principal repayment of housing loan, tuition fees, 5-year tax-saving FD, NSC, etc. Available only under the old regime.

20. What deductions are available under Section 80D for medical insurance premium?

    Rs. 25,000 for self/spouse/children (Rs. 50,000 if senior citizen), plus Rs. 25,000 for parents (Rs. 50,000 if senior citizen). Includes up to Rs. 5,000 for preventive health check-up within these limits. Old regime only.

21. What is the deduction under Section 80CCD(1B) for NPS contributions?

    An additional deduction of up to Rs. 50,000 for the assessee's own contribution to the National Pension System (NPS), over and above the Rs. 1,50,000 limit under Section 80C/80CCD(1). Available under the old regime.

22. What is the deduction under Section 80TTA and Section 80TTB?

    80TTA: up to Rs. 10,000 on interest from savings bank account for non-seniors. 80TTB: up to Rs. 50,000 on interest from deposits (savings + fixed) for resident senior citizens. Both under old regime only.

23. When is an individual liable to pay Advance Tax, and what is the threshold?

    Advance tax is payable when the estimated tax liability for the year (after TDS/TCS) is Rs. 10,000 or more. Resident senior citizens with no business/professional income are exempt from advance tax.

24. What are the four advance tax instalment due dates and percentages for non-corporate assessees?

    15 June: 15%, 15 September: 45% (cumulative), 15 December: 75% (cumulative), 15 March: 100% (cumulative). Assessees under presumptive taxation (44AD/44ADA) pay 100% by 15 March in a single instalment.

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