SATHYABAMA UNIVERSITY (Established under section 3 of UGC Act , 1956) Jeppiaar Nagar, Rajiv Gandhi Salai , Chennai -119 DEPARTMENT OF MANAGEMENT STUDIES TAX MANAGEMENT- SBAX5025 Unit – I Section – A 1. Define Tax 2. Write short notes on a) person b) Income. 3. Define a) Previous year b) Assessment year 4. Define a) Direct taxes b) Indirect taxes. 5. Write a short note on residential status. 6. Define Total Income? 7. Who is an ordinary resident? 8. Mr. K, an Indian citizen leaves India for the first time on 31 st May 2006 and comes back on 15 th May 2009. He again leaves India on 10 th June 2010 to come back on 14 th January 2011. He is living in India since then. Determine his status for the previous year 2011-12. 9. What is capital Expenses? 10. Explain capital Lessees?
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SATHYABAMA UNIVERSITY
(Established under section 3 of UGC Act , 1956)
Jeppiaar Nagar, Rajiv Gandhi Salai , Chennai -119
DEPARTMENT OF MANAGEMENT STUDIES
TAX MANAGEMENT- SBAX5025
Unit – I
Section – A
1. Define Tax
2. Write short notes on a) person b) Income.
3. Define a) Previous year b) Assessment year
4. Define a) Direct taxes b) Indirect taxes.
5. Write a short note on residential status.
6. Define Total Income?
7. Who is an ordinary resident?
8. Mr. K, an Indian citizen leaves India for the first time on 31st May 2006 and comes back
on 15th May 2009. He again leaves India on 10th June 2010 to come back on 14th January
2011. He is living in India since then. Determine his status for the previous year 2011-12.
9. What is capital Expenses?
10. Explain capital Lessees?
Section – B
1.Which of the following incomes are taxable when the residential status of Mr. Umesh is :
(i) Resident, (ii) Not Ordinary Resident, (iii) Non – Resident.
Income accrued in Canada but received in India Rs. 2,000.
Rs. 5,000 were earned in Africa and received in India Rs. 2,000.
Rs. 5,000 earned in India but received in Canada.
Rs. 10,000 earned and received in Srilanka from a business controlled from India.
House property income (computed)from Srilanka Rs. 2,000.
Rs.4,000 was past untaxed foreign income which was brought to India during the
previous year.
Profit earned from a business in Kanpur Rs. 10,000.
2. Explain the term ’assessee’ of state the different classes of Assesses.
3. What is Agricultural Income as per Income as per income tax act?
4. What are different categories of assesses according to residential status?
5. What test would you distinguish capital receipts and revenue receipts?
6. Explain any ten items exempted from Income tax?
7.What are the tax free incomes ?give examples of any eight tax free incomes?
8.Give eight examples for income partially exempt from income tax U/S 86.
9.Enumarete the exception to the rule that income of the previous year is taxable in the
following assessment year.
10.Bring out the meaning of income received and income deemed to be received in India.
Unit – II
Section – A
1. Define salaries under the income tax act.
2. Write short note on ‘perquisites’.
3. What is profit in lieu of salary?
4. From the following details calculate taxable house rent allowance of Mr. Kannan who is
working and living in chennai.
Rs.
Basic Salary 78, 000
Dearness allowance
(Service benefit) 7, 800
H.R.A. 11, 700
Rent paid per annum 13, 200
5. Mr. Prakash retired in September 2010 after having put in 42 years of services in a
company. His average salary for 10 months preceding September was Rs. 2,500 p.m. He
receives gratuity of Rs. 60,000 compute his taxable gratuity.
6. What are allowances?
7. What are the items included under the head salary u/s 80 c?
8. How do you exempt House Rent Allowance?
9. What is Recognized provident Fund?
10. Explain who is specified employee.
Section – B
1. What are Allowances? How will you treat them?
2. Define Perquisites. Describe the fully exempted perquisites as per I.T Act.
3. Describe the methods of savings available to save the tax for salaried individual .
4. Following are the particulars of salary of Mr.R an employee of ABC Ltd of
Bangalore.
i. Basic Salary Rs.30,000 p.m
ii. DA Rs.5000 p.m ( 50% enters in retirement benefits )
iii. Transport Allowance Rs. 2000 p.m
iv. Helper Allowance Rs.2000 p.m. he is paying Rs.1600 p.m to a helper
which he got engaged for his office work.
v. Bonus Rs.10,000
vi. Commission Rs.40,000
vii. Reimbursement of medical bills Rs.60, 000 out of his wife and she
got her medical treatment from a private hospital.
viii. Amount paid by employee for free supply of gas, electricity at his
residence Rs.18,000
ix. Educational Allowance @ Rs.200 p.m per child for three children.
x. House Rent Allowance Rs.4000 p.m
Rent paid for the house Rs.5000 p.m
Compute income under the head of salary for the assessment year 2011-12.
5. Mr. A is an employee in PQR Ltd in a place where population is 15 lakhs. He
draws a basic salary of Rs . 2400 p. m ; D.A is Rs.1200 p. m ( enters for service
benefits ) ; Bonus is Rs.1600 p. m , Traveling Allowance Rs.1600 p. a ( actually
incurred Rs.1200 only ) He has been provided a rent free accommodation by the
company. The company provided furniture on hire for Rs.800 p.a. Calculate
taxable value of RFA if Rs.200 p. m is deducted as rent free accommodation from
his salary.
6.Form the particulars given below compute his salary income:
i. Basic Salary Rs. 13,000 p.m.
ii.Dearness Allowance Rs. 900 p.m. (Rs. 500 p.m. enters into pay for service benefits).
iii.Bonus Rs. 8,400.
iv.Salary in lieu of leave Rs. 3,000.
v. Entertainment allowance Rs. 1,500 p.m.
vi.Traveling expenses Rs. 1000 p.m.
vii.Furnished House at Concessional rent of Rs. 800 p.m. in Chennai [population above
25 lakhs] Fair Rental Value Rs. 2,500 p.m. Cost of furniture Rs. 35,000. Salary of
gardener Rs. 1,000 p.a.
viii.Club bill paid by employer Rs. 2,200 p.a.
ix.Contribution by employer to R.P.F. – 13%(each) of salary.
x. Advance salary Rs. 2,000.
xi.Life Insurance Premium (Paid by employee)
Own life = 3,000 p.a.
Wife’s life = 4,000 p.a.
Major son = 2,000 p.a.
xii. Professional tax Rs. 1020.
7. P and Q are officers in the State Bank of India. The bank has allotted free of rent
identical flats to both P and Q in Nariman Point Mumbai [population above 25 lakhs], the
fair market rent of each flat being Rs. 6,000 p.m. in April, 2010.P was promoted its Chief
officer but he continues to occupy the same flat.
The Bank has also furnished the above flat.
The original cost of furniture provided in each flat works out to Rs. 45,000. The salary
particulars of P and Q are as follows.
P Q
Rs. Rs.
Basic 9,000 p.m. 7,500 p.m.
Dearness Pay (enter) 1,750 p.m. 1,600 p.m.
Dearness allowance 1,500 p.m. 1,400 p.m.
Educational allowance 1,300 p.m. 1,300 p.m.
Children hostel allowance 1,800 p.m. 1,500 p.m.
Petrol allowance 900 p.m. 800 p.m.
Determine the perquisite value of the flat in the hands of P and Q. Two children are
studying and staying in hostel in each case.
8.The Following are the particulars of the income of Sh. Arvind for the previous year
ending on 31st March 2011
xiii.Salary Rs. 12,000 p.m.
xiv.Contribution to Recognized P.F. Rs. 1,610 per month.
xv. Employer contributes the same amount as the employee contributes towards P.F.
xvi.Dearness Allowance : Rs. 300 p.m. It is not considered for computation of his
retirement benefits.
xvii. Interest credited to P.F.@13% is Rs. 13,000.
xviii. Contribution to Public Provident Fund is Rs. 9,000.
xix.Bonus Rs. 3,000.
xx. His ration bill of Rs. 2,000 p.m. is paid by employer.
xxi.Premium of life Policy is Rs. 12,000 on a Policy of Rs. 1,00,000.
xxii. Employer company has provided him free club facility which costed 24000
and free lunch for 300 days cost being Rs. 450 per day
xxiii. Repayment of house building loan taken from HDFC (a Govt. agency) Rs.
20,500 during the year.
Find out taxable income of Shri Arvind for the assessment year 2011– 12.
9.Following details are available from Shri. P.N. Dutta, a resident individual for the year
ending on 31.03.2008. you are required to compute his taxable income under the head
‘Salaries’. Rs.
a. Salary received 71,800
b. Income-tax deducted at source 1,200
c. Own contribution to R.P.F. deducted from salary 8,000