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Article 10 – Dividend | International Tax Interpreting Tax Treaty (DTAA)

 

DECLARATION OF DIVIDEND

 

KEY ASPECTS TO BE COVERED

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MEANING OF DIVIDEND

 

ARTICLE 10(1) OF INDIA USA TREATY – RIGHT TO TAX

Dividends paid by
a company which is a resident of a Contracting State
to a resident of the other Contracting State
may be taxed in that other State

RIGHT TO TAX

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INCLUSIONS

EXCLUSIONS

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DIVIDEND TAXATION

PAID – HOW IT FARES ?

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ARTICLE 10(2) OF INDIA USA TREATY – RIGHT OF SOURCE STATE TO TAX DIVIDEND

However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident, and according to the laws of that State,
but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed :
• 15 per cent of the gross amount of the dividends if the beneficial owner is a company which owns at least 10 per cent of the voting stock of the company paying the dividends.
• 25 per cent of the gross amount of the dividends in all other cases.
………..
This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid

SALIENT FEATURES

BENEFICIAL OWNERSHIP – NOT DEFINED IN TREATY

 

TEST OF BENEFICIAL OWNERSHIP ?

BENEFICIAL OWNERSHIP

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CAPITAL – NO OECD DEFINITION MAKES REFERENCE TO LOCAL COMPANY LAW MANDATORY

WHETHER TAXPAYER CAN OPT FOR ACT PROVISION INSTEAD OF TREATY ?

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ARTICLE 10(3) OF INDIA USA TREATY – MEANING OF DIVIDEND

The term “dividends” as used in thisArticle means
income from shares or other rights, not being debt-claims, participating in profits,
income from other corporate rights which are subjected to the same taxation treatment as income from shares by the taxation laws of the State of which the company making the distribution is a resident ; and
income from arrangements, including debt obligations, carrying the right to participate in profits, to the extent so characterised under the laws of the Contracting State in which the income arises.

DIVIDEND COVERS

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DIVIDEND – WHAT ALL IS COVERED ?

ARTICLE 10(4) OF INDIA USA TREATY – PE OR FIXED BASE

The provisions of paragraphs 1 and 2 shall not apply
if the beneficial owner of the dividends, being a resident of a Contracting State,

carries on business in the other Contracting State, of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the dividends are attributable to such permanent establishment or fixed base.

In such case the provisions of Article 7 (Business Profits) or Article 15 (Independent Personal Services), as the case may be, shall apply

PE SITUATION

ARTICLE 10(5) – RIGHT TO TAX DIVIDEND DECLARED BY FOREIGN CO DERIVING INCOME FROM OTHER STATE

Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State,
that other State may not impose any tax on the dividends paid by the company except insofar as such dividends are paid to a resident of that other State (Case 2)
or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, (Case 3)
nor subject the company’s undistributed profits to a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State (Case 4)

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CASE 1 AND 2 – F1 DERIVES INCOME FROM SOURCE STATE

CASE 3 AND 4

 

INDIA HUNGARY TREATY – PROTOCOL

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ARTICLE – 4(2) OF THE OECD & UN MODEL– TIE BREAKER INDIVIDUAL

ARTICLE – 4(2) OF THE OECD & UN MODEL– TIE BREAKER INDIVIDUAL

ARTICLE – 4(2) OF THE OECD & UN MODEL– TIE BREAKER INDIVIDUAL

CASE STUDY 1 – CENTER OF VITAL INTEREST (PENDING)

CASE STUDY 2 – CENTER OF VITAL INTEREST (PENDING)

RETENTION OF TWO HOUSES (PENDING)

 

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ARTICLE – 4(3) – TIE BREAKER RULE – PERSON OTHER THAN AN INDIVIDUAL

ARTICLE – 4(3) – TIE BREAKER RULE – PERSON OTHER THAN AN INDIVIDUAL

Where by reason of application of paragraph 1 a
person other than an individual is a resident of both
Contracting States, then it shall be deemed to be a
resident only of the State in which its place of
effective management is situated

ARTICLE – 4(3) OF INDIA-USA TREATY

Where by reason of the provisions of paragraph 1
a person other than an individual
is a resident of both Contracting States,
then it shall be deemed to be a resident only of the State
in which its place of effective management is situated.

APPLICABILITY

WHEN A COMPANY CAN BE TAXED IN TWO STATE

PLACE OF EFFECTIVE MANAGEMENT

RELEVANT FACTORS

RELEVANT FACTORS

PROTOCOL TO INDIA – BELARUS TREATY

With reference to Article 4, it is understood that when establishing the “place of effective management” as used in paragraph 3 of Article 4, circumstances which may, inter alia, be taken into account are
the place where a company is actually managed and controlled,
the place where the decision making at the highest level on important policies essential for the management of a company takes place,
the place that plays a leading part in the management of a company from an economic and functional point of view and
the place where the relevant accounting books are kept.

INDIAN GUIDELINES ON POEM

PERIOD OF STAY

OTHER FACTORS

 

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ARTICLE – 4(1) OF THE INDIA UAE TREATY

ARTICLE – 4(1) OF THE INDIA UAE TREATY

For the purposes of this Agreement the term ‘resident of a Contracting State’ means:
(a) …… ; and
(b) in the case of the United Arab Emirates: an individual who is present in the UAE for a period or periods totalling in the aggregate at least 183 days in the calendar year concerned, and a company which is incorporated in the UAE and which is managed and controlled wholly in UAE.

PARTNERSHIP – LIABLE TO TAX ?

PENSION FUNDS, CHARITABLE TRUSTS – WHETHER LIABLE TO TAX ?

EXCLUSIONS:-

PROOF OF BEING “RESIDENT” OF CONTRACTING STATE

INFORMATION REQUIRED IN FORM 10 F

ARTICLE – 4(2) OF INDIA – USA TREATY – TIE BREAKER INDIVIDUAL

Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:
(a) He shall be deemed to be a resident only of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests);
(b) If the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode;
(c) If he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;
(d) If he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

ARTICLE – 4(2) – TIE BREAKER INDIVIDUAL

PERMANENT HOME

CENTRE OF VITAL INTEREST

HABITUAL ABODE

HABITUAL ABODE – FACTORS CONSIDERED BY INDIAN COURTS

NATIONALITY

 

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Article 2 – Taxes Covered under the Scope of the Treaty/ DTAA

Article 2 – Taxes Covered under the Scope of the Treaty, deals with  which  “Taxes”,  paid by the taxpayer, shall be eligible for benefit under the Treaty.

WHY IS ARTICLE 2 RELEVANT  ?

WHICH TAXES ARE COVERED ?

ARTICLE 2 (1) – INDIA NETHERLANDS TREATY

This Convention shall apply to
taxes on income and on capital
imposed on behalf of
one of the States or
of its political subdivisions or
local authorities,
irrespective of the manner in which they are levied

ARTICLE 2(1) – INDIA USA TREATY

The existing taxes to which this Convention shall apply are :

(a) In the United States, the Federal income taxes imposed by the Internal Revenue Code (but excluding the accumulated
earnings tax, the personal holding company tax, and social security taxes), and the exercise taxes imposed on insurance
premiums paid to foreign insurers and with respect to private foundations (hereinafter referred to as “United States Tax”);
provided, however, the Convention shall apply to the exercise taxes imposed on insurance premiums paid to foreign insurers only
to the extent that the risks covered by such premiums are not reinsured with a person not entitled to exemption from such taxes
under this or any other Convention which applies to these taxes ; and

 

ARTICLE 2(1) – INDIA USA TREATY

 

(a) in India :
(i) the income-tax including any surcharge thereon, but excluding income-tax on undistributed income of companies, imposed under the Income-tax Act ; and
(ii) the surtax (hereinafter referred to as “Indian tax”).
Taxes referred to in (a) and (b) above shall not include any amount payable in respect of any default or omission
in relation to the above taxes or which represent a penalty imposed relating to those taxes

 

KEY FEATURES OF ARTICLE 2

 

WHICH TAXES ARE COVERED ?

ARTICLE 2 (2) – INDIA NETHERLANDS TREATY

There shall be regarded as taxes on income and on capital
all taxes imposed on total income,
on total capital, or
on elements of income or of capital,
including taxes on gains from the alienation of movable or immovable property,
taxes on the total amounts of wages or salaries paid by enterprises,
as well as taxes on capital appreciation.

WHICH TAXES ARE COVERED  ?

KEY FEATURES

ARTICLE 2(2) – INDIA USA TREATY

The Convention shall apply also to any identical or substantially similar taxes
which are imposed after the date of signature of the Convention
in addition to, or in place of, the existing taxes.
The competent authorities of the Contracting States shall notify each other
of any significant changes which have been made in their respective taxation laws and
of any official published material concerning the application of the Convention.

KEY FEATURE OF ARTICLE 2(2) OF INDIA USA TREATY

 

ARTICLE 2 (3) – GENERAL CLAUSE

The existing taxes to which the Convention shall apply are in particular :
(a) In the XYZ :
(b) In India :

ARTICLE 2(2) – INDIA UAE TREATY

1. ……
2. The existing taxes to which the Agreement shall apply are (added <<<>>>> ) :

(a) In United Arab Emirates :
(i) income-tax ;
(ii) corporation tax ;
(iii) wealth-tax

(hereinafter referred to as “U.A.E. tax”) ;
(b) In India :

(i) the income-tax including any surcharge thereon ;
(ii) the surtax ; and
(iii) the wealth-tax

(hereinafter referred to as “Indian tax”).

ARTICLE 2(3) – INDIA GERMANY TREATY

The existing taxes to which this Agreement shall apply are in particular :
(a) in the Federal Republic of Germany :
the Einkommensteuer (income-tax),
the Korperschaftsteuer (corporation-tax),
the Vermogensteuer (capital tax), and
the Gewerbesteuer (trade tax)
(hereinafter referred to as “German tax”);

(b) in the Republic of India,
the income-tax including any surcharge tax thereon (Einkommensteuer, einschl, darauf entfallender Zusatzsteuern), and the wealth-tax (Vermogensteuer) (hereinafter referred to as “Indian tax”).

KEY FEATURES OF ARTICLE 2(3)

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How to master your speed in online tests?

Online tests are strictly time bound.  Everyone giving online test faces the generations old dilemma – the battle between accuracy and speed. You can optimize your speed only when you have a clarity of concepts and have dedicated hours of practice – practice is the master key to success.  Here are some easy ways to help you speed up your pace and perform well in online tests.

  1. Run through several aptitude tests online – Practice aptitude tests online as much as possible their format is repetitive and the more you practice the better your score will be. It is best to take several mock tests before the actual one. This gets you in the habbit of sitting for a designated period of time. Also, the more you practice the more will you be able to comprehend the kind of questions that come in, this will help you prepare better.
  2. Ensure a clutter free environment – Whilst preparing for online exams, it’s better to free yourself from all kinds of distractions. Giving online test requires you to concentrate to ensure that maximum questions get answered within the set time frame. Don’t have your family sit around when you are practicing aptitude tests.  Also, keep your surroundings clutter free, it brings a sense of calmness.
  3. Read all guidelines – Before you begin to answer the questions, please read all the guidelines carefully. Give yourself 15 minutes to read the questions and guidelines carefully. Make a note of how much time you should be spending on each question and do keep 15 minutes aside to go through all the answers marked.
  4. Don’t get stuck – Never ever get stuck or spend too much time on one question. If you are stuck, move on. Finish the questions you think are not time consuming and flag the difficult ones. Once you are done with the easier ones, if you have time left, come back to the flagged ones and try to solve them
  5. Move on – Time management is the key. Setting a time frame for different sections is important. Maths usually require more time. So, plan accordingly. Don’t get stuck or spend too much time on one question. The key is to get as many questions right in the set timeline.
  6. Use reasoning – Your aptitude test score will divulge your speed and accuracy.  Well, it is important to mark a time for each question, just don’t haphazardly try to answer them. Stay away from wild guessing! It is better to use your skills and knowledge to resolve the questions instead of picking up randomly.
  7. Read the graphs and tables – Before beginning to solve a question, it is best to study the pictorials given along. Having a clear understanding of the graphs, tables, etc. helps you not only understand the question better but also helps you attain the information that is not directly present in the question.
  8. Keep a rough sheet along – Use a spare sheet to do all your Keep enough space to practice your calculation and recheck it twice. Even a decimal missing can make you lose your desired score.
  9. Get a goodnight sleep – For a body to function to the best of its ability, it needs 7 – 8 hours of sleep. The night before the exam, do not crumble under the tension or the pressure to perform well. Give your body enough rest to cope up with the next day’s requirements. Practice meditation and yoga to activate all the senses. Exercising does help in reliving tension and helps body fight stress better.

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Benefits of Learning via an App

No more boring home works and tough class lectures! With technology progressing at an unimaginable pace, books have now been replaced with colorful pages and moving animations, interactive videos, games, and much more to make learning fun and interactive. One of the most powerful developments in education has been the arrival of learning apps. While we spent hours trying to learn algorithms, today’s generation wants to know the how of algorithms. Their love for questioning has led change in the way education and learning are perceived. Students have become a lot more receptive and even more willing to learn when learning is made fun. With app learning, children can dive into an imaginary world, to take the challenge and outsmart the opponents.  Let’s see what makes mobile learning one of the hot educational trends that have taken learning to a whole new level.

Fun – Learning: Learning via app engages both, the parents and the students. App learning makes the entire experience interactive and is seen to be an effective way to engage the students. Also, mobile apps allow students to learn at their own pace and repeat lessons, if and when required. This automatically helps the student learn better.

Recreational: In today’s time, kids want to know the ‘how ‘of everything. They want practical explanations. With mobile apps, students are at the receiving end can actually see the reason behind a proposed algorithm – it propagates active learning. Furthermore, the lessons are transformed into games to heighten the child’s interest and grasping skills.

Readiness: What makes mobile apps the preferred choice is its availability. Unlike the traditional education system, mobile apps can be used from anywhere, at any time. Also, app learning is not time-bound learning. These apps are also advantageous for students suffering from physical disabilities as they don’t have to move and attend lectures.  Anyplace can be a classroom.

Efficient Learning: App based learning enables both – smart learning and systematic learning.  Mobile apps help students lean the topic in a factual way, with real life example and situations. Unlike the conventional approach, which students find difficult to understand, with mobile based learning students don’t have to sit for hours to understand the concepts of math and science. They instead can comprehend the theories in a fun way by having a practical explanation for it.

Convenience: It’s difficult to imagine parents and kids without a phone or a tab in hand, thus making apps available to children anywhere, anytime. Learning is no more confined to the classrooms alone. Not only children, even teachers can benefit from the set of apps. These apps allow teachers to modulate the lessons according to the current needs of the class and can take help of the exercises to make learning more fun and interactive.

Systematic Updates: Unlike the traditional methods where the communication happened via a diary or notices, learning apps offer instant updates. Parents can instantly check the updates at any time, and initiate payments at their own convenience. The way the tech world is progressing, we will soon have apps with alerts, timetables, campus events, etc.

Supervision & Tracking: Learning apps allows the tailoring of class lessons according to individuals’ academic strengths and weaknesses. This helps the students to learn at their own pace. Also, since the answers are readily available, and in no time, the students as well as the parents can check the progress in real time.  Along with the advancement, parents can visualize the effectiveness of the apps in the learning and see how each app is helping the kids to improve their reading skills, comprehension power, maths, science, etc.

 

 

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5 Tips to Improve Your Memory

A healthy brain ensures a strong memory. Good memory is an important part of preparing for any examination. Whether you’re a student studying for board exams or a professional competing in the rat race, many of us struggle with it. Luckily, there are a lot of things you can do to smarten up. These 5 simple tips can help you improve your memory, and increase your retention power.

Brain workout: Memory, like muscles, needs to be used. The more we work out our brain, the better we will be able to process, remember and recapitulate information. Brain, just like the body, gets accustomed to the daily routine and thus, it is important to shake things up from time to time! The easiest way to do so is to break the monotony and develop new brain pathways. For instance, try something outside of your comfort zone, like a new music instrument or a new sport. Trying activities out of your routine gets the brain working. The more we work out our brain, the better it will be able to process and remember information.

Even though brain workout is important, it would be a mistake to stay within the four walls of your room to exercise the brain. It is important to step out in the fresh air and sweat out to get the body energized. Physical exercise helps to keep the brain stay sharp as it increases oxygen supply to the brain and helps in the release of happy brain chemicals, thus reducing stress.

Stress check: Stress has proven to be the biggest enemy for almost anyone taking an exam. Prolonged stress not only harms the overall well-being of an individual but also plays a havoc in the brain. It can damage the brain cells, eventually impacting your grades. Not only this, chronic stress can damage the hippocampus, the part of the brain responsible for the formation of new memories and also for the recapitulation of old ones.

To keep stress at bay, it is important to express oneself freely. It is also important to take some time off and participate in activities that help reduce daily work pressure. Meeting friends, having a good laugh, going for a vacation, etc. are a great way to de-stress. Following a healthy, balanced diet is also must as it helps to keep the body fueled for the day’s requirements.

Have a good laugh: Laughter is, indeed, the best medicine. Unlike other emotional responses, laughter involves different regions of the brain. Laughter not only helps relieve stress but also lightens the atmosphere. Listening to jokes, participating in fun activities, quizzes, etc. are a great way to relieve stress and help the brain function better.

Share funny incidents and never be embarrassed of yourself.  The best way to take ourselves less seriously is to talk about the times when we took ourselves too seriously. Spend time with fun-loving people, discuss funny incidents, for after all laughter is contagious.

Brain-boosting diet: Just as the body needs fuel to sustain through the day’s activities, so does the brain. Thus, it is best to incorporate certain lifestyle changes to improve memory and overall health. A diet based on fruits, vegetables, legumes, whole grains, lean protein and healthy fats and will provide essential nutrients coupled with health benefits. A balanced diet helps boost brainpower and reduces the risk of brain diseases. It is best to limit the intake of trans- and saturated fats as these have a negative impact on the brain, and often lead to impaired concentration and memory.

Get a good night’s sleep: An average adult needs between 7.5 to 9 hours of sleep. Sound sleep is critical to learning and memory. If the body doesn’t get proper rest your memory, problem-solving abilities, creativity, and critical thinking are all compromised. Sleep is essential for memory consolidation and thus, it is necessary to have a regular sleep schedule. Also, it is best to avoid the use of smartphones, tablets, etc. at night as it not only affects the eyesight but also tires the brain without actually grasping anything constructive.

 

 

 

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Tax implications – Walmart’s acquisition of Flipkart

In what is termed as the largest e-commerce deal in the world, Walmart has finally announced the acquisition of Flipkart. Based on news report, it seems that the acquisition has been made of shares of the Singapore parent of the Indian entity from the existing shareholders. This transaction, apparently, seems to be another battle in the making between the tax authorities in India, and the selling shareholders of Flipkart India.

Based on the news report, the Singapore parent has selling shareholders who are resident of US, Mauritius and India. Given that the value of the Singapore entity is most likely to be substantially derived from India, a question that naturally arises is , whether such a transfer of shares would be liable to tax in India ?

Clearly, if one were to look at the provision of the Income Tax Act, in the event the value of the Singapore parent is substantially derived from India, the shares of such entity would be treated as a capital asset situated in India, and transfer of such shares of the Singapore entity would be taxable in India under the Indian Income-Tax Act, both for the resident as well as non-resident shareholders.

If one were to evaluate the taxation impact on such transfer, it would be as under : –

 

Tax on shares sold by Indian shareholders

As per Section 5 of the Indian Income-Tax Act, Indian residents are liable to pay tax on their global income. Thus, any gain arising to the resident shareholders, from sale of stake in Singapore entity , would be entirely taxable in India, provided they had direct ownership in the Singapore parent. Due to lack of any information on this account, it may be difficult to comment, if the Indian shareholders held shares in the Singapore parent indirectly, in which case, the tax implications , may vary. Since India does not have any Controlled Foreign Corporation regulations, in case the shares are held through an Intermediary Holding company, the same may not be taxable in India.

 

Tax on Shares sold by foreign investors  

 

Given that the transfer of shares of a foreign company, which derives its substantial value from India would be taxable in India under the domestic tax laws, the taxability of foreign shareholders would also need to be looked at from the perspective of the Treaty between India and their country of residence. In this case, based on new reports and public information, it seems that the foreign investors, are registered in USA and Mauritius.

For the investors who are tax residents of USA, and eligible to the benefits of India USA Treaty, India has right to tax capital gains arising from the transfer of a capital asset situated in India, as per its domestic law. In such a case, transfer of shares of Singapore parent, which if treated as a capital asset in India, would be liable to tax in India, at the applicable rate and methodology prescribed under the IT Act.

For the investors who are tax residents of Mauritius, and eligible to the benefits of India Mauritius Treaty, under the current provisions, India also has rights to tax capital gains. However, there are grandfathering provisions in India-Mauritius tax treaty. Thus, any shares acquired before April 1, 2017 would not be taxable in India and would be taxable only in Mauritius. Consequently, transfer of shares by Mauritius Investors would not attract any tax in India, as per India-Mauritius treaty, if the investments are eligible for the grandfathering provisions.  However, one should look at whether, if the investors have structured their investments through Mauritius solely for tax purpose, even though they are tax resident of other country, GAAR provisions could be applied to disregard the Treaty benefits.

 

Withholding Tax

In the present case, where the income is liable to tax in India, the buyer, would be under an obligation to withhold appropriate tax while making payments to foreign investors, depending on their tax liabilities determined as above.

 

Non availability of carry forward of tax losses

Since there is a change of shareholding by more than 49%, any tax losses of the Indian entity, would no longer be available for carry forward for future years. However, given the limitation of 8 years for carry forward of tax losses, and the fact that online marketplace model takes years to turn profitable, one may say that these may not have any real value.

It’s a long road ahead on the tax matter for the parties involved in the transaction and the tax office. As things unfold, one would need to see, whether this is another tax dispute in the making, which only time would reveal. At this stage, if one were to go by news report, the tax office has already shown that they are willing to explore the tax aspects of this transaction, sooner, than later.

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10 things to Believe – CA May 2018 Examination Aspirants

As the day of examination appears closer (CA Examinations in May 2018), the heart beat increases a bit more, there are a lot of butterflies in the stomach, the fear and excitement creeps in, all the efforts of past few months come down to that one moment. If you can relate to these, you are like any other normal human being. The system has been designed to make you feel so, and sometime, you wonder, what it would feel like to move a step closer to or even achieving your dream of cracking through one of the toughest exams globally. As an individual, there are various beliefs we carry and read at various times and places. Personally, after being through these myself, and looking at several life situations (personal or others), I have felt that certain principle always help you feel better and move towards success. While these may not have Universal application, I am sure they do help. I have tried to summarize these for the benefit of all the Future Chartered Accountants and successful individuals, who are appearing for the examinations this May : –

  1. Preparation matters, but  the results are an outcome of concentration – Do things that help you relax and increase your concentration. A little bit of laughing and extra sleep will help you concentrate more, improve focus on questions and seek the right answers;
  2. Think of what would be the best thing that would happen, once you clear the examinations – Sometimes knowing what you are aiming for helps you hit the right Target
  3. You don’t need to beat everyone around you in the examination Hall – Don’t worry what they are doing . You only need to focus on your answer sheet that would help you get that one seat for yourself and thats what matters .
  4. Think of the moment when you last did something that you believed was difficult, or even impossible – If you were successful then, there is no reason to fear why this would be different
  5. Life is a long exam –  There are various stops, some of which matter and many of them don’t. Let this one be just another one in the journey. You reached it means you are progressing and thats what is important.
  6. Those who make your papers also went through the CA exams, and cleared them at one stage – They had there tough days and now they are giving you a tough time. Your time would also come – Be patient and take that one step now that would take you closer to that destination.
  7. Not everyone who pass, is successful and not everyone who doesn’t pass is unsuccessful. Your destiny would be decided by what you do with yourself, once you fall on either side. But leave that decision to be taken when time comes. No need to worry about it now.
  8. Its time to prove the World that they are wrong, that YOU are the winner, that your learnings and experience are far more important.
  9. Worrying about the  Paper, that is over,   can only eat and ruin the time you have for the next paper between examinations. The worries of any given paper should be handed over to the examiner alongwith the answer sheets. As you come out, think of the next one. 
  10. GOD has something good for everyone in STORE. The key to that is keep striving towards it by working hard. I know you all had worked really hard for last few months. Just keep going for the next few weeks. All the very BEST.

 

Do leave your feedback, write or connect to see if I can be of help.

 

CA Arinjay Kumar Jain

Email – arinjay2009@gmail.com

Facebook : – https://www.facebook.com/caarinjayjain

 

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I failed CA once.. what next ?

I am sure so many of us could relate to this Sentence…

Sounds HORRIFYING for those who are lucky enough not to experience this but are on their journey to CA exams, a NIGHTMARE for those who are going through it, and a BAD MEMORY for those who have been through this, but are now successful ICAI member..

But whatever we may say, the very pattern of our CA exam and the likelihood of this happening to 90-95% of the student is almost certain.. Having said this, you should bear one thing in mind, its only the bravehearts who start CA.. even as you begin, you know the road is bumpy ride.. when you knew this and still decided to tread along, why should you now fear..

As I start to write on this, I must accept I had a close shave off, with this feeling myself .. While it wasn’t the case where I failed, it was nevertheless the same feeling, as I could appear in only 3 out of 8 papers and missed clearing CA in the first attempt …

As a student, I hardly saw what Rank 2 in class was, whether in regular examination or in the Board examination, where I topped the District and was amongst first 5 students in the SRCC list (it’s a different matter I couldn’t graduate from SRCC)….

CA Inter MCQs Book

God was kind that I got good aggregate numbers in CA Foundation (CA CPT), CA Intermediate (CA IPCC), where on one hand I missed a rank by a few numbers (Sad ??? ), but on the other hand I also got a 40 at both exams in one of the subjects (and I must confessed I rejoiced this more than missing the rank)…

But now here I was, feeling dejected, demoralized, thinking how could this happen to me, is it real and wondering what to do now..  And then came the usual fear in my mind.. something which I am trying to address through this Article, and my thought process on those days .. : –

IS CA THE RIGHT COURSE FOR ME ?

It’s never too late to question, whether the path you took turned out to be a wrong one..

But before you doubt this, ask yourself, what went wrong ? Was it : –

  • Lack of interest;
  • Inability to cope up with the humongous syllabus;
  • Lack of time; or
  • Lack of knowledge

that makes you think this ?

If its time, I think that’s in your control and if you use it judicuosly, you can manage humongous syllabus as well. But if its lack of interest or relevant knowledge due to low level of basic knowledge at school level, think of it once again… But then, even before you think of this, there has to be a PLAN B.. what would you do if not CA ? Don’t chose an easy way out, because you had a difficulty.. Its very easy to give up a  tough road, but the regret later is only bigger ..

CA Inter MCQs Book

HOW WOULD I FACE PEOPLE BACK AT OFFICE ?

I would assume most of them are themselves CA or pursuing CA. If anyone in the World can understand you, and your feeling at that time, they are the ones… some of them may want to give you a valuable piece of advise, but may refrain, thinking what you may think.. do not hesitate and seek advise.. Personally, I owe a lot to my two Senior Article in the firm, where I worked.. After being dejected and demoralized for 2 weeks with the feeling of losing an attempt, these 2 Seniors voluntarily took me for an outstation audit, where they guided me on how to see through those difficult times.. I owe a lot to them personally…

WHAT IF I DO NOT PASS THE NEXT TIME AROUND ?

If you think this, you are ruining yourself, even before you are en-route your road of success.. I would say, think what I would do once I successfully get through to the next attempt.. Many a times, these thoughts would themselves take you to a level where you would focus only on success…

After the initial miss out on examinations, I was determined that the minimum that would suffice my expectation would be a Rank.. and guess what, I got one.. It’s a different matter that this time around also I had a 40 in one paper, but that didn’t matter.. FOCUS on what you WANT, and give it your best shots.. thereafter, some things are to be left to HIM…

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SHOULD I APPEAR FOR ONE GROUP OR BOTH.. WHAT IF I AM UNSUCCESSFUL IN BOTH AND CLEAR NEITHER ?

This question only YOU can answer for yourself in the best manner, as its you who knows your own strength and weakness the best, and inputs from others should only add as a support… I must say, when you ask this question from others (including if you were asking me), most of the people would have been equally (if not more) confused, if they were in your position.. While some may have piece of advise (that should be thankfully accepted), please consider this, their strength would be different from yours, their circumstances would be different from yours, so nothing customized can be applied here..

If you think one group is better, go for it.. Trust me in the long run, 6 more months you spend giving exam in 2 attempts would not matter.. Eat only what you can swallow, and your stomach is best understood by YOU..

SHOULD I JOIN SOME MORE COACHING CLASSES OR STUDY AT HOME ?

Think what additionally benefit they can give you.. If you didn’t take coaching for a subject earlier and did badly in it, this may not be a bad idea.. but if you are reasonable comfort, then I would say (and its personal view) this may be a bad investment for two reason :-

  • You would spend considerable part of you study time in only one subject;
  • This would eat up due time required for others.

I am personally not a Big Fan of Mass Coaching classes, but I do agree that they benefit you in two ways :- (a) Organized studies; and (b)  Sharing of experience gathered by faculties from n number of earlier students, that they bring on table for you…

But be rest assured,  they are only as good as your committement is..

CA Inter MCQs Book

AM I LEFT BEHIND IN LIFE WHEN MY OTHER FRIENDS HAVE MOVED ON SUCCESFULLY ?

NOT AT ALL.. If you know your stuff, when you get into practice or job, you would get your dues, albeit in due course of time.. If you have the skill, there is a lot of demand for YOU… As an employer I can say, the worst part of growing business is to get good people.. We get people with a Degree, but the degree of their knowledge is extremely low at many times.. So, as long as you are good at work and practical in approach, people would want to hire you.. atleast I WOULD, if I were to recruit you..

SINCE ITS MORE THAN FEW ATTEMPTS AND I AM YET TO BE THROUGH WITH BOTH GROUPS OF FINAL, SHOULD I SEARCH FOR A JOB ?

If you are in a financial crunch situation (which many people could be), I suggest yes.. But if not , then have a mixed approach.. work for sometime (say until 2-2.5 months before exams) with a firm, where you get knowledge, company of like minded people and start studies afresh.. However, if nothing is working out despite repeated attempts, I suggest you may consider taking a one off break from exams, work in the interim and reflect on way forward in life.. Many a time, getting out of the herd, gives you new ways (may be, new ways of looking at things/ different path)… This would help you take a better call for yourself..

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FOR THOSE WHO TOOK A JOB AT POINT 7, SHOULD I CONTINUE DOING THE JOB OR GIVE IT ANOTHER SHOT ?

You should try and give it another shot.. I have two examples, of a friend’s elder brother and my own very close friend who did this almost after 8-10 years of giving up.. And guess what, both of them got through the first time around.. they probably didn’t had fear at that time, and that’s what made them see through.. Its always good to try again, and again, until you succeed.. As you grow older, someday, you may reflect and say, IF ONLY I HAD TRIED ONCE MORE, I WOULD HAVE BEEN A CA.. don’t let this happen to you and do give it a shot.. Fortune favours the brave..

While there could be no fixed solutions, to any of the above point, as one size doesn’t  fits all, you may have to apply these to your individual circumstances.. I applied these in my life and got through .. may be it could be of some use for you as well..

I would like to end by saying, to do CA, you need to have only one belief………………….. “BELIEVE  YOURSELF AND THAT YOU CAN DO IT”… rest nothing matters and everything else would fall in place…

GOOD LUCK…..

 

Arinjay Kumar Jain, is a Chartered Accountant, who is fond of teaching and guiding young students for their careers.  An all India CA Final Rank Holder of November 2001, he worked  with leading International and M&A Tax specialist firms, last being as a Director in KPMG M&A Tax. He is now enjoying his life as an entrepreneur and can be reached at arinjay2009@gmail.com. You can also reach authors facebook page at

https://www.facebook.com/caarinjayjain

CA Inter MCQs Book