Title 2019.pdf ✅

VI Semester B.B.A. Examination, May/June 2019 (CBCS) (F+R) (2016-17 and Onwards) BUSINESS ADMINISTRATION Paper - 6.3: Income Tax Time : 3 Hours Max. Marks: 70 Instruction: Answer should be written in English only. SECTION - A 1. Answer any 5 sub-questions. Each carries 2 marks. 5x2=10 A. Define Person. As per section 2(31) of the Income Tax Act ,1961, Person includes: 1. an Individual; 2. a Hindu Undivided Family (HUF) ; 3. a Company; 4. a Firm 5. an association of persons or a body of individuals, whether incorporated or not; 6. a local authority; and 7. every artificial juridical person not falling within any of the preceding sub-clauses. 8. Association of Persons or Body of Individuals or a Local authority or Artificial Juridical Persons shall be deemed to be a person whether or not, such persons are formed or established or incorporated with the object of deriving profits or gains or income.
B. State any two canons of taxation. By canons of taxation we simply mean the characteristics or qualities which a good tax system should possess. In fact, canons of taxation are related to the administrative part of a tax. Adam Smith first devised the principles or canons of taxation in 1776. Even in the 21st century, Smithian canons of taxation are applied by the modern governments while imposing and collecting taxes.Canons of taxation in classical sense are: (i) Canon of equality or equity (ii) Canon of certainty (iii) Canon of economy Modern economists have added more: (i) Canon of productivity (ii) Canon of elasticity C. What is meant by profit in lieu of salary ? As per section 17(3) The amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the modification of the terms and conditions relating thereto is regarded as profits in lieu of salary. D. What is the Annual Value of House Property ? 'Annual Value' of a House Property as per section 23(1)(a) the Annual Value of any property shall be the sum for which the property might reasonably be expected to be let from year to year. It may neither be the actual rent derived nor the municipal valuation of the property. E. Define Business.
The definition of business is an occupation or trade and the purchase and sale of products or services to make a profit.Business is either an occupation, profession, or trade, or is a commercial activity which involves providing goods or services in exchange for profits. An example of business is farming,house sales. F. What is capital gain ? Capital gain can be defined as any profit that is received through the sale of a capital asset. The profit that is received falls under the income category. Therefore, a tax needs to be paid on the income that is received. The tax that is paid is called capital gains tax and it can either be long term or short term. G. What are tax free commercial debentures ? Tax-free debentures are similar to fixed deposits or other debentures issued by companies but with certain unique features.the interest earned by the investor is tax-free in the year of receipt. They generally have a face value of Rs 1000 and carry a Coupon Rate of interest (payable half-yearly) and have a fixed maturity date that can be as long as 15-years. For example, HUDCO, a government company may issue 5 % HUDCO 2035 tax-free bonds. SECTION - B Answer any 3 questions. Each carries 6 marks. 3x6=18 2. Mr. Robert, a citizen of America, comes to India on 20 th March 2017. On
1 st September 2017 he leaves India for China on a business trip. He came back on 26 th ’ February 2018. Determine his residential status for the AY 2018-19. Section 6(1) prescribes two tests. An individual who fulfils any one of the following two tests (a or b) is called Resident under the provisions of this Act. These tests are: Test A – RESIDENT (a)If he is in India during the relevant previous year for a period amounting in all or in aggregate to 182 days or more. OR (b)If he was in India for a period or periods amounting in all to 365 days or more during the four years preceding the relevant previous year AND he was in India for a period or periods amounting in all to 60* days or more in that relevant previous year. (*182 days refer note ii) An individual who is Resident u/s 6(1) can be subdivided into two categories Ordinary Resident TEST B; OR Not ordinarily Resident Test C Test B – RESIDENT (Ordinary Resident) -ROR After fulfilling one of the above two tests, an individual becomes resident of India. Further to become, an ordinary resident of India an individual has to in addition to Test A fulfill both the following two conditions: 1. He has been resident of India in at least 2 previous years out of 10 previous years immediately prior to the previous year in question.