16 CC72 17322

Third Semester B.Com. Examination, November/December 2018 (CBCS Scheme 2016-17)

LAW AND PRACTICE OF INcOME TAX- I

2 Time 3 Hours Max. Marks 80

PART A

Answer any five questions. 2 marks each. 1. What is direct tax ?9

(5x2-10)

2. What is assessment year? 3. What is gross total income ? 4. What is provident fund scheme? 5. What do you mean by annual value ? 6. How do you calculate expected rent ? 7. Name any four perquisites taxable in the hands of specified assessees.

PART B

Answer any three questions. 5 marks each. (3x5-15) 8. What are the objects of taxation ?

9. Briefly explain disadvantages of Indirect taxes. 10. Mr. Vijeth is a citizen of America, comes to India on 20-3-2017 for the first time and on 1-9-2017 he left India and went to Nepal on a business trip. Again he

comes back to India on 26-2-2018. Determine his residential status for the assessment year 2018-19.

11. After serving for 33 years and 9 months in Bharath Chemicals Ltd. Mr. Prakul who is covered under the Payment of Gratuity Act retires from service on November 2017. The employer pays him a gratuity of F 3,00,000. His monthly basic salary at the time of retirement was 10,000, D.A. 7 3,000 and HRA 1,500 You are required to detemine the amount of gratuity exempt U/S 10 of the IT Act.

P.T.O.

16 CC 72 17322

-2 12. Compute the value of concessional rent particulars. He is employed in a town (population 13 lakh) provided with a furnished houses 800 drs

per month are as

from follo

his salary. Value of furniture provided 40,000, other

OIcessional rent house of Mr. Vinay from the following

the fair rental value or which is 50,000 p.a. The employer deducts only

particulars are as follows a) Basic salary 20,000 p.m. b) D.A. 6,000 p.m. (60 % enters for retirement benefits) c) Bonus 20,000

d) Entertainment allowance 7 1,000 p.m.

PART C

(3x10-30) Answer any three questions. 10 marks each.

13. What is tax ? State the differences between Direct taxes and Indirect taxes. 4. Briefly explain any 10 incomes exempt from income tax U/S 10.

15. The following are the incomes of Mr. Arjun for the previous year 2017-18. a) Income from business in Chitradurga, managed from Uganda T 25,000 b) Income from assets in China, received in Davanagere 7 30,000 c) Profit from business in Sri Lanka, deposited in a bank there 10,000 d) Income from profession in Kenya, received there the profession was set up in Shimoga 40,000

e) Income from agriculture in America received there, but later on remitted to India 50,000

f) Income from agriculture in Channagiri 50,000. It is all spent on the education of children in Mangalore. g Dividend received from a domestic company 70,000 h) Income earned from business in Chitradurga which is controlled from Hubli 30,000 i) Interest on China development bonds (1/5 received in India) F 50,000. Compute Gross Total Income of Mr. Arjun for the A. Year 2018-19 if he is (a) Resident (b) Not ordinarily Resident (c) Non-resident.

16. income Kumari Sushmitha submits the following informations regarding her salary

3 16 CC-72 17322

income for the previous year 2017-2018.

i) City Ompensatory allowance 7 150 p.m.

Basic salary7 11,000 p.m.

aren education allowance (for 3 children) T 400 p.m. e-imbursement of medical expenses 25,000 p.a. ne was entitled to HRA of T6,000 p.m. from 1-4-2017 to 31-8-2017. How ever

she was paying a rent of 7,000 p.m. for a house in Delhi with effect from -9-2017 she was provided with an accommodation by the company, for Cn tne company was paying a rent of 5,000 p.m. Compute her gross

salary, for the assessment year 2018-19

Mr. Krishna Prasad is working as a Chief Accountant in X Ltd. at Bengaluru. He made the following payments during the P.Y. 2017-18.

a) Life insurance premium on his own life R45,000 D) Life insurance premium on the life of his wife 10,000

C) Contributions to RPF7 20,000 d) Amount deposited in PPF 28,000 e) Contribution to Ulip of UTI T 5,000

) Repayment of loan taken from SBI for construction of house 7 23,000

9) Tution fees paid for the education of child R 41,000

h) Term deposit for 5 years in Corporation Bank 25,000

i) Deposit under time deposit scheme (5 year) of post office 10,000. Compute

the amount of deduction available from him U/S 80C for the A.Y. 2018-19

PART D

(1x15-15) Answer any one of the following. 15 marks each.

18. Mr. Verma was appointed in a company in Chennai in the grade pay of

T20,000 - 500 25,000 1,000 -30,000 since 1-1-2011.

He gets 40% of salary as dearness allowance 800 p.m., entertainment

allowance 300 p.m. as additional DA. He also gets HRA 7 3,500 p.m. But

rent paid by him for the houses 4,500 p.m. He contributes 10% of his salary

to RPF and the company contributes 25,500. The company provided him a

sweeper, a cook and a gardner and paid them { 500 p.m. each.

He has been provided small motor car for official and personal purpose. The

company pays all the expenses of the car including Driver salary. The employer

provide travel concession of 5,000 for travel to Shimla (conditions satisfied).

The company also paid his club bills { 3,000 and telephone bills 2,000. He

paid professional tax 3,000 and life insurance premium is T 5,000.

Compute his salary income and deductions U/S 80C for the assessment year

2018-19.

16 CC 72 17322 4 19. Mr. Pandey owner three houses in Chitradurga

furnished the following

pute his income from house property for the A. year 2018-19.

House 2 House 3 SOP

information. Cor House 1

SOP Letout

Standard rent Municipal value Rent received

36,000 34,000 37,500

45,000 2,000

40% duee

63,500 56,500 30,000

67,500 45,000 3,000

Fully paid Fully paid

Fair rent Repairs Municipal tax (10% of MV) Interest on loan taken for construction of houses 2,000

500 4,000 1,000

6 months 6 months

3,000 750 Brokerage

Vacancy period Collection chargess Recovery of unrealised rent (allowed at deduction 2015-16)

2 months 3,000

5,000

PART E

Answer the following question. 10 marks each. (1x10-10)

20. a) Prepare a salary statement of any 2 employees of an organisation you visited with imaginary figures.

OR

b) As a tax practitioner, advises an individual regarding tax savings scheme.

.

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odpayodo orb neR euTOA. JOD 2 so8neb. (5x2-10) 1. Sed 3or oddeab ?

2. Bdsa OTOeab ?

3. 2, oe smo odoeab