CS Professional · December 2025 · Paper 4.5
CS Professional Advanced Direct Tax Laws and Practice December 2025: paper analysis
Our own analysis of the official paper, as of 12 October 2026. The questions and answers belong to ICSI; read them on ICSI'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(a) | 15 | Computing book profit under Section 115JB for an Ind AS company with OCI items, revaluation and insolvency status | Computation of Total Income, Tax Liability and Filing of Return of Companies |
| 1(b) | 5 | Computing minimum alternate tax payable by the company | Computation of Total Income, Tax Liability and Filing of Return of Companies |
| 1(c) | 5 | Eligible MAT credit under Section 115JAA and its carry-forward period | Computation of Total Income, Tax Liability and Filing of Return of Companies |
| 2(i) | 3 | Eligibility for presumptive taxation under Section 44AD with enhanced turnover limit and its target assessees | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 2(ii) | 3 | Businesses excluded from the Section 44AD presumptive scheme | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 2(iii) | 3 | Whether presumptive income is final and whether further expenses are deductible | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 2(iv) | 3 | Computing presumptive business income using cash and digital receipt rates | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 2(v) | 3 | Consequences of opting out of Section 44AD within the lock-in period | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 3(a) | 5 | Interest under Sections 234B and 234C for a company liable to MAT without advance tax | Computation of Total Income, Tax Liability and Filing of Return of Companies |
| 3(b) | 5 | Advance tax on capital gains arising late in the year and avoiding interest | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 3(c) | 5 | Section 80AB limit on a Section 80-IB deduction when another unit incurs a loss | Computation of Total Income, Tax Liability and Filing of Return of Companies |
| 4(a) | 5 | Book profit of a firm and allowable working partner remuneration under Section 40(b) | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 4(b) | 5 | Tax liability under the new regime with crypto income and short-term capital gains at special rates | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 4(c) | 5 | Capital gains on slump sale of an undertaking with revalued assets and fair market value rules | Income Tax Implication on Specified Transactions |
| 4A(i) | 5 | Whether arm length price adjustment can extend to transactions with unrelated parties | Transfer Pricing and General Anti Avoidance Rules (GAAR) |
| 4A(ii) | 5 | Limitation for issuing a Section 143(2) scrutiny notice after a defective return is rectified | Assessment |
| 4A(iii) | 5 | Denial of Section 10(23C) exemption to an educational trust that diverted income | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 5 | 15 | Total income and tax of a senior citizen with foreign income, deductions and unilateral relief under Section 91 | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 6(a) | 5 | Testing associated enterprise status under Section 92A across loan, purchase, board, holding and guarantee situations | Transfer Pricing and General Anti Avoidance Rules (GAAR) |
| 6(b) | 5 | Addition under Section 68 for a large gift from a relative and the burden to explain cash credits | Income Tax Implication on Specified Transactions |
| 6(c) | 5 | Role of technology in improving direct tax compliance and its benefits | Assessment |
| 6A(i) | 5 | Situations where GAAR does not apply under Rule 10U | Transfer Pricing and General Anti Avoidance Rules (GAAR) |
| 6A(ii) | 5 | Alternate minimum tax for an LLP claiming a profit-linked deduction | Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies |
| 6A(iii) | 5 | Applicability of transfer pricing to royalty from a subsidiary and sales to a partly held foreign company | Transfer Pricing and General Anti Avoidance Rules (GAAR) |
What stood out
- Computation dominates: Q1 (25 marks on book profit, MAT and MAT credit) and Q5 (15 marks on an individual with foreign income and Section 91 relief) together carry 40 marks.
- Non-corporate entities are the most tested chapter by count, covering presumptive taxation under Section 44AD, partnership remuneration, advance tax, the new regime with special rates, LLP AMT and trust exemption.
- Transfer pricing and GAAR form the optional block: arm length price scope, associated enterprise tests, Rule 10U exclusions and transfer pricing applicability.
- Recent provisions are visible, including the enhanced Section 44AD turnover limit linked to cash receipts and taxation of virtual digital asset income alongside listed equity gains.
- Very few pure theory parts appear; most questions apply provisions to numeric facts, rewarding practice in structured computations.
Practise the chapters that carried the marks
Computation of Total Income, Tax Liability and Filing of Returns of various Entities excluding Companies, Computation of Total Income, Tax Liability and Filing of Return of Companies, Transfer Pricing and General Anti Avoidance Rules (GAAR): study guides and practice questions in the CS Professional format.