Académique Documents
Professionnel Documents
Culture Documents
Notes:
(1) It is assumed that the donation of Rs. 1,00,000 to the charitable trust is made by any mode
other than cash.
(2) The maturity proceeds received under a life insurance policy are wholly exempt from tax under
section 10(10D), assuming that the conditions given thereunder are satisfied (i.e., the annual
premium does not exceed the specified percentage of actual capital sum assured)
(3) Dr. Shilpa is eligible for deduction under section 80CCG since her gross total income does not
exceed Rs.12 lakh. It is assumed that she is a new retail investor.
2. Computation of taxable salary of Mr. Anish for A.Y. 2017-18
Particulars Rs.
Basic pay [(Rs. 25,000×11) + (Rs. 27,500×1)] = Rs. 2,75,000 + Rs. 27,500 3,02,500
Dearness allowance [15% of basic pay] 45,375
Bonus [Rs. 27,500 × 1.5] 41,250
Employer’s contribution to Recognized Provident Fund in excess of 12%
(18% - 12% = 6% of Rs. 3,47,875) 20,873
Taxable allowances
Telephone allowance 12,000
Taxable perquisites
Rent-free accommodation [See Note 1 below] 60,169
Medical reimbursement (Rs. 40,000 - Rs. 15,000) [See Note 2 below] 25,000
Reimbursement of salary of housekeeper [Rs. 2,000 × 12] 24,000
Gift voucher [See Note 4 below] -
Motor car owned and driven by employee, running and maintenance charges 15,000
borne by the employer [Rs. 36,600 - Rs. 21,600 (i.e., Rs. 1,800 × 12)]
Value of free lunch facility [See Note 5 below] -
Income under head “Salaries” 5,46,167
3. Medical insurance premium paid by the employer to effect an insurance on the health of
the employee is fully exempt.
4. If the value of any gift or voucher or token in lieu of gift received by the employee or by member
of his household is less than Rs. 5,000 in aggregate during the previous year, the perquisite
value is Nil. In this case, the gift voucher was received on the occasion of marriage anniversary
and the sum is less than Rs. 5,000. Therefore, the perquisite value of gift voucher, is Nil.
5. Free lunch provided by the employer during office hours is not a perquisite, assuming that the
value does not exceed Rs. 50 per meal.
3. (a) (i) Computation of income under the head “Profit and gains of business or
profession” of ABC Ltd. for A.Y. 2017-18
Particulars Rs. Rs.
(in lakh) (in lakh)
Profits from the specified business of new four-star hotel
in Bangalore (before providing deduction under section 80
35AD)
Less: Deduction under section 35AD
Capital expenditure incurred during the P.Y. 2016-17
(excluding the expenditure incurred on acquisition of land) 150
= Rs. 250 lakh – Rs. 100 lakh (See Notes 1 & 2 below)
Capital expenditure incurred during January 2016 to
March 2016 (i.e., prior to commencement of business)
40
and capitalized in the books of account as on 1.4.2016
(See Note 3 below)
Note: Computation of Gross Annual Value (GAV) of first floor of Geeta’s house
If a single unit of property (in this case the first floor of Geeta’s house) is let out for some months
and self-occupied for the other months, then the Expected Rent of the property shall be taken into
account for determining the annual value. The Expected Rent shall be compared with the actual
rent and whichever is higher shall be adopted as the annual value. In this case, the actual rent shall
be the rent for the period for which the property was let out during the previous year.
The Expected Rent is the higher of fair rent and municipal value. This should be considered for 9
months since the construction of property was completed only on 30.6.2016.
Expected rent = Rs. 75,000 being higher of -
Fair rent = 1,00,000 x 9 /12 = Rs. 75,000
Municipal value = 72,000 x 9/12 = Rs. 54,000
Actual rent = Rs. 90,000 (Rs. 15,000 p.m. for 6 months from July to December, 2016)
Gross Annual Value = Rs. 90,000 (being higher of Expected Rent of Rs. 75,000 and actual rent of
Rs. 90,000)
5. (a) Computation of Total Income of Mr. Dhanush and Mrs. Meena for the A.Y. 2017 -18
Particulars Mr. Dhanush Mrs. Meena
(Rs.) (Rs.) (Rs.)
Salaries 4,60,000
Profits and gains of business or profession 7,50,000
Income from other sources:
Income by way of interest from company deposit 30,000
earned by minor daughter A [See Note (d)]
Less: Exemption under section 10(32) 1,500 28,500
Total Income 7,78,500 4,60,000
Notes:
(a) The income of a minor child suffering from any disability of the nature specified in section
80U shall not be included in the hands of the parents. Hence, Rs. 1,08,000, being the
income of minor son ‘B’ who suffers from disability specified under section 80U, shall not
be included in the hands of either of his parents.
(b) The income derived by the minor from manual work or from any activity involving exercise
of his skill, talent or specialised knowledge or experience will not be included in the
income of his parent. Hence, in the given case, Rs. 86,000 being the income of the minor
daughter ‘C’ shall not be clubbed in the hands of the parents.
(c) Under section 56(2)(vii), cash gifts received from any person/persons exceeding
Rs. 50,000 during the year in aggregate is taxable. Since the cash gift in this case does
not exceed Rs. 50,000, the same is not taxable.
2. Deduction under section 80G is allowed only if amount is paid by any mode other than cash,
in case of amount exceeding Rs. 10,000. Therefore, the contribution made to public charitable
trust is eligible for deduction since it is made by way of an account payee cheque.
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