SHORT QUESTIONS CORPORATE TAX PLANNING

¡  SHORT QUESTIONS –CORPORATE  TAXATION

¡  CORPORATE TAX PLANNING

¡  DIFFERENCE BETWEEN TAX PLANNING, TAX AVOIDANCE AND TAX EVASION

¡  INFRASTRUCTURE FACILITY

1.       It means the following:-

2.       A road including toll road, a bridge or a rail system

3.       Widening of existing road by constructing lanes or a part of highway project

4.       A water supply project, water treatment system, irrigation project, sanitation and sewerage system or solid waste mgmt system

5.       A highway project including housing or other activities being integral part of the highway project

6.        A port,airport,inland waterway, inland port or navigational channel in the sea

¡  Sec 80-IA

1.       Assessee who are engaged in the business of providing infrastructure facility are eligible for the purpose of deduction.

2.       Conditions are : -It should be Indian company or consortium of such companies or company established under Central or state act.

3.       Engaged in the business of developing,operating,maintaining any infrastructure facility

4.       Started the work on or after 1.4.1995

5.       Entered into agreement with central/state or a local authority for developing or operating and maintaining or developing, operating and maintaining such infrastructure facility.

6.       Deduction are allowed for 10 consecutive assessment years. 100% of profit eligible for this deduction.

¡  Tax provisions for Non resident

¡  The following incomes whatever sources derived from part of total income in the case of Non residents

1. Any income which is received or is deemed to be received in India during the relevant previous year by or on behalf of such person
2. Any income which accrue and arise or is deemed to accrue or arise to him in India during the relevant previous year
3. Tax provisions relating to computation of Income Of Non Resident

¡  Special tax provisions

1.       Specified Rates on dividend and interest income

2.       Provisions relating to appointment of agents of Non Resident

3.       Non resident and advance ruling system

¡  ADVANCE RULING

1.        With a view to avoiding a dispute in respect of assessment of income tax liability in the case of non resident. A scheme of advance ruling was introduced by incorporating Chapter XIX-B in the income tax act 1961. The scheme enables the nonresident to obtain in advance a binding ruling from the authority  for advance ruling on the issue which could arise in determining their tax liability so that time consuming and expensive appeals can be avoided.

2.       Advance ruling can be sought by a non resident or resident having transactions with non resident or  a resident or a public sector company

¡  Compensation package

¡  Compensation Package does not have any statutory definition yet it is used very much. It could also be called salary package, gross salary, remuneration to employee, cost to company. Compensation package means various forms of payment made by employer to their employees as part of remuneration. It does not mean only salary or wages but includes various forms of salary such as basic salary,allowances,perquisites,bonus, leave salary,retirement benefit like provident funds gratuity etc

¡  Taxation Of Compensation package

1.       Section 15-17 of income tax deals with meaning of salary, forms of salary, basis of tax ability of salary.

2.       Rule 3 of income tax rules 1962 specify the valuation of various perquisites given by employer

3.       Section 10 specifies exemption of various salary income

4.       Section 89 specifies the procedure to avail relief in case of arrears of salary