Income Tax Law and Practice Question Paper’ 2021 (Held in 2022), Gauhati University B.Com 3rd Sem CBCS Pattern

Income Tax Law and Practice Question Paper’ 2021 (Held in 2022)

Gauhati University B.Com 3rd Sem CBCS Pattern

(SEM-3/CBCS) ITLP HC/RC

2021 (Held in 2022)

COMMERCE (Honours/Regular)

Paper: COM-HC-3026/COM-RC-3026

(Income Tax Law and Practice)

Full Marks: 60

Time: Three hours

The figures in the margin indicate full marks for the questions.

1. Answer the following as directed: 1×7=7

(a) ‘Assessment Year’ means the period starting from 1^stApril ending on _______ of the next year. (Fill in the blank)

(b) The year in which income is earned is known as Assessment Year and the year in which it is taxable is known as Previous Year. (State whether the statement is true or false)

(d) Tax liability of an assessee depends upon his/her residential status. (State whether the statement is true or false)

(e) Agricultural income is taxable under section 10(1) of the Income Tax Act, 1961. (State whether the statement is true or false)

(f) Section 48 of the Income Tax Act deals with income that is exempted from tax. (State whether the statement is true or false)

(g) Agricultural land situated in a rural area in India is a Capital Asset. (State whether the statement is true or false)

2. Answer the following questions: 2×4=8

(a) Explain the meaning of long-term capital gain.

(b) State the meaning of uniform previous year as per the Income Tax Act, 1961.

(d) State the meaning of income.

3. Answer any three questions: 5×3=15

(a) Briefly explain various heads of income.

(b) Explain the manner of determining the residential status under ‘resident and ordinarily resident’ in India.

(d) Mr. Anil Barua is the owner of a house property which is let out by him at a monthly rent of Rs. 10,000. The particulars of the house are given below:

Municipal Valuation (MV)

Fair Rent (FR)

Standard Rent under Rent Control Act (SR)

Fire Insurance

Municipal Taxes Paid

Rs. 1,30,000 p.a.

Rs. 1,10,000 p.a.

Rs. 90,000 p.a.

Rs. 600 p.a.

10%

Determine his income from house property for the assessment year 2021-22. 5

(e) For the Assessment Year 2021-22, Ramesh is non-resident in India. From the information given below, find out his income chargeable to tax for the Assessment Year 2021-22:

(1) Royalty received by him outside India from the Government of India Rs. 17,000.

(2) Technical fees received from P. Ltd. (an Indian Company) in Germany for advice given by him in respect of a project situated in Dubai Rs. 2,40,000.

(3) Income from a business situated in Sri Lanka (goods are sold in Sri Lanka, sale consideration is received in Sri Lanka but business is controlled partly in Sri Lanka and partly in India) Rs. 1,40,000.

(4) Income from a business connection in India (it is received outside India) Rs. 3,17,000.

4. Answer any three questions: 10×3=30

(a) What is a capital asset as per section 2(14) of the Income Tax Act, 1961? Describe the procedure of computation of long term capital gains as per the provisions of this Act. 5+5=10

(b) Sitaram (age 45, resident) is a salaried employee (salary being Rs. 40,000 per month). During the previous year 2020-21, he makes the following investment deposits or payments:

(1) Life insurance premium (policy taken in 2009) on the life of his married daughter: Rs. 6,000 (sum assured is Rs. 20,000)

(2) Life insurance premium (policy taken in 2011) on his own life: Rs. 2,700 (sum assured Rs. 60,000).

(3) Life insurance premium (policy taken in 2011) on his life of his dependent sister: Rs. 10,000.

(4) Contribution towards recognised Provident Fund: Rs. 9,000.

(5) Contribution towards public Provident Fund: Rs. 1,30,000.

(6) Repayment of loan taken from LIC for purchase of residential house property: Rs. 30,000.

(7) Contribution towards notified equity-linked saving scheme of UTI (i.e., MEP 2021): Rs. 14,000.

Compute his Tax Liability for the Assessment Year 2021-22, assuming that his income from house property is Rs. 2,28,900. 10

(c) From the following Profit & Loss A/c of Sudesh Bhosale (Age 45 years; resident) for the year ended on 31^stMarch, 2021, ascertain his Gross Total Income for the AY 2021-22: 10

Particulars

Amount (Rs.)

Particulars

Amount (Rs.)

Salaries

Bad Debts

Prepaid Rent

Insurance

General Expenses

Salary to Sudesh Bhosale

Interest on Overdraft

Interest on Loan to wife of Sudesh Bhosale

Interest on Capital of Sudesh Bhosale

Depreciation

Advertisement Expenditure

Contribution to Employees’ Recognised Provident Fund

Net
Profit

26,800

44,000

4,000

1,200

52,000

1,02,000

8,000

84,000

46,000

96,000

14,000

26,000

4,00,600

Gross Profits

Commission

Brokerage

Sundry Receipts

Bad debt Recovered (earlier allowed as deduction)

Interest on Debentures

6,91,000

36,600

74,000

5,000

22,000

76,000

Total

9,04,600

Total

9,04,600

Other Information:

(1) The amount of depreciation allowable is Rs. 57,000 as per Income Tax Rules.

(2) Advertisement expenditure includes Rs. 3,000 being the cost of permanent sign board fixed on the office premises.

(3) Income of Rs. 3,08,700, accrued during the previous year, is not recorded in the Profit and Loss A/c.

(4) Sudesh Bhosale pays Rs. 15,000 as premium on own life insurance policy of Rs. 70,000.

(5) General expenses include Rs. 12,000 given to Mrs. Sudesh Bhosale for purchasing a gift for a marriage party of a friend’s daughter.

(6) Loan was taken from Mrs. Sudesh Bhosale for payment of arrears of income tax.

(d) Briefly explain the basic rules governing the deductions under section 80C to 80U of the Income Tax Act, 1961.

(e) Explain the process of setting off of losses and their carry forward as per the provisions of the Income Tax Act, 1961. 10

(f) Write short notes on the following: 5+5=10

(1) On-line filing of returns of income.

(2) Tax deducted at source.

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