CA Inter Paper 3: Taxation study guide
CA Inter Paper 3: Taxation · Work through your exam, one topic at a time.
CA Intermediate Paper 3: Taxation is one of the two papers in the second level of the Chartered Accountancy course, sitting alongside Advanced Accounting. It is written for students who have cleared the CA Foundation or the Direct Entry route and now need a working command of Indian tax law, not just an academic acquaintance with it. The CA Inter Paper 3: Taxation study guide has 15 sections and about 5,203 words.
01Income-tax Law: Basic Concepts
Basic Concepts supplies the vocabulary for every later computation: the charging section, the year framework, who is a person, what counts as income, and the rate structure. Direct questions are usually short, but the same concepts are assumed in every case study.
346 words, about 2 min02Residential Status and Scope of Total Income
Residential status decides whether foreign income enters the computation, so examiners pair it with a computation of total income or a short theory question on deemed residence. Basic condition u/s 6(1): stay in India for 182 days or more in the previous year, or 60 days or more in the previous year plus 365 days in the four preceding years.
386 words, about 2 min03Salaries and House Property
Salary is taxed on due or receipt basis, whichever is earlier, u/s 15. Standard deduction Rs.50,000 is available in both regimes; entertainment allowance and professional tax (capped at Rs.2,500) are old-regime deductions only.
325 words, about 2 min04Profits and Gains of Business or Profession and Capital Gains
Sections 30 to 37 allow expenses wholly and exclusively for business; Section 40 disallows income tax and payments to non-residents without TDS. 40A(3): a cash payment above Rs.10,000 (Rs.35,000 for transporters) is fully disallowed.
339 words, about 2 min05Income from Other Sources
Section 56 catches income not covered by the other four heads: interest on securities and deposits, dividends, winnings from lotteries, crossword puzzles, races and game shows, rent from plant and machinery, and gifts. Interest is taxed on accrual, with a 25% deduction u/s 57(iv) for interest on compensation or enhanced compensation, taxed in the year of receipt.
322 words, about 2 min06Clubbing, Set-off and Carry Forward of Losses
Income arising to a spouse, minor child or son's wife from an asset transferred without adequate consideration is clubbed with the transferor. Exceptions: income of a minor from manual work or skill, income from assets transferred for adequate consideration, and income of a minor suffering from disability assessed in the minor's own hands.
334 words, about 2 min07Deductions from Gross Total Income
Deductions reduce gross total income. The aggregate of 80C, 80CCC and 80CCD(1) cannot exceed Rs.1,50,000.
298 words, about 1 min08Rebate, Relief and Total Income Computation
Section 87A under the new regime: rebate up to Rs.25,000 where total income does not exceed Rs.7,00,000. It is not allowed against tax on 112A long-term gains.
355 words, about 2 min09Advance Tax, TDS/TCS, Return Filing and Self-Assessment
Corporate and non-corporate taxpayers pay advance tax in four instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Shortfall attracts interest u/s 234C at 1% per month for three months; non-payment of tax by 31 March attracts 234B at 1% per month until payment or assessment.
353 words, about 2 min10GST: Supply, Charge of GST, Place of Supply and Time of Supply
Section 7 covers sale, transfer, barter, exchange, licence, rental, lease and disposal for consideration in the course of business, plus import of services for consideration whether or not in the course of business. Schedule I covers supplies without consideration, such as permanent transfer of business assets, supplies between related or distinct persons, and principal-agent supplies.
373 words, about 2 min11GST: Value of Supply, Exemptions and Reverse Charge Mechanism
Transaction value is accepted where the supplier and recipient are unrelated and price is the sole consideration. It includes taxes other than GST, incidental expenses such as packing and freight, interest, late fees and penalties, and subsidies directly linked to price.
360 words, about 2 min12GST: Input Tax Credit, Registration and Tax Invoices
Section 16(2) requires possession of a tax invoice, receipt of the goods or services, tax actually paid to the government and filing of the return. The supplier's invoice must also be communicated in GSTR-1.
348 words, about 2 min13GST: Returns, Payment of Tax, Refunds and Assessment
GSTR-1 is due on the 11th (13th for quarterly filers); GSTR-3B on the 20th; CMP-08 quarterly for composition dealers. GSTR-9 is annual for turnover above Rs.2 crore and GSTR-9C for turnover above Rs.5 crore.
322 words, about 2 min14GST: Appeals, Advance Ruling, Offences and Penalties
Section 107: appeal to the Appellate Authority within three months of communication, with a pre-deposit of 10% of the disputed tax, capped at Rs.20 crore each under CGST and SGST. The Authority should decide within one year.
380 words, about 2 min15Integrated Case Studies and Cross-Topic Application
A case study gives one entity and asks for income-tax computation, a GST consequence, and the interaction between the two. Work in a fixed sequence: identify the person and residential status, apply each head of income, apply Chapter VI-A and rebate, then turn to the GST supply, value, place and time of supply, ITC and return.
362 words, about 2 min