(For the candidates admitted from onwards) B.Com. DEGREE EXAMINATION, JULY Third Year Non-Semester INCOME TAX LAW AND PRACTICE

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1 BCOM (For the candidates admitted from onwards) B.Com. DEGREE EXAMINATION, JULY Third Year Non-Semester INCOME TAX LAW AND PRACTICE Time : Three hours Maximum : 100 marks PART A (10 2 = 20 marks) Answer ALL questions. 1. What is total income? ö õzu Á õú GßÓõÀ GßÚ? 2. Who is non-resident? Si² ø ö ÓõuÁº Gß Áº õº? 3. Mention the deduction u/s-16. Ä 16&ß RÌ EÒÍ PÈÄPøÍ TÖP. 4. What is annual value? Bsk v GßÓõÀ GßÚ? 5. What do you mean by profession? ]Ó öuõèà ØÔ }ú AÔÁx GßÚ? 6. What do you mean by transfer of Capital assets?»uú ö\õzxupøí õøó ö\ Áx ØÔ }ú AÔÁx õx? 7. What is casual Income? uøö\ À Á õú GßÓõÀ GßÚ? 8. How is Speculation loss treated? FPÁõo mh GÆÁõÖ øp õí kqóx?

2 9. What is tax rebate? Á uòð i GßÓõÀ GßÚ? 10. What is the time limit for filing an appeal? À øó±k ö\ ÁuØPõÚ Põ» AÁPõ\ õx? PART B (5 4 = 20 marks) Answer ALL questions. 11. (a) List out any eight fully exempted incomes from Income Tax Act u/s 10. Á õú Á \mh Ä 10&ß RÌ ÊÁx õp Á õú Á »US ö ØÓ H uý Gmk Á õú[pøí mi ¼kP. What will be the previous year in relation to assessment year in the following cases? (i) Sri Murthy started up a new business on (ii) Mrs. Lakshmi joined an Indian Company on (iii) Smt. Mookambika bought a house on and let out at Rs.6,000 p.m. RÌUPõq `Ì{ø»PÎÀ 2016&17 Po BsiØPõÚ \ õú øu Bsk õx? (i) ÿ ºzv vuõp öuõèà öuõh[q uv (ii) v v ö»m_ª C v {Ö zvà o À \º ux (iii) v v. Põ øp AßÖ Ãk JßÖ Áõ[Q AuøÚ õu ¹.6,000US ÁõhøPUS Âmhõº. 12. (a) What are the different types of provident fund? À ÁÖ ÁøP õú \» {vpò õøá? From the following particulars, compute the taxable income from House Property of Mr. X: Municipal value Rs. 1,20,000, Annual Rent Received Rs. 1,50,000, Date of Loan borrowed , Date of completion of construction , Amount of loan borrowed Rs.50,000. Rate of Interest on Loan 15% p.a. Loan not completed upto the end of the current previous year. 2

3 RÌUPõq upáàpî¼ x v. X &ß Ãmk ö\õzx Á õúzøu PnUQkP. Pμõm] v ¹.1,20,000, Bsk ÁõhøP ö ØÓx ¹.1,50,000, Phß Áõ[Q uv , Ãk Pmi iup mh uv , Phß Áõ[Q öuõøp ¹.50,000, Phß «uõú Ámi Á hzvøs 15%, h {v õsk Áøμ Phß öuõøp v ö\¾zu hâàø». 13. (a) How to treat bad debts recovered but disallowed earlier? ßÚº AÝ vup mh ÁμõUPhß uø õx «mp mhõà AuøÚ GÆÁõÖ øp õí Ásk? From the following particulars furnished by Mr. Vivek (resident) compute his income from capital gains for the Assessment Year : Date of purchase of house property , Cost of acquisition Rs.2,50,000, Cost of addition in 1980 Rs.25,000, Fair market value as on Rs.3,50,000, Cost of additions in Rs. 77,700, Sale proceeds in Rs.44,00,000. Cost inflation index : =100; = 259; = v.â ÁU (Si² ø ö ØÓÁº)&ß RÌUPõq upáàpî¼ x»uú Buõ zvß RÌ Á õúzøu 2016&2017 Po BsiØS PnUQkP. Ãk Áõ[Q x uv , Áõ[Q vß AhUP ¹.2,50,000, 1980&À Tku»õP \ºzx ¹.25,000, AßÖ { õ \ øu v ¹.3,50,000, 1994&95À Tku»õP \ºzux ¹.77,700, 2015&À ÂØ øú ö\ ux ¹.44,00,000. AhUP Âø» SÔ±mk Gs. 1981&82 = 100 ; 1994&95 À Tku»õP \ºzux ¹.77,000, 2015&À ÂØ øú ö\ ux ¹.44,00,000. AhUP Âø» SÔ±mk Gs 1981&82 = 100 ; 1994&95 = 259 ; 2015&16 = 1, (a) The following incomes were received by Mr. A during the financial year : Rs. Director s Fees 6,000 Income from Agricultural Land in Pakistan 40,000 Interest from Post-office Savings Bank A/c 1,500 Interest on fixed deposit in SBI 1,800 Winning from lottery (Net) 34,550 Income from Crossword Puzzles 2,500 Royalty on books 20,000 (Expenses in this connection Rs.4,000) Compute his income from other sources. 3

4 RÌUPõq Á õú[pò v. A BÀ 2015&2016 {v õsiøs ö Ó mhx. ¹. C US º Pmhn 6,000 õqìuõû¼ x ÂÁ\õ Á õú 40,000 u õà {ø» \ª PnUQ¼ x Ámi 1,500 õμu ì hm Á[Q {μ uμ PnUQ¼ x Ámi 1,800 øu ^mià öáßóx ({Pμ) 34,550 SÖUöPÊzx õmi ¼ x Á õú 2,500 zup «uõú E ø z öuõøp (ö\»ä ¹.4,000) 20,000 Ó»[Pμ x Á õúzøu PnUQkP. What are the provisions governing set-off of losses? mhzøu \ PmhÀ öuõhº õp EÒÍ \mh åμzxupò õøá? 15. (a) Mention any five powers of Income Tax Officer. Á õúá AvPõ ß H uý I x AvPõμ[PøÍ TÖP. What are the due dates for filing Income Tax Returns? Á õú Á AÔUøP uõupà ö\ ÁuØPõÚ uáøn õmpò õøá? PART C (5 12 = 60 marks) Answer ALL questions. 16. (a) Nixon, an American citizen, was appointed a senior scientific officer in India on April On 31 st January, 2013 he went to Uganda on deputation for a period of 3 years, but left his wife and children in India. On 1 st May 2014 he came to India and took with him his family to Uganda on 30th June, He returned India and joined his original job on 2 nd February Determine his residential status for the assessment year {U\ß, J Aö UP Si² ø ö ØÓÁº, H μà 1, 2005 AßÖ C v õâà zu AÔ À AvPõ õp { ªUP kqóõº. 31, áúá 2013 AßÖ μv{vu SÊÁõP EP uõâøs ßÖ BskPÒ ö\àqóõº. BÚõÀ uúx SÇ øupøí², øúâø ² C v õâà Âmk ö\àqóõº. 1, 2014 AßÖ C v õâøs Á x uúx Sk zøu AøÇzx 30 áüß 2014 AßÖ «sk EP uõ ö\àqóõº. μá 2, 2016 AßÖ C v õâøs v «sk uúx Esø õú o À \ QÓõº. 2016&2017 Po BsiØPõÚ AÁμx Si {ø»ø wº õûup. 4

5 The following are the income for the previous year : (i) Interest on England Development bond (1/5 received in India) Rs. 50,000. (ii) Agricultural Income from America, received there. Rs. 81,000. (iii) Income from property in Canada. Rs.40,000. (iv) Income earned from business in Uganda, which is controlled from India (Rs.25,000 is received in India) Rs. 45,000. (v) Dividend paid by a domestic company Rs. 40,000. (vi) Past untaxed foreign income brought to India Rs. 10,000. (vii) Profit from a business in Chennai. Rs. 2,00,000. (viii) Profit on sale of a building in India but received in Srilanka Rs. 18,000. From the above particulars ascertain GTI of Mr. Naresh for the previous year , if he is (1) a resident, (2) a not ordinarily resident, and (3) a non-resident. RÌUPõn upáà 2015&2016 øu BsiØPõÚ Á õú[pò : (i) C[Q»õ x Áͺa] zvμ «uõú Ámi (1/5 C v õâà ö ØÓx ¹.50,000) (ii) Aö UPõ¼ x ÂÁ\õ Á õú, Aö UPõÂÀ ö ØÓx ¹81,000. (iii) PÚhõ¼ x Ãmk ö\õzx Á õú ¹.40,000 (iv) EP uõâà Dmi öuõèà Á õú, C v õâ¼ x Pmk õk ö\ ux (¹.25,000 C v õâà ö ØÓx) ¹.45,000 (v) EÒ õmk {Ö zvà ÁÇ[P mh [Põuõ ¹.40,000 (vi) øu BskPÎÀ Á h hõu öáî õmk Á õú C v õâøs öpõsk Áμ mhx ¹.10,000 (vii) ö\ßøú À öuõèà» Dmi C»õ ¹.2,00,000 (viii) C v õâà Pmihzøu ÂØÓvÀ Dmi C»õ C»[øP À ö ØÓx ¹.18,000 ØUPõq upáàpî¼ x v. μè ß Ê ö õzu Á õúzøu 2015&2016 øu BsiØS PnUQkP. AÁº (1) Si² ø ö ØÓÁμõP (2) \õuõμn Si² ø ö ÓõuÁμõP (3) Si² ø ö ÓõuÁμõP C uõà. 17. (a) The following are the particulars of the income of Mr. Yaaswanth for the previous year ending 31 st March. (i) Salary Rs.12,000 p.m. (ii) Contribution to recognized P.F. Rs.1610 p.m. 5

6 (iii) Employer contributes the same amount as the employee contributes toward RPF. (iv) Dearness allowance: Rs.300 p.m. (v) Interest credited to 13% is Rs.13,000. (vi) Bonus Rs.3,000 (vii) His ration bill of Rs.2,000 p.m. is paid by employer (viii) He is provided with a car by his employer for both personal and office use. (ix) Premium paid on L.I.C. Rs.12,000 by employer. Find out taxable salary income of Mr.Yaaswanth for the A.Y RÌUPõq Á õú upáàpò v. èá z&ß 31, õºa& Áõk iáøh² øu BsiØS x. (i) \ Í õu JßÖUS ¹.12,000 (ii) A[RP UP mh \» {vupõú [PÎ õu JßÖUS ¹.1,610 (iii) A[RP UP mh \» {vupõp u»õî², \ {ø» À [PÎUQÓõº. (iv) APÂø» i õu JßÖUS ¹.300 (v) A[RP UP mh \» {vupõú ÁμÄ øáup mh Ámi 13 \uãuzvà ¹.13,000 (vi) v ¹.3,000 (vii) AÁ øh μåýupõú õu Pmhn ¹.2,000&I u»õî ö\¾zxqóõº. (viii) AÁ US õmhõº Põº JßÖ A¾Á»P ØÖ _ ß õmiøpõp ÁÇ[P mkòíx. (ix) B²Ò Põ mk øú u»õî õà ö\¾zv x ¹.12,000, 2016&2017 Po BsiØPõÚ v, èá z Á huti \ Í Á õúzøu PnUQkP. Mr. Dilip owns a big house, the constructions of which was completed in May % of the floor area is let out for residential purposes on a monthly rent of Rs.3,200. however; this portion remained vacant for one month during % of the floor area is used by the owner for the purpose of his profession, while remaining 25% of the floor area is utilized for the purpose of is residence. Other particulars of the house are as follows. Municipal valuation Rs. 75,000, Standard rent Rs. 90,000, Municipal taxes paid Rs. 12,000, Repairs Rs. 3,000, Interest on capital borrowed for repairs Rs.28,000.Compute the taxable income of Mr.Dilip for the assessment year

7 v. v½ ö Ãmiß E ø õíº, AÆÃk 2010&À Pmi iup mhx. AvÀ 50% Sv õúx õu JßÖUS ¹.3,200 Ãu ÁõhøPUS Âh mhx C Ý 2015&2016& BsiÀ J õu C Sv õúx ÁõhøPUS Âh hâàø». 25% uøμ Sv ö\õ u öuõè¾upõp E ø õíμõà ß kzu mhx. «u ÒÍ 25% Sv õúx _ Si UPõP ß kzu mhx. AÆÃmiß Cuμ upáàpò ßÁ õö : Pμõm] v ¹.75,000, {ø» õú ÁõhøP ¹. 90,000, Pμõm] Á ö\¾zv x ¹. 12,000, Êx õº ö\»ä ¹. 3,000, Ãmøh Êx õº uøpõú Áõ[Q Phß «uõú Ámi ¹. 28,000, 2016&2017 Po BsiØPõÚ v. v½ &ß Ãmk ö\õzx Á õúzøu PnUQkP. 18. (a) The following is the profit and loss account of a merchant for the year ending 31 st March Profit and Loss Account Rs. Rs. To Office salary 6,500 By Gross Profit 36,750 To Bad debts written off 1,700 By commission 1,250 To Provision for bad debts 3,000 By Discounts 500 To Advertisement 3,800 By sundry receipts 200 To Fire insurance premium 550 By Rent on Buildings 3,600 (House Property) To General expenses 2,750 By profit on sale of 3,000 investment To Depreciation 1,200 To Interest on Capital 2,000 To Interest on bank loan 1,300 To Net Profit 22,500 45,300 45,300 Compute the taxable profit from business. The amount of depreciation is Rs RÌUPõq upáàpò J ÁoP ß iáøh² BsiØPõÚ C»õ mh PnUS : C»õ mh P/S ¹. ¹. A¾Á»P \ Í 6,500 ö õzu»õ 36,750 ÁμõUPhß õuq x 1,700 PÈÄ 1,250 ÁμõUPhß JxUS 3,000 uòð i 500 ÂÍ μ 3,800 Ø» ö ÖuÀPÒ 200 7

8 C»õ mh P/S ¹. ¹. Ãmka ö\õzvß «uõú 550 Pmih «x ÁõhøPPøÍ 3,600 w Põ mk øú ö õxa ö\»äpò 2,750 u¼kpøí 3,000 ÂØÓvÀ C»õ u õú 1,200 uà «x Ámi 2,000 Á[Q Phß «x Ámi 1,300 {Pμ C»õ 22,500 45,300 45,300 öuõèà Á õúzøu PnUQkP. u õúz öuõøp ¹. 1,000. Mr. Hanuman submits the following particulars about sale of assets during the year : Particulars Jewelry Plot in Rs. Gold in Rs. Selling price 7,00,000 18,24,000 5,00,000 Expenses on Sale Nil 24,000 Nil Cost of acquisition 75,000 2,00,000 1,00,000 Year of acquisition He has purchased a house for Rs. 15 lakh on Calculate the amount of taxable capital gains if CII for , , and are 125,150,389 and 1081 respectively. ßÁ ÁÚÁØÔÀ 2015&2016 BsiØPõÚ ö\õzxupò ÂØ øú ÂÁμzøu v.íý õß \ º UQÓõº. ÂÁμ øppò (¹.) ÍõmkPÒ (¹.) u[p (¹.) ÂØ øú Âø» 7,00,000 18,24,000 5,00,000 ÂØ øúa ö\»ä Nil 24,000 Nil Áõ[Q AhUP 75,000 2,00,000 1,00,000 Áõ[Q Bsk AßÖ ¹ 15,00,000zvØS Ãk JßÖ Áõ[QÚõº. Á huti»uú Buõ zøu PnUQkP. AhUPÂø» SÔ±k , , ØÖ BQ ØÔØS øó 125,150,389 ØÖ

9 19. (a) Mr. Lalit an ordinary resident in India earned the following incomes during the financial year Director s fees Rs.12,000 Income from agricultural land in Pakistan Rs. 6,000 Ground-rent for land in Pathankot Rs. 8,500 Interest on postal savings bank account Rs. 12,500 Interest on deposits with Industrial Finance Corporation of India Rs.16,000 Dividend from foreign company Rs.7,000 Rent from sub-letting a house Rs. 14,000 Rent paid for the sub-let house Rs.4,800 Other expenses incurred on this sub-let house Rs.600 Winning from Race - horses Rs.24,000 (Net) Interest on Securities Rs.4,000 (Gross) You are required to calculate Income from other sources of Mr. Lalit for the Assessment year »¼z GßÝ \õuõμn Si² ø ö ØÓ C v º 2015&16 B BsiÀ AÁº Dmi Á õúzøu u QÓõº. C US º Pmhn ¹.12,000 õqìuõû ÂÁ\õ Á õú ¹. 6,000 uß Põmi¼ x uøμ ÁõhøP ¹.8,500 u õà {ø» \ª PnUQÀ Ámi ¹.12,500 IFCI ¼ x Ámi¹.16,000 öáî õmk {ÖÁÚzv¼ x [Põuõ ¹.7,000 J Ãmøh xøn ÁõhøPUS ÂØÓvÀ Á õú ¹.14,000 xøn ÁõhøPUS ÂØÓvØPõP ÁõhøP öpõkzux ¹.4,800 xøn ÁõhøP Á õúzvøpõú Ó ö\»äpò ¹.600 øu Svøμ» Á õú ¹.24,000 ({Pμ v ) øn [PÒ «uõú Á õú ¹.4,000 (ö õzu v ) 2016&17 Po BsiØPõÚ v.»¼zvß Ó» Á õúzøu PnUQkP. 9

10 Mr. Soni whose gross total income is Rs 40,00,000 makes the following donations during the previous year ending on To prime ministers National relief fund Rs. 1,00,000 To National Defence fund Rs. 2,00,000 To a temple of public worship for its repair (so notified) Rs. 2,00,000 To a local college for construction of Commerce block Rs. 1,00,000 To a poor student as aid Rs. 10,000 To Municipal Committee Rs. 1,00,000 To Chandigarh for promotion of family planning Rs. 50,000 To chief minister s earthquake relief find Maharashtra Rs. 20,000 The gross total income includes Rs. 10,00,000 as profit on sale of long term capital assets. Compute his total income for the assessment year \õû ß Ê ö õzu Á õú ¹.40,00,000, iáøh² BsiØPõÚ AÁº öpõkzu ßöPõøhPÒ ßÁ õö : μu v u] {Áõμn {v ¹.1,00,000 u] õxpõ øhupõú {v ¹. 2,00,000 ö õx UPÒ ÁÈ õmk Põ ¾US Êx õº ö\»äupõp öpõkzux ¹.2,00,000 EÒк PÀ US ÁoP À Pmih PmkÁuØS öpõkzu ßöPõøh ¹.1,00,000 HøÇ õnáýus Eu x ¹.10,000 Pμõm] {ºÁõPzvØS öpõkzux ¹.1,00,000 Sk Pmk õmøh uõøöâ uøpõp \sipº Aμ\õ[PzvØS öpõkzux ¹.50,000 Põμõèiμõ uà v P {Áõμn {vus öpõkzux ¹.20,000 Ê ö õzu Á õúzvà ¹.10,00,000 }sh Põ»»uÚ ö\õzxupîß Buõ EÒÍh[Q x. 2016&17 Po BsiØPõÚ ö õzu Á õúzøu PnUQkP. 20. (a) Write a brief note on recovery of tax and rectification of mistakes. Á ø «mhà ØÖ uáôøú \ ö\ Áx ØÔ SÔ ÁøμP. Explain about payment of Advance Tax. ß Tmi ö\¾zx Á õú Á ØÔ ÂÍUSP. 10