CA Final · January 2026 · Paper 4
CA Final Direct Tax Laws & International Taxation January 2026: paper analysis
Our own analysis of the official paper, as of 12 October 2026. The questions and answers belong to ICAI; read them on ICAI's website.
Chapter-wise marks
Where the marks were in this paper (out of 100; internal-choice alternatives not double counted).
What each question tested
In our words, by question number. Open the official paper for the full question.
| Q | Marks | Tests | Chapter |
|---|---|---|---|
| 1 | 14 | Total income and tax of a multi-unit manufacturing company with business adjustments, depreciation and compensation receipts, and evaluating the concessional regime | Profits and Gains of Business or Profession |
| 2(a) | 4 | Intra-group transfer of land between holding and subsidiary, later converted into stock-in-trade and sold | Capital Gains |
| 2(b) | 4 | Tax consequences of a share buyback for the company and the shareholder, before and after the change in regime | Assessment of Various Entities |
| 2(c) | 6 | Total income of a non-resident Indian opting for special provisions on foreign exchange assets, with other Indian incomes | Non Resident Taxation |
| 3(a)(i) | 6 | Computing total income of a registered educational trust, including application of income and anonymous donations | Assessment of Trusts and Institutions, Political Parties and Other Special Entities |
| 3(a)(ii) | 2 | Exemption for a small educational institution without separate approval, based on receipts threshold | Assessment of Trusts and Institutions, Political Parties and Other Special Entities |
| 3(b) | 6 | Total income and tax of a resident with income from non-treaty countries, including unilateral relief | Double Taxation Relief |
| 4(a)(i) | 2 | TDS on purchase of immovable property where stamp duty value exceeds consideration | Deduction, Collection and Recovery of Tax |
| 4(a)(ii) | 4 | TDS on large cash withdrawals from a co-operative bank by return filers and non-filers | Deduction, Collection and Recovery of Tax |
| 4(a)(iii) | 2 | TDS on taxable maturity proceeds of a life insurance policy | Deduction, Collection and Recovery of Tax |
| 4(b) | 6 | Arm's length price for services to an associated enterprise under the cost plus method with comparability adjustments | Transfer Pricing |
| 5(a)(i) | 4 | Time limit for issuing a scrutiny notice where a defective return is later rectified | Assessment Procedure |
| 5(a)(ii) | 4 | Whether a rectification order is a specified order for the Dispute Resolution Committee, and monetary limits | Dispute Resolution |
| 5(a)(iii) | 4 | Eligibility and time limit to apply for compounding of offences under revised guidelines after an earlier rejection | Miscellaneous Provisions |
| 5(b)(A) | 3 | Meaning of most favoured nation clauses and base erosion and profit shifting in the context of tax treaties | Application and Interpretation of Tax Treaties |
| 5(b)(B) | 3 | Taxing rights over independent personal services under the UN Model Convention | Overview of Model Tax Conventions |
| 6(a) | 6 | Tax audit reporting of delayed payments to micro and small enterprises and related disallowance | Tax Audit and Ethical Compliances |
| 6(b) | 4 | Whether GAAR can be invoked for an offshore subsidiary and a treaty-based interest arrangement | Provisions to Counteract Unethical Tax Practices |
| 6(c) | 4 | Who qualifies as an applicant for an advance ruling based on transaction type and tax value thresholds | Advance Rulings |
What stood out
- The 14-mark Question 1 again centred on a manufacturing company's business income, with depreciation on asset sales, a new unit and enhanced compensation receipts adding complexity.
- Transfer pricing appeared in both parts: interest limitation and resale price method in the MCQs and a cost plus method computation with comparability adjustments in the written section.
- Trust taxation was again worth 16 marks overall, covering corpus investment modes, accumulation, anonymous donations and a full trust income computation.
- Black Money Act disclosure and penalty, virtual digital asset taxation and GAAR scenarios showed the examiner's continued interest in anti-avoidance and new-economy topics.
- Question 5 offered a choice of two out of three procedural parts on scrutiny time limits, Dispute Resolution Committee eligibility and compounding of offences.
Practise the chapters that carried the marks
Profits and Gains of Business or Profession, Assessment of Trusts and Institutions, Political Parties and Other Special Entities, Deduction, Collection and Recovery of Tax: study guides and practice questions in the CA Final format.