Direct and Indirect Taxation Past Paper PDF 2022-2023

## Direct and Indirect Taxation Paper - I *Paper / Subject Code: 23115* ### **Instructions:** 1. All Questions are compulsory carrying 20 marks each. 2. Exercise internal options wherever given. 3. Figures to the right represent full marks to the question. 4. All questions should be answered w.r....

## Direct and Indirect Taxation Paper - I *Paper / Subject Code: 23115* ### **Instructions:** 1. All Questions are compulsory carrying 20 marks each. 2. Exercise internal options wherever given. 3. Figures to the right represent full marks to the question. 4. All questions should be answered w.r.t assessment year 2022-23. 5. All workings shall form part of the main answer. 6. Use of simple calculator is allowed. ### Q.1 A: Multiple Choice questions (any ten) **(10)** 1. Surat Gram Panchayat is a * a. Company * b. Firm * c. Local Authority * d. Artificial Juridical Person 2. For a newly set up business, previous year can be * a. of 12 months only * b. more than 12 months * c. 12 months or less than 12 months * d. more than 24 months 3. Gratuity for non-government employees is exempt upto a maximum of.. * a. Rs. 5,00,000 * b. Rs. 10,00,000 * c. Rs. 15,00,000 * d. Rs. 20,00,000 4. Employer Contribution to Recognised Provident Fund (RPF) is allowable upto a maximum of * a. 10% of salary * b. 12% of salary * c. 15% of salary * d. 9.5% of salary 5. In the case of Income under the head "Income from House Property", the Municipal taxes will be allowed as a deduction only if it is paid by * a. Owner * b. Tenant * c. both owner and tenant equally * d. either by owner or tenant 6. Rent from letting out of a open plot of land for marriage, is taxable under the head of * a. Income from Salary * b. Income from House Property * c. Income from. Capital gains * d. Income from Other sources 7. Depreciation is allowed in case of * a. Tangible fixed assets only. * b. intangible assets only * c. Tangible and Intangible assets * d. Wasting assets 8. Gift received from a non-relative of Rs. 50000 is * a. Taxable * b. Non-Taxable * c. a Business expenditure * d. a business receipt 9. Mr. Nishi spends Rs. 5000 on the medical treatment of his dependent brother, who is physically handicapped to the extent of 65%. The deduction available to Mr. Nishi u/s 80DD will be Rs. * a. Rs. 125000 * b. Rs. 75000 * c. Rs. 5000 * d. Rs. 150000 10. Salary of Member of Parliament is taxable under the head * a. Income from Salary * b. Income from House Property * c. Income from Capital gains * d. Income from other sources 11. Bonus to employees is taxable in the year of * a. Accrual * b. Receipt * c. Accrual or receipt whichever is later * d. Accrual or receipt, whichever is earlier 12. Professor Phadke, who is employed with AJ College of Commerce, received exam remuneration of Rs. 5300 during the previous year. The amount shall be taxed under the head of * a. Income from Salary * b. Income from House Property * c. Income from Capital gains * d. Income from Other sources ### Q.1 B State whether the following statements are True or False (any ten) **(10)** 1. Deduction for Entertainment Allowance is available to all employees. 2. Agricultural Income in Nepal is exempt from tax. 3. Deduction U/s 80E is available to a Hindu Undivided Family. 4. Uncommuted pension received by Government employee after retirement is fully exempt from tax. 5. Unlisted Shares held for 18 months is a long term capital asset. 6. Municipal tax paid by tenant is allowed as deduction for deemed to be let out property. 7. Cost inflation index is applicable for transfer expenses incurred on transfer of capital assets. 8. Mediclaim premium paid by cash Rs. 15,000 is allowed as deduction U/s 80D. 9. Dividend received from Indian company is fully exempt. 10. Income from Sub-letting of house property is taxable under the head of Income from Other Sources. 11. Capital gain on transfer of depreciable business assets is always short-term capital gain. 12. Thirumalai Devasthanam Temple is an example of Artificial Juridical Person. ### Q.2 A: Mr. Shastry works with M/s XYZ Traders. He gives you the following information for the year ended 31st March, 2022. **(20)** | Particulars | Rs. | |---|---| | 1. Basic salary | 8,00,000 per annum| | 2. Deamess allowance | 25% of Basic salary | | 3. Commission received | 1,00,000 | | 4. Bonus | 75,000 | | 5. Advance salary received | 87,500 | | 6. House rent allowance [Exempt u/s 10(13A) Rs.25,000)] | 85,000 per annum | | 7 Entertainment allowance received | 75,000 per annum | | 8. Medical Allowance | 44,000 | | 9. Profession tax deducted from salary | 2,500 per annum | **Other Information:** | | Rs. | |---|---| | 10. Lottery prize received | 55,000 | | 11. Interest on term deposit with bank | 66,000 | | 12. Received maturity proceeds of Life Insurance policy | 85,000 | | 13 Interest on Income Tax refund | 10,000 | | 14 Gift from brother | 70,000 | | 15. Dividend from mutual fund | 22,000 | | 16. He paid contribution to LIC Pension Fund | 17,500 | | 17. Expenses incurred on maintenance of his dependent son, who is suffering from severe physical disability to the extent of 90% | 1,00,000 | Compute his taxable income for the Assessment year 2022-23. ***OR*** ### Q.2 B: Mr. Kushal is partially blind (55% disability): He gives the following details for previous year 2021-2022. **(20)** | Particulars | House 1 | House 2 | |---|---|---| | Nature | Self Occupied | Let out | | Fair Rent | 8,00,000 | 10,00,000 | | Municipal Valuation | 10,00,000 | 12,00,000 | | Standard rent | 10,00,000 | 12,00,000 | | Interest on Loan taken for construction of property | 3,00,000 | 3,50,000 | | Municipal tax paid by tenant | - | 10,000 | | Municipal tax paid by Kushal | - | 12,000 | | Rent per month | - | 1,50,000 | Other information: Interest received on Saving Bank Account Rs.25,000. Winning from Lottery Net Rs. 1,20,000 (TDS Rs.50,000). Dividend from the Tata Ltd Rs.5,000. Compute taxable income of Mr. Kushal for the Assessment year 2022-23. ### Q.3 A: Following is the Profit and Loss Account of "Nilkanth Homes" owned by Mr. Prem Vijay, for the year ended 31st March, 2022: **(20)** | Particulars | RS() | Particulars | RS | |---|---|---|---| | To Salaries (including 3,60,000 Proprietor's salary) | 6,60,000 | By Gross Profit | 14,32,000 | | To Profession Tax | 2,500 | By Refund of Income Tax | 18,000 | | To Loss by Theft | 11,200 | By Bank FDR Interest (Net of TDS of Rs. 2000) | 18,000 | | To Conveyance Exps. | 1,300 | By Savings Bank Interest | 12,000 | | To Printing & Stationery | 2,500 | By NSC Accrued Interest | 20,000 | | To Interest on Capital | 30,000 | | To Rent | 12,000 | | To Depreciation on: | | | | - Furniture 10,000 | 27,000 | | - Computers 17,000 | 30,000 | | To Interest on loan for son's Marriage | 30,000 | | To Personal Drawings | 6,93,500 | | To Net Profit | 15,00,000 | | | TOTAL | 15,00,000 | TOTAL | 15,00,000 | **Additional Information:** a. He contributed to Pension Fund Rs. 60000, b. Depreciation as per Income Tax Rules is Rs. 47000. c. Loss by theft represent "shop-lifting" by customers. d: Drawings include Life Insurance Premium for self of Rs. 15000/- Compute the Taxable Income of Mr. Prem Vijay for the Assessment year 2022-23. ***OR*** ### Q.3 B: Mr. Quinton Dsouza is the owner of "Bakes and Cakes". He provides you the following information for the year ended 31st March, 2022. **(20)** | Particulars | Rs. | Particulars | Rs. | |---|---|---|---| | To Salaries | 2,75,000 | By Gross profit | 12,60,000 | | To Travelling Expenses | 15,000 | By Savings Bank Interest | 12,500 | | To Advertisement | 35,500 | By LIC Maturity Proceeds | 3,00,000 | | To Interest on Capital | 18,000 | By LIC Monthly Annuity | 21000 | | To Depreciation | 17,500 | By Bank FDR Interest | 27000 | | To Bad Debts | 12,500 | | To Misc. Expenses | 40,000 | | To Net Profit | 12,07,000 | | | TOTAL | 16,20,500 | TOTAL | 16,20,500 | Following further information has been provided: a. Depreciation allowed as per Income Tax Rules is Rs. 21,000/-. b. Advertisement expenses includes Rs. 25,500/- spent for the advertisement in souvenir of a political party. c. Rs. 10,000/-paid as penalty imposed by Income-tax Officer, has been wrongly included in salaries. d. Miscellaneous expense include expense of Rs: 9,500 paid in cash for purchase of stationery and Rs.10,000 paid towards life Insurance premium for wife. e. During the year, he had invested in Public Provident Fund account Rs. 150000 Compute the taxable income of Mr. Quinton Dsouza for the assessment year 2022-23. ### Q.4 A: Mr Parag Dabke purchased a house property on 20th June 1998 for Rs 19,50,000. He made the following additions/ alterations to the house property. **(10)** * Cost of construction of 1st floor in the financial year 2011-12 Rs 10,00,000 * Cost of construction of 2nd floor in the financial year 2017-18 Rs 4,50,000 * He sold the property on 21st January 2022 for Rs. 2,85,50,000 paying brokerage of Rs 2,00,000 * He invested Rs1,55,00,000 in a new residential property on 18.3.2022 * He invested Rs 65,00,000 in Bonds of Power Finance Corporation Limited (Eligible) on 30th March 2022. The Fair market value of the property on 1.4.2001 was Rs 25,75,000 Relevant Cost Inflation Indices are as follows | Previous Year | Cost Inflation Index | |---|---| | 2001-02 | 100 | | 2011-12 | 184 | | 2017-18 | 272 | | 2021-22 | 317 | Compute his Capital Gains for the Assessment Year 2022-23 ### Q.4 B: Mr. Rishi is a citizen of U.K., came to India for the first time on 1st April, 2017 and started a business in Pune He went back to U.K. on 1 May 2021 and came back to India on 22nd January, 2022. Determine his Residential status for the Assessment year 2022-23. **(10)** ***OR*** ### Q.4 C: Mr Padmanabh Sathe purchased a House property on 21st June 1999 for Rs 29,75,000 and paid Fis. 25000 for its registration. **(10)** * He made the following additions/ alterations to the house property * Cost of construction of 1st floor in the financial year 2011-12 Rs 7,7'5,000 * Cost of construction of 2nd floor in the financial year 2017-18 Rs 3,50,000 * He sold the property on 21st February 2022 for 1,95,20,000 paying brokerage of Rs 2,50,000 * He invested Rs1,05,00,000 in a new residential property on 18.3.2022 * He invested Rs 15,00,000 in Bonds of Power Finance Corporation Limited (Eligible) on 30th March 2022. The Fair market value of the property on 1.4.2001 was Rs 32,00,0000 Relevant Cost Inflation Indices are as follows | Previous Year | Cost Inflation Index | |---|---| | 2001-02- | 100 | | 2011-12 | 184 | | 2017-18 | 272 | | 2021-22 | 317 | Compute his Capital Gains for the Assessment Year 2022-23 ### Q.4 D: Mr. Surendra has earned the following income during the previous year ended on 31st March, 2022. **(10)** | Particulars | Rs. | |---|---| | 1. Rent from house in Pune, received in Japan | 6,00,000 | | 2. Income from business in Spain, being controlled from India | 4,00,000 | | 3. Salary earned and received in Bangladesh | 3,00,000 | | 4. Professional fees received in India | 2,00,000 | | 5. Interest received from State bank of India, in Nagpur | 1,000,000 | | 6. Past untaxed profit earned outside India, brought to India | 1,50,000 | | 7. Agriculture Income earned in India received in Sri Lanka | 1,00,000 | | 8. Dividend from an American company received in Rome | 1,50,000 | Compute his total income for the assessment year 2022-23 assuming as follows: a) He is Resident and Ordinarily Resident b) He is Resident but not Ordinarily Resident ### Q.5 A. Explain the provisions of Depreciation u/s 32 and the concept of Block of Assets as per the Income tax Act **(10)** ### Q.5 B. Explain 'Perquisites' u/s 17(3) of the Income Tax Act 1961 and state any eight items of Tax-free perquisites. **(10)** ***OR*** ### Q.5 C: Write Short Notes (Any 4) **(20)** a) Taxability of Gift from Relatives under Income Tax Act, 1961. b) Annual Value of a Property c) Deduction for Interest on Housing Loan under Income tax Act d) Commutation of Pension e) Explain the term "Person" and "assessment year" f) Deduction u/s 80U of Income Tax Act