Income Tax Law (Group I) Model Test Paper - 4 (Answers) | Model Test Papers for CA Intermediate PDF Download

 Page 1


ANSWERS OF MODEL TEST PAPER 4 
INTERMEDIATE COURSE: GROUP - I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ No. Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (b)  3. (a) 
 (ii) (d)  4. (d) 
 (iii) (a)    
2. (i) (a)    
 (ii) (c)    
 (iii) (a)    
Division B – Descriptive Questions 
1.   Computation of Total Income of Ms. Farah for the A.Y.2025-26  
   under default tax regime under section 115BAC 
Particulars ?  ?  ?  
Income from house property    
Gross Annual Value
1
   90,000  
Less: Municipal taxes paid     9,000  
Net Annual Value (NAV)  81,000  
Less: Deduction under section 24(a) – 
30% of NAV = 30% of ? 81,000 
  
  24,300 
 
56,700 
Profits and gains of business or 
profession 
   
Net profit as per Profit and loss 
account 
 25,91,000  
Add: Expenses debited but not 
allowable 
   
(i) Purchase of car [Amount paid for 
purchase of car is not allowable 
since it is a capital expenditure] 
3,00,000   
(ii) Municipal tax paid in respect of 
house property [allowable as 
deduction under the head “Income 
from house property”] 
9,000   
(iii) Payment made to tax consultant 
in cash [disallowed under section 
50,000   
 
1
 Rent received has been taken as the Gross Annual Value in the absence of other information 
relating to Municipal Value, Fair Rent and Standard Rent. 
509
Page 2


ANSWERS OF MODEL TEST PAPER 4 
INTERMEDIATE COURSE: GROUP - I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ No. Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (b)  3. (a) 
 (ii) (d)  4. (d) 
 (iii) (a)    
2. (i) (a)    
 (ii) (c)    
 (iii) (a)    
Division B – Descriptive Questions 
1.   Computation of Total Income of Ms. Farah for the A.Y.2025-26  
   under default tax regime under section 115BAC 
Particulars ?  ?  ?  
Income from house property    
Gross Annual Value
1
   90,000  
Less: Municipal taxes paid     9,000  
Net Annual Value (NAV)  81,000  
Less: Deduction under section 24(a) – 
30% of NAV = 30% of ? 81,000 
  
  24,300 
 
56,700 
Profits and gains of business or 
profession 
   
Net profit as per Profit and loss 
account 
 25,91,000  
Add: Expenses debited but not 
allowable 
   
(i) Purchase of car [Amount paid for 
purchase of car is not allowable 
since it is a capital expenditure] 
3,00,000   
(ii) Municipal tax paid in respect of 
house property [allowable as 
deduction under the head “Income 
from house property”] 
9,000   
(iii) Payment made to tax consultant 
in cash [disallowed under section 
50,000   
 
1
 Rent received has been taken as the Gross Annual Value in the absence of other information 
relating to Municipal Value, Fair Rent and Standard Rent. 
509
40A(3), since such cash payment 
exceeds ? 10,000]  
(iv) Travel expenditure on foreign 
professional tour [Since it is 
incurred in connection with 
professional work, the same is 
allowable as deduction. As it has 
already been debited to profit and 
loss account, no further 
adjustment is required] 
-   
(v) Repair and maintenance of car 
[Repairs and maintenance paid in 
advance for the period 1.4.2025 to 
30.9.2025 i.e. for 6 months 
amounting to ? 17,500 is not 
allowable as deduction, since Ms. 
Farah is following the accrual 
system of accounting] 
17,500 
 
 
 
 
 
 
3,76,500 
 
  29,67,500  
Less: Income credited but not taxable 
under this head: 
   
(i) Dividend from an Indian company 
(taxable under the head “Income 
from Other Sources") 
11,00,000   
(ii) Interest on deposit certificates 
issued under gold monetization 
scheme, 2015 (taxability or 
otherwise to be considered under 
the head “Income from Other 
Sources") 
25,000   
(iii) Honorarium for valuation of 
answer papers 
50,000   
(iv) Rent received in respect of house 
property  
90,000 12,65,000  
  17,02,500  
Less: Depreciation on car @15%  45,000  
   16,57,500 
Income from Other Sources    
Dividend from an Indian company  11,00,000  
Interest on deposit certificates issued 
under gold monetization scheme, 
2015 [Exempt under section 10(15)] 
 -  
Honorarium for valuation of answer 
papers 
 50,000 11,50,000 
Gross Total Income   28,64,200 
510
Page 3


ANSWERS OF MODEL TEST PAPER 4 
INTERMEDIATE COURSE: GROUP - I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ No. Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (b)  3. (a) 
 (ii) (d)  4. (d) 
 (iii) (a)    
2. (i) (a)    
 (ii) (c)    
 (iii) (a)    
Division B – Descriptive Questions 
1.   Computation of Total Income of Ms. Farah for the A.Y.2025-26  
   under default tax regime under section 115BAC 
Particulars ?  ?  ?  
Income from house property    
Gross Annual Value
1
   90,000  
Less: Municipal taxes paid     9,000  
Net Annual Value (NAV)  81,000  
Less: Deduction under section 24(a) – 
30% of NAV = 30% of ? 81,000 
  
  24,300 
 
56,700 
Profits and gains of business or 
profession 
   
Net profit as per Profit and loss 
account 
 25,91,000  
Add: Expenses debited but not 
allowable 
   
(i) Purchase of car [Amount paid for 
purchase of car is not allowable 
since it is a capital expenditure] 
3,00,000   
(ii) Municipal tax paid in respect of 
house property [allowable as 
deduction under the head “Income 
from house property”] 
9,000   
(iii) Payment made to tax consultant 
in cash [disallowed under section 
50,000   
 
1
 Rent received has been taken as the Gross Annual Value in the absence of other information 
relating to Municipal Value, Fair Rent and Standard Rent. 
509
40A(3), since such cash payment 
exceeds ? 10,000]  
(iv) Travel expenditure on foreign 
professional tour [Since it is 
incurred in connection with 
professional work, the same is 
allowable as deduction. As it has 
already been debited to profit and 
loss account, no further 
adjustment is required] 
-   
(v) Repair and maintenance of car 
[Repairs and maintenance paid in 
advance for the period 1.4.2025 to 
30.9.2025 i.e. for 6 months 
amounting to ? 17,500 is not 
allowable as deduction, since Ms. 
Farah is following the accrual 
system of accounting] 
17,500 
 
 
 
 
 
 
3,76,500 
 
  29,67,500  
Less: Income credited but not taxable 
under this head: 
   
(i) Dividend from an Indian company 
(taxable under the head “Income 
from Other Sources") 
11,00,000   
(ii) Interest on deposit certificates 
issued under gold monetization 
scheme, 2015 (taxability or 
otherwise to be considered under 
the head “Income from Other 
Sources") 
25,000   
(iii) Honorarium for valuation of 
answer papers 
50,000   
(iv) Rent received in respect of house 
property  
90,000 12,65,000  
  17,02,500  
Less: Depreciation on car @15%  45,000  
   16,57,500 
Income from Other Sources    
Dividend from an Indian company  11,00,000  
Interest on deposit certificates issued 
under gold monetization scheme, 
2015 [Exempt under section 10(15)] 
 -  
Honorarium for valuation of answer 
papers 
 50,000 11,50,000 
Gross Total Income   28,64,200 
510
 
Less: Deduction under Chapter VI-A 
[Deduction under section 80D would 
not be allowable]  
   
 
               - 
Total Income   28,64,200 
 Computation of tax payable under default tax regime under section 
115BAC 
Particulars ?  
Tax on total income of ? 28,64,200  
Upto ? 3,00,000  Nil  
? 3,00,001 – ? 7,00,000 [i.e., ? 4,00,000@5%] 20,000  
? 7,00,001 – ? 10,00,000 [i.e., ? 3,00,000@10%] 30,000  
? 10,00,001 – ?12,00,000 [i.e., ? 2,00,000@15%] 30,000  
? 12,00,001 – ? 15,00,000 [i.e., ? 3,00,000@20%] 60,000  
? 15,00,001 – ? 28,64,200 [i.e., ? 13,64,200 
@30%] 
4,09,260  
 5,49,260 
Add: Health and Education cess@4%   21,970 
Tax Liability 5,71,230 
Less: Advance Tax paid  1,00,000 
Less: Tax deducted at source on dividend income from an Indian 
company under section 194 [ ? 11,00,000 x 10%] 
  
 1,10,000 
Tax payable  3,61,230 
Computation of total income and tax payable by Ms. Farah  
for the A.Y.2025-26 under regular provisions of the Act 
Particulars ?  
Gross Total Income 28,64,200 
[Income under the “Income from house property” “Profits and 
gains from business or profession” and “Income from other 
sources” would remain the same under regular provisions of the 
Act] 
 
Less: Deductions under Chapter VI-A   
Section 80D  
Medical insurance premium paid online for 
parents, being senior citizens  
47,000  
Payment made in cash of ? 8,500 for preventive 
health check-up for self and spouse restricted to  
5,000 52,000 
Total Income 28,12,200 
 
 
 
511
Page 4


ANSWERS OF MODEL TEST PAPER 4 
INTERMEDIATE COURSE: GROUP - I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ No. Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (b)  3. (a) 
 (ii) (d)  4. (d) 
 (iii) (a)    
2. (i) (a)    
 (ii) (c)    
 (iii) (a)    
Division B – Descriptive Questions 
1.   Computation of Total Income of Ms. Farah for the A.Y.2025-26  
   under default tax regime under section 115BAC 
Particulars ?  ?  ?  
Income from house property    
Gross Annual Value
1
   90,000  
Less: Municipal taxes paid     9,000  
Net Annual Value (NAV)  81,000  
Less: Deduction under section 24(a) – 
30% of NAV = 30% of ? 81,000 
  
  24,300 
 
56,700 
Profits and gains of business or 
profession 
   
Net profit as per Profit and loss 
account 
 25,91,000  
Add: Expenses debited but not 
allowable 
   
(i) Purchase of car [Amount paid for 
purchase of car is not allowable 
since it is a capital expenditure] 
3,00,000   
(ii) Municipal tax paid in respect of 
house property [allowable as 
deduction under the head “Income 
from house property”] 
9,000   
(iii) Payment made to tax consultant 
in cash [disallowed under section 
50,000   
 
1
 Rent received has been taken as the Gross Annual Value in the absence of other information 
relating to Municipal Value, Fair Rent and Standard Rent. 
509
40A(3), since such cash payment 
exceeds ? 10,000]  
(iv) Travel expenditure on foreign 
professional tour [Since it is 
incurred in connection with 
professional work, the same is 
allowable as deduction. As it has 
already been debited to profit and 
loss account, no further 
adjustment is required] 
-   
(v) Repair and maintenance of car 
[Repairs and maintenance paid in 
advance for the period 1.4.2025 to 
30.9.2025 i.e. for 6 months 
amounting to ? 17,500 is not 
allowable as deduction, since Ms. 
Farah is following the accrual 
system of accounting] 
17,500 
 
 
 
 
 
 
3,76,500 
 
  29,67,500  
Less: Income credited but not taxable 
under this head: 
   
(i) Dividend from an Indian company 
(taxable under the head “Income 
from Other Sources") 
11,00,000   
(ii) Interest on deposit certificates 
issued under gold monetization 
scheme, 2015 (taxability or 
otherwise to be considered under 
the head “Income from Other 
Sources") 
25,000   
(iii) Honorarium for valuation of 
answer papers 
50,000   
(iv) Rent received in respect of house 
property  
90,000 12,65,000  
  17,02,500  
Less: Depreciation on car @15%  45,000  
   16,57,500 
Income from Other Sources    
Dividend from an Indian company  11,00,000  
Interest on deposit certificates issued 
under gold monetization scheme, 
2015 [Exempt under section 10(15)] 
 -  
Honorarium for valuation of answer 
papers 
 50,000 11,50,000 
Gross Total Income   28,64,200 
510
 
Less: Deduction under Chapter VI-A 
[Deduction under section 80D would 
not be allowable]  
   
 
               - 
Total Income   28,64,200 
 Computation of tax payable under default tax regime under section 
115BAC 
Particulars ?  
Tax on total income of ? 28,64,200  
Upto ? 3,00,000  Nil  
? 3,00,001 – ? 7,00,000 [i.e., ? 4,00,000@5%] 20,000  
? 7,00,001 – ? 10,00,000 [i.e., ? 3,00,000@10%] 30,000  
? 10,00,001 – ?12,00,000 [i.e., ? 2,00,000@15%] 30,000  
? 12,00,001 – ? 15,00,000 [i.e., ? 3,00,000@20%] 60,000  
? 15,00,001 – ? 28,64,200 [i.e., ? 13,64,200 
@30%] 
4,09,260  
 5,49,260 
Add: Health and Education cess@4%   21,970 
Tax Liability 5,71,230 
Less: Advance Tax paid  1,00,000 
Less: Tax deducted at source on dividend income from an Indian 
company under section 194 [ ? 11,00,000 x 10%] 
  
 1,10,000 
Tax payable  3,61,230 
Computation of total income and tax payable by Ms. Farah  
for the A.Y.2025-26 under regular provisions of the Act 
Particulars ?  
Gross Total Income 28,64,200 
[Income under the “Income from house property” “Profits and 
gains from business or profession” and “Income from other 
sources” would remain the same under regular provisions of the 
Act] 
 
Less: Deductions under Chapter VI-A   
Section 80D  
Medical insurance premium paid online for 
parents, being senior citizens  
47,000  
Payment made in cash of ? 8,500 for preventive 
health check-up for self and spouse restricted to  
5,000 52,000 
Total Income 28,12,200 
 
 
 
511
Tax on total income of ? 28,12,200  
Upto ? 2,50,000  Nil  
? 2,50,001 – ? 5,00,000 [i.e., ? 2,50,000@5%] 12,500  
? 5,00,001 – ? 10,00,000 [i.e., ? 5,00,000@20%] 1,00,000  
? 10,00,001 – ? 28,12,200 [i.e., ? 18,12,200 
@30%] 
5,43,660  
 6,56,160 
Add: Health and Education cess@4%  26,246 
Tax Liability 6,82,406 
Less: Advance Tax paid  1,00,000 
Less: Tax deducted at source on dividend income from an 
Indian company under section 194 [ ? 11,00,000 x 10%] 
 
1,10,000 
Tax payable 4,72,406 
Tax payable (Rounded off) 4,72,410 
 Note – Since the tax payable under default tax regime under section 115BAC 
is lower than the tax payable under the regular provisions of the Act, it would 
be beneficial for Ms. Farah to pay tax under default tax regime under section 
115BAC for A.Y. 2025-26. 
2. (a)  An Indian citizen, who leaves India in any previous year, inter alia, for 
purposes of employment outside India, would be resident in India during 
the relevant previous year if he stayed in India during that previous year 
for 182 days or more. 
(i) Since Sagar is leaving India for the purpose of employment outside 
India, he will be treated as resident only if the period of his stay 
during the previous year amounts to 182 days or more. Therefore, 
Sagar should leave India on or before 28
th
 September, 2024, in 
which case, his stay in India during the previous year would be less 
than 182 days and he would become non-resident for the purpose 
of taxability in India. In such a case, only the income which accrues 
or arises in India or which is deemed to accrue or arise in India or 
received or deemed to be received in India shall be taxable.  
 The income earned by him in New York would not be chargeable 
to tax in India for A.Y. 2025-26, if he leaves India on or before  
28
th
 September, 2024. 
(ii) If any part of Sagar’s salary will be credited directly to his bank 
account in Delhi then, that part of his salary would be considered 
as income received in India during the previous year under section 
5 and would be chargeable to tax under Income-tax Act, 1961, even 
if he is a non-resident. Therefore, Sagar should receive his entire 
salary in New York and then remit the required amount to his bank 
account in Delhi in which case, the salary earned by him in New 
York would not be subject to tax in India. 
  
512
Page 5


ANSWERS OF MODEL TEST PAPER 4 
INTERMEDIATE COURSE: GROUP - I 
PAPER – 3: TAXATION 
SECTION – A: INCOME TAX LAW 
Division A – Multiple Choice Questions 
MCQ No. Sub-part Most Appropriate 
Answer 
 MCQ 
No. 
Most Appropriate 
Answer 
1. (i) (b)  3. (a) 
 (ii) (d)  4. (d) 
 (iii) (a)    
2. (i) (a)    
 (ii) (c)    
 (iii) (a)    
Division B – Descriptive Questions 
1.   Computation of Total Income of Ms. Farah for the A.Y.2025-26  
   under default tax regime under section 115BAC 
Particulars ?  ?  ?  
Income from house property    
Gross Annual Value
1
   90,000  
Less: Municipal taxes paid     9,000  
Net Annual Value (NAV)  81,000  
Less: Deduction under section 24(a) – 
30% of NAV = 30% of ? 81,000 
  
  24,300 
 
56,700 
Profits and gains of business or 
profession 
   
Net profit as per Profit and loss 
account 
 25,91,000  
Add: Expenses debited but not 
allowable 
   
(i) Purchase of car [Amount paid for 
purchase of car is not allowable 
since it is a capital expenditure] 
3,00,000   
(ii) Municipal tax paid in respect of 
house property [allowable as 
deduction under the head “Income 
from house property”] 
9,000   
(iii) Payment made to tax consultant 
in cash [disallowed under section 
50,000   
 
1
 Rent received has been taken as the Gross Annual Value in the absence of other information 
relating to Municipal Value, Fair Rent and Standard Rent. 
509
40A(3), since such cash payment 
exceeds ? 10,000]  
(iv) Travel expenditure on foreign 
professional tour [Since it is 
incurred in connection with 
professional work, the same is 
allowable as deduction. As it has 
already been debited to profit and 
loss account, no further 
adjustment is required] 
-   
(v) Repair and maintenance of car 
[Repairs and maintenance paid in 
advance for the period 1.4.2025 to 
30.9.2025 i.e. for 6 months 
amounting to ? 17,500 is not 
allowable as deduction, since Ms. 
Farah is following the accrual 
system of accounting] 
17,500 
 
 
 
 
 
 
3,76,500 
 
  29,67,500  
Less: Income credited but not taxable 
under this head: 
   
(i) Dividend from an Indian company 
(taxable under the head “Income 
from Other Sources") 
11,00,000   
(ii) Interest on deposit certificates 
issued under gold monetization 
scheme, 2015 (taxability or 
otherwise to be considered under 
the head “Income from Other 
Sources") 
25,000   
(iii) Honorarium for valuation of 
answer papers 
50,000   
(iv) Rent received in respect of house 
property  
90,000 12,65,000  
  17,02,500  
Less: Depreciation on car @15%  45,000  
   16,57,500 
Income from Other Sources    
Dividend from an Indian company  11,00,000  
Interest on deposit certificates issued 
under gold monetization scheme, 
2015 [Exempt under section 10(15)] 
 -  
Honorarium for valuation of answer 
papers 
 50,000 11,50,000 
Gross Total Income   28,64,200 
510
 
Less: Deduction under Chapter VI-A 
[Deduction under section 80D would 
not be allowable]  
   
 
               - 
Total Income   28,64,200 
 Computation of tax payable under default tax regime under section 
115BAC 
Particulars ?  
Tax on total income of ? 28,64,200  
Upto ? 3,00,000  Nil  
? 3,00,001 – ? 7,00,000 [i.e., ? 4,00,000@5%] 20,000  
? 7,00,001 – ? 10,00,000 [i.e., ? 3,00,000@10%] 30,000  
? 10,00,001 – ?12,00,000 [i.e., ? 2,00,000@15%] 30,000  
? 12,00,001 – ? 15,00,000 [i.e., ? 3,00,000@20%] 60,000  
? 15,00,001 – ? 28,64,200 [i.e., ? 13,64,200 
@30%] 
4,09,260  
 5,49,260 
Add: Health and Education cess@4%   21,970 
Tax Liability 5,71,230 
Less: Advance Tax paid  1,00,000 
Less: Tax deducted at source on dividend income from an Indian 
company under section 194 [ ? 11,00,000 x 10%] 
  
 1,10,000 
Tax payable  3,61,230 
Computation of total income and tax payable by Ms. Farah  
for the A.Y.2025-26 under regular provisions of the Act 
Particulars ?  
Gross Total Income 28,64,200 
[Income under the “Income from house property” “Profits and 
gains from business or profession” and “Income from other 
sources” would remain the same under regular provisions of the 
Act] 
 
Less: Deductions under Chapter VI-A   
Section 80D  
Medical insurance premium paid online for 
parents, being senior citizens  
47,000  
Payment made in cash of ? 8,500 for preventive 
health check-up for self and spouse restricted to  
5,000 52,000 
Total Income 28,12,200 
 
 
 
511
Tax on total income of ? 28,12,200  
Upto ? 2,50,000  Nil  
? 2,50,001 – ? 5,00,000 [i.e., ? 2,50,000@5%] 12,500  
? 5,00,001 – ? 10,00,000 [i.e., ? 5,00,000@20%] 1,00,000  
? 10,00,001 – ? 28,12,200 [i.e., ? 18,12,200 
@30%] 
5,43,660  
 6,56,160 
Add: Health and Education cess@4%  26,246 
Tax Liability 6,82,406 
Less: Advance Tax paid  1,00,000 
Less: Tax deducted at source on dividend income from an 
Indian company under section 194 [ ? 11,00,000 x 10%] 
 
1,10,000 
Tax payable 4,72,406 
Tax payable (Rounded off) 4,72,410 
 Note – Since the tax payable under default tax regime under section 115BAC 
is lower than the tax payable under the regular provisions of the Act, it would 
be beneficial for Ms. Farah to pay tax under default tax regime under section 
115BAC for A.Y. 2025-26. 
2. (a)  An Indian citizen, who leaves India in any previous year, inter alia, for 
purposes of employment outside India, would be resident in India during 
the relevant previous year if he stayed in India during that previous year 
for 182 days or more. 
(i) Since Sagar is leaving India for the purpose of employment outside 
India, he will be treated as resident only if the period of his stay 
during the previous year amounts to 182 days or more. Therefore, 
Sagar should leave India on or before 28
th
 September, 2024, in 
which case, his stay in India during the previous year would be less 
than 182 days and he would become non-resident for the purpose 
of taxability in India. In such a case, only the income which accrues 
or arises in India or which is deemed to accrue or arise in India or 
received or deemed to be received in India shall be taxable.  
 The income earned by him in New York would not be chargeable 
to tax in India for A.Y. 2025-26, if he leaves India on or before  
28
th
 September, 2024. 
(ii) If any part of Sagar’s salary will be credited directly to his bank 
account in Delhi then, that part of his salary would be considered 
as income received in India during the previous year under section 
5 and would be chargeable to tax under Income-tax Act, 1961, even 
if he is a non-resident. Therefore, Sagar should receive his entire 
salary in New York and then remit the required amount to his bank 
account in Delhi in which case, the salary earned by him in New 
York would not be subject to tax in India. 
  
512
(b) TDS implications 
(i) Since the sale consideration or stamp duty value of residential 
house exceeds ? 50 lakhs, Mr. Deepak is required to deduct tax at 
source@1% of ? 65 lakhs, being higher of sale consideration of  
? 60 lakh and stamp duty value of ? 65 lakhs under section 194-IA.  
 TDS provisions under section 194-IA are not attracted in respect of 
transfer of rural agricultural land, even if the consideration exceeds 
? 50 lakh.  
Tax deducted at source = ` 65 lakhs x 1% = ` 65,000 
(ii) Every person, being a seller, who receives any amount as 
consideration for sale of a motor vehicle of the value exceeding  
? 10 lakhs, is required to collect tax at source @1% of the sale 
consideration from the buyer. 
 TCS provisions will, however, not apply on sale of motor vehicles 
by manufacturers to dealers/distributors. Hence, XYZ Ltd., the 
manufacturer-seller need not collect tax at source on sale of cars 
to the dealer, ABC & Co., even if the value of each car exceeds  
? 10 lakhs.  
 However, TCS provisions would be attracted when ABC & Co., sells 
cars to individual buyers, since the value of each car exceeds ? 10 
lakhs. ABC & Co. has to collect tax@1% of the consideration on 
sale of each car to an individual buyer. 
3.  (a) Computation of income from house property of Mr. Kamal for  
A.Y. 2025-26 
Particulars ?  ?  
1. Income from let-out property in 
Dubai [See Note 1 below] 
  
2
Gross Annual Value (DHS 20,000 p.m. x 
12 months x ? 22) 
 52,80,000 
Less: Municipal taxes paid during the year 
[DHS 4,000  (DHS 2,500 + DHS 1,500) x  
? 22]
3
 
    
      88,000 
Net Annual Value (NAV)  51,92,000 
Less: Deductions under section 24   
     (a) 30% of NAV 15,57,600  
     (b) Interest on housing loan                -  15,57,600 
36,34,400 
 
 
 
2
 In the absence of information related to municipal value, fair rent and standard rent, the rent 
receivable has been taken as the GAV 
3
 Both property tax and sewerage tax qualify for deduction from gross annual value 
513