DISTANCE EDUCATION
B.B.A. (Corporate Secretaryship)/B.B.A. (Lateral)
DEGREE EXAMINATION, MAY 2017.
TAX LAWS
(2005 onwards)
Time Three hours Maximum 100 marks
PART A — × 8 40 marks)
Answer any FIVE questions.
1. Define the terms Assessment Year and Previous Year
under Income Tax Act 1961.
2. Explain the provisions for the determination of
residential status of partnership firms.
3. Give any 10 incomes exempted under section 10 of the
Income Tax Act 1961.
4. Calculate the taxable amount of annual accretion to
R.P.F. if following information is provided by assessee
Basic Pay Rs. 7,500 p.m.
Commission received by him on the basis of
turnover achieved by him: Rs. 6,000
Employer's contribution to R.P.F. 14% of salary
Interest credited during the year to R.P.F. Balance
12% is Rs. 24,000.
5. Explain the expenses expressly allowed under the head
Profits and gains of business or profession.
Sub. Code
32
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6. Calculate Gross Annual Value from following
information:
House-A House-B
MRV 80,000 80,000
FRV 1,00,000 1,00,000
Standard Rent 70,000 1,20,000
Actual Rent 1,20,000 90,000
Municipal Taxes 8,600 8,000 (only 50% paid)
It is assumed that both the houses were let out
throughout the year and there was also no unrealized
rent.
7. Define the terms 'Transfer' and 'Long term and Short
term capital gain' for the computation of capital gains
under Income Tax Act 1961.
8. Explain the taxability of income from, family pension,
winnings from lottery and letting of plant and machinery
under the head 'Income from Other Sources'.
PART B — × 15 60 marks)
Answer any FOUR questions.
All questions carry equal marks.
9. Define the terms Income, Assessment year and Assessee
under the Income Tax Act 1961.
10. The following are the details of income of Mr.
Share of income from a joint venture in India
Rs. 10,000.
Dividend Rs. 1,000.
Income from Agriculture in Pakistan Rs. 20,000.
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Salary received in India Rs. 9,800 (computed) but
the services for the same were rendered in Iran.
Income from business (controlled from India) in
Pakistan Rs. 10,000 and the income remitted to
India.
Income earned and received in Pakistan from bank
deposits Rs. 5,000.
Income accrued in India but received in Iran
Rs. 10,000.
Compute Mr. taxable income if he is a resident,
a not ordinarily resident, or a non-resident.
11. From the particulars given below compute income from
house property which consists of two independent units
having 1/3rd and 2/3rd area:
Date of Completion 1-11-2003
Municipal Rental Value Rs. 96,000
Fair Rental Value Rs. 84,000
Self-occupied 2/3 portion
Let-out 1/3 portion from 1-4-2014 to 31-8-2014
Rs. 7,200 p.m. and self-occupied from 1-9-2014 onwards.
Municipal Taxes Rs. 6,000 p.a.
Fire Insurance Premium Rs. 2,000 pa.
Ground Rent Rs. 4,000 pa.
Interest on Loan Rs. 7,500.
12. Mr. Ram is general manager of a company is Madras and
draws Rs. 8,500 per month as salary. He is provided with
a house for which the company pays Rs. 60,000 P.a as
rent. Furniture and fittings costing Rs. 30,000 are also
provided. He is also provided with a Car of 1.6.
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Lts. capacity by his employer, and the Car is used both
for private and official purposes. All expenses including
salary of driver are borne by the employer.
The employer has also provided him services of sweeper
at Rs. 140 p.m. a watchman at Rs. 160 p.m. and Gardener
at Rs. 600 p.m
He is a member of recognised provident fund to which he
contributes 12% of salary and a similar contribution is
made by the employer. Interest on provident hind balance
at 14% credited to his provident fund account amounted
to Rs. 4,200. His son is studying in an engineering college
and the expenditure of Rs. 24,000 p.a. on this account
was met by the employer.
Compute his salary income for the previous year 2014-15.
13. From the following profit and loss A/c of a manufacturer,
calculate income under the head profits and
gains of business or profession for the year ending
31st March 2015.
Particulars Rs. Particulars Rs.
Salaries to employees 95,000 Gross profit 3,80,000
Advertisement expenses
(paid in cash)
24,000 Interest on securities 14,000
General Expenses 16,000 Income from house
property
25,000
Entertainment Expenses 22,000 Bad debts recovered
allowed earlier)
12,000
Bad debts 1,500
Drawings by Proprietor 24,000
Sales tax (due and paid
on
6,000
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Interest on proprietor's
capital
7,000
Repairs 2,500
Rent 21,000
Legal expenses 5,000
Depreciation 15,000
Bonus 6,000
Bonus to proprietor 4,000
Car purchased 72,000
Expenses on a during the
year
12,000
Donation 2,000
Provisions for bad debts 6,000
Net Profit 90,000
Total 4,31,000 4,31,000
From the examination of books of accounts, the following
other information are available.
Advertisement expenses were spent on insertion in
newspapers.
Rs. 3,000 was spent on purchase of land and is
included in legal expenses.
Half of the repair expenses were on let-out building.
Depreciation allowable on all assets including car is
Rs. 14,400.
Bonus was paid to employees on 30.6.2015 and due
data of filing of returns is 31.7.2015.
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14. Mr. X owned two motor cars which were mainly used
for business purposes. The written down value on
April 1,2013 of these cars is Rs. 1,81,000. The block of
assets comprising of only these two cars, was sold in June
2013 for Rs. 1,50,000. In September 2013, he sold
1,000 shares in X Ltd. (unlisted) an Indian Company, for
Rs. 30,00,000. He had purchased the same during
March, 1995 for Rs. 3,10,000. A house plot purchased in
March, 1991 for Rs. 3,00,000 was sold by him for
Rs. 9,35,000 on January 18, 2014.
(CII 94-95:259, 1990-91:182, 2013-14:939)
Compute the capital gains chargeable to tax in respect of
the above transactions for the assessment year 2014-15.
15. From the following particulars of Mr. find out his total
income for the previous year 2015-16:
Salary Rs. 4,500 per month from which 10%
deducted for statutory provident fund:
Annual value of the rent free house Rs. 4,000
Wardenship allowance Rs. 1,200 per annum
12% interest on government loan of Rs. 65,000
Income from house property (computed) Rs. 4,800
Received Rs. 3,500 for writing articles in a Journal.
Paid Rs. 2,000 by cheque to GIC under mediclaim
Interest on postal savings deposit Rs. 800
Interest (gross) Rs. 2,500
Examinership remuneration Rs. 6,000
During the year he paid Rs. 2,400 as life insurance
premium on own life policies and spent Rs. 1,000 on
books purchased for his own use.