C. S. Govt Tax Regulation Dec. 09 Solved Ans. 1 Qn. 1. (A) Select essentially the most applicable reply from the given choices in respect of the next having regard to the provisions of the related direct, tax legal guidelines (i) Revenue-tax in India is charged on the price(s) prescribed by — (a) The Finance Act (b) The Revenue-tax Act (c) The Central Board of Direct Taxes (d) The Ministry of Finance Resolution: (a)The Finance Act (ii) Beneath the Revenue-tax Act, 1961, depreciation on equipment is charged on — (a) Buy worth of the equipment (b) Market worth of the equipment (c) Written down worth of the equipment d) The entire above. Resolution: (c) Written down Worth of the equipment (iii) Revenue accruing in India in earlier yr is taxable for — (a) Resident (b) Not ordinarily resident (c) Non-resident (d) The entire above. Resolution (d) The entire above (iv) Sandeep bought a home for his residential objective after taking a mortgage in January, 2007. In the course of the earlier yr 2008-09, he paid curiosity on mortgage Rs, 1,67,000. Whereas computing revenue from home property, the deduction is allowable to the extent of — (a) Rs. 30,000 (b) Rs, 1,00,000 (c) Rs. 1,67,000 (d) Rs. 1,50,000. Resolution: (d) Rs. ,50,000 (v) Which of the next is an ‘asset’ below part 2(ea) of the Wealth-tax Act, 1957 — (a) Fairness shares in an organization (b) Steadiness in provident fund (c) Motor automotive held as stock-in-trade – (d) Jewelry for private use. Resolution: (d) Jewellary for private use (B) Re-write the next sentences after Filling-in the clean areas with applicable phrase(s)/determine(s) : (i) Deduction for unhealthy debt is allowed to an assessee carrying on enterprise within the yr wherein the debt is ________ as unhealthy. (ii) Deduction accessible below part 80GG in the direction of hire paid shall not exceed Rs. ______ per 30 days. (iii) It’s compulsory for an assessee to pay advance tax the place the quantity of tax payable is Rs. ________ or extra. (iv) A belated return of revenue might be filed at any time earlier than the expiry of ________ from the tip of related Assessment yr. (v) Wealth-tax is levied on the web wealth of an individual as on 31″ March, this date is called _______ date. Resolution: (i) declared (ii) 2000 (iii) 5000 (iv) 1 yr (v) Valuation date. (C) Rajan is an worker of a non-public restricted firm and will get the next emoluments in the course of the earlier yr ended on 31sl March, 2009: Wage: Rs. 6,000; Wage in lieu of go away: Rs. 6,000; Leisure allowance: Rs. 10,000; and Fee: Rs. eight,000. Rajan’s son research in a college which is owned and maintained by the corporate. The price of training in an identical faculty within the locality is Rs. 22,000 per yr, however the firm expenses Rs. four,000 from Rajan. Wage of a home C. S. Govt Tax Regulation Dec. 09 Solved Ans. 2 servant supplied to Rajan by the corporate is Rs. 6,000 and the identical is paid by the corporate. The corporate purchases a pc on 1st April, 2008 for Rs. 50,000 which is given to Rajan for workplace and personal use.
The corporate purchases a fridge for Rs. 20,000 on 30th June, 2008 for private use of Rajan. Rajan and the corporate each contribute Rs. 1. 2,000 in the direction of recognised provident fund. Rajan deposits Rs. 40,000 in the direction of public provident fund. Rajan earns Rs. 1,00,000 by means of hire from a vacant plot, of land. Compute the taxable revenue and tax legal responsibility of Rajan for the Assessment yr 2009-10. Resolution (I) Revenue from wage Wage Wage in lieu of go away Leisure allowance Fee Perquisites Home servant Laptop Fridge
Profit to price of training (22,000- four,000) Contribution to PF (in extra of 12%) Gross Wage (-) deduction U/S 16 Skilled Tax Leisure allowance Complete Quantity (II) Revenue from home Property Gross whole Revenue (I + II) (-) Deduction U/S 80 C – 80 U U/S 80 C ( Contribution to PPF ) Complete Revenue 96,000 6,000 10,000 eight,000 6,000 NIL NIL 6,000 18,000 480 1,44,480 NIL NIL NIL 1,44,480 1,00,000 40000 2,04,480 Computation of tax legal responsibility Upto Rs. 1,50,000 Subsequent 54,480 10% + Three% training cess Complete tax legal responsibility NIL 5,448 Complete Tax legal responsibility 5,448 163 5611 = Rs. 5610 QN. 2. A) From the next revenue and loss account of Vinay for the yr ended 31st March, 2009, compute his whole revenue and tax legal responsibility for the Assessment yr : 1009-10 : Rs. Curiosity on capital Insurance coverage Unhealthy money owed Depreciation Advance tax Common bills Commercial Wage (together with wage to Vinay Rs. 20,000) Curiosity on mortgage Internet revenue 12,000 2,000 30,000 34,000 25,000 12,000 5,000 Gross revenue Brokerage Unhealthy money owed recovered (earlier allowed as deduction) Sundry receipts Curiosity on debentures (gross) [TDS Rs,4,120] 85,000 eight,000 four,00,000 6,13,000 Further data : i)The quantity of depreciation allowable as per income-tax guidelines is Rs. 42,000. Rs. 5,10,000 30,000 15,000 18,000 40,000 6,13,000 C. S. Govt Tax Regulation Dec. 09 Solved Ans. (ii) Common bills embrace Rs. 5,000 given as contribution to a political celebration. (iii) Vinay pays Rs. 5,200 as premium on his personal life insurance coverage coverage of Rs. 50, 000. (iv) Mortgage was obtained for cost of income-tax, Three Resolution (I) Revenue from enterprise Internet revenue for the yr Add: Bills not allowed below Revenue tax act however debited to P & L A/C Intt. On capital Depreciation as per books of a/c Advance tax
Common Bills Wage to Vinay Intt on mortgage Much less: Revenue not allowed however Credited to P& L a/c Intt. On debentures Depreciation as per Revenue tax Act Complete Revenue (II) Revenue from Wage (III) Revenue from different sources Curiosity on debenture Gross whole revenue [I + II + III ] Much less: Deduction U/S 80C – 80U (i) Premium on life insurance coverage coverage (80C) (ii) Contribution to political celebration Sec (80 GGC ) Complete Revenue Tax legal responsibility Upto Rs. 150,000 Subsequent 1,50,000 Subsequent 1,71,800 Charge NIL 10% 20% Rs. 12,000 34,000 25,000 5,000 20,000 eight,000 40,000 42,000 Rs. four,00,000 1,04,000 82,000 four,22,000 20,000 40,000 ,82,000 5,200 5,000 four,71,800 Computation of tax legal responsibility Much less: Advance tax Paid Much less: TDS Add: Three % training cess Complete tax legal responsibility = 20850 NIL 15,000 34,360 49,360 25,000 four,120 20,240 607 20847 (B) Write brief notes on any two of the next : (i) Taxation of zero coupon bonds (ii) Share of revenue from partnership agency (iii) Exemption of revenue of newly established models in particular financial zone. Resolution (i) Switch of zero coupon bond will probably be topic to capital acquire tax: The income arising on the switch of such zero coupon bond shall be chargeable below the pinnacle “capital positive factors”.
Additional, part 2(42A) has been amended to present that if such zero coupon bonds are held for no more than 12 months, such capital asset shall be handled as short-term capital asset and therefore shall be topic to short-term capital acquire. Alternatively, the place these bonds are held for greater than 12 months, such capital acquire shall be handled as long-term capital acquire. Taxability of long-term capital acquire from zero coupon bond [Proviso to section 112 (1)] The long-term capital acquire on zero coupon bonds shall be chargeable to tax at minimal of the next two: (a) 20% of long-term capital acquire after indexation of price of such bonds, or i) 10% of long-term capital acquire earlier than indexation of price of such bonds, C. S. Govt Tax Regulation Dec. 09 Solved Ans. four Resolution (ii) Share of revenue – Part 10(2A) supplies that within the case of a accomplice (together with a minor admitted for the good thing about the agency) of a agency, his share within the whole revenue of the agency shall be exempt from tax. Remuneration or interest- If situation of part 184 and part 40(6) are happy then curiosity, wage, bonus, fee or remuneration paid/ payable by the agency to companions is taxable within the palms of companions (to the extent these are allowed as deduction within the palms of the agency).
The next factors one ought to observe — 1. Remuneration will not be taxable below the pinnacle “Salaries”- Remuneration will not be taxable within the palms of companions below part 15 below the pinnacle “Salaries” (Clarification 2 to part 15). It’s taxable as enterprise revenue. 2. Bills are deductible below sections 30 to 37- Any expenditure incurred so as to earn wage/curiosity revenue might be claimed as a deduction below sections 30 to 37 from such revenue. As an example, if a artner borrows cash to make his capital contribution to the agency and he has obtained curiosity on his capital contribution, the quantity of such curiosity will probably be taxed below the pinnacle “Earnings and positive factors of enterprise or career”, however the curiosity paid by him on the borrowed cash could have to be allowed as a deduction. Three. Penalties when remuneration/curiosity is disallowed in agency’s hands-if wage/ curiosity is disallowed within the palms of agency below part 40(b) and/ or part 184, then the identical will not be taxable within the palms of the companions.
Likewise, if part of wage/curiosity will not be allowed as deduction within the palms of the agency, that a part of wage/curiosity will not be taxable within the palms of the companions. The cumulative impression of the aforesaid provision is that within the palms of companions your complete remuneration/ curiosity (excluding the quantity disallowed within the Assessment of companions ) is chargeable to tax. Resolution (iii) The deduction below this part shall be allowed as below for a complete interval of 15 related Assessment years. 1.
For the primary 5 consecutive Assessment years 100% of the income and positive factors derived from the export starting with the Assessment yr related to of such articles or issues or from companies the earlier yr wherein the unit begins to manufacture such articles or issues or present companies 2. Subsequent 5 consecutive Assessment years 50% of such income or positive factors Three. Subsequent 5 consecutive Assessment years A lot of the quantity not exceeding 50% of the income as is debited to revenue and loss account of the earlier yr in respect of which the deduction is to be allowed and credited to Particular Financial Zone
Reinvestment Reserve Account to be created and utilised for the aim of the enterprise of the assessee within the method laid down in sub-section (2) beneath. (c) State, with causes briefly, whether or not the next statements are appropriate or incorrect: (i) Unabsorbed depreciation of any yr might be carried ahead for set-off for a vast time period. (ii) A person will not be liable to pay fringe profit tax. ? (iii) The complete quantity of profitable from lotteries is taxable at a particular price of income-tax. (iv) Revenue of minor little one is included within the revenue of his dad and mom below the Revenue-tax Act, 1961 in all circumstances. v) When the prize is given partly in money and partly in variety, income-tax will probably be deducted from money solely. Resolution (i) True : Unabsorbed depreciation of any yr might be carried ahead for set off for a vast time period. (ii) True: Particular person will not be liable to fringe profit tax. (iii) True: The complete quantity of profitable from lotteries is taxable on the price of 30%. (iv) False: Revenue of minor little one will not be included within the revenue of his dad and mom in all circumstances. Any revenue of minor little one U/S 80U, handbook work finished and in case of exercise concerned particular expertise should not clubbed within the palms of fogeys. v) False: When the prize is given partly in money and partly in variety, Revenue tax is deducted from each money and type. Qn. Three. (A) Distinguish between any three of the next: (i) Gross whole revenue’ and ‘whole revenue’. (ii) Recognised provident fund’ and ‘statutory provident fund’. (iii) ‘Obligatory finest judgment Assessment’ and ‘discretionary finest judgment Assessment’, (iv) ‘Exemptions’ and ‘deductions’. C. S. Govt Tax Regulation Dec. 09 Solved Ans. 5 Resolution (i) Gross Complete Revenue: As per part 14, all revenue shall, for functions of Revenue-tax and computation of whole revenue, be labeled below the next heads of revenue: i) Salaries, (ii) Revenue from Home Property, (iii) Earnings and Positive factors of Enterprise or Career, (iv) Capital Positive factors, (v) Revenue from Different Sources. Mixture of incomes computed below the above 5 heads, after making use of clubbing provisions and making changes of set off and carry ahead of losses, is called Gross Complete Revenue (GTI). [Section 80B(5)] Complete Revenue: The overall revenue of an assessee is computed by deducting from the gross whole revenue, all deductions permissible below Chapter VIA of the Revenue-tax Act i. e. , deductions below sections 80C to 8OU. Resolution (ii)
Particulars SPf RPF 1. Worker’s/ assessees’ Deduction u/s 80C is offered from Deduction u/s 80C is offered from contribution gross whole revenue topic to the gross whole revenue topic to the restrict restrict specified therein specified therein 2. Employer’s contribution Absolutely exempt from tax Exempt upto12% of wage. Quantity in extra of 12% is included in gross wage. Three. Curiosity on Provident Absolutely exempt from tax Fund Exempt u/s 10 upto 9. 5% p. a. Curiosity credited in extra of 9. 5% p. a. is included in gross wage four. Compensation of lump sum Absolutely exempt u/s 10(11) mount on retirement/ resignation/ termination Exempt topic to sure situations. See Observe 2. Resolution (iii) Greatest Judgment Assessment: In a finest judgment Assessment the assessing officer ought to actually base the Assessment on his finest judgement i. e. he should not act dishonestly or vindictively or capriciously. There are two kinds of judgement Assessment: 1. Obligatory finest judgement Assessment made by the assessing officer in circumstances of non-co-operation on the a part of the Assessee or when the Assessee is in default as regards supplying informations. . Discretionary finest judgement Assessment is finished even in circumstances the place the assessing officer will not be happy concerning the correctness or the completeness of the accounts of the Assessee or the place no technique of accounting has been often and constantly employed by the Assessee. Resolution(iv) Exemption – All receipts which give rise to revenue, are taxable below the Revenue tax -Act until it’s particularly supplied that it doesn’t type a part of whole revenue such incomes which don’t type celebration exempt from tax. As per sec. zero to 13A, sure incomes are both completely exempt from tax or exempt upto a sure restrict subsequently, there incomes to the extent there are exempt, should not included within the whole revenue of an assessee for computation of his whole revenue. Deduction:- The combination of revenue computed below every head, after giving impact to the provisions for clubbing of revenue and set off of loss is “Gross whole Revenue” . In computing the overall revenue of an assessee sure deductions are permissible below sec. 80C to 80U from “Gross whole Revenue”.
However Deductions can not exceed Gross whole Revenue and to get deduction, It’s Assessee’s obligation to place related materials earlier than the stated authority together with Return. QN. Three(B) What’s the time-limit for deposit of ‘tax deducted at supply’ (TDS) to the credit score of Central Authorities? Resolution C. S. Govt Tax Regulation Dec. 09 Solved Ans. TIME LIMIT FOR DEPOSITE OF TDS TO THE CREDIT OF CG 6 Part below which deduction is made Individual (1) Sum deducted below sections 193, 194A, 194C, 194D, 194E, 194G, 194H. 194-1, 194J. 195. 196A to 196D (A) Tax deducted by or on behalf of the Authorities (B) Tax deducted by or behalf of any ther individual: Identical day of deduction: (i) if the quantity is credited to the account of the payee as on the date upto which the account of such individuals are made (ii) in every other case inside 2 months, of the expiration of the month wherein that date falls. (2) Sum deducted below sections 192. 194, 194B, 194BB, 194EE, 194F and 194Ok Time restrict of de Central Authorities (A) Tax deducted by or on behalf of Authorities (B) Tax deducted by or on behalf of different individual inside one week for the final day of the month wherein the deduction is made Identical day of deduction Inside one week from the final day of the month wherein eduction made, Qn. four. (A) What are the particular provisions for computing income and positive factors of retail enterprise ? Resolution: Part 44AF – Particular provisions for computing income and positive factors of retail enterprise : (1) However something to the opposite contained in Sections 28 to 43C, within the case of an assessee engaged in retail commerce in any items or merchandise, a sum equal to 5% of the overall turnover within the earlier yr on account of such enterprise or, because the case could also be, a sum increased than the aforesaid sum as declared by the assessee in his return of revenue shall be deemed to be the income and positive factors of such usiness chargeable to tax below the pinnacle “Earnings and positive factors of enterprise or career”: Supplied that nothing contained on this sub-section shall apply in exceeds an quantity of 40 lakhs rupees within the earlier yr. respect of an assessee whose whole turnover (2) Any deduction allowable below the provisions of sections 30 to 38 shall be deemed to have been already given full impact to and no additional deduction below these sections shall be allowed.
Supplied that the place the assessee is a agency, the wage and curiosity paid to its companions shall be deducted from the revenue computed below sub-section(1) topic to the situations and limits laid out in Part 40(b). (Three) The written down worth of any asset used for the needs of the enterprise referred to in sub-section(1) shall be deemed to have been calculated as if the assessee had claimed and had been acutually allowed the deduction in respect of the depreciation for every of the related Assessment years. four) The provisions of sections 44AA and 44AB shall not apply in as far as they relate to the enterprise referred to in sub-section (1) and in computing the financial limits below these sections, the overall turnover or the revenue from the stated enterprise shall be excluded. (5) However something contained within the foregoing provisions of this part, an assessee could declare decrease income and positive factors than the income and positive factors laid out in sub-section (1), if the retains and maintains such books of accounts and different paperwork as required u/s 44AA and will get his accounts audited and furnishes a report of such audit as required u/s 44AB. B) What are the provisions relating to clubbing of revenue arising to partner from the belongings transferred ? Resolution: Revenue from belongings transferred to the partner [Section 64(l)(iv)]: In computing the overall revenue of a person, all such revenue as arises immediately or not directly, topic to the provisions of part 27(i) (i. e. deemed proprietor), to the partner of such particular person from belongings (apart from home property) transferred immediately or not directly to the partner of such particular person in any other case than for ample consideration or in reference to an settlement to dwell aside shall be included. C. S. Govt Tax Regulation Dec. 9 Solved Ans. 7 As per this provision, if a person transfers any asset apart from home property to his/her partner, the revenue from such an asset shall be included within the whole revenue of the transferor. This provision will not be relevant to home property as a result of in that case transferor is deemed to be the proprietor of the home property and the annual worth of the property is taxed within the palms of the transferor as per part. 27. The revenue from the transferred belongings shall not be clubbed within the following circumstances: (i) If the switch is for ample consideration; (II) the switch is below an settlement to dwell aside; iii) if the connection of husband and spouse doesn’t exist, both on the time of switch of such asset or on the time of accrual of the revenue. (C) Alka is carrying on textile enterprise. Compute her web wealth from the next — particulars of her belongings and in addition decide her wealth-tax legal responsibility for the Assessment yr 2009-10 : (i) Land in rural space (it lies inside eight kms. from a municipality having a inhabitants of greater than 10,000; land was bought in 1990; development is permissible. (ii) Land in city space (held as stock-in-trade since 2001 ) (iii) Motor automobiles (iv) Plane to be used of staff and auditors (v) Financial institution steadiness vi) Visitor home located in rural space (vii) Residential flats of equivalent dimension supplied to staff close to the manufacturing unit (wage of staff doesn’t exceed Us. 5. 00,000 in a yr) (viii) Residential home given to basic supervisor (whose annual wage is Rs. 15,00,000) (ix) Money in hand as per money ebook (x)Two residential homes; let-out on hire (worth of every being Rs. 22 lakh; one is letout for 250 days in the course of the monetary yr 2008-09). Market Worth 48,00,000 35,50,000 eight. 60,000 1,25,00,000 12. 00,000 10,50,000 30. 00,000 25,00,000 2,00,000 Alka has taken a mortgage of Rs. 24,00,000 for buying the plane; Rs. 5,50. 000 for and; and Rs. ,00,000 for residential home given to basic supervisor Resolution: Computation of not wealth of Alka for the Assessment yr 2009-10 i. Land in Rural Space (Lies inside eight Kms from a Municipality) 48,00,000 ii. Land in City Space (held as SIT) –iii. Motor automotive eight,60,000 iv. Plane to be used of staff and auditors 1,25,00,000 v. Financial institution Steadiness –vi. Visitor home located in Rural Space 10,50,000 vii. Residential flats to staff (wage doesn’t exceed Rs. 500000) -viii. Residential home given to basic supervisor 25,00,000 ix. Money in hand as per books –x. Two residential home set free on hire however one home is set free for lower than 300 days. 2,00,000 Gross wealth 2,39,10,000 Much less: Mortgage taken for Acquisition of air craft 24,00,000 City land —Residential home to Common Supervisor four,00,000 28,00,000 Complete Tax [ i. p. 1% on the amount in excess of Rs. 15,00,000 ] 19610000 x 1% 2,11,10,000 1,96,100 Qn. 5. (A) Anurag sells a plot of land on eighth July, 2008 for Rs. 40 lakh and paid brokerage on its sale @1%. He bought this plot on 19th December, 1986 for Rs. four. 20,000. On 1st February, 2009, he bought a residential home for Rs. 15 lakh. He owns one residential home an eighth July, 2008. The associated fee inflation index for 1986-87 was 140 and for 2008-09 is 582.
Discover out the quantity of capital positive factors chargeable to tax for the Assessment, yr 2009-10. Suppose Anurag sells the brand new residential home earlier than 1st February. 2012, what would be the taxable quantity of capital positive factors and C. S. Govt Tax Regulation Dec. 09 Solved Ans. eight wherein yr will probably be charged to tax? If Anurag purchases every other residential home earlier than 1st February, 2011, what would be the taxable quantity of capital positive factors and wherein yr will probably be charged to tax ? Resolution: (A) Computation of capital positive factors chargeable to tax for A/Y 2009-10 Gross sales Consideration Much less: Bills an switch [brokerage @ 1%]
Much less: Listed price of acquision 420000 x 582 —140 40,00,000 four,00,000 17,46,000 18,54,000 15,00,000 LTCG Three,54,000 If Anurag sells the brand new residential home earlier than 1st Feb 2012 the taxable quantity is entire gross sales consideration and it’s taxable in A/Y 2013 -14 If Anurag buy every other residential home earlier than 1st Feb 2011, than taxability will not be come up in A/Y 2012 -13. (-) Exemption U/S 54 (B) Danny has the next investments within the earlier yr ended 31st March, 2009: (i) Rs. 7,160 obtained as curiosity on securities of Karnataka authorities. (ii) Rs. 9,000 obtained as curiosity on securities of a listed paper manufacturing firm. iii) Rs. 7,200 obtained as curiosity on the unlisted securities of a sugar firm. (iv) Rs. 30,000. 11% securities (unlisted) of a textile firm. (v) Rs. 20,000, 10% Tamil Nadu authorities mortgage, (vi) Rs. 50,000, 13. 5% listed debentures of Dolly Ltd. Curiosity on ail securities is payable on 30lh June, and, 31″ December. The financial institution expenses 1/5% fee on web realisation of curiosity as assortment expenses. Danny additionally obtained Its. 15, 000 as director’s payment from an organization. His different incomes are — winnings from horse race: Rs. 25,000 (gross); and curiosity on submit workplace financial savings checking account : Rs. 6,000.
Discover out taxable revenue of Danny from different sources for the Assessment yr 2009-10. Resolution: Computation of Revenue from different sources for the A/Y 2009 -10 Director Charges Profitable from horse race Curiosity from submit workplace saving checking account 11% securities (unlisted ) of a textile firm 10% Tamil nadu Govt. mortgage 13. 5% listed debentures of Dolly ltd. Intt. On securities of Karnataka Govt. Intt. On a listed paper mfg. Co. Intt. On the unlisted securities of a sugar firm Much less: Deduction Financial institution Expenses 1. 5% Complete Revenue Quantity 15,000 25,000 6,000 Three,300 2,000 6,750 7,160 9,000 7,200 81410 1,221 80,189 C) “Loss below any head of revenue for any Assessment, yr might be set-off towards the revenue from different heads of revenue however when it has to be carried ahead for being set-off, it might solely be set-off from revenue below the identical head. ” Clarify. Resolution: The place in respect of any Assessment yr, if after setting off losses towards revenue below the identical head the web results of the computation below any head of revenue, apart from ‘capital positive factors’ is a loss, the assess shall be entitled to have the quantity of such a loss set off towards his revenue, if any, accessible, for that Assessment yr below every other head.
However If the losses couldn’t be set off below the identical head or below completely different heads in the identical Assessment yr, such losses are allowed to be carried ahead to be claimed as set off from the revenue of the next Assessment Yr for eg;- A loss below the pinnacle home property, if couldn’t be set off or was not wholly set off in the identical Assessment yr, will probably be allowed for be carry ahead and set off solely below the pinnacle Revenue from home property equally Enterprise losses different hypothesis enterprise might be carry ahead and set off below the pinnacle PGBP. C. S. Govt Tax Regulation Dec. 9 Solved Ans. 9 The place in respect of any Assessment yr, the web results of the computation below the pinnacle “Capital Positive factors” is a loss to asseessee, whether or not brief time period or long run. Such loss shall be individually carried ahead, additional such carried ahead brief time period capital loss might be set off in subsequent Assessment yr from revenue below the pinnacle capital positive factors, whether or not brief time period or long run, however introduced ahead long run capital loss shall be allowed to be set off solely from long run capital acquire. QN. 6 (A) Rohit is the proprietor of a home property, its municipal valuation. s Rs. 80,000. It has been let-out for Rs. 1,20,000 every year. The native taxes payable by the proprietor quantity to Rs. 16,000, however as per settlement between the tenant and the owner, the tenant has paid the quantity direct to the municipality. The owner, nevertheless, bears the next bills on tenant’s facilities: Rs. Extension of water connection Water expenses Elevate upkeep Wage of gardener Lighting of Stairs Upkeep of swimming pool The owner claims the next deductions : Repairs and assortment expenses Land income paid Three,000 1,500 1,500 1,800 1,200 750 7,500 1,500
Compute the taxable revenue of Rohit from the home property for the Assessment yr 2009-10. Resolution: Computation of Revenue from Home Property of Rohit. Precise Lease Worth Much less: Bills web by Rohit an facilities supplied to the tenant’s Water expenses Elevate Upkeep Wage of gardener Lighting of stairs Upkeep of Swimming pool Extension of water connection Annual Lease Internet Annual worth ( Municipal hire worth Rs. 80,000 or Rs. 1,10,250 which ever is increased ) Much less: Statutory deduction @ 30% Taxable revenue from Home Property 1,20,000 1,500 1,500 1,800 1,200 750 Three,000 9,750 1,10,250 1,10,250 33,075 77,175 B) What are ‘capital belongings’ ? What objects should not included in capital belongings ? Resolution: Capital asset means property of any variety held by the assessee, whether or not or not linked together with his enterprise or career, however doesn’t embrace: (i) any stock-in-trade, consumable shops or uncooked supplies held for the needs of his enterprise or career as these will probably be taxed below the pinnacle “income and positive factors of enterprise or career”; (ii) private results, that’s to say, movable property (together with sporting attire and furnishings), held for private use by the assessee or any member of his household depending on him.
Nonetheless, the next belongings shall not be handled as private results although these belongings are moveable and could also be held for private use: (a) jewelry; (b) archaeological collections; (c) drawings; (d) work; (e) sculptures; or (f) any murals. (iii) agricultural land in India, which isn’t an city agricultural land. In different phrases, it have to be a rural agricultural land; (iv) 6. 5% Gold Bonds, 1977, 7% Gold Bonds, 1980 or Nationwide Defence Gold Bonds, 1980 issued by the Central Authorities; (v) Particular Bearer Bonds, 1991, issued by the Central Authorities;
C. S. Govt Tax Regulation Dec. 09 Solved Ans. (vi) Gold Deposit Bonds issued below the Gold Deposit Scheme 1999. 10 QN. 7. Try any 4 of the next : (a) “Service tax is usually payable by the service supplier, however there are specific conditions wherein service receiver is liable to pay service tax. ” Clarify. (b) What are the due dates for cost of service tax by completely different assessees? (c) Point out the quantity of curiosity payable for late cost of service tax and the quantity of penalty payable for late submitting of return of service tax. d) Clarify the provisions relating to submission of return below service tax. (e) What’s the foundation of calculation of service tax payable? Clarify the provisions governing valuation of taxable companies. (f) Select essentially the most applicable reply from the given choices in respect of the next; (i) What can be the worth of taxable service, if gross quantity charged by a service supplier on fifth March, 2009 is Rs. 9,000 — (a) Rs. eight,zero10 (b) Rs. eight,160 (c) Rs. 9,000 (d) Rs. eight,100. (ii) If Raj has collected any quantity of service tax from Brij which isn’t required to be collected.
Raj shall pay the quantity so collected to — (a) Brij (b) The Central Authorities (c) Hold it with himself (d) Not one of the above. (iii) E-payment of service tax is obligatory within the case of an assessee who had paid service tax within the previous monetary yr equal to no less than — (a) Rs. 10 lakh (b) Rs. 40 lakh (c) “Rs. 50 lakh (d) Rs. 1 crore. (iv) Upto what quantity, the worth of all taxable companies supplied by a service supplier throughout a monetary yr is exempt from cost of service tax — (a) Rs. four lakh (b) Rs. eight lakh (c) Rs. 10 lakh (d) Rs. l2 lakh. v) If a company assessee lias paid Rs. 5,000 as extra service lax throughout; the earlier half-year ending interval, this extra quantity might be adjusted towards its subsequent tax legal responsibility — (a) Equally each month (b) Equally per quarter (c) In a single lump-sum (d) Equally on half-yearly foundation, Resolution (a) The final precept is that the individual offering a taxable service is liable to pay service tax, however in sure particular conditions, as Authorities could notify, individuals apart from the individual offering the taxable service are accountable for cost of service tax. S. No. Providers Individuals accountable for cost 1 Telecommunication Supplier of service Common Insurance coverage Insurer or reinsurer Three four 5 Insurance coverage Auxiliary Insurance coverage Agent Any service supplied from exterior India and Receiver of service in India obtained in India Items transport company (GTA) Individual making cost of freight i. e. receiver of the service (if consignor or consignee of products are in organized sector), or GTA i. e. supplier of service (in different circumstances) C. S. Govt Tax Regulation Dec. 09 Solved Ans. Sponsorship companies Receiver of companies Enterprise auxiliary companies of distribution of mutual Receiver of service in India fund Another taxable service Service supplier 6 7 eight 11 B) There have been frequent adjustments within the due dates for cost of service tax. The present legislation pertaining to due dates for depositing the service tax are summarized within the desk given beneath: Class of Assessee Periodicity of Cost Interval Due Date People, proprietary Quarterly companies or partnership companies April to June fifth (sixth in case of eJuly to September paymentofthe month October to December instantly following the stated quarter January to March Three 1st March Others All months besides March fifth (sixth in case of e-payment) of the month instantly , following the calendar month Month-to-month
March Three 1st March (C) The quantity of curiosity payable for late cost of service tax is 13%. Return of service tax has to be filed throughout the prescribed interval. A late payment has to be paid together with the submitting of return of service tax if the identical is filed late. The place the return is furnished late the individual liable to furnish return is liable to pay to the Central Authorities a penalty, on the idea of interval of delay topic to most of Rs. 2,000. Interval of delay from due date Penalty to be paid Upto 1 5 days 16 to 30 days Rs. 500 Rs. 1,000 After 30 days Rs. 1,000 + 100 per day in extra of 30 days pto most of Rs. 2,000 (D) Each individual liable to pay service tax shall himself assess the tax due on the companies supplied by him and furnish a return in Kind ST-Three (in triplicate) on a half-yearly foundation. ‘Half yr’ means 1st April to 30th September and 1st October to 31st March of monetary yr. With out prejudice to the provisions of part 70, the Board could, by notification in he Official Gazette, body a Scheme for the needs of enabling any individual or class of individuals to put together and furnish a return below part 70, and authorise a Service Tax Return Preparer to act as such below the Scheme.
The return has to be submitted by the 25th of the month following the actual half-year. Even a NIL return has to be filed if the assessee has not rendered any taxable service throughout a specific half yr. There are not any provisions below the Act which allow the submitting of revised returns. (E) As per part 66, service tax is to be charged @ 12% of the worth of taxable service proved or to be supplied. Therefore, we’ve to decide the worth of such taxable companies in order to pay service tax. As per part 67, the valuation of taxable service shall be decided as below:— State of affairs
Valuation (i) the place the supply of service is for a gross quantity charged by the service supplier for such consideration in cash service supplied or to be supplied by him (ii) the place the supply of service is for a such quantity in cash, with the addition of service tax consideration not wholly or partly consisting charged, as is equal to the consideration. In different of cash phrases, it ought to be worth of comparable companies supplied to third celebration. If related service will not be supplied to third celebration, it ought to be market worth as decided by the assessee ut it can’t be decrease than the price of provision of similar. (iii) C. S. Govt Tax Regulation Dec. 09 Solved Ans. 12 the place the supply of service is for a the quantity as could also be decided within the prescribed consideration which isn’t ascertainable method (F) (i) (b) 8160 (ii) (b) The central Authorities (iii) (c) Rs. 50 lakhs (iv) (c) Rs. 10 lakhs (v) (c) In a single Lump-sum PART—C QN. eight Try, any 4 of the next : (i) How would you’re taking enter tax credit score when items bought are transferred by the vendor to his department in every other State ? ii) A registered vendor can set-off the quantity of enter tax towards the quantity of his output tax. ” Clarify. (iii) Clarify the process of registration below “worth added tax’ (VAT). (iv) In what purchases enter, tax credit score will not be allowed below VAT ? (v) What are the deficiencies within the design of VAT that has been adopted by the States in India? Give your opinion (vi) “Tax credit score or bill technique has been adopted universally as a result of; of the inherent benefits within the credit score technique of calculating tax legal responsibility? Clarify, Resolution (i) Inventory/Department transfers i. . switch of inventory from head workplace to the department or vice-versa (viz. Inter-State transfers) don’t contain sale and, subsequently, they can’t be subjected to sales-tax/VAT. Nonetheless, if (1) inputs are used within the manufacture of completed items, that are inventory/department transferred; or (2) items bought for re-sale are inventory/department transferred, then, tax paid on such inputs/items will probably be accessible as enter tax credit score topic to retention of four% out of such tax by the State Governments. (ii) For claiming enter tax credit score vendor have to be a registered vendor.
A registered vendor can solely set off the quantity of enter tax towards the quantity of his output tax. Additional a registered vendor should buy items from one other registered vendor who has not opted for composition scheme to declare credit score of enter tax. Other than registration requirement the registered vendor should maintain supporting evidences like VAT bill of the purchases. (iii) Any vendor whose gross annual turnover is above Rs. 5 lakh will probably be liable to get obligatory registration. An present vendor will probably be robotically registered below the VAT Act.
A vendor registered below the VAT Acts known as a registered vendor. Another vendor could get himself voluntarily registered. On such a vendor Commissioner could impose any situations as he thinks match. If vendor fails to get registration he could also be registered compulsorily by the commissioner. Time restrict Utility for registration have to be made inside 30 days from the date of legal responsibility to get registered. Whom to apply Utility for registration have to be made to the VAT Commissioner. Exemption from registration A small vendor with gross annual turnover not exceeding Rs. lakhs doesn’t require registration. Additional States could enhance the above restrict for the small sellers to Rs. 10 lakhs. Penalty If a vendor who’s liable to get himself registered, fails to accomplish that then he shall be liable to penalty and he shall not be eligible for enter tax credit score associated to the interval prior to the obligatory ‘registration. Cancellation of registration Within the following circumstances registration might be cancelled: (i) In case of discontinuance of enterprise; or (ii) In case of sale or disposal of enterprise; or (iii) In case of shifting or switch of enterprise to a brand new state; or (iv)
Annual turnover of the vendor falls beneath the required quantity. (iv) Buy wherein enter tax credit score will not be allowed below VAT :i) purchases from unregistered vendor. ii) iii) iv) v) vi) vii) viii) C. S. Govt Tax Regulation Dec. 09 Solved Ans. Buy from registered vendor who opted for composition scheme. Buy of products as could also be notified by the state Authorities. Buy of products the place bill doesn’t present the quantity of tax individually. Buy of products, that are being utilized within the manufacture of exempted items. Items imported from exterior the territory of India.
Inter state purchases. Buy of products used for private use/ consumption or supplied freed from cheque us items. 13 (v) Deficiencies within the design of VAT that has been adopted by the States in India are as below : (1) Detailed information even by small merchants : So as to guarantee real availment of credit score, VAT system requires upkeep of detailed accounting information even by all sellers. The small merchants/companies discover it troublesome to accomplish that for the reason that accounting price is increased than the profit gained by them by marinating such information. Therefore, they object to the VAT system. 2) Issues due to completely different VAT charges, exemptions, concessions and composition schemes : The benefits of VAT might be achieved provided that there may be single price of VAT with none exemptions, concessions and/or composition schemes. The presence of various VAT charges, exemptions, concessions and/or composition schemes distorts the movement of audit path launched by VAT system and will end in cascading impact of taxation. (Observe : Composition schemes present for lumpsum cost of VAT at a decrease price on the overall turnover, in full discharge of VAT legal responsibility, with none enter tax credit score. (Three) Matching Necessities v. Totally different charges of VAT : Due to various fiscal and social wants, there are various VAT charges in India. The presence of various VAT charges requires matching of purchases and gross sales, which isn’t solely troublesome however impractical as properly. Nonetheless, if matching requirement is waived off, then, there will probably be scope for tax evasion by exhibiting increased gross sales of products bearing decrease price and decrease gross sales of products bearing increased price. (four) Improve in funding and inflation : As in contrast to single-point taxation- on the time of final sale, VAT equires cost of tax at every stage of manufacturing/distribution. Since there could also be time-gap in availment of credit score on inputs and utilization of such credit score towards cost of VAT on gross sales, the sellers could have to carry tax paid inventory, which might imply increased funding in shares/working capital. This may enhance curiosity price and would enhance the costs, thereby, inflicting inflation. Nonetheless, this criticism will not be totally appropriate. Availability of credit score/set-off of tax paid on inputs reduces price of manufacturing and in the end the sale worth, thereby, placing a verify over inflation.
The worth discount is greater than worth enhance due to curiosity price. Thus, VAT will not be inflationary in nature. (5) Non-integration of State VAT with Central VAT : Till the State VAT will get built-in with Central VAT and Central Gross sales Tax, the purchases from different states can’t be put at par with purchases from throughout the Stage as a result of tax on inter-state purchases (i. e. CST) will not be accessible as credit score/set-off whereas tax on intra-state purchases (i. e. VAT) is offered as credit score/set-off. Thus, VAT system would not rule out cascading impact and the neutrality as to supply of purchases stays confined to throughout the State. vi) Tax credit score or bill technique has been adopted universally as a result of; of the inherent benefits within the credit score technique of calculating tax legal responsibility that are (i) Authorities will get the tax on final sale worth to client i. e. the tax paid by the buyer will get into Authorities Exchequer. The Income is collected at numerous phases on the quantity of worth addition made on the respective phases. Thus, there isn’t any income leakage. (ii) This technique checks evasion of tax. So as to avail credit score of tax paid on purchases, the vendor could have to keep buy invoices.
If the acquisition invoices should not maintained, no credit score will probably be accessible and the vendor could have to pay tax on the overall gross sales worth, thereby, main to increased sale worth or decrease income. A vendor not sustaining buy invoices will free both approach. Thus, the opportunity of tax evasion is minimal. (iii) If the revenue margin is saved at fixed stage, then the credit score/set-off supplied below this technique would eradicate cascading impact of taxation and would end in discount of final sale worth. Thus, the business and the commerce would profit.
