CA IPCC Tax Amendments May 2018 (Indirect Tax Syllabus)

IPCC Tax Syllabus May 2018 : CA IPCC Tax Amendments for May 2018 (Also in PDF for CA Inter New Syllabus) including Indirect Tax Amendments and Syllabus were provided below. Budget 2017 will be applicable for May 2018 CA IPCC Exams. And also, all Notifications and Circulars issued by the CBDT until November 1st 2017, will be applicable for CA IPCC May 2018 Tax Exam. In Direct Tax Part, there are no much amendments, however, in Indirect Tax syllabus have few significant amendments due to the introduction of GST. ICAI has already issued Supplementary Study Material explaining the amendments in CA IPCC Tax for May 2018. There are no changes in Income Tax Slabs rates. CA Gaurav Jain has explained these amendments below. We will also recommend students to download Tax Notes made available in Finapp.

Features of CA IPCC Tax Amendments

Share of Amendments 32%
Majority in IDT Part
New Study Material Given Below

Tax Syllabus for May 2018

For both CA IPCC Students registered under the old syllabus, and CA Inter students registered under the new syllabus, GST will be applicable in the Indirect Tax Paper.

The study material is same for both old and new syllabus students and we have provided it for download in our other article.

For Direct Tax part, there are very few amendments and you can read them later from the RTP for May 2018 that is going to be released by the ICAI.

List of IPCC Tax Amendments May 2018

When ever a new union budget is introduced, it brings in lot of new changes. For IPCC Students, these amendments will be reflected in May Exams every year.

So, For May 2018 exams, there are not many new amendments since May 2017. There are only 2 Changes in Tax Syllabus when compared to May 2017, that too in DT only. These are listed below:

Amendment 1

For Calculating Deemed Profit under section 44AD, the rate of profit has been reduced to 6% for receipts through Digital Means. Note that, for cash receipts, still the old rate of 8% will apply.

For example, A Hotel in Mumbai has a total turnover of Rs.80 Lakhs. The hotel only accepted payments through Debit Card and Paytm. Now, this Hotel can show their Profit as only 6% of total sales, instead of 8%.

Amendment 2

Earlier, on any unexplained incomes (Black Money), the tax has to be paid at 30%. Now, this rate has been  increased to 60% under Section 115BBE. (Expect a Question from this topic).

ICDS Applicability

ICDS which is recently introduced by the CBDT will be applicable for May 2018 CA IPCC Tax Exam. The same has been specified by the ICAI in an Announcement.

House Property

Deduction for Interest on Capital borrowed for house construction can be claimed up to Rs. 2 Lakh. To claim this deduction, the house construction shall be completed with in 5 years (Earlier, the house construction shall  be completed with in 3 years. This was recently amended to 5 years).

This particular amendment in CA IPCC Tax Paper is very important for May 2018 Exam.

Non-Compete Fee

Any income from Non-Compete fee received by an Assessee shall be taxable as Business Income. This is covered under section 55 of Income Tax Act.

Corporate Tax Reduced to 25%

This is one of the most important incentive offered by the Finance Minister in the recently introduced budget. As per this incentive, the new rate of Corporate Tax is 25% (This is 30% earlier).

IPCC Students should also stress on this amendment as there are high chances that this amendment will be covered in May 2018 Tax Paper.

Spectrum Fee Tax

This covers the expenditure by any telecom company on payment on spectrum fee to the government.

This is relatively large amendment and students can read this from the Tax Amendments Material Provided below for May 2018.

NBFCs Bad Debts Deductible

This is also one of the important amendment in Tax for May 2018. Non Banking Finance Corporations can claim deduction for Provision for Bad Debts under section 36(1)(viia).

44AD Limit changed

The threshold limit for Gross Receipts under section 44AD has been increased to Rs.2 Crore. Earlier, this limit is Rs.1 Crore Only.

44ADA 

This is a newly inserted section. This provision lays down presumptive taxation benefit for Professionals.

This Amendment has also been covered in the Material provided below for May 2018.

CG on Unlisted Shares

The Period of holding of unlisted shares in order to be qualified as a Long-Term Capital asset has been brought down to ‘more than 24 months’. Earlier, it is ‘more than 36 months’.

LLP Conversion

Total Value of assets of a private company or unlisted company not to exceed Rs.5 crore in any of the three preceding previous years for exemption of transfer of capital asset or intangible asset on conversion of such company into LLP.

Gold Bonds Amendment for May 2018 Tax Paper

Redemption by an individual of sovereign gold bonds issued by RBI does not constitute transfer for the purpose of levy of capital gains tax. In simple words, it is not taxable.

Tax Amendments Material May 2018