Page 283 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes

Solution:
Calculation of Taxable Profits from Business
Net Profit 15,970
Add: Inadmissible items:

1. Income tax 1,400
2. Household Expenses 2,000
3. Life Insurance Premium 1,000
4. Interest on Capital 500

5. Provision for gratuity 4,000
6. Provision for bad debts 2,000
7. Provision for Income-tax 1,800
12,700 28,670

Less: Income to be shown separately:
1. Dividends from a cooperative society 3,000
2. Income from property 850
3. Interest from Government Securities 2,000 (5,850)

Taxable Profits from Business 22,820
Calculation of Income from house property:
Income from property 850
Less: 30% under Section 24 (255)

Income from house property 595
Calculation of Income from other sources:
Dividends from cooperative society 3,000
Interest from Government Securities 2,000

Income from other sources 5,000
Calculation of Gross Total Income:
Income from house property 595
Income from Business 22,820

Income from other sources 5,000
28,415

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