M.Com. (Semester (CBCS) Examination Oct/Nov-2017
TAXATION
Day Date: Thursday, 16-11-2017 Max. Marks: 70
Time: 02.30 PM to 05.00 PM
Instructions: All questions are compulsory.
All questions carry equal marks.
Q.1 Choose the alternatives given below. 14
Surcharge on Income tax is payable by
All assessee's except a foreign company
Individual and HUF only
A company, domestic or foreign
All assessee's except local authority or cooperative society
All assessee's provided their income exceeds a certain amount
Education cess is leviable on:
Income Tax
Income tax Surcharge if applicable
Surcharge
None of the above
Atul was born in India in 1989. His father was born in India in 1949 and his
mother was born in England. His grandfather was born in England his
grandmother was born in South Africa. The parents of Atul along with Atul
took the citizenship of England. Atul is a
Citizen of India
Person of Indian origin
None of these
Murli, a citizen of India left India for U.S. on 16.08.2015 for booking orders on
behalf of an Indian company for exporting goods to U.S. He came back to
India on 5.5.2016. He had been resident in India for the past 10 years. For
Assessment year 2016-17, he shall be
Resident and ordinarily resident in India
Resident but not ordinarily resident in India
Non-resident
Income of a Trade Union from a house property and from other sources is
Taxable
Exempt
Added to total income for rate purposes
Where total income of an individual includes the income of minor children,
such individual shall be entitled to an exemption of:
Rs. 1,500
Rs. 1,500 per minor child
Rs. 1,500 per minor child or to the extent of income of the minor child
included in total income of the assessee whichever is less
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Salary of an employee is Rs. 2,00,000. Rent paid by the employer for the
unfurnished house provided to employee at Moradabad is Rs. 3,000 p.m. The
employee charges Rs. 2,000 p.m. as rent from the employee. The valuation
of this perquisite shall be:
Rs. 16,000 Rs. 6,000
Rs. 12,000 Nil
Interest credited to Statutory Provident Fund shall be:
Fully exempt Exempt up to 8.5%
Fully taxable Exempt up to 9.5%
Compensation received on voluntary retirement is exempt u/s 10(10C) to the
extent of:
Rs. 2,40,000 Rs. 3,50,000
Rs. 10,00,000 Rs. 5,00,000
10) The maximum amount of which income tax is not chargeable in case of HUF
for the Assessment Year 2016-17 is:
Rs. 2,00,000 Rs. 2.80,000
Rs. 2,50,000 None of these
11) Part II of Schedule I of the Finance Act, 2015 has given the rates of tax
deductible at source for the financial year:
2015-16
2016-17
2017-18
12) A house property whose fair rent Rs. 1,20,000 is neither let out nor self
occupied throughout the previous year. It's Annual Value shall be:
Rs. 1,20,000
Nil
13) Unrealized rent is deduction from:
Gross Annual Value
Net Annual Value
Income from the head house property
14) Assessee has two house properties and both of them are self occupied. The
annual value of
Of both houses shall be Nil
Of one house shall be Nil
Of no house shall be Nil
Q.2 Write short Notes. (Any three) 14
Annual value of a let out house property.
Exemption available to an employee for Gratuity received.
Any five Exemptions under Section 10.
Distinction between statutory provident fund and recognized provident fund.
Valuation of Perquisite in respect of furnished house property provided by
employer to employee.
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SLR-CJ-4
Q.3 Gopal is the owner of three houses in Bangalore, particulars of which for the
year ended 31.03.2016 are as follows:
14
1st House 2nd House 3rd House
Construction started on 01/04/1989 01/08/1990 01/07/1977
Construction completed on 31/12/1992 31/01/1992 31/12/1977
Vacancy/unoccupied period 3 months
Cost of repair borne by Owner Owner Owner
Actual rent received (let out
for residential purpose)
4,00,000 90,000
Own
residence
Fair rent 4,50,000 90,000 1,78,000
Total Municipal Tax 42,000 9,000 16,000
Municipal tax paid by Gopal 42,000 4,500 16,000
Municipal tax paid by tenant 4,500
10) Collection charges 5,000 3,000
11) Insurance Premium 10,000 1,000
12) Interest on loan taken for
Construction
1,50,000 30,000 1,60,000
13) Unrealised rent allowed in the
past recovered during year
2,00,000
Gopal resided in Mysore for 3 months during the previous year in connection with
his business and during this period his dwelling house at Bangalore remained
vacant. During his stay at Mysore he paid rent of Rs. 3,000 per month for a house.
Compute his income from house property for the Assessment Year 2016-17.
OR
Virat is a cost accountant in High-Fi Ventures Ltd., Mumbai and he gets
Rs.18, 000 per month as salary. He owns two houses, one of which has been
let out to the employer company High-fi Ventures Ltd. which in turn was
provided to him as rent free accommodation.
14
Determine the taxable income from salary and house property of Virat for the
A Y 2016-17 after taking into account the following information relating to
property income.
House I House II
Fair Rent (Rent Control Act is not
applicable)
60,000 1,82,000
Actual Rent 63,000 1,84,000
Municipal Valuation (Annual Value) 61,000 1,85,000
Municipal Taxes paid 14,000 40,000
Repairs 3,500 7,700
Insurance premium on building 3,000 33,000
Land Revenue 7,500 24,000
Ground Rent 4,000 7,800
Interest on capital borrowed by mortgaging
house No.1 to construct house No.2
Rs. 18,000
Nature of Occupation Let out to
High-Fi Ltd.
Let out to
Gajanan for
residence
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SLR-CJ-4
Q.4 From the following incomes earned by Mr. Abhram during the financial year
2015-16, Determine his total income for the assessment year 2016-17 if he is
Resident and ordinarily resident;
Not ordinarily resident;
Non-resident.
14
Rs.
Profits from a business in Bombay managed from London. 1,60,000
Pension for services rendered in India but received in Burma. 15,000
Interest on U.K. Government Bonds half of which is received in
India.
4,000
Income from property situated in Pakistan received there. 20,000
Past foreign untaxed income brought to India during the previous
year.
7,000
Income from agricultural land in Nepal received there and then
brought to India.
30,000
Income from profession in Kenya which was set up in India,
received there.
12,000
Q.5 Anand, a General Manager of Anand Anand Company Ltd., retired from the
company on 15.06.2015.
14
At the time of such retirement, his basic salary was Rs. 68,000 p.m. He was also
entitled to dearness allowance 20% of his basic salary. 60% of the dearness
allowance forms part of the salary as per terms of employment. He had worked
with the company for 20 years 11 months and 15 days. He got an increment of
Rs. 6,000 in his basic salary w.e.f. 01/02/2015.
At the time of his retirement, the company paid him a gratuity of Rs.8,00,000.
Anand had earlier worked with Chetan Chetan Ltd. from where he had
received gratuity and had availed of an exemption of Rs.1,20,000. Compute the
amount of exemption available out of the gratuity received from Anand Anand
Company Ltd. He is not covered under the Payment of Gratuity Act. Also
compute his gross salary for the assessment year 2016-17.