ASSIGNMENT
MBA III : Business Taxation
Q.1 what do you understand by income tax? Discuss its main characteristics.
Q.2 writes notes:-
(a) gross total income (b) total income.
(c) assessment year (d) previous year
Q.3 how is the residential status of an assesse determined for income tax purposes? Discuss the influence
of residence on tax liability.
Q.4 Mr. Scott who is citizen of Germany has been staying in India since 2004. He leaves India for the
first time on 14th july, 2012 on a visit to Germany and comes back on 8th January, 2013. Determine his
residential status for the previous year 2012-13.
Q.5 Following are the particulars of taxable income of shree harinarayan arora for the previous year ended
31st march 2013.
1. Royalty received from government of India 224000
2. Income from business earned in Afghanistan 25000, of which 15000 were received in India business is
control from India
3. interest received from shree aditya Kumar a non resident against a loan provided to him run a business
in India 5000
4. Royalty received from AL-Afnan a resident for technical services provided to run a business outside
India 20000
5. Income from business in jaipur 40000, This business is controlled from France. 20000 were remitted to
France
Find out gross total income shree harinarayan arora for assessment year 13-14, If he is –
(a) resident of India (b) not ordinary resident of India (c) nonresident of India
Q.6 A Semi- Govt. Officer receives basic salary 14,000 per months D.A. 48% of basic salary
(Under the terms of employment) and bonus equal to one month basic salary.
The following amounts have been deducted from his salary for Recognized provided fund (i) 10%
of basic salary (ii) 50% of D.A.
The employer contributed 27,000 towards the fund.
Interest credited to the fund balance 20,000 @ 10%.
Compute taxable amount regarding the Recognized Provident Fund.
Q.7 Shri Gajendra Mathure was appointed in Mumbai in a private factory on a post of Manager on 1st
January, 2013. The particulars of his income on 31st March, 2013 are given below:
(1) Basic Salary 46,000 per month.
(2) Dearness Allowance 1,000 per month (its 10% in included for retirement
benefits).
(3) Lunch allowance 300 per month.
(4) Children education allowance 150 per month per child (for three children).
(5) Rent free accommodation where fair rental value is 5,000 per month House
belongs to employer.
(6) Hire of A.C. provided in the accommodation 850 per month and cost of furniture 60,000.
find out value or perquisite of Rent Free Accommodation and taxable salary.
Q.8 Discuss the rules of valuation of perquisites under the head of salary in income tax act?
Q.9 An employee receives basic salary Rs.78,000, dearness allowance Rs. 17,000. City compensatory
allowance Rs. 12,000 and commission Rs. 15,000. The employer and employee each contributes 15% of
salary to provident fund.
Calculate taxable contribution to provident fund if provident fund is-
(a) Recognised, (b) Unrecognised (c) Statutory.
Q.10 Mr. Naroitam Patel who is not covered by the Payment of Gratuity Act. 1972, retires on September
30,2012 from Reliance Industries Ltd. after service of 22 years 8 months. The company paid him gratuity
amounting to 3,85,000. Average monthly salary of 10 months immediately preceding the retirement was
24,000. What amount will be exempted from tax?
Q.11 Write short notes on the following –
1. Interest on loan taken for construction.
2. Recovered of unrealized rent.
Q.12 Mr. Sawan Mandhanya is owner of three houses, whose Municipal valuations are 1,20,000,
1,00,000 and 80,000 per annum respectively Municipal tax is 15% of Municipal valuation.
The first house was occupied by Mr. Mandhanya for self residence A Loan taken amounting 15
Lakhs for its construction on 1.4.98 while the house was completed on 1.1.2001. Second house was let out
to Mr. Leeladhar Mundra at the rent of 10,000 per month. Third house is used for his own business.
First and second house were completed on 1st April, 2012 and second house was let out from 1st June
2012, third house was completed on 1st January 2012.
The expenses of houses are below-
I II III
Repairs 5,000 2,000 4,000
Collection charges -- 6,000 ---
Insurance premium 2,000 -- 3,000
Interest on loan for construction 1,06,000 10,000 --
Mortgage loan for business purpose -- 40,000 ---
Lease rent -- -- 1,000
Find out his income from house property for the assessment year 2013-14.
Q.13 State any four expressly allowed and disallowed deduction for calculating income from business.
Q.14 The following is the profit and Loss account of M/s Prakash & Sons for the year ended on 31st
March, 2013. Compute his taxable income from business for that year.
Opening Stock 1,50,000 Sales 18,00,000
Purchase 12,00,000 Closing Stock 2,00,000
Salary 2,00,000 Gift from Father 1,00,000
Rent 60,000 Sale of Car 1,70,000
Repairs of Car 30,000 Income Tax Return 30,000
Wealth Tax 20,000
Medical Expenses 30,000
General Expenses 1,00,000
Depreciation on car 30,000
Advance Income tax paid 10,000
Profit for the year 4,70,000
23,00,000 23,00,000
Additional information:
a. Mr. Prakash carries on his business in rental premises, 1/2 of which used as his
residence.
b. Mr. Prakash bought a car during the year for 2,00,000. He charged 15% depreciation on the
value of car. The car was sold during the year for 1,70,000. The use of car was 1/4 for
personal purpose.
c. Medical expenses were incurred during sickness of Mr. Prakash for his treatment.
d. Salaries includes 2,500 per month on account of driver’s salary for 10 months.
Q.15 Distinguish between long term capital gains and short term capital gains. Discuss the procedure of
computation of long term capital gains.
Q.16 Mr. Basant jain has transferred the following assets during the previous year 2012- 13.
1. A plot was sold on 15th july 2012 for Rs.2,08,000, Brokerage paid Rs. 8,000 on
sales. the plot purchased on 1st June 1999 for Rs.45,000.
2. On 1st august 2012 the car was sold for Rs.45,000 which was in his personal use.
The car was purchased in 1999 for Rs. 2,08,000. He purchased a new car for
Rs.2,85,000.
3. Cost of inflation index are as under for computation of long term capital gain or
loss-
1999-2000 (389)
2012-2013 (852)
compute taxable capital gain for the assessment year 2013-14.
Q.17 Give 10 examples of Income from other sources.
Q.18 Mr. jyotirmay ghosh income particulars are as under for the previous year 2012-13.
1. Net amount received from prize of Haryana state lottery 140000.
2. Profit on sales of plot 16000
3. Royalty from mine 19000
4. Income from agriculture land in India 15000.
Collection charges of royalty 1200 and dividend 30. He bought lottery tickets worth Rs. 1760 during the
previous year. Compute taxable income from other source for the assessment year 2013-14.
Q. 19 Discuss the following deductions-
(a) Deduction in respect of Life Insurance Premium, Contribution to Provident Fund, NSC etc. (Sec
80C)
(b) Section 80CCC Pension Fund
(c) Deduction for Medical Insurance (Sec. 80D)
(d) Deduction for medical treatment of dependent being a person with disability ( Sec. 80DD)
(e) Section 80DDB relating to medical treatment
(f) Deduction in respect of payment of interest taken for higher education (Sec. 80E)
Q. 20 Write Short notes TDS provisions:
(a) Salary u/s 192
(b) Interest on securities u/s 193
(c) Interest other than Interest on securities u/s 194A
(d) Payment to Contractors u/s 194C.
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