RATHINAM COLLEGE OF ARTS & SCIENCE
(AUTONOMOUS)
Coimbatore-641021
DEPARTMENT OF COMMERCE
DIRECT TAX
Lab Manual
Prepared by: Approved & Reviewed by: Issued by: W.e.f Date:
Vishnu M.M Dr. S. Harikaran Nov 2019
In-charge HOD Principal
Rathinam College of Arts & Science
Rathinam Institutions, Office: +91 422 4040904,
Rathinam Techzone Campus, Pollachi Road, Eachanari,
Coimbatore - 641021, Tamil Nadu.
http://www.rathinamcollege.com
Department of Commerce
Lab Manual for the Academic Year 2020-21
(in accordance with Commerce syllabus)
SUBJECT : 19BCP5DA – DSC- Direct Tax Practical
STREAM : B.Com CS, B.Com IT
H.O.D DEAN
INDEX
S. No Contents Page. no
1 Lab Objective 4
2 Introduction About Lab 5
3 Standard Operating Procedure – SOP 7
3 Guidelines to Students 8
4 Description about Secretary 9
List of Lab Exercises
5 10
Syllabus Programs (Commerce)
6 Background Theory 10
7 11-27
Execution of Programs
8 Additional Viva Question 27
9 References 27
LAB OBJECTIVE
Upon successful completion of this Lab the student will be able to:
Become productive by acquiring a basic understanding of Direct Tax.
Direct Tax:
Understand concepts and importance of direct tax
Understanding the status of persons and industries
Classification of allowances and calculation of income from salaries
Computation of annual value & deductions from income from house property.
Computation of income from other sources and capital gains
INTRODUCTION ABOUT LAB
There are 60 systems (Compaq Presario) installed in this Lab. Their
configurations are as follows:
Processor : Dual Core
RAM : 120 MB
Hard Disk : 8 GB
Mouse : USB/PS2 Mouse
Network Interface card : Present
STANDARD OPERATING PROCEDURE – SOP
a) Explanation on today’s experiment by the concerned faculty using OHP/PPT covering the
following aspects: 25 mins.
1) Name of the Application Program /Aim
2) Software/Hardware required
3) Algorithm
b) Writing of Application Program by the students 25 mins.
c) Execution of the Application Program
100 mins.
Writing of the application of the program in the Observation Book:
The students will write today’s application of the program in the Observation book as per the
following format:
a) Name of the Application of Program /Aim
b) Software/Hardware required
c) Algorithm
d) Viva-Voce Questions and Answers
e) Errors observed (if any) during compilation/execution
f) Signature of the Faculty
Guidelines to Students
Equipment in the lab for the use of student community. Students need to
maintain a proper decorum in the computer lab. Students must use the
equipment with care. Any damage is caused is punishable.
Students are required to carry their observation / programs book with completed
exercises while entering the lab.
Students are supposed to occupy the machines allotted to them and are not
supposed to talk or make noise in the lab. The allocation is put up on the lab
notice board.
Lab can be used in free time / lunch hours by the students who need to use the
systems should take prior permission from the lab in-charge.
Lab records need to be submitted on or before date of submission.
Students are not supposed to use floppy disks/CD/DVD/Pen drive.
Programe 1
What is Income Tax?
Answer:
Tax is a free charged by a government on a product, income or activity. There are two types
of taxes. One, direct taxes and other indirect taxes. If tax is levied directly on the income or
wealth of a person. It is called direct taxes. Income tax Act, Wealth Tax Act is the example of
direct taxes. If tax is levied on the price of goods or services it is called indirect taxes. GST is
an indirect tax which is applicable in India on 1 st July 2017 onwards. The levy of income tax
is governed by Income Tax Act 1961. The Act came into force on 1 st April 1962. Every year
the finance minister presents the budget in the parliament. This budget speech contains
proposals policies of the government in fiscal areas and detailed tax proposals.
Programe 2
Mr. Ankur Tagra resides in Jaipur. He wants to claim full deduction towards HRA. Comment
whether it is possible. Basic Salary rs.4, 000P.m. D.A. Rs.2000 per month (50% forms part of
salary), HRA Rs. 3,000 per month (rent paid Rs. 2500 p.m), During the previous year he
achieved a turnover of Rs. 2, 25,000. He usually gets 4%commission onturnover.
Answer:
Working: Calculation of Exempted HRA
Least of the following items should be exempted.
Actual HRA 36,000
Rent Paid – 10% of salary
Salary means = Basic Pay + D.A (forming part of salary) + fixed % of commission
= 48,000+12000+9,000
= 69,000
10 % of salary = 6900
Rent Paid(2500X 12) = 30,000
30,000 – 6900 = 23,100
40 % of salary 27,600 High
Exempted HRA 23,100
Taxable HRA = Actual HRA – Exempted HRA
= 36,000 -23100
= 12,900
Programe 3
. From the following P&L A/c Calculate Income from Business.
Rs. Rs.
To Rent 40,000 By Gross Profit
To Salary to employees 25,000 2,50,000
To depreciation 10,000 By House property Income
To donation 8,000 1,50,000
To net profit By Income from other sources
5,17,000 2,00,000
6,00,000
6,00,000
1. Depreciation to be allowed as per income tax provision Rs.8,000
2. Business Income of Rs.12,000 is not shown in the P&L A/c.
3. Rs.8,000 of the rent is of personal nature.
Answer:
Calculation of Income from Business
Particulars Amt Amt
Net Profit as per P&L A/c 5,17,000
Add: Donation 8,000
Depreciation 10,000
Business income not shown in 8,000
the P& L A/c 12,000
Rent 8,000 38,000
5,55,000
Less: H/P Income 1,50,000
Income from other sources 2,00,000
Depreciation 8,000
3,58,000
1,97,000
Programe 4
Calculate taxable capital gain. An Asset was purchased in the year 2007-2008 for Rs.
4,26,000.
During the previous year it was sold for Rs. 8,00,000. Expenses in connection with the
transfer of sales is Rs 10,000. [CII 2007-2008: 2016-2017: 1125]
Answer:
Calculation of capital gain
Sales consideration 8,00,000
Less: Expenses in connection with
Transfer 10,000
Net Sales 7,90,000
Less: Indexed cost[LTCA]
4,26,000x1125/551 8,69,000
LTCG (loss) -79.782
Programe 5
Ms. Furnishes the following details of his income. Calculate income from other sources for
the previous year.
a. Rs.25,000 received as interest from government securities. Rs.2000 Spent
towards collection charges
b. Dividend from an Indian company Rs. 40,000.
c. Dividend from a foreign company Rs.15,000
d. Family pension Rs.12,000
Anwer:
Calculation of income from other sources
a. received as interest 25,000
Less: collection charges 2,000
23,000
b. Dividend from an Indian company NIL
c.Dividend from a foreign company Rs.15,000
d. Family pension Rs. 12,000
Less:
12,000x1/3=4,000
4,000 or 15,000 Whichever is less 4,0008,000
IFOS 46,000
