Dibrugarh University - Direct tax Law' 2012

1. Write short notes on:
(a) Method of accounting
(b) Income tax authorities
(c) Capital expenditure
(d) Charge of income tax


“Income tax is charged on the income of the previous year.” Do you fully agree with this statement? If not, what are the exceptions?

2. During the financial year 2010 – 2011, Mr. X had the following incomes: Solution Available Here
a.       Salary income received in india for services rendered in hong kong  390000
b.      Income from profession in india but received in germany 360000
c.       Property income in uganda (Out of which 240000 was remitted to india) 500000
d.      Profit earned form a business in bangalore 150000
e.      Agricultural income in kenya 160000
f.        Profits from a business carried on in nepal but controlled from india 230000

Compute the income of Mr. X for the assessment year 2011 – 2012, if he is –
a)      Resident and ordinarily resident
b)      Resident but not ordinarily indian resident
c)       Non – resident in india


State briefly the provisions of section 10 of the income tax Act, 1961 with regard to incomes which are exempted from tax.

3. Explain the provisions of the income – tax Act, 1961 with regard to the following:
(a) Payment of unrecognised provident fund
(b) Gratuity


Mr. X is an manager of a textile company at jaipur since 1986. He submits the following particularsof his income for the financial year 2010 – 2011:
(i)      Basic salary 240000per
(ii)    Dearness allowance  5000 p.m. (200 p.m. enters into retirement benefit)
(iii)   Education allowance for two children @ 150 p.m. per child
(iv)  Commission on sales @1% of turnover of 1000000
(v)    Travelling allowance 30000. The entire amount was spent by him for official purpose
(vi)  He was given cloth worth 1000 by his employer free of cost
(vii) He resides in the flat of the company at jaipur (26 lacs population)
(viii)           A cook and a watchman have been provided by the company at the bunglow who are paid @ 400 each p.m.
(ix)  He has been provided with a motor car of 1.8 ltrs engine capacity for his official and personal use. All expenses are borne by employer of the car.
(x)    Emplyer’s contriution to RPF is 40000 and interest credited to RPF @ 13% amounted to 16250.
(xi)  His own contribution to RPF 40000
(xii) Rent of house recovered from his salary 1500 p.m.
Compute the income from salary for the assessment year 2011 – 2012.

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


Mr. R has two house properties situated in Delhi. Property A is self-occupied for the first 6 months from 1 – 4 – 2010 to 30 – 9 – 2010 and w.e.f 1-10-2010 it was let out for 10000 p.m. Property B is let out w.e.f.1-4-2010 at a rent of 12000 p.m. and w.e.f. 1-10-2010 it was self occupied as R shifted his residence from property A to B. The other details of the above two house properties are as under:

Property A
Property B
Municipal tax paid
Insurance premium paid
Interest on money borrowedfor purchase of house property
Compute the income from house property for the assessment year 2011 – 2012.

5. Write short notes on the following:
(a) Tax incidence
(b) Computation of net wealth
(c) Deemed assets
(d) Exempted assets


Explain the provisions of the wealth tax act, 1957 with regard to the following:
(a)    Property held by a member of a housing society
(b)   Assets held by a minor