Unique Paper Code 7501
Revised 0 of 17

Income Tax Law and PracticeDecember 2025

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

Duration: 3 HoursMaximum Marks: 90

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

Before you start

  1. Most asked here. Income from salaries (9 papers), Income from house property (9 papers), Capital gains (9 papers). These come back almost every year, so learn them first. The asked N× note beside each part counts the DU papers that set its topic.
  2. Numbers and theory. 10 numerical parts and 10 theory parts. Numericals take longer to lay out, so give them your freshest time.
  3. Pace. Two minutes a mark: about 36 minutes for each 18-mark question, with nothing spare in 3 hours. Pick your side of each OR before you start writing.
  4. 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.

18 marks
· ~36 min
(a)Income of one year taxed after it ends, and the exceptionsasked 7×"A previous year's income is taxable in the assessment year immediately succeeding it". Do you agree with this statement. Give exceptions. Paper note: Set under the Income-tax Act, 1961 for assessment year 2025-26…(6)
(b)Residential status from past stays and taxable income of a not ordinarily residentasked 8×Ms. Shikha, an Indian citizen, has worked since April 2018 as General Manager in HDGL Life Insurance, and her insurance profession takes her abroad often. In the tax year 2026-27 she spent 183 days in India. Before…(12)
OR
(a)Permanent Account Number and four transactions needing it (as set, 1961 Act)asked 7×What is a Permanent Account Number? State four transactions in which quoting the PAN is compulsory. Paper note: The as-set version: set and answered under the Income-tax Act, 1961 for assessment year 2025-26 (previous…(6)
(b)Deemed residence of an Indian citizen living abroad, and its effect on taxable incomeasked 8×Ms Varsha, an Indian citizen, is settled in Singapore since year 1/04/2010 and has not visited India since then. Her income during the tax year 2026-27 is given below : Singapore does not tax the above incomes. (i) For…(12)

2.

18 marks
· ~36 min
(a)Six incomes excluded from total income, with examplesasked 3×With suitable examples, list six incomes exempted under Section 10 of the Income Tax Act. Paper note: Set under the Income-tax Act, 1961 for assessment year 2025-26 (previous year 2024-25); answered under the Income-tax…(6)
(b)
Income from salariesBeing checked
(12)
OR
(a)Gratuity of an employee not covered by the Payment of Gratuity Actasked 9×Discuss the tax treatment for availing of the exemption under section 10(ii), where the assessee is not covered under Payment of Gratuity Act, 1972. Paper note: Set under the Income-tax Act, 1961 for assessment year…(6)
(b)Salary income in the year of retirement under the new regime: gratuity, leave salary, provident fund and pensionasked 9×Mr. Krishna has been a senior sales manager in Shyama Co. Ltd. since 1/4/2007. His salary details for the tax year 2026-27 are: (i) Basic Salary (as on 1/04/2026) : Rs. 50000 p.m. (ii) D.A. (40% is part of retirement…(12)

3.

18 marks
· ~36 min
(a)Exemption of capital gains invested in specified long-term bondsasked 9×Briefly explain the exemption under section 54EC of the Income Tax Act, 1961 for capital gains on investment in certain bonds. Paper note: Set under the Income-tax Act, 1961 for assessment year 2025-26 (previous year…(6)
(b)Income from two house properties under the new regime, one let for part of the yearasked 9×Mr. Raman, a GST officer at Jaipur, owns two residential houses, at Delhi and at Jaipur; the details are: In the tax year 2026-27 he repaid Rs. 200000 to SBI on the loan taken to construct house-2, out which Rs. 90000…(12)
OR
(a)Gross annual value of a let-out house propertyasked 9×Taking a suitable example, briefly explain how the Gross Annual Value of a let out property is computed. Paper note: Set under the Income-tax Act, 1961 for assessment year 2025-26 (previous year 2024-25); answered under…(6)
(b)
Long-term gains on gold, unlisted shares and a house, with the indexation option, under the old regimeBeing checked
(12)

4.

18 marks
· ~36 min
(a)
How depreciation is calculated on a block of assets, with examplesBeing checked
(6)
(b)Business income from a trading and profit and loss account, with disallowancesasked 7×Mr. X gives his Trading and Profit & Loss Account for the tax year 2026-27, ending on 31/03/2027 : Further details are given below: (i) Advertisement expenses include Rs. 10000, the cost of diaries and calendar given to…(12)
OR
(a)Bad debts, a payment to a relative and undervalued closing stock: admissible or notasked 7×Explain the provisions on the following points, for admissible or inadmissible under PGBP : (i) A provision for bad debts, and actual bad debts, in the business's profit and loss account. (ii) A payment to a relative…(6)
(b)Income of an advocate on the cash system, and his total incomeasked 7×Mr. A, an advocate, keeps his books on receipt and payment basis and gives the following for the tax year 2026-27 ending on 31/03/2027 : Additional information is as follows : (i) Personal use accounts for 20% of the…(12)

5.

18 marks
· ~36 min
(a)Set off and carry forward of house property losses under both regimesasked 6×For let out and self-occupied properties, briefly explain, under both tax regimes, how losses under the head income from house property are set off, and how they carry forward. Paper note: Set under the Income-tax Act,…(6)
(b)Total income and tax under the old regime with capital gains at special rates and race winningsasked 5×Mr. Aakash (48 years resident individual) is a professional consultant in decoration and interiors, based at Chandigarh. For the tax year 2026-27, he gives this information on his income and expenditure. Assuming he…(12)
OR
(a)Clubbing of a minor child's income with the parent's incomeasked 6×Explain the provisions u/s 64(1A) of the Income Tx Act, 1961 on clubbing the income of minor children. Paper note: Set under the Income-tax Act, 1961 for assessment year 2025-26 (previous year 2024-25); answered under…(6)
(b)Net income of a severely disabled senior citizen under the old regimeasked 7×Mr. Rahul (62 years, a severely disable person certified by AIMS Delhi) gives this information for the tax year ending 31st March, 2027. Assuming that he is a resident and ordinarily resident in India, determine his net…(12)

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