| Re: Executive Tax Law Question Paper
Here is the list of few questions of Executive Tax Law exam for your idea.
PART – A
(Answer Question No.1 which is compulsory
and any three of the rest from this part.)
1. (a) Write the most appropriate answer from the given options in respect of the following
having regard to the provisions of the relevant direct tax laws :
(i) Total income of a person is determined on the basis of his —
(a) Residential status in India
(b) Citizenship in India
(c) Both (a) and (b) above
(d) None of the above.
(ii) Income accruing from agriculture in a foreign country is taxable in the case of
an assessee who is —
(a) Resident
(b) Not ordinarily resident
(c) Non-resident
(d) None of the above.
(iii) The maximum amount of entertainment allowance deductible under section 16(ii)
in respect of non-government employee is —
(a) _5,000
(b) _9,000
(c) _10,000
(d) None of the above.
(iv) The employer provides a cash gift/gift cheque of _3,000 to Ramesh. Besides,
he gets a wrist watch of _18,000 as Diwali gift from the employer. The taxable
amount of gifts in the hands of Ramesh is —
(a) _21,000
(b) _18,000
(c) _16,000
(d) _13,000
(v) Which of the following income is not an example of income chargeable under
the head 'income from other sources' —
(a) Director's fees
(b) Insurance commission
(c) Gratuity paid to an employee
(d) Family pension received by family member of a deceased employee.
(1 mark each)
(b) A and B are working partners in a partnership firm. They have contributed _5,00,000
each as capital and _2,00,000 each as loan. Partnership deed allows payment of interest
on loan as well as on capital @16% per annum and remuneration _5,00,000 to each
working partner.
If profit of the firm after paying interest but before deducting remuneration of partners
is _8,80,000, determine the total income of the firm.
(5 marks)
(c) Re-write the following sentences after filling-in the blank spaces with appropriate
word(s)/figure(s) :
(i) The due date for e-filing of return of income if the assessee is a charitable trust
and the charitable trust does not wish to avail exemption under sections 11 and
12, is ___________ of the assessment year.
(ii) Deduction of tax at source will be made only in cases where the income by way
of winnings from horse races to be paid to a person exceeds ____________.
(iii) The net wealth computed under the provisions of the Wealth-tax Act, 1957 shall
be rounded off to the nearest multiple of ____________.
(iv) An assessee ___________ benefit of section 54EC (i.e., no tax on long-term
capital gains if invested in specified bonds) with respect to depreciable asset.
(v) The time-limit for rectification of mistakes under section 154 is ___________
from the end of the financial year in which the order was passed.
(1 mark each)
2. (a) Tarun, aged 48 years, has following income for the previous year 2013-14. You are
required to ascertain his taxable income and tax liability for assessment year 2014-15 :
_
Income from salary 2,40,000
Profit from business 1,20,000
Actual rent of house property 1,80,000
Municipal tax paid (10% of municipal value) 20,000
Agriculture income 1,20,000
Long-term capital gains on sale of plot 15,000
Winnings from lotteries (gross) 5,00,000
LIC premium paid 20,000
Contribution to PPF (Public Provident Fund) 50,000
Interest on fixed deposit in a bank (gross) 30,000
(5 marks)
(b) State, with reasons in brief, whether the following statements are true or false :
(i) Every person is liable to pay wealth tax.
(ii) Tax return preparers are employees of Income-tax Department.
(iii) Income of previous year is always taxable in the immediately following
financial year.
(iv) Gifts on the occasion of marriage, birthday, marriage anniversary, etc. are not
chargeable to tax in all the cases.
(v) There is no difference between short-term and long-term capital gains so far as
taxability is concerned.
(2 marks each)
3. (a) Kapil owns a house at Pune. From the following particulars, compute the total income
under the head 'income from house property' for the assessment year 2014-15 :
_
Municipal valuation 5,00,000
Fair rent 5,60,000
Actual rent (_25,000 per month) 3,00,000
Standard rent 5,20,000
Municipal taxes paid (half of it was borne by the tenant) 25,000
Expenses on repairs 15,000
Fire insurance premium paid 12,000
Ground rent 16,000
He had borrowed a sum of _20,00,000 @10% per annum from LIC Housing Ltd. on
1st August, 2009 and the construction of the house was completed on 1st January, 2013.
Total loan is still unpaid.
(5 marks)
(b) After serving for 29 years and 7 months in Sonam Ltd., Karim retired on 30th September,
2013. He is covered by the Payment of Gratuity Act, 1972. The company has paid
him a gratuity of _6,68,800. At the time of retirement, he was getting basic salary of
_15,800, dearness allowance _4,260 and house rent allowance _1,800 per month.
Determine the amount of gratuity exempt under section 10(10). Also show your workings.
(5 marks)
(c) (i) How losses under the head 'income from house property' can be set-off ?
Can such losses be carried forward ?
(3 marks)
(ii) Under what circumstances, the Commissioner of Income-tax can revise the orders
passed by any authority subordinate to him ?
(2 marks)
4. (a) Subodh, aged 41 years, gives the following particulars of his income received from
Nalanda Ltd. for the year ended 31st March, 2014 :
_
Salary after deduction of income-tax at source and own
contribution to recognised provident fund 9,00,000
Income-tax deducted at source 80,000
Own contribution to recognised provident fund 1,45,000
Employer's contribution to the provident fund 1,40,000
Interest credited to provident fund @11% per annum 2,89,000
House rent allowance (actual rent paid by Subodh for the house in
Delhi was _1,08,000) in addition to salary of _9,00,000 as
given above. 1,20,000
He is given free use of 1200 CC car by the employer for domestic as well as official
purposes (with effect from 1st November, 2012) and all expenses including driver's salary
being met by the employer. He is also provided free services of a watchman
(with effect from 1st May, 2013) and a sweeper (with effect from 1st December, 2012).
Salary (_2,675 per month per person) is paid by the employer.
Subodh pays life insurance premium of _4,000 on his own life (sum assured _1,00,000).
His income from other sources is _2,40,000.
Compute total income and tax liability of Subodh for the assessment year 2014-15.
(6 marks)
(b) Distinguish between the following. Attempt any three :
(i) 'Normal depreciation' and 'additional depreciation'.
(ii) 'Assets under wealth tax' and 'deemed assets under wealth tax'.
(iii) 'Short-term capital gains' and 'long-term capital gains'.
(iv) 'Gross total income' and 'total income'.
(v) 'Statutory provident fund' and 'recognised provident fund'.
(3 marks each)
5. (a) Karan is an Indian citizen and resident in India. His assets and liabilities as on
31st March, 2014 are as follows :
(i) Self-occupied residential house in foreign country _90,00,000. For its construction,
he borrowed _20,00,000 in the foreign country which is due on 31st March, 2014.
(ii) He has national savings certificates VIII issue _1,00,000.
(iii) Another self-occupied house (residential) in Chennai (India) _60,00,000.
(iv) He has jewellery worth _60,00,000 out of which ornaments worth _18,00,000
are meant for daily use by his wife.
(v) He has motor car for his personal use valued _5,30,000.
(vi) In February, 2013 he has transferred his house to his married daughter without
consideration. The value of the house as on 31st March, 2014 is _38,00,000.
(vii) The house given to daughter was purchased in 2010 for which a loan of
_12,00,000 was taken. Out of this loan _7,00,000 is outstanding.
Compute the net wealth and wealth-tax payable.
(7 marks)
(b) Write notes on the following. Attempt any two :
(i) Pay as you earn scheme
(ii) Deduction in respect of interest on loan taken for higher education
(iii) Taxability of pension received by the widow of a deceased employee.
(4 marks each)
6. (a) What is the scheme of partial integration of non-agricultural income with agricultural
income ?
(5 marks)
(b) Raman gifts a house property to his married minor son. Discuss the taxability of the
same under wealth-tax and income-tax. What will be your answer if instead of house
property jewellery is gifted.
(5 marks)
(c) The tax payable for the assessment year 2014-15 by Raghu is _2,35,600. He has
deposited the following amount as advance tax :
Date of deposit Amount deposited
(_ )
14th September, 2013 20,000
15th December, 2013 50,000
15th March, 2014 30,000
Compute the interest payable under section 234C, if any.
(5 marks)
PART – B
7. Attempt any four of the following :
(i) Re-write the following sentences after filling-in the blank spaces with appropriate
word(s)/figure(s) :
(a) Service tax is rounded off to the nearest multiple of _________ .
(b) The application for registration shall be made within a period of __________
of commencement of business by a service provider.
(c) Return of service tax is required to be filed by every assessee in Form
No. __________.
(d) Due date for e-payment of service tax in the case of individual assessee is
__________ immediately following the quarter in the financial year except in
case of last quarter.
(e) Service tax, being an indirect tax, is being administered by __________.
(1 mark each)
(ii) State, with reasons in brief, whether the following statements are true or false in context
of service tax :
(a) Service tax returns have to be electronically filed by all service tax assessees on
mandatory basis.
(b) Service tax return need not be filed where no taxable services were rendered in
the relevant half-year.
(c) Service tax is payable on issue of invoice or receipt of payment whichever is
earlier.
(d) There are provisions of TDS in respect of service tax.
(e) Service tax is applicable to the whole of India except the State of Jammu and
Kashmir.
(1 mark each)
(iii) Deep Ltd. is engaged in providing taxable service. Ascertain the amount of service
tax payable by it for the month of September, 2013 from the following information :
_
Supply of farm labour for agricultural purpose 1,00,000
Market value of services provided free of cost 62,000
Advance received in September, 2013 from clients for
which no service has been rendered till date 91,000
Amount received for the taxable services rendered in June, 2013
(bills for the same were issued on 25th June, 2013) 1,08,000
Bill raised for the service rendered in the month of
September, 2013 against which no amount is
received so far 75,000
The above amounts are exclusive of service tax. Deep Ltd. is not eligble for small
service provider's exemption in the financial year 2013-14.
(5 marks)
(iv) Explain in brief the provisions relating to the procedure of registration under the
service tax.
(5 marks)
(v) What are the various provisions relating to payment of service tax ?
(5 marks)
PART – C
8. Attempt any four of the following :
(i) Determine the VAT liability using invoice method of computation from the
following data :
Purchase price of goods acquired from local market
(including VAT) _52,00,000
VAT rate on input 4%
Transportation, insurance, warehousing and handling cost
incurred by him _20,000
Goods sold at a profit margin 14%
VAT rate on sales 12.5%
(5 marks)
(ii) What are the conditions to be fulfilled by the dealer accepting the composition scheme
under the value added tax (VAT) ?
(5 marks)
(iii) State, with reasons in brief, whether the following statements are true or false :
(a) VAT is a multi-point tax.
(b) VAT system is followed by all States in India.
(c) Registration of dealer is mandatory under VAT.
(d) The rate of VAT for precious and semi-precious metals is 4%.
(e) As a result of introduction of VAT, the central sales tax will be phased out.
(1 mark each)
(iv) "Input tax credit is generally given for the entire VAT paid within the State on purchases
of taxable goods meant for resale or manufacture of taxable goods." Explain.
(5 marks)
(v) Distinguish between 'zero rating' and 'exempted transaction'.
(5 marks)
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