& GAINS OF

14.81
oOFITS
ROFITS BUSINESs/PROFESsiON By: CA Vijender Aggarwal
Salory pod in cash disallowed u/s 40A(D)
30 000 633.700
Inc ome u/h Business/Professien
from Other Sources
Incme
1C Polbcy matured {Assumed to be exempt u/s 10(10D)}
Honorarum for qivng iec tures of seminors
24,000
Winning at TV gome show (Rs 35 000 Rs 15 0O00)
50,.000
Inc ome u/h Other Sources
74,G00
Gross Total Income 7,07.70o
Less Deductons u/s 80C 80U
.8OC LIC Premum (10% of sum assured, ie 10. of Rs
2,00,000)
.8OC Contribution towards PPF (20,000)
80E Interest on ioan taken for (1.20.000
higher
education of daughter (10,000)
. 806 National Children Fund (100% of Donation) (51,000)
80G Charitable Trust (50% of Qualifying Amount, ie Rs 55,770)
Working Note: (27 885)
Donation Amount = Rs 1,00,000
AGTI 6TI
Deduction u/s 8OC to 80U (except 806)
7,07,700 140,000 10,000 Rs 5,57,700
-

Qualifying amount :10% of AGTI or donation whichever is less =Rs 55,770

Total Income
4,78,815
Rounded off u/s 288A 4,78,820
Computationof Tax Liability of Dr Dheeraj for AY 2021-22
Particulars Amount (Rs)
Tax on casual income of Rs 50,000 30% u/s 115BB
15,000.000
Tax on normal income of Rs 4,28,820 at slab rates
Tax before Rebate & Health & Education Cess
8,941.00
23,941.00
Less Rebate u/s 87A (12,500.00)
Tax before Health & Education Cess
11.441.00
Add Health &Education Cess 4%
Tax LiabiliTy
457.64
11,898.64
Less:TDS
(15.000.00)
Tax Refund 3,101.36
Tax Refund (Rounded off u/s 2888) 3,100.00
Note: Winnings from TV game show should be
should be deducted from tox grossed up for the chargeability u/h other sources. TDS of Rs 15.000
liability to arrive at the tax payable. Such winnings are subject to tax 30% / s 11588
Answer 62
Computation of Total Income of Mr Devansh for AY 2021-22:
Net Profit as Particulars Amount (Rs)
P&L
per AlC Amount (Rs)|
Add: Inadmissible expenses 1,3400o
Fire insurance (3/4h of Rs 10,000)
Income tax 7,500
Household expenses 27,000
Municipal taxes paid for house property (3/4h of 42 500
Rs 36,000)
Less: Eligible 27,000
expenses/ineligible incomes
Cash gifr (on the occasion of
Interest on debentures
marrioge)
(1,20,000)
Tncome under the head
Business/Profession (5,400)
1.12,60o
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14.82 PROFITS & GAINS OF BUSINESS/
PROFESSION By: CA Vijender Ag
eme u/h Heuse Preperty
ross Annual Velue
1,65,000
Less Municipal Taves
(18,000)
Net Annual vahe
1,47,000
Las Deduc ton u/'e 24(a) 30% of NAV (44,100)
Les Interest on capital berrowed u/s 24(b) Nil
Inceme from Heuse Property
of acquusition of banus shares is Nil) 1092 6
Neme trem Capitel Geins TC6 (Cost
Ieme frem Other Serces
2,20 00
Cesh 6ft (Recerved on the occasion of marrioge) Exempt
6ross interest on debentures 6,000
occount [Exempt u/s 10(15)] Nil
Interest on post offce sav1ng -1,05,000)
taxable u/s 56(2%*)(2,80,000 1,75,000
6ft
on acqursition of vacent site
Inceme u/h Other Sources
Gross Totol Income 1,81,00
6,16,300
Deduc tvon u/s 8OC (15% of Rs 3,00,000)
Total Income (45
Cemestetion of Tox Liability:
5,71,500
Particulers Amount (Rs)
Tax on Long Term Capital Gain of Rs 2,20,000 @ 20% 44,000
Tax on ANormal Income of Rs 3,51,500 at slab rates 5,075
Tax before Health & Education Cess 49,075
Add.Health &Education Cess 4% 1963
Tax Liabulity 51,038
Less:TDSs (600)
Net Tax Payable 50,438
Roundedoffu/s 2888 50,440
Answer 63
Computation of Total Income of Mr Yfor AY 2021-22:
Particulars Amount (Rs) Amount (Rs)
Net Profit as per P&L A/Mc 5,35,000
Add: Inadmissible expenses
Advance Income Tax 6,500
Depreciation on car 3,000
Medical expenses of wife 4,500
Driver's salary (1/4th being for personal use) 4,500
Repair of Car (1/4th being for personal use) 750
LSs:Ineliglbleincomes
Cush Gift from friend (25,000)
Sale of Car (17,000)
Interes on income tax refund (3,000)
Incomeu/h Business/Profession 5,09 250
Income u/h House Property:
GrossAnnual Value(Higher of Actual Rent &Expected Rent) 3,00,000
Actual Rent (Rs 25,000 x 12) Rs 3,00,000
Expected Rent Rs 2,50,000
eSs: Municipal Taxes (No amount has yet been paid by the owner hinself) Ni
Net Annual Value 3,00,000
Less: Deduction u/s 24(a)30% of NAV (90,000)
Less: Tnterest on capital borrowed u/s 24(b) (20,000)
Income from House Property 1,90,000
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 Aggarw
GAINS OF USINESs/PROFESSION By: CA V i j e n d e r

P8ORIT. ITS & G

from Other Sources:

since total gift does not exceed Rs 50,000) Exempt

s
3,000
( E x e m p t

cem grft tax refund

income
2sh
ca on
terest o n
accruing to Mr V's minor daughter 8500
t e r e s t o n c

ompany deposits
o m p a n y

available u/s 10(32

emption 11,500
Income u/h
Other Sources
7,10,750o
Gress Total Income (1,25.000)

educ
t r o nu / s AODD (Dependent son is suffering from severe disability) (10,000)
BOE
on loan taken for higher educotion of son) 5,75,750o
u/s

Deduc
tion Total Income

Tax iabilit Amount (Ps)

onof Particulars 27,650.00

5,75,
750 a t
slab rates
1,10600
4%
n
Rs
Education
Cess @ 28,756.00
&
sd
Heailth Tax Liability 22,260.00
Advance Tax of 6,500) (After Rounding off u/s 2888)
T a xP a y a b l e
le (28,756 -
income
the
Mr Y, since
minor daughter from stage acting is not
includible in the income of i n c l u d i b i e in
Mr Ys
Income received by
Notes:
Mr Y's deposits is
account of her special talent. However, interest
on compary taiet.
n
income derived from special
even though the deposit was made out of
anc
Section 64(1A), cf purchase
per
as p er
Sect The transaction
the s a m e year.
i n c o m e

where an asset is purchased and sold during set-off in future

yecs.
is available to be c/f for
nreciation would result in a short-term capital loss eligible
during the year
ef motor car

AnSwer 6 4

Total Income
Tot of Mr X for AY 2021-22: Armount (Rs) Amount (Rs)
Computa onof Particulars 30.000
Arrears salary of received from ex-employer after
eme u/h Salary:
Incon of Rs 50,000 u/'s 16(ia)
dllowing standard deduction
u/h House Property
(at Delhi): 2,40,000
Income of Actual Rent & Expected Rent)
Gross Annual Value (Higher Nil
Less: Municipal Taxes
2,40,000o
Net Annual Value (72.000)
u/s 24(a) 30% of NAV
Less:Deduction Nil
borrowed u/s 24(b)
Less: Interest on capital 1,68.00o
Income from House Property
Income u/h Business/Profession: 1,95,000
24,37,500 x 8%)
44AD (Rs
Income from retail trade in grains u/s (1,95,000)
forward business loss rela ing to AY 2019-20 of
Less: Set-off of brought loss shali be c/f)
discontinued textile business (Balance Rs 2,500 Nil
Income from Business
Income u/h Capital Gains: 2,20,000
Full value of consideration
Nil
Less: Cost of acquisition
2,20,000
Short term capital gains
business
(1,50,000)
Less: B/f unabsorbed depreciation for textile 70,000
Balance Taxable Short Term Capital Gainslease 1.12,000o
Rent from vacant site let on
COme u/h Other Sources: 3,80,00o
Gross Total Income
Less: Deduction u/s 80G (30,000)
Fund (100%)
Contribution to Prime Minister's National Relief
Contribution to Charitable Trust (50% of Qualifying Amournt) (19,000)

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 14.84 PROFITs & GAINs OF BUSINESS/PROFESSION By: CA Vijender
Working Note
Aggarwa
Donation to Charitable trust Rs 40,000
R s 3,80,000
AGTI =

GTI Deduction u/s BOC to BOU (except 806)

whichever is less
aiitying amount 10% of AGTI o r donation Rs 40,000 Rs 38,000
Lower of 10% of Rs 3,80 000 or
Total Income
3,31,000
Computation of Tox Liobility:
Particulars Amount (Rs)
Tax on Rs 3,31000 at siab rates 4,050
Less Rebate u/s 87A (4,050)
Tax Liability Nil

Answer 65
Computation of Total Inceme of Mr y for Ay 2021-22:
Particulars Amount (Rs) Anount (Rs)
Net Profit as per Income & Expenditure A/c 9,28,224
Add: Inadmissible expenses/Eligible incomes
Value of benefits received 10,500
Purchase of Car 80,000
Municipal Tax
3,000
Payment nade in cash in excess of Rs 10,000 (Sec 40A(3)
30,000
Less: Ineligible incomes/Eligible expenses
Dividend on shares
Income from Unit Trust of India
(10,524)
Honorarium received (7,600)
Rent received
(15,800)
Depreciation of car (80,000 x 15%) (Note 1) (85,600)
(12,000)
Incomeu/h Business/Profession
Lncomeu/h House Property: 9,20,200
Gross Annual Value
Les Municipal Taxes 85,600
Net Annuai Vaiue (3,000)
Less: Deduction u/s 24(a) 30% of NAV 82,600
Less: Interest on capital borrowed u/s 24(b) (24,780)
Nil
Incomefrom House Property 57,820
Income u/h Other Sources:
Dividend from Indian Company 10,524
Income from UTI
Honorarium received 7,600
15,800
Income from Other Sources
Gross Total Income
33,924
Less: Deduction u/s 80c (NSC) 10,11944
Less: Deduction u/s 80D (Not available since mediclaim (10,000)
premium paid in cash) Nil
Total Income 10,01.944
Total Income (Rounded off u/s 2888) 10,01,940
Computation of Tax Liability
Particulars Amount (Rs)
Tax on Rs 10,01,940 at siab rates 1,13,082.00
Add: Heaith &Education Cess @47% 4,523 28
Tax Liability 1.17.605.28
Rounded off u/s 288B 1.17.610.00
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PROFITS
s h GAINS
OF BUSINESss/ PROFESsION By:CA Vijender Aggarwal 1485
u w e r6 6

gtationefTo f TotolIncome of Mr Yfor AY 2021-22:

Particulars Amount (Rs) Amount (R)
Ieme
headABusiness/Profession
nder theP&L /
as per 11,20.000
profit
et Income/Ineligible Expenses
Eligible
Add.
Cor used for personal purpose (Rs 78,000 x 1/4) 19,500
Under valuation of closing stock 12,000
disallowed u/s 40A(2)
Salary 2,500
55,000 Rs 50,000)
Depreciation (Rs 5,000
-

Drawing 10,000
.Irnvestment in NSC 15,000
IncligibleIncome/Eligible Expenses
s:
Dividend from units of UTI (22,000)
Interest on debentures
(17 500)
.Winningfrom races
(15,000)
.Under valuation of opening stock (8,000)
Business Income 11,21,500
Sources
under the head Other
Income.Dividend from units of UTI 22,000
Interest on debentures 17.500
.Winning from Races 15,000
Income from OtherSources 54,500
Gross Total Income 11,76,000
Less: Deduction u/s 8OC (Investment in NSc) (15,000)
Total Income 11.61,000

Answer 67

Conputation ofTotal Income of Mr Gurumoorthy for AY 2021-22: Amount(Rs) Amount (Rs)

Particulars
as per Income& Expenditure A/c 2,92,500
Net Profit
Add: Inadmissible expenses
Rent for his residential accommodation 36,000
.Municipal tax paid relating to residential house included in administrative expenses 9,000
Less: Ineligible income/eligible expernses
(54,000)
Rent received
Dividend on shares from Indian Companies (27,000)
Winning from lotery (net of TDS) (35,000)
Income tax refund (16,500)
Depreciation on clinical equipment (15% of Rs 4.5 lakhs+7.5% of Rs 1 akh) (75,000)
Income under the head Business/Profession 1,30,000
Incomeu/h House Property:
Gross Annual Value 54,000
Less: Municipal Taxes (9,000)
Net Annual Value 45,000
Less:Deduction u/s 24(a) 30% of NAV (13,500)
Less Interest on capital borrowed u/s 24(b) Nil

Income from HouseProperty 31.500

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 By: CA Vijender Aggar
14.86 ROFITS & GAINS OF BUSINESss/PROFESSIO

Income u/h OtherSources: 27,000

Dividend from Indian Company 1,500
Interest on income tax refund 50,000
Winnings from lottery (Rs 35,000 Rs 15,000)
Income from Other Sources
78,500
Gross Total Encomne

for full time

education of his Son)
2,40,000
Deduction u/s 80C (Tuition fees paid to university
80E (Interest on loan taken for higher
education of his daughter) (60,000)
S Deduction u/s Total (65000)
Computation of Tax Liability:
1.15,000
Amount (Rs)
Particuiars 15,000
Tax on Rs 50,000 30% u/s 115BB
Tax on normal income of Rs 65,000 at slab rates Nil
(12,500)
Less: Rebateu/s 87A 2,500
Tax after rebate
Add: Health &Education Cess 4% 100
Tax Payable 2,600
Less: TDS on winnings from lottery (15,000)
TaxRefund 12,400
otes:
The principal amount received towards income tax refund will be exciuded from
computation of total income. rest
received will be taxed u/h other sources
Winnings from lottery should be grossed up for computing the total income. While computing tax liability, TDS of
Rs 15,000 should be deducted to arrive at the tax payable.

Answer 68
Particulars Amount(Rs) Amount (Rs)
Income u/h Business/ Profession:
.Income from wholesale trade in furniture
4,00,000
Less: Loss from automobile business (current year)
(1,10,000)
Less: B/f loss relating to discontinued textile business (PY
2016-17) (2,00,000)
Net income from wholesale trade in furniture
90,000
Income from Speculation Business 1,10,000
Less: B/f loss from speculation business related to cotton
(50,000)
Net income from speculation business 60,000
Notes:
Total Income 1,50,000
Tf fhe assessee
opts for presumptive taxation scheme u/s 44AD in
(inciuding depreciation) would be deemed to have been respect of any business, then deductions uls 30 to 30
given full effect to and no further deduction under those
would be ailowable.
Therefore, where the unabsorbed depreciation relates to the business in sectio
respect of which
presumptive basis u/s 44AD, then, such unabsorbed depreciation is deemed to have beenincome
been determined on a
effect fo while determining the
presumptive income. Hence, no further deduction would be available in given
of siucn
respect
unabsorbed depreciation.
ST
capital loss of Rs 70,000 on sale of vacant site during Ay 2021-22 to be c/f for 8
years starting from AY
2022-4

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PROFTTS& GAINS OF BUSINESS/PROFESSION
GAIN 14.87
pROFITS By: CA Vijender Aggarwal
Answer69

Compuitaticn
ofTote
afTotal Income of MrK for Ay 2021-22:
Particulars Amount (Rs) Amount
(Rs)
n eu / h B u s i n e s s / P r o f e s s i o n :

Lncome fromown usiness:

as per books
profit 5,60,000
Net
Depreciation as per books
add: isallowance of munic 34,000
nicipai taxes paid for the
second half-year u/s 438, since the 3,500
Add:
ne was paid
same
af ter the due date of filing of return

Add:
nisnllowance u/s 40A(3) for salary
exceeding Rs 10,000 paid in cash 21,000
o% of car expenses for personal use
Add: 8,000
esS: Depreciation allowable (Note 1) (86.400)5,40,100
from firm: Intere on capital from partnership firm
1,20,000
n t is includible as businesS income in the hands of the partner only to the extent
wed as deduction in the hands of the firm. Interest upto 12% p.a. is allowable
s de
tion to the firm. Therefore, interest 12% p.a. amounting to Rs
1,20,000
dd
would
be treated as the business income of Mr K. It has also been assumed that the

interesi
pst on capital has been authorized under the Partnership Deed)
Sources:
Incomeu/h Other
.Interest on bank fixed deposit (Gross)
15,000
. Interest on income tax refund 2,300 17,300
Gross Total Income 6,77,400
Less: Deduction u/s 80c (LTC premium paid for major son) (60,000)
LeSs Deduction u/s 80C(Amount credited to PPF in the name of his wife) (70,000)
Less: Deduction u/s 80TTB (Interest on barnk fixed deposit) (15,000)
Total Income 5,32,400
Note 1: Depreciation allowable underthe IncomeTax Act, 1961:
Opening WDv Rate Depreciation
Block1 Computers Rs1,20,000 40% Rs 48,000
,Motor Car (80% used for business Rs 38,400
Block 2 Rs 3,20,000 15%
and207, used for personal purposes) (Rs 3,20,000* 15%* 80%)
Total Depreciation for PY 2020-21 Rs 86,400
Answer 70
Computation of Total Income of Mr Xfor AY 2021-22:
Particulars Amount (Rs) Amount (Rs)
Income u/h Business/Profession:
Fees from professional services
9,38,000
Less: Eligible Expenses
Staff salary, bonus andstipend (1,50,000)
Other administrative expenses (48,000)
Office rent (30,000)
Motor car maintenance (10,000 x 4/5) (8,000)
Car loan interest
(not allowable since the same has not been paid till the Nil
last date of
filing return of income)
Depreciation on motor(Rs 4,25,000 x 15% xix4/5)
car

Depreciation on books being annual publications 40% (25,500)

Depreciation on furniture and fittings 10% of Rs 60,000 (8,000)
Depreciation on Plant & machinery15% of Rs 80,000 (6,000)
Depreciction on computer 40% of Rs 50,000 (12,000)
Depreciation on computer (new) Rs 30 000 40x 50%]_ (20,000)
(6 00
 14.88 xOPTTS & GAINS OF BUSINESs/PROFESSION By: CA Vijender Agga
Business Income 6,24 500garwa
ceme u/h hHese Prepecty
Sifecuggd Hass Nil
Gross Annual Value
Les: Deduc thon u/s 24(a) 30% of NAV Nil
Rs 44.000
Interest on capital bornrowed u/s 24(b)
(50% of 88.000 =
(30,000)
but limuted to Rs 30.000)
Loss from self-occupred Property (30,000)
LeTet Rrogerty
Gross Annual Value 60,000
Less Muncipal Tax Nil
Net Annuai Value 60,000
NAV
Less: Deduction u/s 24(a) 30% of (18,000)
Less: Interest on copi tal bornrewed u/s 24(b) (44,000)
Loss from let out house property (2,000)
Total less from house property
Gross Total Income
(32,000)
Less: Deduction u/s 80c
5,92,500
Housing loan pruncipal repayment
PPF subscription (1,00,000)
Life insurance premium (20.000)
Less: Deduction u/s 80Ð (medical insurance premium paid) (24,000)
(18,000)
Total Income
4,30,500
Compurtation of Tax Liability:
Particulars Amount (Rs)
Tax on Rs 4,30,500 at slab rates 9,025
Less:Rebate u/s 87A (9,025)
Tax Liability Nil

Answer 71
Computation of Total Income of Dr Roopa for AY 2021-22:
Particulars Amount (Rs) Amount (Rs)
Income u/h Business/Profession:
Business Receipts: Sale of medicine
2,50,000
Consultation fees
50,000
Visiting fee
2,00,000
Less: Business Expenses
Purchase of medicines (47,000)
Medical journal
(5,000)
Depreciation on surgical instrument (15% of Rs 50,000)
(7.500)
Depreciation on motor car [(15% of Rs 4,00,000) x 3/4]
(45,000)
Motor car expenses (50,000 x 3/4)
(37,500)
Interest on loan taken for motor car (18,000 x 3/4)
(13,500)
Interest on housing loan (60,000 x 1/4)
(15,000)
Business Income 3,29,500
Income u/h House Property:
Net Annual Value
Nil
Less: Deduction u/s 24(a) 30% of NAV
Less: Interest on capitai borrowed u/s 24(b) (Rs 45,000, being 3/4th of Rs 60,000
Ni
(30 000)
but limited to Rs 30,000)
Loss from self-occupied house property (30,000)
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