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CA Inter Taxation - Income Tax RTP May 2024 | CA Inter May 2024 Preparation

CA Intermediate by PW・91 minutes read

Jasmeet Singh leads a discussion on income tax and GST amendments for RTP 2024, covering various scenarios like life insurance policies and deductions under section 80C. Specific details include taxes on different income sources, deductions for medical insurance premiums, and eligibility conditions for life insurance policies.

Insights

  • The discussion led by CA Jasmeet Singh delves into taxation for the RTP 2024 exam, focusing on income tax and GST, with a detailed analysis of case studies involving life insurance policies, deductions under section 80C, tax liabilities, and total income calculations.
  • Specific details provided include Mr. Akash's income sources, long-term capital gains, dividends, and interest income, along with discussions on deductions under section 80D for medical insurance premiums, reimbursement eligibility, and maximum deduction amounts for family members' medical expenses.
  • The session highlights the tax implications of different life insurance scenarios, emphasizing conditions for tax treatment of maturity proceeds based on premium amounts, policy issuance dates, and restrictions on premium payments exceeding 10% of the capital sum assured.
  • Detailed calculations for tax liabilities, deductions, and adjustments based on various income sources, expenses, and compliance regulations are essential components of the discussion, providing a comprehensive understanding of tax provisions and implications for individuals and businesses.

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Recent questions

  • What is the focus of the taxation discussion?

    Income tax and GST.

  • What are the key components of the income tax discussion?

    Amendments through the Finance Act 2023.

  • What scenarios are discussed in the case studies?

    Life insurance policies, deductions under section 80C, tax liabilities under different regimes, and total income calculations.

  • What specific details are provided in the discussion?

    Mr. Akash's age, income sources, long-term capital gains, dividends, and interest income.

  • What deductions are discussed for medical insurance premiums?

    Deductions under section 80D for medical insurance premiums, limits for family members, and preventive health checkup expenses.

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Summary

00:00

Taxation Discussion for RTP 2024 Exam

  • CA Jasmeet Singh is leading a discussion on taxation for the RTP 2024 exam, focusing on income tax and GST.
  • The income tax discussion will be split into two parts, covering amendments through the Finance Act 2023.
  • The session involves analyzing case studies to determine appropriate responses based on given facts.
  • Questions include scenarios on life insurance policies, deductions under section 80C, tax liabilities under different regimes, and total income calculations.
  • Specific details are provided, such as Mr. Akash's age, income sources, long-term capital gains, dividends, and interest income.
  • Deductions under section 80D for medical insurance premiums are discussed, including limits for family members and preventive health checkup expenses.
  • Payments made through cash or credit card for medical expenses are detailed, with distinctions for senior citizens and reimbursement eligibility.
  • Maximum deduction amounts under section 80D for family members' medical expenses are clarified based on specific scenarios.
  • The discussion extends to multiple life insurance policies, highlighting conditions for tax treatment of maturity proceeds based on premium amounts and policy issuance dates.
  • Differentiating between maturity proceeds received at death and other instances, the tax implications are explained for various life insurance scenarios.

18:16

Insurance Premium Guidelines for Maximum Benefits

  • Premium paid should not exceed 10% of the capital sum assured before 142023.
  • Maturity proceeds will be empty if premium exceeds 10% of the capital sum assured.
  • Policies issued on or after 1423 have dual conditions: premium should be less than or equal to the capital sum assured at 10% and aggregate premium should not exceed Rs 5 lakh.
  • GST should be considered in the premium amount.
  • Term insurance policies mature only upon the insured's death.
  • Policy X issued before 142023 has specific conditions regarding premium and capital sum assured.
  • Policy issued before 142023 with a premium exceeding 10% of the capital sum assured will not be exempt from tax.
  • Policy issued on 1423 with a premium under Rs 5 lakh will mature in 2032 with specific premium payment details.
  • Policy A issued on 1424 with a premium under Rs 5 lakh will mature in 2033 with specific premium payment details.
  • Combining policies to ensure aggregate premium does not exceed Rs 5 lakh is crucial for eligibility for MPAN under Section 10 10D.

36:03

Tax Calculation and Deductions for Income

  • Three rights without deduction: 150, 68, 500, 10,000 approaching 228,500, answer is C.
  • Calculate Akash's tax liability in default regime, remove tax liability from old regime.
  • Calculated total income and tax liability based on salary of Rs 45 lakhs and standard salary of Rs 50,000.
  • Deductions available in both default and optional regimes, 50% of salary income, 4450 in LTCG 112a, dividend income of 12 lakhs, interest on savings account Rs 16,000, interest on FD Rs 45,000.
  • Gross total income in default regime, no deductions for AC or AD, TT or A's GTI, total income under old regime 28,500.
  • Deductions available: 150, 80c, 68, 58d, 1080 tt, total income after deductions 61,36500.
  • Differentiate between normal income and special income, tax rates based on slab rates and special rates.
  • Tax calculation on income, waiver on long term capital gains, normal tax on residual income, surcharge and cess applied.
  • Payment details for Mr. Anil's business purchases, compliance with MSME Act Section 15 for deductions.
  • Payment dates and compliance for purchases from Mr. A, Mr. B, and Mr. C, deduction availability based on payment timing and compliance with regulations.

52:28

Tax Deductions and Timely Payments for Businesses

  • Expenses covered under section 43B are paid on a due basis.
  • Micro and small businesses are prioritized for timely payments.
  • Deductions are available based on timely payments for micro and small businesses.
  • Expenses not covered under section 43B are allowed on an accrual basis.
  • Two expenses totaling Rs 23324 are available for micro and medium businesses.
  • Deductions of Rs 5 lakh and Rs 8 lakh are available for small and medium businesses, respectively.
  • Mr. Sunil took an education loan of Rs 8 lakh for his son's MBA.
  • Remittances for personal use and medical treatment were made by Mr. Sunil.
  • TCS is applicable based on the purpose and timing of remittances.
  • Adjustments and tax implications are detailed based on income sources and limits.

01:09:15

Tax Rebate Calculation and Residency Status Clarified

  • The rebate amount will be either 15 + 4 = 19 or Rs 19,000, whichever is lower.
  • If the lower amount is 19 out of 24, a rebate of Rs 5,000 will be given.
  • A cess of Rs. 4 will be deducted, leaving a tax liability of Rs. 5,200.
  • The answer to the question will be B.
  • Miss Rita is an Indian citizen who completed an MBA at Howard University and works at Auto Fit LLP in Country A since June 2016.
  • Rita has been in India since 1512 and has not visited India in the last 10 years.
  • Rita's income in Country A is Rs 24,00,000 from interest and Rs 15,00,000 from salary until returning to India in the financial year 2324.
  • Rita's salary in India is Rs 13,50,000 from Auto Fit until March 31, and she earned Rs 3,00,000 from shares of an Indian company.
  • Rita's total income from Indian sources is Rs 16,50,000, making her a deemed resident in India.
  • Raj, an Indian resident, owns two properties in Delhi and Kanpur, with the Delhi property rented out and the Kanpur property self-occupied.

01:26:39

Tax Deductions and Losses in Income Calculation

  • Rent of 180 and 172 expected to become wives, hire as livelihood
  • Deduction of municipal taxes from 80000 GV, municipal taxes received
  • Stayed 10250, A will come out, AV of 180000, 10250 NAV, 1697 NAV, 750 NV
  • Standard deduction at 30%, 5925 interest on capital, Baroda worth 4 lakh
  • Loss of 420000, total loss of 30175, loss carried forward in new regime
  • NAV nil, standard deduction nil for Kanpur property, no interest allowed
  • Gross total income of 50000, no deductions in new regime, total income of 1750000
  • Loss from house property not adjusted, total income of 1750000
  • Deduction of 150000 under 80A, total income of 144 lakhs
  • Deduction of 150000 under 80A, income of 144 lakhs, capital gain assessment year 2425

01:44:01

Taxable Income Calculations and Deductions Summary

  • A new house worth Rs 10 crores will be given, with the cost of the house being subtracted from this amount.
  • The full value of Rs 15 crores will remain, with a consideration cost of Rs 13 crores and a short-term capital gain of Rs 12 crores.
  • The MPN received was reduced to Rs 3 crores, with the cost remaining at Rs 15 crores.
  • The house was worth Rs 10 crores, with the MPN reducing the cost to Rs 3 crores.
  • The firm will incur expenses and interest, with the remunerated partner receiving a salary and interest from the firm.
  • The firm is paying interest on capital at 13%, but the deduction is only available at a maximum of 12%.
  • The deduction of Rs 7.5 lakh will be based on the export profit of Rs 40 lakhs out of a total turnover of Rs 120 lakhs.
  • The profit from the edible oil business is Rs 750,000, with expenses being reversed and depreciation of Rs 10 lakhs allowed.
  • Interest on savings account and dividends received will be considered as income from other sources.
  • The total income is calculated to be Rs 2,986,500, with deductions under various sections reducing the taxable income.

02:02:23

Tax Provisions and Deductions Calculation Summary

  • The tax provisions entail Rs 28,500 for the first Rs 2 lakh, Rs 12,500 on the next Rs 25 lakhs, and Rs 5 lakhs on the subsequent Rs 5 lakhs, with a residual income of Rs 1 lakh taxed at Rs 20, now at Rs 30. Education cess of Rs 1 lakh is added, advance tax is deducted, and adjusted total income must be calculated for tax payment.
  • Deductions such as Section 35 AD and 10 DA are considered, with adjustments made for MT and AMT calculations. The final tax liability is determined based on the better outcome between normal provisions and AMT, with the AMT amounting to Rs 579 and the total tax payment being Rs 463.
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