IGNOU| ELEMENTS OF INCOME TAX (ECO - 11)| SOLVED PAPER – (DEC - 2022)| BDP| ENGLISH MEDIUM
BACHELOR'S DEGREE PROGRAMME
(BDP)
Term-End Examination
December - 2022
(Elective Course: Commerce)
ECO-11
ELEMENTS OF INCOME TAX
Time: 2 Hours
Maximum Marks: 50
Note: Question No. 1 is compulsory. Attempt any three questions from the remaining questions.
1. Compute the total income of Mr. Amit Chaudhary from
the following particulars of his income for A. Y. 2021-22: 14
(i) Salary per
month - 15,000
(ii) Dividend
received from Indian company - 10,000
(iii) Share of
profits from partnership firm - 12,000
(iv) Dividend
from a co-operative society - 6,000
(v) Rental income
from house property - 10,000
(vi) Interest on
Savings Account - 8,000
He makes the
following payments/investments during the previous year:
(a) Purchase of
National Savings Certificate (VIII Issue) - 40,000
(b) Deposit in
Public Provident Fund - 20,000
(c) Donation to
Prime Minister National Relief Fund - 10,000
2. (a) Mr. Ashutosh retired from an Indian Company after
serving 34 years 4 months on 31st December, 2019. The company paid him 8,00,000
as gratuity under the Payment of Gratuity Act, 1972. His monthly salary and D.
A. at the time of retirement was 58,000 and 5,800 respectively. Compute the
exempted gratuity U/S 10 (10) (11) of Income Tax Act. 8
(b) Name any
four allowances which are partially exempt from tax. 4
Ans:- As
per the instructions of the Income Tax Act, these allowances are exempted from
tax up to a certain limit. Here are some commonly known partially taxable
allowances:
(i) House
Rent Allowance: HRA is a special allowance given to an employee by his
employer as per section 10(13A) exclusively for payment of rent for residence,
subject to at least one of the following: Is: And the remaining amount is
taxable.
Exemption is not
available to an assessee who lives in his own house, or in a house for which he
has not incurred the expenditure of rent.
(ii) Child
Education Allowance: This allowance is given for the expenses incurred on
the education of the child. There is a discount of up to Rs. Rs 100 per child
up to a maximum of 2 children.
(iii)
Hostel Expenses Allowance: This allowance is given to the employees for the
expenses incurred on the hostel fees of their child. There is a discount of up
to Rs. Rs 300 per child up to a maximum of 2 children.
(iv)
Transport Allowance: To meet the expenses of transportation of an employee
who is blind, deaf and dumb or physically handicapped with lower body
disability between his residence and place of duty. Any transport allowance
given is exempt up to Rs. 3200 per month.
3. (a) Determine the annual value of house of Mr. Varun
for the A. Y. 2021-22: 8
Municipal value
- 2,00,000
Fair rent -
1,80,000
Actual rent (per
month) - 25,000
House remained
vacant for two months during the previous year. Unrealised rent 40,000.
Municipal tax paid by the landlord 20,000.
(b) Discuss
the residential status of a company. 4
Ans:- (i)
An Indian company is always resident in India. Even if an Indian company is
controlled from a place outside India (or even if the shareholders of the
Indian company controlling more than 51 percent of the voting power are
non-residents and/or located outside India), the Indian company Is included in
India. Is resident in. An Indian company can never be non-resident.
(ii) A
foreign company is resident in India if its place of effective management
(POEM) during the relevant previous year is in India. For this purpose, place
of effective management means the place where key management and commercial
decisions necessary for the conduct of the business of the entire entity are
taken. For this purpose, a set of guiding principles (to be followed in
determining POEM) has been issued by the Board vide Circular No. 6/2017, dated
January 24, 2017. These guiding principles are briefly explained in paragraph
28.1.
(iii)
The provisions of section 6(3)(ii) shall not apply to a foreign company having
a turnover or gross receipts of Rs. Rs 50 crore or less in a financial year –
Circular No. 8/2017, dated February 23, 2017. In other words, a foreign company
(whose annual turnover/gross receipts is Rs 50 crore or less) cannot be
resident in India. , From assessment year 2017-18.
4. What do you mean by 'Provident Fund'? Discuss the
different types of provident funds of which a salaried employee may be a member
including taxations thereof. 4+8
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