Book-keeping, Accounting, Taxation and Financial Crime Compliance Services and TAS: formula sheet

Key formulas

Four-block answer frame

Service scope → Eligible provider → IFSCA authorisation → Ongoing compliance

Use this order in every answer on ancillary services. It keeps you from missing a block.

Book-keeping vs accounting

Book-keeping = recording transactions; Accounting = classifying, summarising, preparing statements and reporting

Examiners often test whether you can tell the two apart.

Regulated activity rule

Service from IFSC + no IFSCA authorisation = non-compliance

Apply this when a case shows a firm starting work without approval.

Authorisation rule

Taxation service in IFSC = IFSCA authorisation + permitted activity + IFSC location

No authorisation means no right to offer the service from the IFSC.

Tax holiday for IFSC units

Deduction = 100% of the eligible income of a unit in an IFSC for any 10 consecutive years chosen out of the first 15 years, if the unit begins operations by the sunset date in the Act

Under the 1961 Act this was section 80LA(1A). It gives a 100% deduction for 10 consecutive years out of 15 to an IFSC unit that is a specified unit. The deduction is allowed only on the eligible income of the unit as the section defines it, not on all business profit. The concession is available only if the unit commences operations on or before the sunset date specified in the Act. That date has been extended by the Finance Acts from time to time, so check the current date before you apply the benefit. The unit must opt for the 10-year block by exercising the option in its return of income. The 2025 Act carries the concession forward, so confirm its section and its commencement date in the text before quoting. Other conditions apply.

Minimum tax for IFSC units

MAT = 9% of book profit (company that is an IFSC unit deriving income solely in convertible foreign exchange). AMT = 9% of adjusted total income (IFSC unit deriving income solely in convertible foreign exchange; AMT applies to persons other than companies).

Under the 1961 Act, MAT was in section 115JB and AMT in section 115JC. The concessional 9% rate for both MAT and AMT applies only to a unit of an IFSC that derives its income solely in convertible foreign exchange. If the unit does not meet this condition, the normal rates apply: 15% for MAT (plus surcharge and cess) and 18.5% for AMT. Book profit under MAT is not reduced by the Chapter VI-A deduction. Adjusted total income under AMT adds back the Chapter VI-A deduction. The 2025 Act carries these forward in its own numbering.

Transaction exemptions

Securities Transaction Tax and Commodities Transaction Tax do not apply to specified transactions on a recognised stock exchange located in an IFSC where the consideration is paid or payable in foreign currency. Capital gains exemptions apply only to the specified transfers listed in the Act.

Apply only to the transactions and persons the Act lists. Do not extend the exemption to other transfers.

Answer structure

Service → authorisation → incentive → conditions → conclusion

Follow the provision, analysis, conclusion pattern in case answers.

AML versus FCC

FCC = AML + CFT + sanctions + fraud and bribery controls + monitoring and reporting

AML is one part of FCC. Use this when a question asks for the difference.

Core AML/CFT cycle

Risk assessment → Customer due diligence → Screening → Ongoing monitoring → Reporting → Record keeping

Use this as your answer skeleton for any process question.

Three stages of money laundering

Placement → Layering → Integration

Placement puts cash into the system, layering hides the trail, integration returns the money as apparently legitimate.

Outsourcing accountability rule

Task can be outsourced; responsibility stays with the regulated entity

State this in every question where a service provider performs the checks.

Beneficial owner test

Look through the legal entity to the natural person who owns or controls it

Apply it to companies, trusts and partnerships. Use the ownership thresholds given in the IFSCA text.

Risk-based approach

Higher risk customer → enhanced due diligence and closer monitoring

Examples of higher risk include politically exposed persons and high-risk jurisdictions.

Core rule

Ancillary service to an IFSC entity → authorisation by IFSCA required first

Frame every answer around this. A firm cannot start the service and apply later.

Services covered

Book-keeping and accounting | Taxation | Financial crime compliance | Trade application services

Learn these as a list. Check the current Regulations for the exact wording and any later additions.

Authorisation sequence

Eligibility → Application with documents and fee → IFSCA scrutiny → Grant or refusal → Ongoing compliance

Use this as the skeleton for process questions.

Figures to verify

Fee, net worth or capital threshold, timelines = as prescribed in the Regulations and circulars

These can change. Quote them only from the current official text.

Core rule: authorisation first

Provide TAS from an IFSC = obtain IFSCA authorisation first, then operate

State this as the opening point in any answer on whether an entity may start the service.

Answer structure

Service → Permission → Conditions → Ongoing duties → Conclusion

Use this order for every case-based question. It matches the provision, analysis and conclusion format.

Boundary rule

Platform activity ≠ banking or lending activity

Running a trade platform does not allow deposit-taking or lending. Those need their own permissions.

Ongoing compliance

Authorised provider = maintain conditions + keep records + report to IFSCA + allow supervision

Check the regulation text for the exact forms, timelines and thresholds before quoting any of them.

Quick revision

• The chapter covers book-keeping and accounting, taxation, financial crime compliance and TAS in IFSC.
• Learn the framework first: eligibility, authorisation and ongoing compliance apply across services.
• Always check the exact scope of each service before saying a provider may or may not do something.
• Authorisation comes from IFSCA, so your answer should name the authority and the route.
• Financial crime compliance covers AML and CFT type controls. Know the provider's duties, not just the definition.
• Taxation services in an IFSC need the IFSC tax context, so do not apply general domestic rules blindly.
• TAS is a separate activity with its own conditions. Do not mix it with the other three services.
• Open-book helps only if you can locate the rule fast, so tab by topic.
• Structure each answer as provision, analysis of facts, conclusion.
• Use the latest IFSCA circulars as given in your study material.

Common mistakes

• Treating book-keeping and accounting as unregulated back-office work. Fix: Remember that in an IFSC these are ancillary services that need IFSCA's authorisation.
• Mixing up accounting services with statutory audit. Fix: Keep audit separate. Accounting prepares and maintains records. Audit is an independent examination of them.
• Saying any CA or tax firm can offer tax services in GIFT City without IFSCA approval. Fix: Always state that the entity must be authorised by IFSCA before it begins the service.
• Claiming the tax holiday for any 10 years from commencement. Fix: Write it exactly: the unit picks the block within the 15-year window.
• Treating AML and financial crime compliance as the same thing. Fix: Write that AML is the core part of FCC. FCC also includes sanctions, fraud, bribery and monitoring.
• Saying that outsourcing KYC to a service provider transfers liability. Fix: State that the regulated entity stays accountable and must supervise the provider.
• Treating ancillary services as part of banking or capital market business and applying those registration rules. Fix: Separate the support services from the core financial business. Ancillary providers are authorised under their own Regulations.
• Writing exact fee or net worth figures from memory. Fix: Quote figures only from the current official text. Otherwise state the rule and say the amount is as prescribed.
• Treating a TAS provider as a bank or lender Fix: Say the platform supports trade and financing. Lending or deposit-taking needs its own permission.
• Skipping the authorisation point Fix: Open every answer with the rule that IFSCA authorisation is needed before operating.

Exam tips

• Write answers in the four-block order: scope, provider, authorisation, ongoing compliance.
• In case questions, always apply the rule to the given facts and end with a conclusion.
• Do not quote numbers or fees unless you are sure. Marks go for the principle and the application.
• Read the chapter's regulation text once for exact wording, since the paper expects the law as stated in the official text.
• Link this topic with taxation, financial crime compliance and trade application services, as they are one framework.
• Write both parts clearly: the service rules from IFSCA regulations and the tax rules from the Income-tax Act.
• Use the provision, facts, analysis, conclusion order in case-based answers.
• Mention authorisation in every answer about a service. It is the point examiners look for first.