Taxation and Auditing

Meaning and objectives of tax; Classification of taxes: direct and indirect tax with merits and demerits; Canons of taxation.

Historical background of evolution of income tax in Nepal; Features of Income Tax Act,2058; Definition of basic terms under Income Tax Act; Tax accounting and timing: accounting based on cash, accounting on accrual basis, quantification, allocation and characterization of amounts; Classification and status of a ssesse (Taxpayers): natural person and entity, resident and non-resident, single and couple; Heads and sources of income: concepts, classification: income from employment , income from business, income from investment, casual gain, sources of incomes: domestic and foreign. Tax Act with other laws: Constitution, Tax Act, Tax rule, Finance Act, Legal precedents established by court; Concepts of Presumptive taxation, Turnover taxation, Personal Income Tax (PIT),

Concept of employment, Features of employment income, Chargeable Income under the head of employment; Non - taxable/non chargeable income; Valuation of perquisites;Allowable reduction; Exemptions; Tax credit; Tax rate; Computation of assessable income; Taxable income; Tax liabilities and payable.

Methods of stock valuation, Adjustments of over and under valuation of stocks; Calculation of cost of trading stocks; Assets pooling system of depreciation, Calculation of depreciation basis and allowable depreciation; Provisions for unabsorbed pollution control cost, research and development cost Provision for repairs and maintenance cost; Provisions of additional depreciation allowance.

Concept of business income; Concepts of capital and revenue incomes and expenses; Chargeable and non-chargeable incomes from business; Deductible and non-deductible expenses; Assessable income from sole proprietorship business and profession other than entities; Set-off and Carry forward of business loss.

Concept of investment income; Difference between investment and business; Charge able and non-chargeable incomes from investment; Deductible expenses and non-deductible expenses; Taxation on Capital Gain: tax on gain on sale of shares and non-business, land and building; Investment income from domestic sources and foreign sources; Assessable income from investment, taxable income, Tax liability and tax payable for individual taxpayers other than entities. Set-off and carry-forward of investment losses;

Concepts of statement of total assessable income and taxable income; Allowablereductions: Exemption; Progressive slab rates and flat rates; Tax credit: Foreign tax credit, Medical tax credit; Tax concessions; Adjustments of advance tax; Tax de ductionat source (TDS); Computation of total assessable income Taxable income and tax payable with sole proprietorship business and profession other than entities.

Tax authorities and their powers, rights and duties; Rights and duties of a taxpayer; Documentation, record keeping and information collection; Income return and tax assessment; Payment, collection (recovery/realization), remission, refund and set-off; Penal Provision; Provision of fees and interest; Provision of penalties for offences; Administrative review and appeal.

Concept of value added tax (VAT); Origin and evolution of VAT; Principle governingVAT; Types of VAT; Method of computing VAT; Method of collection/realization andrefund of VAT; Penalties and appeal; Threshold limit and rate of VAT; PermanentAccount Number and VAT number; Abbreviated invoice and VAT invoice.

Meaning, scope, objectives and advantages of auditing, accounting, auditing andinvestigation, Errors and frauds: concepts, types, detection and prevention of errors andfrauds, Concept of internal control: Internal auditing and internal check; Basic conceptsof audit plan, vouching, verification and valuation. Concept,contents and types of audit report. Concept of tax audit.