Corporate Tax Planning Is The Arrangement Of The Financial Activities In Such A Way That Maximum Benefits Are Enjoyed By Making Use Of All Beneficial Provisions In The Tax Laws. It Entitles The Corporate World To Avail Certain Exemptions, Deductions, Rebates And Reliefs So As To Minimize Respective Tax Liability. This Is Permitted Not Frowned Upon.

CORPORATE TAX PLANNING

LOCATION OF BUSINESSNATURE OF BUSINESSFORM OF BUSINESS ORGANISAZATION & THE PATTERN OF OWENERSHIPSPECIFIC MANAGEMENT DECISION LIKE MAKE OR BUY, OWN OR LEASE, CAPITAK STRUCTURE, RENEW OR REPLACE etc.

AREAS OF CORPORATETAX PLANNING

LOCATION OF BUSINESSTAX PLANNING IS Relevant From The Location Point Of View. There

Are Certain Locations Which Are Given Special Tax Treatment.

Full Exemption U/S 10 A For 10 Years In Free Trade Zone(ftz). Full Exemption U/S 10 AA In Special Economic Zone (Sez) On Or After 1-4-

2005 Full Exemption U/S 10 B For 10 Years In Case Of 100 % Export Oriented

Undertaking. Deductions U/S 80- IAB In The Development Of Special Economic Zone. Deductions U/S 80- IB In Case Of Newly Established Industrial Undertaking In

An Industrially Backward State Or District. Deductions U/S 80 IC, In Case Of Newly Established Industrial Undertaking Or

Substantial Expansion Of An Existing Undertaking In Certain Special Category State.

FULL EXEMPTION U/S 10 A FOR 10 YEARS IN THE CASE OF NEWLY ESTABLISHED UNIT IN FTZ

1. General:-a Deduction Of Profit & Gains From The Export Of Things/ Articles Or Comp. Software

2. Eligible:- Any Assessee

3. Essential Condition:-a) Begun To Manufacture The Articles

a) 1981-82 In FTZ

b) 1994-95 Any Electronic Hardware Technology Park

b) 2. Should Not Be Formed By Splitting Up Or Restructuring Of Business. However, Deduction as A Result Of Reestablishment, Reconstruction, Or Revival By The Assessee Acc To Section 33b.

c) 3. Should Also Not Formed By Transfer Of Machine/ Plant Previously Used For Any Person, To A New Business.

d) 4.The Sale Proceed Of Article/ Things So Exported Out Of India With In A Period Of 6 Months Before The End Of Previous Year

e) the exemption prescribed form, the report by CA about the claim of deduction.

f) if the assessee has more than 1 business Assessing office shall hav power to recompute the profit.

4. CLAIMING DEDUCTION/ PERIOD FOR WHICH DEDUCTION IS AVAILABLE:-

1. FIRST 5 CONSECUTIVE YEAR 10 %

2. NEXT 5 CONSECUTIVE YEARS 5 %

3. Next 5 consecutive years 5%

5. How to compute profit and gains from the export of such undertaking(sec. 10A(4)):-

profit from business of under taking × Export turnover of under taking by selling article

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Total Turnover of business

6. Ban on enjoyment of other benefits:-

a. unabsorbed capital expenditure on scientific research etc will be allowed to carry forward and setoff.

b. brought forward losses u/s 72(1), 74(1) and 74(3) not allowed.

c. 80 IA, 80 B not allowed

7. Option Not To Claim Benefit Of Tax Holiday U/S 10 A(8)

8. Deduction In Case Of Amalgamation/ DEMERGER:-

Only In The Hands Of Amalgamated Company

FULL EXEMPTION U/S 10 AA FOR 10 YEARS IN THE CASE OF NEWLY ESTABLISHED UNIT IN SEZ1. General:-a Deduction Of Profit & Gains From The Export Of

Things/ Articles Or Comp. Software

2. Eligible:- Any Assessee

3. Essential Condition:-a) Begun To Manufacture The Articles On Or After 1-4-2006 In SEZ

b) Should Not Be Formed By Splitting Up Or Restructuring Of Business. However, Deductionas A Result Of Reestablishment, Reconstruction, Or Revival By The Assessee Acc To Section 33b.

c) Should Also Not Formed By Transfer Of Machine/ Plant Previously Used For Any Person, To A New Business.

d) 4.The Sale Proceed Of Article/ Things So Exported Out Of India With In A Period Of 6 Months Before The End Of Previous Year

E) The Exemption Prescribed Form, The Report By CA About The Claim Of Deduction.

F) If The Assessee Has More Than 1 Business Assessing Office Shall Hav Power To Recompute The Profit.

4. Period Of Tax Holiday:-

1. No Deduction:- There After 2011-12.

2. On Or After 2001-02 Eligible

5. How To Compute Profit And Gains From The Export Of Such Undertaking(sec. 10a(4)):-

Profit From Business Of Under Taking × Export Turnover Of Under Taking By Selling Article

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Total Turnover Of Business

6. Ban On Enjoyment Of Other Benefits:-

A. Unabsorbed Capital Expenditure On Scientific Research Etc Will Be Allowed To Carry Forward And Setoff.

B. Brought Forward Losses U/S 72(1), 74(1) And 74(3) Not Allowed.

C. 80 IA, 80 B Not Allowed

7. Option Not To Claim Benefit Of Tax Holiday U/S 10 A(8)

8. Deduction In Case Of Amalgamation/ DEMERGER:-

Only In The Hands Of Amalgamated Company

DEDUCTION U/S 10 B FOR 10 YEARS FOR 100 % EXPORT ORIENTED UNDERTAKING

1. General:-a Deduction Of Profit & Gains From The Export Of Things/ Articles Or Comp. Software

2. Eligible:- Any Assessee

3. Essential Condition:-a) The Undertaking Should Be An Approved 100 % Eou, Must Be

Approved By The Board Appointed By Central Governement.

b) It Manufactures Or Produces Any Article Or Thing Or Computer Software.

c) ON the Condtions Same As Of Section 10 A

E) The Exemption Prescribed Form, The Report By CA About The Claim Of Deduction.

F) If The Assessee Has More Than 1 Business Assessing Office Shall Hav Power To Recompute The Profit.

4. Claiming Deduction/ Period For Which Deduction Is Available:-

1. First 5 Consecutive Year 10 %

2. Next 5 Consecutive Years 5 %

3. Next 5 Consecutive Years 5%

5. How To Compute Profit And Gains From The Export Of Such Undertaking(sec. 10a(4)):-

Profit From Business Of Under Taking × Export Turnover Of Under Taking By Selling Article

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Total Turnover Of Business

6. Ban On Enjoyment Of Other Benefits:-

A. Unabsorbed Capital Expenditure On Scientific Research Etc Will Be Allowed To Carry Forward And Setoff.

B. Brought Forward Losses U/S 72(1), 74(1) And 74(3) Not Allowed.

C. 80 IA, 80 B Not Allowed

7. Option not to claim benefit of tax holiday u/s 10 A(8)

8. Deduction in case of Amalgamation/ DEMERGER:-

ONLY IN THE HANDS OF AMALGAMATED COMPANY

DEDUCTION U/S 80 IAB ENGAGED IN THE DEVELOPMENT OF SEZ

1. General:-a Deduction DEVELOPER, ON AFETR 1-4-2005 UDER SEZ ACT 2005

2. QUANTUM OF DEDUCTION:-

100 % OF THE PROFIT $ GAINS FOR 10 CONSECUTIVE YEARS.

3. CONSEQUENCES OF TRANSFER OF UNDERTAKING:-

TRANSFEREE DEVELOPER FOR REMAINING 10 YEARS.

4. PROFIT OF ELIGIBLE BUSINESS HOW TO COMPUTE:-

AS IF SUCH BHUSINESS WAS THE ONLY SOURCE OF INCOME OF THE ASSESSEE.

5.CONDITION PRESCRIBE U/S 80- IA(7) TO 80 IA(12) TO BE APPILCABLE FOR CLAIMING DEDUCTION:-

A. AUDIT OF ACCOUNTS

B. INTER UNTI TRANSFER OF GOODS OR SERVICES.

C. RESTRICTION OF DOUBLE DEDUCTION.

D. RESTRICTION OF EXCESSIVE PROFIT.

E.POWER OF CENTRAL GOVT TO NOTIFY UNDERTAKING TO WHICH SECTION 80 IAB DOESNOT APPLY.

F. DEDUCTION IN CASE OF AMALGAMATED / DEMERGER.

6. DEDUCTION NOT TO BE ALLOWED IN CASE WHEN RETURN IS NOT FILLED WITHIN SPECIFIED TIME LIMIT.

DEDUCTION U/S 80 IB FOR CERTAIN INDUSTRIAL UNDERTAKING IN J&K

1. General:- Gti Include Profit & Gains.

2. Essential Condition:-

Same As 10 A. And Manufacturing Before 1-4-2012

3. Quantum Of Deduction:-

Industrial Undertaking:-

Owned By A Company First 5 Year 100 %

Next 5 Year30 %

Owned By A Cooperative Society 100% And 25 %

Owned By Any Other Assessee 100 % And 25 %

4. Profit How To Compute?:-

Same As Section 80iab

DEDUCTION U/S 80 IC FOR CERTAIN INDUSTRIAL UNDERTAKING IN H.P & U.K1. General:- GTI Include Profit & Gains.

1. Articles Not Being Mentioned In Schedule 12 H.P

2. Articles Not Being Manufactured In Schedule 14 U.K

2. Essential Condition:- Same As Sec- 10 ABegins Manufacturing 7-1-2003 To 1-4-2012

3. Quantum Of Deduction:-100 %

4. Condition Prescribe U/S 80- Ia(7) To 80 Ia(12) To Be Appilcable For Claiming Deduction:-

A. AUDIT OF ACCOUNTS

B. INTER UNTI TRANSFER OF GOODS OR SERVICES.

C. RESTRICTION OF DOUBLE DEDUCTION.

D. RESTRICTION OF EXCESSIVE PROFIT.

E.POWER OF CENTRAL GOVT TO NOTIFY UNDERTAKING TO WHICH SECTION 80 IAB DOESNOT APPLY.

F. DEDUCTION IN CASE OF AMALGAMATED / DEMERGER.

6. DEDUCTION NOT TO BE ALLOWED IN CASE WHEN RETURN IS NOT FILLED WITHIN SPECIFIED TIME LIMIT.