CA Final Direct Tax Laws & International Taxation RTP November 2026

Preparing for the CA Final Paper can be challenging because Direct Tax Laws and International Taxation involve complex provisions, lengthy computations and cross-border tax issues. You may find it difficult to apply the correct sections to questions on business income, deductions, capital gains, TDS, TCS, foreign tax credit and transfer pricing.

Use the November 2026 Revision Test Paper to practise these areas through case-based MCQs and descriptive questions. It covers provisions applicable for A.Y. 2026–27 and includes ICAI's suggested answers. Attempt the questions, review the provisions and compare your calculations with the suggested solutions to assess preparation for the paper.

CA Final Paper RTP November 2026: Applicability and Amendments

The November 2026 RTP specifies the applicable tax provisions, assessment year and judicial updates that students must consider while attempting the questions.

Important examination-related details include:

• Finance Act, 2025: Direct Tax questions are based on the provisions amended by the Finance Act, 2025.

• Applicable assessment year: A.Y. 2026–27 is relevant for the November 2026 examination.

• Notifications and circulars: Significant notifications and circulars issued up to 30 April 2026 are considered.

• ICAI Study Material: The September 2025 edition contains provisions amended by the Finance Act, 2025 and notifications and circulars issued up to 31 July 2025.

• Judicial Update: The September 2025 Study Material must be read along with the Judicial Update for the November 2026 examination.

• Statutory Update: ICAI has not issued a separate Statutory Update for this attempt because no significant notifications or circulars were issued between 1 August 2025 and 30 April 2026, except Notification No. 54/2026 dated 31 March 2026, which is included as a note in the Judicial Update.

The Direct Tax syllabus covers the broader subject requirements, including income computation, tax administration and international taxation.

Questions Covered in CA Final DT RTP November 2026

The RTP contains two case scenarios followed by individual questions on corporate taxation, individual taxation, compliance provisions and international taxation.

1. Case Scenario I: Non-Resident Banking Company and Head Office Expenditure (Questions 1–6)

The first case scenario concerns Nordica International Bank AG, a Swiss tax-resident banking company operating through a Mumbai branch that constitutes its permanent establishment in India.

The six MCQs examine:

• Head office expenditure: Deduction under Section 44C for expenditure allocated by the Zurich Head Office to the Mumbai branch.

• Business expenditure: Allowability of certain head office expenses under Section 37.

• Bad and doubtful debts: Provisions and actual write-offs under Sections 36(1)(viia) and 36(1)(vii).

• Interest on advances: Tax treatment of interest accrued on advances classified as bad and doubtful debts under RBI prudential norms.

• Interest payable to the foreign head office: Taxability and TDS requirements under Section 195, along with disallowance under Section 40(a)(i).

• TDS compliance: Treatment of delayed deduction and deposit of TDS on interest credited to resident depositors, including Sections 40(a)(ia) and 201(1A).

2. Case Scenario II: Amalgamation, Business Income and Slump Sale (Questions 7–12)

The second case scenario is based on Bharat Infra Projects Limited (BIPL), which undertakes infrastructure construction and renewable energy activities.

It tests the following Direct Tax provisions:

• Amalgamation and accumulated losses: Carry forward and set-off of losses under Section 72A.

• Construction contract revenue: Revenue recognition for a Hybrid Annuity Model highway contract under Section 43CB.

• Depreciation: Computation of depreciation on solar power generating systems after considering the subsidy received and the relevant block of assets.

• Reassessment after amalgamation: Validity of a notice under Section 148 issued in the name of an entity that had ceased to exist.

• Slump sale: Computation of long-term capital gains under Section 50B, including the treatment of consideration and asset values.

• Corporate taxation: Computation of total income and tax liability, including normal provisions, Sections 115BAA and 115BAB, MAT under Section 115JB and available MAT credit.

3. Other Direct Tax Practice Questions (Questions 13–17)

Questions 13–17 cover corporate taxation, clubbing of income, withholding tax and reporting requirements.

The question-wise coverage includes:

• Question 13 – Shares received on amalgamation: Taxability of shares allotted under an amalgamation scheme when the original shares were held as stock-in-trade.

• Question 14 – Company tax liability: Computation of total income and comparison of normal tax provisions with the concessional regimes under Sections 115BAA and 115BAB, including MAT and brought-forward MAT credit.

• Question 15 – Individual taxation: Gift of shares between spouses, deemed dividend, transfer of immovable property, stamp duty value, cross transfers and clubbing of interest income.

• Question 16 – TDS and TCS: Tax deduction on cash withdrawals by a cooperative society that has not furnished its returns, and TCS on overseas tour packages and LRS remittances.

• Question 17 – SFT reporting: Reporting of bank drafts, time deposits, credit card payments and cash purchases under Section 285BA.

The Direct Tax MCQs resource also includes case-based practice involving TDS, TCS, LRS, non-resident taxation and capital gains.

4. International Taxation Practice Questions (Questions 18–20)

The final three questions focus on foreign-source income, presumptive taxation of non-resident shipping businesses and international transfer pricing.

Question 18 – Double Taxation Avoidance Agreement and Foreign Tax Credit

This question involves an Indian resident earning income from three foreign countries, with different tax-treaty arrangements.

Important areas include:

• Taxability of foreign-source income in India.

• Royalty income taxable in the source country under the relevant DTAA.

• Interest income taxable in both contracting states and the availability of foreign tax credit.

• Agricultural income earned in a country with which India has no DTAA.

• Treatment of foreign house property loss.

• Relief under Sections 90 and 91.

• Conversion of foreign currency income using the applicable Telegraphic Transfer Buying Rate.

Question 19 – Presumptive Taxation of Shipping and Cruise Businesses

This question concerns a non-resident foreign company operating a cargo ship and a cruise ship between Mumbai and Singapore.

The provisions tested include:

• Section 44B: Presumptive taxation for non-residents engaged in the business of operating ships other than cruise ships.

• Section 44BBC: Presumptive taxation of qualifying non-resident cruise ship operators.

• Freight, demurrage and handling charges.

• Passenger transportation receipts from India and abroad.

• Interest income earned on fixed deposits with an Indian bank.

Question 20 – Transfer Pricing

The last question involves an Indian company purchasing mobile phones from its foreign parent company under a longer credit period than that offered to unrelated customers.

Important concepts include:

• Identification of associated enterprises and international transactions.

• Comparable Uncontrolled Price (CUP) method.

• Adjustment for differences in credit periods.

• Computation of the arm's length price.

• Primary adjustment to taxable income.

• Secondary adjustment and repatriation of excess money.

The Paper subject overview also covers the broader areas of DTAA, cross-border transactions and transfer pricing.

CA Final Direct Tax RTP November 2026: Suggested Answers and Solutions

The ICAI RTP provides an MCQ answer key for Questions 1–13 and detailed suggested answers for Questions 14–20.

MCQ Answer Key: Questions 1–13

The following table summarises the correct options and key answer points given in the RTP.

Descriptive Suggested Answers: Questions 14–20

The remaining questions include detailed computations, statutory explanations and workings.

Some important numerical outcomes from the suggested answers include:

• Question 14: Total income under normal provisions is Rs. 4.60 crore. The solution compares the normal tax provisions and MAT with the alternative regimes under Sections 115BAA and 115BAB.

• Question 15: Gross total income is computed separately for Mr. Abhishek and Mrs. Neetu, considering clubbing and deemed income provisions.

• Question 18: Total income is Rs. 16.60 lakh, and net tax liability after foreign tax relief is Rs. 2,06,560.

• Question 19: Total income of the non-resident company is computed at Rs. 7.6875 crore using the applicable presumptive taxation provisions.

• Question 20: The computed arm's length price is Rs. 2,311.35 crore, with a primary adjustment of Rs. 188.65 crore.

Strengthen your understanding of Direct Tax and International Taxation with focused classes from PW CA Final Batches. 

CA Final Direct Tax Laws RTP November 2026 PDF

Direct Tax Laws and International Taxation form the focus of the paper in the CA Final November 2026 examination, as covered in the ICAI Revision Test Paper.

Paper forms part of CA Final Group 2, along with Indirect Tax Laws and Integrated Business Solutions, covered in the Group 2 RTP for November 2026.

How to Prepare for CA Final Direct Tax and International Taxation

Effective preparation requires you to practise case-based questions, understand the applicable provisions and work through lengthy tax computations.

• Attempt the RTP independently: Solve both case scenarios and individual questions before referring to the suggested answers. Note the provisions you find difficult to apply.

• Revise the applicable amendments: Focus on the Finance Act, 2025 provisions and the judicial updates relevant to A.Y. 2026–27.

• Practise numerical questions: Give particular attention to business income, capital gains, depreciation, total income, MAT and foreign tax credit calculations.

• Strengthen objective preparation: Practise Direct Tax MCQs involving case scenarios, TDS, TCS, LRS and non-resident taxation.

• Attempt mock examinations: Include the November MTPs in your revision and practise the paper under the prescribed examination time limit.

• Review the actual examination: The November paper analysis covers the topics tested in the November 2026 examination and provides another reference point for reviewing your RTP preparation.

Do you want to practise under exam conditions? Check the CA Final Mock Test Series schedule and plan your revision.

The November 2026 Paper RTP provides practice across domestic taxation, corporate tax computations, compliance provisions and international taxation. Focus on understanding the statutory provisions behind each case, practising numerical questions and reviewing the suggested answers. Consistent practice with both case-based MCQs and descriptive problems will help you strengthen your preparation for CA Final Direct Tax Laws and International Taxation.