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)
- Important definitions in the Income-tax Act, 1961.
- Basis of charge; rates of taxes applicable for different types of assessees.
- Concepts of previous year and assessment year.
- Residential status and scope of total income; Income deemed to be received / deemed to accrue or arise in India.
- Incomes which do not form part of total income.
- Heads of income and the provisions governing computation of income under different heads.
- Income of other persons included in assessee’s total income.
- Aggregation of income; set-off or carry forward and set-off of losses.
- Deductions from gross total income.
- Computation of total income and tax payable; rebates and reliefs.
- Provisions concerning advance tax and tax deducted at source.
- Provisions for filing of return of income.
Part II: Service tax (25 marks) and VAT (25 marks)
Service tax (25 marks)
- Service tax – concepts and general principles.
- Charge of service tax and taxable services.
- Valuation of taxable services.
- Payment of service tax and filing of returns.
VAT (25 marks)
- VAT – concepts and general principles.
- Calculation of VAT Liability including input Tax Credits.
- Small Dealers and Composition Scheme.
- VAT Procedures.