Full Marks: 100
B.B.S.(4 Yrs.)) II Year/ MGMT
Fundamentals of Taxation & Auditing (MGT.218) Time: 3 hrs.
Candidates are required to give their answers in their own words as far as practicable.
The figures in the margin indicate full marks.
Brief Questions Answer 5×2-10
Attempt ALL questions.
1 What is direct tax? Give any three examples.
2What do you know about “Canon of Equality”?
3 What are the provisions of carry forward of business loss under Income Tax Act, 2058?
4 Mr. Sharma has disclosed total income from a sole proprietorship business Rs. 10,00,000 before deducting donation paid to a tax- exempt social organization Rs. 10,000. Compute tax liability for the current income year.
Required: Cost of trading stock
5 .A trading company supplied the following information: Beginning inventory of the raw materials Rs. 4,00,000, Purchases during the year Rs. 10, 00, 000, Carriage inward Rs. 50, 000, Custom duty Rs. 20,000, Closing stock Rs.70,000.
Short Questions Answer [4*10=40]
Attempt All the questions.
6 a Ma Sumijo, a Japanese citizen, came to Nepal on 1″ Kartik of previous income year and involve in business and investment activities. He submitted the statement with following incomes:
Income from handicraft business Rs. 5, 00,000
Gain from investment Rs. 2, 00,000
Remunçration on delivery of lecture in a work shop Rs.20, 000.
He has paid donation to a social club Rs. 50,000.
a Residential status with explanation
b Statement of taxable income.
c Tax liability
6 b A product was passed from producer to wholesaler atRs.1,13,000 inclusive VAT. The wholesaler sold it to a retailer at Rs. 1,50,000 without VAT. The retailer sold it to a final customer charging profit 20 percent on cost price. The administrative expense incurred by the retailer was Rs. 2,000.
a) Cost price to the final customer,
b) VAT páyable to the government at different levels of selling. [2+3
7 a A company earned net încome of Rs. 10, 00,000 from trading business. The other details relating to its net income are as föllowing :
Allowable depreciation of Rs.35, 000 has not been deducted,
Miscellaneous income of Rs. 50,000 is not included in net income,
Refund of income tax Rs. 15,000 is included in net income,
Unrecovered business loss of last year Rs 2, 00,000 is not adjusted with net income
.Required: Taxable income and tax liability.[4+1
b Describe the provisions regarding depreciation as laid down under Income Tax Act, 2058.Mr. Thapa Magar has submitted the following incomes and expenditures for the previous income year:
Rent of tents and furniture Rs.5,00,000,
Dividends from shares of commercial banks Rs.95, 000 (net)
Interest from saving bank deposit Rs.70, 000,
Royalty on copyright Rs.1, 70,000 (net)
Rent of building let out Rs.90, 000
Interest on tax free government securities Rs.1, 00,000
Refund of income tax on investment Rs.18, 000
Natural resource incomes Rs.2, 55,000 (net)
He claimed following expenses for deductions:
Collection expenses for natuiral resource incomes Rs.15, 000,
Interest on loan taken to purchase shares of commercial banks Rs.35,000,
Repairing expenses of tents and furniture (with written down value of Rs. 2, 00,000) Rs. 30,000
Donation to a community hospital Rs.20, 000
Required: Taxable Income from investment 
9 Mr. Gokul was appointed as an officer of Nepal Government on 1 Shrawan 2062 B.S. at the pay scale of Rs. 36, 000- 1000-46,000
2,000 6,000. The other details of his income and expenditures of previous income year are given below:
. House rent allovwance Rs. 4,000 PM.”
Dearmess allowance Rs. 2,000 PM
Meeting allowance Rs. 12,000
Children education allowance Rs. 30,000
Local allowance Rs. 2,000 PM.
His telephone and electricity bills paid by office Rs. 26,000.
He received Dashain bonus and provident fund facilities as per Government regulations.
Interest received from private borrowings, Rs. 40,000,
He claimed fuel expenses of private car Rs. 36,000 for deduction.
. He claimed premium Rs. 30,000 on his life insurance for deduction
a)Assessable income from employment
b) Statement of total taxable income ,
c)Tax liability [6+2+2]
Comprehensive Questions Answer
Attempt any TWO questions. [2*15=30]
10.(a) What are the duties of tax payers as per income Tax Act, 2058?
10.b) Briefly explain the different methods of tax collection as per income Tax Act, 2058.
11 a . A trading company has supplied following particulars of its fixed assets under block “B” for the current income year:
Opening written down value Rs. 8, 00,000,
Purchase of office furniture Rs. 3, 00,000 on Chaitra,
Purchase of office equipment Rs. 90,000, on Baisakh,
Disposal of damaged furniture at Rs. 60,000.
Actual cost incurred for repairing furniture during the year Rs. 75,000.
(a) Allowable amount of depreciation,
(b) Closing balance of depreciable value to the next year. [5+3]
11 b The operating results of a proprietorship business units are as following:
year 1 2 3 4 5
profit/loss (300000) (500000) 400000 (600000) 700000
On enquiry the following facts were found
:In year 1, donation to a tax-exempt organization Rs. 20,000was deducted from the income.
In year 2, allowable depreciation of Rs. 50,000 was not deducted,
In year 3, pollution control cost Rs. 30,000 was also deducted,
In year 4, sales amount of old news papers and scrapes Rs. 25,000 was not included in the income.
Taxable income of the business unit showing carry-forward of business losses and necessary other adjustments with explanation .(7)