Personal Tax Planning and Tax Management — DU B.Com. (Hons.) Previous Year Question Papers

Q1. (a) Differentiate between short-term tax planning and long-term tax planning. Discuss g their objectives, characteristics, and relevance as part of an effective tax-planning strategy for the taxpayers. (9) (bD "Exemptions on leave encashment granted to non-government employees under the Incomatax Act provide valuable opportunities for structured and off:I;ective tax pJ¢##!.#g. " In light of this statement, explain the provisions relating to the taxability and exemption of leave enca§hment for non-goverrment employees, and discuss how employees can strategically manage their leave encashment to minimise the tax liab ility. (9) Q1. (a) Discuss the interrelationship between tax planning, saving, and investment. Explain how effective tax planning supports sound financial decision-making and helps individuals optimise their .savings by selecting appropriate investment options that minimise tax liability and maximise returns. (9) (b) ``Strategic tax plo[rming through donations digivble under section 80G enables taxpayers to reduce their taxable income while condibuting to social welfare." IrL light of this statement, explain the provisions of section 80G. regarding deductions for donations. Discuss how taxpayers can effectively utilise section 80G as a tax-planning tool to minimise tax liability. (9) Q[2h (a,® ``Choosing between House Rent Allowance (HRA) and Rent-Free Accommododion requires caroful evaluoalon Of tax implications and personal /gjc¢Jfcz.aJ co#sz.derm!fz.o#s. " In light of this statement, discuss the key factors that influence the decision between claiming HRA exemption and opting for rent-free accommodation. Explain how taxpayers can analyse both options to select the most tax-efficient benefit, using suitable examples. (9) (b) Vinod provides the following details for the previous year 2024-25: Particulars Amount (€) Agricultural land purchased in 2005-06 8,50,000 Sale consideration of agricultural land sold in January 2025 80,00,000 Other income Nil (Cost Infoation Index for the 2005-06 is 117) (i) Compute the long-term capital gain and the tax liability of Vinod for the assessment year 2025-26. (ii) Recommend suitable tax-planning strategies available to minimise tax liability. Q2„ (a.D "Section 44AD provides a simplified presumptive taxation scheme fior small taxpayers engaged in eligible businesses, allowing income to be esti:mated on a percentage basis rather than maintaining detailed books of accounts. " In light of this statement, explain the provisions for estimating the profits and gains of an assessee engaged in business under section 44AD. Highlight its relevance as a tax-planning mechanism for small businesses. 9) (b) Anmol, a General Manager in a textile company in Gandhinagar (2011 Census population: 14,00,000), receives the following salary: (9) Particulars Amount (8) Basic Salary 1,00,000 per month Dearness Allowance 50,000 per month (100% forms part of salary for retirement benefits)