Thursday, March 12, 2015

‘Assessment’ of “Companies”

‘Assessment’ of “Companies

1.         Company Taxation

2.         Important Definitions

[A]       Person [Section 2(3 1)]

[B]       Company [Section 2(17)]

[C]       A person having substantial interest in the company [Section 2(32)]

[D]       Principal Officer [Section 2(35)]

3.         Types Of Companies

            1. Indian Company [Section 2(26)]

2. Company in which public are substantially interested [Section     2(18)]

3. Widely Held Company

4. Closely held Company

5. Domestic Company [Section 2(22A)]

6. Meaning of “the prescribed arrangement for declaration and payment of dividends within India” (Rule 27)

7. Foreign Company [Section 2(23A)]

8. Investment Company [Section 109 (ii)(i)]

9. Consultancy Service Company

10. Trading Company [Section 109(iia)]

11. Banking Company

4.         Residential Status Of A Company [Section 6(4)]

            (a) Resident Companies [Section 6(3)]

(b) Non Resident [Section 2(30)]

5.         Incidence Of Tax—Scope Of Total Income

            A. Resident : U/s 5(1)

B. Non Resident. U/s 5(2)

6.         Types of incomes

1. Income received in India

2. Deemed to be received in India

3. Income accruing or arising in India

4. Income deemed to accrue or arise in India

5. Any income accruing and received outside India

6. Past Untaxed Income

7.         Computation Of Gross Total Income Of A Company

            1. Head wise calculation

            2. Agricultural Income of a Company

            Table - Splitting Tip Of Composite Income In Certain Specified Cases

8.         Set off and Carry Forward of Losses of Companies

9.         Carry Forward of Losses

            1. House property

            2. Profits and gains of Business or Profession

            3. Loss under the head capital gains

            4. Other sources

10.       Special Provisions Regarding Losses Relating To Companies Only

            Accumulated Loss

Ubabsorbed Depreciation

11.       Carry forward and Set-off losses of certain companies [Section 79]

12.       Deductions Out Of Gross Total Income

13.       Special provision for payment of income tax by certain companies or minimum alternate tax (MAT) on companies [Section 115JB)

Credit of tax paid under mat [Section 115JAA (la)]

Necessity of preparing Profit & Loss Account in accordance with the provisions of Companies Act, 1956

Points to be kept in mind while preparing Annual Accounts by the Companies

14.       Calculation of Book Profits [Explanation to Sec. 115JB(2)]

15.       Explanation of Certain Items of Statutory Additions:

            (a)       Income tax paid or payable or any provision thereof

            (b)       Transfer to any reserve             

            (c)        Provisions for unascertained liabilities

(d)       An ascertained liability      

(e)       An unascertained liability

16.       Treatment of Certain Statutory Deductions


(i)         Withdrawal from any Reserve or Provision [ Section 11 5JB(2)(i) (explanation)]

(ii)        Case A. If reserve was created before 1-4-97

(iii)       Case B. (1) If reserve was created on or after 1-4-97

(iv)       B/F loss or Unabsorbed depreciation

17. Dividend Tax—Special Provisions Relating To Tax On Distributed Profits Of Domestic Companies

1. Tax on distributed profits of companies [Section 115-0]

2. Treatment of dividend received by a domestic company from its subsidiary company [Section 115-O(1A) [Inserted by the Finance Act, 2008, with retrospective effect from Assessment Year 2008-09]

3. Responsibility to deposit tax

4. Final payment

5. No deduction

6. Interest payable for non-payment of tax by domestic companies [Section 115P )

7. Assessee in default [Section 115Q]

18.       Credit of Tax paid under MAT [Section 115JAA(1A)]

1. Amount of Tax Credit
2. Year in which tax credit shall be available [Section 115JAA(4)]
3. Period for which tax Credit is available [Section 115JAA(3A)]
4. Increase/Decrease of Tax Credit