ASSESSMENT OF INDIVIDUALS
Q.1. Mr. X provides the following particulars of his income for the previous year ended on 31st March, 2014 :
(a) Basic salary Rs. 1,72,000
(b) Bonus Rs. 7.200
(c) He owns a house property and the same is let out for a monthly rent of Rs. 1,250.
Municipal value of the house is Rs. 12,000. Municipal taxes paid by him amounted to Rs. 3,000 p.a.
(d) He received interest on unlisted debentures Rs. 4,500 and interest on bank deposits Rs. 2,000.
(e) He paid life insurance premium of Rs. 10,000 (sum assured being Rs. 80,000).
(f) He paid the following donations:
(i) The Prime Minister's Drought Relief Fund Rs. 7,000.
(ii) The Prime Minister's National Relief Fund Rs. 10,000.
(g) He paid interest on loan taken for his higher education to a financial institution Rs. 8,000.
You are required to compute the taxable income of Mr. X for the assessment year 2014-15.
Q.2. Shri Anil Bushan Gupta, working in Western India Limited, Mumbai, has furnished the following details of his income for the year ended March 31, 2014 :
(i) Salary Rs. 12,000 per month,
(ii) Bonus equal to six months' salary.
(iii) Transport Allowance (for coming to office and going back to his residence) at Rs. 650 per month.
(iv) Entertainment Allowance at Rs. 500 per month.
(v) Received house rent allowance of Rs. 3,000 per month from the employer, but he paid a rent of Rs. 4,000 p.m.
(vi) Personal medical bills of Rs. 10,000 were reimbursed by the employer. His treatment has been done in a private nursing home not belonging to the employer,
(vii) His contribution to the company's Recognised Provident Fund is Rs. 18,000 and the employer contributes an equal amount. The interest credited to the Provident Fund Account 9.5% per annum, Rs. 12,000.
(viii) Interest on Government Securities Rs. 3,000.
(ix) Income from units of Mutual Fund Rs. 5,500 Gross.
(x) Interest on bank deposits received Rs. 3,000.
(xi) Donation paid to Prime Minister's Drought Relief Fund Rs. 2,500.
(xii) Donation paid to the Government for the promotion of family planning Rs. 2,000.
(xiii) Life Insurance Premium paid during the year Rs. 4,200.
Compute the total income of Shri Anil Bhushan Gupta for the A. Y. 2014-15 and, also state the amount entitled to deduction u/s 80C.
1. House Rent Allowance. The least of the following alternatives is exempt: Rs.
|House Rent Allowance||36,000|
|Excess of rent paid over l/10th of salary (Rs. 48,000 - 14,400)||33,600|
|1/2 of Salary (1/2 of Rs. 1,44,000)||72,000|
The least amount is Rs. 33,600, hence taxable part of house rent allowance = Rs. 36,000 - 33,600 = Rs. 2,400.
2. Donation to Prime Minister's Drought Relief Fund is fully qualified for deduction u/s 80G but deduction is admissible @ 50% of the amount of donation. Donation for promoting family planning is within 10% of total income, hence whole of Rs. 2,000 qualifies for deduction and in this 100% deduction is permissible, hence whole of Rs. 2,000 have been deducted.
3. Reimbursement of medical bills for employee's treatment is exempt upto Rs. 15,000 as the treatment has been done in a private nursing home not owned by the employer.
4. Transport allowance for coming to his place of duty from his residence and going back to his residence is exempt upto Rs. 800 p.m.
Q.3. From the following particulars of income of Mr. Ashok Kumar for the year ended on 31st 1 March, 2014, calculate his total income for the assessment year 2014-15 :
1. Salary Rs. 10,000p.m.
2. Interest received from Bank of Baroda on fixed deposit Rs. 900.
3. Interest received from Maruti Ltd., on fixed deposit Rs. 5,400.
4. Interest received from Government Securities Rs. 7,500.
5. Dividend received on equity shares of D.C.M. Ltd. Rs. 4,000 (gross).
6. Dividend received from a Co-operative Society Rs. 200.
7. Income received on units of Mutual Fund Rs. 8,950 (Net).
8. He owns a poultry farm also. Its profits for the previous year amounted to Rs. 51,000.
9. He sold his residential house on 11th April, 2013 for Rs. 3,50,000 which he had purchased for Rs. 20,000 in 1980 and its fair market value on 1.4.1983 was Rs. 30,000.
10. Other LTCG Rs. 58,300.
11. He purchased National Savings Certificates VIII Issue on 31.3.2014 for Rs. 10,000.
12. He paid Rs. 10,000 by cheque as medical insurance premium of his spouse.
Cost Inflation Index in 1982-83 was 100 and in 2012-13 it was 785.
Q.4. Determine the total income of Shri Mahesh Chandra Gupta and his wife from the following particulars for the year ending on 31st March, 2014:
(i) Shri Mahesh Chandra Gupta and his wife are partners in a firm dealing in Electric business. Their share in firm's profits being Rs. 15,000 and Rs. 10,000 respectively.
(ii) Shri Mahesh Chandra Gupta transferred his house, yielding a monthly rent of Rs. 1,000 to his wife on 1st Nov., 2012 for adequate consideration.
(iii) Shri Mahesh Chandra Gupta had transferred his bank deposit of Rs. 2,00,000 to his wife in April, 2008 without consideration on which amount his wife had earned upto the beginning of the previous year interest of Rs. 60,000. During the financial year 2013-14
his wife earned interest @ 10% on Rs. 2,60,000.
(iv) Notified Debentures of a public sector company of Rs. 30,000 and Rs. 20,000 purchased two years ago are in the name of Shri Mahesh Chandra Gupta and his wife respectively on which 10% interest is receivable. His wife had transferred Rs. 20,000 out of her
personal income to Shri Mahesh Chandra Gupta for purchasing debentures.
(v) He donated clothes worth Rs. 10,000 to an orphanage.
1. The treatment of the interest of Rs. 60,000 earned during the preceding 3 years would have been done in the respective years concerned.
2. Income from asset transferred to spouse without adequate consideration is included in the total income of the transferor; but income from the accrued income from the transferred asset is to be included in the total income of the transferee. Hence, in this question interest of Rs. 20,000 on Rs. 2,00,000 is included in the total income of Shri Mahesh Chandra Gupta and interest of Rs. 6,000 on accrued interest of Rs. 60,000 is included in the total income of Mrs. Mahesh Chandra Gupta.
Q.5. The taxable income of an individual is Rs. 7,70,000 from Business and Rs. 60,000 from House Property for the previous year 31st March, 2014. His wife is also employed and is getting a salary of Rs. 16,500 per month. Prepare his assessment for the relevant assessment year.