Q1) Mr.

Sachin and his 3 sons Congo, Bongo and Chongo are equal co-owners of a
House property consisting of 20 residential flats. Out of the above, one flat each is
occupied by Sachin and his sons for own residential purpose (self-occupied). The
balance 16 flats are let out at the rent of Rs 2,000 p.m per flat.
The reasonable letting value of each flat is Rs 10,000 p.a.The municipal taxes
Paid for each flat is @ 50% of the reasonable letting value.
The following expenses were incurred by them during the year ended 31/12/2009.
1) Fire Insurance Premium Rs.12,000 (for 20 flats)
2) Interest on Money Borrowed for Construction of Property Rs.60,000 (for 20
flats)
Compute the income from house property chargeable in the hands of all the co-
owners for the A.Y. 2009-10.

Mr. Sachin & sons

Computation of income from house property (16 flats)
P.Y:- 08-09 A.Y:- 09-10
Individual R & OR
RS RS
Gross Annual Value 3, 84,000
(-) Municipal Taxes Paid 80,000
Net Annual Value 3, 04,000
(-) Deduction U/S 24
1) Standard Deduction @ 30% 91,200
2) Interest 48,000 1, 39,200

Taxable income from house property 1, 64,800

W.N:-
Municipal value : - NA
Fair Rent : - 1, 60,000
Higher : - 1, 60,000
Standard Rent : - NA
Lower : - 1, 60,000
Actual Rent : - 3, 84,000
Gross Annual Value: - 3, 84,000

W.N:-
S C B C
Income from LOP 41,200 41,200 41,200 41,200
(-) Income from SOP 3,000 3,000 3,000 3,000

38,200 38,200 38,200 38,200

Q2) The following are the particulars in respect of a property owned by Shekhar,
which was let out throughout during the financial year 2008-09.
 Particulars RS
Municipal Valuation 21,000
Reasonable Rent 26,000
Actual Rent Receivable at Rs.2,500 p.m. 30,000
Municipal taxes paid 2,600
Interest on Loans for construction 11,000
Collection Charges 1,400

The property remained vacant from 1-9-2008 to 31-10-2008, and no rent was received
for this period. Compute the Income from House Property.

Mr. Shekhar
Computation of income from house property
P.Y:- 08-09 A.Y:- 09-10
Individual R&OR
RS RS
Gross Annual Value 25,000
(-)Municipal Taxes Paid 2,600
Net Annual Value 22,400
(-)Deduction U/S 24
1) Standard Deduction @ 30% 6,720
2) Interest 11,000
Taxable income from house property 4,680

W.N:-
Municipal Valuation: 21,000
Fair Rent : 26,000
Higher : 26,000
Standard : NA
Lower : 26,000
Actual Rent : 25,000
Gross Annual Value: 25,000

Q1) The following is the Profit and Loss Account of X on the basis of which compute
his income from business for A.Y. 2009-10.
RS RS
To Salaries and wages 12,000 By Gross Profit 48,200
To Rent, Rates and Taxes 3,200 By Rent from house property 5,400
To Trade Expenses 1,450 By Dividends from Indian co 2,400
To Advertisement 950
To House hold Expenses 3,500
To Discounts and rebates 1,250
To Postage and Stationery 275
To Fire insurance (House) 300
To Life Insurance Premium 2,000
To Donations 1,000
To Income – Tax 3,300
To Repairs (house property) 500
To Audit fees 300
To Loss of stock in trade 2,000
To Interest on capital 200
To Net Profit trans.to capital A/c 23,775
56,000 56,000

Mr.X
Computation of income from Business&Profession
P.Y:08-09 A.Y:09-10
Individual R&OR
RS RS
Net Profit as per Profit&Loss A/c 23,775
Add:-
1) House hold Expenses 3,500
2) Fire Insurance 300
3) Life Insurance Premium 2,000
4) Donations 1,000
5) Income Tax 3,300
6) Repairs 500
7) Interest on capital 200 10,800
34,575

Less:-
1) Rent from house property 5,400
2) Dividend from Indian company 2,400 7,800
Taxable income from Business 26,775

Q2) From the following Profit and Loss Account of X for the year ending
31/12/09 compute his business income.
RS RS
To Depreciation {other assets} 15,000 By Gross Profits 1,30,000
To office salaries 15,000 By Interest on Bank Deposits 4,100
To General Expenses 8,500 By Interest on Company deposit 7,600
To Int. on capital of proprietor 3,000 By refund of Income Tax 1,000
To Bad debts reserve 5,000
To Advertisement 9,000
To Fire Insurance Premium 1,200
To Donations 5,000
To Advance Income Tax 4,000
To Sales tax paid 5,000
To Income Tax for 07-08 3,000
To Net Profit 69,000
Following additional information is given:
1) General expenses include furniture purchased worth Rs. 2,500, rate of
Depreciation @10%.
2) Office salaries include salaries paid to Mrs.X Rs.3, 000. Mrs. X, B.Com.
Writes the accounts of the business. It is assumed that it is reasonable.
3) Advertisement includes Rs.2, 500 for the Advt in souvenier of a political
party.

Mr. X
Computation of income from Business&Profession
P.Y:08-09 A.Y:09-10
Individual R&OR
RS RS
Net Profit as per Profit&Loss A/c 69,000
Add:-
1) General Expenses 2,500
2) Interest on capital 3,000
3) Bad debts reserve 5,000
4) Advertisement 2,500
5) Donation 5,000
6) Advance income tax 4,000
7) Income Tax 3,000 25,000
94,000
Less:-
1) Interest on Bank 4,100
2) Interest on company 7,600
3) Refund of Income Tax 1,000
4) Depreciation on General Exp. 250 12,950
Taxable income from Business&Profession 81,050

A PROJECT WORK
 ON

DIRECT &
INDIRECT
TAXATION

By NAYAN V.KALE
T.Y.B.Com Div: II
Roll No. 160

ELPHINSTONE COLLEGE
156 Mahatma Gandhi Rd,
 Fort, Mumbai – 400032.

A Project Report on:

Submitted by: Nayan v.kale

T.Y.B.Com Div: II
Roll No.: 160

DECLARATION
I/We of
hereby declare that I/We
have completed this project on
In the year 2009-
2010. This information submitted true
and original to the best of my
knowledge.

Signature of Student:
Date:

CERTIFICATE
I hereby certify that
of has
Completed project on
in the academic year 2009-2010.

Signature of Head of Department:

Subject Teacher:

INDEX
 DIRECT TAX
Sr. Topic Pg.from Pg. to Marks out of 5
1
2
3
4

MARKS AWARDED
WRITTEN ORAL TOTAL
PRESENTATION PRESENTATION MARKS
Direct tax:
Indirect tax:
Total Marks:

Name of Professor:

Signature: