Practice Test - 08 UDESH REGULAR (GROUP-1) 30/04/2023

Total Marks - 50
Taxation [Subjective]

1. Mr Arjun is working with XYZ LIMITED

Basic salary per month Rs 40000
Commission per month Rs 2000
His son is allowed to use a motorcycle belonging to the company . The company had purchased this motorcycle for
Rs 60000 on 1 may 2019 The motorcycle was finally sold to him for Rs 30000 on 1 August 2022
Compute his gross salary
(5 Marks)

2. Vikram sold his residential house property in March 2022 . In july 2022 , he recovered rent of Rs 10000 from Dimple
to whom he had let out his house property for two years April 2016 to March 2018 .
He could not realize two months rent of Rs 20000 from her .& to that extent actual rent was reduced while computing
income from house property for AY 2018-19
Further he had let out his house property from April 2018 to February 2022 to Ganesh .In April 2020 he has increased
rent from Rs 15000 𝑡𝑜 𝑅𝑠 20000 per month & the same was a matter of dispute
In Sept 2022 the matter was finally settled & Vikram received Rs 70000 as arrears of rent for the period April 2020
to February 2022 .
Compute the income from house property for the AY 2023-24.
(5 Marks)

3. Mr.Karan is working with PQR LIMITED

Basic salary per month Rs 30000
Commission pm Rs 5000
A personal loan of Rs five lakhs was provided to him on 1 july 2022 on which it charges interest @ rate of 5 % per
annum entire loan is still outstanding ,SBI RATE is 10% per annum
Compute the gross salary
(5 Marks)

4. Rakesh , a retail trader in cloth business of Andhra Pradesh gives the following Trading & Profit & Loss Account for
the year ended 31𝑠𝑡 March 2023

Particulars Rs Particulars Rs

To Opening Stock 300000 By Sales 2100000

To Purchases 1600000 By Closing Stock 300000

To Gross Profit 500000

2400000 2400000

To Salary 120000 By Gross Profit 500000

 To Rent 94000 By Dividend from 13000
Domestic Company

To Interest on Loan 30000 By Agriculture Income 30000

To Depreciation 107000 By Income from UTI 7000

To Printing & 35000

Stationery

To Postage & Telegram 8000

To general Expenses 16000

To Net Profit 140000

550000 550000

Additional Information
It was found that some stocks were omitted to be included in both the Opening & Closing stocks , the value of
which were Opening Stock Rs -6000
Closing Stock Rs - 18000
General Expenses include SGST Penalty of Rs 6000 paid contravention of provisions of GST
Salary paid to his father Rs 90000 which was reasonable to the extent of Rs 78000
The whole amount of Printing & Stationery was paid in cash in one time
Allowable Depreciation Rs 92000
Compute the profits & gains as per normal provisions of the Act assuming that he has not opted for the
provisions of Section 115 BAC .
(10 Marks)

5. Two brothers Balram & Krishna are co-owners of a house property with equal share . The property was constructed
during the financial year 1998 − 1999 .
The property consists of eight identical units & it is situated at Lucknow.During the financial year 2022 − 23 , each
co-owner occupied one unit for residence & balance of six units were let out at a rent of Rs 12000 per month per unit
The municipal value of the house property is Rs 900000 & the municipal taxes are 20 % of the municipal value which
were paid during the year .
The other expenses were as follows
i) Repairs Rs 40000
ii) Insurance premium paid Rs 15000
iii) The interest payable for the loan taken for construction of house Rs 300000
One of the let out units were remains vacant for four months during the year
Balram could not occupy his units for six months as he was transferred to Punjab . He does not own any other house
Compute the Income under the head Income from House Property
(10 Marks)

6. Rashmi co -owns a house property in Madras along with her sister Vidya , Both of them have equal share in the
property & the same is used by them for self occupation . Interest is payable in respect of a loan of Rs 40 𝑙𝑎𝑘ℎ𝑠 @
10% taken on 1. 4. 2021 for acquisition of such property In addition Rashmi owns a flat in Punjab in which she &
her parents reside .
She has taken a loan of Rs 3 𝑙𝑎𝑘ℎ𝑠 @ 10% for repairs of this flat . Compute the deduction which would be
available to Rashmi & Vidya under section 24( 𝑏) 𝑓𝑜𝑟 𝐴𝑌 2023 − 24 .
(5 Marks)
7. MNO LTD ,a manufacturing concern purchased Machinery Rs 9 Lakhs on 01. 05. 2007 and insured it with LIC of
India against Fire .
The written down value of the assets as on 01. 04. 2022 was Rs 500000
A fire broke out in Dec 2022 causing heavy damage to the machinery
.MNO Limited received a sum of Rs 11 lakhs from LIC on 22. 03. 2023
Compute Capital Gain
(5 Marks)

8. Parneeti received following gifts during the FY 2022 − 23 from Tarun

Particulars Amount

200 shares of LG Limited on 11. 3. 22 , her birthday the FMVof 75000

which was Rs 75000

An office building on 22. 11. 22 from his friend Shambhavi fora 1500000
consideration of Rs 15 lacs, stamp value of which is Rs 20 lakhs

Compute Income from other sources

(5 Marks)
 Practice Test - 08
UDESH REGULAR (GROUP-1) 30/04/2023

Taxation [Subjective]
Hints and Solution
1. (H & S)
Computation of Gross Salary
Particulars Amount

Basic Salary (40000 × 12) 480000

Commission ( 4000 × 12) 48000

ADD

Use of motor cycle 60000 × 10% × (4 ÷ 12) 2000

Transfer of motor cycle- perquisites Depreciatedvalue less Amount

recovered from employee 60000 − (60000 × 10% × 3)less 30000 12000

Gross Salary 542000

2. (H & S)
Computation of Income from House Property for the AY 2023 − 24
Particulars Amount

Unrealsed rent recovered 10000

Arrears of rent received 70000

80000

Less Deduction @ 30 % 24000

Income from house Property 56000

3. (H & S)
Computation of Gross Salary
Particulars Amount

Basic Salary (30000 × 12) 360000

Commission ( 5000 × 12) 60000

Add Value of personal loan benefit

Interest on personal loan 18750

(500000 × 9 ÷ 12 × (10% − 5%)

Gross Salary 438750

4. (H & S)
Computation of Business Income of Rakesh for the AY 2023 − 24

Particulars Amount Amount

Net Profit as per Profit & Loss Account 140000

Add: Inadmissible expenses

Under Valuation of Closing Stock 18000

SGST penalty disallowed 6000

Salary paid to father unreasonable u/s 12000

40 𝐴 ( 3 )

Printing & Stationery was paid 35000

in cash disallowed u/s
40 𝐴 ( 3 )

Depreciation 107000 178000

318000

Less Items to be deducted

Under Valuation of Opening Stock 6000

Dividend from Domestic Company 13000

( Chargeable under the head Income from Other
Sources

Agriculture Income ( Exempt U/s 10 (1) 30000

Income from UTI (Chargeable under the head 56000

Income from Other Sources ) 7000

Business income before depreciation 262000

Less Allowable Depreciation 92000

Net Business Income 170000

5. (H & S)
Computation of income under the head Income from House Property for the AY 2023 – 24

Particulars Balram Krishna

Self occupied portion ( 2 units out of

8)

Annual Value NIL NIL

Less Deduction u/s 24 𝑏

Interest on loan taken for constructionRs 30000 30000

37500 ( being 25 % of Rs 150000)
restricted to maximum of Rs 30000 for
each co-owner since the property was
constructed before 1. 4. 1999 Hence it is
assumed that loan was taken before 1. 4.
1999

Loss from self occupied property (30000) (30000)

Let out portion (6 units out of 8 ) 125850 125850

Income from House Property 95850 95850

Working note

Particulars Amount Amount

Let Out Portion (6 units out of 8 )

Gross Annual Value (75 % of Rs 900000 ) 675000

Actual rent (12000 × 12 × 6)=864000

less (12000 × 4 × 1) = 48000 816000
whichever is higher 816000

Less Municipal taxes paid (75 % 𝑜𝑓 ( 135000

900000× 20%)
Net Annual Value 681000

Less Deduction u/s 24

30% of Net Annual Value 204300

Interest on loan (75 % of Rs 300000 225000 429300

Income from Let out house property 251700

Share of each co-owner Balram Krishna

50% Share of each co owner 125850 125850

6. (H & S)
Computation of Deduction available to Rashmi & Vidya u/s 24( 𝑏) 𝑓𝑜𝑟 𝐴𝑌 2023 − 24

Rashmi Vidya

Interest on loan taken for acquisition of house

property at Nasik
40 𝑙𝑎𝑘ℎ𝑠 @ 10% ie Rs 4 lakhsRashmi ’s
share ie
Rs 200000 ( 50% 𝑠ℎ𝑎𝑟𝑒 )

Parineeti ‘s share ie 200000

Rs 200000 ( 50% 𝑠ℎ𝑎𝑟𝑒 )

200000

Interest on loan taken for repair of flat at GoaRs

3 𝑙𝑎𝑘ℎ𝑠 @ 10% 𝑜𝑛 1. 10. 2021
𝑅𝑠 30000

30000

Total 230000 200000

Deduction u/s 24( 𝑏) restricted to Rs 200000 200000

7. (H & S)
Computation of Capital Gain

Particulars Amount

Full Value of Consideration 1100000

Less WDV as on 01. 04. 2022 500000

Short Term Capital Gain 600000

Full Value of Consideration is the amount of insurance claim received Where any capital assets is destroyed due to
fire and insurance claim is received then capital gain is taxable in the year in which such insurance claim is received
8. (H & S)
Computation of Income from other sources

Particulars Amount

200 shares of LG Limited on 11. 3. 22 , her birthday theFMV

of which was Rs 75000 −
Since shares are included within the definition ofProperty 75000
Value of shares are taxable

An office building on 22. 11. 22 from his friend Shambhavi 500000

for a consideration of Rs 15 lacs, stamp value of which is Rs
20 lakhs - Immovable Property taken against inadequate
consideration is taxable u/s56(2)𝑥.
Hence the difference of Rs 5 lakhs is taxable

Income from other sources 575000

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