INCOME TAX MANAGEMENT
Mr Bhatnagar as specified employee working in Chennai
COURSE : Total Marks :
CASE STUDY : 1
Mr Bhatnagar an employee of private limited company is drawing Rs 20,000 p.m. as basic salary, Rs 10,000 p.m. as DA (Forming part), Rs 3,000 p.m. as CCA, Rs 2,000 p.m. as lunch allowance and Rs 25,000 p.a. towards leave travel concession (LTC), Professional tax of Rs 1,000, LIC Premium of Rs 2,000 and Club bill of Rs 3,000 are paid by the employer. The employee was provided with a motor car (big car), expenses
met by the employer. Calculate Income from Salary in the following cases.
Question :
1) Mr Bhatnagar as specified employee working in Chennai.
2) Mr Bhatnagar as unspecified employee working in Ahmedabad.
3) Explain the provisions and exemptions available U/s 10 for Income from Salaries.
4) State the perquisites which can be taxed only in the case of specified employees.
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CASE STUDY : 2
Following are the incomes of Mr Shinde for the previous year. Calculate his taxable
income on the assumption that he is.
Question :
1) a) Ordinary Resident
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b) Not Ordinary Resident
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c) Non Resident
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i) Profit from business carried from Hyderabad Rs 50,000.
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ii) Income accured in India but received in Hongkong Rs 75,000.
iii) Past untaxed income brought into India during this previous year Rs 42,000.
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iv) Income from house property situated in Srilanka Rs 48,000.
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v) Income from agriculture in USA Rs 1,00,000.
2) Explain the provisions for finding the residence of an individual.
3) Explain “Every Resident person is not necessarily an ordinarily Resident”.
4) When are the following deemed to accrue or in India.
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a) Income from business connections
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b) Salary
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c) Interest
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d) Dividend
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e) Royalty
CASE STUDY : 3
Mrs Parab owns a house which is let out for residential purposes. The construction of
the house is completed in June 2005. The annual letting value of the house is Rs
1,06,000. Municipal tax is Rs 26,000. On 1-4-2003 she had borrowed Rs 60,000 at
15% interest and spent it on the construction of the house, so far nothing has been
repaid.
Question :
1) Calculate her income from house property.
2) Calculate interest on borrowed capital
3) Explain “Annual Value” U/s 23(1) of the Income Tax Act
4) State various expenses and allowances that are deductible under the Income Tax Act
1961 to compute “Income from House Property”.
CASE STUDY : 4
On 01/04/2008 a plant and machinery has a WDV of Rs 6,50,000. On 1st August 2008 a new machinery costing Rs 1,00,000 was purchased. Rs 75,000 worth of machinery was sold on 12/08/2008.
Question :
1) Calculate depreciation that can be claimed for the current assessment year 2009-
2010 if rate of depreciation is 15%. The assessee is engaged in the manufacture of
computer posts.
2) Discuss and explain the provisions in respect of depreciation allowable under the
Income Tax Act.
3) Explain in detail about depreciation on Foreign car.
4) Explain the basic principle regarding computation of `Income from Business or
Profession’.
Mr Bhatnagar as specified employee working in Chennai
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