Corporate Tax Management
Work Sheet with Solutions
Question 1
Amal Sugars Ltd. manufactures and sells sugar. The Statement of Profit & Loss of the company for
the year disclosed a net profit of ₹ 10,00,000. This was arrived at after deducting the following:
i. Expenses incurred on the salaries and wages of staff involved in the 11,000
installation of new machinery
ii. Pension paid to Mr. Joseph, a retired employee living in London with no 60,000
deduction of income tax at source
iii. Income tax 1,20,000
iv. Depreciation on fixed assets used in business 1,00,000
v. Legal expenses incurred on income tax appeal 10,000
vi. Staff welfare expenses 15,000
Other details:
(1) Bad debts previously written-off and allowed as deduction recovered in the previous year
₹ 20,000 was not shown as receipt in Statement of Profit & Loss.
(2) Allowable depreciation on fixed assets used in the business for the relevant previous year is ₹
1,30,000
(3) ₹ 30,000 dividend received from an Indian Company and ₹ 20,000 dividend received from a
foreign company were added in Statement of Profit & Loss.
Compute the total income of the company for the Assessment Year 2024-25.
Question 2
From the following information compute the tax payable by X Ltd. for AY 2024-25:
₹
1. Business income from sale of securities 8,50,000
2. Other Business income 10,00,000
3. Long-term capital gains 4,00,000
4. Securities transaction tax paid 1,50,000
(Not deducted from business income)
Question 3
Kwality Electronics Ltd. is a domestic company in which public are substantially interested. The
following are the particulars of income in respect of the Previous Year 2023-24:
i. Interest on Govt. securities – Rs.20,000
ii. Income from business – Rs.5,00,000
iii. Short-term capital gain – Rs.15,000
iv. Long-term capital gain – Rs.33,000
v. Dividend from an Indian company (Gross) – Rs.10,000
vi. Dividend from a Foreign company – Rs.10,000
Compute company’s total income and its tax liability.
Question 4
The Statement of Profit & Loss of XY Ltd., for the year ended 31st March 2024 shows a net profit of
₹ 15,00,000. The Statement of Profit & Loss includes the following items among others:
₹
1) Dividend from an Indian Company (gross) 1,00,000
2) Net Rent from house property (let out to outsiders) after debiting repairs ₹
1,000 and municipal tax ₹ 3,000 23,000
3) Provision for taxation 20,00,000
4) Cost of maintenance of a liaison office in New York for promoting exports 60,000
5) Legal expenses for contesting a suit for eviction from a premises used as a 3,000
showroom
6) Interest on loan 20,000
7) Amount embezzled by the cashier of the company, which is irrecoverable 15,000
Entire amount of dividend income from another Indian Company has been distributed as dividend to
its shareholders on 10.9.2023.
Compute the total income of the company for the relevant assessment year.
Question 5
From the following information compute the total income of X &Co for AY 2024-25.
Statement of Profit & Loss
(for the year ended 31st March, 2024)
Particulars Note Figures as at the
No. end of current
reporting period
I. Revenue from operations 7,00,000
II. Other income
Interest on fixed deposits 1,00,000
III. Total Revenue (I + II) 8,00,000
IV. Expenses:
Cost of material consumed ------
Purchases of Stock-in-Trade -----
Changes in inventories of finished goods,
work-in-progress and stock-in-trade --------
Employee benefits expenses -------
Other expenses:
Provision for contingent liability 40,000
Provision for diminution in the value of an asset 50,000
Expenses relating to business 4,50,000
Total expenses 5,40,000
V. Profit before tax (III – IV) 2,60,000
VI. Tax expenses:
Income tax paid 20,000
VII. Profit for the period (V – VI) 2,40,000
Additional information:
1. B/F business loss Rs.2,00,000 for the Assessment Year 2023-24.
MAT
Question 6: For the Assessment Year 2024-25 a company has calculated its ‘Book Profit’ as per the
provisions of Section 115JB of the Income Tax Act, 1961 at Rs.95 lakh as against the total income of
Rs.30 lakh for the same period as per the Statement of P & L of the company. Calculate the amount of
tax payable by the company.
Question 7: A domestic company submits the following particulars of its income for the previous
year ending on March 31, 2024:
₹.
(i) Profits of business after deduction of donations
to approved charitable institution 4,00,000
(ii) Donation to the charitable institution by cheque 50,000
(iii) Interest on Govt. securities 20,000
(iv) Dividend from a domestic company (gross) 60,000
(v) Long-term capital gain 1,00,000
(vi) Book Profits u/s 115JB 10,00,000
During the Financial Year 2023-24 the company deposited Rs.50,000 in Industrial Development Bank
of India.
Compute the taxable income of the company and tax payable by it for the Assessment Year 2024-25.
Question 8: Following are the incomes of a domestic company for the year ending on 31 st March
2024:
₹.
(i) Business profit 4,20,000
(ii) Dividend from an Indian public sector company (Gross) 10,000
(iii) Dividend from an Indian company whose 80% income
is agricultural income (Gross) 9,000
(iv) Income from Mutual Fund (Gross) 5,000
(v) Royalty received from a foreign concern for providing
technical knowledge 16,000
(vi) Fee from an Indian company for technical advise 12,000
(vii) Dividend from a foreign company 8,000
(viii) Company has donated to National Rural Development
Fund during the previous year 8,800
Compute the total income of company for the Assessment Year 2024-25. Find out tax liability if the
book profit of the company is Rs.7,00,000 u/s 115JB.
Question 9:
From the particulars submitted below, find out the total income of PQR Co. Ltd.:
Statement of Profit & Loss
(for the year ended 31st March, 2024)
Particulars Note Figures as at the
No. end of current
reporting
period(Rs.)
I. Revenue from operations 11,52,500
II. Other income:
Transfer fees 300
Rent of agricultural lands 1,000
III. Total Income (I+II) 11,53,800
IV. Expenses:
Cost of materials consumed (cane purchased) 4,75,200
Changes in inventories of finished goods, work-
in-progress and Stock-in-trade
(Opening Stock) 52,400
Employee benefits expenses:
Salaries and wages 45,500
Finance costs:
Interest on loan 8,500
Depreciation and amortization expenses 69,000
Other expenses:
Manufacturing expenses 2,59,000
General expenses 8,500
Commission and brokerage 36,400
Director’s fees 1,200
Reserve for bad debts 19,500
Provision for dividends 30,000
Total Expenses 10,05,200
V. Profits before tax (III-IV) 1,48,600
VI. Tax expenses:
Income tax 35,800
VII. Profit for the period (V-VI) 1,12,800
Other Information:
(i). General charges include:
(1) Rs.1,000 as donation to a hospital.
(2) Rs.1,000 subscription to sugar syndicate
(3) Rs.2,600 commission to broker for arranging a loan for the company; and
(4) Rs.2,000 paid to a director for a trip to Hyderabad to study modern methods in Chocolates
making
(ii). The actual bad debts amounted to Rs.6,000
(iii). Depreciation is Rs.72,000.
