Get fully solved SMU MBA Assignments
(May 2012)
Master of Business Administration - Semester 3
MF 0012: “TAXATION MANAGEMENT”
(4 credits)
(Book ID: B1210)
ASSIGNMENT- Set 1
Marks 60
Note: Each Question carries 10 marks. Answer all the questions.
1. Write a note on the following:
a. Tax holidays
Answer : A tax holiday is a temporary reduction or elimination of a tax. Programs may be referred to as tax abatements, tax subsidies, tax holidays, or tax reduction programs. Governments usually create tax holidays as incentives for business investment. Tax holidays have been granted by governments at national, sub-national, and local levels, and have included income, property, sales, VAT, and other taxes. Some tax holidays are extra statutory concessions, where governing bodies grant reduction in tax not necessarily authorized within the law. In developing countries, governments sometimes reduce or eliminate corporate taxes for the purpose of attracting Foreign Direct Investment or stimulating growth in selected industries.
Tax holiday stimulate community revitalization, retain City residents, attract homeowners to the City, and to reduce development costs for homeownership and rental projects. The program provides a benefit for residents who improve their homes and encourages home shoppers to buy in the City. The tax abatement benefits stay with the property the entire length of the abatement and will transfer to any new property owner within that period.
A tax holiday may be given in respect of particular activities,[1] in particular areas with a view to develop that area of business,[2] or to particular taxpayers.[3]
Sales tax holidays in the United States
In New York, a state-wide sales tax holiday was first enacted by the New York Legislature in 1996 and enabled the first tax-free week in January 1997. Local governments in New York were given the option of whether or not to participate.[4] Since then, the initiative has been adopted by thirteen states. It commonly takes place as a form of tax-free weekend lasting Friday through Sunday, usually during a major shopping period for necessities, such as just before school starts. During that period, sales tax is not collected on selected items, such as clothing and school supplies. The items subject to the sales tax exemption may also be restricted by price (for example, clothing up to $100), but consumers are free to buy unlimited quantity of items.
As with other sales taxes, visiting residents of non-participating states who purchase tax-free goods (holiday or not) may still have to pay "use tax" on their goods that they take home.
b. SEZ
Q2. Comment on incomes which are exempted from the tax.
Q3. Enumerate the differences between tax planning and tax evasion.
Q4. What are the key steps to calculate the tax liability of an individual.
Q5. Explain the basic rules of deductions.
Q6. Explain the capital gains exempt from tax.
(May 2012)
Master of Business Administration - Semester 3
MF 0012: “TAXATION MANAGEMENT”
(4 credits)
(Book ID: B1210)
ASSIGNMENT- Set 2
Marks 60
Note: Each Question carries 10 marks
1. Write a note on the following:
a. Wealth Tax
Answer : Wealth Tax
Wealth tax is a direct tax, which is charged on the net wealth of the assessed. It is a tax on the benefits derived from ownership of property. The tax is to be paid year after year on the same property on its market value, whether or not such property yields any income. Wealth tax, in India, is levied under Wealth-tax Act, 1957. The Income tax department under the Department of Revenue in the Ministry of Finance administers the Wealth Tax Act, 1957 as well as the Wealth Tax Rules framed there under.
Under the Act, the tax is charged in respect of the wealth held during the assessment year by the following persons :-
Individual
Hindu Undivided Family(HUF)
Company
Chargeability to tax also depends upon the residential status of the assessed same as the residential status for the purpose of the Income Tax Act.
Wealth tax is not levied on productive assets, hence investments in shares, debentures, UTI, mutual funds, etc are exempt from it. The assets chargeable to wealth tax are :-
· Guest house, residential house, commercial building
· Motor car
· Jewellery, bullion, utensils of gold, silver etc
· Yachts, boats and aircrafts
· Urban land
· Cash in hand(in excess of 50,000), only for Individual & HUF
· The following will not be included in Assets :-
· Any of the above if held as Stock in trade.
· A house held for business or profession.
· Any property in nature of commercial complex.
· A house let out for more than 300 days in a year.
· Gold deposit bond.
· A residential house allotted by a Company to an employee, or an Officer, or a Whole Time Director ( Gross salary i.e. excluding perquisites and before Standard Deduction of such Employee, Officer, Director should be less than Rs. 5,00,000).
· The Assets exempt from Wealth tax are :-
· Property held under a trust.
· Interest of the assessed in the coparcenaries property of a HUF of which he is a member.
· Residential building of a former ruler.
· Assets belonging to Indian repatriates.
· One house or a part of house or a plot of land not exceeding 500sq.mts,for individual & HUF assessed.
Wealth tax is chargeable in respect of Net wealth corresponding to Valuation date.(Net wealth means all assets less loans taken to acquire those assets. Valuation date means 31st March of immediately preceding the assessment year). In other words, the value of the taxable assets on the valuation date is clubbed together and is reduced by the amount of debt owed by the assessed. The net wealth so arrived at is charged to tax at the specified rates. Wealth tax is charged @ 1% of the amount by which the net wealth exceeds Rs. 15 Laths.
b. Service tax
Q2. Define clubbing of income. What are the key provisions for income clubbing?
Q3. Define fringe benefits and perquisites.
Q4. Write a note on income from capital gain.
Q5. What are the key rebates and reliefs under Income Tax Act?
Q6. Summarise the objectives of tax planning.
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