Super 30 Questions for CA Inter MAY 25 Exams

(ii) Dividends from a foreign company `1,60,000.

(iii) Interest from banks on fixed deposits net of TDS at 10% : `1,35,000
(iv) The assessee had made a sale of for ` 20 Lakhs to M/s A. Co Engineers a sole proprietary concern, on

Super 30 Questions for MAY-25 CA Inter 10-10-2023. On 01-02-2024 ` 10 lakhs were written off in the books as bad debts. Due to the demise
of the sole proprietor, the assessee could collect only ` 7 Lakhs towards the final settlement on 01-03-
2025. The amount recovered was shown as Bad debts recovered and credited to Statement of Profit and
Loss.
(v) Trade creditors `5,00,000 were outstanding for more than 5 years and there is no business relationship
with them. The amount was unilaterally transferred to credit of statement of profit and loss.
Question 1 [Topics Covered: Total Income - Indirect Method] Additional Information:
Statement of Profit and Loss account of Mr. BB, resident individual, age 34 years, engaged in production and (1) Depreciation as per Income-tax Rules: `28,00,000
marketing of diversified products, shows a net profit (before tax) of `72,00,000 for the financial year ended 31st (2) Expenditure pertaining to previous financial year allowed on due basis, but paid in current financial
March, 2025 after charge of the following items: year in cash on 18.01.2025: `35,000
A: Items debited to the Statement of Profit and Loss: (3) Audit fee for the previous year 2023-24: `75,000. TDS deducted but not paid in the relevant previous
(i) Depreciation as per Books of accounts: `24,00,000 year. However, TDS was paid on 31.12.2024.
(ii) Interest amounting to `60,000 for short payment of advance tax paid as per section 234B relating to (4) The eligible salary and dearness allowance for the pension scheme referred to u/s 80CCD is `10,00,000.
the assessment year 2023-24. (5) The assessee has obtained a loan of ` 5 lakhs from Manu Textiles Private Limited in which he holds
(iii) Expenditure of `41,000 paid in cash comprising of `22,000 directly paid to producer of dairy farming 16% voting rights. The accumulated profits of Manu Textiles Private Limited on the date of receipt of
products and `19,000 paid towards printing and stationery items to a trader. loan was ` 2 lacs.
(iv) `3,50,000 paid to a contractor for carrying out repair work at factory premises. Tax was not deducted (6) Grant received from State Government for acquisition of generator `10 lakhs. The generator was
at source on this payment. acquired and put to use for printing business on 01.06.2024 for `35 lakhs. A sum of `5 lakhs was paid
as advance by cash to the supplier of generator.
(v) Contribution to AAM Aadmi Party: `3,00,000 paid by way of cheque.
Further following expenses related to acquisition of asset –
(vi) Expenditure towards advertising charges in a brochure of a political party registered u/s 29A of
Representation of People Act, 1951: `40,000 paid by way of cheque. (a) Transportation charges paid of transporter ` 25,000 in cash
(vii) Interest on term loans obtained from Cooperative Bank is ` 2,60,000. Interest ` 1,60,000 not paid before (b) Installation charges paid to Mr. Ali ` 35,000 through BHIM UPI
the due date of filing of return of income (due date being 30.10.2025) & on 12.12.24 Co. op bank This adjustment is not recorded in books of account.
converted outstanding interest of 1,00,000 into loan and assessee deducted the said interest while (7) An asset was purchased for ` 6,00,000 on 17-11-23 for conducting scientific research and the deduction
computing profits and gains of business of A.Y.2025-26. was claimed u/s 35 of the Income-tax Act, 1961. This asset was sold on 05-09-2024 for a consideration
(viii) Actual contribution to the pension scheme of employees: `1,50,000 of ` 8,00,000.
(ix) The assessee has made provision for Gratuity based on actuarial valuation of ` 5 lacs. Actual gratuity (8) Employees contribution to EPF of ` 2 lakhs recovered from their salaries for the month of March 2025
paid amounting to ` 1,20,000 during financial year 2024-25 was debited to provision of Gratuity and shown in the Balance Sheet under the head Sundry Creditors was remitted on 31st May, 2025.
Account. (9) During the year F.Y. 2024-25, the assessee has employed 56 additional employees for leather
(x) Employer’s contribution to EPF of `2 lakhs for the month of March, 2025 were remitted on 8th June manufacturing business. All these employees contribute to a recognized provident fund. 39 out of 56
2025. employees joined on 1-6-2024 on a salary of ` 15,000 per month, 14 joined on 1-7-2024 on a salary of
(xi) Advertisement expenditure debited to profit and loss account includes the sum of `60,000 paid by ` 45,700 per month, and 3 joined on 1-11-2024 on a salary of ` 22,000 per month. The salaries of 9
NEFT to the sister of assessee, the market value of which is `52,000. employees who joined on 1-6-2024 are being settled by bearer cheques every month. Audit u/s 44AB
has been done before the due date.
(xii) The opening and closing stock for the year were ` 55 lakhs and ` 54 lakhs respectively. Opening stock
was overvalued by 10% and Closing stock was undervalued by 10%. Compute the total income & tax liability of Mr. BB for assessment year 2025-26 under default tax regime and
optional tax regime and also advice the assessee that which option is more beneficial. Give brief reasons for the
(xiii) ` 45,000 paid in cash to Mr. Raj employee of the company at the time of his retirement.
treatment given to each of the items taken into consideration in computation of income of the assessee. [Ignore
(xiv) Contribution of ` 2,50,000 to a scientific laboratory functioning at the national level with a specific AMT Provisions] Assume last year turnover of Mr. BB was more than 1 crore.
direction for use of the amount for scientific research programme approved by the prescribed authority.
Answer
(xv) An amount of ` 5 lakhs was paid to the manager of the company under Voluntary Retirement Scheme.
Computation of Total Income & Tax liability Mr. BB for the A.Y. 2025-26 as per default taxation regime
(xvi) Raw material of ` 5,00,000 purchased on 17th March, 2025 from Mr. Kuku (a small enterprise as per
u/s 115BAC
MSME Act), payment made to Kuku on 15th April, 2025. There is no written agreement between
parties related to payments. Particulars Amount (`)
B: Items credited to the Statement of Profit and Loss: I Income from house property
(i) Unrealised rent of `3,80,000 pertaining to financial year 2021-22 & 2022-23 recovered during the year
Unrealised rent [Taxable u/s 25A, even if Mr. BB is no longer 3,80,000
in respect of a commercial property owned by the assessee, which was sold by the assessee on
the owner of commercial property]
23.03.2024.

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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Particulars Amount (`) Particulars Amount (`)
Less: 30% of above 1,14,000 2,66,000 date of filing of return] [1,60,000 + 1,00,000]

II Profits and gains of business and profession Section 43B clarifies that if any sum payable by the
assessee as interest on any such loan is converted into a
Net profit as per the statement of profit and loss 72,00,000 loan or borrowing or advance, the interest so converted
Add: Items debited but to be considered separately or to and not actually paid shall not be deemed as actual
be disallowed payment, and hence, would not be allowed as deduction.

(i) Depreciation as per Books 24,00,000 (viii) Contribution towards pension scheme of employees 10,000
[Contribution towards pension scheme, referred to in
(ii) Interest u/s 234B for short payment of advance tax 60,000 section 80CCD, of employees is allowed only to the
[Any interest payable for default committed by assessee extent of 14% of salary of the employee in the P.Y. i.e.,
for discharging his statutory obligations under Income- `1,40,000 being 14% of `10,00,000. Therefore, the
tax Act, 1961 which is calculated with reference to the excess contribution of `10,000 [i.e., `1,50,000 –
tax on income is not allow- able as deduction u/s `1,40,000] is disallowed u/s 36(1)(iva).
40(a)(ii). Since the same has been debited to statement
of profit and loss, it has to be added back] (ix) Provision for gratuity 3,80,000
[Provision of ` 5 lakhs for gratuity based on the actuarial
(iii) Cash payment in excess of `10,000 19,000
valuation is not allowed as deduction as per section
[Disallowance u/s 40A(3) is attracted in respect of 40A(7). However, actual gratuity of ` 1,20,000 paid is
expenditure, for which payment exceeding `10,000 in a allowable as deduction. Hence, the difference has to be
day has been made in cash. Since expenditure of added back to income (` 5,00,000 – ` 1,20,000)]
`19,000 towards printing and stationery items is debited
to the statement of profit and loss, the same has to be (x) Employers’ contribution to EPF -
added back. However, payment of `22,000 to producer [As per section 43B, employers’ contribution to EPF is
for dairy farming products is not disallowed since it is allowable as deduction since the same has been
covered under the exceptions specified in Rule 6DD] deposited on or before the ‘due date’ of filing of return
u/s 139(1). Since the same has been debited to profit and
(iv) Repair work paid to contractor without deduction of 1,05,000
loss account, no further adjustment is necessary]
tax at source
[Disallowance of 30% of the amount of `3,50,000 paid (xi) Advertisement expenses paid to sister 8,000
for carrying out repair work to a contractor without [As per section 40A(2) any payment made to relative
deduction of tax at source would be attracted u/s shall be disallowed to the extent unreasonable]
40(a)(ia)]
(xii) Stock Adjustment
(v) Contribution to political party 3,00,000 Overvaluation of opening stock [` 55,00,000 x 10/110]
[Contribution to political party is not allowable as Undervaluation of closing stock [` 54,00,000 x 10/90] 11,00,000
deduction while computing business profits. Since the
contribution has been debited to statement of profit and (xiii) Payment to Mr. Raj, an employee, on his retirement Nil
loss, the same has to be added back while computing [Section 40A(3) provides for disallowance@100% of
business income] the expenditure incurred exceeding ` 10,000 otherwise
than by an account payee cheque drawn on a bank or an
(vi) Advertisement in brochure of a political party 40,000
account payee bank draft or use of electronic clearing
[Advertisement charges paid in respect of brochure system through a bank account or through such other
published by a political party is not allowable as electronic mode as may be prescribed. However, no
deduction from business profits as per section 37. Since disallowance u/s 40A(3) is to be made as the amount
the expenditure has been debited to statement of profit paid to Mr. Raj is on his retirement since such sum
and loss, the same has to be added back while computing payable does not exceed ` 50,000. This exception is
business income] provided in Rule 6DD]
(vii) Interest to co-operative bank not paid before 260,000 (xiv) Contribution to National Laboratory 2,50,000
31.10.2025 & Interest converted into loan
[As per section 35(2AA) donation to National
[Disallowance u/s 43B would be attracted for A.Y.2025- Laboratory eligible for 100% deduction but when
26, since the interest was not paid on or before the due assessee opted section 115BAC then this deduction not

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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Particulars Amount (`) Particulars Amount (`)
allowed] 1,52,17,000
(xv) Voluntary Retirement Scheme expenditure 4,00,000 Less: Items credited to statement of profit and loss, but
[Only 1/5th of expenditure on voluntary retirement not includible in business income/ permissible expenditure
scheme is allowable over a period of five years u/s and allowances
35DDA. Since whole amount of expenditure is debited (i) Unrealised rent 3,80,000
to statement of profit and loss, 4/5th has to be added [Unrealised rent in respect of commercial property is
back [` 5,00,000 x 4/5] taxable under the head “Income for house property”.
(xvi) Salary paid to employees through bearer cheques 13,50,000 Since the said rent has been credited to the statement of
profit and loss, the same has to be deducted while
[Salary paid through bearer cheques (9 employees x computing business income]
` 15,000 x 10 months) will attract disallowance u/s
(ii) Dividend received from foreign company 1,60,000
40A(3) and hence, the same has to be added back]
[Dividend received from foreign company is taxable
(xvii) Payment made to Mr. Kuku 5,00,000 under the head “Income from other sources”. Since the
[Disallowance u/s 43B(h) would be attracted for said dividend has been credited to the statement of profit
A.Y.2025-26, since the amount was not paid to small and loss, the same has to be deducted while computing
enterprise within time limit of section 15 of MSMED business income]
Act, 2006] (iii) Interest from bank fixed deposit 1,35,000
[As per section 15 of MSMED Act, 2006 Where any [Interest on fixed deposit is taxable under “Income from
person purchases goods/services, from a micro/small Other Sources”. Since the said interest has been credited
enterprise, the payment shall be made before the date to the statement of profit and loss, the same has to be
agreed upon between him and supplier in writing. In no deducted while computing business income]
case the period agreed upon between the supplier and the (iv) Audit fees of P.Y. 2023-24 22,500
buyer in writing shall more than 45 days. If, however, [30% of `75,000, being the audit fees disallowed in the
there is no such agreement, the payment shall be made P.Y. for non-remittance of TDS on or before due date of
within 15 days of acceptance or deemed acceptance of filing for P.Y. 2023-24 would be allowed in the year of
goods/services. Since payment made after 15 days so 71,82,000 payment of TDS i.e., P.Y. 2024-25]
amount disallowed in PY 24-25] (v) Bad debt recovered 7,00,000
1,43,82,000 [Since the deduction of bad debt allowed u/s 36 was `
10 lakhs out of the total debt of ` 20 lakhs; and the
Add: Amount taxable but not credited to statement of
amount recovered in respect of such debt is only ` 7
profit and loss
lakhs which is not more than the amount of ` 10 lakhs
Expenditure pertaining to previous financial year 35,000 not written off, no amount is chargeable to tax as
business income. Since the amount of ` 7 lakhs
[Cash payment in excess of `10,000 made in the current year
recovered has been credited to the statement of profit
in respect of expenditure allowed on mercantile basis in the
and loss, it has to be reduced while computing business
previous year, would be deemed as income in the current year
income.
as per section 40A(3A).]
(vi) Bad debts 3,00,000
Employees’ contribution to EPF 2,00,000 [The assessee had written off ` 10 lakh earlier, and out
[Since employees’ contribution to EPF has not been deposited of the balance ` 10 lakhs, only ` 7 lakhs could be
on or before the due date under the PF Act, the same has to be collected towards final settlement. Therefore, the
added for computing business income] balance ` 3 lakhs will be allowable as deduction,
provided it is written off in the books of account]
Sale of Scientific Research Asset 6,00,000
(vii) Cessation of a trading liability -
[Sale proceeds of asset acquired for conducting scientific
[Remission or cessation of a trading liability, allowed as
research taxable as business income u/s 41(3) in the year of
deduction in an earlier previous year, would be deemed
sale to the extent of lower of ` 6,00,000 (being the deduction
as income in the year of remission or cessation, as per
allowed u/s 35) and ` 8,00,000 being the excess of sale
section 41(1)(a). Since the amount of `5 lakhs has
proceeds and deduction allowed u/s 35 i.e., (` 8,00,000 + `
already been credited to statement of profit and loss, no 16,97,500
6,00,000) over the capital expenditure incurred of ` 6,00,000]
further adjustment is required]

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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Particulars Amount (`) Particulars Amount (`)
1,35,19,500 Computation of Tax Liability
Less: Depreciation u/s 32 as per Income tax Rules 28,00,000 Upto ` 3,00,000
` 3,00,001 - ` 7,00,000 @5% 20,000
Depreciation on Generator
` 7,00,001 - ` 10,00,000 @10% 30,000
Normal Depreciation [` 20,35,000 x 15%] 3,05,250
` 10,00,001 - ` 12,00,000 @ 15% 30,000
Additional Deprecation [Not allowed in default tax regime] - 31,05,250
` 12,00,001 - ` 15,00,000 @ 20% 60,000
[As per explanation to section 43(1), any amount paid in single
day to single person more than ` 10,000 otherwise by account ` 15,00,001 - ` 99,41,250 @ 30% 25,32,375 26,72,375
payee cheque or DD or ECS then it should not be part of actual Add: Surcharge @10% 2,67,238
cost, so advance paid to supplier and transportation charges
29,39,613
not part of actual cost. As per explanation 10 of sec 43(1),
Govt. grant related to acquisition of asset shall be reduced Add: Health & Education cess @ 4% 1,17,585
while calculation actual cost] Net Tax liability 30,57,198
Imp. BB’s Note – limit of cash payment ` 35,000 to Net Tax liability (rounded off) 30,57,200
transporter is only for the purpose of revenue expenses u/s
40A(3) and not for capital expenditure. Working Note - Computation of deduction u/s 80JJAA

Profits and gains from business or profession 1,04,14,250 No of eligible additional employees [56 (-) 14 = 42] 33

III Capital Gain [14 employees who joined on 1.7.2024 do not qualify as “additional employees” since their
monthly emoluments exceed ` 25,000. However, 3 employees who joined on 1.11.2024
Sale of asset acquired for conducting scientific research
qualify as additional employees, since they have been employed for more than 150 days
Full Value of Consideration 8,00,000 during the P.Y.2024-25.]
Less: cost of acquisition 6,00,000
Additional employee cost means the total emoluments paid or payable to additional
Short Term Capital Gain 2,00,000 employees employed during the P.Y.2024-25. However, the additional employee cost in
IV Income from Other Sources respect of 9 employees who joined on 1.6.2024, whose salary is paid by bearer cheques would
be Nil.
Dividend from foreign company 1,60,000
Additional employee cost ` 48,30,000
[No deduction is allowable in respect of expenditure incurred
on earning dividends except Interest] [` 15,000 x 30 employees (39 - 9) x 10 months] + [` 22,000 x 3 employees x 5 months] =
` 45,00,000 + ` 3,30,000
Deemed dividend u/s 2(22)(e) 2,00,000
Eligible deduction = 30% of ` 48,30,000 ` 14,49,000
[Loan of ` 5 lakhs by Manu Textiles Pvt. Ltd., a company in
which the public are not substantially interested, to assessee, Computation of Total Income & Tax liability Mr. BB for the A.Y. 2025-26 as per Normal Provisions
who is holding 16% i.e., 10% or more of the voting power of
Particulars Amount (`)
the company would be deemed to be dividend to the extent of
` 2 lakhs being the accumulated profits Total Income as per 115BAC 99,41,250
Interest from banks on fixed deposits (Gross) Less: Donation to National Laboratory 2,50,000
[Interest on banks on fixed deposits is taxable as “Income 1,50,000 5,10,000 Additional Depreciation on Generator 4,07,000
from other sources”] [`1,35,000 x 100/90] [` 20,35,000 x 20%]
Gross Total Income 1,13,90,250 Less: Deduction u/s 80GGC 3,00,000
Less: Deduction under Chapter VI-A [Contribution to pollical party is allowable as deduction, since payment is made
otherwise than by cash] Expenditure incurred on advertisement in brochure
Deduction u/s 80JJAA [See working note below the question] 14,49,000 published by political party not treated as contribution to such political party]
[It is allowed even assessee follow default tax regime u/s
Total Income as per Normal Provision 89,84,250
115BAC]
Computation of Tax Liability
Total income 99,41,250
Upto ` 2,50,000 -
` 2,50,001 - ` 5,00,000 @5% 12,500

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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Particulars Amount (`)
` 5,00,001 - ` 10,00,000 @20% 1,00,000 Other Information:
` 10,00,001 - ` 89,84,250 @ 30% 23,95,275 (i) Allowable rate of depreciation on motor car is 15%.
(ii) Value of benefits received from clients during the course of profession is ` 10,500.
25,07,775
Add: Surcharge @10% 2,50,778 (iii) Incentives to articled assistants represent amount paid to two articled assistants for passing
CA Intermediate Examination at first attempt.
27,58,553 (iv) Repairs and maintenance of car include ` 2,000 for the period from 1-10-2024 to 30-09-2025.
Add: Health & Education Cess 1,10,342 (v) Salary includes ` 30,000 to a computer specialist in cash for assisting Ms. Purvi in one
Net Tax Liability 28,68,895 professional assignment.
Net Tax liability (rounded off) 28,68,900 (vi) The travelling expenses include expenditure incurred on foreign tour of ` 32,000 which was
within the RBI norms.
Conclusion: Tax as per normal provision is lower as compare to tax as per 115BAC, so assessee should opt
(vii) Medical Insurance Premium on the health of dependent brother and major son dependent on
out from default tax regime u/s 115BAC and follow normal provisions.
her amounts to ` 5,000 and ` 10,000, respectively, paid in cash.
(viii) She invested an amount of ` 10,000 in National Saving Certificate.
Question 2 [Topics Covered: Total Income Indirect Method] (ix) She has paid ` 70,000 towards advance tax during the P.Y. 2024-25.
Ms. Purvi, aged 55 years, is a Chartered Accountant in practice. She maintains her accounts on Compute the total income and tax payable by Ms. Purvi for the A.Y. 2025-26 in a most beneficial
cash basis. Her Income and Expenditure account for the year ended March 31, 2025 reads as manner.
follows: Answer
Expenditure (`) Income (`) (`) Computation of total income and tax payable by Ms. Purvi for the A.Y. 2025-26 under default tax regime
u/s 115BAC
Salary to staff 15,50,000 Fees earned:
Particulars ` `
Stipend to articled 1,37,000 Audit 27,88,000
Income from house property (See Working Note 1) 57,820
Assistants Taxation services 15,40,300
Profit and gains of business or profession 9,20,200
Incentive to articled 13,000 Consultancy 12,70,000 55,98,300
(See Working Note 2)
Assistants Dividend on shares of X Ltd., 10,524 Income from other sources (See Working Note 3) 33,924
an Indian company (Gross)
Gross Total Income 10,11,944
Office rent 12,24,000 Income from UTI (Gross) 7,600 Less: Deductions under Chapter VI-A [not allowable under default tax -
Printing and stationery 12,22,000 Honorarium received from 15,800 regime]
various institutions for Total Income 10,11,944
valuation of answer Total Income (rounded off) 10,11,940
papers
Tax on total income
Upto ` 3,00,000 Nil
Meeting, seminar and 31,600 Rent received from residential 85,600 ` 3,00,001 - ` 7,00,000 @5% 20,000
conference flat let out ` 7,00,001 - ` 10,00,000 @10% 30,000
Purchase of car (for official 80,000 ` 10,00,001 - ` 10,11,940 @ 15% 1,791 51,791
use) Add: Health and Education cess @ 4% 2,072
Repair, maintenance and 4,000 Total tax liability
petrol of car 53,863
Less: Advance tax paid
5,25,000 70,000
Travelling expenses Less: Tax deducted at source on dividend income from an Indian company u/s
1,052
194
Municipal tax paid in
respect of house property 3,000 Tax deducted at source on income from UTI u/s 194K 760 1,812
Tax Payable/(Refundable)
Net Profit (17,949)
9,28,224 Tax Payable/(Refundable) (rounded off)
(17,950)
57,17,824 57,17,824

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Particulars ` `
Computation of total income and tax payable under normal provisions of the Act
(ii) Amount paid for purchase of car is not allowable u/s 37(1) since it is a 80,000
Particulars ` ` capital expenditure
Gross Total Income 10,11,944 (ii) Municipal taxes paid in respect of residential flat let out 3,000 1,13,000
[Income under the “Income from house property” “Profits and gains from 10,41,224
business or profession” and “Income from other sources” would remain the
same even if Ms. Purvi opts out of the default tax regime u/s 115BAC] Add: Value of benefit received from clients during the course of profession 10,500
[taxable as business income u/s 28(iv)]
Less: Deductions under Chapter VI-A (See Working Note 4) 10,000
10,51,724
Total Income 10,01,944
Total Income (rounded off) Less: Income credited but not taxable under this head:
10,01,940
Tax on total income (i) Dividend on shares of X Ltd., an Indian company (taxable under the head 10,524
Upto ` 2,50,000 Nil “Income from other sources")
` 2,50,001 – ` 5,00,000 @5% 12,500 (ii) Income from UTI (taxable under the head “Income from other sources") 7,600
` 5,00,000 - ` 10,00,000 @20% 1,00,000 (iii) Honorarium for valuation of answer papers 15,800
` 10,00,000 – ` 10,01,940 @ 30% 582
(iv) Rent received from letting out of residential flat 85,600 1,19,524
Add: Health and Education cess @ 4%
1,13,082 9,32,200
Total tax liability
Less: Advance tax paid 4,523 Less: Depreciation on motor car @15% (See Note (i) below) 12,000
Less: TDS u/s 194 on dividend 1,052 1,17,605 9,20,200
TDS u/s 194K on income from UTI 760 70,000
Notes:
Tax Payable 1,812 (i) It has been assumed that the motor car was put to use for more than 180 days during the previous year
Tax Payable (rounded off) and hence, full depreciation @ 15% has been provided for u/s 32(1)(ii).
45,793
Note: Alternatively, the question can be solved by assuming that motor car has been put to use for less
45,790 than 180 days and accordingly, only 50% of depreciation would be allowable as per the second proviso
Since there is tax refundable under default tax regime u/s 115BAC and tax payable under the regular provisions below section 32(1)(ii).
of the Income-tax Act, 1961, it would be beneficial for Ms. Purvi to pay tax under default tax regime u/s (ii) Incentive to articled assistants for passing CA Intermediate examination in their first attempt is deductible
115BAC. u/s 37(1).
Working Notes: (iii) Repairs and maintenance paid in advance for the period 1.4.2025 to 30.9.2025 i.e. for 6 months
amounting to ` 1,000 is allowable since Ms. Purvi is following the cash system of accounting.
(1) Income from House Property
(iv) ` 32,000 expended on foreign tour is allowable as deduction assuming that it was incurred in connection
Particulars ` ` with her professional work. Since it has already been debited to income and expenditure account, no
Gross Annual Value u/s 23(1) 85,600 further adjustment is required.
(3) Income from other sources
Less: Municipal taxes paid 3,000
Particulars `
Net Annual Value (NAV) 82,600
Less: Deduction u/s 24@30% of NAV 24,780 57,820 Dividend on shares of X Ltd., an Indian company (taxable in the hands of shareholders) 10,524
Income from UTI (taxable in the hands of unit holders) 7,600
Note - Rent received has been taken as the Gross Annual Value in the absence of other information relating to
Municipal Value, Fair Rent and Standard Rent. Honorarium for valuation of answer papers 15,800
(2) Income under the head “Profits & Gains of Business or Profession” 33,924
Particulars ` ` (4) Deduction under Chapter VI-A :
Net profit as per Income and Expenditure account 9,28,224 Particulars `
Add: Expenses debited but not allowable Deduction u/s 80C (Investment in NSC) Deduction u/s 80D (See Notes (i) & (ii) below) 10,000
(i) Salary paid to computer specialist in cash disallowed u/s 40A(3), since such 30,000 Total deduction under Chapter VI-A Nil
cash payment exceeds ` 10,000
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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
10,000 housing loan was taken.
(2) Motor car was put to use both for official and personal purpose. One-fifth of the motor car use is
Notes: for personal purpose. No car loan interest was paid during the year.
(i) Premium paid to insure the health of brother is not eligible for deduction u/s 80D, even though he (3) The written down value of assets as on 1-4-2024 are given below:
is a dependent, since brother is not included in the definition of “family” u/s 80D. Furniture & Fittings ` 60,000
(ii) Premium paid to insure the health of major son is not eligible for deduction, even though he is a Plant & Machinery ` 80,000
dependent, since payment is made in cash. (Air-conditioners, Photocopiers, etc.)
Computers ` 50,000
Question 3 [Topics Covered : Total Income Direct Method] Note: Mr. Rajiv follows regularly the cash system of accounting.
Mr. Rajiv, aged 50 years, a resident individual and practicing Chartered Accountant, furnishes you Compute the total income of Mr. Rajiv for the assessment year 2025-26, assuming that he has shifted
the receipts and payments account for the financial year 2024-25. out of the default tax regime u/s 115BAC.
Answer
Receipts and Payments Account
Computation of total income of Mr. Rajiv for the assessment year 2025-26
Receipts ` Payments ` Particulars ` ` `
Opening balance (1.4.2024) Cash on 12,000 Staff salary, bonus and stipend to 21,50,000 Income from house property
hand and at Bank articled clerks Self-occupied
Fee from professional services 59,38,000 Other administrative expenses 11,48,000 Annual value Nil
(Gross) Less: Deduction u/s 24(b) Interest on housing loan
Rent 50,000 Office rent 30,000 50% of ` 88,000 = 44,000 but limited to 30,000
Loss from self occupied property (30,000)
Motor car loan from Canara Bank (@ 2,50,000 Housing loan repaid to SBI (includes 1,88,000
Let out property
9% p.a.) interest of ` 88,000)
Annual value (Rent receivable has been 60,000
Life insurance premium (10% of sum 24,000 taken as the annual value in the absence of other information)
assured)
Less: Deductions u/s 24
Motor car (acquired in 4,25,000 30% of Net Annual Value 18,000
Jan. 2025 by A/c payee cheque) Interest on housing loan (50% of ` 88,000) 44,000 62,000 (2,000)
Loss from house property (32,000)
Medical insurance premium (for self 18,000 Profits and gains of business or Profession
and wife)(paid by A/c Payee cheque) Fees from professional services 59,38,000
Less: Expenses allowable as deduction Staff salary, bonus and 21,50,000
Books bought on 20,000 stipend
Other administrative expenses 11,48,000
1.07.2024 (annual publications by
A/c payee cheque) Office rent 30,000
Motor car maintenance (10,000 x 4/5) 8,000
Computer acquired on 1.11.2024 by 30,000 Car loan interest – not allowable (since the same has not been Nil 33,36,000
A/c payee cheque (for professional paid and the assessee follows cash system of accounting)
use) 26,02,000
Domestic drawings 2,72,000 Motor car Depreciation ` 4,25,000 x 7.5% x 4/5 25,500
Books being annual publications@40% 8,000
Public provident fund subscription 20,000
Furniture and fittings@10% of ` 60,000 6,000
Motor car maintenance 10,000 Plant and machinery@15% of ` 80,000 12,000
Closing balance (31.3.2025) Cash on 19,15,000 Computer@40% of ` 50,000 20,000
hand and at Bank Computer (New) ` 30,000 @ 40% x 50% 6,000 77,500 25,24,500
Gross Total income 24,92,500
62,50,000 62,50,000
Less: Deductions under Chapter VI-A
Following further information is given to you: Deduction u/s 80C
(1) He occupies 50% of the building for own residence and let out the balance for residential use at Housing loan principal repayment 1,00,000
a monthly rent of ` 5,000. The building was constructed during the year 1997-98, when the

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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Particulars ` ` ` (b) Yes, since amount received in cash during the year exceeds 5% of turnover.
PPF subscription 20,000 (c) Yes, since cash payments during the year exceed 5% of aggregate payments.
Life insurance premium 24,000 (d) No, since the amount received in cash during the year does not exceed 5% of total amount received.
Total amount of ` 1,44,000 is allowed as deduction since it is 1,44,000 4. What is the amount of profits and gains of business chargeable to tax in the hands of Mr. Naveen as per
within the limit of ` 1,50,000 books of account?
Deduction u/s 80D (a) ` 10,50,000
Medical insurance premium paid ` 18,000 18,000 1,62,000 (b) ` 16,11,000
Total income 23,30,500 (c) ` 16,81,000
(d) ` 16,60,000
Question 4 [Topic Covered: PGBP Presumptive] 5. What is the amount of profits and gains of business chargeable to tax in the hands of Mr. Naveen if he does
Mr. Naveen, aged 40 years, is engaged in the manufacturing business. He follows mercantile system of not want to get his books of account audited?
accounting. The details pertaining to his business for the year ending on 31.3.2025 is as under – (a) ` 17,40,000
Particulars Amount (`) (b) ` 16,96,000
Capital receipts 1.20 crores (c) ` 22,40,000
Turnover 2.80 crores (d) ` 16,80,000
Amount received in cash [out of turnover] 8 lakhs Answer

Amount received in cash [out of capital receipts] 2 lakhs 1. (c) 2. (d) 3. (c) 4. (b) 5. (a)
Amount received through account payee cheque/ NEFT and other prescribed mode on 2.50 crores
or before the specified date u/s 139(1) [out of turnover] Question 5 [Topic Covered: Total Income & Tax Liability]
Total payment 1.60 crores Mr. Rajesh is a working partner in M/s Sunflower Associates, a partnership firm. Mr. Rajesh has
Cash payment [out of total payments] 9 lakhs contributed ` 15 lakhs as capital in the firm.

Net profit as per books of account 10.50 lakhs Partnership deed authorises payment of interest to partners @ 13% and also payment of
remuneration to partners @20,000 per month. Whole of the remuneration is allowable as deduction
An analysis of profit and loss for the year ended on 31.3.2025 revealed the following information to M/s Sunflower Associates.
1. Salary incudes wages of ` 15,000 p.m. each paid to 1 security guard, 2 housekeeping staff in cash. Mr. Rajesh has set up a unit in SEZ in May, 2017. The total turnover, export turnover and net profit
2. Other administration expenses include ` 70,000 paid in cash (Payment in a day is less than ` 8,000). for the year ended 31.3.2025 were ` 120 lakhs, ` 45 lakhs and ` 7.5 lakhs respectively. Out of the
3. Interest charges includes interest payable on loan to Kamal of ` 70,000 on which TDS has not been export turnover of ` 45 lakhs, only ` 40 lakhs has been received in convertible foreign exchange by
30.9.2025.
deducted. Loan was taken for the business purpose.
On the basis of the facts given above, choose the most appropriate answer to Q.1 to Q.5 below - During the P.Y. 2024-25, Mr. Rajesh has commenced a business of warehousing facility for storage
of edible oil. The net profit of this business as per profit & loss account is ` 7,50,000. The following
1. Is Mr. Naveen eligible to declare income on presumptive basis under the provisions of the Income-tax Act, items are debited to Profit & Loss Account:
1961 for A.Y. 2025-26?
(i) Personal drawings ` 70,000
(a) No, since turnover of Mr. Naveen exceeds the threshold limit of ` 2 crores.
(ii) Advance income-tax paid ` 1,00,000
(b) Yes, since aggregate cash receipts during the year do not exceed 5% of total amount received.
(iii) Purchase of warehouse building of ` 10 lakhs on 10.6.2024 for the purpose of storage of edible
(c) Yes, since amount received in cash during the year do not exceed 5% of turnover. oil.
(d) No, as cash payments during the year exceed 5% of aggregate payments. The following items are credited to Profit & Loss account:
2. What would be your answer to MCQ 1, assuming for the purpose of answering this MCQ and MCQ 3 that (i) Interest on saving bank account with post office ` 15,000
Mr. Naveen has additionally received ` 10 lakhs by way of crossed cheque [out of turnover] during the
P.Y. 2024-25? (ii) Interest on fixed deposit with SBI ` 20,000
(a) No, since turnover of Mr. Naveen exceeds the threshold limit of ` 2 crore. (iii) Dividend from Indian companies (Gross) ` 32,000
(b) No, since the aggregate cash receipts during the year exceed 5% of turnover. He has paid the premium of ` 60,000 on life insurance policy in the name of her married daughter.
The policy was taken on 1.10.2018 and the sum assured being ` 5,00,000.
(c) No, as cash payments during the year exceed 5% of aggregate payments.
Compute the total income and tax payable by Mr. Rajesh for the A.Y. 2025-26 under default tax
(d) No, due to both (a) and (b) regime and normal provisions of the Act.
3. Is Mr. Naveen required to get his books of account audited during the P.Y. 2024-25?
(a) No, since turnover of Mr. Naveen does not exceed the threshold limit of ` 10 crores.
CA Bhanwar Borana 15 16 CA Bhanwar Borana
 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Answer ` 3,00,001 – ` 7,00,000 [@5% of ` 4 lakhs] 20,000
Computation of total income of Mr. Rajesh for the A.Y. 2025-26 under default tax regime u/s 115BAC
` 7,00,001 – ` 10,00,000 [@10% of ` 3 lakhs] 30,000
Particulars Amount (in `)
` 9,00,001 – ` 12,00,000 [@15% of ` 2 lakhs] 30,000
I Profits and gains of business and profession ` 12,00,001 – ` 15,00,000 [@20% of ` 3 lakhs] 60,000
Income from firm M/s Sunflower Associates ` 15,00,001 - ` 29,86,500 [@30% of ` 14,86,500] 4,45,950
Interest on capital@13% p.a. on ` 15 lakhs, restricted to 12%, 1,80,000
5,85,950
which is the maximum deduction allowable in the hands of the firm
Add: Health and Education cess @4% 23,438
Salary to Mr. Rajesh as a working partner, which is allowable as 2,40,000 4,20,000
deduction in the hands of firm (` 20,000 x 12) 6,09,388
Profit from SEZ unit Less: Advance income-tax paid 1,00,000
Net profit from SEZ unit 7,50,000 Tax payable 5,09,388
Income from warehousing facility for storage of edible oil Tax Payable (Rounded off) 5,09,788
Net profit as per profit and loss account 7,50,000 Computation of total income of Mr. Rajesh for the A.Y. 2025-26 under normal provisions of the Act
Less: Income credited to profit and loss account but taxable Particulars Amount (in `)
under the head ‘Income from
Gross Total Income as per section 115BAC 29,86,500
Other Sources’ Less: Deduction u/s 10AA 1,25,000 28,61,500
Interest on savings bank A/c with post office 15,000 [` 7,50,000 x 40,00,000/ ` 1,20,00,000 x 50%, being eighth year of operation]
Interest on fixed deposit with SBI 20,000 Less: Deduction under Chapter VI-A
Dividend from Indian companies (Gross) 32,000 Deduction u/s 80C
6,83,000 Life insurance premium [maximum 10% of sum assured] 50,000
Add: Payments not allowable as deduction Deduction u/s 80TTA
Advance income-tax paid disallowed u/s 40(a)(ii) 1,00,000 Interest on saving bank account with post office, restricted to 10,000 60,000
Personal drawings disallowed u/s 37 70,000 Total Income 28,01,500
Purchase of building 10,00,000
Computation of tax payable by Mr. Rajesh for A.Y. 2025-26 under the regular provisions of the Act
18,53,000
Particulars ` `
Less: Depreciation on building [` 10,00,000 x 10%] 1,00,000 17,53,000
Tax on total income of ` 28,01,500
II Income from Other Sources Upto ` 2,50,000 Nil
Interest on savings bank A/c with post office 15,000 ` 2,50,001 – ` 5,00,000 [@5% of ` 2.50 lakhs] 12,500
Less: Exempt u/s 10(15) 3,500 11,500 ` 5,00,001 – ` 10,00,000 [@20% of ` 5 lakhs] 1,00,000
Interest on fixed deposit with SBI 20,000 ` 10,00,001 - ` 28,01,500 [@30% of ` 18,01,500] 5,40,450 6,52,950
Dividend from Indian companies (Gross) 32,000 63,500 Add: Health and education cess@4% 26,118
Gross Total Income/ Total Income 29,86,500 Total tax liability 6,79,068
[No deduction u/s 80C, 80TTA and 10AA would be allowable] Less: Advance income-tax paid 1,00,000
Computation of tax payable under default tax regime for A.Y. 2025-26 Tax payable 5,79,068
` ` Tax payable (rounded off) 5,79,070
Tax on total income of ` 29,86,500 Computation of adjusted total income and AMT of Mr. Rajesh for A.Y. 2024-25
On first ` 3,00,000 Nil Particulars ` `

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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Total Income (computed above as per regular provisions of income 28,01,500 Answer
tax) Computation of total income of Mr. Sunil for A.Y. 2025-26 under default tax regime u/s 115BAC
Add: Deduction u/s 10AA 1,25,000 Particulars ` ` `
Adjusted Total Income 29,26,500 I Income from house property Let out portion [First
Alternative Minimum Tax@18.5% 5,41,403 floor]
Add: Health and education cess@4% 21,656 Gross Annual Value [Rent received is taken as GAV, 2,95,000
Total tax liability 5,63,059 in the absence of other information]
Less: Advance income-tax paid 1,00,000 Less: Municipal taxes paid by him in the P.Y. 2024-25
Tax payable 4,63,059 pertaining to let out portion [` 25,000/2] 12,500
Tax payable (rounded off) 4,63,060 Net Annual Value (NAV) 2,82,500
Since alternate minimum tax payable is less than the regular income-tax payable, tax payable under normal Less: Deduction u/s 24
provisions of the Act is ` 5,79,070. (a) 30% of ` 2,82,500 84,750
(b) Interest on housing loan [` 1,50,000/2] 75,000 1,59,750
Question 6 [Topic Covered: Total Income]
Mr. Sunil, aged 48 years, a resident Indian has furnished the following particulars for the year 1,22,750
ended 31.03.2025: Self-occupied portion [Ground Floor]
(i) He occupies ground floor of his residential building and has let out first floor for residential use Annual Value Nil
at an annual rent of ` 2,95,000. He has paid municipal taxes of ` 25,000 for the current financial [No deduction is allowable in respect of municipal
year. Both these floors are of equal size. taxes paid] Nil
(ii) As per interest certificate from HDFC bank, he paid ` 1,50,000 as interest and ` 80,000 towards Less: Interest on housing loan [Not allowable u/s
principal repayment of housing loan borrowed for the above residential building in the year 2018. 115BAC]
(iii) He owns an industrial undertaking established in a SEZ and which had commenced operation Nil 1,22,750
Income from house property
during the financial year 2020-21. Total turnover of the undertaking was ` 400 lakhs, which II
includes ` 150 lakhs from export turnover. Out of ` 150 lakhs, only ` 120 lakhs have been Profits and gains of business or profession
received in India in convertible foreign exchange on or before 30.9.2025. This industrial Income from SEZ unit 40,00,000
undertaking fulfills all the conditions of section 10AA of the Income-tax Act, 1961. Profit from this
III Capital Gains
industry is ` 40 lakhs.
(iv) He employed 20 new employees for the said industrial undertaking during the previous year Long-term capital gains on sale of land (since held
2024-25. Out of 20 employees, 12 were employed on 1st May 2024 for monthly emoluments of for more than 24 months)
` 18,000 and remaining were employed on 1st September 2024 on monthly emoluments of `
Full Value of Consideration [Actual consideration of 15,00,000
12,000. All these employees participate in recognised provident fund and they are paid their
` 15 lakhs, since stamp duty value of ` 16 lakhs does
emoluments directly to their bank accounts.
not exceed actual consideration by more
(v) He earned ` 30,000 and ` 40,000 as interest on saving bank deposits and fixed deposits,
than 10%]
respectively.
(vi) He also sold his vacant land on 01.07.2024 for ` 15 lakhs. The stamp duty value of land at the Less: Indexed Cost of acquisition [` 4,00,000 x 14,52,000 48,000
time of transfer was ` 16 lakhs. This land was acquired by him on 15.10.1998 for ` 2.80 lakhs. 363/100]
The FMV of the land as on 1st April, 2001 was ` 4.8 lakhs and Stamp duty value on the said date Cost of acquisition
was ` 4 lakhs. He had incurred registration expenses of ` 12,000 at that time.
The cost of inflation index for the financial year 2024-25 and 2001-02 are 363 and 100, Higher of -
respectively. - Actual cost ` 2.80 lakhs + ` 0.12 lakhs = ` 2.92
(vii) He paid insurance premium of ` 40,000 towards life insurance policy of his son, who is not lakhs and
dependent on him.
- Fair Market Value (FMV) as on 1.4.2001 = ` 4.8
You are requested to compute total income and tax liability of Mr. Sunil for the Assessment Year lakhs but cannot exceed stamp duty value of ` 4
2025-26, in the manner so that he can make maximum tax savings. lakhs.
IV Income from Other Sources

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Particulars ` ` ` Particulars ` `
Interest on savings bank deposits 30,000 [Profits of the SEZ x Export Turnover received in convertible foreign
exchange/Total Turnover] x 100% [` 40 lakhs x ` 120 lakhs/ ` 400 lakhs x
Interest on fixed deposits 40,000 70,000
100%]
Gross Total Income 42,40,750
Less: Deduction under Chapter VI-A
Less: Deduction under Chapter VI-A
Deduction u/s 80C
Deduction u/s 80JJAA 7,12,800
Repayment of principal amount of housing loan 80,000
30% of the employee cost of the new employees
employed during the P.Y. 2024-25 for 240 days or Insurance premium paid on life insurance policy of son allowable, even though 40,000 1,20,000
more during the P.Y. 2024-25 allowable as deduction not dependent on Mr. Sunil
[30% of ` 23,76,000 (12 x 18,000 x 11)]
Deduction u/s 80JJAA [As computed above] 7,12,800
As per section 115BAC, no deduction u/s 10AA or
under Chapter VI-A is allowable except u/s 80JJAA Deduction u/s 80TTA 10,000

Total Income 35,27,950 Interest on savings bank account, restricted to ` 10,000

Computation of tax liability of Mr. Sunil u/s 115BAC Total Income as per regular provisions of the Act 21,22,950

Particulars ` ` Computation of tax liability of Mr. Sunil for A.Y. 2024-25 under the regular provisions of the Act

Tax on total income of ` 35,27,950 Particulars ` `

Tax on LTCG of ` 48,000@20% 9,600 Tax on total income of ` 21,22,950

Tax on remaining total income of ` 34,79,950 Tax on LTCG of ` 48,000@20% 9,600
Upto ` 3,00,000 Nil Tax on remaining total income of ` 20,74,950
` 3,00,001 – ` 7,00,000 [@5% of ` 4 lakhs] 20,000 Upto ` 2,50,000 Nil
` 7,00,001 – ` 10,00,000 [@10% of ` 3 lakhs] 30,000 ` 2,50,001 – ` 5,00,000[@5% of ` 2.50 lakhs] 12,500
` 10,00,001 – ` 12,00,000 [@15% of ` 2 lakhs] 30,000 ` 5,00,001 – ` 10,00,000[@20% of ` 5 lakhs] 1,00,000
` 12,00,001 – ` 15,00,000 [@20% of ` 3 lakhs] 60,000 ` 10,00,001 – ` 20,74,950[@30% of ` 10,74,950] 3,22,485 4,34,985
` 15,00,001 – ` 34,79,950 [@30% of ` 19,79,950] 5,93,985 7,33,985 4,44,585
7,43,585 Add: Health and education cess@4% 17,783
Add: Health and education cess@4% 29,743 Total tax liability 4,62,368
Total tax liability 7,73,328 Tax liability (rounded off) 4,62,370
Tax liability (rounded off) 7,73,330 Computation of adjusted total income and AMT of Mr. Sunil for A.Y. 2025-26
Note - An individual paying tax u/s 115BAC is not liable to alternate minimum tax u/s 115JC. Particulars `
Computation of total income of Mr. Sunil for A.Y. 2025-26 under normal provisions of the Act Computation of adjusted total income
Particulars ` ` Total income as per the normal provisions of the Act 21,22,950
Gross Total Income as per default tax regime u/s 115BAC 42,40,750 Add: Deduction u/s 10AA 12,00,000
Less: Interest on borrowing in respect of self- occupied house property [` 75,000 Deduction u/s 80JJAA 7,12,800
1,50,000/2]
Adjusted Total Income 40,35,750
Gross Total Income as per section 115BAC 41,65,750 Alternative Minimum Tax@18.5% 7,46,614
Less: Deduction u/s 10AA 12,00,000
Add: Health and education cess@4% 29,865
[Since the industrial undertaking is established in SEZ, it is entitled to
AMT liability 7,76,478
deduction u/s 10AA@100% of export profits, since P.Y.2024-25 being the 5th
year of operations] AMT liability (rounded off) 7,76,480

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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Since the regular income-tax payable is less than the alternate minimum tax payable, the adjusted total income preceding this year was for 16 days. Therefore, due to non-fulfillment of any of the two conditions for a resident,
shall be deemed to be the total income and tax is leviable @18.5% thereof plus cess@4%. Therefore, liability she would be treated as non-resident for the Assessment Year 2025-26.
as per section 115JC is ` 7,76,480.
Since, tax liability as per section 115BAC is lower than the tax liability of as per AMT, it is beneficial for Mr. Computation of total income of Miss Charlie for the A.Y. 2025-26
Sunil to exercise the option of the default tax regime u/s 115BAC.
Particulars ` `
Question 7 [Topics Covered: Residential Status] Income from house property
Miss Charlie, an American national, got married to Mr. Radhey of India in USA on 2.03.2024 and Show room located in Mumbai remained on rent from 01.05.2024 to 31.03.2025 @ 2,75,000
came to India for the first time on 16.03.2024. She left for USA on 19.9.2024. She returned to India ` 25,000/- p.m.
again on 27.03.2025. While in India, she had purchased a show room in Mumbai on 30.04.2024, Gross Annual Value [` 25,000 x 11] (See Note 1 below)
which was leased out to a company on a rent of ` 25,000 p.m. from 1.05.2024. She had taken loan Less: Municipal taxes Nil
from a bank for purchase of this show room on which bank had charged interest of ` 97,500 upto
31.03.2025. She had received the following cash gifts from her relatives and friends during 1.4.2024 Net Annual Value (NAV) 2,75,000
to 31.3.2025: Less: Deduction u/s 24
- From parents of husband ` 51,000 30% of NAV 82,500
- From married sister of husband ` 11,000 Interest on loan 97,500 1,80,000 95,000
- From two very close friends of her husband (` 1,51,000 and ` 21,000) ` 1,72,000 Income from other sources
(a) Determine her residential status and compute the total income chargeable to tax along with the Cash gifts received from non-relatives is chargeable to tax as per section 56(2)(x),
amount of tax liability on such income for the Assessment Year 2025-26 if she opts out of the if the aggregate value of such gifts exceeds ` 50,000.
default tax regime u/s 115BAC. - `50,000 received from parents of husband would be exempt, since parents of
(b) Would her residential status undergo any change, assuming that she is a person of Indian origin husband fall within the definition of ‘relative’ and gifts from a relative are not Nil
and her total income from Indian sources is `18,00,000 and she is not liable to tax in USA? chargeable to tax.
Answer - `11,000 received from married sister of husband is exempt, since sister-in-law
I. U/s 6(1), an individual is said to be resident in India in any previous year, if he/she satisfies any one of the falls within the definition of relative and gifts from a relative are not chargeable Nil
following conditions: to tax.
(i) He/she has been in India during the previous year for a total period of 182 days or more, or - Gift received from two friends of husband ` 1,51,000 and ` 21,000 aggregating
to ` 1,72,000 is taxable u/s 56(2)(x) since the aggregate of ` 1,72,000 exceeds
(ii) He/she has been in India during the 4 years immediately preceding the previous year for a total period ` 50,000. (See Note 2 below)
of 365 days or more and has been in India for at least 60 days in the previous year. 1,72,000 1,72,000
If an individual satisfies any one of the conditions mentioned above, he/she is a resident. If both the above Total income 2,67,000
conditions are not satisfied, the individual is a non-resident. Computation of tax liability by Miss Charlie for the A.Y. 2025-26
Therefore, the residential status of Miss Charlie, an American National, for A.Y.2025-26 has to be determined Particulars `
on the basis of her stay in India during the previous year relevant to A.Y. 2025-26 i.e., P.Y.2024-25 and in the
preceding four assessment years. Tax on total income of ` 2,67,000 850
Her stay in India during the previous year 2024-25 and in the preceding four years are as under: Add: Health and Education cess@4% 34
P.Y. 2024-25 Total tax liability 884
01.04.2024 to 19.09.2024 - 172 days Total tax liability (rounded off)
880
27.03.2025 to 31.03.2025 - 5 days Notes:
Total 177 days 1. Actual rent received has been taken as the gross annual value in the absence of other information (i.e.
Four preceding previous years Municipal value, fair rental value and standard rent) in the question.
P.Y. 2023-24 [1.4.2023 to 31.3.2024] - 16 days 2. If the aggregate value of taxable gifts received from non-relatives exceed ` 50,000 during the year, the
P.Y.2022-23 [1.4.2022 to 31.3.2023] - Nil entire amount received (i.e. the aggregate value of taxable gifts received) is taxable. Therefore, the entire
amount of ` 1,72,000 is taxable u/s 56(2)(x).
P.Y.2021-22 [1.4.2021 to 31.3.2022] - Nil 3. Since Miss Charlie is a non-resident for the A.Y. 2025-26, rebate u/s 87A would not be available to her,
P.Y.2020-21 [1.4.2020 to 31.3.2021] - Nil even though her total income does not exceed ` 5 lacs.
Total 16 days 4. The tax liability of Miss Charlie would be the same even if she opts to pay tax as per section 115BAC,
The total stay of the assessee during the previous year in India was less than 182 days and during the four years since she would be eligible for deduction u/s 24(b), for interest on housing loan in respect of let out
property under regular provisions as well as u/s 115BAC of the Income-tax Act, 1961.
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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
16,50,000
II. Residential status of Miss Charlie in case she is a person of Indian origin and her total income from
Since Ms. Rita is a citizen of India who is not liable to pay income-tax in Country A and her total income, other
Indian sources exceeds ` 18,00,000
than income from foreign sources, exceed ` 15 lakhs, she would be deemed resident in India u/s 6(1A) for
If she is a person of Indian origin and her total income from Indian sources exceeds ` 15,00,000 (` 18,00,000, A.Y.2025-26. A deemed resident is, by default, a resident but not ordinarily resident.
in her case), the condition of stay in India for a period exceeding 120 days during the previous year and 365 In case of a resident but not ordinarily resident, income accrues or arises, deemed to accrue or arise and received
days during the four immediately preceding previous years would be applicable for being treated as a resident. or deemed to be received in India, is taxable. In addition, Income which accrues or arises outside India would
Since her stay in India exceeds 120 days in the P.Y.2024-25 but the period of her stay in India during the four also be taxable if it is derived from a business controlled in or a profession set up in India.
immediately preceding previous years is less than 365 days (only 16 days), her residential status as per section
6(1) would continue to be same i.e., non-resident in India. Ms. Rita’s total income for A.Y. 2025-26
Further, since she is not a citizen of India, the provisions of section 6(1A) deeming an individual to be a citizen Particulars `
of India would not get attracted in her case, even though she is a person of Indian origin and her total income Salary income from AFL LLP [Not taxable since it accrues or arises outside India] -
from Indian sources exceeds ` 15,00,000 and she is not liable to pay tax in USA.
Salary income from Autofit Ltd. [Computed] 13,50,000
Therefore, her residential status would be non-resident in India for the previous year 2024-25.
Interest income in Country A [Not taxable since it accrues or arises outside India] -
Question 8 [Topic Covered: Residential Status] Dividend from shares of an Indian company 3,00,000
Ms. Rita, an Indian citizen and an MBA from Howard University, was employed in AFL LLP of Country Total Income 16,50,000
A since June, 2017. She came to India on 15.11.2024 and joined as CEO of Autofit Ltd. Ms. Rita was
in India before she left for overseas education in May, 2013 and was subsequently employed outside
Question 9 [Topic Covered: Salary HRA & RFA]
India and never visited India thereafter. There is no income-tax in Country A. She has earned interest
income of ` 2,40,000 (net) in Country A and salary income from AFL LLP of ` 15 lakhs up to the date Mr. Kashyap, aged 38 years, is entitled to a salary of ` 40,000 per month. He is given an option by
of her return to India in the financial year 2024-25. his employer either to take house rent allowance or a rent-free accommodation which is owned by
the company. The HRA amount payable was ` 8,000 per month. The rent for the hired
Salary income (computed) of Ms. Rita from Autofit Ltd. up to 31.03.2025 is ` 13,50,000 and she
accommodation was ` 6,500 per month at New Delhi. Advice Mr. Kashyap whether it would be
earned dividend of ` 3,00,000 from shares of an Indian company.
beneficial for him to avail HRA or Rent-Free Accommodation. Give your advice on the basis of “Net
What would be the residential status of Ms. Rita and her total income for the A.Y. 2025-26?
Take Home Cash benefits”. Assume Mr. Kashyap has opted option to shift out of the default tax
regime u/s 115BAC.
Answer
Answer
Determination of residential status of Ms. Rita for the A.Y. 2025 -26 Computation of tax liability of Kashyap under both the options
As per section 6(1), in order to be a resident of India in the P.Y.2024 -25, Ms. Rita should satisfy either of the
Particulars Option I – Option II –
following two conditions -
HRA (`) RFA(`)
(1) Her stay in India should be for a period of 182 days or more in the P.Y.2024-25; or
Basic Salary (` 40,000 x 12 Months) 4,80,000 4,80,000
(2) Her stay in India should be for a period of 60 days or more in the P.Y.2024-25 and for a period of 365
days or more in the four immediately preceding previous years. Perquisite value of rent-free accommodation (10% of ` 4,80,000) N.A. 48,000
Ms. Rita’s stay in India in the P.Y.2024-25 is 137 days (i.e., 16 days + 31 days +31 days + 28 days + 31 days). House rent Allowance (` 8,000 x 12 Months) ` 96,000
She left India in May, 2013 and never visited India thereafter. Her stay in India in the four immediately
preceding previous years would be Nil. Less: Exempt u/s 10(13A) – least of the following -
Therefore, she does not satisfy either condition (1) or condition (2) for being a resident. - 50% of Basic Salary ` 2,40,000
As per section 6(1A), an individual who is a citizen of India would be deemed to be a resident of India if his - Actual HRA received ` 96,000
total income, other than income from foreign sources, exceed ` 15 lakh during the relevant previous year and
- Rent paid less 10% of salary `30,000 ` 30,000 66,000
he is not liable to tax in any other country by reason of his domicile or residence or any other criteria of similar
nature. Gross Salary 5,46,000 5,28,000
Ms. Rita’s total income, other than income from foreign sources, would be ` 16,50,000 for A.Y.2025-26 as Less: Standard deduction u/s 16(ia) 50,000 50,000
shown below –
Net Salary 4,96,000 4,78,000
Particulars `
Less: Deduction under Chapter VI-A - -
Salary income from Autofit Ltd. [Computed] [Accrues or arises in India] 13,50,000
Total Income 4,96,000 4,78,000
Dividend from shares of an Indian company [Accrues or arises in India] 3,00,000
Tax on total income 12,300 11,400

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Particulars Option I – Option II – Particulars ` `
HRA (`) RFA(`)
Entertainment allowance 10,000
Less: Rebate u/s 87A - Lower of ` 12,500 or income-tax of ` 12,300 & 11,900, 12,300 11,400
Interest on housing loan given at concessional rate, would be perquisite, since 49,291
since total income does not exceed ` 5,00,000
the amount of loan exceeds ` 20,000, For computation, the lending rate of SBI
Nil Nil on 1.4.2024 @8% has to be considered. Thus, perquisite value would be
determined @ 3.5% (8% - 4.5%) [See Working Note]
Cash Flow Statement
Health insurance premium paid by the employer [tax free perquisite] Nil
Particulars Option I – Option II
HRA – RFA Gift voucher on the occasion of his marriage anniversary [As per Rule 3(7)(iv), 10,000
the value of any gift or voucher or token in lieu of gift received by the employee
Inflow: Salary 5,76,000 4,80,000 or by member of his household exceeding ` 5,000 in aggregate during the
Less: Outflow: Rent paid (78,000) - previous year is fully taxable] (See note below)

Tax on total income Nil Nil Allotment of sweat equity shares

Net Inflow 4,98,000 4,80,000 Fair market value of 800 sweat equity shares @ ` 700 each 5,60,000

Since the net cash inflow under Option I (HRA) is higher than in Option II (RFA), it is beneficial for Mr. Less: Amount recovered @ ` 450 each 3,60,000 2,00,000
Kashyap to avail Option I, i.e., House Rent Allowance Use of furniture by employee
10% p.a. of the actual cost of ` 1,10,000 11,000
Question 10 [Topic Covered: Salary] Use of Laptop
Mr. Samaksh is a Marketing Manager in Smile Ltd. From the following information, you are required
Facility of use of laptop is not a taxable perquisite Nil
to compute his income chargeable under the head salary for assessment year 2025-26. Assume he
has shifted out of default taxation regime u/s 115BAC Transfer of asset to employee
Value of furniture transferred to Mr. Samaksh 1,10,000
(i) Basic salary is ` 70,000 per month.
(ii) Dearness allowance @ 40% of basic salary Less: Normal wear and tear @10% for each completed year of usage on SLM
basis [1,10,000 x 10% x 4 years (from September 2020 to September 2024)] 44,000 66,000
(iii) He is provided health insurance scheme approved by IRDA for which ` 20,000 incurred by
Smile Ltd. Gross Salary 15,22,291
(iv) Received ` 10,000 as gift voucher on the occasion of his marriage anniversary from Smile Ltd.
Less: Standard deduction u/s 16 [Actual salary or ` 50,000, whichever is less]
(v) Smile Ltd. allotted 800 sweat equity shares in August 2024. The shares were allotted at ` 450
50,000
per share and the fair market value on the date of exercising the option by Mr. Samaksh was `
700 per share. Net Salary 14,72,291
(vi) He was provided with furniture during September 2020. The furniture is used at his residence Working Note:
for personal purpose. The actual cost of the furniture was ` 1,10,000. On 31st March, 2025, the
Computation of perquisite value of loan given at concessional rate
company offered the furniture to him at free of cost. No amount was recovered from him towards
the furniture till date. For computation, the lending rate of SBI on 1.4.2024 @8% has to be considered. Thus, perquisite value would
(vii) Received ` 10,000 towards entertainment allowance. be determined @ 3.5% (8% - 4.5%)
(viii) Housing Loan@ 4.5% p.a. provided by Smile Ltd., amount outstanding as on 01.04.2024 is ` Month Maximum outstanding balance as on last date of month Perquisite value at
15 Lakhs. ` 50,000 is paid by Mr. Samaksh every quarter towards principal starting from June (`) 3.5% for the month (`)
2023. The lending rate of SBI for similar loan as on 01.04.2024 was 8%. April, 2024 15,00,000 4,375
(ix) Facility of laptop costing ` 50,000
May, 2024 15,00,000 4,375
Answer June, 2024 14,50,000 4,229
Computation of income under the head “Salaries” of Mr. Samaksh for the A.Y.2025-26 July, 2024 14,50,000 4,229
Particulars ` ` August, 2024 14,50,000 4,229
Basic Salary [`70,000 x 12 months] 8,40,000 September, 2024 14,00,000 4,083
Dearness allowance [40% of `8,40,000] 3,36,000 October, 2024 14,00,000 4,083

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November, 2024 14,00,000 4,083
Computation of income from house property of Mr. Vikas for A.Y. 2025-26
December, 2024 13,50,000 3,937.50
Particulars Ground floor First floor
January, 2025 13,50,000 3,937.50
Self occupied)
February, 2025 13,50,000 3,937.50
Gross annual value (See Note below) Nil 60,000
March, 2025 13,00,000 3,792
Less: Municipal taxes (for first floor) 4,000
Total value of this perquisite 49,290.50
Net annual value(A) Nil 56,000
Note: An alternate view possible is that only the sum in excess of ` 5,000 is taxable. In such a case, the value
Less: Deduction u/s 24
of perquisite would be ` 5,000 and gross salary and net salary would be ` 15,17,291 and ` 14,67,291,
respectively. (a) 30% of net annual value 16,800
(b) interest on borrowed capital
Question 11 [Topic Covered: House Property]
Current year interest
Mr. Naveen and Mr. Vikas constructed their houses on a piece of land purchased by them at Delhi.
The built-up area of each house was 1,800 sq. ft. ground floor and an equal area in the first floor. `10,00,000 x 10% = `1,00,000 50,000 50,000
Naveen started construction on 1-04-2022 and completed on 1-04-2024. Vikas started the Pre-construction interest
construction on 1-04-2022 and completed the construction on 30-09-2024. Naveen occupied the
entire house on 01-04-2024. Vikas occupied the ground floor on 01-10-2024 and let out the first floor `10,00,000 x 10% x 21/12 = `1,75,000
for a rent of `20,000 per month. However, the tenant vacated the house on 31-12-2024 and Vikas `1,75,000 allowed in 5 equal installments
occupied the entire house during the period 01-01-2025 to 31-03-2025. `1,75,000/5 = `35,000 per annum 17,500 17,500
Following are the other information
Total deduction u/s 24 67,500 84,300
(i) Fair rental value of each unit - ` 1,00,000 per annum (ground floor /first floor)
Income from house property (A)-(B) (67,500) (28,300)
(ii) Municipal value of each unit (ground floor / first floor) - ` 72,000 per annum
(iii) Municipal taxes paid by Loss under the head “Income from house property” of Mr. Vikas (both (95,800)
ground floor and first floor)
Naveen – ` 8,000
Vikas – ` 8,000 Note: Computation of Gross Annual Value (GAV) of first floor of Vikas’s house
If a single unit of property (in this case the first floor of Vikas’s house) is let out for some months and self-
(iv) Repair and maintenance charges paid by
occupied for the other months, then the Expected Rent of the property shall be taken into account for
Naveen – ` 28,000 determining the annual value. The Expected Rent shall be compared with the actual rent and whichever is
Vikas – ` 30,000 higher shall be adopted as the annual value. In this case, the actual rent shall be the rent for the period for which
Naveen has availed a housing loan of ` 15 lakhs @ 12% p.a. on 01-04-2022. Vikas has availed a the property was let out during the previous year.
housing loan of ` 10 lakhs @ 10% p.a. on 01-07-2022. No repayment was made by either of them till
31-03-2025. Compute income from house property for Naveen and Vikas for the previous year 2024- The Expected Rent is the higher of fair rent and municipal value. This should be considered for 6 months since
25 if both exercise the option of shifting out of the default tax regime provided u/s 115BAC(1A). the construction of property was completed only on 30.9.2024.
Answer Expected rent = `50,000 being higher of -
Computation of income from house property of Mr. Naveen for A.Y. 2025-26
Fair rent = 1,00,000 x 6 /12 = `50,000 Municipal value = 72,000 x 6/12 = `36,000
Particulars ` `
Actual rent = `60,000 (`20,000 p.m. for 3 months from October to December, 2024)
Annual value is nil (since house is self occupied) Nil
Gross Annual Value = `60,000 (being higher of Expected Rent of `50,000 and actual rent of `60,000).
Less: Deduction u/s 24(b)
Interest paid on borrowed capital `15,00,000 @ 12% 1,80,000 Question 12 [Topic Covered: House Property]
Pre-construction interest `3,60,000/5 72,000 Two brothers Arun and Bimal are co-owners of a house property with equal share. The property was
constructed during the financial year 2016-2017. The property consists of eight identical units and is
2,52,000
situated at Cochin.
As per second proviso to section 24(b), interest deduction restricted to 2,00,000
During the financial year 2024-25, each co-owner occupied one unit for residence and the balance
Loss under the head “Income from house property” of Mr. Naveen (2,00,000) of six units were let out at a rent of ` 12,000 per month per unit. The municipal value of the house

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property is ` 9,00,000 and the municipal taxes are 20% of municipal value, which were paid during Less: Deduction u/s 24
the year. The other expenses were as follows:
(a) 30% of NAV 2,04,300
`
(b) Interest on loan taken for the house [75% of ` 3 lakh] 2,25,000 4,29,300
(i) Repairs 40,000
Income from let-out portion of house property 2,51,700
(ii) Insurance premium (paid) 15,000
(iii) Interest payable on loan taken for construction of house 3,00,000 Share of each co-owner (50%) 1,25,850
(ii) If Arun and Bimal have exercised the option of shifting out of the default tax regime provided u/s
One of the let out units remained vacant for four months during the year.
115BAC(1A)
Arun could not occupy his unit for six months as he was transferred to Chennai. He does not own
any other house. Computation of total income for the A.Y. 2025-26
The other income of Mr. Arun and Mr. Bimal are ` 2,90,000 and ` 1,80,000, respectively, for the Particulars Arun (`) Bimal(`)
financial year 2024-25. Income from house property
Compute the income under the head ‘Income from House Property’ and the total income of two I. Self-occupied portion (25%)
brothers for the A.Y. 2025-26 if they pay tax under the default tax regime u/s 115BAC.
Annual value Nil Nil
Also, show the computation of income under this head, if they both exercised the option of shifting
out of the default tax regime provided u/s 115BAC(1A). Less: Deduction u/s 24(b)
Answer Interest on loan taken for construction ` 37,500 (being 25% of ` 1.5 lakh)
[Allowable since they have exercised the option of shifting out of the
(i) If Arun and Bimal pay tax under the default tax regime u/s 115BAC Computation of total income default tax regime provided u/s 115BAC(1A)]
for the A.Y. 2025-26 37,500 37,500
Loss from self occupied property
Particulars Arun (`) Bimal(`) II. Let-out portion (75%) – See Working Note above (37,500) (37,500)
Income from house property Income from house property 1,25,850 1,25,850
I. Self-occupied portion (25%) Other Income 88,350 88,350
Annual value Nil Nil 2,90,000 1,80,000
Total Income
Less: Deduction u/s 24(b) Nil Nil 3,78,350 2,68,350
Loss from self-occupied property Nil Nil
II. Let-out portion (75%) – See Working Note below Question 13 [Topics Covered : Capital Gain Slump Sale]
1,25,850 1,25,850 Mr. Aditya is a proprietor of Star Stores having 2 units. On 1.4.2024, he has transferred Unit 2, which he started
in 2004-05, by way of slump sale for a total consideration of ` 18 lakhs. The professional fees & brokerage
Income from house property 1,25,850 1,25,850 paid for this transfer are ` 78,000. His Balance Sheet as on 31-03-2024 is as under:
Other Income 2,90,000 1,80,000 Liabilities ` Assets Unit 1 ` Unit 2 ` Total
Total Income 4,15,850 3,05,850 Own Capital 20,50,000 Land 12,75,000 7,50,000 20,25,000
Working Note – Computation of Income from Let-Out Portion of House Property Revaluation reserve 2,50,000 Furniture 2,00,000 5,00,000 7,00,000
Particulars ` ` Bank Loan (70% for Unit 1) 8,50,000 Debtors 2,00,000 3,50,000 5,50,000
Let-out portion (75%) Trade Creditors (20% for Unit 2) 4,50,000 Patents - 7,25,000 7,25,000
Gross Annual Value Unsecured Loan
(a) Municipal value (75% of ` 9 lakh) 6,75,000 (30% for Unit 2) 4,00,000
(b) Actual rent [(` 12000 x 6 x 12) – (` 12,000 x 1 x 4)] 8,16,000 40,00,000 16,75,000 23,25,000 40,00,000
= ` 8,64,000 - ` 48,000 Other Information:
- whichever is higher 8,16,000 1. Land of Unit 2 was purchased at ` 5,00,000 in the year 2004 and revalued at ` 7,50,000 as on 31.3.2024.
Less: Municipal taxes 75% of ` 1,80,000 (20% of ` 9 lakh) 1,35,000 2. No individual value of any asset is considered in the transfer deed.
Net Annual Value (NAV) 6,81,000 3. Patents were acquired on 01-12-2022 on which no depreciation has been provided.
4. Furniture of Unit 2 of ` 5,00,000 were purchased on 01-12-2023 on which no depreciation has been

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provided. 3. Written down value of patents as on 1.4.2024
5. Fair market value of capital asset transferred by way of slump sale of Unit 2 is ` 18,10,000. Value of patents `
Compute the capital gain for A.Y. 2025-26.
Cost as on 1.12.2022 7,25,000
Answer
As per section 50B, any profits and gains arising from the slump sale effected in the previous year shall be Less: Depreciation @ 25% x 50% for Financial Year 2022-23 90,625
chargeable to income-tax as capital gains arising from the transfer of capital assets and shall be deemed to be WDV as on 1.4.2023 6,34,375
the income of the previous year in which the transfer took place.
Less: Depreciation@25% for Financial Year 2023-24 1,58,594
If the assessee owned and held the undertaking transferred under slump sale for more than 36 months before
slump sale, the capital gain shall be deemed to be long-term capital gain. Indexation benefit is not available in WDV as on 1.4.2024 4,75,781
case of slump sale as per section 50B(2).
Computation of capital gain on slump sale of Unit 2
Question 14 [Topic Covered: Capital Gain]
Particulars `
Mr. Rajkumar bought a residential house for ` 5 crores in March 2016. He entered into an agreement
Full value of consideration for slump sale of Unit 2 [Fair market value of capital asset 18,10,000 for sale of the said residential house with Ms. Nikita (not a relative) in September 2024 for ` 17 crores.
transferred by way of slump sale (i.e., ` 18,10,000) or fair market value of the consideration The sale proceeds were to be paid in the following manner:
received (value of the monetary consideration received i.e., ` 18,00,000) whichever is (i) 10% through account payee bank draft on the date of agreement.
higher] (ii) 80% on the date of the possession of the property.
Less: Expenses on sale [professional fees & brokerage] 78,000 (iii) Balance after the completion of the registration of the title of the property.
Net full value of consideration 17,32,000 Ms. Nikita was handed over the possession of the property on 10.11.2024 and the registration
process was completed on 05.02.2025. She paid the sale proceeds as per the sale agreement. Value
Less: Cost of acquisition, being the net worth of Unit 2 (Note 1) 13,35,781 of property for stamp duty in September 2024 was ` 19 crores. Subsequently, the State stamp
Long term capital gains arising on slump sale 3,96,219 valuation authority had revised the values, hence, the value of property for stamp duty purposes was
` 20 crores on 05.02.2025. Mr. Rajkumar paid 1% as brokerage on sale consideration received.
(The capital gains is long-term as the Unit 2 is held for more than 36 months) Subsequent to sale, he purchased another residential house for ` 13 crores in Mumbai in March
Notes 2025.
1. Computation of net worth of Unit 2 You are required to compute the capital gains chargeable to tax in the hands of Mr. Rajkumar for A.Y.
2025-26. What would be the capital gain, if any, in A.Y. 2026-27 if Mr. Rajkumar transfers the new
Particulars ` residential house in December 2025 for ` 15 crores?
(1) Book value of non-depreciable assets CII: 2015-16: 254; 2024-25: 363
(i) Land (Revaluation not to be considered) 5,00,000 Answer
(ii) Debtors 3,50,000 Computation of capital gains of Mr. Rajkumar for A.Y. 2025-26
(2) Written down value of depreciable assets u/s 43(6) Particulars ` (in crores)
(i) Furniture (See Note 2) 4,75,000
Actual sale consideration ` 17 crores
(ii) Patents (See Note 3) 4,75,781
Value adopted by Stamp Valuation Authority ` 19 crores
Aggregate value of total assets 18,00,781
[Where the actual sale consideration is less than the value adopted by the Stamp Valuation
Less: Current liabilities of Unit 2
Authority for the purpose of charging stamp duty, and such stamp duty value exceeds 110%
Bank Loan [` 8,50,000 x 30%] 2,55,000 of the actual sale consideration, then, the value adopted by the Stamp Valuation Authority
19
Trade Creditors [` 4,50,000 x 20%] 90,000 shall be taken to be the full value of consideration as per section 50C.
Unsecured Loan [` 4,00,000 x 30%] 1,20,000 4,65,000 However, where the date of agreement is different from the date of registration, stamp duty
Net worth of unit 2 value on the date of agreement can be considered provided the whole or part of the
13,35,781
consideration is received by way of account payee cheque/bank draft or by way of ECS
2. Written down value of furniture as on 1.4.2024 through bank account or through prescribed electronic modes on or before the date of
agreement.
Value of patents `
In this case, since advance of ` 1.7 crores is received by account payee bank draft, stamp duty
Cost as on 1.12.2023 5,00,000 value on the date of agreement can be adopted as the full value of consideration.
Less: Depreciation @ 10% x 50% for Financial Year 2023-24 25,000 Gross Sale consideration (Stamp duty value on the date of agreement, since it exceeds 110%
WDV as on 1.4.2024 4,75,000 of the actual consideration)

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Particulars ` (in crores) Answer
Computation of taxable capital gains for the A.Y.2025-26
Less: Brokerage @1% of sale consideration (1% of ` 17 crores) 0.17
Particulars ` `
Net Sale consideration 18.83
Sale consideration 1,25,00,000
Less: Cost of acquisition 5.00
Less: Expenses incurred for transfer -
Long term capital gains 13.83
1,25,00,000
[Since the residential house property was held by Mr. Rajkumar for more than 24 months
Less: (i) Cost of acquisition
immediately preceding the date of its transfer, the resultant gain is a long-term capital gain]
(a) Cost 8,50,000
Less: Exemption u/s 54 10 (b) - FMV on 1/4/01 18.2 lakhs
Where long-term capital gains exceed ` 2 crore, the capital gain arising on transfer of a long- - SDV on 1/4/01 16.0 lakhs 16,00,000 16,00,000
term residential property shall not be chargeable to tax to the extent such capital gain is (ii) Cost of improvement (12-13) 4,00,000
invested in the purchase of one residential house property in India, one year before or two
years after the date of transfer of original asset. However, if the cost of new residential house (iii) Cost of improvement (23-24) 3,50,000 23,50,000
exceeds ` 10 crores, the amount exceeding ` 10 crore would not be taken into account for Long term capital gains 1,01,50,000
exemption.
Computation of Total Income & Tax Liability for the A.Y.2025-26
Therefore, in the present case, the exemption would be available in respect of the residential
house acquired in Mumbai and to the extent of ` 10 crores only. Particulars ` `
Long term capital gains chargeable to tax LTCG u/s 112 1,01,50,000
3.83
As per proviso to section 112, this case while calculating tax liability, assessee is required to pay Income from other sources 10,00,000
tax at 12.5% without indexation or 20% with indexation, whichever is lower.
Net Taxable Income 1,11,50,000
Computation of capital gains of Mr. Rajkumar for A.Y. 2025-26
Computation of Tax Liability
Particulars ` (in crores) 1. Tax on LTCG u/s 112 [Note-2]
Sale consideration 15 (a) Tax @ 12.5% without Index [1,01,50,000 x 12.5%] 12,68,750
(b) Tax @ 20% with Index (note -1) [56,00,914 x 20%] 11,20,183 11,20,183
Less: Cost of acquisition (-) capital gains exempt in A.Y. 2025-26 (` 13 – ` 10) 3 Whichever is lower
Short term capital gains chargeable to tax 12 2. Tax on Balance Income
Since the residential house property was held by Mr. Rajkumar for not more than 24 months Upto 2,50,000 -
immediately preceding the date of its transfer] > 2,50,000 upto 5,00,000 5% 12,500
> 5,00,000 upto 10,00,000 20% 1,00,000 1,12,500
Question 15 [Topic Covered: Capital Gain] 12,32,683
Mr. Gopal resident Individual acquired a house property for ` 7,00,000 during PY 1982-83 & paid Add: Surcharge @15% since Total Income more than 1 crore 1,84,902
stamp duty ` 1,50,000 at the time of registration of property. He incurred following expenses for 14,17,585
improvement of property, Add: Health & Education cess @4% 56,703
PY 96-97 - ` 3,50,000
Net Tax Liability 14,74,289
PY 12-13 - ` 4,00,000
i.e. 14,74,290
PY 23-24 - ` 3,50,000
Note: 1
FMV as on 01/04/2001 of such property is ` 18,20,000 & Stamp Duty Value on same date is
`16,00,000. Particulars Amount `
Mr. Gopal sold this property as on 10/12/2024 for ` 1,25,00,000. Full Value of Consideration 1,25,00,000
Mr. Gopal’s income from other sources is ` 10,00,000. Compute Total Income and Tax liability.
Assume he opted out from section 115BAC. Less: Transfer Expenses — NIL
Cost Inflation Index for F.Y. 2001-02: 100; F.Y. 2012-13: 200, F.Y. 2023-24: 348, F.Y. 2024-25: 363 Net Consideration 1,25,00,000
Less: Indexed Cost of Acquisition — (58,08,0000)

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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Particulars Amount ` (5) Difference between the stamp duty value of ` 23 lakh on the date of booking and the actual 3,00,000
16,00,000 × 363 [F.Y. 2024-25] consideration of ` 20 lakh paid is taxable u/s 56(2)(x) since the difference exceeds `
2,00,000, being the higher of ` 50,000 and 10% of consideration
100 [F.Y. 2001-02]
Less: Indexed Cost of Improvement Income from Other Sources 9,35,000
4,00,000 × 363 [F.Y. 2024-25]
200 [F.Y. 2012-13] (7,26,000) Computation of “Capital Gains” of Mr. A for the A.Y.2025-26
3,50,000 × 363 [F.Y. 2024-25] Particulars `
348 [F.Y. 2023-24] (3,65,086)
Sale Consideration 7,00,000
Long Term Capital Loss 56,00,914
Less: Cost of acquisition [deemed to be the stamp value charged to tax u/s 56(2)(x) as per 5,00,000
Note: 2 section 49(4)]
If a Resident Individual or HUF transfers any immovable property acquired before 23rd July, 2024, and the tax Short-term capital gains 2,00,000
calculated on LTCG at the new rate (12.5% without indexation) is higher than the tax calculated at the old rate
(20% with indexation), then the excess tax is ignored. In other words, the assessee is required to pay tax at Note – The resultant capital gains will be short-term capital gains since for calculating the period of holding,
12.5% without indexation or 20% with indexation, whichever is lower. the period of holding of previous owner is not to be considered.

Question 16 [Topic Covered: IFOS & Capital Gain] Question 17 [Topic Covered: IFOS LIP & Mix]
Mr. A, a dealer in shares, received the following without consideration during the P.Y. 2024-25 from Mr. Akash (aged 47 years) is a CEO of BAC Enterprises (P) Ltd. During the P.Y.2024-25, he has earned the
his friend Mr. B, - following income -
(1) Cash gift of ` 75,000 on his anniversary, 15th April, 2024. - Salary of ` 45 lakhs

(2) Bullion, the fair market value of which was ` 60,000, on his birthday, 19th June, 2024. - Long-term capital gain on sale of listed equity shares on 10th June 2024 (STT paid) amounting to ` 6,54,000

(3) A plot of land at Faridabad on 1st July, 2024, the stamp value of which is ` 5 lakh on that date. - Dividend of ` 12,00,000 from shares of Indian companies
Mr. B had purchased the land in April, 2009. - Interest on saving bank account with SBI of ` 16,000
Mr. A purchased from his friend Mr. C, who is also a dealer in shares, 1000 shares of X Ltd. @ ` 400 - Interest on fixed deposits with BOB of ` 45,000
each on 19th June, 2024, the fair market value of which was ` 600 each on that date. Mr. A sold Mr. Akash has made the following payments towards medical insurance premium for health policies taken for
these shares in the course of his business on 23rd June, 2024. his family members:
Further, on 1st November, 2024, Mr. A took possession of property (office building) booked by him - Medical premium for his spouse aged 43 years: ` 13,500 (by cheque)
two years back at ` 20 lakh. The stamp duty value of the property as on 1st November, 2024 was ` - Medical premium for his mother aged 65 years: ` 26,670 (by cheque)
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. - Preventive health check-up of ` 5,500 each for his wife and mother in cash.

On 1st March, 2025, he sold the plot of land at Faridabad for ` 7 lakh. Mr. Akash also incurred medical expenses, by credit card, of ` 17,000 for the treatment of his mother and of `
27,000 for his father who is 67 years old.
Compute the income of Mr. A chargeable under the head “Income from other sources” and “Capital
Gains” for A.Y. 2025-26. He has multiple life insurance policies. The details of such policies are given hereunder:
Answer Particulars X Y Z A B
Computation of “Income from other sources” of Mr. A for the A.Y. 2025-26 (Term insurance
policy)
Particulars `
Date of issue 1.4.2017 1.4.2023 1.4.2025 1.4.2024 1.3.2023
(1) Cash gift is taxable u/s 56(2)(x), since it exceeds ` 50,000 75,000 Annual premium (excluding ` 40,000 ` 3,00,000 ` 2,00,000 ` 2,50,000 ` 80,000
(2) Since bullion is included in the definition of property, therefore, when bullion is received 60,000 GST)
without consideration, the same is taxable, since the aggregate fair market value exceeds GST@18% ` 7,200 ` 54,000 ` 36,000 ` 45,000 14,400
` 50,000
Total premium ` 47,200 ` 3,54,000 ` 2,36,000 ` 2,95,000 ` 94,400
(3) Stamp value of plot of land at Faridabad, received without consideration, is taxable u/s 5,00,000 Date of maturity 31.3.2026 31.3.2032 31.3.2034 31.3.2033 28.3.2056
56(2)(x)
Consideration received on ` 7,00,000 ` 36,00,000 ` 28,00,000 ` 30,00,000 -
(4) Difference of ` 2 lakh in the value of shares of X Ltd. purchased from Mr. C, a dealer in - maturity (including bonus)
shares, is not taxable as it represents the stock-in-trade of Mr. A. Since Mr. A is a dealer
in shares and it has been mentioned that the shares were subsequently sold in the course Sum assured ` 5,00,000 ` 33,00,000 ` 25,00,000 ` 27,00,000 ` 2,00,00,000
of his business, such shares represent the stock-in-trade of Mr. A.
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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
On the basis of the facts given above, choose the most appropriate answer to Q.1 to Q.5 below, based on the of a single transaction and each transfer constitutes consideration for the other by being mutual or otherwise.
provisions of the Income-tax Act, 1961 - If two transactions are inter-connected and are part of the same transaction in such a way that it can be said that
1. Which are the life insurance policies in respect of which Mr. Akash would be eligible for exemption u/s the circuitous method was adopted as a device to evade tax, the implication of clubbing provisions would be
10(10D) in respect of maturity proceeds? Choose the option most beneficial to Mr. Akash. attracted.
(a) X, Y and Z As per section 64(1A), all income of a minor child is includible in the hands of the parent, whose total income,
(b) X and Y before including minor’s income is higher. Accordingly, the interest income arising to Mr. Karan’s brother’s
(c) X, Z and A son from fixed deposits would be included in the total income of Mr. Karan’s brother, assuming that Mr.
(d) Y and Z Karan’s brother’s total income is higher than his wife’s total income, before including minor’s income. Mr.
Karan’s brother can claim exemption of ` 1,500 u/s 10(32).
2. What would be your answer to MCQ 1, if Mr. Akash surrendered LIC A in A.Y. 2026-27 and claimed
exemption u/s 10(10D) in respect of such LIC? This information is only for the purpose of this MCQ. Interest on debentures arising in the hands of Mrs. Karan would be taxable in the hands of Mr. Karan as per
(a) X, Y and Z section 64(1)(iv).
(b) X and Y This is because both Mr. Karan and his brother are the indirect transferors of the income to their spouse and
minor son, respectively, with an intention to reduce their burden of taxation.
(c) X, Z and A
(d) Y and Z In the hands of Mr. Karan, interest received by his spouse on debentures of ` 9 lakhs alone would be included
and not the entire interest income on the debentures of `10 lakhs, since the cross transfer is only to the extent
3. What would be the amount of deduction available to Mr. Akash under Chapter VI-A for the A.Y. 2025-26
of ` 9 lakhs.
if he has exercised the option to shift out of the default tax regime?
(a) ` 82,170 Hence, only proportional interest (i.e., 9/10th of interest on debentures received)` 72,900 would be includible
in the hands of Mr. Karan.
(b) ` 78,500
The provisions of section 56(2)(x) are not attracted in respect of sum of money transferred or value of
(c) ` 2,28,500
debentures transferred, since in both the cases, the transfer is from a relative.
(d) ` 2,32,170
4. What is Mr. Akash’s tax liability for A.Y.2025-26 under the default tax regime u/s 115BAC?
(a) ` 16,97,350 Question 19 [Topics Covered : Clubbing of Income]
(b) ` 16,57,310 Details of Income of Mr. R and his wife Mrs. R for the previous year 2024-25 are as under:
(c) ` 18,41,270 (i) Mr. R transferred his self-occupied property without any consideration to the HUF of which he is
(d) ` 18,84,170 a member. During the previous year 2024-25 the HUF earned an income of ` 50,000 from such
5. What is Mr. Akash’s tax liability for A.Y.2025-26 if he has exercised the option to shift out of the default property.
tax regime? (ii) Mr. R transferred ` 4,00,000 to his wife Mrs. R on 01.04.2009 without any consideration which
(a) ` 17,27,610 was given as a loan by her to Mr. Girish. She earned ` 3,50,000 as interest during the earlier
(b) ` 18,93,720 previous years which was also given as a loan to Mr. Girish. During the previous year 2024-25,
she earned interest @ 11% per annum.
(c) ` 17,29,210
(d) ` 17,27,500 (iii) Mr. R and Mrs. R both hold equity shares of 27% and 25% respectively in AMG Limited. They
are also working as employees in such Company. During the financial year 2024-25 they have
Answer withdrawn a salary of ` 3,20,000 and 2,70,000 respectively.
1. (a) 2. (c) 3. (c) 4. (b) 5. (a) (iv) Mrs. R transferred 5,000 equity shares of RSB Ltd. on 17.09.2016 to Mr. R without any
consideration. The Company issued 3,000 bonus shares to Mr. R in 2019. On 04.03.2025, Mr.
R sold entire share holdings and earned ` 5,20,000 as capital gains.
Question 18 [Topic Covered: Clubbing “Cross Gift”]
Apart from above income, Mr. R has income from commission ` 4,00,000 and Mrs. R has interest
Mr. Karan gifted a sum of ` 9 lakhs to his brother’s minor son on 1-5-2024. On the same date, his income of ` 3,30,000.
brother gifted debentures worth ` 10 lakhs to Mrs. Karan. Son of Mr. Karan’s brother invested the Compute Gross Total income of Mr. R and Mrs. R for the assessment year 2025-26. Assume they
amount in fixed deposit with Canara Bank @ 9% p.a. interest and Mrs. Karan received interest of ` have opted out from default taxation regime u/s 115BAC.
81,000 on these debentures during the previous year 2024-25. Discuss the tax implications under Answer
the provisions of the Income- tax Act, 1961. Computation of Gross Total Income of Mr. R and Mrs. R for A.Y. 2025-26
Answer
Particulars Mr. R Mrs. R
In the given case, Mr. Karan gifted a sum of ` 9 lakhs to his brother’s minor son on 1.5.2024 and simultaneously,
his brother gifted debentures worth ` 10 lakhs to Mr. Karan’s wife on the same date. Mr. Karan’s brother’s Amount (`)
minor son invested the gifted amount of ` 9 lakhs in fixed deposit with Canara Bank.
I. Income from house property Income from property transferred to
These transfers are in the nature of cross transfers. Accordingly, the income from the assets transferred would
HUF without consideration
be assessed in the hands of the deemed transferor because the transfers are so intimately connected to form part

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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Particulars Mr. R Mrs. R Particulars Mr. R Mrs. R
Amount (`) Amount (`)
Since Mr. R has transferred his property to his HUF without consideration, Salary income of Mrs. R = ` 2,70,000 – ` 50,000 (standard deduction) 2,20,000
income of ` 50,0001 from such property would be included in the total 50,000
Gross Total Income 6,89,000 11,83,500
income of Mr. R as per section 64(2).
II. Capital Gains
Income from equity shares transferred by Mrs. R to Mr. R without Question 20 [Topics Covered : Clubbing of Income]
consideration Mr. Samrat and his wife, Mrs. Komal, holds 12% voting power each in ABC (P) Ltd. Mr. Samrat and Mrs.
Komal are working in ABC (P) Ltd. However, Mrs. Komal is not qualified for the job. From the following
Capital gains arising to Mr. R from transfer of equity shares of RSB Ltd. 3,25,000 information given in respect of F.Y. 2024-25, you are required to compute the gross total income of Mr. Samrat
gifted to him by Mrs. R would be included in the hands of Mrs. R [` and Mrs. Komal for the A.Y. 2025-26 as per default taxation regime of section 115BAC.
5,20,000 x 5,000/8,000]
(i) Dividend of ` 22,500 and ` 45,000 is received by Mr. Samrat and Mrs. Komal, respectively, from ABC
Capital gains arising to Mr. R from transfer of bonus shares issued by RSB 1,95,000 (P) Ltd. Mr. Samrat has instructed the company to pay 50% of his dividend to Ms. Kajal, daughter of his
Ltd. on the basis of holding of the said equity shares would be included in deceased brother.
the income of Mr. R and not Mrs. R, since income derived from accretion (ii) Salary earned by Mr. Samrat and Mrs. Komal from ABC (P) Ltd. is ` 8,75,000 and ` 5,75,000,
of the transferred asset cannot be clubbed with the income of transferor of
respectively.
the original asset i.e., Mrs. R [` 5,20,000 x 3,000/8,000]3
(iii) Business income earned by Mr. Samrat from his sole proprietary business is ` 15,60,000
III Income from Other Sources
(iv) Interest on fixed deposit earned by Mrs. Komal of ` 9,00,000.
Income from commission 4,00,000 (v) Their son, Akash, aged 10 years having PAN, received interest of ` 54,000 from bank on a fixed deposit
Interest income 3,30,000 created by his grandfather in his name.
Interest income on ` 4 lakh transferred by Mr. R to Mrs. R without
consideration Answer
Income of ` 44,000, i.e., 11% of `4,00,000, being the amount transferred 44,000 Computation of Gross Total Income of Mr. Samrat and Mrs. Komal for A.Y. 2025-26
by Mr. R to Mrs. R without any consideration and loaned by her to Mr. Particulars Mr. Samrat Mrs. Komal
Girish, would be included in the income of Mr. R
` ` ` `
Income of ` 38,500 i.e., 11% of ` 3,50,000, being the interest earned by 38,500
Mrs. R out of amount gifted by Mr. R and thereafter, given by her as loan Salary of Samrat 8,75,000 -
to Mr. Girish, would be included in the income of Mrs. R, as income Less: Standard deduction u/s 16(ia) -
derived by Mrs. R from accretion of the amount gifted by Mr. R (i.e., Salary of Komal 75,000 8,00,000
interest income) cannot be included in the income of Mr. R. 5,75,000
Less: Standard deduction u/s 16(ia) -
Total income [before considering adjustment on account of item (iii) i.e., 6,89,000 6,93,500 [Salary earned by Mrs. Komal has to be included 75,000 5,00,000 -
salary income from a company in which both Mr. R and Mrs. R have in the total income of Mr. Samrat, since he has
substantial interest] substantial interest in the concern (i.e., having
IV. Salary income from a company in which both Mr. R and Mrs. R have 24% voting power in ABC (P) Ltd., along with
substantial interest his wife) and Mrs. Komal does not have any
professional qualification for the job.]
Since both Mr. R and Mrs. R have substantial interest in AMG Ltd. (on
account of holding equity shares carrying 20% or more of voting power) Business Income
and both are in receipt of income by way of salary from AMG Ltd., such Dividend income from ABC (P) Ltd. [Taxable
salary income would be includible in the hands of that spouse, whose in the hands of Mr. Samrat as per section 60,
total income, before including such salary income, is higher. since he transferred the income i.e., dividend
15,60,000 -
Accordingly, the salary income of both Mr. R and Mrs. R would be without transferring the asset i.e., shares]
50,000 50,000
included in the hands of Mrs. R in this case, since her total income, before Interest on Fixed Deposit earned by Mrs. Komal [22,500/90 x [45,000/90
including such income, is higher than that of Mr. R. Total Income (before including minor’s 100 x 2]
income) x 100]
Salary income of Mr. R = ` 3,20,000 – ` 50,000 (standard deduction) 2,70,000
Income of minor child to be included in Mr.
Samrat’s income, since his total income before
1 Assumed as computed figure.
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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Particulars Mr. Samrat Mrs. Komal Particulars Amount (`) Amount (`)
` ` ` ` Less: Interest u/s 24(b) is not allowed in case of self-occupied property -
including minor’s income is higher than that of since Mr. Mayank is paying tax u/s 115BAC]
Mrs. Komal. [` 54,000/90 x 100] - 9,00,000 Less: Loss from let out property in Delhi of A.Y. 2024-25 cannot be -
[Exemption of ` 1,500 u/s 10(32) in respect of 60,000 29,10,000 9,50,000 set off against income from house property of A.Y. 2025-26 since Mr.
the income of each child so included not 60,000 Mayank has paid tax u/s 115BAC during the A.Y. 2024-25 and no
- deduction in respect of loss of house property of that year will be
available under 115BAC]
allowed in any subsequent year. 1,75,000
Gross Total Income 29,70,000 9,50,000
Profits and gains from business or profession

Question 21 [Topic Covered: Set-off & C/F] Profits from manufacturing business 36,86,000
Mr. Mayank, a resident individual, furnished the following information in respect of income earned and losses Add: Additional depreciation not allowable in case of section 115BAC 50,000
incurred by him for the F.Y. 2024-25 37,36,000
Particulars Amount (`) Less: Brought forward business loss of A.Y. 2024-25 (5,35,000)
Income from Salary (Computed) 27,40,000 Less: Unabsorbed normal depreciation (2,10,000)
Long term capital loss on sale of shares of Reliance Ltd. STT has been paid both at (1,25,000) Capital Gains 29,91,000
the time of acquisition and sale
Long term capital loss on sale of shares of Reliance Ltd. on which STT (1,25,000)
Income from let out property in Kanpur 5,50,000 has been paid can be set off only against long term capital gains.
Loss from let out property in Delhi (3,75,000) Hence, it has to be carried forward -
Interest on self-acquired property in Mumbai (1,50,000)
Income from Other Sources
Net winnings from online games (Net of TDS) 35,000
Net winnings from online games [` 35,000/70%]
Profit and gains from manufacturing business (after deducting normal depreciation 36,86,000
of ` 2,00,000 and additional depreciation of ` 50,000) 50,000
Gross Total Income 59,56,000
The other details of losses and unabsorbed depreciation pertaining to A.Y. 2024-25 are as follows:
Particulars Amount Losses to be carried forward to A.Y. 2026-27
Business loss from manufacturing business (5,35,000) Particulars Amount
(`)
Unabsorbed normal depreciation (2,10,000)
Brought forward loss from the activity of owning and maintaining the race horses of A.Y. 1,50,000
Loss from the activity of owning and maintaining the race horses (1,50,000) 2023-24 can be set off only against the income from the activity of owning and
maintaining race horses. Hence, it has to be carried forward.
Loss from let out property in Delhi (2,10,000)
Long term capital loss on sale of shares of Reliance Ltd. on which STT has been paid 1,25,000
Mr. Mayank filed his return of income for A.Y. 2024-25 on 28.7.2024 and opted for section 115BAC. Compute
the Gross total income of Mr. Mayank for the A.Y. 2025-26 and the amount of loss, if any, that can be carried
forward if he wants to continue with the provisions u/s 115BAC. Question 22 [Topic Covered: TDS & TCS]
Answer Kishore & Sons is a dealer of coal. Its turnover for the F.Y. 2023-24 was ` 12 crores. The State Government of
Computation of gross total income of Mr. Mayank for A.Y. 2025-26 Hyderabad granted a lease of coal mine to Kishore & Sons on 1.5.2024 and charged ` 11 crores for the lease.
Kishore & Sons sold coal of ` 95 lakhs to M/s BAC Co. during the P.Y. 2024-25. M/s XYZ Ltd. purchased
Particulars Amount (`) Amount (`) coal of ` 55 lakhs from Kishore & Sons for trading purpose in July 2024. Turnover of M/s XYZ Ltd. during
Income from Salary (Computed) 27,40,000 the P.Y. 2023-24 was ` 12 crores. PAN is duly furnished by the buyer and seller to each other. Details of sale
to and payments from M/s BAC Co. by Kishore & Sons are as follows:
Income from house property
S. No. Date of sale Date of receipt/ Payment Amount (`)
Income from let out property in Kanpur 5,50,000
1 29.05.2024 10.05.2024 35,00,000
Less: Set off of loss from let out property in Delhi (3,75,000)
2 30.06.2024 10.07.2024 25,00,000

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 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
3 25.11.2024 25.10.2024 8,00,000 1. (a) 2. (d) 3. (a) 4. (a) 5. (d)
4 20.01.2025 22.01.2025 15,00,000
5 01.03.2025 15.02.2025 12,00,000 Question 23 [Topic Covered: TDS & TCS]
Examine the TDS/TCS implications in the cases mentioned hereunder–
Turnover of M/s BAC Co. during the P.Y. 2023-24 was ` 11 crores. The above amounts were credited to
Kishore & Sons account in the books of M/s BAC Co. on the date of sale. M/s BAC Co. furnishes a declaration (i) On 1.6.2024, Mr. Ganesh made three nine months fixed deposits of ` 3 lakh each, carrying interest@9%
to Kishore & Sons that coal is to be utilised for generation of power. p.a. with Dwarka Branch, Janakpuri Branch and Rohini Branch of XYZ Bank, a bank which has adopted
Based on the above facts, choose the most appropriate answer to Q. No. 1 to 5 – CBS. The fixed deposits mature on 28.2.2025.
1. Who is required to deduct/collect tax at source in respect of lease of coal mine by the State Government of (ii) On 1.10.2024, Mr. Rajesh started a six months recurring deposit of ` 2,00,000 per month@8% p.a. with
Hyderabad to Kishore & Sons and at what rate? PQR Bank. The recurring deposit matures on 31.3.2025
(a) State Government of Hyderabad is liable to collect tax at source @ 2% on ` 11 crores (iii) Mr. X, a resident, is due to receive ` 4.50 lakhs on 31.3.2025, towards maturity proceeds of LIC policy
(b) State Government of Hyderabad is liable to collect tax at source @0.1% on ` 10.50 crores, being the taken on 1.4.2022, for which the sum assured is ` 4 lakhs and the annual premium is ` 1,25,000.
amount exceeding ` 50 lakhs (iv) Mr. Y, a resident, is due to receive ` 3.95 lakhs on 31.3.2025 on LIC policy taken on 31.3.2012, for
(c) Kishore & Sons is liable to deduct tax at source @0.1% on ` 10.50 crores, being the amount exceeding which the sum assured is ` 3.50 lakhs and the annual premium is ` 30,100.
` 50 lakhs (v) Mr. Z, a resident, is due to receive ` 95,000 on 1.8.2024 towards maturity proceeds of LIC policy taken
(d) Neither State Government of Hyderabad is liable to collect tax at source nor Kishore & Sons is liable on 1.8.2018 for which the sum assured is ` 90,000 and the annual premium was ` 10,000.
to deduct tax at source (vi) Mr. X, a salaried individual, pays rent of ` 55,000 per month to Mr. Y from June, 2024 for immovable
2. Is Kishore & Sons required to collect tax at source in respect of the sale transactions with M/s BAC Co. If property. Is he required to deduct tax at source? If so, when is he required to deduct tax? Also, compute
yes, when and what is the amount of tax to be collected? the amount of tax to be deducted at source.
(a) Yes; ` 1,000 on 30.6.2024, ` 800 on 25.10.2024, ` 1,500 on 20.1.2025 and ` 1,200 on 15.2.2025 Would your answer change if Mr. X vacated the premises on 31st December, 2024? Also, what would
(b) Yes; ` 35,000 on 10.5.2024, ` 25,000 on 30.6.2024, ` 8,000 on 25.10.2024, ` 15,000 on 20.1.2025 and be your answer if Mr. Y does not provide his PAN to Mr. X?
` 12,000 on 15.2.2025 (vii) XYZ Ltd. makes a payment of ` 28,000 to Mr. Ganesh on 2.8.2024 towards fees for professional services
(c) Yes; ` 1,000 on 10.7.2024, ` 800 on 25.10.2024, ` 1,500 on 22.1.2025 and ` 1,200 on 15.2.2025 and another payment of ` 25,000 to him on the same date towards fees for technical services. Discuss
(d) No, Kishore & Sons is not liable to collect tax at source whether TDS provisions u/s 194J are attracted.
3. Is Kishore & Sons required to collect tax at source in respect of the sale transaction with M/s XYZ Ltd. If (viii) Payment of ` 2,00,000 to Mr. R by S Ltd., a transporter who owns 8 goods carriages throughout the
yes, what is the amount of tax to be collected? previous year and furnishes a declaration to this effect alongwith his PAN.
(a) Yes; ` 55,000 (ix) ABC and Co. Ltd. paid ` 19,000 to one of its directors as sitting fees on 01-01-2025.
(b) Yes; ` 5,500
(x) Fee paid on 1.12.2024 to Dr. Srivatsan by Sundar (HUF) ` 35,000 for surgery performed on a member
(c) Yes; ` 500 of the family.
(d) No, Kishore & Sons is not liable to collect tax at source (xi) ` 2,00,000 paid to Mr. A, a resident individual, on 22-02-2025 by the State of Uttar Pradesh on
4. Is M/s BAC Co. required to deduct tax at source in respect of the purchase transactions with Kishore & compulsory acquisition of his urban land.
Sons. If yes, when and what is the amount of tax to be deducted? (xii) Mr. Rohit transferred a residential house property to Mr. Arun for ` 45 lacs. The stamp duty value of
(a) Yes; ` 1,000 on 30.6.2024, ` 800 on 25.10.2024, ` 1,500 on 20.1.2025 and ` 1,200 on 15.2.2025 such property is ` 55 lacs.
(b) Yes; ` 3,500 on 10.5.2024, ` 2,500 on 30.6.2024, ` 800 on 25.10.2024, ` 1,500 on 20.1.2025 and ` (xiii) Rashi Limited is engaged by Jigar Limited for the sole purpose of business of operation of call centre.
1,200 on 15.2.2025 On 18-03-2025, the total amount credited by Jigar Limited in the ledger account of Rashi Limited is `
(c) Yes; ` 1,000 on 10.7.2024, ` 800 on 25.10.2024, ` 1,500 on 22.1.2025 and ` 1,200 on 15.2.2025 70,000 regarding service charges of call centre. The amount is paid through cheque on 28-03-2025 by
(d) No, M/s BAC Co. is not liable to deduct tax at source Jigar Limited.
5. Assume for the purpose of this MCQ, M/s BAC Co.’s turnover for the F.Y. 2023-24 was ` 9 crore, who (xiv) Ms. Mohit won a lucky draw prize of ` 21,000. The lucky draw was organized by M/s. Maximus Retail
will be required to deduct/ collect tax at source in respect of transactions between Kishore & Sons and M/s Ltd. for its customer.
BAC Co. and at what rate?
(a) Kishore & Sons is liable to collect tax at source @1% of ` 95 lakhs Answer
(b) Kishore & Sons is liable to collect tax at source @0.1% of ` 45 lakhs, being the sum exceeding ` 50 (i) XYZ Bank has to deduct tax at source@10% u/s 194A, since the aggregate interest on fixed deposit with
lakhs the three branches of the bank is ` 60,750 [3,00,000 × 3 × 9% × 9/12], which exceeds the threshold limit
(c) M/s BAC Co. is liable to deduct tax at source @0.1% of ` 45 lakhs, being the sum exceeding ` 50 lakhs of ` 40,000. Since XYZ Bank has adopted CBS, the aggregate interest credited/paid by all branches has
to be considered. Since the aggregate interest of ` 60,750 exceeds the threshold limit of ` 40,000, tax has
(d) Neither Kishore & Sons is liable to collect tax at source nor M/s BAC Co. is liable to deduct tax at to be deducted@10% u/s 194A.
source
(ii) No tax has to be deducted u/s 194A by PQR Bank on the interest of ` 28,000 falling due on recurring
Answer deposit on 31.3.2025 to Mr. Rajesh, since such interest does not exceed the threshold limit of ` 40,000.

CA Bhanwar Borana 45 46 CA Bhanwar Borana

 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
(iii) Since the annual premium exceeds 10% of sum assured in respect of a policy taken after 31.3.2012, the or aggregate of payments exceeded ` 50 lakhs in the P.Y.2024-25. However, since the payment does not
maturity proceeds of ` 4.50 lakhs due on 31.3.2025 are not exempt u/s 10(10D) in the hands of Mr. X. exceed ` 50 lakh in this case, there is no liability to deduct tax at source u/s 194M also.
Therefore, tax is required to be deducted@2% u/s 194DA on the amount of income comprised therein (xi) As per section 194LA, any person responsible for payment to a resident, any sum in the nature of
i.e., on ` 75,000 (` 4,50,000, being maturity proceeds - ` 3,75,000, being the aggregate amount of compensation or consideration on account of compulsory acquisition under any law, of any immovable
insurance premium paid). property, is required to deduct tax at source, if such payment or the aggregate amount of such payments
(iv) Since the annual premium is less than 20% of sum assured in respect of a policy taken before 1.4.2012, to the resident during the financial year exceeds ` 2,50,000.
the sum of ` 3.95 lakhs due to Mr. Y would be exempt u/s 10(10D) in his hands. Hence, no tax is required In the given case, there is no liability to deduct tax at source as the payment made to Mr. A does not
to be deducted at source u/s 194DA on such sum payable to Mr. Y. exceed ` 2,50,000.
(v) Even though the annual premium exceeds 10% of sum assured in respect of a policy taken after 31.3.2012, (xii) On payment of sale consideration for purchase of residential house property – As per section 194-IA if
and consequently, the maturity proceeds of ` 95,000 due on 1.8.2024 would not be exempt u/s 10(10D) consideration or SDV is 50 lakhs or more then TDS @1% applicable on consideration or SDV whichever
in the hands of Mr. Z, the tax deduction provisions u/s 194DA are not attracted since the maturity proceeds is higher. Mr. Arun is required to deduct tax at source u/s 194-IA on 55 lakhs i.e., 55,000.
are less than ` 1 lakh.
(xiii) On payment of call centre service charges - Since Rashi Limited is engaged only in the business of
(vi) Since Mr. X pays rent exceeding ` 50,000 per month in the F.Y. 2024-25, he is liable to deduct tax at operation of call centre, Jigar Limited is required deduct tax at source@2% on the amount of ` 70,000 u/s
source @2% of such rent for F.Y. 2024-25 u/s 194-IB. Thus, ` 11,000 [` 55,000 x 2% x 10] has to be 194J on 18.3.2025 i.e., at the time of credit of call centre service charges to the account of Rashi Limited,
deducted from rent payable for March, 2025. since the said date is earlier than the payment date i.e., 28.3.2025.
If Mr. X vacated the premises in December, 2024, then tax of ` 7,700 [` 55,000 x 2% x 7] has to be (xiv) On payment of prize winnings of ` 21,000 -Tax is deductible @ 30% u/s 194B by M/s. Maximus Retail
deducted from rent payable for December, 2024. Ltd.., from the prize money of ` 21,000 payable to the customer, since the winnings exceed ` 10,000.
In case Mr. Y does not provide his PAN to Mr. X, tax would be deductible@20%, instead of 2%.
In case 1 above, this would amount to ` 1,10,000 [` 55,000 x 20% x 10], but the same has to be restricted Question 24 [Topic Covered: Return Filing]
to ` 55,000, being rent for March, 2025. Examine whether the following persons are required to file return of income for A.Y.2025-26, giving brief
In case 2 above, this would amount to ` 77,000 [` 55,000 x 20% x 7], but the same has to be restricted to reasons for your answer –
` 55,000, being rent for December, 2024.
(i) Mr. Albert, aged 31 years, whose turnover from business is ` 70 lakhs for the P.Y.2024-25 and
(vii) TDS provisions u/s 194J would not get attracted, since the limit of ` 30,000 is applicable for fees for
whose total income computed as per books of account is ` 2 lakhs. This is the first year of his
professional services and fees for technical services, separately. It is assumed that there is no other
business. He has no other income. He is not claiming any deduction under Chapter VI-A or section
payment to Mr. Ganesh towards fees for professional services and fees for technical services during the
10AA.
P.Y.2024-25
(viii) No tax is required to be deducted at source u/s 194C by M/s S Ltd. on payment to transporter Mr. R, since (ii) Mr. Ashish, aged 42 years, has gross receipts of ` 5 lakhs from profession and profits and gains of
he satisfies the following conditions: ` 2.50 lakhs (computed) from profession for the P.Y. 2024-25. In addition, he has interest of ` 4
lakhs on fixed deposits and ` 50,000 from savings bank account.
-He owns ten or less goods carriages at any time during the previous year.
-He is engaged in the business of plying, hiring or leasing goods carriages; (iii) M/s. ABC & Co., a law firm, whose gross receipts from profession for the P.Y.2024-25 is ` 9 lakhs.
-He has furnished a declaration to this effect along with his PAN. (iv) XYZ (P) Ltd. which has incurred expenditure of an amount of ` 95,000 towards consumption of
(ix) Section 194J provides for deduction of tax at source @10% from any sum paid by way of any electricity in the F.Y.2024-25.
remuneration or fees or commission, by whatever name called, to a resident director, which is not in the (v) Mr. Vallish, aged 58 years, who has deposited ` 50 lakhs in his savings bank account with SBI on
nature of salary on which tax is deductible u/s 192. The threshold limit of ` 30,000 upto which the 28th March, 2025. The said sum was received as a gift from his son, Mr. Rishi, aged 30 years, who
provisions of tax deduction at source are not attracted in respect of every other payment covered u/s 194J is employed in a company. Mr. Vallish used the said sum to purchase a flat for ` 30 lakhs on 25th
is, however, not applicable in respect of sum paid to a director. April, 2025 for self-residence. The balance money was transferred to a 1-year fixed deposit on 28th
Therefore, tax@10% has to be deducted at source u/s 194J in respect of the sum of ` 19,000 paid by ABC April, 2025. Mr. Vallish does not maintain any other bank account. He is not in receipt of any other
Ltd. to its director. source of income other than interest on this fixed deposit.
Therefore, the amount of tax to be deducted at source: = ` 19,000 x 10% = ` 1,900 (vi) Mr. Ravi Prakash, a resident Indian aged 52 years, gifted a sum of ` 30 lakhs to his wife Mrs. Sudha
(x) As per the provisions of section 194J, a Hindu Undivided Family is required to deduct tax at source on on the occasion of her 50th birthday. Out of the said sum, Mrs. Sudha purchased a car for ` 29,52,000
fees paid for professional services only if the total sales, gross receipts or turnover form the business or inclusive of RTO charges of ` 2,15,000, insurance of ` 51,575, extended warranty of ` 25,255 and
profession exceed ` 1 crore in case of business or ` 50 lakhs in case of profession, as the case may be, in accessories charges of ` 35,460 during the P.Y. 2024-25. These charges were shown separately in
the financial year preceding the current financial year and such payment made for professional services the invoice. Mrs. Sudha’s furnished her Aadhaar No. to the dealer. She is a housewife and does not
is not exclusively for the personal purpose of any member of Hindu Undivided Family. have any income except rental income of ` 25,000 p.m. in respect of a house property gifted to her
Section 194M, provides for deduction of tax at source by a HUF (which is not required to deduct tax at by her father.
source u/s 194J) in respect of fees for professional service if such sum or aggregate of such sum exceeds Mr. Ravi Prakash is of the opinion that his wife is not required to furnish return of income, since
` 50 lakhs during the financial year. her total income does not exceed the basic exemption limit. Examine.
In the given case, the fees for professional service to Dr. Srivatsan is paid on 1.12.2024 for a personal
Answer
purpose, therefore, section 194J is not attracted. Section 194M would have been attracted, if the payment

CA Bhanwar Borana 47 48 CA Bhanwar Borana

 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
Requirement of filing return of income Rule 12AB, inter alia, prescribes that any person other than a company or a firm, who is not required
to furnish a return u/s 139(1), has to file income-tax return in the prescribed form and manner on or
(i) Yes, Mr. Albert is required to file his return of income for A.Y.2025-26.
before the due date if, the aggregate of tax deducted at source and tax collected at source during the
As per section 139(1)(b), an individual is required to file his return if his total income, without giving previous year, in case of such person, is ` 25,000 or more.
effect to deductions under, inter alia, Chapter VI-A and section 10AA, exceeds the basic exemption
Accordingly, it has to be examined whether, in Mrs. Sudha’s case, the requirement to file return for
limit. In this case, Mr. Albert’s total income of ` 2,00,000 is lower than the basic exemption limit of
A.Y.2025-26 arises due to TDS/TCS, in her case, exceeding ` 25,000 in the P.Y.2025-26.
` 2,50,000 or ` 3,00,000. However, such person referred to in section 139(1)(b) who is not required
to file his return on account of his total income being lower than the basic exemption limit would be As per section 206C(1F), every person, being a seller, who receives any amount as consideration for
required to file return of income if, inter alia, his turnover in business exceeds ` 60 lakhs. In this case, sale of a motor vehicle of the value exceeding ` 10 lakhs, has to collect tax from the buyer @1% of
since Mr. Albert’s turnover from business for the P.Y.2024-25 is ` 70 lakhs, he has to file return of the sale consideration.
his income for A.Y.2025-26. Accordingly, dealer of the car is required to collect tax at source of ` 26,247 @1% on ex-showroom
price i.e., ` 26,24,710 (` 29,52,000 – ` 2,15,000 – ` 51,575 – ` 25,255 – ` 35,460) from Mrs. Sudha,
(ii) Yes, Mr. Ashish is required to file his return of income for A.Y.2025-26.
being the buyer of the car.
Mr. Ashish’s total income for A.Y.2025-26 without giving effect to Chapter VI-A deductions is ` 7
Hence, as per the seventh proviso to section 139(1) read with Rule 12AB, Mrs. Sudha is required to
lakhs [` 2.50 lakhs from profession + ` 4 lakhs interest on fixed deposits + ` 0.50 lakhs interest on
mandatorily file her return of income for A.Y.2025-26, even though her gross total income/total
savings bank account], which exceeds the basic exemption limit of ` 2,50,000. Hence, he is required
income does not exceed the basic exemption limit, since tax collected at source during the P.Y. 2024
to file his return of income for A.Y.2025-26 as per section 139(1)(b).
25, in her case is ` 26,247 which exceeds the threshold of ` 25,000.
Note - The threshold limit of ` 10 lakhs for gross receipts in profession has to be looked into only in
a case where an individual referred to in section 139(1)(b) is not required to file his return of income
thereunder i.e., only if Ashish’s total income without giving effect to Chapter VI-A deductions is lower Question 25 [Topic Covered: Return Filing]
than the basic exemption limit. (i) Mr. Sudarshan, due to inadvertent reasons, failed to file his Income-tax return for the assessment year
(iii) Yes, M/s. ABC & Co. is required to file its return of income for A.Y.2025-26. 2025-26 on or before the due date of filing such return of income.
As per section 139(1)(a), a firm is compulsorily required to file its return of income. The threshold (a) Can he file the above return after due date of filing return of income? If yes, which is the last date for
limit of ` 10 lakhs for gross receipts in profession is relevant only for a person other than a company filing the above return?
or a firm. (b) What are the consequences of non-filing the return within the due date u/s 139(1)?
(iv) Yes, XYZ (P) Ltd. is required to file its return of income for A.Y.2025-26. (ii) To whom the provisions of section 139AA relating to quoting of Aadhar Number do not apply?
As per section 139(1)(a), a company has to mandatorily file its return of income. The condition of (iii) Mrs. Hetal, an individual engaged in the business of Beauty Parlour, has got her books of account for the
filing of return of income where expenditure towards consumption of electricity exceeds ` 1 lakh financial year ended on 31st March, 2025 audited u/s 44AB. Her total income for the assessment year
applies to a person other than a company or a firm. 2025-26 is ` 6,35,000. She wants to furnish her return of income for assessment year 2025-26 through a
tax return preparer. Can she do so?
(v) Yes, Mr. Vallish is required to file his return of income for A.Y.2025-26. Answer
Gift of ` 50 lakhs received from son is not taxable u/s 56(2)(x) in the hands of Mr. Vallish, since his (i) If any person fails to furnish a return within the time allowed to him u/s 139(1), he may furnish the belated
son is his relative, and gifts from a relative are excluded from the applicability of section 56(2)(x). return for any previous year at any time -
The only income of Mr. Vallish for the P.Y.2024-25 would be interest on savings account for a period
of 4 days from 28th March, 2025 to 31st March, 2025 on ` 50 lakhs, which would be lower than the (a) 3 months prior to the end of the relevant assessment year; or
basic exemption limit. As per section 139(1)(b), an individual is required to file his return if his total (b) before the completion of the assessment,
income exceeds the basic exemption limit. In this case, Mr. Vallish’s total income is lower than the whichever is earlier.
basic exemption limit of ` 2,50,000 or ` 3,00,000. The last date for filing return of income for A.Y.2025-26, therefore, is 31st December 2025. Thereafter,
However, such person referred to in section 139(1)(b) who is not required to file his return on account Mr. Sudarshan cannot furnish a belated return after this date.
of his total income being lower than the basic exemption limit would be required to file return of Consequences for non-filing return of Income within the due date u/s 139(1)
income if, inter alia, the deposit in his savings account is ` 50 lakhs or more during the previous year.
Carry forward and set-off of certain losses: Business loss, speculation business loss, loss from specified
Since a deposit of ` 50 lakhs has been made in the savings account of Mr. Vallish in the P.Y.2024-25, business u/s 35AD, loss under the head “Capital Gains”; and loss from the activity of owning and
he is required to file his return of income for A.Y.2025-26. maintaining race horses, would not be allowed to be carried forward for set-off against income of
(vi) Mrs. Sudha’s income from house property would be ` 2,10,000 (` 3,00,000 less 30% of net annual subsequent years, where a return of income is not furnished within the time allowed u/s 139(1).
value). Since this is her only source of income, her gross total income/total income for A.Y.2025-26 Interest u/s 234A: Interest u/s 234A@1% per month or part of the month for the period commencing from
would be ` 2,10,000, which is lower than the basic exemption limit. Hence, she is not required file the date immediately following the due date u/s 139(1) till the date of furnishing of return of income is
her return of income for A.Y.2025-26 as per section 139(1)(b), since her gross total income/total payable, where the return of income is furnished after the due date.
income does not exceed the basic exemption limit of ` 2,50,000. Fee u/s 234F: Fee of ` 5,000 would be payable u/s 234F, if the return of income is not filed on or before
However, proviso of section 139(1) provides that a person (other than a company or a firm) who is the due date specified in section 139(1). However, such fee cannot exceed ` 1,000, if the total income does
not required to furnish a return u/s 139(1) has to furnish return on or before the due date if he/she not exceed` 5,00,000.
fulfills such other conditions as may be prescribed under Rule 12AB. (ii) Persons to whom provisions of section 139AA relating to quoting of Aadhar Number does not apply

CA Bhanwar Borana 49 50 CA Bhanwar Borana

 Super 30 Questions for CA Inter MAY 25 Exams Super 30 Questions for CA Inter MAY 25 Exams
The provisions of section 139AA relating to quoting of Aadhar Number would not apply to an individual If an individual satisfies any one of the conditions mentioned above, he is a resident. If both the above
who does not possess the Aadhar number and is: conditions are not satisfied, the individual is a non-resident.
(i) residing in the States of Assam, Jammu & Kashmir and Meghalaya; During the previous year 2024-25, Mr. Thomas was in India for 75 days and during the 4 years preceding
(ii) a non-resident as per Income-tax Act, 1961; the previous year 2024-25, he was in India for 360 days (i.e. 50+ 65+ 95+ 150 days).
(iii) of the age of 80 years or more at any time during the previous year; The total stay of the Mr. Thomas during the previous year in India was less than 182 days and during the
four years preceding this year was for 360 days. Therefore, due to non-fulfillment of any of the two
(iv) not a citizen of India
conditions for a resident, he would be treated as non-resident for the Assessment Year 2025-26.
(iii) Section 139B provides a scheme for submission of return of income for any assessment year through a
(1) Not taxable, since interest payable by a non-resident to another non-resident would be deemed to accrue
Tax Return Preparer. However, it is not applicable to persons whose books of account are required to be
or arise in India only if the borrowed fund is used for the purposes of business or profession carried on
audited u/s 44AB. Therefore, Mrs. Hetal cannot furnish her return of income for A.Y.2024-25 through a
by him in India. In this case, it is used for investing in Indian company’s debt fund for earning interest
Tax Return Preparer.
and not for the purposes of business or profession. Hence, it is not taxable in India.
(2) No income shall be deemed to accrue or arise to Mr. Thomas through or from activities which are
Question 26 [Topic Covered: Residential Status, PAN & Adv Tax] confined to the collection of news and views in India for transmission outside India. Hence, ` 10 lakhs
(a) Mr. Thomas, a citizen of Japan, comes to India for the first time during the P.Y. 2020-21. During the is not taxable in India in the hands of Mr. Thomas.
financial years 2020-21, 2021-22, 2022-23, 2023-24 and 2024-25, he was in India for 50 days, 65 days, 95 (3) ` 10 lakhs is deemed to accrue or arise in India to Mr. Thomas, a non-resident, since it represents
days, 150 days and 75 days, respectively. Determine his residential status for the A.Y. 2025-26. Examine royalty/fees for technical services paid for services utilized in India, in this case, for setting up a Steel
the tax implications in the hands of Mr. Thomas for the Assessment Year 2025-26 of the following manufacturing plant in India. Hence, the same would be taxable in India in the hands of Mr. Thomas.
transactions entered by him.
(b)
(1) Interest received from Mr. Michel, a non-resident outside India (The borrowed fund is used by Mr.
Michel for investing in Indian company's debt fund for earning interest). Transaction Is quoting of PAN mandatory in related
(2) He is also engaged in the business of running news agency and earned income of ` 5 lakhs from documents?
collection of news and views in India for transmission outside India. 1. Payment of life insurance premium of ` 40,000 No, since the amount paid does not exceed
(3) He entered into an agreement with ABC & Co., a partnership firm for transfer of technical documents in the F.Y.2024-25 by account payee cheque to ` 50,000 in the F.Y.2024-25.
and design and for providing services relating thereto, to set up a Steel manufacturing plant, in India. LIC for insuring life of self and spouse
He charged ` 15 lakhs for these services from ABC & Co. 2. Payment of ` 1,10,000 to RBI for acquiring its Yes, since the amount paid exceeds ` 50,000
(b) Mr. Naksh has undertaken certain transactions during the F.Y.2024-25, which are listed below. You are bonds
required to identify the transactions in respect of which quoting of PAN is mandatory in the related
documents – 3. Applied to SBI for issue of credit card. Yes, quoting of PAN is mandatory on making an
application to a banking company for issue of
S. No. Transaction credit card.
1. Payment of life insurance premium of ` 40,000 in the F.Y.2024-25 by account payee cheque 4. Payment of ` 1,00,000 by account payee cheque No, since the amount was paid by account payee
to LIC for insuring life of self and spouse to travel agent for travel to Dubai for 3 days to cheque, quoting of PAN is not mandatory even
2. Payment of ` 1,10,000 to RBI for acquiring its bonds visit though the payment exceeds ` 50,000

3. Applied for issue of credit card to SBI (c) Computation of advance tax of Ms. Soha under Presumptive Income scheme as per section 44AD
The total turnover of Ms. Soha, a dealer of scooter, is ` 110 lakhs. Since her total turnover from such business
4. Payment of ` 1,00,000 by account payee cheque to travel agent for travel to Singapore for is less than ` 200 lakhs and she does not wish to get his books of account audited, she can opt for presumptive
3 days to visit tax scheme u/s 44AD.
(c) Ms. Soha (aged 35 years), a resident individual, is a dealer of scooters. During the previous year 2024-25, Profits and gains from business computed u/s 44AD:
total turnover of her business was ` 110 lakhs (out of which ` 25 lakhs was received by way of account Particulars `
payee cheques and balance in cash). Ms. Soha does not opt to pay tax as per the provisions of section
115BAC. 6% of ` 25 lakhs, being turnover effected through account payee cheque 1,50,000
8% of ` 85 lakhs, being cash turnover 6,80,000
What would be your advice to Ms. Soha relating to the provisions of advance tax with its due date along
with the amount payable, assuming that she wishes to make maximum tax savings. 8,30,000
Answer An eligible assessee opting for computation of profits and gains of business on presumptive basis u/s 44AD in
(a) U/s 6(1), an individual is said to be resident in India in any previous year, if he satisfies any one of the respect of eligible business is required to pay advance tax of the whole amount on or before 15th March of the
following conditions: financial year.
(i) He has been in India during the previous year for a total period of 182 days or more, or Computation of tax liability of Ms. Soha as per normal provisions of Income-tax Act, 1961
(ii) He has been in India during the 4 years immediately preceding the previous year for a total period of Particulars Amount in `
365 days or more and has been in India for at least 60 days in the previous year.

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 Super 30 Questions for CA Inter MAY 25 Exams 2
Total Income 8,30,000
Tax on 8,30,000
Upto ` 2,50,000 Nil
` 2,50,001 – ` 5,00,000@5% 12,500
` 5,00,001 – ` 8,30,000@20% 66,000 78,500
Add: Health and Education cess@4% 3,140
Tax liability 81,640
Accordingly, she is required to pay advance tax of ` 81,640 on or before 15th March of the financial year.
However, any amount by way of advance tax on or before 31st March of the financial year shall also be treated
as advance tax paid during the financial year ending on that day for all the purposes of the Act.

CA Bhanwar Borana 53
 Lee CoA
Answer MRRaghav 1424 25742526
stept Cost 604 40
Computation
of TotalIncome as per default tax Regime VIS 715BAC 249.0000
Step2 a Fmv on 31 1 18 301

b Fuel 361 3000000 30 00.000

Income from
salary TCG VISIIZA 60.0.000
Basic 170000mn Smonty Income from other sources
salary 1360000
DA Interns 80.000 smouts 640000 Giff from friend 200000
Commisting 320001 8m 256000 Interst on Bank FD 100000
Transport Allowance 5000 8m 900 100
40.000
9 14000
Medical Reimbursement 10000 Intest on SB AC
Gratuity Reed 250.0000 3.14.000
Les ExemptV15 0110
i 1 2 AugswayAm Noofyears Grass TotalIncome 47.8.5000
1
ofservice
2 250000 loyens 1250000
Leif Dean UIC III A N A
117 ActualAmtReed
2500000
1 Max 20.00.000 0.000
200000 124 1250000
TotalIncome NettaxableIncome 478.5000

Goussaray 3516.000
Less Standard Dean vis 16 ia 75000
Netsalary 35.11.000 Cain of Taxliability
Profit Gain from Buiners or profering 759 Vis 112A 12.5 in excess 125000 475000 12 57 59375
of
Income from Hiring Vehicles 600000 125000

Heavy tenious 4 20.000 3 me 240000 Tax on BalanceIncome 6185900

Othervehicus UX 7500 4m 120000 unto 300.000
TGBP 360000 300000 upto700.000 57 20.000
CapitalGain on sale 60.000Shares 700000 Unto 10.0.0000 10 30.000
of
100.0000 Upto 1200.000 157 30,000
FOE 60.000 60 36.00.000 1200.000 upto 1500000 20 60,000
 1500000unto 30
41850.00 805501 945500
1004875 Cain Tax
of liability
Add.HEC 4 40195 759 Vis 112A 12.5 in excess 125000 475000 12 57 59375
of
Net tax 1045070 600000 125000
liably
Tax on BalanceIncome
unto 300.000
BEB Computation
of
Total Income asperNormalprov of IncomeTax optont 300.000unto5000.00 5 100.08
FromIISBAC
7500000 Unto10.00.000 20 100000
1000000 unto 3960000 30 888000 998000
GTI asper see 115B 47.85.000 1057375
Add Dean VISIG As under Normalion dean 25.000 Add HEC 4 42295
Allowedis
only 50.000 Net tax Lab 10,99670
4010000

Les DeanuicVT A
110000
insurancepolicypremium 20000 130000
LIC Pension scheme 25000
DEC
155000
Aspersee DOICE Soc Soccc SOCCID
Restricted to 150000 150000 50000
80C medical 1ns Premium 60.000
Incaseof senior Citizen Max Allowed 50.000 50000

80GB Intent on Deposites 50000

Total income 45,60000

 MR Surem MY 24 25 Ap 25.26

of Total Income
Computation as per Normal prov
of IT
Particular

Income from House

Property
Rent Reed GrossAnnualvalue 720.000
Maffy

Lee Std dean 304

ofNAL 216000 504010

Prostfrom Business or Bopersion

IBP
Net profit as per Pbl Ale 73.52.815
Add Disalloned Items consider
separately
I Dep as per Boors Ace's 182000
1 Income tax paid of
for 142233 34.5.000
111
Income tax Fees VIS 234 F NotAllowed 1000
9 CASH
salaryPaid insingledaytosingleperson 30.000
Not Allowed due to see MOA 3
4 Interest on loan taken From MBFC
Personal Purpose 115000
71 23000
Burners Purpure 30 disallowed As725
27600
NotDeducted See 40 a ia 92000 307
1
Advtg in the SouvenirofPoliticalParty Not 25,000 633600
Allowed
7986415
Less Allowed Items considerseparatay
Divided from Indian companies 172.0000
111 Intent on F D 108000
111
Rent Reed 7.20.000
1
N income
tax Refund 19.000
 V7 Dep as per Incometax Rutes 27 87000 Nettax liability
2.20.000 23,85556
5199415 Les TDS 12000

Advance 900000
Add stock Adjustment Closingstoneunderrated 55,000 Nettax Payable 14,73 556
PEEP 52.54.415 if 14,731
60

Income from other sources

Divided from Indian Companies 1720.000

Intent on 0 100 120000
1009

Intest on IncometaxRefund 2500 1842500

GrossTotalIncome GTI 76,00915
Lers Dedutin VIC II A
800 Health Insurance premium 35000
25000
man Alonded is 2500g
8049C in the souvenir
tag of
Politicalparty is not treatedas
Donation to political
party
NTI TotalIncome 7575,915

Computation
of Tax Payable
Unto 250.000
7250000Unto 500000 57 12500
500000 unto 1000.000 200 100000
1001000 Unto 7575915 30 1972775 2085276
Add Surcharge 10 208528
22,93804

Add HEC 4 91752

 MR Alok 1424 25 742526
PGA Computation
of TotalIncome Taxliability asper DefaulttaxRegimeUis IBAC

Income from HorseProperty

Gras Annual rate ActualRent 35000 12m 420000
bers municipal taxes paid 8200
Net Annual rate 611800
Leg Federtion VIS 24
a Std dean 30 123540
OfNAV
b Intent on loan 201500 86760
Profit Gain fromBusiness or profession
Feesfrom legal service 49.60.000

Leif Exps Allowed VIS 301037

StaffSalay Boring 17.50.000

OtherGeneral Admin exps 22.00.008

Office Rent 148000

Motor CARMaint 72000 213 48000
Dep on Assets
motor CAR 950000 15 50 213 47500

Books 80000 Uat 32.000

Computer 52000 407 507 70400 4235900

PGP 724100

Income from speculative BusinessBusiness 12.0.000

20000
Is loss from speculateBusiness
speculateBuiners loss can besetoff onlyagainst
Spectate BusinessIncome so remaininglossof
 ng of 1
60,000 Shall be CIF for Next YAYIS if 45 20

IB Computer
ofTotalIncome Taxliabilyifasserseeopt.outfoms.ee isBAC
ofCapitalGain
Computation

TCG on sale GrasTetedIncome as computedAbove 1054860

oflistedshares VIS 112A
For 595.000 Leg Deduction VIC VI A

WE IC i life insurancePremium 49000

cost 121800 1 Repayment 180000
15800 75 ofHovingloan
11 a Fmv 31 1 18
435000 111 PPF 50000
b tree 595000 435000 435000 379000
169000
Max Allowed is 150000 50000

Incomefrom other sources 806 Donahm to Pm CaresFend 121000

CASH 80466 Donation to Polihey 350000
Gift from friends 21000 4 84000 party
Since in money morethan 50,000 Totellcome 433860
gift
so it is Fully taxable
GrasTotallmome 1054860 759 visita 12.5 in excess
of 125000 4375
NotAvailable 35000 12 57
Leg DeanVIC VI A

TetedIncome 1054860 1 Tax on Bal Income 433860 160.000 273860

Unto 250000
Computation
ofTaxliability 7250000 Upto 273860 57 1193
1 Tax on LT G vis 12.5 in excess of 125000
5568
IIa
160000 125000 35000 12.57 4375 Less Rebate VIS OFA
Taxon Balanceincome 1054860 160000 894860 1 Tax Amt 1193
1 12500 12500 1193
Unto 3000.00
300000 Unto700.000 57 2,0000 4375
700.000 Unto894860 10 19486 39486 Add HEC 4 175
43861 4550
Nettax liability
1754
AT HEC 4
Nettaxliably 45,615
Question : 30 GrassTotal Income 3150000
Mr. Daksh acquire house property on 10 July 1996 for ₹ 25 Lakhs. Totalthrome
FMV of property as on 1 April 2001 is ₹ 50 Lakhs . He sold the calm
of Tax liability
house property for ₹1 crore. He also sold some listed shares of is 419 12.5 inexiers
on sale
ofshares
vis 1121 of 125000J
reliance industries Limited on 10 October 2024 and LTCG is ₹ 98 1650000 125.000
Lakhs. His income from House property is ₹ 15 lakhs. 1525000 12.57 190625
Calculate total income and tax liability of Mr Daksh as per default 1 Bal NTI Tax
tax regime if he transfer house property:- Upto 300000
(A) 15th June 2024 300000 Unto700000 57 200.00
(B) 14th Feb 2025. 700000 Unto 10.00.000 10 300.00
100.0000unto 1200000 157 30,000
A If HP Transfer on 15 6 2029 1200.000 upto 1500000 20 60001 140000
330625
of Toted Income
Computation

Add HE 106 13225

343850
Nettentiably
Income from HouseProperly 150.0000
3 If HPtransfer on 14 2 25
Income from capital Computer Total Income
gain of
1 416 on sale of listedshares
of RFC 90.00.000
Income From Hp 1500.000
1 LTCC on sale CapitalGain
ofHP on 151612024
Free HCG on sale 9800000
10.000,000 of shares
ICOA LTG on try of HP
Troe 10.0.00.000
Tilting 35099mm 36312ns
100 01 02
1.81.50.000
81.50.000 81,50000
GA 500.0000

LTIL 419 5090000 5010000

of sale ofHP of 8150000 Canbesetoff
against 1716 on sale ofShares
719 on sale oflistedshares
165
01 Toteneme 1.63.00.000
Camoftax liability

Tax on 17190 s 112A fromshares 9800.000 125.000 1209375

9675000 12.57

Taxonceia of HP
9 12.57 Without Index 50.00000 12.57 625000
b 20 with Index 875.0000 201 Nil Nil

Tax on Bal home 140000

1500.000
Taxesbrete 1369375
202606
Add SECITE
1551781
Add HE 104 62671

Nettenliabity 1859s