Problems and answers- Income From Profession
1.
Dr.Ramesh is a Medical Practioner. He gives the following summary of cash book
for the year ending 31-3-2025.
|
|
|
|
|
|
To
Balance To
consultation fees To
visiting fees To
Gifts and Presents To
sale of medicines To
Dividends fro U.T.I To
Life Insurance Maturity To
Interest from National Defense Bonds |
10,000 60,000 45,000 8,000 42,000 6,000 1,00,000 6,000 |
By
Rent of Clinic By
Purchase of Medicines By
staff salaries By
surgical equipment By
motor car expenses By
Purchase of motor car By
household expenses By
Closing Stock |
18,000 38,000 24,000 40,000 8,000 1,40,000 7,000 2,000
|
Other Information:
-
i. 50% of the motor car expenses incurred in connection
with profession. Car was purchased in December, 2024.
-
ii.
Household expenses include Rs.6,800 for life insurance
premium
-
iii.
Gifts and presents include Rs.3,000 from relatives
-
iv.
Closing stock of medicine Rs.12,000 and on 1-4-2024
opening stock Rs.4,000
Compute
his Professional gain for the assessment year 2025-26.
Solution
Computation of Professional gain
|
|
Rs. |
Rs. |
|
Professional Receipts: Consulting
fees Visiting
fees Gifts&
Presents(8,000-3,000) Sale
of medcines |
60,000 45,000 5,000 42,000 |
1,52,000 |
|
Less: Professional Expenses Rent
of Clinic Mediine Staff
Salaries Depreciation
of Surgical Equipment(40,000x15%) Motor
car Expenses(1/2) Depreciation
on Car (1,40,000x15%)x1/2 |
18,000 38,000 24,000 6,000 4,000 5,250 |
95,250 |
|
PROFESSIONAL GAIN |
|
56,750 |
2.
Kumar a lawyer by profession keeps his cash book as per cash system of
accounting. The following is the summary of his cash book for the year ended 31st
March, 2025.
|
|
|
|
|
|
To
Balance To
fees To
Remuneration as examiner To
interest on Bank Deposits To Rent
from House property To Dividends
|
5,000 35,000 3,000 2,500 8,000 1,600 |
By Rent
of Chamber By
Car expenses By
Household expenses By
local tax for house By
Repairs of the houses By
LIC premium for self By
Cost of Books for profession By medicine
treatment for self By
Balance |
2,400 3,600 12,000 1,200 4,000 4,800
4,000 5,000 18,100 |
|
|
55,100 |
|
55,100 |
Additional
Information:
1.
1/3 of the house is used by Kumar for his own
residence.
2.
Kumar is insured for Rs.40,000
3.
Kumar has to get Medical treatment for an eye ailement
caused by intensive study of law books
4.
½ of the car expenses relate to personal use of the
car by kumar
5.
Depreciation computed at the prescribed rate on the
written down value of the car is Rs.2,000.
Compute
his income from profession.
Solution
|
|
Rs. |
Rs. |
|
Professional Receipts:
i.
Fees ii.
Remuneration as examiner |
35,000 3,000 |
38,000 |
|
Less: Professional Expenses
i.
Rent of Chamber ii.
½ of the expenses of car iii.
Cost of depreciation books for profession (4,000x40/100) iv.
Depreciation of Car (2,000x1/2) |
2,400 1,800 1,600 1,000 |
6,800 |
|
PROFESSIONAL GAIN |
|
31,200 |
3.Manish Thiwari is practicing as a Charted Accountant in New Delhi. He deposits all receipts in his Bank Account and pays expenses by cheque Following is the analysis of his bank account for the year ending 31-03-2025. Compute his income from profession.
|
|
Rs. |
|
Receipts:
Consultation
Audit
Fees Appellate
Tribunal Appearance Presents
from clients Interest
on government securities Rent
received from house Loan
from client Miscellaneous
receipts Payments Computer
purchased Stipend
to articled clerks Office
expenses Office
Rent Salaries
and Wages Printing
and stationery Subscription
to C.A Institute Purchase
of books for professional use(Annual Publication) Travelling
expenses Interest
on loan Donation
to NDF |
4,00,000 90,000 50,000 20,000 60,000 70,000 1,00,000 7,000
50,000 24,000 30,000 15,000 18,000 5,000 800
10,000 12,000 15,000 20,000 |
Additional
Information:
i.
Travelling expenses are incurred for profession
ii.
Computer is purchased on 1-8-2024 and used for office purpose.
iii.
50% of the books were purchased in August 2024.
iv.
½ of travelling expenses are disallowed.
v.
½ of the loan from client is used for personal
purpose.
Solution
|
|
Rs. |
Rs. |
|
Professional Receipts: Consultation
Fees Audit
Fees Appallate
Tribunal Appearance Presents
from clients Miscellaneous
receipts |
4,00,000 90,000 50,000 20,000 7,000 |
5,67,000 |
|
Less: Professional Expenses Stipend
to article clerks Office
expenses Office
Rent Salaries
and Wages Printing
andStationery Subscription
to C.A. Institute Travelling
Expenses(12,000x1)/2 Interest
on loan( 15,000x1/2) Depreciation
on computer at 40% Depreciation
on books used for profession(10,000x40/100) |
24,000 30,000 15,000 18,000 5,000 800 6,000 7,500 20,000 4,000 |
1,30,300 |
|
PROFESSIONAL GAIN |
|
4,36,700 |
Comments
Post a Comment