BBA504 & TAXATION MANAGEMENT

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Assignment

DRIVE	FALL 2014
PROGRAM	BBA
SEMESTER	V
SEMESTER CODE & NAME	BBA 504 & TAXATION MANAGEMENT
BK ID	B1852
CREDIT	2
MARKS	30

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

1 Write about capital receipts vs. revenue receipts and capital expenses vs revenue expenses.

Answer: Capital receipts: A capital receipt tends to be of a non-continuing nature. Thus, the sale of a fixed asset or shares in a business arises on only an occasional basis. One exception is when shares are sold on an ongoing subscription basis.

Another way of looking at capital receipts is that they are not generated by the sales of goods or services in the ordinary course of business. Thus, they do not arise from the operating activities of a business.

Capital expenses: Capital expenditures (CAPEX

               

2 Write about the basis of charge and chargeability of salary.

From the following details in respect of Mr. Rahul, calculate the income chargeable under the head income from salaries.

Basic salary 3,40,000

Dearness allowance 1,60,000

House rent allowance 1,48,000

City compensatory allowance (per month) 34,000

Profession tax deducted from salary 6,000

The following additional information is provided:

(a) Mr Rahul was provided various taxable perquisites which were valued at 24,000.

(b) Mr Rahul was provided a car exclusively for travel between his residence and office. He lives in a house owned by him.

Answer:

3 Give an overview of service tax. Explain the significance and need for service tax.

Answer: Service tax: Service Tax is a tax imposed by Government of India on services provided in India. The service provider collects the tax and pays the same to the government. It is charged on all services except the services covered in the negative list (Section 66d of Finance Act'1994) of services & services covered under Mega Exemption Notification (Notification NO. 25/2012 ST dated 20.06.2012). The current rate is 12.36% on gross value of the service. Service tax is a tax levied by the government on service providers on certain service transactions, but is actually borne by the customers. It is categorized under Indirect Tax and came into existence under the

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