ECO 11 Solved Assignment 2021 – 22
IGNOU Free Solved Assignment 2021 – 22
TUTOR MARKED ASSIGNMENT
COURSE CODE: ECO-11
COURSE TITLE: ELEMENTS OF INCOME TAX
ASSIGNMENT CODE: ECO-11/TMA/2021-22
COVERAGE: ALL BLOCKS
Maximum Marks: 100
Attempt all the questions:
1. (a) Mr. Shakil is an employee of Axis Ltd. He receives Rs. 5,00,000 as gratuity as per the provisions of payment of Gratuity Act, 1972. He retired on 31st March, 2021 after doing service for 27 years and 9 months. At the time of retirement his monthly salary was Rs. 17,000. Calculate the taxable gratuity in the hands of Mr. Shakil for
assessment year 2021-22. (10)
Solution:
|
|
Rs. |
|
1. 15 days’ salary for each completed year of service. Completed year is 28 because fraction of month is more than 6 months. 17,000 x 15/26 9,808 x 28 2. Maximum amount 3. Actual amount received |
2,74,624 20,00,000 5,00,000 |
The minimum amount of above three amount is 2,74,624 which is exempted and remaining part (5,00,000 – 2,74,624) = Rs. 2,25,376 is taxable as gratuity.
(b) Particulars of the income of Mr. James for the year ended on March 31, 2021 are as follows: 10
|
Particulars |
Amount (Rs.) |
|
Income from house property (computed) Profit and gains of sole tradership Share profits from an association of persons which has paid tax on its income Long-term capital gains on jewellery Short-term capital gains Long-term capital loss on sale of shares Dividends from an Indian company (the shares are held as stock-in-trade) Brought-forward items/losses of the previous year: Business losses Loss from house property |
2,10,000 25,000 15,000 10,000 22,000 (-) 22,000 6,500
(-) 42,000 (-) 2,60,000 |
Determine his gross total income of Mr. James for the assessment year 2021-22.
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2. (a) Mr. Radhey Shyam is employed in a company. He gets the following from the company: (10)
i) Salary @ 20,000 p.m.
ii) Dearness allowance @ Rs. 2,000 p.m.
iii) Medical allowance @ Rs. 5,000 p.m.
iv) Bonus equal to 2 month’s salary
v) Commission @ Rs. 20,000 p.a.
The following perquisites are provided by the employer:
i) A sweeper and a cook getting salary of Rs. 1,500 p.m. each
ii) A car of 1400 cc for his personal use for which the employer pays.
iii) Rent-free unfurnished house in Etawah (Population less than 10 lakhs) owned by employer, annual rental value of which is Rs. 1,00,000
iv) A Gardner whose salary is Rs. 2,000 p.m.
v) Free gas, electricity and water facility for private use, employer actually paid for this facility Rs. 20,000 for previous year.
Compute taxable salary of Mr. Radhey Shyam for the A.Y. 2021-22.
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(b) Mr. Amit is employed in XYZ Ltd. Getting basic pay Rs. 15,000 p.m. and dearness allowance Rs. 5,500 p.m. forming part of salary. He has contributed Rs. 3,000 p.m. to the recognized provident fund and employer has also contributed an equal amount. During the year interest of Rs. 25,000 was credited @ 8.5 p.a. Employer has provided rent-free-accommodation to the employee for which rent paid by the employer is Rs. 6,000 p.m. The employee has enchased one month leave and was allowed leave salary of Rs. 17,000. Compute his income under the head salary for Assessment year 2019-20. (Hint: Population of the city of accommodation is above 25 lakhs) (10)
Ans: Contact 9577097967 for Complete Solutions. We provide solutions of practical problems @ Rs. 10 per question for IGNOU Students. If you want solution of only one question we can provide.
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3. (a) Compute income from the other sources of Mr. Anupam for A.Y. 2021-22. 10
i) Winning from Horse Race 10,000
ii) Loss in card games 3,000
iii) Winning from wager 25,000
iv) Amount received from winnings of lottery 66,500
v) Winning from T.V. show (Gross) 50,000
Solution:
Computation of Income from other sources of Mr. Anupam for AY 2021 – 22
|
|
Rs. |
|
1. Winning from horse race 2. Winning from wager 3. Lottery (grossed up) [(66,500*100)/(100-30)] 4. Winning from TV show |
10,000 25,000 95,000 50,000 |
|
Income from other sources |
1,80,000 |
Note: Loss on Card game is not deductible. It can be deducted only from Income of card game if there are two card games and assessee has income in one card game and loss in the other card game.
(b) Mr. Shankar Lal’s income particulars are as under:
i) He took a house on the rent of Rs. 1,000 per month and let it out again for Rs. 1,600 per month. Besides it he received Rs. 5,000 rent from his ownership house.
ii) Dividend from an Indian Company Rs. 4,000 (Gross).
iii) Speculation business profit Rs. 6,000 and Rs. 500 from cricket gambling.
iv) Agricultural income in Pakistan Rs. 10,000 was not brought in India. Rs. 18,000 income from agricultural land situated at Kanpur.
v) Salary as an M.L.A. Rs. 30,000 and Daily Allowances Rs. 4,000.
vi) Share in H.U.F. income Rs. 8,500.
vii) Dividend received Rs. 6,000 from Co-operative Society.
Compute Income from other sources.
Solution:
Statement of Income from Other Sources of Mr. Shankar Lal’s for AY 2020 – 21
|
|
Rs. |
Rs. |
|
|
1. |
Income from Sub-letting:
Rent received Less: Rent Paid |
19,200 12,000 |
7,200 |
|
2. |
Dividend from an Indian Company |
|
4,000 |
|
3. |
Cricket Gambling + speculation business profit |
|
6,500 |
|
4. |
Agricultural income in Sri Lanka (Agricultural income from foreign country is taxable in India) |
|
10,000 |
|
5. |
Agricultural Income in Kanpur |
|
Exempt |
|
6. |
Salary as M.L.A. (Daily Allowance is exempt) |
|
30,000 |
|
7. |
Dividend from a Co-operative society |
|
6,000 |
|
|
Income from Other Sources |
|
63,700 |
Note: Agricultural income from foreign lands shall be table in India.
4. (a) Mr. Ashish, an owner of three houses, sells a residential house in Kolkata for Rs. 24,93,800 on 23rd May, 2020. This house was purchased by him on 1st April, 2007 for Rs. 8,00,000. On 30th May, 2020, he purchased a flat in Delhi for Rs. 8,70,000 for the purpose of residence of his son-in-law. On March 1, 2020, Mr. Ashish sells the house in Delhi for Rs. 12,10,000. Compute the capital gains arising on two transactions. Is Mr. Ashish eligible for exemption under Section 54 in respect of the second sale? Cost inflation index for the financial years 2007-08 and 2020-21 are 129 and 301. (10)
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(b) Mr. Ramakrishna derives income from estates in coffee, rubber and tea. He also has nursery wherein he grows plants and sells for the previous year ending 31st March, 2021. From the following particular of income from estates and sale of plants, compute the taxable income for the assessment year 2021-22.
i) Manufacture of rubber 8,50,000
ii) Manufacture of coffee grown and cured 2,50,000
iii) Manufacture of tea 3,50,000
iv) Sale of plants from Nursery 1,00,000 (10)
Solution:
|
|
Computation of taxable income for the assessment year 2020-21 |
Rs. |
|
1. 2. 3. 4. |
Manufacture of coffee grown and cured (25% of income shall be business income). Manufacture of rubber (35% of income Shall be business income) Manufacture of tea (40% of income Shall be business income) Sale of plants from nursery. |
62,500 2,97,500 1,40,000 Exempt |
|
|
Taxable Income |
5,00,000 |
5. Write short notes on the following: (4X5)
(a) Entertainment Allowance
Ans: Entertainment Allowance: Entertainment allowance is fully taxable for non-government employees. But in case of a government employee’s a deduction is allowed u/s 16(ii) at the least of the following:
(a) Statutory limit: 5000
(b) 1/5th of basic salary
(c) Actual entertainment allowance
(b) Annual Value of House Property
Ans: Annual Value (Section 23)
The Annual Value of a house property is the inherent capacity of the property to earn income and it has been defined as the amount for which the property may reasonably be expected to be let out from year to year. It is not necessary that the property should actually be let out. It is also not necessary that the reasonable return from property should be equal to the actual rent realized
when the property is, in fact, let out.
Computation of annual value: Computation of Annual Value for the determination of Income from House property requires three steps.
Ø STEP 1 Determine the Gross Annual Value(GAV)
Ø STEP 2 Determine the value of Municipal taxes
Ø STEP 3 Compute the Net Annual Value
STEP 1- Determine the Gross Annual Value (GAV):
STEP 2 – Determine the value of Municipal taxes:
The municipal tax or the property tax paid is allowed as a deduction from the Gross Annual Value if the following two conditions are satisfied.
(a) The property is let out during the whole or any part of the previous year,
(b) The Municipal taxes must be borne by the landlord. If the Municipal taxes or any part thereof are borne by the tenant, it will not be allowed.
(c) The Municipal taxes must be paid during the year. Where the municipal taxes become due but have not been actually paid, it will not be allowed.
STEP 3 – Compute the Net Annual Value:
Gross Annual Value ++++++
Less: Municipal Taxes ++++++
Net Annual Value ++++++
(c) Income of minor child
Ans: Income of a minor Child (Including Step or Adopted) in excess of Rs. 1,500 p.a. (After all deduction) is clubbed with the total income of parent whose income is higher and continuously clubbed with his income unless the AO is satisfied to change. Following points must be taken into consideration while clubbing the income of a minor:
1) If parents are living separately: club with the income of guardian
2) If incomes of parents are identical: club with income of any of the parents which is beneficial.
3) If parents are not alive, a separate return is to be filed, cannot be clubbed with guardian’s income
4) But income of minor cannot be clubbed if:
a) Child suffering from any disability
b) Income arises on account of any manual work done by him
c) Income arises on account of skills, talent or specialized knowledge and experience of minor
(d) Deduction under Section 80QQB
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