MF0012 –Taxation Management



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Master of Business Administration- MBA Semester 3

MF0012 –Taxation Management- 4 Credits

(Book ID: B1760)

Assignment (60 Marks)

Note: Answer all questions (with 300 to 400 words each) must be written within 6-8 pages. Each Question carries 10 marks 6 X 10=60


1. Explain the concept of tax planning. What are the objectives of tax planning?


The  avid goal of every taxpayer is to minimize his Tax Liability. To achieve this objective taxpayer may resort to following Three Methods :

  • Tax Planning
  • Tax Avoidance
  • Tax Evasion



2. R owns two buildings, the depreciated value of the block on 1-4-2007 being 22.50 lacs of the said buildings which had been purchased on 30-4-1996 for Rs.18 lac is compulsorily acquired by the government on 15-5-2007 for which a sum of Rs. 50 lacs is paid as compensation on 20-3-2008.The said building was being used by the company as a tenant for about 4 years prior to the date of acquisition of the same by the company. The company purchases a new building on 10-4-2009 for Rs.14 lac for the purpose of setting up another industrial undertaking.

Compute the amount of capital gains for the assessment year 2010-11.


What would be the capital gains if the new building was purchased on 8-5-2008?


Hint: Short-term capital gain chargeable to tax for AY 2010-11 = 1350000



3. What is value added tax? How does it operate? Write about the purchase eligibility for input tax credit. (2 + 5+3)


Input tax is the VAT charged by your supplier on your business purchases in the State of Andhra Pradesh. It includes the VAT on goods purchased for resale, raw materials, consumables, packing materials, capital goods and



4. Discuss the tax planning for amalgamation/merger and demerger of companies.



The words “Mergers” (M), “Amalgamation” (A), “Demergers” (D) are not defined in the Companies Act, 1956. The words used in the Companies Act are ” compromise and arrangements”. These words “MAD” are therefore to be understood in the general context and from judicial pronouncements.

“Mergers” is generally a blending of two




6. Discuss the exemptions and rebates from service tax.

Answer : Services exempted from Service Tax:

Some general exemptions are provided in respect of:


  • Services provided to the United Nations;
  • Services to units in and developers of Special Economic Zones;
  • Services rendered free of cost; and
  • Services prior to the effective date of the service being included as a taxable service, even if payments are realized later.




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