Mms Tax Problems

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Prof. S.P.Desai Chartered Accountant

MMS BATCH I BATCH II TAXATION PROBLEMS

1. The following are the particulars of the income and expenses of Prof. Frank, employed

with MIT college, Pune, for the year ended 31st

March 2012:

1) Gross salary Rs. 25,000 per month.

2) Rent free bunglow, perquisite value of which is of Rs. 60,000 per annum.

3) Leave salary of Rs.12000.

4) Bonus Rs.20,000 declared .

5) Arrears of salary of last three years Rs.2,00,000.

6) Professional tax deducted of Rs.200 per month from salary.

7) Examinership remuneration from his college Rs.6,000.

8) He received Rs.5,000 as examiner from Mumbai university.

9) He has spent Rs.4,400 for purchase of books for the purpose of his employment.

10) He received Rs.3,000 for writing article in The Economic Times.

11) Received from giving tuitions to students Rs. 30,000 (for which he spent about 20% on

conveyance)

Compute is Income from for the assessment Year 2012-13.

2. Nikunj who is totally blind is employed with BXL Ltd. The details of his salary for the

previous year 2011-12 as follows:

a) Basic salary Rs.8,000 p.m.

b. D.A. @75% of Basic

C. H.R.A.

(Exempt amount Rs.400 p.m. u/s 10(13A)

@20% of Basic

d. Entertainment Allowance Rs.2,000 p.m.

e. Arrears of salary Rs.5,000

f. Advance against Salary Rs.6,000

g. Contribution of Employer to Recognized provident Fund in

excess of Prescribed limits

Rs.2,300

h. Interest on recognized provident Fund in excess of Prescribed

limits

Rs.780

i. Bonus equal to 2 months basic paid

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j. Amount spent by him on entertainment Rs.500 p.m.

k. Education Allowance

(Exempt u/s 10(14) Rs.1,200)

@Rs.600 p.m.

l. Perquisite value of vehicle provided by employer for personaluse

Rs.4,000

m. Professional Tax Deducted from salary Rs.200 p.m.

n. He paid medical insurance premium for himself and his wife Rs.7,000 by cheque

Compute the net taxable income for A.Y. 2012-13.

3. Mr. Shankar informs you that his taxable income under the head income from house

property is Rs.60,000 and. The particulars of income from other sources are as follows:

Dividend from Thane Janata Sahakari Bank Rs.1,000.

Interest on fixed deposits with Abhinav Sahakari Bank Rs.4,500, commission

paid to Bank Rs.25.

Income from units of Unit trust of India Rs.13,000/-.

Interest on Company deposit Scheme Rs.1900 (TDS Rs.100)

Dividend from M/s Compliance Industries Ltd. Rs.3,005 and bank charges paid

for collection of dividend Rs.5/-

He paid to General Insurance Corporation Rs.13,500/- in respect of medical

insurance for self, his wife and children.

Family Pension received Rs.48,000.

Interest received on F.D. with bank Rs.900 (Net of TDS@ 10%).

Compute the net taxable income of Mr. Shankar for the assessment year 2012-13.

4. Mr. Wagle physically handicapped (men severe) is the owner of a house property viz.

Radhika, The net taxable income from the house property is ascertained at

Rs.2,68,000/-

The particulars of his income from other sources is given below:

Rs.

A) Interest on NSC VIIIth issue (Accrued) 12,000

B) Dividend from Sumitra Industries Ltd. 4,250

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C) Dividend on shares of Bharat Sahakari Bank Ltd. 1,200

D) Interest on fixed deposits with Saraswat Co-operative Bank Ltd. 13,800

E) Interest on deposit with Company. 11,500

F) Income from units of U.T.I 23,750G) Interest on fixed deposits with post office. 11,250

H) He invested Rs.10,000/- in scheme framed by LIC for physically disabled brother.(severe)

Invested Rs 40000 in LIC(Capital sum Rs 40000)

Invested in Infra Bonds 100000/-

You are required to ascertain the taxable income of Mr. Wagle for the assessment year 2012-13.

5. Mrs. Lisa aged about 66 years is a Finance Manager of M/s. Lakme & Co. based at

Calcutta. She is in continuous service since 1984 and receives the following salary and

perks from the Company during the year ending 31.3.2012:

a) Basic Salary (50,000 x 12) =Rs.6,00,000

b) DA (20,000 x 12) =Rs.2,40,000

c) Bonus 2 months Basic Pay

d) Commission 0.1% of the Turnover of the company. The turnover for the Financial

Year 2008-09 was Rs.15.00 crores.

e) Contribution of the Employer and employee to the RPF Account Rs.3,00,000 each.

f) Interest credited to theRPF Account at 9.5% - Rs.60,000.

g) Rent free unfurnished accommodation provided by the company for which the

Company pays a rent of Rs.70,000 per annum.

h) Entertainment Allowance Rs.30,000.

i) Childrens education allowance to meet the hotel expenditure of the children

Rs.15,000 (Exempt Rs.7,200).

j) Profession Tax paid Rs.2,500.

She makes the following payments and investment:

k) Premium paid to insure the life for her major son Rs.15,000.

l) Medical Insurance premium for self Rs.12,000 and spouse Rs.5000.

m) LIC Pension Fund Rs.18,000.

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Paid loan for higher educational studies Rs 60000/-(Interest Rs 30000/-)

Paid Rs 60000/-for treatment of disease qualified for deduction

Determine the Net Taxable for the A. Y. 2012-13.

6. Mr. Bharadwaj, Proprietor of Bharadwaj and Sons submits the following information for

the Previous year ended 31st March, 2012.

Profit and loss Account for the year ended 31st March 2012.

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Particulars Amount Particulars Amount

Salaries and Wages

Printing and stationery

Motor car expenses

Rent

Entertainment expenses

Advertisement Expenses

Depreciation

Drawings

Advance Income tax

Embezzlement by an

employee

DonationsStaff welfare expenses

Net Profit

1,22,000

24,000

29,600

24,000

17,000

47,000

32,000

50,000

15,000

5,000

28,000

66,0002,80,000

Gross Profit

Agricultural income

Interest on PPF

account

Gift from father

Winning from lotteries

NSC interest

7,10,000

8,000

6,000

4,000

10,000

2,000

Total 7,40,000 7,40,000


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Additional Information:

(a)Allowable depreciation u/s 32 of Income Tax: Rs.35,000

(b)Half the rent is attributable towards the residence of the proprietor

(c)Staff welfare expenses include Rs.16,000 incurred for his own medical treatment

(d)Advertisement expenses include Rs.15,000 towards introduction of a new product

(e)Printing and stationary expenses include Rs.4,400 paid for printing of marriage card of

his son

(f)He spent Rs.200 for purchase of lottery tickets

(g)A deduction of Rs.21,000 is available u/s 80(G)in respect of donation expenditure

incurred

You are required to compute the taxable income of Mr.Bharadwaj for the Assessment

year 2012-2013.

7. Mrs. Sunita Shankar is a management consultant. Mar. Shankar is also a visiting faculty

at a few management colleges. She provides you with the following details of her receipts

and payments pertaining to her profession for the financial year 2011-12:

Receipts Amount Payment Amount

Bank Balance

Fees from clients

Honorarium for Lectures

Cash from clients

1,40,000

12,00,000

60,000

50,000

Purchase of computers

Motor car expenses

Purchase of book

Salary to staff

Office RepairsIncome tax

Subscription to journals

Annual membership fees

Of a professional body

Telephone charges

Entertainment expenses

60,000

90,000

50,000

100,000

50,0001,50,000

25,000

5,000

30,000

24,000

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Household expenses

Office expenses

Bank Balance (31.3.2012)

6,000

60,000

8,50,000

Total Rs. 1500000 1500000

Additional Information:

1) Mrs. Sunita Shankar had maintained her books of accounts on cash basis.

2) 50% of the motor car expenses pertain to professional work

3) Depreciation on motor car is charged at the rate of 20 per cent per annum.

You are required to compute the taxable income of Mrs. Sunita Shanka for the Assessment Year

2012-13

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Mms Tax Problems

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