MADRAS CHRISTIAN COLLEGE (AUTONOMOUS)

M.COM. DEGREE EXAMINATION NOVEMBER - 2020

GROUP/BRANCH: M.COM. COMMERCE (COBA)
TITLE OF THE PAPER: INCOME TAX LAW AND PRACTICE (125CO2M02 & 085CO2M03)
TIME : 1½ HRS SEMESTER – II TOTAL MARKS: 50
19.12.2020 F.N. SECTION – A (4 X 5=20 Marks)
Answer any FOUR out of SIX questions each not exceeding 200 words.
1. Write short notes on a) Previous year ; b) Gross Total Income.

2. State the various items of income chargeable under the head “Income from other
sources”.

3. Mr. Kishore is an employee Z Ltd. He gets basic salary of Rs.64,000 p.m. and
DA Rs.32, 000 p.m. (50 % enter for retirement benefit). Medical allowance Rs.8,000
p.m. He has been provided a house is owned by company in Bombay.
Calculate taxable amount of rent free accommodation.

4. Compute Gross Annual Value from the following:

Actual rent Rs.7,000 p.m.

Municipal rental value Rs.80,000 p.a.
Fair rental value Rs.70,000 p.a.
Standard Rent Rs.69,000 p.a.

Rent is not receivable for two months during the year.

5. Mr. Sundar purchases a house property for Rs.92, 000 on 16-6-90. He dies on
12-9-1998. The property transferred to Mrs.Sundar by his will. Mrs.Sundar spends
to Rs.1, 40,000 during 2004-05 for reconstruction of the property. Mrs.Sundar sells
the property for Rs.16, 75,000 on 20th March 2020..Brokerage paid by Mrs. Sundar
Rs.16, 750. The FMV of the house on 1st April 2001 is
Rs.3, 00,000. The CII on 2004-05 is 113, and for 2001-02 is 100, 2019-20 is 289.
Compute the amount of taxable capital gain for the assessment year 2020-21.

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SECTION – B (2 X 15 = 30 Marks)
Answer Any TWO out of FOUR questions each not exceeding 500 words.

6. Mr. Kannan held the following investments:

a) Rs.25,000 , 7 % Government Securities
b) Rs.40,000, 10 % Karnataka Govt. Loan
c) Rs.30,000, 13.5 % Debentures of Lohia Machine Tools Ltd. (listed)
d) Rs.35,000, 11 % Securities of Sugar Mill Company (not listed)

Compute his income from interest on securities for the year ending 31-3-2020.

SECTION – B (2 X 15 = 30 Marks)
Answer Any TWO out of FOUR questions each not exceeding 500 words.

7. Define ‘Capital asset’ and ‘Cost of Improvement’ under Capital gain.

8. From the particulars given below compute the business income of Mr. A:
Rs.
Net profit as per profit and loss a/c after charging
the following items: 2, 66,000
Office Salary 30,000
Income tax 35,000
Donation to Political Party 80,000
Contribution to URPF 30,000
Trade Exp. 15,000
Drawings 50,000
Interest on Capital 30,000
Household Exp. 24,000
Provision for bad debts 5,000
Life Insurance premium 3,000
Rent from House Property 15,000

9. From the following particulars find out the taxable salary of Mr.Ajith
Working at Chennai.

i) Basic Salary Rs.50,000 p.m.

ii) DA Rs.5,000 p.m. (enters)
iii) HRA Rs.10, 000 p.m. (Rent paid Rs.8, 000 p.m.)
iv) Employer’s contribution to RPF 16 % of salary
v) LIC premium paid by Employer Rs.5, 000.
 vi) Medical allowance Rs.1, 500 p.m.
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vii) Advance Salary Rs.25,000

viii) Lunch Allowance Rs.1, 000 p.m.
ix) CCA Rs.2, 000 p.m.
x) Profit Bonus Rs.12,000

10) Mr. X constructed one house in 2009. 75 % of the property is let out
and 25 % is occupied for his residence. The let out portion is also self-
occupied for one month. The particulars are:

Rs.

Municipal value Full house 50,000 p.a.

Annual rent of 75 % portion 40,000 p.a.

Municipal Taxes 5,000 p.a.

Repairs 2,000 p.a.

Interest on loan taken for construction 6,000 p.a.

Determine his income from house property.

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