FIN623 Solved MCQs and Subjective Questions by Instructor -3

FIN623 Taxation Management MCQs and Subjective Questions Solved and Verified by Course Instructor of VU ,

Shared by Fuad Hasan from LMS Moderated Discussion Board

FIN623 Taxation Management - Question: Sir I have a few questions from the excercises in Lect. 32:  1. Excercise 1 (pg. 64). How have you computed the rental income?  2. How repairs have been calculated in the same excercise.  3. How do we apply tax rate of 5% when the gross amount is Rs. 1,880,000 (before subtracting deductions). In notes, it says that where gross amount exceeds Rs. 1,000,000; rate of tax will be: Rs. 57,500 and 10% of exceeding amount.  4. Finally, in Excercise 2, the rental income is wholly exempt because Mr. A is an individual. However, in the previous excercise, Mr. A is also an individual and yet we have made no exemptions from his rental income. Please explain.  Thank you so much for your help, sir!

Instructor's Reply:

In exercise # 1 the rental income has been given in the question. The value of repairs is calculated by taking 1/5 of the gross rental income. So 1/5 of 1880,000 is 376,000. The note has been given in the end of the exercise. The rate of property tax is 5% which has been applied. It has been discussed in the video lectures. There is misprinting in handouts. I have updated them. Do not worry about this. In exercise # 2 the amount of rental income is 120,000 which is less than the minimum taxable income from the property i.e. 150,000. That is why tax has not been applied.

FIN623 Taxation Management - Question: Dear Sir, A person file the tax return having 250 sq.yard of land. Plz clarify either this land is  residential or commercial?

Instructor's Reply:

It depends whether the registration of the land has been done as residential, agricultural, or  commercial baisis.

FIN623 Taxation Management - Question:  Dear Sir, A company have no. of employees but all of them have salary not come in tax liability of individual. Now the salary paid by the company is treated as expense or not, as no tax deducted at source as no one employee fall in tax liability.

Instructor's Reply:

Then company will not deduct the tax at source and when there will not be tax deductions.

FIN623 Taxation Management - Question: Dear Sir, As u replied of my question, "It depends whether the registration of the land has been done as residential, agricultural, or commercial basis." It means the all persons having 250 sq. yard area will file tax return. Now the question is, as the agriculture income is exempt, than why the person filing the return. A salaried person who's income not fall in tax liability but having area of 250 sq.yard what will be condition of return filing.

Instructor's Reply:

Yes every person who have 250 sq. yard will file the tax return. Agriculture income is exempt but there are conditions for this that have been discussed in detail in lectures. Read them carefully.  A person has different sources income so if his salary does not fall in the tax bracket but he owns 250 sq. yard land then he must file the return.

FIN623 Taxation Management - Question: Dear sir, In your reply, "Then company will not deduct the tax at source and when there will not be tax deductions." Now the question arises that the salaried paid by the company is treated as expense or no?

Instructor's Reply:

Yes salaries paid will be booked as salaries expense.

FIN623 Taxation Management - Question: Dear Sir, If any person making payment as loan to some one through banking channel (cross bank cheque) but the receiver did not has NTN, did this mean this loan will be treated as income of loan receiver? Or Loan granter.. Please explain Best Regards//

Instructor's Reply:

Loan taken or received by a person is treated as income for tax purposes. For a company the amount received through bank account or cross cheque is not allowed as deduction.

FIN623 Taxation Management - Question: which is the right option for minimum tax liability? The amount of minimum tax liability is arrived at as follows: (A x 0.5%) B  (A x B) 0.5% (A + B) 0.5% (A / 0.5%) B

Instructor's Reply:

The amount of minimum tax liability is arrived at as follows:  (A x 0.5%) B