Direct and Indirect taxes is a subject that appears in sem 4 of your BMS. After learning accountancy and cost accountancy, this is a subject which is related to accounts but has no similarities to it at all. Let us go through the syllabus before we go ahead in trying to understand how to score:
DIRECT AND INDIRECT TAXES
I) Basic Terms(S: 2,3 and 4)
Assessee
Assessment Year
Annual Value
Business
Capital Assets
Income
Person
Previous Year
Transfer
Scope of Total Income(S: 5)
Residental Status(S: 6)
II) Heads of Income(S: 14; 14A)
a. Salary(S 15 to 17)
b. Income from House Properties(S 22 to 27)
c. Profit and Gain Business
(S:28,30,31,32,35,35D,36,37,40,40A & 43B)
d. Capital Gain (S: 45,48,49,50,50B,50C)
e. Income from Other Sources (S:56 to S:59)
Exclusion from Total Income (S: 10)
Exclusion related to specified heads to be covered with
relevant head, eg. Salary Business Income, Capital Gain,
Income from Other Sources
a. Deduction from Total Income
S 80C, 80CCC, S80D, S80DD, S80E
b. Compration of Total income for Individual
Indirect Tax – Service Tax
III) Basic Terms
Taxable Service
Input Service
Output Service
Provision Related to some important services
Practicing Chartered Accountants
Business Auxiliary
Commercial Training & Coaching
Courier Services
Other Important aspects
Valuation of Taxble Service(Ind Abarements)
Service Tax and Cess Payable
E VAT Credit related to Service Tax(Only Basic Principles)
Registration & Returns
Direct Tax –
Indirect Tax – MV – VI
Definitions
Section 2 (4) Business
2 (8) Dealers
2 (12) Goods
2 (13) Importer
2 (15) Manufacture
2 (20) Purchase Price
2 (22) Resale
2 (24) Sales
2 (25) Sales Price
2 (27) Service
2 (33) Turnover of Sales
Incidence of Levy of Tax
See 3 Incidence of Tax
See 4 Tax Payable
See 5 Tax Not Leviable I Certain Goods
See 6 Levy of Sales Tax on goods specified in he schedule
See 7 Rate of tax on Packing Material
See 8 Certain Sale & Purchase Not Liable for Tax
Payment of Tax and Recovery
Section 12 Composition of Tax
Set Off Refund etc.
Section 48 & 49 Set Off Refund etc. along with rules 52, 53, 54, 55
TIPS:
- This subject is semi-practicle and although theory accounts for only 25% of your paper, it is important.
- Usually faculty provide you with a question bank for the theory, make sure you do only those questions as all the importance in this subject goes to the sums.
- For direct taxation as well as indirect taxation practice is extremely important.
- New formats and new concepts are difficult to grasp all at once, but taxation is one subject that will come in use throughout your life so make sure that you study this subject well.
- Understanding the concepts is very important as this understanding will be the basis for solving your sums and attempting your theory.
- A very interesting subject, taxation has a completely different outlook towards its direct and indirect part so dont get confused once you learn both.
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