Assessment of Company and NRI
Company being an artificial legal person is taxable like any other assessee. Company may be an Indian company, foreign company, Domestic Company etc. Tax treatment for all companies may vary as per their status
Section 2(26) of the Income Tax Act, 1961 ‘Indian Company’ as a company formed and registered under the Companies Act, 2013 and includes:
(a) a company formed and registered under any law relating to companies formerly in force in any part of India (other than the State of Jammu and Kashmir, and the Union Territories specified in (e) below);
(b) any corporation established by or under a Central, State or Provincial Act;
(c) any institution, association or body which is declared by the Board to be a company under Section 2(17) of the Income Tax Act, 1961;
(d) in the case of State of Jammu & Kashmir, any company formed and registered under any law for the time being in force in that State; and
(e) in the case of any of the Union Territories of Dadra and Nagar Haveli, Goa, Daman and Diu and Pondicherry, a company formed and registered under any law for the time being in force in that Union Territory;
As per Section 2(22A) of the Income Tax Act, 1961, domestic company is an Indian company or any other company which, in respect of whose income liable to tax under the Income Tax Act, company made the arrangements for the declaration and payment within India, of the dividends including dividends on preference shares payable out of such income
As per Section 2(23A) of the Income Tax Act defines foreign company as a company, which, is not a domestic company.
If a non-Indian company has made the arrangements for declaration and payments of dividends within India, such a non-Indian company must be treated as a “domestic company” and not as a “foreign company”.
Marginal Relief : In case of a company whose total income exceeds Rs. 1 crore, marginal relief would be provided to ensure that the additional income-tax payable including surcharge, on the excess of income over Rs. 1 crore is limited to the amount by which the income is more than Rs. 1 crore.
These online MCQ tests and MCQ questions includes all main concepts of the chapter (Assessment of Company and NRI) in CS Executive Module I Tax Laws & Practice (MCQ based OMR) Exam