14 marks:

sum no.1
Total Income of Mr.S

PGBP (note 1) 2458000

LTCG (note 2) 16000
STCG (see note below) 200000
IFOS (note 3) 72000
GTI 2746000
Less: Chapter VIA deductions
Section 80EEB 150000 int on loan taken to buy electric car (max)
2596000

Computation of tax liability:

2596000
other income LTCG Casual income
2535000 16000 45000
on 1000000 110000 20% 30%
balance 1535000 460500 3200 13500
570500
587200
add: 4% 23488
610688
610690

note 1: PGBP

Net profit as per P and L a/c 1574500

Add: Closing stock 62000
Less: Opening stock 50000
1586500
Add: Disallowances
Contribution to NPS 24000
VRS compensation 192000
Interest on loans (personal) 165000 12 lacs x 15% x 11/12
Depreciation 617000
2584500
Add: Sale of asset used for
research to the extent of
deduction allowed u.s.35 600000

3184500
 Less: Incomes considered sep
Profit on sale of asset 200000
Winning from lottery 31500

Less: Depreciation as per IT rul

450000 + 45000 495000 450000 + (300000 x 15%)

PGBP 2458000

working: closing stock: 558000 x 100/90 620000

620000 - 558000 = 62000

opening stock 450000 x 100/90 500000

500000 - 450000 = 50000

working: Employer contribution to NPS:

Salary = Basic + DA (forming)
300000 + 60000 = 360000

Er contn to NPS (20% of basic) 60000

(-) allowed as deduction 36000 (10% of salary)
Excess to be disallowed 24000

working: VRS compensation:

Expenditure debited 240000
(-) allowed as deduction 1/5th 48000 u.s.35DDA
Balance to be disallowed 192000

working: Sale value of asset 800000

to the extent of
deduction allowed u.s.35 600000 to be treated as business income
Balance STCG 200000

note 2: LTCG

Compensation received 1250000

Less: ICOA 634000 234000 x 317
LTCG before exemption 616000 117
Less: Section 54D 600000
LTCG 16000
note 3: IFOS:
Winning from lottery (gross) 45000 (31500 x 100/70)
Interest on enhanced compsn 54000
(-) 50% deduction 27000 27000
72000
lectric car (max)

Casual income
sum no.2

Computation of total income

a) Income from house property (note 1) 56700 Section 80D

b) PGBP (note 2) 640000 On parents
c) IFOS (note 3) 1150000 preventive health
Gross Total Income 1846700 check up
Less: Chapter VIA
Section 80D 52000
Total Income 1794700

Computation of tax liability:

Existing tax scheme (old)
1794700
1000000 112500
794700 238410
350910
4% cess 14036.4
364946.4
(-) Advance tax 100000
(-) Tds on dividend 110000 1100000 x 10% u.s.194
Tax payable 154946.4
rounded off to 154950

Tax computation u.s.115BAC (new scheme)

Total Income (normal provisions) 1794700
Add: Section 80D 52000
Total Income 1846700

Tax on 1846700
On 1500000 187500 or
346700 104010 Total income
291510 on first
add: 4% cess 11660.4 on next
303170.4 on next
less: advance tax 100000 on next
less: tds 110000 on next
93170.4 on next
rounded off to 93170 on the balance
Note: Since the tax payable under the special provisions of section 115BAC
is lower than the tax payable under the regular provisions of the Act,
it would be beneficial to opt for Section 115BAC.
She has to exercise this option on or before the due date of filing
return of income. i.e. 31st October

note 1: HP
GAV (rent) 90000
Less: MT paid 9000
NAV 81000
(-) section 24
std deduction 24300
IFHP 56700

note 2: PGBP

NP as per P and L a/c 1591000

add: disallowances
Payment in cash 50000 u.s.40A(3)
Purchase of car (cap ex) 300000
MT of HP 9000

1950000 note: I-phone 12 pro is received

Less: Inc consd separately for successful presentation
Dividend 1100000 in the ITAT is treated as pa
Int on deposit 25000
Honorarium recd 50000 note: assessee follows cash syste
Rent from HP 90000 is fully allowed this year

Less: Deprn on car as per ITR

300000 x 15% 45000

PGBP 640000

note 3: IFOS
Dividend from Indian comp 1100000
Interest on deposit certificates
issued under gold monetization
scheme, 2015 exempt u.s.10(15)
Honorarium received 50000
1150000
 47000

5000
52000

Total income 1846700

250000 0
250000 5% 12500
250000 10% 25000
250000 15% 37500
250000 20% 50000
250000 25% 62500
on the balance 346700 30% 104010
 291510
add: 4% cess 11660.4
303170.4
less: advance tax 100000
less: tds 110000
tax 93170.4
rounded off to 93170

-phone 12 pro is received from client

or successful presentation of case
n the ITAT is treated as part of professional income

assessee follows cash system; repairs and maintenancce

s fully allowed this year
sum no.3

Computation of total income:

a) Income from salary (note 1) 695000

b) Income from HP (note 2) 166600
c) Capital gains (note 3) 1200000
d) IFOS (note 4) 112250
Gross Total Income 2173850
Less: Chapter VIA nil
Total Income 2173850

Tax computation:
Normal provisions (old) 2173850

other income STCG u.s.111A

973850 1200000
500000 12500 15%
473850 94770
107270 180000
287270
4% cess 11490.8
298760.8
rounded off to 298760

Section 115BAC:
Total Income as per normal provisions 2173850
Add: HRA 135000
Add: Std deduction 50000
Add:: Section 10(32) 1500
2360350

Tax on 2360350
other income 1160350 STCG u.s.111A 1200000
1000000 75000 15%
160350 32070
107070 180000

287070
4% cess 11482.8
 298552.8
rounded off to 298550

note: tax as per normal provisions: 298760

tax as per section 115BAC 298550

Assessee is advised to opt for Section 115BAC

Tax savings (298760 - 298550) 210

note 1: Salary:
Basic 240000 HRA:
DA 60000 Salary =
HRA (note below) 45000
Accident Insurance not taxable
Shares allotted 400000 (1500 - 1300) x 2000
Gross Salary 745000
(-) section 16(ia) 50000
IFS 695000

note 2: IFHP MV
GAV 264000 FR
(-) MT 26000 Rent
NAV 238000 SR
(-) Section 24
Std ded 71400
IFHP 166600

note 3: Capital gains:

Sale consideration of shares
(2000 x Rs.2100) 4200000
Less: COA being fmv on the
date of allotment 3000000 2000 x Rs.1500
STCG < 12 months 1200000

note 4: IFOS
Int on deposit in the name
of minor child 43750
(-) exempt u.s.10(32) 1500 42250
Gold chain from friend 70000
LED TV from friend not taxable (TV is not a capital asset; gift provisions
Cash gift from relative not taxable
112250
(or)

total income 1160350

on first 250000 0
on next 250000 5% 12500
on next 250000 10% 25000
on next 250000 15% 37500
on the balance 160350 20% 32070
107070
add: 15% tax on 12 lacs STCG 180000
287070
add: 4% cess 11482.8
298552.8
rounded off tax liability 298550
240000 + 30000 = 270000

a) 50% of salary 135000

b) HRA received 180000
c) 600000 - 27000 573000

taxable HRA = 180000 - 135000 = 45000

260000
220000
264000
240000
apital asset; gift provisions are not applicable)
sum no.4

Computation of total income

PGBP (note 1) 55851700

Capital gains (note 2) 0
IFOS 400000
Gross Total Income 56251700
Less: Chapter VIA
Section 80D 10000 30000/6 + 5000
Section 80EEB 150000
Section 80G (cash not allowed) 0 interest on loan to buy electric car
Section 80RRB 300000 royalty received in respect of patents:
Total Income 55791700 actual royalty
or
Limit

Tax computation: 55791700

senior citizen On 1000000 110000
54791700 16437510
16547510
37% SC 6122578.7
22670088.7
4% cess 906804
tax due 23576892
(-) tds u.s.194IA 100000 purchase of immovable property (purc
(-) tcs on car 12000 12 lacs x 1%
(-) tcs on timber 50000 20 lacs x 2.5%
Final tax 23414892
Rounded off to 23414890

note 1: PGBP

NP as per P and L a/c 56444700

Add: Disallowances
Amount paid to Gurudwara 20000
Contribution to university allowed u.s.35
Interest on loan (personal) 167000
Purchase of timber (raw
material for making furniture) allowed revenue expenditure; assessee is a furniture manuf
 56631700

Less: Incomes consd septy

Royalty from patents 400000 taxable as IFOS
Bad debts recovered 200000 not taxable; hence excluded

Less: Depreciation ass per ITR

12 lacs x 15% 180000

PGBP 55851700

note: Sale of furniture to a relative at a price less

than fmv is to be ignored. Excessive or
unreasonable provisions applies only
for "payments" to relative and not for
"sale" to a relative - hence no adjustment

note 2: Capital Gains:

On sale of property on 1st March 2022

Sale consideration given 10000000

Less: ICOA not relevant
LTCG before exemption 5000000 given
Less: Section 54 5000000
Taxable LTCG 0

note: Amount invested in new house: 10000000

Out of deposit made in CG
a/c scheme 2500000 utilised within three years
Balance from sale of res house 7500000
10000000

note 3: IFOS
Royalty from patents 400000
oan to buy electric car
ved in respect of patents:
actual royalty 400000
whichever is less
300000

mmovable property (purchase price 1 crore x 1%)

essee is a furniture manufacturer

NOTE:
bad debt claimed 500000 2017-18
(-) recovered now 300000 2021-22
actual loss reduced to 200000

but loss allowed in the past was Rs.300000

therefore, excess deduction claimed Rs.1,00,000 is now taxable

as business income.

Amount credited in P and L a/c 300000

Amount taxable as income 100000
Excess amount credited is not
taxable; hence excluded 200000
sum no.5

Computation of total income:

PGBP (note 1) 7981554

IFOS (note 2) 4850
Gross Total Income 7986404
Less: Chapter VIA deductions (note 3) 45000
Total Income 7941404
Rounded off 7941400

Computation of tax:
7941400
On 1000000 112500
6941400 2082420
2194920
10% surch 219492
2414412
4% cess 96576
tax due 2510988
Less: TDS u.s.194N 200000 (2 crores - 1 crore) x 2%
tax due 2310988
rounded off to 2310990

note 1: PGBP:
Net profit as per P and L a/c 7521000
Add: Disallowances
Int on loan to acquire plant to be captzd
till 31.08.2021 252083
VRS compensation (900000 x 4/5) 720000
Share of profit distributed as bonus to
be disallowed (7521000 x 5%) 376050
Depreciation as per books 1750000

10619133

Less: Incomes considered separately

IT refund 14850

Less: Depreciation as per IT Rules

On P and M 2568229
On factory building 54500
 PGBP 7981554

note 2: IFOS
Interest on IT refund 4850

note 3: Chapter VIA deductions:

Section 80C
a) LIP on his father not eligible
b) LIP on his married daughter
10% of 500000 or 45000 wel 45000
45000
note:
purchase of plant and machinery on hire purchase basis
qualifies for depreciation.
since payment made in cash in a day to a person does not
exceed Rs.10,000, the actual cost incurred on plant and mach
Rs.12 lacs is eligible for depreciation.
Additional depreciation is also allowed

Interest on loan to purchase another plant and machinery

Interest amount: 55 lacs x 11% 605000
Interest paid upto the date the asset is first put to use
should be capitalized: 605000 x 5/12 252083.333

note:
VRS compensation 900000
allowed (1/5) 180000
To be disallowed 720000
Depreciation as per IT Rules:
P&M Factory
building
15% 10%
wdv as on 01.04.2021 900000 545000
add: Purchases
> 180 days 1200000
5752083
< 180 days 0
7852083 545000
Less: Normal deprn 1177812.45 54500
Less: Additional deprn 1390416.6 0
wdv as on 01.04.2022 5283853.95 490500
sum no.6

Computation of total income:

PGBP (note 1) 3995350

IFOS (note 2) 41000
Gross Total Income 4036350
Less: Chapter VIA (note 3) 181000
Total Income 3855350

Tax computation:
3855350
On 1000000 112500
2855350 856605
969105
add: 4% cess 38764.2
1007869.2
rounded off to 1007870

note 1: PGBP

Net profit as per P and L A/c 3943000

Add: Disallowances
Purchase of furniture 48000
Depreciation 90000
Family planning expenditure 20000
Payment to Sister in law allowed
Employees contribution
deposited after due date 10000
Medical expenses (father) 80000
Commn paid without tds 7500 30%

4198500

Less: Incomes considered separately:

Interest on PPF 60000
Interest on savings account 20000
Interest on NSC 21000

Less: Depreciation as per IT rules

books x 40% 36000
computers x 40% 14000
 new furniture 10% 1900
on car 335000 x 15% 50250

PGBP 3995350

note 2: IFOS:
Interest on PPF exempt
Interest on savings a/c 20000
Interest on NSC VIII issue 21000
41000

note 3: Chapter VIA deductions:

Section 80D 50000 max
medical expenditure on the health
of senior citizen not having mediclaim
policy

Section 80C
PPF 100000
Interest accrued on NSC VIII 21000
121000

section 80TTA
int on savings a/c with bank 10000
note: Family planning expenditure is allowed as deduction
only for company-assessee. Hence disallowed

note: Sister is included in definition of relative;

sister in law is not a relative

note: Gross receipts of py 2020-21 has exceeded Rs.50 lakhs

hence tds provisions are attracted for py 2021-22.

Cost of furniture purchased 48000

Less: Payment in cash > 10k 18000
Less: Payment in cash > 10k 11000
Cost of furniture eligible for 19000
depreciation

note: Amount paid in cash to transporter

is not a revenue expenditure as it is
in connection with purchase of furniture.
Hence, higher limit of Rs.35000 is not applicable here.

note:
sum no.7

Computation of total income:

a) IFHP (note 1) 138600 amount of deduction u.s.1
b) PGBP (SEZ) 2500000
c) LTCG (note 2) 252000 profit of sez unit
c) IFOS (note 3) 288000 export turnover
Gross Total Income 3178600 total turnover
Less: Chapter VIA (note 4) 267000 3rd year from commencem
Less: Section 10AA (sez) 1750000
Total Income 1161600 2500000 x 140/200

Tax computation:
1161600
other income LTCG 252000
909600 20%
500000 12500
409600 81920
94420 50400

144820
4% cess 5793
tax due 150613

note: Assessee claims deduction u.s.10AA and also u.s.80QQB; hence AMT is applicable

Computation of AMT
Total Income as per normal provisions 1161600
Add: Section 10AA 1750000
Add: Section 80QQB 190000
Adjusted Total Income 3101600

AMT @ 18.5% on adjusted total income 573796

add: 4% cess 22952
AMT due 596748

Final tax due:

tax as per normal provisions 150613
or whichever is higher
AMT 596748
 tax payable is Rs.596750 rounded off

note 1: IFHP

GAV first floor 228000

(-) MT for first floor (50%) 30000
NAV 198000
(-) Section 24
Std deduction 59400
IFHP 138600

note 3: IFOS
Royalty from books 288000
Less: Expenditure 40000 248000
Int on savings bank a/c 40000
288000

note 2: LTCG

Sale consideration 1520000 1520000 x 100

Less: Selling expenses 0 1000000
Net consideration 1520000
Less: ICOA 1268000 ICOA:
LTCG 252000

note 4: Chapter VIA deductions:

Section 80C
LIP on his son 39000
LIP on his father not allowed (if assumed as medical insurance prm; then deducti
Tuition fees (14000 x 2) 28000
67000

Section 80QQB
Qualifying amount (not to exceed 15%) 240000
or or whichever is less
amount brought to India 230000
Amount of dedution 230000 - 40000 expenses Rs.190000

Section 80TTA 10000

Total deduction allowed under chapter VIA

67000 + 190000 + 10000 267000
amount of deduction u.s.10AA:

profit of sez unit 2500000

export turnover 140 lakhs
otal turnover 200 lakhs
3rd year from commencement of manufacture

2500000 x 140/200 1750000

T is applicable
 152 > 110%
hence SDV should be adopted as sale consideration

400000 x 317
100

surance prm; then deduction is allowed u.s.80D)

sum no.8

computation of total income

IF Salary (note 1) 20000

IFHP (note 2) 163800
PGBP (note 3) 805000
LTCG (note 4) 0
IFOS (note 5) 59500
Gross Total Income 1048300
Less: Chapter VIA (note 6) 180000
Total Income 868300

Computation of tax liability:

868300
On 500000 10000
368300 73660
83660
4% cess 3346
tax due 87006
rounded 87010
Less: Advance tax pd 90000
refund due -2990

note 1: IFS
Gross salary 70000
Less: std deduction 50000 20000

note 2: IFHP
GAV (rent) 144000
Less: M taxes 0
NAV 144000
Less: Section 24
Std deduction 43200
IFHP 100800
Add: Rental arrears 90k - 30% 63000
IFHP 163800

note 3: PGBP
A. From SAR & Associates:
i) Share of profit exempt
ii) Int on cap (285000 x 12/15) 228000 It is given in the problem
iii) Salary received 120000 348000 allowed in the hands of
 in the hands of the partn
B. Boutique business:
Net profit as per P and L account 350000
Add: Disallowances
Advance IT paid 90000
Personal drawings 80000

Less: Incomes consd separately

Interest on savings bank a/c 27000
Interest on savings a/c with post office 11000
Interest on fixed deposit 25000
Income from Boutique business 457000

PGBP A +B 805000

note 4: Capital gains:

Sale consideration 9100000
Less: ICOA 31.5/105 x 317 9510000
LTCL to be cfd -410000

note 5: IFOS
a) Interest on savings a/c 27000
b) Int on savings a/c with PO 11000
Less: Section 10(15) 3500 7500
c) Int on FD with canara bank 25000
59500

note 6: Chapter VIA deductions:

Section 80C
Life insc prm (spouse) 10% 80000
Section 80D
Medical insurance prm 50000
Section 80TTB (max) 50000
180000
t is given in the problem that salary to partner is fully
allowed in the hands of the firm; hence it is taxable
n the hands of the partner
sum no.9

Computation of total income

Income from HP (note 1) 504000

PGBP (note 2) 5435115
IFOS (note 3) 1842000
Gross Total Income 7781115
Less: Chapter VIA (note 4) 25000
Total Income 7756115
rounded off to 7756120

Tax computation:
7756120
On 1000000 112500
6756120 2026836
2139336
add: 10% 213934
2353270
add: 4% 94131
tax due 2447400
Less: Advance tax 1500000
Less: Tds on int 12000 u.s.194A 120000 x 10% FD int
Balance tax due 935400

note 1: IFHP
GAV (rent) 720000
Less: MT paid 0
NAV 720000
Less: Section 24
Std ded 216000
IFHP 504000

note 2: PGBP
NP as per P and L A/c 7543815
Add: Closing stock (under vald) 45000

Add: Disallowances
IT paid 345000
Depreciation 0 fully allowed as it is as per IT Rules
Late fee for filing ITR 1000
Payment in cash > 10000 25000
 Int on loan to NBFC
personal use 24000 note:
failure to deduct tds 28800
Advertisement expns 20000

8032615

Less: Incomes consd separately

Dividend recd 1720000
Int recd on FD 108000
Rent recd 720000
IT refund 18000
note:
Less: Deprn on car
210000 x 15% 31500

PGBP 5435115

note 3: IFOS
Dividend 1720000
Int on FD (gross) 120000 108000/90 x 100
Int on IT refund 2000
1842000

note 4: Chapter VIA

Section 80D 25000 max
Section 80TTA 0
120000 x 10% FD int
loan amount borrowed from NBFC is Rs.10 lacs
used for personal purpose is Rs.2 lacs
balance for business use

Int to be disallowed
personal: 120000 x 2L / 10L 24000
without tds (last year sales 3.08 crores)
120000 x 8L / 10L x 30%
28800

Int paid on late filing of GST is an admissible expenditure

It is not in the nature of a penalty or fine.
Sum no.10 6 marks only (not a 14 mark question)

Computation of total income:

note:
IFHP (note 1) 214200
IFOS (note 2) 22500
Total Income 236700

note:

note 1: IFHP: note:

Rental income from house at Bangkok not taxable

Rental income from house in India:

GAV 27500 x 12 330000
(-) MT (not paid). He never came to
India during the py 21-22 nil
NAV 330000
(-) Section 24
Std deduction 99000
Int on loan allowed on due 84000 basis
IFHP 147000
Add: Rental arrears (96000 - 30%) 67200
IFHP 214200

note 2: IFOS:
Int on bonds of a japanese company (50%
received in India) 22500
Contract fee from Apple Orchid earned
and received in Nepal not taxable note: Earned in katmand
IFOS 22500

Alternative view: Deposited in Katmandu branch

of Union Bank of India can be taken as received
in India and therefore can be taxed.
In this case, contract fee received Rs.500000 can
be taxed. Total Income shall be Rs.736700
 Residential status of Mr.J
did not visit India during the previous year 21-22
(last visited India in July 2020)
Non-resident

Income earned and received outside India shall

not be taxed in the hands of a non-resident.
Rent from a property in Bangkok, received there
is not taxable in India.

Profit from a business in Thailand - not taxable

note: Earned in katmandu and deposited outside India

and later brought to India - view taken
to solve the problem. Hence not taxable