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Total No. of Questions : 8] SEAT No. :

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M.B.A. (Semester - III)

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FINANCIAL MANAGEMENT SPECIALISATION - II

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304 - B : Direct Taxation
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(2008 Pattern)
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Time : 3 Hours] [Max. Marks :70
Instructions to the candidates:
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1) Q.No. 1 is compulsory.

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2) Attempt any four questions from the remaining.
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3) Figures to the right indicate full marks.

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4) Use of simple calculator is allowed.

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Q1) What do mean by residential status of an individual? Explain the term
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ordinarily resident and non ordinarily resident. [10]
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Q2) Mr. Aarya is Asstt. Manager of a Chemical company of Delhi, since 1989.
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He has submitted the following particulars of his income for the financial
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year 2015-2016: [15]

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a) Basic Salary Rs. 25,000 per month

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b) Dearness Allowance Rs. 5,000 per month. (Rs. 2,000 p.m. enters into RV
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retirement benefits.)
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c) Education Allowance for two children at Rs. 200 p.m. per child.
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d) Commission on sales 1% of turnover of Rs. 12,00,000

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e) Entertainment allowance Rs. 700 p.m

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f) Traveling allowance for his official tours Rs. 35,000. The entire amount
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is spent on the official tour.

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g) He resides in the flat of the company. Its market rent is Rs. 10,000 p.m
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h) He has been provided with a motor car of 1.8 ltr. Engine capacity for
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his official as well as personal use. The running and maintenance costs
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are borne by the Company.

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Compute income from salaries for the assessment year 2016-17. Assume
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the population of Delhi is more than 25 lakhs.

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Q3) a) Mr. X own a house property in Delhi. From the particulars given

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below compute the income from house property for the assessment

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year 2016-17 [10]

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Municipal Value 2,20,000

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Fair Rent 2,58,000

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Standard Rent 2,45,000

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Actual Rent per month 24,000

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Municipal taxes paid during the year 25% of municipal value
Municipal taxes paid during the year 40% of tax levied
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Expenses on repairs 20,000

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Insurance premium 5,000
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Mr. X borrowed a sum of Rs. 12,00,000 @ 10% on 1.7.2010 and the

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construction of the property was completed on 28.02.2012.

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b) When income from house property is not charged to tax. [5]

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Q4) Write short note on (any three) [15]
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a) Income from other sources

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b) Self Assessment tax.
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c) Residential status of company.

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d) Incidence of tax.

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e) Expenses expressly allowed as deduction under profits and gains of
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business or profession.
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Q5) Mr. Bhupen acquired a residential house on 1.10.1979 for Rs. 1,50,000.
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Fair market value of the house as on 1.4.1981 is Rs. 3,25,000. He spent an

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amount of Rs. 60,000 on 15.12.1986 on improvement of the house.

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Mr. Bhupen gifted the said property to his son Viraj on 25.10.1995.
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Pr. Viraj also spent Rs. 45,000 on improvement of the house On 25.08.1997.
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Mr. Viraj sold the above house on 31.12.2012 for a sum of Rs. 40,00,000.
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Expenses on transfer were 1.5% of the sale consideration. Compute the

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capital gain for the assessment year 2016-17. (CII for 1981-82 = 100,
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2012-13 = 852, 1986-87=140,1997-98=331) [15]

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Q6) a) Write a note on Deduction under Sec 80. [8]

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b) Write a note on Appeal under the Income Tax Act, 1961. [7]

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Q7) Discuss the provisions of Tax Deductible at Source (TDS) under the Income

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Tax Act 1961. [15]

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Q8) What are various expenses deductible under the head income from other
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sources? [15]
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