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CA Intermediate - Direct Taxation Amendments
Recent Amendments in Direct Tax for CA intermediate exams

CA Intermediate - Direct Taxation Amendments

CA Intermediate - Direct Taxation Amendments

  • 06-October-2020
  • CA-Inter
  • By TeamKoncept

Direct Tax Amendments

Dear Students, Professionals & Teachers;

We have compiled all the Direct Taxation Amendments relevant for CA Intermediate Nov 2020 keeping Finance Act 2019 as base. The main purpose of this document is to help CA Intermediate students, in clearing their CA Intermediate examinations. Also all changes of Finance Act 2019 have not been discussed here, only the changes which are a part of CA Intermediate syllabus as per CA course updated on ICAI are discussed here.

For best reference and understanding, we suggest our konceptca students to watch parallel videos available in the Direct Taxation subject videos in your study account. We have added a screenshot of the video

We have added few tax amendments sums which we developed, these would immensely help you in deeper understanding of the provision. If you find any typing error or mistakes in the document please contact and let us know at 9228446565 or yash@konceptca.com

Happy Reading…… and remember amendments have weightage of about 30%-40% in your exam. The following document will help you to gain these crucial 30 - 40 marks.


Tax Slab Rate, Surcharge and Rebate for CA Intermediate Nov 2020 Exams
You all are confused regarding the actual slab rates applicable for our exams i.e. for November 2020. No worries now. We have done that for you. Below given are the Tax Slab Rates, Surcharge and Rebate for different assessees applicable for CA Intermediate November 2020 exams.

SLAB RATES FOR DIFFERENT ASSESSEES


(1) Individuals / HUF / AOP / BOI / AJP


(i)Where total income does not exceed Rs. 2,50,000NIL
(ii)Where total income exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,0005% of the amount by which the total income exceeds Rs. 2,50,000
(iii)Where total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000Rs. 12,500 plus 20% of the amount by which the total income exceeds Rs. 5,00,000
(iv)Where total income exceeds Rs. 10,00,000Rs. 1,12,500 plus 30% of the amount by which the total income exceeds Rs. 10,00,000

(2) Resident Senior Citizens

(i)Where total income does not exceed Rs. 3,00,000NIL
(ii)Where total income exceeds Rs. 3,00,000 but does not exceed Rs. 5,00,0005% of the amount by which the total income exceeds Rs. 3,00,000
(iii)Where total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000Rs. 10,000 plus 20% of the amount by which the total income exceeds Rs. 5,00,000
(iv)Where total income exceeds Rs. 10,00,000Rs. 1,10,000 plus 30% of the amount by which the total income exceeds Rs. 10,00,000

(3) Resident Super Senior Citizens

(i)Where total income does not exceed Rs. 5,00,000NIL
(ii)Where total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,00020% of the amount by which the total income exceeds Rs. 5,00,000
(iii)Where total income exceeds Rs. 10,00,000Rs. 1,00,000 plus 30% of the amount by which the total income exceeds Rs. 10,00,000

(4) Firm / LLP                            30%

(5) Local Authority                    30%

(6) Co-operative Society

(i)Where total income does not exceed Rs. 10,00010% of the total income
(ii)Where total income exceeds Rs. 10,000 but does not exceed Rs. 20,000Rs. 1,000 plus 20% of the amount by which the total income exceeds Rs. 10,000
(iii)Where total income exceeds Rs. 20,000Rs. 3,000 plus 30% of the amount by which the total income exceeds Rs. 20,000

(7) Company

(i)Domestic Company
  • Total turnover / gross receipts in the P.Y. 2017-18 ≤ Rs. 400 Cr.
  • Any other case

25%

30%
(ii)Other than Domestic Company40%


SURCHARGE FOR DIFFERENT ASSESSEES for CA Intermediate Nov 2020 exams

(1) Individuals / HUF / AOP / BOI / AJP

(i)Where total income does not exceed Rs. 50,00,000NIL
(ii)Where total income exceeds Rs. 50,00,000 but does not exceed Rs. 1,00,00,000 10%
(iii)Where total income exceeds Rs. 1,00,00,000 but does not exceed Rs. 2,00,00,00015%
(iv)Where total income exceeds Rs. 2,00,00,000 but does not exceed Rs. 5,00,00,00025%
(v)Where total income exceeds Rs. 5,00,00,00037%
 
(2) Co-operative Society

(i)Where total income does not exceed Rs. 1,00,00,000NIL
(ii)Where total income exceeds Rs. 1,00,00,00012%

(3) Domestic Company

(i)Where total income does not exceed Rs. 1,00,00,000NIL
(ii)Where total income exceeds Rs. 1,00,00,000 but does not exceed Rs. 10,00,00,000 7%
(iii)Where total income exceeds Rs. 10,00,00,00012%

(4) Foreign Company

(i)Where total income does not exceed Rs. 1,00,00,000NIL
(ii)Where total income exceeds Rs. 1,00,00,000 but does not exceed Rs. 10,00,00,000 2%
(iii)Where total income exceeds Rs. 10,00,00,0005%


REBATE

Only available to Resident Individual 
Total Income ≤ Rs. 5,00,000Amount of Rebate upto Rs. 12,500


Alternate Minimum Tax (AMT) applicable for CA Intermediate Nov 2020 exams

Alternate Minimum Tax (AMT) is a small but important topic. Do not miss on it. Alternate Minimum Tax is covered in Video no. 16, 17 and 18 of Chapter no. 13 in your study account.



At intermediate level, since profit-linked deductions provided under section 80- IA to 80-IE, section 80JJA, 80LA, 80P and 80PA have been excluded from the scope of syllabus by way of Study Guidelines and computation of total income and tax liability is restricted to individual assessees only, the discussion in relation to AMT is limited with respect to deduction under section 10AA, section 35AD and deduction under section 80JJAA, 80QQB & 80RRB only.

Health & Education Cess - 4%

The Income-tax, as increased by the surcharge or as reduced by the rebate under section 87A, if applicable, is to be further increased by an additional surcharge called “HEALTH & EDUCATION CESS @ 4%”

Earlier

The Income-tax, as increased by the surcharge or as reduced by the rebate under section 87A, if applicable, is to be further increased by an additional surcharge called education cess @ 2% and secondary and higher education cess @ 1%

tax amendments idea, careful
HEALTH & EDUCATION CESS @ 4% is a Tax-on-Tax, meaning 4% is not charged on income earned its charged on the taxes computed, after considering surcharge and rebate, if applicable on the income earned.

So,
Step 1 = Calculate Total Income
Step 2 = Calculate Total Tax
Step 3 = Calculate Surcharge, if applicable
Step 4 = Calculate Rebate, if applicable
Step 5 = Step 2 + Step 3 - Step 4
Step 6 = Calculate 4% on Step 5

Step 6 value = Cess

CASE 1CASE 2CASE 3
TOTAL INCOME - XXXXXTOTAL INCOME - XXXXXTOTAL INCOME - XXXXX
Tax Computed - Rs. 25,000Tax Computed - Rs. 10,25,000Tax Computed - Rs. 9,000
Surcharge - NILSurcharge - Rs. 15,000Surcharge - NIL
Rebate - NILRebate - NILRebate - Rs. 2,000
Cess =Cess =Cess =




Circular No. 28/2016, dated 27-07-2016, B'day 1st April -> 31st.March

Circular - The CBDT has, vide this Circular, clarified that a person born on 1st April would be considered to have attained a particular age on 31st March, a day preceding their actual birthday. Hence the question of attainment of age for being considered a senior or very senior citizen would be decided on the basis of this above criteria.

ANALYSIS - An individual who is resident in INDIA and of the age of 60 years or more (Senior Citizen) and 80 years or more (Very Senior Citizen) is eligible for a higher basic exemption limit Rs. 3,00,000 and Rs. 5,00,000 respectively.

Earlier

IF 60th B’day or 80th B’day on 1st April 2019, then it was considered that they attained Seniority or Super Seniority in the PY 2019 - 2020, hence in AY 2020 - 2021 they would be given the benefit of higher basic exemption limit

Now

IF 60th B’day or 80th B’day on 1st April 2019, then it will be considered that they attained Seniority or Super Seniority on 31st March 2019. Hence in the PY 2018 - 2019 only they would be considered senior or super senior, and in AY 2019 - 2020 they would be given the benefit of higher basic exemption limit

ca inter tax amendments
  • Please note that the benefit of higher basic exemption limit is only available a “RESIDENT INDIVIDUAL”, so if the assessee is a Non Resident Individual no point in computing age, hence no point of this circular.
  • Be careful if the assessee in the question is a resident individual with B’day on 1.4.1959, he would be having his 60th B’day on 1.4.2019 but as per this notification his B’day would be considered on 31.3.2019 and hence he would attain the benefit of higher exemption limit from the AY 2019-2020
  • Be careful if the assessee in the question is a resident individual with B’day on 1.4.1939, he would be having his 80th B’day on 1.4.2019 but as per this notification his B’day would be considered on 31.3.2019 and hence he would attain the benefit of higher exemption limit from the AY 2019-2020

Case 1. Compute the tax liability of Mr. A (Birthday on 1.4.1989) for the AY 2019-20, Mr. A visits India for 150 days in every financial. This has been his practice for past 6 financial years. He has earned the following income pertaining to the year ending on 31.3.2019

ParticularsRs.
Short Team Capital Gain other than 111A received in India6,00,000
Dividend from a Japanese company received in Japan1,00,000
Rent income from property situated in London deposited in London, later on remitted to India75,000
Dividend income from Rx Ltd., an Indian company15,000
Agricultural income from land in Gujarat25,000

Case 2. Compute the tax liability of Mr. A (Birthday on 1.4.1959) for the AY 2019-20, Mr. A visits India for 150 days in every financial. This has been his practice for past 6 financial years. He has earned the following income pertaining to the year ending on 31.3.2019

ParticularsRs.
Short Team Capital Gain other than 111A received in India6,00,000
Dividend from a Japanese company received in Japan1,00,000
Rent income from property situated in London deposited in London, later on remitted to India75,000
Dividend income from Rx Ltd., an Indian company15,000
Agricultural income from land in Gujarat25,000

Case 3. Compute the tax liability of Mr. A (Birthday on 1.4.1939) for the AY 2019-20, Mr. A visits India for 105 days in every financial. This has been his practice for past 6 financial years. He has earned the following income pertaining to the year ending on 31.3.2019

ParticularsRs.
Short Team Capital Gain other than 111A received in India6,00,000
Dividend from a Japanese company received in Japan1,00,000
Rent income from property situated in London deposited in London, later on remitted to India75,000
Dividend income from Rx Ltd., an Indian company15,000
Agricultural income from land in Gujarat25,000


Tax Rate of Domestic Company - Relaxed Turnover Limit

For November 2020 exams, In case of Domestic Company

  • If the total turnover or gross receipt in the “PY - 2017-2018” ≤ Rs. 400 crore : 25% of total income
  • In other case : 30% of total income

Earlier

In case of Domestic Company

  • if the total turnover or gross receipt in the “PY - 2016-2017” ≤ Rs. 250 crore : 25% of total income
  • In other case : 30% of total income