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Taxation is a vast subject and ample time must be dedicated towards it in order to score higher marks. Students have to study taxation in both IPCC and Final levels.
There is two parts of tax to be studied in the syllabus i.e. direct taxation and indirect taxation.
Whether it is IPC or Final, Tax is always a scoring subject until and unless you are not proper with your studies. You can score high on this subject but there is a need of proper planning and guidance to score such.
Taxation in IPC is divided into two sections one is Direct Tax i.e. Income Tax and another is Indirect Tax i.e. GST and Customs each consisting 50 marks.
While the taxation in final includes three different heads namely Direct tax laws, International taxation and Indirect tax laws. Direct taxation and International taxation are included in one paper in two parts whereas Indirect taxation is a different paper and includes GST and Customs & FTP.
The preparation for taxation on both the levels of the examinations varies based on the syllabus covered under them. But if you prepare IPCC taxation properly, it will definitely help you in the Final examination as well as it will make your basics strong.
Taxation is considered tough as it includes a lot of numerical and you also have to remember the theory on many sections as taxation is based on sections.
How to Prepare CA IPCC Taxation
1.Selection of Study Material
Plenty of time students, could not decide correct study material for them. Even at the end moments they often run for some other teacher’s notes which are a big blunder they are playing with themselves.
You can chose your coaching notes, the Institute Study Material or either refer to some reference book to study but don’t forget to cover the Practice manual as it is considered as most important for the Chartered Accountancy course.
As well as stick to one material which is best suitable for you and revise it at least two to three times.
2.For Direct taxation
Make a proper timetable and allocate your time genuinely between five heads of income and the remaining part. Five Heads are Income from Salaries, Income from House Property, Income under the head PGBP, Income from Capital Gain and Income from other Sources.
All the five heads are an important part of your syllabus but at the IPCC level Income from Salaries is considered most important. Don’t skip Income from other sources as this is equally important with the other heads.
But Income Tax is not limited to these five heads as this is a vast subject and besides the Five Heads, it has other topics like TDS, Advance Tax, Provisions relating to filing of returns, Residential Status and Exempt Income u/s 10.
Cover each and every topic and revise it thoroughly. These topics are small as well as easy as compared to five heads.
The important thing for scoring high in Direct Tax is conceptual understanding. At the IPCC level, you are not much expected to write the names of case studies. However, provision and conclusion regarding the same must be correct.
For Indirect Taxation- As per the latest syllabus to be followed, indirect taxation now includes the concept of indirect taxes and GST laws. ICAI study material is best for GST preparation as it explains all the topics in a very friendly manner with flow charts.
After completing a chapter, you can refer synopsis for quick revision given at the end of the chapter in the ICAI study material. Besides, you can also refer questions and MCQ’s given at the end of the chapter.
After that, solve the practice manual of the institute.
3. Prepare your own handwritten notes
No doubt you are studying from the best reference book but still own handwritten notes are the most effective material to study. You can either prepare them in Paragraph forms or chart forms or you can draw them on charts and paste them on your room walls to revise it daily.
4.Revision and Practice
During the examination period you should refer RTP, MTP or you can also refer old question papers. It would be quite enough to cover your taxation.
The main & important thing is that don’t depend only on indirect tax or direct tax to clear the subject. You should have the good command on both.
The examination is meant to check your knowledge in both subjects during the checking process, when the marks are allotted.
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How to Prepare CA-FINAL Taxation
For study material, you can go for the notes provided by your coaching center. But the study material from the institute should never be avoided as it covers the topics related to your examination properly.
After reading from the study material, you can go for any reference book of your choice for better understanding or practice matters.
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2.For direct taxation
Direct tax is the most extensive subject of CA Final in terms of volume and sometimes it seems to be intimidating as well. Consistent reading of your notes will enable you to remember almost all the major sections of the Income Tax Act which you can comfortably quote in the paper.
You have to mandatorily do the recent case law book released by ICAI applicable for your attempt which can be bought or downloaded from ICAI’s website. Try to follow the same presentation for practical, case law based as well as other questions as given in the PM.
Important chapters which have maximum weightage are Profits and Gains from business and professional, Capital Gain, Assessment of various entities, Assessment Procedure and Collection and recovery of tax.
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3.For Indirect taxation
In final the indirect taxation includes GST for 75 marks and is a very important topic as it carries maximum marks and also it is a relatively new topic to be included in the syllabus.
The questions are asked from the topics included in the study material of the ICAI only. Also, there are not many questions from previous papers available for practice, so you have to prepare from the material provided by the institute as a preference.
The second part of the paper includes custom laws and FTP (Foreign Trade Policy). This part is of 25 marks and is mostly theoretical. Foreign trade policy is a relatively easy topic and is included only to the part relevant with the indirect taxes.
So in the second part, you can first opt for the FTP to study and then go for the Customs law. Give maximum focus to the GST but don’t leave the other two topics as they will also help you in gaining the marks required.
4.For International taxation
This subject is included in two papers. First, it has a different paper as a sub part in the 6th paper of final and then it is also included in the direct taxation paper.
In the 6th paper which was earlier ISCA, now 6 optional subjects have been introduced and International Tax is one choice out of such 6 subjects.
Students can choose another subject of their own choice out of such 6 optional subjects. The optional paper would be of 100 marks full while the direct taxation part of the international tax would be of 30 marks only.
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In direct taxation part, you mostly have to deal with the practical aspect of the paper while under the part of 6th paper named as International taxation; you have to study the theory part mostly including taxation rules, laws and its application together with learning about taxation of certain transactions.
The important point to note on this subject is that it is not only wide but it may be very complicated too if someone does not have real / practical & significant background on it including international exposure and knowledge about international commentaries.
Therefore, students have to be considerate while planning studies for international taxation.
1. Good revision plan- The effectiveness of taxation depends upon effective Revision plan. For clearing and scoring good mark, you should be perfect in taxation laws with crystal clear with concepts. This can be achieved through constant and good revision strategies only.
2. Keep a work book- Keep a Scheduler or a daily work book and fix a daily target and area proposed to be completed within that day. Take an immediate action plan for any deficiency.
3. Reference book and scanners and suggested answers in tandem- Start with a reference book and then comes to the past exam question. Understand the practical and application oriented past exam question pattern.
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This will improve your potential to the exam, even though which may not be repeated to your exam. Make a list of the Compulsory Practical question of past exam.
4. Practice questions- You have to solve all the practical compulsory questions of past few exams. Solving more and more practical problem will improve your problem solving ability during the exam.
You have to do the recent RTP as well as previous RTP. Do solve questions from the ICAI practice manual compulsorily.
5. Reading and revising daily- Try quoting small hints like section no, provisions or anything that enables you to easily attempt the question on the question paper during the reading time itself.
So the reading time has a major role to play in taxation, to enable you to comfortably crack this paper and score exemption.
But remember, if you don’t remember any section number exactly never mention it in the paper as not writing section number will not harm you but if you quote wrong section number you will lose your marks.
So just prepare yourself mentally first and then go for the preparation. Complete all the topics from the study material that you prefer and then practice from the books and previous year papers.
Most importantly, maintain your calm and confidence during the examination as it will help you in remembering the topics when it is necessary.
Give all your time to the preparation and then go for the examination confidently and you will definitely crack the examination.