{"id":21642,"date":"2023-04-18T11:27:14","date_gmt":"2023-04-18T05:57:14","guid":{"rendered":"https:\/\/gstguntur.com\/?p=21642"},"modified":"2023-04-18T11:39:53","modified_gmt":"2023-04-18T06:09:53","slug":"taxation-of-companies-llp-and-non-resident-cs-professional-study-material","status":"publish","type":"post","link":"https:\/\/gstguntur.com\/taxation-of-companies-llp-and-non-resident-cs-professional-study-material\/","title":{"rendered":"Taxation of Companies, LLP and Non-resident – CS Professional Study Material"},"content":{"rendered":"

Chapter 18 Taxation of Companies, LLP and Non-resident – CS Professional Advance Tax Law Notes<\/a>\u00a0is designed strictly as per the latest syllabus and exam pattern.<\/p>\n

Taxation of Companies, LLP and Non-resident – CS Professional Advance Tax Law Study Material<\/h2>\n

Question 1.
\nDiscuss briefly the treatment of un-availed tax credit of minimum alternate tax (MAT) in case of conversion of a private company or unlisted public company into a limited liability partnership (LLP). (Dec 2012, 3 marks)
\nAnswer:
\nSection 115JAA(7) w.e.f. 1.04.2011, Assessment Year 2011-12 and onwards, provides that in case of conversion of a private company or unlisted public company into a Limited Liability Partnership Act, 2008, the provisions of Section 115JAA shall not apply to the successor LLP, that is to say tax credit will not be allowed to such LLP.<\/p>\n

Question 2.
\nWhat are the provisions of section 54F in relation to capital gains on transfer of asset other than a residential house? (Dec 2012, 5 marks)
\nAnswer:
\nAny long term capital gain, arising to an individual or HUF from the transfer of any long term capital asset, not being residential house property shall be exempt in full, if the entire net sales consideration is invested in purchase of one residential house within one year before or 2 years after the date of transfer of such an asset or in the construction of one residential house within 3 years after the date of such transfer. Where part of the net sales consideration is invested, then Long term capital gain shall be exempted proportionately.<\/p>\n

The proportionate exemption shall be that amount of capital gains which bears the same proportion which the amount invested in the new house bears to the net consideration price of the asset transferred i.e.
\n\"Taxation
\nThe above exemption shall be available only when the assessee does not own more than one residential house property on the date of transfer of such asset exclusive of the one which he has bought for claiming exemption u\/s 54F.<\/p>\n

\"Taxation<\/p>\n

Question 3.
\nDiscuss with the help of an example, the cascading effect of dividend distribution tax and the remedial action taken by the government. (Dec 2012, 7 marks)
\nAnswer:
\nTax on distributed profits of domestic companies [Section 115-O (1)]: The Domestic Company shall, in addition to the income tax chargeable in respect of its total income, be liable to pay additional income-tax on any amount declared, distributed or paid by such company by way of dividend (whether interim or otherwise), whether out of current or accumulated profits. Such additional income-tax shall be payable @15% plus surcharge @12% plus Health and Education cess 4% of the amount so declared, distributed or paid.<\/p>\n

Tax Rates:
\nTax on distributed profit shall be computed after grossing up the tax by using following formula:
\nRate of Dividend Distribution Tax before surcharge and cess =
\n\"Taxation<\/p>\n

Dividend received from subsidiary company to be reduced from the above dividend to be distributed [Section 115-O(1A)]:
\nFor the purpose of computation of tax on distributed profits, the amount of dividend distributed by the domestic company during the financial year shall be reduced by the following:<\/p>\n

(i) The amount of dividend, if any, received by the domestic company during the financial year, if such dividend is received from its subsidiary and,-
\n(a) where such subsidiary is a domestic company, the subsidiary has paid the tax which is payable under this section on such dividend; or
\n(b) where such subsidiary is a foreign company, the tax is payable by the domestic company under section 115BBD on such dividend;
\nHowever, the same amount of dividend shall not be taken into account for reduction more than once;<\/p>\n

(ii) The amount of dividend, if any, paid to any person for, or on behalf of, the New Pension System Trust referred to in Section 10(44).<\/p>\n

For the purpose of Section 115-O(1A), a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company.<\/p>\n

NOTE 1:<\/p>\n