Corporate Tax Planning

CORPORATE TAX PLANNING
Assignment A
1. Differenciate between exemption and rebate?
2. Discuss the conditions that should be met to claim deductions against profits and gains
of business or profession under section 37(1)?
3. Explain the provisions regarding set-off and carry forward capital losses?
4. Differenciate between long term and short term capital gains?
5. Describe the provisions of law regarding advance payment of taxes in case of company
assessee?
6. Explain, how tax is calculated/computed on domestic as well as other than domestic

company?
7. What do you mean by Maximimum marginal tax, explain with examples?
8. Describe in detail the Capital gains ccount Scheme?
Assignment B
Case Detail:
Chasing Taxes
Indonesia and India have embarked on big, bold and historic hunts for hidden assets. The moves
come amid a global shift in attitude toward tax avoidance and offshore holdings but the emerging
economies have singular reasons for seeking undeclared riches. Each wants fresh cash for
much-needed infrastructure projects and a chance for a fairer distribution of wealth.
In the last days of September, in the dark of 3 a.m., people began queuing outside a single
government building in central Jakarta. They were clutching financial papers that in some cases
exposed offshore accounts worth billions of rupiah. Two months earlier, President Joko Widodo had
launched a massive tax amnesty campaign to repatriate hidden assets to Indonesia. As the first
reporting deadline loomed, crowds swelled into the office that handles the tax affairs of the
country's wealthiest individuals and companies.
More than 10,000 people a day answered the president's pitch in September: declare assets now and
take advantage of a discounted tax rate -- as little as 2% compared to 25% -- and, in turn, be part of
Indonesia's future. Revenue from the nine-month amnesty, continuing through March, is promised
to build railway networks, ports and airports in a country whose prospects, politically and
economically, have been on the ascent.
Widodo, who was elected in 2014, has cast the program as good for business -- and pivotal to the
next generation. Twice before Indonesia tried amnesties to lure money back home but those efforts
in 1964-65 and in 1984 failed, in part, due to poor incentives. Now Indonesia has calculated that
political stability and a dramatic drop in the tax rate could help to bring in an estimated 11,400
trillion rupiah ($851 billion) parked overseas.
"We have a large amount of money outside," Widodo told a group of businessmen in Jakarta this
summer. "What is most important now is to bring this money back to our country. We need your
participation right now to build the nation."
Indonesia's call for revenue echoes across many countries in Asia where private wealth has risen
steeply in the past decade. New wealth accounts for about 60% of the total wealth growth in the
Asia-Pacific region excluding Japan and, by 2019, the region is expected to account for 26% of all
global financial wealth, according to a recent Boston Consulting Group report. It is those potential
taxpayers that emerging economies want to rein in as partners in their next phase of development.
People streamed to banks in New Delhi to try to withdraw or deposit old currency notes banned on
Nov. 8. India has taken more radical steps this year, starting with amnesty and then launching a
wholesale assault on its shadow economy by banning high-denomination bank notes. Life in the
cash-starved society has morphed into a kind of collective suffering. But both India and Indonesia see
their experiments as helping to secure economic ballast at a critical time to attract domestic and
global investment. Transparent accounting at home will help each country to prepare for tougher
global standards for financial information that will go into effect next year.
Indonesia's hunt for revenue is spurred by ambition for this country of 20 million taxpayers. It has
enjoyed 5% annual growth for the past few years. In order to keep this growth momentum, the
country needs to build and improve its infrastructure such as airports and power grids. The
government has estimated 5,500 trillion rupiah is needed through 2019 for infrastructure; the state
budget can likely cover a quarter of that.
Amnesty became appealing first to trade associations, law firms and major developers that liked the
lower tax rate -- and possibly saw future government contracts for big construction. Wealth
managers said tax rates were locked in depending on how early declarations were made. That
sparked the September rush. "Just with 2% or 4%, you can bring the 'dark' money under the sun,"
said a private banker in Singapore. "Once you declare amnesty, the money is no longer 'dark.'"
Question
1. Provide a brief summary of the case?
2. What common initiative both countries have taken?
3. What success you predict for the Indonasia's call for revenues?
Assignment C
Question No. 1 Marks - 10
A method of financing a business where money is received by the issuance of shares in the
enterprise.
Options
Equity Capital
Demerger
Merger
Debt
Sales revenue less cost of sales, operating expenses, and interest, before taxes have been paid.
Options
EBT
EAT
PAT
EBIT
Persons who have left their country and live abroad.
Options
Expatriate
NRI
Foreigners
Natives
Financial transaction whereby an enterprise sells its debt claims to a third party in order to obtain
cash
Options
Factoring
Forfaiting
Accounting
Cash Management
lease is where the lessor is considered only as a financier.
Options
Finance
Left
Right
Time
Any 12month period which is set for accounting purpose of an enterprise.
Options
Accounting Year
Fiscal Year
Calender Year
Assessment Year
Part of economic policy which relates to taxation and public expenditure.
Options
Monetary Policy
Fiscal Policy
Cash Policy
Exim Policy
.. Property is also called as real property; immovable property comprises land, houses and
buildings.
Options
Movabale
Fixed
Immovable
Liquid
Capital receipts are shown in the Balance Sheet on the .. side.
Options
Above
Below
Asset
Liability
Winnings from lotteries, races etc. are taxable under the head "Income from other sources".
Options
TRUE
FALSE
Sometimes
Can't Say
Wealth tax is to be rounded off to nearest multiple of.......
Options
10
100
1000
Tax is to be rounded off to nearest multiple of .........
Options
Ten
Hundred
Rupee
Thousand
Year in which income is earned is known as......................... Year.
Options
Annual
Taxable
Assessment
Previous
Aggregate amount of deduction under section 80C, 80CCC and 80CCD cannot exceed:
Options
150,000
100,000
200,000
250,000
LLC stands for limited liability ..
Options
Corporation
Company
Console
Centre
Tax and/or accounting convention under which the value of assets/liabilities is adjusted to reflect fair
market value of a specific date.
Options
conventional tax rate
Sovereign Rate
Mark to market
Managerial
is an increase in the price of something, especially from the price a trader pays for something
to the price he sells it for.
Options
Column-down
Column-up
Mark-down
Mark-up

Tax on mortgages usually in the form of a stamp duty levied on the mortgage document.
Options
Mortage tax
Document Tax
Implied tax
Annual Tax
A lack of due care or failure to do what a reasonable and ordinarily prudent person would do under
the given circumstances.
Options
Accounting Fraud
Negligence
Accounting Mistake
Fraud
Obligation to persuade a court or other entity of the validity of a factual assertion.
Options
Branch Tax
Statutiory Tax
Burden of Proof
Compliance Tax
A tax imposed on an act, occupation, privilege, manufacture, sale, or consumption.
Options
Sales
Excise
Income Tax
IPR tax
Income-tax is an annual tax on ..
Options
Royality
Income
charity
Commission
Generally, an income amount that relates to a future period and therefore can be set aside and
included in income for that period.
Options
Asset
Liability
Surplus
Reserves
A deduction used to reduce net income for tax purposes.
Options
Taxation
Liability
Write Off
Reserves Creation
Term
generally used to describe a number of operations involving the reorganization of companies.
Options
Trial Balance
Merger
Acquisition
Take Over

Department of government generally responsible for formulating monetary policy, implementing the
tax laws, collecting revenue, etc.
Options
Ministry of Accounting
Monistry of Commerce
Ministry of Finance
Ministry of Taxation
. Is the gross income less deductible income related expenses.
Options
Net
Pure
Total
Casual
Association of two or more person (individuals or companies) formed for the purpose of making a
profit.
Options
Sole Propreitorship
JSCs
Strategic Alliance
Partnership
An intangible asset that represents the superior earning power of a business.
Options
Asset
Liability
Goodwill
Pure Asset
A written application addressed to a court or judge, and stating facts and circumstances relied upon
as a cause for judicial action.
Options
Filing
Petition
Application
Writ
Any 12-month period which is set for accounting purpose of an enterprise is year.
Options
Fiscal
Previous
Assessment
Monetary
A risk-management strategy to balance positions of different business units or with unrelated third
parties is called hedging.
Options
Liberal
Expatriate
Foreign
Global
The period following the due date of taxes during which legal action for recovery of delinquent taxes
will not be instituted and interest will not commence to run is . Period.
Options
Flexible
Grace
Advanced
Extended
Reserves which are not disclosed on the balance sheet of an enterprise, either by overvaluing debts
or undervaluing assets are called reserves.
Options
Fixed
Hidden
Flexible
Statutory
A tax applied at the same rate to all levels of income is . Tax.
Options
Straight Line
Flat Tax
Forward
Fixed Tax
Amount of money received by persons or entities as compensation for damages or for losses
incurred.
Options
Deflamation
Indemnification
Income Shifting
Income Spliting
Real property or personal property that is received by heirs.
Options
Solely
Benefited
Gifted
Inheritance
A transaction among parties, each of whom acts in his or her own best interest is called ..
Transaction.
Options
Arm's Length
Attributable
Auxilary
Pending
Environment tax is commonly called as tax.

Options
Green
Eco
Forest
White
Rule under which one is precluded and forbidden by law to speak against his own act or deed.
Options
Pestel
Escort
Estoppel
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CORPORATE TAX PLANNING

1. Differenciate between exemption and rebate?

4. Differenciate between long term and short term capital gains?

6. Explain, how tax is calculated/computed on domestic as well as other than domestic

7. What do you mean by Maximimum marginal tax, explain with examples?

8. Describe in detail the Capital gains ccount Scheme?

1. Provide a brief summary of the case?

2. What common initiative both countries have taken?

Question No. 1 Marks - 10

Question No. 2 Marks - 10

Question No. 3 Marks - 10

Persons who have left their country and live abroad.

Question No. 4 Marks - 10

Question No. 5 Marks - 10

lease is where the lessor is considered only as a financier.

Any 12month period which is set for accounting purpose of an enterprise.

Question No. 7 Marks - 10

Part of economic policy which relates to taxation and public expenditure.

Question No. 9 Marks - 10

Capital receipts are shown in the Balance Sheet on the .. side.

Question No. 10 Marks - 10

Question No. 11 Marks - 10

Wealth tax is to be rounded off to nearest multiple of.......

Question No. 12 Marks - 10

Tax is to be rounded off to nearest multiple of .........

Year in which income is earned is known as......................... Year.

Question No. 14 Marks - 10

Question No. 15 Marks - 10

LLC stands for limited liability ..

Question No. 16 Marks - 10

conventional tax rate

Question No. 17 Marks - 10

Question No. 18 Marks - 10

Question No. 19 Marks - 10

Question No. 20 Marks - 10

Obligation to persuade a court or other entity of the validity of a factual assertion.

Question No. 21 Marks - 10

A tax imposed on an act, occupation, privilege, manufacture, sale, or consumption.

Question No. 22 Marks - 10

Income-tax is an annual tax on ..

Question No. 23 Marks - 10

Question No. 24 Marks - 10

A deduction used to reduce net income for tax purposes.

Question No. 25 Marks - 10

generally used to describe a number of operations involving the reorganization of companies.

Question No. 26 Marks - 10

Question No. 27 Marks - 10

. Is the gross income less deductible income related expenses.

Question No. 28 Marks - 10

Question No. 29 Marks - 10

An intangible asset that represents the superior earning power of a business.

Question No. 30 Marks - 10

Question No. 31 Marks - 10

Question No. 32 Marks - 10

Question No. 33 Marks - 10

Question No. 35 Marks - 10

A tax applied at the same rate to all levels of income is . Tax.

Question No. 36 Marks - 10

Question No. 37 Marks - 10

Real property or personal property that is received by heirs.

Question No. 38 Marks - 10

Question No. 39 Marks - 10

Environment tax is commonly called as tax.

Question No. 40 Marks - 10