Answer 1 Short Answer Type Questions Model Answer B.Com (Hons) VI Semester Subject-Income Tax Law and Accounts Paper Code- AS-2643 i. Deductions allowed @ 100% are as under:- a) National Defence Fund Set up by the Central Govt. b) Prime minister s National Relief Fund c) Prime Minister s Armenia earthquake Relief Fund d) National Foundation for communal Harmony e) Andhra Pradesh Chief Minister s Cyclone Relief Fund ii. Under Section 80 U iii. Under Section 80 C iv. Rs. 2,50,000 v. Hindu Undivided Family has not been defined in the income tax Act. But, as per the Hindu Law all such persons who are descendants of common ancestors form an H.U.F. This includes wives and unmarried daughters of the family members. H.U.F. is also referred to as joint Hindu Family. H.U.F. consist of many members of the family. vi. The net profit in the profit and loss Account and calculated in accordance with the provisions of Section 28 and 44 D is book profit provided amount of remuneration paid or payable to partners has not been deducted from it. If such amount of remuneration has been deducted while calculating net profit then such amount shall be added to net profit to get book profit. vii. Rules regarding taxation (TDS) OF Dividends: a) Dividend distributed by a domestic company is exempt, so company is not empowered to deduct tax at source. b) The amount received as dividend from co-operative society shall be included in the income. However, the society is not empowered to deduct tax at source. c) The dividend received from a foreign company is to be included in the income but foreign company is not liable to make TDS. viii. Advance Tax shall be payable during a financial year in every case where the amount of such tax payable by the assessee during the year, as computed in accordance with the provisions of advanced tax, is Rs. 10,000 or more. Instalments of advance tax and due dated during the financial year 2013-14 are as under (all assesse other than company):- a) On or before 15 September not less than 30% of such advance tax. b) On or before 15 th Dec not less than 60% of such advance tax c) On or before 15 th March the whole amount of such advance tax ix. An assessing officer means the assistant commissioner or deputy commissioner or deputy director or assistant director or the Income Tax officer who is vested with the relevant jurisdiction by virtue of directions or orders issued by the central board of direct taxes and it also includes the joint commissioner or joint director who is
directed to exercise of perform all or any of the pow er and functions conferred on or assigned to an assessing officer. x. An appeal is the petition against an order of the assessing officer. When an assessee is not satisfied with a order of assessing officer, he may file an appeal against his order or may appeal for its revision to the commissioner of income tax. Answer:2 Computation of total income (for the assessment year 2013-14) Particulars Amount Income from Business 1,52,000 Income from other sources:- Interest from Govt securities 2000 Dividend from Co- operative society 2600 Interest on Debentures 3000 Interest from a business firm 400 Gross Total Income- Less : Deduction u/s 80c to 80u:- Donation to prime Minister National Relief Fund (80G) 3000 Donation to C.G. Govt. for promoting the family welfare (80G) 2000 Donation to public hospital (80 G) (16,000-2000) = 14000*50% = 7,000 8000 1,60,000 Total Income (12,000) 1,48,000 Working Note:- Calculation of qualifying amount for deduction under section 80G :- (least of the following two):- (i) 10% of adjusted total income (1,60,000*10%) = 16,000 (ii) Amount of with limit donation = 20,000 Qualifying amount =16,000
Answer 3. Computation of Total Income of Mr. X (For the assessment year 2013-14) Income from salary (15000*12 1,80,000 Income from house property:- GAV (Rent recd ) 4000*12 Less: Municipal Tax Annual Value 48,000 NIL 48,000 Deduction u/s 24:- 30% of annual value 14,400 Income from House Property 33,600 Capital Gains: Long term Capital Gains Short term Capital Loss Income from other sources: Dividend from co-operative society Interest from firm Interest from govt. securities Winning from lotteries Gross Total Income Less: Deduction u/s 80c to 80D Deduction u/s 801c (10,000+31,000) Deduction u/s 80D 35000 (20000) 2000 8,000 1,000 1,15,000 41,000 1,00,000 15000 1,26,000 3,54,600 (1,41,000) Answer-4. Computation of Total income of Shri Vivek for the A.Y.2013-14 Income from salary 149000 Income from House property: G.A.V.(Rent received) 20000 (-) M.Tax Nil Annual Value 20000 (-)Deduction U/S 24:- 30% on annual value 6000 Income from House Property 14000 Income From Business 470000 Long Term Capital gains 30000 Income from other sources: Royalties 30000 Dividend(Exempt) -------- Interest on Govt. Securities 8800 Total Income 2,13,600
Income of a minor son(15000-1500) 13500 52300 Gross Total Income 715300 Less:- Deductions U/S 80 C to 80U: Life Insurance Premium paid (U/s 80C) 10000 Contribution to P.P.F (U/s 80C) 30000 Health Insurance Premium Paid(u/s 80D) 8000 Donation to N.D.F(u/s 80G) 5000 Royalty Income (u/s 80 Q.Q.B) 30000 (83000) Total Income 632300 Computation of Tax liability Total Income 632300 Tax on L.T.C.G. 30000*20% 6000 Tax on Other Income(632300-30000) Tax on first 200000 Tax on next 300000 @10% Tax on balance (602300-500000) @20% Add: E.C.@ 3% Nil 30000 20460 1694 Gross Tax liability 58144 Answer-5: Computation of total Income of Namo Patel for the A.Y.2013-14 Income from House Property: G.A.V. (-) M. Tax paid Annual Value 16000 1600 14400 (-) Ded U/S 24:- 30% of Annual Value 4320 Income from H.P. 10080 Income from Business:-
Net Profit +Income tax disallowed Exp. 19300 8720 201720 Capital gains:- LTCG from transfer of property 26000 LTCG from Investment 19000 45000 Income from other sources :- Dividend from Indian Company(Exempt) ------ Gross Total Income 256800 (-) Ded u/s 80C to 80U: Amount spent for treatment handicapped Family member(u/s 80DD) 50000 Donation to recognized Medical institution ((80G) 16180*50% 8090 (58090) Total Income 198710 Answer-6. Computation of Total Income of Firm C for the A.Y.2013-14 Book Profit 380000 Less: Partners Remuneration(Least of the following) (i) Actual Remuneration 180000 (ii) Statutory limit 318000 Income from Business B/F Business Loss Income from business Long term Capital gains:- 180000 200000 200000 100000 Nil (i) Capital Gain invests specified assets(u/s 54 EC) 30000 (ii) Amount deposited in capital gain A/C scheme 1956 Income from other sources: Taxable LTCG 30000 40000 Interest on fixed deposit 50000
(-) Unabsorbed dep 30000 Gross Total income 60000 (-) Ded U/S 80C to 80U Nil Total Income 60000 Computation of Tax liability Tax on LTCG 40000@20% 8000 Tax on other income 20000@30% 6000 +E.C. @ 3% 420 Gross Tax liability 14420 Note- Proper working note for calculation of book profit & other adjustments as required need to be shown. Answer.7. In this answer students are expected to write brief introduction. Then explain various types of Assessment. Types of assessment may be as follow. (a) Self-Assessment (b) Assessment on the basis of return (c) Regular assessment by the Assessing officer (d) Re-Assessment Note- Proper explanation of above points are required. Answer.8. In this answer students are required to write a brief introduction about CBDT or CIT. Then various power of any one are to be explained. Various power of CBDT may be as follows: (a) Power U/S 295 (b) Power U/S 296 (c) Power U/S 119 (d) Power U/S 117 (e) Power U/S 120 (f) Power U/S 127 (g) Power U/S 132 (h) Power U/S 138 Note-Proper explanation of power under various sections are required by students. Prepared by: B.P. Singhraul Assistant Professor Dept. of Commerce Guru Ghasidas Vishwavidyalaya