Proper solution of both the questions Q4.a) From the profit and loss account of A (age 34 years) for the year ending March 31,2021,ascertain his income chargeable under profit and gain of business and profession for theassessment year 2021-22Rs.Rs.General ExpenseBad debt15,000.0034,000.006,000.00 Brokerage9,000.00 Sundry receiptGross ProfitCommission8,00,000.001,34,000.0049,500.0010,000.00Advance TaxInsuranceBad debt recovered - AllowedSalary to StaffSalary to XInterest on Overdraft1,23,000.003,00,000.007,800.008,700.0056,000.0098,000.00as deduction earlier1,00,000.00Interest on debenture90,000.00Interest on loan to Mrs.XInterest on Capital of XDepreciationAdvertisement expenditureContribution to employeerecognized provident fundNet Profit76,000.004,50,000.0011,83,500.011,83,500.001. The amount of depreciation allowable is Rs. 37,300 as per Income Tax rules, it includesdepreciation on permanent sign board.2. Advertisement expenditure includes Rs.5000 being cost of permanent signboard.3. A pays Rs.6000 as premium on own life insurance.4. General expenditure includes include Rs.3000 for arranging a party at home of Mr A.5. Loan was taken from Mrs.X for payment of arrear of income tax. Q3.During the previous year, X (40 years) is employed by a private company. He gets `70,000 asbasic salary and '20000 as dearness allowance (40 percent of which is considered for end termbenefits), tiffin allowance Rs.2200 per month, medical allowance .2000 per month; childreneducation allowance '2100 per month for his three children; research allowance: 20,000 (out ofwhich only 13000 is used in the year on research related work). Besides he gets a fixcommission of '5000 per month. Company has provided a rent free accommodation at Nagpur(population as per 2001 census 20 lakh), company has provided him a watchman, salary of'4000 per month is paid by the company (1000 per month is recovered from X), company hasalso provided him a car (1800cc) for both personal as well as official purpose. Cost incurred inrunning and maintenance of the car by the company is '97,000. Company contributes 14 percentof the "salary" towards recognized provident fund. A matching contribution is made by X. X alsopays medical insurance premium of '20,000 per annum for self and spouse. He also made somedonation to charitable institution, out of which only 25,000 is eligible for deduction under 80G.His income from other sources `2,50,000. Determine his net income and tax liability for theassessment year 2021-22.

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a) From the profit and loss account of A (age 34 years) for the year ending March 31,2021, ascertain his income chargeable under profit and gain of business and profession for the assessment year 2021-22 Rs. Rs. General Expense Bad debt 15,000.00 34,000.00 Commission 6,000.00 9,000.00 Sundry receipt Gross Profit 8,00,000.00 1,34,000.00 49,500.00 10,000.00 Advance Tax Brokerage Insurance Bad debt recovered Allowed as deduction earlier Salary to Staff Salary to X Interest on Overdraft Interest on loan to Mrs.X Interest on Capital of X Depreciation Advertisement expenditure Contribution to employee recognized provident fund Net Profit 1,23,000.00 3,00,000.00 Interest on debenture 7,800.00 8,700.00 56,000.00 98,000.00 1,00,000.00 90,000.00 76,000.00 4,50,000.00 11,83,500.0 11,83,500.00 The amount of depreciation allowable is Rs. 37,300 as per Income Tax rules, it includes depreciation on permanent sign board. 2. Advertisement expenditure includes Rs.5000 being cost of permanent signboard. 3. A pays Rs.6000 as premium on own life insurance. General expenditure includes include Rs.3000 for arranging a party at home of Mr A. 5. Loan was taken from Mrs.X for payment of arrear of income tax. 1. 4.

a) From the profit and loss account of A (age 34 years) for the year ending March 31,2021, ascertain his income chargeable under profit and gain of business and profession for the assessment year 2021-22 Rs. Rs. General Expense Bad debt 15,000.00 34,000.00 Commission 6,000.00 9,000.00 Sundry receipt Gross Profit 8,00,000.00 1,34,000.00 49,500.00 10,000.00 Advance Tax Brokerage Insurance Bad debt recovered Allowed as deduction earlier Salary to Staff Salary to X Interest on Overdraft Interest on loan to Mrs.X Interest on Capital of X Depreciation Advertisement expenditure Contribution to employee recognized provident fund Net Profit 1,23,000.00 3,00,000.00 Interest on debenture 7,800.00 8,700.00 56,000.00 98,000.00 1,00,000.00 90,000.00 76,000.00 4,50,000.00 11,83,500.0 11,83,500.00 The amount of depreciation allowable is Rs. 37,300 as per Income Tax rules, it includes depreciation on permanent sign board. 2. Advertisement expenditure includes Rs.5000 being cost of permanent signboard. 3. A pays Rs.6000 as premium on own life insurance. General expenditure includes include Rs.3000 for arranging a party at home of Mr A. 5. Loan was taken from Mrs.X for payment of arrear of income tax. 1. 4.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 35P

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