Assignment MBA III Business Taxation

Q-1. Define the following: a. Assessee, Assessment Year, Previous Year. b. Person , financial year Q-2. Discuss the following with example: a. Resident of India b. Not-Ordinarily Resident of India c. Non-resident of India in Previous Year Q-3. State residential status for the following for A.Y. 2012-13 a. Ajay is citizen of India. He left for Iran on 18th April, 2011 and could not return to India till the end of the F.Y. 2011-12. b. Gautam left for USA on 10th March, 2009 after having lived in India for 20 years. He returned to India on 10th September, 2010. Q-4. Following are the particulars of taxable income of shri Hari Naryan Arora for the previous year ended 31 st March,2012 (1) Royalty Received from govt. of India Rs.224000/(2) Income from business earned in Afganistan Rs.25000/- which Rs.1500/- were received in India . Business is controlled from India. (3) Interest received from Shri Aditya Kumar a Non-Resident against a loan provided to him run a business in India Rs.5000/(4) Royalty received from AL-Afnan a resident for technical service provided to run a business outside India Rs.2000/(5) Income from business in Jaipur Rs.40000/- this business is controlled from france . Rs.20000/-were remitted to France. Find out Gross total Income of Shri Hari Naryan Arora for assessment Year 201213 if he is: Resident of India Not-Ordinarily Resident of India Non-resident of India in Previous Year. Q-5 Explain: Difference between allowances & Perquisite Basis of charge of salary income Specified employee & Non Specified employee Raja, not being covered by the payment of Gratuity Act,1972 retires on January 6, 2012 from PQR and receives Rs.135000/- as gratuity after service of 29 years and 11 months .His average monthly salary during march 1,2011 to December

Q-6

31,2011 is Rs.8500/-.Determine the amount of :(a) taxable gratuity,(b) gratuity exempt from tax for the assessment year 2012-13.

Q-7

Rakesh , an employee of the Central Government, receives Rs.63200 as cash equivalent of earned leave to his credit at the time of his retirement on Augustc31,2011.He joins a private sector organization on October 1,2011. The Assessing Officer is of the view that Rakesh has joined a private organization; the amount of earned leave received by him is fully taxable. Do you agree? Shyam is employed by X ltd. He holds 14% equity share capital and 50% preference share capital in the company. Remaining shares in X ltd. Are owned by the relatives of X. X is not a director in X ltd. he has been provided three cars for official and personal use. These cars cannot be used by any other employee of the company. The company incurs the followings expenses in respect of these cars: Car1 (1800 CC) Rs. CC) Rs Petrol Bills 48500 Insurance 5900 Salary of driver 80500 7700 34000 70600 7300 Car 2 (1800 CC) Rs Car 3(1800

Q-8

Cost of car to employer is :Rs.289000/-Rs.275000/-.find out the value of the perquisite for the assessment year 2012-13 in respect of cars if monetary emoluments of X is (a) Rs.55000/-or (b)more than 55000/-. Q-9 Discuss the procedure of computation of income from the following housesFully let out house Fully self occupied house Self occupied for a part of the year and let out for the remaining part. Q-10 Mr. Sharma is owner of three houses. Their municipal valuations are Rs.75000/,90000/-,102400/-per annum. Municipal Tax is 15% of its valuation. The first house is occupied for self residence. Second house is being used for his own business and third is let out on monthly rent Rs.12500/- from 1st Jan.2012. The first and second were completed on 1st jan.2007, while the third house was completed on 1st Oct.2011.Compute Net Annual value for the Assessment year 2012-13.

Q-11 Shree Vinod Godbole owns house at nagpur (Municipal Value Rs.20000) of the fair rent of Rs.30000 p.a. during the previous year 2011-12 the house is used by him for his own residence from 1st April,2011 to 30th june 2011 and let out for residential purpose on 1st july,2011 @15000 Per month. He makes the following expenditure in respect of the house property: Municipal taxes Rs.16000 and Repaire 12000, fire Insurance premium Rs.13500 Land Revenue Rs.14000 and ground Rent Rs.12000 were paid during the year. A loan of Rs.120000/- was taken on 1st April 2008@15%p.a. for the construction of the house which was completed on 1st April, 2011. Nothing was repaid on loan account so far. Find out his taxable income from house property for the assessment year 2012-13 Q-12. What are the various specific allowances and specific disallowances to compute income under the head business or profession? List atleast five each. Q-13 Profit and loss account of a trader shows Net profit Rs.138000 after debiting following itemsIncome tax paid Rs.7000 and Income tax procedure expenses Rs.1100 Interest on loan taken for payment of Income tax Rs.1000. Sales tax Rs.18000 and penalty interest Rs.5000 for delay in payment of sales tax. Penalty for Sales tax evasion Rs.4000. Cash payment to a creditor A Rs.28000. On 28th January 2010 in two parts Rs. 15000 & 13000 respectively and B Rs. 29700 (on 28th January Rs.19700 and 30th January Rs.10000). Municipa ltax Rs1800. The 1/3 portion of the house is used for business and half portion is used for self residence and the remaining portion is let out. The aforesaid Net Profit includes Rs.3000 for recovery of old bad debts which were disallowed by Income Tax Officer. Depreciation on business assets regarding the pervious year 2010-11 is allowed for Rs.16800 according to section 32 of Income Tax Act was not recorded in the books. Find out taxable income from business. Q-14 X starts a new business on December 5, 2010. it purchases the following 5 assets. Categories these into different blockLand for constructing factory RS.1260000 Rollers in flour mills Rs.50000 Energy saving device RS.10000 Renewal energy devices Rs.860000 Land for residential house Rs.927860. Q-15 Define Capital Assets discuss the type of capital Assets. & When will the capital gain from residential House be exempted?

Q-16 A Co. (a partnership firm) sells a commercial building on May10,2010 for Rs.1247500/- from the data given below, find out the income under the head Capital Gains for the assessment Year 2012-13 Gains for the assessment Year 2012-13 Cost of plot of land (acquired in 1984-85) Rs.50000/Cost of Construction (incurred in 1985-86) Rs.170000/Cost of additional construction (incurred in 1989-90) RS.20000/Expenditure on transfer RS.2500/Q-17 Compute income from other sources from the following information: Income from agriculture land in Bangladesh Rs.6000/Interest on fixed deposit with bank (net) Rs.13500/Dividend received on shares (listed) of a limited company Rs.3580/Interest on post office saving bank account Rs.1000/Q-18 Explain briefly. (i) Tax deducted at source. (TDS) (ii) Permanent account number (PAN) (iii) Filing of return u/s139(1) Q-19 List out deductions permissible u/s chapter VIA. Q-20 Write notes on: a. Scientific research expenditure b. Bad debts. c. Maintenance of Account

Activity Part
A. Mr. Dwarka das somani (67 year) received taxable income Rs. 3,88,000 during previous year 2011-12. He has made the following contributions during previous year(i) Life Insurance Premium Rs. 17,500, (ii) National Savings Certificates (VIII) Rs. 6000. Compute taxable income and find out tax payable for the assessment year 2012-13

B.

The particulars of Mr. Romil Bandis previous years 2011-12 income are as under1. Income from Salary

i. ii. iii. iv. v.

Salary from employer Rs 1,48,000 (Gross) professional tax Rs. 1,500 were deducted against his salary. His contribution to R.P.F. 15% of Salary and employers contribution 8%. House Rent Allowance Rs 400 p.m. Conveyance allowance Rs200 p.m. Life Insurance premium Rs. 8000, of which half amount is paid by employer. The policy amount Rs. 70,000

2. Income from House property i. ii. iii. Annual value of self residential house Rs. 8,000. Annual value of rental house Rs.42,000. Municipal Tax is 15%. Insurance premium of self house Rs. 300. Interest on loan taken for construction of rental house Rs.4,500.

3. Other Income i. ii. iii. iv. Dividend from Indian companies Rs. 8,000 Interest on fixed deposit with Bank Rs. 16,000. Interest on loan given to friend Rs.2,000. Interest on post office savings Bank Rs. 1,500

Compute his total income and tax liability for the assessment year 2012-13