Chapter 1: Basic Concepts & G Question 1 Mr. X has a total income of € 16,00,000 for P.Y.2023-24, comprising of income from house property and interest on fixed deposits. Compute his tax liability for A.Y.2024-25 assuming is age is— (a) 45 years (b) 63 years (c) 82 years Assume that Mr. X exercises the option of shifting out of the default tax regime provided u/s 115BAC(1A). [Ignore 115BAC] [sMQ] Question 2 (a) Compute the tax liability of Mr. A (aged 42), having total income of % 51 lakhs for the Assessment Year 2024-25. Assume that his total income comprises of salary income, Income from house property and interest on fixed deposit. Assume that Mr. A exercises the option of shifting out of the default tax regime provided u/s 115BAC(1A). [Ignore 115BAC] [sMQ] (b) Suppose Total income of Mr. A is % 1,01,00,000 Compute tax liability. (c) Suppose Total income of Mr. A is % 2,01,00,000 Compute tax liability. (d) Suppose Total income of Mr. A is % 5,01,00,000 Compute tax liability. Question 3 Mr, Raghav aged 26 years and a resident in India, has a total income of % 4,40,000, comprising his salary income and interest on bank fixed deposit. Compute his tax liability for AY.2024-25, Assume assessee exercises the option of shifting out of the default tax regime provided u/s 115BAC(1A). [Ignore 115BAC] [sMQ] Question 4 Mr. Dinesh aged 35 years and a resident in India, has a total income of % 4,80,000, comprising of long term capital gains taxable u/s 112. Compute his tax liability for A.Y.2024- 25. Assume assessee exercises the option of shifting out of the default tax regime provided u/s 115BAC(1A). [Ignore 115BAC]. IsMQ] Question 5 Who is an “Assessee"? IsMQ] Answer 5 As per section 2(7), assessee means person by whom any tax or any other sum of money is payable under the Income-tax Act, 1961 Bam Ld4 Chapter jasié Concepts & General Tax Rate In addition, the term includes ~ + Every person in respect of whom any proceeding under the Act has been taken for the assessment of * his income; or * the income of any other person in respect of which he is assessable; or * the loss sustained by him or by stich other person; or © the amount of refund due to him or to such other person. * Every person who is deemed to be an assessee under any provision of the Act; Every person who is deemed to be an assessce in default under any provision of the Act. Question 6 What are the two schools of Hindu law and where are they prevalent? Explain. Also, mention the difference between the two schools of Hindu Law. [sm Qj Answer 6 The two schools of Hindu law are Dayabaga school, prevalent in West Bengal and Assam, and Mitakshara school, prevalent in rest of India. Under the Dayabaga school of Hindu Law, nobody acquires the right, share in the property by birth as long as the head of family is living. Thus, the children do not acquire any right, share in the family property, as long as his father is alive and only on death of the father, the children will acquire righ/share in the property. Hence, the father and his brothers would be the coparceners of the HUF. Under the Mitakshara school of Hindu Law, one acquires the right to the family property by his birth and not by succession irrespective of the fact that his elders are living. Thus, every child born in the family acquires a right/share in the family property. Question 7 The Jain HUF in Assam comprises of Mr. Suresh Jain, his wife Mrs. Sapna Jain, his son Mr. Sarthak Jain, his daughter-in-law Mrs. Preeti Jain, his daughter Miss Seema Jain and his unmarried brother Mr. Pritam Jain. Which of the members of the HUF are eligible for i coparcenary rights? IsMQ] | Answer 7 Dayabaga school of Hindu law is prevalent in Assam. In Dayabaga school of Hindu law, nobody | acquires the right, share in the property by birth as long as the head of family is living. Thus, the i children do not acquire any right, share in the family property, as long as his father is alive and only on death of the father, the children will acquire right/share in the property. Hence, Mr. Suresh Jain and his brother, Mr. Pritam Jain would be the coparceners of the Jain HUF and are eligible for coparcenary rights, Question 8 What is the difference between an Association of Persons and Body of Individuals? [SM Q.] Answer 8 In order to constitute an Association of Persons (AOP), i \ pao ma eis ri aoe | action and their object must be to produce income: i it is not enough that the persons receive the income jointly. Body of Individuals denotes the status of persons like executors or trustees who merely receive the income jointly and who may be assessable in like manner and to the same extent as the beneficiaries individually. Thus, coexecutors or co-trustees are assessable as a BOI as their title and interest are indivisible. Gi ead 4Chapter 1: Basic Concepts & General Tax Rate in case of a BOI, only individuals can be the The difference between an AOP and BOI is be its member i. entities like company, firm etc. ‘members, whereas in case of AOP, any person c can be the member of AOP but not of BOL In case of an AOP, members voluntarily come together with a common will for a common intention or purpose, whereas in case of BOI, such common will may or may not be present. Question 9 State any four instances where the income of the previous year is assessable in the previous year itself instead of the assessment year. [sMQ] Answer 9 The income of an assessee for a previous year is charged to income-tax in the assessment year following the previous year. However, in a few cases, the income is taxed in the previous year in which it is eamed. These exceptions have been made to protect the interests of revenue. The exceptions are as follow: (i) Where a ship, belonging to or chartered by a non-resident, carries passengers, livestock, mail or goods shipped at a port in India, the ship is allowed to leave the port only when the tax has been paid or satisfactory arrangement has been made for payment thereof. 7.5% of the freight paid or payable to the owner or the charterer or to any person on his behalf, whether in India or outside India on account of such carriage is deemed to be his income which is charged to tax in the same ‘year in which it is earned. Where it appears to the Assessing Officer that any individual may leave India during the current assessment year or shortly after its expiry and he has no present intention of returning to India, the total income of such individual for the period from the expiry of the respective previous year up to the probable date of his departure from India is chargeable to tax in that assessment year. (iii) If an AOP/BOI ete. is formed or established for a particular event or purpose and the Assessing Officer apprehends that the AOP/BOI is likely to be dissolved in the same year or in the next year, he can make assessment of the income up to the date of dissolution as income of the relevant assessment year. (iv) During the current assessment year, if it appears to the Assessing Officer that a person is likely to charge, sell, transfer, dispose of or otherwise part with any of his assets to avoid payment of any liability under this Act, the total income of such person for the period from the expiry of the previous year to the date, when the Assessing Officer commences proceedings under this section is chargeable to tax in that assessment year. (v) Where any business or profession is discontinued in any assessment year, the income of the period from the expiry of the previous year up to the date of such discontinuance may, at the discretion of the Assessing Officer, be charged to tax in that assessment year. Question 10 Mr. Agarwal aged 40 years and a resident in India, has a total income of & 6,50,00,000, comprising long term capital gain taxable u/s 112 of % 55,00,000, short term capital gain taxable u/s 111A of € 65,00,000 and other income of & 5,30,00,000. Compute his tax liability for A.Y.2024-25. Assume he exercises the option of shifting out of the default tax regime provided u/s 115BAC(1A). [Ignore 115BAC] [smQ] ee)5 Question 11 Question 14 Chapter 4: Basic Concepts & General Tax Rate resident in India, has a teal incor of © 2,30,00,000, i 42 of & 52,00,000, short term capital comprising tong term capital gain taxable u/s 1 pital gay, ae er ef ¢ 64 .00,000 and other income of ¢ 1,14,00,000, Compute his tax liabity ae pod.38 Assume he exercises the option of shifting out of the default tax reging provided u/s 115BAC(1A). [Ignore 115BAC] {sma} Mr. Sharma aged 62 years and @ Question 12 ‘ed 37), having total income of & 5,01,00,000 for the that his total income comprises of salary income fixed deposit. Assume that Mr. D exercises the vided u/s 115BAC(1A). [Ignore 1158Ac] [sMa) Compute the tax liability of Mr. D (ag Assessment Year 2024-25. Assume Income from house property and interest on option of shifting out of the default tax regime pro) Agriculture Income Question 13 ses the same for the purpose of manufacturing sugar in his factory, 30% of sugarcane produce is sold for @ 10 lacs, and the cost of cultivation of such sugareane is € 5 lacs. The cost of cultivation of the balance sugarcane (70%) is & 14 lacs dnd the market value of the same is ® 22 lacs. After incurring ® 1.5 lacs in the manufacturing process on the balance sugarcane, the sugar was sold for & 25 lacs. Compute B's business income and agricultural income. [SMQ)} Mr. B grows sugarcane and u Mr. X, a resident, has provided the following particulars of his income for the P.Y. 2023-24. (i) Income from salary (computed) = © 4,80,000 (ii) Income from house property (computed) ~ © 2,50,000 (iii) Agricultural income from a land in Jaipur - & 4,80,000 -% 1,70,000 (iv) Expenses incurred for earning agricultural income Compute his tax liability for A.Y. 2024-25 assuming his age is - (a) 45 years (b) 70 years ‘Assume that Mr. X exercises the option of shifting out of the default tax regime provided u/s 115BAC(1A). [Ignore 115BAC] [sma] Question 15 Miss Vivitha, a resident and ordinarily resident in India, has derived the following income from various operations (relating to plantations and estates owned by her) during the yeat ended 31-3-2024: S.No. Particulars x 3,00,000 (i) |Income from sale of centrifuged latex processed from rubber plants grown in Darjeeling. (ii) | Income from sale of coffee grown and cured in Yercaud, Tamil Nadu. (ii) Income from sale of coffee grown, cured, roasted and ‘grounded, in CW es eeChapter 1: Basic Concepts & General Tax Rate ‘Colombo. Sale consideration was received at Chennai _ (\v) _|Income from sale of tea grown and manufactured in Shimla 4,00,000 (¥) Income from sapling and seeding grown in a nursery at Cochin. Basic’ 80,000 ‘operations were not carried out by her on land. You are required to compute the business income and agricultural income of Miss Vivitha for the AY. 2024-25, [SM Q] Question 16 Explain with brief reasons, whether the following income can be regarded as agricultural income, as per the provisions of the Income-tax Act, 1961: (i) Rent received for letting out agricultural land for a movie shooting. (ii) Income from sale of seedlings in a nursery adjacent to the agricultural lands owned by an assessee. [sMQ] Answer (Rent received for letting out agricultural land for a movie shooting: As per section 2(1A), “agricultural income” means, inter alia, ‘© any rent or revenue derived from land ‘* which is situated in India and is used for agricultural purposes. In the present case, rent is being derived from letting out of agricultural land for a movie shoot, which is not an agricultural purpose and hence, it does not constitute agricultural income. Income from sale of seedlings in a nursery: As per Explanation 3 to section 2(1A), income derived from saplings or seedlings grown in a nursery is deemed to be agricultural income, whether or not the basic operations were carried out on land, ‘Therefore, the amount received from sale of seedlings in a nursery adjacent to the agricultural lands owned by the assessee constitutes agricultural income. Question 17 Mr. Raja, resident Indian, earns income of @ 10 lakhs from sale of coffee grown and cured in India during the A.Y.2024-25. His friend, Mr. Shyam, a resident Indian, earns income of 20 lakhs from sale of coffee grown, cured, roasted and grounded by him in India during the ‘AY.2024-25. What would be the business income chargeable to tax in India of Mr. Raja and Mr. Shyam? [sma] Answer In case of income derived from the sale of coffee grown and cured by the seller in India, 25% income on such sale is taxable as business income. In case of income derived from the sale of coffee grown, cured, roasted and grounded by the seller in India, 40% income on such sale is taxable as business income. Business income of Mr. Raja = 25% of & 10 lakhs = 2.5 lakhs Business income of Mr. Shyam = 40% of ® 20 lakhs = 8 lakhs eedesidence and Scope of Total Income Question 1 . f a Singapore bound Indian shi Mr id Indian citizen and a member of the crew of p enoaged n carlage of passengers in international traffic departing from Chennai port ona June, 2023. From the following details for the P.Y. 2023-24, determine the residential status of Mr. Anand for AY. 2024-25, assuming that his stay in India in the last 4 previous years (preceding P.Y. 2023-24) is 400 days: [sma] Particulars Date] Date entered into the Continuous Discharge Certificate in respect of| 6" June, 2023) Joining the ship by Mr. Anand | Date entered into the Continuous Discharge Certificate in respect of| 9 December, 202: signing off the ship by Mr. Anand Answer 1 In this case, since Mr. Anand is an Indian citizen and leaving India during P.Y. 2023-24 as a member of the crew of the Indian ship, he would be resident in India if he stayed in India for 182 days or more. The voyage is undertaken by an Indian ship engaged in the carriage of passengers in international traffic, originating from a port in India (i.e., the Chennai port) and having its destination at a port Outside India (i.e., the Singapore port). Hence, the voyage is an eligible voyage for the purposes of section 6(1). Therefore, the period beginning from 6" June, 2023 and ending on 9th December, 2023, being the dates entered into the Continuous Discharge Certificate in respect of joining the ship and signing off from the ship by Mr. Anand, an Indian citizen who is a member of the crew of the ship, has to be excluded for computing the period of his stay in India. Accordingly, 187 days [25 + 31 +31 +30 + 31 * 30 + 9] have to be excluded from the period of his stay in India. Consequently, Mr. Anand’s period of stay in India during the P.Y. 2023-24 would be 179 days [i.e., 366 days — 187 days]. Since his period of stay in India during the P.Y, 2023-24 is less than 182 days, he is a non-resident for ALY. 2024-25, Question 2 Brett Lee, an Australian cricket player visits India for 100 days in every financial year. This has been his practice for the past 10 financial years. (@) Find out his residential status for the assessment year 2024-25, (b) Would your answer change if the above facts relate to Srinath, an Indian citizen who resides in Australia and represents the Australian cricket team? (c) What would be your answer if Srinath had visited In \dia for 120 days instead of 100 days every year, including P.Y.2023-247 saa 3 [sMQ] CreChapter 2: Residence and Scope of Total Income Question 3 Mr. B, a Canadian citizen, comes to India for the first time during the P.Y. 2019-20. During the financial years 2019-20, 2020-21, 2021-22, 2022-23 and 2023-24, he was in India for 55 days, 60 days, 90 days, 150 days and 70 days, respectively. Determine his residential status for the A.Y. 2024-25, [sm Q] Question 4 The business of a HUF is transacted from Australia and all the policy decisions are taken there. Mr. E, the Karta of the HUF, who was born in Kolkata, visits India during the P.Y. 2023-24 after 15 years. He comes to India on 1.4.2023 and leaves for Australia on 1.12.2023. Determine the residential status of Mr. E and the HUF for A.Y. 2024-25. [SM Q.] Question 5 Mr. David, an Indian citizen aged 40 years, a Government employee serving in the Ministry of Extemal Affairs, left India for the first time on 31.03.2023 due to his transfer to High Commission of Canada. He did not visit India any time during the previous year 2023-24. He has received the following income for the Financial Year 2023-24: S.No. neatieenteib ae Particulars | fat vid a z (i) _ [Salary (Computed) 5,00,000 (ii) __ | Foreign Allowance [not included in (i) above] 4,00,000 (ii) [interest on fixed deposit from bank in India 4,00,000 (iv) _ [income from agriculture in Nepal ‘| 2,00,000 (v) _ |Income from house property in Nepal 2,50,000! Compute his Gross Total Income for Assessment Year 2024-25. [sma] Answer 5 As per section 6(1), Mr. David is a non-resident for the A-Y, 2024-25, since he was not present in India at any time during the previous year 2023-24. As per section 5(2), a non-resident is chargeable to tax in India only in respect of following incomes: (i)_ Income received or deemed to be received in India; and (ii) Income accruing or arising or deemed to accrue or arise in India. In view of the above provisions, income from agriculture in Nepal and income from house property in Nepal would not be chargeable to tax in the hands of David, assuming that the same were received in Nepal. Income from ‘Salaries’ payable by the Government to @ citizen of India for serv rendered outside India is deemed to accrue or arise in India as per section 9(1)(ii). Hence, income is taxable in the hands of Mr. David, even though he is a non-resident However, allowances or perquisites paid or allowed as such outside India by the Government to a citizen of India for rendering service outside India is exempt under section 10(7). Hence, foreign allowance of & 4,00,000 is exempt under section 10(7) in the hands of Mr. David Gross Total Income of Mr. David for A.Y. 2024-25 [ BATE SPS C. Particulas z ‘Salaries (computed) 5,00,000 Income from other sources (Interest on fixed deposit in India) CA Bhanwar BoranaChapter 2: Residence and Scope of Total Income Gross Total Income —— = Question 6 Miss Vivitha paid a sum of 5000 USD t practising in Colombo, specializing in project Mr. Kulasekhara is a non-resident. The consullancy te Possible Ceylonese collaboration. Is this payment charge Mr. Kulasekhara, since the services were used in India’ Answer 6 accrues or arises or is deemed to accrue or arise to him in India. os’ $00.00 0 Mr. Kulasekhara, a management consultant 4 financing. The payment was made in Colombo, Itancy is related to a project in India with le to tax in India in the hands of [smaq} A non-resident is chargeable to tax in respect of income received outside India only if such income The income deemed to accrue or arise in India under section 9 comprises, infer alia, income by way of fees for technical services, which includes any consideration for rendering of any managerial technical or consultancy services. Therefore, payment to a management consultant relating to project financing is covered within the scope of “fees for technical services’ The Explanation below section 9(2) clarifies that income by way of, inter alia, fees for technical services, from services utilized in India would be deemed to accrue or arise in India in case of a non- resident and be included in his total income, whether or not such servi were rendered in India or whether or not the non-resident has a residence or place of business or business connection in India, In the instant case, since the services were utilized in India, the payment received by Mr. Kulasekhara, a non-resident, in Colombo is chargeable to tax in his hands in India, as it is deemed to accrue or arise in India. Question 7 Compute the total income in the hands of an individual aged 35 years, being a resident and ordinarily resident, resident but not ordinarily resident, and non- resident for the A.Y. 2024- 25 [sMQ] Particulars Amount (2) Interest on UK Development Bonds, 50% of interest received in India 10,000] Income from a business in Chennai (50% is received in India) 20,000 Short term capital gains on sale of shares of an Indian company received 20,000 in London Dividend from British company received in London 5,000 |Long term capital gains on sale of plant at Germany, 50% of profits are 40,000 received in India Income earned from business in Germany which is controlled from Delhi (® 70,000} 40,000 is received in India) Profits from a business in Delhi but managed entirely from London 15,000 Income from house property in London deposited in a Bank at London, 50,000 brought to India (Computed) : Interest on debentures in an Indian company received in London 12,000| Fees for technical services rendered in India but received in London 8,000 ead adChapter 2: Residence and Scope of Total Income Particulars. paariocint (CF Profits from a business in Mumbai managed from London 28,000) Income from property situated in Nepal received there (Computed) 16,000 Past foreign untaxed income brought to India during the previous year 5,000) Income from agricultural land in Nepal received there and then brought to) -—~=«*18,000 ae om profes ion in Kenya which was set up in India, received there) 5,000 Gift received on the occasion of his wedding i 20,000| Interest on savings bank deposit in State Bank of India _ __ 12,000 Income from a business in Russia, controlled from Russia 20,000 Dividend from Reliance Petroleum Limited, an Indian Company 5,000 Agricultural income from a land in Rajasthan 15,000 Question 8 ‘Mr. Ram, an Indian citizen, left India on 22.09.2023 for the first time to work as an officer of a company in Germany. Determine the residential status of Ram for the assessment year 2024-25. IsMQ] Answer 8 Under section 6(1), an individual is said to be resident in India in any previous year if he satisfies any one of the following conditions - (i) He has been in India during the previous year for a total period of 182 days or more, or (ii) He has been in India during the 4 years immediately preceding the previous year for a total period of 365 days or more and has been in India for at least 60 days in the previous year. In the case of Indian citizens leaving India for employment, the period of stay during the previous year must be 182 days instead of 60 days given in (ii) above. During the previous year 2023-24, Mr. Ram, an Indian citizen, was in India for 175 days only (i.e., 30+31+30+31+314+22 days). Thereafter, he left India for employment purposes. Since he does not satisfy the minimum criteria of 182 days stay in India during the relevant previous year, he is a non-resident for the A.Y. 2024-25. Question 9 Mr. Dey, a non-resident, residing in US since 1990, came back to India on 1.4.2022 for permanent settlement. What will be his residential status for assessment year 2024-25? [sMQ] Answer 9 Mr. Dey is a resident in A.Y. 2024-25 since he has stayed in India for a period of 365 days (more than 182 days) during the P.Y. 2023-24. As per section 6(6), a person will be “Not ordinarily Resident” in India in any previous year, if such person, inter alia,: (a) has been’a non-resident in 9 out of 10 previous years preceding the relevant previous year; or CA Bhanwar Borana=~ Chapter 2: Residence and Scope of Total Income «prev Previous Year been in tng immediately preceding the rele (b) has during the 7 previous yea for 729 days or le: Ihe does not satisfy cither of these conditions, nee For the previous year 2023-24 (A.Y. 2024-25), his status would alle us tot dina resident” since he was non-resident in 9 out of 10 previous ei paren pe ing the py’ 2023.24. He ean be resident but not ordinarily resident also due (0 the, Si a is ¥en ag, only for 365 days (i.e., less than 730 days) in 7 previous years 1m iB the PLY. 299" 24, he would be a resident and ordinarily resident Question 10 ied the following incomes dur: Mr. Ramesh & Mr. Suresh are brothers and they earn Ng the financial year 2023-24. Mr. Ramesh settled in Canada in the year 1996 and Mr. Sirece : Settled in Delhi. Compute the total income for the A.Y. 2024-25. Ismay |'sr. No. Particulars we. earneany ®) 1. interest on Canada Development Bonds (only 38,000 50% of interest received in India) 2. Dividend from British company received in London 28,000 3. Profits from a business in Nagpur, but managed] —_1,00,000 x directly from London on : 4. |Short term capital gain on sale of shares of an 60,000 2 Indian company received in india 5.__ | Income from a business in Chennai 80,000 6. [Fees for technical services rendered in India, but| _1,00,000 7 : received in Canada 7. Interest on savings bank deposit in UCO Bank, 7,000 12,000) Delhi | 8. | Agricultural income from a land situated in Andhra 85,000 45,000) Pradesh | 9. |Rent received in respect of house property at 1,00,000 60,000] Bhopal 10. _|Life insurance premium paid = 30,000) Answer 10 Computation of total income of Mr. Ramesh & Mr. Suresh for the ALY. 2024-25 s. Particulars Mr. Ramesh | Mr. Suresh No. (Non- Resident) | (Resident) | ®@ ® 1. Interest on Canada Development Bond (See Note 2) 17,500 40,000 2. [Dividend from British Company received in London (See : 20,000) Note 3) 3. | Profits from a business in Nagpur but managed directly from 1,00,000/ — 1,40,000 London (See Note 2) ‘| 10. CA Bhanwar BoranaChapter 2: Residence and Scope of Total Income: 4 [Short term capital gain on sale of shares of an Indian| 60,000 90,000 ‘company received in India (See Note 2) 5. |Income from a business in Chennai (See Note 2) 80,000 coed 6. | Fees for technical services rendered in India, but received in 1,00,000 - Canada (See Note 2) 7. |Interest on savings bank deposit in UCO Bank, Delhi (See 7,000 12,000 Note 2) 8. | Agricultural income from a land situated in Andhra Pradesh : ; (See Note 4) 9. Income from house property at Bhopal (See Note 5) 70,000) _42,000 Gross Total income 4,34,500| — 4,14,000 Less: Deduction under Chapter VIA Section 80C - Life insurance premium . 30,000) Section 8OTTA (See Note 6) 7,000] _10,000 ‘Total Income 4.27,500| _3,74,000) Notes: 1. Mr. Ramesh is a non-resident since he has been li settled in Delhi, and thu: ing in Canada since 1996. Mr. Suresh, is , assumed as a resident and ordinarily resident. 2. In case of a resident and ordinarily resident, his global income is taxable as per section 5(1) However, as per section 5(2), in case of a non-resident, only the following incomes are chargeable to tax: (i) Income received or deemed to be received in India; and (i Therefore, fees for technical services rendered in India would be taxable in the hands of Mr. Ramesh, even though he is a non-resident. The income referred to in SI. No. 3,4,5 and 7 are taxable in the hands of both Mr. Ramesh and Mr. Suresh since they accrue or arise/ deemed to accrue or arise in India, Interest on Canada Development Bond would be fully taxable in the hands of Mr. Suresh, whereas only 50%, which is received in India, is taxable in the hands of Mr. Ramesh. Income accruing or arising or deemed to accrue or arise in India. 3. Dividend received from British company in London by Mr Ramesh, a non- resident, is not taxable since it accrued and is received outside India. However, such dividend received by Mr. Suresh is taxable, since he is a resident and ordinarily resident. 4. Agricultural income from a land situated in India is exempt under section 10(1) in the case of both non-residents and residents. 5. Income from house property- Bie Mr. Ramesh Mr, Suresh e ® ® Rent received 1,00,000 60,000, Less: Deduction under section 24(a) @30% 30,000 18,000 Net income from house property 70,000 42,000 ‘The net income from house property in India would be taxable in the hands of both Mr. Ramesh and Mr. Suresh, since the accrual and receipt of the same are in India, 6. In case of an individual, interest upto € 10,000 from savings account with, inter alia, a bank is Writ aed 11a, Chapter 2: Residence and Scope of Total Income allowable as deduction under section 80TTA. Question 11 i Ex th ness or otherwise of the statement - meee canes OF arise reins che coctness othr OO oyally and foes fore sae taxed irrespective of territorial nexus” ] Answer 11 This statement is correct. As per Explanation to section 9, income 4 way a Which is deemed to accrue or arise in India by virtue a be included in the total income of the non- resident, whether or not f 7 e ction in India; or (non-resident has a residence or place of business or business connecti terest, royalty or fees for technical services lauses (v), (vi) and (vii) of section 9(1), shal ii) the non-resident has rendered services in India In effect, the income by way of fees for technical services, interest or royalty aa services utilised in India would be deemed to accrue or arise in India in case of a non-resident and be included in hig total income, whether or not such services were rendered in India and irrespective of whether the non. resident has a residence or place of business or business connection in India. Question 12 Examine with reasons whether the following transactions attract income-tax in India in the hands of recipients: (i) Salary paid by Central Government to Mr. John, a citizen of India & 7,00,000 for the services rendered outside India. Li) Interest on moneys borrowed from outside India % 5,00,000 by a non-resident for the Purpose of business within India say, at Mumbai. (ii) Post office savings bank interest of € 19,000 received by a resident assessee, Mr Ram, aged 46 years. if he exercises the option of shifting out of the default tax regime Provided u/s 115BAC(1A), (0 Royalty paid by a resident to a non-resident in respect of a business carried on outside India Wii) Legal charges of ® §,00,000 paid in Delhi to a lawyer of United Kingdom who visited India to represent a case at the Delhi High Court [smQ] Answer 12 Taxable/Not | Amount liable Reason Taxable to tax (®) () [Taxable 650,000 As per section 9(1)(ii), salaries payable by the Government to a citizen of India for service rendered outside India shall Pe deemed to acerue or arise in India, Therefore, salary paid by Central Government to Mr. John for services renlred outside India would be deemed to acerue or arise in India| since he is a citizen of India. He would be entitled to | Standard deduction of ® 50,000 under section 16(ia), Gi) | Taxable 5,00,000 (ii) |Partly Taxable 5,500Taxable/Not Am *TasKiie jount liable to tax (®) (iv) |Not Taxable | | Chapter 2: Residence and Scope of Total Income Reason exempt u/s 10(15)(i), only to the extent of % 3,500 in case | of an individual a/e, Further, interest upto @ 10,000, would be allowed as deduction u/s 80TTA from Gross Total Income. Balance & 5,500 i.e., % 19,000 - % 3,500 - % 10,000 would be taxable in the hands of Mr. Ram, a resident. Royalty paid by a resident to a non-resident in respect of a business carried outside India would not be taxable in the hands of the non-resident provided the same is not received in India. This has been provided as an exception to deemed accrual mentioned in section 9(1)(vi(b). () | Taxable In case of a non-resident, any income which accrues or arises in India or which is deemed to accrue or arise in India or which is received in India or is deemed to be received in India is taxable in India. ‘Therefore, legal charges paid in India to a non- resident | lawyer of UK, who visited India to represent a case at the| Question 13 Mr. Shridhar (age 45 years), a citizen of India, serving in the Ministry of Finance in India, was transferred to Indian Embassy financial year 2023-24 is given hereunder: Delhi High Court would be taxable in India. in Australia on 15th March 2023. His income during the Particulars z remitted to Indian bank account. Salary from Government of India Rent from a house situated at Australia, received in Australia. Thereafter,| 5,25,000,_ Interest on Post office savings bank account in India | 4,600 Foreign Allowances from Government of India 8,00,000) 9,25,000 Mr. Shridhar did not come to India Total Income for the Assessment ye: Answer 13 Mr. Shridhar is a non-resident for the during the previous year 2023-24 [Secti As per section 5(2), a non-resident is ch (i) Income received or deemed to be received in In (ii) Income accruing or arising or income deemed to accrue or arise in India Computation of Gross Total during the financial year 2023-24. Compute his Gross yar 2024-25. [MTP Q.] ALY.2024-25, since he was not present in India at any time ion 6(1)]- argeable to tax in India only in respect of following incomes: and Income of Mr. Shridhar for A.Y. 2024-25 Particulars z Salaries Salary from Government of India (Income chargeable under the head ‘Salaries’ payable by the Government to a citizen of 9,25,000 edesidence and Scope of Total incom” eer eee cin s a iculars - ned to accrue or arise in India under | — Toutside India is deemed to accrue or a | services rendered outside India is deen r. Shridhar, a citizen of | |scetion 9(1 ii) Monee uel nome is taxable the hands of na nae | |India, even though he is a non-resident and rendering services ude | Pees f ia Nil Foreign Allowance from Government of India india bs oe [Any allowances or perquisites paid or allowed as such oui ia esate 00) | |'0 a citizen of India for rendering service outside India is exemp' | | 9,25,09 | Gross Salary ; ; | | 9.25, 00 , eing lower of gross sala | Less: Standard Deduction under section 16(ia) of © 50,000, being low a ry] 5.000 or & 50,000 | 8,75,000| Income from House Property Nil] Rent from a house situated at Australia, received in Australia an e a ands | Gncome from property situated outside India would not be taxable i ioe te a of a non-resident, since it neither accrues or arises in India nor is it deeme« | arise in India nor is it received in India) | Income from Other Sources Interest on Post office savings bank account — exempt upto 3,500 1,000 Gross Total Income | 8,76, 000) Note ~ Interest on Post office saving bank account of & 1,000 would be allowed as deduction under section 8OTTA. Question 14 ‘You are required to determine the residential status of Mr. Dinesh, a citizen of India, for the previous year 2023-24. Mr. Dinesh is a member of crew of a Singapore bound Indian ship, carrying passengers in the international waters, which left Kochi port in Kerala, on 16th August, 2023, Following details are made available to you for the previous year 2023-24: Particulars Date | OP namtered into the Continuous Discharge Certificate in respect| 16th August, 2023) of joining the ship by Mr. Dinesh | | Date entered into the Continuous Discharge Certificate in respect|21st January, 2024 of signing off the ship by Mr. Dinesh 1p June, 2023, he had gone out of India to Dubai on a private tour for a continuous period of 27 days. During the last four years preceding the previous year 2023-24, he was Present in India for 425 days. During the last seven previous years Preceding the previous year 2023-24, he was present in India for 830 days. IRTP NOV2001 Answer 14 Determination of residential status of Mr. As per Explanation | to section 6(1), where a Indian ship, he will be resident in India only i previous year. Cea iesh for the PLY, 2023-24 ndian citizen leaves India as a member of crew of an he stayed in India for 182 days during the relevantChapter 2: Residence and Scope of Total Income As per Explanation 2 to section 6(1)1, in and a member of the crew of a fore case of an individual, being a citizen of Ind oT Fore et Sound ship leaving India, the period or periods of stay in India sh aoe vats Dine s, YOYaEE: Not include the period commencing from the date entered into the Continuous Discharge Certificate in respect of joining of ship by the said individual for the eligible aeeee hat nang on the date entered into the Continuous Discharge Certificate in respect of signing off by that individual from the ship in respect of such voyage. Eligible voyage includes a voyage undertaken by an Indian ship engaged in the carriage of passengers en traffic, originating from any port in India and having its destination at a port outside In this case, voyage is undertaken by f ya foreign bound Indian ship engaged in the carriage o' Passengers in international traffic, originating from a port in India (ie., the Kochi port) and having its destination at a port outside India (i-e., the Singapore port), Hence, the voyage is an eligible voyage. Therefore, the period from 16th August, 2023 and ending on 21st January, 2024 has to be excluded for computing the period of stay of Mr. Dinesh in India. Accordingly, the period of 159 days [16+30+31+30+31421] has to be excluded for c 9 period of his India during the P.Y.2023-24 for computing the period of his stay in India during Further, since Mr. Dinesh had also gone out of India to Dubai on a private tour for a continuous period of 27 days in June, 2023, such period has also to be excluded for computing his period of stay in India during the P.Y.2023-24, Consequently, the period of stay in India during the P.Y. 2023-24 would be 180 days [i.e., 366 days ~ 159 days ~ 27 days}, which is less than 182 days. ‘Thus, Mr. Dinesh would be a non-resident for A.Y. 2024-25. Since the residential status of Mr. Dinesh is “non-resident” for A.Y. 2024-25 consequent to his number of days of stay in India in P.Y. 2023-24, being less than 182 days, his period of stay in India in the earlier previous years become irrelevant. Question 15 Determine the residential status and total income of Mr. Raghu for the assessment year 2024-25 from the information given below. Mr. Raghu (age 62 years), an American citizen, is employed with a multinational company in Gurugram. Mr. Raghu holds a senior level position as researcher in the company, since 2009. To share his knowledge and finding in research, company gave him an opportunity to travel to other group companies outside India while continuing to be based at the Gurugram office. The details of his travel outside India for the financial year 2023-24 are as under: Country Period of stay USA 25 August, 2023 to 10 November, 2023 | UK 20 November, 2023 to 23 December, 2023 | Germany 40 January, 2024 to 24 March, 2024 During the last four years preceding the previous year 2023-24, he was present in India for 380 days. During the last seven previous years preceding the previous year 2023-24, he was present in India for 700 days. During the P.Y. 2023-24, he earned the following incomes: (1) Salary % 15,80,000. The entire salary is paid by the Indian company in his Indian bank account. (2) Dividend amounting to & 48,000 received from Treat Lid., a Singapore based company, Bhanwar Borana ‘Ejcome Chapter 2: Residence and Scope of Total In Answer 15, Question 16 unt in Singat which was transferred to his bank acco! K (Delhi) amounting to & 10.59 , jab National Ban! 0 Wag 3) Int fixed deposit with Pun c (MTp © tons haan tame EBKC a pore. Determination of residential status in PY. 2023-24, it he satisfies any one oF the ftloyig Mr. Raghu would be a resident in India in , conditions: ear for a total period of 182 days or more, or () He has been in India during the previous year for a total p tea eces g the previous year for a ii) He has been in India during the 4 ee ea ifte 7 year. of 365 days or more and has been in India for at leas " 5 above cond It he satisfies any one of the mentioned above, he is a resident. If both the above conditions are Satisfied, he would be a non-resident. 7 la 186 da During the P.Y. 2023-24 Mr. Raghu stayed in India for 180 days i.c., 366 days lays [78 days 4 34 days + 74 days} and 380 days i.e., more than 365 days during the 4 preceding previous Years. He satisfies the second basic condition for being a resident. Hence, he is a resident in India for ALY.2024-25, total periog ot A person would be “Not ordinarily Residen India in any previous year, if such person, inter ali (@) has been a non-resident in 9 out of 10 previous years preceding the relevant previous year; or (©) has during the 7 previous years immediately preceding the relevant previous year been in India for 729 days or less. For the previous year 2023-24, Mr. Raghu would be “Resident but not ordinarily resident” since he Stayed for less than 729 days during the 7 previous years immediately preceding P.Y. 2023-24. Computation of total income of Mr. Raghu for A.Y.2024-25 Particulars Amount a (1) Salary from Indian company received in a bank account in 15,00,000 India Less: Standard deduction w/s 16(ia) 50,000 14,50,000 (2) Dividend of @ 48,000 received from Singapore based company transferred to Nil his bank account in Singapore is not taxable in the hance of the resident but | not ordinarily resident since the income has neither accrued or arisen in India | or has it been received in India. @) Interest on fixed deposit with PNB credited to his savings bank account is 10,500] taxable in the hands of Mr. Raghu as Income from other sources, since it has | accrued and arisen in India and is also received in India Gross Total Income 14,60,500| Less: Deduction w/s 80TTB Total Income 3rd February, 2023 and car on 11-08-2023. She return She received the following gifts from her relatives and friends during 01 2024 in India Cee)Chapter 2: Residence and Scope of Total Income + From parents of husband - From married sister of husband ~ From two very close friends of her husband & 1,41 ,000 and & 1,21,000 % 71,000 % 21,000 % 2,62,000 (i) Determine her residential status and compute the total income chargeable to tax for the Assessment Year 2024-25, (ii) Will the residential status change if she had returned to India again on 20-01-2024 instead of 20-02-2024? Answer 16 [MTP Q.] (@ Determination of residential status and computation of total income of Miss Bhanushali (if she returned to India on 20.2.2024) Particulars Under section 6(1), an individual is said to be resident in India in any previous year, if he/she satisfies any one of the following conditions: (i)_He’she has been in India during the previous year for a total period of 182 days or more, or (ii) He/she has been in India during the 4 years immediately preceding the previous year for a total period of 365 days or more and has been in India for at least 60 days in the previous year. If an individual satisfies any one of the conditions mentioned above, he/she is a resident. If both the above conditions are not satisfied, the individual is a non- resident. Therefore, the residential status of Miss Bhanushali, an American National, for A.Y.2024-25 has to be determined on the basis of her stay in India during the| previous year relevant to A.Y. 2024-25 i.e. P.Y.2023-24 and in the preceding four} assessment years. Her stay in India during the previous year 2023-24 and in the preceding four years are as under: P.Y. 2023-24 01.04.2023 to 11.08.2023 - 133 days 20.02.2024 to 31.03.2024 = 4l days Total 174 days Four preceding previous years P.Y.2022-23 [14.2.2022 to 31.3.2023] - 47 days P.Y.2021-22 - Nil P.Y.2020-21 - Nil P.Y.2019-20 - Nil 47 days rotal ‘The total stay of Miss Bhanushali during the previous year in India was less than 182 days and during the four years preceding this year was for 47 days. Therefore, due to non-fulfillment of any of the two conditions for a resident, she would be treated as non-resident for the Assessment Year 2024-25. Computation of total income of Miss Bhanushali for the A.Y. 2024-25 Income from other sources n-relatives is chargeable to tax as per section 56(2) (x) if the Gifts received from not ee amis tea FY| Income Chapter 2: Resicience and Scope of Total Income _ Ses Particular’ pil ea be — saeqeeedsi€ 50,000: oe naa ee | Lose an crn emee ants of husband would be exempt, since parents of] | ~ 271,000 received from parti of ‘relatives’ and gifts from a relative are not husband fall within the definition of , | chargeable to tax. _ ; ny from married sister-in-law is exempt, since sister of husband Fats wit tne denon 9 and gifts from a relative are not chargeable ut falls within the definition of relative to tax. fr and % 1,41,000 and & 1,21,000 | > Gift receives two friends of her husband & 1,41,000 and & 1,21 ae £202 (000 is taxable under section 56(2)(x) since the aggregate of| Be | __ 262099) % 2,62,000 exceeds % 50,000. Total Income (ii) Determination of residential status of Miss Bhanushali (if she returned 20.1.2024) Particulars Yes, the answer would change, if she had returned to India again on 20.1.2024 | instead of 20.2.2024 In such case, her stay in India during the previous year 2023-24 would be: 01.04.2023 to 11.08.2023 - 133 days | 20.01.2024 to 31.03.2024 - 72 days 205 days | Total Since she satisfies the condition of stay in India for more than 182 days during the Previous year 2023-24, she would become resident in India, She would be a resident but not ordinarily resident in India for A.Y. 2024-25, since her stay in India in the | Preceding seven years is less than 730 days (it is only 47 days)! ‘In the alternative, an individual can be treated as not ordinarily resident if she is non-resident in any 9 out of 10 preceding assessment years. In this case, Miss Bhanushali is a non-resident in all 10 preceding assessment years. She was in India for only 47 days in A.Y.2024-25 and never visited India earlier. ed SEE |Chapter 3: Income from Salary fo aig Question 1 Mr. Ravi retired on 15.6.2023 after gratuity of € 18,00,000. At the time of retirement, his salary was: Basic Salary : % 50,000 p.m Dearness Allowance % 10,000 p.m. (60% of which is for retirement benefits) Commission + 1% of turnover (turnover in the last 12 months was % 1,20,00,000) Bonus 2 % 25,000 pa. Compute his taxable gratuity assuming: completion of 26 years 8 months of service and received (a) He is private sector employee and covered by the Payment of Gratuity Act, 1972 (0) He is private sector employee and not covered by Payment of Gratuity Act, 1972. (c) He is a Government employee. [sma] Question 2 Mr. Sagar who retired on 1.10.2023 is receiving = 5,000 p.m. as pension. On 1.2.2024, he commuted 60% of his pension and received 7 3,00,000 as commuted pension. You are required to compute his taxable pension assuming: (a) He is a government employee. (b) He is a private sector employee and received gratuity of % 5,00,000 at the time of retirement. (©) He is a private sector employee and did not receive any gratuity at the time of retirement [sma] Question 3 Mr. Gupta retired on 1.12.2023 after 20 years of service and received leave salary of %5,00,000. Other details of his salary income are: Basic Salary : © 5,000 p.m. (% 1,000 was increased w.e.f. 1.4.2023) Dearness Allowance 3,000 p.m. (60% of which is for retirement benefits) Commission : ©500p.m. Bonus : 1,000 p.m. Leave availed during service : 480 days He was entitled to 30 days leave every year. You are required to compute his taxable leave salary assuming: 19 rdChapter 3; Income from Salary (@) He is a government employee = rie (b) He is a non government employee. [SM Qj Question 4 a Mr. Raj Kumar has the following receipts from his employer: (1) Basic pay % 40,000 p.m, (2) Dearness allowance (D.A.) So Pm (3) Commission ,000 pa (4) Motor car for personal use (expenses met by the employer) 2 1,500 p.m, (5) House rent allowance 215,000 p.m . Raj Kumar assuming that he Find out the amount of HRA eligible for exemption to Mr. Paid a rent of ? 16,000 pm. for his accommodation at Kanpur. DA forms part of salary for retirement benefits. Mr. Raj Kumar exercises the option of shifting out of the default tay regime provided u/s 115BAC(1A). ion 5 Mr. Srikant has two sons. He is in receipt of chi his elder son and € 70 p.m. for his younger son. receives the following allowances: Transport allowance : % 1,800 p.m. Tribal area allowance : ¢ 500 p.m. Compute his taxable allowances. Mr. Srikant default tax regime provided u/s 115BAC(1A) Answer 5 Children Education Allowance: Elder son ((€ 150 ~ & 100) p.m. x 12 months] ‘Younger son [(& 70 — 70) p.m. x 12 months] ‘Transport allowance (21,800 p.m. x 12 months) Taxable allowances Question 6 ‘Tribal area allowance ((¥ 500 ~¥ 200) p.m. * 12 months} [sma] jldren education allowance of 150 p.m. for . Both his sons are going to school. He also exercises the option of shifting out of the [sMQ] Taxable allowance in the hands of Mr. Srikant is computed as under ~ =% 600 Nil 7600 221,600 23,600 25,800 Mr. A retires from service on December 31, 2023, after 25 years of service. Following are the particulars of his incomelinvestments for the previous year 2023-24: 2 Particulars | Basic pay @ % 16,000 per month for 9 months 1,44,000) Dearness pay (50% forms part of the retirement benefits) ¥ 8,000 per month) 72,000) for 9 months Lumpsum payment received from the Unrecognized Provident Fund 6,00,000 Deposits in the PPF account 40,000 Out of the amount received from the unre contribution was & 2,20,000 and the interest ther Cognised provident fund, the employer's eon % 50,000. The employee's contribution CWwas ® 2,70,000 and the Chapter 3: Income from Salary _ Paed orleans et Ihereon ® 60,000. What is the taxable portion of the amount year 2024-25? ‘ed provident fund in the hands of Mr. A for the oe ‘Answer 6 [SM Q Taxable portion of the amount receiv 7 - : computed hereunder,” T°¢eived from the URPF in the hands of Mr. A for the A.Y. 2024-25 is | g share in the pa | i s he payment received from the URPF | 2,20,000] F Interest on the employer's share 50,000] | [test Soo 2,70,000| | a eee = 4 Amount taxable under the head “Income from Other Sources” | Interest on the employee's share 60,000] | [Total amount taxable from the amount received from the fund 3,30,000 | | Note: Since the employee is not eligible for deduction under section 60C for contribution to URPF at ¥ the time of such contribution, the employee's share received from the URPF is not taxable at the time. of withdrawal as this amount has already been taxed as his salary income. ‘ Question 7 E Mr. B is working in XYZ Ltd. and has given the details of his income for the P.Y. 2023-24 You are required to compute his gross salary from the details given below. IsMQ] | Basic Salary % 10,000 p.m D.A. (50% is for retirement benefits) 2 8,000 p.m. Commission as a percentage of turnover 0.1% Turnover during the year %50,00,000 Bonus % 40,000 Gratuity % 25,000 His own contribution in the RPF % 20,000 é Employer's contribution to RPF 20% of his basic salary Interest accrued in the RPF @ 13% p.a 2 13,000 Question 8 Mr. Dutta received voluntary retirement compensation of & 7,00,000 after 30 years 4 months of service. He still has 6 years of service left. At the time of voluntary retirement, he was drawing basic salary % 20,000 p.m.; Dearness allowance (which forms part of pay) % 5,000 p.m. Compute his taxable voluntary retirement compensation, assuming that he does not _ claim any relief under section 89. [IsMQ] Question 9 Mr. Garg received retrenchment compensation of % 10,00,000 after 30 years 4 months of service. At the time of retrenchment, he was drawing basic salary % 20,000 p.m.; dearness allowance ¥ 5,000 p.m. Compute his taxable retrenchment compensation CU) |, Chapter 3; Income from Salary Question 10 i from 1.9.2021. His basic satay, Ltd. in Mumbai + Se Mr. X is appointed as a cro ot fee He contributes 10 Ye eerie ig ‘sends hig ome eed ee anal fovdani hind ae an {4.2080 oa’ 3.2023 jhe Fecognized provident roviden r 31. iecSiilsiad balance in pe naa ‘46,48,555, reeneciNely arate the Perduisite 31.3.2024 is & 9,81,137, & 27,43, \ds of Mr. X u/s 17(2)(vii) and 17(2)( ey [or the AY, ago value chargeable to in ae 2021, he was a eure whee Professional i Wag -25. Prior to 1. : es cme tans eee gains of business or prot May Question 14 is wife and three children (ong Pe Denton Sak Sales ooe S ose] THE ee by ig {economy es) arg ae ; 2 i methadone g Aces ae eco option of shifting out of the default tax regime Provided us i AC (1A). B. In the above point A, will there be any difference if among his three children ne fins were 5 years old and the son 3 years old? Discuss. a) Answer 14 A. Since the son’s age is more than the twin daughters, Mr. D can avail exemy tion for all his three children. The restriction of two children is not applicable to multi re Pe births after one child, Teo, ftiday being in India and the joumey being rerfornes by air (economy class), the emit’ imbursement met by the employer is fully exempt, : 3. Since the twins’ age is more than the son, Mr. D cannot avail for exemption for all his three shildren. LTC exemption ean be availed in respect of only two children. Taxable Lte=18,000%1 =%5,000 LTc ‘exempt would be only % 55,000 (i.e. 760,000 — & 5,000) Question 12 Compute the taxable value of the So aulsite in respect of medical facilities received by Mr. g from his employer during the PLY. 2023-24: [sm qq Medical premium paid for insuring health of Mr. G ® 7,000 Treatment of Mr. G by his family doctor 25,000 Treatment of MR G in a Government hospital % 25,000 Treatment of Mr. G's grandfather in a private clinic € 12,000 Treatment of Mr. G's mother (68 years and dependant) by family doctor = 8,000 ‘Treatment of Mr. G's sister (dependant) in a nursing home 23,000 ‘Treatment of Mr. G's brother (independent) 6,000 ‘Treatment of Mr. G's father (75Chapter 3: Income from Salary Limit specified by RBI # 75,000 Answer 12 Computa Putation of taxable value of perquisite in the hands of Mr. Particulars a z z ‘Treatment of Mrs. G ina Goverment hospital hospital 3 Treatment of Mr. G's father (75 years and dependent) abroad | 50,000 Expenses of staying abroad of the patient and attendant 30,000 80,000] Less: Exempt up to limit specified by RBI 75,000 5,000 Medical premium paid for insuring health of Mr. G Treatment of Mr. G by his family doctor 5,000 Treatment of Mr. G's mother (dependent) by family doctor 3,000 Treatment of Mr. G's sister (dependent) in a nursing home 3,000 ‘Treatment of Mr. G's grandfather in a private clinic 12,000] Treatment of Mr. G’s brother (independent) | 6,000 Taxable value of perquisite l ae Question 13 Mr. C is a Finance Manager in ABC Ltd. The company has provided him with rent- free unfurnished accommodation in Mumbai. He gives you the following particulars Basic salary % 6,000 p.m Deamess Allowance % 2,000 p.m. (30% is for retirement benefits) Bonus 1,500 p.m. Even though the company allotted the house to him on 1.4.2023, he occupied the same only from 1.11.2023. (a) Calculate the taxable value of the perquisite for A.Y.2024-25. (b) Compute the value of the perquisite if Mr. C is required to pay a rent of & 1,000 p.m. to the company, for the use of this accommodation (c) Compute the value of the perquisite it ABC Ltd. has taken this accommodation on a lease rent of % 1,200 p.m. and Mr. C is required to pay a rent of € 1,000 p.m. to the company, for the use of this accommodation. (d) Compute the value of the perquisite if ABC Ltd. has provided a television (WDV & 10,000; Cost % 25,000) and two air conditioners. The rent paid by the company for the air conditioners is % 400 p.m. each. The television was provided on 1.1.2023. However, Mr. C is required to pay a rent of % 1,000 p.m. to the company, for the use of this furnished accommodation. ) Compute the value of the perquisite if Mr. C is a government employee, The licence fees . deterrhined by the Government for this accommodation was % 700 p.m. [sMQ] eked ceOO EEE —— ?-.. | Chapter 3: Income from Salary Questi = Me wir Y are working for W's. Gama Ltd. AS per salary fixation norms, the folowing Ya perquisites were offered domestic servant for ¢ 500 per month, his. employe, (i) For Mr. X, who engaged a reimbursed the entire salary pall (ii) For Mr. Y, he was provided with a do! 'd to the domestic servant i.e. % 500 per month mestic servant @ & 500 per month as part of remuneration package. You are required to comment on the taxability of the above in the hands of Mr. x a Y, who are not specified employees. Qj Answer 14 obligation which the employee would have discharged even if the the case of ecomes an Se tei ite will be covered under section 17(2\jy) employer did not reimburse the same. Hence, the perquisite will be e and will be taxable in the hands of Mr. X. This is taxable in the case of all employees. In the case of Mr. Y, it cannot be considered as an obligation which the employee would meet, The employee might choose not to have a domestic servant. This is taxable only in the case of specified . there is no perquisite element in the hands of Mr. y. employees covered by section 17(2)(iii). Hen: Question 15 Mr. X retired from the services of M/s Y Ltd. on 31.01.2024, after completing service of 39 years and one month. He had joined the company on 1.1.1994 at the age of 30 years and received the following on his retirement: (i) Gratuity = 6,00,000. He was covered under the Payment of Gratuity Act, 1972. (ii) Leave encashment of ¥ 3,30,000 for 330 days leave balance in his account. He was credited 30 days leave for each completed year of service. (ili) As per the scheme of the company, he was offered a car which was purchased on 30.01.2021 by the company for € 5,00,000. Company has recovered % 2,00,000 from him for the car. Company depreciates the vehicles at the rate of 15% on Straight Line Method. (iv) An amount of € 3,00,000 as commutation of pension for 2/3 of his pension commutation (v) Company presented him a gift voucher worth % 6,000 on his retirement (vi) His colleagues also gifted him a Television (LCD) worth % 50,000 from their own contribution. Following are the other particulars: ()) He has drawn a basic salary of € 20,000 and 50% dearness allowance per month for the period from 01.04.2023 to 31.01.2024. (ii) Received pension of % 5,000 per month for the period 01.02.2024 to 31.03.2024 after commutation of pension. Compute his gross total income from the above for Assessment Year 2024-25 assuming he exercises the option of shifting out of the default tax regime provided u/s 115BAC(1A). [sma] a CAChapter 3: Income from Salary inance Manager gives you the list of perquisites im for the entire financial year 2023-24. mestic servar “0 Asoo fa aah ee Servant wat ihe fesidence of Bala. Salary of domestic servant is € company (employer) S engaged by him and the salary is reimbursed by the In case the compan perquisite? pany has employed the domestic servant, what is the value of per month and for Ashok at 1,200 per mor company for such education facility from Bala” NO AMOUR Mas recovered by the (iv) A gift voucher worth ® 10,000 was given on the occasion of his marriage anniversary. It is given by the company to all employees above certain grade ee anne (v) Telephone provided at the residence of Shri Bala and the paid by the employer. bill aggregating to ¢ 25,000 (vi) Housing loan @ 6% per annum. Amount outstanding on 1.4.2023 is % 6,00,000. Shri Bala pays % 12,000 per month towards Principal, on Sth of each month. Compute the chargeable perquisite in the hands of Mr. Bala for the A. -Y. 2024-25. The lending rate of State Bank of India as on 1.4.2023 for housing loan may be taken as 10%. tel: Answer 16 Taxability of perquisites provided by ABC Co. Ltd. to Shri Bala (i) Domestic servant was employed by the employee and the salary of such domestic servant was paid/ reimbursed by the employer. It is taxable as perquisite for all categories of employees Taxable perquisite value = & 1,500 x 12 = 18,000. If the company had employed the domestic servant and the facility of such servant is given to the employee, then the perquisite is taxable only in the case of specified employees. The value of the taxable perquisite in such a case also would be % 18,000. (ii) Where the educational institution is owned by the employer, the value of perquisite in respect of free education facility shall be determined with reference to the reasonable cost of such education in a similar institution in or near the locality. However, there would be no perquisite if the cost of such education per child does not exceed @ 1,000 per month. Therefore, there would be no perquisite in respect of cost of free education provided to his child Arthy, since the cost does not exceed % 1,000 per month, However, the cost of free education provided to his child Ashok would be taxable, since the cost exceeds @ 1,000 per month. The taxable perquisite value would be € 14,400 (& 1,200 x 12). Note ~ An alternate view possible is that only the sum in excess of € 1,000 per month is taxable, In such a case, the value of perquisite would be ¥ 2,400. 25 CadChapter 3: Income from Salary (iii) Where the employer has provided movable assets to the employee or any member of his household, 10% per annum of the actual cost of such asset owned or the amount of hire charges incurred by the employer shall be the value of perquisite. However, this will not apply to laptops and computers. In this case, the movable assets are television, refrigerator and air conditioner and actual cost of such assets is & 1,10,000. The perquisite value would be 10% of the actual cost ic., & 11,000, being 10% of & 1,10,000 (iv) The value of any gift or voucher or token in lieu of gift received by the employee or by member of his household not exceeding & 5,000 in aggregate during the previous year is exempt. In this case, the amount was received on the occasion of marriage anniversary and the sum exceeds the limit of & 5,000, Therefore, the entire amount of € 10,000 is liable to tax as perquisite. Note- An alternate view possible is that only the sum in excess of € 5,000 is taxable. In such a case, the value of perquisite would be *5,000 (v) Telephone provided at the residence of the employee and payment of bill by the employer is a tax free perquisite (vi) The value of the benefit to the assessee resulting from the provision of interest-free or concessional loan made available to the employee or any member of his household during the relevant previous year by the employer or any person on his behalf shall be determined as the sum equal to the interest computed at the rate charged per annum by the State Bank of India (SBI) as on the Ist day of the relevant previous year in respect of loans for the same purpose advanced by it. This rate should be applied on the maximum outstanding monthly balance and the resulting amount should be reduced by the interest, if any, actually paid by him. “Maximum outstanding monthly balance” means the aggregate outstanding balance for loan as on the last day of each month. The perquisite value for computation is 10% - 6% = 4% ce, Maximum outstanding Perquisite value at _| balance as on last date of 4% for the month (%) = china OPE iit April, 2023 5,88,000 1,960 May, 2023 5,76,000 1,920 June, 2023 5,64,000 1,880 July, 2023 5,52,000 1,840 August, 2023 5,40,000 1,800 September, 2023 5,28,000 1,760 October, 2023 5,16,000 1,720 November, 2023 5,04,000 1,680 December, 2023 4,92,000 1,640 January, 2024 4,80,000 1,600 February, 2024 4,68,000 1,560 March, 2024 4,56,000 1,520 20,880 ‘Total value of this perq Candcai Chapter 3: Income from Salary Foy iae oF taxable perguisite = & 74,280 [ie € 10ND + € 14400 + € 11,000 + £10,000 +2 Note - In case the alternate views ar ews are taken for items (ii) & (iv), the total value of taxable perquisite would be % 57,280 fi.e., % 18,000 +8 2,400 + % 11,000 +8 5,000 4% 20,880). Question 17 As Co. Ua, iets 1000 sweat equity shares to Sri Chand in June 2023. The shares were a per share as against the fair market value of 7 300 per share on the date of exercise of option by the allottee viz. Sri Chand. The fair market value was computed in accordance with the method prescribed under the Act. (i) Whatis the perquisite value of sweat equity shares allotted to Sri Chand? (ii) In the case of subsequent sale of those shares by Sri Chand, what would be the cost of acquisition of those sweat equity shares? [SM Q] Answer 17 (i) As per section 17(2)(vi), the value of sweat equity shares chargeable to tax as perquisite shall be the fair market value of such shares on the date on which the option is exercised by the assessee as reduced by the amount actually paid by, or recovered from, the assessee in respect of such shares. =a er a oie z Fair market value of 1000 sweat equity shares @ % 300 each 3,00,000 Less: Amount recovered from Sri Chand 1000 shares @ & 200 each 2,00,000 Value of perquisite of sweat equity shares allotted to Sri Chand 1,00,000 (ii) As per section 49(2AA), where capital gain arses from transfer of sweat equity shares, the cost of acquisition of such shares shall be the fair market value which has been taken into account for perquisite valuation under section 17(2)(vi). Therefore, in case of subsequent sale of sweat would be & 3,00,000. t equity shares by Sri Chand, the cost of acquisition Question 18 X Lid, provided the following perquisites to its employee Mr. Y for the P.Y. 2023-24 ~ (1) Accommodation taken on lease by X Ltd. for % 15,000 p.m. € 5,000 p.m. is recovered from the salary of Mr. Y. (2) Furniture, for which the hire charges pald by X Ltd. is * 9,000 pm. No amount is recovered from the employee in respect of the same. {@) A Car of 1,200 cc which is owned by X Ltd. and given and personal purposes. All running and maintenan employer. He is also provided with a chauffeur. (4) A gift voucher of & 40,000 on his birthday. ax for the A.Y.2024-25, assuming his Compute the value of perquisites chargeable to t salary for perquisite valuation to be & 10 lakh. [sMQ] to Mr. Y to be used both for official ce expenses are fully met by theChapter 3: Income from Salary a ani (es chargeable to tax in the hands of Mr. Y for the A.Y.2024-25 Computation of the value of perquisit eee Particulars (1) | Value of concessional accommodation Actual amount of lease rental paid by X Ltd. 1,80,000 15% of salary ie, 15% of & 10,00,000 150,000) Lower of the above 1,50,000 Less: Rent paid by Mr. ¥ (% 5,000 * 12). | 60,000] 90,000 Add: Mire charges paid by X Ltd. For furniture 36,000 provided for the use of Mr. ¥ (& 3,000 = 12) (2) |Perquisite value of Santro car owned by X Ltd. and provided to Mr. Y for his personal and official use ((% 1,800 + % 900) « 12 3) | Value of gift voucher* Value of perquisites chargeable to tax 1,68,400 * An alternate view possible is that only the sum in excess of ® 5,000 is taxable. In such a case, the value of perquisite would be € 5,000 Question 19 Mr. Goyal receives the following emoluments during the previous year ending 31.03.2024 Basic pay % 40,000 Dearness Allowance = 15,000 Commission = 10,000 Entertainment allowance % 4,000 Medical expenses reimbursed % 25,000 Professional tax paid © 2,000 (® 1,000 was paid by his employer) Mr. Goyal contributes & 5,000 towards recognized provident fund. He has no other income. Determine the income from salary for A.Y. 2024-26, if Mr. Goyal is a Stale Gevemmert employee. Ignore provisions of Sec 115BAC, [SMQ] Answer 19 TPR Basic Salary 40,000 Deamess Allowance 15,000 Commission 10,000 Entertainment Allowance received 4,000 ZedChapter 3: Income from Salary ___Particutars Sa Si Employee's contribution RPE |Note} | Medical expenses reimbursed 25, oy Professional tax paid by the employes | 1,000) Gross Salary | 95,000) Less: Deductions under section 16 | under section 16(ia) - Standard deduction of upto & $0,000 50,000 under section 16(ii) - Entertainment allowance being lowest of (a) Allowance received 4,000 (b) One fifth of basie salary [1/5 x & 40,000] | 8,000) | (©) Statutory amount 5,000 4.000 under section 16(iii) - Professional tax paid 2,000. [Income from Salary 39,000 | Note: Employee's contribution to RPF is not taxable. It is eligible for deduction u/s 80C. Question 20 In the case of Mr. Hari, who turned 71 years on 28.3.2024, you are informed that the salary (computed) for the previous year 2023-24 is ¥ 10,20,000 and arrears of salary received is € 3,45,000. Further, you are given the following details relating to the earlier years to which the arrears of salary received is attributable to: | Previous year Taxable Salary(%) Arrears now received (2) 2010-2011 7 7,10,000 4,03,000 [2011 - 2012 8,25,000 4,17,000) 2012-2013 950,000 1,25,000| Compute the relief available under section 89 and the tax payable for the A.Y. 2024-25. Assume that Mr. Hari does not opt for section 115BAC. 4 Note: Rates of Taxes: [Assessment Slab rates of income-tax . Year |For resident individuals of the age of | For other resident individuals 60 years or more at any time during the previous year | i Slabs Rate Slabs Rate 1 2011-12 Upto % 2,40,000 Nil Upto % 1,60,000 Nil ; £2,40,001-%5,00,000 | 10% | € 1,60,001-¥5,00,000 | 10% %5,00,001 - 7 8,00,000 20% | €5,00,001-%8,00,000 | 20% Above ® 8,00,000 30% Above €8,00,000 | 30% Ez adshapter 3: Income from Salary cals camara RL Ca { ee “Upto? 1.80.00 | N Partewars | Apritatay | dune-Oet an _| Feb-March 7 | | 20 | :sonm-2mo00 | aoe ve 15,000 | ‘napa pyre | 20% |] Ae oa | 30% 15,000] 13,000] 15,000! a | Upot | J2or-14 | Upto 2.50.000 nil m Na 2| 5 2 1 ezsooor-esoned | 10% | £20001 -*6,00,000 eee | | onoie | 2am |*a0001-¢ 10.0000 3opca} 75,00 i | “hse ® 1000000 | 20% | Above ® 000.000 es000000__| 90h _ 0.00.0 Note ~ Edvcaton cess @2% and secondary and higher education cess@1% was 30,000) 16,000] 000) 16.00 ‘on the income-tax fora above preceding eas €6000:5)] 000-2] @8000=1)] 8.0002) Gas House re allowance 12000] 30.000] 12000} 7000) 14000 Me Monit is employed with XY Lid. on abasic slay of ® 10,000 p.m. He is also ented to (una) revived dang | € 600052)] 6.00089] 6000%2)| (€ 7.0001) Goatees atiance @100% of base salary, 5% of whch is included in salary a6 pe te retevant period (A) ot employment The compary gues him house rent atowance of € 6,000 pin. which was increased o£ 7000 pm. wih eect fom 01.01 2028 He also got an increment of & 1,000 NA pr mic basi salary wih efet rom 01 02.2028. Rent paid by him during the previous Your 2023-28 as under soa} 12.000) 7.000] Aor and May, 2028 Ni ashe stayed wth his parents 2. Ren pid (>) 10% of -| 2,500) 13,000] 6.500] 12.700 June to October, 2023, £6,000 pm. or an accommodation in Ghaziabad sly November, 2025 o Maren, 2024 -® 8,000 pam. for an accommodation in Dl Comput ns gross salary for assessment yer 202-25 assuming he has not opted forthe Panes | raped cease provers of eee NE ‘su Coes Chia dione cou] con ame to 0:4 2035) Answer 21 75400 T1soon| £33,000 Comprtation Monitor A.¥. 2024-28 jee Exempt HRA () xi] 2zseo] 2.900] 600] 12,700 teen axable HRA (Actst RA | 12.000] 7.500 xi} 500) 1.300 12,000 (Exe HRA House Rent Allowance (See Note below) “Taxable HRY 000 + 8 7500+ 8 500 + € 1,300 = € 21,300 Gross Salary Note: Computation of Faxable House Rent Allowance (HRA) Fartclas Apa | JaneOet | Neopce’ | aan ROA ® ® e ® © Basic salary per month 10.000| 10.000] Yo,000chapter 3: Income from Salary Question 22 Ms, Rakhi is an employes from the company dur Answer sapmateconpary Se ces th 109 medal ba eaneeteie: till = ticulars ia experans reed by ME i |) On treatment of her settemployed dauahter ina private clinic 4,000 oy ontatant of ayfaty ce ‘os Fs bei epndert oF Mt | Soc 2 lmancteemmetntcinnacinennenam | mae Aor Pie ie 5 eoeeereret yon one vse terior sen) 1080 | abroad including stay expenses 6 Expenses in relation to foreign travel of Rakhi and her son for! 1,20,000 Examine the taxabilly of the above benefits and allowances in the hands of Rakhi. [SM Q] 22 ‘Tas treatment of medical bene inthe hands of Ms. Rak Particulars 1. _| Reimbursement of medical expenses incurred by Ms. Rakhi perguisite ‘ofthe first proviso to section 17(2), the following expenditure incurred by tne employer would be excluded from perquisite subject to certain conditions Expenditure on medical eatment of the employee, or any member of the family of such 1 and stay abroad ofthe employee or any member of the fa and one attendant who accompanies the pai The conditions subject to which the above expenditure would be exempt areas follows (i) The expenditure on medical weatment and stay abroad would be excluded from pergusit to the extent permitted by Reserve Bank of India, ‘The expenditure on travel would be excluded from perquisite only in the case of an] employee whose gross total income, as computed before including the sid expendita does not exceed ® 2 ak ince the expenditure on medical weatment and stay abroad does not exceed th ‘by RBI, they would be filly exempt. However, the foreign travel expe inorson bore by the employer would be exclude from per if the gross total income of Ms. Rakhi, as computed before including the 3384 expenditure, oes not exceed taki. ployed with AB Ltd. on a monthly salary of % 25,000 per month and an ‘lowance and commission of @ 1,000 p.m, each. The company provides him withthe folowing benef: 4. A company owned accommodation is provided 10 him in Delhi, Furniture costing ¢ 2.40,000 was provided on 1.8.2023 2. A personal loan of % 6:00,000 on 1.7.2023 on which it charges interest @ 6.75% pia ‘Tne entre loan is sil oustanding, (Assume SBI rate of interest on 1.4.2023 was 12.75% pa) His son is allowed to use a motor cycle belonging to the company. The company had purchased this motor cyte for € 60,000 on 1.5.2020, The motorcycle was finally sold to Fim on 1.8,2023 for ¢ 30,000. 4, Professional tax paid by Mr. Xi € 2,000, Compute the income from salary of Mr. X for the A.Y. 2024-25 assuming Mr. X has ‘opted for the provisions of section 11SBAC. IsMa],laptop and computer was provided to Bal for 9 ‘and computer ? 35,000 were acquired “Transfer of meso yee [NOt tne salary chargeable 10 tax for the AY.2024-25 Grow Salary Less Deduction under etion 16, of shifting out ofthe defauit tax regime provides ‘Under section 16(ia) ~ Standard deduction a of Rama & Co., in Gurgaon. He was appointed on 1.1.2023 in Jade sect 1) - ta pid 2.000| 100 £30,000 tie s pu! 10% DA & orus equvalent to one ‘Under section 1 - Profesional Of March every year, He conrbutos 15% of fis pay and OA ase oy fund and te company contbutes he same amount. DA ‘Valve of rent free unfurnished accommodation facility which has been taken on rent by the company at go provided wi folowing festes 750000. medical Weatment bil of his brother of € 25,000, whois Question 24 is oeting telephone allowance @¥ 500 per month [suay Me. Bala), employed 28 Producton Manager in Bela Ltd., fumishes you the followin information for the year ended 31.03.2024: : a Question 26 () Basic salary upto 9.102028 50,000 pm. year 2023 Basic salary om 01.41.2023 €60,000 pm Note: Salary is due and paid on the 7 baceice'@ 40% of ask [asic salary 540,000 alto one menth salary. Pld in October 2028 on basic salary plus deorness [Deamess atowance 360,000 applicable for that month. oe | Commis 50,000) (W) Contribution of employer to recognized provident fund unt 1e employee@ 16% aclneal if 3 baie salary, sarees Cettel data aed Entertainment allowance 7.500) lesional tx paid 2.500 of which 2,000 was pad by the employer ‘Medical expenses reimbursed bythe employer | 21.000(Chapter 3: Income from Sal Cchapter 3: Income from Salary Profession is, 50% pad by employer) aaa : Particulars | Health insurance premium paid by employe 8,000 Gin voucher given by employe on DANY 12,000 Standard Dection as pr sect lower of Life insurance premium of Neeraj paid by employer 000 tual cost 20.000 Laptop provided for use at home. Actual ne asessee te ao using he L210 Employer compary owns a Maruti Suzuki Swit car ( oa Spe sal be dein he value of any gift or voucher received by the dis not excusively used) 5,000 at during the previous year would cher of @ 12,000 was received to compute the income chargeable under _Bssesement year 2024-25, Assume he exercises the option of shilting out fegime provided us 115BAC("A) ‘Answer 26 per annum would be exempt, beyond which 000. Accordingly, the gross sary and net salary would be i ~. ly Basic Salary 540,000 eae Deseret tomate 2m Mr. Samaksh is @ Marketing Manager in Smile Ltd. From the following information, you are (Commission 50,000 , required to compute his income chargeable under the head Salary for assessment yé 2024-25. Assume he exercises the option of shifting out of the default tax regime provided Enersinment allowance 7,500) SBAC(IA, Medial expenses reimbursed by the employer is fully taxable 21,000] Basic salary is & 70,000 per month Professional tax pid by the employer i a axable perquisite as per section 17(2Miv),| 2,000 ) Dearess allowance @ 40% of basic salary since itis an obligation ofthe employee which s pid by the employer He pried stn sane scheme proved by IRDA owe € 20.000 nue Health insurance premium of ® 9,000 pad by the employe is an exempt perquisite Nil ao [Clause (il of proviso to section 172)) ( ecoed 19000 ast voucher nthe occasion of hs mariage aniversary fom [Git voucher given by employer on Mr. Neeraj birthday (entre amount is taxable! 12,000) () Smile Lid. allots 80 ity shares in August 2023. The shares were allotted at since the perouisite value exceeds 5, 450 per share and rket value on the date of exercising the option by Mr Life insurance premium of Mr. Neeraj paid by employer isa taxable perquisite as per| 34,000 ee section 172) (vi) He was provided with furniture during September 2019. The furniture is used at his Laptop provided fr use at home i an exempt peruisite as per Rule 37 vi) Nil rion of mote cr gn aie cpt) ort 16 28,80 employer provide to employee, the perqust value would bet las per Rule 32) (vii)Housing Loan@ 45% p.a. provided by Smile Lid., amount outstanding as on (01.04.2025 is & 15 Lakhs. € 50,000 is paid by Me. Samaksh every quarter 'Annal credit card fees paid by employer isa taxable Frending ap eal et cd fp by empl is tale pei per Rae 37) 000] principal stating from June 2022. The lending rate of SBI for similar loan as on iw the ee exclusively used fr (01.04.2023 was 8%, (Gx) Fecilty of laptop costing & 50,000 ime a} (Gross Salary 10,60,300 ‘Answer 27 of income under the head “Salaries” of Mr. Samaksh for the A.Y 2024.25 [Less Deductions under section 16, | ‘CA Bharwar Borana(Chapter 3: Income from Salary =e Mey 2003 1500000 | aa pan i, ng fan given at conesional ie onl be 14,50.000 | 4229 plate vas seh el | 0010 ame Jue would be determined @ 3.5% (8%| ‘October, 2023 14,00,000 4083 November, 2023 14,00,000 4.083 Nil December, 2023 13,50,000 3,937.50 ft voucher oo the cecasion of his mariage aniverany [As PTE 10,00 January, 2028 13,50,000 | 3937.50 his id exceeding @) February, 2024 13,50,000, 3,937.50 is ful le] (See note nea Soon yea equity shares Fair market value of $00 sweat equity shares @ € 700 cach 560,000 Less: Amount recovered @ 8450 each 3,60,000| 2.00.09 “ ‘Use of furniture by employee 10% pa of the setual cost of' ‘You are required to compute the income from salary of Mr. Raja from the following 10,000 i eit 2 2024, Assume he exercises the opton of shiting Fuse of laptop is nota taxable perguisite nil [Transfer of Value of fri toemployee transferred to Mr, Samaksh 1.10,000} was pi a ratty of 3,5,000 He was covered bythe paenet | wea and eat 0% for each completed year of age Fo hod not rcsved any oer gah tary pt of me Tomas 10% 4 yeas (em Seember 20195] 44000] oo (vite had accumased leave of 18 dys per annum curing the period of is soi Gros Salary 122201 3.1000 wa Les: Suna dein ws 16 Ata slay 0 50.00, whichever ; of is persion eee: 50,000) ra and received € 3,00,000 as commuted pension. (wT company presontod him wih a gt wouchorof€ 000 on his retrement. His olesgues oped hana medio. phone, Wor 80000 om cto, 147.291 Answor 28 Computation af income under the head “Salaries” of Me. Raja forthe A.Y.2024.25, Maximum outstanding of mont Api, 2023 ioa Mr Shah, an Accounts Mar ager, has retired from BB Ltd. on 151.2024 after rendering services Vey acnat Gry res for 30 yea lls salary € 25,000 pm. upto 30.09.2023 and € 27.000 thereafter. He crn Grit ree re also ges ¢ 2 435 dearness allowance (53% ay fr every yest of completed serie (1526 a8 25,000 r Fetirement benefits 7 not covered by the Paymen 75.0 | { Lacsas gratuity from the employer company. Compute the ae Shab. fans: 399.500), fife iit = 2 3,15,000 2,50,000| 65,9 Leas: Least ofthe following exempt under section 1(10AA) 5,.00,000 250,00, being 10 mons salary x® 25,000 \ eof ave aig tte et of he employe sd Bes teeta 10 (max. 30 days per year of] | (Leave Due ~ Leave allowed Leave taken} = 750 30 days per year» 25 years) 375 days (15 ys 29) =375 days] Uncommuted Pension received [8 5,000 x1} + (5,000 2x 40%) 9,000 Commuted Pension received 3,00,000 Less: Exemp under section 10(10) (3 x8 3,00,000'60% x 100%) Gift Voucher (As per Rule 37, th vale of any gif or vo token in liew of gift received by the employer of by member of hs household not exceeding € 5,000 in agerceate during the previons: exempt] 1,66,667] 1.33333 Exempt cm(Chapter 4: Income from House Property an4.as Cee india, at of which ate Tot-out. Compute the GAV of each below — [sma} an of f 7,00,000 for constuction of propery on 1.102022. Interest mall |\Hoose 12% p.a. The construction was completed on 3062023. No principal House || House ll | House lll) House IV | House y ‘been made up to 31.3.2024. Compute the interest allowable as deduction o | @ | © © © | AY 2026-25, 0,000] 55.000] 65,000] 24.000) 0.009 0000) 60,000] 65,000) 26,000, 75,009 anlar fo canon of House 10.0000 on O1NGI17 @t2% pa, Loan reais on , 00:00. Constucion completed on 12/2022. Compute interest on fan NA| 75,000] 58,000) NAL) 78,000 deduction for AY, 2024-25, ae ~ | actua rent received! receivable | 72,000] 72,000| 60,000] 30,000] 72,009) Question 2 Page a9. 82. 9 Me. Nandan own five houses at Delhi. Compute the NAV of each house from the information given below: 0 Muna Vato 1.20009 i Ret 10.000 | sundora Ren $08.00 ‘Actual receivable Aaa Municipal Taxes 1 received / 1,80 009| jestion3 Poge ro. 54 Rajesh, @ Bish national, isa resident and ordinary resid 2 in Lone te Question Page 90.24 % Talore 4 ‘Anirudh has a property whose municipal | © 1,30.000 p.a. The fair rent ist Rent Control Act 1s € 1,20,000 2, The