DIRECT TAX RTP MAY 25

QUESTIONS
Case Scenario
Mr. Raj, aged 38 years, an Indian citizen, is carrying on
manufacturing business in Canada. He frequently visits India for
business purpose on a regular basis. He was in India for the first
time in the year 2021-22 for 190 days, in the year 2022-23 for 145
days and in the year 2023-24 for 155 days.
Afterwards he decided to close his business in Canada and shift
permanently in India. So, he came to India on 1.11.2024 and
started a business in Mumbai. His profits from business in Canada
till 31.10.2024 is ` 15 lakhs and from Indian business is ` 5 lakhs.
He does not own any house property in Mumbai and is staying in
a rented accommodation from 1.11.2024 on a monthly rent of `
20,000. He made a donation of ` 50,000 to PM Cares Fund and
donation of ` 20,000 to Prime Minister’s Drought Relief Fund by
cheque during the P.Y. 2024-25.
He had purchased 10,000, 9% debentures of ABC (P) Ltd. in August
2020 @ ` 150 each. Face value of each debenture is ` 100. He sold
eo
2,500 debentures in April, 2024 @ ` 175 each and remaining 7,500
debentures in August, 2024 @155 each.
Interest on debenture is due on 30th June and 31st December of
every year.
CII – F.Y. 2020-21: 301; F.Y. 2024-25: 363

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 PVSV / C.A. INTER / DIRECT TAX / RTP MAY 25
Mr. Raj follows cash basis of accounting, and he wants to opt out
of the default tax regime under section 115BAC.
Based on the facts of the case scenario given above, choose the
most appropriate answer to the following questions:
1. What is the residential status of Mr. Raj for the previous year
2024-25?
-(a) Resident but not ordinarily resident
(b) Resident and ordinary resident
(c) Non-resident
(d) Deemed resident
2. What is the amount of capital gains chargeable to tax in the
hands of Mr. Raj on sale of debentures for the P.Y. 2024-25?
(a) LTCG of ` 1,00,000
(b) LTCG of (` 14,750) & STCG of ` 37,500
(c) LTCG of (` 2,09,000)
- (d) LTCG of ` 62,500 and STCG of ` 37,500
3. What will be the gross total income of Mr. Raj for the A.Y.
2025-26?
(a) ` 21,00,000 (b) ` 6,33,750
(c) ` 5,37,500 (d) ` 5,71,500
4. What is the amount of deduction available under Chapter VI-
A to Mr. Raj for A.Y. 2025-26?
(a) ` 60,000 (b) ` 85,000
(c) ` 70,000 (d) ` 1,20,000
5. What is the tax liability of Mr. Raj for A.Y. 2025-26?
(a) ` 25,290 (b) ` 28,340
(c) ` 29,380 (d) Nil

6. Mr. Kunal (age 27 years) is an employee in a private

company posted in Delhi. He was appointed on 01.02.2023
in the scale of ` 60,000 - ` 1,000 - ` 70,000. He furnishes you
the following information for the previous year 2024-25:

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 PVSV / C.A. INTER / DIRECT TAX / RTP MAY 25
(i) Dearness allowance @25% of basic salary (60% of DA
forms part of retirement benefits)
(ii) Bonus equal to one month salary. Paid in November
2024 on basic salary applicable for that month.
(iii) Leave encashment for P.Y. 2024-25 of ` 10,000.
(iv) He also received a motor car on 01.12.2024 (cubic
capacity of engine exceeds 1.60 litres) along with
chauffeur for both official and personal purpose. The
motor car is owned by his employer and all expenses
are met by the employer.
(v) His employer granted him a loan of ` 2,00,000 on 1st
June, 2024 which is repayable in equal quarterly
installments over 2 years starting from 1st October, 2024.
The State Bank of India (SBI) lending rate for such loans is
9.5% per annum as on 01.04.2024, while the employer
recovers interest @5.5% per annum from the employee.
(vi) His employer gave him a rent-free accommodation
(fully furnished) in Delhi from 01.04.2023. This house is
owned by the employer. The perquisite value of such

lastin furnished rent-free accommodation during the

previous year 2023-24 was valued at ` 92,000. Further,
the accommodation is continued to be provided by the
employer to the employee in P.Y. 2024-25 also.
(vii) The furniture and appliances provided with the house
were bought by the employer at an aggregate cost of `
1,50,000 on 01.01.2023. Electricity and water bills of `
5,000 p.m. for the said house were paid by the employer.
Cost Inflation Index
F.Y. 2023-24-348, F.Y. 2024-25-363.
(viii) His colleagues gifted him a mobile phone worth ` 45,000
④ from their own contribution on account of his marriage.
You are required to compute the income chargeable under
the head Salaries in the hands of Mr. Kunal for the
Assessment Year 2025-26 assuming that he wants to pay tax
under default tax regime under section 115BAC.

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 PVSV / C.A. INTER / DIRECT TAX / RTP MAY 25
7. Ms. Priya has always been financially aware and strategic
with her investments. In January 2022, she saw an
opportunity in gold and purchased gold jewellery worth `
3,25,000, believing it would be a safe investment for the
future. In October 2024, gold prices increased and she
&
decided to sell her jewellery on 31.10.2024 for ` 4,75,000.

O
She also sold her house property in Delhi on 01.12.2024 for
` 80 lakhs. The stamp duty value of property at the time of
transfer was ` 90 lakhs.
She purchased this property on 15.07.1998 for ` 8.80 lakhs.
The FMV of the property as on 1st April, 2001 was ` 10.8 lakhs
and Stamp duty value on the said date was ` 10 lakhs. She had
incurred brokerage and other expenses @1% on purchase
price at that time.
Compute the capital gain tax to be paid by Ms. Priya for A.Y.
2025-26 assuming her other income exceeds the basic
exemption limit.
CII – F.Y. 2001-02: 100; F.Y. 2021-22: 317; F.Y. 2024-25:363
8. Mr. Akshay, a resident individual, provides the following
details of his income/losses for the year ended 31.03.2025:
Particulars Amount (`)
(i) Income from salary (computed) 35,20,000 [S
(ii) Rent received from house property 5,00,000 2 FH >
C
situated in Delhi
(iii) Repayment of loan taken for purchase 15,25,000
804
of above property. Loan was taken from
a friend. This repayment includes 24
payment of interest of ` 7,00,000
(iv) Rent received from house property 3,20,000 2 FH >
situated inCJaipur
(v) Interest on loan taken for repair of
house properties situated in Mumbai
& 1,50,000 [Fr

and Delhi. The property in& Mumbai is

self-occupied. Loan was taken on
75000LOP
01.04.17 and was utilized in 50:50 ratio 75000 SoP(R)
for house properties situated in Mumbai
and Delhi, respectively. 30600

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 PVSV / C.A. INTER / DIRECT TAX / RTP MAY 25
(vi) Long-term capital gains on sale of 7,95,000 CG
equity shares on which STT has been
paid
(vii) Interest on fixed deposit 73,000 IFOS
⑨ (viii) Loss from textile business 7,50,000
(ix) Speculation business profit 2,30,000 2- B
(x) Lottery income (Gross) 75,000 I FOS
⑨ (xi) Loss incurred by the firm in which he is 1,60,000
a partner
(xii) Salary received as a partner from 50,000 2- B
partnership firm. The same was allowed
to firm
(xiii) Life insurance premium paid for his son 15,000 80C
who is 30 years of age and is working in
USA
He has the following brought forward losses of A.Y. 2024-25
Brought forward short-term capital loss on 2,75,000
⑨
sale of gold
⑨
Brought forward loss on sale of equity shares 25,000
u/s 111A
Compute total income of Mr. Akshay for the assessment year
2025-26 and the amount of loss that can be carried forward.
Mr. Akshay has opted out of the default tax regime.

9. Examine the applicability and amount of Tax deduction at

August source (TDS) or Tax collection at source (TCS) as per the Income-
tax Act, 1961 for the A.Y 2025-26 in the following situations:
52000pm
/ 5m X 5 %
(i) Mr. Subhash is a salaried individual pays rent of `
52,000 per month to Mr. Raj from April 2024. Mr.
Octoxes Subhash vacated the premises on 31st August, 2024.
52000pm What if he vacates the premises on 31st October, 2024.
/ EmX 2%
(ii) ABC Traders, a partnership firm, is engaged in the
wholesale business of tendu leaves. Its turnover for the
Double Rate P.Y. 2023-24 was ` 9 crores. During the financial year
5.. 2024-25, it sold tendu leaves worth ` 12 lakhs to XYZ
High Ltd. XYZ Ltd. does not provide its PAN to ABC Trader.

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 PVSV / C.A. INTER / DIRECT TAX / RTP MAY 25
10. Mr. Ganesh, a resident and ordinarily resident aged 61 years,
is engaged in the business of manufacturing furniture. He is
subject to tax audit under section 44AB of Income-tax Act,
1961. He has provided following information:
Profit & Loss account for the year ended 31st March, 2025
Particulars ·
75 (`) Particulars (`)

64
To Admn exps. 64,30,000 By GP 2,57,30,000
272 To Salaries & wages 80,00,000 By Winnings 31,500 I FOS
·
S To Interest on loans 7,50,000 (Net of TDS)
To Depreciation 6,17,000 Bad debt 3,00,000
To Professional fees 12,70,000 recovered
2
To Rent, rates & taxes 22,80,000
To Travelling & 11,40,000
conveyance
To Loss on sale of 2,00,000
asset of scientific
research
To Net Profit 53,74,500
Total 2,60,61,500 Total 2,60,61,500
Other information:
USE (i) Opening and closing stock of finished goods were 1 61 111
undervalued by 10%. Opening stock of ` 14,50,000 and , ,

U3I Closing stock of ` 15,58,000 was shown.

1. 73 11l
(ii) Salaries & wages include following items: .

20 % of 5 (a) Contributed 20% of basic salary in National Pension

00000 Scheme referred in section 80CCD regarding salary
paid to an employee Mr. Ramesh who has
7 % of 16 < withdrawn basic salary of ` 5,00,000 and Dearness
(5L ( -
allowance is 40% of basic salary. 50% of Dearness
84000 allowance forms part of the salary.
&
(b) Some of the employees opted for retirement under
the voluntary retirement scheme; a sum of `
6842724 3,40,000 was paid to them on 1st January, 2025.
(iii) Interest on loan includes interest paid @ 15% per
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 PVSV / C.A. INTER / DIRECT TAX / RTP MAY 25

80
annum on loan of ` 12,00,000 which was taken from
State Bank of India on 01.05.2022 for purchase of new
-

3 electric car of ` 15,00,000. The car is used for personal

purpose. No amount is repaid so far.
(iv) Depreciation allowable as per Income-tax Rules, 1962 is
` 4,50,000 but during the calculation of such
USE depreciation following addition was not considered:
Motor car purchased for ` 3,00,000 for supply of
finished goods to dealers on 25-08-2024.
(v) An asset was purchased for ` 6,00,000 on 23.7.2021 for
conducting scientific research and the deduction was
claimed under section 35 of the Income-tax Act, 1961.
U3I This asset was sold on 05-09-2024 for a consideration
of ` 4,00,000. sale
price
(vi) Administrative expenses includes expenditure of ` RULI
1,75,000, paid to a scientific research association
approved under section 35. Out of ` 1,75,000, ` 50,000
was utilised towards the purchase of land by the
research association.
(vii) He received ` 3,00,000 from a debtor which was
written off as bad in the year 2018-19. Amount due
from the debtor (which was written off as bad) was `
5,00,000, out of which tax officer had only allowed `
3,00,000 as deduction in computing the total income
for assessment year 2018-19.
Compute the total income and tax liability of Mr. Ganesh for the
assessment year 2025-26 assuming that he wants to pay tax under
section 115BAC.

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