SVKM’s NMIMS ASMSOC – Course Outline

Course 742FI0C006
Code
Course Direct Taxes
Title
Course Mr. Raj Shah
Instructor/s
Course 4
Credit
Program B.Com.(Hons.) – Semester III
and
Semester
Pre- Students should be well versed with basic accounting concepts, preparation of
Requisite books of accounts and financial statements.
Learning 1. To provide working knowledge and equip students with application of principles
Objectives and provisions of Income-tax Act, 1961 and Income Tax Rules, 1962 for relevant
assessment year (PLO 2b)
2. To understand, demonstrate & be well versed with the process of computation of
total income & determine tax liability for an individual & HUF. (PLO 1c)
3. To ensure that the student is able to interpret the law and understand the
amendments to the law in future (PLO 1b)
Learning At the end of the course students should be able to:
Outcomes 1. Understand & apply the basic concepts of income tax law and determine the
residential status of an individual & HUF
2. Compute income under all the five heads of income under income tax law for
individual & HUF
3. Understand & apply provisions of clubbing of income, setoff and carry
forward of losses, deductions from gross total income and computation of
total income & tax there on for an individual & HUF including computation of
tax under optional tax regime
4. Have working knowledge of various income tax provisions so as to choose
between two tax regimes based on taxability.
Course The course introduces Income Tax and various provisions of income tax having
Description impact on total income and tax outflow thereby enabling the students to apply it
practically and aiding in tax planning.
Evaluation Specific Assessment % Assessment of Intended CLOs to
Pattern Methods / Weightage Learning (AOL) beAssessed
Task Instruments

C C C C C
L L L L L
O O O O O
1 2 3 4 5
TEST I 10 Marks Tests
TEST II 10 Marks Tests
TEST III 10 Marks Tests
Mid-term examination 20 Marks Tests
Term-end examination 50 Marks Tests

1
 Course Session Plan
Law applicable for Assessment Year 2022-23 shall be taught during the term

Session Topics / Module Chapters (Mention Page

Numbers) / Articles / Cases
/ Material and
Activities
Module I
1 – 10 PRELIMINARY Part 1: Chapter 1: Systematic
Definitions: Approach to Income Tax –
 Sec 2(1A) – Agricultural Income Dr. Girish Ahuja & Dr. Ravi
 Sec 2(7) – Assessee Gupta – Commercial Law
 Sec 2(8) – Assessment Publishers (India) Pvt. Ltd.
 Sec 2(9) – Assessment year
 Sec 2(24) – Income Lectures, power point
presentations and caselets
 Sec 2(25A) – India
(class exercise as well as
 Sec 2(31) – Person
home assignments), self-
 Sec 2(34) read with Sec 3 – Previous year learning material

Explaination of basic concepts:

 Sec 2(45) – Total income
 Sec 80B – Gross total income
 Sources of income (capital and revenuereceipts)
 Heads of income
 Charge of Income Tax (Sec 4)

Introduction to Relevant components of Finance Act relating to

Direct Taxes & Computation of tax:
 Rates of tax for all types of individuals and HUF only
along with Health & Education cess
 Aggregation of agricultural income for rate purpose
i.e. partly agricultural and partly nonagricultural
income along with tax computation thereof including
Rules 7A, 7B& 8
 Surcharge on income tax & marginal relief
 Sec 288A – Rounding off of total income
 Sec 288B – Rounding off amount payable and refund
due
 Rebate u/s 87A
 Section 115BAC – Optional scheme of payment of tax
by individual & HUF (understanding, numerical and
analysis of the choice between regular scheme of
payment of tax and optional scheme of payment of tax
u/s 115BAC)
Part 1: Chapter 2: Systematic
BASIS OF CHARGE
Approach to Income Tax –
 Sec 6 – Residential status of Individual andHUF only Dr. Girish Ahuja & Dr. Ravi
 Sec 5 – Scope of total income (on the basisof residential Gupta – Commercial Law
status including Section 7 & 9) Publishers (India) Pvt. Ltd.

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 INCOMES WHICH DO NOT FORMPART OF Part 1: Chapter 3: Systematic
TOTAL INCOME (Exempt Incomes) Approach to Income Tax –
 Sec 10(1) – Agricultural Income Dr. Girish Ahuja & Dr. Ravi
 Sec 10(2) – Sums received from HUF bymember Gupta – Commercial Law
 Sec 10(2A) – Share of Profits from firm Publishers (India) Pvt. Ltd.
 Sec 10(11A) – Payment from SukanyaSamriddhi
Account
 Sec 10(16) – Scholarships
 Sec 10(17A) – Awards and rewards
 Sec 10(18) – Pension and family pension in specific
cases
 Sec 14A read with Rule 8D – Expenditure incurred in
relation to income not includiblein total income
(Head Specific exemptions are covered under relevant
heads of Income)

Learning outcomes:
At the end of this module students will be ableto:
1.Give characterization based on definitions 2.Determine
residential status of an individual
and HUF
3. Determine taxability of income
4. Calculate the amount of tax payable by an individual
and HUF
5. Determine amount of tax payable in cases where there
is aggregation of agricultural and nonagricultural
income
6. Choose between the regular tax payment scheme and
tax payment scheme u/s 115BAC
11 – 24 Module II Part 1: Chapter 4: Systematic
INCOME FROM SALARY Approach to Income Tax –
Definitions: Dr. Girish Ahuja & Dr. Ravi
Sec 17(1) – Salary Gupta – Commercial Law
Sec 17(2) – Perquisite Publishers (India) Pvt. Ltd.
Sec 17(3) – Profits in lieu of salary (including but not
restricted to Keyman insurance poicy) Lectures, power point
presentations and numericals
Exempt incomes and retirement benefits in relation to salary (class exerciseas well as home
and respective rules relating thereto with reference to Sec assignments)
115BAC as applicable:

 Sec 10(5) read with Rule 2B – Leave Travelconcession

or assistance
 Sec 10(13A) read with Rule 2A – HouseRent
Allowance (HRA)
 Sec 10(14) read with Rule 2BB – SpecialAllowances
(only general allowances applicable to most employees
to be covered, allowances in relation to specified areas
or specified workto be ignored)
 Sec 10(10A) – Commutation of Pension (Uncommuted
pension also should becovered)
 Sec 10(10AA) – Leave Encashment

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  Sec 10(10) – Gratuity
 Sec 10(11) & Sec 10(12) – Payments from Provident
Fund (Statutory, public,recognised and unrecognised)
 Sec 10(10C) read with Rule 2BA – Voluntary
Retirement Scheme
 Sec 10(12A) & Sec 10(12B) – Payments from National
Pension Scheme
 Sec 16 – Deductions from salary
 Taxability of perquisites – Students should be able to
identify whether a certain perquisite is taxable or not –
Part 1: Chapter 5: Systematic
including for specified employees (valuation of
Approach to Income Tax –
perquisites is excluded)
Dr. Girish Ahuja & Dr. Ravi
INCOME FROM HOUSE PROPERTY Gupta – Commercial Law
 Sec 23: Annual value how determined (including Publishers (India) Pvt. Ltd.
vacant property) and Computation of income for Let
Out Property (LOP), Self Occupied Property (SOP),
Deemed Let Out Property and Property heldas stock in
trade
 Sec 27 – Deemed owner: meaning and applicability
 Sec 24 – Deductions from income from house property
 Sec 25 – Amount not deductible from income from
house property
 Sec 25A – Special provision for arrears of rent and
unrealized rent received subsequently
 Sec 26 – Property owned by co-owners and its income
calculation
Impact if an assesse opts for optional tax regime u/s
115BAC, if any.

Learning outcomes:
At the end of this module students will be ableto:
1. Compute the income from Salaries(excluding
valuation of perquisites)
2. Compute income under House property
3. Choose properties to be self-occupied or deemed
let out
ICA One: 10 marks consisting of Module I and Module II
25 – 40 Module III Part 1: Chapter 6: Systematic
PROFITS AND GAINS OF BUSINESS OR Approach to Income Tax –
PROFESSION Dr. Girish Ahuja & Dr. Ravi
(Excluding presumptive taxation, income computation Gupta – Commercial Law
and disclosure standards and provisions applicable only Publishers (India) Pvt. Ltd.
to specific businesses but including Keyman insurance
policy) Lectures, power point
Definitions: presentations and numericals
 Sec 2(13) – Business (class exerciseas well as home
 Sec 2(29BA) – Manufacture assignments)
 Sec 2(36) – Profession

Sec 29 – Computation of profits and gains of business or

profession

4
 Admissible expenses:
 Sec 30 – Rent, rates, taxes, repairs andinsurance for
buildings
 Sec 31 – Repairs and insurance ofmachinery,
plant and furniture
 Sec 32 – Depreciation – normal & additional – assets put
to use for less than 180 days – Block of Assets –
power sector undertaking – unabsorbed depreciation,
 Sec 35 – Expenditure on scientific research
 Sec 35D – Amortisation of certainpreliminary expenses
 Sec 36 – Other deductions (only general expenses to
be covered – expenses applicable to specific businesses
/ specific items to be ignored)
 Sec 37 – General
Inadmissible expenses:
 Sec 40(a) – Amounts not deductible (only general
expenses to be covered – expenses applicable to
specific businesses / specific items to be ignored)
 Sec 40A – Expenses or payments not deductible in
certain circumstances
 Sec 43B – Certain deductions to be only on actual
payment
Mid Term Test: 20 marks consisting of all topics up-to Profits and gains of business or profession

Part 1: Chapter 7: Systematic

CAPITAL GAINS
Approach to Income Tax –
Definitions:
Dr. Girish Ahuja & Dr. Ravi
 Sec 2(14) – Capital asset Gupta – Commercial Law
 Sec 2(47) – Transfer Publishers (India) Pvt. Ltd.
 Sec 2(22B) – Fair market value
 Sec 2(29A) – Long term capital asset
 Sec 2(42A) – Short term capital asset

Chargeability, computation, exemptions and taxability:

 Sec 45 – Chargeability of capital gains including but
not restricted to conversion of capital asset into stock in
trade, compulsoryacquisition under any law
 Sec 47 – Transactions not regarded as transfer
 Sec 49 & Sec 55 – Cost of acquisition (COA)
 Sec 55 – Cost of improvement (COI)
 Sec 48 – Mode of computation of capitalgains &
indexation of COA & COI
 Sec 51 – Advance money received
 Sec 50 – Special provision for computationof capital
gains in case of depreciable assets
 Sec 111A, Sec 112 & 112A – Tax on STCG& LTCG
 Capital gains on Self-generated assets –bonus shares,
Goodwill
 Exemption – Sec. 54, 54B, 54EC, 54F with capital gains
account scheme under the above sections, wherever
applicable
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 Capital gains not chargeable to tax
 Sec 10(33) – Capital gain on transfer of unit of UTI
 Sec 10(37) – Capital Gain on transfer of land used for
agricultural purposes not to be charged in certain case
 Sec 10(34A) – Income arising on account of buy back of
shares
 Sec 10(43) – Any amount received either in lump sum
or in installment under the schemeof reverse mortgage

Learning outcome:
At the end of this module students will be ableto:
1. Compute profits and gains of business or profession
(Excluding presumptive taxation, income computation
and disclosure standards and provisions applicable
only to specific businesses)
2. Compute capital gains arising from transfer of capital
asset
3. Compute tax in relation to capital gains
4. Identify avenues that can be used in order to save
capital gain tax
ICA Two: 10 marks consisting of Capital Gains
41 – 48 Module IV Part 1: Chapter 8: Systematic
INCOME FROM OTHER SOURCES Approach to Income Tax –
(Excluding income computation and disclosure Dr. Girish Ahuja & Dr. Ravi
standards) Gupta – Commercial Law
 Sec 56 – Chargeability of income from other sources Publishers (India) Pvt. Ltd.
(including but not restricted to Keyman insurance
policy) Lectures, power point
Different types of Income from Other Sources presentations and numericals
(excluding deemed dividend) (class exerciseas well as home
Casual & Non-Recurring Receipt (winnings from assignments)
lotteries, crossword puzzles, races including horse
races, card games and other games of any sort or
gambling or betting of any form or nature
whatsoever) including Sec 115BB in relation to
computation of tax on suchincome
 Sec 57 – Deductions Part 1: Chapter 9: Systematic
 Sec 58 – Amounts not deductible Approach to Income Tax –
Dr. Girish Ahuja & Dr. Ravi
INCOME OF OTHER PERSONS, INCLUDED IN Gupta – Commercial Law
ASSESSEE’S TOTAL INCOME Publishers (India) Pvt. Ltd.
 Sec 60 – Transfer of income where there is no transfer
of assets
 Sec 63 – Definition of "Transfer" and "Revocable
transfer"
 Sec 61 – Clubbing of income in case of revocable
transfer of assets
 Sec 62 – Transfer irrevocable for a specifiedperiod
 Sec 64 – Income of individual to include income of
spouse, minor child, etc.
 Sec 65 – Liability of person in respect of income

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 included in the income of another person
 Sec 10(32) – Exemption in respect of clubbing of Part 1: Chapter 10:
income of a minor child Systematic Approach to
Income Tax – Dr. Girish
AGGREGATION OF INCOME AND SET OFF OR Ahuja & Dr. Ravi Gupta –
CARRY FORWARD OF LOSS Commercial Law Publishers
Set off of losses: (India) Pvt. Ltd.
 Sec 70 – Loss from one source against income from
another source under the samehead of income
 Sec 71 – Loss from one head against income from
another

Carry forward of losses:

 Sec 71B – Carry forward and set off of lossfrom house
property
 Sec 72 – Carry forward and set off of business losses
 Unabsorbed depreciation
 Sec 73 – Losses in speculation business
 Sec 74 – Losses under the head "capitalgains"
 Sec 74A – Loss from the activity of owning&
maintaining race horses
ICA Three: 10 marks consisting of income from other sources, clubbing of income and setoff and carry
forward of losses
DEDUCTIONS TO BE MADE IN Part 1: Chapter 11:
COMPUTING TOTAL INCOME Systematic Approach to
Sec 80C, 80CCC, 80CCD, 80CCE, 80D,80DD, 80E, 80EE, Income Tax – Dr. Girish
80EEA, 80EEB, 80GG, 80TTA, 80TTB, 80U Ahuja & Dr. Ravi Gupta –
Commercial Law Publishers
Learning outcome: (India) Pvt. Ltd.
At the end of this module students will be ableto:
1. Compute income from other sources for an individual
/ HUF
2. Determine whether clubbing provisions are applicable
& if so, use them to determine total income
3. Determine whether there is any scope for setoff of
losses or for carry forward of losses & if so, apply the
provisions in calculating the total income
4. Determine whether the deductions (as specified) can
be claimed & if so use them in determining total
income
49 – 54 Module V Part 1: Chapter 1, 12, 13, 15,
COMPUTATION OF TOTAL INCOME &TAX 16: Systematic Approach to
PAYABLE – AGRICULTURAL &NON – Income Tax – Dr. Girish
AGRICULTURAL INCOME – TDS, ADVANCE TAX & Ahuja & Dr. Ravi Gupta –
INTEREST Commercial Law Publishers
Computation of tax liability of an individual / HUF (India) Pvt. Ltd.
having multiple income sources including but not
restricted to agricultural income, casual income, clubbing Lectures, power point
of income, set-off of losses and carry forward of losses presentations and numericals
along with rounding off of total income, amount of tax (class exerciseas well as home
payable and refund due assignments)

Tax deduction at source (TDS):

7
  Sec 192 – TDS from salary
 Sec 193 – TDS on interest on securities
 Sec 194 – TDS on Dividend
 Sec 194A – TDS on interest other thaninterest on
securities
 Sec 194B – TDS on winnings from lottery /crossword
puzzle
 Sec 194BB – TDS on winnings from horseraces
 Sec 194I – TDS on Rent
 Sec 194J – TDS on fees for professional /technical
services

Advance Tax: (only for individual & HUF):

 Sec 207 & 208 – Liability for payment ofadvance tax
 Sec 209 & 210 – Computation of advancetax
 Sec 211 – Installments of advance tax anddue dates

Interest:
 Sec 234A – Interest for default in furnishingreturn of
income
 Sec 234B – Interest for default in paymentof advance
tax
 Sec 234C – Interest for deferment ofadvance tax
 Sec 234F – Fee for default in furnishing return of
income.

Learning outcome:
At the end of this module students will be ableto:
1. Compute tax payable along with interest if any or
determine the amount of refund to be claimed by an
individual / HUF
2. Calculate the amount of TDS for specific transactions
3. Determine the amount of advance tax payable along
with the installments and dates of payment
55 – 60 Module VI ICAI – CA Final study
INTRODUCTION TO INTERNATIONALTAXATION material – Paper-7: Direct
& OPERATIONALLASPECTS Tax Laws and
OF DIRECT TAXES International Taxation –
 Double taxation Avoidance Agreement Module 4 – Chapter 3 –
(DTAA): agreement with foreign countries (meaning) Page 3.9
 Sec 91 – Unilateral relief: Relief if there is no DTAA
Lectures, power point
Learning outcome: presentations and
At the end of this module students will be able to: numericals
1.Determine the quantum of unilateral relief and
understand the applicability of DTAA
Prescribed Text Book:
 Ahuja, Girish and Ravi Gupta – Systematic Approach to Income Tax. (For Assessment Year
Reading
List and 2022-23)
References
Prescribed Reference Books:
 Singhania, Vinod K. and Monica Singhania. Students Guide to IncomeTax. (For
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 Assessment Year 2022-23)
 Lal, B.B. Income Tax Law and Practice. (For Assessment Year 2022-23)
 Singhania, Vinod K. and Kapil Singhania. Tax Computation on CD. (For Assessment Year
2022-23)
 Finance Act 2021

Web References:
 www.incometaxindia.gov.in
 www.incometax.gov.in
 www.manupatrafast.com
 www.icai.org
Note:
 The Syllabus is restricted to study of particular sections, specifically mentioned rules andnotifications
only.
 Study of all the sections / rules should be done from the point of view of an individualand an HUF
only
 All Modules / units include computational problems / Case Study / Case Laws.
 The Law in force on 1st April immediately preceding the commencement of Academic year will be
applicable for ensuing examinations. i.e Assessment Year 2022-23

Prepared by Faculty Approved by Program Approved by Associate

Members Chairperson Deans
Mr. Raj Shah

Approved by I/C Dean –

ASM SOC