Q.1 ICAI Taxation question paper solution of nov 2020 by CS K K Agrawal ...

Question 1 From the following particulars furnished by Mr. Ganesh, aged 58 years, a resident Indian for the previous year ended 31.03.20XX, you are requested to compute his total income and tax liability under normal as well as special provisions (AMT) S 115JC, if any, applicable to him for the Assessment Year 20XX-XX. (i) He occupies ground floor of his residential building and has let out first floor for residential use at an annual rent of ₹ 2,28,000. He has paid municipal taxes of ₹ 60,000 50% allowed as deduction for the current financial year. (ii) He owns an industrial undertaking established in a SEZ and which had commenced operation during the financial year 2017-18. Total turnover of the undertaking was ₹ 200 lakhs, which includes ₹ 140 lakhs from export turnover. This industrial undertaking fulfills all the conditions of section 10AA of the Income-Tax Act, 1961. Profit from this industry is ₹ 25 lakhs. (iii) He received royalty of ₹ 2,88,000 from abroad for a book authored by him on the nature of artistic. The rate of royalty as 18% of value of books and expenditure made for earning this royalty was ₹ 40,000. The amount remitted to India till 30th September, 2020 is ₹ 2,30,000. (iv) Received ₹ 40,000 as interest on saving bank deposits. 80TTA max 10,000 (v) Received ₹ 47,000 as share of profit from an AOP where all the members are individual and which had paid the tax by normal rates of income tax. (vi) He also sold his vacant land on 10.11.2019 for ₹ 10 lakhs. The stamp duty value of land at the time of transfer was ₹ 14 lakhs. The FMV of the land as on 1st April, 2001 was ₹ 4 lakhs. This land was acquired by him on 5.08.1995 for ₹ 1.80 lakhs. He had incurred registration expenses of ₹ 10,000 at that time. The cost of inflation index for the year 2019-20 and 2001-02 are 289 and 100 respectively. (vii) He paid the following amounts, out of his taxable income : (a) Insurance premium of ₹ 39,000 paid on life insurance policy of son Available, who is not dependent on him. (b) Insurance premium of ₹ 48,000 on policy of his dependent father. (c) Tuition fees of ₹ 42,000 for his three children to a school. The fees being ₹ 14,000 p.a. per child. Max 2 child