B.Com. III (Semester VI) (CGPA) Examination, 2018
Advanced Accountancy (Paper II)
(Income Tax)
Day and Date Saturday, 8-12-2018 Max. Marks 70
Time 2.30 p.m. to 5.00 p.m.
N.B. All questions are compulsory.
Figures to the right indicate full marks.
Attempt any one Q. 4 and Q. 4
Attempt any one from Q. 5 and Q. 5
1. Choose the correct alternative. 14
Assessment year means the period of twelve months commencing on 1st
day of every year.
January April
July September
Transport allowance to physically handicapped person is exempt up to
per month.
Rs. Rs.
Rs. Rs.
Income tax rates are determined by the following law
Annual Finance bill Income Tax Act, 1961
Ordinance of the president None of the above
In order to be resident in India the minimum stay in India should be
days.
182 115
90 60
The deduction allowable from the Annual value of self-occupied house is
Standard Deduction Unrealised Rent
Vacancy Allowance Interest on housing loan
Income from lottery is taxable under
Income from other sources Business Income
Exempt Exempt upto Rs.
Seat
No. Set P
Set P
SLR-CO 91 *SLRCO91*
Capital Assets includes
Car incase of car dealer Rural agricultural land
Jewellery None of the above
Under income from business is allowable expenditure.
Interest on capital Salary to staff
Repairs to house property Drawings
The maximum amount of deduction u/s 80DD for severe disability of a
person
Rs. Rs.
Rs. Rs.
10) Refreshment provided by an employer to all employees during working
hours in office premises is
Exempt from tax
Chargeable to tax
Exempt from tax upto Rs. 50 per day
None of the above
11) In case of Government employee the maximum deduction for entertainment
allowance is Rs.
Rs. Rs.
Rs. Nil
12) Donations are eligible for deduction u/s
80C 80D
80G 80DD
13) Free education allowance given to employee is exempt upto Rs.
per child for 2 children p.m.
Rs. Rs.
Rs. Rs.
14) City compensatory allowance is
50 taxable Fully taxable
Non-taxable None of the above
2. Write short notes (any 14
Person
Income from Other Sources
House Rent Allowance.
Set P
3. Mr. Udaya has a house property situated in Delhi. From the following
particulars compute income from house property for the Assessment Year
2017 2018. 7
Municipal valuation Rs. 90,000
Fair Rent Rs. 1,10,000
Standard Rent Rs. 1,00,000
The house property was let out for Rs. 8,000 per month. It was vacated by
the tenant on 30-9-2016 from 1st Dec. 2016, it was let out to another tenant
for Rs. 11,0000 per month.
Municipal taxes paid 20 of municipal value. Interest on loan taken for
purchase of this house is Rs. 30,000/-.
Shri Raj owns a house in Delhi. During the previous year, 3
4
th (Three
fourth) portion of the house was self-occupied for full year and 1
4
th
(One
fourth) portion was let out for residential purposes from 1st April 2016 to
31st Dec. 2016 on a rent of Rs. 700 per month.
Municipal valuation of the house is Rs. 20,000/-. Municipal taxes due but
not paid Rs.
A loan of Rs. 1,00,000 was taken on 1st April 2012 9 p.a. for the
construction of the house which was completed on 28th March 2016.
Find out income from property for the A.Y. 2017 2018. 7
4. From the following particulars of Mrs. Gouri. Compute her Income from
business for the A.Y. 2017 2018. 14
Profit and Loss A/c
Particulars Rs. Particulars Rs.
To Salary 35,000 By Gross Profit 1,40,000
To Office rent 4,800 By Rent from house property 18,000
To General Expenses 12,200 By Interest on Debentures 3,600
To Advertisement 1,800 By Dividend from Indian company 5,000
To Interest on borrowed
capital 3,000
To Interest on Bank loan 4,500
To Fire Insurance 400
To Life Insurance premium 8,250
To Income Tax 3,000
To Drawings 10,000
To Repairs on house property 1,200
To Household expenses 12,000
To Stationery 1,500
To Postage 600
To Legal Expenses 3,750
To Car Expenses 12,400
To Depreciation 4,200
To Net Profit 48,000
1,66,600 1,66,600
Adjustments
½ (half) of car expenses are pertaining to personal use.
General expenses included Rs. 1,000 being donations.
Stationery included Rs. 900 being cost of book for her son.
Depreciation allowable as per rules Rs.
OR
Mr. Ramchandra is a leading advocate at Solapur. Following is the summary
of cash book for the year ending 31-3-2017. Compute his income from
profession for the A.Y. 2017 18. 14
Receipts Rs. Payments Rs.
To Opening Balance 25,000 By Salary to Assistants 25,000
To Professional Fees 1,60,000 By Rent of Chamber 18,000
To Arbitration Fees 40,000 By Household Expenses 1,20,000
To Gifts 25,000 By Membership Fees 6,000
To LIC policy amount received 2,00,000 By Car Expenses 20,000
To Interest on Bank Deposits 20,000 By Fixed Deposits in SBI 2,50,000
To Agricultural Income 70,000 By Books for profession 10,000
By Advance Income Tax 5,000
By Donations 4,000
By Bonus and Gifts to staff 20,000
By Purchase of type-writing
machine 10,000
By Telephone Expenses 13,000
By Closing Balance 39,000
5,40,000 5,40,000
Additional Information
Gifts included Rs. 7,000 received from friends and relatives on family
function and balance from clients.
Depreciation allowable on assets as per income tax rules amounted
to Rs. 16,000, including Rs. 5,000 on car but excluding that on cost of
books purchased.
1
5
th
(one-fifth) of the car expenses are related to personal use.
Membership fees included Rs. 2,000 to bar council and balance to
private club.
5. Shri Harsh is a manager in a company in Bangalore. He gives the following
information for the previous year 2016 17. 14
Basic salary Rs. 4,000 per month.
Dearness allowance Rs. 1,000 p.m. (Rs. 500 p.m. of this enters into
retirement)
Family allowance Rs. 300 p.m.
City compensatory allowance Rs. 200 p.m.
Education allowance for 2 children at Rs. 400 p.m. per child.
Company has provided a new telephone at his residence ans paid the
telephone bills Rs. 5,000 during the year.
House Rent Allowance Rs. 1,200 p.m.
He is allowed to use one motor car of 16 H.P. only for office purpose.
Reimbursement of medical expenses Rs. 8,000 for his treatment in a
private nursing home.
10) The company has paid his Income Tax Rs. 3,400 during the year.
11) Conveyance allowance Rs. 5,000 per annuam. (p.a.)
12) Provision of the following domestic servants and they are paid by the
company.
Watchman Rs. 100 p.m.
Sweeper Rs. 60 p.m.
13) Entertainment allowance Rs. 700 p.m.
14) Company has contributed to his RPF at 14 of his salary.
15) During the year he paid Rs. 50 p.m. as professional tax.
16) Rs. 1,000 p.m. paid as rent for his residential house.
Compute income from salary for A.Y. 2017 18.
OR
Mrs. Madhavi is employed as Sales Executive in Kinetic Spark Ltd. Chennai.
Following are the particulars of her income for the year ending 31-3-2017.
Net salary per month Rs. 9,200
Income tax deducted at source p.m. Rs. 800
Profession tax deducted at source p.m. Rs. 200
Provident fund contribution p.m. deducted from salary Rs. 600
LIC premium deducted from salary p.m. Rs. 1,200
Employer's contribution to RPF p.m. Rs. 2,000
Interest credited to RPF 15 p.a. Rs. 3,000
SLR-CO 91 *SLRCO91*
Set P
Allowance for travelling on transfer received from employer Rs. 3,500
Commission on sales 1 on turnover achieved at Rs. 5,00,000.
10) High cost of living allowance during the year (D.A.) Rs. 6,000. (Which
enters the retirement benefits).
11) She was abroad on company's work during January Expenses incurred
by her abroad reimbursed to her Rs. 86,500.
12) Entertainment allowance received Rs. 5,000 p.a.
13) Domestic servants Gardener @Rs. 200 p.m.
Watchman Rs. 250 p.m.
Compute Taxable income from salary of Mrs. Madhavi for A.Y. 2017 2018.