1. JOSEPHS COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – OCTOBER 2014

BCOM – V SEMESTER

 INCOME TAX – I

Duration: 3 Hours                                                                                       Max. Marks: 100

SECTION – A

 

1. Answer ALL the questions. Each carries 2 marks.                                         (2 x 10 =20)

 

1. X an Indian origin settled in Canada visits India for 150 days every year since 2010. Determine his Residential status.
2. ABC Ltd., an Indian Co. carries on business in Delhi and London. The entire management and control is outside India and 80% of profits are from London. What is its residential status?
3. Identify the category of the ‘Persons’ below
4. Gods and Idols Mumbai Municipal Corporation.
5. Give two cases where income of Previous Year is assessed in the same year.
6. Specify the provisions of entertainment allowance deduction to Government Employees
7. List any four examples of Perks which are fully exempt from tax.
8. How would you treat the following received?
9. Leave travel concession   Encashment of earned leave during service.
10. What are the conditions to be satisfied if unrealized rent is to be deducted from actual rent?
11. How is annual value and taxable income of one self occupied house property determined?
12. Define Assessee u/s 2(7)

 

 SECTION – B

1. Answer any FOUR Each carries 5 marks.                                  (4×5=20)
2. From the following information compute tax liability of R for the AY 14-15

Business Income Rs. 4,60.000 . Income from sale of trees of spontaneous growth Rs. 1,00,000. Agriculture income Rs. 60,000

 

12. George retired on 13/2/2014 and received Rs. 1,80,000 as leave encashment for 15 months. He has served for 20 years and his employer allowed him 45 days leave for every one year of service. His salary for calendar year 2013 was Rs. 11,000 p.m and it was raised to Rs. 12.500 with effect from 1/1/2014 Compute taxable amount of Leave encashment.

 

13. Bimal built  a residential house at Bangalore and for the completion of the house he took a loan of Rs. 40 lakhs from a bank as under:
14. a) On 1/5/2007 Rs. 16 lakhs @ 10%
15. b) On 1/11/2008 Rs.16 lakhs @ 9%
16. c) On 1/1/2010 Rs. 8 lakhs @ 8%

House was completed in October 2010 and since then it is Let Out. He repaid Rs 8,00,000 to the bank on 1^st December 2013 and the bank adjusted this amount against the 1sr Loan

Determine the amount of deduction u/s 24

 

14. Determine Income for House property from the following particulars.

1/3^rd of the house is used for own business

1/3^rd of the house used for own Residence

1/3^rd of the house let out for Rs. 3,000 p.m and was self occupied for one month during the year. Municipal rental Value Rs 96,000 p.a  on which municipality levies taxes @ 10 %. These taxes are paid by tenant.

 

15. Give any ten examples of incomes that are fully exempt from Tax.

 

16. Explain in detail tax treatment of Statutory Provident Fund, Recognised Provident Fund and Unrecognised Provident Fund with respect to employers and employees contribution, Interest on accumulated balance and Refund/lumpsum received at the time of retirement.

 

SECTION – C

III)      Answer any THREE questions.    Each carries 15 marks.                    (3×15=45)

 

• X has the following incomes for the year 13-14. Determine his taxable income if he is a Ordinary Resident, Not ordinary Resident & Non Resident

Profits on sale of Machinery in London (1/3^rd received in India) Rs. 90,000

Salary from Indian Co. received in London ( one fifth is paid for services rendered  in India) Rs. 1,20,000

Income from property in London received there Rs.10,000.

Income from agriculture in Germany which was later remitted to India Rs.50,000

Dividends from Indian Co. received in London Rs.15,000.

Rental income from a property in Nepal deposited by the tenant in a foreign branch of Indian bank operating there Rs.18,000.

Fees in foreign currency received from a friend. 1/3^rd received in India   Rs.9,00,000.

 

• X owns four houses the particulars of which are as follows.

	House I	House II	House III	House IV
MRV	2,00,000	16,000	86,000	5.00.000
FRV	2,50,000	22,000	92,000	5,55,000
Rent	–	–	–	5.72,000
Unrealized rent	–	–	–	90,000
Municipal tax paid	17,000	800	3,000	45,000
Date of completion of construction	June 16 1991	June 1974	June 1997	March 1998
Repairs	Nil	2,000	950	Nil
Collection charges	—	–	–	400
Land revenue	800	–	230	900
Interest on Loan borrowed for repairs	2,000	800	810	10.000
Interest on loan borrowed for construction	5700	–	–	–
Interest on loan borrowed for payment of municipal taxes	200	–	600	100
Nature of occupation.	Self occupied for residence	Self occupied for business	Self occupied for residence	Let out for residence

House IV remains vacant for the month of January and he could not occupy house III for 2 months. Compute taxable income from House Property.

 

19. X was employed with ABC ltd. He retired w.e.f 1.2.2014 after completing a service of 24 years and 4 months.  He submits the following information

• Basic salary Rs. 10,000 pm (at the time of retirement)
• Dearness allowance 120% of basic salary (40% of basic salary forms part of salary as perterms of employment )
• Last increment Rs. 1000 w.e.f 1.7.13
• His pension was determined at Rs. 6000 per month. He got 50% of the pension commuted w.e.f 1.3.14 and received a sum of Rs. 200000 as commuted pension.  In addition to this, he received  agratuity of Rs. 240000 and leave encashment amounting to Rs. 112000 on account of accumulated leave of 240 days.  He was entitled to 40 days leave for every year of service.

Compute his gross salary for AY 2014-15 assuming that he is not covered under payment of gratuity act.

 

 

20. S lives in Pune population 20 lakhs and received the following salary.

Basic salary Rs. 18,000 p.m

DA Rs 2,500 p.m

CCA Rs 800 p.m

Entertainment allowance Rs 12,000 p.a

Commission on sales achieved by him Rs 24,000

Furnished Rent free Accommodation owned by the Co. is provided. The cost of Furniture is Rs 1,20,000

Medical bills reimburse by Co. Treatment taken in private hospital Rs. 2,000

He is provided with a car of 1.8 ltrs and a driver for both personal and official purpose. Maintenance expenses met by the employer of Rs. 30,000 & depreciation of Rs. 10,000 Drivers salary is 15,000.

Professional tax paid by employer Rs 2,000

During an official trip he was paid travelling and daily allowance of Rs. 16,000 and 12,000

He and his employer contributed Rs. 35,000 p.a  each  to RPF

Compute taxable salary.

 

21. L has a house property in Mumbai which has two equal units, unit I and Unit II. Unit I is self occupied for residence and unit II is let out for a rent of Rs.6,000 p.m. Rent of two months could not be recovered .Municipal value of the property is Rs. 1,30,000, standard rent Rs. 1,25,000 and fair rent Rs. 1,40,000. Municipal tax is levied @15% of municipal valuation which is paid by L. other expenses paid are repairs Rs. 800, insurance Rs. 1,500 interest on capital borrowed for the current year Rs 63,000 (Loan borrowed in 1998)

Find House Property income of L

 

SECTION – D

1. IV) Case study- Compulsory questions.           (15 marks)
2. R retired from G Ltd, Pune on 31/10/13 after service of 18 years and 8 months. At the time of retirement his employer pays a gratuity of Rs. 96,000 his average monthly salary of preceding 10 month is Rs.8, 200. He also receives pension of Rs. 1,000 p.m but one 1/12/2013 he gets 70% of the pension commuted for Rs. 35,000.Besides the aforesaid pension and gratuity he receives the following  emoluments from G Ltd., per month. Basic Pay Rs. 8,600, HRA Rs.600 , (rent paid by him Rs 1250 p.m) entertainment allowance Rs. 600 , contribution to RPF by employer and employee 10% of salary . Lumpsum received from RPF at the time of retirement Rs 90,000

Compute taxable salary.

 

 

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