The Institute of Cost and Works Accountants of India 2008 Certification CWA/ICWA Applied Direct Taxation - Test 2 - Question Paper
PAPER-7 APPLIED DIRECT TAXATION
TEST PAPER - I/7/ADT/2008/T-2
Time Allowed: 3 Hours Full Marks: 100
Answer Question No. 1 is compulsory and any two from the rest in this section.
Q1) (A) Fill up the blanks: 1*6=6
(i) In case of an existing industrial undertaking for additional depreciation , increase
in installed capacity as compared to the installed capacity as on 31.03.2002 is _per cent.
(ii) The due date for filing return of net wealth by an individual who is a non-working partner is a firm whose accounts are audited u/s 44AB of the Income Tax Act, 1961 is_.
(iii) The maximum amount of permissible under section 80C, subject to overall ceiling of Rs.1, 00, 000, for repayment of principle part of eligible housing is Rs _and that of interest is Rs_.
(iv) The Basic exemption limit in case of a non-resident individual being a senior citizen is Rs_.
(v) A person owns 4 heavy goods vehicles. His estimated annual income under section 44AE is Rs._(1, 68,000 /1, 51,200/1, 92,000/2,40,000)
(vi) Where an Indian company incurred any expenditure in connection with amalgamation or demerger, the same is allowable as deduction, spread over _successive years beginning with the year_.
(B) State with reasons whether the following statements are true or false
(Answers without reasons will not receive any credit) 2*7=14
(i) Mr. A has compared gift of Rs.1, 50,000 on 12th December, 2004 from his
close friend who is assessed to income-tax. The same is taxable at the hands of Mr. A.
(ii) Surplus on sale of motor car on which depreciation has been allowed for 4 years by proprietor of a business will be taxed as long-term capital gain.
(iii) In the case of an individual resident in India, who is an author maximum deduction available from gross total income in respect of eligible royalty income is Rs. 5 lacs
(iv)Gift received from assesses grandfather in excess of Rs. 50,000 will be taxed as income from other sources.
(v) Property held by an assessee under trust for any private purpose of charitable nature in India is not an exempt asset under section 5 of the wealth tax Act.
(vi) A charitable trust whose income is not exempt under any clause of section 10 of the Income tax Act,1961. will be chargeable to wealth tax in all cases, where the trust profits exemption.
(vii) Income from Any Farm house is exempt from Tax
Q2) (a) What are expectation to the rule that the Income of the previous year shall
assessed in the subsequent assessment year? 6
(b) State whether the following are capital or revenue receipts:
1. Premium on issue of new shares
2. sales tax collected from purchasers of goods
3. Share Premium 6
(c) Name any three transaction where tax collection at source is required to be made and the rate at which tax collection is to be done. 4
Q3) (a) Compute the total income of Mr. & Mrs. A from the following information:
Rs.
(i) Salary Income (computed) of Mrs. A 2,30,000
(ii) Income from profession of Mr. A 3,90,000
(iii)Income of Minor son B from Company Deposit 15,000
(iv)Income of Minor daughter C from Special Talent 32,000
(v) Gift received by C on 30/09/2006 from friend of Mr.A 2,500
Brief working is sufficient. Detailed computation under various heads of income is not required. 7
(b) Mr. Yeshwant submits the following information for the financial year ending 31.03.2008.
He desires that you should:
(i) Compute the Gross Total Income
(ii) Ascertain the amount of losses that can be carried forward,
(I) He has two houses:
(a) House No. 1 -After all statutory deductions 36,000
(b) House No. 2 - Current year loss (10,000)
(II) He has three proprietary businesses
(a) Textile Business:
- Discontinued from 31.10.2007- Current year loss (25,000)
- Brought forward business loss of year 2003-04 (80,000)
(b) Chemical business:
-Discontinued from 01.03.2006- hence no profit/loss Nil
- Bad debts allowed in earlier years recovered this year 30,000
- Brought forward business loss A.Y 2006-07 (20,000)
(c) Leather Business: Profit for current year 70,000
(III) Capital Gains:
(a) STCG
(b) LTCL
20,000
(15,000)
Q4) Mr. A, a senior citizen has furnished the following particulars relating to his House properties
|
Particulars |
House I |
House II |
|
Nature of occupation |
Self Occupied |
Let Out |
|
Municipal Valuation |
Rs. 60,000 |
Rs. 1,20,000 |
|
Fair Rent |
Rs. 90,000 |
Rs. 1,50,000 |
|
Standard Rent |
Rs. 75,000 |
Rs. 90,000 |
|
Actual Rent |
Nil |
Rs. 9,000 |
|
Municipal Taxes paid |
Rs. 6,000 |
Rs. 12,000 |
|
Interest on Capital Borrowed |
Rs. 70,000 |
Rs. 90,000 |
Loan for both Houses were taken on 01.04.2003. House II remained vacant for 4 months.
Besides the above two houses, A has inherited during the year an old house from his grandfather. Due to business commitments, he sold the house immediately for a sum of Rs. 250 lakhs. The house was purchased in 1962 by his grandfather for a sum of Rs. 2 lakhs.
However the fair market value as on 01.04.1981 was Rs. 20 lakhs. With the sale proceeds, A purchased a new house in March 2008 for a sum of 100 lakhs & the balance was used in his business.
The other income particulars Mr. A besides the above are as follows( A.Y. 2008
09):
Business loss Rs.2 lakhs
Income from other sources (bank interest) Rs.1 lakhs
Investment made during the year: P.F. Rs. 70,000
ICICI Infrastructure Bond purchased Rs. 30,000
Compute total income of Mr. A & his tax liability for the A.Y. 2008-09. 16
Q5) Write short notes:-
1. Section 80GG
2. Self Assessment T ax under Section 140A
3. What is revocable transfer of Assets U/s 61 ? 4*2=8
Q7) Mr. Executive is employed as a manager of XYZ Ltd. at Chennai. He has furnished the following particulars in respect of his income for the year ending 31 .3.2003.
i) Basic salary Rs. 1,20,000.
ii) DA Rs. 60,000 (50% of which forms part of salary)
iii) He has been provided a rent free furnished bungalow in the factory premises at Chennai. Fair rental value of such bungalow is Rs. 3,000 p.m. Furniture provided in the bungalow Rs. 2 lakhs (cost) whose written down value Rs. 180000 and rented furniture for which rent paid Rs. 10,000.
iv) The company employs a watchman and pays Rs. 300p. m. for looking after the bungalow.
v) He availed 15 days leave out of 30 days to which he was entitled. He encashed the unavailed leave (for 15 days) and received Rs. 6,000 which he claims as exempt.
vi) The company pays Rs. 1,000 p.a. as premium for an accident insurance policy for the benefit of Mr. Executive.
vii) The company has paid club fees of Rs. 1,000 p.a. The club bill amounting to Rs.2750 have also been reimbursed.
viii) The company has deducted tax on employment @150p.m from the salary of Mr. Executive.
Besides above, the company has given the following benefits to the employee:
i) The company has advanced an interest free loan of Rs. 2 lakhs for purchase of Motor car on 1.5.2002. Mr. Executive has been repaying the loan in installments of Rs. 5.000 p.m. at the end of each month.
ii) Company provides free meals in the once during working hours for 200 days. The cost of meals to the company is Rs. 80 per meal.
iii) The company has given a gift cheque of Rs. 10.00() on the occasion of Mr. Executives birth day on 15.9.2002.
iv) The company had purchased a Laptop for Rs. 1.50,000 on I .10.1999. This Laptop sold w Executive for Rs. 10.000
v) The company also provides Mr. Executive to use Video Camera which was purchased for Rs. 1,00,000 on 1.10. 1999.
vi) The company provides the use of motor car (capacity 1.6 ltr.) for official as well as private purpose.
vii) Expenditure on maintenance of the car by the company is Rs. 30,000.
Compute the taxable income of Mr. Executive for the assessment year 2003
04. 20
|
Attachment: |
| Earning: Approval pending. |
