B.Com 3rd Year Question Papers (Distance): Direct Tax Law' 2016

2016 (August)
Course: 306
(Direct Tax Law)
Full Marks: 90

Time: 3 hours

The figures in the margin indicate full marks for the questions

1. Write short notes on the following: 3½ x 4=14
  1. Method of Accounting.
  2. Income Tax Authorities.
  3. Capital Expenditure.
  4. 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? 14
2. During the financial year 2010-11, Mr. X had the following incomes:

  1. Salary income received in India for services rendered in Hong Kong
  2. Income from profession in India but received in Germany
  3. Property income in Uganda (out of which Rs. 2,40,000 was remitted to India)
  4. Profits earned from a business in Bangalore
  5. Agricultural income in Kenya
  6. Profits from a business carried on in Nepal but controlled from India

Compute income of Mr. X for the assessment year 2011-12, if he is –
  1. Resident and ordinarily Indian resident;
  2. Resident but not ordinarily Indian resident;
  3. Nonresident in India. 14
State briefly the provisions of section 10 of the Income-tax Act, 1961 with regard to incomes which are exempted from tax. 14
3. Explain the provision of the Income-tax Act, 1961 with regard to the following: 7x2=14
  1. Payment from unrecognized Provident fund.
  2. Gratuity.
Mr. X is an Assistant Manager of a Textile Company at Jaipur, since 1986. He submits the following particulars of his income for the financial year 2010-11:
  1. Basic salary – Rs. 2,40,000.
  2. Dearness Allowance – Rs. 5,000 p.m. (Rs. 200 p.m. enters into retirement benefit)
  3. Education Allowance for two children @ Rs. 150 p.m. per child.
  4. Commission on sales @ 1% of turnover of Rs. 10,00,000.
  5. Travelling Allowance Rs. 30,000. The entire amount was spent by him for official purpose.
  6. He was given cloth worth Rs. 1,000 by his employer free of cost.
  7. He resides in the flat of the company at Jaipur (26 lakh population of the flat)
  8. A cook and watchman have been provided by the company at the Bunglow who are paid @ Rs. 400 each p.m.
  9. He has been provided with a motor-car of 1.8 litres engine capacity for his official and personal use. All expenses are borne by employer of the car.
  10. Employer’s contribution of RPF is Rs. 40,000 and interest credited to RPF @ 13% amounted to Rs. 16,250.
  11. His own contribution to RPF Rs. 40,000.
  12. Rent of the house recovered from his salary Rs. 1,500 p.m.
Compute the income from salary for the assessment year 2011-12. 14
4. Discuss in detail the general principles governing determination of business income. 14
Mr. R has two houses properties situated in Delhi. Property A is self-occupied for first 6 months from 01.04.2010 to 30.09.2010 and w.e.f. 01.10.2010 it was let out for Rs. 10,000 p.m. Property B is let out w.e.f. 01.04.2010 at a rent of Rs. 12,000 p.m. and w.e.f 01.10.2010 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 borrowed for purchase of house property

Compute the income from house property for the assessment year 2011-12. 14
5. Write short notes on the following: 3½ x 4=14
  1. Tax incidence.
  2. Computation of net wealth.
  3. Deemed assets.
  4. Exempted assets
Explain the provisions of the Wealth-tax Act, 1957 with regard to the following: 7x2=14
  1. Property held by a member of a housing society.
  2. Assets held by a minor.
6. Answer the following questions: 4x5=20
  1. Write shortly what you understand the terms ‘Previous Year’ and ‘Assessment Year’.
  2. Write in short on exempted income under Income Tax Act.
  3. What is Perquisites? Mention its different categories.
  4. Write briefly on income from property.
  5. Write briefly on the assets mentioned in Section 2 (ea) of the Wealth Tax Act 1957.