TMI Short Notes

TMI Short Notes on various issues

351. What is considered as disability and Severe Disability?

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352. Who can be your disabled dependent?

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353. Can somebody having invested the amount from income exempt from tax or by taking loan, claim deduction u/s 80D?

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354. If office deducts salary for medical insurance for employee and his family, whether the employee can claim deduction u/s 80D?

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355. Part contribution ?

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356. An individual assessee pays (through any mode other than cash) during the previous year medical insurance premium, out of his taxable income, as under: a. 12,000/- to keep in force an insurance policy on his health and on the health of his wife and dependent children; b. 17,000/- to keep in force an insurance policy on the health of his parents.

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357. Mr A, new retail investor has invested in listed equity share/units of equity oriented fund of Rajiv Gandhi Equity Savings Scheme. Calculate the amount of deduction u/s 80CCG for the following years.

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358. X deposit 1,10,000 in PPF & made a contribution of 410,000 to annuity policy of LIC (eligible for deduction u/s 80CCC).

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359. X deposit 41,000 in PPF & made a contribution of 1,10,000 to annuity policy of LIC (eligible for deduction u/s 80CCC).

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360. Suppose Mr. has paid premium of 25,000 for policy A taken on 30th June 2011 (sum assured 2,00,000) and 12,000 for policy B taken on 1st August 2013 (sum assured 1,00,000). Calculate the amount of deduction Mr. X can claim u/s 80C.

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361. I and my wife both paid for education of our one child. My wife paid 70,000 and I paid 1,60,000 can we both claim deduction?

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362. Can I claim deduction u/s 80C of Income tax Act, 1961 for my adopted child’s school fees?

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363. What are the inclusions and exclusions in Tuition Fees?

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364. Example illustrating the Rule of Residence for an Individual for the Assessment year 2015-16

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365. Example:-During the previous year ending 31st March, 2013, X, a salaried employee received ₹ 10,67,000 as basic salary and ₹ 20,000 as arrears of bonus of the financial year 1992-93. During the previous year 1992-93, X has received ₹ 50,000 as salary. X deposits ₹ 1,500 (during 1992-93) and ₹ 10,000 (during 2012-13) in PPF.

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366. Example:-The employer sells the following assets to the employees on 1st January 2015. Car to Z for 2,10,000 (Cost: 6,96,000) Computer to A for 24,270 (Cost: 1,17,000) Fridge to B for 1,000 (Cost: 40,000) All assets were purchased and put to use on 15th May 2012

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367. Example:-. On 15th October 2014, the company gives its music system to Y for domestic use. Ownership is not transferred. Cost of the music system (in 2003) to the employer is ₹ 15,000

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368. Example:-X owns car (1400cc). He uses it partly for official purposes and partly for private purposes. During the previous year 2014-15, he incurs a sum of ₹ 40,000 on running and maintenance of car. Besides, he has engaged a driver (salary ₹ 24,000). The employer reimburses the entire expenditure of ₹ 64,000. Log book of the car is not maintained.

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369. Example:-X is employed by a company. He has been provided a car (1200cc) owned by employer, cost of the car is ₹ 4,26,000. The expenditure incurred by the company on maintenance of the car are – petrol: ₹ 46,000, driver: ₹ 36,000 and maintenance: ₹ 10,000. The car can be used by X partly for official purposes partly for personal purposes. A sum of ₹ 12,000 is recovered from X.

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370. Example:- X, a director-employee of a private sector company based at Indore (population: 24Lakhs), draws ₹ 90,000 p.m. as basic salary. Other allowances and benefits attached to his office are: DA (forming part of Salary): 20% of basic salary; bonus: 30% of basic salary; commission: 800 p.m. and rent free house (lease rent paid by the employer: ₹ 40,000 p.m.) Determine the value of perquisite.

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371. Example:-X, an employee of ABC Ltd., posted at Ajmer (population: 18 Lakh), draws ₹ 3,00,000 as basic salary, ₹ 10,000 as DA (forming part of salary) and ₹ 5,000 as commission. Besides, the company provides a rent-free accommodation in Ajmer. The house is owned by the company. Fair rent of the accommodation is ₹ 50,000 p.a. Determine the taxable value of the perquisite.

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372. Example:-X has received following amount during the previous year. Basic Salary 7,000 p.m.; Dearness Allowance (D.A) – 1,000 p.m.;House Rent Allowance (H.R.A.) 3,000 p.m. The Actual Rent Paid is 3,000 p.m. Calculate exemption of HRA u/s 10(13A)

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373. Example:-Mr. X received voluntary retirement compensation of ₹ 7,00,000 after 30 years 4 months of service. He still has 6 years of service left. At the time of voluntary retirement, he was drawing basic salary ₹ 20,000 p.m.; Dearness allowance (which forms part of pay) ₹ 5000 p.m. Compute his taxable VRS.

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374. Example:-Mr. X received retrenchment compensation of ₹ 10,00,000 after 30 years 4 months of service. At the time of retrenchment, he was drawing basic salary ₹ 20,000 p.m.; dearness allowance ₹ 5,000 p.m. Compute his taxable retrenchment compensation.

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375. Example:-Mr. X retired from ABC Ltd. on 11th March 2014 after serving for 30 years and 11 months and the employer has paid him leave salary of ₹ 5,00,000. At the retirement, he was getting basic pay of ₹ 22,000. Further he was getting dearness allowance of ₹ 4,000 and 50% of the DA forms the part of salary for retirement benefits. The employee was entitled for 3 months leave for every year of service, but the employee has availed 7 months leave throughout the service and has encashed 4 months leave. Compute leave salary exemption u/s 10(10AA) for the AY 2014-15.

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376. Example:-X retires from B Ltd. on 31st July, 2014. He gets pension of ₹ 1,000 per month up to 31st December, 2014. W.e.f 1st January, 2015 he gets 60% of pension commuted for ₹ 1,70,000. Does it make any difference if he also receives gratuity of ₹ 3,000 at the time of retirement?

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377. Example:-An employee of X Ltd. retires on 10th March, 2015 after service of 26 years and receives ₹ 6,50,000 as gratuity. X Ltd. is not covered by the Payment of Gratuity Act, 1972). If Salary drawn by him during 1st May 2014 and 28th February 2015 is as follows: 1st May 2014 to 31th December 2014 Rs. 26,000 p.m. 1st January 2015 to 28th February 2015 Rs. 26,500 p.m. Besides, he receives ₹ 400 p.m. as dearness allowance (forming part of salary for the computation of retirement benefits). He is also entitled to 6% commission on sales achieved by him (during 1st May 2014 and 28th February 2015, turnover achieved by the employee is ₹ 25,77,860). Is the entire amount of gratuity exempt from tax?

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378. Example:-X, an employee of A Ltd., receives ₹ 62,000 as gratuity (he is covered under the Payment of Gratuity Act, 1972). He retires on 31st January, 2015 after service of 29 years and 8 months. At the time of retirement monthly salary of X was ₹ 3,100. Is the entire amount of gratuity exempt from tax?

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379. Example:- X, an employee of Central Govt., receives 9,20,000 as gratuity at the time of his retirement on 31st December, 2014. Is gratuity fully exempt from tax? Does it makes any difference if he joins a company in the private sector on 11th January, 2015?

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