Get solved assignments at nominal price of

Rs.100 each.
Mail us at: subjects4u@gmail.com or contact
at
09857777350, 08894344452
Winter-2014
Master of Business Administration- MBA Semester 4
MF0012Taxation Management-4 Credits
(Book ID: 1759)
Assignment (60 Marks)
Note: Answer all questions (with 300 to 400 words each) must be
written within 6-8 pages. Each Question carries 10 marks 6 X 10=60
Q1. Explain the objectives of tax planning. Discuss the factors to be
considered in tax planning.
Answer. Objectives of tax planning
Reduction of tax liability by utilizing the benefits available in the tax laws.
Informed and pragmatic financial decision: A person adds the dimension
of tax incidence in his decision making on financial matters and it helps
him to optimize his decisions.
Discharging a citizen's duty: when it comes to pay tax it is breathtaking
situation for every person, they tries to hide earned income and skip
paying income tax but these are very illegal methods of reducing tax
liability and increasing the black money. Tax planning provides the
Q2. Explain the categories in Capital assets. Mr. C acquired a plot of
land on 15th June, 1993 for 10, 00,000 and sold it on 5th January, 2010
for 41, 00,000. The expenses of transfer were 1, 00,000.Mr. C made
the following investments on 4th February, 2010 from the proceeds of
the plot.
A) Bonds of Rural Electrification Corporation redeemable after a
period of three years, 12, 00,000.
B) Deposits under Capital Gain Scheme for purchase of a residential
house 8, 00,000 (he does not own any house).Compute the capital
gain chargeable to tax for the AY 2010-11.
Answer. Categories of capital assets

1. Short term capital assets

A short term capital assets means as per u/s 2(42A) a capital asset held by an
assesses for not more than (a) twelve months before its transfer in case of
companies equity & preference shares or any other security listed in a
recognized stock exchange or units of mutual funds and UTI or zero coupon
bond and (b) 36 months before its transfer in the case of any other asset.
2. Long term capital assets
Any capital asset other than a short term capital asset is termed as a long term
capital asset. When gains arising from the transfer of long term capital assets
are called Long term capital gains. It qualifies
Q3. Explain major considerations in capital structure planning. Write
about the dividend policy and factors affecting dividend decisions.
Answer. There are three major considerations in capital structure planning,
i.e. risk, cost of capital and control, which help the finance manager in
determining the proportion in which he can raise funds from various sources.
Risk- Risk is of two kinds, i.e. financial risk and business risk. Here we are
concerned primarily with the financial risk.
Q4. X Ltd. has Unit C which is not functioning satisfactorily. The
following are the details of its fixed assets:
Asset
Land
Goodwill (raised in
books on 31st March,
2005)
Machinery
Plant

Date of acquisition
10th February, 2003

Book value (Rs. lakh)

30
10

5th April, 1999

12th April, 2004

40
20

The written down value (WDV) is Rs. 25 lakh for the machinery, and
Rs.15 lakh for the plant. The liabilities on this Unit on 31st March,
2011 are Rs.35 lakh.
The following are two options as on 31st March, 2011:
Option 1: Slump sale to Y Ltd for a consideration of 85 lakh.
Option 2: Individual sale of assets as follows: Land Rs.48 lakh,
goodwill Rs.20 lakh, machinery Rs.32 lakh, and Plant Rs.17 lakh. The
other units derive taxable income and there is no carry forward of loss
or depreciation for the company as a whole. Unit C was started on 1st
January, 2005. Which option would you choose, and why?
Answer.

Option 1: Slump sale

Q5. Explain the Service Tax Law in India and concept of negative list.
Write about the exemptions and rebates in Service Tax Law.
Answer. Service Tax is a tax levied on the transaction of certain specified
services by the Central Government under the Finance Act, 1994. It is an
indirect tax, which means that normally the service provider pays the tax and
recovers the amount from the recipient of taxable service. In certain cases
Government may shift the liability of payment of service tax to the receiver of
service as a measure of administrative convenience. It is often referred to as
reverse charge in common
Q6. What do you understand by customs duty? Explain the taxable
events for imported, warehoused and exported goods. List down the
types of duties in customs. An importer imports goods for subsequent
sale in India at $10,000 on assessable value basis. Relevant exchange
rate and rate of duty are as follows:
Particulars

Date

Exchange Rate
Declared by
CBE&C

Rate of Basic
Customs Duty

Date of
submission of
bill of entry

25th February,
2010

Rs.45/$

8%

Date of entry
inwards
granted to the
vessel

5th March,
2010

Rs.49/$

10%

Calculate assessable value and customs duty.

Answer. A tax levied on imports (and, sometimes, on exports) by the customs
authorities of a country to raise state revenue, and/or to protect domestic
industries from more efficient or predatory competitors from abroad.
Custom duty: the word custom comes from Sanskrit word "kashtam" which
means difficulty. When goods imported into the country from another country
which creates a taxable events therefore it is
= 46,350

Get solved assignments at nominal price of

Rs.100 each.

Mail us at: subjects4u@gmail.com or contact

at
09857777350, 08894344452