Computation of Tax (Corporate Tax India)
CORPORATE TAX INDIA
(COMPUTATION OF TAX)
Q.1. Compute the tax payable on LTCG in the following cases for A.Y. 2012-13 assuming
(i) that the shares are listed in a recognised stock exchange in India;
(ii) total income does not exceed one crore rupees;
(iii) the securities transaction tax has not been paid:
(1) Y Ltd. is a shareholders of X Ltd. The company allotted it bonus shares of face value of Rs. 10,000 in 1982-83 and Rs. 15,000 in 1995-96. Y Ltd. sold all the bonus shares, in July, 2010 for Rs. 50,000.
(2) Y Ltd. purchased shares of Z Lt. as under :
(i) In 1981-82 cost Rs. 10,000;
(ii) In 1994-95 cost Rs. 15,540.
Y Ltd. sold the shares in Aug., 2010 for Rs. 75,000 and Rs. 74,000 respectively. Cost inflation index for 1981-82 100, 1994-95 259 and 2011-12 785.

Q.2. From the following information compute tax payable by X Ltd. for the A.Y. 2012-13 :
Rs. | |||
1. | (i) | (i) Equity shares purchased on 10.6.2010 | 18,520 |
(ii) sold these shares in recognised stock exchange on 15.12.2011 | 25,400 | ||
(iii) Paid brokerage Rs. 300 and securities transaction tax Rs. 50 | |||
2. | (i) | Equity shares purchased on 8.5.2011 | 1,00,000 |
(ii) | Sold these shares in recognised stock exchange on 6.2.2012 | 1,50,000 | |
(iii) | Paid brokerage Rs. 1,500 and securities transaction tax Rs. 300. | ||
3. | (i) | Equity shares purchased on 9.5.1984 | 40,000 |
(ii) | Company purchased its own shares during previous year | ||
from shareholders and paid to X Ltd. for its holdings | 2,75,500 | ||
4. | Other Income | 40,000 |
Cost inflation index in 1984-85, 2010-11 and 2011-12 was 125, 711 and 785 respectively.

Notes :
1. Securities transaction tax is not deductible in computing capital gains.
2. Total income does not exceed one crore rupees hence, surcharge is not payable.
Q.3. The Net Profit of X Company Ltd., as per Profit & Loss Account for the year ended on 31.3.2011 is Rs. 17,50,000. From the following information calculate the Book-Profit of the Company under section 115JB for the assessment year 2012-13.
The following amounts are found debited to profit and loss account:
Rs. | |
Excise Duty | 1,50,000 |
Provision for Unascertained Liability | 1,00,000 |
Loss of Subsidiary Company | 2,00,000 |
Provision for Income-Tax | 2,50,000 |
Wealth Tax | 5,000 |
Proposed Dividend | 9,95,000 |
The following amount is found credited to profit and loss account. | |
General Reserve (Withdrawal) | 5,00,000 |
Additional information:
Unabsorbed losses/allowances brought forward from past year as per books of accounts prepared under Schedule VI of Companies Act are ask follows:
Rs. | |
Unabsorbed Business Loss (excluding depreciation) | 2,65,000 |
Unabsorbed Depreciation | 3,50,000 |

Note :
Provision for loss of subsidiary company is added back in computing the ‘Book Profit’. But in the question, ‘the loss of subsidiary company’ is given. It is a deductible item, hence, not added to find out the book-profit.