Sl.· No. o/ Ques.

Paper : 1214 IC
Unique Paper Code : 22413304
,t ·
,._ M~e of Paper . _ : Personal Tax Planning
Name of Course : B.Com. (H) : SEC
Semester : III

J '
~Duration
Maximum Marks
: 3 hours
: 75

(Write your Roll No. on the top immediately

on receipt ofthis question paper.)

Nqm :- ..Answers may be -Written either in E_nglish or in Hindi;

but the same medium should be _used throughout ·
the paper.

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Attempf all questions.

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What do you mean by Tax ~i~~? Explain differences
- \_,.....__ .....
.· between Tax Avoidan9e and Tax Evasion with the help.of
. . .':

a suitable example. _
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~ - Arun of23 y~ars is a foreign citizen. He is employed

in Mauritius. During April 1, 2013 and March 31, 2017, he
was·in India for more than 365 days. He wanted to visit
India during the calender year 2017-18 for 290 days. He
had already visited Kolkata from 15th May 2017 to 14th
September·2017. For how·many days maximum he should
stay in India during the previous year 2017-18 so that his
~ liability is minimum?
. .
23 ~ -~ ~ ~~~ .:w1Ri:h t- 1 ~ 'ff{\~m -q
cfil4{d i-1 1-4-2013 ~ 31-3-2017 '6 ffl qg- cqmr-q 365
~~~WI~ ffi{71°s< cl"6f 2017-18 -q 1,ffif 290
~~ ~ c6 ~ -aTRT· illt;dl t I ~ 15-5-2017 ~
14-9-2011 oc6 chl~ch1ai ~ ~ t-1 ~ fcba~ ~
~ ijq) 1lRo -q ~ fJ!ijt\ ~ cl"6f 201.7-18 c6 ~ '3(-f?bl
cfi{attal Pf9aq m? 7
Or(~) .
·@ having status ofnon-residentbeneficial or is itbeneficial
Is
· to have status of a resident, if an assessee has income
majorly from abroad. Justify your answer by giving a
' .

suitable example.
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® How will tax liability will be calculated ifan Individual has : ·
1214 - . .2 .
 Case I : Agricultural income of Rs. 5,00,000 and income
from other sources as Rs. 6,60,000
Case 2 : Agricultural income of Rs. 4,500 and Income
( ~ - from other sources of Rs. 5,00,000
cfi{~<Hil ~ ~ lffe@" ~ \Jua,fi ~ ~ ~Fcki c6t' :
M" 1 : ~ ~ 5,00_,000 ffl t- ~ 3R mar ~
3mi 6,60,0~0__ffl ~ I
· ,..,L · M- 2 = ~ ~ 4,soo m hfR i3f'lr mart ~
~-·.U / __ 5,00,000
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~ -Y is offered an employment by a company in Delhi with .
the follo~ing two alternative packages : / · ,\I ~.,,,r,
Particulars • . _Offer I Offer/I _
Basic Salary 6,00,(XX) 6,00,000
D.A. · . 3,64,CXX> - -3,00,000
. Bonus 90,000 90,000 .
Hostel Allowance for one child · 15000
'
Cost ofeducation ofa·child fu a
· school nm by einployer . 15,000 _

lff. -
_·1 House Rent Allowance
-· ·- 1,20,000
I'j
(rent payable 1,00,000 p.a) _
Rent Free Acconnno dation Owned by Employer
. ...
-
' . '

MedicalAl lowan ce ._· .20,000

Reimbursement ofmedical Bills 20,000
Hire charges of furniture 10,000
Suggest Mr. Y, which option is more beneficial fo~-him.
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6,00,f1JJ 6,00,(XX)
3,64,f1JJ 3,00,(XX)
. ro,<XX> ~,(XX)
m;ra 15,(XX)
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~~~~~ch'r-~~ -A, ~ 15,<XX>
mu m
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f;f <ilcfdT tt (QI Q

lJm fc6{14T ~ (fch{I~

1,20,(XX)
!!;Jkti'l 1,00,000 qffercf;) . - ·
fch{l41 ~~ . f;f<i}c@T c6T ~lf&i(tl
20,000
Rlfchttt14 ~
20,000
Rlfchffil4 ~
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What are the tax planning devices available_to .an employee
with respect to the following benefits under _t~e Income Tax
Act? Discuss the following:
(a) Education (b) Food
.(c) Transportation
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(a) fmrr (b) 1ffl-
. (c) 4ial41d . . _ _ _ __ _ is

3. ~ Mr. Amar works in an IT comp311y,~He puri:hased a house

_ property in Bengaluru for Rs. 30,00,000 on 0 1.07.2017.
1214 4
l I He .purchased this property jointly with ~smother. Mr.
Amar has taken
. .
a loan ofRs. 25 lakhs@ 10% p.a. on 30
· June 2017 and his mother is a co-borrower in this loan. His
·parents live in this house.currently. Mr. Amar has income
~om salary of Rs.18,00,000 p.a. He also has income .from
in~ st on securities of Rs. 50,000. Suggest Mr. Amar as

.,.,
. -~
. to how he can reduce his tax liability.
t
'3tiR ~ t:f q,..q;ft -q c614{d I~ l-7-2017 .c61' 4~1Ri~
. ~ I'- -q .30,00,000 ffl' -q .'Ctcn 'lc6H . tlitfftd <9f1Gdi t.1~ .
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~ . ~ ·~ ~ 25,00,000 c6T ~ _10% IDij' ~ lR
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1I . - -c6t -~ -« ~ 1s,oo,ooo IDij' qlSf i" r S1Rl\fa4f -«-~
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~ ~ 50,000 .c6t'·3Wf ,fl' i° I §$tl~q ctl" ~ - ~
c6{~4dl c61' ~ c6'I' en{ tlcbdl i° I
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@ xplain die tax treatment of Interest on boITOwed capital
in case of self-occupied property.
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Mr. Rishabh has two house properties which he uses for.his
residential p!JIPOses: Ll O · S l ,0
Particulars House I House II
Municipal value . 50,000 70,000
FRV 60,000 80,000
. Standard Rent 70,000 94,000
1214 5 P.T.O.
 Municipal Taxes 4,000
6,00o
Expenses on repairs 2,000
4,00o
Insurance premium 1,000 2,50()
Year in which loan taken for purchase
of house 1998 . 2004
Interest on loan paid during the previous
, year 2017-18 45,000 ro,ooo
Advise Mr. Rishabh how he can plan his tax liability.
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.flR' Pti1tfl4 c6lr,a . so,ooo 10,000 .
FRY ....__ ro,ooo so,ooo
gq1ftla fcb,(141 10,000 94,ooo
';flR Pt4i'i ~ 4,000 6,000
¥Hutd ti( cZl<f . 2,000 4,000
'iftirr
sflft14r, ~... 1,000 2,500
~ qfif qq:;1'1 &ftGq cS ~ :ft1JT ~ 1998 2004
. ~ qtf 2017-18 cS ~ :llUT ti(
~ 34-ii4 I . 45,000 (>0,000
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4. @)Mr. ~ I has been earning profit of Rs. 20,00,000 in~
year from his telecommunication business. He is thinking
of buying a new plant for Rs. 6,00,000. He can either use .
his own money or borrow from bank at 12% rate ofinterest.
1214 6
 If he uses.his own money, he will lose i~terest @ 9% p.a.
which he would have got by depositing in the bank. Asswne ·
appl_icable ~ rate to be 30%. Suggest the following :
(i) Whether he should use his own money or borrow
money from bank? State along with reason.
(ii) By which date he shouid pW'Chase the plant and install
it? Will it make any difference ifhe purchases the asset
in the previous year but does not install it?
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~ \H1·~1< oQiql( c6'wl' 20,00,000 mer~~
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ffl i I ~ 6,00,000 .m' -q ~ ;m fl'-49?1 @~Gq ~

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~ ~ 12% 'i!:1F11' 'R ';[Of~ tlcfidl t I ~ ~ ~ ~
ffl c6«IT i ffl '3tlcfil 9% ~ cftf iQ'Fif ~ 'fflf.r i~
~ fq~dl i°~-q~~'RI Sl41~ c:6t~~ 30%
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·~ Discuss the proyisions relating to taxabiHty of inco~
way of gifts of money, immovable property and movable
property.
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1214 1 P.T.O.
I Or (af'ffl)
/i~~ r. Zubin, a retail trader gives the following
Tradin g and
st March,
v and Loss Account for the year ended 31
~: fit
2018:
Rs. Particulars Rs.
Particulars
Sa lar y 20,000 Gross Profit 4,50,00()

Rent and Rates 45,000 • Other receipts -50,00()

Printing exp~ses 15,000

Depreciation 1,20,000
Interest on Joan 1,50,000
Property tax 30,000
General Expenses 10,000
Net Profit 1,10,000
. 5,00,000 5,00,000
brother, which is
(i) Salaiy includes Rs. 10,000 paid to his
.
unreasonable to the extent of Rs. 2,000
(ii) The whole amowtt ofprinting wa
s paid in cash by way
of one tjine payment.
(iiI) Rent an d rates includes sales
tax liability ofRs. 3,400
paid,on 07.04.2018. •.

. 2,000 paid as
(iv) Other general expenses include Rs
· donation to a Public Charitable Trust.
2017 -2 01 8 is Rs.
(v). His turnover for the previous year
_payee cheque.
1.10 crore, received _by way of~ccount
ether he can opt
You are re_quired to advise Mr. Zubin wh
44AD and if so,
for pre.sumptive taxa_tion under s.ection .

to declare income
whether it would be beneficial for him
ole ofthe amount
as per section 44AD. Assume that the wh
yee cheque during
of turnover is received by ·acc.ount pa
the previous year.
1214 8
 ~ ~ c4Nltl ftro ~ 31 ~, 2018 q;)' "8tfl~ qtf
q;r ~ c-4141Rq; fflffl' -qct ~-~ mor w i' =

fclq(Ui · ~o fclq(UI ~o

ffl 20,000 tlchcl ~ 4,50,000

~ cf 14,{i~I 45,000 ~ g,~4f 50,000
~~ 15,000
. 'l.ef4~1tf 1,20,000
:ftUT ~~ 1,50,000
t1AtRd c.$:r. 30,000
tll'U~ ~ 10·000
'
f.lqcl mif . 1,10,000
. .· · . . · :5,00,000 5,00,000
.(i) ~ ~ - ~ ~ -cb1" ~ 10,000 ffl ~fat~a ~
· \Jiff&, 2,000 .ffl· q;- Rl©R W6 ~~d ~,
(ii)_ IDl1l c6t ~ ~ ~ ft ~ -l{cb~!to !!Jldi~ -q
(iii) Pb<,41 cf G\ -q .Pcl~4 ~ -~ 3,400· ffl efatRia
. t '11T 7-4-2018 .cb1" ,!!JidH. ~ ~ _ll{ I . ·
li"lfef_~ cb1" ~
.(iv)~ _tfl'tl;.J.I · ~ - ~ fl_l4Ziirlc:{> .,_
' __. -ey;r· 2,000 ffl° ttfnl~a . ,i-J -': .. . .
~ .m
.

(v) -~ ~-2017-18 ~ \1.ttctl ._ 1.1,.0_ amRf-~'111"

~ . &m -~ g'3lf 1.- .
'3114.$1 , ~p ~ ~ tlcll€i. tft,~ ~J~-.:~ cIT ,~ 44AD
. -q ~ljitiPlch 41<1<19°1 - ~ ~~(tq,., ~J.} ~ ~ -mm
. ~ 44.Af) c6" ~j~q ~ • •
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(3 niscw;s the pi-9vi~i~ns, rei\ltini to. ~~bili ty of inc6'ii e

by way of int~res t on- s~curit ie.s and.- ~i_n ntng from
lotteries. ·
1214 9 P.T.O.
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5. (a) Is purchase or construction of residential house property

one of the effective tax planning tools to reduce tax on
capital gains? Explain the cases and also the difference in
the method of claiming exemption.
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· . 3RR ,i) ~l'!ii!Wl! I . · • . ·. . . . G,
~ finn i~ engaged in agricultural itctivities. They have '
urban agncultural land. The land has been used by the
---
finn for cultivation since 2008-09. The firm purchased the ·
land for Rs. 2,00,000 in July, 2007. Both the.partners agreed .
. .

to sell the Land for Rs._30,00,000 on 15th November, 2017. ·

In order to claim exemption under section 54B, they agree ·
to buy new agricultural land for Rs~25,00,000 on 20th Feb, ·
2018. Can theyreduce·theirCapital Gain? If yes, by how
-much amount? Suggest how they could have planned their
(;;\ activity from beginning with regard to fonn oforganisation
\_Jf to sa~e their capital ~in tax. The Cn of the year 2007-08
is 129 and of2017-181s 272. -
AB q;if ~ ~ 1T ~ t' I ~ mf mfr ~
~ ! ,-~ ~ ~ q;i:f ~ 2oos-2009~t mfr-~ q,'l- i" r
-q;tf ~ ~ q;)- ~ 2007 ~ 2,00,000 .lf -€1~&1 ~ I q;if
~GRl't11it&I{ ~q)f 30,00,000 ffl°1l I5-U-2017 q;]"
ffl q;)- liFr ~ I '{9Us 54B -q ~ °AA t ~ 20 q;{c,fl,
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I 20IS q;)- ~
~ ~ ~ ~ 25,00,000 m if ©ftG~ cfiT
~I ~ "ITT ~ I ~ B9icf,"f ~ ~ -q;ir mJil~'II? ~ tf,
oT Pha~ ~? "fl$il~q- ~ g1<&-1J ~ tf ~ ~ cfrt ~
~ill~ ~ fmr ~ t14ic3.f ~ g l<qq ~ e~P£ta 31q;ft
on 4,14c:11g) q;r Pt41Zit.f ~ ~ ttcbd ~ I qff 2007-08 c6T
ID CII 129 t~ -2017-1 8 coT 2721 7
· Or (31'4cU).
y{Discuss whether the following are tax planning or tax
ff j evasion tools : .
?
(i) The seller of capital asset shows lesser value than the
f I
actual price for which asset is sold.
) (ii) The taxpay er choose s the higher of the two costs:
actual cost of purcha se/cons tructio n or fair market
value as on 1.4.2001 in respect of assets purcha sed
before 1st April, 2001. ..
~e
· . (iii) taxp~y er avails .any of the two options in case of
listed securit ies (1} 10% rate of tax withou t indexa tion
and 20% rate of tax with indexation. ·
(iv) Mr. A gets bill of higher amoun t made than the actual
·cost of capital asset to reduce the taxable c~pital gain.
(v) Mr~ X sells his depreci able assets after using for more@
· t ~ _15 years and treats the, gain as long term capita /
~- . . .. . . .

f4ail91 ctl·Piq fc1; ~~C O\. Pi4'Zit~ i zj ~ Ciii~i er;

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(i) ~ e~Ra $1" f4~a, ei:qf«i _cfIT _c:11«1f4ch ?6tf ~

~ c6li R@1a1 i - .
(ii) cb<Glcil {rll~,a c6 G);rr a{)cbl 'ij ~ lis~i1 ~ :g;icil t-: ,
~ ~ Pilifol ctl" cll(klfclcb ·{11~,a ~ -'3~ci csll'1il(
~ i-4-2001 cfi1" ~ e~Ra4'" er;~ m1-4-2001
~ m- ~~~I
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fclq,ti<J m1T ~ : ~J)cf;{Uf t ~ cR tf>I G{ 10% (JT

I c6 mtf en{ ~ ~ 20%
ft
~~ q,(O m
cS
{iv) A <i,{<il•<ll if_oflr m"f <fit .;,,(f;ft~ iif:;lt _ffflt
ijAt~ ch'l' ctt«i~cn ml@' t1 3f en q;r ,~~ ~

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~ Mr. X has the following assets :
~cular s Date of Rs.(Cost) Sale Price Date of
purchase Sale
Gold 15.71012 1,50,<XX> 8,40,<XX> 12.5.17
Debentures 9.51006 60,000 1,20,CXX) . 7.9.17
Listed Shares . 3.8.14 1,20,<XX>_ 8,00,CXX) 31.91017
Find out the capital gain and suggest how he can plan his
. sales to reduce the tax burden. The CII of the year 2006-
07 is 122, 2012-13 is 200, 2014-15 is 240 and 2017-18 is
272.
X ~ ~ 6ittfffl4i ~ :
' fclq(GI ffi'lf c€t' fflt@' [44,4 -~ c6t'
fafir (~o) ~ ~
.n 15.11012 1,so,000 - s,40,ooo 12.s.11
:tt0 1q:1 _ 9.51006 60,000 · 1,20,000 7.9.17 .
~ ~ 3.8.14 . 1,20,000 8,00,CXX) 31.91017
~ ~ Plchl~q ~ @l~q FS t«
X ffl ~ -cfil
Pl41Pla ~ ~ q;r «qR q;q 'q;'{, 6chdl ~ 1 qff 2006-07
. q;r CII 122 t, 2012-13 q;r 200, 2014-15 q;r 240 ~ _
· 2017-18q; f272t1 8

1214 - 2400