D 40001 (Pages : 4) Name. Reg. No. SIXTH SEMESTER B:Com. DEGREE EXAMINATION, MARCH/APRIL 2018 (cUCBCSs—uG) BOM 6B 12—INCOME TAX LAW AND PRACTICE ‘Time : Three Hours ‘ ‘Maximum : 80 Marks : Part I ‘ Answer all questions. Each question carries 1 mark. I. Choose the most appropriate answer from the following : 1. The aggregate of incomes under various heads after making deductions under Chapter VI A of the Income Tax Act is called (a) Gross total Income. (b) Net Income. (©) Total Income. (a) Net Taxable Income. 2 The income Tax Act 1961 defines term person as per (a) See, 2 (24). (b) See. 2 (80). (©) Sec. 2 (81). (a) Sec. 8 8 Annual accretion is in relation to (a) Statutory Provident Fund. (b) Recognised Provident Fund. (©) Unrecognised Provident Fund. . (a) Public Provident Fund. 4. Profits in lieu of salary include (a) DORG. (b) Payment from statutory provident fund. (©) Payment received under Keyman Insurance Policy. (@) All of the above. 5 Pre-construction period interest is deductible in (a) Three equal instalments. (v) Five equal instalments. + () Ten equal instalments. (@) Fully ina year. 6 The company whose undertaking is transferred, pursuant to a demerger, to a resulting company is Turn over2 D 40001 7 Capital gains from agricultural land, invested in new agricultural land get exemption under section f 8 Selling securities cum-interest and buying back the same, ex-interest after the due date of interest, is called ———, 9 Interest on own contribution to the unrecognised provident fund is taxable under the head - 10 Depreciation which could not be claimed due to insufficiency of profits is called ———, (10 x 1 = 10 marks) Part II Answer any eight questions. Each question carries 2 marks. What is previous year ? > What is maximum marginal rate ? > 13. State any two situations of accelerated assessment. 14 Whois a specified employee for the purpose of taxation of perquisites ? 15 State the provisions of Income Tax Act regarding taxation of entertainment allowance, 16 How expected rent is calculated under income from house property ? 17 State the rule 4 in respect of deduction of unrealised rent in computing income from house property. 7 18 How is cost of bonus share determined ? 19 What ere the deductions admissible in computing income, from other sources ? 30- State the deductions under section 80 DD. (8 x 2= 16 marks) Part III Answer any six questions. Each question carries 4 marks. Zi, State any eight items of income exempt from tax. © Explain the taxation of House Rent Allowance. 2K State the expenses which are expressly disallowed in computing profits and gains of business or profession, - 24 Mr. Ashok, an Indian citizen, is employed in London sincé 2001, He comes to India every year for two months to spend his holidays. However during the year 2016-17, he came to India on Teave-and spent 181 days in Kerala. Determine his residential status for the previous year 2016-17,3 D 40001 25 A company took a house on rent and allotted to its employee. From the following information find out the value of perquisite of accommodation : Rent paid for the year. w=» 60,000 Salary w= 5,00,000 Cost of furniture provided in the house a 60,000 Rent charged from employee per month = ..._—*1,000 26 From the following information, compute depreciation allowable for the Assessment ‘Year 2017-18 : Rs. W.D.V of furniture on 1-4-2016 s+ 1,10,000 Furniture purchased in June, 2016 v= 15,000 Furniture purchased in January, 2017, 20,000 Part of furniture sold in February,2017 3,000 27. Mr. Ashraf purchased shares in Indian companies as investments on June 10,2015 for Rs, 1,20,000. On June 1, 2016 he started a business.as a dealer in shares and transferred the entire holdings to the business, The market value of the shares as on that date was Rs. 1,60,000. ‘These shares were sold by him for Rs. 2,00,000 on October 20, 2016. Compute gains. 28 From the following particulars of income and losses calculate the gross total income of an individual after set off losses for the current assessment year : Rs. ‘Tncome from house property A si 50,000 ‘Loss from house property B 80,000 Income from interest on securities .. __2,00,000 Loss from cycle business = 2,00,000 Profit from speculation business ..-——2,00,000 Gain from short term capital asset... _-2,50,000 ‘Long-term capital loss o 60,000, Long-term capital gains s+ 2,10,000 (G x 4 = 24 marks) Part IV Answer any two questions. Each question carries 15 marks. 3 ‘What are tax free perquisites ? Turn over4 D 40001 30 Mr. John is an employee of a company in Mumbai. He gets monthly salary Rs. 20,000, D. A. Rs. 5,000 per month, bonus Rs. 3,000 per month and entertainment allowance Rs. 2,000 per month, He paid tax on employment Rs. 5,000 during the financial year 2016-17. He has been provided a rent free unfurnished house. He owns two houses He claims that both houses are self occupied. The following details are available : Housel House I Rs. Rs. Fair rental value = 1,50,000 —2,00,000 Municipal valuation’ = 1,60,000 _8,50,000. Standard rent. a 180,000 3,00,000 Municipal taxes paid oo 10% 10% Repairs, insurance and land revenue Ground rent 40,000 60,000 10,000 20,000 40,000 1,70,000 11.1999 11.2006 Determine total income of Mr. John for the Assessment Year 2017-18. 31 Mr. Singh has the following investments in the previous year ended 31%* March, 2017 :— Interest on capital borrowed Loan taken on Rs, 10 % Karnataka State Govt. Loan + 11,000 18.5 % Debentures of LMT Ltd, (listed) ++ 30,000 , 11 % Securities of Sugar Mill Co. (not listed) s+ 85,000 10% Tax-free commereial securities (listed) + 82,000 Received as interest on Tamil Nadu Govt. Securities v 8,580 Received as interest on the securities of a Paper Mill Company (not listed) ... 3,600 Received as interest on the securities of Textile Company (listed) 4,500 Interest on all securities is payable on 30th June and 31st December, He was also a director in a company from which he received Rs. 3,000 as director’s fees. His other incomes are : Rs. Winning from lottery 25,000 Income from agriculture in Sri. Lanka. «= 10,000 Winning from Horse race «15,000 Interest on Post Office Savings Bank Account 2,000 Find out his taxable’ Income from Other Sources' for the Assessment Year 2017-18, (2x15 0 marks)