Time: 3 Hours
Maximum Marks: 100
Instructions
- Question 1 is compulsory.
- Attempt any four questions from the remaining.
- Working notes should form part of the answer.
- Assume Assessment Year 2025-26 unless stated otherwise.
Question 1 – Compulsory (20 Marks)
(a) Multiple Concept Questions (10 × 1 = 10)
Choose the correct answer:
- Income tax in India is governed by which Act?
a) Finance Act
b) Income-tax Act 1961
c) GST Act
d) Companies Act - Agricultural income in India is:
a) Fully taxable
b) Partially taxable
c) Fully exempt
d) Taxed under GST - The previous year for taxation normally refers to:
a) Calendar year
b) Financial year
c) Assessment year
d) Accounting period only - Which of the following is a capital receipt?
a) Salary income
b) Interest income
c) Loan received
d) Rent income - GST stands for:
a) General Sales Tax
b) Goods and Service Tax
c) Government Sales Tax
d) Goods Supply Tax - Under GST, input tax credit is allowed for:
a) Personal expenses
b) Business expenses
c) Income tax payment
d) Penalties - Which income head includes salary from employer?
a) Income from business
b) Income from salary
c) Capital gains
d) Other sources - GST is classified as:
a) Direct tax
b) Indirect tax
c) Wealth tax
d) Property tax - Tax deducted at source is called:
a) TDS
b) TCS
c) GST
d) VAT - The authority responsible for GST administration in India is:
a) RBI
b) GST Council
c) SEBI
d) Supreme Court
(b) Short Notes (5 × 2 = 10)
Write short notes on:
- Assessment Year vs Previous Year
- Gross Total Income
- Input Tax Credit
- Composite Supply under GST
- Exempt Supply under GST
Question 2 – Residential Status (20 Marks)
Mr. Raj left India on 1 June 2024 for employment abroad.
His stay in India during previous years was:
| Year | Days Stayed |
|---|---|
| 2024-25 | 62 |
| 2023-24 | 200 |
| 2022-23 | 180 |
| 2021-22 | 150 |
Additional Information:
Income earned during the year:
- Salary received in India – ₹6,00,000
- Income from property in London – ₹4,00,000
- Interest from Indian bank – ₹50,000
Required:
- Determine Residential Status of Mr. Raj.
- Compute taxable income in India.
Question 3 – Income from Salary (20 Marks)
Mr. Arun received the following from his employer:
Basic Salary: ₹8,00,000
Dearness Allowance: ₹2,00,000
House Rent Allowance: ₹1,80,000
Rent paid: ₹1,20,000
Bonus: ₹80,000
Professional Tax: ₹2,500
Additional Information:
- He lives in Delhi.
- DA forms part of retirement benefits.
Required:
Compute Taxable Income from Salary.
Question 4 – Income from House Property (20 Marks)
Mr. Sharma owns a house property with the following details:
Municipal Value: ₹4,00,000
Fair Rent: ₹4,50,000
Standard Rent: ₹4,20,000
Actual Rent Received: ₹4,80,000
Expenses:
Municipal Taxes Paid: ₹40,000
Interest on Loan: ₹1,50,000
Required:
Compute Income from House Property.
Question 5 – GST Computation (20 Marks)
A registered dealer provides the following information:
Output GST on sales: ₹3,50,000
Input GST on purchases: ₹2,20,000
Input GST on capital goods: ₹40,000
Additional Information:
- Input tax credit not allowed for ₹10,000 personal purchases.
- Some purchases used partly for exempt supply (₹20,000).
Required:
Compute Net GST payable.
Question 6 – Capital Gains (20 Marks)
Mr. Amit sold a residential property with the following details:
Sale Price: ₹45,00,000
Purchase Price (2015): ₹20,00,000
Cost of Improvement: ₹3,00,000
Transfer Expenses: ₹50,000
Cost Inflation Index:
2015 = 254
2025 = 348
Required:
- Calculate Indexed Cost of Acquisition.
- Compute Long Term Capital Gain.
Solution
Question 1 – Compulsory
(a) Multiple Choice Answers
- b) Income-tax Act 1961
- c) Fully exempt
- b) Financial year
- c) Loan received
- b) Goods and Service Tax
- b) Business expenses
- b) Income from salary
- b) Indirect tax
- a) TDS
- b) GST Council
(b) Short Notes
- Assessment Year vs Previous Year
- Previous Year: The year in which income is earned (FY 2024-25)
- Assessment Year: The year following previous year in which income is assessed (AY 2025-26)
- Gross Total Income (GTI)
- Sum of income under all five heads: Salary, House Property, Business/Profession, Capital Gains, Other Sources, before deductions.
- Input Tax Credit (ITC)
- Tax paid on purchases used for business can be set off against GST on sales.
- Composite Supply under GST
- Supply of two or more goods/services together, one being principal. Taxed as single supply.
- Exempt Supply under GST
- Supply not liable to GST, e.g., unprocessed agricultural produce, educational services.
Question 2 – Residential Status & Taxable Income
Step 1: Determine Residential Status
Rule:
- Resident if stays ≥182 days in India OR
- Stays ≥60 days in current year and 365 days in last 4 FYs
Given:
- Stay in 2024-25 = 62 days
- Total past 4 years (2023-24 + 2022-23 + 2021-22) = 200 + 180 + 150 = 530 days
60 + 365 condition satisfied (62 days + 530 ≥ 365) ✅
Residential Status: Resident
- Since he is abroad for employment, Resident but Not Ordinarily Resident (RNOR)
Step 2: Taxable Income in India
Income in India only taxable for RNOR:
- Salary received in India = ₹6,00,000
- Interest from Indian bank = ₹50,000
- Income from property in London = exempt
Total Taxable Income = ₹6,50,000
Question 3 – Income from Salary
| Particulars | ₹ |
|---|---|
| Basic Salary | 8,00,000 |
| Dearness Allowance | 2,00,000 |
| House Rent Allowance (HRA) | 1,80,000 |
| Bonus | 80,000 |
| Gross Salary | 12,60,000 |
Step 1: HRA Exemption (Sec 10(13A))
HRA received = 1,80,000
Rent Paid = 1,20,000
DA included for retirement benefits, so consider fully taxable
Exemption = Minimum of:
- Actual HRA received = 1,80,000
- Rent paid − 10% of Salary = 1,20,000 − 10% of (8,00,000 + 2,00,000) = 1,20,000 − 1,00,000 = 20,000
- 50% of salary (Delhi) = 50% × 10,00,000 = 5,00,000
HRA Exemption = ₹20,000
Step 2: Salary Income
Gross Salary = 12,60,000
Less HRA exemption = 20,000
Less Professional Tax = 2,500
Taxable Income from Salary = ₹12,37,500
Question 4 – Income from House Property
Step 1: Annual Value
- Actual rent received = ₹4,80,000
- Municipal Value = 4,00,000, Fair Rent = 4,50,000, Standard Rent = 4,20,000
Annual Value (Higher of Municipal Value or Fair Rent, subject to actual received)
- Gross Annual Value = Max of (Received, MV, FR, SR) = ₹4,80,000
Step 2: Less Municipal Taxes Paid
Net Annual Value = 4,80,000 − 40,000 = 4,40,000
Step 3: Less 30% Standard Deduction
Net income = 4,40,000 × 70% = 3,08,000
Step 4: Less Interest on Loan
Taxable income from house property = 3,08,000 − 1,50,000 = ₹1,58,000
Question 5 – GST Computation
Step 1: Eligible Input Credit
- Input GST = 2,20,000 + 40,000 = 2,60,000
- Less non-business/personal purchases = 10,000
- Less exempt supply portion = 20,000
Eligible ITC = 2,60,000 − 10,000 − 20,000 = 2,30,000
Step 2: Net GST Payable
- Output GST = 3,50,000
- Less eligible ITC = 2,30,000
Net GST Payable = 3,50,000 − 2,30,000 = ₹1,20,000
Question 6 – Capital Gains
Step 1: Indexed Cost of Acquisition
- Purchase Price = 20,00,000
- CII 2015 = 254, CII 2025 = 348
Indexed Cost = 20,00,000 × (348 / 254) = 20,00,000 × 1.3701 ≈ 27,40,000
- Cost of Improvement = 3,00,000 × (348 / 254) = 4,11,000
- Total Indexed Cost = 27,40,000 + 4,11,000 = 31,51,000
Step 2: Long Term Capital Gain
- Sale Price = 45,00,000
- Less Indexed Cost = 31,51,000
- Transfer Expenses = 50,000
LTCG = 45,00,000 − 31,51,000 − 50,000 = ₹12,99,000
✅ Summary of Key Results
| Question | Result |
|---|---|
| Residential Status | RNOR |
| Taxable Income (Salary + Interest) | ₹6,50,000 |
| Taxable Salary Income | ₹12,37,500 |
| Income from House Property | ₹1,58,000 |
| Net GST Payable | ₹1,20,000 |
| Long Term Capital Gain | ₹12,99,000 |
Disclaimer:
This mock test is designed for practice and educational purposes only. It does not guarantee exam results. Users should rely on official study materials and guidelines for CA Intermediate exams.