Alagappa University 2008 Diploma Accounting & Finance ELEMENTS OF TAXATION — I - Question Paper

DISTANCE EDUCATION
DIPLOMA IN ACCOUNTING AND TAXATION EXAMINATION, MAY 2008.
ELEMENTS OF TAXATION — I

Time : 3 hours Maximum : 100 marks
PART A — (5 × eight = 40 marks)
ans any 5 ques..

1.How would you decide the residential status of a company?
2.State any 6 items exempted from Income tax.
3.What are the perquisites taxable in the hands of specified assessees?
4.What are the approved deductions from the head “Income from House property”?
5.Discuss the different expenses that are expressly disallowed in the assessment of Business Income.
6.The profit and Loss account of Mr. Nirmal revealed a net profit of Rs. 30,000. The other particulars are as follows:
(a) Wages paid includes Rs. 500, for installation of Machinery.
(b) General Expenses include amount drawn by Mr. Nirmal for his personal use Rs. 2,000
(c) Allowable depreciation charged in profit and loss account
(d) Interest on loan includes Rs. 1,000 paid towards the loan found from his spouse which she has contributed from out of the amount provided by Mr. Nirmal
(e) The net profit includes interest on securities Rs. l,000. obtain out his income from business.
7.Mr. X, resides in Chennai, gets Rs. 3,00,000 p.a. as basic salary, D.A. forming part of salary for service benefits Rs. 40,000 and 2% commission on turnover achieved by him. (Turnover achieved by him during the relevant period is Rs. 3,00,000). He receives Rs. 60,000 as H.R.A. though he pays a rent of Rs. 80,000 p.a. compute the salary income of Mr. X.
8.K.M.K. & Co., is a partnership firm registered in India and controlled from India. Out of the four partners three partners were in Germany for more than 200 days during the previous year 2005 — 06. Determine the residential status of the firm for the previous year 2005 — 06 and also explain the residential status of the firm if:
(a) All the 4 partners are non Resident during 2005–06;
(b) All the 4 partners are Resident during 2005–06; and firm is controlled from outside India;
(c) All the 4 partners are Resident but not Ordinarily Resident during 2005–06.

PART B — (4 × 15 = 60 marks)
ans any 4 ques..

9.Discuss the rules relating to determination of residential status of an assessee.
10.Enumerate any ten items of Income which are exempted totally from tax.
11.Shri Balaji left India on 28-6-2005 on a business trip to Thailand and returned to India on 30-3-2006. During the past 4 years his stay in India was as follows :
Previous year 2004-2005 first April 2004 to 1-11-2004
Previous year 2003-2004 : first July 2003 to 31st Jan 2004
Previous year 2002-2003 : first April 2002 to 31st Dec 2002
Previous year 2001-2002 : lst September 2001 to 31st March 2002. He has never left India before. Determine the residential status of Shri Balaji for the Assessment year 2006- 2007.

Earning:   Approval pending.