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DISTRICT RESOURCE CENTRE

MAHBUBNAGARB.Com III YEAR PRE-FINAL EXAMINATION JAN/FEB-2011

(Common paper for Computers & Computer Application)

INCOME TAX [302]Time : 3 hours Max.Marks: 100

PART-A [5 X 5 = 25 Marks]Answer any 5 questions. Answer to the theory questions should not exceed 20 Lines each.

1. Assessment Year

2. Permanent Account Number [PAN]

3. Revenue Expenses Vs Capital Expenses

4. Mr.Chand is a state Government Employee working in Hyderabad.

His Salary particulars are as under: Basic Pay Rs.1800 pm, DA Rs.750pm, CCA Rs.180pm,

HRA Rs.600pm(Rent paid Rs.750pm). Calculate exempted amount of HRA.

5. Gross Annual Value.

6. Mr.Vijay kumar purchased Diamond Ring on 5th July,1985 for Rs.68,000 and sold for Rs.5,10,000

during the previous year relevant to the current assessement year. Cost inflation index for 1985-86 is

133 and for the previous year is 632. Calculate Capital Gain.

7. The following are the particulars of investment of Mr.Bupesh for the previous year ended March

31st,2010

.(i) Rs.1,00,000 2% Tax free Kerala Govt.Securities.(ii)Rs.90,000 4% (less Tax) AP Govt.Bonds.

(iii)Bank Charges paid Rs.60

(iv)Interest paid on loan taken for the purchase of Tax free Govt.Securities Rs.850

8. The following are the particulars of Income and other related information of Mr.Janaiah. Compute

Total Income. Income from House Property(Letout) Rs.60,000 Loss from self occupied House

Rs.21,000 Income from Profession Rs.3,50,000 long term Capital Gain Rs.75,000 Interest on NSC

VIII issue Rs.3,000

PART-B [5 X 15 = 75 Marks]

Answer all questions. Answer to the theory questions should not exceed 4 pages each.

9. (a) What are the conditions to be satisfied for an Income to be treated as an

Agricultural Income?

[OR]

(b) Explain any Ten items which are fully exempted Incomes to Individuals from

Income Tax.

10. (a) From the following compute the Income of Sri.Badrinath under the head

Salary: Basic pay Rs.15,000; Dearness Allowance(Enters for Retirement benefit)

Rs.7,500pm; Annual Bonus 5% of Basic Pay, Entertainment Allowance Rs.2,000pm.Employer provides with the following benefits:

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(i) Rs.8,000 is awarded as Scholarship for his Daughter.

(ii) Free refreshments costing Rs.10 per day is served for 300 days in the office.

(iii) A Rent free accomdation is provided in a city having 10.2 lakhs of population. Cost of

Furniture provided is Rs.70,000

(iv) A small Motor Car is provided for Official purpose

(v) The Employer provided the services of Watchman and a cook whose monthly salary @Rs.3,000 pm each and Bonus to them one month salary also paid by the Employer.

(vi) Employer allowed to use a computer costing Rs.60,000 for official and personal purpose.

(vii) Reimbursement of Medical expenses spent in a recognized Hospital in India Rs.30,000.

(viii) Employers contribution to Approved Superannuation Fund Rs.1,08,000.

(ix) Employer paid Rs.5,000 for extra work (i.e) for undertaking Tution to his son.

Professional Tax paid by the Assessee is Rs.450 pm.

[OR]

(b) Sri.V.V.Prasad is the owner of a House, which is letout on a monthly rent of Rs.7,500. The

Municipal Valuation is Rs.80,000 pa. Prasad incurs the following expenses. Municipal Taxes

Rs.9,300, Repairs Rs.5,000, Interest paid on the loan taken to purchase the house Rs.14,300.Compute Income from House Property.

10. (a) Sri. Murali is the owner of a Business. From the following Profit & Loss A/c Compute

Income under the head of Profit & Gain of Business.

Dr Profit & Loss A/c for the year ending 31st March, 2010 Cr

Particulars Rs. Particulars Rs.

To Salaries

To Proprietors Salary

To Taxes & Insurance

To Advertisement

To Lighting

To Cost of goods given under

warranty claims

To Life Insurance Premium

To Bad debts

To Provision for doubtful debts

To Interest on Loan

To Interest on Capital

To Sales Tax Penalties

To Depreciation

To Net Profit

33,000

10,000

5,200

55,000

11,100

7,500

3,200

2,500

3,000

16,000

8,000

5,000

18,000

3,30,000__________

5,07,500

By Gross Profit

By Rent

By Interest on Bank Deposits

By Bad debts Recovered

(out of this Rs.3,000 is

disallowed earlier)

By Export Incentive

Received

4,05,000

50,000

10,000

5,000

37,500

___________

5,07,500

Additional Information:-

(i) Depreciation allowed as per I.T.Act is Rs.15,300.

(ii) Advertisement expenses includes Rs.25,000 paid in cash on the last day of the Accounting Year.

(iii) On the last date of the Accounting Year the cashier reported a cash shortage of Rs.200 and

Stock

Verifier found a shortage of Rs.500 worth goods.

(iv) The Assessing Officier found a valuable item of gold worth Rs.1,00,000 at the residence of the

Assessee and explanation for source of funding is not satisfactory.

(v) Lighting Expenses includes Rs.2,000 towards Electricity generating expenses.(vi) For achieving the sales target he received a Motor Cycle worth Rs.45,000 as gift from a supplier.

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(vii) Interest on Loan includes Rs.3,000 Interest on Loan taken from wife out of her STRIDHAN

[OR]

(b) Sri. Raju a chartered Accountant in Hyderabad submitted the following particulars.

Compute the Income from Profession.

RECEIPTS: Audit Fee: Companies Rs.2,88,000, Banking Companies Rs.1,56,000, FirmsRs.75,000, Others Rs.81,000, Gifts from clients worth Rs.22,500, Interest on Bank Deposits Rs.3,200

share of Income from HUF Rs.11,000, Financial Advices Rs.1,05,000, Accountancy works

Rs.3,07,500

PAYMENTS: Office Rent Rs.77,000, Telephone Charges Rs.32,000, Salaries to Staff Rs.86,500,

Stipend given to Trainees Rs.27,000, Subscription to Journals Rs.4,000, Car expenses Rs.36,800,

Electricity Bill Rs.17,800, Membershp fee paid to Institute of CA Rs.2,000, Purchase of Books

Rs.13,000, Purchase of Computer Rs.36,000

ADDITIONAL INFORMATION:-

(i) Depreciation on Car Rs.64,100

(ii) One month Rent Rs.7,000 is outstanding(iii) Audit Fee from the Banks due is Rs.75,000

(iv) 25% of the Car use is personal

12 (a) Mr. Venkat Purchased a property for residential purpose for Rs.7,50,000 in 1975. During the

financial year 1983-84 he had spent Rs.1,20,000 towards improvement. On 1st April,1995 he entered

into an agreement to sell the House and received Rs.1,20,000 as an advance. This advance was

forfeited as the purchaser did not pay the balance of amount in time. During the previous year

relevant to the current assessement year the entire property was sold for Rs.21,42,000, Brokerage paid

is 1%. On the last day of the previous year he purchased a small house for his residential purpose for

Rs.2,50,000[ Brokerage Paid 0.5%]. Calculate from Capital gain if Cost Index for 1983-84 is 116

[OR]

(b) The Investments of Mr.AmirKhan during the Financial Year are as under.

Rs.20,000 5% Municipal Bonds

Rs. 5,000 12 years 12% National Defence Certificates.

Rs.10,000 8% Bombay Development Loan

Rs.30,000 5.5% Tax free Indian Govt.Loan

Rs.40,000 6% Tax free Debentures of XYZ Ltd.(Unlisted)

Rs.20,000 9% Tax free Debentures of ABC Ltd(Listed)

Rs.12,000 10% Textile Company Debentures(Less Tax ,Listed)

On 1-12-2009 he bought Rs.40,000 6% Debentures of a Paper Company, for this purpose

he took a loan at 5% and paid Rs.250 for Brokerage. The Interest on these Securities was realizedthrough Bank and banker charged 1% on gross interest. Compute Income from Interest on Securities.

13 (a) Sri. Govind submitted the following particulars. Compute Total Income.

Salary Rs.25,200 pm and Profession Tax paid Rs.4,200

Rent received Rs.5,000pm Contribution to LIC Pension Fund Rs.9,500

Medical Insurance Premium paid for self Rs.10,000 and for father age 59 years Rs.18,000

[OR]

(b) Write a Short Notes On:

(i) Tax Deduction at Source(ii) Advance Payment of Tax

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(iii) Best Judgement Assessment.

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