Q.2 ICAI Taxation question paper solution of nov 2020 by CS K K Agrawal ...

Question 2 (a) Mr. Mukesh born on 1.4.1960 on 1-4-2019 he attains the age of 59 years furnished his original return for Assessment Year 2020-21 on 30.07.2020. He has shown salary income of ₹ 7.30 lakhs (computed) and interest from his savings bank of ₹ 12,700 80TTA and from his fixed deposits of ₹ 43,000. He also claimed deduction under section 80C ₹ 1.50 lakhs. He had claimed deduction u/s 80D of ₹ 25,000. He also claimed deduction u/s 80TTA of ₹ 10,000. His employer had deducted TDS of ₹ 33,950 from his salary, which he adjusted fully against tax payable. He paid health insurance premium 80D of ₹ 38,000 max 25,000 by account payee cheque for self and wife. He paid ₹ 1,500 in cash for his health check- up max 5,000 and ₹ 4,000 by cheque for preventive health check-up max 5,000 of his parents. He also paid medical insurance premium of ₹ 33,000 max 50,000 during the year to insure the health of his mother, aged 80 years, staying with his younger brother. He further incurred medical expenditure of ₹ 25,000 on his father, aged 81 years, who is staying with him. His father is not covered under any mediclaim policy. He seeks your advice about possibility of revising his return S 139(5) and if possible file his revised return latest by 31-3-2021. Analyse the above narrated facts as per applicable provisions of the Income Tax Act 1961. Does he need to revise his return and for what reasons ? Please advise him suitably and if needed, re-compute his income and tax payable or refund due for the Assessment Year 2020-21. (b) State in brief the applicability of tax deduction at source provisions, the rate and amount of tax deduction in the following cases for the financial year 2019-2020 under the Income-tax Act, 1961. Assume that all payments are made to residents : (i) Sanjay, a resident Indian individual, not deriving any income from business or profession makes payments of ₹ 12 lakh in January, 2020 no TDS, ₹ 20 lakh in February, 2020 no TDS and ₹ 20 lakh in March, 2020 TDS @ 5% on ₹ 52 Lakh to Mohan, a contractor for reconstruction of his residential house. Section 194M (ii) ABC Ltd. makes the payment of to Ramlal, an individual transporter who owned 6 goods carriages throughout the previous year. He does not furnish his PAN. Section 194C & 206AA. TDS @ 20% (iii) Smt. Sarita paid 5,000 on 17th April, 2019 to Smt. Deepa from the deposits in National Savings Scheme account. TDS not applicable