Name: Vishisht Nagpal
Roll no. 2022/09/011
Course: B.Com. (H)
Sec: A
INCOME TAX LAWS AND PRACTICES
1. (a) State any four instances where the income of the previous year is
assessable in the previous year itself instead of
the assessment year. (ICAI Pg-1.96) (4 marks)
(b) Mr. David, an Indian citizen aged 40 years, a government employee
serving in the Ministry of External Affairs, left
India for the first time on 31.03.2023 due to his transfer to High
Commission of Canada. He did not visit India any
time during the F.Y. 2023-24. He has received the following income for the
F.Y. 2023-24:
S. No. Particulars Rs.
(i) Salary (Computed) 5,00,000
(ii) Foreign Allowance [not included in (i) above] 4,00,000
(iii) Interest on fixed deposit from bank in India 1,00,000
(iv) Income from agriculture in Nepal 2,00,000
(v) Income from house property in Nepal 2,50,000
Compute his Gross Total Income for A.Y. 2024-25. (ICAI Pg-2.24) (8 marks)
(c) Mr. X has a total income of Rs.16,00,000 for P.Y.2023-24, comprising of
income from house property and interest
on fixed deposits. Compute his tax liability for A.Y.2024-25 under the
default tax regime under section 115BAC.
(ICAI Pg-1.56)
OR
What income is exempted under section 10? What are the special
provisions in
respect of newly established hundred percent export oriented
undertakings? (18 Marks)
(V.K Singhania book page no:39-50.)
2. a) Prem owns a house in Madras. During the previous year 2023-24,
2/3rd portion of the house was self-occupied and 1/3rd portion was let out
for residential purposes at a rent of 8,000p.m. Municipal value of the
property is 3,00,000 p.a., fair rent is 2,70,000 p.a. and standard rent is
3,30,000 p.a. He paid municipal taxes @10% of municipal value during the
year. A loan of ₹25,00,000 was taken by him during the year 2019 for
acquiring the property. loan paid during the previous year 2023-24 was
1,20,000. Compute Prem's income from house property for the A.Y.2024-
25 assuming that he has exercised the option of shifting out of the default
tax regime provided under section 115 BAC (1A).
What would be Prem's income from house property under the default tax
regime? (3.162
ICAI)
b) What are the deductions from Annual Value in Income from House
Property? (3.146 ICAI)
OR
(a) X Ltd. provided the following perquisites to its employee Mr. Y for the
P.Y. 2023-24: (1) Accommodation taken on lease by X Ltd. For Rs.15,000
p.m. Rs.5,000 p.m. is recovered from the salary of Mr. Y. (2) Furniture, for
which the hire charges paid by X Ltd. is Rs.3,000 p.m. No amount is
recovered from the employee in respect of the same. (3) A car of 1,200 cc
which is owned by X Ltd. and given to Mr. Y to be used both for official and
personal purposes. All running and maintenance expenses are fully met
by the employer. He is also provided with a chauffeur.(4) A gift voucher of
Rs.10,000 on his birthday. Compute the value of perquisites chargeable to
tax for the A.Y.2024-25, assuming his salary for perquisite valuation
to be Rs.10 lakh. (ICAI Pg-3.100) (12 marks)
(b) What are the deductions from Annual value in Income from House
Property. (ICAI Pg-3.146) (6 marks)
3. a) How will you calculate the period of holding in case of the following
assets?
(1) Shares held in a company in liquidation
(2) Bonus shares
(3) Flat in a co-operative society
(Page no. 3.373 of ICAI ‘Capital Gains’ pdf.)
b) Prepare pointers performa of PGBP.
(Page no. 3.186 of ICAI ‘Profits and Gains of Business or Profession’ pdf.)
(6+12)
OR
Q3. (a) Mr. Gamma, a proprietor started a business of manufacture of
tyres and tubes for motor vehicles on 1.1.2023. The manufacturing unit
was set up on 1.5.2023. He commenced his manufacturing operations on
1.6.2023.
The total cost of the plant and machinery installed in the unit is R.120
crore. The said plant and machinery included second hand plant and
machinery bought for Rs.20 crore and new plant and machinery for
scientific research relating to the business of the assessee acquired at a
cost of Rs.15 crore.
Compute the amount of depreciation allowable under section 32 of the
Income-tax Act, 1961 in respect of the assessment year 2024-25. Assume
that all the assets were purchased by way of account payee cheque and
Mr.
Gamma has exercised the option of shifting out of the default tax regime
provided under section 115BAC(1A). (ICAI Pg-3.226) (12 marks)
(b) Examine with reasons, the allowability of the following expenses
incurred by Mr. Manav, a wholesale dealer of commodities, under the
Income-tax Act,1961 while computing profit and gains from business or
profession for the A.Y. 2024-25 if he has exercised the option of shifting
out of the default tax regime provided under section
115BAC(1A) -
(i) Construction of school building in compliance with CSR activities
amounting to Rs.5,60,000.
(ii) Purchase of building for the purpose of specified business of setting up
and operating a warehousing facility for storage of food grains amounting
to Rs.4,50,000.
(iii) Interest on loan paid to Mr. X (a resident) Rs.50,000 on which tax has
not been deducted. The sales for the P.Y. 2022-23 was Rs.202 lakhs. Mr. X
has not paid the tax, if any, on such interest.
(iv) Commodities transaction tax paid Rs.20,000 on sale of bullion. (ICAI
Pg-3.346) (6 marks)
Q4. (a) In which of the following situations capital gains tax liability does
not arise?
(i) Mr. A purchased gold in 1970 for Rs.25,000. In the P.Y. 2023-24, he
gifted it to his son at the time of marriage. Fair market value (FMV) of the
gold on the day the gift was made was Rs.1,00,000.
(ii) A house property is purchased by a Hindu undivided family in 1945 for
Rs. 20,000. It is given to one of the family members in the P.Y. 2023-24 at
the time of partition of the family. FMV on the date of partition was
Rs.12,00,000.
(iii) Mr. B purchased 50 convertible debentures for Rs.40,000 in 1995
which are converted into 500 shares worth Rs.85,000 in November 2023
by the company. (ICAI Pg-3.384) (9 marks)
(b) Aarav converts his plot of land purchased in July, 2004 for Rs.80,000
into stock-in-trade on 31st March, 2023. The fair market value as on
31.3.2023 was RS.3,00,000. The stock-in-trade was sold for Rs.3,25,000 in
the month of January, 2024.
Find out the taxable income, if any, and if so under which head of income
and for which Assessment Year? (ICAI Pg-3.472) (9 marks)
OR
(a) Examine, with reasons, whether the following statements are True or
False.
(i) Alienation of a residential house in a transaction of reverse mortgage
under a scheme made and notified by the Central Government is treated
as "transfer" for the purpose of capital gains.
(ii) Zero coupon bonds of eligible corporation, held for 14 months, will be
long-term capital assets.
(iii) Zero Coupon Bond means a bond on which no payment and benefits
are received or receivable before
maturity or redemption. (6 marks)
(b) Mr. Mithun purchased 100 equity shares of M/s Good money Co. Ltd. on
01-04-2007 at rate of Rs.1,000 per share
in public issue of the company by paying securities transaction tax.
Company allotted bonus shares in the ratio of 1:1 on 01.12.2022. He has
also received dividend of Rs.10 per share on 01.05.2023. He has sold all
the shares on 01.10.2023 at the rate of Rs.4,000 per share through a
recognized stock exchange and paid brokerage of 1% and securities
transaction tax of 0.02%.
Compute his total income and tax liability for A.Y. 2024-25 if Mr. Mithun
pays tax under default tax regime, assuming that he is having no income
other than given above. Fair market value of shares of M/s Good money
Co.Ltd. on 31.1.2018 Rs.2,000. (ICAI Pg-3.470) (12 marks)
Q5. (a) Mr. A, a dealer in shares, received the following without
consideration during the P.Y. 2023-24 from his friendMr. B, -
(1) Cash gift of Rs.75,000 on his anniversary, 15th April, 2023.
(2) Bullion, the fair market value of which was Rs.60,000, on his birthday,
19th June, 2023.
(3) A plot of land at Faridabad on 1st July, 2023, the stamp value of which
is Rs.5 lakh on that date. Mr. B had purchased the land in April, 2009. Mr.
A purchased from his friend Mr. C, who is also a dealer in shares, 1000
shares of X Ltd. @Rs.400 each on 19th
June, 2023, the fair market value of which was Rs.600 each on that date.
Mr. A sold these shares in the course of his business on 23rd June, 2023.
Further, on 1st November, 2023, Mr. A took possession of property (office
building) booked by him two years back at Rs.20 lakh. The stamp duty
value of the property as on 1st November, 2023 was Rs.32 lakh and on
the date of booking was Rs.23 lakh. He had paid Rs.1 lakh by account
payee cheque as down payment on the date of booking.
On 1st March, 2024, he sold the plot of land at Faridabad for Rs.7 lakh.
Compute the income of Mr. A chargeable under the head “Income from
other sources” and “Capital Gains” for A.Y.
2024-25. (ICAI Pg-3.502) (12 marks)
(b) What conditions need to be followed while carrying forward business
losses under Section 72? (ICAI Pg-5.10) (6
marks)
OR
(a) Mr. Batra furnishes the following details for year ended 31.03.2024:
(i) Short term capital gain- Rs.1,40,000.
(ii) Loss from speculative business -Rs.60,000.
(iii) Long term capital gain on sale of land- Rs.30,000.
(iv) Long term capital loss on sale of unlisted shares- Rs.1,00,000.
(v) Income from business of textile (after allowing current year
depreciation) -Rs.50,000
(vi) Income from activity of owning and maintaining race horses-
Rs.15,000.
(vii) Income from salary (computed)- Rs.1,00,000.
(viii) Loss from house property- Rs.40,000.
Following are the brought forward losses:
(i) Losses from activity of owning and maintaining race horses-pertaining
to A.Y.2021-22 – Rs.25,000.
(ii) Brought forward loss from business of textile Rs.60,000 - Loss pertains
to A.Y. 2016-17.
Compute gross total income of Mr. Batra for the Assessment Year 2024-25,
assuming that he has exercised the option of shifting out of the default tax
regime provided under section 115BAC(1A). Also determine the losses
eligible for carry forward to the A.Y. 2025-26. (ICAI Pg-5.32) (12 marks)
(b) What are the deductions in respect of investment in specified assets as
per section 80C? (ICAI Pg-6.9) (6 marks)
