This module covers the intricacies of taxation and planning in India. As per implications under Indian Tax System, a citizen deals with various Direct taxes such as agricultural, business, salary, attendant exemptions, and benefits, those are essential for the students to be identified. The course study includes – tax saving measures, various tax slabs, intelligent investing, schemes, and funds. For corporate, service tax, duties, as well as the other types cess, levied in the form of tax is covered in the module. It deals with complete knowledge pertaining to tax laws, compliance procedures, hitches and curves of the Estate Planning as an essential part of the curriculum.
On completion of the course, the students will be able to:
- Relate the implications of tax on various income groups, working class, demography factors, residency status, separate individual and business tax system.
- Calculate the total taxable income of the client, the benefits that can be availed with tax deduction schemes, admissible expenses from professional income, tax on client assets such as property, jewellery, car or other valuables.
- Also, do the calculations and time line of availing return income tax.
- Suggest various tax planning schemes and strategies that include long term and short term investments in beneficial financial products to maximise the client’s capital security.
- Judicially advise the client to avail or own the assets for estate planning as well as to identify the various strategies for the client’s benefits to aid the client in successful wealth management.
Details of the course:
Section 1: Features of Indian Tax System and Direct Taxes
1.1 Features of Indian Tax System: The structure of Indian Tax System has to be understood in three levels- Central Government, State Government, and Local Bodies. Topic covers discerning and identification of direct and indirect taxes along with tax concurrence and outcomes on various investment decisions.
1.2 Indian Direct Tax Structure: the topic covers the study of Central Board of Direct Taxes (CBDT), Income Tax Act,1961 and Income Tax Rules (ITR), 1962; Wealth Tax Act-1957; Finance Act; Judicial precedents – Tax tribunals and the Courts.
1.3 Tax Compliance Matters: the scope of the topic covers- Tax Returns and Procedure of Assessment, ITR Forms, Filing dates and Documentation, E-filing of Income Tax Returns, Advance tax and due dates, Tax Deducted at Source (TDS), Interest and Penalties, Fraud/concealment penalties and Tax Refund.
1.4 Residency Rules: The contents of this topic are- Residential status of an individual, Residential status of other taxable entities, Indian income and foreign income, Tax incidence for different taxpayers.
Section 2: Taxation and Business Taxation- Computation and Tax Efficiency
2.1 Salary Income: this topic details- Gross Salary Income – Basic pay, Bonus, Allowances, Retirement benefits, and Perquisites; Treatment of various Allowances; Perquisites – Valuation and Taxability; Treatment of Retirement Benefits and Voluntary Retirement Scheme (VRS); Profit in lieu of Salary; Deductions from Salary.
2.2. Income from House Property: this topic involves the following sub topics- Basis of charge and applicability; self occupied and Let out House Property; Determination of Gross and Net Annual Value; Deductions and Special provisions.
2.3. Income from Business or Profession: the topic will make the students learn- Scope of Income and its computation; Deductible and Inadmissible Expenses; Deemed Income and Special Provisions; Tax Shelter and Tax Holidays.
2.4. Capital Gains in Transfer of Capital Assets: the content of this topic are-Nature of Capital Gain – Short Term or Long Term depending on capital asset and holding period; Application of Cost Inflation Index (CII) in computing indexed cost of acquisition/renovation; Computation of Capital Gains/Losses; Netting rules and carry forward of capital losses.
2.5. Income from Residuary Sources and Tax Calculation Rules: the topic contents are- Income from Other Sources – Chargeability, Exemptions and Deductions; Clubbing of Income; Deductions; Taxable income; Tax liability.
2.6. Tax Characteristics of Business Forms: the topic contents are- Sole Proprietorship; Partnership Firm; Hindu Undivided Family (HUF); Association of persons (AOP); Cooperative Societies; Trusts; Companies.
Section 3: Taxation of Various Financial Products and Transactions, Tax Planning Strategies
3.1. Tax Implications for Non-resident Indians (NRIs): the topic covers- Exempt Income of Non-resident
Indians (NRIs); Special provisions on certain transactions; Double Taxation Relief.
3.2. Tax Planning – Various Avenues and Techniques: the topic covers- Need and Importance of Tax Planning; Tax Planning vs. Tax Evasion and Avoidance; Tax Planning vs. Tax Management; Deferral of tax liability ; Maximizations of exclusions and credits ; Managing loss limitations ; Deductible expenditures of individuals and business forms
3.3. Taxability of Various Financial Products: the topic covers- Provident Fund and Small Savings Schemes – Contribution, Interest, Withdrawal and Terminal value; Equity shares – Listed and unlisted; Equity Transactions – stock market and off market; Equity oriented products – Equity schemes of Mutual Funds, ETFs, ELSS, etc.; schemes of Mutual Funds including Fixed Maturity Plans (FMPs) ; Income distribution and dividends on various investment products; Securities Transaction Tax (STT) and Dividend Distribution Tax (DDT); Life and Health Insurance products, Unit Linked Insurance Plans (ULIPs), Unit Linked Pension Plans (ULPPs), etc.; Annuities, Pension Products, and Reverse Mortgage Scheme.
3.4. Taxation of Various Financial Transactions: the topic covers- Transaction in the nature of Gifts/Prizes/Winnings; Agricultural Income; Cash payment over a specified limit; Dividend and Bonus stripping provisions – shares, MF schemes including with reinvestment option 3.5. Wealth Tax: the topic covers- changeability; Clubbing of Assets; Exemptions in respect of Assets; Valuation of Assets.
Section 4: Estate Planning Process, Strategies and Taxation Aspects
4.1. Estate Planning Overview: the topic covers- The concept of Estate Planning; Purpose and Need of Estate Planning; Risks and Drawbacks involved in Estate Planning; Hindu and Indian Succession Act; Succession – Testate and Intestate.
4.2. Estate Planning Process: the topic covers- Collect comprehensive information and examine circumstances to set Estate planning goals; Determine the value of client’s estate and liquidity aspects; Estimate cost of transfer and other expenses; Develop a plan of transfer; Implement the plan and review periodically.
4.3. Methods of Estate Planning: the topic covers- Will; Trust; Insurance; Gift; Power of Attorney; Transfer of property and partition.
4.4. Will: the topic covers- Characteristics and Contents of a Will; Types of Will – Unprivileged, Privileged, Joint, Mutual and Conditional; Legal requirements and Testamentary capacity; Modifying or revoking a Will; Probate Process.
4.5. Powers of Attorney: the topic covers- Use and purpose; Types – General and Special; Revocation; Role of the executor.
4.6. Trust Structure for Efficient Transfer: The topic covers- Trust structures for Tax Efficiency; Trust structure to align strategic objectives of the settler; Trust Perpetuities; Trust as a Pass-through entity; Lower taxes on future earnings and capital gains; Direct acquisition of assets – Benefit of Stamp duty and Capital gains tax; Distributable net income.
Section 5: Vehicles of Estate Planning- Features
5.1. Intra-Family Business and Property Transfer: the topic covers- Estate planning for family business; Forms of family business ownership; Calculating the value of the family business; Transfer of Business and inter-generation wealth transfer; Forms of property transfer – joint tenancy and tenancy-in; Offshore trusts and regulatory requirements; Asset protection and Creditor protection period.
5.2. Trusts – Characteristics & Regulation: the topic covers- The Indian Trust Act-1882; Classification of
Trust – Revocable/Irrevocable and Simple/Complex; Characteristics of Trust – Discretionary and Determinate; Different types of a family trust; Family Trust V/s Will; Parties to Trust; Hybrid Trusts; Cancellation (Extinguishing) and Revocation of Trust.