The following is the Profit & Loss Account of Mr. X for the year that ended on
Question:
The following is the Profit & Loss Account of Mr. X for the year that ended on 31st March 2020. Compute his taxable income from the business for that year:
Particulars | INR | Particulars | INR |
Opening Stock | 15,000 | Closing stock | 20,000 |
Purchases | 1,40,000 | Gift from father | 10,000 |
Wages | 20,000 | Sale of car | 17,000 |
Rent | 46,000 | Income tax refund | 3,000 |
Repairs of car | 3,000 | Sales | 2,80,000 |
Medical Expenses | 3,000 | ||
General Expenses | 10,000 | ||
Depreciation of car | 4,000 | ||
Profit for the year | 89,000 | ||
Total | 3,30,000 | 3,30,000 |
Following further information is given:
1. Mr. X carries on his business from a rented premise, half of which is used as his residence.
2. Mr. X bought a car during the year for Rs. 20,000. He charged 20% depreciation on the value of the car. The car was sold during the year for Rs. 17,000. The use of the car was 3/4th for the business and 1/4th for personal use.
3. Medical expenses were incurred during the sickness of Mr. X for his treatment.
4. Wages include Rs. 250 per month on account of Mr. X’s driver for 10 months.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill