Mr. A (age 50 years) is the Chief Executive Officer of XYZ Enterprise Limited. During the previous year, he earned salary of ₹1,65,00,000 and long-term capital gain of ₹1,06,500 on sale of listed equity shares. He earned savings account interest of ₹4,82,778. He did not receive house rent allowance from his employer. Mr. A took a home loan from State Bank of India on 27 October 2017 for repair of his self-occupied house in Delhi and during FY 2019-20 paid interest of ₹80,000 and principal of ₹1,50,000 on this loan. He paid medical insurance premiums: Brother - ₹13,500 (by cheque), parents - ₹17,670 (by cheque), himself and wife - ₹21,000 (by cheque). He paid cash for wife's preventive health checkup - ₹6,400. He deposited ₹1,00,000 in PPF, ₹50,000 in Tier 1 account, and ₹2,50,000 in Tier 2 account. He paid advance tax of ₹5,30,000. His employer deducted TDS of ₹51,89,000. He believes if any balance tax is due, he will pay on 27 July 2020.
Calculate the deduction available to Mr. A under Chapter VI-A for AY 2020-21:
(A) ₹2,04,070
(B) ₹2,42,670
(C) ₹2,52,670
(D) ₹2,02,670
Assuming Mr. A pays monthly rent of ₹65,000 to Mr. C for a rented house in Mumbai, is Mr. A liable to deduct TDS on such rent payment? If yes, at what rate and what amount?
(A) Yes, Mr. A is liable to deduct TDS at the rate of 5% per month, i.e., ₹3,250 per month on rent payment.
(B) Yes, Mr. A is liable to deduct TDS at the rate of 10% per month, i.e., ₹6,500 per month on rent payment.
(C) Yes, Mr. A is liable to deduct TDS at the rate of 5% in March 2020 i.e., ₹39,000 on total rent payment.
(D) No, Mr. A is not liable to deduct TDS as he is not required to get his books of accounts audited under section 44AB.
What is the net tax payable in the hands of Mr. A for AY 2020-21?
(A) ₹78,230 payable tax
(B) ₹60,290 payable tax
(C) ₹49,530 payable tax
(D) ₹67,470 payable tax
Calculate the interest recoverable under section 234B for shortfall in advance tax payment:
(A) ₹1,980
(B) Nil
(C) ₹3,130
(D) ₹2,410
Ms. Champli, age 45 years, provided the following data for business and professional income for FY 2018-19 and 2019-20: FY 2018-19 - Business income ₹78,00,000, Professional income ₹43,00,000, Total gross receipts ₹1,21,00,000; FY 2019-20 - Business income ₹85,00,000, Professional income ₹47,00,000, Total gross receipts ₹1,32,00,000. During FY 2019-20, she paid a contractor ₹1,20,000 for polishing old furniture and paid an interior decorator ₹2,50,000 for services. On 28-05-2019, she sold commercial property for ₹50,00,000 with stamp duty value of ₹52,00,000. She purchased it on 28-04-2017 for ₹40,00,000. Cost inflation index for FY 2017-18 is 272, for FY 2019-20 is 289. She has brought forward long-term capital loss of ₹7,80,000 from FY 2018-19. During the year, she incurred loss of ₹70,00,000 from agricultural commodity trading (no CTT payment).
Is Ms. Champli liable to get her accounts audited under the Income Tax Act for FY 2019-20?
(A) Yes, because total gross receipts exceed ₹1,00,00,000.
(B) No, because business/professional gross receipts are below the prescribed minimum.
(C) Yes, because business receipts exceed ₹50,00,000.
(D) Yes, because professional receipts exceed ₹25,00,000.
What is the amount of TDS to be deducted by Ms. Champli for FY 2019-20?
(A) ₹1,200
(B) ₹26,200
(C) Nil
(D) ₹27,400
What is the amount and nature of capital gain available in Ms. Champli's hands for AY 2020-21?
(A) ₹10,00,000 short-term capital gain
(B) ₹12,00,000 short-term capital gain
(C) ₹7,50,000 long-term capital gain
(D) ₹9,50,000 long-term capital gain
What is the loss amount that can be carried forward to AY 2021-22, assuming business income for FY 2019-20 is ₹45,00,000 and professional income is ₹25,00,000?
(A) ₹7,80,000 under section 74
(B) ₹70,00,000 under section 73
(C) ₹30,000 under section 74
(D) ₹30,000 under section 74 and ₹70,00,000 under section 73
Mr. A, age 45 years, acquired agricultural land situated 7 km from municipal corporation with population of 4,00,000 on 13-09-2018 for ₹49.25 lakh and sold it on 04-10-2019 for ₹52 lakh. He also acquired agricultural land situated 1.5 km from municipal corporation with population of 12,000 on 15-02-2018 for ₹46 lakh and sold it on 12-12-2019 for ₹53 lakh. Cost inflation indices for FY 2017-18, 2018-19, and 2019-20 are 272, 280, and 289 respectively. What is the amount of capital gain available in Mr. A's hands for AY 2020-21?
(A) ₹9.75 lakh short-term capital gain
(B) ₹7 lakh short-term capital gain
(C) ₹4,12,500 lakh long-term capital gain
(D) ₹5,29,196 lakh long-term capital gain
Mr. Arjun holds 1,000 equity shares of X Ltd. acquired on 01-07-2018 at ₹600 per share. Ms. Shaurya purchased 500 shares on 1-05-2019 at ₹550 per share. X Ltd. announced dividend at ₹65 per share on 20-07-2019 (record date). Ms. Shaurya sold 300 shares on 28-09-2019 at ₹475 per share and sold remaining 200 shares on 28-10-2019 at ₹450 per share. Additionally, Ms. Shaurya has long-term capital gain of ₹50,000 from sale of unlisted shares. Assuming Ms. Shaurya has no other income, what is her total income for AY 2020-21?
(A) ₹7,500
(B) ₹27,000
(C) ₹50,000
(D) ₹30,000
Payment for professional services was made without TDS on 1-7-2019 for ₹40,000. On 28-02-2020, another payment was due for ₹50,000. TDS was deducted at 10% on total amount of ₹90,000 (₹9,000) and deposited on 22-6-2020. What will be the interest payable under section 201(1A)?
(A) ₹1,080
(B) ₹860
(C) ₹1,620
(D) ₹840
Mr. Nishant was a resident but not ordinary resident in the previous year and is an ordinary resident for the current year. During FY 2018-19, he earned rental income of ₹1,00,000 from property in Canada which he deposited in a Canadian bank. During FY 2019-20, he remitted the amount to India through authorized banking channel. Is such rental income taxable in India and if yes, in which year?
(A) Yes, ₹70,000 was taxable in India during FY 2018-19.
(B) Yes, ₹1,00,000 was taxable in India during FY 2018-19.
(C) Yes, ₹70,000 was taxable in India during FY 2019-20.
(D) No, such rental income is not taxable in India in FY 2018-19 or FY 2019-20.
Mr. Dinesh, resident of India, has total income of ₹2,30,000 from savings account interest and rental income combined for FY 2019-20. He spent ₹2,00,000 for his son's educational tour in Europe. Is he required to file return of income for AY 2020-21? If yes, what is the due date?
(A) Yes, the due date is 31 July of the assessment year.
(B) Yes, the due date is 30 September of the assessment year.
(C) Yes, the due date is 31 October of the assessment year.
(D) No, he is not required to file return of income.
Mr. Nihal maintains savings account and current account with Mera Bank Ltd. During FY 2019-20, cash withdrawals were made on different dates: Savings account - 05.04.2019 (₹15,00,000), 25.06.2019 (₹20,00,000), 28.10.2019 (₹35,00,000), 12.12.2019 (₹25,00,000); Current account - 10.05.2019 (₹22,00,000), 17.07.2019 (₹5,00,000), 10.11.2019 (₹38,00,000). Is Mera Bank Ltd. required to deduct TDS on withdrawals made by Mr. Nihal during FY 2019-20 under section 194N? If yes, what is the amount of TDS?
(A) No, TDS is not required as total cash withdrawals from 01-09-2019 onwards do not exceed ₹1 crore.
(B) No, TDS is not required as neither savings nor current account withdrawals exceed ₹1 crore individually.
(C) Yes, TDS of ₹60,000 is required.
(D) Yes, TDS of ₹120,000 is required.
Q9Residential status determination, ship crew members
0 marks easy
Determine the residential status of Mr. Dinesh, an Indian citizen, for FY 2019-20. Mr. Dinesh is a member of the crew of an Indian ship engaged in international voyage carrying passengers on the route between Singapore and Kerala who left Kochi Port on 16 August 2019. During FY 2019-20, he was: present in India for 425 days in the four years preceding the previous year, and 830 days in the seven years preceding the previous year. He was outside India for 27 continuous days in June 2019 for private purposes. Discharge certificate entry dates: joining 16 August 2019, leaving 21 January 2020.
Q10Agricultural income definition and scope
0 marks easy
With brief reasons, explain whether the following can be considered as agricultural income under the Income Tax Act, 1961:
Q11Salary computation, allowances, perquisites
0 marks easy
Mr. Neeraj, a salaried employee, provided the following information for FY 2019-20: Basic salary ₹5,40,000, Dearness allowance ₹3,60,000, Commission ₹50,000, Entertainment allowance ₹7,500, Medical expenses reimbursed by employer ₹21,000, Professional tax (50% paid by employer) ₹4,000, Health insurance premium paid by employer ₹9,000, Birthday gift voucher from employer ₹12,000, Life insurance premium paid by employer ₹34,000, Laptop for home use (actual cost) ₹30,000 (child also using it), Maruti Swift car provided (engine > 1.6 liter) for personal and government use (all expenses paid by employer), Annual credit card fee paid by employer ₹5,000 (not used exclusively for government work). Calculate the total income under the head 'Salaries' for AY 2020-21.
Q12House property income, self-occupied house selection
0 marks easy
Ms. Pihu owns three houses, all self-occupied. The details are: House I - Annual municipal value ₹1,30,000, fair rent ₹1,10,000, standard rent ₹1,00,000, completion date 30-01-2005, property tax 12%; House II - Annual municipal value ₹1,20,000, fair rent ₹1,85,000, standard rent ₹1,90,000, completion date 31-07-2008, property tax 9%, repair interest on loan ₹75,000; House III - Annual municipal value ₹1,20,000, fair rent ₹1,45,000, standard rent ₹1,30,000, completion date 31.5.2011, property tax 10%. Calculate the income from house property of Ms. Pihu for AY 2020-21 and suggest which house she should choose as self-occupied to minimize tax liability.
Q13Gifts, income from gifts, section 64
0 marks easy
Mr. Karn made a gift of ₹9 lakh to his brother's minor son on 1-5-2019. On the same date, his brother's wife (Mrs. Karn) made a gift of promissory notes worth ₹10 lakh to Mrs. Karn. The brother's son invested the amount in a fixed deposit with Canara Bank at 9% interest per annum, and Mrs. Karn received interest of ₹81,000 on promissory notes during FY 2019-20. Discuss the tax implications under the provisions of the Income Tax Act.
Q14Loss computation, speculation business, depreciation carry f
0 marks easy
Mr. Krishna, resident of Jaipur, provided the following information for FY 2019-20: Income from textile business ₹4,60,000, income from satta business ₹25,000, loss from gambling ₹12,000, loss from horse racing for racing purposes ₹15,000, unabsorbed depreciation of textile business from previous year ₹5,000, unabsorbed depreciation of AY 2018-19 ₹10,000, satta loss of AY 2019-20 ₹30,000. Calculate the gross total income of Mr. Krishna for AY 2020-21 and describe the loss and the period for which depreciation can be carried forward.
Q15Income from partnership, business income computation
0 marks easy
Mr. Suraj, age 50 years, is engaged in wholesale health products business and is a partner in partnership firm XYZ & Co. The following information is provided: Interest on capital at 15% from XYZ & Co. ₹1,50,000, Partner's share of firm profit ₹35,000, Salary as working partner (fully approved by firm) ₹1,00,000, Interest from fixed deposit with bank (net of TDS) ₹40,500, Savings bank account interest ₹12,300, Income tax refund received for AY 2019-20 including interest ₹34,500, Net profit from wholesale business ₹5,60,000. Business expenses include: Depreciation per books ₹34,000, Motor car expenses ₹40,000, Property tax for shop (paid half-yearly on 12-7-2020 and 31-12-2020) ₹7,000, Manager's salary paid in cash ₹21,000.