Mock Test 002

Taxation (Test 002)

TAXATION

MOCK TEST - 002

Marks: 50

Time: 01:40 hours

Question 1

(12)

Mr. Arjun, an Indian citizen, was working with UNO till 31 st July 2010 and was residing at Canada . On 1 st August, he joined Indian-Government service and was deputed to Lahore in Pakistan. On 1 st December, he left the Indian-Government service and joined a private company and started working at its Tokyo branch. On 1 st March, he has been shifted to the head office in Mumbai, India. His salary structure in various assignment are as under:
Particulars	UNO	Government service	Private Ltd. Co.
Basic	Rs.5000 p.m.	Rs.6000 p.m.	Rs.4000 p.m.
Dearness Allowances	Rs.2000 p.m.	Rs.4000 p.m.	Rs.3000 p.m.
Car Allowance	Rs.1000 p.m.	Rs.1500 p.m.	Rs.800 p.m.
Fair rent of Rent free accommodation' provided to employee	Rs.800 p.m.	Rs.700 p.m.	Rs.1200 p.m.
Children education facility for 3 children in a school owned by employer. Notional fee of such institution p.m. per student	Rs.4000 p.m.	Rs.2000 p.m.	Rs.1600 p.m.

Find taxable salary for the previous year 2010-11.

Question 2

(8)

Mr. Abdul provides the following information regarding his income of P.Y. 2010-11. Compute income liable to be charged in India in the following cases:
a. He is an ordinarily resident.	b. He is not an ordinarily resident.	c.He is a non-resident.

Particulars	Rs.
Business income from USSR received in India	10000
Business income earned in India received in Pakistan	20000
Salary income from a company of UK situated in India	15000
Interest on German Development Bond (2/5 th received in India )	60000
Income from agriculture in Nepal received there but later on remitted to India	181000
Income from property in Jakarta received outside India	86000
Income earned from business in UAE which is controlled from Delhi (Rs.15000 received in India )	65000
Profit from a business in Madras and managed from outside India	27000
Profit on a sale of a building in India but received in Sri Lanka	1480000
Pension from a former employer in India received in USSR	36000
Gift in foreign currency from a relative received in India	80000

Question 3

(5)

X Ltd. has two house properties both of which are vacant. Municipal value of 1 st house property is Rs.100000 and that of 2 nd is Rs.80000. It has computed income from house property as under:

Particulars	Details	Amount
HP1: Self occupied [Sec. 23(2)(a)]
Net Annual Value ( NAV )	Nil
Less : Interest on loan u/s 24(b)	Nil
Income from HP1		Nil
HP2: Deemed to be let out [Sec. 23(4)]
Gross Annual Value (GAV)	80000
Less : Municipal tax	Nil
Net Annual Value ( NAV )	80000
Less : Standard deduction u/s 24(a) @ 30% of NAV	24000	56000
Income from house property		56000

Do you agree with the computation of income from house property of the assessee

Question 4

(5)

Roshan started a business of designing on 01-04-2009. He acquired a laptop on 01-04-2009 for Rs.50000 for his business use. Since his gross total income for the previous year 2009-10 is only Rs.55000/-, he did not file his return of income. During the previous year 2010-11, his business income before depreciation u/s 32 is Rs.560000. Since he is required to file his return of income for the assessment year 2011-12, he seeks your advice for computing depreciation. Please compute depreciation on his behalf assuming that:

a.	He is maintaining books of account from 01-04-2009 but did not provide any depreciation on laptop.
b.	He is maintaining books of account from 01-04-2009 and provided depreciation Rs.8000 on laptop.
c.	He is maintaining books of account from 01-04-2010

Question 5

(10)

Explain with reason either the statements are true or false:
a.	An employee claiming exemption u/s 10(10C) is not eligible for relief u/s 89 for such receipt.
b.	An Indian citizen, who leaves India during the previous year for world tour shall be treated as resident in India only if he satisfies any of the conditions given u/s 6(1).
c.	Owner, in the context of sec. 22, means a person in whose name property is registered or a person who can enjoy the right of the owner, not on behalf of the owner but in his own right and includes deemed owner.
d.	Income from saplings shall not be considered as agricultural income.
e.	Medical allowance to the extent of Rs. 15000 is exempt in hands of all employees.

Question 6

(10)

a.	Describe the ad-hoc method of segregating partly agricultural income & partly business income.
b.	Enlists the income specified u/s 28