Income tax, Service tax & Vat:

Tax is of two types Direct tax & Indirect tax .Income tax (50 marks) is a Direct tax whereas Service tax & Vat (50 marks) are indirect taxes each carrying 25 marks. Income tax is 150 year old tax & is levied by Central Government on income of persons. The rate of income tax ranges from 10 % to 30% for individuals whereas for Indian companies it is 30%. Service tax refers to tax on provision of service & is also levied by Central Government .In last 50 years; the service sector has grown the fastest. Hence service tax is a major source of revenue for the government. It is presently levied @ 12.36%.Vat refers to Value Added Tax which is levied by State Government on sale of goods within a state.
Major changes are about to come in both these taxes. Direct tax code (DTC) will replace the existing Income tax act. DTC will help integrate Direct taxes with International practises & will bring stability in tax regime. Goods & Services tax (GST) will replace indirect taxes like Service tax, Vat, Excise etc. It will help the business to claim input tax credit across goods & services thereby avoiding cascading effect. Act.


(One paper – three hours – 100 marks)

Part I: Income-tax (50 marks)

  1. Important definitions in the Income-tax Act, 1961.
  2. Basis of charge; rates of taxes applicable for different types of assessees.
  3. Concepts of previous year and assessment year.
  4. Residential status and scope of total income; Income deemed to be received / deemed to accrue or arise in India.
  5. Incomes which do not form part of total income.
  6. Heads of income and the provisions governing computation of income under different heads.
  7. Income of other persons included in assessee’s total income.
  8. Aggregation of income; set-off or carry forward and set-off of losses.
  9. Deductions from gross total income.
  10. Computation of total income and tax payable; rebates and reliefs.
  11. Provisions concerning advance tax and tax deducted at source.
  12. Provisions for filing of return of income.

Part II: Service tax (25 marks) and VAT (25 marks)

Service tax (25 marks)

  1. Service tax – concepts and general principles.
  2. Charge of service tax and taxable services.
  3. Valuation of taxable services.
  4. Payment of service tax and filing of returns.

VAT (25 marks)

  1. VAT – concepts and general principles.
  2. Calculation of VAT Liability including input Tax Credits.
  3. Small Dealers and Composition Scheme.
  4. VAT Procedures.

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