REGISTER NO. : ………..

Q.P.CODE. : ………..
(Batch 2014)
RATHNAVEL SUBRAMANIAM COLLEGE OF ARTS AND SCIENCE, (AUTONOMOUS), SULUR
B.COM / B.COM (CA) / B.COM (IT) DEGREE EXAMINATIONS, NOVEMBER 2016
COMMERCE
FIFTH SEMESTER - DIRECT TAX
Time: THREE HOURS Maximum : 75
MARKS
UNIT - I
SECTION A - (10x1=10 Marks)
(Choose the Correct Answer)
1. An individual who wants to be resident of India u/s (i)(a) must stay in India for at least
a) 182 days b) 365 days
c) 730 days in 7 previous years.
d) 230 days in 2 previous years.

2. Income accruing in India but received outside India is taxable in respect of

a) Only ordinary resident b) Only NOR

c) Only NR d) All

3. The maximum exemption of Entertainment allowance shall be

a) Rs. 2100 b) Rs. 2500
c) Rs. 5000 d) Rs. 10000

4. Salary paid by an Indian Co. to its employee working in one of its branches outside India
is
a) Salary accruing in India b) Salary accruing outside India
c) Salary deemed to accrue in India d) Salary deemed to accrue in outside India

5. The term previous year means

a) The accounting period of the assesseeb) Financial year before the assessment
year
c) Calendar year before the assessment d) Financial year after the assessment year
year

6. Tax benefit for senior citizen is available to an assessee who has attained the age of
a) 60years b) 65years
c) 70years d) 66Years
7. Under the Income-tax Act, the incidence of taxation depend on

a) The citizenship of the taxpayer b) The age of the taxpayer

c) The residential status of the taxpayer d) Both a& c

8. An individual who want to be resident of India must satisfy at least

a) One of Two basic condition b) Both the basic conditions

c) Both the additional conditions

d) One of Two additional condition
9. Income tax Act is applicable to
a) Whole of India b) Whole of India except State of J & K
c)Whole of India except the state of Sikkim d) Whole of India except State of Jammu

10. The year in which income is earned is called

a) Previous year b) Current year

c) Assessment year
d) None of these

1
 SECTION-B
REASONING QUESTIONS
1. Compute the tax liability for the assessment year 2016-2017 of an individual from
figures given below
PARTICULARS AMOUNT(RS)
Gross salary 2,46,000
House property rent 20,000
Long term capital gains 20,000
Winning from lottery 50,000
Interest on debentures 4,400
Qualifying amount for deduction u/s 80C: 10,000

2. Determine the status of the following persons

i) Punjab National Bank; ii) Madras University; iii) Calcutta Municipal Corporation
iv) Kalyani Publishers Ltd. v) RBI vi) LIC.

3. Mr. Ram an Indian citizen left India on 22.09.2015 for the first time to work as an
officer of a company in Germany. Determine the Residential status of Ram for the
assessment year 2016-17 and explain the conditions to be fulfilled for the same under
the Income Act, 1961.

4. ‘Every assessee is a person, but every person need not be an assessee. Examine.

5. The following are the incomes of ShriKiran for the previous 2015-16.
(i) Profit from Business in Dharwad Rs.7,000.
(ii) Income accrued in India but received in India Rs.6,000.
(iii) Profit from business in England received in India Rs.5,000.
(iv) Income from house property in Africa received in India Rs.4,000.
(v) Profit from business established in Iran and deposited in a bank there, the
business being controlled from India Rs.3,000.
(vi) Income from house property in Pakistan and deposited in bank there Rs.2,000.
(vii) Past untaxed foreign income brought to India during this previous year
Rs.1,000.
Compute the total income of ShriKiran foe the assessment year 2016-17 if he is
(a) Ordinary Resident (b) Not Ordinarily Resident and (c) Non-Resident.

DESCRIPTIVE QUESTIONS

1. How the Previous year and Assessment year can be defined?

2. Give rate of tax schedule for senior citizen.

2
3. Determine the status of the following person.
(i) Tata steels (ii) Andhra bank (iii) Bharathiar University (iv) Coimbatore Municipal
Corporation (v) Narendramodi, Prime minister of India (vi) Village Panchayat

4. A person after about 26 years stay in India went to West Indies in April 2013 and
returned to India on 15th February 2015 to take up a salaried appointment. What is his
residential status for the previous year 2015-16?

5. Analyze the situations that When the individuals became OR, NOR and NR.

6. List out the features of Income tax in India.

7. Mr. B, a married citizen of India left for Germany for the first time on 15.9.2013 on a
business. He returned to India on 5.6.2014. During his absence from India he
maintained a dwelling house for himself in Calcutta. Determine his residential status in
the previous year 2015-16.

8. Prashant went to Germany for course on 5th August 2015 and came back to India on
25th February. His family remained in India. He had never been out of India before.
Identify his residential status for the assessment year 2016-17.

9. Following are the incomes of Mr.A for the previous year. Calculate his taxable income
on the assumption that he is (a) Ordinary resident (b) Not ordinary resident and (c)
Non-resident.
a. Salary drawn during the year for employment outside India from govt. of India –Rs.
93,500.
b. Salary for employment in London office of an Indian company for three months –
Rs.18,000.
c. Profits earned abroad and received in India –Rs.25,000.
d. Income from business outside India and kept in bank there - Rs.18,000.
e. Dividend received from an Indian company - Rs.3,000.

10. Which of the following incomes are taxable when the residential status of Amaranth
is:
(i) Resident (ii) Not ordinarily resident (iii) Non- resident
a) Interest on bank deposit in Allahabad bank – Rs.1,200
b) Income from agriculture in Africa invested in Nepal – Rs.10,000
c) Dividend received in UK from an American company a part of which Rs.2,000 remitted
to India – Rs.10,000
d) Pension received in Belgium for services rendered in India with a limited company –
Rs.20,000.

3
 SECTION- C
REASONING QUESTIONS
1. Mr.Dey, non-resident, residing in US since 1960, came back to India on 1.4.2014 for
permanent settlement. What will be residential status for assessment years 2015-16 and
2016- 17.

2. Following are the particulars of Income of Mr. RTM for the assessment year 2016-17:
(i) Income from business in Mumbai Rs.80,000.
(ii) Income from house property in Pune Rs.20,000.
(iii) Pension from former employer for service rendered in India but received in UK
Rs.24,000.
(iv) Profit from business in UK but controlled from Mumbai Rs.1,60,000. Out of this
Rs.20,000 were received in India.
(v) Dividend from an Indian company but received in UK Rs.16,000.
(vi) Income from agriculture in Nepal: received there but later on remitted to India
Rs.60,000
(vii) Interest on Bonds issued by UK Government out of which 50% is received in India
Rs.40,000.
(viii) Past untaxed income of 2012-13 to 2014-15 brought in to during 2015-16 Rs.4,00,000.
(ix) Income from house property in UK and denoted there to be a notified charitable
Institution Rs.20,000.
Compute the total income for the assessment year 2016-17 if Mr. RTM is:
(a) Resident (b) Resident but not ordinarily resident and (c) Non resident

3.From the following particulars compute the total income of Mr.C.A for the assessment
year 2016-17 if he is (a) Ordinary resident (b) Resident but not Ordinarily resident or
(c) Non-resident.
(i) Income from house property in India [Computed] Rs.32,000.
(ii) Income from house property in England received there and deposited in bank
there Rs.90,000.
(iii) Business income in India Rs.2,60,000.
(iv) Loss from business in England Rs.1,20,000.
(v) Profit from business in England which is controlled from there Rs.1,00,000.
(vi) Interest on debentures of an Indian company Rs.10,000.
(vii) Income from profession set up in India received in England for services
rendered in India Rs.2,00,000.

4. Mr. B, a Canadian Citizen, Comes to India for the first time during the P.Y. 2011-12.
During the financial years 2011-12, 2012-13, 2013-14, 2014-15 and 2015-16, he was in
India for 55 days, 60 days, 90 days, 150 days and 70 days, respectively. Determine his
residential status for the A.Y 2016-17.

4
5. Brett Lee, an Australian cricket player visits India for 100 days in every financial year.
This has been his practice for the past 10 financial years. Find out his residential status
for the assessment Year 2016-17.

DESCRIPTIVE QUESTIONS:
1. Distinguish between Direct tax and Indirect tax.

2. Mr.Peter, a foreigner, came to India from Poland for the first time on 1st April 2009.
He stayed here continuously for 3 years and went to France on 1st April 2012. However,
he returned to India on 1st July 2013 and went to Poland on 1st December 2012. He
again comes back to India on 25th January 2016 on a service in India. What is his
residential status for the A.Y. 2016-17?

3. From the following particulars of Mr. Harish calculate total income if he is OR, NOR
and NR.
(i) Income from profession set-up in India but amount received in Afghanistan
Rs.2,25,000.
(ii) Income accrued in Bhopal but received in Chandigarh Rs.39,000.
(iii) Income from business in Uganda, controlled from Coimbatore [Rs.25,000 received in
Trichy] Rs.50,000.
(iv) Royalty received from government of India Rs.45,000.
(v) Past untaxed profit of 2003-2004 brought into India during the current previous year
Rs.65,000.
(vi) Gift in foreign currency from a friend received in India Rs.56,000.
(vii) Salary from an Indian company received in London Rs.5,00,000 [Rs.2,00,000 is
paid for service rendered in India.]

4. Following are the incomes of Mr. Rathnam for the previous year. Calculate his taxable
income on the assumption that he is (a) Ordinary resident (b) Not ordinary resident and
(c) Non-resident.
a. Profit from business carried from Bangalore Rs.10,000.
b. Income accrued in India but received in Japan Rs.4,000.
c. Past untaxed income brought into India during this previous year Rs.10,000.
d. Income from house property situated in Karachi received in Bombay Rs.4,000.
e. Income from house in USA and deposited there Rs.2,000.
f. Profit from business in Canada but received in India Rs.5,000
g. Income from business in England and deposited there, controlled from India
Rs.20,000.

5. How to identify the residential status of an individual?

7. List out any 10 Exempted Income u/s 10. Elucidate.

5
8. Compute the taxable income of Mr.Z if he is
(a) A Resident (b) A Not Ordinarily Resident, (c) A Non- Resident
(i) Honorarium received from Government of India (expenses of Rs.5,000
were incurred in this connection)- Rs.10,000.
(ii) Profits earned from a business in Kerala controlled from Pakistan – Rs.
5,000.
(iii) Profits earned from a business in USA controlled from West Bengal-
Rs.6,000.
(iv) Profits earned from a business in U.S.A. controlled from Pakistan and
amount deposited to his personal account in a bank there- Rs.4,000.
(v) Dividends from a Italian company credited to his account in Swish-
Rs.2,000.
(vi) Agricultural income from Thailand not remitted to India- Rs.6,000.

9. Following are the incomes of Katyal for the previous year. Calculate his taxable
income on the assumption that he is (a) Ordinary resident (b) Not ordinary resident and
(c) Non-resident.
a) Profit from business carried from Delhi Rs.44,000.
b) Income from business established in England and deposited there, controlled from
India Rs.20,000.
c) Past untaxed income brought into India during this previous year Rs.5,000.
d) Income from house property situated in UK received in India Rs.4,000.
e) Income from house in Nepal Rs.5,000.
f) Profit from business in Nepal and controlled from there but received in India
Rs.12,000.
g) Salary received in England for services rendered in India Rs.10,000.
10. Mr.C,a Japanese citizen left India after a stay of 10 years on 01.06.2012. During the
Fianancial year 2014-15, he comes to India for 46 days. Later, he returns to India for 1
year on 10.10.2015. Determine his residential status for the A.Y. 2016-17.

6
 UNIT - II
SECTION A- (10x1=10 Marks)
(Choose the Correct Answer)
1.
Salary received by a member of parliament is
a) Taxable as salary income b) Exempt from tax

c) Taxable as income from other sources d) Not consider as Salary

2. Dearness allowance is taxable in the hands of:

a) Govt employees b) Non Govt employees
c) All employees d) Specified Employee

3.
House rent allowance received while living in own house
a) Fully exempted b) Partly taxable
c) Fully taxable d) Actual rent paid alone is taxable

4.
Children education allowance is exempted up to a maximum of:
a) Rs.200 p.m. per child b) Rs.300 p.m. per child
c) Rs.100 p.m. per child d) Rs.400 p.m. per child

7
5. Hostel expenditure allowance is exempted up to:
a) Rs.300 per month per child b) Rs.200 per month per child
c) Rs.150 per month per child d) Rs.250 per month per child

6. The value of interest free or concessional loans to employees is determined on the basis of
lending rates for the same purpose of
a) S.B.I b) R.B.I
c) Central govt. d) State govt.

8. Employer's contribution to RPF is exempted up to

a) 10% of salary b) 13% of salary

c) 12% of salary d) 11% of salary

9. Statutory limit for exemption of gratuity received by non-Govt. employees is

a) Rs.300000 b) Rs.500000
c) Rs.1000000 d) Rs.400000

10. Commuted value of person is fully exempted in case of:

a) An employee of private sector b) An employee of a public sector
undertaking
c) A Govt. employee
d) Exempted up to the amount of actual
expenditure incurred on medical treatment.

11. Maximum deduction of entertainment allowance in case of Govt. employees

u/s 16(ii)is:

a) Rs.7500 b) Rs.5000
c) 15% of employee's salary
d) 25% of employee's salary
12. Statutory limit of exemption of leave encashment is:
a) Rs.350000 b) Rs.300000
c) Rs.500000 d) Rs.250000
13. Value of rent free accommodation in case of Govt. employee shall be taxable up to :
a) 20% of employee’s salary b) License fee fixed by Govt
c) 15% of employee’s salary c) Fully exempted
14. Medical allowance received by an employee if he has taken treatment at private hospital
a) Fully taxable b) Fully exempted
c) Exempted up to the amount of actual d) Exempted up to Rs.15,000
expenditure incurred on medical treatment
15. Perquisites and allowances paid to Govt. employees posted abroad are
(a) Fully taxable (b) Fully exempted
(c) Exempted if consumed abroad (d) Not consider as Salary
16. Gratuity received by a Govt. employess is
a) Fully taxable b) Fully exempted
c) Exempted upto Rs.3,50,000 d) Partly Taxable
17. Commuted value of pension is fully exempted in case of :
a) A Govt. employee b) An employee of private sector
c) An employee of public sector d) Specified Employee
undertaking

8
 18. The amount of exemption for running allowance is :
a) 70% of such allowance or Rs.3000 p.m. b) 70% of such allowance or Rs.6000
WEL p.m.WEL
c) Fully exempted d) Fully taxable
19. A university teacher is :
a) Govt. employee b) Semi govt. employee
c) Private sector employee d) Specified Employee

SECTION-B
REASONING QUESTIONS

1. Mr.Y is employed at Amirstar on a salary of Rs.3,000 pm. The employee is

paying HRA of Rs.350.P.M but the actual rent paid by the employee is
Rs.500 PM. He is also getting 2% commission on turnover achieved by him
& turnover is Rs.150,000. Calculate his taxable portion of HRA& Gross
Salary.

2. Mr.Y gets Rs.6,000 pm as basic pay in addition to that he received Rs.2,000

PM as entertainment allowance. Calculate exempted portion and taxable
portion of Entertainment allowance.

3. Mr.Akash is appointed as sales manager of company at Chennai he was

transfer to Bangalore where he stayed in hotel free of rent.
The following on his particulars:
PARTICULARS AMOUNT(RS)
Basic pay 25,000 pm
DA 5,000 pm
Conveyance Allowance 1,000 pm
[actualexp.Rs.600pm] 1,000 pm

9
CCA 1,000 pm

Calculate the value of Hotel Accommodation and Gross Salary for the
following situations:
(a) If he stayed 14 days& actual bill is Rs.6,600
(b) If he stayed 38 days & Actual bill Rs.30,950

4. Mr.X has been provided with a car (1800cc) facility to be used both for
official purposes as well as for private use. Expenses on this Car are:
PARTICULARS AMOUNT(RS)
Petrol 60,000
Driver 48,000
Insurance, repairs etc 40,000
Cost of car 8,00,000
Mr. X pays Rs.500 per month to his Employer for the private use of Car.
Find out the taxable portion of Motor car facility for the previous year 2015-
2016.

5. Mr. srikanth retries from a Public Ltd, company on 31.08.2015 and his Pension
was fixed Rs.1,500 Pm. He does not commute any part of his pension for the
previous year 2015-2016. Compute his taxable portion of pension.

DESCRIPTIVE QUESTIONS
1. Mr.N resides in Pune he gets Rs.5000 pm as the basic salary, Rs.300 pm. as
DA [Forming part of] and Rs.600 pm as HRA, he pays Rs.400 Pm towards
rent. Calculate exempted portion of HRA & taxable portion of HRA.

2. From the following particulars of Mr. Ragavan for PY 2015-16. Calculate the
taxable portion of allowances.
PARTICULARS AMOUNT(RS)
DA (does not forming) 1,000 p.m
Marriage allowance 1,200
Helper allowances (expenditure Rs.1, 000 pm) 1,200 p.m
Overtime Allowance 500
Warden ship Allowance 1,380
City Compensatory allowances (CCA) 7,500
Travelling allowances (expenditure Rs.750 pm) 1,500
Conveyance allowance (40%Personal) 1,500
Transport allowance 1,900
Foreign allowance 4,000 p.m

3. From the following particulars compute Gross salary

PARTICULARS AMOUNT(RS)

10
 Salary 1,48,000
Bonus 12,000
Free gas, electricity, water etc. (actual bills paid by company) - Rs.6,000
Furnished flat provided to the employee at Kanpur (Population above 25 lakhs)
for which actual rent paid by the company Rs.78,000. Rent recovered from the
employee is Rs.1,000 pm. Cost of furniture Rs.50,000.

4. Find out Taxable value of Perk from the following case

Mr.A is a executive director of a company and has been provided by 2 cars. One
of the car costing is Rs.16,00,000 is meant for his family use and the other one
is meant for official use. The running & maintenance of car for the private use
are as under.
PARTICULARS AMOUNT(RS)
Petrol 48,000
Insurance 16,000
Driver 60,000

Running & maintenance expenses on the car being used for official duties are as
under:
PARTICULARS AMOUNT(RS)
Petrol 72,000
Cost of Car 16,00,000
5. Calculate taxable portion of perquisites for Mr. Santhosh as he is specified
employee.
(i) LIC Premium of Santhosh spouse Rs.3,000 Paid by the employer.
(ii) Reimbursement of medical expenses for the treatment of his family
member in private hospital Rs.25,000.
iii) Rs.3,000 towards gas and electricity Rs.1,000 towards legal expenses of
Mr.Santhosh paid by the employer.
iv) He received gift in kind worth of Rs.15,000.
v) Free domestic servant (Salary Rs.600 pm per servant for 2 servants)
provided by the employer.
vi) Gardener appointed by the employer Rs.500pm which is paid by employer,
Rs.300 pm collected from the employee.
vii) Medical bill were reimbursed in the following manner;
(a) From a notified Hospital Rs.12,000.
(b) From a private Hospital Rs.38,000.
viii) Reimbursement of school fees for employee children Rs.2,000.

6. Mr.Y an employee of Info Ltd received Rs.23,000 as gratuity. He is covered by

payment of Gratuity Act 1972. He retires on 15.1.16 after rendering 28 years & 3
month’s service. At that time of retirement his monthly salary was Rs.2,500.
Calculate taxable Gratuity.

11
7. Mr.N retires on 30.6.15 after 18 years of service and received Rs.75,000 as
amount of Leave encashment. His employer allows 45 days leave for every year of
service. During his service he has already enchased leave for 12 months. Calculate
taxable portion of leave salary if his salary during the last year of service was
Rs.5,000 pm.

8. From the following information calculate gross salary for PY 2015-2016. If

contribution towards PF is (a) SPF, (b) RPF, (c) URPF, (d) PPF
Basic salary - Rs.1,00,000
DA (Forming) - Rs.30,000
Commission on turnover achieved at 2% at Rs.5,000
Both employees and employers contribution towards PF – Rs 18,000 each

9. Define salary. List out its Characteristics.

10. State the provisions of the Income tax Act regarding Entertainment Allowance
received.

SECTION-C
REASONING QUESTIONS
1. Mr.Jagan is working with a company at Delhi submits the following information
about his salary income for PY 2015-16.
PARTICULARS AMOUNT(RS)
Salary 8,000 pm
DA 2,000 pm
Bonus 15,000

His employee paid him Rs.2,000 Pm as HRA up to 30/11/15 and it was raised
Rs.5,000 pm from 1/12/15. He lived with his parents in a house owned by his father
and no rent was paid him from 1.12.15, he shifted to a rented house and paid
Rs.5,000 pm as rent. Calculate his gross Salary.

2. From the following information calculate income from salary of Mr.N working in
Vellore in a private company.
PARTICULARS AMOUNT(RS)
Basis Salary 12,500
DA 8,000
CCA 1,200
Special allowances 600

12
Servant allowance 250
Deputation allowance 100
OT Allowances 650
Fixed Medical 50
HRA 4,000
Conveyance (actual amount spent Rs.4800 pa) 6,000 pa
20% of total DA does not enter into service benefits. He pays rent of Rs.2,150 pm
for house where he resides. Apart from above mention he was paid Rs.3,400 as
bonus. He gets Rs.250 pm towards entertainment allowance.

3. Mr.AB Sen has furnished the following particulars;

i) Salary Rs.10,000 pm.
ii) DA@500 PM (It enters into pay for retirements Benefits).
iii) Entertainment allowance Rs.600 pm.
iv) Bonus @ Rs.8,400.
v) Cost of furniture Rs.20,000.
Calculate the value of Rent free-accommodation.
Case 1: AB Sen is Govt. Employee and Rent of house fixed by Govt. is Rs.300 per
month.
Case 2: AB Sen is working in semi Govt. undertaking in Chennai (Population More
than Rs.25,00,000) and Fair rental value of the house in Rs.1,000pm.
4. Mr.Sriram who is not covered by payment of Gratuity Act 1972 retired on
15-11-2015 and received Rs.1,90,000 as Gratuity after 37 years & 7 months
service. His salary is Rs.7500 pm, up to 31.07.2015 & Rs.8,500 from 1.08.2015
besides he gets Rs.800 pm as DA (Rs.600 forms part of salary) Calculate Taxable
portion of Gratuity.

5. Mr.Karthi retired from the service of Pvt Company on 30.06.2015. On

01.10.2015, he got 2/3rd of his pension commuted for Rs.90,000. Calculate his
taxable portion of pension. His monthly pension is fixed as Rs.1200pm.

DESCRIPTIVE QUESIONS
1. Compute Gross salary form the information given below for each situation
separately
PARTICULARS AMOUNT(RS)
Salary 3,500 pm
DA 1,000 pm
CCA 200 pm
HRA 1,000 pm
Commission on turnover achieved by him Rs.6,000.
SITUATION:
i) Living in Own House.

13
 ii) Living in rented house at Delhi. DA enters in to pay for the
retirement benefits and rent paid is Rs.1,500 pm.

2. Mr.C is a finance manager in ABC Ltd. The company has provided him with
rent-free unfurnished accommodation in Mumbai. He gives you the following
particulars:
PARTICULARS AMOUNT(RS)
Basic salary 6,000 pm
Advance salary for April 2016 5,000 pm
Dearness allowance (30% is for retirement benefits) 2,000 pm
Bonus 1,500 pm

Even though the company allotted the house to him on 1.4.2015, he

occupied the same only from 1.11.2015. Calculate the taxable value of the
perquisite for AY. 2016-17
Compute the value of the perquisite if ABC Ltd has provided a
television (WDV Rs.10,000; Cost Rs.25,000) and two air conditioners. The
rent paid by the company for the air conditioners is Rs.400 p.m. each. The
television was provided on 1.1.2016. However, Mr. C is required to pay a
rent of Rs.1,000 p.m. to the company for the use of furnished
accommodation.

3. Employer has provided the employee two small cars which he uses both for
official use as well as for private purposes. Expenses incurred on the cars
during the previous year are:
PARTICULARS CAR I CAR II
Cost of Car 5,00,000 4,00,000
Petrol 36,000 40,000
Insurance & Repair 20,000 24,000
Calculate the value of Perquisite.

4. Mr.Kannan retires from the company after getting 30 Years and 7 months
service. He received Rs.1,80,000 as Gratuity under payment of Gratuity Act
1972. He received basic salary & DA (forming) were Rs.5,000 pm &
Rs.1800pm respectively . Calculate taxable Gratuity.

5. Mr.Ragu retired on 15.2.15 and he received Rs.1,80,000 as leave

encashment for 15 months. He has served for 33 years. His employer allowed
him 90 days leave for every year of service.
His salary fixed for calendar year 2015 was Rs.11,000 pm and from
1.1.2016 onwards Rs.12,000 pm. Calculate his exempted & taxable portion
of leave encashment.

14
 6. Mr. M is an area manager of M/s N.Steels Co. Ltd. during the financial year
2015-16, he gets the following emoluments from his employer
PARTICULARS AMOUNT(RS)

Basic salary
Up to 31.06.2015 Rs.20,000 p.m.
From 1.07.2015 Rs.25,000 p.m.
Transport allowance Rs.2,000 p.m.
Contribution to recognized provident fund 15% of basic salary
Children education allowance (Total) Rs.500 p.m. for two children
City compensatory allowance Rs.300 p.m.
Hostel expenses allowance (Total) Rs.380 p.m. for two children
Tiffin allowance (actual expenses Rs.3700) Rs.5,000 p.a.
Tax paid on employment Rs.2,500
Compute the salary income chargeable to tax in the hands of M for the
assessment year 2016-17.

7. Mr. Goyal receives the following emoluments during the previous year ending
31.03.2016.
PARTICULARS AMOUNT(RS)
Basic pay 40,000
Dearness allowances 15,000
Commission 10,000
Entertainment allowance 4,000
Medical expenses reimbursed 25,000
Professional tax paid (Rs.2,000 was paid by his employer) 3,000

Mr. Goyal contributed Rs.5,000 towards recognized provident fund.

He has no other income. Determine the income from salary for A.Y 2016-17,
if Mr.Goyal is a State Government Employee.

8. How to calculate the taxable portion of Rent free accommodation given to an

Employee under Income tax Act.

9. How do you treat Gratuity under Income tax Act?

10. What are the various Allowances generally paid to Employees?

15
 UNIT - III
SECTION A- (10x1=10 Marks)
(Choose the Correct Answer)
1. The basis of charge for tax on income from house property is
a) Annual value b) Rental value
c) Municipal value d) Market value

2. Expected rent cannot exceed.

a) Municipal rent b) Fair rental value
c) Actual rental value d) Standard rental value
3. GAV of let out house is:
a) Higher of GRV or Actual rent b) Least of ERV or Actual rent
c) Lower of FRV or M.R.V. d) Higher of Standard Rent
4. GAV of self-occupied house is:
a) Always nil b) Always fully taxable
c) Higher of MRV/FRV d)Partly Taxable
5. Standard deduction u/s 24 is
a) 1/4 of NAV b) 1/5 of NAV
c) 30% of NAV d) Rs.10000
6. Preconstruction interest is deductible in
a) 4 installments b) 5 installments
c) 6 installments d) 3 installments

16
7. Interest on the securities held as stock-in-trade of an assesses business should be
included in his total Income as
a) Income from business b) Interest on securities
c) Income from other sources d) Income from Salaries
8. Due date of filing of return by a non-business assesse is
a) 31st August b) 31st July
c) 30th August d) 30th June
9. Reduction admissible from tax liability is known as
a) Exemption b) Deduction
c) Rebate d) All the above
10. Bonus shares received by a dealer of shares is a :
a) Capital receipt b) Revenue receipt
c) Exempted income d) Professional receipt
11. Subsidy received from Govt. under scheme for promotion of industry is a
a) Revenue receipt b) Capital receipt
c) Professional receipt d) Income
12. Unabsorbed depreciation can be carried forward for set off :
a) For a period of 4 years b) For a period of 8 years
c) For an unlimited period d) For a period of 6 years
13. Unabsorbed speculation business loss can be carried forward for set off:
a) For a period of 4 years b) For a period of 8 years
c) For an unlimited period d) All the above
14. Consultancy fee received by a lawyer is:
a) Taxable b) Non-taxable
c) Taxable if used as a hotel d) All the above
15. Professional expenses are allowed on
a) Accrual basis b) Payment basis
c) Accrual or payment basis d) All the above
16. Bad debts allowed earlier and recovered latter on is
a) Business income b) Non-business income
c) Exempted income d) Professional receipt
17. Gifts from clients are
a) Professional income b) Income from other sources
c) Nontaxable item d) Business receipt

17
 SECTION-B
REASONING QUESTIONS
1. From the following information calculate NAV.

Particulars H1(Rs.) H2(Rs.)

MRV 10,000 20,000
FRV 15,600 15,000
SR 15,000 -
AR 1,750pm 1,200pm
Period of Vacancy 1 Month 2 months
Unrealized Rent 1 Month -
Municipal Tax 12% 15%

Municipal tax for H1 was paid and for H2 was due. Assume H1 and H2 are let out
properties.

2. Calculate GRV from the particulars given below.

MRV = Rs.60,000 pa. FRV = Rs.66,000 pa.
(a)If Actual rent is Rs.72,000 pa. & Standard rent Rs.69,000pa.
(b)If Actual rent is Rs.63,000 pa. & Standard rent is Rs.69,000 pa.

3. Vaibhav own five houses of Cochin, all of which are let out. Compute the gross

Particulars House – I House –II House –III

Municipal value 1,20,000 2,40,000 1,10,000
Fair Rent 1,50,000 2,40,000 1,14,000
Standard rent 1,08,000 N.A 1,44,000
Actual rent received /receivable 1,80,000 2,10,000 1,20,000

annual value of each house from the information given below.

4. Profit and Loss Account of M/s Raju& Company

Particulars Rs. Particulars Rs
General Expenses 7,000 Gross profit 1,40,000
Fire Insurance Premium 2,000 Bad debts recovered but disallowed
Bad Debts 1,000 earlier 4,000
Salaries 65,000 Interest from Govt. Securities 4,000
Advertisement (In Cash) 22,250 Rent received from employees 12,000
Proprietor’s Salary 12,500 Interest from debtors for delayed
Interest on capital 2,000 payment 6,000
Income Tax 1,000
Depreciation 2,000
Sales-Tax(due) 5,,000
Advance income tax paid 1,000
Donations 500
Motor Car Expenses 750
Municipal Taxes of Quarters let
to employees 5,000
Net profit 39,000
1,66,000 1,66,000
General expenses include Rs.4,000 paid as compensation to an old employee
whose services were terminated in the interest of the business and Rs.2,200 by way of

18
 help to a poor student. Depreciation calculated according to the rates comes to Rs.2,900
sales tax was paid on 01.05.2016 date of filling of return is 31.07.2016. 50% Motor car
expenses are for proprietor’s personal use. Compute Business Income.

5. Mr.Sathish is a Medical Practitioner. He gives you the following summary of cash book
for the year ending 21.3.2016

Expenditure Rs Income Rs
To Balance 10,000 By Rent of Clinic 18,000
To Consultancy fees 60,000 By Purchase of Medicine 38,000
To Gift & present 8,000 By Staff salaries 24,000
To Visiting fees 45,000 By Surgical equipment 40,000
To Sales of medicines 42,000 By Purchase of Motor Car 1,40,000
To Dividend from UTI 6,000 By Motor car expenses 8,000
To LIC Maturity 1,00,000 By House hold expenses 7,000
To Dividend from N.D.S 6,600 By Closing balance 2,000
2,77,000 2,77,000

 50% of motor car expenses incurred in connection with profession. Car was
purchased in December 2015.
 Household expenses include 6,800 Insurance premium.
 Gifts and presents include 3,000 from relatives.
 Closing stock of medicine 12,000 and opening stock 1-4-2015 was Rs.4,000.
Compute the professional gain.

DESCRIPTIVE QUESTIONS

1. How do you determine the annual value of house property?

2. What is the approved deductions u/s24 under the head Income from house
property?

3. Mr.Deb Arora received a building as a gift from his father on 1.04.2015. The
building was used by his father in his own business .It was acquired by his father
Rs.5,00,000 and its fair market value on 1.04.2015 was Rs.6,00,000. His father had
claimed depreciation of Rs.2,60,000 up to 31.3.2015. Determine the cost of building
on which Mr.Deb Arora charge depreciation.

19
4. Find out the GAV
PARTICULARS AMOUNT(RS)
Municipal value 1,20,000
Fair rent 1,30,000
Standard rent 1,10,000
Actual rent 1,26,000

5. From the following information calculate income from HP which is used for 40%
portion as self-occupied & 60% has let out.

PARTICULARS AMOUNT(RS)
MRV 5,000
FRV 9,600
Municipal tax 1,000
Actual rent 200pm
Interest on borrowed loan 1,000

6. The following is the profit & loss A/c of a merchant for the year ending 31st March
2016.
PROFIT AND LOSS ACCOUNT
Particulars Rs. Particulars Rs.
To Office salary 6,500 By Gross profit 36,750
To Bad debts written off 1,700 By commission 1,250
To Provision for Bad debts 3,000 By discounts 500
To Advertisement 3,800 By Sundry receipts 200
To Fire insurance premium By Rent of buildings 3,600
(House property) 550 By profit on sale of investments 3,000
To General expenses 2,750
To Depreciation 1,200
To Interest on capital 2,000
To Interest on Bank (due) 1,300
To Net Profit 22,500
45,300 45,300
Compute the taxable profits from business. The amount of depreciation is Rs.1,000.
Interest on Bank Loan was paid on 1.08.2016. Due date of filing of Return is
31.07.20016.

20
7. From the following particulars, compute the business income of Mr.S.Ranganathan.
Particulars Rs. Particulars Rs.
To salaries 90,000 By gross profit 3,50,000
To Rent & Taxes 20,000 By Dividend 4,000
By Bad debts recovered(Allowed
To Service charges 4,000
earlier) 4,400
To Legal Expenses 5,000
By interest from Post office savings
To Reserve for Income Tax 6,000 bank 1,200
To Depreciation 12,000
To Expenses on acquisition of
patent Rights 56,000
To Office expenses 42,000
To Contribution to RPF 12,000
To Bad Debts 4500
To Donation to N.D.F 2500
To Net Profit 1,05,600
3,59,600 3,59,600
i. Legal expenses include Rs.2,000 incurred by assessee for defending a case for
damages for breach of contract which was decided in favor of assessee
ii. Depreciation of the year on assets other than patent rights is Rs.16,900.
iii. Contribution to RPF due on 31.03.2016 Rs.2,000.

8. Following is the profit and loss account of Mr.Q for the year ended 31.03.2016
Particulars Rs. Particulars Rs.
To Repairs on building 1,81,000 By Gross profit 6,01,000
To Amount paid to IIT, Mumbai By I.T. Refund 8,100
for an By Interest on company deposit 6,400
approved scientific research
program 1,00,000
To Interest 1,10,000
To Traveling Exp. 1,30,550
To Net profit 93,950
6,15,500 6,15,500
Following additional information is furnished:
i. Repairs on building includes Rs.10,00,000 being cost of building a new toilet.
ii. Interest payment includes Rs.50,000 on which tax has not been deducted and
penalty for contravention of central sales tax Act of Rs.24,000.
Compute the income chargeable under the head Profits and gains of Business or
Profession of Mr. Q for the year ended 31-03-2016 ignoring depreciation.

9. Explain the term Business and Profession.

10. Write down the provisions of expenditure on scientific Research and income from
business.

21
 SECTION- C
REASONING QUESTIONS:
1. From the following particulars calculate interest on loan for deduction U/s 24.
Date of loan 1/7/2011
Amount of Loan Rs.5,00,000
Rate of Interest 14% pa
Date of completion 1/7/2013
Amount of Loan Return Rs.1,00,000 on 31/3/15
Purpose of Loan – Construction of house
Assume (a) if the HP is Let-out; (b) If the HP in self-occupied.

2. From the following information find out income from HP which is used for partly let
out & partly self-occupied.
PARTICULARS AMOUNT(RS)
MRV 5,000
FRV 9,600
Actual rent 2,000 PM
Local tax 1,000(Municipal tax)
Ground rent 100
Repair 900
Insurance 200
Collection charges 200
Interest on loan taken for construction 1,000

3. From the following information calculate income from House property which has been
used for the PY Let-out for 4 months &self-occupied for 8 Months.

PARTICULARS AMOUNT(RS)
MRV 90,000
FRV 60,000
AR 65,000
SR 65,000
Municipal tax 10%
SUR charges 2% on municipal tax
Gardner salary 300pm
Lift maintenance 150 pm
Interest on loan taken for construction 3,000

22
4. From the following statement, compute income from profession of Dr.S.Kapoor if
accounts are maintained on Cash/Receipt system:
Particulars Rs. Particulars Rs.

To Dispensary rent 36,000 By Visiting fees 45,000

To Electricity and water charges 6,000 By Consultation fees 1,25,000
To Telephone expenses 6,000 By Sales of medicines 72,000
To Salary to nurse and By Dividends 5,000
Compounder 36,000
To Dep. on surgical equipment 6,000
To Purchase of medicines 36,000
To Depreciation on x-ray machine 4,000
To Income tax 5,500
To Donation to Rama Krishna
Mission 4,000
To Motor car expenses 9,600
To Dep. On car 4,800
To Net Income 93,100
2,47,000 2,47,000
 Electricity & water bills include domestic bill of Rs.2,500.
 Half of motor car expenses are for professional use.
 Telephone expenses include 40% for personal use
 Opening stock of medicines was Rs.6,000 and closing stock was Rs.4,000.

5. Mr.Devan is Chartered Accountant in Delhi. They have submitted the following

income on expenditure account for the year. Compute income from profession.

Expenditure Rs Income Rs
To Drawings 48,000 By Auditing fees 2,24,000
To Office rent 42,000 By Financial consultancy service 98,000
To Telephone installation By Dividend from Indian
charges 15,000 Company(Gross) 6,000
To Electricity bill 4,200 By Dividend on units of UTI 4,000
To Salary to staff 66,000 By Accountancy work 24,000
To Charity donation 1,200
To Gifts given to relatives 9,600
To Car expenses 21,000
To Subscription for Journals 2,500
To Institute fees 1,200
To Stipends given to trainees 12,000
To net income 1,33,300
3,56,000 3,56,000
 Depreciation of car during the year amounted to Rs 5,000. 30% of the time, car
is used for personal purposes
DESCRIPTIVE QUESTIONS
1. How will you compute income from let out house property?

2. Give tax treatment for interest on loan u/s 24 under income from House property.

23
3. Mrs. Arun owns two self-occupied house. From the following Information find out
Income from HP and state that which houses is choose as self- occupied.
Particulars H1(Rs.) H2(Rs.)
SR 36,000 56,000
FRV 42,000 62,000
MRV 24,000 44,000
Municipal Tax paid 1,200 -
Municipal tax Due - 1,500
Mr.Arun has taken a loan of Rs.2,50,000 at 10% pa on 1.06.2011. For construction
of H1 and construction was completed on 31/01/2013. He repaid the loan amount
Rs.2,00,000 on 1/1/2015.

4. Mr.Krishna owns a residential house in Delhi. The house is having two identical units.
First unit of the house is self-occupied by Mr.Krishana and another unit is rented for
Rs.12,000 p.m. the rented unit was vacant for three months during the year. The
particulars of the house for the previous year 2015-16 are as under
Standard rent Rs.2,20,000 p.a
Municipal valuation Rs.2,44,000 P.a
Fair Rent Rs.2,35,000 p.a
Municipal tax paid by Mr.Krishna 12% of the Municipal valuation
Light and water charges Rs.800 p.m
Interest on borrowed capital Rs.2,000 p.m
Insurance charges Rs.3,500 p.a.
Painting Expenses Rs.16,000 p.a
Compute income from house property of Mr.Krishna for the A.Y 2016-17.

5. Arvind had taken a loan of Rs.5,00,000 for construction of property on 1.10.2014.

Interest was payable @ 10% p.a. the construction was completed on 30.06.2015.
No principal repayment has been made up to 31.03.2016; Compute the interest
allowable as deduction under section 24 for the A.Y 2016-17.

6. From the following profit & Loss Account of a manufacturer, calculate the income
under the head, profits and Gains of Business or profession for the year ending on
31st March 2016
Particulars Rs. Particulars Rs.
Salaries to employees 95,000 Gross profit 3,80,000
Advertisement expenses (in cash) 24,000 Interest on securities 14,000
General expenses 16,000 Income from house property 25,000
Entertainment expenses 22,000 Bad debts recovered (allowed
Bad debts 1,500 earlier) 12,000
Drawing by the proprietor 24,000
Sales tax (due and paid on 1.7.15) 6,000
Interest on proprietor’s capital 7,000

24
Repairs 2,500
Rent 21,000
Legal expenses 5,000
Depreciation 15,000
Bonus (due) 6,000
Bonus to the proprietor 4,000
Car purchased 72,000
Expenses on car during the year 12,000
Donations 2,000
Provisions for bad debts 6,000
Net profit 90,000
4,31,000 4,31,000
From the examination of books of accounts, the following other information are
available:
a. Advertisement expenses were spent on insertions in newspapers.
b. Rs.3000 were spent on purchase of land and included in legal expenses
c. Half of the repair expenses were on let out building
d. Depreciation allowable on all assets including car Rs.14,400
e. Bonus was paid to employers on 30.06.2016 & date of filling of return is
31.07.2016.

25
7. Following is the profit & loss account of Mr.S.K for the year ending 31.03.2016
Particulars Rs. Particulars Rs.
To salary 5,60,000 By Gross profit 12,10,000
To Repairs 20,000 By commission 12,000
To patents [1/14 part]
th
7,000 By Sundry receipts 18,000
To Bad debts 12,000 By Rent from let out house 30,000
To Provision for bad debts 11,000 By profit from sale of old machine 16,000
To revenue expenditure on By debt recovered 10,000
Scientific research 20,000 By interest on Govt. securities
To expenditure on promotion of (Investment made out of business
family planning amongst funds) 20,000
employees 14,000 By interest on income tax refund 8,000
To donation to an approved
institution 15,000
To health insurance premium of
employees 16,000
To contribution to employees
provident fund @ 15% of
employees salary 30,000
To advertisements 40,000
To expense on Guest house 36,000
To interest on borrowed money 50,000
To entertainment expenses 20,000
To loss of stock due to theft by
an employee 8,000
To sales tax penalty 12,000
To Donation to a university for
research 40,000
To Gratuity 30,000
To Depreciation 1,20,000
To Income tax 40,000
To provision for income tax 20,000
To Net profit 2,03,000
13,24,000 13,24,000
ADDITIONAL INFORMATION
a) 50% of health insurance of employees has been paid in cash.
b) Income tax provision is excessive to the turn of Rs.8,000.
c) Patents were acquired on 1.11.2015.
d) Income accrued during the year but not credited to profit & Loss account
Rs.20,000
e) Expenses on advertisement include on expenditure of Rs.15,000 on neon sign
board. (Rate of Dep. is 15%)
f) WDV of machine sold was nil.

26
 g) Research conducted by the university is not related to assess field of business.

h) WDV of assets on 1.04.2015 was: factory building Rs.2,00,000 non-factory

building Rs.3,00,000 plant & machinery Rs.3,00,000. A new machinery costing
Rs.2,00,000 was acquired on 15.12.2015 and was actually put to use on
15.01.2016.
From the information given above calculate the business income of Mr.S.K for the
assessment year 2016-17.

8. Mr. Sivam a retail trader of Cochin gives the following Trading and profit and loss
Account for the yearended 31th March, 2016:
Trading and profit and loss Account for the year ended 31.03.2016
Particulars Rs. Particulars Rs.
To Opening stock 90,000 By sales 12,11,500
To Purchase 10,04,000 By income from UTI 2,400
To Gross profit 3,06,000 By closing stock 1,86,100
14,00,000 14,00,000

To Salary 60,000
To Rent and rates 36,000 By gross profit 3,06,000
To Interest on loan 15,000
To Depreciation 1,05,000
To Printing & stationery 23,200
To Postage & telegram 1,640
To Loss on sale of shares
(Short term) 8,100
To Other general expenses 7,060
To Net profit 50,000
3,06,000 3,06,000
Additional information:
(i) It was found that some stocks were omitted to be included in both the
opening and closing stock, the values of which were:
a. Opening stock Rs.9,000
b. Closing stock Rs.18,000
(ii) Salary includes Rs.10,000 paid to his brother, which is unreasonable to
the extent of Rs.2,000
(iii) The whole amount of printing and stationery was paid in cash by way of
onetime payment
(iv) The depreciation provided in the profit and loss account Rs.1,05,000 was
based on the following information:
The written down value of plant and machinery is Rs.4,20,000 as on
01.4.2015. A new plant falling under the same block of depreciation
was bought on 01.07.2015 for Rs.70,000. Two old plants were sold
on 1.10.2015 for Rs.50,000
(v) Rent and rates includes sales tax liability of Rs.3400 paid on 07.04.2016
(vi) Other general expenses include Rs.2,000 paid as donation to a Public
Charitable Trust

27
 Calculate Business income of Mr.Sivam for the Assessment year 2016-17

1. Give the format to compute income from Business. List out some inadmissible
expenditure.

10. What are the admissible deductions under profits and Gains of Business or
Profession?

28
 UNIT-IV

SECTION A- (10x1=10 Marks)

(Choose the Correct Answer)
1. Which of the following is not an `exempted asset` for the purpose of calculation of
Income from capital gains under taxation
a) Asset held for personal use b) Shares of domestic companies

c) Gold deposit bonds under 1999 scheme
2. Listed shares held for less than 12 months are
a) Short term capital asset
c) Exempted capital asset
d) Special Bearer Bonds issued by central
govt. in 1991
b) Long term capital asset
c) Medium term capital asset

3. Unlisted shares held for15 months are

a) Short term capital asset b) Long term capital asset
c) Exempted capital asset c) Medium term capital asset

4. Land held for 56 months are

a) Short term capital asset b) Long term capital asset
c) Exempted capital asset c) Medium term capital asset

5. “Transfer of capital assets” is defined under I.T Act 1961

a) Sec1(32) b) Sec 9(26)
c) Sec 26(3) d) Sec 2(47)
6. Indexation is applicable to
a) Sale of short term capital asset b) Sale of depreciable capital asset
c) Sale of short term capital asset which d) Sale of Long term capital asset
are not depreciable asset.
7. What is the date from which “cost of improvements” to capital asset is taken into account
while computing capital gains
a) 01.04.2001 b) 01.04.1971
c) 01.04.1991 d) 01.04.1998
8. What is the date on which “fair market value” of capital asset acquired is determined?
a) 01.04.2001 b) 01.04.1971
c) 01.04.1981 d) 01.04.1971
9. Cost of inflation rules for the purpose of long term capital gain has been notified by the
central govt every year starting from the financial year
a) 1991-92 b) 1985-86
c) 1981-82 d) 1975-76
10. Short term capital gain on sale of listed shares are
a) Exempted b) Taxable
c) Partly Taxable d) Partly Exempted
11. Short term capital gain on sale of un listed shares are
a) Exempted b) Taxable
c) Partly Taxable d) Partly Exempted
12. Long term capital gain on sale of listed shares subjected to STT are
a) Exempted b) Taxable
c) Partly Taxable d) Partly Exempted
13. Exempted u/s 54 is allowed for investment in
a) Another residential house b) Land
c) Jewells d) Shares

29
14. Exempted u/s 54B is allowed for investment in
a) Agricultural land b) Shares
c) Residential house d) Nonagricultural land
15. Exempted u/s 54C is allowed for investment in
a) Residential house b) Bonds of NHAI and RECI
c) Agricultural land d) Jewells
16. Tax on long term capital gain is
a) 10% b) 20%
c) 25% d) 30%

17. Tax on short term gain on sale listed shares subjected to STT is
a) 20% b) 15%
c) 30% d) 40%

18. Income from other source is

a) Residuary head of income b) Major head of income
c) Income from a single source d) Constant and regular income

19. Dividends from co-operative society are

a) Exempted b) Taxable
c) Partly Taxable d) Partly Exempted
20. Tax is reduced from casual incomes at
a) 10%+ surcharge and accesses b) 20%+ surcharge and accesses
c) 30% d) 40%
21. Interest on bank term deposit is subject to tax deduction at source if the interest amount
during the relevant previous year exceeds
a) Rs.2000 b) Rs.3000
c) Rs.10000 d) Rs.15000
22. Grossing up of interest on securities is required when
a) Interest is received after T.D.S b) They are central govt. securities
c) Income from a single source d) Constant and regular income
23. Family pension is subjected to
a) Standard deduction b) Taxable @20%
c) Taxable@30% d) Taxable@40%
24.
Rate T.D.S for unlisted securities, is
a) 10.6% b) 15.6%
c) 10% d) 11%

30
 SECTION-B
REASONING QUESTIONS
1. Calculate taxable capital gain from the following.
An asset was purchased in 2014-15 for Rs.1,50,000. The asset was sold for Rs.2,50,000
in the previous year 2015-2016.

2. From the following details calculate capital gain

a. Sale consideration of residential House for Rs.30,00,000 on 26-8-2014 [CII:
1024].
b. Cost of acquisition of house on 1-7-2007 is Rs.10,02,000[CII :551].
c. New residential house acquired on 2nd March 2015 for Rs.10,00,000.
d. Cost of stamp and registration fees is Rs.1,00,000.

3. An agricultural land situated in Theni district purchased in 1993-94 For Rs.2,50,000

was sold on 15th September 2015 for Rs.12,50,000. Another piece of Land was
purchased on 15th October 2015 for Rs.50,000 and on the same day Rs.25,000 was
deposited in the Capital Gains Deposit Account Scheme of a nationalized bank.
Calculate taxable capital gain [CII: 1993-94:244:2015-16: 1081].

4. Ms. Malini purchased 400 equity shares of Rs.100 each in the year 1999-2000. She
has spent Rs.150 towards brokerage for purchase of shares in June 2004 she
received 4,000 bonus shares. On 1st December 2015 she got 250 right shares for
Rs.80 each. She sold 200 bonus shares and 150 right shares in 1st January 2016 @
of Rs.125per share. Calculate the taxable capital gain.
(CII-1999-2000:389, 2015-16: 1081).

5. From the following details calculate capital gain

a. Sale consideration of residential house Rs.25,00,000 on 26-10-2015 [CII: 1081]
b. Cost of acquisition of the house on 1-8-2007is Rs.7,02,000[CII:551]
c. New residential house acquired on 2ndFebraury 2016 is Rs.7,50,000.
DESCRIPTIVE QUESTIONS
1. Calculate taxable capital gain. An asset was purchased in the year 2009-10 for
Rs.4,26,000. During the previous year it was sold for Rs.8,00,000. Expenses in
connection with the transfer of sale is Rs.10,000 [CII= 2009-10; 632,2015-16 ;
1081].

2. Mr.Andal owns a residential house in Mumbai, which he acquired in the month of

June 1996 for Rs3,50,000. He sells the house for Rs.25,00,000 on 18th August 2014.
He purchased another house at Chennai on 10th December 2014 for Rs.7,00,000.
On 25th December 2014 he deposits Rs.450000 in SBI under capital Gain Deposit
Account Scheme. Calculate the taxable amount of capital gains. [CII: 1996-1997:
305: 2014-2015 – 1024].

31
 3. A manufacturing company purchases a factory building on 6th June 2007 for
Rs.1,00,000. The value of the building on 1-4-2014 is Rs.2,15,000 after allowing
10% towards depreciation. The building is compulsorily acquired by the
Government on 15th April 2015 for which a sum of Rs.4,00,000 is paid as
compensation on 10th February 2015. The company purchased another factory
building on 4th April 2015 for Rs.50,000. Calculate taxable gain [CII: 2007-08:551:
2015-16: 1081].

4. From the following calculate taxable capital gain of Mr.James.

Sale of residential house on 31st December 2014 Rs.15,00,000
Purchase of another residential house in March 2015 Rs.2,00,000
Investment in bonds on 15th January 2015 which qualifies for u/s 54EC
Rs.50,000
House, which was purchased in the year 1998-99 for Rs.3,00,000, was sold on 31st
December 2014 [CII 1998-99:351, 2014-15:1024].

5. Mr. Nalli sells jewellery on 25th August 2014 for Rs.15,00,000 cost of the jewellery
on 25th June 1994 was Rs.3,00,000. Brokerage and commission paid for transfer
was Rs.10,000 from the earned capital gain Mr. Nalli purchased a residential house
on 12th January 2015 for Rs.325000. Calculate taxable capital gain.[CII:1994-95:
259: 2015-16: 1081].

6. From the following particulars compute the total income of shri.Manoj for the A.Y
2016-17

S.NO Particulars Rs
i) Sale price of jewellery Oct 2015 (CII-1081) 75,00,000
ii) Cost of acquisition in 1985-86 (CII-133) 3,00,000
iii) Amount deposited in capital Gain Deposits scheme for completing
the construction of the house (Deposited on 27-06-2016) 12,00,000
Compute deemed capital gain if he is able to invest Rs.10,00,000 out of Amount
deposited in capital gain deposit scheme before oct 2018.

7. Give five examples of “Income from other sources”.

8. What is the procedure to Gross up the following: i) winning from lotteries ii)
Winning from card games

9. Write provisions for exemption u/s 54 under Income form capital gain.

10. What are the deductions allowed while computing income from other sources?

32
 SECTION- C
REASONING QUESTIONS
1. From the following details given by Mr. Punaram who has shifted his industrial
undertaking from urban area to a non-urban area. Calculate the taxable capital
gain. The following were extracted during the shifting.
a. He sold one plant and machinery costing Rs.2,00,000 purchased on 31st
December 2014 on 14th April 2016 for Rs.3,45,000. He invested the gain amount
in another plant and machinery in the non-urban area.
b. He sold furniture’s costing Rs.75,000 for Rs.1,42,000 in the course of shifting and
purchased new furniture’s in the non-urban area.

2. Mr. Suman carrying business in an urban area is shifting his capital assets to a special
Economic Zone. Calculate his taxable gain.
Cost of Assets Rs.20,00,000
Date of Purchase 10-5-2008
Sale value Rs.45,00,000
Date of sale Rs.10-5-2015
He has deposited Rs.10,00,000 in the Capital Gains Deposit Account Scheme
immediately after the date of sale.[CII: 2008-09:582:: 2015-16: 1081]

3. Calculate capital gain from the following particulars given by Mr.Kannadasan for the
previous Year, if CII for 2015-16 : 1081 and 1984-85 is 125.
Cost of Residential House Rs.3,25,000 [FMV as on 1-4-1981]
Date of purchase 1-10-1979
Date of sale 1-10-2015
Sale value Rs.35,00,000
Cost of improvement Rs.50,000
Date of improvement 1-10-2004 [CII:480]
Stamp duty and legal charges Rs.50,000
The assesses has purchased another residential house within one year for Rs.3,00,000
before the date of sale.

4. From the following calculate capital gains of Mrs. Kalpana for the current assessment
year if CII for 1995-96 is 281, 1999-00 is 389, 2007-08 is 551 and 2015-16 is 1081
respectively.
a) Asset – Jewelry
Year of Purchase 1995-96
Year of Sale 2015-16
Cost of Acquisition Rs.1,50,000
Cost of Improvement in 1999-00 Rs.46,000
Consideration received on sale Rs.9,50,000
b) Asset- Debentures
Year of purchase 2007-08
Year of sale 2015-16
Cost of Acquisition Rs.1,80,000
Selling Expenses Rs.5,000
Consideration received on sale Rs.3,00,000.

33
5. From the following particulars of Pankaj for the previous year ended 31st March,
2016, compute the income chargeable under the head “Income from other sources”
Sl.No Particulars Amount(Rs)
1 Directors fee from a company 10,000
2 Interest on bank deposits 3,000
3 Income from undisclosed sources 12,000
4 Winning from lotteries (Net) 35,000
5 Royalty on a book written by him 9,000
6 Lecturers in seminars 5,000
7 Interest on loan given to a relatives 7,000
8 Interest on debentures of a company (listed in a recognized 3,600
stock exchange )net of taxes
9 Interest on post office savings Bank Account 500
10 Interest on Government securities 2,200
11 Interest on money Income Scheme of Post Office 33,000

DESCRIPTIVE QUESTIONS:

1. Mr.Guru purchased a house in Mumbai in November 2013 for Rs.1,50,000 on 12th

march, 2015 he entered into an agreement to sell the property to Mr.kamesh for a
consideration of Rs.2,00,000 and received earnest money (advance money) of Rs.30,000
as per the terms of the agreement, the balance payment should be made within 30 days
of the agreement and if not the earnest money be forfeited. As Mr.kamesh could not
make the payment within the stipulated time the amount of Rs.30000 was forfeited by
Mr.Guru subsequently on 12-5-2015;Mr.Guru sold the house to Mr.madhu for
Rs.4,00,000. He paid 2%brokerage on sale of the house .calculate taxable capital gains
for the current assessment year. CII for 2013-14 is 939 and 2015-16 is 1081.

2. Sri. Mukunda furnishes the following particulars of the income for the previous year
2015-16 Compute his total income:

S.NO Particulars Amount(Rs)

i) Dividend Equity (Gross)(Indian company ) 600
ii) Dividend on preference shares (Indian company) 3,200
iii) Income from letting on hire of building and Machinery –
composite lease 17,000
iv) Interest on bank deposits 2,500
v) Director’s sitting works 1,200
vi) Ground Rent 600
vii) Income from undisclosed sources (unexplained expenditure) 10,000
viii) Income from lotteries (Gross) 10,000

The following deductions are claimed by him:

a) Collection charges of Dividend Rs.20

b) Allowable depreciation on building and machinery Rs.4,000
c) Fire insurance on building and machinery Rs.100

34
3. During the year ended 31-03-2016 Mr.Devid sold the following assets :

S.NO Particulars Sale proceeds

Rs.
i) Shop purchased in 1985-86(CII-133) for Rs.18,000 1,80,000
ii) Machinery purchased in 1983-84 (CII-125) for Rs.50,000(WDV on
1.4.2015 Rs.35,000) 60,000
iii) Furniture purchased on 1-05-2015 for Rs.1,000 1,300
iv) Machinery purchased on 1-05-2015 for Rs.10,000 12,000
v) Agricultural land in Agra purchased in 1979-80 for Rs.10,000
[F.M.V on1-04-1981 (CII : 100) being Rs.15,000] 2,20,000
vi) One residential house purchased in 1987-88(CII : 150)costing 2,70,000
Rs.30,000

During the Year he bought a new house for his residence for Rs.5,00,000

Work out the amount of Capital Gains to be included in the Gross Total Income and also
compute his Total Income, if his other business income during the year was
Rs.1,00,000, CII : 2015-16 is 1081.

4. Compute the income from other source of Miss.Anu from the following details
furnished:
i) She holds Rs.50,000, 10% tax free government securities.
ii) She received Rs.10,000, interest on Tamilnadu State government securities.
iii) She holds 1,00,000, 10% tax free debentures of P & R Co.Ltd (Listed).
iv) Rs.12,000 interest was received by her on tax free securities of a limited
company
v) Rs.60,000, 15% debentures are held by her in a limited company
vi) Rs.8,000, interest was received by her on securities of a paper mill company
(Listed).

5. Compute ‘income from other sources’ form the following information for the
Financial year 2015-16
Particulars Amount(Rs)
i. Amount won from :
Lottery 80,000
Betting on horse Racing 8,000
ii. Amount receive from :
Lottery 63,000
Betting on horse Racing 42,000
iii. Income from :
Lottery 1,800
Betting on horse Racing 1,000

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6. Mrs. Jacob an ordinary of India received the following income as interest on
investment in security during the year ended 31st March 2015.
Rs.1,000 as interest on central government Bonds;
Rs.7,200 as interest on debentures issued by local authority
Rs.5,600 as interest on debentures of ‘A’ Ltd. (unlisted)
Rs.2,700 as interest on debentures ‘B’ Ltd.(listed)
Rs.4,800 as interest on tax free debentures of ‘C’ Ltd. (unlisted)
Determine Mrs. Jacob’s interest on securities under the head income from other sources
for assessment year 2016-17.

7. What are the Capital assets? Explain its classification?

8. Distinguish between short term Capital gains and long term Capital gains with its
provisions.

9. State the various items of income chargeable under the ‘Income from other sources’

10. Furnish the format to computate of Income from other sources.

36
 UNIT- V
SECTION A- (10x1=10 Marks)
(Choose the Correct Answer)
1. Intra head or inter-source set off i.e. set off of a loss against income from any source
under the same head can be done under I.T Act 1961
a) Sec50 b) Sec60

c) Sec70 d) Sec 80
2. Setting off long term capital loss against long term capital gain is called
a) Intra head set off b) Inter head set off
c) Capital gain set off d) Capital loss set off

3. Business loss cannot be set off against

a) Salary income b) Business income
c) Long term Capital gain d) Short term Capital gain

4. Loss from long term capital assets can be set off against
a) LTCG b) Salary income
c) STCG d) House property income
5. How many exceptions are there to provision as regarded inter head set off?
a) 2 b) 4
c) 6 d) 5
6. Carry forward and set off losses
a) Can be done in a given order of setoff b) Can be done in any order

c) Cannot be done at all d) Can be done in income

7. Speculation loss can be carried forward for

a) 8yrs b) 5yrs
c) 4yrs d) 6yrs
8. Business loss can be carried forward for
a) 10yrs b) 8yrs
c) 9yrs d) 7yrs
9. Unabsorbed depreciation can be carried forward for

a) Unlimited period b) 10yrs

c) 7yrs d) 9yrs
10. Deduction from G.T.I are available when
a) GTI is appositive figure only b) Even when the G.T.I is negative
c) When the G.T.I is nil d) In all the above case
11. Deduction from G.T.I in respect of certain payment is available under
a) Sec 60 to 65 b) Sec 80C to 80 GGC
c) Sec 90B to 90G d) Sec 60B to 90G
12. Deduction u/s 80D is in respect of
a) Medical insurance premium b) LIC premium
c) Pension fund contribution d) Children Education
13. Deduction u/s 80DD is in respect of
a) LIC premium paid b) Contribution to PF
c) Medical handicapped dependent d) Pension fund contribution
14. Deduction u/s 80DDB is in respect of
a) Treatment of specified diseases b) Contribution to RPF
c) Maintenance of handicapped dependent d) LIC premium paid

37
 15. Deduction u/s 80E is in respect of
a) Interest on loan taken for higher b) Premium paid to LIC
education
c) Investment in NSS d) Contribution to RPF
16. Deduction u/s 80V is in allowed to
a) Handicapped assessee b) All assesses
c) Member of HUF d) Company

17. Donation to NDF is allowed as deduction at the rate of

a) 50% b)100%
c) 60% d)70%
18. Donation to Rajiv Gandhi memorial fund is allowed as deduction at the rate of
a) 25% b) 76%
c) 50% d) 50%

SECTION-B
REASONING QUESTIONS
1. Mr. A submits the following particulars pertaining to the A.Y.2016-17:
Particulars Amount(Rs)

38
Income from salary 4,00,000
Loss from self-occupied property 70,000
Business loss 1,00,000
Bank interest (FD) received 80,000
Compute the taxable income of Mr. A for the A.Y.2016 -17.

2. Mr. B, a resident individual, furnishes the following particulars for the P.Y.2015-16:
Particulars Amount(Rs)
Income from salary (Net) 45,000
Loss from house property 24,000
Loss from business – non-speculative 22,000
Loss from speculative business 4,000
Short-term capital Loss 25,000
Long-term capital gains 19,000
What is the total income chargeable to tax for the A.Y.2016-17?

3. During the P.Y. 2015-16, Mr. C has the following income and the brought forward
losses:
Particulars Amount(Rs)
Short term capital gains on sale of shares 1,50,000
Long term capital loss of A.Y.2014-15 96,000
Short term capital loss of A.Y.2015-16 37,000
Long term capital gain 75,000

What is the capital gain taxable in the hands of Mr. C for the A.Y.2016-17?

4. Mr.Basha whose gross total income is Rs.40,000 makes the following donation
during the previous year 2013-14.
Particulars Amount(Rs)
PM’s national Relief fund 1,00,000
National defense Fund 2,00,000
Chief minister relief fund 20,000
Compute total income of Basha after following deduction u/s 80-G.

5. Mr. E has furnished his details for the A.Y.2016-17 as under:

Particulars Amount(Rs)
Income from salaries 1,50,000
Income from speculation business 60,000

39
 Loss from non-speculation business 40,000
Short term capital gain 80,000
Long term capital loss of A.Y.2014-15 30,000
Winning from lotteries 20,000
What is the taxable income of Mr. E for the A.Y. 2016-17?

DESCRIPTIVE QUESTIONS
1. Mr. Rajan, submits the following information relevant for the previous year ending
march 31, 2014.
Particulars Amount(Rs)
Loss from house property 45,000
Business income 25,000
Short-term capital Gain 10,000
Determine the net income.

2. Compute the gross total income of Mr.X from the following details:
Particulars Amount(Rs)
Speculation loss 60,000
Income from house property 5,000
Non-speculation business income 1,00,000
Winning from cross-word puzzles 50,000

3. Mr. A provides the following particulars of his income for the assessment year
2016-17 Find out his tax, education cess, etc. Mr. A is 81 years old.

Particulars Amount(Rs)
Salary income (Computed) 8,60,000
House property income 40,000
Winning from lottery 1,00,000
Profit on sale of shares (short term) – STT paid 90,000
Long term capital gain on sale of a piece of plot 2,20,000
Total income 13,10,000

4 .Mr.Soni whose gross total income is Rs.40,00,000 makes the following donations
during the previous year ending on 31.3.2016:
i.To prime minister’s national relief fund Rs.1,00,000
ii.To national defense fund Rs.2,00,000
iii.To a temple of public worship for its repair (so notified) Rs.2,00,000

40
 iv.To a local college for construction of commerce block Rs.1,00,000
v.To a poor student as aid Rs.10,000
vi.To municipal committee Rs.1,00,000
vii.To P.G.I 41 handigarh for promotion of family planning Rs.50,000
viii.To chief minister Earthquake relief fund Maharashtra Rs.20,000
The gross total income includes Rs.1000000 as profit on sales of long term capital assets.
Compute his total income for the assessment year 2016-17.

5. Compute taxable income & Loss to carry forward

1. Business profit for the precious year 2015-16 – Rs.20,000
2. B/F Business loss of 2012-13 (– Rs.10,000)
3. Capital loss on shares( – Rs.60,000)
4. Loss from self-occupied house (– Rs.5,000).

6. Shri Anil earned gross total income of Rs.500,000 in the previous year 2015-16 and
made the following donation during the year:
i. Rs.10,000 to chief minister earthquake relief fund Gujarat.
ii. Rs.15,000 to national foundation for communal harmony.
iii. Rs.20,000 to Municipal Corporation approved for promotion of family
planning.
iv. Rs.45,000 to approved institution.
v. Rs.20,000 to Swachh Bharat Kosh.
Compute the amount of deduction admissible to him u/s 80G for assessment year
2016-17.

7. Explain Intra head and Inter-head set-off Losses.

8. Explain the applicable four deductions from gross income.

9. How would you determine the net income of an individual?

10. Explain the provisions relating to deduction of some of the expenses incurred by an
individual assesse.

SECTION-C
REASONING QUESTIONS
1. Compute the gross total income of Mr. F for the A.Y.2016-17 from the information
given below –
Net income from house property Rs.12,50,00

41
 Income from business (before providing for depreciation) Rs.1,35,000
Short term capital gain on sale of shares Rs.56,000
Long term capital loss from sale of property
(brought forward from A.Y.2015-16) Rs.9,00,00
Income from tea business Rs.1,20,000
Dividends from Indian companies carrying on agricultural operation Rs.80,000
Current year depreciation Rs.26,000
Brought forward business loss (loss incurred six years ago) Rs.45,000

2. The following are particulars of loss of an individual under different heads of

income.
Set-off losses in the assessment year 2016-17 & find out the net result
a) Income from house property A Rs.5,000
b) Loss from house property B Rs.8,000
c) Income from interest on securities Rs.20,000
d) Loss from a cycle business Rs.20,000
e) Profit from speculation business Rs.20,000
f) Loss from short term capital asset Rs.6,000
g) Long term capital loss Rs.25,000
h) Long term capital gain Rs.21,000.

3. The gross total income for Mrs.Usha amounted to Rs.6,00,000 in the previous year
ending on 31, March 2016 she has made the following donation:
i. To Gujarat earthquake relief fund Rs.40,000
ii. To Africa (public contribution India)fund Rs.10,000
iii. To approved education Institution Rs.15,000
iv. To approved temples Rs.35,000
v. Cloths distributed to poor Rs.5,000
vi. To municipal corporation for promotion of family planning Rs.20,000
vii. To P.G.I chandigarth for helping the poor and needy in cash Rs.20,000
viii. During the year he also donated Rs.20,000 to clean ganga fund.
Compute the amount of deduction admissible u/s 80G for the assessment year 2016-17.

4. From the following particulars of income of assesse A,B,C how the capital losses shall
be set-off and carry forward for the previous year 2015-16
A
1. Business income Rs.15,000
2. Short term capital loss Rs.1,200
3. Long term capital gain Rs.7,200
B

42
 1. Business income Rs.30,000
2. Short term capital loss Rs.40,000

C Business income Rs.6,000

1. Short term capital gain Rs.20,000
2. Long term capital gain Rs. 17,000
3. Carry forward loss (STC) Rs.50,000.

5. Mr. Arul furnishes the following particulars of his income for the assessment year
2015-16. You are required to deal with set-off carry forward of losses.
i) Income from securities (Gross) – Rs.10,000
ii) Income from residential house – Rs.5,000
iii) Profits from Rayon Business – Rs. 25,000
iv) Income from an agency business – Rs.2,000
v) Speculation income – Rs.2,000
vi) Short-term capital gain – Rs.4,000
vii) Long term capital gain – Rs.9,500
viii) Current year depreciation for Rayon Business – Rs.500
The carry forward items from the assessment year 2015-16
i) Loss from hosiery business (Discontinued) - Rs.4,000
ii) Loss in agency business – Rs.3,000
iii) Loss from Rayon business – Rs.3,000
iv) Speculation loss – Rs.4,000
v) Short term capital loss – Rs.6,000
vi) Long term capital loss (of PY 2012-13) – Rs.6,500.

DESCRIPTIVE QUESTIONS
1. From the following particulars given below, compute the total income and tax
payable of Mr. Deb, a central government employee working at Chandigarh:
I. (a) Salary Rs.25,000 p.m
(b) T.A. Bill Rs.5,000 pa
Actual expenditure Rs.6,000 p.a
(c) His contribution to S.P.F Rs.1,700 p.m
(d) Employer’s contribution to S.P.F 10% of salary
(e) Interest on accumulated balance of S.P.F @ 13 % Rs.12,000
(f) Entertainment allowance Rs.1,000 p.m

II. He owns two houses, one of which is let-out at a rent of Rs. 400 p.m and other
(whose annual value is Rs.1,000) remained vacant through-out the year on account
of his employment at Ambala where he has taken a house on rent. The two houses
are subject to Municipal taxes of Rs.600 and 100 respectively.

III. During the year he sold shares of Hero Honda Ltd., and earned a short term
capital gaine of Rs.50,000. [STT paid].

IV. He earned Rs. 11,500 as interest from the government securities and the bank
interest on fixed deposits Rs. 11,000 and on a saving account Rs. 10,600.

He pays life insurance premium of Rs. 25,000 on his life policy of Rs. 4,00,000
He deposited Rs. 10,000 in Home deposit account.

43
2. Mr.Gand, a resident individual, furnishes the following particulars of his income and
other details for the previous year 2015-16
S.No PARTICULARS Amount(Rs)
1 Income from Salary 15,000
2 Income from Business (Before providing depreciation) 66,000
3 Long term capital gain on sale of land 10,800
4 Loss on maintenance of race horses 15,000
5 Loss from gambling 9,100

The other details of unabsorbed depreciation and brought forward losses pertaining to
Assessment year 2015-16 are as follows.
S.No PARTICULARS Amount(Rs)
1 Unabsorbed depreciation 11,000
2 Loss from speculative business 22,000
3 Short term capital loss 9,800
Compute the Gross total income of Mr.Garg for the Assessment Year 2016-17 and the
amount of Loss, if any that can be carried forward or not.

3. The following are the details relating to Mr.Srivatsan, a resident Indian, aged 57,
relating to the year ended 31.03.2016
Particulars Amount(Rs)
Income from salaries 2,20,000
Loss from the house property 1,90,000
Loss from cloth business 2,40,000
Income from speculation business 30,000
Loss from specified business covered by section 35AD 20,000
Long-term capital gain from sale of urban land 2,50,000
Long term capital loss from sale of listed shares in recognized stock
exchange (STT) paid 1,10,000
Loss from card games 32,000
Loss from betting (Gross) 45,000
Life insurance premium paid 1,20,000
Compute the total income and show the items eligible for carry forward

4. Mr. Chaturvedi having gross total income of Rs.6,35,000 for the financial year
2015-16 furnishes you the following information:
(i) Deposited Rs.50,000 in tax saver deposit in the name of major son in a
nationalized bank
(ii) Paid Rs.25,000 towards premium on life insurance policy of his married
daughter (Sum Assured Rs.2,50,000). This policy was taken on 01.05.2013
(iii) Contributed Rs.10,000 to Prime Minister’s National Relief Fund

44
 (iv) Donated Rs.20,000 to a Government recognized institution for scientific
research by cheque
Compute the total income of Mr. Chaturvedi for the A.Y. 2016-17.

5. The gross total income of Mr. Nepal for the Assessment Year 2016-17, was
Rs.12,00,000. He has made the following investment during the Year -2015-16
Particulars Amount(Rs)
1 L.I.C premium paid ( policy value Rs.1,00,000)
( taken on 1.03.2013) 25,000
2 Contribution to Public Provident Fund (PPF) 70,000
3 Repayment of housing loan to Indian Bank 50,000
4 payment made to L.I.C. pension fund 20,000
5 Medical insurance premium for self, wife and dependent children
6 Mediclaim premium for parents (aged over 80 years) 18,000
30,000
Compute the eligible deduction for the Assessment Year 2016-17

6. Mr. X furnished the following details:

Salary income Rs.42,000
Income from house property:
House A: Rs.38,000 (Income)
House B : Rs.17,000(Loss)
House C: Rs.21,000 (Loss)
Compute his income for the Assessment year 2016-2017.

7. From the following Receipts and Payments Account or the year ended 31st march
2016 of Dr.Deb from further particulars given below, compute his total income and tax
payable

Particulars Rs. Particulars Rs.

To Opening cash balance 1,024 By Consulting Room expenses 12,000
To Consulting fees 90,000 By Cost of X-ray machine 60,000
To Salary from medical college 2,66,000 By Car expenses 6,000
To Sales of shares 28,976 By Life insurance premium 22,000
To Interest from the bank 23,200 By Son’s marriage expenses 5,000
To Loan from bank 10,000 By Advance income tax 3,000
To Cash Gifts on Son’s marriage 10,000 By house hole expenses 1,72,000
By Closing Cash Balance 1,49,200
4,29,200 4,29,200
Particulars:

i. ½ of car expenses are treated as personal.

ii. Cost of shares acquired in1988-89 was Rs. 4,000 and C.I.I for 1988-89 is 161
and for 2015-16 is 1081.
iii. He deposited Rs. 5,000 in P.P.F on 30-03-2016 and Rs. 10,000 in NSC VIII
issue.
iv. Household expenses include interest on loan of Rs.5,000 for purchase of
office computer.
v. He has insured himself for Rs.2, 00,000 on 1-5-2015.

45
8. What are no limits Donations?

9. Explain the provisions relating to’ Set off of losses’

10. State the order in which current and brought forward losses are to be adjusted.

46