Revision Video Classes 15 Golden Hours on pen drive |
CA-IPCC Income tax – Nov 2019 – AY 19-20
STUDENT MUST SOLVE THESE QUESTION FOR BOOSTING PERFORMANCE IN EXAM.
Full computation - Tax Liability – Residential Status
Problem (Revision Class on pen drive 15 golden hours) ID - 01
Miss Charlie, an American national got married to Mr Radhey of India in USA and came to India for the first time on 16.03 of preceding previous year. She remained in India up till 19.9 and left for USA on 20.9 She returned to India again on 27.03 While in India, she had purchased a show room in Mumbai on 01.05., which was leased out to a company on a rent of 20,000 p.m. from 1.05. She had taken loan from a bank for purchase of this show room on which bank had charged interest of 97,500 up to 31.03.
She had received the following gifts from her relatives and friends during the year:
From parents of husband 51,000
From married sister of husband 11,000
From two very close friends of her husband 1,51,000 and 21,000 total 1,72,000
She owned a piece of land acquired 8 years before in Hyderabad which was sold during the year and profit on sale of the land computed as per capital gains chapter is 30,000.
She has professional fees income of Rs. 5000 earned and received in Canada.
You are required to
Determine her residential status and compute the total income chargeable to tax along with the amount of tax payable.
Would your answer be different if she would have been staying in India during whole of previous year.
What if she stays in India for every year for 160 days since last 15 years.
Full computation with Income and Expense account
Problem (Revision Class on pen drive 15 golden hours) ID - 02
Dr Niranjana, a resident individual, aged 60 years is running a clinic. Her Income and Expenditure Account for the year is as under:
Expenditure | | Income | |
To Medicine consumed | 35,38,400 | By Consultation and Medical charges | 58,85,850 |
To Staff salary | 13,80,000 | By Income-tax refund (Principal 5,000 interest 450) | 5,450 |
To Clinic consumables | 1,10,000 | By Dividend from units of UTI | 10,500 |
To Rent paid | 90,000 | By Winning from game show in TV (net of TDS 15,000) | 35,000 |
To Administrative expenses | 2,55,000 | By Rent | 27,000 |
To Amount paid to scientific research association approved under section 35 | 1,50,000 | | |
Net Profit | 440,400 | | |
Total | 59,63,800 | Total | 59,63,800 |
Rent received relates to property situated at Surat. Gross Annual Value 27,000. The municipal tax of 2,000. paid in December, has been included in “administrative expenses’
She received salary of 7,500 p.m. from Full Cure Hospital” which has not been included in the “consultation and medical charges”
Dr Niranjana availed a loan of 5,50,000 from a bank for higher education of her daughter She repaid principal of 1,00,000, and interest thereon 55,000 during the year.
She paid 1,00,000 as tuition fee (not in the nature of development fees/donation) to the university for full time education of her daughter
An amount of 28,000 has also been paid by cheque on 27 March, for her medical insurance premium.
LTCG on listed shares Rs. 2,00,000 (computed as per provisions of income tax) is directly transferred to capital account.
For the security of clinic she has acquired a Rottweiler Dog for 120,000. The amount is capitalised in books of accounts.
You are required to
From the above, compute the total income and tax liability of Dr. Niranjana.
Salary paid includes Amount of 900,000 paid as salary to Dr. Raja (Assistant doctor in clinic). Dr Raja has informed about his other incomes and losses. Professional loss is 20000, house property (net) loss is 30000 and Interest income is 12000. He has invested in LIC policy with annual premium of 5,000. Tax deducted is 5,000 on his property income. You are required to compute the tax deductible out of payments made to Dr. Raja.
(All questions are solved as per the assessment year of this book, however in some of the questions there is reference to earlier year say for PY 2006-07, this is only for illustrative purposes. Answers are solved as per provisions, limits, % of laws, deductions of the assessment year only.)
Full computation with Income and Expense account
Problem (Revision Class on pen drive 15 golden hours) ID - 03
Ms. Purvi aged 55 years, is a Chartered Accountant in practice. She maintains her accounts on cash basis. Her Income and Expenditure account for the year reads as follows:
Expenditure | | Income | |
| | Fees earned: | |
Salary to staff | 15,50,000 | Audit | 27,88,000 |
Stipend to articled assistants | 1,37,000 | Taxation services | 12,70,000 |
Incentive to articled assistants | 13,000 | Consultancy | 15,40,300 |
Office rent for 12 months paid to ABC limited | 12,24,000 | Dividend on shares of Indian companies (Gross) | 10,524 |
Printing and stationery | 12,22,000 | Income from UTI | 7,600 |
Meeting, seminar and Conference | 31,600 | Rent received from residential flat let out | 85,600 |
Purchase of car | 80,000 | Honorarium received from various institutions for valuation of answer papers and other incomes. | 15,800 |
Repair, maintenance and petrol of car | 4,000 | | |
Travelling expenses | 5,25,000 | | |
Municipal tax paid in respect of house property | 3,000 | | |
Net Profit | 9,28,224 | | |
Total | 57,17,824 | Total | 57,17,824 |
Other Information:
Allowable rate of depreciation on motor car is 15%.
Value of benefits received from clients during the course of profession is 10,500.
Incentives to articled assistants represent amount paid to two articled assistants for passing IPCC Examination at first attempt.
Repairs and maintenance of car include 2,000 for the period of 12 months from 1.10.
Salary include 30,000 to a computer specialist in cash for assisting Ms. Purvi in one professional assignment.
The travelling expenses include expenditure incurred on foreign tour of 32,000 which was within the RBI norms.
Medical Insurance Premium on the health of dependent brother and major son dependent on her amounts to 5,000 and 10,000, respectively, paid in cash.
She invested an amount of 10,000 in National Saving Certificate.
On 01-07 she has paid in cash to Mr. Gimmy 12,000 for his outstanding stationery bill of 2 years back.
She has received loan by account payee cheque of Rs. 25,000 from ABC private limited in which she is holding 25 % of shares.
Honorarium includes 3,000 Remuneration from ADAL Ltd on account of directors sitting fees. She is director in the company.
Her total gross receipts from profession in preceding financial year was 18,50,000
You are required to
Compute the total income and tax payable.
Advise her as to how much tax should be deducted out of payment to ABC limited.
She is desirous to file return of income as per 44ADA, and seeking your advise for the same.
Required to advise ADAL ltd on the tax to be deducted at source.
Full computation with Summary Adjustments
Problem (Revision Class on pen drive 15 golden hours) ID - 04
Mr Y carries on his own business. His turnover in the business is 60 lakhs during the preceding financial year. An analysis of his trading and profit & loss for the year revealed the following information:
The net profit was 11,20,000.
The following incomes were credited in the profit and loss account
Dividend from UTI - 22,000.
Interest on debentures - 17,500.
Winnings from races - 15,000.
It was found that some stocks were omitted to be included in both the opening and closing stocks, the value of which were
Opening stock 8,000.
Closing stock 12,000.
1,00,000 was debited in the profit and loss account, being contribution to a University approved and notified under section 35(1)(ii).
Salary includes 20,000 paid to his brother which is unreasonable to the extent of 2,500.
Advertisement expenses include 15 gift packets of dry fruits costing 1,000 per packet presented to important customers.
Total expenses on car was 78,000. The car was used both for business and personal purposes ¾ is for business purposes.
Miscellaneous expenses included 30,000 paid to A &Co., a goods transport operator in cash on 31.1. for distribution of the company’s product to the warehouses.
Depreciation debited in the books was 55,000. Depreciation allowed as per Income-tax Rates, 1962 was 50,000.
Drawings 10,000.
Investment in NSC 15,000.
Rs. 20,000 was paid as professional fees to Koymoto Inc a Foreign company incorporated in Netherlands without the tax deduction at source.
During the year he travelled to Singapore for a week long business trip. He has recorded expense of 17,000 in books of accounts. However assessing officer considers 35,000 as reasonable expense.
Compute the total income tax liability.
Full computation with Receipt and Payment account
Problem (Revision Class on pen drive 15 golden hours) ID - 06
Mr Rajiv, aged 50 years, a resident individual and practicing Chartered Accountant, furnishes you the receipts and payments account.
Receipts | | Payments | |
| | | |
Opening balance Cash on hand and at Bank | 12,000 | Staff salary, bonus and stipend to articled clerks | 21,50,000 |
Fee from professional services | 59,38,000 | Other administrative expenses | 11,48,000 |
Rent | 50,000 | Office rent | 30,000 |
Motor car loan from Canara Bank (@ 9% | 2,50,000 | Housing loan repaid to SBI Includes interest of 88,000. | 1,88,000 |
| | Life insurance premium | 24,000 |
| | Motor car (acquired in Jan. by cheque) | 4,25,000 |
| | Medical insurance premium (for self and wife) | 18,000 |
| | Books bought (annual publications by cheque) | 20,000 |
| | Computer acquired on 1.11 (for professional use, paid in cash) | 30,000 |
| | Domestic drawings | 2,72,000 |
| | Public provident fund Subscription | 20,000 |
| | Motor car maintenance | 10,000 |
| | Closing balance Cash on hand and at Bank | 19,15,000 |
| 62,50,000 | | 62,50,000 |
Following further information is given to you:
He occupies 50% of the building for own residence and let out the balance for residential use at a monthly rent of 5,000. The building was constructed during the year 1997-98, when the housing loon was taken.
Motor car was put to use both for official and personal purpose. One fifth of the motor car use is for personal purpose. No car loan interest was paid during the year
The opening written down value of assets as on are given below:
Furniture & Fittings - 60,000
Plant & Machinery (Air-conditioners, Photocopiers, etc.) - 80,000
Computers - 50,000
Mr Rajiv follows regularly the cash system of accounting.
Compute the total income and tax liability.
Tax Liability – Set Off and special rates of taxes
Problem (Revision Class on pen drive 15 golden hours) ID - 05
Mr. B furnishes the following information for the year:
Income from business - (1,35,000)
Income from house properly - (15,000)
Lottery winning (Gross) - 5,00,000 (TDS 150,000)
Speculation business income -1,00,000
Income by way of salary - 60,000
Long term capital gain - 70,000
Assessee has explained cash credits (bogus loan) – 600,000 this is offered to tax at normal rates of taxes. However assessing officer has applied the special rates of tax as per 115BBE on this income while doing the assessment.
Due date of filing return for Mr.B is July however he has filed his return of income on 5th August.
He has paid one instalment of advance tax on 12th of September Rs. 20,500.
Compute his total income, tax liability, late fees and interest if any.
Tax Liability – Salary and HP
Problem (Revision Class on pen drive 15 golden hours) ID - 07
From the following details, compute the total income of Siddhant of Delhi age 52 and he visits Singapore every year for 60 days to meet his family friends.
Salary including dearness allowance - 3,35,000
Bonus - 11,000
Salary of servant provided by the employer - 12,000
Rent paid by Siddhant for his accommodation - 49,600
Bills paid by the employer for gas, electricity and water provided free of cost at the above flat - 11,000
Siddhant purchased a flat in a co-operative housing society in Delhi for 4,75,000 in April. 2011, which was financed by a loan from Life Insurance Corporation of India of 1,60,000 ( 15% interest, his own savings of 65,000 and a deposit from a nationalized bank for 2,50,000 to whom this flat was given on lease for ten years. The rent payable by the bank was 3,500 per month.
The following particulars are relevant
Municipal taxes paid by Mr Siddhant 4,300 (per annum)
House Insurance 860
He earned 2,700 in share speculation business and lost 4,200 in cotton speculation business.
3 year back, he had gifted 30,000 to his wife. The gifted amounts were advanced to Mr Rajesh, who was paying interest @ 19% per annum.
4 year back, his father in law gifted 60,000 to his wife. The gifted amounts were advanced to Mr Mahesh, who was paying interest @ 15% per annum.
2 year back, maternal grand parents of his minor son had gifted 20,000 to his minor son. The gifted amounts were advanced to Mr Rajesh, who was paying interest @ 19% per annum.
His minor son is a child artist and earns 75,000 per annum out of acting in TV serials.
Siddhant received a gift of 25,000 each from four friends.
He contributed 50,000 to Public Provident Fund.
You are required to
Compute his total income and tax liability.
On 31st of March he wants to make the payment of advance tax so that there is no interest u/s 234B, you are required to determine the amount of advance tax to be paid on 31st of March of PY
Problem (Revision Class on pen drive 15 golden hours) ID - 08
Ramdin working as Manager (Sales) with Frozen Foods Ltd., provides the following information for the year:
Basic Salary 15,000 p.m.
DA (50% of it is meant for retirement benefits) 12,000 p.m.
Commission as a percentage of turnover of the Company 0.5 %
Turnover of the Company 50 lacs
Bonus 50,000
Gratuity 30,000
Own Contribution to R.P.F - 30,000
Employer’s contribution to R.P.F - 20% of basic salary
Interest credited in the R.P.F account @ 15% p.a. - 15,000
Further information is as follows
Gold Ring worth 10,000 was given by employer on his 25 wedding anniversary.
Music System purchased on 01.04. by the company for 85,000 and was given to him for personal use.
Two old heavy goods vehicles unladen weight is 13000 kgs owned by him were Leased to a transport company against the fixed charges of 6,500 p.m. Books of account are not maintained.
Received interest of 5,860 on bank FDRs, dividend of 1,260 from shares of Indian Companies and interest of 7,540 from the debentures of Indian Companies.
Made payment by cheques of 15,370 towards premium of Life insurance policies and 12,500 for Mediclaim Insurance policy.
Invested in NSC 30,000 and in FDR of SBI for 5 years 50,000.
Donations of 11,000 to an institution approved u/s 80G and of 5,100 to Prime Ministers National Relief Fund were given during the year by way of cheque.
Compute the total income and tax payable.
Problem (Revision Class on pen drive 15 golden hours) ID - 09
From the following particulars furnished by Mr X for the year,
Mr. X retired on 31.12. at the age of 58, after putting in 25 years and 9 months of service, from a private company at Mumbai.
He was paid a salary of 25,000 p.m. and house rent allowance of 6,000 p.m. He paid rent of 6,500 p.m. during his tenure of service.
On retirement, he was paid a gratuity of 3,50,000. He was not covered by the payment of Gratuity Act. His average salary in this regard may be taken as 24,500. Mr. X had not received any other gratuity at any point of time earlier, other than this gratuity.
He had accumulated leave of 15 days per annum during the period of his service; this was encashed by Mr X at the time of his retirement. A sum of 3,15,000 was received by him in this regard. His average salary may be taken as 24,500. Employer allowed 30 days leave per annum.
After retirement, he ventured into textile business and incurred a loss of 80,000.
Mr X has invested 62,500 in public provident fund and 37,500 in National Savings Certificates.
Income from winning from horse races 45,000.
You are requested to
Tax liability of non resident senior citizen
Problem (Revision Class on pen drive 15 golden hours) ID - 10
Rosy and Mary are sisters, born and brought up at Mumbai. Rosy got married in 1982 and settled at Canada since 1982. Mary got married and settled in Mumbai Both of them are below 60 years. The following are the details of their income for the previous year.
| Rosy | Mary |
Age attained in PY | 65 years | 68 years |
Pension received from State Government (net computed as per provision of salary chapter) | - | 10,000 |
Pension received from Canadian Government | 20,000 | - |
Long-term capital gain on sale of land at Mumbai | 1,00,000 | 50,000 |
Short-term capital gain on sale of shares of Indian listed companies in respect of which STT was paid | 20,000 | 300,000 |
Life Insurance Corporation | | 10,000 |
Premium paid to Canadian life insurance at Canada | 40,000 | - |
Mediclaim policy premium paid | - | 25,000 |
Investment in PPF | - | 20,000 |
Rent received in respect of house property at Mumbai | 60,000 | 30,000 |
You are required to
Compute taxable income and tax liability.
Determine the amount of advance tax payable on 31st March so that there is no liability to interest u/s 234B
Advise them on the amount of late fees if any for filing return of income one month late then the due date of filing of return of income.
Tax liability of with LTCG on listed shares
Problem (Revision Class on pen drive 15 golden hours) ID - 11
Mr Rajesh is serving in a public limited company as General Manager (Finance). His total emoluments for the year are as follows:
Basic Salary - 5,40,000
HRA (Computed) - 1,80,000
Transport allowance - 22,000
Apart from the above, his employer has sold the following assets to him on 1 January,:
(i) Laptop computer for 20,000 (Acquired in September, of last year for 1,20,000)
(ii) Car 1800 cc for 3,20,000 (purchased in 2 years back for 8,50,000)
He also owns a residential house, let out for a monthly rent of 15,000. The fair rental value of the property for the let out period is 1,50,000. The house was self occupied by him from 1st January to 31 March. He has taken a loan from bank of 20 lacs for the construction of the property, and has repaid 1,05,000 including interest 40,000).
During the year Mr Rajesh sold shares of different Indian companies on 14 April,:
Name | Sale value (per share) | Purchase price (per share) | Acquired on | No. of shares |
A Ltd. (listed) | 150 (FMV on 31-01-2018 is Rs. 160 per share.) | 120 (STT paid at acquisition) | 2 May, 2009 | 200 |
B Ltd. (not listed) | 82 | 65 | 16 April of preceding year | 125 |
Sale proceeds were subject to brokerage of 0.1% and securities transaction tax of 0.125% on the gross consideration. He received income tax refund of 5,750 (including interest 750) relating to the assessment year 2016-17.
You are required to
Compute the total income and tax liability.
Tax Liability and Unused Basic exemption limit
Problem (Revision Class on pen drive 15 golden hours) ID - 12
Mr. Ashok owns a property consisting of two blocks of identical size. The first block is used for business purposes. The other block has been let out from 1.4. to his cousin for 10,000 p.m. The cost of construction of each block is 5 lacs (fully met from bank loan), rate of interest on bank loon is 10% p.a. The construction was completed on 01.04. During the year, he had to pay penal interest of 2,000 in respect of each block on account of delayed payments to the bank for the borrowings. The normal interest paid by him in respect of each block was 42,000. Principal repayment for each block was 23,000 made at the end of the year An identical block in the same neighbourhood fetches a rent of 15,000 per month. Municipal tax paid in respect of each black was 12,000.
The income computed in respect of business prior to adjustment towards depreciation on any asset is 2,20,000. Depreciation on equipment’s used for business is 30,000.
On 23.3, he sold shares of B Ltd., a listed share in BSE for 2,30,000. The share had been purchased 10 months back for 1,80,000. Securities transaction tax at sale paid may be taken as Rs. 220.
Brought forward business loss of a business is 80,000. This loss has been determined in pursuance of a return of income filed in time and the current year is the seventh year
The following payments were effected by him during the year:
(i) LIP of 20,000 on his life and 12,000 for his son aged 22, engaged as a software engineer and drawing salary of 25,000 p.m.
(ii) Mediclaim premium of 6,000 for himself and 5,000 for above son. The premiums were paid by cheque.
You are required to compute the total income. The various heads of income should be properly shown, Ignore the interest on bank loan for the period prior to 1.4., as the bank had waived the same.
Problem (Revision Class on pen drive 15 golden hours) ID - 13
Mr Venus Aged 65 years resident in India provides the following details for the previous year
Salary from HNL Ltd. 50,000 per month
Interest on FD with SBI – 72000 (Net of TDS)
Brought forward long term capital loss (3 years back) - 96000
Long term capital gain - 75000
House property Loss of minor son 90,000 computed in accordance with the provisions of Income - tax Act, 1961. Mr. David (neighbour of Venus) transferred his own house to his minor son without adequate consideration few years back and minor son let it out and suffered loss.
Business Loss of his sons wife 2,00,000. She carried business with funds which gifted to her by her father in law.
He has not provided any details about his other income and losses to his employer HNL Ltd.
He has signing authority in a bank account in Hong Kong which is actually belonging to his Uncle living in Canada.
You are required to
Compute taxable income and tax liability.
You are required to advise him as to whether he is required to file a return of income and if yes what will be the due date.
You are required to calculate the interest chargeable u/s 234B of income tax act.
Tax Liability Marginal Relief
Problem (Revision Class on pen drive 15 golden hours) ID - 14
Mr. Madan aged 69 years resident in India has furnished the following details for the calculating tax liability.
Income From Salary (net computed) | 27,88,000 |
House property income (net computed) | 15,80,000 |
Interest Income | 6,30,000 |
Interest income on enhanced compensation | 44,000 |
Legal expense on enhanced compensation | 12,000 |
Family Pension | 30,000 |
Advance monies for Land at Noida was forfeited as the buyer of the land Mr. Shah could not fulfil his commitments. | 50,000 |
Also advise him for the payment of advance tax.
Agricultural Income and Mix Operations
Problem (Revision Class on pen drive 15 golden hours) ID - 15
X Ltd. grows sugarcane to manufacture sugar. Data is as follows
| Rs. |
Cost of cultivation of sugarcane | 6 |
Market value of sugarcane when sugarcane is transferred to factory | 9 |
Other manufacturing cost | 6 |
Sales turnover of sugar | 22 |
Salary of managing director who looks after agriculture as well as non-agricultural operations of the company | 2 |
You are required to find out the agricultural income of the company.
Agricultural Income and Tax Liability
Problem (Revision Class on pen drive 15 golden hours) ID - 16
For the year, net agricultural income of an assessee is Rs. 86,000 and non-agricultural income is Rs. 12,65,000. The taxpayer contributes Rs. 40,000 towards public provident fund. Find out the tax if the taxpayer is:
Capital Gains – Slump sale
Problem (Revision Class on pen drive 15 golden hours) ID - 17
X Ltd. has two units — one engaged in manufacture of computer hardware and the other involved in developing software. As a restructuring drive, the company has decided to sell its software unit as a going concern byway of slump sale for Rs. 385 lakh to a new company called S Ltd., in which it holds 74 per cent equity shares.
The balance sheet of X Ltd. as on March 31, being the date on which software unit has been transferred, is given hereunder -
Liabilities | Rs. In lakh | Assets | Rs. In lakh |
Paid up share capital | 300 | Fixed assets (hardware unit) | 170 |
General reserve | 150 | Fixed assets (software unit) | 200 |
Share premium | 50 | Debtors (hardware unit) | 140 |
Revaluation reserve | 120 | Debtors (software unit) | 110 |
Current liabilities (hardware unit) | 40 | Inventories (hardware unit) | 95 |
Current liabilities (software unit) | 90 | Inventories (software unit) | 35 |
| 0750 | | 75 |
The following additional information is available —
The Software unit is in existence since May 2011. Fixed assets of software unit include land which was purchased at Rs. 40 lakh in the year 2008 and revalued atRs. 60 lakh as on March 31, 2015.
Fixed assets of software unit mirrored at Rs. 140 lakh (Rs. 200 lakh minus land value Rs. 60 lakh) is written down value of depreciable assets as per books of account. However, the written down value of these assets under section 43(6) is Rs. 90 lakh.
Ascertain the tax liability, which would arise from slump sale to S Ltd. What would be your advice as a tax consultant to make the restructuring plan of the company more tax-savvy, without changing the amount of sale consideration?
Capital Gains – Advance – Stamp duty value
Problem (Revision Class on pen drive 15 golden hours) ID - 18
R received a house in may, 2010 by way of Gift from Mr. G who had purchased the same in April, 1979 for Rs. 12,00,000. The cost of improvements incurred by G were Rs. 2,55,000 in March, 2000 and Rs. 3,40,000 in November, 2008. The fair market value of the house as on 1-4-2001 was Rs. 9,14,000. Before this house was gifted to R, G had received an advance of Rs. 3,00,000 in March, 2006 towards sale of this house from S but the sale did not materialize and the advance was forfeited by G. the house was sold and registered by R on 12th March PY for Rs. 38,00,000 when the stamp duty value is 48,00,000. However advance money of 125,000 for the house was taken in cash on 1st December PY when the stamp duty value was 44,00,000. Assessee claimed before the officer that stamp duty value was excessive and unreasonable and matter was referred to valuation officer by officer, who value the house at 49,00,000. Ascertain the capital gains chargeable to tax.
Capital Gains – Agri Land – concept of violation of holding period
Problem (Revision Class on pen drive 15 golden hours) ID - 19
During the previous year ending on March 31, X sells the following :
| | Date | sale | Cost of | Year of | Fair market |
| | Sale | proceeds | acquisition | purchase | Value on |
| | (PY) | | | | April 1, |
| | | | | | 2001 |
Preference shares | | April 10, | 4,90,000 | 1,00,000 | 2003-04 | 1,80,000 |
Agriculture land 1 (situated in 1 km limit of Mumbai and population is 5,000) | | May 25, | 30,00,000 | 2,30,000 | 1973-74 | 3,40,000 |
Agriculture land 2 (situated in 1 km limit of Mumbai and population is 8,00,000) | | June 10, | 49,00,000 | 6,17,250 | 2006-07 | 2,00,000 |
Debentures (listed) | | April 10, | 3,17,900 | 2,30,615 | 1993-94 | 1,80,000 |
Personal car | | July 1, | 1,25,000 | 70,000 | 1986-87 | NA |
On July 31, (being the due date of furnishing return of income), X deposits Rs. 1,00,000 under section 54B for claiming exemption in future by purchasing agriculture land 3 situated in jurisdiction of municipality having population of 5000 persons by withdrawing from the deposit account, Rs. 70,000 till January 9 of assessment year. Agricultural land 3 is sold for 75,000 in just 2 months after its acquisition.
Capital Gains – Investment in Industrial Undertaking
Problem (Revision Class on pen drive 15 golden hours) ID - 20
X Ltd. located within the corporation limits decided in December-PY to shift its industrial undertaking to non-urban area. The company sold some of the assets and acquired new assets in the process of shifting. The relevant details are as follows:
| | (Rs. In lakhs) |
| Particulars | Land | Bldg. | P/M | Fur. |
(i) | Sale proceeds (Sale effected in March,-PY) | 8 | 18 | 16 | 3 |
(ii) | Indexed cost acquisition | 4 | 10 | 12 | 2 |
(iii) | Cost of acquisition in terms of section 50 | 1 | 4 | 5 | 2 |
(iv) | Cost of new assets purchased in specified time limit for the purpose of business in the new place | 4 | 7 | 17 | 2 |
During the process of shifting X Ltd has incurred transportation, uninstallation and re-installation expense on shifting of some of its old plant and machinery to new location, amount 50,000 Rs.
Compute the capital gains of R Ltd.
Capital Gains – Investment in to Bonds
Problem (Revision Class on pen drive 15 golden hours) ID - 21
Mrs. X, resident woman, transfers a house property (received without consideration from her husband in 1991) on January 16,. On the said transaction she earns a long-term capital gain of Rs. 1,01,50,000. She invests a sum of Rs. 50,00,000 in capital gains bonds specified in section 54EC on January 5 out of the advance monies received on account of transfer,. She further invests a sum of Rs. 50,00,000 in the same bonds after 3 months of the first investment in bonds. She has raised Funds of 40,00,000 on the security of above bonds of Value 50,00,000 in the month of March of next year. Her other income for year is Rs. 46,000. Discuss the tax consequence of the above transactions.
House Property – Concept of annual value and vacancy
Problem (Revision Class on pen drive 15 golden hours) ID - 22
S constructed his house on a plot of land acquired by him in Kolkata. The house has two floors of equal size. He started construction of the house on 1st April of Last year and completed construction on 30th June of Previous Year. He occupied the ground floor on 1st July and let out the first floor at a rent of 20,000 per month on the same date. However, the tenant vacated the first floor on 31st January and S occupied the entire house from 1st February.
Other information
Fair rent of each floor - 1,20,000 per annum
Municipal value of each floor - 80,000 per annum
Municipal tax paid - 10,000
Repair expenses - 5,000
S obtained a housing loan of 15 lacs at interest of 10% per annum on 1st July of Last Year.
He did not repay any part of the loan till the end of the previous year.
Standard rent of each floor is 25,000 per month
House Property – Concept of Co-ownership property
Problem (Revision Class on pen drive 15 golden hours) ID - 23
X and Y are co-owners of two houses with equal share of both the houses. While the first house is used by them for their residence, the second house is let to a tenant at a monthly rent of 2,500. The other relevant particulars of the houses are as follows:
| House 1 | House 2 |
Construction completed on | 30.06.2005 | 31.03.2007 |
Municipal Tax @ 10% | 2,000 | 2,500 |
Insurance Premium | 2,500 | 2,500 |
Interest on loan | 10,000 | 9,000 |
Compute income from house property of X and Y for the relevant assessment year.
IFOS – Taxation of gifts and other receipts
Problem (Revision Class on pen drive 15 golden hours) ID - 24
Mr A, a dealer in shares, received the following without consideration during year from his friend Mr B, -
(1) Cash gift of 75,000 on his anniversary.
(2) Bullion, the fair market value of which was 60,000, on his birthday.
(3) A plot of land at Faridabad on 1 July PY, the stamp value of which is 5 lakh on that date. Mr B had purchased the land in April, 2008.
Mr. A purchased from his friend Mr. C who is also a dealer in shares, 1000 shares of X Ltd. 400 each on 1 9 June PY, the fair market value of which was 600 each on that date. Mr. A sold these shares in the course of his business on 23 June PY.
Further on 1 November PY, Mr. A took possession of property (building) booked by him two years back at 20 lakh. The stamp duty value of the property was 32 lakh and on the date of booking was 23 lakh. He had paid 1 lakh by account payee cheque as down payment on the date of booking.
On 1 March PY he sold the plot of land at Faridabad for 7 lakh.
Compute the income of Mr A chargeable.
Residential Status - Individual
Problem (Revision Class on pen drive 15 golden hours) ID - 25
X is a foreign citizen (not being a person of Indian origin). During the financial year 2010-11, he comes to India for 85 days. Determine his residential status for the assessment year 2011-12 on the assumption during financial years 1996-97 to 2010-11, he was present in India as follows:
1996-97 | 85 days | 2003-04 | 16 days |
1997-98 | 310 days | 2004-05 | 360 days |
1998-99 | 6 days | 2005-06 | 181 days |
1999-2000 | 5 days | 2006-07 | 305 days |
2000-01 | 65 days | 2007-08 | 65 days |
2001-02 | 180 days | 2008-09 | 10 days |
2002-03 | 360 days | 2009-10 | 126 days |
Residential Status - HUF
Problem (Revision Class on pen drive 15 golden hours) ID - 26
D is the karta of a Hindu undivided family, and the control and management of the family is wholly situated in India. On 30 April, 2016 D went to Bangladesh for business purposes and did not return till 31st March, 2017. D did not go out of India any time before. What would be the residential status of the Hindu undivided family and Mr. D for the assessment year 2017-2018 ?
Business Income - Tea Development Account
Problem (Revision Class on pen drive 15 golden hours) ID - 27
R Ltd. is engaged in the business of growing and manufacturing tea in India. For the previous year its composite business profits before allowing deduction u/s 33AB are Rs. 60,00,000. On 1-9-AY (before due date of filing of return) it deposited a sum of Rs. 11,00,000 in the Tea Development Account. Two years back it has incurred a business loss of Rs. 14,00,000 which has been carried forward. on 25-1-AY, it withdraws Rs. 10 lakh which is utilised as under:
Rs. 6,00,000 for purchase of non-depreciable asset as per the scheme specified.
Rs. 3,00,000 for purpose other than specified in the scheme.
Rs. 1,00,000 was spent for the purpose of scheme.
Compute the business income of R Ltd.
What are the tax consequences of money misutilised / not utilised?
What will be the consequence if the asset which was purchased for Rs. 6,00,000 is sold for Rs. 8,00,000 after 18 months.
Advance Tax - Full Computation
Problem (Revision Class on pen drive 15 golden hours) ID - 28
Mr Kalpesh Sanghavi furnishes return of his total income on 1 August of assessment year (due date under Sec. 139(1) is 31 July). He is assessed on 15 December of assessment year. He furnishes the following particulars of his income-tax liability.
Particulars | Rs |
(i) Income tax as per return (includes income tax Rs. 1050 on casual income which was earned on 10-December of PY) | 37,260 |
(ii) Income tax as per assessment | 48,450 |
(iii) Tax deduced at source (actual) (includes TDS of Rs. 1,000 on casual income which was earned on 10-December of PY) | 2,450 |
(iv) Instalment’s of advance tax: | |
15.9.PY | 13,000 |
15.12.PY | 4,000 |
15.3.PY | 8,000 |
31.3.PY | 5,000 |
(v) Payment of self-assessment tax on 01.08.AY | 10,000 |
Determine his tax liability including interest, if any.
AMT (alternate Minimum Tax) is included in CA Inter / IPCC exam from May 2020 onwards.
Look out for our detailed coverage in revision course including AMT for May 2020 exam.
