NMIMS
Global Access
School for Continuing Education (NGA-SCE)
Course: Taxation- Direct and Indirect
Internal Assignment Applicable for December 2019 Examination
Assignment Marks: 30
1 . Mr. Somaya recently joined as a marketing executive in a construction company. The Human
resource department of the company recruited him at a CTC of Rs6.5 lacs, annually. The said
department asked him to follow adequate tax planning so as to minimize income tax liability.
However, being a graduate in Marketing Somaya is confused among the terms tax planning, tax
avoidance and tax evasion. He approached you for discussing the differences in these terms
School for Continuing Education (NGA-SCE)
Course: Taxation- Direct and Indirect
Internal Assignment Applicable for December 2019 Examination
Assignment Marks: 30
1 . Mr. Somaya recently joined as a marketing executive in a construction company. The Human
resource department of the company recruited him at a CTC of Rs6.5 lacs, annually. The said
department asked him to follow adequate tax planning so as to minimize income tax liability.
However, being a graduate in Marketing Somaya is confused among the terms tax planning, tax
avoidance and tax evasion. He approached you for discussing the differences in these terms
You recently come to know about the difference by studying them
under the course of Taxation –
Direct and Indirect.
Explain him the needful with suitable examples. (10 Marks)
2. The basis of charge under the head salary is different when compared with income from other
various sources. Further, there are certain deductions under the Income tax Act which are available
only to the salaried employees and which are in addition to the deductions under Chapter VI of the
income tax Act.
Mention at least three of the deductions available to salaried employees with the maximum
deductible amount for each of them. Also, discuss the conditions needed to be satisfied in order to
charge any income under the salary head. (10 Marks)
3
a. Mr. Morgan received voluntary retirement compensation of Rs7.5 lakhs after service of 30
years. He still has 5 years of service left. At the time of VRS, he was drawing basic salary of Rs
25000 per month, Dearness allowance Rs 7000per month. Compute his taxable voluntary
retirement compensation, assuming he can’t claim any relief U/S 89. (5 Marks)
b. Ramman is a resident and ordinary resident in India for the previous year 2018-19. He owes a
house in London, which he has to let out at pound 15000 per month. The municipal taxes paid to
the Municipal Corporation of London is pound 7000 during the previous year 2018-19. The value
of one pound in India rupees to be taken Rs 90.50. Compute Ramman’s Net Annual Value of the
property for the Assessment year 2019-20. (5 Marks)
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Direct and Indirect.
Explain him the needful with suitable examples. (10 Marks)
2. The basis of charge under the head salary is different when compared with income from other
various sources. Further, there are certain deductions under the Income tax Act which are available
only to the salaried employees and which are in addition to the deductions under Chapter VI of the
income tax Act.
Mention at least three of the deductions available to salaried employees with the maximum
deductible amount for each of them. Also, discuss the conditions needed to be satisfied in order to
charge any income under the salary head. (10 Marks)
3
a. Mr. Morgan received voluntary retirement compensation of Rs7.5 lakhs after service of 30
years. He still has 5 years of service left. At the time of VRS, he was drawing basic salary of Rs
25000 per month, Dearness allowance Rs 7000per month. Compute his taxable voluntary
retirement compensation, assuming he can’t claim any relief U/S 89. (5 Marks)
b. Ramman is a resident and ordinary resident in India for the previous year 2018-19. He owes a
house in London, which he has to let out at pound 15000 per month. The municipal taxes paid to
the Municipal Corporation of London is pound 7000 during the previous year 2018-19. The value
of one pound in India rupees to be taken Rs 90.50. Compute Ramman’s Net Annual Value of the
property for the Assessment year 2019-20. (5 Marks)
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