Practice Test - 06 CA Intermediate Udesh May 2025 (Group 1) 01/12/2024

Maximum Marks - 50 Time Allowed – 1 Hr. 30 min

Income Tax
All Questions are Compulsory.
Wherever necessary suitable assumptions may be made and disclosed by way of a note.
Working Notes should form part of the answer.

OBJECTIVE
1. TexMax Ltd. distributed deposit certificates (without interest) to its equity and preference shareholders on
15.12.2024. Accumulated profits as on this date was ₹50 lakh. Mr. J, holding 10% equity shares, received deposit
certificates of the value of ₹10 lakh. Amount of dividend taxable in the hands of Mr J would be:
(2 Marks)
(1) ₹5,00,000
(2) ₹10,00,000
(3) Exempt
(4) ₹15,00,000

2. DLG (P) Ltd., a real estate dealer, sold a flat to D, its director, on 15.4.2024 for ₹10 lakh when its SDV was ₹30 lakh.
Cost of construction of flat was ₹20 lakh. D sold the flat to G for ₹35 lakh on 15.9.2024 when its SDV was ₹45 lakh.
Upon reference to the valuation officer on a claim made by D, value was flat was determined at ₹40 lakh. Amount
taxable in the hands of the company and D for AY 2025 -26 would be:
(2 Marks)
(1) Company: PGBP of (–) ₹10 lakh; D: IFOS of ₹20 lakh, STCG of ₹10 lakh
(2) Company: PGBP of ₹10 lakh; D: IFOS of ₹20 lakh, STCG of ₹9 lakh
(3) Company: PGBP of ₹10 lakh; D: IFOS of ₹20 lakh, STCG of ₹30 lakh
(4) Company: PGBP of ₹10 lakh; D: IFOS of ₹20 lakh, STCG of ₹10 lakh

3. Mehul received compensation of ₹50 lakh on 12.3.2024 on account of compulsory acquisition of his house by the
State Government on 12.5.2023. He received interest on compensation to the tune of ₹2,00,000 on 12.5.2024. In a
major earthquake, his properties got destroyed for which he received compensation of ₹5,00,000 from the Central
Government on 12.12.2024. The event was covered as disaster under the Disaster Management Act. Since the death
of his father two years back, he was getting ₹5,000 p.m. as family pension from his father’s employer. His own
business income was computed at ₹3,00,000 for the previous year. His total income for the AY 2025-26 would be:
(2 Marks)
(1) ₹5,45,000
(2) ₹9,45,000
(3) ₹4,40,000
(4) ₹4,45,000

4. Divyansh (14 years) won the first prize of ₹1 lakh in National Talent Search on 1.4.2024. He invested this money in
the business of his friend from which he received profit share of ₹50,000 on 1.10.2024. He deposited this profit share
in bonds of a closely held company which generated interest income of ₹3,000 for the previous year. His father and
mother earned salary income of ₹2 lakh and ₹3 lakh during the year, respectively (computed). Divyansh’s father
gifted ₹15 lakh to Divyansh’s mother on 10.4.2024 which she lent to a colleague who paid ₹1.5 lakh as interest for
the year. Compute taxable income of Divyansh and his parents for AY 2025 -26 as per the optional tax regime:
(2 Marks)
(1) Divyansh ₹1,00,000; Father ₹4,01,500; Mother ₹3,00,000
(2) Divyansh ₹1,53,000; Father ₹3,48,500; Mother ₹3,00,000
(3) Divyansh ₹1,03,000; Father ₹3,98,500; Mother ₹3,00,000
(4) Divyansh ₹1,03,000; Father ₹2,00,000; Mother ₹4,98,500
5. Raja and Rani, spouses, were employed with BCD (P) Ltd on annual salary income of ₹2 lakh each (computed), on
the post of tax manager. Raja and Rani were doctors and operated their clinic from which they earned professional
income of ₹3 lakh and ₹4 lakh, respectively (computed). Both of them had individually acquired 15% equity shares
in the company on 1.6.2023. However, while Raja transferred 10% of his holding to his minor son on 1.1.2024, Rani
transferred 10% of her holding to her friend on 1.3.2024. Taxable income of Raja and Rani for AY 2025-26 is:
(2 Marks)
(1) Raja ₹5 lakh; Rani ₹6 lakh
(2) Raja ₹7 lakh; Rani ₹4 lakh
(3) Raja ₹8 lakh; Rani ₹3 lakh
(4) Raja ₹3 lakh; Rani ₹8 lakh

6. Mr. Z gifted ₹5 lakh each to Mrs. Z, his spouse, and Master Z, his son aged 25 years, on 1.4.2022. They invested this
amount on 1.4.2022 in 10% debentures of BCD Ltd. The interest accrues annually and is reinvested. Compute the
amount taxable in the hands of Mrs. Z for AY 2025-26.
(2 Marks)
(1) ₹50,000
(2) ₹60,500
(3) ₹10,500
(4) Nil

7. Sana has loss from grocery business of ₹1 lakh, income from hospital business referred u/s 35AD of ₹3 lakh, loss
from speculative day trading in shares of ₹2 lakh, loss from let out house property of ₹2.5 lakh, long term capital
gain u/s 112A of ₹4 lakh, short term capital loss of ₹3.5 lakh, loss from card games of ₹50,000 and winning from
betting of ₹1.5 lakh. Her total income, under the optional tax regime, would be :
(2 Marks)
(1) Income of ₹2 lakh
(2) Income of ₹3 lakh
(3) Income of ₹1.5 lakh
(4) Income of ₹1 lakh

8. For AY 2025-26, Mohit had income from cold chain business referred u/s 35AD of ₹2,00,000, income from F&B
business of ₹3,00,000 and short term capital loss u/s 111A of ₹1,00,000. Loss of ₹2,50,000 from the cold chain
business, for AY 2016-17, was brought forward. Mohit filed return of income for AY 2025-26 after the due date.
Total income and loss to be carried forward, as per the optional tax regime, would be :
(1 Mark)
(1) Total income ₹3 lakh; Carry forward loss ₹1,50,000
(2) Total income ₹5 lakh; Carry forward loss Nil
(3) Total income ₹4 lakh; Carry forward loss Nil
(4) Total income ₹3 lakh; Carry forward loss ₹50,000
 SUBJECTIVE
1. The following details have been furnished by Mrs. Hemali pertaining to the year ended 31.3.2025:
(a) Cash gift of ₹ 51,000 received from her friend on the occasion of her “Shastiaptha Poorthi”, a wedding function
celebrated on her husband completing 60 years of age. This was also her 25th wedding anniversary.
(b) On the above occasion, a diamond necklace worth ₹ 2 lacs was presented by her sister living in Dubai.
(c) When she celebrated her daughter's wedding on 21.2.2025, her friend assigned in Mrs. Hemali's favour, a fixed
deposit held by the said friend in a scheduled bank; the value of the fixed deposit and the accrued interest on the
said date was ₹ 52,000.
Compute the income, if any, assessable as “Income from other sources” for A.Y.2025-26.
(6 Marks)

2. Examine the following transactions in the context of Income-tax Act, 1961:

(a) Mr. B transferred 500 shares of R (P) Ltd. to M/s. B Co. (P) Ltd. on 10.10.2024 for ₹ 3,00,000 when the fair
market value was ₹ 5,00,000. The indexed cost of acquisition of shares for Mr. B was computed at ₹ 4,45,000.
The transfer was not subjected to securities transaction tax. Determine the income chargeable to tax in the hands
of Mr. B and M/s. B Co. (P) Ltd. because of the above said transaction.
(b) Mr. Chezian is employed in a company with taxable salary income of ₹ 5,00,000. He received a sum of ₹
1,00,000 from Atma Charitable Trust (registered under section 12AB) by account payee cheque in December
2024 for meeting his medical expenses. Is the sum of money so received from the trust chargeable to tax in the
hands of Mr. Chezian?
(6 Marks)

3. Mr. B is the Karta of a HUF, whose members derive income as given below:
Particulars ₹
(i) Income from B' s profession 45,000
(ii) Mrs. B' s salary as fashion designer 76,000
(iii) Minor son D (interest on fixed deposits with a bank which were gifted to him 10,000
by his uncle)
(iv) Minor daughter P's earnings from sports 95,000
(v) D's winnings from lottery (gross) 1,95,000
Examine the tax implications in the hands of Mr. and Mrs. B.

(7 Marks)

4. Mr. Batra furnishes the following details for year ended 31.03.2025:
Particulars ₹
Short term capital gain 1,40,000
Loss from speculative business 60,000
Long term capital gain on sale of land 30,000
Long term capital loss on sale of unlisted shares 1,00,000
Income from business of textile (after allowing current year depreciation) 50,000
Income from activity of owning and maintaining race horses 15,000
Income from salary (computed) 1,00,000
Loss from house property 40,000
Following are the brought forward losses:
(i) Losses from activity of owning and maintaining race horses-pertaining to A.Y.2022-23 - ₹ 25,000.
(ii) Brought forward loss from business of textile ₹ 60,000 - Loss pertains to A.Y. 2017-18.
Compute gross total income of Mr. Batra for the Assessment Year 2025-26, assuming that he has exercised
the option of shifting out of the default tax regime provided under section 115BAC(1A). Also determine the
losses eligible for carry forward to the A.Y. 2026-27.
(8 Marks)
5. Mr. Joshi, resident Indian, aged about 58 years, furnished the following details of his income for the previous year
2024-25:
(i) Income from House property (computed) ₹ 2,00,000.
(ii) Income from Proprietary Business ₹ 3,00,000.
(iii) Short Term Capital Gain on sale of Land ₹ 2,00,000.
(iv) Short Term Capital loss on sale of equity shares listed in recognized stock exchange (STT paid) ₹ 75,000.
(v) Interest on Bank fixed deposit ₹ 50,000 received by his son, aged 21 years, out of money gifted by Mr. Joshi
in 2023.
(vi) Loss from Speculation Business ₹ 40,000.
(vii) Loss from Owning and Maintenance of Race Horses ₹ 50,000.
Following are the brought forward losses:
(a) Brought forward House property loss of assessment year 202 2-23 ₹ 2,50,000.
(b) Brought forward business loss of Proprietary business from assessment year 2014-15 ₹ 50,000.
(c) Unabsorbed Depreciation relating to assessment year 2015-16 ₹ 1,00,000.
(d) Brought forward Long Term Capital Loss from assessment year 2019-20 ₹ 90,000. Return of income for that
year was filed on 31.01.2020, after due date of filing the return.
Compute the total income of Mr. Joshi for the assessment year 2025-26 and show the items eligible for carry
forward, assuming that he exercises the option of shifting out of the default tax regime provided under Section
115BAC(1A).

(8 Marks)

PW Web/App - https://smart.link/7wwosivoicgd4

Library- https://smart.link/sdf ez8ejd80if

Content Feedback - https://f orms.gle/tZpnxPhzQof 2s4pn8