Corporate Tax Planning 1A

Assignment A
Q1. Differentiate between the following:
(i) “Defective return of income” and “Belated return of income”
(ii) “Tax avoidance” and “Tax Evasion”

Q2. Explain the different kind of provident fund.

Q3. When an individual is assessable in respect of income of his or her minor child?

Q4. Discuss briefly the provisions relating to set off and carry forward of non-speculative business losses?

Q5 1. Write short note on any three of the following.
a. What is Permanent Account Number?
b. What do you mean by GTI?
c. Who is specified employee?
d. Define previous year.
e. Expand CBDT and CIT.

Q6 How do you determine the residential status of company?
Q7. Explain the procedure for registration under Service Tax.
Q8. Define ‘annual value’ and discuss the deduction to be made out of Annual Value for computing income from house property?

Assignment B
Case Detail :
Case Study Dr. Bankey Lal, a businessman, constructed a multi-storied building consisting 16 flats of equal size. The construction was started in April 2004 and completed on March 31, 2008. Of these 16 Flats, 8 were let-out to tenants for their residence, 2 to tenants for their business, 2 were used by Doctor Bankey Lal for their business, 2 were used by him for his own business and 2 were allocated to 2 employees of Dr. Bankey Lal; Business for their residence and the occupation of these 2 flats by the two employees facilitated the carrying of on his business. The rent charged from each of the ten tenants were Rs 500 p.m. but from the two employees of Dr. Bankey Lal@ Rs 200 p.m. One of the tenants were in arrear of rent for two months during the year and was unable to pay the same. After, he vacated the flat, Dr. Bankey Lal had to wait for two months to get new tenant. The expenses incurred by Dr. Bankey Lal in respect of the flats during the year ended on 31 March 2013 were as follows :- Municipal taxes for each flat Rs 750, cost of repair of each flat Rs 500, annual interest on loan on construction of house Rs 24000, Fire is insurance premium for flat Rs 100, Law charges in connection with a lease agreement were paid for each flat Rs 500.
1. Compute the income from house property of Dr. Bankey Lal for the assessment year 2013-2014.

Assignment C
Question No: 1
A.O.P should consist of:

Individual only
Persons other than individual only
Both the above
None of the above

Question No: 2
Body of individual should consist of :

Individual only
Persons other than individual only
Both the above
None of the above

Question No: 3
The maximum amount on which income-tax is not chargeable in case a co-operative society is:
Rs.50,000
Rs.30,000
Nil
.

Question No: 4
Which of the following types of income is not specifically exempt from income tax
Statutory redundancy pay
Income from Individual Savings Accounts
Any benefit in kind provided to employees by an employer
Income from National Savings Certificates

Question No: 5
The basic rate of income tax on non-savings income for tax year 2012-13 is:
20%
10%
40%
50%

Question No: 6
If a married couple (or civil partners) receive joint income, the amount of that income will normally be divided equally between them for tax purposes. True or False?
True
False
.
.

Question No: 7
A taxpayer has taxable income for 2012-13 (after deducting the personal allowance) of £75,200. None of the income is derived from savings or dividends. The income tax liability for the year is:
£15,040
£23,206
£30,080
£37,600

Question No: 8
A taxpayer has taxable income for 2012-13 (after deducting the personal allowance) of £185,300. None of the income is derived from savings or dividends. The income tax liability for the year is:
£92,650
£74,120
£70,776
£37,060

Question No: 9
Which of the following types of income is received by individuals without deduction of basic rate tax?
Loan interest paid by UK companies
Building society interest
Patent royalties
Bank interest received on a National Savings bank account

Question No: 10
In 2012-13, an individual receives net building society interest of £792. The equivalent gross income is:
£792
£1,320
£880
£990

Question No: 11
In 2012-13, George has property income of £8,780 and net bank interest of £4,000. He claims the personal allowance of £8,105. What is the income tax borne for the year?
£931.50
£864.00
£1,135.00
£567.50

Question No: 12
In 2012-13, an individual receives a net dividend of £648. The equivalent gross income is:
£720
£810
£648
£6,480

Question No: 13
Which of the following is a “chargeable asset” for CGT purposes?
A motor car
A taxpayer’s principal private residence
A taxpayer’s holiday home
Gilt-edged securities

Question No: 14
Payments on account of capital gains tax fall due on 31 January in the tax year concerned and on the following 31 July. True or False?
True
False
.
.

Question No: 15
In some cases assessment year and previous year can be same financial year.
True
False
.
.

Question No: 16
In 2012-13, Steven has business profits of £34,125, net bank interest of £1,240 and net dividends of £9,000. He claims the personal allowance of £8,105. What is the income tax payable for the year after subtracting tax deducted at source?

£7,234
£5,924
£8,154
£6,164

Question No: 17
Which of the following is not a “chargeable person” for CGT purposes
An individual who is resident and ordinarily resident in the UK
A company which is resident in the UK
A partner in a UK partnership
A trustee of a UK trust

Question No: 18
Which of the following could give rise to a capital gain (or allowable loss)?
A gift of an asset to a charity
A transfer of an asset between a husband and wife who live together during the tax year in which the transfer occurs
A disposal caused by the death of the taxpayer
The receipt of compensation on the destruction of an asset

Question No: 19
A taxpayer has a single capital gain in 2012-13 of £18,000. The gain does not qualify for entrepreneur’s relief and there are no other gains or losses in the year.
The taxpayer’s taxable income for the year (after deducting the personal allowance) is £20,000 and there are no Gift Aid donations or pension contributions during the year.
The CGT liability for the year is:
£1,332
£2,072
£3,240
£3,603

Question No: 20
A taxpayer has a single capital gain in 2012-13 of £15,600. The gain does not qualify for entrepreneur’s relief and there are no other gains or losses in the year.
The taxpayer’s taxable income for the year (after deducting the personal allowance) is £50,000 and there are no Gift Aid donations or pension contributions during the year.
The CGT liability for the year is
£900
£4,368
£1,400
£2,808

Question No: 21
A taxpayer has a single capital gain in 2012-13 of £22,500. The gain does not qualify for entrepreneur’s relief and there are no other gains or losses in the year.The taxpayer’s taxable income for the year (after deducting the personal allowance) is £30,000 and there are no Gift Aid donations or pension contributions during the year.
The CGT liability for the year is:
£2,142
£5,863
£2,895
£3,332

Question No: 22
A taxpayer has a capital loss brought forward from the previous tax year of £2,000. In 2012-13 he has capital gains of £18,200 and allowable losses of £700. What is the CGT assessment for 2012-13?
£17,500
£15,500
£6,900
£4,900

Question No: 23
A new business was set up on15-11-2008 and it commenced its business from 1-12-2008.The first previous year in this case shall be:
15-11-2008 to 31-3-2009
1-12-2008 to 31-3-2009
2008-2009
None of the above

Question No: 24
A person leaves India permanently on 15-11-2008.The assessment year for income earned till 15-11-2008 in this case shall be:

2007-08
2008-09
2009-10
All of the above

Question No: 25
Surcharge in case of an individual or HUF for assessment year 2009-10 is payable at the rate of :

12% of the income-tax payable provided the total income exceed Rs.60,000.
10% of the income-tax payable provided the total income exceeds Rs.10,00,000
5% of the income-tax payable if the total income exceeds Rs.8,50,000
None of the above

Question No: 26
Surcharge in case of a firm for assessment year 2009-10 is payable at the rate:

2.5% of income-tax payable
5% of income-tax payable
10% of income-tax payable
All of the above

Question No: 27
A local authority is taxable at flat rate of income-tax.

True
False
.
.

Question No: 28
Betty died on 30 November 2012, having made net capital losses of £5,000 between 6 April 2012 and the date of her death. Her net gains in the previous three years (and the annual exemption for each of those years) were as follows:
Net gains AE
£ £
2009-10 20,500 10,100
2010-11 9,000 10,100
2011-12 12,500 10,600
Betty’s CGT assessment for 2009-10 is:
£5,400
£10,400
£7,300
£8,400

Question No: 29
Betty died on 30 November 2012, having made net capital losses of £5,000 between 6 April 2012 and the date of her death. Her net gains in the previous three years (and the annual exemption for each of those years) were as follows:
Net gains AE
£ £
2009-10 20,500 10,100
2010-11 9,000 10,100
2011-12 12,500 10,600
Betty’s CGT assessment for 2011-12 is:
£12,500
£10,600
£1,900
£nil

Question No: 30
The maximum amount on which income-tax is not chargeable in case of firm is:

Rs.1,00,000
Rs. 90,000
Nil
None of the above

Question No: 31
Income which accrue outside India from a business controlled from India is taxable in case of:

Resident only
Not ordinarily resident only
Both ordinarily resident and NOR
Non-resident

Question No: 32
Income which accrue or arise outside India and also received outside India taxable in case of:

resident only
not ordinarily resident
both ordinarily resident and NOR
none of the above

Question No: 33
TI of a person is determined on the basis of his:

residential status in India
citizenship in India
none
both of the above

Question No: 34
Once a person is a resident in a P.Yr. he shall be deemed to be resident for subsequent P. Yr.

True
False
.
.

Question No: 35
Once a person is resident for a source of income in a particular P. Y r. he shall be deemed to be resident for all other sources of income in the same P. Yr :
True
False
.
.

Question No: 36
R Ltd., is an Indian company whose entire control and management of its affairs is situated outside India. R Ltd., shall be :

Resident in India
Non-resident in India
Not ordinarily resident in India
All of the above

Question No: 37
R Ltd., is registered in U.K. The control and management of its affairs is situated in India .R Ltd shall be :

Resident in India
Non-resident
Not ordinarily resident in India
None of the above

Question No: 38
R, a foreign national visited India during previous year 2008-09 for 180 days. Earlier to this he never visited India. R in this case shall be:

Resident in India
Non-resident
Not ordinarily resident in India
None of the above

Question No: 39
An Indian company is always resident in India

True
False
.
.

Question No: 40
Dividend paid by an Indian company is:
Taxable in India in the hands of the recipient
Exempt in the hands of recipient
Taxable in the hands of the company and exempt in the hands of the recipient
All of the above