Unit Test

Question 1

Choose the correct answer from the options provided 3*1 marks

i) What is the entry number in Union List for Direct Tax as per Article 246 read with VII
Schedule –
a) Entry 83
b) Entry 90
c) Entry 82
d) Entry 88

ii) Who among the following is not a person as per the definition of person u/s 2(31)
a) Ramesh
b) Indian Railways
c) Kerala State Road Trasport Corporation
d) Company registered in USA.

iii) How much percentage out of composite profit is considered to be Agricultural Income for
Coffee grown and cured in India as per Rule 7B of Income Tax Rule, 1962.
a) 65%
b) 75%
c) 40%
d) 60%

Question 2

Write short note on exceptions to the general rule of Assessment Year succeeds Previous Year.
5marks.
Question 3 10 marks

Mr. Ramesh age 61, a resident in India, provides following income details for the Previous Year ended
31.03.2026.

Particulars Amount in ₹

01. Business Income 1,20,00,000

02. LTCG from Land (Transfer – 11.11.2025)
With Indexation 90,00,000
Without Indexation 1,35,00,000
03. LTCG from Listed Shares 25,00,000
04. STCG from Units of Business Trust 10,00,000
05. Casual Income 12,00,000
06. Interest on FD 5,00,000

Determine tax liability under default regime for Assessment Year 2026-27

Question 4 7 marks

Miss Vijitha, a resident and ordinarily resident in India, has derived the following income from various
operations (relating to plantations and estates owned by her) during the year ended 31-3-2026

Particulars Amount in ₹

01. Income from centrifuged latex processed from rubber plants grown in Darjeeling. 3,00,000

02. Income from sale of coffee grown and cured in Yercaud, Tamil Nadu 1,00,000

03. Income from sale of coffee grown, cured, roasted and grounded, in Colombo. Sale 2,50,000
consideration was received at Chennai.

04. Income from sale of tea grown and manufactured in Shimla. 4,00,000

05. Income from sapling and seedling grown in a nursery at Cochin. Basic operations 80,000
were not carried out by her on land.

You are required to compute the business income and agricultural income of Miss Vijitha for the A.Y. 2026-27.
Answer Key

1–

i) – c)
ii) – b)
iii) – b)

2 –Following are the exceptions to the general rule that assessment year succeeds previous year

a) Shipping business by non-resident

b) Person leaving India permanently or without intension to come back
c) AOP/BOI/AJP created for a specific event or short duration
d) Person disposing off the property with an intension to evade tax
e) Discontinuance of business at the discretion of Assessing Officer

3 – Statement showing computation of Total Income & Tax for Mr. Ramesh during AY 26-27

Particulars Workings Amount

01. PGBP - 1,20,00,000

02. Capital Gains
a) LTCG u/s 112 1,35,00,000
b) LTCG u/s 112A 25,00,000
c) STCG u/s 111A 10,00,000 1,70,00,000
03. IFOS
a) Casual Income 12,00,000 17,00,000
b) Interest on FD 5,00,000

Gross Total Income - 3,07,00,000

-
Less: Chapter VI-A

Total Income 3,07,00,000

Computation of Tax

Basic Income Tax

a) LTCG u/s 112 (refer note 1) 16,87,500
b) LTCG u/s 112A – (25,00,000 – 1,00,000) * 12.5% 2,96,875
c) STCG u/s 111A – 10,00,000 * 20% 2,00,000
d) Casual Income – 12,00,000 * 30% 3,60,000
e) Slab rate on 1,25,00,000 (refer note 2) 33,30,000 58,74,375

Surcharge 15% 8,81,156.25

Health & education Cess 4% 2,70,221.25

Total Tax 70,25,752.50

Rounded off 70,25,750
Note

1. Tax on LTCG u/s 112 – Lower of the following

a) With indexation * 20% - 90,00,000 * 20% = 18,00,000
b) Without indexation * 12.5% = 1,35,00,000 * 12.5% = 16,87,500

2. Slab Rate on 1,25,00,000

Slab Rate Tax

0 – 4 lakhs - -
4 – 8 lakhs 5% 20,000
8 – 12 lakhs 10% 40,000
12 – 16 lakhs 15% 60,000
16 – 20 lakhs 20% 80,000
20 – 24 lakhs 25% 1,00,000
> 24 lakhs (1,01,00,000) 30% 30,30,000
Total 33,30,000

Answer 4

Statement showing computation of Agriculture & Business Income for Miss Vijitha for AY 26-27

Particulars Agriculture Business

Income Income

01. Income from centrifuged latex processed from rubber plants grown in 1,95,000 1,05,000
Darjeeling.

02. Income from sale of coffee grown and cured in Yercaud, Tamil Nadu 75,000 25,000

03. Income from sale of coffee grown, cured, roasted and grounded, in - 2,50,000
Colombo. Sale consideration was received at Chennai.

04. Income from sale of tea grown and manufactured in Shimla. 2,40,000 1,60,000

05. Income from sapling and seedling grown in a nursery at Cochin. Basic 80,000 -
operations were not carried out by her on land.

Total 5,90,000 5,40,000