Description

SESSION JULY -AUGUST 2024
PROGRAM MASTER OF BUSINESS ADMINISTRATION
(MBA)
SEMESTER 3
COURSE CODE & NAME DFIN303 TAXATION MANAGEMENT

Assignment Set – 1

1. What is the meaning of business connection as explained in section 9 of the Income
tax Act? Provide a few suitable examples for the same?
Ans 1.
Meaning of Business Connection as per Section 9 of the Income Tax Act
The concept of “business connection” as explained in Section 9 of the Indian Income Tax Act
serves as a critical foundation in determining the tax liability of a non-resident in India. It
signifies a relationship or connection that establishes the presence of a business activity of a
non-resident in India. This provision ensures that income arising from such a connection is
taxable in India, even if the income originates outside the country.
Definition and Scope of Business Connection
According to Section 9(1)(i), a business connection refers to any relationship or arrangement
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2. What is double taxation avoidance agreement (DTAA) ? Explain the importance of
DTAA with suitable examples. Further, explain the taxability of fee for technical
services (FTS) and royalty as compared to the provisions in Income tax Act with
comparative table.
Ans 2.
Double Taxation Avoidance Agreement (DTAA)
Double Taxation Avoidance Agreement (DTAA) is an important mechanism designed to
mitigate the impact of double taxation on the same income earned in two countries. This is
achieved through bilateral treaties between countries, ensuring equitable taxation without
creating a financial burden on taxpayers.
Concept and Importance of DTAA
DTAA prevents a taxpayer from being taxed twice for the same income: once in the source
3. What is a slump sale? Explain the various provisions relating to slump sale with an
example? Further, explain the difference between slump sale and a demerger?
Ans 3.
Slump Sale – Meaning and Provisions
A slump sale is a transaction where a business undertaking is transferred as a going concern
for a lump sum consideration without assigning individual values to the assets and liabilities.
This concept is covered under Section 2(42C) of the Indian Income Tax Act. It plays a
critical role in restructuring businesses, mergers, and acquisitions by simplifying the transfer
of undertakings.
Meaning and Key Features
A slump sale involves the transfer of an entire business undertaking, including assets,
Assignment Set – 2
1. Explain the concept of input tax credit in GST Act in detail with examples
Ans 1.
Input Tax Credit (ITC) in GST Act
The Input Tax Credit (ITC) is a cornerstone of the Goods and Services Tax (GST)
framework, allowing taxpayers to offset the taxes paid on inputs against their output tax
liabilities. ITC reduces the cascading effect of taxes and enhances transparency and
efficiency in the tax system.
Concept of ITC
Under the GST regime, a registered taxpayer can claim credit for the taxes paid on goods and
2. Explain the concept of transfer pricing and its importance. What are the different
methods used for calculating the arm’s length price? Which is the popularly used
method and why?
Ans 2.
Transfer Pricing and Its Importance
Transfer pricing refers to the pricing of goods, services, and intangibles transferred between
associated enterprises, both domestically and internationally. The concept is governed by
specific regulations to ensure that such transactions reflect fair market values and do not
result in tax evasion.
Concept of Transfer Pricing
Transfer pricing is significant in transactions involving multinational enterprises (MNEs), as
they often engage in inter-company transactions across borders. For instance, a parent
3. What are the procedures to be followed by a startup to claim the deduction under
income tax Act? Further, explain the provisions under Chapter VIA which provides
deduction for a startup Company in India?
Ans 3.
Tax Deduction Procedures for Startups under Income Tax Act
Startups play a vital role in driving innovation and economic growth. Recognizing their
importance, the Indian government provides various tax deductions and benefits under the
Income Tax Act to support their growth. These provisions encourage entrepreneurship while
addressing the unique challenges startups face.
Procedures to Claim Tax Deductions