Advance, PRE A eee LY) So] RU Tey ester 2mester ¢ Based on New Syllabus ¢ Chapter based and Semesterwise Exam Questions Answer ¢ Answer of Probable Questions | Mohan Prasad Tiwari{2 THEORETICAL PROBLEMS BBM BroUDIAN Brief Answer Quostions, 4. [2049 Sep @. No. 1][2016 G. No. 4}ootine indiroct tax with examples “The tax which paid by one person and the burden of the tax could be shifted to the another person is called indirect tax. The woalth of the charging person could not be reducad by the indirect tax. The amount of tax is collected by the business man by adding as additionat cost of sold to the customer. The examples of indirect tax are value added tax, excise duty, custom duty etc, 2017 Sep Q. No. 2| Point out any two demerits of indirect tax. “The demerits of indirect tax are: a. Uncertainty b. No civil consciousness 2016 Q. No. 2] Point out any two demerits of direct tax. + The demerits of direct tax are: a. Inconvenience b, Unpopular 2015 Sep Q. No. 1] Define direct tax. = The tax which paid by the person to home itis legally imposed. The burden ofthe tax could not be the shifted to another person. The wealth of the charging person is reduced by the tax, The examples of direct taxes are income tax, house and land tax, vehicle tax etc. 5, [2015 Sep Q. No. 2] What do you understand by "Canon of Equity"? i i ding to the earning capacity of tax The canon of equality means the tax is levied accor ol me The ae is taking advantages from the resources of the nation so te eames pay to the state according to taking benefit from the resources. A good taxis Het which is based on the principle of equality. Se Brlof Answor Questions _ 1. poe. Fic 4] what do you moan by canon economy? «This canon implios that minimum possiblo money sto spont th plies tal iin cotocted anon! sbouk be depasted in MS Fy taxes, The ravi pany gxpontr in th collacton should Bo ROSNY accounts, Thus all unneces: pee ha Defino indirect Tax. Z [pais take up) @. Wo. 2016. No.1] don of the 2 [eto iia) Ho vo chaging porson can shied Ue DUET hs te gil yn and th P q Det wi pa io tax, The charging persons add the amount tax to the another N 2 > in the collection of governmentSEY ens Sorast's TU Soto’ to Cxporate Tocton in Nepal «BDAY, TH expenditure and collect from their customers. The example of indirect taxes are vay. ‘added tax, custom duty, exercise duty [2848 (Rake up) @. No. 4] Clarify the concept of Tax. The tax is compulsory cash contribution to the government without expecting any direc return from the government. If anybody denial to pay tax to the government imprison, The a tax collected by th prent Act and rules. 4 4, [2016 Q. No. 1] List out any two demerits of direct Tax. § = The demerits of direct taxes are: a. inconveniences: The main drawback of the direct taxes is inconvenience because it requires numerous accounting and other formalities to be observed. Sornetirnes, taxpayers have to pay a large amount of taxation in lump sum which causes inconveniences to the tax payers. Besides, the taxation system is quite complicated and it is difficult for a layman to understand the implication involved in it. As a result he has to take the guidance of an expert which too costs much. b. Unpopular: These taxes are directly imposed for an individual. So, it appears quite pinch to the tax payers. This type of taxation is unpopular among the tax-payers anc ——__. they resist it. BBM Descriptive Answer Questions | 6 markoamy 2015 Sep Q. No. 13] "Tax is the compulsory contribution from a person to governmer Explain, . — Tax is a compulsory contribution by general people to the government without expecting any direct return. Tax is a part of public revenue. It is not a borrowing, not loan from external sources or internal sources, neither this is a grant. The government does not imposed tax without under the provision of different Act, rules and regulations, If tax payers refuse to pay tax then the tax payer is punished as per the provision of law. Therefore, tax is not voluntary it is compulsory. A tax payer does not receive any specific benefit from the state and the state does not guarantee any particular benefit. Public authority or parliament including head of the state is only authorized to levy tax. The government may be central, province or local. According to the constitution of Nepal, no taxes shall be lived without framing and enforcing an Act. In Nepal so many Acts are in force to implement various taxes. The taxes are imposed on natural or corporate persons Taxes do not includes any fines, penalty fees etc. charged for breaks of provisions of the Act and rules and directives formed under the Act. Civil Aviation Authority is fully government of Nepal owned company. It charges passenger fee from each passenge’ embarking from Nepal. The fee is being charged as per by laws of the company but net ss per any Act of Government of Nepal. The is why; the fee is revenue of the company. So. it is also not tax. Therefore, the tax should be clearly understood as: the revenue being collected as per the provisions of any prevailing Acts and the revenue that goes to the fund of any governmental Finally, the tax is @ compulsory payment to the state under the provision of law. The taxpayer does not directly benefited. The tax contributed by the people to meet the pt expenditure ‘of the government. It is imposed on income, properly, expenditure a consumption. settleGeneral Background of Income Tax Act. 1 ” 2 o > a = Brlef Answer Questions Ras ois Sep Q. No. 2| Define the term xempt organization’ under Income Tax Act, 2058, The non profit. making organizations which have the Privilege of not charging tax to the’ organization is called tax exempt organization. The examples of tax exempt organization are a social, religious education, or Charitable organization of a Public character established without a profit motive, 2019 Sep Q. No. 3] Write the Meaning of assessment year. The income year this is started from first sharawn and end to the ashar current year. In the year the amount of tax liabilities are determine for the previous income year, The current assessment year is 2077/78 and the current income year is 2076/77, 2018 Sep Q. No. 1] [2015 Sep Q. No.7] Enumerate the ‘heads of income under Income Tax Act. According to income tax Act, 2068 the head of income are: @. Income from employment b. Income from investment ©. Income from business 4d. Causal gain {2048 Sep Q. No. 2] Define a ‘natural person’ - under Income Tax Act. It means natural person and for purpose of this Act, the term also denotes to a Laat OF unregistered proprietorship firm owned by the natural person and a couple or, single Natural person, 2018 Sep Q. No. 3] [ 2015 Sep-@. No. 3 What do you mean by ‘withholding Payment’? : : The earning distributed after deducting reasonable rate of tax is called pene Payment. There are two types of withholding payment one is final withholding payment another one is advance tax paid. 2018 Sep Q. No, 4] Explain the provision for deducted of Life Insurance ep i“ Life insurance Premium is one of the reduction in total income or it is common Z limit up to Rs. The provision of ite insurance premium as per income tax Ac, is maximum limit up 25000,‘Abvonce Sarasa’ TU Soli’ to Corporate Taxation n Nepal = BENBEHM, TU 2017 Sep Q. No. 1] Define the term ‘Income year’. Pe ‘ ‘ % The amount a tax labile is determined from the earning of the year iS called income ‘year. The curren income year is 2077/78. 8. [2076 @, No. 3] What do you mean by PAN? Permanent Account Number (PAN) refers to a number assigned by the Inland Revenue Department to every taxpayer for identification. This number is required to be mentioned on all documents and correspondence with the Department. i Brief Answer Questions 2019 G, No. 3] [2016 Q. No, 2] Define the term income year and assessment year under income tax Act 2058, a, Income year: Any year which starts from 1st Sharwan of a year and to the end of Ashadh of following year. Example Current income year is 2076/77. b, Assessment year: Assessment year is the period of 12 month from the first day of ‘Shrawan of the current year to the last day of Ashad of the next year. Itis also current fiscal year or financial year of the government. In the assessment year, the tax Payer required to submit the income return and pay income tax within the time period prescribed by the income tax Act 2058. The current tax assessment year is started from 1 Shrawan 2076 to end Aashad 2077. 2019 (Make up) Q. No.2] What do you understand by "Tax Deduction at Source (TDS)"? ‘Any income reosived after deducting reasonable tax rate is called tax deducted at sources "TDS" itis also called with holding income. There are two types of with holding income first ‘one is final with holding income another one is advance tax paid income. The final with holding incomes are not included in the process of calculating taxable income of tax payers. 4 [2019 @. No. 4] ifr. Ashok, a permanent officer of Nepal government, was appointed as @ first secretary at Embassy of Nepal in Srilanka, He left Nepal on 1% Marga of previous income year. Required: Residential status of Mr. Ashok, Mr. Ashok, @ permanent officer of Nepal government, he was appointed as a first secretary at Srilanka. He is representative of Nepal govemment. So, his status is resident 2048 Q. No. 2] What do you understand by "Non-business Chargeable Assets"? Normally, the Non- business Chargeable assets is investment in land, land and bi shares and debenture etc. The non-business chargeable assets does not inclu following assets: 2, Business assets, depreciable assots or trading stock b. sidential house of an indi | ten year and resided for intermittent. dual that has been owned continuously for at least @ tolal period of a least ten years either Continuously oF c._ Interest in a retirement fund of a beneficiary, d, A private residential house and land of ity lakhs eupees, ‘an individual that is disposed off in less that thinly i Non business ne of an individual that is disposed of by way of any type of transfer other than the Sale and purchases made within three generation,patie odaund of one Tax Ae. TEER, aA. z 1 Qu 1, [2019 Sop Q. No. 7] Brioly describe the Provisions of pollution control cost and research and development cost under Income Tax Act, 2058, ‘+ For the purposes of calculating income a person's income for business pollution control cost (PCC) can be ti during et in conducting i ale “sea be eons yep The limitation of deduction alowed toa person for an income ye the adjusted taxable income from all business conducted by the For the purpose of calculating a person's income for an and D cost can be deducted to the extent incurred conduction the business, The limitation of an income year from any at shall not exceed 50% of person income year from any business R by the person during the year in 8 deduction allowed to a person for an income year shall not exceeds 50% Of the adjusted taxable income from all business conclicted by the person, EE) Problem Solving Questions | 6 marks 1. [2019 Sep Q. No. 13] [2047 Sep Q. No. 13] What do you understand by self-tax assessment? Explain with benefits, “A tax payer has an obligation to submit tax returns on time. In case a person submit a tax ‘etum including the information regarding the total tax payable during the year andthe tax due for payment on the date of submiting the return, it is believed that the income tax assessment is complete, In legal tems the filing of an annual return isa seltassessment made by the tax payer and is treated as assessed by the inland revenue officer (IRD) unless the conditions under: a) The total tax labilities of the taxpayer during the year is equal to the amount of withholding tax deducted by withholding agents on payments to it and the amount of advance tax paid by it b) The deemed tax assessment shows that there is no more tax payable forthe year by thetarpaye, 2. [2iit Sep G tio. 1] whats amended assessment of tax? When this assessments made? The IRD may amend selfassossment and joopardy tax assessment or this section s0 ast adjust the assessed person's lability to tax in such a manner as, according to the IROS bet judgment is consitont wth th intention of this Act, The IRD may amend an assossment as monoy mes asin thinks appropiate fy bes judgment, The IRD shal be required to make an assessment within the pert of fou ye after the folowing data a) Inthe case of sell ssment, the due date for tiling the return, b) In the caso of Jeopardy assossmont, the date on which the notice of S805 able according to tay law, served on the person assossed lax payal i) While amending an assessmont unde tis section, the Department shal be required to oe opportunity in writing to produce proot, i any ia cv favors with respoct of the assessme spocitying the basis that led to the amendment and giving atime fini of 18 days otévene Saraswats TU Soto’ to Corprate aration n Nepal - BBAYBEM, TU : ! 2. [2016 @. No. 13] What is “Jeopardy assessment"? Under what circumstances itis adel \ Jeopardy assessment is the process of determining tax lability of taxpayer by IRD in the following condition: a) The person becomes bankrupt, is wound up, oF goes into liquidation. b)_ The person is about to leave Nepal indefinitely. c)_ The IRD otherwise considers it appropriate. Under any one of the above conditions the IRD may serve a notice to the taxpayer ty ‘submit a tax retum for the specified period for the year within specified days. In the case of | a taxpayer who submits it in either case, the income tax assessment is supposed to be made as self assessment. \2 NuMeRicat Questions (a Brief Answer Questions EE 1, [2019 Sep Q. No. 6] Mr. David an American citizen came to Nepal on 1% Marga of previous income year and involved in‘business activities, | Required: His residential status Length of stay in Nepal = 30 days x 8 months = 240 days (Approx) Mr. David an American citizen is stayed in Nepal more than 182 days so his status is resident. 2. [2015 Sep Q. No. 5] Mr. Bush is a American citizen arrived Nepal on Ashad 20,2070 and stayed here till Poush 23, 2070, What will be his residential status for income year 2070171? Tiel Length of stay in Nepal = 30 days x 6 months + 23 days of Poush = 203 days (Approx) ‘Mr. Bush an American citizen is stayed in Nepal more than 182 days so his status is resident. f Answer Questions 1, 7020. No. 3 (b)| Mr. Gopal, an under-secrotary in the Ministry of Foreign Affairs, Government of Nepal, appointed as an ambassador to USA. He left Nepal on Magh 1st of previous year. His salaries and other emoluments are paid by Nepal Government. He furnished the following information about his incomes, + Salary Rs. 50,000 p.m, # Tiffin facility has provided by the government e ‘quay to all employees on a average RS 700 per month white hse was in Nopa, me ne « He Cn US dallor 3,000 as foreign allowance while he was in USA, US Dollor 12 Rs. |) His Residential status ii) Taxable income mGeneral Background of come Tax kt. SETA (i) Mr. Gopal is a representative of Nepal government so his status is resident {ij Calculation of taxable income, Particulars [Amount (Rs) | ‘Salaries (50,000 * 12) 600,000 Contribution to provident fund by employer (10% of 600,000) #0009 Dashain allowances 50,000 Foreign allowances ($3,000 x 110) 10060 ‘Net assessable income from employment 10,40,000 ‘46,667 or, actual Rs. 300,000) Less: Contribution to provident fund (1/3 of 10,40,000 20% of 6,00,000 = Rs. 120,000 or, Maximum li Lower Less: Foreign allowances exemption (75% of 330,000) Total taxable income 2. [019 (Make up) Q. No. 4] Mr. Romo Suzuki, Japanese citizen came to Nepal on 1" Ashwin of previous year and involved in business and investment activities. Required: His residential status. Length of stay in Nepal = 30 days x 10 month = 200 days Mr. Romo Suzuki is stayed more than 183 days during the previous income year so, his status is resident. 3. [20160 No. 4] Mr. Samir, a citizen of Pakistan came to Nepal on 10® Marga, 2072 and return back on last chaitra, 2072. Required: His residential status. Length of tay in Nepal = 20 days of Marga + 30 days x 7 months = 230 days Mr. Samir is stayed more than 183 days during the previous income year so, his status is resident. 4, [£616 ONo. 3] Mr. Jone an Italian Citizen came to Nepal on 21% Falgun of previous year and involved in investment activities. Required: His residential status. Length of stay in Nepal = 9 days of Falgun +30 days x 4 months = 129 days Mr. Jone is stayed Less than 183 days during the previous income year so, his status is ‘non-resident, totokDeductions of Costs and Expenses AE Turoneticat Questions a. om ots under group DDepeeiation base oho New Addition of Asset: ses. at oponing data (WOY) Rs. 1,500,000, iS Sep G. No. €] A special Industry provided tho following dotall of Its fixed. | | In Aswin In tag Z ara Calculate allowable depreciation —Paeaiars | Boginning WoW Absoied adons: =| "inten (500003200000 «4 | Insta (600000 28) Total Loss: Disposal value Depreciation base 1 | Deprociation rato | | Aicwabiedopeciaion | sa sees] | 3 iT Sonata) elt lovable deprecation ro flowing ce On Karth Rs. 900,000 Pamela — On Falgun Rs, 600,000 Beginning WOV | ‘Assots disposed off at (BV Rs. $00,000) Rs. 400,000 naa i Ropar exposes charged in cont year Rs, 70.000 ve i {1 Amount of deprecation to bo charged fr th yor. can a : blab ropa xpanses. en EE Ceulton of dopreclaton and repr base Catala alonabe depreciation Fence C ice TSea-A Rel SSR =O Begeming WOV 7 ae ‘Boginning WOV ‘Absorbed additions: In Kart (0.00 = 09) In Fado (600.00 » 29) Teta ese: igo Dees cae eb 8 Rowan Rs, 480,000 1, Alonabio repair expanses = 7% of 24,00,000 = Rs. 168,000 of, Acial = Rs, 70,000, whichoveris th less + lowabo repair expanses * Rs, 70,000 “Tho spool goods man mal ao, ro dna a fort company + Wal 15 = 20% 2,_ [2018 Sep 0.8] calculate allowable depreciation rom tho following data a 5a een wn, cian bo Gago Toh your Tor ack Dass = 7M of AO RO uring company is alowed addtional 13 doprciatin thon ‘Absorbed adton tm Kart (800,000 « 73) - {n Asa (2000,000« 13) L 8 - Total BRT | TERS Loss: Disposal _ Doprecaion base BEST Depreciation rato ES -Aiowablo dopreciaion—— co 4 [201.0 WE] Catal allowable deprecation frm te falewing ie Be flowing otal fora spocal ind Paes ieiing ov Disposal ‘tons InPous $2,000 - In dost =| 20000IRIE sec semncs stn Capra ht A = Calculate allowable depreciation Panieulars Biock=C(Rs]_[Block—DiRs}] eee 20000] ,000 600 Absorbed adtons: woot x InP 0000539 0 ‘eae al ‘eine | — To ar Less: Disposal ae 80.000 = Depresaion base 300000 | 106667 aces 20% ‘8% Non-deductible Expenses or Amounts sono | —Fe0.000 THIS 8] Calelte alowable depreciation form the folowing for the following Asta or pecandusty, Faris BoRR | BOAB | Boake | BoD Saprng OV sooo | se0000 | aor | 70000 ten mate dig yea feuct ‘0on0 ; ‘0000 zeninge Dipones cig Cleulate allowable depreciation Fara Biockh | Block® | BlockO | Back Saal e000 | 380000 | #00900 | —7a008 Absorbed stone tenerxzrweomex3e) | sooo | : ladaeh (18000020) = | sono | : InBassinzeqisomma 1m |__- i soon : Total 700,000 450,000, 450,000 70,000 Les: ial ae 290 Depreciation base 709,000 450,000 “450,000 130,000 Depresten ate sors | sass | zoom | 0m ‘Riise ciewava asa | vses | “tis | fom Note:The spr mandaciung compony salted adnal 1 daprodaton Win roma ttek W THeorencat Quesrions. | 1 State the various expenses which are expressly disallowed for deducten while Brlof Answer Questions, ‘Computing net (assessable) income of an assessee. {nthe process at computing assessable income from employment. Business cr mesine~ the folowing expenses ae disallowed for deduction or rot allowed for da ‘Act 2058. Expenditure of capital nature, Foreign income tax pid 2, Expenses of domestic or personal nature. '. Tax payable under this Act and fine and similar penaltes pa tothe ce Political sub division of a goverment of any county for breach c* equations for bylaws framed there under. © Expenses inured for tax exempted incomes, 4. Paymentin cash for more than Rs. 60,000 except certain conditons. tQuantification, Allocation, a Neots NSE Z ¥ [2018 Q. No. 3] Briefly describe the provision related to quantification of vehicle and Characterization of cum eau Garena ployer an provider veil tte employes ochre the use ef Amounts | pat ppese, In sch 2 case te employe aor sous qs etic faily and ines in employment ncone, The pose fe eazoe tr be veld tha shouldbe quand and indus in enplaymarincone a Forregur sly payment sas 05% o slay 'b. For other then regularly payment staff lite, advisor, chairman etc is | V2 Tweorencat Questions —__ ‘market value of the vehice which was provided to the person, 3, [6 Nea] Sate any four examples of revenue expenditure. (oe Bina geese nom * no ores (POO [LSS NEO ety esc eponreaogamsain || ~ PeOertive wnat naa dy de ses tensor Pe of vehi act provided to anerplyee. example of revenue exprue are purchases, Wages pad aan pa |» merci wy potndy enon wee mics rpinerwet: ff Sarat ws ouo pro Te hc oad We aoe ot then n be tens a eae ees 2 0.5% of salary. (if itis provided to employee, labour or any other individual receiving I ‘monthly remuneration) bemoan an, a on ey che chil wid ence may oo) 2, (BETESepCTa eat eo you ean ty quanta of anaun? fucken oor pertain cerry tra bene vaeojatin tay eaves hisaauny frase ppeeanw teammate ey eal soe aca eS emes aeT sconces bb Fisessoroup AY __ Ann Brey describe the provision related to quanfeaton of secommedtion ality provided oan employee. “Provision of houte fact: The amount is tein in accordance vith te ts tespet eh usec aby or uso house holy pay forthe pate purposes | ofa pn et weir ernne vata. cag 2. ep | ison empoyo or water er grsan vin emunraed byte payer na many bls the aunt these iy is quate as 2 of eure say fp any te caso i he Payer mas sata a rer teuse ta pay, ho amounts quae 38 25h ol he feta ite payer dos rat ay hose reel tt aos te hus? avaiable 10 the payee, the amount is quand as 25% of ho prevaing mavkot vale of | the house E‘Tac enpns, Coens, edu, Tx Ras, Tax Get rd St tos EE Tax Exemptions, Concessions, |, ,,.__, Mtn | Deduction, Tax Rates, Tax t Credit and Set off Loss =a Sule Answer Questions En 1 ‘ir. Rohit, an industrialist involved in export business based in Sindhupalchok (Remote Area ‘E), has taxable income of Rs, 3,600,000. He paid own | tteinsurance premium Rs, 25,000, Calculate his tax ibility "pea Calculate of taxable income Ve THeoreTicaL PRoBLENS — man “Taxable income before deducing le nsurance premium and remole area exemption Less: Lie insurance premium (Actua Rs, 25,000, Maximum vt. 25,000) Loner Less: Remote area exemption -E 1 Define tax-exempt entity. What are the tax-exempt amounts? Explain as perlncome Tax et 2058, ‘The non proft making organization whose objective is providing social welfare is non as 3500000 Total arable income iad tax exempt enti. According to income tax Act 2058 such enies ae fee from tax. The 1 Soril,Reigious, educational or benevolent organization of public nature established Parteular ‘Ameunt Re wih non prot motive, Fst Rs. 400000 sgl status 2 Next Rs. 100,000 @ 10% ‘amateur spots organizational so formed with 2 view to promoting social oF sports ‘elated facts tha the rganization or its members does not derive profi, Nets. 260,000 @ 15% ‘politcal pat eastred in the Election Comission, Net Rs, 130,000 @ 15% Rural Municipality, Municipality, Distict Coordination committee, | | Balance Rs. 15.65,000 @ 36% Nepal Resta Ban, Total tax aby Provincial govemment, Local government and Federal goverment, cxanpleoleemptare | Calla of tox abity | F —————— 2. [2018 @ No.5] Mr. Thapa reported total taxable income, from business actvites of Z re i 2, [2OiS GN. J [OTe (ake up) @. No. 2/State any four examples of tacexempt | ‘Rs, 800,000 (including Rs. 180,000 net gain trom disposal of shares) incomes. Required: Taxiaity The tax lw has specied some amounts a tee incomes. Such ax exempls incomes I ‘38 not cuted in the ttl ncome wile caleltng taxable income of a perso. E Calculate of taxable income 1. Amount received by @ person ented to privileges under a bilateral or a muliiateral k Particular [Amount (Rs) \realy or agreement concluded between the goverment of Nepal and a foreign [| Taxable income inciting gain fom disposalolshewes ee] om soe [| ess: ain tom cisposa ef shares 150000 runt Feceiv neu] Person from employment in the pubic service of the | | Total taxable income excluding in rom disposal of shares: Pareles | Getta rem tin ionic = 1 Tim natal aca ea ret pon say by ese af peroming wo a cemooyment ris a ronesient person f patna Ete Amount Rs} i The amount ar payaie om ta pubic und fhe county. Eine : _ | Nex 1.00000 @ 10% \ 3 Artie fon neo cay baton et | | ee RE so “_ teenie teleemensaapeen, |S 9 4. Aount recived by @ Mal prsn ois rl cizon of Hap om engiynent Teal tan : by government of Nepolon tems oa tax exemption, : ns a=f } 5) (eoo0) | (oocen) | T5060) | eG |Z Caculate of tx ability Protoss) Rs) [ (e000 | I i we mia a2 os TA fz iness has taxable Laer Crest, abr, at Pt, Tt rd 3 auak 16 No_§ Mr, Kash an industitist ive aor snes | 2 HORE Fiowing ae the operating nuts ct a mantnrog eorewr ot income of Rs, 2000.00 before base exemption | apa Required: Taxi Year 7 2 3 CT] z t ‘Alowablo R&D oost= Rs. 4c0.090 —— cr ae ‘On sritiny, was found tata donation of Rs. 10000 wa chest Tignga Eye za M|: [2 Hee chepa tyro Stat pratt yor wet ext ar as DEC Sle ats ‘00 deducting polluion contrel cost Rs. 200,000 and before deducting intrest om bare Non Rs. 103800 @ 19% p00 Joan Rs, 5,000 at 5° year. eee 195,000 Ukewise, depreciation of Rs, 5,000, Rs. 4000 and Rs. 6.000 have not been chore Herts. 18000008 15% a in above PL inyear2;3 and 4” year respectively. SS Required: Taxable income giving necessary explanation. =a =a Short Answer Questions ‘Statement showing table income ofa business fim fr respecte income years ieee = TL? I Ye] 1 | 2 a [a Ts 4 Prot (Les) (RS) 20,000] 600 coo} (78.20) PEERS) | (aco) | 20000) | (240,000) | 100,000 | (200,000) | 500,000 ‘Ad: Donation 100.000} = - ‘Company pid donation of Rs. Sins Grameen eed was || aas:Pce -|-- ceetmniempmetpemamtmeaameang | | ae cn bank oan Rs, 150,00. The company has incured Research and Development (R Less: Dprecaton =| 5000) cost Rs. 500,000 in year not charged in PIL AI. \ Pratitess rrc0 co 08 00 each yar wih explanation wherever necessary. || tess: cary oar oes ot i Year-1 toca} - Statement of cary forward of loses } Year-2 + | aes oc0 , 77?]73]7«7s]e]7] | Youd == f= | treme Toei | iy [aa] osm] awe] |_| Adega come i x00 | |” Bsplanatonnorking notes 159.000 t 4. Theloss toma business canbe eared fava up ono? ye a | a oan e208 [oo 50000 | O00) | 2. Daprcatonand interest ae alonaie dececnes t 3. Donaton and PCCs tobe dodutd on aust table nse 6 ‘ma | = |= [eam] == 4. Loss oyear 1,2 and ae fly recover ~ [aa ee) Of Ye ienieencawrecns = [= ena [ oom) [aon] co or > = [aa eomn|—=—] | “ a mo i ins brates] RAS RATT a AW PRPS ee a ee RRsat as und Wat unesoveoe year Fares Working note: : 50.900 an iss of your 6 obaied ater deducting donation Re 18,001 tax Awl REDCo= Sutin ono fe Anne tal Rs «ner, vndmee Sam Ann isthe ss i Required: Taxatio now with giving eyoration whereas nesesssryBRUIT Asoee sont enc sin FONT Tox pins, Cores ate, Vt oe a ef a Tess: PCO (60% of 210,000 = Re, va atement showing taxable income ofa business firm for respective income years ee ate | m9 TTT? Le La oer = ilos Red 0,000] 00 Goo 175,000] 400,000] 200,000] 300,00) Taxable income at | it at_ | 105 08pm so ‘een ‘ow} = | - | - | Eaplnation Waring wales Ads PCC : : 2 ~_| sooo} _- | 41. The loss from a business can be cared forward upto next 7 years, ProfitLess (200,000) (300,000)] (175,000)| 400,000 } 250,000) 300,009} 2. Depreciation and interest are allowable deduction. Less: Cary foward ot os of: '3, Donation and PCC is tobe deducted on adjusted taxable incor only. (Rs.425000) ma fe Stl 4, Loss of year 1,2 and 3 are fully recovered. m0) sooo). i sooo]. | f % (ati lake-w OH The folowing ae the operative resuks oP a Linked. = | 400.000) = (200.000}200.000) - » fone SS following are the operative results of 2 Limited. ce | ron |= [coon sn =m s a 1. The seroma bushoss canbe cai forward upto next” years 2. Danaion and POC to be ducted on ajustd taxable income ony 3. The oes of year 2Re, 425,000 uncovered, 4._Loss of year 7, and 9 ae uly eoovered ' %, [BEL a8] Folowing ae the financial result of Mahataxmi Peleol Pump Ltd. of | (On investigation itis observed thatthe company had paid donation of Re 30,000 ta 3 Public hospital in year 6 and had charged on the Profit and Loss Account before determining above profit (loss). It is also observed that there is the balance of ‘unrecovered loss of Rs 200,000 of year 1 at the end of year 4, Required: Taxable income giving explanation wherever necessary. eis [ ‘Statement showing taxable income ofa business firm for respective income years Year 7 z z z 3 = Profit (Loss) (Rs.) | (200,000) | (400,000) | (175,000) | 400,000 | 200,000 | 300,000 Faia aor —. a (On scrutiny, i was found that @ donation of Rs. 300,000 was given to Public ‘enone, ee | | eseee Hospital, charged in year 1St, Similarly, the profit of 4! year was calculated after ProflLess 0,000 | 25,000 | (75,000) ‘deducting pollution control cost Rs. 400,000 and at St" year before deducting ‘Loss: Camy forward of loss of: interest on bank oan Rs. 50,000 Likewise, depreciation of Rs. 5,000, RS 4,000 and Year=1:Rs 200000 | (6n000)| 5.000] - Rs, 6,000 have not been charged in above PL in year 23 and 4 year respectively. Year-7 - | + | roo] Required: Taxable income with explanation wherever necessary. Year-8 = : 20.000 ay Tarable income er ‘Statement showing taxable income ofa business fm for respective income years ExplanatlonAorking nots: Year 1 z 3 4 5 6 1. The loss from a business can be carried fonvard up to next 7 years. Profle Rs) (200,00) 200,000) 175:000)] 400,000 | 2000] 300.00) 2 Donations to be deducted on adjusted taxabi income only 488 Donon sop] - aaa 3. Tho ossesof year on is uncovered by Rs. 115,00 at Poe 1 2. legpoel ce" 4. Loes yo and 8 are ful recoire ete - : 50,000 6. [2017 Wo. The following are the operating reaits of a company for the lat ctlen 000 | ato | a0 | =| _- yeas re Sen emainag | 85 | 50 ae oon ne S69 E _ 7 B 2 [oa] ee. Yeat-2 ofl) a) | TeaRH | HRA | Wa | Raw mo 0 eo Teeny od tc ns Ea ‘jest wale eae ‘afar a on equi: Toxabo incone of company gun eanaton wher ee 8.i RH cone one an tc Ts an NT lvoe ota business than for espeetvo NcOMe year, TT) fs i ace ana | enon | SHIT [ALOT woo] | aon yf Gana | BN aon 2000 2000) 20,000) Meaning and Classification Sources of Income (10,000) | (89,000) [Nit ‘ill ‘planation Working nate 1 The bss tm abusines cn cane foward up to meat 7 years. ‘natin isthe dct on asset aaa income only \f Theorericat Questions 11. List out the sources of income which defined by income tax Act 2222 = Incomo taxis imposed on taxable income ofa person, Income Tax Act. 20 tho term income’ as a person's income from any employment, bus as oateet ress or hermes, Loss of yo 1 year 2 an year 6 wore unvecoered hy Rs, 10,000, Rs $0,000 ant | casual gain andthe total of hat ncome as calculated in accordance wr Pe sc: Secs $ Rs 0000 respecte ___ tt othe acthas identified the folowing income heads 7. {2018 G-NoG A manutactting company located in Biratnagar farshos the folowing operating results as h Year 7 z 7 7 3 | [ I T i Pewee enon ano L anc00 | an [0000 | Enployent Bisons Toestret cua | ‘On investigation. Hi obwerved thatthe company pald donation Rs 60,000 and Rs. $0,008 | {nthe year t and 4 respectively. Ii also observed thatthe company pad Rs, 30,000 for PCC In yar = 6. The above figues ofthe profit and loss were anived after deductlon ‘nation and PCC by the company. Required: Taal mcome wh eysanatn wherever Hee, ESo.ation] Statement showing taxable income ofa business firm for respective Income years Yeu (eam) ara tea eal ‘rots Lows) fe) | (60.0009 300:000)] 150,000 [200,000] 15000} 0.0) fest Donat «0.000 40900] 1 =_|e00) Prottiess ~~) (e400) Ga0 O00) BHO, ] eH, 000 850.05 ese Cay hres of somo}. |i f2so.000} 60.000) + _ f1oo,o00} 2c} ce wi wi wa 606 tower - 300.00] Tabi icone iva [taf 300.08 Tplonationtioding non 1, _The fs tom 9 tases can be ean oan yp to nos 2. Donation 6 be decd on act sable com only, 3 Lose year #942 woe aly oe atk 2. Define in brief about employment. : Income from employment is known as income fom remuneration. Ascoring t Sector ‘an inividuats income from an employment for an income year § Te ASvcz's {emuneration from the employment forthe year. It can be said at remunersnos TESS tho income received by any natural person ffom the employer im respect of meloyerin ary reore ve As por Secton 2h), casual gain means lotary, git, pce, 89, wining ct any woe 'ncome to bo received casualy. Any casual gain is subject t2 acvance some Sk SS {ay) atthe rate of 256 at the time of payment. tikBusiness Income and ies we et He cme ROTTS frome fom ong erm contrat Calculation of Assessable | |reristinermetiner a5 Income ter amour ected estes bias : ve ern a Less: Allowable deduction: (General deductions (Ofce & adninistraton expenses, eng & = = don opis adobe reer) wx ; Inlrest expenses (Genera). | \ TucoRencaL QuESTONS, Cost of tracing stock (WN). ne] 2 jenny . Repair and improvement cost (W.N}. - od Briet Answer Questions ee ‘Depreciation (W.N). Ln a eee |. rae any four expenses whi sallowed for! Netloss tom posal of business Ase mma 1 (eS a oe a rane ee ace Ls rom disposal of depecabe assets. ~] sexe eduction under - os om ng em co ae ~ inthe proces ot comping aseesabeincame fom enploymen, Business orinetmen CRE oaE easel EE te log expenses are alowed fr dducon oo awed econ sper easton ble POS and RED nc2088 | [Asisted taxabie income Before business loss. — mT 7 2. Expenses of domestic ox personal nature, | [bess: Previous year business oss (Up last? years) ». Taxpaalunder his cand ne and sna peas pid the govemmentor2) a caancoms alos ea pata using bell sub cision of govemment of any county for breech of any law fl se eret pada contoting ently regulations for by laws framed thereunder. i [Adjusted taxabe income before PCC a Expenses incu for ax exempted incomes. | A nd RAD. 5 4. Payment in cash for more than Rs. £0,000 except certain conions. f at ©. Expenditure of capt nature k [esac cenrneot aatediat ere ra sR | f.Foregn income tax pid BONNE en ( Nuwericat Questions [NetAssessabe income fom business. Fornatural person Statementot le ncome Computation of assessable income from business of. cea tare nce For the income year 207778 i Particulars anountins)| At : i RR Pats Srey | ee)| [Sean eRe} Freomer Assessal income fom BusnessPrtetion. a wx Senco tees (Coniston management tecnica sere fees, consaion stale nee tom nese kd es, der fr, ut es, leglfes nd aer serve es). soe Teal Assessabe income = [Amount derived tom disposal of acing stclSlesreVONE nn Less: “Common deduction: Net sn tom pone bss ast or busines abs 4 Contibuton to approve reticent fund Net gen om posal of eprecabieasats. Naxinun samo cin rocve bya person inespect cf business Vota asses * w-} s00t bla essessatl come Loner ncn eet y= peronnconinten ots coping retin on | "2% %, cil ontbuson (Empayer + Ene». xx business : } [oration cee ten sinners nn] || | Dealt npr income due to change in ccauring metho... & ee Y alae Set ee ra tgaextarga . root Shot Adjusted mab incono so Lower inane oa = LL sx eta oat ~ xext 1 RETIRE fer nas itso mantener “E Donalion to Prime Minster Disaster Relief Fund and inst Income and Cdston of sete eon ETI Calculation of tax ability I Statement of total taxable income [ _Patculars ‘ssnssabi inom rom Busnes Prolaton Assessabl incom rom inet | Total Assossabe income | Les: Donation to tax exempt organization: 1 Noms donation Maxima et Rs, 100,000 Sot Ajusted trate income evn f Lower © tal dana paid es |. Donation resins pace and spot development asia iit 10% coal assessabloinceme xen Re, em (0, tal donation paid fi, Dos ta hme er Oar Rll Funan ead ecorsten Fr ic etn palo) Tinabis income ‘Amouni (Re) [Amount Nana Reconstuton Fund (cs dnatn pois vn i] — 1 a | as ee 0 Ca a ‘Remote atea allowance: | Nest Rs.1,00,000 ; i os re be sie in *|EE ema | B |S Eventos) 4000 40000 20000 20000 10000 —_ | Neus nner sa a 3 Le isurane premio 1] Gan onsaes of nntusiness chapeate asses (NECA) | tte | ae Viet 525.0007 yop wf, cnaseseaetuaaneraen | | Akl rei id 7 4 | Gainon sae ollandland and bing mx aS TH ee Maxima 520000 opr Less: Tax erat: Aes ou i om 2 “Advance tax padT0S (om a Fon alovarens Ea orca aaron a Feral emntain tx rei (10% fale abies mm Diab oven: FA of 40000 gel Se 7 tea ae “ens = Fenn sae 0% tctenoeémede arf Lower | 25% 400.000 ee) 25% of 48000 (coupons fp me tht oc sone sx TaPaabe | mr Tobie eee nloaing capa po rr foram ent (Company) aE tess: Cats Gan ay) Toile eae | (0 Gainen des crontushesscargeabe assets ea | Toa ae (scr) | Tout = (9. Gonos ots (Use nd nosed) var || Lose Taxed i (i)_Gainonsse ef nan ar baling ‘Advance tx paldTOS ax Tae cons ecuing xpi an Ta) Forage arctede i 1 Foreniy (Company) Cane [eer] fag Brlef Answer Questions 1 [2017 Sep 0. Wo. JA businessman supplied the folowing information: + Adjusted taxable income for the year: Rs. 200,000. * Unrocovered cost of Research and Development relatos ast year-Re. 800,000. «Rested Deduct amount of unrcovered R&D coef eye. Calculate allowable Research and Development (R 8 D) cost = 50% of income or, Actual amount of R 8 D cost = 50% of 200,000 £.00,000 wicheveris theless is alowed for deduction Ith actual & 0 costs exces then $0% of Adjusted taxable income then the excess ‘Amount would bo a unrecovered RO cost. Inthe above case the actual uncovered R & Dcostis ess then 50% of Adjusted taxa income so, there is no any unrecovered R &Deost,PEPER son secon si ot tnd FOWL TEE BIE Ea ecg any pd ew alors se Rperginenoyalmechanno! —— ReIS0000 1 tse dg te ye fe ooo axed reco 1 Gang st tendo fs 880 Reavis Costl tang fk Sa alan oles ta sok Pate Beginning inventory of merchandise 9, Purchase dug the year ‘Customer ty paid Less: Casing stock at the end | Cost of trading stock. 000,000, sen) Drees ee wt later heie vcr STR 8 Sep 0. Ho. 71) Falloning is tha surmaraed statement of cash eoncaming tagistored auditor forthe previous year. (EET__escriptve Answer Questions _EGEEST 3. [ETS Sep G Ne. 12] Gorkhe Furiture Udyog Pvt. Ltd has two factories in Kathmandu and Gorkha (Underdeveloped area) The industry furnished the following Information forthe previous income year: Details [Kathmandu | Gora] Toul | Rs €00000 | 600,000 | Rs 1400000 zagon | 260000} 780,000 eago0 | — soo00 | snc00 - =| w090 inde expenses lonaled ov bass sls revenue “Tea tale income and ta ably Calculation of ttl taxable income and tax labllty shmanda | Gotha | Total ~eno,no0 | 600,000 | ¥400,000 zocco | —sgo00) e000 rere ences eng | —sog00) —som0 eect eas soon | coo | 140900 Tasabie neare 240.000 | 180.000 [~ 990,000 Taxrale ws om - Texts amo| —sam| —_ s100 ote: The specialist mpi taxed by 70%. W such indus f estabished Et under deelped region, Wa the company is tare by 6% upto the fst 10 ys ofthe estabishocnt i & Bile se @ ne 13] PERERA i f ame iS ___—_=«( Armour Raj) Parris "Fo Bsancod bd 4006 | By Pea encase ToConsutation eos enue To Aust feos sous Tolnterest rombank depest(ret) | 22.500 ToLater income m0 ToGits tom cents 40000 To Sale of old newspaper 2000 To Disord fom resident Co. 1130 Total 725,000 | Teal Te ‘Additional information: |. Consuitaton fees include Rs, $0,000 related to previous year 50% of loan used for personal purpose Electiciy charge is used equally for profession and househelépurzase iv. Office expenses included Rs, 20,000 paid to household servant. Required: Net assessable income from profession EE Calculation of net assessable income from profession Tancun (Ra) Corsulaton fe (Icing prvious year) ‘Auditice its rom ents ‘Sale of od nowspaper Gross nceme Las: Alowable deduction Ofce expenses (180,000 - 20.000) cect charges (7200072) Salary lo assistant Interest on oan (16,00 «£0%) lot assossabe income from profession Mr Binod furnished the folowing particulars gf ns incomes *ponditues forthe previous year. Royalty trom natural resources Rs. 255,000 (ret Interest om private money lending actites Rs. 200.000 ont rom subting Nats Rs. 90,000 (re. Dhvidond rom a resent company RS. 28.500 (re) Intros om bank pest Rs. 89.000 ont rom house let out RS 138,000 rot)04 sea Se avert 6% Dl aOWed 9 Bdcng cents TSA FEI ow “ene rang tinvesten Mavens ieee) ve eae 2D Negima 00) rnc e100 Sette tog pnsen tor dest: ec connone nl meee ves. 1000, «Savers 2 : : Delaware’ Re S000 ps apc amet Re, 10000 { Pocueuna fe Ste apttee oe eqiee ». Nersesse name fam evesest > Tate fene Tats Colon sesal ince amines [see Royaty from natural resources (258,000,0.85) 300,000 tare pe ong ses, awe Brcasemenso0es0) "atm ine am Gross income 537,000) Ue ob cect ‘Interest collection charge of private money lending activites: 1,000 - Fey Osan cae 2am] seo serene om eine Bei auditor for the previous year. ee E & (Bib Sep TT Fotovng i he Sonmared ston feat concesing on [__ Receipt [Amount Re] Payment ‘Amount (Rs) Tobsince ba By ofc eperatons cot 160.000 To consutaton foes By otice expenses 700.000 To Aud: fs By purchase ofjoumals 25.000 Tointerest fom bark By slay stall 400.000 Tosaie oo rewspaser 8y membership fees 30.000 To diidend income 8y eanings ToGits tom cents Byincome tax = ____| Byatance S500 Da oe ‘Additional information; + Consolation fs inte Rs 101.000 rlated oprevius year + Advance au ee Rs 20,000 not ince in above statement Bre ec wt et Pts + Consutation fees incase Re 213.11 1+ Donation given toa goar stutert + Depreciatins of charged inthe above statervart. Required: Total Net Assessable incre EE Calculation of net assessable income ftom pectession income CConsutation fees (including previous year & atiarze audtfoes Sale fod newspaper Gatrom eet Advance aut fes ecehied Gross income Less: Alouable deducton Otiee operators cost Ofc expenses Seley to stat Purchases ofjourals Membership fees Desrecistion of ece fetus Net assessable income from profession | 7. O18 Sep Q. No. 12] From the fellowing information given Selsw, comscs Se allowable amount of pollution contrt cost (PCC) forthe relevant income year Gross assessabe income fom business Goss assessable income from invesine ‘Actual amount of PCC. ‘Actual donation amount Previous year umecovered oss cam ‘+ Total deduction form business bere PCC donation ond Calculation of allowable amount of pollution conte’ cost FC — aan Gross assessabisincome fom Rares ‘288 Total deduction tom business before PCC, Denater Ba _Ssessable income fom business before srevus yess ‘ess: Previous yearioss Austed mate income Avowabl a a mount of POC (50% ef ats tabi noon 01 700.000 = Rs. 35,000, Acta = Re amount of POG Sw Be aE 00) Lowersm oat stn BARI, Prem ne at wien vie ETE PEDBE cneestens tin - saa 7 fs the receipts and payment account of egy, priecarwcn yte i (oe Sep He 1] Te ein 2 [pet tt at | forthe previous yea } Recents {Amounts Wate Pence ee | Foionoett ord Total taabe ec seme Tocensstaten bes 0.9 “ - - - ania Testers $1,000} tres on oan 4, [BON Sep @ Wo 2] From we tenon wlarmsion. camp Oe Dome Totnes on nese ot 256,000 | By came tax amount of donation 35 wall as research ard cevsgmace D2 D) com tx be Torucest tomar (ret), 142500 | By Trai ope + televant year ToLeps tes 100.000 | By Mambo ts gee Totcan to bank 20,060 | By iearancspromim oo ertnan ee Predcass yar urrecreers es t ant Rewain arch teresine Fo amt 1 eset hes Re 2000 pi of on ie sd Rs, #000 te ener + obi depen apr Wl. £0000. i {Porc Fon pl Government R300. fr manasa 4 Lisuuanc omen wu 400 be ent o mail expan a Regie: Sant of al tate ene at ably, Boo iationy Aedialameaah A enh we eer Fis TD wa change in sateract x orate Caleulation| ‘sna nen te Porters Liss: Pea rea incon tet ante earn Certaten as elven pein er on) cose Lapses mon Bsc cts went toma | | rnaincropielaape ee Gross ino 00) | mapmuenina ts toca Less anti ete tx et 20000 -4n0) wen i ten enon taen test enna ia tment ta soem nan V6 G. Wo, 15). Botnet a practicing chartered acccumianta mas Ww Bd Perper ae 160 ‘on cash basis fumahed the folowing stntemert fre yew ene 3 Cowden sane ele nwa eaten Het incon rm pestnal ~ — Recests and Pop toape % cra ‘Sateen of al tarabte come vais =e aol rit | oa Pa ‘rou a botast hes noo ime bon eden ‘Caton & “0n 1 et assess eer ts nee eel on ete eee a ome eminent] aH Til teomteenee a to Net assessable ine un oreo er wend x Pers za) “neon Total assessable income sie!I ese reno - a ters ne wicca is ee ET aT a ee nim] {| Morbnanastt PEC ctacua se soxencr we Teaecrecremetomsn| | enema | mit) || ea ana scaroe oe ores soto sof ae | Atowate amount of R&D cos (0% fase arabe irc, cs Teal jess se ap imal oma tasessabe icone fom business aan en ens sod Rs 50000 fos esd or asin ocurens p [tematic eon oat 2 Se encom pon eRe, 1200, | “2, [ZO1S Sep. Na TH] Pun i an advocato of lclary Public marten Folonng = 1 Cregeen cnr eco by 1% |." fistncome ad expend acount far th previous your 5 Slsundng oc ert Rs 3000s tthe pd oo oi = Req Sertl ai nee | Poon sn | Bylo Sn Totelgton expenses 130 | By Constancy te eelton of et asessble income from proesson Tale owns eon 2000 | yrs tom Bar) oT foot [Amour To nr rt sasorny 3000 | ByLotey eae i) a 7 ‘ToBectcty charges 6500 | By Divider (en Se ren000 Tees pp pone 100 | By tem cots Certo es Gesingdoameises) 100 ToDeaton to atenin 1500 | By Sandy neone Gtstondins ‘sn000 Tobieestentan 20 Ss pls books 2000 Tesupie tat | Gres neo vara | [Ter aengon | Teal = tess Aol detcon ‘ional infomation fee nares ano + 50% oan ted pron pups teen ton 00 + Suny name ince RS, S000 bad dts recovered when nt aisees tne es ‘not ae sascoioclomats 25009 + Eectcy and lepheeiused euler plesson and houses ros see Office rent a: Required: Assessable income from profession carers (000 00110 ce a esses nome om pessoal rae Caeuation ofa assessable income rom rfessen 11, [2018 0. Ho. 72] From the information given below, compute the allowable amount of pollution coir and research and development cst forthe relevant income yeat. *+ Gross assesssbe income rom a business Rs. 2,700,000 + Total deduction before PCC and R & D cast Rs, 2000,000 *+ Previous year uneoovered business loss Rs. 100,000 + Actual amet of polision contol est Rs, 400,000 + Actual amountot research and development cost Rs. 200,000 aa Clcultion of allowable amount of pollution control cost (PCC) ‘Assessable income Gis setae wc em ss Les: Tl odo a ines ble ble POC and RO cat Less: Preveu yea ass ‘Aust teat incor Panicalare rom business beer previous year ks Particulars income Logal feos Consuitaton fes (Incusing documents fes) Gis rom chents ‘Sundry Income (18,700 5,000) Gross income Loss: Atowable deduction Oto rent Tolophena expenses Printing and statenary Ect chaos (680072) News paper expanses Intros on fa Oveot Sv)BRT ba ses teen Tt nd PEON TD ‘and Gorkha (Underdeveloped region). The industry furnished information forthe previous income yer. ST 49, [EE Sep. Nepal Garment industry Pvt. Lid has two factory in Kath the foley Dents Kathmand Goria Toa) cer ‘200000 | #2000 T0067 Contetsves | ssoec0 | 290.000 sro | Opering eperses ‘roan | 25006 195.05 | ines owpenees \ me Tred expense expenses alozaed on be bass sles amount i Required: Cast ttl tral income ad tax ity. Cylcuation of total taxable income and tax ablity Pare Yathmanda | _—_ Gorkha Tas} Sales revenue 1200000 420000 | 16,2008 ss: Cosot sas e000} — 2anom | erou peratng expenses: ‘470,000 25000 1950) Inect expenses (Baked on sees) 0,000 31.500 sil Tas ne 360,000 73.500 a Taciadiltes 4 oy, ‘Note: The special industrial comy — ae veloped regio, that estabishment Baa EN Briet Answor Questions. 4. [20200 9-215) From the follow z jowing informat donation and research and develo Gross business income ‘Toa aoned dedcton belo R Previous yearunrecovered loss ‘Neate aout cepreiaton not indudeinabove cost tual amount of research and development cost Donation paid toa Goverment hospal 0 Cos, donation anos auctent ry axed by 2s such indus is esabished in wl the company is tare by 6% upto the fst 10 years of ion, compute the allowable amount pment (R& D) cost as per Income Tax Act. Rs. 1,800.8 (rine Ice bd Catan et ‘Avowablo research and development cost = £0% of a ‘amount of research and development cost, whichever isthe leas 355,000 or, Rs. 450,000 whichever is the less ‘Alowable research and development cost = Rs, 385.000 ‘owable donation = Sih of adjusted taable noone or acual arent of donaten, \iicheveris th lass = 5th of 710,000 = Rs. 25,500 or, Rs. 180,000 whichaver ist exe ‘Alonable research and development cost = Rs, 25,500 Z [au20.O. No. 3 (a) Nepal Carpet Industry Pvt. Ltd. has two factory in Kathmandu ‘and Parbat (Under- developed region}. The industry furnished the following information forthe previous income year. rent of aca of T1600 © Rs. Kathmandu | Parbat | ‘Tou a) ~~ yz00.000 ‘ania | Tee Costof sales (Rs) 580,000 monn | sTOM Operating expenses (RS) 170.000 on | 195000 Required: Total taxabie income Calculation of Total taxable income Deals Kathmandu Pabat Sales RS) 1,200,000, 420,000 Costof sales (Rs) 520,000 00 Speraing expenses (Rs) 170030 25.000 “axable income 460,600 15 00 3 [0200 Wo. 6 (ah mr Shrestha furnished the folowing particulars of his income for the previous year: ‘Assessable income from Business. Rs. 2,500,000 ‘Assessable income from Employment Rs, 900,000 ‘Assessable income fom Investment Rs. 1,200,000 He claimed the following expenses for deduction. CContbution oretrement fund Rs, 400,000 Ute Insurance premium Rs. 35,000, ‘Taxpaidin advance Rs. 60,000, Required: Total taxable income andtaxFabilty Statoment of total taxable income lio le donation and ‘esearch and development cost ee r is per income tax Act. Assessable income from employment 900,000, ross busines —] "I Assessable income fram Investment 1200000 ce reno | | ca taabe mane i08 Aas Tl ee *tntenattetinen | gman) | Seton ia tango: are Seema Assossabl income am business ber ‘Less: Lif insurance premium (Actual RS. 36,000 or, Maximum Less: Previous year foss, Previous year loss _imit = Rs, 25,000) Lower 25,000 Adjused taxable ncoce Tolaltaabie income 2.75.00BEEBE ser ei 1st nC Tanta NRE TH Calculation of tx Hablities Fro Consitaton fos a meu] J | mut es Saas ike Sea wi ote oman post rey year ean ts 10000 @ 1 00 Fete re pytosecc ees Nest Rs 700,000 @) 20% sooo To Git rom eSents By Balance cit tet aon0t9 @ 0% Teno eee eeeniieeeneemeerenereers neon] Ee aa 4 [aE 10. NO. 4 [h} Calculate allowable depreciation amount and repairs nigel "Additional Information: to te ening deta aa Pater TEATRO | | + Content aur sswesm a ‘cono] e009 1 sO%ot an was sed pena pone : ere “| “seen + hci chage use cay or pessoal adhe uote, dene Regute Nel assessable fom ptsson ines | xo fst scon0 7 Caelton of xsessable incon om rtession Repairs expenses 180,000 td Particulars Amount As} [Amour (Ra ma [Consutaton fees (including previous year) Calan oat eecton . een Particulars Block-A(Rs)| —Block-C (Rs) | Gifs from clients a canon) —— sono] | |sseorat mye net er eee Ia not 30 | con : tp 02 non =] | fie oma etn aia ‘60,00,000| 1600,000| ec choges 72002) ss: Disposal value -| 300,000] * ton and reg . Salary to assistant nods | sions epwcaonate am. es nerstan ant 18000) soy és cata encunt 300,000 325,000] | [Net assessable income from profession [ey Cain fone pa eres | © BEia(ioie up) @ Na The folowing Wlomaton road 2 comseny & Geen Pa BlockA (Rs) ] Block-C (Rs) below: Seas aed 00000] o0m00 + Alowable depreciation (Bick) Rs. 300.080) Thal eecaten gta (6) Tieoteo oo c00| Freel a0 000 + Atal pai and improvement cost 8, 12,000. etter ens 0) =Rs.420.to] =Rs. 91,000 Required: Alowable amount ol epi and ingoverent ost pas expanees fy 150,009] 118,000] Linceenendaonnte TaReao| Tare otoo| | AE a 5 BR OAC Fania nmol dtm avon | PASM IRBs ape gisteredausior forthe previous year, I 8.12000. eal an Payments Acounte FE owt anu of mp an inprremet cot = (7% T2000 = Re. 8400 a eee roe F—Aetatapaandingeenent Re. 20.0) ove Ho Balance bid - al o ~ t ‘Therefore, Allowable amount of repair and improvement cust = Rs. $4,000 io of aati isan Ao ~ = z {sense enn FONE i : sof Pl LM Company ae given: Sowing inka rerio BEE row een stn 7. bib wakeup) ONS fe! ssessaie coe fom Buses ate Sst meant of poston cont cot PEC) Donasen ven iota everstosanisaton Requred: Areca! donation dase ete Petes ES of Depesaton bse cf aset Poo [Purchase of asset Pos B on Csira Disposal value of aset'S* Saat Ran SRO a aloe pe Taint + Opeing dpi tse + Ate ve of pt Sop = so (exsne8) sam = Resim oa eine eet = 25 of 500 sae Short Answer Question 19 Ga. 6 Folowng ls the summarized statement of cash ol an aout 1. Zis2 GNa.8 Fotoning isthe sunmarized statement of eash ofan autor fr! previous year. | or, Receipts and payment accounts Rees ‘now (Re) Payments ToBaincs bs 40000 | By Otice expenses 7 a fees 220.000 | By Ofce rent fees 381000 | By Satay assistant Torawestemterk aaa) 22500 | By Linn ni (se) To come rom wat sce 21000 | by Househad expenses Tonserestonpatorereyeded ant | By aang To sale of old newspaper es ee sa ten nie ee Additional informatio + Conaiation feos cdo Rs + Autos neue Rs, 40,000, Office assistant canted 14 of hes tnt ho onsabota ‘© Danton to exempt enpinization Rs. 1,00 not incon at ‘= Depreciation ofoce equipmont Rs, 8,000 and medal 6,00 ylang ort your ed to pens years lecludd in tho above slatorent Roquitd: i. Net Assossale incom from profssion i Taxable incom aaa Calculation of assoxsable name ftom pofozsion af an aut fo prove Constaton eos (cong nest yeat) ‘Adit oes (Inchading provious yea) Income from wring tice ‘Salo of old nowspapor 2.900 Gross incomo ‘Less: Aowatio deduction: Oca expenses Office rent ‘Salary to assistant (4,000 « 24) Depreciation of fico equipment [Not Assessable Income from profession ‘Statement of Total taxable ncorme Parteuiars "Net assessable incoma Fam pression Not assessable income frm investment {Interest on private money lending) Total assessable income ‘Less: Donation (5% of 406,000 = Rs. 20,300 or Actual Rs. 15,000 or maim tnt Rs, 100,000) Lower Less: Lilo insurance premium (Actual Rs. 18,000 or maximum limit Rs. 25,000) Lower ‘Tota taxable income ‘Noto: Assume a medical exponse swig he BABS persone ENE 2 (iD Hake ap] HOG The givens the summarized statement cash pertain practicing medical doctor. Receipts and payment accounts sine ARR] Rae lo Halanco bi FEW | Ore aessen “iniete To Vsting foes 009 |) Car pretased 2000cin AT REDE pi sere stars = eg Fo conesttos fe (0) 2.12500 [By Paso of medi a -romiscctnsovs names 3.000 | rest ontoon sae suet esr 42900 |8ycarexsenses ecm tm ooomenmrict |e Dow ton Book puchase pesca aDwdenstonnepalGoxus. | 10000 |8y orton 2200 |oyuneeomenrenim) | 25000 osxarrrs toes 48,000 [By Bane et 000 Tolan am ty rt) 0000 Toneeng tees 2500 ae [e200 | 7 “Aaéiional information: Requed: i Depreciation on car has to be charged as peru. 508 of car expenses related to personal purpose. Book purchased include Rs. 4,000 ascot of textbooks forhschidren Prevalng rete of interest on lan is 15% but hei paying 10%ony. COustanding offce expenses Rs, 20,000 is yt ta be pid Bank Loan was taken for professional purpose, Not Assessable income from profession ‘Statement of Taxable income Ceteiaton of assossabie income from profession a an auctor forthe previous year Fat Zant 5) [Anouk RE] a 135400 Corsten os 212500085) 50000 estannss cones 43.000 Ssieotmescne 199000 ie romgotent 000 rst us 5 000 510 1es00 Gos iene 73500 Less: Alon decom fe exranees 400000 uate eet fcr 2000x308 20%) 50% | 25,000 Puchasrotmedione ‘2000 nest en en 250 Caremerses 8.0072) 000 Book purchase edicts 000 6000) 10000 | o2000 Less trom prtession 111500 ‘Sltement of Tot orate rcome Patales _[ fat a) [aot a ‘Net assessable income from profession 111,500 of Net assessable income fom investnent Na Total taxable income 111,500 : Pree el enn Nee re ETI Hole: Dividend, examiner’ fos ard mest teas ar fad wirtciaen ramen i An Individual hoops there acccurt on cath tava va cxponses i ignored ‘3, B18 QNo. 9 Mrs. Sunita Thapalia is an advocate, maintains her account ‘bass furnished the following statement forthe year end 31st Ashach. cach Receipts and Payments Account Receipts Tamourt =) Pay Te Baanoe be 25,00 | By Oca expenses ToLegalfees 256.000 |. By Otic rent ‘To onsutaton oes 152400 | By Teeghone expenses To ater nea (net) 7900 | By Iterest on barkclcan ToDivdend (net 5700 | 8y Membership subseroten To nerest tom Bank ne) 21800 | By Blectrty charges To Sundry incomes ‘37.400 | By Newspaper expenses ToGit tom cents ‘9000 | By Conaton By Carexpenses By Premium of insurance By Balance ett 425000 | “Additonal information: ‘+ 50% of bank oan is related to personaluse. Alowable depreciation on caris Rs. 30,000. fice expenses included Rs. 10,000 paid for household servant Outstanding ofce rent Rs, 24,000 is yet o be pi Electricity and telephone expenses is used equaly for profesecn anc soe: Purpose, Requires: i, Assessable income from profession i. ‘Statement ot taxabe income Catan of ssossale incu fom profession of an au Legal feos ‘Consutaton fees ‘Sundry incomes Git rom cents Gross income Less: Alowatie deduction: tice expanses (0,000 ~ 10.000) Offic rent Telephone oxpenses (8.0002) Intros on tak loan ($0% of 25,000) ‘Momborsip subserptsn lotcty charges (0002)exceed TE RETR reo a Newspaper cufense8 a Cxrempowes i Depreaaton oo a et Assessable income from protesion [=i Til accuse Paar fam potstion sot ase ‘Teta taxable income rent of Tota patie come scone oe nese bone 20T6 se eran 0 207,60 «10.80. As RS 40,000 10359 Rs 109,00) Lower rei (tual Rs, 39.09) 0 asia mien tel 3 sets 171650 \ SSC TFT elt We Nt Cie rte ere ORE Loss Alemable dette: roost Otten rt aa Remuroraten of sft \ ” Otfcn exper oe Teaphonn charges (thot 0.00) | ‘Monat cope oa 2) | ‘Aonabe rai ocx (00072) | « tet Assessable Income trom profession Parca ot assessable income om profession Net assessable incom tem investment "cre, Gens ane terest fom bank are final wibholding income. ‘© BEE Wace pu) Ne. The fliowing isthe Receipts and Payments Account of Mr. Godar, field actor, forthe previous year: Araeie)| —Pojats arnt a) 000 | yen 20.00 1192000 | Bj eminrton os 150000 6 oo epenee 107000 zamnaoa | By domestic epenses s0oac0 20:0 | yeleprae nares 20000 £2.00 | By ucewe ofc 2101000 |erenteetatetpay | oma 'édual Keeps there atcaunt on cash base so the outstanding office rent is ‘Aasitenalntormation: Car was purchased on| Domest expenses indude maintenance cost of car of R 200,000, (Cor was used for personal and professional work equally. 62fs of eephone cost was elated to his rolessional work. Regie: i Asyessable incame ro profession, 4 Statement oftata income ZEEE Cacuatin of assess! income rm profession ofan autor forthe previous yet Fence ‘vn [noun 3) | ‘Advance on Signing agreement 11,00,000 Fil payrrt! pes ys weed ins mm Ges income La | Total assessable Income Loss: Donation (8% of 24 43,000 122,160 or Actual Rs 150,000 cr maximum Ent, 100060) Lower ‘Total taxable income Note: Depreciation and repairbase of ear (21 i. Allowable depreciation of ear 1$,00,000 @ 20%) fi. Alowable maintenance cost of ear (7% of 14.00 200,000) Lower = Rs, 98,000 {v_Interest and mootng fees ar final withokéng and expenditures for the previous year as under, ‘5. BIT GNo- Wr. Sohan, a practicing lawyer, submited hs sistewew oP cones Experdive ‘Aroont Ra] | Toone To Salaries to sa T0000] By gar ioes To Otc rent 120,000] By Corsutavan tes To Stationery and printing 3000] 8) itorest on savng a ne Tolnterest on lean £3000] By Wid a gaa inet ToL insurance premiam 12.000] By Dnidene rom comesae To Telephone expenses 4.000] company (re) ToEectity expeases 4.000] By Gis tom eens To Donaton| 83.000} To Exo2ss of income over expendvee S400) aks Z = ‘Additional information: + Consultancy fees due RS.20.000 ans + AG tho loan was used fortis personal punRse eurweses Roquirod, a, Assossatio (net) inname tym gratession 1 Statoment of tal inane ary curating BS TON ay DeBEDE sie Seem Catton of assessate income from pression cers cits oor es RET ofan auitr forthe previous year Gis tomers wi Gost ineone Less: Alowate deduction ony sostestast eed Fee ret en Eutaneyane patna 4 seston 998000 *23) 2m Tesoro eserses Beene 00 | 253.000 ‘Net Assessable income from profession 4100 ‘Suatel Teal arabe noone Partoutars Amount (Rs.) | Amount (Rs) Ti ase Pesos Fam prone 7,000 nisin reone fem sine i “etal acesabe income 500 Les Deron (5: of41 50 = 2075 hail Re 80000r 2.008 ram it, 109) Lovet Us cence premio ctl. 12000 ermasinan e000 Sint, 2500) ower Teta eb income RE XE Flv fer savig secant wll gan and didend rom domesic company at tra wating came, & EETEGTIE Following isthe summarized statement ofeach conceming an audio forthe predous year Feat Frasi(Re)| __Payrais | Pownl sl] ¢ Tettire be | Bont [a Okeroa | xo Tocensutaton foes | 13910 | By orton rent 250,00 Tous ees | e000 | By Seat oss seo.) To interest onloen | 50000 | By Domest erpenses 0,000 ToSaesotojamras | 2090 | Byte eum pemivn(Sel] 2.00 Tepwawcime | | Btn 00 Tote! tem Bare sun 14,600,000 | ‘adéiional oration + Consitistion es ncade Re, Advance tt es recived Ps. 60,000 000 relating 10 to years. ago, isnot inchuded in above statement AE AN He IUDs TO ces ota ee AT A ia ven We Soa Deen of ote wrrgenets W. ULs so wares wn 26,00 a6 eo change i atzses ators = he Roquited: a. Nut Assnseatin ere te elosnen b. Statement of Teal Tanai err aL, Caleulation of assessatlelennern cen uiroca oh we Pare Conia ts cing aa Audit tos Sales of od yas araren a oes Gross income I Less: Allowable deduction: | Otis expanses | tic at Salary to assistann (8.000 + Depreciation of ten enemas Net Assessable income trom profession ‘Statement of Total arabia reer Pastors otessessable came trom profession Het assessable income rn invest Ineest on ln) Tol assessable income Less: Lite insurance priv (actual Fits, 25,000) Lower ‘Total taxable Income Interest om bank and diana nan ar Comprehensi 4+ Baie tr, Pandey a wader has prepared the fiowng Yraaoy Loss acount forthe previous year or aT TsO ok cy Sa “TF Yotatal cosine 1507600] y Comey seen Ye Latour cost se. 000 - ~ ¥o Gros prot ci xen} | 210.60),‘Adsiional information: ‘+ Opening stack are overvalued by 20%. ‘+ Opening WY ofthe plant was Rs algun and pat 000. 30.00 soldat Rs «+ Insrance on ventas ince egal ‘Donation was given to Bi Hospital Required: “2 oe taint FRETS A seme tt OT pb aga To Sasres zc By Dist ; Tooronereses oy Bad et i ToDepesn a onsen ' Tondeserert 5.00] Byers on ed dept otssane nines sono By custom cu refed opinangans s2tere9 S00] By Compensation reed By Ltr income '500,009, The purchase cost of plant was Rs. ‘of plant costing 60,000 having book value Rs. expenses Rs. 10,000, ‘Not assessable income rom business { . Statement of otal taxable income c. Taxliabity (5e20q) mE 3 Cotaiton af cost of wing tock Paris Troan RS] * 100/120) 200,000 as, Matra ensues 15,0000 Letewret ‘00000 andecwrng epenses 0.000 less: Gesig sock (280.000) Costot wating stock 2440000 Depreciation base of pant (Block -D) = Opening WDV + Absorbed vale of purchest 500,000 + (200,000 27) ~ 4500 a deprecation of plant = 15% of 655,000 = Rs, 98,250 ~ Disposal val 3s. 655,000 Ceeution of assessable income from business of Mr. Pandey forthe previous year Partadars ‘rvount (Rs) | Amount (R3)|! Sales 38,50,000 Discount 60,000 Bad debts recoreres 0,000 Compensation recived 100,000 Gross income 080000 Less: Allowable deduction; Cost of trading stock Haring neta) 24.40.00 Salaries 50,000 Office expenses zooo| Des etre wa co Depreciation on plant (Wortng ata} ‘Advertisement Insuranco of inventors (eluding logal expenses) Pring ard Statonary Net Assessable income from Business ‘Statement of Total taabie hear, Paricuars et assessable ncome om business 7 Net assessable income rom investment © Total assessable income: Less: Donation [5% of 112,750 = 56,088 or Actua Rs 20,000 ‘ormaximum it RS, 100,000) Lower ‘otal taxable income Calculation of ax rabity Priors Fst Rs. 400,000 Next Rs, 100,000 @ 10% NextRs. 200,000 @ 20% Balance 385,662 @ 20% Taxpayable Noes ‘Dividend, interest and lotery income are nal wit Notes -2: ‘There is no custom duty paid is givan in dett side of the custom duty refund is assume relating tothe fred copia reccive, and oss accounts. entree 2 Mr. Madan a sole trader submitted the following trading and pro®t Paris ‘Anourt(Rej]___Parieulrs Ane Te Oparng sock 110900] By es Totter purchase 2000,000| By csing sock Tocustm dy 100.909 ToGoss pot 260,00 To Salaries 090] By Gross prot ToProvsen or bad debs 50,00] By Ostend oma coneony ToProvson frig £0.00] 8y inerestenin ToHospiaity exponsos 20809] By Consensston oF insurer preniom 20000] 8; Dscunt ToRewarhanidewtymerécst] 342000] 8) Sag cee eset ToDenaon 40,009 Gs an sens ToFin and pony 2,00 To Ault os 000BREE sen Seshons seer cane a AHL aoa Telege eenats AN By Suny Roome a Te Reap ant inegeom, 8030] By Goin on sae of ron business To Ge-visennensee 7.000] chagendie assets Todsrroree 1000 9 Seat wetae eens TaDsare ocean, Temweest tacornason Tess 340,00 veas Rs, $00,000, The purchase cost of plant was Rs. parof plant having book value Rs, 30,000 soldat Rs. ingore ta Act. recovered was nat alowed previous. ‘Rs 10.009 appeal aainstincometaxoffce. minci Rs, 10,000 forthe lf insurance of his om, ress ess Rs. 180009 ratinctded inthe above statement. Assessable income from business ot taxble income Faas SS) | [etna rom bass - ‘come from investment: 100 Interest on investment 200020 | || oncnsaatranbuscesschagetoases Less. Cosng sek ennceo) Net Assessable income from investment Conettasng ck a Sutonert of eal wae Te = Gifs and recovered Rent from stat quarters Sundry income Gress income Less: Allowable deduction: Cost of adn tock (Wenn cs) Salaries Hospiaty expenses Fire insurance premium (20.000 - 10,006 ‘ut fees Legal expenses (20,000 19000) Pesiage and telegram Genera expenses Disttuton cost Saf welae expenses Discount Gratuity terest Connision Bonusto stat Atewable deprecaton of plat ering ot) Assessable income trom business before previus year less Less: Previous year loss ‘Adjusted taxable income Less: Research and development cost 50% of21 25,000 = Rs 1062500 Aca Rs. 300,000, Lower Deve: paring VIDW + Absorbed value of purchase = Disposal vas = £00.60 + (300,000 » 25) 40,000 E Pancaas fm ‘arent 5) ‘Sees 82.00 Compenssten 000 Discount 10.000 Bad debs recovered (40%: of 5,000) ‘2000 ‘Net assessable Income fom business Netassessabieincame from investront Total assessable Income: ‘Less:Donaon f% of (2,25,000 + 200,00) © | Less insurance premium (Actual Rs. 10.0000 maxinan iit Rs. 25,000) Lower 0.000 [etl taxable income including pan on sales of NBCA ars 005 00000 | | ‘etal Rs 40,000 matinam iS. 100000) Lower f | i i Less: Ganon sales of BCA 10000 __ Uetatarabo income excluding gta on sales of NECA T7500REID Ansys zac cop ttn dA le cin wh ate thee ce (SETI ee = ent comer Catataton ol ett vation sack Nil Partenaes ‘Amount (Rs.) Fre Re 106,00 Sale Sas 10000 paring sock 40.000 072 ei) ext, 100.000 @ 10% 40,000 ‘hdd Materials purchase ate ‘Next Rs, 200,000 @ 20% 325,500 el 460,000 Balance 11,75, 000 @ 30% 0000 tanec venere aaa sxoc0o For gai onsales of MBCA Rs. 10,000 @ 10% [#2500 | tess: Closing stock (360,000 10/120) (300,000) Taxpayale ostot wating stock as Notes Oricon fora or any and eres fon bancae fal witoking henmes —_ Taped bse of faa Bak) = Gpaaag WOT GSE ‘small industry (Special Industry) run by Me. Adhikari ‘Disposal value = 500,000 + (300,000 « 28) - 40,600 = Rs. 660,000 Faribhes the foloing Trading and Prof and loss account forthe previous year. Alowable deprecation of plant = 15% of 660,00 = Rs. $9000 cr. Colaation of assessable income tom business of. Maden [—reas ——ememes ———meaminsg] F Patan Tarot 3) Sosa 700] Sa eal |e 7038 ToMaeras purchase 1,000.00] By Coen stock Compensation aoa Totaser cst 0000) Dice 10,900 To Maruacing expenses 00.00 Bad dbis recovered enomo TaGeoss potted szzneco Custom ety refined ‘o.0c0 0.900 3710000 | | compensation received sea,ce0 ToSairies 150,000] By Gros profit bid a0) Gross income To fea expenses ‘zat ByCenmisen aaoa Less: Allowable deduction: Te Deseaton on Part scm acttaa « ioees Bee as | BOG] | | Gettin ss To nsrarce ninvertrs 35:000| By Dhidend income sco eee pa ToRAD cost 400.00) By rerest on investment +5000 Office expenses 0000 To Prosi fortes 10,000] By Custom duty refund 10,000 ‘Atonable depreciation on tant Working note) 3.000 Hobanaton 18000|8y Compensation received 10.000 ‘Abverisoment 25000 To Net prost 675,000 . Insurance on inventories (35,000 - 15,000) 20,000 ies9 arson | Legal epense (ect 15020) rato | anzssta ‘Additional information: j Assessable income from business before previous year loss 10,208,500 + Opening ard cosig stock bah are overvalued by 20%. 1) [tess: Previous year oss 0000 + Opening WOY of te plant was Re, 50,000, The purchase cost of plant was RS. | | Asa taiable income abt Fenndptel petting ODay nl aueRs |_| Las Remar sop si esses eateasone va I go 148 500 = Rs, 524250 or Adal RS. 300.0%, Lover ‘inventories include legal expenses Rs. 15,000 f + Sthollga expenses related to appeal against IT ofoer jp | pateaeeeabe income tom buses ee + He's tho mombor of ano omen [| Income from investment: ee Poort element od ahs conbued oR, 190000 |_| pe fom ein ay . Pa year businass fos Rs, $0,000 not included inthe above statement [Net Assessable incom trom investment $5000 Recaaaeen pee enone rane asain wich was a c ‘Statement of Total taxable income Roquiod: a. Net Assessable income tom business f Paras Tanount Ro) [ Ano) ‘b. Statement of taxable income "Net assessable income from business 748,500 "Not assessable income from investment 15,000 © Talay (Assuming lected as couple tox payer)1+ Opening tock undervalued by 6 Round of income tax incu Revere rt Ghttinet Mest cone ETN 4 an desing ck overvalued by 10%. Rs, 15.00 as end of eustom duty. + Legal expenses incited Rs. 5,000 farina tax sopesl against income taxotfce. DDepreciaton on eat has ot base ofthe car was RS. 5,009, However ‘ofthe car Rs. 60009, n charged in te abo ‘atement. The depreciation the pas expences included the repairs 1+ Office expenses include RS. 5,000 cost ot patect ght wih ie period ofS years 8 ‘months. Charge depreciation 2s per le, Required >. Statement of ttl tarate income a. Assessable income trom business erd investment Trading and Profit & Loss Account Tamount (Re) Parteulars cr, Around i) \ Less: Closing stock (5.000 » 1001110) Cost of trading stock © Taxtatity aa Gaicuaton of cost of vasng sek Panevan [arenas ‘Opening saek (95,000 10055) 100,050 ‘Add: Purchases Ccaniage previous year: Wages: To Aust tes ToBres SES TARense Toner ae BySse By Cosng eck By Commission 8 terest on invest By Rete cfincome tax By Sung income By Dividend Net) By Bad debs recovered By Amount received for stich regarding 29.00 100.000 1950.00 2005.00, 70.10.00, 39000] | 59.000 000 2500 37500] | Bo 25000 ‘Depreciation base of car (Block -C) = 500,000» 20% Therelore, Allowable repair= Rs, 35,000. ‘Allowable repair of car = 7% of £00,000 = Rs 35000 or Actual Rs. 60. Calculation of assessable income fom business of Mr. Macan fot RS, 100, Pena ae | F | See Commission ‘Sundry income Bad debs recovered Amount received for accepting resvition egarng busess Gross income ‘Less: Allowable deduction: (Cost of wating sock Working nota) Saiaios Legal expenses (12000-5000) ‘Bad dais expenses Depreciason (Others) Repairs (100,000 69,000 + 35. Office expenses (185,000 -§5 00) Aucttees Hosptaty expanses ‘Bonus to sas Acverisng Atowabve deprecation of $50,000 180,000 14000 20,000 159.000 75,000 110.000 15,00 2.000 35000 2000 10000 BAS 000 1588000Se ce aun ht OE, baer ine vt ekeen homie me SEA BEE seis sion Assessable Income rom business before previous year oss Gro) aed i a Less: olution contol cost 0,000 To office rent Ati \by sim choa renspaper 000 Stes NDR Sor ARS ON, LOE ro ierestontoan Tet Asessaie income fom business saraan| f [rocacaten cn a nt insane rom investent ro goneral oxpenses Ineresten nese sao ro adertseent Net Assessable income trom investment Taas]|_ [Torovsintorbat ets ‘Statement of Total taxable income To repair exp Block roincome tx pad Partai Trane) [Amo] | [lor Tie asnssve reame Fon bss “7,000 I mue| Net assesabie nome fo ivesinent 50000 mon fora Total assessable income: 487,000 © Opening stock was under value by 25% Less: Donation [5% of 57,000 + 0000) = 25,80 or Acta «+ Puchooos indie Rs 400000 pctaee ofa ck en shin reset Lrataiel mmr alae aoe © Witen down value of furiture at opening date was Rs 102.000, Some fumitue Total taxable income Bie having book value Rs 60,000 was disposed f x Re 40,000 on cas dung ayer. Calclaton of ax abiy + 60% of bad debs hasnt been aceped by TO duet ack cfevcece Paris Troma] «Net amount recehed, om natural resouce payrert of Rs 40.600 has not been Fes Re A00000 7] included into above Proft Loss Aexour. Balance 31,650 @ 10% 3.165 Required: a. Assessable income from business Notes Dviend incomes fal wifhadng noone i. The custom sty is not given inte debit side of trading account o its assure Catniatonctcostt tha he refund of custom dt is relating to red assets. Pata '5. EbiB [Make up) G. No. 11] Given below isthe Trading and Profit and Loss AVC of Mr Sica, ar, raps yur. Dr ‘Trading and Profit and Loss Account cr Sanaa [mut ay] Paras Rt] To Opening stock "600,000 By sales 2,600,000 To purchases 1,800,000 | By closing stock 400,000, ob Kean ‘e000 ro wozes sen ro gess pote soto Teen [isan] | ro sis slates ono [by gots Poe a0 py exes 10000 [By eommison xn fore oe mechan] 8 ro vavelng expenses 30000 [ey goionsale of ushess assets | 300000 i I E ‘Opening stock (600000 x T0075) ae: Loss Cost of tang stock Depreciation base a urine (BOA 6) = Opens WOV Absabed value of purchase — Disposal value= 100,000 + (409.000 89) ~ 400 ‘Alwabe depreciation of plant= 15% of 480.00 = R, 62.00. ‘wae ropairs of plant = Ti 460.00 Therefore allowable repairs of plant = Rs. 32.200 Calculation of assessable income from business of Mr, Madan forthe previous yeot Purchase (18,0000 - 40,000) 14.00.00 Freight & custom 150,000 Wages 50000 Closing stock 400,000) 20000000, 3s. 480000 32.200 actual RS. 35,000 Lower Parcs “aan. T Aroxse Re ‘Sales 25,0000 Comission 300.009BREE soc seen Tsar Coy aso he tt 1 Dasaston Msoe ‘Se of 92 ewssaper ‘ross income Leet: Alowabie deduction Cost rang ick Wang ro Hosptay exenses Dasoee Trawling emenses reson oat Atowabe cepeeston ot ite (Worting rte) Gere exerses owabe rera* expanses Bock 3 Baap 3 ebis wrsen of (3,000 x 40%) 26,3200 Asvessabie income from business before previous year loss ore] Less: Previous yee oss tay ‘Net Assesszbie income from business eee | Income fom investment t ‘rout received from natural esouree payment (340,00085) | 400,000 Net Assessabie income from investment 400.05] | ‘Statement of Total arab I Periosars ‘runt (Rs) [Ani Pa)] | sssable income fom business 676.500 | Net assessable income fom investment 400,000 I Total assessable income: ore Less: Donaton (5% of 10,76 200 = 83,40 or Actual Rs 4,000 t ‘oc masimum fit RS, 100,000) Lower 0st0 | Less: Lis insurance premium (Actual Rs 1,000 of maximum RS, 25,000) Lower 18000 Total taxable income Particulars Calculation of ax tabi First Rs, 00,000 single sas ‘Next Rs. 100,000 @ 10% ‘Next Rs. 200,000 @ 20% Balance 318,800 @ 30% Total Tax payable Less: TDS on income from rature resources (40,000 340,000) 1900 | | 4000] 9a610| 1560 Vee ite cant et it 1 ba tts wren of on _ en 0 brit sate a 6. BiiTO WoT Given tains Soma Ble Trading and Profit and Lass Account of a yes, Patans To Opening wick ToPurchaces To Cariage cn puchacn Tovioges To Ges pot tt 1 Sa tan, ToOtice& edrinisratve eins eases ToS sates | an ToProitentrearecein “aan ToRana es teat ToFee trates ea [Tosiniyerrarees | sexe es ToDspacienenraciey? | gaz | zat ToReparoanssiney'D ten ToPekionamtest soa Tocanpasten panes | erpoyees | S000 ‘70000 Tobcomeucpadinesance | 020 | ‘20 ToDension | sac | Tonto seo f 0 ‘Additional Information pening stock was underly 1% wheres closing socks venalesby Ihe Depreciaton en machinery was charges as pane egaton fhe act * WB of the Bad Debt recovered was not alowed previously by IT officer fr deducton ue to lack of evidence, ‘Sundry income ineludes Rs. 20,00 rer tom godoun letdown, Required: a. Net (assessable income from business ._ Net (assessabe income tom investment © Statement oftotalincome 6. Tax abityREI hse sanc Tes Gt sn AT eh ame St Ct te eon CREED SEER Calculation of cost of trading stock ‘Total assessable incomo: rapa Particulars: [Amount iiey) Loss: Donation I 907090 #7000) = 1325.6 oo Petes ____) as Adel R840 or air et oe rng od OTD TOT | 1 abl income noo ‘Ags: Purchase "2.00.09 tle 117,000 Caray on pce ‘zy ae anes 200.09 Partcsars fama Ln it sek 00 OH) Lm| | eins ant sais my Cost of trading stock 1420000 ‘Nox! Rs. 100,000 @ 10% a sera par be Smeaiey Hoa-D)= HOOT TOMTE= R265 ~| | nents 2000 @ 27% 00 eruie eof Machinery #75 0125657 = Rs. 18667 or Aci! RS. 1800, Lower | | poancn 47.00@ 30% ‘ame Tero aowabe repr = Rs, 18.00, a a Calculation of assessable income from business of Mr. Madan forthe previous year || Less: Advance tax pal eo Parteuars fAmount(Rs}] Amount]! | Toxpayble [aa] ea 20.00 | Nes: Drier neon ra thoy Reames Sony name (cg ret of gafom et own “20000 LT jaken eid eres ee ced tale Bod debt recovered (180,000 * 23) 100,000 | assume that the whole block ofthe depreciable assets is not 590s rae am | Compensation en ssf sock 0.600 | the evant income yer Rent {rom sal quatar 85,000, | or cr. Gross eee || Tartans [aro a] atin Tava Less: Allowable deduction: ' ‘To Opening stock ‘500,000 | By Sales | 6,000,000 Cest of trating stock (Working note) 14,20,000 | | ToPurchases 3000,000 | ByBaddebisrecovered = | 80.000 Offce& administrative expenses 200,000 | | owns tmnoni| syretrdetheses taxa] "10000 Sates zo Toriompestn om | oprameessey | 2000 ee ion Teegeatan car sen | syeaatmenetniest | ‘Alowable depreciston on machinery "0" 40,000 ToSalaries 7am | accepting tushessresticion | 00000 Nona rpaen macht (Wore ms) 1800) Token se0m0 | eyDsmatncnee | e000 congersian pd ood enploees soca | zoseen ||| Totrxton Osta socmn | By Cenrgese | zon ‘Assessable income from business before previous year loss 13,07,000 To lnvestment reserve, | Less: Previous year loss Wa}{ | ToPenatty Adjusted taxable Income from business. 14,07,000 To Pollution control cost Less: Peon xr eat (50% 1307, 00 =, 65 or soa] | Toovtens eR.) Lovet To Diet | ‘Net Assessate income trom business TG] | Tone prost Y de a iam] nscts (en bie) trao0 a Net Assessztle income from investment FTO) Opening stock was overvalued by 15% however closing stock was undervalued by ‘Statement of Tota! taxable income i: 10%. FE Panicuiars Frount Rey [Amount] + Refund of income tax inde Rs 4000 as refund of custom dy. Tsk ssessabe near Feritusrass 7.000 + Investment resene inde Rs. 5,000 reserve for bad debi. | fattenane roe tn rere aeRET vcr som stn Cort Teta ne: ANT Real includes Rs, 40,000 depreciation on furniture. Opening ovo be inte peg res cn Catarn Calaion of teria ite re SRT was, 250000 a ‘ of Taxable com ate ans Reqited: 2, Satementof Taxable income 3+q [| Fans aor sn oa ae ee Next Rs. 100,000 @ 10% Nil re ince 97,267, @ 20% 10,000 Bal Jedaion ol ostt ving sock a! F er omy ‘Tax payable oe = 44,78 Noles: i. The custom day isch gren be tom - Spang Bae OT HOTT aa eu ate A Ye Gi as erg amet Spay ae webs las yi wag ued ss wages : ‘i ve Cory ek 000 2819 [eta P Cost of vain tock — 2 ca _ comprehensive Answer Questions - ays Ra (10 Sop No.7] Wr. " Sal ‘Depreciation and repair base of future (Block -B) = Rs. 7. fe attarai a trader has prepared the following Trading and fl Awad Degen fan = 2940121000 R 2510 profit and Loss account forthe provision elie 1 ‘Calculation of assessable income rom business of Mr. Madan for the previous Ye paca soe Paricuars Amount (Re) Amount ey To Opening stock 240000 | By see 1 aesac00 Sales oa ToMataal consumed 1.900000 | 8 Cesng sock | seo000 Bad det rece = To Labour cet somo | Interest subsidy faa ‘To Manufacturing expenses ‘300.000 | ‘Amount received in leu of accepting business restriction re “To Gross profit id 4200000 | Discount received $0,000 ! ees a0 i050 Tae i oan niece nae Tosaues TS1000 | By Gass poi [zac Cost tadrg sock (Noting rt) 052988 Toc expenses rang00 | By ene gen | “son “Transportation 80,000 ‘To Depreciation (80,000 | By Discount | 10,000 Depreciation on car ae To Advertisement 25,000 | By Bad debt recovered | 80,000 Salaries if To Insurance on inventories (35,000 | By Dividend income 50,000 fer Soa a sca (nes | cece ee ft wre ‘ean |_| ePetontrie som | ByCaionaayrint |= t0000 owe serene unto zzsio| stata] | ToDo s100 | Byconrtonnened | nud Assessable incom om busines before previous yarloss 434538] | Teter 75000 | Byte neone | Less! Pree arose wa || [Tot “i800 | Toul [ats 00 t ‘Aajsied ale cone fom bainess 7257,038 || ‘Additional information: i Less: Polon conte ent (to 1 84,53 = Rs, 597268 597.268 || i. Opening and closing stock bot are avervalue by 20%. Actuals. 860 } Opening WOV ott plat was Rs. 500000 Te purchase cost of an was. [Net Assesssbie income from business wat] 300,000 acquired in Falgun and part of plant costing $0,000 having book value: Rs. — Sutenentol Teale hear a 30000 sald ts 40,00. aeas Petia | surance on ineniaes ele ga pense Rs Til ezessabe Poor Yon bsvess Arun} Amount Sg. 53 ofiagal enpenssis eld poe! gst ocr . Net assessable income fom investment San | Previous yar buses is Rs 125000 n te above tee Na if ‘vi. Donation includes Rs. 20,000 given to Local Women association wt Teta taxable income ae registered ti nan and ests given Be Hooor ATT BEER svete to ROMA TS eu See Rs 40000 aa fn spot vis Let nonin Rs : stn Bey TOON et asc Ho ma ROUOS HA PU sees nao om buns pete tl taxable neo ty Patina ~ grata rama lam lt . ec haasessth ronetonmesmentraunaw, | tet 9308 one line ess Donation (5% of 616,000 + 00.000 = 920 e Rs 60000 or maximum ent Rs. 109,000) tones ean of cost oftaing 6h rot oabe nome : cles cunt Pte asl ie Ta fai alas pa} FR 400000 ‘00.00 Next RS 100,000 @ 10% 2 (220.00) _—— iad #00 1650000 te Coat aig sock : ae Less: TDS on income fom raul sauces (200.000 79.000) Deanna Tf (Beck D)= Opeing WOV + Rsaed vue of pushes | Pa ‘Deposal ate = 600000 + (300000 « 23) - 40,000 = Rs. 660,000 — : ‘iowa deecton of pat = 15% of 660000 = Rs, 9000 i ce eatin wa tay eare eo ‘Cotati of assessabie income from business of Mr. Bataelfo the previous year 7, home Parieulars [amount (ts) | Amount (s)] Notes -2: = Sn ao pat gn tt te of tad et 750,000 1 cst yo eee rg dees a eon ng 25 capi receved. - 10,000 eee Coto sn 7 [RO Sep ONT Given blows Prot and Los Recount of Ram had Conpessten caved 100000 Pariulare ‘cunt Para “arent a) Gros income ‘080000 To Ofie expres GOON | By Gras Pret 20a Les: Alovabededucon: Tesdey soon | By Exchange in 200000 Cesc ag zk arig rte) 1650000 Tondeisonent 101900 | By Canmssen zoo Sates 10,000 Torts ontoan 50.000 | By Rent om house) 0900 fee ererses ‘29000 Todenan «2,000 | By Rent tom rail Depecaen(obes) £0,000 Todepecaton 0000 | sour (re) esoan0 Depactonen il Werte) e000 ToPrison orbad ees ‘non | 8 ines 5000 pasensenent 25.000 Tore eae Tax 7000 | Bj tet Bar aed Irsrance tetris (95 000-2000) 45,00 ToRepais soow | AC 25000 Legal expenses (0% of 20.000) 10000 | _21.48000 ToGenaalResene 000 | By Later income 175,000 ‘Assessable income trom Business before previous year loss 941,000 ToOce Rent 290,000 | By Sundry income 725000 Less: Previous yeaross 125000 ToPolton contol cost soon ‘Adjusted taxable income 16,000 ToAust Fees 190,000 Less: Potion contol cost (50% of 816,000 = Rs, 408,000 or, ToMedcal ex (set) 000 KE Rs, 40000 Lower eooon| | [etre 258000 am Y 7 a ct assessable income fom busese “ant somo 00 —t600 Jf taa ounces en aston un ty 2 on a ee oy wan 2790.8 ot SPE ns 0B desis of 7 wma oe ese Reo epee sR 001 1 Riper as eae Doe ee rteet Sin one «an suse RS. om pes tes ts e750 cd ees acing len amouried R 10,000 was charged in general esa, vartlTalTabe reane Tay the rea of fit received in espa of investment Rs Required: 3. St ssn nse of future (Bock -B) = Opening WOV + Absorbed valve of purchase ‘egos waue = £0000 + (300000 « 28) N= Rs, 600,000 pate deren offre = 25% of 600,000 = Rs. 150,000 scowate pars = of 60000 = Rs. 4,000, ecu = Rs, 50,000, Lower 5.42000, Aloablerepa Calton of ssesable nome rom business of Mc Ram orth provous year Fares [Amount (Amount 7 700,000 egg no 700000 Suny comes (2500-60000 49000 125000 Cuesta cf opeig suck Now dese) noo eaccans econ 75,000 Grssincome aot Less: Alowate deduction: Oteaegerses 600.000 ra 500,000 tac Sr ca anole aan eps 00-5900) ‘a0 fee et ‘ estes bares Medical exces boas Alawar of ane (Weng aa at Alou ets (ttt) ; on Expenses gan yen 1.000 | 1912.00 va ane tenga tan el hum Bsns tates pedis yur, tee: Pron a ; pst table ever tase: Potion cel ot et basal 360) ame teres cone om inns tom ton vin: stomatal rues 005 i Gite recelved in respect of investment Oe etassessable income fom investment i Statement of Total taxatile income - Pare ‘Races Fon en ers a0 Tat Net assessable income rom instant (170.0000 25) Tota assessable income: Less: Donation [5% of (1228000 + 620.00 = 103.00 ‘Actuals. 60,00 or maximum bit 10066) Teta taxable income Caleaton ofa asi Parialrs Fests. 400000 Nox Rs. 100000 @ 10% Next Rs. 200000 @ 20% Balance 668,000 @ 30% Total Las: TDS on rent fom nau esses (00.00 ~ 82000) ‘Advance tx pid Toxpayable Notes Rent fom Foose, end set Fon FIN income ar fina inhing are 17 Sop. No 17] Mr. Mina a trader has prepared te foiowing Profit and Loss ‘Account for previous year: Parcs Ant) Paris aan) Toe expanses BOW | By Goss RORD 1500000 ToOtice rent ‘50000 | By Based recoiered 00009 To Deprecaton 7a00 | Bj Anourrece ater De ToBad debs topano | cessatonctoldbsness 2a Tolocome tax 1.00 | 8y Ovens ‘e040 ToProperty tax 20,000 | By Discount 150000 Leeceataty to sat sa000yen mon 7500 15.00 0,000 Tosiersee Tarininge’? ocean Totes on Tonetpatet Toa Ase orgy tt an 2 Fe Tax us aed by Rs. 624 cose 4 pepsin ba eared hve une SA nore asinine pr ens ceestd Toatert)asiaret om ae city Dacoxt income tom speculation. wees rnc x tl P2000 fo dg ey rot chargedin PLN ince fom Busnes fesse ame om esti acabe nc b Statement of Tota a. Taxtshity ei ten wt ome rom ivestont Antena fet ten en serpy it aseossabo Ince fromm investonnt “Ht assassabl inca fom bys et ss08eable cn am irvestnnct A790 05 ‘Total assessable income: 7 300,000] Lower nerd Calculation oft by Pars Fess 0000 Next Rs, 100000 @ 10% Next Rs. 200000 @ 20% palace 1145 000 @ 20% Total tess TDS on terest tom Prat lendr aches (eco ~243.000) Taxpayable Notes =f Dhidend and spain gan ae fal wn Particulars : Mr Uprety a trader has prepared the following proft and loss CE. sesablencome tom buss of Mt Manali for the previous ye meet Pariears Amount iS )]Amour}| "count forthe previous yet. Gos pot ene Parle ‘anon Fares | rout) Bet dts eon ey To pening Sock ‘oto | By ses ‘acre ater esa f business ToPuctases ation | by Bad deb ezvered count (15900050000) 100,000 Toeigttrward 700.00 | 8 Connissers Unde vation cost tok (Nowineased) s,o00 ToBaddebis ” 150000 | By Irerest income Gros income Bwt|| | Toca ent s0.00 | By xctnge gan tenis Abonble deco: Tobira o9 0,00 | By Conpersaton Cen eonen Fa 50900-15400) ‘sn000 ToFeeinswance penium 75.000 | By Lote ino (re) Okara “00 Toltreston Loan 25000 | By Ovcerd (nt provision or bad eis sqo00 | 8yCoseg Sox Depreciton Too00 pepe 4 “To Advanced income at 0000 cant an. To Teaveing and diy exp soon Pome : 20000 ToBonusia stat 75009 eral 120,000 ToGrahity to stat snow aoe 0000 ToLegalexpenses 200 Traveling eerses 25000 ToDonaton 131000 Consutaton es ean To Depreciation (Block) ‘940 Commission psd ae “Toletoeson Copal same Expenses for dled ete of tsi ; ToNet Prost 0 oss assets Net assessable income fombusiness a Toil ra ass