Dibrugarh University - Direct Tax Law 2010

1.       a) Write short notes on the following :
i)        Assessment year
ii)       Charge of income tax
iii)     Capital asset

b) Explain the provisions of the Indian income tax act relating to deduction of tax from salary at source.


b) The following are the particulars of income of Mr. R for the previous year 2008-09: Solution available here
i) Rent from a property in Delhi received in USA                : 80,000
ii) Income from a business in USA controlled from Delhi :1, 20,000 
iii) Income from a business in Bangalore controlled from USA: 1, 80,000 
iv) Rent from property in USA received there but subsequently remitted to India : 60,000
v) Interest on deposits from an Indian company received in USA : 20,000
vi) Profits for the year 2007-08 of a business in USA remitted to India during the previous year 2008 (not taxed earlier)
vii) Gifts received from his parents
        Compute his income for the assessment year 2009-10 if his residential position is as under:
                        (i)Resident and ordinarily resident in India
                        (ii)Resident but not ordinarily resident
                        (iii)Non-resident Indian

3.       (a)Mr. X has the following income during the previous year 2008-09 :
Basic salary --- Rs.1, 20,000.
Dearness allowance (forming part of salary)—Rs 24,000
Medical allowance (actual expenditure Rs 4,000)—Rs, 6,000
Educational allowance (for three children)—Rs 6,000  
Rent free house in Delhi for which the employer company paid Rs 5,000 p.m. as rent. The house was furnished with rented furniture. The rent of the furniture is Rs 300 p.m.
The company provided two servants and one watchman. The company paid Rs 300 to each of them per month.
The company paid Rs 2,500 on his training programme.
Mr. X paid his professional tax of Rs 2,400 and deposited Rs 20,000 as LIP on his own life and Rs 15,000 for NSC.
Compute his taxable income for the assessment year 2009-10.


b) Explain in detail as to how the following items are treated in computing taxable income:
                        i) Recognised Provident Fund
                        ii) Commuted value of pension
                        iii) Relief u/s 89(1) of the Income tax Act.

4.       A) Discuss in detail the general principles governing determination of business income.


b) Following are the particulars of house properties of Mr. X for the previous year 2008-09:

House A
House B
Construction started on
Construction completed on
Annual rental value
Municipal valuation
Municipal tax
Annual repairing expenses
Interest on money borrowed for Renovation of the building
Insurance premium               
Ground rent
House property was vacant for (months)
Rent collection charges

        Both the above houses were let out for residential purposes. Insurance premium of house A and ground rent of house B are still outstanding. Repair expenses of house A  And municipal tax of house B was paid by the tenants.
Compute the income from house property.

5.       A) Write short notes on the following :
I)        Valuation date
II)      Debts owed

b) Explain the provisions of the wealth tax act, 1957 with regard to the following:
ii) Gift by means of book entries where money has not been actually delivered to the other person.