Skip to content

CS Professional · Advanced Direct Tax Laws and Practice · Computation of Total Income, Tax Liability and Filing of Return of Companies

A specified person's registration is cancelled on 10 July 2027. Its total assets have an aggregate fair market value of Rs 9,00,000 and its total liabilities are Rs 3,50,000 on that date. Ignoring any specified assets and related liabilities, what is the accreted income under the formula in section 352 of the Income-tax Act, 2025?

Accreted income is the fair market value of total assets minus total liabilities on the specified date. Here it is Rs 9,00,000 less Rs 3,50,000, which equals Rs 5,50,000. Adding the liabilities would be wrong because the formula subtracts them.

  1. ARs 12,50,000
  2. BRs 5,50,000Correct
  3. CRs 3,50,000
  4. DRs 9,00,000

Explanation

Accreted income A = B - C, where B is the fair market value of total assets and C is total liability. So A = 9,00,000 - 3,50,000 = Rs 5,50,000. Adding the liabilities, as in the first option, uses the wrong sign.

Did you get it right without looking?

One question tells you little. A timed set on Computation of Total Income, Tax Liability and Filing of Return of Companies shows your real accuracy, how long you take and where you lose marks.

Practise Computation of Total Income, Tax Liability and Filing of Return of CompaniesFree diagnostic mock

More Computation of Total Income, Tax Liability and Filing of Return of Companies questions