Master of Business Administration- Semester III MF0012 Taxation Management- 4 Credits Assignment Set- 1 (60 Marks)

Note: Each Question carries 10 marks. Answer all the questions. Q1. Tax planning may be effective in every area of business management. Discuss some of the important areas where tax planning may be attempted.

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Q2. When minors are not allowed to be employed under the Constitution of India, can a minor still have income? If yes then how? Analyse the exemption from income-tax available in the case of a minor child. Q3. Profit and Loss A/c of CS and Daughters, a partnership firm is as follows: Particulars Establishment and other expenses Interest on capital to partners @ 24% p.a. Interest on loan to partners @ 20% Rs. Particulars Rs.

3,00,000 48,000

Gross Profit Rent from House Property Interest from Government securities 24,000 10,000 5,000 10,000 2,00,000 10,000 25,000

6,60,000 60,000

20,000

32,000

Interest on loan to Mr. C @ 24% Municipal taxes of let out house property Repairs of the house property Donations to National Children s Fund Remuneration to partners Int. on money borrowed for investment in Govt. securities Sales tax

Net Profit 7,52,000

1,00,000 7,52,000

Other Information: a) Out of municipal taxes of Rs. 10,000; Rs. 6,000 was payable on 31.3.2011 and the same was paid on 30.6.2011. b) Sales tax includes a sum of Rs. 10,000 payable on 31.3.2011. Rs. 6,000 was paid on 31.7.2011 and Rs. 4,000 was paid on 30.11.20 although the due date of payment under the Sales Tax Act was 14.5.2011. Compute: a) The book profit b) The maximum amount of remuneration deductible u/s 40(b) c) The total income of the firm assuming that the maximum remuneration allowable u/s 40(b) is paid to the partners. d) Also state the income from the firm which will be taxable in the hands of the partners. Hint: Book profit= 2,79,000; maximum amount of remuneration=1,64,100; Total Income= 1,71,100; Total Income of each partner as business income =Rs.1, 00,050 Q4. Write a note on income from capital gain Q5. Discuss the taxable services under the service tax. Q6. Sameer who is a person with disability submits the following information. Compute (a) the taxable income; (b) the tax payable for the assessment year 2010-11. Rs. i) Salary per annum 180,000 ii) Rent received per month 3,500 iii) Dividend from cooperative society 1,000 iv) Interest on bank deposits 8,000 v) Interest on Government securities 1,000 vi) Winnings from lotteries (gross) 4,000 vii) NSC (VIII issue) purchased during the year 10,000 viii) Deposit under PPF Scheme 30,000 He earned a long-term capital gain of Rs.12,000 on sale of gold during the year. Hint: Total Income = 145,400 ; Tax payable = 5710

Master of Business Administration Semester III MF0012 Taxation Management- 4 Credits (Book ID: B1210) Assignment

Set- 2 (60 Marks) Note: Each Question carries 10 marks. Answer all the questions.

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Q1. Compute the net wealth and wealth tax liability of G Ltd. as on 31-3-2011. The company is engaged in jewellery business-exports and domestic sales: Rs Factory buildings 43,00,000 Bank balance 12,20,000 Unaccounted cash balance 6,50,000 Silver ware 94,00,000 Gold ornaments 96,00,000 Motor cars 15,00,000 Guest house in London 8,00,000 The company has taken a loan of Rs. 6,00,000 by mortgaging guest house and built the factory premises. Hint : Net Wealth taxable Rs. 14,50,000; Wealth tax 14,500 Q2. Write short note on: (a) Cost of Acquisition (b) Cost of Improvement (c) Expenditure on Transfer (d) Transfer Q3. Write a note on taxation of perquisites in the hands of employees. Q4. Nature of business has a major impact on tax planning. Explain.

Q5. Prakash Ltd. has unit Y which is not functioning satisfactorily. The details of its fixed assets are: Asset Land Goodwill (raised in books on March 31,2005) Machinery Plant

Date of acquisition

Book value(Rs. lakhs)

Feb.10, 2003 April 5, 1999 April 12, 2004

30 10 40 20