1) Mr S is a leading lawyer of Bombay; he deposits in the bank a/c all the receipts & always pays all the

expenses by
cheques. The analysis of his bank a/c for the year ending is as follows:-
RECEIPTS AMT PAYMENTS AMT
To Balance b/d 7500 By Salaries 14000
To Professional fee 1,40,000 By Rent of chamber 4500
To Dividend 8000 By Telephone expenses 1000
To House rent 22500 By Motor car expenses 8000
To Income from horse race gross ₹ 15000 10000 By Miscellaneous expenses 5500
To Share of income from HUF 7110 By Purchase of motor car 25000
By Advance payment of income tax 40000
By Donation to Mumbai University 10000
By Personal experience 45500
By Newspaper subscription 3000
By House property expenses [tax-5000, 10,000
insurance 1,500; repair -1500, collection
charge-2000]
By Balance c/d 28610
195110 195110
Compute the income from profession after taking into a/c the following information:
i) 1/4th of the motor car expense relate to personal use.
ii) Rate of depreciation on motor car 15%.
iii) Mr S stays in his house, the gross annual value of which is ₹ 9,800. The following expenses which have been included in
the above a/c in respect of his house, insurance premium ₹ 500, Municipal Tax ₹ 2,500.

2) Mr X is a lawyer who maintains books on cash basis furnishes the following particulars of his income for the year ended
31.3.2020
RECEIPTS AMT PAYMENTS AMT
To Balance b/d 21000 By Purchase of type writer 7000
To Fee from client for 18-19 2,40,000 243000 By Car expense 8000
19-20 3,000
To Present from clients 4000 By Office expense 7000
To Loan from clients 8000 By Salary to staff 18000
By Interest on loan 1000
By Income tax penalty 2000
By Contribution to public provident fund 42000
By Purchase of notified bonds of 6000
infrastructure company
By Balance c/d 131000
276000 276000
i) 20% of car expenses are towards use of car for personal purpose
ii) Fee due but o/s ₹ 4,000
iii) Depreciation on car ₹ 3,000
iv) Income of Mr X from other sources ₹ 45,000
v) Mr X purchased computer for ₹ 80,000 on 10.3.19 , it is however put to use on 31.12.2019 .
Compute taxable income from profession.

3) From the following receipts & payments a/c of Mr N a chartered accountant for the year ended 31.3.2020
RECEIPTS AMT PAYMENTS AMT
To Audit fees 19210 By Office expenses 10000
To Consultation fees 10000 By Office rent 5000
To Miscellaneous income 20000 By Salary & wages 12050
To Interest on govt securities 10000 By Printing and stationery 1000
To Rent received 10000 By Subscription to CA institute 8000
To Presents from clients 25000 By Purchase of books for professional 1300
purpose
By Travelling expenses 5800
By Interest on Bank loan 3000
By Donation to national defence fund 5000
 94210 94210
Adjustments:-
i) Loan from bank was taken for constructing the house in which he lives.
ii) Municipal valuation of his house is ₹ 8,000 & local tax ₹800 pm.
iii) 1/4th of the travelling expenses are not allowed.
iv) Depreciation on books @100%.

4) Dr M a medical practitioner who maintains regular books of a/c on cash basis, his receipts & payment for the year ended
2019 -20 are as follows:-
RECEIPTS AMT PAYMENTS AMT
To Balance b/d 14000 By Rent of clinic 20 - 600
To Consultancy fees 20 - 3000 20 - 4800
20 - 15000 20 - 600 6000
20 - 2000 20000 By Electricity & Water bill 2000
To Visiting fees 30000 By Purchase of professional books[annual 4000
publications]
To Loan from bank for professional purpose 25000 By Household expense 7800
To Sale of Medicine 60000 By Collection charges on dividend income 100
To Gifts & Presents 5000 By Motor car purchases 30000
To Remuneration for articles published in 6000 By Surgical equipment 4800
professional journal
To Dividend 10000 By Income tax 10000
To Interest on post office savings bank a/c 7000 By Salary to staff 15000
By Life insurance premium 15000
By Gift to wife 5000
By Interest on loan 2000
By Car expense 15000
By Purchase of medicine 40000
By Balance c/d 20300
177000 177000
i) 1/3 of use of motor car relates to his personal use.
rd

ii) Depreciation on motor car, books, surgical equipments to be allowed as per income tax rule.
iii) Gifts & presents include ₹ 3,000 from patient in appreciation of his medical service & ( ₹ 2000 received as birthday gift
from relatives).
iv) Closing stock of medicine amount ₹ 5,500
Compute taxable income from profession.

5) Dr P is regular medical practitioner, he keeps his books on cash basis & his summary on cash a/c for the year ended
31.3.2020 is as follows:-
RECEIPTS AMT PAYMENTS AMT
To balance b/d 122000 By purchase of books for 1000
professional[annual publication]
To loan from bank for personal purpose 3000 By cost of medicine 9000
To sale of medicine 25250 By surgical equipment 8000
To consultation fees 55000 By motor car purchased 120000
To visiting fees 24000 By car expense 6000
To interest on govt securities 4500 By salaries 4600
To rent from property[not subject to local tax] 3600 By rent of dispensaries 1600
By general expenses 300
By personal expenses 11800
By life insurance premium 3000
By interest on loan from bank 300
By insurance on property 200
By tatkal deposit in telephone deposit 30000
scheme
By balance c/d 41550
237350 237350
i) 1/3 of motor car expense are in respect of his personal use.
ii) Depreciate books at 100% surgical equipments @ 15% & motor car @ 15%.
Compute taxable professional income.

6) From the following receipts & payments of Mr Z a chartered accountant. Compute taxable professional income.
RECEIPTS AMT PAYMENTS AMT
To balance b/d 3000 By rent 24000
To tax consultation fee 45000 By staff salary 42000
To fee from audit 38000 By subscription to magazine & periodicals 4800
To fee from accounting work 29000 By electricity charges 5200
To cash gift from client 45000 By purchase of computer[professional] 40000
To house rent 1000 By office furniture 3500
To winning from horse race [Net] 18000 By household exp 3900
To interest on govt securities 18000 By motor car expense 15000
To share from hindu undivided family 7000 By purchase of books on tax 21000
To interest on post office savings bank a/c 6000 By balance c/d 26500
219000 219000
i) Staff salary includes ₹ 5000 paid to domestic servant.
ii) Household expenses include ₹ 3000 for purchase of national savings certificate & ₹ 8000 for payment of life insurance
premium on a policy of ₹ 75000.
iii) 60% of motor car expenses are in respect of profession.
iv) Written down value of motor car on 1.4.201 was ₹ 36000.
v) Mr Z lives in ½ of the house & another ½ is used for office, belonging to him, rent & electricity charges are in respect of
this house.
vi) Fees from audit include a receipt of ₹ 2000 as advance for audit work in April 201 .

7) Dr Suresh is a medical practitioner, beside his own he works as a part time physician in a private hospital for which he
receives a monthly remuneration. He is consultation physician of XYZ Co ltd on a monthly retainer fee. The doctor
maintains the record of his receipts & payments.
RECEIPTS:-
Consultation fee ₹ 160000
Gross remuneration from private hospital ₹ 24000
Retainers fee from XYZ ltd ₹ 6000
Interest on bank deposits[National bank] ₹ 13000
PAYMENTS:-
Rent & electricity charges of clinic ₹ 12000
Telephone charges ₹ 2400
Printing & stationery ₹ 500
Car maintenance charges ₹ 12000
Wages of clinic assistant ₹ 3600
Driver’s salary ₹ 3600
Life insurance premium ₹ 2400
Adjustments:-
i) The written down value of the car & furniture at the clinic as on 1.4.21 are ₹ 25000 & ₹ 2000 respectively.
ii) 20% of the use of the car & the telephone is attributable to personal purpose.₹
iii) Provide for depreciation on car @ 15% & furniture @ 10%.
Prepare a statement showing the total professional income of Dr Suresh.

8) Dr R is a registered medical practioner, he keeps his books on cash basis & his summarized cash a/c for the year ended
31.03.201 is as follows’:-
RECEIPTS AMT PAYMENTS AMT
To balance b/d 5850 By cost of medicine 12000
To loan from bank for professional purpose 10000 By general expenses 450
To sale of medicine 26500 By motor car expenses 6000
To consultation fees 16000 By salaries 1200
To visiting fee 3000 By rent of dispensary 2400
To interest on government securities 3600 By telephone expenses 500
To rent from house property 8000 By personal expense 1600
To gift from father-in-law 5000 By life insurance premium 2500
To gift from patient 2000 By interest on loan from bank 200
By insurance premium on car 700
House property 500 1200
By local taxes 80
By travelling expenses[personal] 1000
By charity 100
By balance c/d 50000
79950 79950
i) ½ of motor car expenses are in respect of his personal use.
ii) The following expenses were unpaid on 31.3.2020 . Rent of dispensary for 4 months ₹ 1200, telephone bill ₹ 280.
iii) Consultation fee include a receipt of ₹ 6000 as advance for attending a medical camp in April 201 .
iv) The written down value of motor car on 1.4.201 .

9) Dr D a medical practitioner furnishes his receipts & payments a/c for the year ended 201 -1 .
RECEIPTS AMT PAYMENTS AMT
To balance b/d 28000 By purchase of professional books 10000
other than annual publication
To visiting fee 60000 By membership fee of medical 1000
association
To sale of medicine 120000 By household expense 15000
To consultation fees 201 -1 6000 By rent of clinic 201 -1 2000
201 - 34000 40000 201 - 11000 13000
To salary as part time lecturer in medical 5000 By 2nd instalment of car purchased out 60000
college of 5 instalment
To gift received from patient 10000 By income tax 20000
To retainer fee from G ltd 3000 By water expenses 4000
To examine ₹ fee 1000 By car expenses 30000
To interest on post office savings bank a/c 14000 By medicine purchased 80000
To interest on govt securities 20000 By salary to staff 20000
By surgical equipment 30000
By gift to wife 10000
By balance c/d 8000
301000 301000
i) 1/3rd of motor car relates to his personal use.
ii) Gift includes ₹ 1000 as birthday gift of Dr D.
iii) Medicine costing ₹ 10000 was taken for treatment of his son.
iv) Depreciation to be charged on motor car, books & surgical equipment.
Compute income from profession of Dr D for the assessment year 20-21

10) Mr Harish is a practicing Chartered Accountant; he maintains his a/c on cash basis. Following is the receipt & payment
a/c for the year ended 31.3.20 .
RECEIPTS AMT PAYMENTS AMT
To balance b/d 9300 By office rent 2400
To audit fees 64700 By salary of audit clerk 24800
To income from other accounting work 56800 By allowance of audit clerk 1800
To fee for conducting income tax appeal 8100 By salaries 32400
To examine ₹ fee from university 600 By municipal tax 400
To dividend 7840 By personal expenses 53500
To rent from property 4000 By member ship fee 1100
By life insurance premium 1500
By income tax 2500
By motor car purchased 9000
By insurance of house property 300
By motor car expense 600
By balance c/d 21040
151340 151340
Having regarded to the fact that 1/3 of the motor car expenses is in respect of professional practise.
rd
Compute professional income of Mr Harish assuming rate of depreciation on car @ 15%

11) Mr Bajaj lives in Bhopal he is a lawyer & his receipt & payment a/c is as follows
RECEIPTS AMT PAYMENTS AMT
To opening balance 1892 By book purchase [annual publication] 800
To fee received 40000 By repair of house 1200
To salary as part time lecturer 3600 By local taxes at 10% 600
To exam remuneration from unive ₹ ity 2300 By maintenance expenditure of car 2000
To interest on bank deposit 1200 By office expenses 4000
To amount received on car sold 18000 By domestic expenses 20000
To share sold 26000 By plant for office 700
To dividend received 1540 By car purchased 25000
By LIC premium 5000
By donation to recognised institution 1200
By renovation expenses on house 10000
property
By gift to married daughter 400
By income tax 3500
By assessment expenditure 200
By bank deposit 13000
By public PF 4000
By balance c/d 2932
84532 84532
i) 1/3rd of building is used for professional & 2/3rd for residence.
ii) The car is used in professional & personal work equally.
iii) Books purchased for teaching ₹ 200 & remaining for profession.
Compute Mr Bajaj’s professional income.

12) Shree R.S Jain is a CA he has prepared the following income & expenditure a/c for the year ending 31.3.201 .
EXPENDITURE AMT INCOME AMT
Office expenses 10000 Audit fees 70500
Employee Salary 5000 Gift from father-in-law 5050
Books other than annual publications 500 Dividend 8000
Personal expenses 17000 Profit on sale of asset 6450
Donation to national relief fund 500 Tax Consultancy fee 50000
Interest 700
Income Tax 13300
Car expenses 2000
Net Surplus 91000
140000 140000
You are required to calculate his professional income for the Assessment year 20 - , considering the following points:
i) The Car is used equally in official & personal purpose & depreciation allowed for official work is ₹ 500.
ii) ₹ 1000 domestic servant salary is included in employee’s salary.
iii) Loan has been taken to purchase office building.
iv) Mr Jain is the owner of the building its written down value is ₹ 80000 on 01.04.201 . The building is used for Mr Jain’s
office besides their furniture cost ₹30,000, its written down value on 01.04.201 is 20000 allowable depreciation @ 10% on
building & 10% on furniture under income tax act.

13) Mr S furnishes the following p/l a/c for the year ended 31.3.201 .
PARTICULA ₹ AMT PARTICULA ₹ AMT
To opening stock 104000 By credit sale 278000
To gifts and presents to public 1000 By sundry receipts 8000
To office expenses 10000 By closing stock 210000
To telephone under OYT system 8000
To salary to staff 42000
To audit fees(cash) 22000
To depreciation 28000
To purchase of furniture 5000
To travelling expenses 43000
To loss on cash by an employee through 5000
embezzlement
To amount transferred to special reserve a/c 7500
To expenditure on occasion of diwali 7100
To interest & legal expenses 44000
To sundry expenses 8500
To net profit 160900
496000 496000
i) Amount of sale includes a sum of ₹ 41250 representing the value of goods with drawn for the use of family member . The
goods were purchased at a cost of ₹ 27850 [Market value 45240]
ii) Closing stock & opening stock is valued at 10% below cost price.
iii) Salaries to staff include payment of ₹ 12000 outside India on which tax has not been deducted at source.
iv) Depreciated value of plant & machinery on 1.4.201 ₹ 110000 [rate of depreciation 25%]. A plant that’s written down
value on 1.4.201 is ₹ 17440 is sold during the previous year for ₹ 11000.
v) A machinery [cost ₹ 20000] whose written down value on 1.4.201 is ₹ 2350 is sold during the previous year for 15000.
During the previous year Mr S purchased a new plant for ₹ 40000 which is eligible for depreciation at 25%. The plant is
installed and put to use on 15.3.201 .
vi) Travelling expenses include ₹ 10000 being hotel expenses of an employee in respect of an official visit to Bombay for 5
days.
vii) Interest includes a payment of ₹ 3000 outside India on which tax is not to be deducted.
viii) Sundry expenses include expenditure of ₹ 1000 on maintenance of guest house in Delhi for the purpose of carrying on
business & ₹ 4000 being employee contribution towards ESI out of which ₹ 600 is paid after due date.
ix) Expenses on occasion of Diwali include a gift of ₹ 2000 to Mr S.
x) Legal expenses include the following payment: a) payment of ₹ 4000 to be an employee of Mr S for filing income tax
appeal. b) Payment of ₹ 5000 to Mr C not being an employee of Mr S for the preparation of returns of income. c) Payment
of ₹ 11000 to Mr D an advocate who is not an employee of Mr S for filing income tax appeal & giving tax advice. d)
Payment of ₹ 2000 to Mr E a CA who is not an employee.
xi) Determine the taxable income for the Assessment year2020-21assuming the sundry receipts include ₹ 5000 being
amount towards endowment insurance policy, received from LIC of India @ the time of maturity of the policy [i.e. 5.12.201 ]
amount of premium last paid on 5.6.201 is ₹ 4000.

14) From the following statement compute income from profession of Dr Kapoor for the Assessment year 19-20.
EXPENDITURE AMT INCOME AMT
To Salaries 30000 By visiting fee 55000
To income tax 6000 By dividend 5000
To donation 5000 By constitution fee 135000
To dispensary rent 40000 By sale of medicine 82000
To electricity charges 8000
To telephone expenses 7000
To depreciation 9000
To purchase of X-ray machine 50000
To purchase of medicine 40000
To motor car expenses 11000
To depreciation car 6000
To net income 65000
277000 277000
i) Electricity charges include ₹ 2000 used for domestic purpose.
ii) Telephone expense includes 50% for personal use.
iii) ½ of motor car used for professional use.
iv) Opening stock of medicine was ₹ 5000 & closing stock was ₹ 6000.
15) Mr P a reputed lawyer of Delhi has prepared the following income & expenditure a/c for the year ended 31.3.201 .
EXPENDITURE AMT INCOME AMT
To household expenses 12000 By legal fee 126000
To office expenses 7000 By special commission and 11400
appointment fees
To charity 500 By cash gift received from his 2000
father
To telephone expense 500 By house rent 15000
To income tax 900 By interest on government 3000
securities
To rent 4000 By salary as part time lecturer in 6000
law
To gift to daughter 2000
To electricity charges 1000
To donation of national defence fund 1000
To contribution to RPF 2400
To general subscription 3000
To salaries 15000
To purchase of motor car 60000
To purchase of furniture 2000
To life insurance premium 5000
To motor car expenses 6000
To purchase of type writer 6000
To excess on income over expenditure 25100
153400 153400
i) Mr P lives in half of the house & other half is used for office expenses.
ii) Rent & electricity charges are in respect of this house.
iii) Half of car is for personal use.
iv) Depreciation on motor car at 15%, type writer @ 15% & furniture @ 10%.
Compute taxable income from profession.