Q1PGBP income computation, tax audit applicability, depreciati
14 marks very hard
From the given information, compute the tax payable by Mr. Akash, a manufacturer and distributor of fertilizers and other agricultural products, aged 61 years, for the A.Y. 2022-23. Trading and Profit and Loss Account of Mr. Akash — Dr. side: Opening Stock Rs.24,21,000; Purchases Rs.2,28,00,500; Direct expenses Rs.4,12,040; Freight inward Rs.2,92,000; Gross Profit c/d Rs.79,24,660; Salaries and wages Rs.17,12,000; General expenses Rs.3,65,000; Rates and taxes Rs.2,20,000; Interest paid on late payment of GST Rs.2,845; Income-tax paid for F.Y. 2020-21 Rs.3,45,000; Interest paid to NBFC Rs.1,20,000; Depreciation Rs.1,82,000; Net Profit Rs.75,43,815. Cr. side: Sales Rs.3,12,50,100; Closing stock Rs.26,00,100; Gross Profit b/d Rs.79,24,660; Dividend income from Indian companies (Gross) Rs.17,20,000; Interest received on FDs (Net of tax) Rs.1,08,000; Rent received Rs.7,20,000; Income-tax refund Rs.18,000. Additional information: (a) Closing stock of P.Y. 2021-22 was undervalued by Rs.25,000; (b) Rates and taxes include Rs.1,000 paid towards late filing of IT return under section 234F; (c) Salaries include Rs.15,000 paid on single day by cash to accountant; (d) Interest paid on loan of Rs.10,00,000 from NBFC — Rs.2 lakhs used for personal purpose, balance for business; no TDS deducted on interest; (e) Rs.45,000 paid by cheque towards health insurance policy for himself, spouse and children; (f) General expenses include Rs.20,000 advertisement in souvenir published by local political party; (g) Income-tax refund includes Rs.2,000 as interest; (h) Depreciation does not include depreciation on new Maruti Van (cost Rs.2,10,000) purchased and put to use on 23rd September 2021 for business use; (i) Advance tax paid Rs.15 lakhs; (j) Turnover for year ending 31.03.2021 was Rs.3.08 crores; (k) TDS deducted on income wherever required. Mr. Akash does not opt for section 115BAC.
Q1GST — ITC utilization order and minimum cash payment
8 marks hard
Riddhi & Co., a supplier of goods paying GST under regular scheme, made the following outward taxable supplies in a tax period: Intra-State supply of goods Rs.10,00,000; Inter-State supply of goods Rs.8,00,000. Purchases in that tax period: Intra-State purchases Rs.3,00,000; Inter-State purchases Rs.2,50,000. ITC at beginning of tax period: CGST Rs.57,000; SGST Rs.60,000; IGST Rs.1,40,000. Rates: CGST 9%, SGST 9%, IGST 18%. Both inward and outward supplies are exclusive of taxes. All conditions for availing ITC have been fulfilled. Compute the minimum GST payable in cash by Riddhi & Co. for the tax period and the ITC to be carried forward to the next month. Make suitable assumptions as required.
Q1(i)Residential status of individual
2 marks hard
Case: Anjali is a research scholar pursuing PhD. Unmarried, parents in Ahmedabad, Gujarat; parental grandparents and relatives in South Africa. Was in India till May 2017, then went to London for education. In October 2020, returned to India. On 28th March 2021, travelled to Johannesburg, South Africa for research project and Khadi business exhibitions. Returned on 1st October 2021 to participate in 152nd Birth Anniversary Celebrations of Mahatma Gandhi. Receipts/income for F.Y. 2021-22: (1) Scholarship for research: Rs.4,80,000; (2) Gross receipts from exhibitions in South Africa: Rs.10,00,000; (3)…
What is the residential status of Anjali for the A.Y. 2022-23?
(a) Non-resident
(b) Resident but not ordinarily resident
(c) Deemed resident
(d) Resident and ordinarily resident
Q1(ii)Residential status of HUF
2 marks hard
Case: Anjali is a research scholar pursuing PhD. Unmarried, parents in Ahmedabad, Gujarat; parental grandparents and relatives in South Africa. Was in India till May 2017, then went to London for education. In October 2020, returned to India. On 28th March 2021, travelled to Johannesburg, South Africa for research project and Khadi business exhibitions. Returned on 1st October 2021 to participate in 152nd Birth Anniversary Celebrations of Mahatma Gandhi. Receipts/income for F.Y. 2021-22: (1) Scholarship for research: Rs.4,80,000; (2) Gross receipts from exhibitions in South Africa: Rs.10,00,000; (3)…
What is the residential status of HUF for the A.Y. 2022-23?
(a) Resident and ordinarily resident
(b) Resident but not ordinarily resident
(c) Non-resident
(d) Deemed resident
Q1(iii)Taxability of gifts — relative vs non-relative, section 56(2
2 marks hard
Case: Anjali is a research scholar pursuing PhD. Unmarried, parents in Ahmedabad, Gujarat; parental grandparents and relatives in South Africa. Was in India till May 2017, then went to London for education. In October 2020, returned to India. On 28th March 2021, travelled to Johannesburg, South Africa for research project and Khadi business exhibitions. Returned on 1st October 2021 to participate in 152nd Birth Anniversary Celebrations of Mahatma Gandhi. Receipts/income for F.Y. 2021-22: (1) Scholarship for research: Rs.4,80,000; (2) Gross receipts from exhibitions in South Africa: Rs.10,00,000; (3)…
Determine the taxability of gift received by Anjali from her father's sister and from her friends in 'Gandhi Gujarat Seva Samaj' for the A.Y. 2022-23?
(a) Rs.51,000 will be exempt as it is a gift received from a relative. Rs.27,000 received as cash gifts from her friends would not be taxable as all her friends are non-residents.
(b) Rs.51,000 will be taxed as 'Income from other sources' as father's sister is not a relative. Rs.27,000 received as cash gifts from friends will also be taxable as the total gifts from non-relatives during the A.Y. 2022-23 exceeds Rs.50,000.
(c) Rs.51,000 will be exempt as it is a gift received from a relative. Rs.27,000 received as cash gifts from friends will be taxed as amount is paid in cash and is received from non-residents.
(d) Rs.51,000 will be exempt as it is a gift received from a relative. Rs.27,000 received as cash gifts from friends will not be taxable as the total gifts received from non-relatives during the A.Y. 2022-23 does not exceed Rs.50,000.
Q1(iv)Total income computation — scope of income, exemptions, busi
2 marks hard
Case: Anjali is a research scholar pursuing PhD. Unmarried, parents in Ahmedabad, Gujarat; parental grandparents and relatives in South Africa. Was in India till May 2017, then went to London for education. In October 2020, returned to India. On 28th March 2021, travelled to Johannesburg, South Africa for research project and Khadi business exhibitions. Returned on 1st October 2021 to participate in 152nd Birth Anniversary Celebrations of Mahatma Gandhi. Receipts/income for F.Y. 2021-22: (1) Scholarship for research: Rs.4,80,000; (2) Gross receipts from exhibitions in South Africa: Rs.10,00,000; (3)…
What would be the total income of Ms. Anjali for A.Y. 2022-23 if she wishes to maximize tax savings?
(a) Rs.12,55,000
(b) Rs.8,02,000
(c) Rs.1,51,800
(d) Rs.7,75,000
Q2Recovery of bad debts — section 41(4)
2 marks easy
Mr. Kumar, engaged in wholesale business of clothes and speculative business, discontinued its operations on 19.10.2021 and 30.09.2021, respectively. The cloth business loss upto 19.10.2021 for P.Y. 2021-22 was Rs.8,000 and speculative business loss upto 30.09.2021 for P.Y. 2021-22 was Rs.40,000. Out of total bad debts of Rs.1,00,000 claimed by Mr. Kumar in respect of a particular debtor of cloth business, Rs.60,000 was allowed by the Assessing Officer in P.Y. 2020-21. On 29.01.2022, Mr. Kumar received a sum of Rs.68,000 from the debtor in full and final settlement. How much amount would be taxable in the hands of Mr. Kumar for A.Y. 2022-23?
(a) Rs.28,000
(b) Rs.20,000
(c) Rs.60,000
(d) Rs.68,000
Q2GST ITC — restriction where depreciation claimed on tax comp
2 marks easy
Ganesh Traders, engaged in manufacturing of taxable as well as exempt goods, purchased a machinery worth Rs.17,70,000 (Rs.15,00,000 plus Rs.2,70,000 GST). It capitalized the full amount including taxes in the books of accounts and claimed depreciation on it as per provisions of the Income Tax Act, 1961. Compute the amount of ITC that can be claimed by Ganesh Traders?
(a) Rs.2,70,000
(b) Zero
(c) In proportion of taxable and exempt supply
(d) By decreasing percentage points as prescribed
Q3Capital gains — section 54 exemption with Capital Gains Depo
2 marks easy
In P.Y. 2021-2022, Mr. A has transferred the following assets: (1) Residential house property — Full Value of Consideration Rs.8 crores, Indexed Cost of Acquisition Rs.6 crores, Transfer Date 25.11.2021; (2) Jewellery — Full Value of Consideration Rs.3 crores, Indexed Cost of Acquisition Rs.2 crores, Transfer Date 05.01.2022. Mr. A bought a new residential house property on 01.04.2020 for Rs.1 crore and on 28.02.2022 deposited Rs.3 crores in a capital gains deposit account scheme. On 30.07.2022, Mr. A withdrew Rs.3 crores from capital gains deposit account and acquired a residential house property worth Rs.2.5 crore. What would be the capital gains in the hands of Mr. A for A.Y. 2022-23, if the expenses in connection with transfer of jewellery were Rs.2,00,000?
(a) Rs.80,50,000
(b) Rs.81,55,705
(c) Rs.98,00,000
(d) Rs.48,00,000
Q4Advance tax liability — senior citizen exemption, lottery in
2 marks easy
Mr. Jai, a resident Indian aged 60 years, won Rs.9 lakhs and Mr. Veeru, resident Indian aged 55 years, won Rs.8 lakhs from lotteries. Tax deductible at source under section 194B was duly deducted. Assuming that this is the only source of income of Mr. Jai and Mr. Veeru for A.Y.2022-23, are Mr. Jai and Mr. Veeru liable to pay advance tax for that year?
(a) No, Mr. Jai and Mr. Veeru are not liable to pay advance tax
(b) Yes, Mr. Jai and Mr. Veeru are liable to pay advance tax
(c) Mr. Jai is liable to pay advance tax but Mr. Veeru is not liable to pay advance tax
(d) Mr. Veeru is liable to pay advance tax but Mr. Jai is not liable to pay advance tax
Q5Deduction under section 80CCD — NPS contributions by employe
2 marks easy
The basic salary of Mr. Raj is Rs.1,15,000 p.m. He is entitled to dearness allowance, which is 30% of basic salary forming part of pay for retirement benefits. Mr. Raj and his employer, XYZ Ltd., both contribute 20% of basic salary to the pension scheme referred to in section 80CCD. What is the amount of deduction available to Mr. Raj under section 80CCD for A.Y. 2022-23?
(a) Rs.4,08,800
(b) Rs.5,05,400
(c) Rs.3,79,400
(d) Rs.3,58,800
Q6Clubbing of income — spouse's interest from firm funded by g
2 marks easy
Mrs. Bhawna, wife of Mr. Sonu, is a partner in a firm. Her capital contribution of Rs.10 lakhs to the firm as on 31.3.2021 included Rs.6 lakhs contributed out of gift received from Sonu. On 1.4.2021, she further invested Rs.2 lakh out of gift received from Sonu. The firm paid interest on capital of Rs.1,20,000 and share of profit of Rs.1,00,000 during F.Y.2021-22. The entire interest has been allowed as deduction in the hands of the firm. Which of the following statements is correct?
(a) Share of profit is exempt but interest on capital is taxable in the hands of Mrs. Bhawna
(b) Share of profit is exempt but interest of Rs.80,000 is includible in the income of Mr. Sonu and interest of Rs.40,000 is includible in the income of Mrs. Bhawna
(c) Share of profit is exempt but interest of Rs.72,000 is includible in the income of Mr. Sonu and interest of Rs.48,000 is includible in the income of Mrs. Bhawna
(d) Share of profit to the extent of Rs.60,000 and interest on capital to the extent of Rs.72,000 is includible in the hands of Mr. Sonu
Q1.1GST — stock statement deadline on withdrawal from compositio
2 marks hard
Case: M/s. Harsimran & Co., a registered supplier under GST, deals in supply of taxable goods in Karnataka. The firm opted for Composition Scheme from April of last financial year. Its turnover crossed Rs.1.50 Crores on 9th May of current financial year and opted for withdrawal of composition scheme on that date. Harsimran & Co. removed goods on 10th June for delivery to Simran & Co. on 'Sale or Return Basis'; Simran & Co. accepted goods via confirmation mail dated 15th December. GST paid during August: (a) GST on input services for personal purposes Rs.12,000; (b) GST on two-wheeler motor vehicle (…
Harsimran & Co. needs to furnish a statement containing details of stock of inputs/inputs held in semi-finished/finished goods on the withdrawal of composition scheme by ______
(a) 9th May
(b) 23rd May
(c) 8th June
(d) 7th July
Q1.2GST — time limit for invoice on sale or return basis
2 marks hard
Case: M/s. Harsimran & Co., a registered supplier under GST, deals in supply of taxable goods in Karnataka. The firm opted for Composition Scheme from April of last financial year. Its turnover crossed Rs.1.50 Crores on 9th May of current financial year and opted for withdrawal of composition scheme on that date. Harsimran & Co. removed goods on 10th June for delivery to Simran & Co. on 'Sale or Return Basis'; Simran & Co. accepted goods via confirmation mail dated 15th December. GST paid during August: (a) GST on input services for personal purposes Rs.12,000; (b) GST on two-wheeler motor vehicle (…
In respect of the goods sent on sale or return basis, Harsimran & Co. shall issue the invoice by ________
(a) 10th June
(b) 10th September
(c) 10th December
(d) 15th December
Q1.3GST ITC eligibility — personal use, motor vehicle, depreciat
2 marks hard
Case: M/s. Harsimran & Co., a registered supplier under GST, deals in supply of taxable goods in Karnataka. The firm opted for Composition Scheme from April of last financial year. Its turnover crossed Rs.1.50 Crores on 9th May of current financial year and opted for withdrawal of composition scheme on that date. Harsimran & Co. removed goods on 10th June for delivery to Simran & Co. on 'Sale or Return Basis'; Simran & Co. accepted goods via confirmation mail dated 15th December. GST paid during August: (a) GST on input services for personal purposes Rs.12,000; (b) GST on two-wheeler motor vehicle (…
Determine the amount of eligible input tax credit that can be availed by Harsimran & Co. for the month of August?
(a) Nil
(b) Rs.19,000
(c) Rs.22,000
(d) Rs.50,000
Q1.4GST ITC reversal — non-payment to vendors beyond 180 days
2 marks hard
Case: M/s. Harsimran & Co., a registered supplier under GST, deals in supply of taxable goods in Karnataka. The firm opted for Composition Scheme from April of last financial year. Its turnover crossed Rs.1.50 Crores on 9th May of current financial year and opted for withdrawal of composition scheme on that date. Harsimran & Co. removed goods on 10th June for delivery to Simran & Co. on 'Sale or Return Basis'; Simran & Co. accepted goods via confirmation mail dated 15th December. GST paid during August: (a) GST on input services for personal purposes Rs.12,000; (b) GST on two-wheeler motor vehicle (…
Compute the amount of ITC to be reversed for the month of September. Ignore interest liability, if any.
(a) Nil
(b) Rs.28,000
(c) Rs.15,000
(d) Rs.13,000
Q1.5GST — time of supply for imported services from associated e
2 marks hard
Case: M/s. Harsimran & Co., a registered supplier under GST, deals in supply of taxable goods in Karnataka. The firm opted for Composition Scheme from April of last financial year. Its turnover crossed Rs.1.50 Crores on 9th May of current financial year and opted for withdrawal of composition scheme on that date. Harsimran & Co. removed goods on 10th June for delivery to Simran & Co. on 'Sale or Return Basis'; Simran & Co. accepted goods via confirmation mail dated 15th December. GST paid during August: (a) GST on input services for personal purposes Rs.12,000; (b) GST on two-wheeler motor vehicle (…
Time of supply in respect of service imported by Harsimran & Co. from its Associated Enterprise is ___________
(a) 1st September
(b) 30th September
(c) 1st October
(d) 10th October