CA Inter Paper 3: Taxation flashcards

34 cards. Read the term and the definition here. The deck at the top of this page is optional.

Assessment Year

The period of twelve months beginning 1 April immediately following the previous year, in which the income of the previous year is assessed and taxed.

Previous Year

The financial year immediately preceding the assessment year in which income is earned or accrued; it runs from 1 April to 31 March.

Section 87A Rebate

A rebate against tax payable for resident individuals: up to ₹12,500 where total income is ₹5 lakh or less under the old regime, and ₹25,000 where income is ₹7 lakh or less under the default regime.

Deemed Resident 6(1A)

An Indian citizen with Indian-source income above ₹15 lakh who is not liable to tax in any other country is treated as resident but not ordinarily resident, unless covered by section 6(6).

RNOR Test

A resident individual is not ordinarily resident if non-resident in nine of the ten preceding previous years, or in India 729 days or fewer in the seven preceding previous years.

Section 9(1)(i) Explanation 5

Salary for services rendered in India is deemed to accrue in India regardless of where it is paid, and is taxable in the hands of a non-resident.

Standard Deduction Salary

Under section 16(ia), a flat deduction of ₹50,000 or the amount of salary, whichever is lower, is allowed from salary income for all employees.

HRA Exemption Formula

Exempt amount is the least of actual HRA received, rent paid minus 10% of salary, and 50% of salary in metro cities or 40% elsewhere.

Annual Value Let Property

Gross annual value of a let property is the higher of the expected rent and the actual rent received or receivable, subject to municipal tax deduction.

Block of Assets

A group of assets of the same class and rate of depreciation; depreciation is allowed on the block's written-down value, not on individual assets.

Section 40A(3) Cash Limit

Expenditure paid in cash exceeding ₹10,000 to a single person in a day (₹35,000 for transporters) is disallowed; payment by prescribed banking modes avoids disallowance.

Section 112A LTCG Rate

Long-term capital gains on listed equity shares and equity-oriented funds with STT are taxed at 10% on gains exceeding ₹1,00,000 in a financial year.

Section 56(2)(x) Gifts

Money or immovable property received without consideration from non-relatives is taxable as other-source income if the aggregate value exceeds ₹50,000.

Minor Child Clubbing

Income of a minor child is clubbed with the parent's income under section 64(1A), except income from manual work or skill, with a ₹1,500 exemption per child.

House Property Loss Set-off

Loss under house property can be set off against other heads only up to ₹2,00,000 in a year; the balance carries forward for eight years against house property income.

Section 80CCD(1B)

An additional deduction of up to ₹50,000 is allowed for contributions to the National Pension System, over and above the ₹1,50,000 limit under section 80C.

Section 80D Limit

Health insurance premium deduction is ₹25,000 for non-senior individuals and ₹50,000 for senior citizens, separately available for parents; preventive check-up is capped at ₹5,000.

Section 80TTA

A resident non-senior individual or HUF may deduct interest on savings bank deposits up to ₹10,000; senior citizens instead claim ₹50,000 under section 80TTB.

Section 89 Relief

Relief for salary received in arrears or advance is claimed in Form 10E, computed so that tax does not exceed what would have been payable had the salary been taxed earlier.

Section 234C Interest

Interest at 1% per month for three months applies where advance tax instalments are deferred; the shortfall is measured against 15%, 45%, 75% and 100% cumulative requirements.

Section 139(1) Due Dates

Return due dates are 31 July for non-audit individuals and HUFs, 31 October for audited assessees, and 30 November for transfer pricing cases.

Section 206AA

Where the deductee does not furnish PAN, tax is deducted at the higher of the specified rate and 20%, or the rate in force, whichever is higher.

Composite Supply

Two or more supplies naturally bundled and supplied in conjunction with each other, one of which is the principal supply, taxed at the rate applicable to the principal supply.

Place of Supply Services

Under section 12, the default place of supply for services to a registered recipient is the recipient's location; immovable property services use the property's location.

Transaction Value Section 15

The price actually paid or payable for the supply, where supplier and recipient are unrelated and price is the sole consideration, plus specified inclusions under section 15(2).

Reverse Charge Mechanism

A mechanism under section 9(3)/9(4) where the recipient of specified goods or services, rather than the supplier, is liable to pay GST.

Section 17(5) Blocked Credit

Input tax credit is not available on specified items such as motor vehicles for passenger transport, food and beverages, club membership, and works contract for immovable property.

E-invoicing Threshold

E-invoicing is mandatory for registered persons whose aggregate turnover exceeds ₹5 crore; an e-way bill is required for movement of goods above ₹50,000.

GSTR-3B Due Date

The monthly summary return and tax payment return is due by the 20th of the following month; under the QRMP scheme, quarterly filing applies with monthly payment by the 25th.

Section 54 GST Refund

Refund of unutilised ITC is allowed for zero-rated supplies and inverted duty structure; a provisional refund of 90% of the claim is available for zero-rated supplies.

GST First Appeal Deposit

An appeal to the Appellate Authority under section 107 must be filed within three months with a pre-deposit of 10% of disputed tax, capped at ₹20 crore of CGST.

GST Advance Ruling

A written decision by the Authority for Advance Ruling on classification, place of supply, valuation, ITC eligibility or registration liability, binding on the applicant and the concerned officer.

GST and ITC Cost Impact

If input tax credit is availed, GST paid on inputs is not deductible as an expense under income-tax; if ITC is not availed, the GST forms part of the cost.

Related Party Valuation

For GST, supplies between related persons are valued at open market value under Rule 28; for income-tax, section 40A(2) disallows excessive payments to related parties.