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Everything you need to know while preparing for CA Intermediate Paper 4: Taxation

In this article, we are sharing the tips & tricks on Preparing for CA Intermediate Paper 4: Taxation.

What is the structure of the paper?

The Taxation paper of CA Intermediate is divided into two main parts:

Section A – Income Tax Law

    1. 18 marks of multiple choice questions of 1 or 2 marks (standalone and case based).
    2. 42 marks of descriptive type questions.
      1. Question No. 1 of 14 marks is compulsory.
      2. Attempt any 2 out of 3 from Question Nos. 2 to 4 (14 marks each).

Section B – 28 marks of descriptive type questions

    1. 12 marks of multiple choice questions of 1 or 2 marks (standalone and case based).
    2. 28 marks of descriptive type questions.
      1. Question No. 5 of 8 marks is compulsory.
      2. Attempt any 2 out of 3 from Question Nos. 6 to 10 (10 marks each).

Please Note: This is the trend that has been observed over the years. However, ICAI may change its paper pattern and question break-up any time.

What are the examiner’s expectations?

    1. The questions are often structured and worded in a tricky manner. You may miss intricate details embedded in the questions and end up making silly mistakes. Hence, you need to be able to correctly analyse the data given in the question using the relevant concepts.
    2. As some questions are technically challenging you are expected to have conceptual clarity of the various sections and provisions which can be developed by solving papers.
    3. Although you do not need to memorize every section, you should try to remember sections for topics such as PGBP, Deduction under Chapter VI-A, TDS and TCS.
    4. You are expected to be aware of the latest amendments as they carry more weightage.

What should be the source of content?

    1. Content provided by your Coaching Provider along with your personal summary notes can be used as a base. However, ensure that it is comprehensive in its coverage by cross checking it with ICAI material
    2. Past Examination Papers, RTPs and MTPs.
    3. Referencer developed by ICAI for a summarised version of the notes.
    4. MCQs and Case Scenarios Booklet developed by ICAI for a detailed understanding of types of multiple choice questions asked.
    5. Refer ICAI’s website for Judicial updates and recent amendments in Tax Law which are relevant for the exam.

Pro Tip: Stick to your base material as a reference. You must avoid changing the source of content closer to examination since that may lead to confusion in your study preparation.

What is the ideal learning methodology & time to be invested?

Reading Source Time Expected Outcome
1st A detailed study of every concept involved 6 to 7 days ● Do a detailed study of the entire course content from your base coaching providers and ICAI Material.

● Try solving as many number-driven questions and multiple – choice case studies as possible.

● Prepare a repository of questions for later revisions.

● Highlight the important sections and try to memorise the language.

● Make summarised notes for important chapters like PGBP, TDS & TCS, Capital Gains, Deductions and Exemptions.

● Make a quick reference list of the important points you must remember about every chapter.
2nd A summarised version of the syllabus 3 to 4 days ● Cut down the list of questions to be practised in this revision.

● Finalise on your summarised sections for revision before exam day.
3rd A quick revision to cut-down pre-exam study time 1 to 1.5 day ● Keep practising, go through all your summarised notes, and appear for a mock exam.

● Go through all recent amendments and judicial updates.
4th The final revision one-day before the exam 1 to 1.5 day ● Trust your past preparations and instincts.

● Go through all earmarked sums and theory.

Pro Tip: In MCQs you should quickly glance the question and the options before reading the case study. This helps you to identify the relevant data from the case study. Also, sometimes the question is straight forward, and you do not need to read the case study to answer the MCQ. This helps to save time

What is the appropriate order in which the syllabus should be studied?

The overall portion can be divided into various buckets. Studying the entire syllabus as per these buckets and in the given sequence will be useful in building conceptual clarity and will avoid ad-hoc selective studying.

Visit the concept of ‘Remember, Revise, Recollect’ all throughout your study preparation.

Whether you start with DT or IDT, complete that subject before you move on to the next.

Direct Taxation – Income Tax (60 marks)
Introduction Heads of Income Computation Assessment
· Basic Concepts

· Scope of Income

· Residential Status

· Exempt Income

 · Income from Salaries

· Income from House Property

· Profit and Gains from Business and Profession

· Capital Gains

· Income from Other Sources

 · Clubbing and Set-off

· Deductions from Gross Total Income

· Computation of Total Income

· Section 115BAC

 · Advance Tax

· TDS

· TCS

· Provisions for Return Filing

 

Indirect Taxation – Goods and Services Tax (40 marks)Priority 1Priority 2

· Supply under GST

· Charge of GST

· Exemptions from GST

· Time and Value of Supply

· Input Tax Credit

· Registration

· GST in India – An Introduction

· Tax Invoice: Credit and Debit Notes, E-way Bills

· Payment of Tax

· Returns

Note: Learn about the weightage distribution over various topics as per ICAI

Some trends and observations from the past year examination papers are as under:

Income Tax Law

  1. Question 1 is usually an elaborate 14 marks question on computation of income of an individual that covers concepts from the entire syllabus, though more emphasis is given to provisions of PGBP.
  2. Individual questions on any of the heads of income range between 4 to 7 marks.
  3. Short questions of 3 or 4 marks are often asked on the smaller concepts like clubbing, set-off, TDS, TCS, scope of income and residential status.

Indirect Taxes

  1. Question 5 is generally asked from Value of Supply or Input Tax Credit.
  2. Exemptions, Time of Supply and Registration are popular chapters.
  3. Amendments are given a lot of emphasis.
  4. Both numerical based and descriptive type theoretical questions are asked.

Disclaimer: The above analysis is based on examination papers of the last 3-4 years. The trend may change from time to time at discretion of ICAI

How can I ace my exam writing skills?

  1. Use the 15 minutes reading time judiciously to strategize your way through the paper.
  2. It is very important to choose the right order for attempting the paper – ensure that you manage to attempt 40 marks in the first 1-1.25 hours.
  3. In case you cannot figure out the solution to a particular question within a designated time, make sure you move ahead to the next question.
  4. Ensure that all formats are properly made with headings and unit of account symbol clearly written.
  5. Quote section numbers only if you are sure about them.
  6. Ensure that you write working notes for all the important provisions in the computation sums. For example, in case of disallowances while computing the total income in Q1, specify the section as per which the expense is disallowed.
  7. Ensure that you bullet your answers and underline the key words, wherever relevant.
  8. Save time while solving MCQs by quickly scanning through the case study and understanding the ask of the questions before going into the detailed solving.

Pro Tip: Start writing your exam with the question you are most comfortable with – it will help to boost your confidence for the paper.

How to prepare on the eve of the exam?

It is possible to revise the entire syllabus provided you have prepared summary notes and have a thorough grip on the content.

Below is an illustrative list on how topics should be allocated between the three days you will have. You should prepare your own list based on the syllabus coverage and instructions by your coaching provider.

On day of Tax Paper On Break day On day of Exam
· Try and finish studying atleast 75% of the IDT syllabus.

1. Returns

2. Payment of Tax

3. Tax Invoice

4. Time and Value

5. Supply

6. Introduction

7. Registration

 · Study the remaining 25% of IDT

8. Exemptions

9. Charge of GST

10. ITC

· Study 60% of DT syllabus

1. Basic Concepts

2. Scope of Income

3. Residential Status

4. Exemptions

5. All 5 heads of income

6. Clubbing and Set-off

7. Return Filing

 · Study the remaining 40% of DT

8. TDS, TCS, Advance Tax

9. Deductions

10. Computation and related concepts

· Read the list of section numbers for both DT and IDT.

· Go through the quick reference list of the important points you must remember about every chapter.

What are the major challenges faced by students while attempting the Exam on the D Day & how must I prepare in advance to meet those challenges?

Recollecting and associating questions to the related sections● Ensure that you are well-versed with the sections so that you can quote them and enhance your answer quality.

● Appear for at least 2 mock exams in a time bound format.

Challenges Solutions
Inability to logically think and present an answer to a new question ● Solve a couple of questions in writing in every revision.

● Focus on the format of the various answers as per ICAI.

● Know when to elaborate through working notes to improve understand-ability.
Scoring well in the theory based questions Use the right vocabulary – stick to the keywords used by ICAI
Inability to manage time in the paper Unnecessary time should not be devoted on a particular question. In case you cannot figure out the solution to a particular question, designate some time to it at the end of the paper
Inability to understand the content expectations of the examiner Read up the past RTPs and Exam Papers to gain an understanding of the answer format. Read up Summary of examiner’s comments from past attempts on the ICAI Website.

For additional resources to assist you while preparing for CA Intermediate, visit here.

Good Luck!

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