1. (a) Define the term “assessee” and “person” under the income tax act. What is regarded as income under the income tax act?
(b) “The incidence of tax depends upon the residential status of an assesse.” Discuss. Write four distinctions between avoidance of tax and tax evasion.
2. (a) Following are the particulars of salary of Mr. Borkakoty, an employee of ONGCL of Ahmedabad (Population exceeding 25 lakhs):
a) Basic salary 60000 p.m.
b) DA 10000 p.m. (50% forms part of salary)
c) Transport allowance 4000 p.m.
d) Bonus 20000
e) Commission 80000 on turnover
f) Telephone bill of his residence paid by employer 20000
g) Amount paid by employee for free supply of gas and elecricity at residence 36000
h) He got a loan of 1000000 from his employer at a nominal rate of interest of 3.25% for the construction of his house. SBI lending rate as on 1-4-2010 at 8%.
i) He is paid house rent allowance of 10000 p.m. till 31st july, 2010 and thereafter he is given a rent-free house got by his company on a monthly rent of 20000. Cost of furniture 100000. Before shifting to rent free house he was paying a rent of 8000 p.m.
k) He is given a free lunch worth 100 per day
l) Both he and his employer are contributing 10000 p.m. each towards recognised provident fund (RPF)
Find out Mr. Borkakoty’s salary income for the assessment year 2011 – 2012.
(b) (i) Define annul value. How does it differ from annual rental value?
(ii) How would you determine the annual value of the house used by assessee as let-out and self occupied residence in computing taxable income from house property?
3. (a) From the following particulars, compute the business income of Mr. k.k. Boruah to be taxable for the assessment year 2011 – 2012:
To rent and taxes
To service charges
To legal expenses
To reserve for tax
To exp. On acquisition of patent
To office expenses
To contribution RPF
To bad debts
To Donation to NDF
To net profit
By gross profit
By bad debts recovered (allowed earlier)
By Interest from post office savings bank
a) Legal expenses include 4000 incurred by assessee for defending a case for damages for breach of contract which was decided in favour of assessee
b) Depreciation of the year on assets other than patent rights is 33800
c) Contribution to RPF due on 31-3-2011 – 4000
(b) (i) How is cost of acquisition determined under capital gains tax?
(ii) Explain, in detail, capital gain exempted from tax.
4. (a) Following are the particulars of income of Mrs. A Borgohain for the year ending 31 – 3 – 2011:
(i) salary received from an office workin for 10 months – 600000
(ii) Interest on government securities – 6600
(iii) Interest from bank deposits – 7000
(iv) Rental value of house property (Municipal tax being 1500) – 8000
(v) Profits of retail cloth business – 294600
(vi) Dividends from cooperative societies – 6400
(vii) Dividends from indian companies – 5400
(viii) Interest on debenture of a company – 6000
He is insured for 100000 and paid an insurance premium of 15000. He donated – 4000 to a school (recognised) in which his son is studying.
Compute her taxable income and tax payable for the assessment year 2011 – 12.
(b) (i) Explain the provisions of the income tax Act, 1961 regarding carryforward and setoff of losses.
(ii) Explain the provisions of sec. 80c and 80ccc of the income tax act for claiming deduction in computing income of an individual.
5. (a) (i) What is the procedure for filling of return of income and what is the time limit under the income tax act, 1961?
(ii) What are the provisions relating to deduction of tax at source from income chargeable under the head “Salaries”?
(b) (i) Draw a list of authorities of administrative wing under section 116of the income tax act, 1961. What are the powers of income tax officer?
(ii) What are various appellate authorities under the income tax act? Give the procedure for filling appeal to the appellate tribunal.