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Assessment of Individual
QUESTION FOR PRACTICE

Q.1. The income of Mrs. Verma for the year ended 31st March, 2014 consists of the following Business profits (after setting off Rs. 20,000 paid as donation to the Chief Minister's Relief Fund) Rs.3,52,000.
(i) One-Fourth share from an association of persons in which she was a member Rs. 8,000.
(ii) Interest on Government Securities Rs. 8,000
(iii) Winning from lottery (net) Rs. 70,000
Compute the total income and tax liability for the Assessment Year 2014-15.
Ans. Total Income: 4,60,000. Tax: 27,810.

Q.2. X (44 years) is a resident individual. For the previous year 2013-14, he has the following information ;
1. Income from part-time employment: Rs. 2,32,000.
2. Income from business of dealing in patricides: Rs. 9,00,000
3. Income from the activity of owning and maintaining race camels: Rs. (-)25,000.
4. Long-term Capital Gain on transfer of silver: Rs. 2,57,000.
5. Income from house property: Rs. 60,000.
6. Income from the activity of owning and maintaining race horses: Rs. 51,000.
7. Deposit with SBI for claiming deduction under Section 80C: Rs. 50,000.
A part from the above incomes, on August 12, 2013, X purchases 1,000 equity shares in A Ltd. (of face value of Rs, 10 per share) at the rate of Rs. 860 per share.
On September 10, 2013 (being record date), X gets 180 per cent dividend from A Ltd. On December 7, 2013, X transfers 1,000 equity shares in A Ltd. at Rs. 840 per share. X wants to set off the following losses brought forward from earlier years.
1. House property loss of previous year 2012-13: Rs. 20,000.
2. Business loss of steel trading business of the previous year 2010-11: 
    Rs. 30,000 (this business was discounted in 2012-13).
3. Loss from the activity of owning and maintaining race horses of previous year 2012-13: Rs. 11,000.
4. Loss from the activity of owning and maintaining race camels of previous year 2011-12: Rs. 25,000.
Return for the Assessment Year 2012-13 was submitted on July 1, 2012 and Return of the Assessment Year 2013-14 was submitted on December 20,2013.
Determine the net income and tax liability of X for the Assessment Year 2014-15. Also determine the quantum of losses to be carried forward to the next year.
Ans. Total Income: 13,48,000 Total Tax Liability: 2,39,887.

Q.3. 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. 
Ans. Tax Liability: 1,06,090.

Q.4. Mr. X (age 48 yrs.) is the manager of a private company at Delhi since 1" March 2011. He is in the grade of Rs. 10,000 - 500 - 20,000, plus a dearness allowance @ 20% of his basic pay, half of which enters into retirement benefits. He contributes 15% of his salary to Recognized Provident Fund to which his employer contributes an equal amount. During the previous year he took a loan of Rs. 2,00,000 from his provident fund for his daughter's marriage out of which he repaid Rs. 20,000 during the year by way of deduction from his salary.
He has been provided with a rent free house for which the company pays rent of Rs. 84,000 p.a. He is getting transport allowance of Rs. 3,000 p.m. He is also getting fixed medical allowance of Rs. 2,000 p.m. and tiffin allowance of Rs. 2,000 p.m. His club bills of Rs. 20,000 were also paid by the company.
He received Rs. 11,000 by way of encashment of leave on 31st March, 2014. He has been provided with the facility of a gardener and a cook who are paid each Rs. 2,500 p.m. by the employer. He is also provided with a laptop costing Rs. 1,00,000 for use.
Two children of Mr. X are studying in the school run by the employer for which no fees are paid. Expenditure per student is Rs. 1,500 per month. His salary falls due on the first day of the next month. His other incomes are :
Rs.
Dividend from Reliance Industries 10,000
Long-term Capital Gain 20,000
Bank Interest 51,530
He contributed Rs. 20,000 for Prime Minister's National Relief Fund. He further paid Rs. 10,000 towards medical treatment of his dependent son who is a person with disability. He also paid LIC premium on the life of his major son Rs. 12,000 on a policy of Rs. 50,000.
Compute his total income and tax payable for the Assessment Year 2014-15.

Q.5. Shri Anil working in Eastern India Limited, Mumbai, has furnished the Allowing 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 (spent for coming to office and going back to his home) at Rs. 650 per month.
(iv) Entertainment Allowance at Rs. 500 per month.
(v) House rent allowance of Rs. 3,000 per month rent paid 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 made 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 for the Assessment Year 2014-15 and also state the amount entitled to deduction u/s 80C.

Q.6. X was the General Manager of ABC Ltd. He retired from service on 31-12-2013 after 30 years of service. The following information has been provided by him :
(i) Salary Rs. 18,000 p.m. from 1-1-2013.
(ii) House Rent Allowance Rs. 10,000 p.m. from 1-1-2013, he lived in his own house.
(iii) Medical Allowance Rs. 2,400 p.m.
(iv) Rs. 11,200 being the cost of 1st class rail-ticket for X and his family for their visit to their home town was reimbursed by the employer.
(v) A car of 1.4 litres engine cubic capacity is provided by the company for official and personal use and all expenses of running and maintenance of car and salary of the driver are borne by the employer.
(vi) X contributes 20% of his salary to a recognised provident fund and the employer contributes 10%.
(vii) He has invested Rs. 10,000 in National Savings Certificates VIII issue and Rs. 10,000 in Public Provident Fund A/c. He paid Rs. 8,000 towards life insurance premium.
(viii) He received Rs. 2,70,000 as gratuity.
(ix) He received Rs. 2,16,000 for encashment of leave being twelve months' unavailed leave. He was entitled to one month's leave for every year of service.
Compute his taxable income for the Assessment Year 2014-15.

Q.7. Mr. X (age 58 years) is the General Manager of ABC Ltd Delhi. He has retired on 31-12- 2013 after 20 years of service. He submits the following particulars of his income for the previous year 2013-14.
(1) Salary @ Rs. 20,000 p.m. from 01-01-13.
(2) Dearness allowance Rs. 2,000 p.m. 50% of which is for retirement benefits.
(3) Pension @ Rs. 5,000 p.m.
(4) House Rent Allowance @ Rs. 3,000 p.m. (Actual rent paid by him Rs. 4,000 p.m.).
(5) A car of 1.6 litres engine capacity. All expenses including salary of driver are paid by the company.
(6) He contributes 20% of his salary towards a recognised provident fund. The company contributes 12% of the salary to this fund.
(7) The company paid Rs. 8,000 towards his gas bill.
(8) He received Rs. 1,50,000 as gratuity.
(9) He received Rs. 1,67,500 for encashment of 10 months' unutilised earned leave.
He is entitled to one month's leave p.a. During his service he has availed 10 months' earned leave.
(10) He has invested Rs. 15,000 in unit linked insurance plan of UTI, Rs. 12,000 in PPF A/c and Rs. 15,000 towards life insurance premium on the life of his major son (sum assured Rs. 60,000).
(11) The company deducted Rs. 500 as tax at source.
Compute his taxable income and tax liability for the Assessment Year 2014-15.

Q.8. Mr. X (age 56 years) is a Manager of a company in Delhi. He retires from service on 31st December, 2012 after 28 years and 9 months of service. Other details are as follows for the previous year ending 31st March, 2014.
(i) Basic Salary Rs. 8,000 p.m.
(ii) House Rent Allowance Rs. 3,000 p.m. Rent paid by Mr. X Rs. 2,500 p.m.
(iii) Lunch allowance Rs. 100 per day for 80 days when Mr. X was on field duty.
(iv) Reimbursement by the company of salary of a watchman and a sweeper Rs. 1,200 p.m. each who are the employees of Mr. X.
(v) He receives Rs. 2,50,000 as gratuity. He was drawing a salary of Rs. 8,000 p.m. since 1st January, 2012.
(vi) After retirement he is in receipt of pension @ Rs. 3,500 p.m. On 1st March, 2014 he gets one half pension commuted for Rs. 1,50,000. 
(vii) During the previous year he deposited Rs. 70,000 in Public Provident Fund. He paid the life insurance premium Rs. 4,000 (sum assured Rs. 50,000) on the policy taken on the life of his married son.
Compute his taxable income and tax liability for the Assessment Year 2014-15.

Q.9. Mrs. X is working with ABC Ltd since 1st December 2010 in the pay scale of Rs. 40,000—Rs. 1,000—Rs. 65,000. She gets the following emoluments from the company during the previous year 2013-14:
Rs.
Dearness allowance (forming part of the salary) 24,000 per annum
Lunch allowance 6,000 per annum
Transport allowance 1,000 per month

She is provided with a car (1800 cc) along with the driver for official and private use with effect from 1st February, 2013 as she stops getting transport allowance from that date. Entire expenditure of the car and the driver is paid by the employer company. She pays Rs. 300 per month to the employer for use of the car and driver.
The company also provides her a rent-free furnished house in Delhi with effect from 1st January, 2014. The house is taken by company on lease at a monthly rent of Rs. 10,000. The furnishings are owned by the employer. They were bought on 1st April, 2012 for Rs. 48,000 and their written down value on 1st April 2013 is Rs. 43,200.
Mrs. X contributes 15% of her salary (basic and dearness allowance) to recognised provident fund to which her employer makes a matching contribution. She also deposits Rs. 30,000 with L1C for maintenance of her dependent sister who is suffering from disability of more than 80%.
Her minor son gets a gift of Rs. 12,825 from his relatives on his birthday and Rs. 61,825 from his friends and friends of his mother.
Compute net income and tax liability of Mrs. X for the Assessment Year 2014-15. Salary becomes due on last day of each month.

Q.10. Mrs. X is working with ABC Ltd. since 1-12-2011 in the pay scale of Rs. 40,000— 71,000— Rs. 65,000. She gels the following emoluments from the company during the previous year 2013-14.
Rs.
Dearness allowance (forming part of the salary) 24,000 pa.
Lunch allowance 6,000 pa.
Transport allowance 1.000 p.m.

She is provided with a car (1800 cc) along with the driver for official and private use w.e.f. 1.2.2014 as she stops getting transport allowance from the date. Entire expenditure of the car and the driver is paid by the employer company. She pays 7300 p.m. to the employer for use of the car and driver.
The company also provides her a rent-free furnished house in Delhi w.e.f. 1-1-2014. The house is taken by company on lease at a monthly rent of Rs. 10,000. The furnishings are owned by the employer. They were bought on 1-4-2012 for Rs. 48,000 and their written down value on 1-4-2013 is Rs. 43,200.
Mrs. X contributes 15% of her salary (basic and dearness allowance) to recognized provident fund to which her employer makes a matching contribution. She also deposits Rs. 30.000 with LIC for maintenance of her dependant sister who is suffering from disability of more than 80%.
Her minor son gets a gift of Rs. 12,825 from his relatives on his birthday and Rs. 61,825 from his friends and friends of his mother.
Compute net income and tax liability of Mrs. X for the assessment year 2014-15. Salary becomes due on last day of each month.

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