CTP-X06

CTP-X06
(PGDM [PT] 2006-09 : Term-VII)

Corporate Tax Planning
(Faculty: Prof. S.K. Padhi)

COURSE OUTLINE

Course Objective:

Tax is the revenue for a State. Like an individual, the State also plans for its Income and Expenditure. The revenue of the State is being used for welfare of the society and Corporate entities play a major role in contributing towards the revenue of a State. At the same time Corporate entities carry on business with an objective to maximize the profit. Higher the profit higher shall be tax burden. However, many corporate entities have an obsession to earn higher profit but pay a little or nil tax. Lowering tax burden has a significant impact on the overall cost, return and financial state of affairs of the company. Incidentally, it affects the cash flow and its timing as well. The objective of lowering tax burden should be resorted to through means which fall into the domain of tax planning rather than tax avoidance or evasion. The line of demarcation is thin and blurred. It becomes a choice based upon what is legitimate and what is illegitimate. Legitimacy stems from availing the maximum deduction, rebate, relief and exemptions and also from the choice of right alternative whenever the provisions throw opportunity for choice. The choice would depend on a deep understanding of the related provisions and their collective ramifications. Case made laws, in addition to statute made laws, play a significant role in shaping the choice. Hence it requires an understanding of case based laws also. The course objectives include:

To know how to use tax planning devices in managerial decision making

To provide an overview of CEA basic provisions and CENVAT

Pedagogy: Classroom discussions will be based on provisions of the Act and various judicial decisions. The planning and managerial decision making components shall be illustrated through group work and solved cases.
Classes will be mainly through solving Problems, Lectures and analyzing Cases.

Group Activity/Project: There will be project work based on the classroom discussions

Session Details:

Session	Topic	Issues to be Discussed	Links	Reading Material
1	Basic concepts & definitions , Residential status and planning	What is Income, who to pay and when to pay taxes, Residential status of different persons, scope of total income, planning		Chapters of the text book
2	Business expenditure & tax planning, avoiding disallowances	Scope of section 28, cases in relation to business, depreciation and tax planning		Chapters of the text book
3	Business expenditure & tax planning, avoiding disallowances	Scientific research expenditure, preliminary expenditure, section 36 and general revenue expenses		Chapters of the text book
4	Capital Gains & Planning	Chargeability, definitions		Chapters of the text book
5	Capital Gains & Planning	Computation and exemptions		Chapters of the text book
6	Income from other sources, Losses and planning	Section 56,57,58, Carry forward and set off provisions, tax savings of losses		Chapters of the text book
7	Corporate Restructuring (Internal and External) - Tax Planning	Merger, amalgamation, demerger, slump sale, internal restructuring		Chapters of the text book
8	Corporate Restructuring (Internal and External) - Tax Planning Holding and Subsidiary Company & Tax Planning	Merger, amalgamation, demerger, slump sale, internal restructuring Transfers, WDV, Depreciation, Business connection		Chapters of the text book
9	Securities and Taxation	Securities and capital gains, taxation of ESOPs, bonus, right shares, ZBs, Transaction tax, exemptions, Derivatives		Handout to be given
10	Financial management decisions & Tax Planning	i) Capital structure ii) Dividend policy iii) Bonus shares		Chapters of the text book, Handout
11	Planning for new industries	Form of organisation, Location of business, Nature of business		Chapters of the text book
12	MAT & Planning	Ways to reduce book profit, tax credit		Chapters of the text book
13	Tax planning with respect to managerial decisions	Tax planning with respect to managerial decisions: Purchase of asset out of own fund or from borrowed fund, Own v. Lease, Installment v. Hire purchase, Make or buy, Shut down or continue, Sale of assets used for scientific research		Chapters of the text book
14	International Taxation	Transfer pricing regulations		Handout to be given
15	Overview of CEA and CENVAT	Basic concepts, valuation, CENVAT credit		Handout to be given

Evaluation : It shall be done through term examinations and quizzes

Weightage for different components is as under:
Quizzes : 40% ( 2 quizzes )
End Term : 35%
Project/Assignments : 25%

Mid Term & End Term exam will be under open book and open material system. The students can carry any reading material they like except their laptops and mobile phones or any other communication device during examinations.

Text Book: Direct Taxes Planning & Management by V.K.Singhania

Reference Books :
Direct Taxes Law & Practice: V.K. Singhania
Direct Tax Law & Practice by Girish Ahuja & Ravi Gupta
Direct Tax laws by T.N. Manoharan
Indirect Tax Laws by V.S.Datey
Created By: Bijoy Kar on 06/12/2008 at 11:37 AM
Category: ExPGP-III Doctype: Document

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