1) Dr. Niranjana, a resident individual, aged 60 years is operating a clinic.

Her income and

Expenditure Account for the year ending March 31st, 2022 is as under:
Expenditure Rs. Income Rs.
By Consultation and Medical
To Medicine consumed 5,38,400 58,85,850
charges
By Income tax refund(principal
To Staff salary 13,80,000 5.450
Rs.5,000, interest Rs.450)
To Clinic consumables 1,10,000 By Dividend from units of UTI 10,500
By Winning from game show on
To Administrative expenses 2,55,000 35,000
T.V (net of TDS of Rs.15,000)
To Rent paid 90,000 By Rent 1,27,000
To Amount paid to scientific
research association approved 1,50,000
under section 35
Net profit 34,40,000
59,63,800 59,63,800

 Rent paid includes Rs.30,000 paid by cheque towards rent for her residential house in
surat.
 The opening WDV of Clinic equipments is Rs. 3,88,000; Computer and printer Rs.
84,000 and motor car Rs. 11,80,000/- 25% of usage of car is attributable for personal use
 Rent received relates to property situated at surat, the Municipal value of which is Rs.
1,30,000. The municipal tax of Rs. 2,000, paid in December 2021, has been included in
“administrative expenses”.
 She works as as part time employee for 2 hrs daily and received salary of Rs.27,500 p.m
from “full cure Hospital” which has not been included in the “consultation and medical
charges”
 She as Fixed deposits in Indian Bank on which interest accrued during the year is Rs.
1,48,000. This interest is not received by her and the bank as deducted TDS of 10% on
such interest accrued
 During the year she sold listed securties of BM Ltd and the computed long term capital
loss is Rs. 4,58,000. She also had computed short term capital gain of Rs. 1,20,000/- on
sale of listed shares
 Dr. Niranjana a availed a loan of Rs. 5,50,000 from a bank for higher education of her
daughter. She repaid principal of Rs.1,00,000, and interest thereon Rs. 55,000 during the
year 2021-22
 She paid Rs.1,90,000 as tuition fee to the university for full time education for her son.
 An amount of Rs. 28,000 has also been paid by cheque on 27th March,2022 for her
medical insurance premium.

From the above compute the total income, tax liability and net tax payable of Dr Niranjana for
the AY 2022-23

2) Mr. Zack , aged 35 Years , is a Certified Public Accountant in practice. He maintains his
accounts on cash basis. His income and expenditure account for the year ended March
31,2022 reads as follows
Expenditure Amt(Rs)Income Amount (Rs)
Salary to staff 550,000Fees earned:
Stipend to articled assistants 2,37,000Audit fee 798,000
Incentives to articled students 3,000Taxation services 540,300
Office rent 24,000Consultancy 270,000
Dividend on shares of Indian
Printing and stationary 22,000 12,10,524
Companies( Gross)
Meeting, seminars and
31,600Income from UTI 7,600
conferences
Honorarium received from various
Purchase of car on 01.12.21 3,80,000 institutions for valuation of answer 15,800
scripts
Repairs and maintenance of Rent received from residential flat let
4,000 85,600
car out
Travelling expenses 35,000
Municipal tax paid in respect
3,000
of house property
Net profit 16,38,224
Total 29,27,824 29,27,824
Other information

 Allowable rate of depreciation on motor car is 15%

 Value of benefits received from clients in the course of profession not included above is Rs.
100,500
 Incentives to training assistants represent amount paid for two articled assistants for passing
CPA Inter examination at first attempt
 Salary include Rs. 30,000 to a computer specialist in cash for assisting Mr. Z in one professional
assignments
 He as Fixed deposits in Indian Bank on which interest accrued during the year is Rs. 1,48,000.
This interest is not received by him and the bank as deducted TDS of 10% on such interest
accrued
 During the year he sold a residential house for Rs. 18,00,000/- and the computed long term
capital gain from same is Rs. 1,30,000/-. He also had computed long term gain of Rs. 4,88,000
on sale of listed shares.
 He purchased one lottery ticket for Rs. 12,000/- and won 2,00,000 as prize money, but received
1,40,000/- after TDS.
 The following payments were effected by him during the year:
 LIP of Rs.20,000 on his life and Rs.12,000 for his son aged 22
 Tution fee of his son Rs. 92,000
 Medical premium of Rs. 26,000 covering himself and his family
 Compute the taxable professional income of Zack with reasoning of applicable legal provisions,
the Total income of Mr Zack and the net tax payable by Mr Zack for Assessment year 2021-23

3) Mr.Rajiv, aged 50 years old, a resident individual and practicing Chartered Accountant ,
furnishes you the receipt and payments account for the financial year 2021-22
Receipts Rs Payments Rs
Opening balance (1.04.2021) 12,000 Staff salary, Bonus, and stipend 21,50,000
 to articled clercks
Fess from professional services 59,38,000 Other administrative expenses 11,48,000
Rent 50,000 Office rent 30,000
Motor car loan from Canara Housing loan repaid to SBI
2,50,000 1,88,000
bank @9% p.a on 01.01.22 (includes interest of 88,000)
Dividend from Listed Indian
12,00,000 Life insurance premium 24,000
Companies
Motor car (acquired in Jan
4,25,000
2022 paid by cheque)
Medical insurance premium(
18,000
for self and wife)
Books bought (annual
20,000
publication by cheque)
Computer acquired on
30,000
1.11.2021
Domestic drawings 2,72,000
Public provident fund
20,000
subscription
Motor car maintainence 10,000

Closing balance (31.03.2022) 31,15000

74,50,000 74,50,000
Following further information is given to you:

 The opening balance of his debtors were Rs. 3,68,000/- and closing balance Rs. 5,64,000.
Salary of March 2022 Rs. 1,85,000 is paid in April 2022.
 He occupies 50% of the building for own residence and let out the balance for residential
use at a monthly rent of Rs.5,000. The Depreciation on 50% portion of building as per
income tax rules is Rs. 17,500.
 Opening WDV of Plant and Machinery as on 01.04.2021 is Rs. 3,80,000. Motor car was
put to use both for official and personal purpose. One-fifth of the motor car use is for
personal purpose .
 He has Fixed deposit with SBI on which interest accrued during the year was 89,000/-
Tds @ 10% is deducted on this interest. The interest will be received by him on maturity
of fixed deposit in January 2023.

 Rajiv’s minor son received gift of 5,00,000 from his grand father on 01.01.2022 and the
same is invested in debentures of a Government company @ 12% PA. No interest is
received during the year.
 During the year he had sold a vacant plot and computed long term capital gain from it is
Rs. 4,30,000. He also incurred short term capital loss of Rs. 28,000 on sale of personal
jewellery and long term capital gain of Rs. 2,30,000/- on sale of listed shares.

4) Mr Ashok approaches you with the following details and information requiring to
compute his tax liability for FY 2021-22.
Mr. Ashok, a doctor employed with DM Hospital was drawing consolidated salary of Rs.
1,85,000/- per month. He quit the job on 31st October 2021 and started his own practice. As he
was new to profession he was not aware of books of accounts to be maintained under income tax
law. But based on his patients register it is ascertained that consultancy and professional charges
of Rs. 16,50,000 is received up to March 2022. He estimates his income net of expenses
profession would be Rs. 6,00,000.
He owns a property which was let out to his cousin at Rs. 30,000/- per month. An identical
property in same neighbourhood would fetch rent of Rs. 40,000 per month. Ashok got this
property vacated on 31st October 2021 and started his aforestated profession in this property. He
has taken loan for purchase of this house interest paid during the year is Rs. 1,80,000. Muncipal
tax paid of Rs.12,000 is paid in April 2022
On 23.1.2022, he sold shares of B Ltd., a listed shares in BSE for Rs.12,30,000. The shares had
been purchased 10 months back for Rs.9,80,000.
Master Vinay, son of Mr Ashok received gift of Rs. 8,00,000/- from his grand father on
01.06.2021 and the same is invested in fixed deposit fetching interest @ 9% PA. The interest will
be received on maturity of deposit in June 2023.
The following payments were effected by him during the year:

 LIP of Rs.20,000 on his life and Rs.12,000 for his son aged 22
 Tution fee of his son Rs. 92,000
 Medical premium of Rs. 26,000 covering himself and his family

Ashok has following contentions:

a. His income from property to be computed based on actual rent received as that the actual
income he has earned
b. Any gain on sale of listed shares is exempted as STT is paid on same
c. Fixed deposit is made in his son’s name and therefore it is not the income earned by him
also considering that he has not given gift to his son.

You are required to explain Ashok briefly the relevant provisions of Income Tax Act

i. Clarifying his contentions

ii. How the income from profession to be computed