Deductions out of Gross Total Income

Chapter Rebates of Income Tax)

1 (Including
THEORETICAL PROBLEMS
Act
brietly the provisions of Income Tax
2003 SEP.(6] Discuss made in computing the Total Income
regarding deductions to be certain payments. (Marks 15)
respect of
OT an assessee
in
on deductions allowed out of G.T.I. 26
note
2004 APR.[5] Write a (Marks 15)
regards payments. 80G and 80GG. (Marks 15)
Explain Sections
2004 SEP.(5] section 8OG. (Marks 4)
Discuss
2005 APR.J5\(e)
the provisions of Income Tax Act regarding
2005 SEPI3] Discuss in computing the.total income of an
deductions to be made payments. (Marks 15)
assessee in respect of certain (Marks 4)
Discuss Section 80GG.
(5](e)
APR.[3] Discuss the provisions of Income Tax Act regardina
2006 computing the total income of an
deductions to be made in
Assessee in respect of certain payments.
(Marks 15)
[5]() Discuss Section 88B.
(Marks 4)
2006 SEP[5](g) Discuss section 80U.
(Marks 4)
2007 APR.[5) What do you understand by qualifying amount u/s
80G ? What are the provisions relating to deductions u/s 80G and
80GGA of ITA, 1961 from gross total income ? (Marks 15)
2007 SEP[9(b) Write short note on deduction u/s 80DDB.
(Marks 2)
2008 APR.[5] Describe in detail deduction under section 80C.
(Marks 20)
2008 SEP[5] Describe deduction regarding under Section 80D,
80G and 800QB. (Marks 20)
[91() Briefly explain Section 80D. (Marks 4)
2009 APR.3] What do you understand by Qualifying amount u's
80 G ?.VWho is entitled to it and what are the provisions of the Act
in this connection ? (Marks 15)
(5](e) Describe deduction u/s 80D. (Marks 4)
2009 SEP.[5] Discuss briefly the provision of the Income Tax Act
regarding deduction to be made in computing the total income ot
an assessee in respect of certain payments. (Marks 15)
186
ncome TaxLaw
DPT- Pbi-4
Discuss section 80-D. (Marks 4)
2010APR.[5] What do you
understand
80G ? Whois entitled to it and
by Qualifying amount
what are the provisions of the ActU/S
in
this connection ?
(Marks 15)
(9le) Describe Deduction U/S 80DD. (Marks 4)
2010 SEP[5] Discuss the following deductions available under
Income-1ax Act :
(a) Deduction u/s 80 D
(b) Deduction u/s 80 E
(c) Deduction ws 80 GGB
(d) Deduction ws 80 QQB
(e) Deduction u/s 80 U. (Marks 15)
90 Explain Deduction u/s 80 DDB (Marks 4)
2011 APR5] What are the provisions relating to deductions from
charitable
GTI in respect ot donations to certain funds and
institutions etc. under section 80G of Income Tax Act. (Marks 15)
deductions from
2012 APR[5] What are the provisions relating tounder Income Tax
GTI in respect of payments and investments (Marks 15)
Act ?
deductions from
2012 SEP[5] What are the provisions relating toAct ? (Marks 15)
Income Tax
GTI in respect of payments under Deductions in brief.
2013 MAYI1](iv) Give five examples of (Marks 2)
you mean by deductions from Gross Total Income ?
2] What do Qualifying amount in case of
Discuss the provisions regarding (Marks 15)
deduction u/s 80G.
Differentiate between Deductions and Exem
2014 MAYI1](x) (Marks 2)
ptions.
benefits are available to a perSon in respect of
(3 What tax (Marks 15)
deduction allowed. us 80/C ? Deductions and Exemptions.
Differentiate between
2015 MAYI11(h) (Marks 2)
the provisions relating to the deductions from
Ie Briefly explain Donations to certain funds,
charitable
aross total income of of Income Tax Act, 1961.
under section 80G
WSututions etc. (Marks 15)
available to a person in respect of
Wnat tax benefits are (Marks 15)
eductions allowed U/S 80C ? payments/savings qua
five examples of
MAYI1](iv) Give (Marks 3)
80/C from Gross total income.
"ying for deduction us
187
 Chapter
2 Assessment of Individual
NUMERICAL PROBLEMS

2003 APR.(3] Mr. Somnath is leading lawyer of Mumbai .

deposited in his bank all the receipts and always pays all
by cheque. The analysis of his bank account for the
31.3.2007 is as under: year expenses
ending
Rs.
Bank b/d 7,500 Salaries Rs
Professional receipts 1,40,000 Rent of chamber 14,000
Dividend 8,000 Telephone exps. 4,1,000
500
House rent 22,500 Journal subscription 3,000
Income from horse Motor car expenses
races(gross Rs.15000) 10,000 Office expenses 8,000
Share of income from
Purchase of motor 5,500
HUF
7,110 car
Income Tax 25,000
40,000
Donation to Punjab
University 10,000
Personal expenses 45,500
House property exps:
Taxes 5,000
Repairs 1,500
Insurance 1,500
Collection
Charges
Balance cld
2.000 10,000
28,610
1,95,110
Compute his gross total income after taking into 1,95,110
information:
(a) 1/4th of the
the following
(b) Rate of
motor car expenses relate to
depreciation on car is 15%. personal ise.
(C) The assessee
have been included in stays in his house
the above account and following expenses
in respect of this
Insurance premiúm Rs. 500, M.Taxes Rs. house:
2,400. (Marks 15)
190
 Law
DPT - Pbi-4
From following particulars, compute total income and
the
by
ayable Mr. X, a physically tax
mengyear 2007-08 handicapped person for the assess-
(a) Salayreceived from employer Rs. 1,80,000
(b) Annual value of let out house Rs. 15,000
(c)Interest on loan to purchase another house which is self
aCUDied Rs. 20,000.
(d)He has sold another residential house on 1.4.2006 for Rs.
470,000.Its fair market value on 1.4.81 was Rs. 2,00,000. He
ivested on 30.7.2006 Rs. 4,20,000 in the bonds of NH¬I (C.I..
2006-07 is 519).
wWon Rs. 40,000 in race course betting and Rs. 2,000 in
(e) He
a lottery.
He paid Hs. 6,000 by cheque as premium to secure the
health
insurance of GIC for his family.
ia) His mother dependent on him-is suffering from cancer and
spent Rs. 16.500 on her treatment.
whose special
b) His minor son is mentally retarded on
15,000.
education, he spent Rs. Relief
) He donated Rs. 10,000 to Gujrat State Chief Minister's
Fund.
gave Rs. 2,000 for repair of a notified temple and Rs.
() He association of lndia. (Marks 15)
1,500 to farmily planning
profit of Rs. 1,25,000 and received Rs.
9l(a) Mr. Ahas business of an association of person during
profit
8.000 as 1/8th share of Calculate his tax liability.
(Marks 4)
2006-07.
the previous year
following particulars of Shri Raj
help of the
2005 APR.I3]With the total income for the assessment year
Anand, compute the
2007-08 : Haryana Government Rs. 1,000;
Interest on Securities of Textiles Ltd. Rs. 2,694
(a) Debentures of Madras
Merest received on in India). which is Rs.
Stock Exchangevaluation
uSled in a Recognized of
house. the municipal The municipal
) He owns a 3,000 per month.
has been let out for Rs.
vOO. It borne by the tenant. Loss of Rs. 1,500
be
SHS. 4,000 is toDairy business Rs. 45,000. forward from last
9) Income from shares has been brought Rs. 2,500.
in oil is
B Speculation profit from speculation of
Vear. This year's 191
 Income Tax Law DPT- Pbi-4
(d) Profit from the sale of short-term capital asset Hs. 6,800
Profit on sale of land held for more than three years Hs. 25,000
Loss on sale of other long term capital assets Hs. 8,000.
National Bank
(e) Interest received on fixed deposit with Punjab
M/s Ram Sevak Ram
Hs. 1,260. Interest received from the firm of
1,350. Sixth prize won of Karnataka State Lotteries t
Pratap Hs.
Rs. 6,700.
made the following payments during the previous year
He Fund.
) Rs. 2,000 in Public Provident Municipal Corporation
Delhi
(i) Rs. 3,000 as donation to the 2,000 as help to two students
for construction of an orphanage. Rs.donation to Prime Minister'e
for their education, Rs. 1,000 as
Drought Relief Fund.
Rs. 13,600 for the expernses of education of his son who is
(ii)
in graduation at the Engineering College. for the payment
(iv) Rs. 1,200 paid as interest on the loan taken
of income tax. (Marks 15)
2005 SEP[3] Dr. Goyal retired from Government service in 2005
and took up a job with a Company thereafter in Delhi {Population
more than 25 lakhs). The following are the particulars of his income
for the financial year ended on 31.3.2007 :
Pension from Government Rs. 60,000
Salary from Company Rs. 96,000
Unfurnished rent free bungalow is provided by the company. It
was formerly let out at Rs. 1,075 p.m. Half share in a firm Rs.
15,000. Dividend Rs. 8,950 net. Interest on Government securities
is Rs. 2,000.
He had taken a loan of Rs. 25,000 out of which Rs. 12,500
was invested in shares and the balance in Government securities.
Interest is payable on this loan at 12% per annùm.
He had purchased ashop in 1980 for a sum of Rs. 50,000. lts
market value on 1.4.1981 was Rs. 60,000. It was sold off for Rs.
4,10,000 on 1.10.2005. Thecost inflation index are 1981-82: 100;
2007-08: 519.
He gave a donation of Rs. 10,000 to PM National Relief Fund.
Compute his total income for the assessment year 2007-08.
(Marks 15)

192
IncOmeláX
Lay DPT-Pbi-4
APR3) Mr. Vinod, a lecturer in the Delhi University submits
the
following particulars of Income and Payments for
006
gssessimentyear 2007-08:
phe

BasicSalary Rs. 12,500 p.m.

nearnesS allowance Rs. 300 p.m.
Wardenship allowance Rs. 600 p.m.
Examinership allowance Rs. 9,000
school
govalty from books for
(computed) Rs. 73,920
deimbursement by Delhi University
of cost of books purchased by
Mr. Vinod for preparing lectures Rs. 14,250
Rs. 6,000 p.m.
Income from house property 3,000. During 2006-07 he
Expenses being house tax: Rs.
rent of April and
received asum of Rs. 12,000 being advance
has
May,2007; 60,000, Fair rent : Rs. 64,000,
Municipal valuation : Rs.
Nil; House remäined vacant for one month ]
linrealised rent : securities Rs. 2,000
Interest on Government Rs. 2,600
Interest on company deposits
provident
Contribution to statutory Rs. 7,000
fund
Contribution to public provident Rs. 42,000
fund
premium on
Medical insurance Rs. 3,000
dependent mother
the health of
charitable
Donation to approved Rs. 40,000
institution Assessment
Income of Mr. Vinod for the
Determine the Net (Marks 15)
year 2007-08.
individual retired from XY Co. Ltd. on
resident jointed PQ
<006 SEP.31 X, a and 9 months of service. He
22007 after 20 vears remained in service till 31.3.2007,
day and
W. Ltd. on the same following information
When he furnished the 1.4.2006 to 31.1.2007 from XY
from
Oalary and allowances
Co. Ltd. :

193
Income Tax Law DPT - Pbi-4
Basic Salary Rs. 8,000 p.m.
Dearness allowance Rs. 1,000 p.m.
Commission calculated @ 4% on turnover
of Rs. 1,00,000 achieved by X Rs. 4,000
Gratuity received (not covered by the Payment Rs. 1,05,000
of Gratuity Act, 1972)
Salary and allowances from PQ Co. Ltd.
Rs. 6,000 p.m.
Basic Salary Rs. 800 p.m.
Entertainment allowance
Fixed medical allowance Rs. 200 p.m.
Rs. 500 p.m.
House rent allowance
Rs. 3,000
Leave salary received
Other information :
the year, on which
(a) X resides in his own house throughout the year.
municipal tax of Rs. 5.000 has been paid duringfrom a partnership
(b) X received a share income of Rs. 30,000speculation business
firm. He incurs a loss of Rs. 4,820 from a
carried on during the year. Saving Bank
(c) X received Rs. 2,500 as interest on Post Office
Account and Rs. 1,500 as dividend from a company incorporated
in England. Interest on deposit in companies in the name of his
minor son amounted to Rs. 4,000.
(d) Xpaid a premium of Rs. 10,000 on the policy of Rs. 70,000
on the life of his minor child. Contribution to an approved
superannuation fund and the Jeevan Dhara Scheme of the LIC
amounted to Rs.7,500 and Rs. 4,500 respectively.
(e) Xpaid premium by cheque on medical insurance policy orn
the health of his dependent mother Rs. 3,000, dependent father
in-law Rs. 2,000, dependent widow sister Rs. 2,000 and himsel
Rs. 3,000.
Compute X's total income for the assessment year 2007-08.
(Marks 15
2008 APR.[6] Shri Mukul Jain, a resident of Bombay (populatior
25 lakhs), submits the following details of income for the Finance
Year 2006-07:
() Salary Rs. 12,800 p.m.
(i) D.A. Rs. 300 p.m.
(ii) Entertainment allowance Rs. 300 p.m.
(iv) City compensatory allowance Rs. 100 p.m.

194
incomeTaxLaw DPT- Pbi-4

(v) Bonus Rs. 3,000.

Employer contribution to RPF Rs. 24,000.
(vi) His own contribution to RPF Rs. 24,000.
ii) Interest on accumulated balance of fund @ 10% p.a. =
14,000.
A
i He is provided with an unfurrished house for which the
employer charges Rs. 200 p.m., the municipal value of house being
RS.6,000 p.a.
(x) He is also provided with chaufteur driven 1.8 litre capacity
ar by the employer. The car is used both for personal as well as
ofice purpose and both the entire expenses of its running
and
maintenance are met by employer.
interest on
(xi) During the. year Mr. Jain has received 7,184
debentures (listed) of an Indian company amounting to Rs.
/Net), He earned Rs. 8,070 from bank deposit. purchased NSC
(xii) He Contributed Rs. 2,000 in ULIP and interest accrued
year. The
Vll issue)worth Rs. 6,000 in this previous year amounted to Rs.
earlier
on NSC (VIlissue) purchased in an
donated Rs. 2,000 toward Prime Minister National Relief
2.400. He
the assessment year 2007-08.
Fund. Compute his taxable income for (Marks 20)

Seth, a resident of Delhi (population above

2008 SEP.[6] Mr. K.L.
income for the financial
details of his
25 lakhs) submit the following
year 2006-07: Rs.
Income 7,000 p.m.
Salary 6,000 p.m.
D.A. 350 p.m.
Entertainment allowance
250 p.m.
City compensatory allowance
7,000
Bonus 12,000
Emplojer contribution to RPF 12,000
to RPF
His own contribution @ 13% 7,800
RPF balance
Interest on
unfurnished accommodation for which
an
He is provided with p.m. The municipal value of the house
employer charges Xs. 200 22,050 p.a. He is also provided by
OWned by employer is Rs. car of 1.8 litre capacity. The car is
employer with chauffeur driven the entire expenses of its running
and
Used for official purpose only
the employer.
dnd maintenance are met by
195
 Income Tax Law
During the year Mr. K.L. Seth has received
DPT- Pbi-4
dividend
op. Society amounting to Rs. 4,000. He paid insurance from Co-
of Rs. 3,000 on a policy taken on his life
dependent upon him.
of his father premium
who is not
During the year he had following income also:
(a) Winning from Lottery Rs. 50,000 out of which tax @
has been deducted at source. 30%
(b) He went to Nepal and won Rs. 35,000 from
Casino.
(c) He lost Rs. 20,000 in cards games during
gambling
in a
Diwali season
(d) He earned Rs. 4,910 from bank deposit.
Compute his total income and tax liability for
2007-08. assessment year
(Marks 20)
2009 APR(3] Given below is the Profit and
for the year ended 31.3.2008: LOSs account of Mukul
Rs.
To Salaries Rs
To Drawing
7,000 By Gross Profit 50,000
To Insurance premium 8,000 By Interest on Post
on his life
1,000
Office Savings
To Depreciation Bank A/c 100
To Donation to the 4,500 By Proceeds from
Life Insurance
recognised institution 500Policy
To General expenses 6,900
To Education expenditure 2,600 By Interest of Bank
on his three dependent deposits 3,600
sons in England 6,600
To Provision for doubtful
debts
1,500
To Income tax
2,000
To Rent
1,700
To Net profit 25,200
60,600
60,600
Compute his taxable income for
taking the following information into current assessment year after
(a) The amount of consideration :
(b) General expensesdepreciation allowable is Rs. 4,000.
include Hs. 600 for his private
expenses.
(Marks 15)
196
Income Tax Law DPT- Pbi-4
a09 SEP.[6] Mr. Vipul a resident of Delhi (Population above 25
hs) submits the following details of his income for the financial
year 2007-08 :
Rs.
Salary 7.000 p.m.
D.A. 6,000 p.m.
Entertainment allowance 350 p.m.
City compensatory allowance 250 p.m.
Bonus 7,000
Employer contribution to R.P.F. 12,000
His own contribution tó R.P.F. 12,000
Interest on R.P.F. balance @ 13% 7,800
He is provided with an unfurmished accommodation for which
employer charge Rs. 200 p.m. The Municipal value of house owned
by employer is Rs. 22,050 p.a.
He is also provided by employer with chauffer driven car of
1.8 it, capacity. The car is used for official purpose only and the
entire expenses of its running are met by employer. During the
year, Vipul has received dividend from Cooperative Society
amounting to Rs. 4,000. He paid insurance premium of Rs. 3,000
on a Policy taken on the life of his .father who is not dependent
upon him. During the year he had following income also
(a) Winning from lottery Rs. 50,000 out of which tax @ 30.9%
has been deducted at source.
(b) He went to Nepal and won Rs. 35,000 from gambling in a
casino.
(c) He lost Rs. 20,000 in card games during Diwali session
deposits.
(d) He earned Rs. 4,910 from bank
Compute his total income and tax liability for assessment year
2008-09. (Marks 15)
Rosy has given the following
2010 SEP[6] Mrs.requests you to find out
She
information about
her total
her income. year 2009-10 : income for the
assessment Glaxo
Salary from M/s Ltd. Rs. 54,000.
) Dividends from units of UTI Rs.
(ii) Interest on Securities (Gross) Rs.
(iii) 1,500.
6,000.
(iv) Interest on fixed deposit (PNB) Rs. 4,700.
from agency Business Rs.
(v) Profit
197
10,000.
 Income Tax Law DPT - Pbi-q
(V) Loss from speculation of shares Rs. 10,000.
(vii) Profit from speculation in Silver Rs. 5,0O0.
Rs. 1,00,000.
(Vin) First prize in Delhi State Lotteryclub Rs. 2,000.
(IX) Gain from playing rummyin the
(X) Loss in flash with friends Rs. 3,000. race horses Rs.
(xi) Expensesincurred on maintenance
of 30,000.
Rs. 6,000.
(Xn) Monthly rent of let out house
sale of personal car Rs. 15,000
gain on
(X) Long tern capital
course bettings Rs. 10,000.
(XIV) LoSs in race Securities Rs. 12,000.
received on Govt.
(XV) Interest (Marks 15)
Mrs. Minakshi working as a manager in a company
2011 SEPJ6] the following
Mumbai (Population above 25 lakhs) provides
at Financial Year 2009-10 :
details of her income for the
Salary @Rs. 25,000 per month
per month
Dearness allowance @Rs. 10,000
Entertainment allowance @Rs. 3,000 per month fair rental
accommodation the
Provided with an unfurnished
value of which is Rs. 5,000 per month.
She encashed tWo months leave during the year.
Received interest of Rs. 5,860 on bank Fixed deposits, dividend
of Rs. 1,260 from shares of Indian Company and interest of Rs.
7,540 from the debentures of Indian Companies.
On December 1, 2009, she sold jewellery for Rs. 5,00,000. It
was purchased on 30-04-04 at a cost of Rs. 2,50,000 [C.I.I for
2004-05 is 480 and for 2009-10 is 632].
Spent Rs. 34,800 on medical treatment of specified disease of
her grand father (dependent) aged 80 years.
Donation to P.G.l. Chandigarh for family planning Rs. 7,000.
She tooka loan of Rs. 2,00,000 for the study of her son, who
pursuing full time MBA programme in Australia. During the year
she paid interest of Rs. 20,000 and repaid Rs. 30,000 out of
principal amount.
Compute her total income and tax payable for A.Y. 2010-11.
(Marks 15)
2012
APR.B] Shri Ram
is his P &L Ac for the Gopal the owner of a business.
is
year ended on Following
31.3.2010:
198
ncomelax
Law DPT -Pbi-4
Rs.
Rs.
cetablishment charges 5,110 Gross Profit 50,870
Rent, Rates and tuxes 2,900 Interest on Govt.
Sundry expenses 7,050 Securities (Gross) 5,350
HOUsehold expenses 1,880 Rent from property 5,400
Provision for bad debts 1,200
Loss on sale of motor car
lused for private purpose) 1,800
Insurance premium
(including life insurance of
Rs. 1,790) 2,880
Interest on bank loan 1,380
Provision for Depreciation 6,400
Net profit 31,020
61,620 61,620

Additional Information:
year Rs. 650.
(i) Bad debts written off during the Income-tax rules Rs. 1,600.
per
(ü) Admissible depreciation ashis business in a rented property,
(iiü) The assessee is running own residence. Rent of Rs.
by him for his
half of which is used included in rent, rates and taxes.
entire house is
2,400 in respect of on account of municipal tax paid for
is
The balance of Rs. 500
property given on rent. Total Income of Shri Ram Gopal for the
Compute the Gross (Marks 15)
Assessment year 2010-11.

Chakarvarti, an employee of a public limited

2012 SEP[6] Mr. following emoluments for the
received the
Company at Bangalore,
previous year, 2010-11 Rs.
3,60,000
30,000 p.m.
Basic salary @ Rs. employment Rs. 3,000 p.m. 36,000
of
0) D.A. as per terms months's salary 33,000
() Bonus equal to 1 60,000
(iv) Commission 66,000
(V) Advance salary Provident Fund 48,000
Employee's contribution in recognised
(M)
Employer's contribution in Recognised Provident 48,000
(MI)
Fund
 Chapter
3 Assessment of Hindu
Undivided Family
FROM PUNIAB UNIVERSITY
NOMERICAL PROBLEMS
APR.[13]
20134 M/s XYZ and Sons
following incomes for the year (HUF), with its Karta Mr. X, has
2011-12 :
Ia Profit from family Rs.
X's remuneration)business (Before debiting
h) Share of Income from a firm M/s : ABC 2,50,000
and Co., wherein HUF is a partner through
its karta Mr. X 50,000
(c) Income from ancestral house (Let out) 80,000
id) Interest on securities, bank fixed deposits, etc. 23,000
(e) Interest on Saving Bank account 12,000
() Interest on PPF alc 10,000
(g) Long-term capital gain 1,60,000
(h) Gifts from relatives of coparceners
(not members of HUF) 72,000
(0) Gifts from other persons 21,000
The HUF has invested Rs. 80,000 in its PPF Account, paid Rs.
20,000 as Life Insurance premium and Rs. 18,000 towards
ISurance premium on health of its members (all below 60 years).
lhe HUF has also invested Rs. 1,20,000 in NHAI bonds and has
family
ad Rs. 36,000 to Mr. X as remuneration for managing theHUF for
of
Siness. Compute the taxable income and tax liability (Marks
AY. 2012-13. 15)

supplied by Sh.Raj
APR.(6] From the following particulars total income for the
KuaSesment Karta of HUF, compute its
mar Rampal,year 2013-14:
3,38,000
from family business- Rs. the family received a salary
member of
Sandeep Rampal, a
S service ina college- Rs. 2,50,000
205
 Income Tax Law
DPT - Pbi-4
Meenu Rampal, another member of the family fo.
(C) Salary
her to
services in the family business Rs. 82,000 (Assessing

considers Rs. 80.000 as reasornable)

Officer
Director fees received by Karta- Rs. 2,500
(d) Govt.securities- Rs. 12,000
(e) Interest on
house property- Rs. 30,000
from family 3,000
() Annual rentTaxes paid on let out house property- PRs. 40,000
(g) Municipal Akshar Dham Temple (approved)- Rs.
(h) Donation to (Marks 5)
cheque.
total Inco
information calculate2013-14
folowing
2014 SEP.[6) From theH.U.F. for the assessment year
and Tax Liability of Amt. (in Rs.)
from House Property (computed) 2,30,00
(i) Income
Business Income
3,10,000
(ii) 11,500
Bank Interest
(ii) Listed Debentures of a Company
Interest on 5,000
(iv)
(Gross) 12,000
Interest on Govt. Securities 8,000
(v) Company
(vi) Dividend from Indian paid Rs. 4,000. (Marks 5)
Life Insurance Premium
following details have been supplied by Mr.
2015 APR.[6] The Compute the total income of HUF
Sanyam Duta, Karta of HUF.
2014-15:
for the assessment year Rs.
7,500
(i) Short Term Capital Gains 8,400
(ii) Long Term Capital Gains 4,80,000
(ii) Profit from Business 28,000
(iv) Profit from a firm 32,000
(v) Rental Income from the property let out 3,000
(vi) Local Tax on the above property 18,000
(vii) Interest on securities of a listed company (Net)
(vii) Insurance premium paid on the life of Karta 8,000
of the family 5,000
(ix) Mediclaim premium paid in cash (Marks
of 3
2016 APR.[6) Sh. Vinod Kumar Sharma, who is the Karta
HUF furnishes the following particulars of the income of the HU
for the assessment year 2015-16 :
 Income axLaw DPT- Pbi-4

Rs.
(1) Interest on Securities (Gross) 25,000
(2) Interest from Bank FD 18,000
ia) Income from House Property 25,000
j4) Profit from Business
(Computed) 2,45,000
i5) Long term Capital Gains 1,05,000
The family paid Hs. 15,000 by way of insurance premium on
the life policies of its members and donated Rs. 75,000 for
charitable purpose.
Compute the lotal Income of the HUE. (Marks 5)

o017 MAY.(3] The Karta of a HUF furnishes the following particulars

f the income of the HUF for the assessment year 2016-17 :
Rs.
(a) Interest on Securities (Gross) 8,000
(b) Interest from Bank FD 6,000
22,000
(c) Income from House property (Computed) 2,95,000
(d) Profit from Business
62,000
(e) Long term Capital Gains
The family paid Rs. 25,000 by way of insurance premium onof
premium
the.life policies of its members, mediclaim insurance
purpose.
Rs. 35,000 and donated Rs. 15,000 for charitable
(Marks 5)
Compute the total income of the HUF.
submitted by Sh. Raj
[12] The following particulars have been H.U.F.:
a
Kumar Rampal in the capacity of Karta of
5,30,000 after charging an
(a) Profit from family business Rs. to Karta's brother who
amount of Rs. 8,000 given as salary
has helped in the family business.Rs. 36,000 carried on by a
(0) Income from separate business Funds were provided to
brother of Karta in individual capacity. on the above funds
by HUF
him by HUF. Interest received
advance Rs. 5,000. 20%
Director's fees received by Karta Rs. 5,000 (HUF holds
9)
share in his company).
(0) Interest received on loan Rs. 2,400.
(e) Long term capital gain Rs. 50,800
207
Income Tax Law DPT - Pbr4
approved
() Donation to a charitable institution Rs. 8,000 which is
U/S 80G.
muniCipal taxes paid
(g) Rent of the property let, Rs. 15,000 p.m.,
interest on loan taken to
in respect of the house Rs. 4,500,
repair the house Rs. 5,800.
Rs. 10,000 (Gross)
(h) Dividend from Indian Companydebentures
received on tax free of Ind'an company
() Interest
Rs. 18,000.
Municipal value of self-occupied house of the family Rs. 45,000
0) the house 7,500.
Interest on loan taken to repair
total income of HUF and its tax liability for the
Compute the (Marks 15)
assessment year 2016-17.

MAYI14](a) The following particulars are furnished for the

2018
Previous Year 2016-17.
Rs.
Loss A/c
Net Profit as per Profit and Rs. 6,80,00) 90,97,000
(after deducting Depreciation of Income Tax Act
Depreciation allowable u/s 32 of 7,77,000
Disallowable expense 85,000
Deduction received ws 10AA (as calculated) 78,00,000
3,00,000
Long Term Capital Gains (on sale of land)
Deduction received under Chapter VI A
(as calculated)
80 G 55,000
80 IB 80,000
Calculate Tax Liability assuming that the Assessee is a HUF.
(Marks 5)

FROM PUNJABI UNIVERSITY

THEORETICAL PROBLEMS
2004 APR.[9(c) Write short note on Assessment of H.U.F.
(Marks 4)
2006 SEPI3] Discuss the provisions of Income Tax Act regarding
Computation of income of HUE. (Marks 15)
208
IncomelaxLaw DPI - Pb-4
2009 APR.[5]() Explain
Assessment of H.U.F. (Marks 4)
2009 SEP (9](e) Explain (Marks 4)
Assessment of H.U.F.
a0 APR.[9J0) Explain Assessment of H.U.F. (Marks 4)
2013 MAY(1](vi) Discuss the term "Karta". (Marks 2)
2014 MAY(1]() Exxplain the term "HUF". (Marks 2)
MAYI1](a)
2015 MA Define Coparcener. (Marks 2)
dlle), What do you understand by HUF ? (Marks 2)
4State the rules relating to assessment of Hindu Undivided Family.
Gve the procedure of assessment on partition of HUF. (Marks 15)

NOMERIAL PROBLEMS
2004 APR.[9]0) Compute the Income of H.U.F.
Rs.
Net Profit 4,00,000
These profits were after debiting the
Salary to karta 30,000
Bad debts of a relative 12,000
Interest to a member of HUF 15,000
(Marks 4)

'C' are his major sons

2007 SEP5]'A' is the Karta of a HUF. 'B' andfollowing information
and co-parceners in the HUF. From the the assessment
Compute total income and tax liability of the HUF, for
year 2007-08 :
Rs.
salary
(a) Profit from business (after charging 50,000
to karta) 30,000
company
(b) Profit received by 'B' from a 25,000
Karta from a Co.
(c) Director's fees received by 5,00,000 in the
(HUF holds shares worth Rs.
company) out (Municipal
(0) Rental value of property letwhich Rs. 2,500
taxes are Rs. 5,000, out of 25,000
are not paid upto 31.3.2007) C' 40,000
(e) Professional income of Mr. 5,000
(") Agriculture income of family 15,250
9) Interest on bank deposits
 Assessment of
Chapter
4 Partnership Firms

FROM PUNJAB UNIVERSITY

NOMERICAL PROBLEMS
Compute the business income of a firm (PFAC
2008 SEP[1](0)
from the following information : 31.3.2007 Rs. 1,95,000 afe.
Net profit for the year ended
debiting the following iterns a working partner Cas ne.
Rs. 1,25,000 paid to
(i) Salary of
deed.
(i) Rent of Rs. 12,000 paid towås partner B for the portion of his
situated.
building in which the firm's office
(iüi) Rs. 18,200 paid as interest to partner A on a loan advanced
by him to the firm @13% p.a.
5)
(iv) Rs. 50,000 paid for purchase of patent rights. (Marks
2009 APR.(8] X and Y are equal partners in a firm, compute the
total Income of the firm and its tax liability for the Assessment year
2008-09.
Pand L Alc for 2007-08
Interest on capital Business Profits 1,30,000
@ 12% X 9,000 Income from
15,000 House Property 10,100
Remuneration to Capital Gain :
Working Partners Long term 20,000
X 60,000 Short term 10,000
30,000
Donation to Approved
Charitable Institution 10,000
Profit X 23,050
23,050

1,70,100 1,70,100

214
IncomelaxLay DPT- Pbi-4

remuneration and partrnership

The interest on cap1tal are as per
Deed. Other informations are:
X padinterest to the firm of drawings Rs. 2,000, which is
(a) in Business Profits.
ncluded
Rs. 10,000 as interest on money borrowed to contri-
(b) Y paid
capital in the firm
bute
X
purchased car for Rs. 1,80,000in. June 2007. Therunning
(c) used
and maintenance expenses of car are Rs.
20,000. Car was
purposes
the firm and by him also. The use of car for personal P
taken as 50%. The proper amount has been chargedto
may be
andL a/c. (Marks 15)
Firm fulfils conditions u/s 184.

a firm, sharing profits and

anng SEP[8] A, B, and C are Partners in
the ratio of 2:2: 1. The profit and loss account for the
Insses in
ended 31st March 2008 is as follows.
UPar Rs.
Rs.
To Sundry trade 2,90,000
expenses 1,01,800 By Gross profits b/d
By Interest on
capital
To Interest on securities 10,000
@15%
A- 15,000
B- 15,000
45,000
C- 15,000
30,000
To Rent to B
72,000
To Salary to B 36,000
To Commission to C
15,200
To Net Profit
3,00,000
3,00,000

of
Compute : income of the firm. The firm fulfils the conditions
) The total
Section 184. partners. B and C are working
income of the (Marks 15)
(W) Taxable
partners.
215
 DPT - Pbi-4
Income Tax LaW
are partners inafirm. sharing profits and
and C
2010 APR.(9] A,
B
proportiorns of 2/5th,
2/5th and 1/5th respectively.
lossesin the for the year ended
31st March, 2009
acCOunt
and loss
The profit
is as follows Rs. Rs.
By Gross profit
To Sundry trade
expenses
capital
1,01,800 b/d
By interest on 2,90,000
To Interest on securities
@ 15% 10,000
A: 15,000
B: 15,000
45,000
C: 15,000
30,000
To Rent to B 72,000
To Salary to B 36,000
To Commission to C
To Net Profit 15,200

3,00,000 3,00,000
firm. The firm fulfils the
Compute:() the total income of the
of the three partners
conditions of Section 184. (iü) Taxable income
in the firm. B andC are working
partners. (Marks 15)
the total
2010 SEP(8] From the following information, compute
assessment year
income of the firm and tax payable by it for the
2009-10.
(a) Profit from an industrial undertaking
established in backward state in
February 2004. Rs. 40,000
(b) Profit from business of Poultry breeding Rs. 30,000
(c) Short-term capital gains Rs. 20,000
(d) Long-term capital gains Rs. 40,000
(e) Interest from bank Rs. 6,000
() Loss from house property Rs. 10,000 on
account of interest on loan taken to construct
the property.
(g) Donation to approved Charitable Institution Rs. 15,000
(Marks 15)

216
 IncomeTaxLaw DPT - Pbi-4
2011APR[1](0) A, B, and Care partners of afirm with equal shares.
Theprofit &loss account for the year ended 31st March, 2010
showsa net profit of Rs. 5,60,000 after debiting Rs. 9,000 for
interest paid to A @ 20%, Rs. 75,000 salary paid to B and Rs.
00for rent of business premises paid to C. Compute the total
me of the firm. The firm fulfils the conditions of section 184.
(Marks 5)
o012 APR.[14] The Doctors, Dr. Ahalya and Dr. Somanath are
anning a nursing home under a partnership firm sharing profits
and losses equally and showed Rs. 2,14,600 as profit for 2010-11
her takingg into account the following items :
Debits : Rs.
Operation charges to Dr. Somanath
(Rs. 1,000 per operation) 15,000
Remuneration to Dr. Ahalya 76,000
Honorarium to Dr. Somanath 53,000
Bonus to each Doctor 22,000
Donation to a local temple 5,000
12,000
Interest on capital to each Doctor @ 12% p.a. 20,000
Purchase of surgical equipments
Credit :
9,600
House property rent
4,000
Dividend on shares (Gross)
total income and find out the income of the
Compute firm's
head Profits & Gains :
partners taxable under the
submitted) provides for payment
Firm's deed (certified copy remuneration, bonus and inter
honorarium
of operation charges, (Marks 15)
est on capital.
C are the Owners of a fim. They share
2012 SEPI13] A, Band of 5:3:2. The following particulars of
profits or losses in the ratio 31.3.2011 :
he firm for the
year ended account was Rs. 44.000.
per profit & loSses
i)The net profit as to B and commission on sales of
12,000 paid
i)Salaries of Rs. debited to the accounts. Rs. 3,000 paid
paid to C were
Hs. 6,000
capital Rs. 5,000, Rs. 4,000 and paid to A on
ii) Interest respectively and interest of Rs. 8,000
on
A, Band C accounts. The rate of interest in both
I0 charged to the
is loan were
cases is 20%.
217
 Income Tax Law DPT -Pbi-4
V) Depreciation debited to the accounts amounted to Rs
10,000 but the admissible amount as per rules was Rs. 14,000
term loan of Rs. 40,000 was taken during the yea:
V) A long obtaining the loan
expenses incurred for amounting
to P.
2.000 debited to the accounts. Interest on loan Rs. 1,500
and
and not considered in the books.
Outstanding opening stock of Rs.
stock and 8,00,000&
vi) Therespectively had both been valued at 10% under COstRs
9,00,000 closing
income of the firm for the
Compute the taxable
vear 2011-12. The firm fulfils the assessrnert
conditions of Section 1a4
(Marks 15)
2013 APR.[14] The net profit of a partnership firm (Assessed under
2011-12 is Rs. 52.000 a
Section 184) for the previous year
partners. The firm has two wori
providing interest and salary to per the partnersh
partners sharing profits and losses equally asRs. 1,80,000 earh
remuneration of
deed. Both partners draw a 8,00,000 the na
respect of their total Capital Contribution of Rs.
to Rs. 1,20.000
ners get interest @ 15% p.a. therèon amounting and total tay
You are required to compute the total income assessment
payable by the firm as well as by the partners for the
year 2012-13. (Marks 15)
2013 SEP[11] Profit and Loss Account of a partnership firm, which
is assessed as firm u/s 184, for the year ending 31st March, 2012
is as under :
Rs. Rs.
Cost of goods sold 1,26,000 Sales 1,31,400
General Expenses 40,950 Net Loss 77,400
Interest on Capital
to partners 11,250
Remuneration to
partners 30,600
2,08,800 2,08,800

(1) Expenses of Rs. 6,120 (included in general expenses) are

not deductible according to the provisions.
(2) Interest on Capital to the partners of Rs. 3,195 is also nol
admissible.
218
Income lax Law
(3) The firm has DPT- Pbi-4
also
1,00,000 and donates Rs. gross
Compute the total income10,000 to a winnings
from lotteries of Rs.
of the firmnotified
for thetemple.
2012-13. assessment year(Marks 15)
2014 SEP.[13] The Profit and Loss
irm for the year ending 31st March, Account of an unregistered
2013, is as under :
To Salary and Wages
Amt. (in Rs.) Amt. (in Rs.)
To General Expenses
21,000 By Gross Profit b/d 1,65,000
11,000 By Other Receipts 1,000
To Repairs and Maintenance 500 By Discount 2,000
To Establishment Charges 500 By Interest on Commercial
To Income Tax 800 Securities 3,000
To Bad Debts Reserve 200 By Bad Debts Recovered 1,000
To Depreciation 1,000
To Salary: X 24,000
12.000 36,000
To Z's Commission 21,000
To Net Profit 80,000
1,72,000 1,72,000

General expenses include Rs. 500 donations to a charitable

bad
school. Allowed depreciation for the year is Rs. 1,800 and
the terms of
debts Rs. 400. Salary is paid to partners under commission.
partnership deed but there is no provision forTotal Income' and tax
Compute
X, Y and Z are equal partners.
the assessment year 2013-14 and allocate among the partners.
for (Marks 15)

APR.J11]Dr. Ashish and Dr. Vishal are running a nursing

2015 profits and losses equally
partnership firm sharing
home under a for 2013-14 after taking into
2,54,600 as profit
and showed Rs.
account the following items : Rs.
Debits
Vishal 18,000
Operation charges to Dr. 82,000
Remuneration to Dr. Ashish 53,000
Honorarium to Dr. Vishal 27,000
Bonus to each Doctor

219
 Income Tax Law DPT-Pb-4
8,000
Donation to a local temple 14,000
Interest on Capital to each Doctor @ 14% p.a.
25,000
Purchase of Surgical Equipments
Credits 12,000
House Property Rent 4.500
Dividend on Shares (Gross) 10,000
Long Term Capital Gain liability. Also
find out the
and tax
Compute firm's total income the head Profit and Gains from
income of partners taxable
under
submitted) provides for
(certified copy remuneration, bonus
Business. Firm's deed charges, honorarium,
(Marks 15)
Payment of operations
and interest on capital.
partners in a firm sharing profits and
A. Band Care 2: 1. The Profit and Loss Account
2015 SEPJ11]proportion of 2: follows :
losses in the March, 2014 is as
ended 31s
for the year Rs.
Rs.
By Gross profit 4,70,000
To Sundry trade
1,01,800 By Interest on
expenses Securities 10,000
To Interest on capital
By Long Term
@15%: Capital Gain 20,000
A: 15,000
B: 15,000
C: 15,000 45,000
To Rent to B 30,000
To Salary to B 72,000
To Commission to C 46,000
To Net Profit 2,05,200
5,00,000 5,00,000

Compute:
(i) The total income of the firm and its tax liability. The firm
fulfils the conditions of Section 184.
(i) Taxable Income of the three partners is the firm B and C
are working partrners. (Marks 15)

2016 APR[13] Profit and Loss Account of a firm of X, Y and Z for

the year ending March 31, 2015 is as under:
220
 ncomelaxLaw DPT- Pbi-4
Rs. Rs.
Costof Goods sold 7,90,000 By Sales 13,50,000
To
ToAemuneration to
By Rent of the
Partners : House Property
X 1,50,000 (Half portion) 50,000
1,00,000 By Interest on
55,000 Debentures
partners (Non-trade
To Interest to 60,000
@ 15% investment)
X 45,000
Y 15,000
Z 60,000
of
To Municipal Tax
House Property
(entire property) 5,000
To Other expenses 2,10,000
To Net Profit 30,000
14,60,000
14,60,000
Other Information: 36,
Out of other expenses Rs. 44,500 is not deductible U/S
(a)
37(1) and 43(B).
January 15, 2015 the firm pays an outstanding sales tax
(b) On previous year 2012-13. As this
liability of Rs. 1,700 for the
not been
pertains to the previous year 2012-13, it has
amount and LOSs Account.
debited to the aforesaid Profit
partner.
(C) Z is not a workinghouse. The ground floor is used for business
(d) The firm owns a is given on rent. Municipal tax
is
purpose, and the first floor
paid in April 5, 2015. payments
net income of the firm and treatments of
Find out the assessment year 2015-16. The
hands for the
o partners in their
conditions of section 184. (Marks 15)
im fulfilled and
years) are resident individuals
and Y(26
U16 SEP.[13]X(28 years)
Co. (a firmof chartered
accountants). On
and partners of XY & provision for payment of salary and
March 31st. 2014. there is no partnership has
1, 2014 the deed of
erest toO partners. On April
salary and interest as follows :
provide
veen amended to
221