CA Intermediate Revision Lecture Series

Introduction

• Targeted for students appearing in May 24 or November 24 CA intermediate examinations.
• Focus on the Taxation paper: Income Tax and GST.
• Discussion will cover all chapters and topics as per the syllabus and study material.
• Students can download the lecture material from rajatmogha.com under the CA intermediate section.

Basic Concepts of Income Tax

Importance of Taxation

• Taxes are essential for economic development (education, health, infrastructure, defense).
• Taxes are a major source of revenue for the government.
• Types of taxes: Direct Taxes and Indirect Taxes.

Direct vs Indirect Taxes

• Direct Tax: Burden and collection on the same entity (e.g., Income Tax).
• Indirect Tax: Burden and collection on different entities (e.g., GST, Customs Duty).
• Article 245: No tax collection without law.

Components of Income Tax Law

• Income Tax Act 1961.
• Annual Finance Act.
• Income Tax Rules.
• Notifications and Circulars.
• Court Decisions.

Definitions

• Assessee: Person liable for tax or other sums under the act.
• Types of persons: Individual, HUF, Company, Partnership, AOP, BOI, Local Authority, Artificial Juridical Person.

Assessment Year vs Previous Year

• Assessment Year: Year following the previous year, income is assessed.
• Previous Year: Year in which income is earned.
• Special cases where income is assessed in the same previous year.

Heads of Income

• Five heads: Salary, House Property, PGVP (Profits and Gains of Business or Profession), Capital Gains, IFOS (Income from Other Sources).

Income Tax Rates

For Individual, HUF, AOP, BOI, Artificial Juridical Person

• Default Tax Regime (New Regime):
  • Up to 3 lakh: Nil
  • 3 - 6 lakh: 5%
  • 6 - 9 lakh: 10%
  • 9 - 12 lakh: 15%
  • 12 - 15 lakh: 20%
  • Above 15 lakh: 30%
• Optional Scheme (Old Scheme):
  • Up to 2.5 lakh: Nil
  • 2.5 - 5 lakh: 5%
  • 5 - 10 lakh: 20%
  • Above 10 lakh: 30%
• Senior citizens have different exemptions in the old scheme.

Rebate 87A

• Available to resident individuals.
• Default scheme: Rebate for income up to 7 lakh, max 25,000.
• Optional scheme: Rebate for income up to 5 lakh, max 12,500.

Special Cases

• Income can be assessed during the same previous year in specific situations (e.g., non-residents, discontinuing businesses).

Special Income Tax Rates

• Long-term capital gains: 20%
• Short-term capital gains (on equity shares): 15%
• Long-term capital gains (on equity shares): 10%
• Casual income (lottery, gaming): 30%
• Unexplained income: 60%

Tax on Other Entities

• Partnership Firms and LLPs: 30%
• Companies:
  • Domestic: 30% or 25% (if turnover ≤ 400 crore in PY 21-22)
  • Foreign: 40%

Additional Points

• Health and Education Cess: 4% on tax plus surcharge.
• Rounding off rules for income and taxes.
• Switching between tax regimes is allowed under specific conditions related to PGVP income.

Practice and Upcoming Lectures

• Recommended to practice writing answers to questions from study material.
• Next lecture will cover Residential Status.

These notes encapsulate the core themes and essential knowledge areas discussed in the lecture, providing a concise yet comprehensive study guide.