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CMA Intermediate Taxation Syllabus

The Taxation syllabus for CMA Intermediate in full: 2 chapters and 5 topics, every one listed below, plus 50 Taxation flashcards with answers.

2Chapters
5Topics
50Flashcards

Taxation syllabus: all 2 chapters

Expand any chapter to see its topics and sub-topics.

  1. Income Tax

     3 topics
    • Basic Concepts and Definitions
    • Residential Status and Tax Incidence
    • Income from Salaries

  2. Indirect Tax

     2 topics
    • Goods and Services Tax (GST)
    • Customs Duty

CMA Intermediate Taxation flashcards — 50 questions with answers

  1. Under the Income Tax Act, 1961, what is a 'Previous Year' (PY)?

    The financial year (1 April to 31 March) in which income is earned. Income of the PY is assessed to tax in the immediately following Assessment Year.

  2. Define 'Assessment Year' (AY) under the Income Tax Act, 1961.

    The period of 12 months commencing on 1 April every year and ending on 31 March, in which the income of the previous year is assessed to tax.

  3. Define 'Assessee' under Section 2(7) of the Income Tax Act, 1961.

    A person by whom any tax or any other sum (interest/penalty) is payable under the Act, including deemed assessees and assessees in default.

  4. What are the categories of 'Person' under Section 2(31) of the Income Tax Act?

    Seven categories: Individual; Hindu Undivided Family (HUF); Company; Firm; Association of Persons (AOP) or Body of Individuals (BOI); Local Authority; and every other Artificial Juridical Person.

  5. Distinguish between Gross Total Income (GTI) and Total Income.

    GTI is the aggregate of income under all five heads before Chapter VI-A deductions. Total Income = GTI minus deductions under Chapter VI-A (Sections 80C to 80U); tax is computed on Total Income.

  6. 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, 5) Income from Other Sources.

  7. What is the basic exemption limit and slab structure concept under the Income Tax Act?

    Income up to the basic exemption limit is not taxed; income above is taxed at progressively higher slab rates. The new tax regime (default u/s 115BAC) and old regime have different slabs and exemption limits.

  8. Define 'Income' as it is treated under the Income Tax Act (inclusive definition).

    Section 2(24) gives an inclusive definition covering profits/gains, dividends, salary perquisites, capital gains, winnings from lotteries, voluntary contributions to trusts, etc.; it is not exhaustive.

  9. When does the first previous year of a newly set-up business begin?

    It begins on the date of setting up the business/source and ends on 31 March, so the first PY may be less than 12 months.

  10. What is the residential status test for an Individual to be 'Resident' in India?

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

  11. What are the two additional conditions to determine if a Resident Individual is 'Ordinarily Resident' (ROR)?

    (a) Resident in India in at least 2 of the 10 preceding previous years, AND (b) in India for 730 days or more in the 7 preceding previous years. Satisfying both makes him Ordinarily Resident.

  12. When is a Resident Individual treated as 'Not Ordinarily Resident' (RNOR)?

    When he is a resident but fails to satisfy one or both additional conditions (not resident in 2 of 10 prior years, or less than 730 days in 7 prior years).

  13. How is residential status of a company determined under the Income Tax Act?

    A company is resident in India if it is an Indian company, OR its Place of Effective Management (POEM) is in India during the PY.

  14. How is residential status of an HUF determined?

    An HUF is resident if its control and management is situated wholly or partly in India. It is Ordinarily Resident if the Karta satisfies both additional conditions (2 of 10 years and 730 days/7 years).

  15. What is the scope of total income for a Resident and Ordinarily Resident (ROR)?

    Global income is taxable: income received/accrued in India AND income accrued and received outside India are all taxable.

  16. What is the scope of total income for a Non-Resident (NR)?

    Only income received or deemed to be received in India, and income that accrues/arises or is deemed to accrue/arise in India, is taxable. Foreign income is not taxed.

  17. What is the scope of total income for an RNOR (Resident but Not Ordinarily Resident)?

    Income received/accrued in India is taxable, plus foreign income only if derived from a business controlled in or profession set up in India. Other foreign income is not taxable.

  18. What is the relaxed day-count rule for an Indian citizen leaving India for employment abroad or as a crew member?

    The 60-day condition in the second basic test is extended to 182 days, so he is resident only if in India for 182 days or more in the PY.

  19. Under deemed residency, when is an Indian citizen with income over Rs. 15 lakh treated as resident?

    An Indian citizen having total income (other than foreign sources) exceeding Rs. 15 lakh, not liable to tax in any other country, is deemed resident (RNOR) even if present 120-181 days (with 365 days in 4 prior years).

  20. Define 'Salary' for income tax purposes (key inclusions).

    Salary includes wages, annuity/pension, gratuity, fees, commission, perquisites, profits in lieu of salary, advance salary, and employer's contribution to recognised provident fund in excess of limits.

Show the other 30 Taxation flashcards

  1. What is the basis of charge for 'Income from Salaries' (Section 15)?

    Salary is taxed on due basis or receipt basis, whichever is earlier. Advance salary and arrears are taxed when received (if not already taxed on due basis).

  2. What is the Standard Deduction available from salary income?

    A flat standard deduction from gross salary - Rs. 50,000 under the old regime and Rs. 75,000 under the new regime (Section 16(ia)).

  3. What are the three components considered for House Rent Allowance (HRA) exemption under Section 10(13A)?

    Least of: (a) actual HRA received, (b) rent paid minus 10% of salary, (c) 50% of salary (metro cities) or 40% (non-metro). Salary = Basic + DA (in terms) + commission (% of turnover).

  4. How is gratuity taxed for a non-government employee covered under the Payment of Gratuity Act?

    Exempt to the least of: (a) Rs. 20,00,000, (b) actual gratuity received, (c) 15/26 x last drawn salary x completed years of service (including part over 6 months).

  5. What is the deduction allowed under Section 16 for 'Income from Salaries'?

    Three deductions: (i) Standard deduction u/s 16(ia), (ii) Entertainment allowance u/s 16(ii) (govt employees only), (iii) Professional/employment tax u/s 16(iii).

  6. How are perquisites broadly classified for taxability?

    Taxable for all employees (rent-free accommodation), taxable only for specified employees (car, gardener, etc.), and tax-free perquisites (telephone, employer contribution to RPF within limits).

  7. What is the entertainment allowance deduction limit for government employees u/s 16(ii)?

    Least of: (a) Rs. 5,000, (b) 20% of basic salary, (c) actual entertainment allowance received. Available only to government employees.

  8. What is GST and what taxes did it subsume in India?

    GST is a destination-based, comprehensive indirect tax on supply of goods and services. It subsumed Central Excise, Service Tax, VAT, CST, Entry Tax, Luxury Tax, Octroi, etc.

  9. What are the components of GST in India (dual model)?

    CGST (Central GST) and SGST/UTGST (State/UT GST) on intra-State supplies, and IGST (Integrated GST) on inter-State supplies and imports. CGST+SGST together equal the IGST rate.

  10. What is the 'taxable event' under GST?

    'Supply' of goods or services or both, as defined in Section 7 of the CGST Act, is the taxable event under GST.

  11. How is the place of supply principle used to determine whether GST is intra-State or inter-State?

    If location of supplier and place of supply are in the same State/UT, it is intra-State (CGST+SGST). If in different States/UTs (or import/export), it is inter-State (IGST).

  12. What is Input Tax Credit (ITC) under GST?

    Credit of GST paid on inward supplies of goods/services used in the course or furtherance of business, which can be set off against output GST liability, avoiding cascading of taxes.

  13. What is the order of utilisation of IGST input tax credit under GST?

    IGST credit must first be used to pay IGST, then CGST and SGST/UTGST in any order. CGST credit cannot be used for SGST, and SGST credit cannot be used for CGST.

  14. What is the Composition Scheme under GST and its threshold?

    A scheme for small taxpayers (aggregate turnover up to Rs. 1.5 crore, Rs. 75 lakh for special category states) to pay tax at a flat low rate without ITC and file quarterly. Cannot make inter-State supplies or collect tax from customers.

  15. What is the Reverse Charge Mechanism (RCM) under GST?

    A mechanism where the recipient of goods/services, instead of the supplier, is liable to pay GST to the government (e.g., specified goods/services and supplies from unregistered dealers as notified).

  16. What is the threshold limit for compulsory GST registration?

    Aggregate turnover exceeding Rs. 40 lakh for goods (Rs. 20 lakh in special category states) and Rs. 20 lakh for services (Rs. 10 lakh in special category states).

  17. What is the GST rate structure (slabs) in India?

    Main slabs are 0% (exempt), 5%, 12%, 18% and 28%. Special rates apply to gold (3%) and rough diamonds (0.25%); a cess applies on luxury/sin goods.

  18. What is a 'zero-rated supply' under GST?

    Exports of goods/services and supplies to SEZ units/developers. Tax is charged at 0% but ITC is allowed, and refund can be claimed (unlike exempt supplies where ITC is not allowed).

  19. Distinguish 'exempt supply' from 'zero-rated supply' under GST.

    Exempt supply attracts NIL rate and ITC is NOT allowed/must be reversed. Zero-rated supply (exports/SEZ) is taxed at 0% but ITC IS allowed and refundable.

  20. What is the GSTIN and its structure?

    GSTIN is a 15-digit PAN-based registration number: first 2 digits = State code, next 10 = PAN, 13th = entity/registration number, 14th = 'Z' by default, 15th = checksum digit.

  21. What is Customs Duty and on what is it levied?

    Customs Duty is an indirect tax levied under the Customs Act, 1962, and Customs Tariff Act, 1975, on goods imported into and exported out of India.

  22. What is the taxable event for Customs Duty on imports and exports?

    For imports: when goods cross the customs barrier and reach the customs area / on date of bill of entry. For exports: when goods cross the customs barrier of India for export (let export order).

  23. What is Basic Customs Duty (BCD)?

    The primary duty levied under the Customs Tariff Act, 1975, on imported goods at rates specified in the First Schedule (Import Tariff), computed on the assessable value.

  24. What is the Social Welfare Surcharge (SWS) on customs duty?

    A surcharge levied at 10% on the aggregate of customs duties (mainly BCD) on imported goods, to fund social welfare schemes; replaced the earlier education cesses.

  25. What is IGST in the context of import of goods?

    Imported goods attract IGST under the GST regime (in lieu of CVD/SAD), levied on the value = assessable value + BCD + applicable duties; this IGST is available as ITC to the importer.

  26. What is 'Assessable Value' for customs duty purposes?

    The value on which customs duty is computed, generally the CIF value (Cost + Insurance + Freight) of the goods determined under the Customs Valuation Rules (transaction value method).

  27. What is Anti-Dumping Duty under customs law?

    A duty levied on imported goods that are 'dumped' (sold below normal value) to protect domestic industry from injury; the margin of dumping is the difference between normal value and export price.

  28. What is a 'Bill of Entry' in customs procedure?

    A legal document filed by an importer (or agent) with customs for clearance of imported goods, declaring description, quantity and value; required for assessment and payment of import duty.

  29. What is a 'Shipping Bill' in customs procedure?

    The document filed by an exporter for clearance of goods for export; on the basis of which the 'let export order' is granted and export duty (if any) is assessed.

  30. What is Safeguard Duty under customs law?

    A temporary duty imposed on a sudden surge of imports of a particular article that causes or threatens serious injury to domestic producers, to give the domestic industry time to adjust.

CMA Intermediate Taxation FAQ

What is in the CMA Intermediate Taxation syllabus?

CMA Intermediate Taxation is split into 2 chapters: Income Tax and Indirect Tax. Together they contain 5 topics.

How many chapters are in CMA Intermediate Taxation?

2 chapters, containing 5 topics. The largest chapter is Income Tax, with 3 topics.

Are there flashcards for CMA Intermediate Taxation?

Yes — a 50-card Taxation deck, printed in full in the flashcards section of this page and available in the Examius app with spaced repetition. The free plan covers one exam of your choice, including its flashcards; Examius Pro, a one-time purchase, unlocks every other exam and deck.