BCOM/V/CC/16 Student's Copy
2 0 1 8
CBCS
5th Semester
COMMERCE
Income Tax Law and Practice
Full Marks 75
Time 3 hours
PART A—OBJECTIVE
Marks 25
The figures in the margin indicate full marks for the questions
SECTION—A
Marks 10
Choose the correct answer and place its code in the brackets provided 1×10=10
1. Total income of a person is determined on the basis of his
residential status in India citizenship in India
Both of the above None of the above
2. Agricultural income is exempt provided the
land is situated in India
land is situated whether in India or outside India
land is situated in any rural area in India
None of the above
3. Gratuity shall be fully exempted from tax in the case of
government employees
government employees and employees of local authorities
non-government employees
All of the above
119 1 Contd.
4. Employer's contribution to Recognised Provident Fund shall be
fully exempted
fully taxable
exempted up to 12% of the salary
None of the above
5. The advance tax is payable by the assessee
on his own account
on his own account or when the order for payment is passed by the AO
only when the order for payment is passed by the AO
None of the above
6. Income from rent of agricultural land is
agricultural income
casual income
business income
income from other sources
7. Salary includes
pension
retirement gratuity
the value of the leave travel concession
uniform allowance
8. A borrowed R 5,00,000 12% p.a. on 1.4.2012 for construction of house
property which was completed on 15.3.2016. The amount is still unpaid.
The deduction of interest for Assessment Year, 2017-2018 shall be
R 60,000 R 96,000
R 1,80,000 R 2,40,000
9. Deduction u/s 80D in respect of medical insurance premia is allowed to
any assessee individual only
a HUF only an individual or HUF
10. As per section an individual, who is of the age 60 years but
less than 80 years and resident in India shall have to file return of income
tax, if
his total income exceeds R 3,00,000
his total income before claiming exemption u/s 10(38) and before
allowing deduction u/s 80C to 80U exceeds R 3,00,000
his gross total income exceeds R 3,00,000
None of the above
BCOM/V/CC/16/119 2 Contd.
SECTION—B
Marks 15
Write short notes on the following, taking one from each Unit 3×5=15
UNIT—I
1. Previous year
2. Tax treatment of Entertainment Allowance
UNIT—II
3. How is exemption from tax for House Rent Allowance computed?
4. Tax treatment in respect of pension
UNIT—III
5. Deemed owner
6. Annual value
UNIT—IV
7. Liability of person, i.e., the transferee in respect of income included in the
income of another person, i.e., transferor (Sec. 65)
8. Provisions of Section 80C of the Income-tax Act, 1961
UNIT—V
9. Due dates for payment of advance tax
10. Belated return
PART B—DESCRIPTIVE
Marks 50
The figures in the margin indicate full marks for the questions
1. What is agricultural income? Clearly explain the conditions to be satisfied
for an income to be treated as agricultural income. 10
OR
2. How would you determine the residential status of an individual? 10
BCOM/V/CC/16/119 3 Contd.
3. Discuss the tax treatment in respect of the following items 5+5=10
Perquisites
Gratuity
OR
4. Mr. X has the following income during the previous year, 2017-18
Salary—R 13,000 per month
Dearness Allowance (under the terms of employment)—R 1,250 p.m.
Education allowance (for three children)—R 6,000 per annum
Medical allowance (actual expenditure R 10,000)—R 8,000
Rent-free house (in Ajmer population 15 lakhs) for which the company,
the employer, paid R 6,000 per month as rent. The house is equipped
with rented furniture. The rent of the furniture is R 3,000 per annum
The employer had provided him a domestic servant, a sweeper and a
watchman. The employer paid R 400 per month to each
The employer paid his telephone bills of R 23,000
(viii) His contribution to RPF R 15,000 and employer's contribution
R 10,000
The employer spent R 7,500 on his refresher course
Professional tax paid by him is R 2,500
Compute his taxable income under the head Salary for the assessment
year 2018-19. 10
5. Mr. X owns two residential houses. The first is in Bangalore and was
constructed on 31.12.1992. This has been let out on a rent of R 6,000 p.m.
to a company for its office. The second house is in Poona, which was
constructed on 01.03.2017 and has been occupied by him for his
own residence since then. He took a loan of R 1,80,000 on 01.08.2015
p.a. interest for the purpose of construction of this house. The entire
loan is still outstanding. Other relevant particulars in respect of these
houses are given below
House—I House—II
R R
Municipal valuation 48,000 36,000
Municipal taxes 4,800 3,600
Repairs 5,500 7,500
Insurance premium (fixed) 1,000 —
Land revenue 7,500 3,500
Ground rent 1,000 750
Interest on loan — 14,400
BCOM/V/CC/16/119 4 Contd.
The ground rent of Bangalore house, the municipal tax and land revenue of
the Poona house are unpaid.
Mr. X was transferred to Chennai on 01.12.2017 where he resides in a
house at a monthly rent of R 8,000 and his house at Poona was let out on
the same day on a rent of R 4,000 p.m.
Compute the income from house property in respect of Mr. X for the
assessment year, 2018-2019. 10
OR
6. Distinguish between Annual value and Annual rental value.
Distinguish between Let-out and Self-occupied residential properties.
How would you determine the annual value of the house used by
assesse for his own residence? 5+5=10
7. Under what circumstances income of other persons can be included in the
income of assesse under Income-tax Act, 1961? 10
OR
8. Discuss the provisions regarding deduction allowable to an assesse in
respect of the following 10
Deduction in respect of payment of loan taken for higher education—
Section 80E.
Donation to certain funds and charitable institutions—Section 80G.
9. What are the provisions of Income-tax Act, 1961 relating to deduction of
tax at source from income chargeable under the head 'Salaries'? 10
OR
10. Discuss the various assessees covered by the provisions of Section 139 of
the Income-tax Act, 1961 in regard to filing of Income-tax returns.