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5916
FINAL YEAR B.Com. DEGREE EXAMINATION,
MARCH/APRIL 2008
PART III COMMERECE
PAPER XIV OPTIONAL PAPER I (B)-INCOME TAX LAW &
PRACTICE
INCOME TAX PAPER I
(2004 AND EARLIER ADMISSIONS)
TIME: THREE HOURS MAXIMUM: 80 MARKS
PART A
Answer any ten questions. Each question carries 1 mark.
1. What is assessment year?
2. What is total income?
3. What is maximum marginal rate?
4. Who is resident?
5. What is regular assessment?
6. What is return of loss?
7. Who is deemed assessee?
8. What do mean by short term capital gain?
9. Give any two examples of exempted capital gain.
10. What is tax free commercial securities?
11. What do you mean by unrecognized provident fund?
12. What is composite rent?
(10x1=10 Marks)
PART B
Answer any ten questions. Each question carries 4 marks.
13. What are different types of rental values?
14. What is the meaning of tax deduction at source?
15. Mr. Suresh has furnished the following particulars. Compute the value of rent free
home if Mr. Suresh is a government employee, rent fixed by the government is
Rs.300 p.m.
(i) Salary @ Rs.10,000 p.m.
(ii) D.A. @ Rs.500 p.m. (it enters into retirement benefit)
(iii) Entertainment allowance @ Rs.600 p.m.
(iv) Bonus Rs.8,400
(v) Cost of furniture Rs.20,000.
16. Give any four examples of fully exempted perquisites?
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17. Mr. Raj invested Rs.1,00,000 in 8% tax free debenture of a company. What will be
taxable interest for the previous year ending on 31.3.2007 if the rate of deduction
of ax at source is @ 20.4%. Interest accrues on 1
st
J anuary every year.
18. From the following information compute depreciation allowable for the
essessment year 2006-07.
Rs.
W.D.V. of furniture on 1.4.2005 1,10,000
Furniture purchased in June 2005 1,50,000
Furniture purchased in J anuary 2006 20,000
Part of furniture sold in February 2006 3,000
Rate of depreciation 10%
19. Distinguish between revenue expenditure and capital expenditure.
20. What are perquisites? Give some examples of tax free perquisites.
21. A company took house on rent and allotted it to its employees. From the following
information find out the value of perquisites of accommodation.
Rs.
Rent paid for the year 60,000
Salary 5,00,000
Cost of furniture provided in the house 60,000
Rent charges from the employees per month 1,000
22 Determine the annual value of the house from the following information:-
Rs.
Municipal value 1,00,000
Fair rent 1,20,000
Standard rent 90,000
Refund rent received 1,32,000
Municipal tax 10% of municipal value paid by the
owner.
23. Agriculture land purchased in 1984-85 for Rs.46,400 sold for Rs.3,80,000 on
1.5.2006. The assessee purchased another piece of agriculture land on 1.8.2006 for
Rs.70,000 and deposited Rs.30,000 on 24.6.2007 in capital gain account scheme,
1988. Find out the capital gain chargeable to tax for the assessment year, 2007-08.
The cost of inflation index in 1984-85 was 125 and in 2006-07 519.
24. Explain the concept of Balancing Charges.
(10x4=40 Marks)
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PART C
Answer any two questions. Each question carries 15 marks.
25. What are the provisions relating to deduction of tax at source from income
chargeable under the head Salary.
26. Compute taxable income from the house property from the following particulars:
Rs.
Fair market rent 80,000
Actual rent 72,000
Municipal valuation 50,000
Standard rent 60,000
Municipal taxes 20%
Interest paid 18,000
27. Kalam purchased a house property on 1
st
September 1979 for Rs.2,10,000. Fair
marked value of the property on 1
st
April 1981 was 1,70,000. He incurred the
following expenses.
Rs.
(a) Construction of room on the ground floor
during 1980-81
10,000
(b) Renewal /construction in 1993-94 3,92,000
The property was transferred on 31
st
March 2006 for Rs.18,65,000. Compute the
capital gain. Cost inflation index for the year are as follows:-
Financial year C.I.I.
1993-94 244
2005-06 497
(2x15=30 Marks)