UGC NET Commerce Income-tax and Corporate Tax Planning Syllabus

Income-tax and Corporate Tax Planning syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Income-tax and Corporate Tax Planning in UGC NET Commerce, not a summary of it.

1. 1

   Income-tax

   8 topics

   • 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
2. 2

   International Taxation

   2 topics

   • Double taxation and its avoidance mechanism
   • Transfer pricing
3. 3

   Corporate Tax Planning

   4 topics

   • 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
4. 4

   Deduction and collection of tax at source

   2 topics

   • Advance payment of tax
   • E-filing of income-tax returns

Income-tax and Corporate Tax Planning flashcards for UGC NET Commerce

24 of 50 cards from the Income-tax and Corporate Tax Planning deck — real questions with worked answers.

1. Under the Income-tax Act, what is a 'previous year' and how does it relate to the 'assessment year'?

   The previous year is the financial year (1 April to 31 March) in which income is earned; the assessment year is the following financial year in which that income is assessed and taxed. For income earned in PY 2024-25, the AY is 2025-26.

2. Define 'assessee' under Section 2(7) of the Income-tax Act.

   An assessee is any person by whom any tax or any other sum (interest, penalty) is payable under the Act, including persons against whom proceedings have been taken, deemed assessees, and assessees in default.

3. What are the categories of 'person' under Section 2(31) of the Income-tax Act?

   (1) Individual, (2) Hindu Undivided Family (HUF), (3) Company, (4) Firm, (5) Association of Persons (AOP) or Body of Individuals (BOI), (6) Local authority, and (7) Every other artificial juridical person.

4. What is the difference between 'gross total income' (GTI) and 'total income'?

   GTI is the aggregate of income computed under all five heads before Chapter VI-A deductions. Total income is GTI minus deductions under Sections 80C to 80U, and it is the amount on which tax is charged.

5. Name 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.

6. What are the conditions for an individual to be a 'resident' in India under Section 6(1)?

   An individual is resident if either: (a) he is in India for 182 days or more in the previous year, OR (b) he is in India for 60 days or more in the previous year AND 365 days or more during the 4 preceding previous years.

7. What additional conditions make a resident individual 'ordinarily resident' (ROR) under Section 6(6)?

   A resident is ordinarily resident if he has been resident in India in at least 2 out of the 10 preceding previous years AND was in India for 730 days or more during the 7 preceding previous years. Failing either makes him Resident but Not Ordinarily Resident (RNOR).

8. How is the scope of total income (tax incidence) determined for a Resident and Ordinarily Resident (ROR)?

   An ROR is taxed on global income: income received/deemed received in India, income accruing/arising or deemed to accrue/arise in India, AND income accruing/arising outside India.

9. What is the tax incidence for a Non-Resident (NR) in India?

   A non-resident is taxed only on income received or deemed to be received in India and income that accrues/arises or is deemed to accrue/arise in India. Foreign income is not taxable.

10. How does tax incidence for an RNOR differ from a Non-Resident?

    Like an NR, an RNOR is taxed on Indian-source income, but in addition an RNOR is taxed on foreign income derived from a business controlled in or a profession set up in India.

11. What is agricultural income under Section 2(1A) of the Income-tax Act?

    Agricultural income includes: (a) rent or revenue from agricultural land in India, (b) income from agricultural operations on such land, and (c) income from a farm building required for such operations. It is exempt under Section 10(1).

12. Explain the concept of 'partial integration' of agricultural income.

    Although agricultural income is exempt, it is aggregated with non-agricultural income to determine the tax rate (the slab) on non-agricultural income, applicable when net agricultural income exceeds Rs 5,000 and non-agricultural income exceeds the basic exemption limit. This prevents lowering of the effective tax rate.

13. Give three examples of incomes fully exempt under Section 10 of the Income-tax Act.

    Examples: agricultural income [10(1)], share of profit from a partnership firm [10(2A)], leave travel concession [10(5)], gratuity within limits [10(10)], and sum received under a life insurance policy [10(10D)].

14. Under Section 10(10D), when is a sum received under a life insurance policy exempt?

    Such sums are exempt provided the premium does not exceed the prescribed percentage of the sum assured (e.g., 10% for policies issued after 1 April 2012); otherwise the maturity proceeds become taxable. Death claims remain exempt.

15. What is the standard deduction available from salary income, and to whom does it apply?

    A standard deduction of Rs 50,000 (or the salary amount, whichever is lower) is allowed from gross salary to all salaried employees and pensioners, available under both the old and new tax regimes.

16. What are the two ways 'income from house property' annual value is computed, and what deductions are allowed?

    Net Annual Value (NAV) = higher of expected rent or actual rent received, less municipal taxes paid. From NAV, two deductions under Section 24 are allowed: (a) standard deduction of 30% of NAV, and (b) interest on borrowed capital.

17. What is the maximum deduction for interest on a housing loan for a self-occupied property under Section 24(b)?

    For a self-occupied house, interest on borrowed capital is deductible up to Rs 2,00,000 per year (if the loan was taken for acquisition/construction completed within 5 years); otherwise the limit is Rs 30,000.

18. Distinguish between short-term and long-term capital assets for listed equity shares.

    For listed equity shares (and equity-oriented funds), a holding period of more than 12 months makes the asset long-term; 12 months or less makes it short-term. For most other assets the threshold is 36 months (24 months for immovable property).

19. What is the rate of tax on long-term capital gains on listed equity shares under Section 112A?

    LTCG on listed equity shares/equity-oriented funds (where STT is paid) exceeding Rs 1,00,000 in a year is taxed at 10% without indexation. Short-term gains under Section 111A are taxed at 15%.

20. What is 'indexation' in the context of capital gains?

    Indexation adjusts the cost of acquisition/improvement of a long-term capital asset for inflation using the Cost Inflation Index (CII), thereby reducing the taxable capital gain. Indexed cost = original cost x (CII of year of transfer / CII of year of acquisition).

21. What is the maximum deduction under Section 80C and name three eligible investments?

    Maximum deduction is Rs 1,50,000. Eligible items include LIC premium, PPF, EPF, ELSS, NSC, principal repayment of housing loan, 5-year tax-saving FD, and tuition fees for children.

22. What deduction is available under Section 80D for medical insurance premium?

    Up to Rs 25,000 for premium on self/spouse/children (Rs 50,000 if senior citizen), plus an additional Rs 25,000 (Rs 50,000 for senior citizen) for parents. A preventive health check-up of up to Rs 5,000 is included within these limits.

23. What deduction does Section 80CCD(1B) provide?

    An additional deduction of up to Rs 50,000 for contributions to the National Pension System (NPS), over and above the Rs 1,50,000 limit of Section 80C/80CCD(1).

24. What deduction is allowed under Section 80E?

    Deduction of the entire interest paid on a loan taken for higher education (for self, spouse, children, or a student for whom one is a legal guardian) for up to 8 years, with no upper monetary limit. Principal is not deductible.

See more Income-tax and Corporate Tax Planning flashcards →

Planning Income-tax and Corporate Tax Planning for UGC NET Commerce

Income-tax and Corporate Tax Planning (UGC NET Commerce) FAQ