JCB Interview Questions and Answers

Transfer pricing is the practice of setting prices for goods and services sold between related entities within a company.

• It involves determining the value of goods and services transferred between different divisions or subsidiaries of a company

• Types of transfer pricing include cost-based, market-based, and profit-based methods

• Cost-based methods involve determining the cost of producing a good or service and adding a markup

• Market-based methods involve using prices from compar...read more

Master filing threshold limits depend on the type of tax and entity

• Master filing is applicable for entities with multiple branches or locations

• For GST, the threshold limit is Rs. 5 crores turnover in the previous financial year

• For income tax, the threshold limit is Rs. 50 crores turnover in the previous financial year

• For TDS, the threshold limit is Rs. 50 lakhs in the previous financial year

• Master filing helps in streamlining tax compliance for large entities

Different methods are used for different tax calculations. Examples include FIFO, LIFO, and specific identification.

• FIFO (First In, First Out) is used when the oldest inventory is sold first.

• LIFO (Last In, First Out) is used when the newest inventory is sold first.

• Specific identification is used when each item in inventory is individually identified and tracked.

• Depreciation methods include straight-line, double-declining balance, and units-of-production.

• Choosing the right met...read more

APA stands for Advance Pricing Agreement. It is an agreement between a taxpayer and tax authority regarding transfer pricing.

• APA is a mechanism to avoid transfer pricing disputes between taxpayers and tax authorities.

• It provides certainty to taxpayers regarding their transfer pricing arrangements.

• There are three types of APA: Unilateral, Bilateral, and Multilateral.

• Unilateral APA is an agreement between taxpayer and tax authority of one country.

• Bilateral APA is an agreement b...read more

TP was introduced in India to prevent tax evasion by multinational companies.

• TP stands for Transfer Pricing, which refers to the pricing of goods and services transferred between related parties, such as subsidiaries of a multinational company.

• Multinational companies were using transfer pricing to shift profits to low-tax countries and avoid paying taxes in India.

• To prevent this, India introduced TP regulations in 2001, which require related parties to price their transaction...read more

Transfer pricing methods are used to determine the price of goods and services transferred between related entities.

• There are several transfer pricing methods, including the comparable uncontrolled price method, the resale price method, and the cost plus method.

• The comparable uncontrolled price method compares the price of a controlled transaction to the price of an uncontrolled transaction.

• The resale price method determines the appropriate price by subtracting an appropriate...read more

FAR Analysis is a financial accounting and reporting analysis used to evaluate the financial health of a company.

• FAR Analysis involves analyzing a company's financial statements to assess its financial performance and position

• It helps in identifying trends, patterns, and anomalies in financial data

• FAR Analysis is used by investors, creditors, and other stakeholders to make informed decisions about a company

• It includes analyzing financial ratios, such as liquidity ratios, prof...read more

Secondary Adjustment is a transfer pricing mechanism to adjust the price of goods or services between related parties.

• It is used to ensure that the profits of related parties are not understated or overstated due to transfer pricing.

• It involves making an adjustment to the price of goods or services to reflect the arm's length price that would have been charged between unrelated parties.

• The adjustment can be made either by increasing the income of the seller or decreasing the ...read more