2015
DIRECT TAXES
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate full marks for the questions)
1. (a) Fill in the blanks with appropriate word/ words: 1x5=5
1) As per section _______ a person by whom any tax or any other sum of money is payable under the Income Tax Act is known as assessee.
2) Salary is taxable on due or receipt basis whichever is _______.
3) Rate of statutory deduction in case of income from house property is _______.
4) Section 54 provides exemption to equal gains arising from the transfer of a _______ house property.
5) Interest received by an employee on his own contribution to unrecognized provident fund is taxable under the head _______.
(b) State whether the statement is true or false: 1x5=5
1) An Indian citizen is always considered as resident and ordinarily resident in India.
2) Perquisites cannot be given in monetary form.
3) The highest rate of personal income tax as per the Income Tax Act is 30%.
4) An asset (except shares and debentures) is termed as short term capital asset if it is held for 36 months.
5) Cash in hand in excess of Rs. 20,000 in case of individual are to be considered as an asset for determining net wealth.
2. Write short answers to the following in about 50 words each: 2x5=10
a) An assessee commences his business on:
1) 1st July, 2014 and
2) 16th January, 2014
In each case, what will be his assessment year and what period will be his treated as his previous year for the concerned assessment year?
b) When is an individual considered ‘non-resident in India’ for income tax purpose?
c) Define assets under the Wealth Tax Act.
d) Write the meaning of ‘Total Income’ as per Income Tax Act.
e) State two expenses which are admissible while computing taxable profit of a business.
3. Describe briefly any four of the following: 5x4=20
a) State the procedure of filing of return by an individual assessee.
b) State the consequences of not deducting tax at source as per the provisions of Income Tax Act.
c) What deductions are allowed while computing income from house property?
d) Name any five allowances which are exempted from tax upto the link of actual expenditure.
e) Give five examples of expenses/provisions which are not allowed as deduction while computing the profits and gains of business or profession.
f) State the meaning of ‘long-term capital gains’ and ‘short-term capital gains’.
g) Mention five items of ‘general income’ under the head ‘Income from other sources’.
4. Answer the following questions:
(a) (1) Kasturi Das is the owner of a house property located at Guwahati. From the particulars given below compute the income from house property for the assessment year 2015-16.
| | Rs. |
| Municipal value Fair rent Standard rent Actual rent Municipal taxes levied Expenses on repairs | 42,000 45,000 44,000 4,400 p.m. 4,400 6,000 |
Municipal taxes paid during the year 50% of tax levied.
(2) Mr. Bikash Bora purchases a house property for Rs. 76,000 on September 30, 1975. In 1989-90 he spent Rs. 4,30,000 for reconstruction of the house. The house property was sold by Mr. Bora on June 15, 2014 for Rs. 50,00,000 (expenses incurred on transfer of house property was Rs. 35,000).
Fair market value of the property on 1.4.1981 is Rs. 5,00,000. Cost inflation index for 1981-82: 100; 1989-90: 172; 2014-15: 1,024
Compute the amount of capital gain for the assessment year 2015-16.
Or
The following are the incomes of Shree Deepak for the previous year 2014-15:
| | Rs. |
| 1) Dividend from Indian company 2) Profit from business in Japan received in India 3) Profit from business in Pakistan deposited in a bank there. This business is controlled from India 4) Profit from business in Mumbai (controlled by London Head Office) 5) Income earned in America and received there, but brought in India 6) Income from house property in India received in America (computed) 7) Interest on debentures of an Indian company received in Dubai 8) Capital gain on sale of agricultural land situated at Ajmeer | 10,000 1,20,000 2,00,000 1,10,000 80,000 62,000 25,000 48,000 |
Compute his taxable income if he is
a) Resident,
b) Not ordinarily resident,
c) Non-resident. 10
(b) Mr. Naidu, aged 58 is an employee of Public Ltd. Co., Guwahati. As per terms of the agreement with the company he received the following: 10
| | Rs. |
| Basic salary Dearness allowance Interim relief Family allowance | 30,000 p.m. 12,000 p.m. 5,000 p.m. 2,000 p.m. |
Bonus for the year @ 20% on his basic salary, House rent allowance Rs. 4,000 p.m. (Rent paid by him Rs. 5,000 p.m.)
Contribution to recognized Provident Fund @ 10% of basic salary
During the previous year 2014-15, his employer deducted Rs. 3,000 as professional tax and income tax at source Rs. 6,000 p.m. from his salary. During the previous year, Mr. Naidu paid Rs. 20,000 as life insurance premium on a policy of Rs. 3,00,000 and deposited Rs. 40,000 in PPF account.
Ascertain his income from salary for the assessment year 2015-16 and also show the net amount of tax payable by him.
Or
Write a note on the deduction available under the Section 80C of the Income Tax Act for the assessment year 2015-16.
(c) (1) What do you mean by Agricultural Income under Income Tax Act, 1961?
(2) Explain the procedure of ‘Regular assessment’ under the Income Tax Act. 5+5=10
Or
Mr. A retired from government service and took up a job with a company thereafter. The following are the particulars of his income etc. for the financial year ending 31st March, 2015:
| | Rs. |
| Pension from government Salary from company Finished rent-free house provided by the company at Cochin (Population 15 lakhs) Cost of furnishing is Profit from business Dividend from units of U.T.I (gross) Interest on government securities Bank interest Capital gain (short-term) on transfer of shares | 12,000 p.m. 10,000 p.m. 15,000 35,000 8,000 3,500 8,000 12,000 |
He deposited Rs. 60,000 in 6 years fixed deposited in S.B.I. and Rs. 50,000 in the Public Provident Fund.
Compute the total taxable income of Mr. A for the assessment year 2015-16. 10
(d) (1) When does the liability for payment of advance tax arise? How is it computed?
(2) Discuss the use of ‘PAN’. How can this be procured as per the Income Tax Act? 5+5=10
Or
What is net wealth? How is it computed? Discuss. 10
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