1. Mr. Shashikant, aged 45 years, is an Indian citizen and a member of the crew of a Singapore bound Indian ship engaged in carriage of passengers in international traffic departing from Chennai port on 29th May, 2021.
| Particulars | Date |
| Date entered into the Continuous Discharge Certificate in respect of joining the ship by Mr. Shashikant | 29th May, 2021 |
| Date entered into the Continuous Discharge Certificate in respect of signing off the ship by Mr. Shashikant | 19th December, 2021 |
He stayed in India in the last 4 previous years preceding the P.Y. 2021-22 for 400 days and for a period of 750 days in the last 7 previous years preceding to P.Y. 2021-22. He received salary of 7,20,000 in his NRE account maintained with State Bank of India, Chennai Branch.
He also furnished details of other income earned by him during the previous year 2021-22:
| S.no | Particulars | Amount |
| 1 | Dividend declared in the month of April, 2021 by X limited, a Singapore company. The same was received by him in Singapore | 1,00,000 |
| 2 | Agriculture income from land in Pakistan received in India | 2,50,000 |
| 3 | Rent received from house property in Chennai | 3,60,000 |
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
1.1 What is Mr. Shashikant’s residential status for the P.Y 2021-22?
(a) Resident and ordinarily resident
(b) Resident but not ordinarily resident
(c) Non-resident
(d) Deemed resident
Answer- (c) Non-resident
1.2 What would be the total income of Mr. Shashikant for A.Y.2022-23 assume that he does not opt to pay tax under section 115BAC?
(a) 7,10,000
(b) 11,72,000 5,02,000
(c)
(d) 6,02,000
Answer- (c) 5,02,000
1.3. Assume for the purpose of answering this question that Mr. Shashikant has transferred his house property in Chennai to his minor married daughter on 1st April, 2021 and his wife is a housewife and does not have any income. The minor married daughter receives the rent from house property. In such case, his total income would be –
(a) 5,00,500 6,00,500
(b)
(c) 5,02,000 6,02,000
(d)
Answer- (a) 5,00,500
1.4. Mr. Shashikant would like to minimize his tax liability and consulted you to compute the amount of same for the P.Y. 2021-22. Accordingly, his tax liability (rounded off) would be -
(a) 13,420
(b) 13,210 23,610
(c)
(d) 34,840
Answer- (b) 13,210
2. Mr. Suraj (aged 48 years) furnishes the following particulars for the previous year 2021-22 in respect of an industrial undertaking established in “Special Economic Zone” in March 2015. It began manufacturing in April 2015.
| Particulars | Amount |
| Total sales | 85,00,000 |
| Export sales [proceeds received in India] | 45,00,000 |
| Domestic sales | 40,00,000 |
| Profit from the above undertaking | 20,00,000 |
Export Sales of F.Y. of 2021-22 include freight and insurance of 5 lacs for delivery of goods outside India.
He received rent of 25,000 per month for a commercial property let out to Mr. Sudhir, a salaried individual. He earned interest on savings bank A/c of 12,500 and interest on Post Office savings A/c of 5,500 during the P.Y. 2021-22.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
2.1 Compute the amount of export turnover and total turnover for purpose of computing deduction under section 10AA for A.Y. 2022-23.
(a) 45,00,000 and 85,00,000, respectively
(b) 40,00,000 and 80,00,000, respectively
(c) 45,00,000 and 80,00,000, respectively
(d) 40,00,000 and 85,00,000, respectively
Answer- (b) 40,00,000 and 80,00,000, respectively
2.2 Compute the amount of deduction available under section 10AA to Mr. Suraj under section 10AA for A.Y. 2022-23.
(a) 10,00,000 4,70,577
(b)
(c) 5,62,500 5,00,000
(d)
Answer- (d) 5,00,000
2.3. Assume for the purpose of this question only that Mr. Suraj established SEZ Unit and began manufacturing in April, 2018. Compute the amount of deduction available under section 10AA for A.Y. 2022-23.
(a) 10,00,000
(b) 9,41,154 11,25,000
(c)
(d) 5,00,000
Answer- (a) 10,00,000
2.4 Compute the total income of Mr. Suraj for the previous year 2021-22, assuming that he does not opt to pay tax under section 115BAC.
(a) 12,14,500 17,18,000
(b)
(c) 17,14,500 17,28,000
(d)
Answer- (c) 17,14,500
3. Mr. Kishan is engaged in the following activities on agricultural land situated in India, total area of land is 5 acres.
Activity A:
He grows saplings or seedlings in a nursery spreading over on one acre land, the sale proceeds of which is 5,00,000. Cost of plantation is 1,40,000. Basic operations are not performed for growing saplings or seedlings.
Activity B:
He grows cotton on 3 acres land. 40% of cotton produce is sold for 4,00,000, the cost of cultivation of which is 2,25,000. The cost of cultivation of balance 60% cotton is 3,37,500 and the market value of the same is 6,00,000, which is used for the purpose of manufacturing yarn. After incurring manufacturing expenses of 1,00,000, yarn is sold for 8,50,000
Activity C:
Land measuring 1 acres is let out to Mr. Ramesh on monthly rental of 15,000 which is used by Mr. Ramesh as follows:
– 50% of land is used for agricultural purpose
– 50% of land is used for non-agricultural purpose. Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
3.1 What amount of income arising from activity A would constitute agricultural income in the hands of Mr. Kishan?
(a) 5,00,000 3,60,000
(b) Nil
(c)
(d) 1,40,000
Answer- (c) 3,60,000
3.2. What amount of income from activity B with respect to sale of cotton would constitute agricultural income or/and business income in the hands of Mr. Kishan?
(a) 1,75,000 as agricultural income 1,75,000 as business income
(b)
(c) 1,75,000 as agricultural income and 2,62,500 as business income
(d) 4,00,000 as agricultural income
Answer-(a) 1,75,000 as agricultural income
3.3. What amount of the income from activity B with respect to sale of yarn constitute agricultural income or/and business income in the hands of Mr. Kishan?
(a) 1,50,000 as agricultural income 2,62,500 as agricultural income and
(b) 1,50,000 as business income 3,37,500 as agricultural income and
(c) 1,50,000 as business income 4,12,500 as business income
(d)
Answer- (b) 2,62,500 as agricultural income and 1,50,000 as business income
3.4. What amount of income arising from activity C constitute agricultural income or otherwise in the hands of Mr. Kishan?
(a) Whole amount of 1,80,000 would be agricultural income 1,80,000 would be business income.
(b) Whole amount of
(c) 90,000 would be agricultural income and 63,000 is chargeable to tax as income from house property
(d) 90,000 would be agricultural income and 90,000 is chargeable to tax under the head “Income from Other Sources”
Answer- (d) 90,000 would be agricultural income and 90,000 is chargeable to tax under the head “Income from Other Sources”
3.5. Compute the gross total income of Mr. Kishan for the P.Y. 2021-22, assuming he has no other source of income.
(a) 2,40,000 3,30,000
(b)
(c) 5,02,500 2,13,000
(d)
Answer- (a) 2,40,000
4. Mr. Rajesh Sharma, aged 54 years, an Indian citizen, is working as Assistant Manager in ABC India Ltd. He is getting basic salary of 58,000 per month. He used to travel frequently out of India for his office work. He left India from Delhi Airport on 5th October, 2021 and returned to India on 2nd April, 2022.
For previous year 2021-22, following information are relevant;
(a) Dearness Allowance – 10% of Basic Pay (considered for retirement purposes)
(b) Bonus – 98,000
(c) Medical allowance paid during P.Y. 2021-22 amounting to 60,000
(d) He was also reimbursed medical bill of his mother amounting to 15,000.
(e) He was also transferred a laptop by company for 15,000 on 31st December, 2021. The laptop was acquired by company on 1st October, 2018 for 1,00,000. Company was charging depreciation at 31.666% assuming useful life of laptop as 3 years.
(f) He was also reimbursed salary of house servant of 4,000 per month.
(g) Professional Tax paid by employer amounting to 2,400.
(h) 400 equity shares allotted by ABC India Ltd. at the rate of 250 per share against fair market value of share of 350 on the date of exercise of option.
(i) Short-term capital gain on sale of shares of listed company on which STT is paid amounting to 94,000.
(j) Mr. Rajesh does not opt for the provisions of section 115BAC. Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
4.1 What is Mr. Rajesh Sharma’s residential status for the A.Y. 2022-23?
(a) Resident but can’t determine resident and ordinarily resident or resident but not ordinarily resident from the given information
(b) Non-Resident
(c) Resident but not ordinarily resident
(d) Resident and ordinarily resident
Answer- (a) Resident but can’t determine resident and ordinarily resident or resident but not ordinarily resident from the given information
4.2 What are his taxable perquisites for A.Y. 2022-23?
(a) 55,000 90,400
(b)
(c) 1,05,400 1,03,000
(d)
Answer- (c) 1,05,400
4.3 What is the income chargeable under the head “Salaries” in the hands of Mr. Rajesh Sharma for A.Y. 2022-23?
(a) 9,76,600
(b) 9,86,600 9,71,600
(c)
(d) 9,61,600
Answer- (a) 9,76,600
4.4 The total tax liability of Mr. Rajesh Sharma for A.Y. 2022-23 is:
(a) 1,26,800 1,40,710
(b)
(c) 1,12,130 1,39,960
(d)
Answer- (c) 1,12,130
4.5 Assume for the purpose of this question only, that Mr. Rajesh was found owner of 5 lakh worth jewellery acquired in F.Y. 2021-22, of which he could not provide any satisfactory explanation about source of income. What would be the tax liability (without considering surcharge and Health and education cess, if any) of Mr. Rajesh Sharma towards such unexplained expenditure:
(a) 1,00,000 1,50,000
(b)
(c) 3,00,000 3,90,000
(d)
Answer- (c) 3,00,000
5. Mr. Hardik (age 45 years) is appointed as senior executive officer in Sky India Limited, Mumbai on 01.02.2021 in the scale of 35,000- 3500-65,000. He is paid dearness allowance @ 40% of salary forming part of retirement benefits.
He is given rent free unfurnished accommodation on 01.5.2021 which he occupied only from 01.10.2021. The company pays lease rent of 5,000 p.m.
He has been provided a car of above 1.6 liters capacity which is used by him for private purposes only. The actual cost of the car is 8,00,000. The monthly expenditure of car is 5,000, which is fully met by the employer. Car is owned by his employer.
He pays lumpsum premium of 1,20,000 towards health insurance for self and his wife (age 43 years) for 48 months on 01.10.2021 by account payee cheque. He also contributes 1,50,000 towards PPF.
Mr. Hardik is interested to opt for concessional tax regime available under section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
5.1 What would be the value of rent-free accommodation chargeable to tax in the hands of Mr. Hardik?
(a) 44,835
(b) 44,100 45,570
(c)
(d) 30,000
Answer- (d) 30,000
5.2 What amount of health insurance premium paid during the previous year 2021-22 by Mr. Hardik can be claimed as deduction while computing total income, if he does not opt to pay tax under section 115BAC?
(a) 30,000 15,000
(b)
(c) 24,000 25,000
(d)
Answer- (c) 24,000
5.3 What would be perquisite value of car chargeable to tax in the hands of Mr. Hardik?
(a) 28,800
(b) 21,600 60,000
(c)
(d) 1,40,000
Answer- (d) 1,40,000
5.4 Would you advise to Mr. Hardik to opt to pay tax under section 115BAC?
(a) Yes, Mr. Hardik can opt for section 115BAC, since in such case his tax liability would be 22,760, being lower than the tax liability under normal provisions of the Act
(b) Yes, Mr. Hardik can opt for concessional tax regime, since in such case his tax liability would be 17,560 being lower than the tax liability under normal provisions of the Act.
(c) No, Mr. Hardik should not opt, since as per normal provisions of the Act, his tax liability would be 32,510, being lower than the tax liability under section 115BAC
(d) No, Mr. Hardik should not opt, since as per normal provisions of the Act, his tax liability would be 22,110, being lower than the tax liability under section 115BAC
Answer- (d) No, Mr. Hardik should not opt, since as per normal provisions of the Act, his tax liability would be 22,110, being lower than the tax liability under section 115BAC
6. Ananya Gupta, a citizen of India, lives with her family in New York since the year 2000. She visited India from 21st March, 2021 to 28th September, 2021 to take care of her ailing mother. In the last four years, she has been visiting India for 100 days every year to be with her mother. She owns an apartment at New York, which is used as her residence. The expected rent of the house is $ 32,000 p.a. The value of one USD ($) may be taken as 75. Municipal taxes paid in New York in January, 2022 are $ 2,000.
She took ownership and possession of her house in New Delhi on 25th March, 2021, for self occupation, while she is in India. The municipal valuation is 4,20,000 p.a. and the fair rent is 4,50,000 p.a. She paid property tax of 22,000 to Delhi Municipal Corporation on 21st March, 2022. She had taken a loan of 16 lakhs @ 10% p.a. from IDBI Bank on 1st April, 2017 for constructing this house and the construction got completed on 20th March, 2021. No amount has been paid towards principal repayment so far. The house is vacant for the rest of the year i.e., from October 2021 to March 2022.
She had a house property in Mumbai, which was sold on 28th March, 2021. In respect of this house, she received arrears of rent of 3,00,000 on 4th February, 2022. This amount has not been charged to tax earlier.
She does not have any income under any other source in India during previous year in 2021-22. Ananya Gupta does not want to opt for the new tax regime under section 115BAC for A.Y. 2022-23.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
6.1. What would be the residential status of Ananya Gupta for A.Y. 2022-23?
(a) Resident and ordinarily resident
(b) Resident but not ordinarily resident
(c) Deemed resident but not ordinarily resident in India
(d) Non-resident
Answer- (d) Non-resident
6.2. Ms. Ananya Gupta can claim benefit of “Nil” Annual Value under section 23(2) in respect of -
(a) Her Delhi house
(b) Her New York house, since it is more beneficial; her Delhi house will be deemed to be let out and expected rent would be the annual value.
(c) Her Delhi house alone; her New York house will be deemed to be let out and expected rent would be the annual value.
(d) Both her Delhi house and New York house, since benefit of Nil Annual value u/s 23(2) is available in respect of two house properties.
Answer- (a) Her Delhi house
6.3. What is the income chargeable under the head “Income from house property” of Ananya Gupta for A.Y. 2022-23?
(a) 15,65,000
(b) 3,09,600
(c) 1,00,000
(d) 10,000
Answer- (d) 10,000
6.4. Assuming that, for the purpose of this question alone, Ananya Gupta has let out her flat in New York during the six months (April to September) when she is in India, for a sum of $ 6,000 p.m. Such rent was received in a bank account in New York and then remitted to India through approved banking channels. What would be the income from house property chargeable to tax in her hands in India for A.Y. 2022-23?
(a) 10,000 17,85,000
(b)
(c) 17,95,000 18,85,000
(d)
Answer- (a) 10,000
7. Ram Builders & Developers is the sole-proprietorship concern of Mr. Ram. The main business of the concern is construction, development and sale of residential and commercial units. Ram Builders & Developers developed a project named Luxuria Heaven, which has both residential and commercial units with its own funds. It obtained certificate of completion for the said project with effect from 31/03/2021. Ram sold majority of its residential units and commercial units in the F.Y.2021-22. However, around 30 residential units and 15 commercial units were held by him as stock in trade as on 31.3.2022. During this period, there was a slump in the real estate sector. In order to earn some income from these units, Ram incidentally let out some of the units held as stock-in-trade. The details of units constructed, sold and held as stock-in-trade are given hereunder:
| Particulars | Total Units constructed | Units sold | Units sold Units held as stock in-trade as on31.3.2022 [(2) – (3)] | Units let out duringP.Y.2021 -22 out of (4) | Units vacant during the wholeofP.Y.2021 -22 [(4) – (5)] | Actual rent per unit per month [in respect of let outunitsmentioned in (5)] |
| Residential Units | 100 | 70 | 30 | 10 | 20 | 10,000 pm. |
| Commercial Units | 40 | 25 | 15 | 5 | 10 | 18,000 pm. |
| 140 | 95 | 45 | 15 | 30 |
Out of the residential units sold, 5 residential units were sold to his friend, Mr. Gaurav, who is also a real estate developer, on 15.2.2022, for 20 lakhs each. The stamp duty value on the date of sale was 23 lakhs each. However, the agreement of sale was entered into on 1.11.2021, on which the date the stamp duty value was 22 lakhs. Mr. Ram received 1 lakh by way of account payee bank draft on 1.11.2021 from Mr. Gaurav.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
7.1. While computing the total income of Mr. Ram, the income from residential and commercial units let out during the P.Y.2021-22 will be taxed under head:
(a) Income from house property
(b) Profits and gains of business or profession
(c) Income from let out residential units will be taxed under the head “Income from house property” and income from let out commercial units will be taxed under the head “Profits and gains of business or profession”
(d) Income from other source
Answer- (a) Income from house property
7.2. What would be the tax treatment of vacant residential and commercial units held as stock in trade as on 31.3.2022?
(a) The vacant residential units would be deemed to be let out and expected rent would be deemed as the annual value chargeable to tax under the head “Income from house property” for A.Y. 2022-23.
(b) The vacant units, both residential and commercial, would be deemed to be let out and expected rent would be deemed as the annual value chargeable to tax under the head “Income from house property” for A.Y. 2022-23.
(c) The annual value of both vacant residential and commercial units would be Nil for A.Y.2022-23. Hence, no income is chargeable for such units under the head “Income from house property” for A.Y. 2022-23.
(d) Vacant units held as stock-in-trade can never be deemed as let out at any point of time
Answer- (c) The annual value of both vacant residential and commercial units would be Nil for A.Y.2022-23. Hence, no income is chargeable for such units under the head “Income from house property” for A.Y. 2022-23.
7.3. What would be the full value of consideration in respect of sale of units to Mr. Gaurav for the purpose of computing profits and gains from transfer of units?
(a) 1,00,00,000
(b) 1,15,00,000 1,10,00,000
(c)
(d) 99,00,000
Answer- (a) 1,00,00,000
7.4. Assume that 1 lakh was paid in cash by Mr. Gaurav to Mr. Ram on 1.11.2021 instead of by way of account payee bank draft, what would be the income chargeable under section 56(2)(x) in the hands of Mr. Gaurav?
(a) 15 lakh
(b) 10 lakh
(c) Nil, since the stamp duty value is within the permissible deviation limit
(d) Nil, since section 56(2)(x) is not applicable in this case
Answer- (d) Nil, since section 56(2)(x) is not applicable in this case
8. For the assessment year 2022-23, Mr. Sonu submits the following information:
| Particulars | Building at Chennai (Rs) | Building at Kochi (Rs) |
| Municipal valuation | 35,000 | 80,000 |
| Standard Rent | 36,000 | 70,000 |
| Fair Rent | 31,000 | 82,000 |
| Rent received | 38,000 | 68,000 |
| Municipal taxes paid by tenant Mr. Ramu for building at Chennai and paid by Mr. Sonu for Building at Kochi. | 3,000 | 4,000 |
| Repairs paid by tenant Mr. Ramu for Chennai building and Mr. Sonu paid for Kochi building | 500 | 18,000 |
| Land revenue paid | 2,000 | 16,000 |
| Insurance premium paid | 500 | 2,000 |
| Interest on loan borrowed for payment of municipal tax of house property | 200 | 400 |
| Nature of occupation | Let out for residence | Let out for business |
| Date of completion of construction | 1.4.1996 | 1.7.2008 |
Mr. Sonu is constructing one more building in Mumbai during the previous year 2021-22. Mr. Raju, a film director, took on rent the building under construction in Mumbai at 5,000 per month for his film shooting. The construction of the said building would be completed by April 2022. Mr. Sonu is a real estate developer and letting out properties is not the business of Mr. Sonu.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
8.1. Which of the building’s income is chargeable to tax under the head “Income from house property” in the hands of Mr. Sonu?
(a) Building at Chennai only
(b) Building at Kochi only
(c) Both buildings at Chennai and Kochi
(d) All the three buildings at Chennai, Kochi and Mumbai
Answer- (c) Both buildings at Chennai and Kochi
8.2. Which of the following payments/expenditure is allowable as deduction while computing income under the head “Income from house property” incurred in respect of the building at Chennai and Kochi?
(a) Municipal taxes paid by Mr. Sonu and Mr. Ramu
(b) Municipal tax, land revenue, insurance premium, interest on loan borrowed for payment of Municipal tax paid by Mr. Sonu
(c) Only municipal tax paid by Mr. Sonu
(d) Both Municipal tax and repairs paid by Mr. Sonu
Answer- (c) Only municipal tax paid by Mr. Sonu
8.3. Under which head of income, the amount received from Mr. Raju would be chargeable to tax?
(a) Income from house property
(b) Profits and gains from business or profession
(c) Income from other sources
(d) Income from house property or Income from other sources, at the option of Mr. Sonu
Answer- (c) Income from other sources
8.4. What is the amount chargeable to tax under the head “Income from house property” in the hands of Mr. Sonu for the P.Y. 2021-22?
(a) 72,800 81,200
(b)
(c) 1,14,800 70,700
(d)
Answer- (a) 72,800
9. Mr. Ganesha (a salaried person) has three houses. One in Thane (Maharashtra), second in Jaipur (Rajasthan) and third in Ratlam (Madhya Pradesh). Details of the flats/houses are as follows:
- Thane flat: 3 BHK flat purchased in April, 2003 for 90 lakhs. Afterwards, interior work done in 2006 of 15 lakhs. Mr. Ganesha took loan of 65 lakhs for purchase of this flat in 2001 and settled full loan in 2019.
– Jaipur house: Purchased in July, 2019 of 62 lakhs and interior work done in September, 2020 of 15 lakhs. Loan taken for purchase of this house of 15 lakhs in June, 2019. As per interest certificate, he paid 12,00,500 and 43,500 towards principal and interest, respectively, during the P.Y. 2021-22.
- Ratlam House: Purchased in December 2020 for 70 lakhs (stamp duty value of 65 lakhs). For acquiring this house, he took loan of 40 lakhs from Canara Bank. Loan was sanctioned on 1.8.2020. He pays EMI of 38,100 per month. As per interest certificate, for the previous year 2021-22, he paid 60,900 and 3,96,300 towards principal and interest, respectively
| Particulars | Thane House | Jaipur House (Apr-21 to Dec 21) |
Ratlam House |
| Municipal Taxes paid | 18,574 | 8,090 | 6,909 |
| Municipal value (per month) | 30,500 | 6,800 | 7,200 |
| Fair Rent (per month) | 33,000 | 7,000 | 7,500 |
| Standard Rent (per month) | 32,000 | 8,000 | 7,300 |
Other details are as follows:
- He has sold Jaipur house on 1st January, 2022 for 90 lakhs and invested 15 lakh in RECL bonds issued by the Central Government on 10th August 2022.
- Mr. Ganesha is working in WinDoor Exports Pvt Ltd, Mumbai and self-occupied Thane flat. He earned salary of 22,50,350 for the previous year 2021-22.
– He has no other income from any source for the P.Y. 2021-22.
– He has given Ratlam house on rent for F.Y. 2021-22 to Mr. Pratap on a monthly rent of 8,500.
- He has given Jaipur house on rent for the period of April, 2021 to June, 2021 to Mrs. Madhura Mahto on monthly rent of 7,100 and vacant for remaining period from July, 2021 to December, 2021. Mr. Ganesha would not like to opt concessional tax rates available under section 115BAC.
Cost inflation index (CII) for the Financial Year (F.Y.) 2019-20 is 289; 2020-21: 301; F.Y. 2021-22: 317.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
9.1. What would be Net Annual Value of each house for the previous year 2021-22?
(a) Thane – Nil; Jaipur – 13,210; Ratlam – 95,091
(b) Thane – Nil; Jaipur – 54,910; Ratlam – 95,091
(c) Thane – Nil; Jaipur – 21,300; Ratlam – 1,02,000
(d) Thane – Nil; Jaipur – 13,210; Ratlam – 80,691
Answer- (a) Thane – Nil; Jaipur – 13,210; Ratlam – 95,091
9.2. What would be income/loss under the head “Income from house property” in the hands of Mr. Ganesha?
(a) Loss of 1,67,689 2,86,236
(b) Loss of
(c) Loss of 3,20,489 3,63,989
(d) Loss of
Answer- (d) Loss of 3,63,989
9.3. How much amount will be carried forward as loss from house property for the subsequent assessment year 2023-24?
(a) 3,63,989
(b) 1,63,989 2,00,000
(c)
(d) 1,50,000
Answer- (b) 1,63,989
9.4. What would the amount of capital gains chargeable to tax in the hands of Mr. Ganesha during the previous year 2021-22?
(a) Short-term capital gains of 13,00,000 21,99,308
(b) Long-term capital gains of
(c) Long-term capital gain of 6,19,574
(d) Long-term capital gain of Nil, since he is eligible for deduction u/s 54EC in respect of amount invested in RECL bonds issued by Central Government
Answer- (c) Long-term capital gain of 6,19,574
9.5. What would be the gross total income of Mr. Ganesha for the A.Y. 2022-23?
(a) 26,69,920 24,69,920
(b)
(c) 26,19,920 41,99,660
(d)
Answer- (c) Long-term capital gain of 6,19,574
10. “LUX Enterprise” a proprietorship firm of Mr. Lucifer Mornigstar, a resident individual, in Maharashtra engaged in business of printing and publishing. The following details pertain to the assets of the business:
| Particulars | Date of purchase | Date of put to use | Amount |
| Office building superstructure constructed on leased land | 30.09.2021 | 30.12.2021 | 1,85,00,000 |
| BMW M4 convertible car | 23.08.2019 | 25.08.2019 | 94,80,000 |
| Machineries used in printing and publishing process | 25.09.2021 | 15.10.2021 | 9,12,500 |
Notes:
(1) Car is also used for personal purposes; disallowance for personal use may be taken at 20%.
(2) Written down value of Plant & Machinery (Depreciable @15%) as on 1.4.2021 is 1,45,00,000.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions, assuming all the aforementioned assets are purchased through account payee cheque:
10.1. What would be the amount of depreciation allowable on plant and machinery (@15%) for the previous year 2021-22?
(a) 24,25,938 23,34,688
(b)
(c) 24,94,375 24,03,125
(d)
Answer- (b) 23,34,688
10.2. What would be the WDV of plant and machinery (Depreciable@15%) as on 1.4.2022?
(a) 1,29,86,562
(b) 1,29,18,125 1,30,77,812
(c)
(d) 1,30,09,375
Answer- (c) 1,30,77,812
10.3. What would the WDV of Office building superstructure constructed on leased land as on 1.4.2022?
(a) 1,85,00,000 1,66,50,000
(b)
(c) 1,75,75,000 1,57,25,000
(d)
Answer- (c) 1,75,75,000
10.4. What would be the amount of depreciation allowable on BMW M4 convertible car for the previous year 2021-22?
(a) 22,75,200
(b) 11,37,600 8,80,957
(c)
(d) 13,14,156
Answer- (d) 13,14,156
11. Mr. X has set up a manufacturing unit in Chittor, Andhra Pradesh on 1st April 2020.
During the previous year 2020-21 and 2021-22, Mr. X has purchased
following assets:
| Date of put to use | Asset | Amount |
| 07-Jun-20 | Plant & machinery “X” | 14,75,340 |
| 25-Jul-20 | Office Furniture | 7,65,400 |
| 14-Jan-21 | Plant & machinery “Y” | 5,00,000 |
| 15-May-21 | Plant & machinery “Z” | 8,00,000 |
He has paid professional fees of 35,000 each to Mr. A, Mr. B and Mr. C, respectively on 10th September 2021 credited in the books on the same day, to discuss some legal matter related to business.
The net profit computed in accordance with “Chapter IV-D - Computation of business income” of the Income-tax Act, 1961 for the previous year 2020-21 is 1.2 crore.
Mr. X has 2,000 equity shares of MNO Pvt. Ltd. On 21 October 2021, MNO Pvt. Ltd has bought back 50% shares from its shareholders amounting to 13,50,000 which were issued for 5,70,000 which include 1,15,000 towards premium.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
11.1 What would be the amount of depreciation in respect of Plant & Machinery “Y” allowable as deduction while computing income under the head “Profit & Gains from business or profession” for the previous year 2021-22?
(a) 61,875
(b) 1,11,875 69,375
(c)
(d) 63,750
Answer: (b) 1,11,875
11.2. What shall be the total amount of depreciation for the previous year 2021-22 allowable as deduction while computing profits and gains from business or profession?
(a) 3,77,481 3,71,856
(b)
(c) 5,54,607 6,04,607
(d)
Answer: (d) 6,04,607
11.3. Mr. X wanted to know from you, whether tax is required to be deducted on professional fees paid to Mr. A, Mr. B and Mr. C respectively. If tax has to be deducted, then what would be the rate and amount of tax to be deducted at source?
(a) Yes, TDS amounting to 7,875 @7.5% on 1,05,000 is to be deducted 1,575 @1.5% on
(b) Yes, TDS amounting to 1,05,000 is to be deducted 10,500 @10% on
(c) No, tax is to be deducted, since amount does not exceed the threshold limit
(d) Yes, TDS amounting to 1,05,000 is to be deducted
Answer: (d) Yes, TDS amounting to 10,500 @10% on 1,05,000 is to be deducted
11.4. What shall be the amount of tax payable by MNO Private Limited on buy-back of its shares?
(a) 2,08,500
(b) 1,81,710 3,14,496
(c)
(d) 1,62,240
Answer:(b) 1,81,710
12. ABC & Co. is a partnership firm engaged in the business of sale of footwear. The partnership firm consist of three partners – A, B & C. A & B are working partners and C is a sleeping partner. The firm is liable to tax audit under section 44AB of the Act. It has a book profit of 11,50,000.
Following payments were made to partners as authorised by the partnership deed:
• Remuneration to A & B - 32,000 p. m. to each partner
• Remuneration to C – 10,000 p. m.
• Interest on capital @ 19.5% to A & B - 18,500 p. a. to each
partner
• Interest on capital @ 17% to C – 10,540 p. a.
The firm has following brought forward losses of past years:
| A.Y. | Business loss | Unabsorbed depreciation | Long-term capital loss |
| 2019-20 | 26,000 | 17,600 | 5,300 |
| 2020-21 | 78,000 | 29,860 | - |
| 2020-21 | 1,05,670 | 54,180 | 13,470 |
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
12.1 What amount of interest is allowable as deduction in the hands of firm while computing profits and gains from business or profession?
(a) 29,040
(b) 22,770 47,540
(c)
(d) 30,210
Answer: (d) 30,210
12.2. What amount of remuneration not allowable as deduction in the hands of firm while computing profits and gains from business or profession?
(a) 1,20,000 1,08,000
(b) Nil
(c)
(d) 78,000
Answer: (a) 1,20,000
12.3. What is the due date of filing of return of income for Mr. A and Mr. C for the A.Y. 2022-23?
(a) 31st July 2022 for Mr. C and 30th September 2022 for Mr. A
(b) 31st July 2022 for Mr. C and 31st October 2022 for Mr. A
(c) 31st October 2022 for both Mr. A and Mr. C
(d) 31st October 2022 for Mr. C and 31st July 2022 for Mr. A
Answer: (c) 31st October 2022 for both Mr. A and Mr. C
12.4. What would be the income under the head “Profits and gains from business or profession” in the hands of ABC & Co. for the A.Y. 2022-23?
(a) 70,690 1,72,330
(b)
(c) 51,920 1,53,560
(d)
Answer: (b) 1,72,330
13. Mr. Sarthak (aged 37 years) a share broker, sold a building to his friend Anay, who is a dealer in automobile spare parts, for 120 lakh on 10.11.2021, when the stamp duty value was 150 lakh. The agreement was, however, entered into on 1.9.2021 when the stamp duty value was 140 lakh. Mr. Sarthak had received a down payment of 15 lakh by a crossed cheque from Anay on the date of agreement. Mr. Sarthak purchased the building for 95 lakh on 10.5.2018. Further, Mr. Sarthak also sold an agricultural land (situated in a village which has a population of 5,800) for 60 lakhs to Mr. Vivek on 01.03.2022, which he acquired on 15.06.2015 for 45 lakhs. Stamp duty value of agricultural land as on 1.3.2022 is 65 lakhs.
CII for F.Y. 2015-16; 254; F.Y. 2018-19: 280; F.Y. 2021-22: 317.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
13.1. Is there any requirement to deduct tax at source on consideration paid or payable for transfer of building and agricultural land?
(a) Yes; Mr. Anay and Mr. Vivek both required to deduct tax at source under section 194-IA
(b) Yes; Mr. Anay is required to deduct tax at source under section 194-IA.
(c) Yes; Mr. Vivek is required to deduct tax at source under section 194-IA.
(d) Yes; Mr. Sarthak is required to deduct tax at source under section 194-IA.
Answer:(b) Yes; Mr. Anay is required to deduct tax at source under section 194-IA.
13.2. What amount of capital gains are chargeable to tax in the hands of Mr. Sarthak in respect of transfer of building?
(a) Long-term capital gains of 42,44,643
(b) Long-term capital gains of 32,44,643 12,44,643
(c) Long-term capital gains of
(d) Short-term capital gains of 55,00,000
Answer:(a) Long-term capital gains of 42,44,643
13.3. Assuming that Mr. Sarthak has other income exceeding basic exemption limit, the tax payable (excluding surcharge and health and education cess) on transfer of building and agricultural land, would be –
(a) 6,48,930 2,48,930
(b)
(c) 8,48,930 16,50,000
(d)
Answer:(c) 8,48,930
13.4. What amount of income is chargeable to tax in the hands of Mr. Anay in respect of transfer of building?
(a) 20 lakh
(b) 30 lakhs 15 lakhs
(c)
(d) Nil
Answer:(b) 30 lakhs
14. Mr. Narendra Sharma, aged 54 years, an Indian citizen, carrying on retail business in Dubai. He frequently visits India for business purpose. Details of his visits in India are as follows:
1) Came to India on 03.12.2016 and left India on 26.04.2017
2) Again came to India on 09.09.2019 and left India on 10.01.2020
3) Again came to India on 27.12.2020 and left India on 20.02.2021
Afterwards he decided to shift permanently in India and closed his business in Dubai. So, he came to India on 27.11.2021 and joined Indian Company “Cosmos Heritage India Limited” at registered office in Mumbai from 01.12.2021. From December 2021, he has taken a flat on rent for 60,000 per month from Mr. Sarthak, an Indian resident, and Mr. Sarthak has provided his PAN No. to Mr. Narendra Sharma.
Following details of his salary income earned in India:
– Basic Salary – 2,75,675 per month
- COLA (Cost of Living Allowance) (forms part of retirement benefits) – 1,20,200 per month
– HRA – 1,37,838 per month
- Other Allowances – 1,56,000 per month
For the period from April 2021 to November 2021, his business income arising in Dubai is 26,00,000 and his turnover for the P.Y. 2020-21 is 95,00,000. He is not liable to pay any tax in Dubai. Such business is controlled from Dubai.
He is active in equity share trading after coming to India. Following are the details of his portfolio:
| S. No | Sale/ Purchase | Company | Date of Purchase/ Sale | Qty | Price per Share | Brokerage |
| 1 | Purchase | First Smile Ltd | 10.12.2021 | 250 | 203 | 1.50% |
| 2 | Purchase | Rainbow Ltd | 10.12.2021 | 50 | 503 | 1.50% |
| 3 | Purchase | Mega Service Ltd | 12.12.2021 | 150 | 82 | 1.50% |
| 4 | Sale | First Smile Ltd | 18.12.2021 | 150 | 325 | 1.80% |
| 5 | Purchase | Mega Service Ltd | 15.12.2021 | 110 | 110 | 1.50% |
| 6 | Sale | Mega Service Ltd | 26.12.2021 | 150 | 100 | 1.80% |
| 7 | Purchase | Rainbow Ltd | 28.12.2021 | 200 | 385 | 1.50% |
| 8 | Purchase | Rainbow Ltd | 03.01.2022 | 100 | 465 | 1.50% |
| 9 | Sale | First Smile Ltd | 23.03.2022 | 200 | 150 | 1.80% |
| 10 | Sale | Mega Service Ltd | 26.03.2022 | 110 | 110 | 1.80% |
Following additional details is also given by Mr. Narendra:
– First Smile Limited issued bonus shares 1:1 on 01.02.2022 and credited the shares in his account on 10.02.2022.
– Rainbow Limited declared an interim dividend of 200% on 28.02.2022 (face value of each share is 10). The record date was 31.1.2022.
He does not opt to pay tax as per section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
14.1. What is the residential status of Mr. Narendra for the previous year 2021-22?
(a) Resident
(b) Resident and ordinary resident
(c) Non-resident
(d) Deemed resident
Answer:(d) Deemed resident
14.2. Which of the following statements is correct, in respect of dividend paid by Rainbow Ltd. to Mr. Naredra?
(a) Dividend received from Rainbow Ltd is exempt in the hands of Mr. Narendra. Hence, no tax is required to be deducted at source.
(b) Dividend received from Rainbow Ltd is taxable in the hands of Mr. Narendra but, since the dividend is less than 10,000, no tax is required to be deducted at source.
(c) Dividend received from Rainbow Ltd is taxable in the hands of Mr. Narendra. Tax of 525 is required to be deducted at source.
(d) Dividend received from Rainbow Ltd is taxable in the hands of Mr. Narendra. Tax of 700 is required to be deducted at source.
Answer:(d) Dividend received from Rainbow Ltd is taxable in the hands of Mr. Narendra. Tax of 700 is required to be deducted at source
14.3. What shall be the TDS liability of Mr. Narendra for rent paid to Mr. Sarthak?
(a) There is no TDS liability of Mr. Narendra, since he is a salaried individual.
(b) Mr. Narendra is liable to deduct TDS u/s 194-I of 6,000 for each month.
(c) Mr. Narendra is liable to deduct TDS u/s 194-IB of 3,000 for each month 12,000 in the month of March 2022.
(d) Mr. Narendra is liable to deduct TDS u/s 194-IB of
Answer:(d) Mr. Narendra is liable to deduct TDS u/s 194-IB of 12,000 in the month of March 2022
14.4. What would be income chargeable to tax under the head “Income from Salaries” in the hands of Mr. Narendra for the A.Y. 2022-23:
(a) 26,27,202
(b) 26,77,202 27,08,852
(c)
(d) 26,58,852
Answer:(a) 26,27,202
14.5. What is the amount of short-term capital gain chargeable to tax in the hands of Mr. Narendra on sale of shares for the P.Y. 2021-22:
(a) 21,860 13,556
(b)
(c) 8,018 11,710
(d)
Answer:(d) 11,710
15. Mr. Akshaya Biyani celebrated his 26th birthday on 15th May 2021 and arranged a grand party at Radisson Blu hotel. On this occasion, he invited his friends, blood relatives and distant relatives to attend the party. The ceremony was very grand, the feast was also very spectacular. All the arrangements and decorations were absolutely wonderful. At the end of party, Mr. Akshaya was awarded by gifts and flower’s bouquet as infra:
| Gifts received from | Type of Gift | Remarks |
| Mother | One 22K Gold Chain | She purchased on the same day for 37,822 |
| Father | One 22K Gold Bracelet | He purchased on the same day for 56,075 |
| Wife | 4 Gold Rings | She purchased these rings on 15.5.2020 for 35,500 each. Fair market value on 15th May 2021 is 37,429 each. |
| Sister | Painting | This painting is made by her. Fair market value is 45,000. |
| Cousin brother (Father’s brother’s son) | One Gold chain | He purchased it on the same day for 18,200. |
| Closest cousins (mother’s sister’s sons/daughters) | I-20 Car | Value of 4,10,000 |
| Friends and other distant relatives | Cash | 1,51,000 |
Mr. Akshaya desires to set up a new manufacturing unit with his friend in partnership on 1.12.2021. For making investment in the firm, he sold following jewellery which he has received on his 26th birthday celebration as gifts:
- Mother’s gifted Gold Chain for 42,150
– Father’s gifted Gold Bracelet for 60,180
- Cousin brother’s gifted Gold Chain for 20,600
His wife gave him 1 lakh as a gift so that he could invest sufficient money in the unit.
On 1st December 2021, he invested 6,00,000 (including the amount received on sale of above gifts and amount received from his wife) and his friend invested 4,00,000 in the firm.
On 1st February 2022, his wife again gave him 1 lakh as a gift to invest such money in the firm and apart from that he invested 50,000 more from his individual savings. On this day, his friend also invested 1,00,000 in the firm.
Since the firm is a manufacturing unit and at initial stage, the firm requires sufficient fund so Mr. Akshaya sold his wife’s gifted Gold Rings for 40,250 each as on 31st March 2022 and he deployed the funds as partner’s capital in the firm on 01st April, 2022.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
15.1. What is the amount of capital gain taxable in the hand of Mr. Akshaya for P.Y. 2021-22?
(a) Short term capital gains 10,833
(b) Short term capital gains 29,833 22,117
(c) Short term capital gains
(d) No, capital gains is taxable in his hands, since he received the capital assets as gift.
Answer: (a) Short term capital gains 10,833
15.2. What is the gift amount not considered as income under section 56(2)(x) for P.Y. 2021-22?
(a) 8,98,613
(b) 3,06,813 9,16,813
(c)
(d) 7,16,813
Answer:(c) 9,16,813
15.3. What is the gift amount taxable in the hands of Mr. Akshaya for P.Y. 2021-22?
(a) 1,51,000 1,69,200
(b)
(c) 5,79,200 5,61,000
(d)
Answer: (a) 1,51,000
15.4. Is any amount taxable in the hands of Akshaya’s wife in respect of sale of jewellery by Mr. Akshaya, if yes, what shall be the taxable amount in her hands for P.Y. 2021-22?
(a) No
(b) Yes; 15,284
(c) Yes; 19,000 11,284
(d) Yes;
Answer: (c) Yes; 19,000
16. Mr. Rajesh gifted 15 lakhs to his wife, Raavi, on her birthday on 23rd February, 2021. Raavi lent 6,00,000 out of the gifted amount to Karuna on 1st April, 2021 for six months on which she received interest of 30,000. The said sum of 30,000 was invested in shares of a listed company on 18th October, 2021, which were sold for 66,000 on 25th March, 2022. Securities transactions tax was paid on purchase and sale of such shares. The balance amount of gift was invested on 1st April 2021, as capital by Raavi in her new business. She suffered loss of 22,000 in the business in Financial Year 2021- 22. Raavi is working with a Private company as sales executive at a salary of 62,000 p.m. She paid 3,500 p.m towards tuition fees for her daughter Riya studying in St. Thomas School, Mumbai.
Rajesh is working with an MNC on a monthly salary of 64,000. He has gifted 1,25,000 to Riya on her 13th Birthday. This amount is deposited as 2 years term deposits with SBI bank in her name. On which interest of 11,500 is earned during the previous year 2021-22. Both Mr. Rajesh and Mrs. Raavi opt to pay tax under section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
16.1. In whose hands, the interest income received from Karuna and interest on fixed deposits in the name of Riya would be included?
(a) both interest income to be included in the hands of Mr. Rajesh
(b) both interest income to be included in the hands of Mrs. Raavi
(c) interest income from Karuna to be included in the hands of Mrs. Raavi and interest on two years term deposits to be included in the hands of Mr. Rajesh.
(d) interest income from Karuna to be included in the hands of Mr. Rajesh and interest on two years term deposits to be included in the hands of Mrs. Raavi.
Answer: (d) interest income from Karuna to be included in the hands of Mr. Rajesh and interest on two years term deposits to be included in the hands of Mrs. Raavi.
16.2. In whose hand’s loss from business and capital gains would be included in Assessment Year 2022-23? Assume that capital invested in the business was entirely out of the funds gifted by her husband.
(a) Both loss from business and capital gains would be included in the hands of Mr. Rajesh
(b) Both loss from business and capital gains would be included in the hands of Mrs. Raavi
(c) Loss from business included in the hands of Mr. Rajesh and capital gains included in the hands of Mrs. Raavi
(d) Loss from business included in the hands of Mrs. Raavi and capital gains included in the hands of Mr. Rajesh
Answer: (c) Loss from business included in the hands of Mr. Rajesh and capital gains included in the hands of Mrs. Raavi
16.3. What would be the total income of Mrs. Raavi for the previous year 2021-22?
(a) 6,88,000 7,80,000
(b)
(c) 7,91,500 7,90,000
(d)
Answer: (c) 7,91,500
16.4. What would be total income of Mr. Rajesh for the previous year 2021-22?
(a) 7,76,000
(b) 8,09,500 8,08,000
(b)
(c) 7,98,000
Answer: (a) 7,76,000
17. Miss Hetal transferred to his husband, Mr. Hemant, a residential property worth 45 lakhs located in Nagpur without any consideration. The expected rent of such property is 5 lakhs. Municipal tax of 5,000 paid by Miss Hetal for this property during the previous year 2021-22. Miss Hetal has three residential properties in Mumbai. The expected rent from the 3 properties situated in Mumbai is 10 lakhs, 11 lakhs and 12 lakhs respectively. She purchased the properties out of her own funds. Municipal taxes due are 15,000, 20,000 and 25,000. The same have, however, not been paid this year in respect of the three properties. The expected rent is lesser than the standard rent in case of all the aforementioned properties. Miss Hetal does not have any income from any other source.
Miss Hetal’s father, aged 58 years had capital gains of 5 crores from sale of house property. He reinvested the proceeds from sale in another residential house of 4.98 crores and the remaining sale proceeds were deposited in his savings bank account. He has paid 1,50,000 towards LIC premium. He has no other source of income.
Miss Hetal’s grandfather is aged 81 years and has interest income on fixed deposits of 6 lakhs. He has no other income for the P.Y. 2021- 22. He has to fly to USA for his treatment of cancer on 31st July, 2022 and his return of income is not filed before his flying to USA.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
17.1. What is the amount of income liable to be taxed in the hands of Miss Hetal under the head “Income from House Property” for A.Y.2022-23?
(a) 7,00,000
(b) 10,46,500 10,50,000
(c)
(d) 13,76,500
Answer: (b) 10,46,500
17.2. What would be tax liability of Miss Hetal for the assessment year 2022-23? Compute in a manner so that her tax liability is minimum.
(a) 66,300 88,400
(b)
(c) 87,670 1,31,510
(d)
Answer:(c) 87,670
17.3. Is Hetal’s father required to furnish his return of income in India for the A.Y.2022-23?
(a) No, he is not required, since his income does not exceed basic exemption limit
(b) Yes, he is required to furnish return of income on or before 31st July,2022
(c) Yes, he is required to furnish return of income on or before 30th September, 2022
(d) Yes, he is required to furnish return of income on or before 31st October, 2022
Answer: (b) Yes, he is required to furnish return of income on or before 31st July,2022
17.4. Is Miss Hetal’s grandfather required to pay advance tax during the previous year 2021-22?
(a) No, he is not required to pay advance tax, since he is a senior citizen
(b) Yes, he is required to pay advance tax, since his tax liability exceeds 10,000
(c) No, he is not required to pay advance tax, since he is a senior citizen and he is not having any income under the head “Profits and gains from business or profession”
(d) Yes, he is required to pay advance tax, since his total income exceeds basic exemption limit of 5,00,000
Answer: (c) No, he is not required to pay advance tax, since he is a senior citizen and he is not having any income under the head “Profits and gains from business or profession”
18. Ms. Chanchal, aged 45, provides the following data of her gross receipts for the financial year 2020-21 and 2021-22. She is engaged in agency business along with providing services as tarot card reader. She is generally engaged in cash payments and cash receipts.
| F.Y. | Receipts from business | Receipts from profession | Total Gross Receipts |
| 2020-21 | 1,05,00,000 | 47,00,000 | 1,52,00,000 |
| 2021-22 | 98,00,000 | 49,00,000 | 1,47,00,000 |
She paid an amount of 12,00,000 to a contractor for polishing her old furniture in her self occupied residential house property on 12.04.2021. Further on 05.06.2021, she has taken services from renowned interior designer for the same residential house property for which she paid 2,50,000.
On 28.05.2021, she sold one commercial property for 50,00,000. The stamp duty value on the date of registration is 58,00,000. The value adopted for stamp duty was 54,00,000 on the date of agreement (part payment by account payee cheque was received on the date of agreement). It was purchased for 40,00,000 on 28.06.2019. (Cost Inflation Index for F.Y. 2021-22: 317, F.Y. 2019-20: 289).
The brought forward long-term capital loss from unlisted shares of F.Y. 2020-21 is 5,50,000.
During the year, Ms. Chanchal incurred a loss of 70,00,000 while trading in the agricultural commodity derivatives (no CTT paid).
Ms. Chanchal does not want to opt for the new tax regime available under section 115BAC for A.Y. 2022-23.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions: -
18.1. Is Ms. Chanchal liable to tax audit under the Income-tax Act, 1961 for the P.Y. 2021-22?
(a) Yes, as the total gross receipts exceeds 1,00,00,000
(b) No, as the gross receipts from business or profession are below the specified threshold limits.
(c) Yes, as the gross receipts from business exceeds 50,00,000 25,00,000
(d) Yes, as the gross receipts from profession exceeds
Answer:(b) No, as the gross receipts from business or profession are below the specified threshold limits.
18.2. With respect to payment made to contractor and to the interior designer during the P.Y. 2021-22, Ms. Chanchal consulted various persons and they have the following views –
(i) She is required to deduct tax at source under section 194C and 194J, since her turnover from business for the previous year 2020-21 exceeds 1,00,00,000
(ii) She is required to deduct tax at source under section 194M on both the payments
(iii) She is not required to deduct tax at source neither under section 194C nor under section 194J, since such amounts are paid for personal purposes
(iv) She is not required to deduct tax at source under section 194M, since payment to each individual does not exceed 50,00,000
Which views are correct?
(a) (iii) and (iv) views are correct
(b) (i) view is correct
(c) (ii) view is correct
(d) (i) and (iv) views are correct
Answer:(a) (iii) and (iv) views are correct
18.3. What is the amount and nature of Capital gain chargeable to tax in the hands of Ms. Chanchal?
(a) 14,00,000 and Short-term capital gain. 10,00,000 and Short-term capital gain.
(b)
(c) 11,00,000 and Long-term capital gain. 7,00,000 and Long-term capital gain.
(d)
Answer:(b) 10,00,000 and Short-term capital gain.
18.4. What is the amount of losses which can be carried forward to A.Y. 2023-24, assuming that business income is 45,00,000 and income from profession is 25,00,000 for the P.Y. 2021-22?
(a) 5,50,000 under section 74
(b) 70,00,000 under section 73 5,50,000 under section 74 and
(c) No loss is required to be carried forward, since brought forward loss and current year loss are set-off against current year’s income
(d) 70,00,000 under section 73
Answer:(a) 5,50,000 under section 74
19. Mr. Abhishek Seth, aged 42 years, is working as a CEO of Soil Limited. He provides you the following information for preparation and filing of his income-tax return for the year ended 31st March 2022:
• Salary, allowances and perquisites from Soil Limited – 1,35,00,000
• Dividend from ABC Ltd. which was declared in February, 2021 and received in April, 2021 - 4,55,000
• Dividend from PRQ Ltd. declared and received in July, 2021 – 5,90,000 (Gross)
• Interest income on saving bank account in SBI – 24,530
• Long term capital gains on transfer of residential house in Mumbai on 15th December, 2021 – 1,73,540
• Short term capital gain on transfer of listed equity shares (STT paid both at the time of transfer and acquisition) of Ind Ltd. - 73,00,000
He also furnished the following details of investment/ payments made by him during the P.Y. 2021-22:
(a) Three-year post office time deposit – 25,000
(b) Contribution to PPF - 35,000
(c) Tuition fees of three children in Bharti Sr. Sec. School in Delhi – 20,000 per annum per children
(d) Subscription to NHAI redeemable bonds after 5 years on 16th March, 2022 - 2,00,000. Further, his son Mr. Dhaval, aged 15 years, has also earned the following income:
(a) Income from a quiz competition – 25,000
(b) Interest on bank fixed deposit - 9,500
Assuming that the tax has been deducted on time, wherever applicable. Mr. Abhishek does not want to opt for the provision of section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:-
19.1. What is the quantum of income of Mr. Dhaval which is to be clubbed with the income of Mr. Abhishek, if any, assuming that income of Mr. Abhishek is greater than the income of his spouse?
(a) 34,500 8,000
(b)
(c) 33,000 9,500
(d)
Answer:(b) 8,000
19.2. What is the gross total income of Mr. Abhishek for A.Y. 2022-23?
(a) 2,13,72,530
(b) 2,14,22,530 2,13,64,530
(c)
(d) 2,15,46,070
Answer:(a) 2,13,72,530
19.3. What is the amount of deduction allowable under section 80C to Mr. Abhishek?
(a) 1,00,000 1,20,000
(b)
(c) 95,000 75,000
(d)
Answer:(d) 75,000
19.4. What shall be the tax liability of Mr. Abhishek for A.Y. 2022-23?
(a) 62,67,350
(b) 61,04,100 59,60,050
(c)
(d) 61,45,610
Answer:(b) 61,04,100
20. M/s Abhinav & sons, a sole proprietorship is engaged in the business of manufacturing pharmaceutical products and it had started its business on 20th June 2017. Tax head of M/s Abhinav & sons furnishes you the following particulars for the year ended 31 March 2022:
• Income under the head PGBP – 5,75,22,750
• Interest on fixed deposits (Gross) - 12,50,000 [The same was received on 30th April, 2021 after deduction of tax at source]
• Donation to PM Cares Fund – 2,50,000
• Turnover during the previous year 2021-22 - 15,50,00,000
M/s Abhinav & sons does not want to opt for the provisions of section 115BAC. It has employed total 150 employees during the P.Y. 2020-21 with an annual increment of 10% in their monthly emoluments. Details of the same are as under:
| Date of joining | No. of employees | Employee category | Monthly emoluments per employee | Participate in recognised provident fund |
| 1.5.2020 | 50 | Regular | 26,500 | Yes |
| 1.6.2020 | 65 | Casual | 23,000 | No |
| 1.7.2020 | 35 | Regular | 22,500 | Yes |
It has employed further 50 employees during the P.Y. 2021-22. Details of the same are as under:
| Date of joining | No. of employees | Employee category | Monthly emoluments per employee | Participate in recognised provident fund |
| 1.4.2021 | 20 | Regular | 21,000 | Yes |
| 1.8.2022 | 30 | Regular | 26,000 | Yes |
Emoluments to all the employees are being paid by way of account payee cheque only. No employees have left the job during P.Y. 2020-21 as well as during P.Y. 2021-22.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
20.1. What is the due date of filing of return of income of M/s Abhinav & sons for A.Y. 2022-23?
(a) 31st July, 2022
(b) 30th November, 2022
(c) 30th September, 2022
(d) 31st October, 2022
Answer: (d) 31st October, 2022
20.2. What shall be the amount of deduction available to M/s Abhinav & sons under section 80JJAA for A.Y. 2022-23?
(a) 36,38,250 15,12,000
(b)
(c) 46,30,500 33,84,000
(d)
Answer:(a) 36,38,250
20.3. What would be the total income of M/s Abhinav & sons for the A.Y. 2022-23?
(a) 5,70,10,750
(b) 5,48,84,500 5,57,60,750
(c)
(d) 5,52,64,250
Answer: (b) 5,48,84,500
20.4. What would be the tax payable of M/s Abhinav & sons for the A.Y. 2022-23?
(a) 2,47,47,810 1,94,68,310
(b)
(c) 2,31,92,680 2,30,67,680
(d)
Answer: (d) 2,30,67,680
21. Mr. X wanted to file his return of income for the previous year 2021- 22. He required assistance for which he has approached you. He has shared the following details relevant to the P.Y. 2021-22.
Mr. X owned a house property in Mumbai and the same was rented out for 70,000 p.m. He claims that this was the only income which he earned during the P.Y. 2021-22. However, when you had sought for his bank statement, you observed the following information additionally.
There is a credit for 23,975 towards income-tax refund which includes 5,775 towards interest on income-tax refund. On 15th August, 2021, the bank statement showed a credit of 55,000 which he claimed to have received as a gift from his grandchildren on his 60th birthday. On further assessment you were able to understand that Mr. X and his wife had travelled to Australia during the P.Y. 2021-22 to spend some time with their daughter, who is staying in Australia, since her marriage. On scrutiny of their passport and relevant documents you conclude that they had left India on 27th September, 2021 and retuned on 30th March, 2022. During the 4 years preceding previous year 2021-22, both had stayed in India for 320 days. Prior to that, they had been staying only in India.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:
21.1. What is the residential status of Mr. X for the P.Y. 2021-22?
(a) Resident and ordinarily resident
(b) Resident but not ordinarily resident
(c) Non-resident
(d) Deemed resident but not ordinarily resident
Answer:(a) Resident and ordinarily resident
21.2. Mr. X requests you to compute his tax liability for the A.Y. 2022-23 in a manner such that his tax liability is minimum. Accordingly, his tax liability would be
(a) 22,750
(b) 29,910 32,510
(c)
(d) 20,150
Answer:(a) 22,750
21.3. In continuation to question 21.2, what would be tax liability of Mr. X for the A.Y. 2022-23, if he had paid 1,00,000 towards life insurance premium for self?
(a) 20,150
(b) 29,910 10,400
(c)
(d) Nil
Answer:(d) Nil
21.4. Mr. X had given the house property at Mumbai on rent to Mr. Y, a salaried employee. Is there any requirement to deduct tax at source on such rent by Mr. Y, if yes, what would be the amount
of TDS to be deducted?
(a) No, there is no requirement to deduct tax at source, since Mr. Y is a salaried employee
(b) Yes, Mr. Y is required to deduct tax at source of 42,000 31,500
(c) Yes, Mr. Y is required to deduct tax at source of
(d) No, there is no requirement to deduct tax at source, since Mr. X is a non-resident
Answer:(b) Yes, Mr. Y is required to deduct tax at source of 42,000
21.5. Which of the following statements is correct with respect to advance tax liability of Mr. X for P.Y. 2021-22?
(a) Advance tax liability shall not arise to Mr. X since he is a non-resident
(b) Advance tax liability shall not arise, since Mr. X is a resident senior citizen and he has no income chargeable under the head “Profits and gains of business or profession
(c) Advance tax liability shall arise, since he is a non-resident
(d) Advance tax liability shall arise, since his tax liability is not less than 10,000
Answer:(b) Advance tax liability shall not arise, since Mr. X is a resident senior citizen and he has no income chargeable under the head “Profits and gains of business or profession
22. Mr. Zukaro, aged 42 years, a Singapore citizen, visits India for business purpose on a regular basis. He was in India for the first time in the year 2017-18 for 270 days, in the year 2018-19 for 190 days, in the year 2019-20 for 145 days and in the year 2020-21 for 155 days. In the current financial year 2021-22, he along with his family had come to India on 10th August, 2021 for a pleasure trip. His family returned to Singapore on 31st August, 2021, however he stayed back to complete some business commitments and then returned to Singapore on 17th November, 2021.
Mr. Zukaro owns a manufacturing unit in Singapore. He basically comes to India for procurement of raw material. He has appointed Mr. Manish, as a dependent agent in Mumbai, who procures raw material from India and then exports it to Singapore to his manufacturing unit and then sells
the finished product there. An income of 8,75,000 was received in Singapore out of this activity in the P.Y. 2021-22. He had purchased a residential property for 17,50,000 in Indore in April 2018. On getting an attractive deal in November, 2021, he sold the property for 26,25,000. He also paid brokerage @2% on sales consideration.
Mr. Zukaro had also purchased an agricultural land in India and leased it out to a tenant. The tenant shares a portion of his agricultural income with Mr. Zukaro as a consideration for rent of land every year. The share in the income from the land for the previous year 2021-22 was 6,50,000.
Cost inflation index (CII) for the Financial Year (F.Y.) 2018-19 is 280; F.Y. 2021-22: 317
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:-
22.1. What is the Residential Status of Mr. Zukaro for the assessment year 2022-23?
(a) Resident and ordinarily resident
(b) Resident but not ordinarily resident
(c) Non-resident
(d) Deemed resident but not ordinarily resident
Answer:(a) Resident and ordinarily resident
22.2. Assume for the purpose of answering this question only, that Mr. Zukaro is a non-resident in India for the P.Y. 2021-22, would income of 8,75,000 earned though activity of procuring raw material for manufacturing unit in Singapore be taxable in India?
(a) Yes, since it is deemed to accrue or arise in India through a business connection in India
(b) No, as it is confined to purchase of goods in India for further export and hence not an income deemed to accrue or arise in India
(c) Yes, as business is controlled from India
(d) No, as income is received outside India
Answer:(b) No, as it is confined to purchase of goods in India for further export and hence not an income deemed to accrue or arise in India
22.3. Would income arising from transfer of residential property in Indore is chargeable to tax in India in the hands of Mr. Zukaro? If yes, compute the amount of capital gains chargeable to tax.
(a) Yes, long term capital gain of 5,91,250 is chargeable to tax, since income is deemed to accrue or arise in India and hence taxable in his hands though he is non-resident in India
(b) Yes, long term capital gain of 6,43,750 is chargeable to tax, since he is resident in India
(c) Yes, long term capital gain of 5,91,250 is chargeable to tax, since he is resident in India
(d) Yes, long term capital gain of 6,43,750 is chargeable to tax, since income is deemed to accrue or arise in India and hence taxable in his hands though he is nonresident in India
Answer:(c) Yes, long term capital gain of 5,91,250 is chargeable tax, since he is resident in India
22.4. Would income earned from agricultural land given on lease is taxable in the hands of Mr. Zukaro?
(a) No, such income is exempt, since it is agricultural income
(b) Yes, such income is taxable as income from house property, since land is given on lease
(c) Yes, such income is taxable as income from other sources, since land is given on lease
(d) Yes, such income is taxable since he is non-resident even though it is an agricultural income.
Answer:(a) No, such income is exempt, since it is agricultural income
22.5. What is the tax liability of Mr. Zukaro for A.Y. 2022-23 assuming he does not opt to pay tax under section 115BAC?
(a) 2,13,980 4,03,780
(b)
(c) 2,95,750 3,07,580
(d)
Answer:(d) 3,07,580
23. Mr. Rajan, aged 62 years, an Indian citizen, resides in Delhi. His wife Sheetal and daughter Riya also reside with him. Riya, aged 16 years, is studying in 12th Standard in DAV school at New Delhi. Mr. Rajan left for employment to the United States of America on 15th September, 2021 but his family did not accompany him. He returned to India on 25th March 2022. Mr. Rajan had gone outside India for the first time in his life. During April, 2021 to September, 2021, he was working with a multinational company in Delhi. He earned salary of 14,00,000 from his job in India. He paid Tuition Fee of 1,80,000 for Riya’s education in DAV school.
Apart from that, Mr. Rajan also earned professional income of 60,00,000 (Gross Receipts – 90 lakhs) from India. During the year, he also earned interest from his Indian savings bank account to the tune of 12,000 and interest from fixed deposits with nationalized banks of 45,000. Mr. Rajan also earned a salary income equivalent to 6,00,000 from USA for his job, on which no tax is paid or payable in USA, which was deposited in his bank account in USA and later on remitted to India. Mr. Rajan decides not to opt to pay tax under section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:-
23.1 What is the residential status of Mr. Rajan for the previous year 2021-22?
(a) Resident and ordinarily in India
(b) Resident but not ordinarily resident in India
(c) Non-resident in India
(d) Deemed resident but not ordinarily resident in India
Answer:(d) Deemed resident but not ordinarily resident in India
23.2 What would be the income chargeable to tax under the head “Salaries” in the hands of Mr. Rajan in India for F.Y. 2021-22?
(a) 20,00,000 19,50,000
(b)
(c) 13,50,000 19,60,000
(d)
Answer:(c) 13,50,000
23.3 How much deduction is available under Chapter VI-A from the Gross Total Income of Mr. Rajan?
(a) 2,30,000
(b) 1,95,000 1,60,000
(c)
(d) 2,00,000
Answer:(d) 2,00,000
23.4 What shall be the tax liability of Mr. Rajan for the A.Y. 2022-23?
(a) 22,69,810 22,58,940
(b)
(c) 22,56,080 22,72,670
(d)
Answer:(c) 22,56,080
23.5 What would be the due date for filing income-tax return of Mr. Rajan for the P.Y. 2021-22?
(a) 31st July, 2022
(b) 31st October, 2022
(c) 30th November, 2022
(d) 31st March, 2023
Answer:(b) 31st October, 2022
24. Mr. A (aged 52 years), is a CEO of XYZ Enterprise Limited. During the previous year 2021-22, he earned salary of 1,65,00,000 and longterm capital gain on sale of listed equity shares (STT paid) amounting to 1,06,500. He earned interest of 4,82,778 on saving bank account.
Further, he has provided the following other information for filing his return of income:
He does not receive house rent allowance from his employer. Mr. A took a loan from State Bank of India on 27th October 2019 for repairing his house (self-occupied) at Delhi and paid interest on such borrowings of 80,000 and 1,50,000 towards principal amount during the previous year 2021-22.
Mr. A has made the following payments towards medical insurance premium for health policies taken for his family members:
Medical premium for his brother: 13,500 (by cheque)
Medical premium for his parents: 17,670 (by cheque)
Medical premium for self and his wife: 21,000 (by cheque).
He also incurred 6,400 towards preventive health check-up of his wife in cash. He deposited 1,00,000 towards PPF.
He also deposited 50,000 and 2,50,000 towards Tier I and Tier II NPS A/c,
respectively.
He has paid 5,30,000 as advance tax. His employer has deducted tax at source of 51,89,000. He is of the opinion that the balance amount of tax, if any, he will pay on 27th July 2022 (i.e. before the due date for filing of return of income).
Mr. A does not want to opt for section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:-
24.1. What would be the amount of deduction available to Mr. A under Chapter VI-A for the assessment year 2022-23?
(a) 2,04,070
(b) 2,42,670 2,52,670
(c)
(d) 2,02,670
Answer:(d) 2,02,670
24.2. Assume that, for the purpose of answering this question alone, that Mr. A pays rent of 65,000 per month for his rented house at Mumbai to Mr. C, a resident individual, is Mr. A liable to deduct TDS on such rent. If so, what would be the rate and amount of TDS?
(a) Yes, Mr. A is liable to deduct TDS @ 3.75% amounting to 2,438 every month i.e., at the time of payment of such rent
(b) Yes, Mr. A is liable to deduct TDS @5% amounting to 3,250 every month i.e., at the time of payment of such rent
(c) Yes, Mr. A is liable to deduct TDS @5% amounting to 39,000 in the month of March 2022
(d) No, Mr. A is not liable to deduct TDS, since he is a salaried person
Answer:(c) Yes, Mr. A is liable to deduct TDS @5% amounting to 39,000 in the month of March 2022
24.3. What would be the amount of net tax payable for the assessment year 2022-23 in the hands of Mr. A?
(a) 78,230
(b) 60,290 49,530
(c)
(d) 67,470
Answer:(c) 49,530
24.4. What would be the amount of interest chargeable under section 234B on account of short payment of advance tax?
(a) 1,980 3,130
(b) Nil
(c)
(d) 2,410
Answer:(b) Nil
25. Mr. Sarthak, aged 38 years, working in Nobita Pvt. Limited as Senior Manager- Finance. His yearly pay slip for the financial year 2021-22 is as follows:
| Earnings | Amount | Deduction | Amount |
| Basic Pay | 6,34,068 | Employee’s contribution to Provident Fund | 1,14,132 |
| Dearness allowance | 1,26,814 | Profession tax | 2,400 |
| HRA | 3,17,040 | Income-tax | 2,32,830 |
| Transport Allowance | 19,200 | Net Pay | 13,03,848 |
| Personal Allowance | 5,09,088 | ||
| Children Education Allowance for two children | 12,000 | ||
| Medical Allowance | 15,000 | ||
| Bonus | 20,000 | ||
| Total Earnings | 16,53,210 | 16,53,210 |
(i) His employer also contributes equivalent amount of contribution towards provident fund.
(ii) Dearness allowance forms part of retirement benefits.
(iii) He has intimated to his company that he would opt for 115BAC for the A.Y. 2022-23. Consequently, he has not submitted any investment proof to company.
(iv) He has paid 55,212 towards mediclaim premium for his parents (aged above 65 years) by account payee cheque.
(v) He has purchased a house of 38,00,000 during the year 2014 and taken a loan of 28,00,000 from HDFC to purchase this house. He is paying EMI of 22,835. Possession of house received on 01/04/2021. He himself is occupying this house. Total principal and interest paid for full year is 55,037 and 2,18,983, respectively, as per interest certificate received from bank for F.Y. 2021-22.
(vi) He has 3 children, studying in Sandalwood International School. The following are the components of school fees paid for the Academic Session 2021-22:
| School Fees Component | Child 1 | Child 2 | Child 3 | Total |
| Tuition fees | 30,000 | 37,000 | 40,000 | 1,07,000 |
| Admission fees | 20,000 | - | 20,000 | |
| Books, stationery and uniform | 8,000 | 12,000 | 15,000 | 35,000 |
| Infrastructure Fund | 25,000 | 30,000 | 35,000 | 90,000 |
| Commute cost | 8,000 | 8,000 | 8,000 | 24,000 |
| Activity Fees | 6,000 | 7,000 | 8,000 | 21,000 |
(vii) He has invested 5000 in HDFC ULIP and taken a LIC policy for his wife for 10,000.
(viii) He has invested 12,500 and 25,000 towards NPS Tier I A/c and Tier II A/c, respectively.
(ix) He has also donated 50,000 in PM CARES fund.
(x) He has invested 40,000 in listed equity shares of Shaktimaan Power Solution Limited on 01/03/2021 at 200 per share and sells 100 shares at 350 per share on 01/11/2021. STT is paid both at the time of sale and purchase of these shares.
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:-
25.1. What would be the amount of income chargeable to tax under the head “Salaries” in the hands of Mr. Sarthak for the A.Y. 2022-23?
(a) 16,53,210
(b) 16,21,236 16,76,036
(c)
(d) 16,71,236
Answer:(c) 16,76,036
25.2. Whether the tax deducted at source by Nobita Pvt Ltd. on the salary paid to Mr. Sarthak based on the intimation submitted by him, is correct?
(a) Yes, the amount of 2,32,830 deducted as tax at source is correct. 2,49,920.
(b) No, the correct amount of tax to be deducted at source is
(c) No, the correct amount of tax to be deducted at source is 2,42,800. 2,41,300.
(d) No, the correct amount of tax to be deducted at source is
Answer:(b) No, the correct amount of tax to be deducted at source is 2,49,920.
25.3. What would be the total income (without rounding off) of Mr. Sarthak for the A.Y. 2022-23, assume that he does not opt for section 115BAC?
(a) 11,73,736
(b) 11,76,699 11,61,699
(c)
(d) 11,58,736
Answer:(a) 11,73,736
25.4. What would be tax liability of Mr. Sarthak for the A.Y. 2022-23, if he does not opt for section 115BAC?
(a) 1,66,530 1,68,870
(b)
(c) 1,71,210 1,67,450
(d)
Answer:(b) 1,68,870
25.5. Assuming for the purpose of answering this question only that no contribution is made by Mr. Sarthak and his employer towards provident fund, what amount of deduction is available to Mr. Sarthak under Chapter VI-A for the previous year 2022-23, if he does not opt for section 115BAC?
(a) 2,62,500
(b) 2,59,537 2,50,000
(c)
(d) 2,04,500
Answer: (b) 2,59,537
26. Mr. Animesh, an Indian citizen, aged 61 years, has set-up his business in Canada and is residing in Canada since 2009. He owns a house property in Canada, half of which is used by him for his residence and half is given on rent (converted into INR is 12,00,000 p.a.).
He purchased a flat in Delhi on 13.10.2019 for 42,00,000. The stamp duty value of the flat was 35,00,000. He has taken a loan from Canara Bank in India of 34,00,000 for purchase of this flat. The interest on such loan for the F.Y. 2021-22 was 3,14,000 and principal repayment was 80,000. Mr. Animesh has given this flat on monthly rent of 32,500 since April, 2021. The annual property tax of Delhi flat is 40,000 which is paid by Mr. Animesh, whenever he comes to India to meet his parents. Mr. Animesh visited India for 124 days during the previous year 2021-22. Before that he visited India in total for 366 days during the period 1.4.2017 to 31.3.2021.
He had a house in Ranchi which was sold in May 2018. In respect of this house, he received arrears of rent of 2,96,000 in February 2022 (not taxed earlier).
He also derived some other incomes during the F.Y. 2021-22 which are as follows:
(i) Profit from business in Canada 2,75,000
(ii) Interest on bonds of a Canadian Co. 6,20,000 out of which 50% was received in India.
(iii) Income from Apple Orchid in Nepal given on contract and the yearly contract fee of 5,00,000 for F.Y. 2021-22, was received by Animesh in Nepal.
Mr. Animesh has sold 10,000 listed shares @ 480 per share of A Ltd., an Indian company, on 15.9.2021, which he acquired on 05-04-2017 @ 100 per share. STT was paid both at the time of acquisition as well as at the time of transfer of such shares.
On 31-01-2018, the shares of A Ltd. were traded on a recognized stock exchange as under:
Highest price – 300 per share 290 per share
Average price -
Lowest price – 280 per share
Based on the facts of the case scenario given above, choose the most appropriate answer to the following questions:-
26.1. What would be the residential status of Mr. Animesh for the A.Y. 2022-23?
(a) Resident and ordinarily resident in India
(b) Resident but not ordinarily resident in India
(c) Non-resident
(d) Deemed resident
Answer:(b) Resident but not ordinarily resident in India
26.2. What would be amount of income taxable under the head “Income from house property” in the hands of Mr. Animesh for the A.Y. 2022-23?
(a) 2,52,200
(b) 1,38,200 9,78,200
(c)
(d) 10,92,200
Answer:(b) 1,38,200
26.3. What amount of capital gain would arise in the hands of Mr. Animesh on transfer of shares of A Ltd?
(a) 18,00,000 19,00,000
(b)
(c) 20,00,000 38,00,000
(d)
Answer:(a) 18,00,000
26.4. What would be total income of Mr. Animesh for the A.Y. 2022-23, if he does not opt to pay tax u/s 115BAC?
(a) 22,82,200
(b) 22,68,200 22,48,200
(c)
(d) 21,68,200
Answer:(d) 21,68,200
26.5. What would be the tax liability (computed in the manner so as to minimise his tax liability) of Mr. Animesh for the A.Y. 2022-23?
(a) 1,82,950 1,87,110
(b)
(c) 1,80,350 1,84,510
(d)
Answer:(c) 1,80,350
27. Mr. Kashyap, a manufacturer, has disclosed a net profit of 40 lakhs for the year ended 31st March, 2022. He claimed depreciation of 12,20,000 in his books of account. Expenditure in profit and loss account includes interest payable to Mr. Raj, a resident, without deduction of tax at source 1,50,000. Such tax was, however, deducted on 15.4.2022 and remitted on 17.5.2022.
Mr. Kashyap is engaged in in-house scientific research and development. He incurred expenditure of 1,50,000 on purchase of research equipments and 1,00,000 as remuneration paid to scientists. The said sums are also debited in the profit and loss account.
Mr. Kashyap purchased a new plant and machinery for 45,00,000 on 2nd August, 2021 and put the same to use on 1st November, 2021. For this purpose, he borrowed 25,00,000 on 1st August, 2021 and paid interest@10% p.a. which is debited in profit and loss account. Mr. Kashyap also purchased a motor car for 8,00,000 on 2nd October, 2019, which was put to use on the same date. Written down value of block of plant and machinery (15%) as on 1st April, 2021 is 95,00,000. Turnover for the P.Y. 2020-21 and P.Y. 2021-22 is 2.5 crores and 3 crores, respectively.
Based on the above information, choose the most appropriate answer to the following Multiple Choice Questions –
27.1. What would be the depreciation allowable u/s 32 in respect of block of plant and machinery (15%) and motor car for A.Y.2022-23? Assume that motor car is the only asset in the block.
(a) 22,23,438 and 1,17,600, respectively
(b) 17,67,188 and 86,700, respectively
(c) 22,12,500 and 86,700, respectively
(d) 22,23,438 and 2,40,000, respectively
Answer:(a) 22,23,438 and 1,17,600, respectively
27.2. What is the amount of disallowance, if any, attracted for nondeduction of tax at source on interest payable to Mr. Raj during the P.Y.2021-22?
(a) Nil, since the tax was deducted and deposited on or before the due date of filing of return of income
(b) 30,000 45,000
(c)
(d) 1,50,000
Answer:(c) 45,000
27.3. What would be the income under the head “Profits and gains of business and profession” of Mr. Kashyap for A.Y.2022-23 under the normal provisions of the Act?
(a) 29,86,462 29,23,962
(b)
(c) 28,01,562 34,11,112
(d)
Answer:(a) 29,86,462
27.4. What would be the income chargeable under the head “Profits and gains of business and profession” of Mr. Kashyap for A.Y.2022-23, if he opts for section 115BAC?
(a) 29,65,800
(b) 32,15,800 34,42,712
(c)
(d) 36,92,712
Answer:(c) 34,42,712
27.5. What would be the tax liability of Mr. Kashyap for A.Y. 2022-23 in a manner most beneficial to him?
(a) 7,30,330 7,36,780
(b)
(c) 7,17,280 6,79,090
(d)
Answer:(b) 7,36,780
28. Mr. Akash had bought a residential house worth 2.5 crores at South Extension, Delhi in 2019 and let out the house on rent to Mr. Riyaz. The property was funded through loan from PNB. The interest due for F.Y.2021-22 to PNB is 25 lakhs, out of which he paid only 20 lakhs during the year. Mr. Akash then took a loan of 1.5 crores from SBI on 1.7.2021 for construction of first floor in that house for self occupation. The construction is in progress as on 31.3.2022. Mr. Akash started repaying EMIs due to SBI. During the P.Y. 2021-22, he repaid principal amount of 25 lakhs and 5 lakhs to PNB and SBI, respectively. He also paid interest of 8 lakhs to SBI out of 10 lakhs, being interest due for the period from 1.7.2021 to 31.3.2022.
Mr. Akash owns another house in Haryana. He transferred that house to his minor daughter Miss Sia on her birthday as her birthday gift. Miss Sia gave the said house to the local Panchayat from September, 2021 at a rent of 5,000 per month. Mrs. Akash’s total income for A.Y.2022-23 is higher than that of Mr. Akash. This is the first year when Miss Sia has any source of income.
Mr. Akash bought electric vehicle worth 50 lakhs on loan from BSM Bank which it sanctioned on 1.4.2021. BSM Bank charged interest of 7 lakhs on electric vehicle for the P.Y.2021-22. Mr. Akash has also taken loan from ABC Bank for his daughter’s higher education. He paid 50,000 as interest to ABC Bank. He also paid Mediclaim of 20,000 to New India Assurance Scheme for insuring his health via cheque.
Mrs. Akash owns a shop of 200 square feet area in Gurgaon. She rented it to Mr. Vishal from October, 2021 at 60,000 per month, who gave her an interest-free deposit of 1,50,000.
From the information given above, choose the most appropriate answer to the following questions –
28.1. What is the amount of interest allowable as deduction u/s 24(b) to Mr. Akash for A.Y.2022-23?
(a) 2 lakhs 25 lakhs
(b)
(c) 28 lakhs 35 lakhs
(d)
Answer:(b) 25 lakhs
28.2. What is the amount of deduction permissible to Mr. Akash under Chapter VI-A of Income-tax Act, 1961 for A.Y. 2022-23?
(a) 1,70,000
(b) 2,20,000 3,70,000
(c)
(d) 9,20,000
Answer:(c) 3,70,000
28.3. Is notional interest on interest free deposit received in respect of shop let out on rent chargeable to income-tax? If so, under which head of income would the same be taxable?
(a) No, it is not chargeable to tax
(b) Yes, it is chargeable to tax as profits and gains from business, since a commercial property has been let out.
(c) Yes, it is chargeable to tax as “Income from Other Sources”, being the residuary head of income.
(d) Yes, it is chargeable to tax as “Income from house property”, since section 22 does not distinguish between a residential house property and commercial house property.
Answer:(a) No, it is not chargeable to tax
28.4. In whose hands would Sia’s rental income from house property at Haryana be taxable and how much income would be taxable?
(a) In Sia’s hands; 24,500 24,500
(b) In Mr. Akash’s hands;
(c) In Mrs. Akash’s hands; 23,000
(d) It would change every year depending on the parent whose income is higher in that year.
Answer:(b) In Mr. Akash’s hands; 24,500
29. Mr. Alishaan is engaged in the business of clothes trading since 2015 and Mrs. Alishaan is a house wife. Their minor daughter’s marriage is fixed in October, 2021. Mr. Alishaan planned destination wedding in Udaipur for his minor daughter. For the wedding, he withdrew 40,00,000 cash in the month of August, 2021 and 65,00,000 cash in the month of September, 2021 from Aapka Paisa Bank.
He booked 30 rooms for 5 days for the accommodation of his relatives in Raho Hotel and paid 40,000 in cash as advance and balance by account payee cheque. He took the catering services of Daana Caterers, a sole proprietor, for the wedding for which he paid 10,20,000 on 15.9.2021. On her wedding, he gifted his daughter a house property, purchased from RK Builders on 10.9.2021 by account payee cheque for 15,00,000. The stamp duty value of the property on 10.9.2021 is 16,00,000 and on the date of transfer to minor daughter is 20,00,000.
Mr. Alishaan paid 45,000 in cash and balance in cheque to travel agent for the return ticket of some of his relatives to US. He regularly files his return of income on time but he failed to file his return of income of P.Y. 2019-20. His daughter let out the house property received from him at a monthly rent of 40,000 from 01.11.2021.
Based on the above information, choose the most appropriate option of the following Multiple Choice Questions (MCQs):-
29.1 The amount of tax to be deducted by Aapka Paisa Bank on cash withdrawals by Mr. Alishaan is -
(a) 10,000
(b) 25,000 1,85,000
(c)
(d) 4,25,000
Answer:(a) 10,000
29.2. The amount of tax to be deducted by Mr. Alishaan on payment made to Daana Caterers is –
(a) 1,200 900
(b)
(c) 150
(d) Nil
Answer:(d) Nil
29.3. For which of the following transactions, Mr. Alishaan is required to quote his PAN?
(a) Purchase of immovable property from RK Builders
(b) Payment to Raho Hotel
(c) Payment to Travel agent
(d) All of the above
Answer:(a) Purchase of immovable property from RK Builders
29.4 What shall be the amount taxable and in whose hands with respect to purchase of immovable property by Mr. Alishaan from RK Builders and gift of the same to his daughter?
(a) 1,00,000 in the hands of Mr. Alishaan, 1,00,000 in the hands of RK builders and 20,00,000 in the hands of minor daughter
(b) Nothing is taxable in the hands of Mr. Alishaan, RK Builders and minor daughter
(c) 1,00,000 in the hands of Mr. Alishaan, 1,00,000 in the hands of RK builders and nothing is taxable in the hands of minor daughter
(d) Nothing is taxable in the hands of Mr. Alishaan and RK Builders but 20,00,000 is taxable in the hands of minor daughter
Answer:(b) Nothing is taxable in the hands of Mr. Alishaan, RK Builders and minor daughter
29.5. What shall be the amount taxable under “Income from House property” with respect to let out of house property by daughter of Mr. Alishaan and in whose hands it will taxable?
(a) 1,40,000 taxable in the hands of daughter of Mr. Alishaan
(b) 1,40,000 taxable in the hands of husband of daughter of Mr. Alishaan
(c) 1,38,500 taxable in the hands of Mr. Alishaan
(d) 1,40,000 taxable in the hands of Mr. Alishaan
Answer:(c) 1,38,500 taxable in the hands of Mr. Alishaan
30. Mr. Ram, an Indian resident, purchased a residential house property at Gwalior on 28.05.1999 for 28.5 lakhs. The fair market value and the stamp duty value of such house property as on 1.4.2001 was 33.5 lakhs and 32.4 lakhs, respectively. On 05.02.2012, Mr. Ram entered into an agreement with Mr. Byomkesh for sale of such property for 74 lakhs and received an amount of 3.9 lakhs as advance. However, as Mr. Byomkesh did not pay the balance amount, Mr. Ram
forfeited the advance.
On 15.04.2021, Mr. Ram sold the house property for 2.10 crores, when the stamp duty value of the property was 2.33 crores. Further, he purchased two residential house properties at Delhi and Mumbai for 54 lakhs each on 28.08.2021.
On 28.02.2022, Mr. Ram signed agreement to sale the house property at Mumbai to his nephew, Mr. Vaibhav, for 58 lakhs, from whom 19,000 was received in cash on 15.01.2022 as advance for signing the agreement to sale. Sale deed was registered on 30.03.2022 on receipt of the balance amount through account payee cheque from Mr. Vaibhav. The stamp duty value of house property at Mumbai on 28.02.2022 and 30.03.2022 was 61 lakhs and 64 lakhs, respectively.
Cost inflation index –
P.Y. 2021-22: 317; P.Y. 2011-12: 184; P.Y. 2001-02: 100
Based on the above information, choose the most appropriate option of the following Multiple Choice Questions (MCQs):-
30.1 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) 1,06,19,500 1,02,70,800
(b)
(c) 90,34,500 93,83,200
(d)
Answer:(c) 90,34,500
30.2. The amount of capital gains taxable for A.Y. 2022-23 in the hands of Mr. Ram for sale of residential house property at Gwalior is -
(a) 34,65,500
(b) 88,65,500 31,16,800
(c)
(d) 18,80,500
Answer:(a) 34,65,500
30.3. The amount of capital gains taxable for A.Y. 2022-23 in the hands of Mr. Ram for sale of residential house property at Mumbai is –
(a) 7 lakhs 10 lakhs
(b)
(c) 61 lakhs 64 lakhs
(d)
Answer:(d) 64 lakhs
30.4. The amount taxable under section 56(2)(x) in the hands of Mr. Vaibhav, if any, is -
(a) 3 lakhs
(b) Nil
(c) 6 lakhs 5.50 lakhs
(d)
Answer:(b) Nil
30.5. What shall be the total TDS available with Mr. Ram with respect to sale of two house properties during P.Y. 2021-22 assuming the tax was fully deducted by both the buyers at the time of payment?
(a) 2,01,000 2,53,500
(b)
(c) 2,68,000 2,81,000
(d)
Answer:(c) ` 2,68,000
