M.COM. (Semester (CBCS) Examination, 2017
TAXATION PAPER I
Day Date: Tuesday, 18-04-2017 Max. Marks: 70
Time: 02.30 PM to 05.00 PM
N.B. All questions are compulsory.
All question carry equal marks
Q.1 Select the correct answer from multiple choice given 14
Part III of Schedule I of the Finance Act, 2015 has given the rates
of advance tax and to be deducted in case of salary for the
Assessment Year
2015-16 2016-17 2017-18
The circulars issued by the CBDT are binding on:
Asses see Income tax authorities Both the above
The total income of the assessee has been computed at Rs.
4,83,495. For rounding off the total income will be taken at
Rs. 4,83,500 Rs. 4,83,490 Rs. 4,83,495
Sager, a citizen of India is employed on an Indian ship. During the
previous year 2015-16 he leaves India for Germany on
15/09/2015 for holidays and returned on 01/04/2016. He had been
non-resident for the past 3 years. Earlier to that he was
permanently in India. For the AY 2016-17. Sagar shall be:
Resident and ordinarily resident in India
Resident but not ordinarily resident in India,
None- resident.
Where a non- resident has any income from a business
connection in India, such income:
Shall be Taxable in India as it accrues or arises in India
Shall be taxable in India as it is deemed to accrue or arise
in India
Shall not be taxable as accrues or arises outside India
The daily allowance received by an MLA is:
Exempt
Taxable
Included in total income for rate purposes
Exempt upto Rs.2,000 p.m.
Page 1 of 4
SLR-Q 04
Leave Travel Concession is a tax free perquisite:
For one journey in a block of 4 years
One journey per year
Two journeys in a block of 4 years
The employee is provided with furniture costing Rs. 1,50,000
along with house w.e.f. 01/07/2015. The value of the furniture to
be included in the valuation of unfurnished house shall be:
Rs. 11,250 Rs. 15,000
Rs. 22,500 Rs. 16,875
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 employer provides free facility of watchman, sweeper and
gardener to the employees. It will be perquisite for:
Specified employee only
Employees other than specified employees
All the employees
11) Unrealized rent is deduction from:
Gross Annual Value
Net Annual Value
Income from the head house property
12) Vishvanath gifted the house property to his minor son, which
was let out Rs. 10,000 per month. Income from such house
property shall be taxable in the hands of:
Minor son
Vishvanath, however, it will be first computed as minor
son's income thereafter clubbed in the income of
vishvanath
Vishvanath, as he will deemed owner of such house
property and liable to tax
13) Municipal valuation of the house is Rs. 1,20,000, fair rent
Rs.1,40,000 standard rent Rs. 1,30,000 whereas actual rent
received or receivable is Rs. 1,25,000. Municipal taxes paid are
Rs.40,000. The annual value of the house in the case shall be:
Rs. 1,00,000 Rs. 85,000 Rs. 90,000
14) Ajunkya borrowed a sum of Rs. 5,00,000 at 12% p.a. on
01/04/2005 for construction of a house which was completed on
15/03/2010. The loan is repaid on 31/08/2015. What shall be the
amount of deduction allowed on account of interest for the
Assessment 2016-17:
Rs. 60,000 Rs. 1,08,000
Rs. 25,000 None of the above
Page 2 of 4
SLR-Q 04
Q.2 Write short notes on any three from the following 14
Any five exemptions available under section 10 to a salaried
person
Determination of Annual Value when standard rent is
applicable
Conditions for determination of residential status of an
applicable
Relief for salary received in arrears
Distinction between recognized provident fund and
un-recognised provident fund with particular reference to
income tax
Q.3 Mr. Sehgal owns a house in Banglore construction of which was
completed on 1.7.1998. Half portion is let out for residential
purposes on a monthly rent of Rs. 8,000. However, this portion
remained vacant for three months (from 1.1.2016 to 31.3.2016)
during the previous year 2015-16. 1/4th portion is used by Mr.
Sehgal for the purpose of his profession while the remaining
1/4th portion is used for his own residence for the full year.
14
The other expenses regarding the house were:
i. Municipal taxes 10,000
ii. Repairs 5,000
iii. Interest on loan for renovation of house 40,000
iv. Ground rent 2,000
v. Annual charge 10,000
vi. Fire insurance premium 4,000
Compute the taxable "Income from house property" for the
assessment year 2016-17
Jasprit owns two houses which he occupied for his own
residence. He submits the following particulars in respect of
these for financial year 2015-16:
14
House I
Rs.
House II
Rs.
Municipal value 1,20,000 2,40,000
Fair rent 1,50,000 2,70,000
Standard rent under Rent
Control Act.
90,000 2,04,000
Municipal tax paid 18,000 24,000
Amount spent on repairs 12,000 30,000
Interest paid/payable on loans
taken for building the houses.
30,000 1,60,000
Jasprit requests you to compute his total income in a manner
which minimizes his incidence of tax.
Page 3 of 4
SLR-Q 04
Q.4 Manish an Indian citizen left India for the first time on 24.9.2014
for employment USA. During the previous year 2015-16 he
comes to India on 5.6.2015 for 165 days. Determine the
residential status of for the assessment year 2015-16 and
2016-17.
04
Arun Kumar earns the following income during the financial year
2015-16
10
Rs.
Interest paid by an Indian company but
received in London
2,00,000
Pension from former employer in India,
received in USA
8,000
Profits earned from business in Paris
which is controlled in India, half of the
profits being received in India
40,000
Income from agriculture in Bhutan and
remitted to India
10,000
Income from property in England and
received there
8,000
Past foreign untaxed income brought to
India
20,000
Determine the total income of Arun Kumar for the assessment year
2016-17 is he is
i. Resident and ordinarily resident,
ii. Not ordinarily resident, and
iii. Non-resident in India.
Q.5 A salaried employee has the following income for the period 1.4.2015
to 31.3.2016 and he requires you to compute his income
14
Basic pay Rs. 1,44,000
Dearness allowance Rs. 1,44,000 (not forming part of salary)
Educational allowance for three children Rs. 4,800 p.a.
Reimbursement of club subscription Rs.3,000 for personal
purposes
Leave travel concession by way of reimbursement of train fare
for himself and family members (Rs.7,000) and hotel bill in the
holiday resort (Rs. 12,000)
He has been given rent-free accommodation for which the rent
paid by employer is Rs. 20,000 p.a.
He is also provided with a watchman. Watchman is engaged by
the employee by paying Rs. 500 p.m. which is reimbursed by
the employer.
Conveyance allowance Rs. 6,000. It is certified that the entire
allowance is spent for official duties.
The employer has taken an accident insurance policy and is
paying for a life insurance policy for the benefit of employee, the
premium for which is met by the employer directly being Rs.
500 and Rs. 600 respectively