Corporate Tax Planning 2

ASSIGNMENT – A

 

FIVE QUESTIONS:-

 

1. From the following particulars compute the gross total income of B for the assessment year 2011-12:- Rs.

1. Loss under the head income from house property 15000

from a house which is let out.

2. Income from business 20000

3. Profit from speculation business 5000

4. Long term capital gains from building 30000

5. Short term capital loss 7000

6. Loss under the head income from other sources 12000

 

2. R furnishes the following details of his income and losses for the assessment year 2011-12. Work out the treatment of set-off and carry forward of losses.

Rs.

1. Interest on securities(gross) 14000

2. Income from house property(computed) 30000

3. Profit from paints business 64000

4. Speculation profits 15000

5. Share of profit from a firm 23000

6. Long term capital gains 30000

7. Short term capital gains 18000

Following are the brought forward items of the assessment year 2010-11.

1. Loss from hardware business(discontinued) 15000

2. Unabsorbed depreciation allowance of paint business 11000

3. Speculation loss 27000

4. Loss from short term capital assets 21000

5. Loss from long term capital assets 31000

 

3. R, an Indian citizen, was ordinarily residing in Dubai. He comes to India once every year in the month of October for 3 weeks. He returns to India permanently on 7.8.2010. He owns the following assets:-

 

1. A residential house at New Delhi gifted by his father in law valued at Rs. 3400000.

2. A house at Mumbai purchased out of money remitted from Canada on 11.7.2009.

3. A house at Chennai purchased on 11.9.2009 of money remitted from Canada on 7.6.2007.

4. Two kilograms of gold brought from Canada to India at the time of transfer of leaving that country on 7.8.2010.

5. A residential house at Hyderabad gifted by his uncle valued at Rs. 5000000.

 

What is R’s liability to wealth tax for the assessment year 2011-12.

 

 

4. A earns the following income during the financial year 2010-11.

1. Interest paid by an Indian company but received in London 200000.

2. Pension from former employer in India, received in USA 8000

3. Profits earned from business in Paris which is controlled in India,

half of the profits being received in India 40000

4. Income from agriculture in Bhutan and remitted to India 10000

5. 3.income from property in England and received there 8000

6. Past untaxed income brought to India 20000

7. Income earned from business in Germany which is controlled from

Delhi Rs. 40000 is received in India 70000

 

Find out his taxable income, assuming if he is Resident, Not-ordinarily Resident or Non-Resident for the assessment year 2011-12.

 

 

5. During the previous year 2010-11, X a foreign citizen, stayed in India for just 69 days. Determine his residential status for the assessment year 2011-12 on the basis of the following information:-

i. During 2009-10 he was not present in India but during 2008-09 he came to India for 276 days.

ii. During 2007-08 X was present in India for 90 days.

iii. During 2004-05 and 2003-04 X was in India for 359 days and 348 days respectively.

iv. Earlier to 2003-04 he had been regularly coming to India for 100 days every year.

 

 

 

 

 

 

 

ASSIGNMENT B:-

THREE QUESTIONS & CASE STUDY

 

 

1. “Income tax is charged on income yet it is not properly defined in the income tax Act, 1961”, discuss this statement and elucidate the basic principles relating to income as laid down by courts in different leading cases.

 

2. What do you understand by set off of losses? Discuss the provisions of set off of losses as given in income tax Law? Write short notes on the set off and carry forward of losses of the following losses:-

Capital loss, loss of card gambling, business losses, losses under the head income from house property and income from other sources, speculation loss and loss of firm.

 

3. What is VAT(Value Added Tax), discuss the evolution of VAT in India, How VAT is different from Sales tax? Discussing the advantages of VAT also writ the procedure for calculating VAT?

 

 

 

 

 

 

 

 

CASE STUDY:-

 

Kwality Electronics Ltd. Furnishes you the following information for the assessment year 2008-09, 2009-10, and 2010-11 for advice as regards set off and carry forward of losses:-

2008-09 2009-10 2010-11

Interest on debentures 20000 25000 15000

Dividend from Indian company(gross) 18000 45000 25000

Income from house property(computed) 20000 20000 -20000

Profits or losses from business before depreciation -10000 30000 23000

Depreciation 8000 10000 14000

Profits or losses on sale of securities(long term) 9000 -15000 10000

Speculation profits or losses 50000 -25000 15000

 

 

You are required to compute gross total income of the company for the assessment year 2008-09, 2009-10 and 2010-11.

 

 

 

 

 

ASSIGNMENT – C

 

MULTIPLE CHOICE QUESTIONS (40)

 

1. Finance bill becomes the Finance Act when it is passed by:-

A. The Lok Sabha

B. The Lok Sabha & Rajya Sabha

C. Both the houses of Parliament and given the assent of the President

D. Both the Houses of Parliament and given the assent of the Prime Minister

 

2. The Circulars issued by CBDT are binding on:-

A. Assessee

B. Income tax authorities

C. Both the above

D. none of the above

 

3. A.O.P consists of:-

A. Individuals only

B. Persons other than individuals only

C. Both the above

D. Company

 

4. Surcharge on income tax is payable by:-

A. All assesses except a foreign company

B. Individual and HUF only

C. A company, domestic or foreign

D. All assesses except local authorities or cooperative society

 

5. Education cess is leviable on:-

A. Income tax

B. Income tax + surcharge if applicable

C. Surcharge

D. Surcgarge + tax

 

6. Education cess is leviable @ :-

A. 2%

B. 5%

C. 3%

D. 7%

 

7. Education cess is liable in case of:-

A. an individual aeessee only

B. an individual and HUF

C. a company assessee only

d. all assesse

 

8. SHEC is liable @:-

a. 2%

b. 3%

c. 1%

d. 5%

 

 

9. SHEC is liable in case of:-

a. an individual assessee only

b. individual and HUF

c. all assessees

d. all assessees other than cooperative society or local authority

 

10. R was born in England, his parents were born in India in 1951. His grand parents were born in South Africa. R shall be:-

a. a person of Indian origin

b. a foreign national

c. none of the above

d. all of the above

 

11. An Indian company is always ——– in India:-

a. resident

b. not ordinarily resident

c. non resident

d. none of the above

 

12. R ltd. Is registered in U.K. the control and management of its entire affairs situated outside India. R Ltd. Should be:-

a. resident in India

b. non resident in India

c. not ordinarily resident in India

d. none of the above

 

13. Casual income received by the assessee is:-

a. fully exempt

b. exempt up to Rs. 5000

c. fully taxable

c. none of the above

 

14. The daily allowance received by an MLA is:-

a. exempt

b. taxable

c. included in total income for rate purposes

d. exempted upto Rs. 2000 p.m.

 

15. Loss under the head house property:-

a. can be carried forward for 8 years

b. cannot be carried forward

c. can be carried forward for only 4 years

d. none of the above

 

16. In case of HUF deduction u/s 80C in respect of life insurance premium shall be allowed for:-

a. any coparcener of the HUF

b. Karta of HUF

c. any member of HUF

d. all the members of HUF

 

17. For claiming deductions u/s 80C, the payment or deposit should be made:-

a. out of any income

b. out of any income chargeable to income tax

c. during the current year out of any source

d. during the previous year out of any source

 

18. Deduction u/s 80C in respect of time deposit in post office is allowed if the deposit is for a period of:-

a. 3 years

b. 5 years

c. 7 years

d. 2 years

 

19. Deduction under section 80CCC is allowed to the maximum extent of:-

a. Rs. 20000

b. Rs. 100000

c. Rs. 10000

d. Rs. 25000

 

20. Deduction under section 80D is allowed to HUF for premium paid to insure the health of:-

a. Karta of the HUF

b. any coparcener of HUF

c. any member of HUF

d. any male member of HUF

 

21. The payment for insurance premium under section 80D should be paid:-

a. in cash

b. by cheque

c. by any mode other than cash

d. in cash or cheque

 

22. Deduction u/s 80E for payment by way of interest on loan is allowed for:-

a. 5 years

b. 8 years or till the interest is paid whichever is earlier

c. 10 years

d. 8 years

 

23. Deduction u/s 80G on account of donation is allowed to:-

a. a business assessee only

b. any assessee

c. individual or HUF only

d. none of the above

 

24. Deduction in respect of rent paid u/s 80GG shall be allowed to:-

a. an individual

b. an individual or HUF

c. any assessee

d. a company

 

25. The maximum deduction under section 80GG shall be limited to:-

a. Rs. 1000 p.m.

b. Rs. 2000 p.m.

c. Rs. 3000 p..m.

d. Rs. 4000 p.m.

 

26. In case an individual is a foreign national but resident and ordinarily resident in India, the net wealth shall:-

a. include assets wherever located whether in India or outside

b. include assets which are located in India

c. not include any asset

d. include assets which are located outside India

 

27. A owns a plot of land in Delhi whose total area is 1200 sq. meter. A building is constructed on 35% area of the plot. The amount of premium to be added to the capitalized value shall be:-

a. 20% of the capitalized value

b. 30% of the capitalized value

c. 40% of the capitalized value

d. Nil

 

28. Every year residential status of an assessee:-

a. may change

b. will not change

c. will certainly change

d. none of these

 

29. Pension payable in a foreign country for services rendered outside India is taxable in the hands of:-

a. resident

b. not ordinarily resident

c. non resident

d. all of the above.

 

30. Which assessee may be a not ordinarily resident as per the income tax Act, 1961:-

a. company

b. HUF

c. Association of person

d. partnership firm

 

31. Past untaxed foreign income brought into India during the previous year is taxable in the hands of:-

a. resident

b. not ordinarily resident

c. non resident

d. none of the above

 

32. Income received from which body is exempt from tax:-

a. company

b. firm

c. association of persons

d. body of individuals

 

33. Current year’s loss under the head income from house property can be set off against:-

a. salaries

b. non speculative business income

c. speculative business income

d. all of the above

 

34. Speculative loss can be set off against:-

a. any income

b. business profits only

c. speculative profits

d. none of them

 

35. Not set off business losses can be set off in the subsequent:-

a. 4 years business profits

b. 8 years business profits

c. 8 years income from any head

d. indefinite period

 

36. Loss from the head house property can be carried forward to be set off against the income from house property of subsequent:-

a. 8 years

b. 4 years

c. indefinite period

d. 10 years

 

37. Deduction u/s 80P relates with:-

a. firm

b. cooperative society

c. company

d. an individual assessee

 

38. How much deduction is allowed to a person with disability or severe disability u/s 80U:-

a. 20000

b. 60000

c. 50000 or 100000

d. Nil

 

39. Tax deducted at source is treated as:-

a. advance payment of tax

b. additional tax

c. an expense

d. none of the above

 

40. Who makes the tax deduction at source:-

a. assessing officer

b. additional tax

c. an expense

d. none of them