QA-B1Total income computation – advocate – PGBP, capital gains, h
14 marks very hard
You are required to compute the total income and tax payable by Mr. Alok, aged 58 years, a resident individual. Mr. Alok is an advocate and furnishes you the receipts and payments account for the financial year 2020-21.
Receipts and Payments Account:
Receipts – Opening Balance (Cash & Bank): Rs. 80,000; Fee from legal services: Rs. 49,60,000; Motor car loan from SBI @12% p.a.: Rs. 5,00,000; Sale receipts of 5,800 listed equity shares (sold on 31st March 2021): Rs. 5,95,000. Total: Rs. 61,35,000.
Payments – Staff salary and bonus to clerks: Rs. 17,50,000; Other general and administrative expenses: Rs. 22,00,000; Office rent: Rs. 1,48,000; Life Insurance Premium (Sum Assured Rs. 5,00,000): Rs. 49,000; Motor car (Acquired in January 2021 by way of NEFT): Rs. 9,50,000; Books bought by way of A/c payee cheque in May, June and September 2020 (annual publications): Rs. 80,000; Computer acquired on 1-11-2020 for professional use (payment made by A/c payee cheque): Rs. 52,000; Domestic drawings: Rs. 6,23,000; Motor car maintenance: Rs. 72,000; Public Provident Fund subscription: Rs. 1,50,000; Closing balances (Cash & Bank): Rs. 61,000. Total: Rs. 61,35,000.
Other information:
(i) Listed equity shares on which STT was paid were acquired in August 2016 for Rs. 1,21,800. The fair market value of such shares as on 31st January 2018 and on 1st April 2018 was Rs. 75 per share and Rs. 85 per share, respectively.
(ii) Motor car was put to use for both official and personal purposes. 1/3rd of the motor car is for personal purpose. No interest on car loan was paid during the previous year 2020-21.
(iii) Mr. Alok purchased a flat in Kanpur for Rs. 35,00,000 in July 2013, partly financed by a loan from Punjab National Housing Finance Limited of Rs. 25,00,000, own savings Rs. 1,00,000 and a deposit from Repco Bank for Rs. 9,00,000. The flat was given to Repco Bank on lease for 10 years @ Rs. 35,000 per month. Municipal taxes paid by Mr. Alok: Rs. 8,200 per annum; House insurance: Rs. 11,000. As per interest certificate, he paid Rs. 1,80,000 towards principal and Rs. 2,01,500 as interest for F.Y. 2020-21.
(iv) He earned Rs. 1,20,000 in share speculation business and lost Rs. 1,80,000 in commodity speculation business.
(v) Mr. Alok received a gift of Rs. 21,000 each from four of his family friends.
(vi) He contributed Rs. 1,21,000 to PM Cares Fund by way of bank draft.
(vii) He donated to a registered political party Rs. 3,50,000 by way of cheque.
(viii) He follows cash system of accounting.
Cost Inflation Index: F.Y. 2016-17 – 264; F.Y. 2018-19 – 280; F.Y. 2020-21 – 301.
Assume Mr. Alok is not willing to opt for the provisions of section 115BAC.
QA1(i)Indexed cost of acquisition – capital gains on house propert
2 marks hard
Case: Mr. Ram, an Indian resident, purchased a residential house property at Gwalior on 28.05.1999 for Rs. 28.5 lakhs. The fair market value and the stamp duty value of such house property as on 1.4.2001 was Rs. 33.5 lakhs and Rs. 32.4 lakhs, respectively. On 05.02.2012, Mr. Ram entered into an agreement with Mr. Byomkesh for sale of such property for Rs. 74 lakhs and received an amount of Rs. 3.9 lakhs as advance. However, as Mr. Byomkesh did not pay the balance amount, Mr. Ram forfeited the advance. On 15.04.2020, Mr. Ram sold the house property for Rs. 2.10 crores, when the stamp duty value of th…
What shall be the indexed cost of acquisition of residential house property at Gwalior for computation of capital gains in the hands of Mr. Ram?
(A) Rs. 1,00,83,500
(B) Rs. 97,52,400
(C) Rs. 85,78,500
(D) Rs. 89,09,600
QA1(ii)LTCG on Gwalior property – Section 54 exemption
2 marks hard
Case: Mr. Ram, an Indian resident, purchased a residential house property at Gwalior on 28.05.1999 for Rs. 28.5 lakhs. The fair market value and the stamp duty value of such house property as on 1.4.2001 was Rs. 33.5 lakhs and Rs. 32.4 lakhs, respectively. On 05.02.2012, Mr. Ram entered into an agreement with Mr. Byomkesh for sale of such property for Rs. 74 lakhs and received an amount of Rs. 3.9 lakhs as advance. However, as Mr. Byomkesh did not pay the balance amount, Mr. Ram forfeited the advance. On 15.04.2020, Mr. Ram sold the house property for Rs. 2.10 crores, when the stamp duty value of th…
The amount of capital gains taxable for A.Y. 2021-22 in the hands of Mr. Ram for sale of residential house property at Gwalior is -
(A) Rs. 39,21,500
(B) Rs. 93,21,500
(C) Rs. 35,90,400
(D) Rs. 24,16,500
QA1(iii)Capital gains on sale of Mumbai property to relative – stamp
2 marks hard
Case: Mr. Ram, an Indian resident, purchased a residential house property at Gwalior on 28.05.1999 for Rs. 28.5 lakhs. The fair market value and the stamp duty value of such house property as on 1.4.2001 was Rs. 33.5 lakhs and Rs. 32.4 lakhs, respectively. On 05.02.2012, Mr. Ram entered into an agreement with Mr. Byomkesh for sale of such property for Rs. 74 lakhs and received an amount of Rs. 3.9 lakhs as advance. However, as Mr. Byomkesh did not pay the balance amount, Mr. Ram forfeited the advance. On 15.04.2020, Mr. Ram sold the house property for Rs. 2.10 crores, when the stamp duty value of th…
The amount of capital gains taxable for A.Y. 2021-22 in the hands of Mr. Ram for sale of residential house property at Mumbai is -
(A) Rs. 3 lakhs
(B) Rs. 6 lakhs
(C) Rs. 61 lakhs
(D) Rs. 64 lakhs
QA1(iv)Section 56(2)(x) – deemed gift of immovable property receive
2 marks hard
Case: Mr. Ram, an Indian resident, purchased a residential house property at Gwalior on 28.05.1999 for Rs. 28.5 lakhs. The fair market value and the stamp duty value of such house property as on 1.4.2001 was Rs. 33.5 lakhs and Rs. 32.4 lakhs, respectively. On 05.02.2012, Mr. Ram entered into an agreement with Mr. Byomkesh for sale of such property for Rs. 74 lakhs and received an amount of Rs. 3.9 lakhs as advance. However, as Mr. Byomkesh did not pay the balance amount, Mr. Ram forfeited the advance. On 15.04.2020, Mr. Ram sold the house property for Rs. 2.10 crores, when the stamp duty value of th…
The amount taxable under section 56(2)(x) in the hands of Mr. Vaibhav, if any, is -
(A) Rs. 3 lakhs
(B) Nil
(C) Rs. 6 lakhs
(D) Rs. 5.50 lakhs
QA1(v)TDS credit – Section 194-IA on sale of immovable property
2 marks hard
Case: Mr. Ram, an Indian resident, purchased a residential house property at Gwalior on 28.05.1999 for Rs. 28.5 lakhs. The fair market value and the stamp duty value of such house property as on 1.4.2001 was Rs. 33.5 lakhs and Rs. 32.4 lakhs, respectively. On 05.02.2012, Mr. Ram entered into an agreement with Mr. Byomkesh for sale of such property for Rs. 74 lakhs and received an amount of Rs. 3.9 lakhs as advance. However, as Mr. Byomkesh did not pay the balance amount, Mr. Ram forfeited the advance. On 15.04.2020, Mr. Ram sold the house property for Rs. 2.10 crores, when the stamp duty value of th…
What shall be the total tax credit available with Mr. Ram with respect to sale of two house properties during P.Y. 2020-21 assuming the tax was fully deducted by both the buyers at the time of payment?
(A) Rs. 2,01,000
(B) Rs. 2,53,500
(C) Rs. 2,68,000
(D) Rs. 2,81,000
QA2TDS under Section 194O – e-commerce operator
2 marks easy
TPR & Co., a partnership firm selling its product X through the digital facility provided by MKY Limited (an E-commerce operator). MKY Limited has credited in its books of account, the account of TPR & Co. on 31st January, 2021 by sum of Rs. 4,80,000 for the sale of product X made during the month of January 2021. Out of Rs. 4,80,000, it made payment for Rs. 4,00,300 on 3rd February, 2021. Further, Mr. Pawan, who purchased the product X through the facility provided by MKY Limited, has made the payment of sum of Rs. 40,000 directly to TPR & Co. on 15th January, 2021. Which statement is correct regarding requirement of deduction of tax at source by MKY Limited?
(A) No tax is required to be deducted at source.
(B) MKY Limited is required to deduct tax at source Rs. 4,800 under section 194C.
(C) MKY Limited is required to deduct tax at source Rs. 3,900 under section 194O.
(D) MKY Limited is required to deduct tax at source Rs. 5,200 under section 194O.
QA3Residential status – deemed resident – RNOR provisions
2 marks easy
Mr. Harry, an Indian citizen, is a marketing consultant who provides consultancy to various countries around the globe. Due to his profession, he is required to travel across various countries throughout the year. His marketing project does not last for more than 40 days and therefore his stay in any country including India usually never exceeds 40 days during a year. His income is Rs. 80 lakhs across the globe which is not liable to tax in any country. During the P.Y. 2020-21, an Indian company provides him a marketing project in India. His stay in India for the project is expected to be only 25 days and his income from that project would be Rs. 30 lakhs. Being a highly qualified professional, he consults you about the tax regime on his income and his residential status in India. Which of the following options is correct?
(A) He shall be treated as resident but not ordinarily resident and shall be liable to pay tax on Rs. 30 lakhs.
(B) He shall be treated as resident and ordinarily resident and shall be liable to pay tax on Rs. 80 lakhs.
(C) He shall be treated as non-resident and shall not be liable to any tax.
(D) He shall be treated as resident but not ordinarily resident and shall be liable to pay tax on his entire income of Rs. 80 lakhs earned across the globe.
QA4TDS Section 194DA – LIC maturity – Form 15H validity
2 marks easy
Mr. Vyas, aged 80, is a retired government employee. On 1st April 2020, he received the maturity amount of his LIC policy amounting to Rs. 3,50,000. This policy was taken by Mr. Vyas on 1st April 2013 on which the sum assured was Rs. 3,00,000 and the annual premium was Rs. 40,000. His other income comprised of pension amounting to Rs. 85,000. Mr. Vyas furnishes a declaration in Form 15H for non-deduction of tax at source to the insurance company stating that his net tax liability for the year is NIL. Choose the correct statement from below:
(A) The declaration made by Mr. Vyas is wrong and the insurance company has to deduct tax of Rs. 3,500 under section 194DA.
(B) The claim by Vyas is right and insurance company is not required to deduct tax at source.
(C) The insurance company has to deduct tax under section 194DA since declaration in Form 15H cannot be made for tax deduction under section 194DA.
(D) The declaration made by Mr. Vyas is wrong and the insurance company has to deduct tax of Rs. 1,000 under section 194DA.
QA5Set-off and carry forward of losses – belated return consequ
2 marks easy
During the A.Y. 2021-22, Mr. Kabir has a loss of Rs. 6 lakhs under the head 'Income from house property', loss of Rs. 5 lakhs from business or profession and income of Rs. 3 lakhs from long term capital gains. He filed his return of income for the A.Y. 2021-22 on 31.12.2021. Determine the total income of Mr. Kabir for A.Y. 2021-22 and the amount of loss which can be carried forward in a manner most beneficial to him.
(A) Total income Nil; loss of Rs. 4,00,000 from house property and loss of Rs. 4,00,000 from business or profession.
(B) Total income Rs. 1,00,000; loss of Rs. 4,00,000 from house property.
(C) Total income Nil; No loss is allowed to be carried forward.
(D) Total income Nil; loss of Rs. 6,00,000 from house property.
QB-D1GST computation – ITC utilisation order – minimum cash payme
8 marks hard
Bunty Pvt. Ltd., a supplier of goods, pays GST under regular scheme. It has made the following outward taxable supplies in a tax period:
Intra-State supply of goods: Rs. 11,20,000
Inter-State supply of goods: Rs. 4,20,000
Purchases made in that tax period:
Intra-State purchases of goods: Rs. 2,80,000
Inter-State purchases of goods: Rs. 70,000
ITC available at the beginning of the tax period:
CGST: Rs. 79,800; SGST: Nil; IGST: Rs. 98,000
Notes: (i) Rates of CGST, SGST and IGST are 9%, 9% and 18% respectively. (ii) Both inward and outward supplies are exclusive of taxes. (iii) All conditions necessary for availing ITC have been fulfilled.
Compute the minimum GST payable in cash by Bunty Pvt. Ltd. for the tax period. Make suitable assumptions as required.
QB1.1GTA services – reverse charge mechanism – liable persons
2 marks hard
Case: Explore Logistics, a Goods Transport Agency registered under GST, provided GTA services (taxable @ 5%) to the following persons – (a) Sahil Traders, an unregistered Partnership firm. (b) Mr. Aadi, a casual taxable person, not registered under GST. (c) Small Traders co-operative society registered under Societies Registration Act. In a particular consignment, Explore Logistics transported – (a) Defence Equipments (b) Railway Equipments (c) Organic Manure. Explore Logistics opted to charge GST @ 12% from October. It provided GTA services to Mahajan Steels Pvt. Ltd. on 1st October and issued an i…
Which of the following persons are liable to pay GST on reverse charge in respect of the GTA services (taxable @ 5%) provided by Explore Logistics?
i. Sahil Traders
ii. Mr. Aadi
iii. Small Traders Co-operative society
(A) i & ii
(B) ii & iii
(C) i & iii
(D) i, ii & iii
QB1.2GST exemptions on GTA services – category of goods transport
2 marks hard
Case: Explore Logistics, a Goods Transport Agency registered under GST, provided GTA services (taxable @ 5%) to the following persons – (a) Sahil Traders, an unregistered Partnership firm. (b) Mr. Aadi, a casual taxable person, not registered under GST. (c) Small Traders co-operative society registered under Societies Registration Act. In a particular consignment, Explore Logistics transported – (a) Defence Equipments (b) Railway Equipments (c) Organic Manure. Explore Logistics opted to charge GST @ 12% from October. It provided GTA services to Mahajan Steels Pvt. Ltd. on 1st October and issued an i…
Out of items transported by Explore Logistics, which of the following is/are exempt from GST?
i. Defence Equipments
ii. Railway Equipments
iii. Organic Manure
(A) i
(B) i & ii
(C) i & iii
(D) i, ii & iii
QB1.3Time of supply of services – GTA – forward charge
2 marks hard
Case: Explore Logistics, a Goods Transport Agency registered under GST, provided GTA services (taxable @ 5%) to the following persons – (a) Sahil Traders, an unregistered Partnership firm. (b) Mr. Aadi, a casual taxable person, not registered under GST. (c) Small Traders co-operative society registered under Societies Registration Act. In a particular consignment, Explore Logistics transported – (a) Defence Equipments (b) Railway Equipments (c) Organic Manure. Explore Logistics opted to charge GST @ 12% from October. It provided GTA services to Mahajan Steels Pvt. Ltd. on 1st October and issued an i…
What will be the time of supply in respect of the services provided by Explore Logistics to Mahajan Steels Pvt. Ltd.?
(A) 6th November
(B) 5th November
(C) 30th November
(D) 1st October
QB1.4GTA – forward charge option @ 12% – liability to pay GST
2 marks hard
Case: Explore Logistics, a Goods Transport Agency registered under GST, provided GTA services (taxable @ 5%) to the following persons – (a) Sahil Traders, an unregistered Partnership firm. (b) Mr. Aadi, a casual taxable person, not registered under GST. (c) Small Traders co-operative society registered under Societies Registration Act. In a particular consignment, Explore Logistics transported – (a) Defence Equipments (b) Railway Equipments (c) Organic Manure. Explore Logistics opted to charge GST @ 12% from October. It provided GTA services to Mahajan Steels Pvt. Ltd. on 1st October and issued an i…
Which of the following statements is correct in respect of services provided by Explore Logistics to Mahajan Steels Pvt. Ltd.?
(A) Mahajan Steels Pvt. Ltd. is liable to pay GST
(B) Explore Logistics is liable to pay GST
(C) Service provided by Explore Logistics to Mahajan Steels Pvt. Ltd. is exempt under GST
(D) Mahajan Steels Pvt. Ltd. is liable to pay 50% GST and remaining 50% will be paid by Explore Logistics
QB1.5GSTR-1 – invoice-wise reporting requirement
2 marks hard
Case: Explore Logistics, a Goods Transport Agency registered under GST, provided GTA services (taxable @ 5%) to the following persons – (a) Sahil Traders, an unregistered Partnership firm. (b) Mr. Aadi, a casual taxable person, not registered under GST. (c) Small Traders co-operative society registered under Societies Registration Act. In a particular consignment, Explore Logistics transported – (a) Defence Equipments (b) Railway Equipments (c) Organic Manure. Explore Logistics opted to charge GST @ 12% from October. It provided GTA services to Mahajan Steels Pvt. Ltd. on 1st October and issued an i…
In respect of which of the following supplies, Explore Logistics has to provide invoice-wise details in GSTR-1?
i. Inter-State supplies to registered person with invoice value not exceeding Rs. 2,50,000
ii. Inter-State supplies to unregistered person with invoice value not exceeding Rs. 2,50,000
iii. Inter-State supplies to unregistered person with invoice value exceeding Rs. 2,50,000
iv. Intra-State supplies to registered person with invoice value not exceeding Rs. 2,50,000
(A) i & iv
(B) i & ii
(C) ii & iii
(D) i, iii & iv
QB2Tax invoice threshold – supplies to unregistered persons – G
2 marks easy
Lovely & Co., a registered person, supplies taxable goods to unregistered persons. It need not issue tax invoice for the goods supplied on 16th April, if the value of the goods is ______ and the recipient does not require such invoice.
(A) Rs. 1,200
(B) Rs. 600
(C) Rs. 150
(D) Rs. 200