Alagappa University 2007 Diploma Accounting & Finance ELEMENTS OF TAXATION – II - Question Paper

DIPLOMA IN ACCOUNTING AND TAXATION EXAMINATION, DECEMBER 2007.
ELEMENTS OF TAXATION – II
Time : 3 hours Maximum : 100 marks

PART A — (5 x eight = 40 marks)

ans any 5 ques. in about 200 words every.
All ques. carry equal marks.
1. Explain the term ‘Cost of inflation index’ and ‘Cost of improvement’.
2. What is ‘transfer’ of a capital assets as per part two (47) of the Act?
3. What is meant by income from other sources? provide 4 examples of income chargeable to tax under this.
4. What is included in income of an individual?
5. What are the objects of the Central Sales Tax Act?
6. Explain the term ‘Crossing the customs frontiers of India’.
7. Explain the basis of Levy of Excise Duty.
8. Differentiate ranging from Excise Duty and Custom Duty.


PART B — (4 x 15 = 60 marks)


ans any 4 of the subsequent in about 400 words every.
9. (a) Mr. Singh purchased a plot in 1986 – 87 for
Rs. 2,00,000 and it was sold on 15.01.2006 for Rs. 12,80,000.
He paid Rs. 20,000 as brokerage charges. He invested
Rs. 2,00,000 in bonds issued by NABARD Bonds on 31.3.2006 and Rs. 3,10,000 in Bonds issued by rural Electrification Corporation on 1.8.2006. calculate the taxable amount of Capital Gain if CII for 1986 – 87 is 140 and for 2005 – 06 is 497.
(b) Compute income from the other sources from the particulars provided beneath :
(i) Interest on deposits with a Company
Rs. 10,000.
(ii) University remuneration on working as examiner Rs. 6,000.
(iii) Royalty for writing books Rs. 60,000.
He claims to have spent Rs. 20,000 on writing these books.
(iv) Dividend declared by R. Co., on 1.3.2006
Rs. 6,000.
(v) Interim dividend paid on 1.5.2005 Rs. 3,000.
(vi) Stake money on race horses Rs. 1,50,000. Horses are maintained by him and expenses on maintenance of these horses are Rs. 2,40,000.
(vii) Family Pension received Rs. 36,000.
10. Mr. Charan, a resident of Delhi submits the followings of his income for the financial year 2005 – 06.
Salary Rs. 7,000 p.m.
D.A. Rs. 6,000 p.m.
Entertainment Allowance Rs. 350 p.m.
City Compensatory Allowance Rs. 250 p.m.
Bonus Rs. 7,000.
Employer’s Contribution to RPF Rs. 12,000 ;
His own Contribution to RPF Rs. 12,000 ;
Interest on RPF balance @ 13% Rs. 7,800.
He is given with an unfurnished accommodation for which employer charges Rs. 200 p.m. The municipal value of the house owned by employer is Rs. 22,050 p.a. He is also given by employer with chauffeur driven Car of 1.8lt. Capacity. The Car is used for official purposes only and the entire expenses of its running and maintenance are met by the employer.
During the year Mr. Charan has recieved dividends from a Co–operative Society amounting to Rs. 4,000. He paid insurance premium of Rs. 3,000 on a policy taken on his life of his dad who is not dependent on him.
During the year he had subsequent incomes also :
(a) Winnings from Lottery Rs. 50,000 out of which tax
@ 30% has been deducted at source.
(b) He went to Nepal and won Rs. 35,000 from gambling in a Casino.
(c) He lost Rs. 20,000 in Card games during Diwali Season.
Compute his total Income and tax liability for the AY 2006 – 07.
11. Explain various kinds of Provident Funds.
12. Briefly explain the provision of Sales Tax.
13. Explain the transactions that are exempted from Sales Tax.
14. Explain briefly the rules made TNGST Act 1959.
15. Elucidate the kind of custom duty.

Earning:   Approval pending.