Subject Name: Taxation

Full Marks:30 Duration: 1 Hour

Part – A

Attempt 5 questions

Each question carries 2 Marks (2 X 5)

1. Define Advance Tax

1. Define Surcharge and education cess

2. How WDV is calculated for depreciation?

2. Explain the Old Tax Regime

3. Explain the difference between Tax profit and Book profit

3. How long-term capital gain is calculated?

4. How house rent allowance is calculated?

4. Explain IGST

5. Distinguish between Business and Profession

5. Explain Sec 43B of the Income Tax Act

Part-B Attempt

2 questions

Each question carries 5 Marks (5 X 2)

X, who is not covered by the Payment of Gratuity Act, 1972, retires on Nov 20, 2022, from ABC Ltd. and receives Rs 186000 as gratuity after service of 38 years and 10 months. His salary is Rs. 8000 per month up to Jul 31, 2022, and Rs. 9000 per month from Aug 1, 2022. Besides, he gets Rs. 500 per month as dearness allowance (69 per cent of which is part of his salary for computing all retirement benefits but 100 per cent of dearness allowance is considered for computing provident fund). What amount of gratuity will be exempt from tax?

X, a non-government employee, receives Rs. 375000 as leave salary at the time of retirement on Feb 20, 2023. Based on the following information, determine the amount of taxable leave salary: Basic pay: Rs 15000 per month since 2009; duration of service 26 years; leave at the credit of X at the time of retirement: 25 months; entitlement of leave salary: 60 day’s for every year of service and leave availed while in service: 27 months.

X purchased a house property of Rs. 76000 on Jun 30, 1977. The following expenses are incurred by him for making additional/alterations to the house property.

a) Cost of construction of the first floor in 1985-86 b) Cost of construction of the second floor in 2003-04 c) Alternation/reconstruction of the property in 2012-13 Fair market value of the property on Apr 1, 2001, is Rs. 450000. The house property is sold by X on Jun 15, 2022, for Rs. 110000, 340000, 290000

Rs. 9950000 (expenses incurred on transfer: Rs. 10000

Index 2003-04 109 2012-13=2000

Compute Income from Capital gain

Determine the amount of pension taxable for the assessment year 2023-24 in the following cases on the assumption that it becomes due on the last day of each month

1. X receives Rs. 18250 per month as a pension from the Central

Government during the previous year 2022-23

2. X receives Rs. 21000 per month as pension from the Government

of Punjab during the previous year 2022-23

3. X receives Rs. 20000 per month as pension from ABC Ltd., a public limited company in the private sector, during the previous year 2022-23

4. X retires from the central government service on May 31, 2022. He gets a pension Rs. 15000 per month up to November 30, 2022 (i.e., Rs. 15000 X 6). With effect from December 1, 2022, he gets one-third of his pension commuted for Rs. 718000.

Part – C Attempt

1 question

Each question carries 10 Marks (10 X 1)

a) Pamela is a beautician and owns a parlour. She is not aware of tax payments. She is estimating an income of Rs. 6,00,000 from her business during the financial year 2022-23. Suggest to Pamela how she will be making tax payments during the financial year 2022-23 and if necessary, prepare a chart showing the tax payment schedule

b) Mr. Rohon owns two house properties one at Bombay, where his family resides and the other at Delhi, which is unoccupied. He lives in Chandigarh for his employment purposes in a rented house. For the acquisition of house property in Bombay, he has taken a loan of Rs.30 lakh@10% p.a. on 1.4.2019. He has not repaid any amount so far. In respect of the house property in Delhi, he has taken a loan of Rs.5 lakh@11% p.a. on 1.10.2018 towards repairs. Compute the deduction that would be available to him under section 24(b) for A.Y.2023-24 in respect of interest payable on such loan.

Specify whether the following acts can be considered as

(i) Tax planning; (ii) Tax Management; or (iii) Tax evasion.

c) P pays a premium of Rs. 10,000 for a Health Insurance policy to reduce his total income from Rs. 6,40,000 to Rs. 6,30,000 by claiming deduction u/s 80D (assuming Mr P has not opted for section 115BAC of the Income tax Act, 1961),

SQL Ltd. pays advance tax by estimating its total income in the previous year to ensure timely compliance.

(i) An individual taxpayer making tax saver fixed deposit of

Rs. 1,00,000 in a nationalised bank.

(ii) A bank obtaining declaration from depositors in form

No. 15G/15H and forwarding the same to income-tax

authorities.

Z debits his household expenses as business expenses in the books.

MBA – 3rd Semester | Paper: Taxation