Corporate Tax Planning

 

Assignment A

 

1. Differentiate between exemption and rebate?

2. Discuss the conditions that should be met to claim deductions against profits and gains of business or profession under section 37(1)?  

 

3. Explain the provisions regarding set-off and carry forward capital losses? 

 

4. Differentiate between long term and short term capital gains?  

 

5. Describe the provisions of law regarding advance payment of taxes in case of company assesse? 

 

6. Explain, how tax is calculated/computed on domestic as well as other than domestic company?  

 

7. What do you mean by Maximum marginal tax, explain with examples? 

 

8. Describe in detail the Capital gains count Scheme?

 

Assignment B

 

Case Detail:  

Chasing Taxes

Indonesia and India have embarked on big, bold and historic hunts for hidden assets. The moves come amid a global shift in attitude toward tax avoidance and offshore holdings but the emerging economies have singular reasons for seeking undeclared riches. Each wants fresh cash for much-needed infrastructure projects and a chance for a fairer distribution of wealth.

In the last days of September, in the dark of 3 a.m., people began queuing outside a single government building in central Jakarta. They were clutching financial papers that in some cases exposed offshore accounts worth billions of rupiah. Two months earlier, President Joko Widodo had launched a massive tax amnesty campaign to repatriate hidden assets to Indonesia. As the first reporting deadline loomed, crowds swelled into the office that handles the tax affairs of the country's wealthiest individuals and companies.

More than 10,000 people a day answered the president's pitch in September: declare assets now and take advantage of a discounted tax rate -- as little as 2% compared to 25% -- and, in turn, be part of Indonesia's future. Revenue from the nine-month amnesty, continuing through March, is promised to build railway networks, ports and airports in a country whose prospects, politically and economically, have been on the ascent.

Widodo, who was elected in 2014, has cast the program as good for business -- and pivotal to the next generation. Twice before Indonesia tried amnesties to lure money back home but those efforts in 1964-65 and in 1984 failed, in part, due to poor incentives. Now Indonesia has calculated that political stability and a dramatic drop in the tax rate could help to bring in an estimated 11,400 trillion rupiah ($851 billion) parked overseas.

"We have a large amount of money outside," Widodo told a group of businessmen in Jakarta this summer. "What is most important now is to bring this money back to our country. We need your participation right now to build the nation."

Indonesia's call for revenue echoes across many countries in Asia where private wealth has risen steeply in the past decade. New wealth accounts for about 60% of the total wealth growth in the Asia-Pacific region excluding Japan and, by 2019, the region is expected to account for 26% of all global financial wealth, according to a recent Boston Consulting Group report. It is those potential taxpayers that emerging economies want to rein in as partners in their next phase of development.

People streamed to banks in New Delhi to try to withdraw or deposit old currency notes banned on Nov. 8. India has taken more radical steps this year, starting with amnesty and then launching a wholesale assault on its shadow economy by banning high-denomination bank notes. Life in the cash-starved society has morphed into a kind of collective suffering. But both India and Indonesia see their experiments as helping to secure economic ballast at a critical time to attract domestic and global investment. Transparent accounting at home will help each country to prepare for tougher global standards for financial information that will go into effect next year.

 

Indonesia's hunt for revenue is spurred by ambition for this country of 20 million taxpayers. It has enjoyed 5% annual growth for the past few years. In order to keep this growth momentum, the country needs to build and improve its infrastructure such as airports and power grids. The government has estimated 5,500 trillion rupiah is needed through 2019 for infrastructure; the state budget can likely cover a quarter of that.

Amnesty became appealing first to trade associations, law firms and major developers that liked the lower tax rate -- and possibly saw future government contracts for big construction. Wealth managers said tax rates were locked in depending on how early declarations were made. That sparked the September rush. "Just with 2% or 4%, you can bring the 'dark' money under the sun," said a private banker in Singapore. "Once you declare amnesty, the money is no longer 'dark.'"

 

1. Provide a brief summary of the case?   

 

2. What common initiative both countries have taken?   

 

3. What success you predict for the Indonesia’s call for revenues?

 

Assignment C

 

Question No.  1

A method of financing a business where money is received by the issuance of shares in the enterprise. 

 

Options

 

1. Equity Capital 

Corporate Tax Planning

 

Assignment A

 

1. Differentiate between exemption and rebate?  

 

2. Demerger 

 

3. Merger 

 

4. Debt

 

Question No.  2

Sales revenue less cost of sales, operating expenses, and interest, before taxes have been paid. 

 

Options

 

1. EBT 

 

2. EAT 

 

3. PAT 

 

4. EBIT

 

Question No.  3

Persons who have left their country and live abroad. 

 

Options

 

1. Expatriate 

 

2. NRI 

 

3. Foreigners 

 

4. Natives

 

Question No.  4

Financial transaction whereby an enterprise sells its debt claims to a third party in order to obtain cash 

 

Options

 

1. Factoring 

 

2. Forfaiting 

 

3. Accounting 

 

4. Cash Management

 

Question No.  5

 

…………… lease is where the lessor is considered only as a financier. 

 

Options

 

1. Finance 

 

2. Left 

 

3. Right 

 

4. Time

 

Question No.  6

 

Any 12month period which is set for accounting purpose of an enterprise. 

 

Options

 

1. Accounting Year 

 

2. Fiscal Year 

 

3. Calendar Year 

 

4. Assessment Year

 

Question No.  7

 

Part of economic policy which relates to taxation and public expenditure. 

 

Options

 

1. Monetary Policy 

 

2. Fiscal Policy 

 

3. Cash Policy 

 

4. Exim Policy

 

Question No.  8

………….. Property is also called as real property; immovable property comprises land, houses and buildings. 

 

Options

 

1. Movable 

 

2. Fixed 

 

3. Immovable 

 

4. Liquid

 

Question No.  9

 

Capital receipts are shown in the Balance Sheet on the ………………..  Side.

 

Options

 

1. Above 

 

2. Below 

 

3. Asset 

 

4. Liability

 

Question No.  10

Winnings from lotteries, races etc. are taxable under the head "Income from other sources". 

Options

 

1. TRUE 

 

2. FALSE 

 

3. Sometimes 

 

4. Can't Say

 

Question No.  11

Wealth tax is to be rounded off to nearest multiple of....... 

 

Options

 

1. 1 

 

2. 10 

 

3. 100 

 

4. 1000

 

Question No.  12

Tax is to be rounded off to nearest multiple of......... 

 

Options

 

1. Ten 

 

2. Hundred 

 

3. Rupee 

 

4. Thousand

 

Question No.  13

 

Year in which income is earned is known as......................... Year. 

 

Options

 

1. Annual 

 

2. Taxable 

 

3. Assessment 

 

4. Previous

 

Question No.  14

Aggregate amount of deduction under section 80C, 80CCC and 80CCD cannot exceed: 

 

Options

 

1. 150,000 

 

2. 100,000 

 

3. 200,000 

 

4. 250,000

 

Question No.  15

LLC stands for limited liability …………….. 

 

Options

 

1. Corporation 

 

2. Company 

 

3. Console 

 

4. Centre

 

Question No.  16

Tax and/or accounting convention under which the value of assets/liabilities is adjusted to reflect fair market value of a specific date. 

 

Options

 

1. conventional tax rate 

 

2. Sovereign Rate 

 

3. Mark to market 

 

4. Managerial

 

Question No.  17

………… is an increase in the price of something, especially from the price a trader pays for something to the price he sells it for. 

 

Options

 

1. Column-down 

 

2. Column-up 

 

3. Mark-down 

 

4. Mark-up

 

Question No.  18

 

Tax on mortgages usually in the form of a stamp duty levied on the mortgage document. 

 

Options

 

1. Mortage tax 

 

2. Document Tax 

 

3. Implied tax 

 

4. Annual Tax

 

Question No.  19

A lack of due care or failure to do what a reasonable and ordinarily prudent person would do under the given circumstances. 

 

Options

 

1. Accounting Fraud 

 

2. Negligence 

 

3. Accounting Mistake 

 

4. Fraud

 

 

Question No.  20

Obligation to persuade a court or other entity of the validity of a factual assertion. 

 

Options

 

1. Branch Tax 

 

2. Statutory Tax 

 

3. Burden of Proof 

 

4. Compliance Tax

 

Question No.  21

A tax imposed on an act, occupation, privilege, manufacture, sale, or consumption. 

 

Options

 

1. Sales 

 

2. Excise 

 

3. Income Tax 

 

4. IPR tax

 

Question No.  22

 

Income-tax is an annual tax on …………………….. 

 

Options

 

1. Royalty 

 

2. Income 

 

3. charity 

 

4. Commission  

 

Question No.  23

 

Generally, an income amount that relates to a future period and therefore can be set aside and included in income for that period. 

 

Options

 

1. Asset 

 

2. Liability 

 

3. Surplus 

 

4. Reserves

 

Question No.  24

A deduction used to reduce net income for tax purposes. 

 

Options

 

1. Taxation 

 

2. Liability 

 

3. Write Off 

 

4. Reserves Creation

 

Question No.  25

Term

Generally used to describe a number of operations involving the reorganization of companies. 

Options

 

1. Trial Balance 

 

2. Merger 

 

3. Acquisition 

 

4. Take Over

 

Question No.  26

Department of government generally responsible for formulating monetary policy, implementing the tax laws, collecting revenue, etc. 

 

Options

 

1. Ministry of Accounting 

 

2. Ministry of Commerce 

 

3. Ministry of Finance 

 

4. Ministry of Taxation

 

Question No.  27

……. Is the gross income less deductible income related expenses? 

 

Options

 

1. Net 

 

2. Pure 

 

3. Total 

 

4. Casual

 

 

 

Question No.  28

Association of two or more person (individuals or companies) formed for the purpose of making a profit. 

 

Options

 

1. Sole Proprietorship 

 

2. JSCs 

 

3. Strategic Alliance 

 

4. Partnership

 

Question No.  29

An intangible asset that represents the superior earning power of a business. 

 

Options

 

1. Asset 

 

2. Liability 

 

3. Goodwill 

 

4. Pure Asset

 

Question No.  30

A written application addressed to a court or judge, and stating facts and circumstances relied upon as a cause for judicial action. 

 

Options

 

1. Filing 

 

2. Petition 

 

3. Application 

 

4. Writ

 

Question No.  31

Any 12-month period which is set for accounting purpose of an enterprise is ……………… year. 

 

Options

 

1. Fiscal 

 

2. Previous 

 

3. Assessment  

 

4. Monetary

 

Question No.  32

A risk-management strategy to balance positions of different business units or with unrelated third parties is called ……………… hedging. 

 

Options

 

1. Liberal 

 

2. Expatriate 

 

3. Foreign 

 

4. Global

 

Question No.  33

The period following the due date of taxes during which legal action for recovery of delinquent taxes will not be instituted and interest will not commence to run is ………………. Period. 

 

Options

 

1. Flexible 

 

2. Grace 

 

3. Advanced 

 

4. Extended

 

Question No.  34

Reserves which are not disclosed on the balance sheet of an enterprise, either by overvaluing debts or undervaluing assets are called…………… reserves. 

 

Options

 

1. Fixed 

 

2. Hidden 

 

3. Flexible 

 

4. Statutory

 

Question No.  35

A tax applied at the same rate to all levels of income is …………. Tax. 

 

Options

 

1. Straight Line 

 

2. Flat Tax 

 

3. Forward  

 

4. Fixed Tax

 

Question No.  36

Amount of money received by persons or entities as compensation for damages or for losses incurred. 

 

Options

 

1. Deflamation 

 

2. Indemnification 

 

3. Income Shifting 

 

4. Income Spliting

 

Question No.  37

Real property or personal property that is received by heirs. 

 

Options

 

1. Solely 

 

2. Benefited 

 

3. Gifted 

 

4. Inheritance

 

Question No.  38

A transaction among parties, each of whom acts in his or her own best interest is called …………….. Transaction. 

 

Options

 

1. Arm's Length  

 

2. Attributable 

 

3. Auxiliary 

 

4. Pending

 

Question No.  39

Environment tax is commonly called as……………… tax. 

 

Options

 

1. Green 

 

2. Eco 

 

3. Forest 

 

4. White

Question No.  40

Rule under which one is precluded and forbidden by law to speak against his own act or deed.  

 Options

 

1. Pestel 

 

2. Escort 

 

3. Estoppel 

 

4. Onograph