Compute the total income and tax liability of Ms. Purvi for the assessment year 20xx-xx. Alsomention the amount of tax deductible at source, if any

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C.A. Kalpesh Sanghavi CA IPCC – Income Tax - Revision Classes | R . 1
STUDENT MUST SOLVE THESE QUESTION FOR BOOSTING PERFORMANCE IN EXAM.
Problem (Revision Class on pen drive 15 golden hours) ID - 01
Miss Charlie, an American national got married to Mr Radhey of India in USA and came to India for the first
time on 16.03 of preceding previous year. She remained in India up till 19.9 and left for USA on 20.9 She
returned to India again on 27.03 While in India, she had purchased a show room in Mumbai on 01.05., which
was leased out to a company on a rent of 20,000 p.m. from 1.05. She had taken loan from a bank for purchase
of this show room on which bank had charged interest of 97,500 up to 31.03.
She had received the following gifts from her relatives and friends during the year:
1. From parents of husband 51,000

2. From married sister of husband 11,000
3. From two very close friends of her husband 1,51,000 and 21,000 total 1,72,000
She owned a piece of land acquired 8 years before in Hyderabad which was sold during the year and profit on
sale of the land computed as per capital gains chapter is 30,000.
She has professional fees income of Rs. 5000 earned and received in Canada.
You are required to
1. Determine her residential status and compute the total income chargeable to tax along with the amount
of tax payable.
2. Would your answer be different if she would have been staying in India during whole of previous year.
3. What if she stays in India for every year for 160 days since last 15 years.
Solution :-
Dr Niranjana, a resident individual, aged 60 years is running a clinic. Her Income and Expenditure Account
for the year is as under:
Expenditure Income
To Medicine consumed 35,38,400 By Consultation and Medical charges 58,85,850
To Staff salary 13,80,000 By Income-tax refund 5,450
(Principal 5,000 interest 450)
To Clinic consumables 1,10,000 By Dividend from units of UTI 10,500
To Rent paid 90,000 By Winning from game show in TV 35,000
(net of TDS 15,000)
To Administrative expenses 2,55,000 By Rent 27,000
To Amount paid to scientific 1,50,000
research association approved
under section 35
Net Profit 440,400
Total 59,63,800 Total 59,63,800
i. Rent paid includes 30,000 paid by cheque towards rent for her residential house in Surat.
ii. Clinic equipment’s are :
 Opening WD.V 5,00,000
 7.12 Acquired (cost) by cheque 2,00,000
iii. Rent received relates to property situated at Surat. Gross Annual Value 27,000. The municipal tax of
2,000. paid in December, has been included in “administrative expenses’
iv. She received salary of 7,500 p.m. from Full Cure Hospital” which has not been included in the
“consultation and medical charges”
v. Dr Niranjana availed a loan of 5,50,000 from a bank for higher education of her daughter She repaid
principal of 1,00,000, and interest thereon 55,000 during the year.
vi. She paid 1,00,000 as tuition fee (not in the nature of development fees/donation) to the university for
full time education of her daughter
vii. An amount of 28,000 has also been paid by cheque on 27 March, for her medical insurance premium.
viii. LTCG on listed shares Rs. 2,00,000 (computed as per provisions of income tax) is directly transferred
to capital account.
ix. For the security of clinic she has acquired a Rottweiler Dog for 120,000. The amount is capitalised in
books of accounts.
You are required to
(i) From the above, compute the total income and tax liability of Dr. Niranjana.
(ii) Salary paid includes Amount of 900,000 paid as salary to Dr. Raja (Assistant doctor in clinic). Dr
Raja has informed about his other incomes and losses. Professional loss is 20000, house property
(net) loss is 30000 and Interest income is 12000. He has invested in LIC policy with annual premium
of 5,000. Tax deducted is 5,000 on his property income. You are required to compute the tax
deductible out of payments made to Dr. Raja.
Solution :-
(All questions are solved as per the assessment year of this book, however in some of the
questions there is reference to earlier year say for PY 2006-07, this is only for illustrative
purposes. Answers are solved as per provisions, limits, % of laws, deductions of the
assessment year only.)
Solution :-
Ms. Purvi aged 55 years, is a Chartered Accountant in practice. She maintains her accounts on cash basis. Her
Income and Expenditure account for the year reads as follows:
Expenditure Income
Fees earned:
Salary to staff 15,50,000 Audit 27,88,000
Stipend to articled assistants 1,37,000 Taxation services 12,70,000
Incentive to articled assistants 13,000 Consultancy 15,40,300
Office rent for 12 months paid to 12,24,000 Dividend on shares of Indian 10,524
ABC limited companies (Gross)
Printing and stationery 12,22,000 Income from UTI 7,600
Meeting, seminar and Conference 31,600 Rent received from residential flat 85,600
let out
Purchase of car 80,000 Honorarium received from various 15,800
institutions for valuation of answer
papers and other incomes.
Repair, maintenance and petrol of 4,000
car
Travelling expenses 5,25,000
Municipal tax paid in respect of 3,000
house property
Net Profit 9,28,224
Total 57,17,824 Total 57,17,824
Other Information:
i. Allowable rate of depreciation on motor car is 15%.

ii. Value of benefits received from clients during the course of profession is 10,500.
iii. Incentives to articled assistants represent amount paid to two articled assistants for passing IPCC
Examination at first attempt.
iv. Repairs and maintenance of car include 2,000 for the period of 12 months from 1.10.
v. Salary include 30,000 to a computer specialist in cash for assisting Ms. Purvi in one professional
assignment.
vi. The travelling expenses include expenditure incurred on foreign tour of 32,000 which was within the
RBI norms.
vii. Medical Insurance Premium on the health of dependent brother and major son dependent on her
amounts to 5,000 and 10,000, respectively, paid in cash.
viii. She invested an amount of 10,000 in National Saving Certificate.
ix. On 01-07 she has paid in cash to Mr. Gimmy 12,000 for his outstanding stationery bill of 2 years back.
x. She has received loan by account payee cheque of Rs. 25,000 from ABC private limited in which she
is holding 25 % of shares.
xi. Honorarium includes 3,000 Remuneration from ADAL Ltd on account of directors sitting fees. She is
director in the company.
xii. Her total gross receipts from profession in preceding financial year was 18,50,000
You are required to
i. Compute the total income and tax payable.

ii. Advise her as to how much tax should be deducted out of payment to ABC limited.
iii. She is desirous to file return of income as per 44ADA, and seeking your advise for the same.
iv. Required to advise ADAL ltd on the tax to be deducted at source.
Solution :-
Mr Y carries on his own business. His turnover in the business is 60 lakhs during the preceding financial year.
An analysis of his trading and profit & loss for the year revealed the following information:
1) The net profit was 11,20,000.

2) The following incomes were credited in the profit and loss account
a. Dividend from UTI - 22,000.
b. Interest on debentures - 17,500.
c. Winnings from races - 15,000.
3) It was found that some stocks were omitted to be included in both the opening and closing
stocks, the value of which were
a. Opening stock 8,000.
b. Closing stock 12,000.
4) 1,00,000 was debited in the profit and loss account, being contribution to a University approved
and notified under section 35(1)(ii).
5) Salary includes 20,000 paid to his brother which is unreasonable to the extent of 2,500.
6) Advertisement expenses include 15 gift packets of dry fruits costing 1,000 per packet
presented to important customers.
7) Total expenses on car was 78,000. The car was used both for business and personal purposes ¾
is for business purposes.
8) Miscellaneous expenses included 30,000 paid to A &Co., a goods transport operator in cash on
31.1. for distribution of the company’s product to the warehouses.
9) Depreciation debited in the books was 55,000. Depreciation allowed as per Income-tax Rates,
1962 was 50,000.
10) Drawings 10,000.
11) Investment in NSC 15,000.
12) Rs. 20,000 was paid as professional fees to Koymoto Inc a Foreign company incorporated in
Netherlands without the tax deduction at source.
13) During the year he travelled to Singapore for a week long business trip. He has recorded
expense of 17,000 in books of accounts. However assessing officer considers 35,000 as
reasonable expense.
Compute the total income tax liability.

Solution :-
Mr Rajiv, aged 50 years, a resident individual and practicing Chartered Accountant, furnishes you the receipts
and payments account.
Receipts Payments
Opening balance 12,000 Staff salary, bonus and stipend to 21,50,000

Cash on hand and at Bank articled clerks
Fee from professional services 59,38,000 Other administrative expenses 11,48,000
Rent 50,000 Office rent 30,000
Motor car loan from Canara Bank 2,50,000 Housing loan repaid to SBI 1,88,000
(@ 9% Includes interest of 88,000.
Life insurance premium 24,000
Motor car 4,25,000
(acquired in Jan. by cheque)
Medical insurance premium 18,000
(for self and wife)
Books bought 20,000
(annual publications by cheque)
Computer acquired on 1.11 30,000
(for professional use, paid in cash)
Domestic drawings 2,72,000
Public provident fund Subscription 20,000
Motor car maintenance 10,000
Closing balance 19,15,000
Cash on hand and at Bank
62,50,000 62,50,000
Following further information is given to you:

(1) He occupies 50% of the building for own residence and let out the balance for residential use at a monthly
rent of 5,000. The building was constructed during the year 1997-98, when the housing loon was taken.
(2) Motor car was put to use both for official and personal purpose. One fifth of the motor car use is for
personal purpose. No car loan interest was paid during the year
(3) The opening written down value of assets as on are given below:
a) Furniture & Fittings - 60,000
b) Plant & Machinery (Air-conditioners, Photocopiers, etc.) - 80,000
c) Computers - 50,000
Mr Rajiv follows regularly the cash system of accounting.

Compute the total income and tax liability.
Solution :-
Mr. B furnishes the following information for the year:
Income from business - (1,35,000)

Income from house properly - (15,000)
Lottery winning (Gross) - 5,00,000 (TDS 150,000)
Speculation business income -1,00,000
Income by way of salary - 60,000
Long term capital gain - 70,000
Assessee has explained cash credits (bogus loan) – 600,000 this is offered to tax at normal rates of taxes.
However assessing officer has applied the special rates of tax as per 115BBE on this income while doing the
assessment.
Due date of filing return for Mr.B is July however he has filed his return of income on 5th August.
He has paid one instalment of advance tax on 12th of September Rs. 20,500.
Compute his total income, tax liability, late fees and interest if any.
Solution :-
From the following details, compute the total income of Siddhant of Delhi age 52 and he visits Singapore every
year for 60 days to meet his family friends.
Salary including dearness allowance - 3,35,000

Bonus - 11,000
Salary of servant provided by the employer - 12,000
Rent paid by Siddhant for his accommodation - 49,600
Bills paid by the employer for gas, electricity and water provided free of cost at the above flat - 11,000
Siddhant purchased a flat in a co-operative housing society in Delhi for 4,75,000 in April. 2011, which was
financed by a loan from Life Insurance Corporation of India of 1,60,000 ( 15% interest, his own savings of
65,000 and a deposit from a nationalized bank for 2,50,000 to whom this flat was given on lease for ten years.
The rent payable by the bank was 3,500 per month.
The following particulars are relevant
a. Municipal taxes paid by Mr Siddhant 4,300 (per annum)

b. House Insurance 860
c. He earned 2,700 in share speculation business and lost 4,200 in cotton speculation business.
d. 3 year back, he had gifted 30,000 to his wife. The gifted amounts were advanced to Mr Rajesh,
who was paying interest @ 19% per annum.
e. 4 year back, his father in law gifted 60,000 to his wife. The gifted amounts were advanced to Mr
Mahesh, who was paying interest @ 15% per annum.
f. 2 year back, maternal grand parents of his minor son had gifted 20,000 to his minor son. The
gifted amounts were advanced to Mr Rajesh, who was paying interest @ 19% per annum.
g. His minor son is a child artist and earns 75,000 per annum out of acting in TV serials.
h. Siddhant received a gift of 25,000 each from four friends.
i. He contributed 50,000 to Public Provident Fund.
You are required to
1. Compute his total income and tax liability.

2. On 31st of March he wants to make the payment of advance tax so that there is no interest u/s 234B,
you are required to determine the amount of advance tax to be paid on 31st of March of PY
Solution :-
Ramdin working as Manager (Sales) with Frozen Foods Ltd., provides the following information for the year:
Basic Salary 15,000 p.m.
DA (50% of it is meant for retirement benefits) 12,000 p.m.
Commission as a percentage of turnover of the Company 0.5 %
Turnover of the Company 50 lacs
Bonus 50,000
Gratuity 30,000
Own Contribution to R.P.F - 30,000
Employer’s contribution to R.P.F - 20% of basic salary
Interest credited in the R.P.F account @ 15% p.a. - 15,000
Further information is as follows

a) Gold Ring worth 10,000 was given by employer on his 25 wedding anniversary.
b) Music System purchased on 01.04. by the company for 85,000 and was given to him for personal use.
c) Two old heavy goods vehicles unladen weight is 13000 kgs owned by him were Leased to a transport
company against the fixed charges of 6,500 p.m. Books of account are not maintained.
d) Received interest of 5,860 on bank FDRs, dividend of 1,260 from shares of Indian Companies and
interest of 7,540 from the debentures of Indian Companies.
e) Made payment by cheques of 15,370 towards premium of Life insurance policies and 12,500 for
Mediclaim Insurance policy.
f) Invested in NSC 30,000 and in FDR of SBI for 5 years 50,000.
g) Donations of 11,000 to an institution approved u/s 80G and of 5,100 to Prime Ministers National Relief
Fund were given during the year by way of cheque.
Compute the total income and tax payable.
Solution :-
From the following particulars furnished by Mr X for the year,
a) Mr. X retired on 31.12. at the age of 58, after putting in 25 years and 9 months of service, from a private
company at Mumbai.
b) He was paid a salary of 25,000 p.m. and house rent allowance of 6,000 p.m. He paid rent of 6,500 p.m.
during his tenure of service.
c) On retirement, he was paid a gratuity of 3,50,000. He was not covered by the payment of Gratuity Act.
His average salary in this regard may be taken as 24,500. Mr. X had not received any other gratuity at
any point of time earlier, other than this gratuity.
d) He had accumulated leave of 15 days per annum during the period of his service; this was encashed by
Mr X at the time of his retirement. A sum of 3,15,000 was received by him in this regard. His average
salary may be taken as 24,500. Employer allowed 30 days leave per annum.
e) After retirement, he ventured into textile business and incurred a loss of 80,000.
f) Mr X has invested 62,500 in public provident fund and 37,500 in National Savings Certificates.
g) Income from winning from horse races 45,000.
You are requested to
i. Compute his total income and tax payable.

ii. Assuming that tax is properly deducted on the above transactions you are required to calculate interest
u/s 234C
Solution :-
Rosy and Mary are sisters, born and brought up at Mumbai. Rosy got married in 1982 and settled at Canada
since 1982. Mary got married and settled in Mumbai Both of them are below 60 years. The following are the
details of their income for the previous year.
Rosy Mary
Age attained in PY 65 years 68 years
Pension received from State Government - 10,000
(net computed as per provision of salary chapter)
Pension received from Canadian Government 20,000 -
Long-term capital gain on sale of land at Mumbai 1,00,000 50,000
Short-term capital gain on sale of shares of Indian listed companies in 20,000 300,000
respect of which STT was paid
Life Insurance Corporation 10,000
Premium paid to Canadian life insurance at Canada 40,000 -
Mediclaim policy premium paid - 25,000
Investment in PPF - 20,000
Rent received in respect of house property at Mumbai 60,000 30,000
You are required to

1. Compute taxable income and tax liability.
2. Determine the amount of advance tax payable on 31st March so that there is no liability to interest u/s
234B
3. Advise them on the amount of late fees if any for filing return of income one month late then the due
date of filing of return of income.
Solution :-
Mr Rajesh is serving in a public limited company as General Manager (Finance). His total emoluments for the
year are as follows:
Basic Salary - 5,40,000
HRA (Computed) - 1,80,000
Transport allowance - 22,000
Apart from the above, his employer has sold the following assets to him on 1 January,:
(i) Laptop computer for 20,000 (Acquired in September, of last year for 1,20,000)
(ii) Car 1800 cc for 3,20,000 (purchased in 2 years back for 8,50,000)
He also owns a residential house, let out for a monthly rent of 15,000. The fair rental value of the property for
the let out period is 1,50,000. The house was self occupied by him from 1st January to 31 March. He has taken
a loan from bank of 20 lacs for the construction of the property, and has repaid 1,05,000 including interest
40,000).
During the year Mr Rajesh sold shares of different Indian companies on 14 April,:
Name Sale value Purchase price Acquired on No. of shares

(per share) (per share)
A Ltd. (listed) 150 120 2 May, 2009 200
(FMV on 31-01-2018 is (STT paid at
Rs. 160 per share.) acquisition)
B Ltd. (not listed) 82 65 16 April of 125
preceding year
Sale proceeds were subject to brokerage of 0.1% and securities transaction tax of 0.125% on the gross
consideration. He received income tax refund of 5,750 (including interest 750) relating to the assessment year
2016-17.
You are required to

Compute the total income and tax liability.
Solution :-
Mr. Ashok owns a property consisting of two blocks of identical size. The first block is used for business
purposes. The other block has been let out from 1.4. to his cousin for 10,000 p.m. The cost of construction of
each block is 5 lacs (fully met from bank loan), rate of interest on bank loon is 10% p.a. The construction was
completed on 01.04. During the year, he had to pay penal interest of 2,000 in respect of each block on account
of delayed payments to the bank for the borrowings. The normal interest paid by him in respect of each block
was 42,000. Principal repayment for each block was 23,000 made at the end of the year An identical block in
the same neighbourhood fetches a rent of 15,000 per month. Municipal tax paid in respect of each black was
12,000.
The income computed in respect of business prior to adjustment towards depreciation on any asset is 2,20,000.
Depreciation on equipment’s used for business is 30,000.
On 23.3, he sold shares of B Ltd., a listed share in BSE for 2,30,000. The share had been purchased 10 months
back for 1,80,000. Securities transaction tax at sale paid may be taken as Rs. 220.
Brought forward business loss of a business is 80,000. This loss has been determined in pursuance of a return
of income filed in time and the current year is the seventh year
The following payments were effected by him during the year:

(i) LIP of 20,000 on his life and 12,000 for his son aged 22, engaged as a software engineer and drawing salary
of 25,000 p.m.
(ii) Mediclaim premium of 6,000 for himself and 5,000 for above son. The premiums were paid by cheque.
You are required to compute the total income. The various heads of income should be properly shown, Ignore
the interest on bank loan for the period prior to 1.4., as the bank had waived the same.
Solution :-
Mr Venus Aged 65 years resident in India provides the following details for the previous year
I. Salary from HNL Ltd. 50,000 per month

II. Interest on FD with SBI – 72000 (Net of TDS)
III. Brought forward long term capital loss (3 years back) - 96000
IV. Long term capital gain - 75000
V. House property Loss of minor son 90,000 computed in accordance with the provisions of Income - tax
Act, 1961. Mr. David (neighbour of Venus) transferred his own house to his minor son without adequate
consideration few years back and minor son let it out and suffered loss.
VI. Business Loss of his sons wife 2,00,000. She carried business with funds which gifted to her by her
father in law.
VII. He has not provided any details about his other income and losses to his employer HNL Ltd.
VIII. He has signing authority in a bank account in Hong Kong which is actually belonging to his Uncle living
in Canada.
You are required to
i. Compute taxable income and tax liability.

ii. You are required to advise him as to whether he is required to file a return of income and if yes what
will be the due date.
iii. You are required to calculate the interest chargeable u/s 234B of income tax act.
Solution :-
Mr. Madan aged 69 years resident in India has furnished the following details for the calculating tax liability.
Income From Salary (net computed) 27,88,000

House property income (net computed) 15,80,000
Interest Income 6,30,000
Interest income on enhanced compensation 44,000
Legal expense on enhanced compensation 12,000
Family Pension 30,000
Advance monies for Land at Noida was forfeited as the buyer of the land Mr. Shah
50,000
could not fulfil his commitments.
Also advise him for the payment of advance tax.
Solution :-

X Ltd. grows sugarcane to manufacture sugar. Data is as follows
Rs.
Cost of cultivation of sugarcane 6
Market value of sugarcane when sugarcane is transferred to factory 9
Other manufacturing cost 6
Sales turnover of sugar 22
Salary of managing director who looks after agriculture as well as non-agricultural
2
operations of the company
You are required to find out the agricultural income of the company.
Solution :-

For the year, net agricultural income of an assessee is Rs. 86,000 and non-agricultural income is Rs. 12,65,000.
The taxpayer contributes Rs. 40,000 towards public provident fund. Find out the tax if the taxpayer is:
(a) Mrs. X, an individual (22 years).
(b) A Ltd. an Indian company.
Solution :-
X Ltd. has two units — one engaged in manufacture of computer hardware and the other involved in developing
software. As a restructuring drive, the company has decided to sell its software unit as a going concern byway
of slump sale for Rs. 385 lakh to a new company called S Ltd., in which it holds 74 per cent equity shares.
The balance sheet of X Ltd. as on March 31, being the date on which software unit has been transferred, is given
hereunder -
Liabilities Rs. In lakh Assets Rs. In lakh

Paid up share capital 300 Fixed assets (hardware unit) 170
General reserve 150 Fixed assets (software unit) 200
Share premium 50 Debtors (hardware unit) 140
Revaluation reserve 120 Debtors (software unit) 110
Current liabilities Inventories (hardware unit) 95
(hardware unit) 40
Current liabilities Inventories (software unit) 35
(software unit) 90
0750 75
The following additional information is available —
1. The Software unit is in existence since May 2011. Fixed assets of software unit include land which was
purchased at Rs. 40 lakh in the year 2008 and revalued atRs. 60 lakh as on March 31, 2015.
2. Fixed assets of software unit mirrored at Rs. 140 lakh (Rs. 200 lakh minus land value Rs. 60 lakh) is
written down value of depreciable assets as per books of account. However, the written down value of
these assets under section 43(6) is Rs. 90 lakh.
Ascertain the tax liability, which would arise from slump sale to S Ltd. What would be your advice as a tax
consultant to make the restructuring plan of the company more tax-savvy, without changing the amount of sale
consideration?
Solution :-
R received a house in may, 2010 by way of Gift from Mr. G who had purchased the same in April, 1979 for Rs.
12,00,000. The cost of improvements incurred by G were Rs. 2,55,000 in March, 2000 and Rs. 3,40,000 in
November, 2008. The fair market value of the house as on 1-4-2001 was Rs. 9,14,000. Before this house was
gifted to R, G had received an advance of Rs. 3,00,000 in March, 2006 towards sale of this house from S but
the sale did not materialize and the advance was forfeited by G. the house was sold and registered by R on 12th
March PY for Rs. 38,00,000 when the stamp duty value is 48,00,000. However advance money of 125,000 for
the house was taken in cash on 1st December PY when the stamp duty value was 44,00,000. Assessee claimed
before the officer that stamp duty value was excessive and unreasonable and matter was referred to valuation
officer by officer, who value the house at 49,00,000. Ascertain the capital gains chargeable to tax.
Solution :-
During the previous year ending on March 31, X sells the following :
Date sale Cost of Year of Fair market

Sale proceeds acquisition purchase Value on
(PY) April 1,
2001
Preference shares April 10, 4,90,000 1,00,000 2003-04 1,80,000
Agriculture land 1 May 25, 30,00,000 2,30,000 1973-74 3,40,000
(situated in 1 km limit of
Mumbai and population is
5,000)
Agriculture land 2 June 10, 49,00,000 6,17,250 2006-07 2,00,000
(situated in 1 km limit of
Mumbai and population is
8,00,000)
Debentures (listed) April 10, 3,17,900 2,30,615 1993-94 1,80,000
Personal car July 1, 1,25,000 70,000 1986-87 NA
On July 31, (being the due date of furnishing return of income), X deposits Rs. 1,00,000 under section 54B for
claiming exemption in future by purchasing agriculture land 3 situated in jurisdiction of municipality having
population of 5000 persons by withdrawing from the deposit account, Rs. 70,000 till January 9 of assessment
year. Agricultural land 3 is sold for 75,000 in just 2 months after its acquisition.
Solution :-
X Ltd. located within the corporation limits decided in December-PY to shift its industrial undertaking to non-
urban area. The company sold some of the assets and acquired new assets in the process of shifting. The relevant
details are as follows:
(Rs. In lakhs)
Particulars Land Bldg. P/M Fur.
(i) Sale proceeds (Sale effected in March,-PY) 8 18 16 3
(ii) Indexed cost acquisition 4 10 12 2
(iii) Cost of acquisition in terms of section 50 1 4 5 2
(iv) Cost of new assets purchased in specified time
limit for the purpose of business in the new 4 7 17 2
place
During the process of shifting X Ltd has incurred transportation, uninstallation and re-installation expense on
shifting of some of its old plant and machinery to new location, amount 50,000 Rs.
Compute the capital gains of R Ltd.
Solution :-
Mrs. X, resident woman, transfers a house property (received without consideration from her husband in 1991)
on January 16,. On the said transaction she earns a long-term capital gain of Rs. 1,01,50,000. She invests a sum
of Rs. 50,00,000 in capital gains bonds specified in section 54EC on January 5 out of the advance monies
received on account of transfer,. She further invests a sum of Rs. 50,00,000 in the same bonds after 3 months of
the first investment in bonds. She has raised Funds of 40,00,000 on the security of above bonds of Value
50,00,000 in the month of March of next year. Her other income for year is Rs. 46,000. Discuss the tax
consequence of the above transactions.
Solution :-
S constructed his house on a plot of land acquired by him in Kolkata. The house has two floors of equal size.
He started construction of the house on 1st April of Last year and completed construction on 30th June of
Previous Year. He occupied the ground floor on 1st July and let out the first floor at a rent of 20,000 per month
on the same date. However, the tenant vacated the first floor on 31st January and S occupied the entire house
from 1st February.
Other information
Fair rent of each floor - 1,20,000 per annum
Municipal value of each floor - 80,000 per annum
Municipal tax paid - 10,000
Repair expenses - 5,000
S obtained a housing loan of 15 lacs at interest of 10% per annum on 1st July of Last Year.
He did not repay any part of the loan till the end of the previous year.
Standard rent of each floor is 25,000 per month
Solution :-
X and Y are co-owners of two houses with equal share of both the houses. While the first house is used by them
for their residence, the second house is let to a tenant at a monthly rent of 2,500. The other relevant particulars
of the houses are as follows:
House 1 House 2
Construction completed on 30.06.2005 31.03.2007
Municipal Tax @ 10% 2,000 2,500
Insurance Premium 2,500 2,500
Interest on loan 10,000 9,000
Compute income from house property of X and Y for the relevant assessment year.
Solution :-
Mr A, a dealer in shares, received the following without consideration during year from his friend Mr B, -
(1) Cash gift of 75,000 on his anniversary.

(2) Bullion, the fair market value of which was 60,000, on his birthday.
(3) A plot of land at Faridabad on 1 July PY, the stamp value of which is 5 lakh on that date. Mr B had purchased
the land in April, 2008.
Mr. A purchased from his friend Mr. C who is also a dealer in shares, 1000 shares of X Ltd. 400 each on 1 9
June PY, the fair market value of which was 600 each on that date. Mr. A sold these shares in the course of his
business on 23 June PY.
Further on 1 November PY, Mr. A took possession of property (building) booked by him two years back at 20
lakh. The stamp duty value of the property was 32 lakh and on the date of booking was 23 lakh. He had paid 1
lakh by account payee cheque as down payment on the date of booking.
On 1 March PY he sold the plot of land at Faridabad for 7 lakh.
Compute the income of Mr A chargeable.
Solution :-
X is a foreign citizen (not being a person of Indian origin). During the financial year 2010-11, he comes to India
for 85 days. Determine his residential status for the assessment year 2011-12 on the assumption during financial
years 1996-97 to 2010-11, he was present in India as follows:
1996-97 85 days 2003-04 16 days

1997-98 310 days 2004-05 360 days
1998-99 6 days 2005-06 181 days
1999-2000 5 days 2006-07 305 days
2000-01 65 days 2007-08 65 days
2001-02 180 days 2008-09 10 days
2002-03 360 days 2009-10 126 days
Solution :-
D is the karta of a Hindu undivided family, and the control and management of the family is wholly situated in
India. On 30 April, 2016 D went to Bangladesh for business purposes and did not return till 31st March, 2017.
D did not go out of India any time before. What would be the residential status of the Hindu undivided family
and Mr. D for the assessment year 2017-2018 ?
Solution :-

R Ltd. is engaged in the business of growing and manufacturing tea in India. For the previous year its composite
business profits before allowing deduction u/s 33AB are Rs. 60,00,000. On 1-9-AY (before due date of filing of
return) it deposited a sum of Rs. 11,00,000 in the Tea Development Account. Two years back it has incurred a
business loss of Rs. 14,00,000 which has been carried forward. on 25-1-AY, it withdraws Rs. 10 lakh which is
utilised as under:
Rs. 6,00,000 for purchase of non-depreciable asset as per the scheme specified.
Rs. 3,00,000 for purpose other than specified in the scheme.
Rs. 1,00,000 was spent for the purpose of scheme.
a) Compute the business income of R Ltd.
b) What are the tax consequences of money misutilised / not utilised?
c) What will be the consequence if the asset which was purchased for Rs. 6,00,000 is sold for Rs. 8,00,000
after 18 months.
Solution :-
Mr Kalpesh Sanghavi furnishes return of his total income on 1 August of assessment year (due date under Sec.
139(1) is 31 July). He is assessed on 15 December of assessment year. He furnishes the following particulars of
his income-tax liability.
Particulars Rs
(i) Income tax as per return
37,260
(includes income tax Rs. 1050 on casual income which was earned on 10-December of PY)
(ii) Income tax as per assessment 48,450
(iii) Tax deduced at source (actual)
2,450
(includes TDS of Rs. 1,000 on casual income which was earned on 10-December of PY)
(iv) Instalment’s of advance tax:
15.9.PY 13,000
15.12.PY 4,000
15.3.PY 8,000
31.3.PY 5,000
(v) Payment of self-assessment tax on 01.08.AY 10,000
Determine his tax liability including interest, if any.
Solution :-
AMT (alternate Minimum Tax) is included in CA Inter / IPCC exam

from May 2020 onwards.
Look out for our detailed coverage in revision course including

AMT for May 2020 exam.

Compute the total income and tax liability of Ms. Purvi for the assessment year 20xx-xx. Alsomention the amount of tax deductible at source, if any

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Compute the total income and tax liability of Ms. Purvi for the assessment year 20xx-xx. Alsomention the amount of tax deductible at source, if any

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C.A.

Kalpesh Sanghavi Kalpesh Classes

Price : INR 1,000 (google drive download about 7 gb)

Language of Classes : Hindi + English Winglish

STUDENT MUST SOLVE THESE QUESTION FOR BOOSTING PERFORMANCE IN EXAM.

Problem (Revision Class on pen drive 15 golden hours) ID - 01

1. From parents of husband 51,000

You are required to

Problem (Revision Class on pen drive 15 golden hours) ID - 02

You are required to

Problem (Revision Class on pen drive 15 golden hours) ID - 03

i. Allowable rate of depreciation on motor car is 15%.

You are required to

i. Compute the total income and tax payable.

Problem (Revision Class on pen drive 15 golden hours) ID - 04

1) The net profit was 11,20,000.

Compute the total income tax liability.

Problem (Revision Class on pen drive 15 golden hours) ID - 06

Opening balance 12,000 Staff salary, bonus and stipend to 21,50,000

Following further information is given to you:

Mr Rajiv follows regularly the cash system of accounting.

Problem (Revision Class on pen drive 15 golden hours) ID - 05

Mr. B furnishes the following information for the year:

Income from business - (1,35,000)

Problem (Revision Class on pen drive 15 golden hours) ID - 07

Salary including dearness allowance - 3,35,000

The following particulars are relevant

a. Municipal taxes paid by Mr Siddhant 4,300 (per annum)

You are required to

1. Compute his total income and tax liability.

Problem (Revision Class on pen drive 15 golden hours) ID - 08

Further information is as follows

Compute the total income and tax payable.

Problem (Revision Class on pen drive 15 golden hours) ID - 09

From the following particulars furnished by Mr X for the year,

You are requested to

i. Compute his total income and tax payable.

Problem (Revision Class on pen drive 15 golden hours) ID - 10

You are required to

Problem (Revision Class on pen drive 15 golden hours) ID - 11

Name Sale value Purchase price Acquired on No. of shares

You are required to

Problem (Revision Class on pen drive 15 golden hours) ID - 12

The following payments were effected by him during the year:

Problem (Revision Class on pen drive 15 golden hours) ID - 13

I. Salary from HNL Ltd. 50,000 per month

You are required to

i. Compute taxable income and tax liability.

Problem (Revision Class on pen drive 15 golden hours) ID - 14

Income From Salary (net computed) 27,88,000

Also advise him for the payment of advance tax.

Problem (Revision Class on pen drive 15 golden hours) ID - 15

Problem (Revision Class on pen drive 15 golden hours) ID - 16

Problem (Revision Class on pen drive 15 golden hours) ID - 17

Liabilities Rs. In lakh Assets Rs. In lakh

The following additional information is available —

Problem (Revision Class on pen drive 15 golden hours) ID - 18

Problem (Revision Class on pen drive 15 golden hours) ID - 19

Date sale Cost of Year of Fair market

Problem (Revision Class on pen drive 15 golden hours) ID - 20

Problem (Revision Class on pen drive 15 golden hours) ID - 21

Problem (Revision Class on pen drive 15 golden hours) ID - 22

Problem (Revision Class on pen drive 15 golden hours) ID - 23