CS Executive Tax Laws flashcards

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

Previous year

The financial year in which income is earned, immediately preceding the assessment year. Section 3 defines it, with an exception for the shipping income of a non-resident taxed in the year of departure.

Assessment year

The period of twelve months beginning on 1 April following the previous year, in which the income of the previous year is assessed and taxed at the rates fixed by the Finance Act.

Basic exemption limit

The threshold of total income below which no income tax is payable by an individual or HUF. The amount depends on the regime chosen and on the assessee's age.

Resident individual test

An individual is resident if present in India for 182 days or more in the previous year, or for 60 days or more plus 365 days in the preceding four years.

Resident not ordinarily resident

A resident who is non-resident in nine of the ten preceding years, or present in India for 729 days or less in the seven preceding years. Taxed on Indian income plus specified foreign income.

Deemed resident 6(1A)

An Indian citizen with Indian-source income above Rs 15 lakh who is not liable to tax in any other country is deemed resident but not ordinarily resident, regardless of days of stay.

House rent allowance exemption

The least of actual HRA received, rent paid less 10% of salary, and 50% of salary in metro cities or 40% elsewhere. Available only if rent is actually paid.

Standard deduction salary

A flat deduction of Rs 50,000 or the amount of salary, whichever is less, allowed under Section 16(ia) to every salaried taxpayer, in addition to professional tax and entertainment allowance.

Gross annual value

The higher of municipal value or fair rent, capped by standard rent, compared with actual rent received. Used to compute net annual value for house property income.

Presumptive business income 44AD

For eligible businesses with turnover up to Rs 2 crore, profit is deemed at 8% of turnover, or 6% for receipts through prescribed digital modes. No detailed books are required.

Block of assets

A group of assets of the same class and rate of depreciation. Depreciation is allowed on the written-down value of the block, and gains on its transfer are short-term capital gains.

Section 112A long-term gains

Long-term capital gains on listed equity shares and equity mutual funds are exempt up to Rs 1 lakh and taxed at 10% above that, with no indexation benefit.

Deduction 80C ceiling

Deduction for specified investments and payments such as PPF, life insurance premium, ELSS and tuition fees, capped at Rs 1.5 lakh per year. Not available under the default new regime.

Section 87A rebate

A rebate reducing tax liability for resident individuals: up to Rs 25,000 where total income is up to Rs 7 lakh under the new regime, or Rs 12,500 up to Rs 5 lakh under the old regime.

Set-off and carry forward

Intra-head set-off under Section 70 precedes inter-head set-off under Section 71. Business losses carry forward eight years; unabsorbed depreciation carries forward indefinitely.

Return filing due date

31 July for non-audit individuals and HUFs, 31 October for audited taxpayers, and 30 November for transfer-pricing cases, for the assessment year following the previous year.

Advance tax instalments

For non-presumptive taxpayers: 15% by 15 June, 45% by 15 September, 75% by 15 December and 100% by 15 March. Presumptive taxpayers pay the whole amount by 15 March.

Section 234C interest

Interest at 1% per month for three months on the shortfall in each advance tax instalment. No interest applies if the shortfall is within the specified tolerance limits.

Composite supply

A supply of two or more goods or services naturally bundled and supplied together in the ordinary course of business, taxed at the rate applicable to the principal supply.

Place of supply services

For business recipients, the location of the registered recipient. For unregistered recipients, the address on record, or the supplier's location if no address exists.

Time of supply goods

The earlier of the date of issue of the invoice, or the last date for issue where no invoice is issued, and the date of receipt of payment.

Blocked input tax credit

Credits not available under Section 17(5), including motor vehicles for passenger transport, food and beverages, club membership, health insurance, and works contract for immovable property.

GST registration threshold

Rs 40 lakh for suppliers of goods and Rs 20 lakh for suppliers of services, with lower limits in specified special-category States. Inter-State supply of goods requires registration regardless.

E-way bill threshold

Required for movement of goods with consignment value above Rs 50,000. It must be generated before movement and remains valid for one day per 200 km or part thereof.

Customs valuation sequence

Transaction value first, then identical goods, similar goods, deductive value, computed value and residual method. Freight, insurance and related royalties are added to the transaction value.

Social welfare surcharge

A surcharge levied on imported goods at 10% of basic customs duty. IGST is then computed on the assessable value plus basic customs duty plus the surcharge.

Duty drawback Section 75

A refund of duty on imported inputs used in exported goods, claimed at All Industry Rates or Brand Rates. The claim is filed in Form DBK after the Let Export Order.

CIT(A) first appeal

An appeal against an order of the Assessing Officer filed within 30 days with the prescribed fee. The Commissioner (Appeals) may admit a late appeal on sufficient cause.

Section 270A penalty

Penalty for under-reporting of income at 50% of the tax payable on under-reported income, and 200% where the under-reporting is in consequence of misreporting.

Advance ruling

A binding determination by the Authority for Advance Rulings on the tax liability of a transaction, sought by a non-resident or specified resident applicant in the prescribed form.

Equalisation levy

A levy on specified digital transactions: 6% on online advertisement and related services, and 2% on e-commerce supply by non-resident operators to Indian residents, subject to thresholds.

Transfer pricing arm's length

The principle that transactions between associated enterprises must be priced as if the parties were unrelated. Methods include CUP, resale price, cost plus, profit split and TNMM.