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Unique Paper Code 1204

Revised 0 of 18

Income Tax Law and PracticeNovember–December 2018

B.Com (Hons) · 5 questions · 3 parts still being checked

Duration: 2.5 HoursMaximum Marks: 55

From an older CBCS paper

Reworded by Kunji from the printed paper. The original paper belongs to the University of Delhi. See DU's question bank.

Before you start

Numbers and theory. 10 numerical parts and 11 theory parts. Numericals take longer to lay out, so give them your freshest time.
Pace. Two minutes a mark: about 22 minutes for each 11-mark question, with nothing spare in 2.5 hours. Pick your side of each OR before you start writing.
Keep score. Every part opens a worked answer checked against the books. Turn the key when you have revised it; the boxes at the top fill in, on this device.

1.

11 marks
· ~22 min

(a)Previous year, and the cases where a year's income is taxed in that same year (as set, 1961 Act, AY 2018-19)Define previous year. Enumerate those cases where income of a previous year is taxable in that same previous year. 3 Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year…(3)

(b)Assessee and person distinguished (as set, 1961 Act, AY 2018-19)Differentiate between assessee and person. 3 Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2018-19 (previous year 2017-18), with the dates as printed.(3)

(c)Residential status of an individual from his days of stay (as set, 1961 Act, AY 2018-19)Mr. Suresh lives in Hyderabad and visits China frequently for business purposes. From the particulars given below about his stay in India during different previous years, determine, for AY 2018-19, his residential…(5)

OR

(a)Partial integration of agricultural income with total income (as set, 1961 Act, AY 2018-19)Explain, for the purpose of computing tax liability, the scheme under which agricultural income is partially integrated with the total income. 3 Paper note: The as-set version: set and answered under the Income-tax Act,…(3)

(b)Tax liability on a total income of ₹3,50,000, with the rebate under section 87A (as set, 1961 Act, AY 2018-19)For AY 2018-19, compute the Income Tax liability of Mr. Sachin (age 39 years, a resident individual) having a total Income of ₹ 3,50,000. 3 Paper note: The as-set version: set and answered under the Income-tax Act, 1961…(3)

(c)Taxable income of a non-resident Indian citizen on a visit to India (as set, 1961 Act, AY 2018-19)Mr. Sarthak, an Indian citizen who settled in Netherlands in 1998, comes to India for a visit after a long period, during PY 2017-18, on 12.12.2017, and departs from India on 06.04.2018. He gives the particulars below.…(3)

2.

11 marks
· ~22 min

(a)

Total income and tax of a salaried employee with a disability (as set, 1961 Act, AY 2018-19)Being checked

(8)

(b)Tax treatment of commuted pension, with an illustration (as set, 1961 Act, AY 2018-19)Ilustrate the provisions of the income tax act that relate to the tax treatment of commuted pension. 3 Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2018-19…(3)

OR

(a)Exempt gratuity of an employee not covered by the Payment of Gratuity Act, after an earlier exemption (as set, 1961 Act, AY 2018-19)Raj, who was a General Manager of Reliable Company Ltd., retired from it on 10.8.2017. When he retired, his basic salary stood at ₹ 70,000 p.m. He was further entitled to dearness allowance @ 20% of his basic salary, of…(6)

(b)Valuation of rent-free accommodation provided by the employer (as set, 1961 Act, AY 2018-19)Discuss the rules regarding the valuation of rent free accommodation that the employer provides to the employee ? 5 Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year…(5)

3.

11 marks
· ~22 min

(a)Unrealised rent realised later, under section 25A (as set, 1961 Act, AY 2018-19)What provisions apply to 'House property' when the unrealised rent is subsequently realised, under Income Tax Act, 1961 ? 3 Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment…(3)

(b)

House property with four units: self-occupied, own profession, let out and partly vacant (as set, 1961 Act, AY 2018-19)Being checked

(8)

OR

(a)

Presumptive income of goods carriages under section 44AE (as set, 1961 Act, AY 2018-19)Being checked

(3)

(b)Business income from a proprietor's profit and loss account, and her taxable income (as set, 1961 Act, AY 2018-19)Ms. Jyoti (age 40 Yrs, a resident individual) gives the following particulars for PY 2017-18. 8 Profit and Loss Account for the year ended March 31, 2018 Further Information : (i) The Salary, Bonus and Commission…(8)

4.

11 marks
· ~22 min

(a)Exemption under section 54 on the transfer of a residential house (as set, 1961 Act, AY 2018-19)Write a brief note on the exemption available in respect of capital gain arising on transfer of a residential house property u/s 54 of the Income Tax Act, 1961. 5 Paper note: The as-set version: set and answered under…(5)

(b)Gifts, a property bought below stamp duty value, lottery winnings and other income of a senior citizen (as set, 1961 Act, AY 2018-19)Mrs. Sunaina Khera (age 69 years, resident individual) gives the following information relating to PY 2017-18. For AY 2018-19, compute her taxable income and tax liability. 6 (i) Receives as a gift ₹ 1,20,000 from her…(6)

OR

Capital gain on a flat received through a gift and a will, with exemptions under sections 54 and 54EC (as set, 1961 Act, AY 2018-19)Rohit Gupta purchased, on 01.07.2002, a flat in Ghaziabad for ₹ 12,00,000. In June 2010, he gifted the property to his brother Chetan. Chetan, however, passes away in August 2016, and the property gets transfered…(11)

5.

11 marks
· ~22 min

(a)Clubbing of a minor child's income under section 64(1A) (as set, 1961 Act, AY 2018-19)Explain the provisions that relate to the clubbing of the income of a minor child under section 64(1A) of the Income Tax Act, 1961. 6 Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for…(6)

(b)Philip John Plasket Thomas v. CIT: clubbing needs a spouse at the time of transfer (as set, 1961 Act, AY 2018-19)Briefly discuss the judgement of the Hon'ble Supreme Court in the case of Philip John Plasket Thomas vs. CIT regarding the clubbing of income. 5 Paper note: The as-set version: set and answered under the Income-tax Act,…(5)

OR

(a)Inter-head set off of losses under section 71 (as set, 1961 Act, AY 2018-19)Discuss the provisions contained in section 71 of the Income Tax Act, 1961 regarding the set off of loss from one head against the income from another head. 6 Paper note: The as-set version: set and answered under the…(6)

(b)Interest and remuneration to partners allowable to a firm under section 40(b) (as set, 1961 Act, AY 2018-19)M/S. Rama Krishna & Co. is a firm that carries on business, with business income of ₹ 3,60,000. The firm has paid the partners interest @ 15% p.a., amounting to ₹ 1,50,000, and this has been debited to the profit and…(5)

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