Sairam Ltd., engages in diversified activities, earned a profit of ₹14,50,000 after debit/credit of the following items to its statement of profit and loss account for the year ended on 31.3.2025: Items debited to Statem

CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · PYQS · June 2025
Sairam Ltd., engages in diversified activities, earned a profit of ₹14,50,000 after debit/credit of the following items to its statement of profit and loss account for the year ended on 31.3.2025: Items debited to Statement of Profit and Loss Account Provision for loss of subsidiary: ₹60,000 Provision for income-tax demand: ₹1,10,000 Depreciation: ₹3,50,000 Interest on deposit credited to buyers on 31.3.2025 for advance received from them, on which TDS was deducted in April, 2025 and was deposited on 31st July, 2025: ₹1,00,000 Items credited to Statement of Profit and Loss Account Income from units of UTI (Gross): ₹95,000 Long term capital gain on sale of equity shares on (which securities transaction tax paid at the time of acquisition and sale) dated 15.04.2024: ₹2,50,000 The company provides the following additional information : (i) Depreciation includes ₹1,50,000 on account of revaluation of fixed assets. (ii) Depreciation allowable as per Income-tax Rules is ₹2,80,000. (iii) Brought forward Business Loss/Unabsorbed Depreciation: F.Y. Amount as per books Amount as per income tax Loss (In ₹) Depreciation (In ₹) Loss (In ₹) Depreciation (In ₹) 2021-2022 2,50,000 3,00,000 2,00,000 2,50,000 2022-2023 NIL 2,70,000 1,00,000 1,80,000 2023-2024 3,50,000 3,15,000 1,20,000 2,10,000 You are required to: (iii) Compute the tax on total income & book profits and the tax credit to be carried forward. Assume the tax rate applicable to Sairam Ltd. for the PY 2024-25 is 25% & 115BAA not opted.

Answer & Explanation:

Answer 5(iii) Computation of the Tax on Total Income & Book Profits and the Tax Credit to be carried forward Particulars ₹ Tax on Book Profit u/s 115JB 1,82,520 15% of Book Profit (15% of ₹11,70,000) 1,75,500 + HEC@4% 7,020=1,82,520 Less: Tax on Total Income computed as per the other provisions of the act Tax on LTCG exceeding ₹1,25,000 @ 10% of ₹1,25,000 = ₹12,500 And remaining 25% of ₹4,10,000 = ₹1,02,500 Total ₹12,500+₹1,02,500= ₹1,15,000 + Health and education cess @ 4% (1,19,600) Tax credit to be carried forward u/s115JAA 62,920

Topics: Corporate Tax Planning

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