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Company
v/s Other taxable entities viz Proprietary firm, partnership firm, LLP
In case of loss In case of profit on first Rs. 3 lacs profit book profit whichever is more on the balance profit
Rs.150000
60% of book
COGS 405000 Sales 2010000 Rem. to partners 850000 Int. Received 270000 Rem. to staff 170000 Income tax 52500 Interest to partners 120000 ( @ 15% ) Other expenses 60000 Net profit 622500
From the following data compute income assuming the business is a) proprietary concern b) firm
Particulars COGS Amt 1000000 Particulars Sales Amt 2500000
Other expenses
Salary to proprietor / partner Interest on capital ( 12%) Net Profit
200000
500000 200000 600000 2500000 2500000
Upto 12% Upto allowed 12% allowed Allowed upto given limits Applicabl e Allowed upto given limits NA
Remuneration
No ceiling
NA
I.Determine Total Income and tax liability of R & Sons a proprietary concern. R has invested Rs. 25000 in PPF
Particulars Amt Particulars Amt
COGS Salaries to employees Salary to R Interest on Rs capital Depreciation Interest on loans Other office expenses
500000 Sales 200000 Profit on sale of land 300000 Interest on debentures 12000 Dividend from shares of HUL 25000 30000 100000
1200000 200000
100000 50000
15000
II. Determine Total Income and tax liability of RB & Co a partnership firm with R & B as partners. Both the partners have invested Rs.12500 each in PPF.
Particulars Amt Particulars Amt
COGS Salaries to employees Salary to partners Interest on partners capital @ 12% Depreciation Interest on loans Other office expenses Income tax paid Net Profit
500000 Sales 200000 Profit on sale of land 600000 Interest on debentures 12000 Dividend (shares of HUL) 25000 30000 100000 15000 368000
1500000
200000
100000
50000
III. Determine Total Income and tax liability of RB Pvt. Ltd with R & B as Directors. Both the directors have invested Rs.12500 each in PPF.
Particulars Amt Particulars Amt
COGS Salaries to employees Salary to directors Depreciation Interest on loans Other office expenses
500000 Sales 200000 Profit on sale of land 612000 Interest on debentures 25000 Dividend (shares of HUL) 30000 100000
1500000
200000
100000
50000
15000
368000
From the following data determine which form of business organisation (i) a partnership firm or (ii) Pvt. Ltd Co is more appropriate from tax liability point of view Firm Number of partners : 4 Taxable income before interest/ remuneration : Rs. 1400000 Interest on total capital @ 12% : Rs. 180000 ( equal capital contribution) Remuneration to partners : Maximum allowable i.e Rs.822000 ( Rs.205500 each ) Private Company Number of Directors : 4 Taxable income before remuneration : Rs. 1400000 Remuneration to Directors : Rs. 1200000 ( Rs. 300000 each ) ( Basic Rs.120000, CEA : Rs.2400 , Transport allowance