Page 53 - DCOM508_CORPORATE_TAX_PLANNING

Corporate Tax Planning

Notes 2.8 Keywords

AOP: It is an entity or a unit of assessment which is includes two or more persons who join for a
common purpose with a view to earn an income.
Company: It is an association or collection of individual real persons and/or other business
entities, each of which provide some form of capital.
Hindu Undivided Family (HUF): It is a legal term related to the Hindu Marriage Act.
Incidence of tax: Tax incidence means the final burden of tax. In other words, incidence of tax is

on person who actually bears or pays the final tax liability.

Income: It is the consumption and savings opportunity gained by an entity within a specifi ed
timeframe that is generally expressed in monetary terms.
Partnership fi rm: It is a relation between two or more persons who have agreed to share the

profits of a business carried on by all of them or any of them acting for all.
Receipt: The receipt of income refers to the first occasion when the recipient gets the money

under his control.
Remittance: Remittance is transmission of income after its fi rst receipt.
Royalty: It is a consideration which also includes any lump sum consideration but excluding any
consideration which would be the income of the recipient chargeable under the head ‘Capital
gains’.

2.9 Review Questions

1. What do you understand by residential status of an individual? How is it related to
incidence of an assessee?
2. Describe the division of taxable entities for the purpose of determining residential status.
3. Discuss, in detail, the provisions for determining the residential status of an assessee.

4. Describe how you would determine the residential status of an assessee.
5. Write a note on residential status of a company.
6. Define incidence of tax as per section 5 of the Income Tax Act, 1961.

7. Differentiate between Indian and Foreign Income.
8. Explain the meaning of income received or deemed to be received in India.

9. Mention the different categories of income which are deemed to accrue or arise in India.
10. X, an Indian citizen, leaves India on May 22, 2005 for vacation to Uganda and returns on
April 9, 2006. Determine the residential status of X for the assessment year 2006-07.

11. Y, a foreign citizen, visits India since 1985 every year for a period of 100 days. Determine
the residential status of Y for the assessment year 2006-07.
12. Rakesh was working as a crew member on an Indian ship plying in foreign waters. During
the year ended 31.03.2008, the ship did not touch the Indian coast, except for 180 days. State
the residential status for the assessment and taxability of his salary.
13. X got an employment in Singapore during the previous year 2008-09. He left for Singapore
on August 9, 2008. He is an Indian Citizen. Determine the residential status for the
Assessment Year 2009-10.

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