Maharaja Ranjit Singh College of professional Sciences

Cumulative Test Class : B.B.A. Vth Sem.

Time : 3 Hours Sub: Business Taxation M.M.: 90

Note : Attempt any two questions from Section ‘A’ and any three questions from Section ‘B’. Each
question carries 18 marks.

SECTION : A

Q.1 Define : a) Assessment year b) Previous Year c) Gross total Income d) Total Income

Q.2 How is the residence of assesses determined for income-tax purposes ? Explain the relationship
between residence and tax liability.

Q.3 Write shot notes on : a) House rent allowance b) Gratuity c) Pension d) VAT

SECTION : B

Q.4 Mr. Anil Jain is manager in a company at Nagpur (population 30 lakhs) . The following are the
particulars of his income during the previous year 2009-10 :

1. Basic salary Rs. 16800 per month.

2. Dearness allowance 30 % of basic salary.

3. Bonus equal to one month’s salary.

4. Transport Allowance Rs. 1000 per month for the purpose of commuting between residence and office.
He used his personal car and spends Rs. 1200 per month for this purpose.

5. Rent free house, owned by the company, fair rent of which is Rs. 30000 per annum. The house is
furnished and cost of furniture is Rs. 15,000.

6. Free food and drinks during the office time for 250 working days. The company pays rs. 62 per meai
for these facilities to caterer.

7. Free electricity costing Rs. 3800 from employers factory.

8. His one son is getting free education in the school run by the company. The expenses of education in
such an institution are Rs. 750 p.m. per student.

9. He paid life insurance premium Rs. 4500 and professional tax Rs. 1300.

Compute his taxable income under the head salaries for the assessment year 2010-11.
Q.5 From the following statements, compute the income of Dr. Subir jain from his profession for the
assessment year 2010-11 :

Rs. Rs.

Dispensary rent 36,000 Visiting fees 1,45,000

Electric Bills 13,000 Consultation fees 1,25,000

Telephone expenses 12,000 sale of medicines 72,000

Salary to Nurse 56,000 Dividends 5000

Purchase of Surgical Equip. 36,000 Cardiogram charges 58,000

Purchase of medicines 16,000 Operation fees 78,500

Stationary 1,000

Income Tax 15,500

Donation & Contribution 1,000

Motor car expenses 29,600

Depreciation on Car 24,800

Net Income 2,42,600

4,83,500 4,83,500

Additional Information

1. Electric bills include domestic bills of Rs. 4,500.

2. Half of the motor car expenses are for professional use.
3. Donation and contribution include Rs. 400 to National Relief Fund and remaining Rs. 600
contribution for medical conference.
4. Depreciation allowed on surgical equipment 15%. The written down value of cardiogram
equipment Rs. 20,000 on 1st April 2009.

Q.6 The following are the particulars of Mr. Sohan Patel ‘s income during the previous year 2009-10 :

1. Agriculture Income in Kanpur , India Rs. 25000.

2. Income from business in Indore, the business is controlled from London. Rs. 40,000.

3. Income from electronics income in Australia, its head office is situated in Australia, out of this income
Rs. 50,000 are brought to India. Rs. 1,50,000.
4. Income from business in Iran (Rs. 35,000 the income from a business which is controlled from India is
included) Rs. 80,000.

5. Income from agricultural land in America and deposited in a bank there. Rs. 80,000.

6. Manish who is a non –resident paid interest on loan provided to him for a business carried on in India.
Rs. 28,000.

Compute his taxable income foe the assessment year 2010-11 if he is :

a) Ordinarily Resident b) Not-ordinarily Resident c) Non –resident

Q.7 Mr. Rajiv Singh is working in a company. The following are the particulars of his income for the year
ending on 31st march, 2010:-

Salary 11,750 per month, Commission Rs. 18,400 annual and bonus equal to one month basic salary.

Dearness Allowance 20 % of basic salary.

Mr. Singh’s contribution to RPF Rs. 22,500 and Employer’s contribution Rs. 20,800.

The interest credited to RPF @12% Rs. 7800.

Free refreshment during office hours Rs. 500 per month.

Free education facility in the employer’s school Rs. 1600 per month per child for two children.

Medical Bills paid by the employer Rs. 16000.

Find out taxable income from salary for the assessment year 2010-11. Professional tax Rs. Has been
deducted from his salary.