Problem 19

R is employed on part time basis with two employers, R Ltd., and G Ltd. From the following particulars, comp ute his
income under the head salary for the assessment year 2022-23.
Particulars R Ltd., G Ltd..
Basic salary 15,000 p.m. 5,000 p.m.
D.A 1,000 p.m. 20%
forming part
of salary
 19
300 p.m.
Medical allowance
Medical reimbursement 20,000
HRA 1,000 p.m.
1.8.1997
Date of joining 1.10.2002
16.11.2021
Effective date of retirement 16.11.2021
2,50,000
Gratuity reccived 1,20,000
Leave encashment 1,80,000 90,000
He tled to 40 days leave for each completed year of service from R Ltd., and availed 600 days leave during the
tenure of his service. Whercas he year of service Irom ( Ltd., and
was entitled to 25 days leave for each completed availed
only 25 days leave during his tenure.
GLtd.. provided free unfurnished accommodation in Delhi to R duringhis service with T he house
a rent
the company. is
oWned by the employer and its fair rental value is 10,000 p.m.
Compute his inconme underthe head salary for the assessment year 2022-23. Assume R:
Problem8
his gross total income for the
From the following profit and loss account of R for the year ending 31.3.2022, compute
assessment year 2022-23. Assume he has not opted for presumptive income under section 44AD as his income romousIn
is less than 8% of turnover:
P and L A/c for the year ending 31.3.2022

Opening stock 4,00,000 Sales 80,00,000

Purchases 66,00,000 Closing stock 4,80,000
Salaries 8,00,000 Rent from house property 80,000
Rent rates and taxes 1,20,000 Dividends from an Indian co. 9,000
Legal charges 40,000
Miscellaneous expenses. 20,000
Reserve for bad debts 30,000
Provision for gratuity 20,000
Provision for income-tax 40,000
10
Mrs. R
Salaryto 36,000
Depreciation
40,000
Office expenses
3,000
Net profits
4,20,000
85,69,000
85,69,000
Additional information:

1. Purchases includes R1,00,000 paid in cash to a cultivator for purchase of agricultural produce.
take the
2 Purchases also includes 10,000 paid by way of compensation paid to a supplier as the assessee
delivery of goods due to lack of storage space and finances.
was unable to

3. Opening stock was over-valued by 25% and closing stock was under-valued by 25%.
3
4 Salary includes R15,000 paid as customary bonus over and above the bonus payable under Bonus ACt.
taxes 10r
5. Rent rates and taxes include R10,000 on account of disputed VAT demand, R3,000 on account of municipal
property let out. It also includes 5.000 as customs penalty paid during year. the
6. An amount of R20,000 from a customer was written off from the reserve for bad debts.
retired created for the same this
7. An employee on 28.3.2022. Gratuity payable to him was z20,000. A provision was

year and it was paid on 2.4.2022.

8. Mrs. R is a Law graduate and actively working in the assessee's firm.
Colution
 Problemn9
R who does not want to opt for presumptive income under section 44AD furnishes the following Trading,
ng, Profit
Profit and
Loss Account for the
previous year ending 31.3.2022.

To Stock 2,40,000 By Sales

79,76,900
" Purchases 72,60,000" Stock 4,60,000
|" Freight and duty 50,000
" Manufacturing wages
1,20,000
"Rent, rates and taxes 45,000
" Depreciation

48,000
" Gross Profit 6,73,900
84,36,900 84,36,900
" Ofice saiaries
66,000 " Gross profit b/d
6,73,900
"
Interest on capital 12,000 " Rent of staff quarters 19,000
" Bad debts
9,000 Refund of income tax penalty 1,100
|" Income-tax 11,000" Sale price of an old machinery 25,000
"

Expenses of income-tax proceedings 16,000 " Recovery of bad debts, not allowed to be 6,000
deducted in earlier years
| " Diwali expenses
3,000 Sundry receipts 35,000
" Legal expenses 6,000
" Medical expenses of the proprietor
in the Govt. Hospital 11,000|
" Staff welfare expenses 4,000
" Repairs of staff quarters 11,000
" Telephone expenses 15,000
"Bonus payable to employees 30,000
" Provision for taxes:
" GST
40,000
"Municipal taxes for staff quarters 14,000

"Generalreserve 11,000

" Entertainment expenses 11,000

" N e t profit 4,90,000
7,60,000 7,60,000|
You are required to compute the taxable profits from business after taking the following into consideration:
Purchases include a purchase of R28,000, whose payment was made by a crossed cheque.
(i) Office salaries include 18,000 paid to the proprietor business.
ofthe
(iii) Diwali expenses include gifts of 71,500 made to relatives.
(iv) The written down value of the block consisting of machinery as on 1.4.2020 is T80,000.
(v)The written down value of the block consisting of factory building as on 1.4.2021 R1,20,000. An addition was made
to building on 1.8.2021 at a cost of R40,000. The newly added building was destroyed by fire and the insurance
company paid R41,000 as insurance compensation.
(vi) GST, amounting to R30,000 was paid on 25.6.2022.
(vi) Municipal tax were due on 31.3.2022.
Problem 4 51,000
Shri Ravindra furnishes the following
particulars of his income for the financial year ending 31.3.2022:
() Dividends in September, 2021 from UTI R2,000
Dividends received in July, 2021 from Assam Tea Co. Ltd.,
3,600 (60% of income of the company is agricultural
income)
(ii) Amount received on 1.12.2021 in connection with winning from a horse race 5,600.
(iv) Amount received on 1.12.2021 in connection with winning from lottery 28,000. Cost of lottery tickets purchased
2,000.
() Directors fees received in August, 2021 R20,000
(vi) He has rented a residence of 3250 per month. Half portion of this house was sub-let on amonthly rent of 250 p.m.
Compute his taxable income for the assessment year 2022-23.
 Problem5 assessment year 2022-23
from other sources for the
the following particulars submitted by R, compute his income
From

Director's meeting fees received from Y Ltd. 3,000

10,000
Agricultural income from land situated in India
Agricultural income from Nepal 15,000
Interest:
(a) from bank on FDR (Net) 43,200
600
(6) on post office saving account
1,200
(c) on Government securities
(d) on Public Provident Fund a/e 4,000

(e) on National Savings Certificate VIII issue 3,000

Dividend from A Limited declared on 25.8.2021 (gross) 8,000
Lottery prize received after T.D.S. 28,000
Rent from sub-letting of a flat 12,000
(rent paid to landlord for the flat is ~6,000)
Solution