Test Objectives
Chapter 1: Introduction to Securities Markets
1.1 Know the Securities Market and Securities: Definitions and Features
1.2 Know the Securities Markets: Structure and Participants
1.3 Understand the Securities Markets: Products and Features
1.3.1 Cover all securities market products (various types of equity, debt, derivatives, commodities etc.)
1.3.2 Masala Bonds
1.3.3 FCCBs
1.3.4 ADRs, GDRs
1.3.5 Security Receipts (ARC)/Securitisation/PTC
1.3.6 REITs and InvITs
1.3.7 AIFs
1.4 Know the Sources of Tax Regulations in Securities Markets (Sources: GST Council, CBDT Circulars, IT Act, IT Rules)
Chapter 2: Concepts in Taxation
2.1 Learn about Assessment Year
2.2 Learn about Previous Year
2.3 Learn about Person
2.4 Learn about Assessee
2.5 Learn about Residential Status
2.6 Know the Scope of Income
2.7 Understand the different heads of Income (giving examples of securities markets under the different heads)
2.7.1 Salary Income
2.7.2 House Property Income
2.7.3 Profits and Gains of Business or Profession (To be dealt in detail)
2.7.4 Capital Gains (LTCG & STCG) (To be dealt in detail)
2.7.5 Income from Other Sources (To be dealt in detail)
2.8 Know the Deductions
2.9 Learn about the Exemptions (add all exemptions in annexure with cross reference)
2.10 Know the Rebates
2.11 Know the Gross Taxable Income
2.12 Know the Taxable Income
2.13 Know the Tax Payable
2.14 Learn about the Clubbing of income
2.15 Know the Set off and Carry Forward of Loss under the Heads -Capital Gains and Income from Other Sources and Business Profession
2.16 Understand the difference between investing and dealing in shares and securities
2.17 Learn about the Alternate Minimum Tax (AMT) and Minimum Alternate Tax (MAT)
2.18 Learn about the Double Tax Avoidance Agreement (DTAA) (Concept of Multilateral Instruments and Permanent Establishment)
2.19 Learn about the General Anti-Avoidance Rules (GAAR)
2.20 Know the Exempt Exempt Tax (EET)
2.21 Know the Exempt Exempt Exempt (EEE)
2.22 Know the Exempt Taxable Taxable (ETT)
2.23 Know the Marginal Rate of Tax
2.24 Know the Effective Rate of Tax
2.25 Know what are Tax alpha
Chapter 3: Capital Gains
3.1 Understand what are Capital Assets
3.2 Know the Transfer of capital asset
3.3 Learn about the Transactions not regarded as transfer
3.4 Understand the tax aspects regarding Gifts and Inheritances (Cost of acquisition)
3.5 Understand the Computation of capital Gains
Chapter 4: Income from Other sources
4.1 Know Deemed gift tax
4.2 Learn about the Interest and Dividend
4.3 Income Computation and Disclosure Standards (ICDS)
Part II – Provisions in respect of Investors
Chapter 5: Taxation of Debt Products
5.1 Explain the Sources of Income
5.1.1 Interest Income
5.1.1.1 Accrual Basis
5.1.1.2 Receipt Basis
5.1.2 Capital Gains
5.2 Describe the Types of debt products (Tax treatment of the following bonds when they are listed and when they are unlisted; also cover stamp duty)
5.2.1 Coupon Bond
5.2.2 Zero Coupon Bonds & Deep Discount Bonds
5.2.3 Convertible Bonds
5.2.4 Commercial Papers
5.2.5 Government Securities
5.2.6 Tax Free Bonds
5.2.7 Tax treatment when bonds become Listed from Unlisted
5.2.8 Other than equity MFs (Cover segregated portfolio, consolidation of mutual fund)
5.2.9 Masala Bonds and FCCB
5.2.10 Security Receipts
5.2.11 Pass Through Certificates (PTC)
Chapter 6: Taxation of Equity Products
6.1 Explain the Sources of Income
6.1.1 Dividend Income
6.1.2 Capital Gains
6.2 Describe the tax treatment for Listed Equity Shares (Securities Transaction Tax (STT), Stamp duty, Other Charges and Fees, Grandfathering)(importance of contract notes)
6.3 Describe the tax treatment for Unlisted Shares
6.3.1 Capital Gains when sold in OTC market
6.3.2 Capital Gains when sold in the market after IPO
6.4 Understand the taxation of Preference Shares
6.5 Understand the Taxation of GDR/ADR
6.6 Understand the Taxation of Warrants
6.7 Learn about the taxation in Equity Oriented Mutual Funds (including Fund of Funds and ELSS; LTCG, STCG, Dividend, Grandfathering; Mutual Funds SIPs, SWPs, STP)
6.8 Learn about the Equity Derivatives (Capital Gains & Audit in case of derivatives by individuals/Companies (section 44 of IT Act)
6.9 Understand about Dividend and Bonus Stripping
Chapter 7: Taxation of Other Products
7.1 Know the tax aspects of Employee Stock Ownership (ESOPs)
7.2 Know the tax aspects Sovereign gold bonds
7.3 Know the tax aspects Annuities (NPS Tier 1 & Tier 2)
7.4 Learn about the Exchange Traded Funds (ETFs)
7.4.1 Gold ETFs
7.4.2 Other ETFs (Index ETFs, PSU ETFs)
7.5 Learn about Alternate Investment Funds (AIF)
7.5.1 AIF Category 1 & 2
7.5.2 AIF Category 3
7.6 Know about Real Estate Investment Trusts (REITs)
7.7 Know about Infrastructure Investment Trust (InvITs)
7.8 Learn about Other Derivative Products
7.8.1 Currency Derivatives
7.8.2 Interest Rate Derivatives
7.8.3 Commodity Derivatives (CTT)
Part III- Provisions in Respect of Traders
Chapter 8: Business Income
8.1 Know Speculative/Non Speculative Business Income
8.2 Understand the Method of accounting
8.3 Learn about the Valuation of stock-in-trade
8.4 Learn about the Valuation of stock in special cases
8.5 Understand the Actual cost of assets
8.6 Understand the Computation of business income
8.7 Know about Set off and carry forward of Business Loss
8.8 Learn about the Relevance of ICDS
Chapter 9: Taxation in the hands of Intermediaries
9.1 Learn about the taxes paid by the different Securities Market Intermediaries
Chapter 10: Taxation – In the hands of Foreign Portfolio Investors (FPIs)
10.1 Know Who is a Foreign Portfolio Investor
10.1.1 Understand the different taxes/surcharges levied on FPIs (in case of investments in Debt, Equity and Infrastructure Bonds)
10.2 Understand the Tax Treatment of different categories of FPIs for various instruments
Chapter 11: Tax Implications of IFSC
11.1 Know about the Intermediaries in IFSC
11.2 Know about the Products listed on IFSC Exchange (debt, equity etc.) and the implication of tax
Chapter 12: Tax provisions for special cases 5%
12.1 Understand the tax applicability on Bonus issues
12.2 Understand the tax applicability on Split & Consolidation of securities
12.3 Understand the tax applicability on Buyback of Shares
12.4 Understand the tax applicability on Liquidation of Companies
12.5 Understand the tax applicability on Rights issues
12.6 Understand the tax applicability on Mergers & Acquisitions of securities
12.7 Understand the tax applicability on Stock Lending and Borrowing
12.8 Understand the tax applicability on conversion of Bonds or Preference shares in equity shares.
12.9 Understand the tax liability on conversion of stock into capital asset.
Chapter 13: Indirect Taxes in Securities Markets (not in detail)
13.1 Learn about the Goods and Services Tax
13.1.1 Understand the GST implication on Mutual funds
13.1.2 Understand the GST implication on Mutual fund distributor
13.1.3 Understand the GST implication on Broking business
13.1.4 Understand the GST implication on PMS, Investment Adviser
13.1.5 Understand the GST implications on REITs, InvITs, AIF and any other market intermediary
Annexures
A. Compliances by Tax payers
a. Maintenance of Records
b. Filing of Returns (due date)
c. Penalty for non-compliance
B. Summarised tax tables – product wise
C. Summarised tax tables – other products
D. Recent Developments
E. Exemptions and Deductions with cross reference
Cross References
