Q1) a) Mr. Jayant an Indian Citizen, furnishes the following particulars of his income earned during the previous year relevant to assessment year 2008-09.
|1||Interest on Nepal Development Bond (1/3 received in India)||21,000|
|2||Income from Agriculture in Bangladesh||40,000|
|3||Rent from Property in Japan received outside India||10,000|
|4||Income earned from Business in London which is controlled from Delhi (Rs. 15,000 received in India||35,000|
|5||Interest paid by an Indian company but received outside India||9,000|
|6||Past untaxed profit brought to India||33,000|
|7||Profit from a business in Thane and managed from outside India||50,000|
|8||Profit on sale of building in Mumbai but received in Sri Lanka||40,000|
|9||Pension from an Indian employer in India received in Rangoon||30,000|
Find out his gross total income if he is i) Resident and ordinarily resident. ii) Resident but not ordinarily resident. iii) Non- resident in India for the assessment year 2008-09.
b) Mr Chetan who is an Indian citizen returned to India on 1st July 2007 on a visit. He left India on 25 September 2007. Prior to 1st April 2007 he was in India for more than 365days during the preceding four years 2003-04 to 2006-07. What is his residential status for the assessment year 2008-09?
Q2) Mrs Amrita joined XYZ Ltd., New Delhi, on 1st April 1982 as a Director. She receives the following emoluments during the previous year ending 31st March 2008. Determine the taxable income of Mrs. Amrita for the assessment year 2008-09, taking into account the following information:
a) Salary received Rs 16,000
b) Bonus received Rs 2,000
c) House Rent allowance Rs 6,800
d) Salary in lieu of leave Rs 12,000
e) Entertainment allowance Rs 3,000
f) Company provides free gas and electricity (cost) Rs 6,000
g) Domestic servant (not being sweeper, watchmen or
gardener) paid for by the company Rs 12,800
h) Free education for her two sons in a school
maintained by the company (cost) Rs 12,000
i) Free lunch in office Rs 10,000
j) Salary of cook Rs 12,000
Cook is engaged by Mrs. Amrita. She contributes i) Rs 13,500 towards contribution to a recognized Provident fund and ii) Insurance premium of Rs 15,000 on a policy of Rs 1,40,000 taken on her own life. Her income from other sources is Rs 26,000 Besides, Mrs Amrita owns the following properties:
a) House –I purchased on 1st July 2007 is given on rent (rent being Rs 2,000 per month). Construction of house was completed on 1st June 2007.
b) House –II constructed in 1973 is self –occupied. Expenses incurred for the two houses are as follows:
House I House II
Muncipal tax paid on 31st March 2008 2,100 6,200
Lease Rent 200 1,200
Fire insurance 2,300 600
Repairs 200 –
Collection charges 50 –
Q3) Following is the P&L A/c of M/s Impex Associates owned by Mr Narayan Vyas for the previous year ended 31st March, 2008:
|To Salaries||56,000||By Gross profit||3,40,000|
|To Travelling expenses||14,000||By Subsidies and cash Assistance from govt.||66,000|
|To Embezzlement of cash||10,000||By Export Award received From Government||42,000|
|To Professional Tax||1,500||By amount withdrawn from public provident fund A/c||52,000|
|To Insurance on health Of employees||2,250||By Dividend from Indian Cos.||1,00,000|
|To wealth tax||9,750|
|To Diwali expenses||4,350|
|To telephone & telex charges||5,650|
|To Interest on loan||15,000|
|To Guest house expenses||8,000|
|To expenses on scientific Research||2,12,000|
|To Net profit||2,34,000|
Following additional information has been provided:
a) Salary includes payment of Rs 20,000 out of India on which no tax has been deducted at source.
b) The expenditure on scientific research allowable under the Income Tax Act is Rs 2,04,500.
c) Travelling expenses include Rs 2,400 incurred on travelling to Allahabad to attend Kumbhmela.
d) Diwali expenses include Rs 1,000 paid to son for purchase of cycle.
e) Interest on loan is paid outside India on which no tax has been deducted at source.
f) Advertisement expenses include Rs 2,500 on advertisement in a brochure published by a political party and remaining expenses of Rs 15,000 the benefits of which will accrue for the period of 5 years in all.
g) Depreciation allowable as per Income tax is Rs 8,650.
Compute the taxable income from business of Mr. Narayan Vyas for the assessment year 2008-09.
Q4a) i) Compute the capital gain in the hands of Mr Rohan who has transferred the following assets during the previous year 2007-08:
|Name of the Asset||Cost of acquisition Rs.||FMV on 1st April 1981 Rs.||Full value of consideration Rs.|
|Goodwill of a business||—||40,000||4,00,000|
|Tenancy rights of a commercial building||—||1,00,000||6,00,000|
|Shares acquired in 1978||70,000||50,000||4,00,000|
ii) Would your answer change if the Goodwill transferred is of a profession instead of business?
iii) What shall be your answer if the shares are sold through a recognized stock exchange on 1st December 2007
Q4b) The following incomes are received by Mr. Mohan during financial year 2007-08
a) Director’s fees Rs 2,000
b) Income from agricultural land in Pakistan Rs 5,000
c) Ground rent for land in Pathankot Rs 10,000
d) Interest on Postal Savings bank A/c Rs 100
e) Interest on deposits with Industrial Finance Corporation of India Rs 500
f) Dividend from a foreign company Rs 700
g) Rent from sub-letting a house Rs 26,250
h) Rent payable by Mr. Mohan for the sub-let house Rs 12,000
i) Other expenses on sub-let-house Rs 1,000
j) Winnings from horse – race (Gross) Rs 12,300
k) Interest on securities (Gross) Rs 4,000
You are required to calculate Income from other sources of Mr. Mohan for the assessment year 2008-09.