Quick & Easy Preparation Tips & Tricks on CA Intermediate - Taxation
Taxation is one of the core competence areas of CA. This subject at the Intermediate Level is segregated into two parts: Income Tax Laws and Indirect Tax. The syllabus of Paper 4- Taxation is both vast and versatile. To stay in sync with the syllabus, you have to stay updated with what’s happening around you. You may be thinking that the CA-Intermediate exams are far. But, you never know when time runs out and before you know it, the CA-Intermediate exams will sneak up on you. Also, CA- Intermediate is a comparatively newer exam, introduced by ICAI under the revised scheme. Needless to say, there are more speculations about the exam than specified information.
Rumors have it that CA-Intermediate is a more difficult to crack than CA-IPCC, its former counterpart. Not to instil fear in you or anything, but most CA-Inter students find it difficult to clear Taxation, and it may get difficult for you too if you do not start early. Read on to find out why, and what you can do differently to score good marks in CA-Inter Paper-1.
CA-Intermediate – Taxation in a Nutshell
Total marks allotted: [100 marks]
Section A: Income Tax Laws [60 marks]
Section B: Indirect Taxes [40 marks]
Passing Marks: [40 Marks]
To develop an understanding of the provisions of income-tax and goods and services tax law and to acquire the ability to apply such knowledge to make computations and address application oriented issues.
Syllabus (Along with unit-wise weightage):
Section A: Income-tax Law
Unit1: Basic Concepts – 5%-10%
- Income-tax law: An introduction
- Important definitions in the Income-tax Act, 1961
- Basis of Charge and Rates of Tax
- Concept of previous year and assessment year
Unit2: Residential status and scope of total income – 10%-15%
- Residential status
- Scope of total income
- Deemed receipt and accrual of income in India
Unit3: Incomes which do not form part of total income – 25%-30%
- Incomes not included in total income
- Tax holiday for newly established units in Special Economic Zones
- Charitable and religious trusts and institutions: Basic concepts
Heads of income and the provisions governing computation of income under different heads
- Income from house property
- Profits and gains of business or profession
- Capital gains
- Income from other sources
Unit4: Income of other persons included in assessee’s total income – 10%-15%
- Clubbing of income: An introduction
- Transfer of income without transfer of assets
- Income arising from revocable transfer of assets
- Clubbing of income of income arising to spouse, minor child and son’s wife in certain cases
- Cross transfers
- Conversion of self-acquired property into property of HUF
- Other provisions relating to clubbing of income
Aggregation of income; Set-off, or carry forward and set-off of losses
- Aggregation of income
- Concept of set-off and carry forward and set-off of losses
- Inter-source and Inter-head adjustments
- Provisions governing set-off and carry forward and set-off of losses under different heads of income
- Order of set-off of losses
- Other provisions relating to set-off and carry forward of losses
Deductions from gross total income
- General provisions
- Deductions in respect of payments
- Specific deductions in respect of income
- Other deductions
Unit5: Computation of total income and tax liability of resident Individuals – 20%-25%
- Income to be considered while computing total income of resident individuals
- Procedure for computation of total income and tax liability of resident individuals
Unit6: Advance tax and tax deducted at source – 15% - 20%
- Direct Payment
- Provisions concerning deduction of tax at source
- Advance payment of tax
- Interest for defaults in payment of advance tax and deferment of advance tax
Introduction to tax collection at source
- Tax collection at source – Basic Concept
- Tax deduction and collection account number
Provisions for filing return of income and self- assessment
- Return of Income
- Compulsory filing of return of income
- Fee and interest for default in furnishing return of income
- Return of loss
- Provisions relating to belated return, revised return etc.
- Permanent account number
- Persons authorized to verify return of income
Section B: Indirect- tax Law
Unit1: Levy and collection of CGST and IGST – 30%-50%
- Application of CGST /IGST Law
- Concept of supply including composite and mixed supplies
- Charge of tax (including reverse charge)
- Exemption from tax
- Composition levy
- Basic concepts of time and value of supply
- Input Tax Credit
Unit2: Computation of GST Liability – 20%-30%
Unit3: Registration – 25%-40%
Tax Invoice; Credit and Debit Notes; Electronic way bill
Payment of tax
Unit4: Concept of indirect taxes – Concept and features of indirect taxes; Principal indirect taxes – 0%- 5%
How to Score good marks in CA-Inter Paper 4- Taxation?
Scoring well in any paper in CA-Intermediate depends on hard work and a strategic approach. When it comes to Taxation, students make some mistakes that cost them dearly. Let’s take a look at the common mistakes that students are prone to making, and which keeps them from doing well in this paper.
- Students start preparing late. They undermine the length and breadth of the syllabus
- Students undermine the theory portions since Taxation is a practical subject
- They do not plan their study; even if they come up with a study planner, they forget about it midway
- They prepare in a haywire manner without considering the weightage of the topics
- They do not stay updated with the economic changes that can lead to modification in syllabus
- They go for selective study, and have a tendency to skip ‘unimportant’ chapters
Preparation tips for CA Intermediate Paper 4- Taxation
- Has a weightage of 60 marks
- You can expect practical question (85%-95%) - Solve & Practice problems from ICAI Modules, Mock Test Papers & RTP.
- Go through Amendments well as this forms part of almost 20% of your exams.
- Start with lengthy yet important chapters including Profits and Gains of Business or profession, Salaries, Capital Gains, and Exemptions.
- Then go for small & important chapters- House Property, Deductions, TDS, Procedure of filing returns, etc.
- Finally go through the other chapters like: Aggregation of Income, Set-off & Carry forward & Income from Other Sources, Computation of Total Income and Tax Payable.
Goods and Services Tax (GST) has a weightage of 40 marks
Very Scoring + Limited Content – Try to stick or learn from ICAI’s study material
Solve Practical Problems repeatedly
20% to 45% theory expected (as per ICAI Skill wise weightage)-Such questions may involve recalling
2. Explaining a concept,
3. Describing a process,
4. Discussing a provision of law
5. Listing the conditions to be satisfied or classifying under the appropriate head.
55% to 80% Practical Problems Question Such as Calculation of GST Liability, Case Laws, and Solving problems by integrating provisions.
Additional Preparation Tricks:
- It is compulsory to prepare notes for taxation.( Follow Flow Chart Technique)
- Underline or highlight the crux of provisions.
- Try memorize section numbers and provisions.
- Try to solve practical problems from ICAI Modules and previous year question papers.
- Stick to one reference book, which may be your coaching material
- Keep revising sections regularly.
- Try learning provision and sections in the language as provided in ICAI’s base book (study material).
- Begin your numerical with what is already given in the question and by stating what is required. Then proceed to your computations and working notes necessary to arrive at the solutions.
Follow the preparation tips and tricks in this blog post, and keep coming back to revisit the pointers from time to time. We are sure you will score well in CA-Inter Paper-4 Taxation.