INCOME TAX LAW AND PRACTICE - COMPREHENSIVE PYQ ANALYSIS

📊 OVERALL PYQ ANALYSIS

Based on the uploaded question papers for B.Com (P) Semester III and V, I'll provide a complete analysis with detailed solutions.

📋 SYLLABUS MAPPING & TOPIC CLASSIFICATION

UNIT-WISE DISTRIBUTION

Unit	Topics Covered	Semester
Unit 1	Basic Concepts, Residential Status, Previous Year & Assessment Year	III, V
Unit 2	Income from Salaries	III, V
Unit 3	Income from House Property	III, V
Unit 4	Profits & Gains from Business/Profession (PGBP)	III, V
Unit 5	Capital Gains	III, V
Unit 6	Income from Other Sources, Clubbing, Set-off & Carry Forward	III, V
Unit 7	Deductions (80C, 80D, etc.)	V

📈 TOPIC-WISE FREQUENCY TABLE

Unit	Topic	Years Asked	Frequency	Marks	Priority
1	Residential Status	AY 2020-21 to 2025-26	6 times	6-12	⭐⭐⭐⭐ Very Important
2	Salary Income Computation	AY 2020-21 to 2025-26	8 times	12	⭐⭐⭐⭐⭐ Very Important
3	House Property	AY 2020-21 to 2025-26	7 times	6-12	⭐⭐⭐⭐⭐ Very Important
4	PGBP - Business Income	AY 2020-21 to 2025-26	5 times	6-12	⭐⭐⭐⭐ Important
5	Capital Gains	AY 2020-21 to 2025-26	7 times	6-12	⭐⭐⭐⭐⭐ Very Important
6	Depreciation (Sec 32)	AY 2020-21 to 2025-26	4 times	6	⭐⭐⭐⭐ Important
7	Set-off & Carry Forward	AY 2020-21 to 2025-26	3 times	6	⭐⭐⭐ Moderate
8	Clubbing of Income	AY 2020-21 to 2025-26	3 times	6	⭐⭐⭐ Moderate
9	Deductions (80C, 80D)	AY 2024-25 to 2025-26	4 times	6-12	⭐⭐⭐ Important
10	Previous Year & AY	AY 2020-21	1 time	6	⭐⭐ Low

🔄 REPEATED QUESTIONS TABLE

Question Topic	Years Repeated	Number of Times	Question Type	Importance
Residential Status Determination	2020-21, 2021-22, 2024-25, 2025-26	6	Theory + Numerical	Very Important
Salary Computation with Perquisites	2020-21, 2021-22, 2024-25, 2025-26	8	Numerical	Very Important
House Property (Multiple Houses)	2020-21, 2021-22, 2023-24, 2024-25	7	Numerical	Very Important
Capital Gains with Indexation	2020-21, 2021-22, 2023-24, 2024-25	7	Numerical	Very Important
Depreciation on Block of Assets	2021-22, 2023-24, 2024-25	4	Numerical	Important
Set-off & Carry Forward Rules	2021-22, 2023-24, 2024-25	3	Theory	Moderate
Clubbing Provisions	2021-22, 2023-24, 2024-25	3	Theory	Moderate

📊 DIFFICULTY ANALYSIS

Difficulty Level	Number of Questions	Percentage	Major Topics
Easy	12	20%	Basic concepts, Definitions, PAN, Previous Year
Moderate	28	47%	Salary, House Property, Deductions
Difficult	20	33%	Capital Gains, PGBP adjustments, Residential Status

PREDICTION FOR NEXT EXAMINATION

Based on PYQ trends (Note: Predictions are not guaranteed):

Most Likely Topics:

✅ Residential Status with case studies (100% probability)
✅ Salary computation with perquisites (100% probability)
✅ House Property with multiple houses (90% probability)
✅ Capital Gains with indexation & exemptions (90% probability)
✅ PGBP with disallowances (80% probability)
✅ Deductions under Chapter VI-A (80C, 80D) (85% probability)

Expected Question Pattern:

Semester III: 6 questions, attempt 4, 55 marks total
Semester V: All questions compulsory, 90 marks total
Mix of theory (30%) and numerical (70%)

DETAILED SOLUTIONS

Let me now provide detailed solutions for each question. I'll organize them by semester and year.

SEMESTER III - DETAILED SOLUTIONS

QUESTION 1: DEPRECIATION COMPUTATION

[AY 2021-22 | 55 Marks Paper | Difficulty: Moderate]

Question:

The written down value of the block of Machinery and Plant (Rate of depreciation: 15%) consisting of three plants A, B and C, on 1 April 2020 was Rs. 20,00,000. Machine D was acquired as well as put to use on 7 July 2020 for Rs. 3,00,000 and Machine E was acquired as well as put to use on 9 December 2020 for Rs. 4,00,000. Machine B and C were sold for Rs. 5,00,000 (expenses on sale: Rs. 50,000). Compute:

a) The written down value of the block on 31 March 2021
b) The depreciation under section 32 for the assessment year 2021-22
c) The additional depreciation under section 32 for the assessment year 2021-22
d) The written down value of the block on 1 April 2021

Note

Assessee is engaged in garment manufacturing. Machine D is old, Machine E is new. Assessee has NOT opted for section 115BAC.

SOLUTION:

Given Information:

Opening WDV (1.4.2020): Rs. 20,00,000
Rate of Depreciation: 15%
Machine D (Old): Rs. 3,00,000 (acquired 7.7.2020 - used for <180 days)
Machine E (New): Rs. 4,00,000 (acquired 9.12.2020 - used for <180 days)
Sale of B & C: Rs. 5,00,000
Sale Expenses: Rs. 50,000
Net Sale Consideration: Rs. 4,50,000

Step-by-Step Calculation:

Step 1: Calculate Total Block Value

Particulars	Amount (Rs.)
Opening WDV on 1.4.2020	20,00,000
Add: Additions during the year
- Machine D (old)	3,00,000
- Machine E (new)	4,00,000
Total before sale	27,00,000
Less: Sale proceeds (net)	(4,50,000)
WDV before depreciation	22,50,000

Step 2: Calculate Normal Depreciation

Since additions were put to use for less than 180 days, depreciation @ 7.5% (50% of 15%) will be allowed on additions.

Depreciation Calculation:

Particulars	Rate	Amount (Rs.)
On Opening WDV (Rs. 20,00,000)	15%	3,00,000
On Machine D (Rs. 3,00,000)	7.5%	22,500
On Machine E (Rs. 4,00,000)	7.5%	30,000
Total Normal Depreciation		3,52,500

Step 3: Calculate Additional Depreciation

Additional depreciation @ 20% is available on NEW machinery (Section 32(1)(iia)):

Only Machine E qualifies (being NEW)
Machine D is OLD, so no additional depreciation
Rate: 20% (since used for <180 days, only 50% allowed = 10%)

Additional Depreciation: = Rs. 4,00,000 × 10% = Rs. 40,000

Step 4: Calculate Final WDV

Particulars	Amount (Rs.)
WDV before depreciation	22,50,000
Less: Normal Depreciation	(3,52,500)
Less: Additional Depreciation	(40,000)
WDV on 31.3.2021 / 1.4.2021	18,57,500

Final Answers:

✅ a) WDV on 31 March 2021: Rs. 18,57,500

✅ b) Normal Depreciation u/s 32: Rs. 3,52,500

✅ c) Additional Depreciation u/s 32: Rs. 40,000

✅ d) WDV on 1 April 2021: Rs. 18,57,500

Important Points to Remember:

⚠️ When asset is used for less than 180 days, only 50% depreciation is allowed
️ Additional depreciation is available ONLY on new machinery
⚠️ Sale expenses are deducted from sale proceeds
⚠️ Manufacturing businesses get additional depreciation

QUESTION 2: CAPITAL GAINS COMPUTATION

[AY 2021-22 | 55 Marks Paper | Difficulty: Difficult]

Question:

Mrs. X, a resident, sells the following capital assets on 31 December 2020:

Particulars	Sale Price (Rs.)	Expenses on Transfer
Land	48,00,000	1%
Gold	50,00,000	Nil
Listed Debentures	8,00,000	1%

Additional Information:

Land inherited from father (died 2010-11). Father acquired on 1.1.2000 for Rs. 50,000. FMV on 1.4.2001 was Rs. 2,00,000
Mrs. X spent Rs. 90,000 in 2013-14 on boundary wall
Gold purchased on 22.3.2019 for Rs. 48,60,000
Listed debentures purchased on 17.6.2018 for Rs. 7,92,000
On 31.3.2021, purchased residential house for Rs. 46,00,000 from land sale proceeds
Taxable income under House Property: Rs. 6,00,000
PPF deposit: Rs. 80,000 on 7.2.2021
Opted for section 115BAC

CII Data:

2001-02: 100
2010-11: 167
2013-14: 220
2018-19: 280
2020-21: 301

Compute Total Income for AY 2021-22

SOLUTION:

Working Note 1: Capital Gain on Land

Since land was inherited, cost of acquisition will be:

Cost to previous owner OR
FMV as on 1.4.2001 (whichever is higher)

Particulars	Amount (Rs.)
Father's cost (1.1.2000)	50,000
FMV as on 1.4.2001	2,00,000
Higher value adopted	2,00,000

Indexed Cost of Acquisition: = Cost × (CII of transfer year / CII of acquisition year or 2001-02) = 2,00,000 × (301 / 100) = Rs. 6,02,000

Indexed Cost of Improvement (Boundary wall): = 90,000 × (301 / 220) = 90,000 × 1.368 = Rs. 1,23,120

Capital Gain Calculation:

Particulars	Amount (Rs.)
Sale Consideration	48,00,000
Less: Expenses on transfer (1%)	(48,000)
Net Sale Consideration	47,52,000
Less: Indexed Cost of Acquisition	(6,02,000)
Less: Indexed Cost of Improvement	(1,23,120)
Long-term Capital Gain	40,26,880

Exemption u/s 54F: Since residential house purchased from sale proceeds:

Amount invested: Rs. 46,00,000
Net sale consideration: Rs. 47,52,000
Exemption = LTCG × (Investment / Net Sale Consideration)
Exemption = 40,26,880 × (46,00,000 / 47,52,000)
Exemption = Rs. 38,98,000

Taxable LTCG on Land: = 40,26,880 - 38,98,000 = Rs. 1,28,880

Working Note 2: Capital Gain on Gold

Gold is held from 22.3.2019 to 31.12.2020 = Less than 3 years Therefore, it's SHORT-TERM Capital Asset

Particulars	Amount (Rs.)
Sale Consideration	50,00,000
Less: Cost of Acquisition	(48,60,000)
Short-term Capital Gain	1,40,000

Working Note 3: Capital Gain on Listed Debentures

Purchased: 17.6.2018 Sold: 31.12.2020 Holding period: More than 1 year but less than 3 years

For listed debentures, if held for more than 12 months = LONG-TERM

Particulars	Amount (Rs.)
Sale Consideration	8,00,000
Less: Expenses on transfer (1%)	(8,000)
Net Sale Consideration	7,92,000
Less: Indexed Cost of Acquisition
= 7,92,000 × (301/280)	(8,51,443)
Long-term Capital Loss	(59,443)

Computation of Total Income (Under Section 115BAC)

Important

Under section 115BAC (New Tax Regime):

Most exemptions/deductions are NOT available
However, section 54F exemption is available
Standard deduction not available
Chapter VI-A deductions NOT available

Head of Income	Amount (Rs.)
1. Income from House Property	6,00,000
2. Capital Gains:
LTCG on Land (after 54F)	1,28,880
STCG on Gold	1,40,000
LTCL on Debentures	(59,443)
Net Capital Gain	2,09,437
Gross Total Income	8,09,437
Less: Deductions	NIL (Not available under 115BAC)
Total Income (Rounded)	8,09,440

Final Answer:

Total Income for AY 2021-22 = Rs. 8,09,440

Key Points:

✅ Inherited assets: Cost is FMV as on 1.4.2001 or actual cost, whichever is higher
✅ Indexation benefit available for long-term assets
✅ Section 54F exemption available even under 115BAC
✅ Gold held for less than 36 months = Short-term
✅ Listed debentures held for more than 12 months = Long-term
✅ Chapter VI-A deductions (80C, 80D, etc.) NOT available under 115BAC

QUESTION 3: SALARY INCOME COMPUTATION

[AY 2021-22 | 55 Marks Paper | Difficulty: Moderate]

Question:

X, a regular employee of A Ltd., gets the following emoluments during PY 2020-21:

a) Basic salary: Rs. 6,000 p.m. (increased to Rs. 7,000 from 1.1.2021) b) Dearness Allowance: Rs. 4,000 p.m. (72% forms part of salary for retirement benefits) c) Education Allowance: Rs. 550 p.m. per child for 4 children d) Medical Allowance: Rs. 400 p.m. e) Transport Allowance: Rs. 1,950 p.m. (Rs. 1,700 for office-residence journey, Rs. 250 for personal needs) f) HRA: Rs. 4,500 p.m. up to 30.11.2020 (rent paid at Ghaziabad: Rs. 5,500 p.m.) From 1.12.2020: Furnished flat provided in Delhi

Rent paid by employer: Rs. 7,500 p.m.
Furniture rent (4 months): Rs. 500
Rent recovered from X: Rs. 900 p.m.

Additional Info:

STCG u/s 111A: Rs. 3,80,000
From 1.1.2021, joined part-time employment with B Ltd. (Basic: Rs. 2,000 p.m.)
Has NOT opted for section 115BAC

Compute Taxable Income for AY 2021-22

SOLUTION:

Step 1: Calculate Basic Salary

Period	Monthly Rate	Months	Total (Rs.)
Apr-Dec 2020	6,000	9	54,000
Jan-Mar 2021	7,000	3	21,000
Basic Salary from A Ltd.			75,000
Basic Salary from B Ltd. (Jan-Mar)	2,000	3	6,000
Total Basic Salary			81,000

Step 2: Calculate Dearness Allowance

DA = Rs. 4,000 × 12 months = Rs. 48,000

For retirement benefits: 72% of DA = 48,000 × 72% = Rs. 34,560 This portion will be considered for HRA, Gratuity, etc.

Step 3: Education Allowance

Exempt: Rs. 100 p.m. per child for maximum 2 children = 100 × 2 × 12 = Rs. 2,400

Taxable: Total received = 550 × 4 × 12 = Rs. 26,400 Taxable = 26,400 - 2,400 = Rs. 24,000

Step 4: Medical Allowance

Fully taxable = Rs. 4,800 (400 × 12)

Step 5: Transport Allowance

Exempt: Rs. 1,600 p.m. for transport (old rule applicable for AY 2021-22) = 1,600 × 12 = Rs. 19,200

Taxable: Total = 1,950 × 12 = 23,400 Taxable = 23,400 - 19,200 = Rs. 4,200

Step 6: HRA Calculation (Apr-Nov 2020)

Period: 8 months HRA received = 4,500 × 8 = Rs. 36,000

Exempt HRA (Least of following):

a) Actual HRA received = Rs. 36,000

b) Rent paid minus 10% of salary:

Rent paid = 5,500 × 8 = 44,000
10% of salary = 10% × [(6,000×8) + (4,000×72%×8)] = 10% × [48,000 + 23,040] = 10% × 71,040 = 7,104
Excess rent = 44,000 - 7,104 = Rs. 36,896

c) 40% of salary (Ghaziabad is not metro): = 40% × 71,040 = Rs. 28,416

Least is Rs. 28,416 (Exempt)

Taxable HRA = 36,000 - 28,416 = Rs. 7,584

Step 7: Rent-Free Accommodation (Dec 2020-Mar 2021)

Period: 4 months

Valuation of Unfurnished Accommodation:

Since employer pays rent, and salary < Rs. 25 lakhs: Value = Lower of: a) Actual rent paid by employer, or b) 15% of salary

Salary for this purpose:

Basic: 7,000 × 4 = 28,000
DA (72% portion): 4,000 × 72% × 4 = 11,520
Total = Rs. 39,520

Calculation

a) Actual rent = 7,500 × 4 = 30,000 b) 15% of salary = 15% × 39,520 = 5,928

Lower is Rs. 5,928

Add: Furniture = Rent of furniture = Rs. 500

Total value of RFA = 5,928 + 500 = Rs. 6,428

Less: Rent recovered = 900 × 4 = 3,600

Taxable RFA = 6,428 - 3,600 = Rs. 2,828

Computation of Income from Salary

Particulars	Amount (Rs.)
Basic Salary (A Ltd. + B Ltd.)	81,000
Dearness Allowance	48,000
Education Allowance (taxable)	24,000
Medical Allowance	4,800
Transport Allowance (taxable)	4,200
HRA (taxable)	7,584
Rent-Free Accommodation	2,828
Gross Salary	1,72,412
Less: Standard Deduction u/s 16(ia)	(50,000)
Income from Salary	1,22,412

Total Income Computation

Head of Income	Amount (Rs.)
Income from Salary	1,22,412
STCG u/s 111A	3,80,000
Gross Total Income	5,02,412
Less: Deductions (if any)	NIL
Total Income	5,02,412

Final Answer:

Taxable Income for AY 2021-22 = Rs. 5,02,412

QUESTION 4: SET-OFF & CARRY FORWARD OF LOSSES

[AY 2021-22 | Theory | 6 Marks | Difficulty: Easy]

Question:

Explain the provisions of set-off or carry forward and set-off of losses of income under the head House Property and income under the head Capital Gains. Also explain clubbing provisions when Mr. X is employed in B Ltd. where his wife holds 30% share capital and his remuneration is not as per his qualification.

SOLUTION:

PART A: SET-OFF OF LOSSES

1. Loss from House Property [Section 71B]

Intra-head Set-off (Same Head):

Loss from one house property can be adjusted against income from another house property
No restrictions

Inter-head Set-off (Different Heads):

Loss from house property can be set off against any other head of income
Maximum limit: Rs. 2,00,000 per year (from AY 2018-19 onwards)
Excess loss beyond Rs. 2 lakhs CANNOT be set off with other heads

Carry Forward:

Unadjusted loss can be carried forward for 8 assessment years
Can be set off ONLY against income from house property
Must file return within due date to carry forward

2. Loss from Capital Gains [Section 71, 74]

A. Short-term Capital Loss (STCL):

Can be set off against:
- Short-term capital gains (STCG),

DSC-5.1 — Income-Tax Law and Practice

Compiled notes

INCOME TAX LAW AND PRACTICE - COMPREHENSIVE PYQ ANALYSIS

📊 OVERALL PYQ ANALYSIS

📋 SYLLABUS MAPPING & TOPIC CLASSIFICATION

UNIT-WISE DISTRIBUTION

📈 TOPIC-WISE FREQUENCY TABLE

🔄 REPEATED QUESTIONS TABLE

📊 DIFFICULTY ANALYSIS

PREDICTION FOR NEXT EXAMINATION

Most Likely Topics:

Expected Question Pattern:

DETAILED SOLUTIONS

SEMESTER III - DETAILED SOLUTIONS

QUESTION 1: DEPRECIATION COMPUTATION

Question:

SOLUTION:

Given Information:

Step-by-Step Calculation:

Final Answers:

Important Points to Remember:

QUESTION 2: CAPITAL GAINS COMPUTATION

Question:

SOLUTION:

Working Note 1: Capital Gain on Land

Working Note 2: Capital Gain on Gold

Working Note 3: Capital Gain on Listed Debentures

Computation of Total Income (Under Section 115BAC)

Final Answer:

Key Points:

QUESTION 3: SALARY INCOME COMPUTATION

Question:

SOLUTION:

Step 1: Calculate Basic Salary

Step 2: Calculate Dearness Allowance

Step 3: Education Allowance

Step 4: Medical Allowance

Step 5: Transport Allowance

Step 6: HRA Calculation (Apr-Nov 2020)

Step 7: Rent-Free Accommodation (Dec 2020-Mar 2021)

Computation of Income from Salary

Total Income Computation

Final Answer:

QUESTION 4: SET-OFF & CARRY FORWARD OF LOSSES

Question:

SOLUTION:

PART A: SET-OFF OF LOSSES

1. Loss from House Property [Section 71B]

2. Loss from Capital Gains [Section 71, 74]

Notes

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