Introduction
When you're preparing for a taxation interview—whether for a Big 4, a top consulting firm, or even a
mid-sized CA firm—the line between direct and corporate tax questions often blurs. One moment, you're
explaining Section 44AB and the next, you're being quizzed on international tax treaties.
So, what’s the best way to prepare?
You don’t just “read” taxation. You practice questions, understand context, and build the confidence to
explain it in simple terms. That’s what this blog is all about.
Below is a list of the most commonly asked direct and corporate tax interview questions—along with
practical, to-the-point answers. If you're specifically looking for direct tax interview questions or
corporate tax interview questions, this guide covers both in depth.
Whether you're a fresher or someone switching roles, these taxation interview questions for freshers and
experienced professionals alike will help you get interview-ready.
Also Read: Top CA Firms in India For
Articleship
Core Conceptual Questions
1. Why do you want to work in taxation?
Taxation sits at the intersection of law and business. It’s challenging, always evolving, and
requires analytical thinking. Whether it’s direct tax or corporate tax, the ability to interpret new
laws and apply them practically is what makes this career rewarding.
2. What are the key sources of tax laws in India?
- Income Tax Act, 1961
- Finance Acts (from annual budgets)
- Income Tax Rules, 1962
- CBDT Circulars & Notifications
- Judicial rulings by SC/HC
- DTAAs (for cross-border taxation)
3. How do you stay updated with tax changes?
By subscribing to alerts from Big 4s, Taxmann, and TaxSutra. I also attend ICAI seminars and follow
government portals and Finance Ministry releases.
These CA interview questions on direct tax often start with your understanding of the tax environment
and your source of updates.
Tax Audit & Corporate Compliance
4. What is a Tax Audit?
Tax Audit (Sec 44AB) is an audit conducted by a CA to ensure correctness of income computation. The
report is filed in Form 3CA/3CB and 3CD depending on the nature of accounts.
5. How many clauses are there in Form 3CD?
There are 44 clauses in Form 3CD, each designed to provide details on specific transactions or tax
treatments.
6. Explain some important provisions of the Tax Audit Report.
Clause 12 – Method of Accounting
- Whether books are maintained on cash basis or mercantile basis.
- Any change in method from previous year?
- If yes, what impact did it have on profits?
Why it matters: Helps identify if you're trying to look richer (or poorer) by
just
changing your accounting lens.
Clause 13 – Method of Stock Valuation
- FIFO, weighted average, unicorn magic—whatever method you’re using, disclose it.
- And, if you change the method from last year, please explain why and how much it affected
your profits.
Why it matters: Valuation methods can significantly impact profit.
Clause 21(b) – Expenses Disallowed under Section 40(a)
- If you made payments without deducting TDS or deducted but didn’t deposit—this clause
tattles on you.
- These expenses will be disallowed while calculating your taxable income.
Why it matters: One of the most heavily scrutinized clauses. TDS involved?
Hence, serious zone.
Clause 23 – Amounts Inadmissible under Section 43B
- This clause lists those “expenses allowed only on payment basis”—like PF, ESI, taxes, etc.
- If you haven’t paid them before the due date of filing ITR, say goodbye to deduction.
Why it matters: So many audit adjustments happen here—especially when companies
forget PF deadlines.
Clause 26 – Section 269SS and 269T Violations
- If you’ve taken or repaid loans or deposits in cash above Rs. 20,000—this clause exposes
you.
- You can be slapped with 100% penalty of such amounts.
Why it matters: Cash transactions = red flag = headache for both client and CA.
Clause 32 – Depreciation
- Rate, method (SLM/WDV), asset category—it’s all laid out here.
- It should match the books AND the Income Tax Act.
Why it matters: Helps in reconciliation and ensures clients aren’t
“accidentally” taking double depreciation.
Clause 34 – TDS/TCS Compliance
This one’s like a report card.
It discloses:
- Which sections TDS/TCS was applicable under,
- Was it deducted?
- Was it deposited on time?
- Was it filed in return?
Why it matters: A mismatch here can trigger notices (“intimation u/s 143(1)”)
Clause 44 – GST Breakup
- Total expenditure of the entity is broken down into registered/unregistered vendor payments
and nature of GST applicability.
- A new clause and still confusing for many.
Why it matters: Cross-verification with GST returns is the trend now. No escape.
7. Have you filed TDS returns? What’s the process for salary TDS?
Yes. For salary (Form 24Q), TDS is deducted u/s 192 and includes PAN details, challan details,
payment date, and deposit date. It's filed quarterly using RPU (Return Preparation Utility)
utilities and validated through FVU (File Validation Utility)
These are common tax audit interview questions asked during assessments for audit-focused roles.
Budget & Recent Amendments
8. What are the major Budget 2024 changes relevant to corporates?
- Reduction in tax rate for foreign companies from 40% to 35%
- Equalization levy on e-commerce removed
- Capital gains tax rate changes on listed securities
These changes significantly affect corporate structuring and compliance. This is often covered in
corporate taxation interview tips and discussion points
9. What’s new in individual taxation post Budget 2020?
The optional tax regime under Sec 115BAC offers lower slab rates without exemptions. It's beneficial
for those with minimal deductions—like young professionals or gig workers.
10. Any key amendments from Budget 2019 you remember?
Some provisions introduced included changes in corporate tax rates, start-up taxation relief, and
incentives for affordable housing.
11: Vivad se Vishwas Scheme 2024
Vivad se Vishwas Scheme 2024. The government’s version of “let bygones be bygones”… but with a
deadline.
The Vivad se Vishwas Scheme 2024 is a dispute resolution scheme launched by the Central Government
to clear the clutter of pending tax cases. Think of it like a mega tax clearance sale where you pay
less, get peace of mind, and go home with a clean record (kinda like closing tabs after weeks of
chaos).
In short: “Pay the tax, forget the interest & penalty, and let’s shake hands.”
There was a Vivad se Vishwas Scheme in 2020 - but that was mostly for Direct Taxes.
This one? It’s the 2024 avatar, bigger, better, and laser-focused on resolving indirect tax disputes
(GST, Excise, Service Tax) pending under various tribunals and courts.
Who Can Apply? (Read Carefully)
This scheme is for you if:
- You have disputes pending under Central Excise, Service Tax, or certain other indirect taxes
as on 30th April 2023.
- Your appeal is pending before any appellate authority (Commissioner (Appeals), CESTAT, High
Court, Supreme Court).
- Even if the department has filed an appeal - you can still settle and be done.
But, it’s not for:
Cases under Customs.
Cases involving narcotics, fake invoices, or fraud
Pros:
- One-time settlement = full stop on years of litigation
- No penalty, no interest = actual savings
- Peace of mind = priceless
- No admission of guilt = settle without saying "I was wrong"
Cons:
- You need liquid cash now (if you’re broke, sorry)
- Once settled, no refund, no appeal
12: Old Tax Regime Vs New Tax Regime: What is better for different class of
individuals?
A: Income Tax Slabs Comparison (FY 2025-26)
| Income Slab |
Old Regime Tax Rate |
New Regime Tax Rate (2025) |
| Up to Rs. 2.5 lakh |
Nil |
Nil |
| Rs. 2.5 lakh - Rs. 5 lakh |
5% |
Nil (due to rebate under 87A) |
| Rs. 4 lakh - Rs. 8 lakh |
5% |
5% |
| Rs. 8 lakh - Rs. 12 lakh |
20% |
10% |
| Rs. 12 lakh - Rs. 16 lakh |
30% |
15% |
| Rs. 16 lakh - Rs. 20 lakh |
30% |
20% |
| Rs. 20 lakh - Rs. 24 lakh |
30% |
25% |
| Above Rs. 24 lakh |
30% |
30% |
- Standard Deduction under New Regime (2025): Rs. 75,000 for salaried individuals
- Rebate under Section 87A: Income up to Rs. 7 lakh (old) and Rs. 7.5 lakh (new)
= No tax
What You Get in Each Regime
| Feature |
Old Regime |
New Regime |
| Standard Deduction (Salary) |
Rs. 50,000 |
Rs. 75,000 |
| 80C Deduction |
Up to Rs. 1.5 lakh |
Not allowed |
| 80D (Medical Insurance) |
Allowed |
Not allowed |
| HRA, LTA, etc. |
Allowed |
Not allowed |
| Simplicity |
Complex (Paperwork) |
Simple (Less compliance) |
Which Regime is Better for Whom?
| Type of Taxpayer |
Better Option |
Why? |
| Salaried with minimal deductions |
New Regime |
Simple calculation, less paperwork |
| Salaried with high HRA, 80C, and 80D deductions |
Old Regime |
Deductions bring down taxable income more than reduced rates |
| Freelancers/self-employed with no big investments |
New Regime |
No point in old regime if you’re not claiming deductions |
| Home loan borrowers claiming interest under 24(b) |
Old Regime |
Home loan interest deduction is NOT available in the new regime |
| Senior citizens with high 80D & savings interest |
Old Regime |
Additional deductions available specifically for senior citizens |
| Someone earning below Rs. 7.5 lakh (salary) |
New Regime |
No tax due to Rs. 75,000 standard deduction + 87A rebate |
Miscellaneous & Practical
22. What is Form 26AS?
It's a tax credit statement showing TDS, TCS, advance tax, refunds, etc. Crucial for reconciling
before filing ITR.
23. What is the New Pension Scheme (NPS)?
Started for retirement savings of employees (including private sector). Offers tax benefits, low-cost
investment, and long-term growth.
24. What is Superannuation Fund?
An employer-contributed retirement benefit. Up to Rs. 1.5 lakh contribution is exempt; beyond that,
it's taxable.
25. Difference between LTCG and STCG?
- LTCG: Gains on assets held > 12/24/36 months (varies by asset)
- STCG: Gains on assets held < that period
- LTCG enjoys indexation benefits and lower rates.
26. LTCG under section 112A of Income Tax Act 1961
Section 112A deals with Long Term Capital Gains (LTCG) on the sale of:
- Listed equity shares,
- Equity-oriented mutual funds, and
- Units of business trusts
Provided you've held them for more than 12 months.
But there’s a twist - it only applies if STT (Securities Transaction Tax) was paid
at the time
of purchase/sale.
| Particulars |
Details |
| Type of Asset |
Listed Equity Shares / Equity Mutual Funds / Units of Business Trusts |
| Holding Period |
More than 12 months |
| Tax Rate |
10% on gains exceeding Rs. 1 lakh |
| Exemption Limit |
First Rs. 1 lakh = Tax Free |
| Indexation Benefit |
Not allowed |
| Rebate under Section 87A |
Not allowed against this LTCG |
Pros of Section 112A
- First ₹1 lakh of gains are tax-free every year.
- Low tax rate of 10% for long-term investments.
- Encourages long-term holding in equity.
- Transparent and easy to calculate (compared to business income).
Cons / Watchouts
- No indexation - hurts if inflation eats into your gains.
- No deductions (80C etc.) or rebate u/s 87A on this LTCG.
- Applies only if STT is paid – check before you file.
- Not applicable on unlisted shares – they have different tax rules.
27. What are the conditions for HRA exemption?
- Salary component includes HRA
- Rent is actually paid
- Individual is living in rented accommodation
- Exemption is least of actual HRA, rent paid – 10% salary, or 50%/40% salary (metro/non-metro).
Final Tip
Your goal isn’t just to “memorize” these answers, but to understand them deeply enough to explain
in your own words. That’s what makes an impression.
So next time you walk into a tax interview, walk in like someone who understands how the law applies -
not someone who crammed 100 sections last night.
If you're wondering how to prepare for tax interviews in India, start with these practical tax questions
for job interviews, build your basics, and read smart—not just hard.
You’ve got this!
.png)
.png)
