Total No. of Questions—5] [Total No. of Printed Pages—5
Seat
No.
P.G. DIPLOMA IN TAXATION EXAMINATION, 2018
DIRECT TAXES STRUCTURE AND PROCEDURE
Paper III
Time Three Hours Maximum Marks 100
N.B. All questions are compulsory.
(ii All questions carry equal marks.
1. Explain the term 'Gross Total Income' and deduction to be made
applicable to individuals from Gross Total Income.
[Chapter VI Deductions.]
Or
Explain the term 'Allowances' and state the various allowances which
are fully and partly taxable. Also explain in brief the exempted
or tax free allowances.
2. Write short notes on (any four)
Taxable Perquisites (salary income)
(ii Annual value (house property income)
(iii Deductions expressly allowed (Business income)
Capital Asset
Set off and carry forward of losses
Chargeability and deductions (income from other sources)
P.T.O.
2
3. Mr. Ankush is a general manager of a textile company of Pune.
He has submitted the followng particulars of his income for the
financial year 2016-17
Basic salary Rs. 50,000 p.m.
(ii D.A. 40% of salary (However, D.A. to the extent of 10%
of salary is applicable for retirement benefits)
(iii Company pays him at commission on total sales Rs. 10,00,000.
Entertainment allowance Rs. 1,000 p.m.
Travelling allowance for his official tours Rs. 50,000 (Actual
expenditure on tours amounted to Rs. 40,000)
He contributes to RPF 15% of his salary and his employer
contributes equal amount.
(vii The assessee's two children are studying in the school run
by the employer. The cost of education is Rs. 1500 p.m. per
student. The cost of education in similar institution per student
is Rs. 1000 p.m.
(viii He provided a furnished house at Pune for which he pays
rent Rs. 5,000 p.m. The cost of furniture provided to him
is Rs. 1,50,000.
Electricity bill paid by employer Rs. 3,000 p.m.
He received Rs. 18,000 by way of reimbursement of the hospital
bill by the employer.
He paid professional tax Rs. 2,250 p.a.
The company has provided him a 1.8 cc car for official as
well as private purpose. Running and maintenance expenses
are borne by the employer.
Compute his taxable income from salary for A/Y 2017-18 and
I-tax thereon.
3 P.T.O.
4. Mr. Atul owns three houses for his residential purposes. The following
are the details of these houses.
Particulars House-I House-II House-III
Rs. Rs. Rs.
Municipal valuation 82,000 50,000 70,000
Fair rent 75,000 60,000 65,000
Standard rent 70,000 70,000 65,000
(under Rent Control Act)
Municipal taxes 8,200 6,000 7,000
Repairs 8,000 6,000
Ground rent is paid 10% of Net annual value in respect
of each house. Interest paid on capital borrowed for renewal of
house property No. I and III amounting to Rs. 28,000 and Rs. 12,000
respectively. The loan was taken on 1st June 2000.
You are required to determine taxable income from House-property
of Mr. for the assessment year 2017-18 and I-tax
thereon.
Or
Mr. Laxmanrao purchased a house-property for Rs. 3,00,000 on 1st
May 1975. The following expenses are incurred by him for making
addition and alteration to the house property.
Cost of construction of first floor in 1979-80 Rs. 3,60,000.
(ii Cost of construction of second floor in 1984-85 Rs. 4,40,000.
(iii Renovation of the property in 1997-98 Rs. 1,50,000.
Fair market value of the property on 1st April 1981 is Rs. 7,20,000.
4
The house property was sold in November 2016 for Rs. 1,26,50,000
by incurring expenditure of Rs. 1,50,000 on transfer. The cost of
inflation index for 1981-82, 1984-85, 1997-98 and 2016-17 were 100,
125, 331 and 1081 respectively.
Compute the taxable capital gain for assessment year
2017-18.
5. Profit and Loss account of Mr. Ramesh for the year ended 31st
March 2017 is as follows
Profit and Loss A/c for the year ended 31-3-2017
Particulars Rs. Particulars Rs.
To Salary 1,25,000 By Gross profit 3,00,000
To General expenses 12,500 By Commission 30,000
To Conveyance 1,250 By Sundry receipts 3,000
To Postage 125 By Gift from a friend 12,000
To Depreciation 25,000 By Interest on
To Computer fixed deposit 23,075
stationery 2,500 By bad debts
To Construction recovered 10,000
on canteen 15,700
To Donation to
educational institute 10,500
To Sales tax 25,000
To R.D.D. 2,500
To Net Profit 1,58,000
3,78,075 3,78,075
5 P.T.O.
Additional Information
Salary includes Rs. 12,500 paid to Mr. 'Ramesh'.
(ii General expenses include Rs. 5,850 as gift given to a friend
in his marriage ceremony.
(iii Depreciation allowed as per income tax rule is amounted to
Rs. 22,000.
Sales tax include Rs. 2,500 as penalty for evasion of sales
tax.
Compute taxable income of Mr. Ramesh for the A/Y-2017-18 and
I-tax thereon.