IGNOU ASSIGNMENT, INCOME TAX LAW AND PRACTICE (BCOC - 136), SOLVED PAPER – (2024 - 25)| (B.COM) (GENERAL)| ENGLISH MEDIUM
TUTOR MARKED ASSIGNMENT
COURSE CODE: BCOC-136
COURSE TITLE: INCOME TAX LAW AND PRACTICE
ASSIGNMENT CODE: BCOC-136/TMA/2024-25
COVERAGE: ALL BLOCKS
Maximum Marks: 100
Note: Attempt all the questions.
हिंदी माध्यम: यहां क्लिक करें
Section-A
(Attempt
all the questions. Each question carries 10 marks.)
1. Explain the procedure for E-Filing of Return. 10
Ans:- The process of e-filing income tax returns
(ITR) in India involves several steps, which can be completed online through
the Income Tax Department's e-filing portal or offline using a utility. Below
is a detailed description of the e-filing process.
Online
e-filing process:-
Step 1:
Access the e-filing portal
(a) Visit the
official Income Tax e-filing website and log in using your credentials (PAN,
password and captcha).
Step 2:
Select Income Tax Return Form
(a) Go to e-file
> Income Tax Returns > File Income Tax Return.
(b) Choose the
appropriate assessment year (AY) and select the applicable ITR form (e.g.,
ITR-1, ITR-2, etc.) based on your income sources.
Step 3:
Fill in personal information
(a) Enter your
personal details such as name, PAN, address and other relevant information.
(b) Confirm that
all pre-filled data is accurate. You can edit any incorrect information.
Step 4:
Income and Deductions
(a) Fill in
details about your income from various sources (salary, business income, etc.)
and any deductions you wish to claim.
(b) Review your
entries carefully before proceeding.
Step 5: Tax
Calculation
(a) The system
will calculate your tax liability based on the information provided.
(b) If any tax
is due, you will see options to Pay Now or Pay Later. It is advisable to choose
Pay Now to avoid penalties.
Step 6:
Preview your return
(a) Once you
have completed all the sections, click on Preview Return.
(b) Review your
return for accuracy. If everything is correct, proceed to the next step.
Step 7:
Verification
(a) Click on
Proceed to Verification. The system will check for errors. If there are any
issues, correct them before proceeding.
Step 8:
Verification
(a) After
successful verification, click on Proceed to Verification.
(b) Choose your
preferred method for e-verification (e.g., through Aadhaar OTP, Net Banking,
etc.) and follow the prompts.
Step 9:
Submit your return
(a) Once
verified, submit your return. You will receive a confirmation message on
successful submission.
Step 10:
Acknowledgement
(a) Download the
acknowledgement receipt for your records. This serves as proof of filing your
return.
Offline
e-filing process:-
Step 1:
Download the offline utility
(a) Visit the
e-filing portal and download the offline utility for the relevant ITR form.
Step 2:
Fill in the details
(a) Open the
utility and fill in your personal details and income information as required.
Step 3:
Generate JSON file
(a) After
completing the form, save it as a JSON file.
Step 4:
Upload JSON file
(a) Login to the
e-filing portal and upload the generated JSON file under e-File > Income Tax
Returns > Upload Return.
Step 5:
Follow the steps for online filing beyond preview
(a) After
uploading, follow the same steps as mentioned in the online filing process
beyond preview return.
By following
these detailed steps for online or offline filing, taxpayers can ensure a
seamless e-filing experience for their income tax returns.
2. Explain the provisions relating to House Rent
Allowance u/s 10 (13A). 10
Ans:- Section 10(13A) of the Income Tax Act, 1961
provides exemption for house rent allowance (HRA) received by salaried
individuals, allowing them to reduce their taxable income based on their
housing expenditure incurred while living in a rented accommodation. The key
provisions and eligibility criteria for claiming HRA exemption under this
section are given below.
Provisions of
Section 10(13A):-
(i)
Eligibility for HRA exemption:
(a) The person
should be a salaried employee receiving HRA as part of his salary package.
(b) The employee
should live in a rented accommodation. If the person owns a house and does not
pay rent, HRA is fully taxable.
(c) Proof of
rent payment, such as rent receipts, is required to claim the exemption.
(ii)
Calculation of HRA exemption: The exempt portion of HRA is determined by
the least of the following three amounts:
(a) Actual
HRA received: This is the amount specified as HRA in the salary structure.
(b) Rent
paid after deducting 10% of basic salary: This calculation considers the
actual rent paid by the employee after deducting 10% of their basic salary.
(c)
Percentage of basic salary:
(1) For
employees living in metro cities (Mumbai, Delhi, Kolkata, Chennai), the
exemption can be up to 50% of their basic salary.
(2) For those
living in non-metro cities, it can be up to 40% of their basic salary.
(iii) Tax
implications:
(a) If the
employee lives in his own house or does not pay rent, the entire HRA received
is subject to tax.
(b) The
exemption is not available under the new tax regime introduced in 2020.
(iv)
Documentation:
(a) To claim HRA
exemption, employees must maintain proper documentation, including rent
receipts and declaration of rent paid.
(v)
Self-employed individuals:
(a)
Self-employed individuals cannot claim HRA, but if they do not receive HRA from
an employer, they can avail deduction under Section 80GG for rent paid.
(vi)
Special cases:
(a) If an
employee pays rent to a relative (such as a parent), they can still claim HRA;
however, the relative must declare this rental income in their tax returns.
In short,
Section 10(13A) provides salaried individuals a structured way to reduce
their taxable income through exemption on house rent allowance based on
specific criteria and calculations. Proper adherence to these provisions
ensures compliance with tax regulations while maximizing potential tax
benefits.
3. Explain the certain incomes for which the tax is paid
in the same year. 10
Ans:- Under the Income Tax Act in India, certain
types of income are taxed in the same year they are earned. Below are the
major categories of income, in the year they are received:-
(i)
Salaried income: Salaried individuals must pay tax on their gross salary,
which includes basic salary, dearness allowance, bonus and other allowances.
Tax is calculated based on the income tax slab rates applicable for the
financial year, which runs from April 1 to March 31 of the following year. For
example, if a person earns a salary during the financial year 2023-24, he will
be assessed and pay tax on this income during the assessment year 2024-25.
(ii) Income
from business or profession: Individuals engaged in business or
professional activities must report their net profits as taxable income in the
same financial year. This includes income from self-employment, freelancing and
professional services. Tax on this income is also calculated as per the slab
rates applicable for that financial year.
(iii)
Interest income: Interest earned from savings accounts, fixed deposits or
other financial instruments is taxable in the year it is earned. For example,
if a person earns interest on a fixed deposit during FY 2023-24, it will be
included in their taxable income for the same financial year.
(iv)
Capital gains: Profits from the sale of capital assets such as stocks, real
estate or mutual funds are taxed as capital gains in the year they are
received. Short-term capital gains (from assets held for less than a specified
period) are taxed at a flat rate of 15% or as per the slab rates applicable for
long-term gains.
(v)
Winnings from lotteries or gambling: Any winnings from lotteries, gambling
games or competitions are subject to a flat tax rate of 30% and must be
reported in the same financial year in which they are won.
(vi) Other
sources of income: This category includes various types of income such as
dividends (above certain limits), rental income from property, and any other
miscellaneous income that do not fall into specific categories but are still
taxable in the year they are received.
Conclusion: In
short, various types of income – including salary, business profits, interest
income, capital gains, lottery winnings, and other miscellaneous sources – are
subject to taxation in the same financial year in which they are earned.
Taxpayers must accurately report these incomes during the assessment year
following the financial year to comply with tax regulations.
4. Explain the provisions relating to exemption of incomes
of Charitable and Religious Trust and a Political Party. 10
5. Compute the total Income of Mr. Manas from the following
particulars of his income for A.Y. 2023-24. 10
|
Particular |
Rs. |
|
|
I |
Salary |
1,80,000 |
|
II |
Dividend
received from Indian Company |
10,000 |
|
III |
Share of
profits from HUF |
12,000 |
|
IV |
Dividend from
a Co-operative Society |
6,000 |
|
V |
Rental Income
from home property |
10,000 |
Section-B
(Attempt all the
questions. Each question carries 6 marks.)
6. Explain the Provisions of commutation of Pension u/s 10
(10A). 6
Ans:- Section 10(10A) of the Income Tax Act, 1961
outlines the tax exemption applicable to the commuted value of pension. It is
important for pensioners to understand this section to correctly determine
their tax liabilities.
The key
provisions relating to commutation of pension under this section are given
below:-
Definition of
Commuted Pension: Commuted pension refers to a lump sum payment received by
a pensioner in lieu of a part of his periodical pension. It is different from
uncommuted pension, which is received as regular payments (monthly, quarterly
or annually).
Exemption
Provisions:-
(i) Full
Exemption:
(a)
Government Employees: The commuted value of pension received by employees
of the Central Government, State Government, local authorities and statutory
corporations is fully exempt from income tax under section 10(10A)(i) and
(iii).
(b) Pension
Fund: Any payment received in commutation from a pension fund established
by the Life Insurance Corporation or any other insurer under section 10(23AAB)
is also fully exempt.
(ii) Partial
Exemption:- For employees not covered under the full exemption categories,
the following partial exemptions apply:-
(a) With
Gratuity: If an employee receives gratuity, they are entitled to an
exemption on one-third of the commuted value of their pension.
(b) Without
Gratuity: In cases where no gratuity is received, the exemption is limited
to half of the commuted value of the pension.
(iii)
Calculation of Exemption: The exemption amount is determined based on the
employee's age, health status and recognised mortality tables. For example:
(a) If an
employee has a monthly pension and decides to commute a portion, they can
calculate their exemption amount based on whether they receive gratuity or not.
(iv)
Additional considerations:
(a) Commutation
rules allow government employees to commute up to 40% of their basic pension as
a lump sum payment.
(b) Pensioners
must report their commuted income when filing income tax returns and should be
aware that any additional amount beyond the exemption limit may be taxable.
In short,
Section 10(10A) provides significant tax relief to pensioners through full
exemption for some government employees and partial exemption for others
depending on gratuity status. Understanding these provisions helps ensure
compliance with tax rules while optimizing financial planning after retirement.
7. What
is ITR-1 (SAHAJ)? 6
8. Write the Provisions relating
to Clubbing of minor's income. 6
9. Explain
the Provisions relating to Gratuity u/s 10(10) in case of employees is covered
by Payment of Gratuity Act, 1972. 6
10. After 25
years stay in India, Mr. Ram went to U.S.A. on April 15, 2012 and came back to
India on March 12, 2023. Determine his residential status for the assessment
year 2023-24. 6
Section-C
(Attempt all the questions. Each
question carries 5 marks.)
11. Write short
note on following: 4x5=20
(a) Partial Integration of
Agricultural and Non-Agricultural Income.
Ans:- The concept of partial integration of
agricultural and non-agricultural income is a method of indirectly taxing
non-agricultural income in Indian taxation, while keeping agricultural income
exempt from direct taxation. This approach is particularly relevant for
individuals, Hindu Undivided Families (HUFs), associations of persons (AOPs),
bodies of individuals (BOIs) and artificial judicial persons.
Key points of partial integration:-
(i) Exemption of agricultural income:
Agricultural income is exempted from tax under section 10(1) of the Income Tax
Act, 1961. However, when a person has both agricultural and non-agricultural
income, the latter income may be taxed at higher rates due to the partial
integration method.
(ii) Conditions of applicability:
(a) Net agricultural income should be
more than ₹5,000.
(b) The total non-agricultural income
should exceed the basic exemption limit, which is ₹2,50,000 for individuals
below 60 years of age, ₹3,00,000 for senior citizens (60-79 years) and
₹5,00,000 for very senior citizens (80 years and above).
(iii) Exclusions: This method does not
apply to firms, companies, co-operative societies or local authorities. For
these entities, agricultural income remains completely exempt from tax.
Calculation Process:-
Tax calculation under this method
involves a multi-step process:
Step 1: Calculate income tax on the
sum of non-agricultural income and net agricultural income as if it were total
income.
Step 2: Calculate income tax on the
sum of net agricultural income and maximum exemption limit as per slab rates.
Step 3: The final tax liability is
determined by subtracting the amount calculated in step 2 from the amount
calculated in step 1. The total tax payable is then arrived at by adding any
applicable exemptions or surcharges.
Example: For instance, if a person's net
agricultural income is ₹3,00,000 and non-agricultural income is ₹5,00,000:
Step 1: Total = ₹8,00,000; Calculate
tax on this amount.
Step 2: Total = ₹5,50,000 (₹3,00,000 +
₹2,50,000); Calculate tax on this amount.
Step 3: Final tax = Tax from step 1 –
Tax from step 2. This mechanism ensures that while agricultural income is
exempt from direct taxation, it affects the rate at which non-agricultural
income is taxed when both types of income are present.
In short, partial integration acts as a method
to ensure that individuals having both agricultural and non-agricultural income
are taxed fairly, without directly taxing their agricultural income.
(b) Deduction u/s 80D.
(c) "Defective
return is no return".
(d) Standard Deduction
u/s 16(i).
[FULL UP TO DATE COMING SOON]
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