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Taxation- Direct and Indirect
1. Ms. Dimple earns rental income from three house properties. She wants to plan effectively her investments so that she can get adequate deductions from her gross total income. Discuss the nature of at least five investments or contribution in specified assets that qualify for getting deduction under section 80 C of the Income Tax Act 1961 (10 Marks)
Answer:
INTRODUCTION:
Section 80C of the Income Tax Act: Deductions under Section 80C are available for individuals or HUF, not for any partnerships, or corporate bodies. According to this section, a person or HUF can get up to 1.5 lakh rupees of deduction. There is no minimum limit for this deduction. This section is subdivided into Section 80CCC and Section 80CCD. To claim these deductions filing of Income Tax Return (ITR) by 31st July is required every year.
The amount claimed by an
2. Mr. Vaishnav completed his Bachelor of Science from Holkar Science College. He wants to start a business of manufacturing sanitizers looking at the current business scenario. But before starting the business he wants to understand the points of difference between direct tax and indirect tax. Elaborate. (any five points ) (10 Marks)
Answer:
INTRODUCTION:
Direct Tax: Tax that is levied on the total income of an individual or an organization is known as a direct tax. It includes Income Tax (levied on the income of an individual from sources like salary, interest, investments, etc.), Inheritance Tax (levied on any property or asset inherited by an individual after death of the owner) and Corporate Tax (paid by the corporate sectors or companies on the income
3. Ms. Neha submits the following details for her income for the assessment year 2020-21. Compute the gross total income after considering the relevant provisions of set-off and carry forward of losses
| PARTICULARS | AMOUNT | |||
| Speculation income | 85000 | |||
| Winning in crossword puzzles | 78000 | |||
| Profit from printing business of school textbooks | 435000 | |||
| Short term capital gain | 4500 | |||
| Income from house property | 240000 | |||
| long term capital gain | 20000 | |||
| long term capital losses | -5000 | |||
| Loss from house property under construction | -150000 | |||
| The items brought forward for set-off | ||||
| Loss from discontinued business operation, loss belongs to the A.Y 2017- 18 | 10000 | |||
| Long term capital loss for the AY 2008-09 | 1000 | |||
| Speculation loss for the AY 2016-17 | 50000 | |||
| Loss in the retail business of groceries AY 2019-20 | 45000 | |||
a. Calculate income from Business and Profession (5 Marks)
Answer:
INTRODUCTION:
Income from Business and Profession: Any income which is present in the profit or loss account after considering allowed expenses, is known as income from business and profession. The income earned in the previous year is taxable by the assessee.
Here, business means an activity that is carried away with the motive of earning a profit which includes trade, commerce, manufacturing activity, and so on. And profession means services provided by a
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