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Topic:How to Study CA Final Direct Tax Laws DT in 60 days ?

AnonymousPosted on 8th January,2021 05:15 PM

How to score 60+ in Direct Tax Laws

60 days Study Planner

The syllabus is divided into 2 parts

  • Direct Tax Laws

  • International taxation

As we all know, direct tax revolves around 5 heads of income. But for C.A. Final exams only 3 heads are to be given most priority while studying:

  1. Capital gains

  2. Income from Other sources

  3. Profit and gains from business and profession

Note: Students of NEW Course are advised to please prepare yourself thoroughly for 30 Marks of MCQ since ICAI is expected to test most of the technical concepts through the same.


What are the important sections and provisions?

Focus area?

How to prepare?

What does ICAI expect?

Income from capital gains and black money(Gift taxation)

8-10 Marks

1) Sections of black money i.e. Section 56(2)(viib)/(viii)/(ix)/(x) and section 50C,50 CA and Section 47, 47A read with section 55,154,155,2(42A) and Section 49 and Rule 11UA and 11UAA .

Logic behind such sections and link it with Section 47 , 50C and 50CA as it leads to an intended double taxation by Finance minister due to section 56(2)(x).

Just go through the sections along with the logics and focus on applicability and exceptions of section.

There are various amendments by Finance Act 2017 as well as 2018 in this chapter thus ICAI expects us to be well worth with those.

2)`Exception of Section 45(1) i.e. 45(1A)/(2)/(3)/(4)/(5)/(5A)

Joint developments agreements Section 45(5A) read with TDS section 194IC

The go through the sections and focus on when the tax liability arises in these sections.


3) Section 112,112A and 111A read with 10(38), 2(42A) and 55(2)(ac)

Focus on Section 112A

Note: Sale of Long term capital assets of 10(38) till 31.3.2018 are still eligible for exemption.

Logical study of section 112A and FMV calculation u/s 55(2)(ac) is Very important of exams.

Amendments in 112A and 55(2)(ac).

4) Deemed dividend related sections

Section 115BBDA,115 BBD,115-O,Section 2(22)(a)/(b)/

(c)/(d)/(e),10(34),10(34A),10(35),115R-Mutual funds read with interest and penalties of section 115P,115Q,115S,115T for delayed payment of CDT and other provisions and section
46,115QA Rule 40BB and Sec 46A to be read as a group linked with Sec 2(22)(c) and (d).

Linkage of sections and Section 2(22)(e) amended to include CDT to be paid by Company and exempt in hands of shareholder

Amendments in section 2(22) and 115-O.

5) Section 10 Exemptions and section 48 provisos

Section 10(38) and remember, 3rd Proviso to sec 48 says that where 112A applies , no indexation shall be available.

Just focus on the applicability of exemptions and whom are they applicable to and in what cases.Do not cram it , just understand the concept behind it.

Applicability in various cases.

6) Other Provisions: Section 54 deductions , clubbing and slum sale.

Not much important for CA Final exams but just read twice

Change in Section 54EC

A few adjustments may be asked but not a full fledged question.

Profit and gains from business and profession

16 -20 M

1) Disallowances and allowances i.e. Section 30 to 40A and related case laws

A 16 Marks P/L based question is surely expected thus a clear understanding of calculation of business income is expected

Do a few questions by hand and focus on speed.

Revise the disallowances regularly and logically

A full fledged question is surely asked.

2) Depreciation section 32 and 43 read with section 50.

Depreciation rates and calculation as well as relevant case laws must be thorough

Focus on the 13 Explanations for actual cost under section 43(1).

An adjustment in a full question is only expected but that adjustment is worth 4 marks

3) Deduction of Section 35AD,33ABA, 35D,35DD,35DDA,35ABB,35ABA,35CCD,35CCC and donation section 35 series.

Just read the same a few times and focus on applicability of the same.

Revise it a few times but don't cram it.

Applicability of the section in various cases.

4) Section 40B read with sec 172,40BB,40BBB,40BBA ,read with section 115A

These are related to non-resident and must be read together.

These are a bit similar thus a focus must be made to the RATE at which the income is deemed to be business or profession.

Revise it a few times but don't cram it.

Since focus of ICAI is towards international taxation, thus these sections become very important.

5) Section 41,43A,43B and 43C read with relevant sections 36 and 40A

Most important are sections 40A and 40B

Just a few times revision would be sufficient.

No need to cram

Memory of students for conditions in which these sections are applied.

6) TDS and TCS sections read with section 234E and 271H and Section 220/221 as well as section 201 related to interest/Fee/penalties of TDS and TCS as well as Section 200A and 206C related to procedure of CASS software of processing of returns of TDS and TCS.

Focus is expected on:

i) Rate of TDS/TCS

ii) Threshold limit

iii) The Exceptions to the sections

iv) The amendments and other procedural sections.

Focus on applicability of sections and where individual are required to deduct and where not and where it is only resident and where it is not.

Logical understanding of sections and amendments of finance act 2017 and 2018.

7) Set off and Carry forward.

Just read it a few times

Just read it a few times

Concept clarity.

Income Under head House property and Salary

4-6 Marks

Just focus on latest amendments for these head. A full-fledged question is not asked but only a few adjustments here and there are expected.

Just focus on amendments

Amendments of finance act 2017 and 2018 and latest case laws related to the same.

Taxation of Specific entities.

16-20 Marks

1) Charitable trust along with definition u/s 2(15) and section 115BBC


3) Firms taxation read with section 187,188,189 and 188A for liability of partners.

4) Mutuality Concept

5) HUF

6) Political parties

7) Electoral trust

8) Securitization trust

9) Investment fund

10) Business Trust

1) The latest amendments in the chapter of Charitable trust must be focused on for around 4- 8 marks

2) A full-fledged question of 8 marks from Taxation of Firms is also expected.

3) Business Trust is a new concept and expected to be asked in exams.

Since these are very important for exams, a thorough understanding of the same is required and practice solving at least 3 questions of different types from each of the specific entity is must.

A full-fledged question is asked on few of the type of specific entities.

MAT,AMT and Deduction of chapter VIA and 10AA.

8-12 Marks

Section 115JB and other section from 80 IA to 80 RRB and related procedural section which are relevant and applicable for the relevant assessment year.

Just focus on the rate of deduction and condition for eligibility of deduction to the assessee.

NOTE: Where Section 35 AD is not available due to applicability of AMT, the depreciation along with additional depreciation will be given to the assessee

Just practice few full-fledged questions.

Adjustments of MAT are expected to be known and focus on adjustments.

Returns, Assessments, Appeal and rectification and interest & penalties.

12-16 Marks

1) Section 139 to section 153A related to returns and Assessment procedures.

2) Section 131 to Section 133D related to survey, investigation etc.

3) Other section related to appeal and rectification and revision by commissioner etc.

4) Other Procedural aspects i.e. 140A and interest and
Fee 234F and 271A along with Interests of 234 A/B/C etc.

(NOTE: Fee of section 234F and E are also an allowable deduction while calculation of PGBP income.)

1) Amendments must be focused on

Case laws related to these provisions are very important and expected to fetch around 12 Marks.

3) Pay attention where the Doctrine of Partial Merger and where Total Merger is applicable.

Just go through the sections and related case laws.

2-3 times reading is enough.

Try making summaries of the concept for faster revision as content is huge.

Latest case laws and calculation of Taxable income to be returned along with provision of Re-assessment of section 147 etc.

International taxation

30 Marks

1) Residential status


3) IFSC related amendments and sections.

4) Transfer pricing and DTAA .

5) Other Non-resident related concepts in 5 heads of income.

1) Focus on Non-resident related section and amendments in Chapter of Capital gains.

2) Transfer Pricing & related issues.

3) POEM and residential status was not asked in previous attempts thus becomes more important for may/June 2019 attempt.

Solve questions paper of Nov 2018 and before that,

related to


1) IFSC related amendments in chapter of capital gains

2) Concept clarity of Transfer pricing and DTAA.

3)Amendments of finance act 2017 and 2018.

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