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s.in5916 FINAL YEAR B.Com. DEGREE EXAMINATION,

MARCH/APRIL 2008

PART III COMMERECE

PAPER XIV OPTIONAL PAPER I (B)-INCOME TAX LAW &

PRACTICE

INCOME TAX PAPER I

(2004 AND EARLIER ADMISSIONS)

TIME: THREE HOURS MAXIMUM: 80 MARKS

PART A

Answer any ten questions. Each question carries 1 mark.

1. What is assessment year?

2. What is total income?3. What is maximum marginal rate?4. Who is resident?

5. What is regular assessment?6. What is return of loss?

7. Who is deemed assessee?8. What do mean by short term capital gain?

9. Give any two examples of exempted capital gain.10. What is tax free commercial securities?

11. What do you mean by unrecognized provident fund?12. What is composite rent?

(10x1=10 Marks)

PART B

Answer any ten questions. Each question carries 4 marks.

13. What are different types of rental values?14. What is the meaning of tax deduction at source?

15. Mr. Suresh has furnished the following particulars. Compute the value of rent freehome if Mr. Suresh is a government employee, rent fixed by the government is

Rs.300 p.m.

(i) Salary @ Rs.10,000 p.m.(ii) D.A. @ Rs.500 p.m. (it enters into retirement benefit)

(iii) Entertainment allowance @ Rs.600 p.m.(iv) Bonus Rs.8,400

(v) Cost of furniture Rs.20,000.

16. Give any four examples of fully exempted perquisites?

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s.in17. Mr. Raj invested Rs.1,00,000 in 8% tax free debenture of a company. What will betaxable interest for the previous year ending on 31.3.2007 if the rate of deduction

of ax at source is @ 20.4%. Interest accrues on 1st

January every year.

18. From the following information compute depreciation allowable for the

essessment year 2006-07.

Rs.

W.D.V. of furniture on 1.4.2005 1,10,000

Furniture purchased in June 2005 1,50,000

Furniture purchased in January 2006 20,000

Part of furniture sold in February 2006 3,000

Rate of depreciation 10%

19. Distinguish between revenue expenditure and capital expenditure.

20. What are perquisites? Give some examples of tax free perquisites.

21. A company took house on rent and allotted it to its employees. From the followinginformation find out the value of perquisites of accommodation.

Rs.

Rent paid for the year 60,000

Salary 5,00,000

Cost of furniture provided in the house 60,000

Rent charges from the employees per month 1,000

22 Determine the annual value of the house from the following information:-

Rs.

Municipal value 1,00,000

Fair rent 1,20,000

Standard rent 90,000

Refund rent received 1,32,000

Municipal tax 10% of municipal value paid by the

owner.

23. Agriculture land purchased in 1984-85 for Rs.46,400 sold for Rs.3,80,000 on

1.5.2006. The assessee purchased another piece of agriculture land on 1.8.2006 forRs.70,000 and deposited Rs.30,000 on 24.6.2007 in capital gain account scheme,1988. Find out the capital gain chargeable to tax for the assessment year, 2007-08.

The cost of inflation index in 1984-85 was 125 and in 2006-07 519.

24. Explain the concept of Balancing Charges.(10x4=40 Marks)

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s.inPART C

Answer any two questions. Each question carries 15 marks.

25. What are the provisions relating to deduction of tax at source from incomechargeable under the head Salary.

26. Compute taxable income from the house property from the following particulars:

Rs.

Fair market rent 80,000

Actual rent 72,000

Municipal valuation 50,000

Standard rent 60,000

Municipal taxes 20%

Interest paid 18,000

27. Kalam purchased a house property on 1st

September 1979 for Rs.2,10,000. Fair

marked value of the property on 1st

April 1981 was 1,70,000. He incurred thefollowing expenses.

Rs.

(a) Construction of room on the ground floorduring 1980-81

10,000

(b) Renewal /construction in 1993-94 3,92,000

The property was transferred on 31st

March 2006 for Rs.18,65,000. Compute thecapital gain. Cost inflation index for the year are as follows:-

Financial year C.I.I.

1993-94 244

2005-06 497

(2x15=30 Marks)