Alagappa University 2007 Diploma Accounting & Finance ELEMENTS OF TAXATION — I - Question Paper

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

PART A — (5 x eight = 40 marks)

ans any 5 ques..
All ques. carry equal marks.
1. How to determine the residential status of a Hindu undivided family and firm?
2. Define Municipal value, Fair rental value, Standard rent.
3. Distinguish allowances from perquisites with suitable examples.
4. Explain the procedure for computing Income from House property.
5. Mr. Muthu is employed in ABC Ltd., Bangalore. He gets the subsequent emoluments :
Basic salary – Rs. 12,500 p.m.
D.A. (forming part) – Rs. 6,000 p.m.
Bonus – Rs. 5,000
Fees – Rs. 1,000.
2% commission on turnover achieved (turnover achieved Rs. 1,50,000)
HRA Rs. 7,250 p.m. (Rent paid Rs. 6,400 p.m.)
EA Rs. 4,000 p.m.
Calculate gross salary.
6. Mr. Ravi is employed with a Public Limited Company in Mumbai on a monthly salary of Rs. 10,000. He contributes to the recognised provident fund @ 12% of his salary. A similar amount is contributed by the employer. Interest credited to his P.F. during the year to Rs. 9,800. The accumulated balance to his credit is Rs. 80,000. 2 children of Mr. Ravi are studying in the institution run by the employer for which no fees are paid. Normal expenditure per learner in such institution is
Rs. 300 p.m.
He is given with a rent free accommodation owned by the employer. obtain out his taxable salary income.
7. Mrs. Mahesh, not covered by payment of Gratuity Act, 1972 retires during 2005–06 from Southern Structurals Ltd., received Rs. 60,000 as gratuity after service of 40 years and
10 months. Her avg. monthly salary during last 10 months was Rs. 5,000. Determine taxable gratuity.
8. Compute Net Annual Value from the subsequent info :
(a) Municipal value of the house – Rs. 90,000
(b) Fair rent – Rs. 1,40,000
(c) Standard rent – Rs. 1,20,000
(d) Let out for rent – Rs. 12,000 p.m.
(e) Vacancy period – 1 month.
(f) Municipal taxes paid – Rs. 40,000.
PART B — (4 ? 15 = 60 marks)
ans any 4 ques..
All ques. carry equal marks.
9. ‘‘Incidence of taxation depends on residential status of an assessee’’ – discuss.
10. Give 10 examples of exempted incomes with suitable explanation.
11. What are the components of salary under the Income Tax?
12. Dr. S.K. Raj is a lecturer in Delhi University. subsequent are the details of his income for the PY 2006–07 :
Rs.
Basic salary 16,800 p.m.
DA 45% of salary
CCA 9,600 p.a.
HRA 36,000 p.a.
Remuneration as examiner 1,000
Dr. S.K. Raj is a member of statutory P.F. to which he contributes 10% of his salary, the university is contributing an equal amount. During the previous year he purchased books worth Rs. 2,000. The university paid him Rs. 8,600 for using his own scooter. He used his own scooter for personal and university work.
He lives in a rented house, the rent payable being
Rs. 3,000 p.m. He was sent by the university to refresher course. The university spent Rs. 2,000 for the purpose of his travelling.
Compute S.K. Raj’s taxable income for the AY 2005–06.
13. Mr. Mani is a Production Manager of an Industrial Unit in Chennai. The particulars of his salary income are as under :
Rs.
Basic salary 15,000 p.m.
Dearness allowance (Given under the
terms of employment)
5,000 p.m.
Entertainment allowance 1,000 p.m.
Medical allowance 500 p.m.
House rent allowance 4,000 p.m.
Rent paid for the house 5,000 p.m.
Car of 1.2 lt. capacity given by employer for private and official use. Employer meets expenses of car. He and his employer (each) contribute 15% of salary to RPF. Mr. Mani had taken interest free loan of Rs. 15,000 to purchase refrigerator. calculate income under the head salary for the AY 2006–07.
14. R owns 6 houses in Delhi, details of which are as
under :
Particulars I II III IV V VI
Rs. Rs. Rs. Rs. Rs. Rs.
Municipal value 20,000 24,000 36,000 42,000 48,000 45,000
Fair rental value 24,000 24,000 40,000 42,000 50,000 50,000
Standard rent NA 24,000 50,000 30,000 NA 48,000
true rent/ Annual rent
18,000
36,000
48,000
36,000
54,000
42,000
Compute the Gross Annual Value of the above houses.
15. Dr. Murugan is registered medical practitioner. He has prepared the subsequent Income and Expenditure Account for the year ending 31.3.2006. You are needed to prepare a statement showing his income from profession.
Income and Expenditure Account
Rs. Rs.
Household Consultation fees 1,10,000
expenses 1,20,000 Visiting fees 1,20,000
Car purchased 1,30,000 Gains on race (Gross) 10,000
Travelling exp. Share in sale proceeds
(personal) 4,000 of an ancestral house 34,000
Charity and Capital gains 6,000
donations 1,000 Dividend from domestic
Income tax 2,000 company 5,000
Salaries 8,000 Interest from P.O.
Gifts and Savings Bank 600
Daughter 7,000 Gifts from
Establishment Father-in-law 2,000
expenses 1,000 Book debt recovered
Surgical (not allowed in earlier
equipments 4,000 years) 2,000
Books 1,200 Interest on fixed
LIC 2,000 deposit (Gross) 1,300
Rs. Rs.
Wealth tax 1,000
Interest on
capital 1,000
Surplus 8,700
2,90,900 2,90,900
Rate of depreciation allowable on car is 15% and on surgical equipments is at 15%.

Earning:   Approval pending.