ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS) |
END SEMESTER EXAMINATION – SEPT/OCT. 2015 |
B.COM (T.T.) – V SEMESTER |
C2 12 501: TAXATION – I |
Duration: 3 Hours Max. Marks: 100 |
SECTION – A |
I) |
Answer ALL the questions. Each carries 2 marks. (10×2=20) |
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1. |
How do you ascertain the residential status of a Company? |
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2. |
Distinguish between exemption and deduction. |
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3. |
Define Assessee. |
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4. |
Explain provision in respect of commuted pension with regard to non government employees. |
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5. |
X took a loan of Rs 25 lakhs from his employer @ 5% p.a where as the SBI rate is 12%. Determine the value of taxable perk. |
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6. |
State the provisions of perk w.r.t transfer of electronic asset. |
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7. |
How do you tax the following:
a) Club facility provided
b) Free use of laptop and mobile |
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8. |
Give the conditions to be satisfied for unrealized rent deduction. |
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9. |
How do you tax arrears of rent recovered in the previous year |
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10. |
Give any four incomes which are fully exempt. |
SECTION – B |
II) |
Answer any FOUR questions. Each carries 5 marks. (4×5=20) |
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11. |
Compute the income from house property of Mr. Anil and Mr. Sunil from the following information for the year ending 31st March, 2015:
- Mr. Anil and Mr. Sunil are brothers and they have inherited equally the house property from their father.
- Rent realizable from the property is ` 27,000 per annum.
- Municipal Taxes (To be borne by the landlord) are `9,000 per annum.
- The property is on a leasehold plot of land and the annual lease rent is ` 3,000.
- Rent collector is paid `100 per month.
- Property was mortgaged for taking a loan of ` 50,000 at 10% per annum for the purpose of partnership business of Mr. Anil and Mr. Sunil. The loan was taken on 1st October, 2011.
- One of the Flats in the Building fetching monthly rent of `500 was vacant for two months.
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12.
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Mr. V Raju a surgeon in a government hospital retired on 31.7.2014. He joined as adviser (part time) from 1.9.2014. His other particulars for the year ending 31.3.2015 are:
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` |
Salary during government service |
1,44,000 |
House Rent Allowance (living in own House) |
24,000 |
Gratuity received |
2,72,000 |
Leave encashment on retirement |
1,20,000 |
Commuted value of pension |
1,50,000 |
Expenses on Books and Journals |
6,000 |
Pension |
1,08,000 |
Amount received as adviser |
70,000 |
Compute his income under the head ‘Salary’
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13. |
Mr. R is working with Reliance Industries Ltd. at Ahmedabad (population above 25 lakhs). The particulars of his salary income are as under:
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Salary |
30,000 p.m. |
D.A. (Treated as part of salary for calculation of Provident Fund) |
5,000 p.m. |
Bonus |
10,000 |
Commission |
2,00,000 |
Employee’s and Employer’s contribution to RPF (Each) |
3,000 p.m. |
The employer has provided a rent free house. Calculate the value of the perquisite of rent free house it:
- House is owned by employer and its FRV is `45,000 p.a.
- House is hired by employer at `4,000 p.m.
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14. |
Mr. B. married citizen of India left for Germany for the first time on 15-9-2013 on a business trip. He returned to India on 5-6-2014. During his absence from India he maintained a dwelling house for himself in Calcutta. What will be his residential status for the assessment year 2015-16. |
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15. |
Give 5 examples each for Capital Expenditure and Revenue income. |
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16. |
Mr. G retires on 31-10-14 after 20 years service and received Rs. 1,80,000 as leave encashment for 12 months. His employer allows him one and a half months of leave for every one year of service. He has already encashed leave for 18 months. His salary for 13-14 was Rs. 15,000 and from1-4-14 it was raised to Rs. 16,000 p.m. Compute his taxable amount of leave encashment. |
SECTION – C |
III) |
Answer any THREE questions. Each carries 15 marks. (3×15=45) |
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17. |
Mr. Sri Kant owns two houses, the particulars of which are given below for the previous year 2014-15:
Particulars |
House A
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House B
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Rent Received |
NIL |
1,72,000 p.a. |
Standard Rent |
5,00,000 p.a. |
1,50,000 p.a. |
Municipal Valuation |
4,90,000 p.a. |
1,60,000 p.a. |
Fair Rent |
5,00,000 p.a. |
1,80,000 p.a. |
Municipal Taxes paid during the year |
49,000 p.a. |
16,000 p.a. |
Fire Insurance (due) |
5,000 p.a. |
3,000 p.a. |
Ground Rent paid |
4,500 p.a. |
3,900 p.a. |
Interest on money borrowed during 98-99 for construction of houses (50% paid) |
36,000 p.a. |
48,000 p.a. |
Unrealised rent (Pertaining to this year) |
NIL |
6,000 |
Nature of occupation |
Self occupied |
Let out |
Compute income from house property for the assessment year 2015-16 assuming that the Assessing Officer is satisfied with the non-recovery of rent.
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18. |
Shri Sukhwasi is Secretary to Hamesha Nuksan Ltd. Pune (Population 20 lakhs) and for the period between 1.4.2014 and 31.3.2015 has received the following salary and other payments from his company:
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- Salary
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18,000 p.m. |
- Dearness allowance
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2500 p.m. |
- City compensatory allowance
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800 p.m. |
- Entertainment allowance
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12,000 p.a. |
- Commission on sales achieved by him
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24,000 |
- Rent –free accommodation of building (furnished) for which Co. pays a municipal tax on ` 60,000 per annum and furniture value is ` 1,20,000.
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- Medical bills reimbursed by company. Treatment taken from a private hospital.
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2,000 |
- He is provided with a car of 1.8 lt. capacity which is partly used for personal and partly for employment purposes. During the year company incurred `24,000 on maintenance of car. Normal depreciation on car is ` 30,000 and driver’s salary is ` 12,000 p.a. It was agreed by the Assessing Officer that 40% of the car time is used for personal purposes.
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- As per terms of agreement his professional tax of ` 2,000 was paid by the employer.
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- During the year he travelled in connection with his job and was paid `16,000 as travelling allowance and ` 12,000 as daily allowance.
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- He and his employer contributed ` 35,000 p.a. (each) to R.P.F.
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Compute his income under the head Salaries. |
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19. |
Following are the particulars of income of Mr. RTM for the assessment year 2015-16:
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- Income from business in Mumbai
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80,000 |
- Income from house property in Pune
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20,000 |
- Pension from former employer for service rendered in India but received in U.K.
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24,000 |
- Profit from business in UK but controlled from Mumbai
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1,60,000 |
- Dividend from an Indian company but received in UK
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18,000 |
- Income from agriculture in Nepal: received there but later on remitted to India
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60,000 |
- Interest on Bonds issued by U.K. Government out of which 50% is received in India
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40,000 |
- Past untaxed income of 2011-12 to 2013-14 brought into India during 2014-15
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4,00,000 |
- Income from house property in U.K. and donated there to a notified charitable institution
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70,000 |
Compute the total income for the assessment year 2015-16 if Mr. RTM is (a) Resident, (b) Resident but not ordinarily resident; and (c) Non resident. |
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20. |
Explain in detail Provision of SPF, RPF, URPF and PPF. |
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21. |
Dr. Nagendra is a renowned medical practitioner who maintains books of account on cash basis, furnishes receipt and payment account for the previous year 2014-15:
Receipts |
` |
` |
Payments |
` |
` |
To Balance b/d |
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14,000 |
By Rent of clinic |
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To Consultation Fees: |
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2013-14 |
600 |
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2013-14 |
3,000 |
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2014-15 |
4,800 |
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2014-15 |
15,000 |
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2015-16 |
600 |
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2015-16 |
2,000 |
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6,000 |
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20,000 |
By Electricity & Water |
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2,000 |
To visiting fees |
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30,000 |
By House hold Exp |
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7,800 |
To Loan from Bank |
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25,000 |
By Purchase of Professional Books |
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4,000 |
To sale of Medicines |
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60,000 |
By Collection charges on Dividend |
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100 |
To Gift & Presents |
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5,000 |
By Motor Car purchased |
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30,000 |
To Remuneration from Journals |
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6,000 |
By surgical Equipment purchased |
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4,800 |
To Dividend |
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10,000 |
By Income-tax |
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10,000 |
To Interest on Post Office Savings Bank A/c |
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7,000 |
By Salary to Staff |
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15,000 |
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By Life Insurance Premium |
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15,000 |
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By Gift to wife |
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5,000 |
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By Interest on loan (for profession) |
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2,000 |
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By Car expenses |
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15,000 |
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By Purchase of Medicine |
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40,000 |
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By Balance c/d |
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2,300 |
Total |
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1,77,000 |
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1,77,000 |
Compute his taxable professional income for the assessment year 2015-16 after considering the following:
- 1/3 of the use of car relates to his personal use.
- Depreciation on car is to be allowed @ 15% and on books @ 60%.
- Gifts include `3,000 from patients and `2,000 from relatives.
- Closing stock of medicine is `5,500
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SECTION – D |
IV) |
Case Study (1×15=15) |
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22. |
From the Profit and Loss account of Mr. Ramanathan for the year ending 31-3-2015. Compute his business income:
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` |
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` |
General expenses |
63,400 |
Gross Profit |
2,65,500 |
Bad debts |
22,000 |
Commission |
18,600 |
Provision for bad debts |
21,000 |
Brokerage |
27,000 |
Insurance (House) |
600 |
Sundry receipts |
22,500 |
Salary to Staff |
36,000 |
Bad debts recovered (earlier disallowed as deduction) |
1,000 |
Salary to Ramanathan |
22,000 |
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Interest on loan (Bank overdraft) |
62,000 |
Interest on deposit with a Trust |
15,000 |
Interest on loan taken from Mrs. Ramanathan |
4,000 |
Interest on units of U.T.I. |
13,000 |
Interest on capital of Ramanathan |
13,000 |
House Property |
12,000 |
Depreciation on building |
60,000 |
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Advertisement expenditure |
8,000 |
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Contribution of employees RPF |
12,000 |
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Net Profit |
50,600 |
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3,74,600 |
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3,74,600 |
Other information:
- The amount of depreciation allowable on building is `40,200 as per Income –tax Rules.
- Advertisement expenditure includes ` 5,000 being cost of advertisement in newspaper.
- Income of ` 10,000 accrued during the year is not recorded in the Profit and Loss Account.
- Ramanathan pays ` 12,000 as premium on own life insurance policy of `90,000
- General expenses includes ` 4,500 given to Mrs. Ramanathan for arranging a party in honour of a friend.
- Employer’s contribution to provident fund for last 2 months @ ` 1,000 p.m. has not been paid to appropriate authority within due date.
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