Section 1 - Transfer Pricing
- EVOLUTION OF TRANSFER PRICING IN INDIA – TRANSFER PRICING CA FINAL
- WHAT IS TRANSFER PRICING – CA Final Direct and International Tax
- EVOLUTION OF TRANSFER PRICING IN INDIA [PRE-2001 ERA] – SECTION 92 – TRANSFER PRICING CA FINAL
- MEANING OF TRANSFER PRICE
- TRANSFER PRICING METHODS
- Comparable Uncontrolled Price Method
- EVOLUTION OF TRANSFER PRICING IN INDIA [PRE-2001 ERA] – REPLACEMENT OF EXISTING LAW
- COMPUTATION OF INCOME HAVING REGARD TO THE ALP – SECTION 92 – APPLICABILITY OF ARM’S LENGTH PRINCIPLE
- COMPUTATION OF INCOME HAVING REGARD TO THE ALP – SECTION 92 – BASE EROSION CONCEPT
- ASSOCIATED ENTERPRISES – SECTION 92A (1)
- INTERNATIONAL TRANSACTION [SECTION 92B]
- ARMS’ LENGTH PRINCIPLE
- COMPUTATION OF ARM’S LENGTH PRICE [SECTION 92C]
- SELECTION OF TESTED PARTY
- SELECTION OF PROFIT LEVEL INDICATOR
- SELECTION OF MOST APPROPRIATE METHOD – RULE 10C
- DATA TO BE USED FOR ANALYZING COMPARABILITY OF AN UNCONTROLLED TRANSACTION WITH AN INTERNATIONAL TRANSACTION
- ARITHMETIC MEAN – WHEN MORE THAN ONE PRICE IS DETERMINED
- APPLICABILITY OF RANGE CONCEPT – WHEN MORE THAN ONE PRICE IS DETERMINED
- FUNCTIONS, ASSETS AND RISK (FAR) ANALYSIS
- DOCUMENTATIONS AND COMPLIANCES – DOCUMENTATION REQUIREMENT UNDER THE INCOME-TAX ACT, 1961
- FUNCTIONAL ANALYSIS
- ECONOMIC ANALYSIS
- PENALTY FOR UNDER-REPORTING OF INCOME – SECTION 270A
- PENALTY FOR MISREPORTING OF INCOME – SECTION 270A
- PENALTY FOR FAILURE TO KEEP AND MAINTAIN INFORMATION AND DOCUMENTATION – SECTION 271AA
- PENALTY FOR FAILURE TO FURNISH INFORMATION OR DOCUMENT U/S 92D – SECTION 271G
- COUNTRY BY COUNTRY REPORTING
- Domestic Transfer Pricing
- SAFE HARBOUR RULES FOR INTERNATIONAL TRANSACTION
- TRANSFER PRICING ASSESSMENT procedure in India
- APPEAL PROCEDURE
- POWER OF ASSESSING OFFICER TO DETERMINE THE ARM’S LENGTH PRICE
- REFERENCE TO TRANSFER PRICING OFFICER [SECTION 92CA]
- RECTIFICATION OF TPO ORDER
- POWERS OF TPO
- SECONDARY ADJUSTMENT – SECTION 92CE
- DISPUTE RESOLUTION MECHANISM UNDER TRANSFER PRICING
- ADVANCE PRICING AGREEMENT
- MUTUAL AGREEMENT PROCEDURE
- MISCELLANEOUS TRANSFER PRICING PROVISIONS
Section 2 - Non-Resident Taxation
- CHARGE OF INCOME TAX AND RESIDENTIAL STATUS
- RESIDENTIAL STATUS OF A COMPANY
- SCOPE OF TOTAL INCOME AND INCOME DEEMED TO BE RECEIVED IN INDIA AND ACCRUE OR ARISE IN INDIA
- TAXABILITY OF OFFSHORE FUNDS AND INCOME THROUGH OR FROM ANY PROPERTY, ASSET OR SOURCE OF INCOME IN INDIA
- SALARY PAYABLE BY GOVERNMENT FOR SERVICES RENDERED OVERSEAS AND DIVIDEND PAID BY AN INDIAN COMPANY OUTSIDE INDIA
- EXEMPT INCOME OF NON-RESIDENTS
- INTEREST AND ROYALTY AND FEES FOR TECHNICAL SERVICES
- PRESUMPTIVE TAXATION FOR NON-RESIDENTS – introduction
- Capital Gains tax provisions – CA Final Direct and International Tax Notes
- WITHHOLDING TAX FROM PAYMENTS TO NON – RESIDENTS
Section 4 - Double Taxation Relief
- CONCEPT OF DOUBLE TAXATION AND WHY IT ARISES AND TYPES OF DOUBLE TAXATION RELIEF
- COUNTRIES WITH WHICH NO AGREEMENT EXISTS UNILATERAL AGREEMENTS – SECTION 91
- TREATY PROVISION TO OVERRIDE INCOME TAX ACT AND MODE OF COMPUTATION OF INCOME OF NON-RESIDENTS
- Foreign Tax Credit in India – Rule 128 of the Income Tax Rules 1962 – CA Final International Tax Notes
Section 5 - Black Money
- KEY FEATURES OF THE BLACK MONEY ACT
- APPLICABILITY AND COVERAGE OF THE BLACK MONEY ACT – SECTION 1
- BASIS OF CHARGE – SECTION 3
- DEFINITION OF ASSESSEE – SECTION 2(2)
- APPLICABILITY OF BLACK MONEY ACT TO PERSONS RESIDENT IN INDIA
- DEFINITION OF UNDISCLOSED ASSET LOCATED OUTSIDE INDIA – SECTION 2(11)
- RELEVANT PREVIOUS YEAR FOR CHARGEABILITY TO TAX – UNDISCLOSED ASSET LOCATED OUTSIDE INDIA – SECTION 3
- VALUATION OF AN UNDISCLOSED ASSET LOCATED OUTSIDE INDIA – SECTION 3(2)
- TRANSFER OF ASSETS BEFORE VALUATION DATE
- VALUATION IN CASE OF ACQUISITION OF ASSET OUT OF CONSIDERATION OF OLD ASSET OR BANK ACCOUNT – RULE 3(3)
- MEANING OF ESTABLISHED SECURITIES MARKET – EXPLANATION 1 TO RULE 3
- MEANINGFUL ANNUAL VALUE OF SHARES TRADED ON THE EXCHANGE – EXPLANATION 1 TO RULE 3
- MEANING OF QUOTED SHARE OR SECURITY – EXPLANATION 1 TO RULE 3
- MEANING OF UNQUOTED SHARE AND SECURITY – EXPLANATION 1 TO RULE 3
- SCOPE OF TOTAL UNDISCLOSED FOREIGN INCOME AND ASSET – SECTION 4(1)
- VARIATION MADE IN FOREIGN INCOME DURING ASSESSMENT OR REASSESSMENT- SECTION 4(2)
- NON-INCLUSION OF UNDISCLOSED FOREIGN INCOME AND ASSET IN INCOME COMPUTED UNDER INCOME-TAX ACT- SECTION 4(3)
- NO DISALLOWANCE AND SET-OFF FOR COMPUTATION OF TOTAL UNDISCLOSED FOREIGN INCOME AND ASSET – SECTION 5
- DEDUCTION FROM VALUE OF UNDISCLOSED ASSET OUTSIDE INDIA
- DEDUCTION FROM VALUE OF IMMOVABLE PROPERTY OUTSIDE INDIA
- TAX AUTHORITIES UNDER THE BLACK MONEY ACT – SECTION 6
- CHANGE OF TAX AUTHORITY – SECTION 7
- POWERS OF TAX AUTHORITY
- PROCEEDINGS BEFORE TAX AUTHORITIES TO BE JUDICIAL PROCEEDINGS – SECTION 9(1)
- ASSESSMENT OF FOREIGN INCOME AND ASSETS – SECTION 10
- TIME LIMIT FOR COMPLETION OF ASSESSMENT AND REASSESSMENT – SECTION 11(1)/(2)
- NON-APPLICABILITY OF THE 2-YEAR TIME LIMIT FOR COMPLETION OF ASSESSMENT- SECTION 11(3)
- EXCLUSIONS IN COMPUTING LIMITATION PERIOD OF ASSESSMENT/REASSESSMENT – EXPLANATION 1 TO SECTION 11
- RECTIFICATION OF MISTAKE – SECTION 12
- NOTICE OF DEMAND – SECTION 13
- DIRECT ASSESSMENT OR RECOVERY NOT BARRED – [SECTION 14]
- APPEALS TO COMMISSIONER (APPEALS) – SECTION 15
- APPEAL TO APPELLATE TRIBUNAL – SECTION 18
- APPEAL TO APPELLATE TRIBUNAL – SECTION 18
- APPEAL TO HIGH COURT – SECTION 19
- APPEAL TO SUPREME COURT – SECTION 21
- REVISION OF ORDERS PREJUDICIAL TO REVENUE – SECTION 23
- REVISION OF OTHER ORDERS – SECTION 24
- PAYMENT OF TAX DURING PENDING APPEAL
- RECOVERY OF TAX DUES BY ASSESSING OFFICER -SECTION 30
- RECOVERY OF TAX DUES BY TAX RECOVERY OFFICER – SECTION 31
- MODES OF RECOVERY OF TAX DUES – SECTION 32
- TAX RECOVERY OFFICER BY WHOM RECOVERY OF TAX DUES IS TO BE EFFECTED – SECTION 33
- RECOVERY OF TAX DUES IN CASE OF A COMPANY IN LIQUIDATION – SECTION 34
- LIABILITY OF MANAGER OF A COMPANY – SECTION 35
- JOINT AND SEVERAL LIABILITY OF PARTICIPANTS -SECTION 36
- RECOVERY THROUGH STATE GOVERNMENT- SECTION 37
- RECOVERY OF TAX DUES IN PURSUANCE OF DTAA OR TAX INFORMATION EXCHANGE AGREEMENT- SECTION 38
- RECOVERY BY SUIT OR UNDER OTHER LAW NOT AFFECTED – SECTION 39
- INTEREST FOR DEFAULT IN FURNISHING RETURN AND PAYMENT OR DEFERMENT OF ADVANCE TAX – SECTION 40
- PENALTY IN RELATION TO UNDISCLOSED FOREIGN INCOME AND ASSET – SECTION 41
- PENALTY FOR FAILURE TO FURNISH RETURN FOR FOREIGN INCOME AND ASSET – SECTION 42
- PENALTY FOR FAILURE TO FURNISH INFORMATION OF FOREIGN ASSET OR FOREIGN INCOME IN RETURN OF INCOME – SECTION 43
- DETERMINATION OF VALUE OF FOREIGN BANK ACCOUNT IN INR – EXPLANATION TO SECTION 42
- PENALTY FOR DEFAULT IN PAYMENT OF TAX ARREAR -SECTIONS 44
- PENALTY FOR OTHER DEFAULTS – SECTION 45
- PROCEDURE FOR IMPOSING PENALTY – SECTION 46
- PRIOR APPROVAL OF JOINT COMMISSIONER FOR IMPOSING PENALTY – SECTION 46
- BAR OF LIMITATION FOR IMPOSING PENALTY – SECTION 47
- OFFENCES AND PROSECUTION – CHAPTER V
- AGREEMENT WITH FOREIGN COUNTRIES OR SPECIFIED TERRITORIES – SECTION 73
- MODES OF SERVING NOTICE – SECTION 74
- ADDRESS FOR COMMUNICATION OF NOTICE BY POST OR APPROVED COURIER SERVICE – SECTION 74 READ WITH RULE 14
- E-MAIL ADDRESS FOR COMMUNICATION OF NOTICE – SECTION 74 READ WITH RULE 14
- AUTHENTICATION OF NOTICES AND OTHER DOCUMENTS – SECTION 75
- NOTICE DEEMED TO BE VALID IN CERTAIN CIRCUMSTANCES – SECTION 76
- APPEARANCE BY APPROVED VALUER IN CERTAIN MATTERS OR AUTHORIZED REPRESENTATIVE – SECTIONS 77 & 78
- MEANING OF AUTHORISED REPRESENTATIVE – SECTION 78
- ROUNDING OFF OF INCOME, VALUE OF ASSET AND TAX – SECTION 79
- CONGNIZANCE OF OFFENCE – SECTION 80
- ASSESSMENT NOT TO BE INVALID ON CERTAIN GROUNDS – SECTION 81
- BAR OF SUITS IN CIVIL COURTS – SECTION 82
- INCOME-TAX PAPERS TO BE AVAILABLE FOR THE PURPOSES OF THE BLACK MONEY ACT – SECTION 83
- APPLICATION OF PROVISIONS OF THE INCOME-TAX ACT – SECTION 84
- AMENDMENT OF PREVENTION OF MONEY-LAUNDERING ACT, 2002 – SECTION 88
Section 6 - Overview of Double Tax Convention
Section 7 - Application and interpretation of tax treaties
- ORIGINATION OF INTERNATIONAL TAX LAW AND DOUBLE TAXATION AND CONNECTING FACTORS
- DEFINITION OF TREATY , DOUBLE TAXATION AVOIDANCE AGREEMENT
- DIRECTIVE PRINCIPLES FOR INTERNATIONAL AGREEMENTS UNDER INDIAN CONSTITUTION AND ROLE OF VIENNA CONVENTION IN APPLICATION AND INTERPRETATION OF TAX TREATIES
- INDIAN JUDICIARY ON PRINCIPLES OF INTERPRETATION IN VIENNA CONVENTION AND ARTICLE 33: INTERPRETATION OF TREATIES AUTHENTICATED IN TWO OR MORE LANGUAGES INDIA AND TAX INFORMATION AND EXCHANGE AGREEMENT (TIEA)
- INTERPRETATION OF TREATIES – MONIST VIEW , DUALISTIC VIEW AND TREATY OVER DOMESTIC LAW
- INTERNATIONAL TAX CONFLICTS AND DOUBLE TAXATION INTRODUCTION AND BASIC PRINCIPLES OF INTREPRETATION OF A TREATY
- CUSTOMARY INTERNATIONAL LAW OF TREATY INTERPRETATION – OBJECTIVE INTERPRETATION , SUBJECTIVE INTERPRETATION AND PURPOSIVE INTERPRETATION
- CUSTOMARY LAW OF TREATY INTERPRETATION PRINCIPLE OF EFFECTIVENESS AND CONTEMPORANEA EXPOSITIO AND LIBERAL CONSTRUCTION
- EXTRINSIC AIDS TO INTERPRETATION OF A TAX TREATY
- OBJECTIVES OF TAX TREATIES ,OBJECTIVE OF DTAAs AND PURPOSE OF ENTERING INTO A DTAA INTO INDIAN CONTEXT – SECTION – 90(1) ?
Section 8A - Anti-Avoidance Measures
Section 8B - BEPS
Section 9 - E-Commerce
- HOW BUSINESS IS TRANSACTED THROUGH E-COMMERCE AND PREVALENT BUSINESS FORMS IN VARIOUS SEGMENTS OF DIGITAL ECONOMY?
- GROWTH OF E-COMMERCE AND TAXATION ISSUES ON E-COMMERCE ?
- PERMANENT ESTABLISHMENT IN E-COMMERCE AND DETERMINATION OF NATURE OF INCOME IN E-COMMERCE TRANSACTIONS?
- OECD RECOMMENDATIONS UNDER ACTION PLAN 1 OF BEPS TO TACKLE TAXATION ISSUES OF E-COMMERCE AND INTRODUCTION OF NEW CHAPTER OF EQUALIZATION LEVY ?
- WHO IS LIABLE TO DEDUCT EQUALISATION LEVY AND WHOSE INCOME IS LIABLE FOR DEDUCTION OF EQUALISATION LEVY ?
Article on CA Students
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MCQ - CA Final
COUNTRIES WITH WHICH NO AGREEMENT EXISTS UNILATERAL AGREEMENTS – SECTION 91
COUNTRIES WITH WHICH NO AGREEMENT EXISTS – UNILATERAL AGREEMENTS – SECTION 91
CONDITIONS FOR CLAIMING RELIEF U/S 91(1) : –
- Where any income arises, to an assessee, in countries with which India does not have any DTAA, relief would be granted under Section 91 where all the following conditions are fulfilled : –
- Assessee is a tax resident in India during the relevant PY , in which the income is taxable .
- Income accrues or arises to him outside India and is not deemed to accrue or arise in India during the previous year .
- Assessee has been subjected to income-tax on such income in foreign country and has paid tax thereon in foreign country .
- India does not have any agreement for relief from double taxation with the country where income has accrued or arisen.
EXAMPLE – 1 – NO DTAA WITH COUNTRY
- A received certain consultancy income from Country X, wherein tax @ 10% has been withheld under local laws, as no Treaty exist. As he is tax resident of India, he is liable to tax on his global income in India. Can he claim credit for tax withheld in Country X?
- Section 91 specifies that if a person resident in India has paid tax in any country with which no DTAA (treaty) under section 90 exists, then, for the purpose of relief or avoidance of double taxation, a deduction is allowed from income-tax payable by him, of a sum calculated on such doubly taxed income –
- At Indian rate of tax or the rate of tax of such foreign country, whichever is lower, or
- At the Indian rate of tax, if both the rates are equal .
- Accordingly, the assessee shall be allowed a deduction from the Indian income-tax payable by him as per the scheme of section 91 .
COMPUTATION OF RELIEF U/S 91(1)
Assessee shall be entitled to a deduction from the Indian income-tax payable as under: –
- A sum calculated on such doubly taxed income at the
Indian rate of tax (i. e., average rate of income-tax) or
the rate of tax in the said country,
whichever is lower, or
- at the Indian rate of tax if both the rates are equal
MEANING OF INDIAN RATE OF TAX – SECTION 91
“Indian rate of tax” means the rate determined by
- dividing the amount of Indian income-tax [after deduction of any relief due under the provisions of the IT Act, 1961 but before deduction of any double taxation relief due to the assessee] by total income
FORMULA : –
Income-Tax x 100
MEANING OF RATE OF TAX OF SAID COUNTRY– SECTION 91
“Rate of tax of the said country” means income-tax and super-tax
- actually paid in that country in accordance with the corresponding laws in force in the said country
after deduction of all relief due, but before deduction on account of double taxation relief due in the said country,
- the whole amount of income assessed in the said country.
INCOME-TAX IN OTHER COUNTRIES – MEANING
“Income-tax” in relation to any country includes any excess profits tax or business profits tax charged on the profits by the Government of any part of that country or a local authority in that country.
EXAMPLE – 2 – NO DTAA WITH COUNTRY – RELIEF AVERAGE RATE OF TAX
- Mahesh, an Individual resident in India, is a famous anchor and host deriving income of Rs 2,00,000 from work performed outside India during the PY 2017-18 on which tax of Rs 20,000 has been deducted. India does not have any DTAA with that country.
- His income in India amounted to Rs 4,00,000. He has contributed Rs 1,00,000 in PPF and paid a life insurance premium of Rs 1,00,000.
- Compute the tax liability of Mahesh for the Assessment Year 2018-19?
Where any income arises to an assessee in countries, with which India does not have any double taxation agreement, relief would be granted under Section 91 provided all the following conditions are fulfilled:
- Assessee is a tax resident in India during the previous year in which the income is taxable .
- Income accrues or arises to him outside India .
- Income is not deemed to accrue or arise in India during the previous year .
- Such income has been subjected to income-tax in the foreign country in the hands of the assessee .
- Assessee has paid tax on the income in the foreign country .
Since all the above conditions are satisfied, Mahesh is eligible for deduction u/s 91
Computation of total income of Mahesh for the AY 2018-19
Tax on Total income
EXAMPLE – 3 – NO DTAA WITH COUNTRY – RELIEF – AVERAGE RATE OF TAX – TWO COUNTRIES DEDUCTION
- Ramesh, an Individual resident in India, earned following income in India, Country A and Country B:
- India does not have a DTAA with Country A and Country B .
- Tax rates in Country A and Country B are 5% and 20%, respectively .
- Compute the total income and tax payable by Ramesh for AY 2018-19 ?
SOLUTION: –Computation of total income of Ramesh for the AY 2018-19
SOLUTION : –Computation of total income of Ramesh for the AY 2018-19
Computation of tax liability of Ramesh for the AY 2018-19
Calculation of Rebate for the AY 2018-19
SOLUTION : –
Where any income arising to an assessee in countries with which India does not have any double taxation agreement, relief would be granted under Section 91 provided all the following conditions are fulfilled : –
a) Assessee is a tax resident in India during the previous year in which the income is taxable .
b) Income accrues or arises to him outside India .
c) Income is not deemed to accrue or arise in India during the previous year .
d) Such income has been subjected to income-tax in the foreign country in the hands of the assessee .
e) Assessee has paid tax on the income in the foreign country .
Since all the above conditions are satisfied, Mahesh is eligible for deduction u/s 91