Income-tax-mcq-compilation.pdf

INDEX SN

Name of the Chapter

Page No.

No. of MCQs

1

Basic Concepts of Income Tax

1–3

79

2

Residential Status & Scope of Total Income

4-6

70

3

Exempt Incomes & Agricultural Income

7 - 10

75

4

HEADS OF INCOME

726

4A

Salaries

11 - 17

145

4B

House Property

18 - 21

69

4C

Profits & Gains of Business & Profession

22 - 33

233

4D

Capital Gains

34 - 43

170

4E

Income from other Sources

44 - 49

109

5

Clubbing of Income

50 - 53

58

6

Set off & Carry Forward of Losses

54 - 57

68

7

Chapter VI-A Deductions

58 - 64

117

8

TDS & TCS

65 - 70

130

9

Advance Tax & Interest u/s 234

71 - 72

49

Return of Income

73 - 75

50

10

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1. BASIC CONCEPT OF INCOME TAX Q1. Income Tax is imposed by _____. (a) State Government (b) Central Government (c) Both of the above (d) Constitution of India

Q15. Part 3 of schedule I of The Finance Act, 2018 gives rate of advance tax payable for the AY ___. (a) 2018-19 (b) 2019-20 (c) 2017-18 (d) 2016-17

Q2. Parliament has the power to levy tax on incomes other than ___. (a) Exempt Incomes (b) Income of poor people (c) Agricultural Income (d) All incomes are taxable

Q16. Notifications issued by CBDT are binding on ____. (a) Assessee (b) Income Tax Authority (c) Both of above (d) None of the above

Q3. Which Entry of Union List gives the power to Parliament to levy tax on incomes? (a) Entry 81 of List I to Seventh schedule (b) Entry 81 of List II to Seventh schedule (c) Entry 82 of List I to Seventh schedule (d) Entry 82 of List II to Seventh schedule Q4. Highest Administrative Authority for Income Tax in India is ___. (a) Finance Minister (b) CBDT (c) President of India (d) Director of Income Tax Q5. Income-tax Act, 1961 applies to ____. (a) Whole of India (b) Whole of India excluding J&K (c) Maharashtra (d) All of the above Q6. The basic source of income-tax law is ____. (a) Income-tax Act, 1961 (b) Income-tax Rules, 1962 (c) Circulars/Notifications (d) Judgments of Courts Q7. Income Tax Act came into force on _____. (a) 1.4.1961 (b) 1.4.1962 (c) 1.4.1956 (d) 1.4.1965 Q8. Income Tax Act contains ____ sections (a) XIV (b) 297 (c) XV

Q17. Circulars issued by CBDT are binding on ___. (a) Assessee (b) Income Tax Authority (c) Both of above (d) None of the above Q18. Circulars are issued by the CBDT to _____ the scope & meaning of the provisions of Law. (a) Clarify the doubts (b) Exceptions (c) Proper Administration (d) None of these Q19. As per Section 2(7), “Assesses” means ____ a person (a) By whom any tax or other sum of money is payable (b) Against whom proceeding has been taken under the act (c) A person deemed to be assessee in default (d) All of the above Q20. A person includes ____. (a) Individual & HUF (c) AOP/BOI, LA, Every AJP

(b) Firm & Company (d) All of the above.

Q21. Every assessee is a person, & every person is ____. (a) Also an assessee (b) Need not be an assessee Q22. The term “Person” includes ____. (a) Registered Firm (b) Unregistered Firm (c) Both of (a) & (b) (d) None of (a) or (b)

(d) 298

Q9. Income Tax Act contains ____ schedules. (a) XIV (b) 297 (c) XV

(d) 298

Q23. Association of persons consists of ____. (a) Individuals (only) (b) Company (c) Any Person other than (a) (d) Any kind of person

Q10. Proviso gives _____ to the main provision. (a) Clarification (b) Exceptions (c) Proper Administration (d) None of these

Q24. Body of Individuals consists of. (a) Individuals (only) (b) Company (c) Any Person other than (a) (d) Any kind of person

Q11. Explanation gives _____ to the main provision. (a) Clarification (b) Exceptions (c) Proper Administration (d) None of these

Q25. As per Section 2(31), the following is not included in the definition of ‘person’. (a) Individual (b) HUF (c) Company (d) Minor

Q12. Part 1 of schedule I of the Finance Act, 2018 gives rate of income tax for AY ____. (a) 2018-19 (b) 2019-20 (c) 2017-18 (d) 2016-17

Q26. A municipal corporation legally entitled to manage & control a municipal fund is taxable in the status of : (a) Individual (b) AOP (c) LA (d) AJP

Q13. Finance Bill becomes the Finance Act when it is passed by ____. (a) Lok Sabha (b) Both Lok Sabha & Rajya Sabha (c) Both House of Parliament & signed by President. (d) Both House of Parliament & signed by Prime Minister.

Q27. A & B are legal heirs of C. After death of C, A & B carry on his business without entering into a partnership. What is their Status? (a) Company (b) LLP (c) AOP (d) Firm

Q14. Part 2 of schedule of I of the Finance Act, 2018 gives rate of tax deductible of source for the PY ____. (a) 2018-19 (b) 2019-20 (c) 2017-18 (d) 2016-17 1: d 15: b

2: c 16: c

3: c 17: b

4: b 18: a

5: a 19: d

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6: a 20: d

7: b 21: b

Q28. As per sec. 2(24) definition of ‘income’ is: (a) Inclusive (b) Exhaustive (c) Exclusive (d) Descriptive

8: d 22: c

9: a 23: d

10: b 24: a

11: a 25: d

12: b 26: c

13: c 27: c

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14: a 28: a

1

Q29. A domestic company means ____. (a) Indian company only (b) Both Indian company & foreign company (c) Both Indian company & a foreign company having business connection in India (d) Both Indian company & a foreign company which has made the prescribed arrangement for declaration & payment of dividends in India out of the income chargeable to tax in India. Q30. ‘Income’ includes the following types _________. (a) Legal (b) Illegal (c) Both (d) None Q31. ‘Income’ u/s 2(24) includes ____. (i) Profits of any business carried on by a person. (ii) Any advance money forfeited in the course of negotiations for transfer of capital asset. Choose the correct option: (a) Both (i) & (ii) (b) Only (i) (c) Only (ii) (d) Neither (i) nor (ii). Q32. Which of the following income is not included in the term ‘income’ ? (a) Profit & gains (b) Dividend (c) Profit in lieu of salary (d) Reimbursement of travelling expenses Q33. Cash gift received from a non-relative is regarded as income. But Exempt amount is _____p.a. (a) Rs. 25,000 (b) Rs. 75,000 (c) Rs. 50,000 (d) Rs. 25,000 *Q34. What is not included in taxable Income ? (a) Income from smuggling activity (b) Casual income (c) Capital Receipt, except gains on transfer of capital asset (d) Income received in kind. *Q35. A & Co. received Rs. 2 lacs as compensation from B & Co. for premature termination of contract of agency. Amount so received is ____. (a) Capital receipt & taxable (b) Capital receipt & not taxable (c) Revenue receipt & taxable (d) Revenue receipt & not taxable *Q36. Mr. P has taken a loan of Rs. 5,00,000 from HDFC bank for purchasing a car. His rental income is Rs. 50,000 pm out of which Rs. 5,000 pm directly goes to the bank as an instalment of loan. Discuss the tax treatment. (a) Rs. 5,000 p.m is treated as diversion of Income. (b) Rs. 5,000 p.m is an application of income. (c) Rs. 5,000 p.m is not treated as his income. (d) None of the above. Q37. Year in which income is taxable is known as __& year in which income is earned is known as__. (a) PY, AY (b) AY, PY (c) AY, AY (d) PY, PY Q38. Pick-the correct one. (a) AY & PY are same concepts. (b) AY is the year next to the PY. (c) PY is the year next to the AY. (d) None of the above 29: d 40: c 50

30: c 41: b

31: a 42: a

Q39. Assessment Year is the period of 12 month commencing on 1st day of ___. (a) April every year (b) December every year (c) July every year (d) January every year *Q40. Previous Year can be a period of _____. (a) > 12 months or < 12 months (b) only 12 months (c) 12 months or < 12 months (d) ≥ 12 months. Q41. Assessment year can be a period of ____. (a) > 12 months or < 12 months (b) only 12 months (c) 12 months or < 12 months (d) ≥ 12 months. Q42. Mr. P sets up a new business on 15.7.2018 & he commenced his business from 1.2.2019. First PY shall be: (a) 15.7.2018 to 31.3.2019 (b) PY 2018-19 (c) 1.2.2018 to 31.3.2019 (d) PY 2019-20 *Q43. First previous year in case of a business or profession newly set up on 31.3.2019 would be ____. (a) Start from 1.4.2018 & end on 31.03.2019 (b) Start from 31.3.2019 & will end on 31.3.2019 (c) Start from 1.1.2019 & end on 31.12.2019 (d) Start from 1.1.2019 & end on 31.3.2019 Q44. All Assessees are required to follow: (a) Uniform PY which must be calendar year only (b) Uniform PY which must be FY only (c) Any period of 12 months as previous year (d) Period starting from 1st July to 30th June as PY Q45. A person follows Calendar year for accounting purpose. For taxation, he has to follow ___ (a) Calendar year only – 1 Jan to 31 December (b) FY only - 1 April to 31 March (c) Any Calendar or FY as per his choice (d) He will follow extended year from 1 st January to next 31st March (a period of 15 months) Q46. Mr. P. maintains his accounts of the basis of calendar year. For PY 2018-19, his AY shall be. (a) 2018-19 (b) 2018 (c) 2019-20 (d) 2019 Q47. In which of the following cases, income of PY is assessable in the previous year itself. (a) A persons leaving India (b) Salaried Employee (c) Illegal business (d) Charitable institution *Q48. If the master of the ship belonging to a NR could not file return of income before the departure of ship from India then it can be filed after the ship has left India but within ____ days. (a) 30 (b) 45 (c) 60 (d) 90 *Q49. In case of shipping business of NR, Income = (a) 10% of the fare & freight collected by the ship. (b) 20% of the fare & freight collected by the ship. (c) 25% of the fare & freight collected by the ship. (d) 7.5% of the fare & freight collected by the ship. Q50. Income of NR from shipping business in India is taxed (a) 30% + SC + HEC (b) 40% + SC + HEC (c) 50% + SC + HEC (d) 60% + SC + HEC

32: d 43: b

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33: c 44: b

34: c 45: b

35: a 46: c

36: b 47: a

37: b 48: a

38: b 49: d

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39: a 50: b

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*Q51. Individual leaves India permanently on 1.9.2018. AY for incomes earned till 1.9.2018 = (a) 2017-18 (b) 2018 -19 (c) 2019-20 (d) None Q52. In which of the following cases, AO has the discretion to assess the income of PY in PY itself or in subsequent AY. (a) Shipping business of NR (b) Income of Non-Resident (c) Income of AOP/BOI formed for particular event (d) Discontinued business

Q66. SC is payable by Domestic Company @ ___. (a) 7% of Tax provided its TI > Rs. 10,00,000. (b) 7% of Tax irrespective of its income (c) 7% of Tax provided its TI > Rs. 1 crore & 12% of Tax if TI > Rs. 10 Crores. (d) 7% of Tax provided its TI > Rs. 1 crore.

Q53. Undisclosed Sources of Income is taxable @ ____ % (a) 30 (b) MMR (c) 10 (d) 78

Q67. SC is payable by foreign company @ ___. (a) 2% or 5% of income tax if TI > Rs. 1 cr or 10 cr resp. (b) 5% of income-tax if TI > Rs. 1 crore. (c) 2 % of income-tax if TI > Rs. 1 crore (d) 2% of income-tax always

Q54. The rates of income-tax are mentioned in ____. (a) IT Act, 1961 only (b) IT Act, 1961 & IT Rules, 1962 (c) 1st Schedule to the Annual FA (d) Both (a) & (c)

Q68. Health & Education Cess is leviable on ___. (a) Income tax (b) Income tax + SC (if any) (c) Only Surcharge (d) Not applicable at all

Q55. Maximum amount on which income tax is not chargeable for AY 2019-2020 in case of an individual who is resident in India other than senior citizen is ____. (a) Rs. 1.9 lac (b) Rs. 2 lac (c) Rs. 2.5 lac (d) Rs. 1.8 lac

Q69. The rate of HEC for AY 2019-2020 is ____. (a) 2% (b) 3% + 1% (c) 3%

Q56. Maximum amount exempt from tax in case HUF is __. (a) Rs. 1.8 lac (b) Rs. 2 lac (c) Rs. 2.2 lac (d) Rs. 2.5 lac Q57. Maximum amount which is not taxable for AY 201920 in case of individual who is resident in India & is more than 60 years old but is less than 80 years old is ____. (a) Rs. 2.5 lac (b) Rs. 3 lac (c) Rs. 2 lac (d) Rs. 5 lac Q58. The maximum amount on which income tax is not chargeable for the AY 2019-2020 in case of an individual who is resident in India & is more than 80 years old is. (a) Rs. 2 lac (b) Rs. 5 lac (c) Rs. 2.5 lac (d) Rs. 3 lac

Q60. The rate of tax applicable to a partnership firm for AY 2019-2020 i.e. PY 2018-2019 is(a) 25% (b) 30% (c) 35% (d) 40%

Q62. In case of domestic company whose gross receipts for PY 2016-2017 is Rs. 251 Cr, Tax Rate for AY 2019-2020 is (a) 29% (b) 25% (c) 30% (d) None Q63. Surcharge on income tax is payable by ____. (a) Company (b) Individual (c) Firm (d) All assesses

51: b 66: c

52: d 67: a

53: d 68: b

54: d 69: d

55: c 70: c

56: d 71: a

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57: b 72: c

Q71. Tax liability is rounded off in multiples of __ u/s 288B. (a) Rs. 10 (b) Rs. 100 (c) Rs. 1 (d) None Q72. Direct & Indirect Tax is ___& ___ in nature respectively. (a) Progressive; Progressive (b) Regressive; Regressive (c) Progressive; Regressive (d) Regressive; Progressive

Q74. Mr. P is 55 years old & is a resident of India & has earned a total income of Rs. 7,12,500. Calculate his tax liability for the AY 2019-2020. (a) Rs. 51,000 (b) Rs. 57,200 (c) Rs. 40,820 (d) None Q75. Mrs. S (age 87) is a NR & has earned total income of Rs. 4,00,000. Calculate her tax liability for AY 2019-20. (a) Rs. Nil (b) Rs. 5,200 (c) Rs. 7,800 (d) None

Q61. BEL in case of co-operative society is ___. (a) Rs. 5 lac (b) Rs. 2.5 lac (c) Nil (d) Rs. 3 lac

Q65. For AY 2019-2020, rate of tax for firm is (a) 30% + SC @ 12% if TI > Rs. 1 cr + HEC @ 4% (b) 30% + SC @ 10% if TI > Rs. 1 cr + HEC @ 4% (c) 30% + SC @ 5% if TI > Rs. 1 cr + HEC @ 4% (d) 30% + SC @ 7% if TI > Rs. 1 crore + HEC @ 4%

Q70. In case of Individual, HEC is leviable only when total income of such assessee exceeds ___. (a) Rs. 10 lacs (b) Rs. 1 cr (c) Rs. 2.5 lac (d) None

Q73. If total income of AJP is Rs. 3,25,000, income-tax payable is____ & surcharge payable is____. (a) Rs. 3,750; SC – nil (b) Rs. 7,500; SC - nil. (c) Rs. 1,250; SC – nil (d) Rs. 75,000; SC - Rs. 3,750.

Q59. Max. amount which is not taxable in case of firm is__. (a) Rs. 3,00,000 (b) Rs. 5,00,00 (c) Rs. 2,50,000 (d) Nil

Q64. Surcharge applicable in case of Individual is: (a) 10% of tax if TI > Rs. 50 lacs but ≤ Rs. 1 cr (b) 10% of tax if TI > Rs. 1 cr (c) 15% of tax if TI > Rs. 1 cr (d) Both (a) & (c), as the case may be.

(d) 4%

Q76. Mrs. S , 37 years of age, is a non-resident of India & has earned total income of Rs. 2,70,000. Calculate her tax liability for AY 2019-20. (a) Rs. Nil (b) Rs. 2,080 (c) Rs. 1,040 (d) None Q77. M.s ABC is a partnership firm having business income of Rs. 6,00,000. Income from other sources is Rs. 1,50,000. Specified Donations eligible for deduction u/s 80G is Rs. 2.5 lacs. Calculate tax liability for AY 2019-20. (a) Rs. 13,000 (b) Rs. 65,000 (c) Rs. 1,56,000 (d) Nil Q78. Total income of XYZ Ltd. is Rs. 3 lacs. During PY 201617, XYZ has made the total turnover of Rs. 255 crores. Find the tax liability for AY 2019-20. (a) Nil (b) Rs. 2,600 (c) Rs. 93,600. (d) None. Q79. Average rate of tax for the income of Rs. 5,00,000 is (a) 5% (b) 20% (c) Nil (d) 2.5%

58: b 73; a

59: d 74: b

60: b 75: c

61; c 76: c

62: b 77: c

63: d 78: c

64: d 79: d

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65: a

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2. RESIDENTIAL STATUS & SCOPE OF TOTAL INCOME Q1. Residential status is to be determined for each (a) PY (b) AY (c) A/cing (d) None Q2. Every year, residential status of an assessee ___ change (a) May (b) Will (c) Will not (d) None Q3. Total income of a person is determined on basis of his (a) Residential status (b) Citizenship in India (c) Both (a) & (b) (d) None of the above Q4. Non-resident is defined u/s ___. (a) 2(30) (b) 2(34) (c) 2(35)

(d) None

Q5. Which of the following may be RNOR in India? (a) Individual (b) HUF (c) Company (d) (a) & (b) Q6. To be resident in India, Individual has to satisfy____ basic condition: (a) First (b) Second (c) Both (d) Either of (a) & (b)

Q14. Mr. P was born in India in 1989. His father was born in India in 1974 & his mother was born in England in 1976. His Grandfather was born in England in 1944 & his Grandmother was born in China in 1946. Mr. P along with parents took the Citizenship of England in 1995. Mr. P is. (a) A person of India origin (b) Citizen of India (c) A foreign national (d) None of these Q15. Mr. P was born in UK, his parent were born in India in 1941. His Grandparents were born in USA in 1915. X is: (a) A person of India origin (b) Citizen of India (c) A foreign national (d) None of These Q16. Mr. P was born in India in 1979 & later on took citizenship of Australia. His parents were born in India in 1949. His Grandfather was born in Rawalpindi in 1916 but his Grandmother was born in London in 1920. Mr. P is: (a) A person of India origin (b) Citizen of India (c) A foreign national (d) None of These

Q7. Mr. P is a citizen of India & is employed on an Indian ship. During PY 2018-2019, he leaves for Germany on 15.9.2018 & did not return during the year. He had been non-resident for past 3 years. Earlier to that, he was permanently in India. For AY 2019-2020, Mr. P shall be ___. (a) ROR (b) RNOR (c) NR (d) None

Q17. Mr. P is a person of Indian origin & comes to India on 29.10.2018 & plans to stay here for 185 days. During 4 years prior to PY 2018-19 he was in India for 750 days. He was never in India before this. For AY 2019-20, he shall be: (a) ROR (b) RNOR (c) NR (d) None

*Q8. Mr. P, an Indian citizen & is working as a crew member on Indian ship. During PY 2018-19, he leaves India for Germany on 15.9.2018 for holidays & returned on 1.4.2019. He had been NR for past 3 PYs. Earlier to that he was permanently in India. For AY 2019- 2020, he shall be: (a) ROR (b) RNOR (c) NR (d) None

Q18. Mr. P is a foreign citizen. His father was born in Delhi in 1951 & mother was born in England in 1950. His grandfather was born in Delhi in 1922. Mr. P visited India to see Taj Mahal & other historical places. He came to India on 1st Nov, 2018 for 200 days. He has never come to India before. His residential status for AY 2019-2020 will be: (a) ROR (b) RNOR (c) NR (d) None

Q9. Mr. P who was born & brought up in India left for employment in Dubai on 20th August, 2018. His residential status for AY 2019- 2020 would be: (a) ROR (b) RNOR (c) NR (d) None *Q10. Mr. P is Citizen of India & left India for USA on 16.8.2018 for doing business meetings on behalf of his employer, which is India company, for exporting goods to USA. He came back to India on 15.9.2018. He has been resident in India for past 10 years. For AY 2019-20, X is __. (a) ROR (b) RNOR (c) NR (d) None *Q11. Mr. P is a CA at P Ltd. left India for 1st time on 10.8.2018 for treatment of his wife. For AY 19-20, Mr. P is: (a) ROR (b) RNOR (c) NR (d) None

Q19. Additional conditions are to be satisfied to be ROR is: (a) He is a resident in at least any 2 PY out of the 10 PYs immediately preceding the relevant PY. (b) He has been in India for 730 days or more during 7 PYs immediately preceding the relevant PY (c) Both (a) & (b) (d) None of the above Q20. If Anirudh has stayed in India in PY 2018-19 for 181 days, & he is NR in 9 out of 10 PYs immediately preceding the current PY & he has stayed in India for 365 days in 4 years immediately preceding the current PY & 420 days in all in 7 years immediately preceding the current PY, his residential status for AY 2019-20 would be: (a) ROR (b) RNOR (c) NR (d) None

Q12. An Indian company deputes its employee Mr. P to UK for 2 years starting from 1.7.2018 & he leave India for the first time in his life. Income tax authorities contended that Mr. P is not unemployed at the time of leaving India, hence 2nd basic condition will be applicable & therefore Mr. P is a resident in India. Decide whether he is: (a) ROR (b) RNOR (c) NR (d) None

Q21. Mr. P a foreign national comes to India on 5.10.18 for 210 days. This is his first visit to India & before this he never visited India. Mr. P shall be. (a) ROR (b) RNOR (c) NR (d) None

Q13. Mr. P is a foreign national but a person of India origin. He visited India during PY 2018-19 for 81 days. During 4 preceding PY, he was in India for 400 days, Mr. P shall be: (a) ROR (b) RNOR (c) NR (d) None

*Q23. Determine the residential status of a HUF if HUF's control & management is wholly situated in India & Karta of HUF is NR in India for that PY. (a) ROR (b) RNOR (c) NR (d) ROR/RNOR

1: a 13: c

2: a 14: c

3: a 15: a

4: a 16: a

5: d 17: c

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6: d 18: c

*Q22. Karta of a HUF is NR in AY 2019-20 & thus HUF is (a) NR (b) RNOR (c) ROR (d) Any of the above

7: c 19: c

8: a 20: b

9: c 21: c

10: a 22: d

11: a 23: d

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12: c

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Q24. HUF of Mr. P consisting of himself, his wife & 2 sons is assessed to tax. Residential status of HUF = NR when __. (a) Its management & control is wholly in India (b) Its management & control is wholly o/s India (c) The status of Karta is non-resident for that year (d) When majority of the members are NR. Q25. If Karta is ROR in India but control & management of HUF is situated partly outside India in PY, HUF is: (a) ROR (b) RNOR (c) NR (d) None Q26. Mr. P is Karta of HUF doing business at Pune. Mr. P is residing in Dubai for past 10 years & visited India for 20 days every year for filing Income tax return of HUF. His 2 major sons take care of the day to day affairs of business in India. Residential status of HUF for AY 2019-20 is: (a) ROR (b) RNOR (c) NR (d) None *Q27. Residential status of company is determined (a) u/s 6(4) (b) u/s 6(1) (c) u/s 6(6) (d) u/s 6(3) Q28. A company is considered to be resident if: (a) It is an Indian Company (b) During PY, foreign company’s POEM is situated in India (c) Both (a) & (b) (d) Any of the above Q29. Indian company would be Resident in India if its____. (a) POEM is in India (b) POEM is outside India (c) All shareholders are ROR (d) All directors are ROR Q30. A company incorporated outside India having its place of effective management fully situated in India in the previous year will be treated as ____. (a) NR (b) ROR (c) RNOR (d) Resident Q31. PC Ltd. is registered in Australia & has head office in Australia. POEM of its business affairs is situated in India. PC Ltd. shall be: (a) Resident (b) ROR (c) NR (d) None Q32. PC Ltd. is registered in India but it has POEM in Nepal. D Ltd. is registered in Nepal but it has POEM in India. (a) PC Ltd. – Resident; D Ltd. – NR (b) Both are NR (c) Both D & PC Ltd. are resident of India. (d) PC Ltd. is a NR but D Ltd. is resident of India Q33. PC Ltd. is an Indian company. It carries its business in Delhi & London. The POEM of the company is situated in London. More than 85% of its business income is from the business in England. If so, its residential status will be(a) NR (b) ROR (c) RNOR (d) Resident Q34. Income deemed to be received in India is given u/s (a) 10 (b) 7 (c) 12 (d) 5 Q35. Indian Income means ____. (a) Income accrued.deemed to be accrued in India (b) Income received.deemed to be received in India (c) Both (a) & (b) (d) None of the above. Q36. Foreign Income means ____. (a) Income accrued.deemed to be accrued in India (b) Income received.deemed to be received in India (c) Both (a) & (b) (d) None of the above. 24: b 37: d

25: a 38: d

26: b 39: d

27: c 40: a

28: c 41: a

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29: b 42: a

Q37. Income received in India during the previous year is taxable in the case of ____. (a) ROR (b) RNOR (c) NR (d) All Q38. Foreign income received in India during the previous year is taxable in the case of ____. (a) ROR (b) RNOR (c) NR (d) All Q39. Incomes which accrues in India but received outside India are taxable in case of ____. (a) ROR (b) RNOR (c) NR (d) All Q40. Income which accrue or arise outside India & also received outside India is taxable in case of ___. (a) ROR (b) RNOR (c) NR (d) ROR & RNOR Q41. Income accruing in London & received there is taxable in India in the case of ____. (a) ROR (b) RNOR (c) NR (d) ROR & RNOR Q42. Income accruing from agriculture in a foreign country is taxable in India in case of an assesses who is: (a) ROR (b) RNOR (c) NR (d) ROR & RNOR Q43. Which Income is taxable in India to ROR Individual? (a) Any Income accrued or Received in India (b) Any Income accrued outside India (c) Any Income received outside India (d) All Incomes are Taxable Q44. Which Income is taxable in India to RNOR Individual? (a) Business income accruing outside India (b) Property income accruing outside India (c) Interest income accruing outside India (d) Income accruing outside India if it is derived from a business controlled in India. *Q45. Income which accrue outside India from business controlled from India is not taxable in India in case of: (a) ROR (b) RNOR (c) NR (d) All Q46. Which Income is taxable in India to NR Individual? (a) Any Income accrued or Received in India (b) Any Income accrued outside India (c) Any Income received outside India (d) No Income is Taxable in India in the hands of NR. *Q47. Income earned & received outside India but later on remitted to India, is taxable to: (a) ROR (b) RNOR (c) NR (d) None Q48. Past untaxed profit of PY 2017-18 brought to India in PY 2018-19 is taxable in AY 2019-20 to (a) All the assesses (b) ROR (c) Non-resident in India (d) None of the above *Q49. Profits of Rs. 1,00,000 for PY 2017-18 of a business in Australia remitted to India during PY 2018-2019 (not taxed earlier) would be. (a) Taxable in India for ROR only (b) Not taxable in India for all (ROR, NOR & NR) (c) Taxable in India for all (ROR, NOR & NR) (d) Taxable only for NOR & NR

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Q50. Income of NR from business connection in India is : (a) Exempt in India (b) Partly Exempt (c) Ignored (d) Taxable in India as it is deemed to accrue in India Q51. Income earned from a contract negotiated by agent in India in name of NR but approved by such NR shall be: (a) Exempt in India (b) Partly Exempt (c) Ignored (d) Taxable in India as it is deemed to accrue in India Q52. Where a NR has its operation confined to purchase of goods in India for export, such income shall be ___in India. (a) Taxable as it is deemed to accrue in India (b) Not taxable as it shall not be deemed to accrue in India Q53. STCG on sale of shares of Indian company but received in Australia is taxable in case of: (a) ROR (b) RNOR (c) NR (d) All Q54. Dividend < Rs. 10 lacs paid by Indian company o/s India is _____ to recipient & _____ to company (a) Taxable; Taxable (b) Exempt; Exempt (c) Exempt & Taxable (c) Taxable ; Exempt Q55. Fees for technical services paid by the Central Government will be taxable in case of(a) ROR (b) RNOR (c) NR (d) All Q56. Royalty paid by resident to NR o/s India is ___ in India. (a) Taxable unless it is paid for acquisition of any right or information.property used for business o/s India. (b) Taxable whether such right.information.property is used for business.profession in India or outside India. Q57. FTS paid o/s India by NR to another NR in India is (a) Never taxable in India (b) Always taxable in India (c) Taxable in India provided know-how for which royalty was paid was used for any business or profession in India (d) None of the above Q58. X Ltd of USA borrowed money from companies in USA for doing business in India by name P Ltd. Mumbai. X Ltd paid interest of Rs. 5 lacs. Interest paid is.has: (a) Deemed to Accrued in India (b) Exempt from tax (c) Not accrue in India (d) Taxable in USA Q59. Remuneration for rendering services on a foreign ship is not taxable in India in the case of: (a) Resident (b) ROR (c) Indian Citizen (d) NR *Q60. Income from a business in Canada, controlled from Canada is taxable in case of ____. (a) ROR (b) RNOR (c) NR (d) None *Q61. Mr. P, an Indian citizen, who is living in Delhi since 1980, left for Japan on 1st July, 2016 for employment. He came back to India on 1st January, 2019 on a visit & stayed for 4 months. His residential status for AY 2019-20 is: (a) ROR (b) RNOR (c) NR (d) None Q62. Mrs. X citizen of US, famous astronaut, comes to India on 31.10.2018 to visit her grandmother who was born in MP in 1935. She stays in India till 26.1.2019 & then leaves for USA. Her residential status for AY 2019-20 will be: (a) ROR (b) RNOR (c) NR (d) None 50: d 61: c

51: d 62: c

52: b 63: c

53: d 64: a

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54: c 65: a

55: d 66: b

Q63. Mr. P an Indian citizen, who is appointed as Tax consultant (free liaison) by a reputed company of USA & leaves India for the first time on 13.9.2017. During PY 2018-19, he comes to India on a visit for 175 days. Determine residential status of Mr. P for AY 2019-2020. (a) ROR (b) RNOR (c) NR (d) None Q64. Mr. P is a citizen of Australia & has been staying in India since 1.1.2012. He leaves India on 16.7.2018 to visit Australia & returns on 4.1.2019. Determine his residential status for the AY 2019-20. (a) ROR (b) RNOR (c) NR (d) None Q65. HUF is situated in Delhi whose Karta is Mr. P. Mr. P. has been in India since 1.1.2014 & before that he was in UK. Mr. P takes all decisions regarding the working of HUF in India. Determine residential status of HUF for AY 2019-20. (a) ROR (b) RNOR (c) NR (d) None Q66. Raman was employed in HUL Ltd. He received a salary of Rs. 40,000 p.m from 1.4.2018 to 27.9.2018. He resigned & left for Dubai for the first time on 1.10.2018 & got salary of Rs. 80,000 p.m from 1.10.2018 to 31.3.2019. His salary for October to December 2018 was credited in his Dubai bank account & the salary for January to March 2019 was credited in his Bombay account directly. He is liable to tax in India in respect of: (a) Income received in India from HUL Ltd; (b) Income received in India & in Dubai; (c) Income received in India from HUL Ltd. & income directly credited in India; (d) Income received in Dubai Q67. HUF is situated in Goa. Its Karta is X (age: 95) has delegated power to his eldest son Y. X is in USA for his medical treatment & left India for first time on 18.9.2017. Y has full controls over affairs of HUF. Y excises partial control from India & partially from Nepal. Calculate residential status of HUF & Karta Mr. P for AY 2019-20: (a) HUF – ROR; X – NR (b) HUF – RNOR; X – NR. (c) HUF – NR; X – NR (d) HUF – NR; X – ROR. Q68. Mr. P earns the following Income during the PY ended 31st March, 2019. Interest on UK Development Bonds (1.4th being received in India) - Rs. 2,00,000. Profits on sale of a building in India but received in Holland - Rs. 2 lacs. Taxable Income for AY 2019-20 if Mr. P is RNOR is (a) Rs. 2,50,000 (b) Rs. 4,00,000 (c) Rs. 2,00,000 (d) Rs. 50,000 Q69. Dividend of Rs. 5,000 was received from foreign company, outside India by a ROR out of which Rs. 4,000 is remitted to India. Income taxable in India is: (a) Rs. 1,000 (b) Rs. 4,000 (c) Rs. 5,000 (d) Nil Q70. Dividend of Rs. 5,000 was received from foreign company, outside India by a RNOR out of which Rs. 4,000 is remitted to India. Income taxable in India is: (a) Rs. 1,000 (b) Rs. 4,000 (c) Rs. 5,000 (d) Nil

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3. EXEMPT INCOMEs & AGRICULTURAL INCOME Q1. Incomes which are not included in total income of the assessee are called ____. (a) Exempt Incomes (c) Taxable Incomes (b) Incomes deductible u/c VI-A. (d) None of the above

Q11. _____ Paid by Government of India to a Citizen of India for rendering services outside India is Exempt u/s 10(7). (a) Salary (b) Allowance & perquisites (c) Both (a) & (b) (d) None of the above.

Q2. Gross Total Income means Aggregate of Incomes under all heads of Income _____. (a) After claiming deduction u/c VI-A (b) Before claiming deduction u/c VI-A. (c) Income for which no deduction u/c VI-A. (d) None of the above.

Q12. Government of India paid salary of Rs. 5 lacs & Allowances.perquisites of Rs. 2.20 lacs to a person who is citizen of India for services rendered by him outside India. His taxable income will be____. (a) 7.2 Lacs (b) 5 Lacs (c) 6.1 Lacs (d) Nil

Q3. Total (taxable) Income means Aggregate of Incomes under all heads of Income ____. (a) After claiming deduction u/c VI-A (b) Before claiming deduction u/c VI-A. (c) Income for which no deduction u/c VI-A. (d) None of the above. Q4. Any Expenditure incurred to earn Exempt Income shall be allowed as____while computing income under any head. (a) Deduction (b) not allowed as deduction (c) Exemption. (d) None of the above Q5. Any sum received by an Individual as a member of HUF from the income of HUF shall be ___. (a) Fully taxable (b) Fully exempt u/s 10(2) (c) Fully taxable u/h “Salary” (d) Taxable @ 15%. Q6. Share of the profits from the firm by the partner is: (a) Fully taxable (b) Fully Exempt u/s 10(2A) (c) Fully taxable u/h “Salary” (d) Exempt upto Rs. 2.5 lacs Q7. Interest on any money standing to any Individual’s credit in Non-Resident External A/c in any bank in India is: (a) Taxable to person in whose name A/c is being operated (b) Exempt to person in whose name A/c is being operated (c) Taxable to person who withdraws Amt from such A/c (d) Exempt to person who withdraws Amt from such A/c Q8. Exemption is available on Interest received by NR on money standing in NRE A/c only if __ to maintain such A/c. (a) such NR person is permitted by AO (b) such NR person is permitted by RBI (c) such NR person is permitted by CG.SG (d) No such permission is required Q9. Which of the following incomes are exempt u/s 10(6) in the hands of an Individual who is not a citizen of India ? (a) Remuneration of Foreign Diplomats & Employees of a Foreign Enterprise for services rendered in India (b) Salary received by NR Non-citizen of India as a crew Member of Foreign Ship (c) Remuneration received by Foreign Government Employees from foreign government for specified training in India. (d) All of the above *Q10. Royalty.FTS received by non-corporate NR & foreign companies for services rendered in or o/s India to National Technical Research Organisation (NTRO) is (a) Exempt. (b) Taxable 1: a 12:b

2: b 13: b

3: a 14: b

4: b 15: c

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5: b 16: a

6: b 17: c

Q13. Any compensation received or receivable by a victim of Bhopal Gas leak disaster is _____. (a) Taxable (b) Fully exempt (c) Exempt upto Rs. 10 lacs. (d) Exempt except to the extent of amount received or receivable which has been allowed as deduction for any loss.damage caused by such disaster. Q14. Any amount received from CG.SG.LA by Individual or his legal heir as compensation for any disaster is ____. (a) Taxable (b) Fully exempt (c) Exempt upto Rs. 10 lacs. (d) Exempt except to the extent of amount received or receivable which has been allowed as deduction for any loss.damage caused by such disaster. Q15. Tax paid by the employer on non-monetary perquisites provided to the employee is exempt u/s ____. (a) 17(2) (b) 10(14) (c) 10(10CC) (d) None Q16. Amount received from recognized provident fund after 5 years of continuous service is (a) Exempt u/s 10(12) (b) Fully taxable Q17. Which of the following payment received from Sukanya Samriddhi scheme is.are Exempt? (a) Interest (b) Maturity amount (withdrawals) (c) Both (a) & (b) (d) None of the above. Q18. Amount payable at the time of closure or opting out of National Pension Scheme referred to in section 80CCD shall be exempt to the extent of ___ total amount payable. (a) 30% (b) 100% (c) 40% (d) 25% Q19. Amount payable at the time of partial withdrawal out of National Pension Scheme referred to in section 80CCD shall be exempt to the extent of ____ total amount payable. (a) 30% (b) 100% (c) 40% (d) 25% Q20. Amount received by the nominee at the time of closure.opting out of NPS referred to in sec 80CCD due to death of Assessee is exempt upto___ total amount payable (a) 30% (b) 40% (c) 100% (d) 25% Q21. Interest on Gold Deposit Bonds & bonds issued by LA: (a) Exempt (b) Taxable (c) Partly Exempt Q22. Mr. P traced a missing person & was awarded a sum of Rs. 1 lac but there was no agreement. Such sum is ____. (a) Casual income & fully taxable without BEL (b) Casual income & exempt up to Rs. 2,50,000 (c) Fully exempt (d) Exempt up to 2,50,000 7: b 18: c

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Q23. Scholarship received by a student is : (a) Casual income (b) Fully exempt u/s 10(16) (c) Fully taxable (d) Exempt if AO deems fit Q24. Scholarship received by a student was Rs. 75,000 p.m. He spends Rs. 70,000 for meeting the cost of education, ___ (a) Rs. 75,000 is taxable (b) Rs. 75,000 is exempt (c) Rs. 5,000 is taxable (d) Rs. 5,000 is exempt Q25. Daily Allowance & Constituency Allowance received by a Member of Parliament & MLAs is. (a) Exempt (b) Taxable (d) Spent amount is Exempt (c) Included in total income for rate purpose Q26. MP received Rs. 1.5 lacs p.m as salary & Rs. 4.5 lacs p.a as daily allowances during PY 2018-19. Taxable Amt = (a) Salary - Rs. 18 lacs (b) PGBP - Rs. 22,50,000 (c) IFOS - Rs. 18 lacs (d) Nil Q27. An author was awarded by CG Rs. 10 lacs for writing a book. Such award given by CG in public interest is ____. (a) Casual Income (b) Fully Exempt (c) Fully taxable Q28. Family pension received by legal heir of army personnel who died during operational duties is ____. (a) Exempt u/s 10(18) (b) Exempt u/s 10(19) (c) Exempt u/s 10(20) (d) None of the above Q29. NAV of ____ palace of Ex-ruler is exempt u/s 10(19A). (a) One (b) Two (c) Nothing is taxable to the ex-ruler Q30. Income of certain funds of National Importance set up by CG is exempt. Which are these funds? (a) Swachh Bharat Kosh (b) Clean Ganga Fund (c) Both (a) & (b) (d) None of (a) & (b) Q31. Any pension received by Individual or family pension received by any member of his family is taxable if ___. (a) Such Individual is awarded Param Vir Chakra (b) Such Individual is awarded Maha Vir Chakra (c) Such Individual is awarded Vir Chakra (d) Such Individual is awarded Bharat Ratna *Q32. Income which accrues or arises to a member of scheduled tribes in specified areas is exempt ____. (a) In all cases (b) Never Exempt (c) To the extent such income is derived from any source in the specified states or areas. (d) To the extent such income is derived from any source in the specified states or areas & income by way of dividend or interest on securities. *Q33. Income which accrues or arises to a Sikkimese individual in specified areas is exempt: (a) In all cases (b) Never Exempt (c) If Income is derived from any source in Sikkim & income by way of dividend.Interest on securities. (d) If Income is derived from any source in Sikkim & income by way of dividend.interest on securities & income from house property 23: b 34: c

24: b 35: c

25: a 36: b

26: c 37: b

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27: b 38: c

28: b 39: c

Q34. Where the income of an individual includes the income of minor children, such individual shall be entitled to an exemption of _____. (a) Rs. 1,500 (b) Rs. 1,500 per minor child. (c) Lower of Rs. 1,500 per minor child or Income of minor child included in the total income of the assessee. (d) Rs. 1,500 per minor child upto maximum of 2 children. Q35. Dividend received by shareholder from a domestic company is ____. (a) Fully exempt u/s 10(34) (b) Taxable u/h IFOS (c) Exempt upto Rs. 10 lacs (d) Exempt upto Rs. 5 lacs Q36. Dividend received by a shareholder from foreign company is ______. (a) Exempt u/s 10(34) (b) Taxable u/h IFOS (c) Exempt upto Rs. 10 lacs (d) Taxable @ 15% Q37. Income on buyback of___is Exempt to a shareholder. (a) Listed shares (b) Unlisted shares (c) All shares (d) Not exempt Q38. Income from units of UTI.MF notified u/s 10(23D) is ____ & Income on transfer of units of UTI.MF _____. (a) Exempt; Exempt (b) Taxable; Exempt (c) Exempt; Taxable (d) Taxable; Taxable. Q39. Capital gain arising from compulsory acquisition of urban agricultural land shall be ____. (a) Taxable u/h Capital Gains (b) Taxable u/h IFOS (c) Exempt u/s 10(37) if certain conditions are satisfied *Q40. Income from LTCG from transfer of equity shares is: (a) Fully exempt if shares are sold through NSE (b) Fully exempt if shares are sold through BSE (c) Fully exempt if such share are sold through any RSE in India & such transaction is subject to STT (d) Taxable at special rate u/s 112A. Q41. Specified Income from International Sporting Event held in India is ____. (a) Taxable (b) Exempt Q42. Amount received by Individual as loan under Reverse Mortgage Scheme is ____ in the hands of recipient. (a) Taxable (b) Exempt (c) Not an income since it is a loan (d) Both (b) & (c) Q43. Any sum received under Life Insurance Policy including bonus shall be exempt u/s 10(10D) ______ (a) In all kinds of policies (b) In all kinds of policies except when received under a Keyman Insurance Policy (c) In all kinds of policies except when received under Keyman Policy or covered u/s 80DD(3). (d) In all kinds of policies except when received under Keyman Insurance Policy or covered u/s 80DD(3) or Policy issued, if the premium paid for any year exceeds 10% or 15% of actual capital sum assured, except on death. Q44. Tax holiday u/s 10AA for newly established units in SEZ is allowed for total period of ____. (a) 5 Yrs (b) 10 Yrs (c) 15 Yrs (d) 20 Yrs 29: a 40: d

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Q45. Deduction available u/s 10AA in respect of profits & gains derived by a SEZ unit from export of articles is (a) 100% of Export profits for first 10 consecutive AYs & 50% for next 5 consecutive AYs (b) 100% of Export profits for first 5 consecutive AYs & 50% for next 10 consecutive AYs (c) 100% of Export profits for first 15 AYs (d) 100% of Export profits for first 5 AYs, 50% for export profits for next 5 AYs & upto 50% of export profits for next 5 AYs, if credited to SRR A/c.

Q55. Which of the following income is agricultural income? (a) Rent received from agricultural land (b) Income from dairy farm (c) Income from poultry farm (d) Dividend from a company engaged in agriculture

Q46. Deduction u/s 10AA is available if the eligible entity begins to manufacture.produce articles or things or provide services ________ but not later than _____ in SEZ. (a) during AY 2020-21 or after ; PY 2005-06 (b) during PY 2005-06 or after ; AY 2020-21 (c) during PY 2006-07 or after ; AY 2021-22 (d) None of the above

Q57. Which of the following is an agricultural income? (a) Income from breeding of livestock (b) Income from poultry farming (c) Rent received from land used for movie shooting (d) Rent received from land used for grazing of cattle required for agricultural activities.

Q47. No Deduction u/s 10AA is available if business is formed by _____. (a) Splitting up of business (b) Reconstruction of business already in existence. (c) Both (a) & (b) (d) Deduction is always available Q48. Amount credited to SEZ Re-investment Reserve Account should be utilized for ____. (a) Acquiring P&M which is first put to use before expiry of 3 years following the PY in which reserve was created; (b) Business of the undertaking until acquisition of P&M (c) Distribution of dividend.remittance o/s India as profits (d) Both (a) & (b) Q49. Income of a foreign company received in India in Indian currency on account of sale of crude oil or any other notified goods or rendering notified services to any person in India shall be____. (a) Exempt (b) Taxable (c) Partly Exempt (d) Exempt if certain conditions u/s 10(48) are satisfied Q50. Agricultural Income is _____ in India. (a) Exempt (b) Taxable (c) Partly Exempt (d) Fully Exempt but it is to be aggregated with Nonagricultural Income for determining the rate of tax. Q51. Agriculture Income is Exempt in India provided ____. (a) land is situated in anywhere in India (b) land is situated in any rural area in India (c) land is situated in any urban area in India (d) land is situated whether in.outside India. Q52. Agriculture Income from outside India is ___. (a) Fully Exempt from tax (b) Partly Taxable (c) Fully Taxable u/h IFOS (d) None of the above Q53. Definition of Agriculture Income is given u/s ____. (a) 2(1A) (b) 2(1B) (c) 2(1C) (d) 2(1D) Q54. Any rent/revenue derived from land may be treated as agricultural income & will be fully exempt u/s 10(1) if__. (a) It is derived from Land (b) Land is situated in India (c) Land is used for agricultural purpose (d) All the above conditions are satisfied. 45: d 55: a

46: b 56: b

47: c 57: d

48: d 58: c

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49: d 59: b

Q56. If any person earns income from allied activities like animal husbandry, diary farming, fishery etc. then it is ___. (a) Agricultural Income (b) Income of PGBP (c) Both (a) & (b) (d) None of (a) & (b)

Q58. If any partner has received share of profits from a firm having agricultural Income, such share is: (a) Agricultural Income & exempt (b) PGBP (c) PGBP & exempt from tax u/s 10(2A) (d) Fully Taxable Q59. X is employed in an Agricultural University & getting a Basic Pay of Rs. 20,000 p.m & claims that it is his Agricultural Income? It is a.an ___. (a) Exempt as Agriculture income (b) Salary (c) Taxable u/h PGBP (d) None Q60. Income derived from sugarcane plantation in US but received in India shall be treated as _____. (a) Agricultural income & hence exempt (b) Agricultural income but taxable u/h “IFOS” (c) Exempt as earned outside India. (d) Taxable as Income from business & profession Q61. LTCG on sale of urban agricultural land in is ____ Income & thus _____. (a) Agricultural & exempt (b) Agricultural & taxable (c) Non-agricultural & exempt (d) Non-agricultural & taxable u/h Capital gains *Q62. If an assessee uses the agriculture produce grown by him for his own consumption then _____. (a) Agricultural Income = FMV of Agriculture produce (b) Agricultural Income = FMV of Agriculture produce Cost of cultivation (c) Agricultural Income = Nil. Q63. Assessee has incurred Rs. 1,00,000 on cultivation of agricultural produce. 50% of produce is sold for Rs. 1,10,000 & the balance 50% has been used for selfconsumption. Agricultural income shall be ____. (a) Rs. 1.1 lac (b) Rs. 60,000 (c) Rs. 1.2 lac (d) Rs. 1 lac Q64. If the assessee uses its own agricultural produce for manufacturing certain products other than tea, rubber or coffee, cost of such agricultural produce for the purpose of computing business income of manufacturing shall be ___. (a) Cost of producing such agriculture produce (b) FMV of such agriculture produce as on the date use (c) Any suitable method which Assessee wants to adopt. (d) none of the above 50: d 60: b

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Q65. The proportion of agricultural & business income in case of income derived by the assessee from growing of tea leaves in India & manufacturing of tea is ____. (a) 65% & 35% (b) 75% & 25% (c) 60% & 40% (d) 70% & 30% Q66. If the assessee is engaged in the business of growing & curing of coffee, the agriculture income shall be ____ % of the income from such business. (a) 40% (b) 60% (c) 65% (d) 75% Q67. If the assessee is engaged in the business of manufacturing of rubber, the agricultural income shall be ____ % of the income from such business. (a) 40% (b) 60% (c) 65% (d) 75% Q68. Income derived from rubber plantation in Australia but received in India shall be treated as. (a) agricultural income & hence exempt (b) agricultural income but taxable u/h “IFOS" (c) Taxable in Singapore & thus not taxable in India (d) None of the above Q69. The partial integration of agriculture income with non-agricultural income is done in case of: (1) any assessee other than who is liable to be taxable at flat rate of income tax (2) Individual, HUF, AOP-BOI & AJP (a) (1) is correct (2) is incorrect (b) Both are correct (c) (1) is incorrect (2) is correct (d) Both are incorrect *Q70. Partial integration of agriculture income is done to compute tax on ____. (a) Agricultural Income (b) Non-Agricultural Income (c) Both Agricultural & Non-Agricultural Income (d) None of Agricultural & Non-Agricultural Income 65: c

66: d

67: c

68: b

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69: b

70: b

Q71. There will be no partial integration of if the nonagricultural income does not exceed __. (a) Rs. 5,000 (b) Rs. 10,000 (c) Rs. 50,000 (d) BEL Q72. There will be no partial integration, if the agricultural income does not exceed ___. (a) Rs. 50,000 (b) Rs. 1 lac (c) Rs. 5,000 (d) None Q73. If partnership firm earns agriculture income, ____. (a) It will be exempt in the hands of firm (b) It will be exempt in the hands of firm but taxable in the hands of the partners (c) It will be exempt in the hands of firm & partners (d) It will be taxable in the hands of firm but exempt in the hands of the partners Q74. A person holds shares of ABC Ltd which is an India company & the company is engaged in agricultural operation & person has received dividends of Rs. 12,000 & he claims it is his agricultural Income. Discuss: (a) Fully Taxable (b) Fully Exempt as an agricultural income (c) Fully Exempt as it is dividends of Indian company (d) None of the above Q75. If a company declares dividend out of agriculture income, such dividend declared by the company shall be (a) Exempt in the hands of the shareholder but dividend tax will be payable by the company (b) not be subject to any income tax, either in the hands of company or in the hands of shareholders (c) Exempt in the hands of the company but taxable in the hands of shareholders (d) None of the above 71: d

72: c

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4A. INCOME UNDER THE HEAD SALARY Q1. Mr. P is a CA is employee of PC Ltd. & is working as an internal auditor having contract of services with PC Ltd. Mr. P requests PC Ltd. to show his salary as Internal Audit fee. The amount shall be taxed u/h: (a) Salaries (b) PGBP (c) IFOS (d) None

*Q12. Salary of Mr. P is Rs. 10,000 p.m. Mr. P had taken Salary in advance for April to June 2018 in March 2018 itself. Gross salary of Mr. P for AY 2019-20 : (a) Rs. 1,20,000 (b) Rs. 70,000 (c) Rs. 1,00,000 (d) Rs. 90,000

Q2. Income is taxable as Salary Income when there is employer & employee relationship. However in one exceptional case income is taxable as salary even in the absence of employer employee relationship which is ___. (a) Members of Parliament (b) Professors of college (c) Partner of a firm (d) Judges of HC & SC

Q13. Foregone salary is _____. (a) Exempt if surrendered to government (b) Taxable in other cases (c) Just an application of Income (d) All of the above

Q3. Mr. P was employed on 1.4.2008 in the grade of Rs. 15,000 - Rs. 500 - Rs. 17,000 - Rs. 750 - Rs. 21,500 - Rs. 1,000 - Rs. 31,500. His gross salary for AY 2019-20 is___. (a) Rs. 2.7 lac (b) Rs. 2.58 lac (c) Rs. 2.16 lac (d) Rs. 1.8 lac Q4. PC Ltd is a company paying salary of Rs. 4,50,000 to its employee Mr. P & in addition undertakes to pay the Income Tax amounting to Rs. 10,400 on his behalf during AY 201920. The gross Salary of Mr. P is: (a) Rs. 4.3 lac (b) Rs. 4.5 lac (c) Rs. 4.604 lac (d) None Q5. Read the following statements & state correct answer:

(1) Contract b/w employer & employee is contract of service (2) Contract b/w employer & employee is contract for service (3) Contract b/w professional & client is contract for service (4) Contract b/w professional & client is Contract of Service

(a) 1 & 2 are correct (c) 3 & 4 are correct

(b) 2 & 3 are correct (d) 1 & 3 are correct

Q6. Salary is deemed to accrue at the place where _____. (a) Payment for services is received (b) Services are rendered (c) Either (a) or (b) (d) None of the above Q7. Mr. P is employed in AB Institute, Pune. He is eligible for Rs. 24,000 as dearness allowance to meet increased cost of living. The amount of DA taxable is ___. (a) Rs. 10,000 (b) Nil (c) Rs. 24,000 (d) Rs. 9,000 *Q8. Mr. P who is entitled to a Salary of Rs. 10,000 p.m. took advance of Rs. 20,000 against salary in the month of March 2019. Gross salary of Mr. P for AY 2019-20 shall be: (a) Rs. 1,00,000 (b) Rs. 1,20,000 (c) Rs. 1,40,000 (d) None of the above Q9. Inclusive definition of salary is given u/s: (a) 17(3) (b) 17 (c) 17(1)

(d) None

Q10. U/s 15 salary is taxable on __ basis. (a) Receipt (b) Due (c) Earlier of (a) or (b) (d) None *Q11. Mr. P who is entitled to Salary of Rs. 10,000 p.m. took advance salary from his employer for April & May 2019 along with Salary of March 2019 on 31.3.2019. Gross salary for Mr. P for AY 2019-20 shall be: (a) Rs. 1,20,000 (b) Rs. 1,40,000 (c) Rs. 1,00,000 (d) None of the above 1: a 13: d

2: d 14: a

3: c 15: c

4: c 16: a

5: a 17: a

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6: b 18: b

Q14. Pension/leave salary paid abroad for services rendered in India is deemed to accrue _____. (a) In India (b) Outside India Q15. Which of the following allowance is fully Exempt? (a) Overtime allowance (b) Medical allowance (c) Allowances paid by UNO (d) HRA Q16. HRA is given u/s ____. (a) 10(13A) Rule 2A (c) 20(4) Rule 8B

(b) 10(15B) Rule 3B (d) 10(14A)

Q17. Salary paid by Government to Citizen of India (R.NR) for services rendered o/s India is deemed to accrue ____. (a) in India (b) O/s India (c) Depends on the discretion of Assessee (d) None Q18. Allowance or Perquisites paid o/s India by GOI to a citizen of India for rendering services o/s India will be ____. (a) Taxable in India (b) Fully exempt u/s 10(7) Q19. Government of India announced increase in DA on 15.3.2018 with retrospective effect from 1.5.2016 & the same were paid on 8.5.2018. Arrears of DA is taxable in (a) PY 2017-18 (b) PY 2018-19 (c) PYs to which these are related to (d) PY as per AO Q20. Salary paid to Partner by the firm is ___. (a) Taxable u/h Salaries (b) Taxable u/h PGBP (c) Always exempt (d) Always taxable Q21. Bonus is taxable as salary income on ___ basis. (a) Due (b) Receipt (c) Earlier of (a) or (b) (d) Anytime at the choice of employer Q22. Mr. P is entitled to a watchman allowance of Rs. 600 p.m. for the security of his residence. He pays Rs. 500 p.m. to the watchman employed by him. Taxable allowance = (a) 500 p.m (b) 100 p.m (c) 600 p.m (d) None Q23. Medical expenditure reimbursed by the employer to the employee shall be exempt upto ____. (a) Rs. 15,000 pm (b) Rs. 1,00,000 pa (c) Fully Exempt (d) Fully taxable Q24. Transport Allowance is ___. (a) Always Taxable (b) Exempt to handicapped Employees upto Rs. 3200 p.m (c) Always Taxable except to Handicapped employees. (d) Both (b) & (c) 7: c 19: b

8: b 20: b

9: c 21: b

10: c 22: c

11: b 23: d

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Q25. Which of the following allowances are fully taxable ? (a) Warden Allowance (b) Servant Allowance (c) Non-Practicing Allowance (d) All of the above Q26. Which of the following allowances are fully exempt ? (a) Sumptuary allowance granted to HC.SC Judges. (b) Allowance paid by UNO. (c) Compensatory Allowance received by a judge (d) All of the above Q27. Which of the following is not the condition for claiming exemption for HRA ? (a) Employee is in receipt of HRA. (b) Location of the employer. (c) Rent paid by employee > 10% of salary. (d) Location of the accommodation of employees *Q28. Mr. P is entitled to a basic salary of Rs. 50,000 p.m. & DA of Rs. 10,000 p.m. 40% of which forms part of retirement benefits. He is also entitled to HRA of Rs. 20,000 pm. He actually lives with his parents in Mumbai & does not pay any rent. Market rent of that house is Rs. 20,000 pm in Mumbai. Calculate the exempt HRA. (a) NIL (b) Rs. 1,75,200 (c) Rs. 64,800 (d) Rs. 2,40,000 Q29. Mr. P purchased a residential house property in Ahmedabad on loan for which he paid an interest of Rs. 50,000 during the PY. He is working in Delhi & getting an HRA of 4,000 p.m. He can claim exemption.deduction for: (a) Only HRA (b) Only interest paid (c) Either Interest or HRA (d) Both HRA & interest paid Q30. Children education allowance is exempt upto: (a) Rs. 100 pa for 2 children (b) Rs. 100 pm for 2 children (c) Rs. 100 pm per child for 2 children each (d) Rs. 100 pa per child for 2 children each Q31. Hostel expenditure allowance is exempt upto (a) Rs. 300 p.a for 2 children (b) Rs. 300 p.m for 2 children (c) Rs. 300 p.m per child for 2 children each (d) Rs. 300 p.a per child for 2 children each Q32. Underground allowance to employee is exempt upto. (a) Rs. 700 p.m. (b) Rs. 900 p.m. (c) Rs. 1,000 p.m. (d) Rs. 800 pm Q33. Mr. P received basic salary of Rs. 20,000 p.m. from his employer. He also received children education allowance of Rs. 3,000 for 2 children & transport allowance of Rs. 1,800 p.m. The amount of salary taxable for AY 2019-20 is (a) Rs. 2,62,200 (b) Rs. 2,22,600 (c) Rs. 2,22,200 (d) Rs. 2,07,800 Q34. Transport allowance is exempt upto Rs. 3,200 pm for. (a) Govt. employees (b) Non-Govt. Employees (c) Handicapped Employee (d) Mentally handicapped Q35. Allowance for Transport is exempt upto (a) 70% of such Allowance; (b) Rs. 10,000 p.m (c) Lower of (a) or (b) (d) Rs. 5,000 25: d 36: a

26: d 37: b

27: b 38: c

28: a 39: a

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29: d 40: d

30: c 41: b

Q36. Mr. P received 300 pm as children education allowance for each of his 3 children. The taxable & exempt part of children education allowance shall be? (a) Rs. 8,400 & Rs. 2,400 respectively (b) Rs. 2,400 & Rs. 8,400 respectively (c) Rs. 10,800 & NIL respectively (d) Nil & Rs. 10,800 respectively Q37. Mr. P is employed in PC Ltd. - Transporters as cabin driver. He is paid Rs. 15,000 p.m during AY 2019-20 as allowance for meeting his personal expenditure in the course of running Goods Vehicle. Mr. P does not receive any other amount by way of daily allowance. The amount eligible for exemption is. (a) Rs. 1,80,000 (b) Rs. 1,20,000 (c) Rs. 1,26,000 (d) Rs. 1,75,000 Q38. The Gardner, Sweeper & Watchman are employed by the employer & provided to employee along with rent free accommodation owned by the employer. The salary of Rs. 5,000 p.m per person is paid by the employer. The valuation of this perquisite shall be (a) Rs. 1,80,000 (b) Rs. 1,20,000 (c) Rs. 60,000 (d) Not taxable at all Q39. Mr. P is Pilot with Jet Airways. He is entitled to outstation allowance of Rs. 10,000 p.m. He spends Rs. 4,000 every month. The exemption shall be (a) Rs. 1,20,000 (b) Rs. 48,000 (c) Rs. 84,000 (d) Rs. 72,000 Q40. Mr. P is entitled to a transport allowance of Rs. 1,000 p.m. For commuting from his residence to office & back he spends Rs. 600 pm. The exemption shall be (a) Rs. 1,000 p.m. (b) Rs. 600 p.m. (c) Rs. 400 p.m. (d) Nil Q41. Children born out of multiple birth after the first child will be treated as ___. (a) Two child & exemption will be granted only for 1 child (b) One child only & exemption will be granted only for both child (c) on the discretion of AO (d) None of the above Q42. Rent Free Accommodation is covered in. (a) Sec 17(2)(ii) Rule 3(a) (b) Sec 17(2)(i) Rule 3(1) (c) Section 18(i) Rule 3(1) (d) Section 17(2)(vi) Q43. Accommodation at concessional rent is given u/s ____. (a) section 17(2)(ii) Rule 3(1) (b) sec 18(i) Rule 5(i) (c) section 16(ii) (d) section 16(iii) Q44. Value of perquisite in case of rent-free accommodation given to government employees will be__. (a) 10% of salary (b) 15% of salary (c) 7.5% of salary (d) License fees determined byovernment. Q45. Salary of employee is Rs. 2 lacs. Fair rent of house situated in Delhi given to employee is Rs. 1,30,000. Perquisite in case of Non-Government employee is: (a) Rs. 2,00,000 (b) Rs. 30,000 (c) Rs. 70,000 (d) Rs. 1,30,000 31: c 42: b

32: d 43: a

33: c 44: d

34: c 45: b

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Q46. Employee is provided with furniture costing Rs. 50,000 along with rent free accommodation w.e.f. 1.8.2018. The value of the furniture to be included in the value of rent-free accommodation shall be. (a) Rs. 15,000 (b) Rs. 30,000 (c) Rs. 10,000 (d) Rs. 20,000 Q47. Mr. P is provided with furniture to the value of Rs. 70,000 along with house from February, 2018. Furniture is not owned by employer but has been taken on rent by employer for which employer pays hire charges of Rs. 5,000 pa. The value of furniture to be included along with value of unfurnished house for AY 2019-20 is (a) Rs. 5,000 (b) Rs. 7,000 (c) Rs. 10,500 (d) Rs. 14,000 Q48. Salary of an employee is Rs. 2,00,000. Rent paid by the employer for the unfurnished house provided to employee at Faridabad is Rs. 3,000 p.m. The employer charges Rs. 2,000 p.m. as rent from the employee. The valuation of this perquisite shall be ____. (a) Rs. 24,000 (b) Rs. 36,000 (c) Rs. 30,000 (d) Rs. 6,000 Q49. Mr. P gets salary of Rs. 12,000 p.m. & is provided with rent free unfurnished accommodation at Pune (which has population of 20 lakh). House is owned by employer, fair rental value of which is Rs. 1,400 p.m. House was provided from 1st July, 2018. Value of the perquisite will be. (a) Rs. 21,600 (b) Rs. 10,800 (c) Rs. 16,200 (d) Rs. 12,600 Q50. Mr. P gets salary of Rs. 25,000 p.m. & is provided with accommodation at Pune on his transfer in hotel for a week. Value of the perquisite of rent-free accommodation will be. (a) Rs. 72,000 (b) Rs. 30,000 (c) Rs. 45,000 (d) Nil Q51. If any employee has been transferred & employer has provided him accommodation at the new place also while the employee continuing to occupy the house at old place. In such cases ___. (a) Both houses will be charged to tax as perquisite. (b)Only one of the accommodation having lower perquisite value shall be taxable upto 90 days (three months) & after 90 days, both of the accommodations shall be taxable. (c) Depends upon the agreement between employee & employer (d) Depends upon the discretion of AO Q52. Rent-free official residence provided to a Judge of HC.SC is ___ (a) Taxable (b) Exempt (c) Exempt upto Rs. 5,000 p.m (d) Taxable if such judge stays out of India after retirement. Q53. Rent-free furnished house provided to an Officer of Parliament is ____. (a) Taxable (b) Exempt (c) Exempt upto Rs. 5,000 p.m (d) Taxable if such officer stays o/s India after retirement Q54. Mr. P an employee of PC Ltd. of Delhi, received the following payments during the PY ended 31st March, 2019. Basic salary: Rs. 2,40,000 & DA: 40% of basic salary (40% forming part of salary). Rent-free unfurnished accommodation provided by employer for which rent paid by employer being Rs. 50,000. Taxable perquisite: (a) Rs. 41,760 (b) Rs. 50,000 (c) Rs. 36,000 (d) Rs. 52,500 46: c 55: d

47: a 56: d

48: d 57: c

49: b 58: b

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50: d 59: b

Q55. Medical facility to employee in India is exempt if: (a) Hospital owned/maintained by employer or Government Hospital; (b) Private Hospital (if recommended by Government for treatment of its employees). (c) Specified facility for prescribed diseases in hospital approved by PCC/CC (d) All of the above Q56. Mr. P is entitled to Rs. 8,000 p.m as Medical Allowance. He spends Rs. 4,000 p.m on his medical treatment & Rs. 1,000 on the medical treatment of his major son not dependent on him. Exemption = (a) Rs. 4,000 p.m (b) Rs. 5,000 p.m (c) Nil (d) Rs. 8,000 p.m Q57. Mr. P is employed in PC Ltd. & his wife is suffering from a critical disease. The company has sent Mr. P & Mrs. S to USA for the medical treatment of Mrs. S . The company has incurred expenses on medical treatment of Mrs. S & stay outside India of Mrs. S & of Mr. P. amounting to Rs. 17,00,000 but RBI permitted only Rs. 15,00,000. The travel expenses amounted to Rs. 1,50,000. Salary of Mr. P was Rs. 5,00,000. The taxable perquisite in this case shall be. (a) Rs. 3,50,000 (b) Rs. 8,50,000 (c) Rs. 2,00,000 (d) Rs. 1,50,000 Q58. During AY 2019-20, the employee was reimbursed Rs. 14,000 as medical expenses incurred by him which includes Rs. 9,000 spent in Government hospital. The taxable perquisite in this case shall be. (a) Rs. 9,000 (b) Rs. 5,000 (c) Rs. Nil (d) Rs. 14,000 Q59. Health Insurance Premium paid by employer in approved scheme of CG/IRDA is ____. (a) Taxable (b) Exempt Q60. Mr. P took an interest-free loan of Rs. 15,000 from PC Ltd. (the employer). Market rate of interest on similar loan is 10%, the taxable value of the perquisite for Mr. P : (a) Rs. 150 (b) Rs. 1,500 (c) Nil (d) None Q61. For the purpose of determining the perquisite value of loan at concessional rate given to the employee, the lending rate of State Bank of India as on ____ is required; (a) 1st day of PY (b) Last day of PY (c) Day on which loan is given (d) 1st day of AY Q62. In which of the following cases, Interest-free Loan is not treated as perquisite: (a) If the amount of loans ≤ Rs. 20,000. (b) If Loan is given for Medical Treatment of Prescribed Diseases (Cancer, tuberculosis, etc). (c) Both (a) & (b) (d) None of the above Q63. Employee is on official tour & he takes his family member with him. Value of perquisite = (a) Amount incurred for employee & such family member (b) Amount incurred for such family member (c) It is illegal to take family member with him since it will distract him (d) He should ask for the permission of AO before taking his wife (family member). 51: b 60: c

52: b 61: a

53:b 62: c

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Q64. Any official tour is extended as a vacation. Value of perquisite = (a) Amount incurred for the total period. (b) Amount incurred for the extended period. (c) He cannot extend tour since he will have work in office. (d) He should ask for permission of AO. Q65. Training of employees is not a/an ____ perquisite. (a) Taxable (b) Exempt (c) Exempt upto Rs. 10,000 (d) Depends on the discretion of AO. Q66. Exemption from leave Salary is given u/s _____. (a) 10(10AB) (b) 10(10AA) (c) 10(15A) (d) 10(10A)

Q76. Mr. P employed in PC Ltd. was permitted to admit his only son in the school run by the employer. No fee was charged on such education provided to the son of Mr. P. The cost of such education for other children is Rs. 1,800 per month. The perquisite value of free education shall be: (a) Rs. 1,600 (b) Rs. 12,000 (c) Rs. 36,000 (d) Rs. 9,600 Q77. Free or concessional tickets granted to Employees of an airline or the railways is ___. (a) Taxable Perquisite. (b) Exempt Perquisite. (c) Partly Exempt. (d) None of the above.

Q67. Scholarship given by an employer-company to children of its employees is not a.an ____ perquisite. (a) Taxable (b) Exempt (c) Exempt upto Rs. 10,000 (d) Depends on the discretion of AO.

Q78. A company has provided laptop worth Rs. 50,000 to its employee for official as well as personal purposes. The taxable amount of perquisite will be (a) Rs. 5,000 (b) Rs. 25,000 (c) Rs. 10,000 (d) Nil

Q68. Exemption in respect of Leave Travel Concession is available only for going anywhere ___ with ___. (a) In India.outside India; Family. (b) In India; family. (c) In India; friends or family. (d) In India; Alone

Q79. Employer has given a video-camera for the personal use of the employee. The value of this perquisite is: (a) 10 % pa of historical cost (b) Nil (c) 10% pa of the WDV (d) Fully Exempt

Q69. Exemption in respect of Leave Travel Concession is available only on ____. (a) Hotel charges (b)Boarding expenses (c) Bus.Air.Rail Fare (d) All of the above

Q80. The employer had purchased a car for Rs. 8,00,000 2 years & 7 months ago. This car is sold to the employee for Rs. 2,02,000. The value of this perquisite shall be (a) Rs. 2,80,000 (b) Rs. 1,20,000 (c) Rs. 8,00,000 (d) Rs. 3,10,000

Q70. Credit for ____ unavailed LTC is available in the first calendar year of Next block. (a) One (b) Two (c) Zero (d) Three Q71. PC Ltd. gives a gift in kind on the marriage of the son of the employee. Gift so made shall be ___. (a) Taxable if value is Rs. 6,000 or less (b) Exempt if value is Rs. 5,000 or less (c) Always fully taxable (d) Fully Exempt Q72. Cash gifts are ___. (a) Taxable if value is Rs. 6,000 or less (b) Exempt if value is Rs. 5,000 or less (c) Always fully taxable (d) Fully Exempt Q73. Tea & Snacks are provided by PC Ltd. to employees in the office during office hours. The value of this perquisite shall be (a) Fully taxable (b) Fully Exempt (c) Exempt upto Rs. 50 pm (d) Exempt upto Rs. 50 per round of tea & snacks Q74. An employee has been provided free meal worth Rs. 110 per meal for 295 days in the office, during office hours. Such facility provided to employees shall be taxable for: (a) Rs. 60 per day for 295 days (b) Rs. 110 per day for 295 days (c) Rs. 50 per day for 295 days (d) Not taxable at all Q75. Expenditure pertaining to health club, sports facilities etc.is ____. (a) Taxable Perquisite. (b) Exempt Perquisite. (c) Partly Exempt. (d) None of the above 64: b 75: b

65: a 76: d

66: b 77: b

67: a 78: d

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68: b 79: a

69: c 80: d

Q81. PC Ltd. acquired a motorcar for Rs. 8 lakh on 30 th June, 2018. It sold the said motor car to its employee, Mr. P, for Rs. 6 lakh on 10th July, 2018. The company claimed depreciation @ 15% for the year ended 31st March, 2019. The perquisite value in the hands of Mr. P on sale of motor car would be (a) Rs. 8,00,000 (b) Rs. 6,00,000 (c) Rs. 2,00,000 (d) Rs. 1,40,000 Q82. Mr. P is an employee of JSPC Ltd. which is an oil manufacturing company. He is provided with free gas for his personal purpose by the employer. Perquisite value: (a) Fixed by employee (b) Fixed by the employer (c) Manufacturing cost per unit (d) Market rate of Gas per unit Q83. Employer provides a car (below 1600 CC) along with a driver to Mr. P & he uses the car partly for official & partly for personal purpose. Expenses incurred by employer are. (1) running & maintenance expenses of Rs. 84,000 (2) driver's salary of Rs. 1,20,000. Perquisite value: (a) Rs. 21,600 (b) Rs. 10,800 (c) Rs. 32,400 (d) Rs. 2,04,000 Q84. Mr. P is employee of PC Ltd. & he is provided a car of engine of 1.9 litre capacity along with driver. The expenses of running & maintenance of car are met by Mr. P himself. Besides using the car for official purpose, Mr. P also uses the car for his personal purpose. Perquisite value: (a) Rs. 2,400 pm (b) Rs. 1,800 pm (c) Rs. 600 pm (d) Rs. 900 pm 70: a 81: c

71: b 82: c

72: c 83: c

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Q85. Mr. P an employee owns a car which he used for his private purpose. All expenses of running & maintenance of the car are met by the employer. The perquisite shall (a) Be taxable in case of specified employee only (b) Be taxable in case of an employee other than specified employees (c) Be taxable in case of all type of employees (d) Not be taxable at all for any employee Q86. Which of the following perquisites will be taxable in the hands of non-specified employees ? (a) Provision of sweeper, gardener, watchman or personal attendant or Use of motor car (b) Facility of use of gas, electricity or water supplied by employer (c) Free or concessional educational facilities or Free or concessional tickets (d) None of the above Q87. Encashment of leave salary at the period of service is fully taxable in the case of ___. (a) CG employee (b) SG employee (c) Both CG & SG employees (d) Government employee & Non-Government employee Q88. Encashment of leave salary at the time of retirement is fully exempt in the case of ___. (a) CG Employee (b) SG Employee (c) Both CG & SG Employees (d) Government employee & Non-Government employee Q89. Maximum Exemption in case of leave encashment is: (a) Rs. 2.4 lac (b) Rs. 3.5 lac (c) Rs. 3 lac (d) Rs. 10 lac Q90. Payment of premium on personal accident insurance policies of the employee by the employer is __. (a) Taxable perquisite (b) Exempt Perquisite since no immediate benefit would become payable to the employee (c) Partly Exempt (d) None of the above Q91. Salary for exemption of leave encashment shall be taken as. (a) Last drawn Salary (b) Average Salary of 10 months immediately preceding the month of retirement (c) Average Salary of 10 months immediately preceding the date of retirement (d) Any of the above Q92. Salary for the purpose of exemption of leave encashment shall be taken as. (a) Basic salary + DA (forming part of salary for retirement benefits or not) (b) Basic salary + DA (forming part of salary for retirement benefits) + monthly commission (c) Basic salary + DA (forming part of salary for retirement benefits) + commission (on % basis of sales) (d) Basic salary & commission. Q93. An employee availed the exemption of leave encashment of Rs. 1,00,000 in the past. He received from the second employer a sum of Rs. 2,50,000 as encashment of leave. He will be entitled to exemption to the extent of (a) Nil (b) Rs. 2.5 lacs (c) Rs. 2 lacs (d) Rs. 1.4 lacs 85: a 95: c

86: d 96: c

87: d 97: a

88: c 98: b

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89: c 99: b

Q94. An employee of a GGC public limited company received total Rs. 3,00,000 as encashment of leave salary at the time of retirement. He has 18 months leave to his credit at the time of retirement & his average salary for last 10 months is Rs. 24,000. Taxable Leave encashment is: (a) Rs. 2.4 lacs (b) Rs. 3 lacs (c) Rs. 60,000 (d) Nil Q95. Which of the following leave salary is exempt? (a) Leave salary paid to legal heir (b) Leave salary received by family of government servant who died in harness (on duty) (c) Both (a) & (b) (d) None of the above Q96. Gratuity shall be fully exempt in the case of ____. (a) CG & SG Employee (b) Employees of CG & SC & LA (c) Employees of CG & SG & LA & statuary corporation (d) Only central government employee Q97. Salary for the purposes of exemption of gratuity when employee is covered under Gratuity Act 1972 includes. (a) Basic salary + DA (forming part of salary for retirement benefits or not) (b) Basic salary + DA (forming part of salary for retirement benefits) + monthly commission (c) Basic salary + DA (forming part of salary for retirement benefits) + commission on % basis of sales (d) Basic salary & commission *Q98. An employee is covered under Payment of Gratuity Act, 1972. Salary for purpose of calculating 15 days salary for each completed year of service shall be. (a) Last drawn Salary (b) Avg. Salary of last 10 months (c) Average Salary of last 3 completed years (d) Average Salary of last 12 months Q99. An employee is covered under Payment of Gratuity Act, 1972 If the employee has completed service of 16 years 6 months & 5 days then to calculate exemption of Gratuity the number of completed years shall be taken as. (a) 16 years (b) 17 years (c) 16 years 6 months & 5 days (d) 16 years &7 months Q100. An employee is covered under Payment of Gratuity Act, 1972 For purpose of computing 15 days’ salary, the number of days in a month shall be taken as _____ days. (a) 30 (b) 26 (c) 31 (d) Any of the above Q101. The maximum ceiling limit for exemption u/s 10(10) in respect of gratuity for employees covered by the Payment of Gratuity Act, 1972 is: (a) Rs. 10 lac (b) Rs. 5 lac (c) Rs. 3.5 lac (d) Rs. 20 lac Q102. An employee is Not Covered under Payment of Gratuity Act, 1972 For purpose of computing half month’s salary, number of days in a month shall be taken as ___ days. (a) 30 (b) 26 (c) 31 (d) Any of the above Q103. An employee is Not Covered under Payment of Gratuity Act, 1972. Maximum exemption of gratuity is: (a) Rs. 10 lac (b) Rs. 3.5 lac (c) Rs. 20 lac (d) None 90: b 100: b

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Q104. Mr. P worked with a previous employer for 3 years but was not entitled to any gratuity. He worked with the present employer for 8 years & 3 months. The completed years of service for calculating exemption of gratuity, if employee is covered under Gratuity Act shall be taken as__. (a) 11 years (b) 8 years (c) 3 years (d) None Q105. Mr. P who claimed exemption of gratuity in past to the extent of Rs. 2,50,000 was entitled to gratuity from the present.second employer amounting to Rs. 20,00,000 in AY 2019-20. Both of employers are covered under the Payment of Gratuity Act 1972. Exemption to Mr. P shall be: (a) Rs. 10,00,000 (b) Rs. 15,00,000 (c) Rs. 20,00,000 (d) Rs. 17,50,000 Q106. Un-Commuted Pension received by ANY Employee: (a) Fully Exempt (b) Fully Taxable (c) Partially taxable (d) Partially exempt Q107. An employee was entitled to gratuity. He got 50% of his pension commuted & received a sum of Rs. 1,00,000 as commuted pension. The exemption in his case shall be. (a) Rs. 50,000 (b) Rs. 33,337 (c) Rs. 1,00,000 (d) Rs. 66,667 Q108. A government employee was entitled to gratuity. He got 50% of his pension commuted & received a sum of Rs. 1,00,000 as commuted pension. The exemption shall be: (a) Rs. 50,000 (b) Rs. 33,337 (c) Rs. 1,00,000 (d) Rs. 66,667 Q109. An employee was not entitled to gratuity. He got 60% of his pension commuted & received a sum of Rs. 1,20,000 as commuted pension. The exemption shall be: (a) Rs. 1,20,000 (b) Rs. 66,667 (c) Rs. 80,000 (d) Rs. 1,00,000

Q115. Maximum Standard deduction u/h Salary shall be __. (a) Rs. 40,000 (b) Rs. 50,000 (c) Rs. 2,500 (d) Rs. 5,000 Q116. The standard deduction is allowed from gross salary to the maximum of Rs. 40,000 but (a) Employee has to prove his all expenses to income tax department (b) Employee has to prove his all expenses to the employer (c) Employee has to prove his all expenses to income tax department or employer as per his own discretion (d) Irrespective of any expenses that employee may or may not have incurred Q117. Standard deduction is not allowed from ______. (a) Pension (b) Family pension (c) Arrear of salary (d) Gross salary Q118. Standard deduction is allowed from ____. (a) Pension (b) Gross salary (c) Arrear of salary (d) All of the above Q119. Max deduction for entertainment allowance u/s __. (a) Rs. 3,000 (b) Rs. 5,100 (c) Rs. 2,500 (d) Rs. 5,000 Q120. Deduction for entertainment allowance u/s 16(ii) is allowed to ____. (a) Every kind of employee (b) Every government employee (c) Every non-government employee (d) Every retired employee Q121. Limit u/s 16(ii) for deduction of entertainment allowance in case of government employee is __% of salary (a) 12.5 % (b) 20 % (c) 15% (d) 7.5%

Q110. Mr. P retires from private service on 30th April, 2018 & his pension has been fixed at Rs. 1,500 p.m. He gets a of his pension commuted during January, 2019 & receives Rs. 75,000. He also gets Rs. 60,000 as gratuity. The total pension taxable including commuted value will be. (a) Rs. 16,500 (b) Rs. 21,500 (c) Rs. 39,250 (d) Rs. 14,250

Q122. Entertainment allowance for govt. employee is. (a) Fully exempt & therefore not included in Gross Salary (b) Fully Taxable & therefore added in Gross Salary (c) Not added in Gross Salary but deduction is allowed as per limits of section 16(ii) (d) First added in full in Gross Salary & thereafter deduction allowed from Gross Salary is allowed u/s 16(ii)

Q111. Pension received by gallantry award winner is. (a) Fully Taxable (b) Fully Exempt from tax (c) 50% Exempt & 50% taxable (d) 80% Exempt & 20% taxable

Q123. Professional Tax is charged under which Article of Constitution of India (a) 274 (b) 275 (c) 276 (d) 277

Q112. Mr. P employed in PC Ltd. took voluntary retirement in December 2018 & received Rs. 2,00,000 from NPS Trust. The amount so received chargeable to income tax is. (a) Nil as 100% is exempt (b) Rs. 1,20,000 as 40% is exempt (c) Rs. 1,00,000 as 50% is exempt (d) Rs. 80,000 as 60% is exempt Q113. Compensation received on Voluntary retirement is exempt u/s 10(10C) to the maximum extent of ____. (a) Rs. 2.4 lac (b) Rs. 3.5 lac (c) Rs. 5 lac (d) Rs. 3 lac Q114. Standard deduction is allowed from gross salary u/s (a) 16(i) (b) 16(ia) (c) 16(ii) (d) 16(iii) 104: a 116: d

105: d 117: b

106: b 118: d

107: d 119: d

108: d 120: b

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109: d 121: b

Q124. Professional Tax is charged by ___. (a) CG (b) SG (c) LA (d) Statutory corporation Q125. The deduction for Professional Tax u/s 16(iii) is for (a) Actual amount paid (b) Actual amount due (c) Actual amount charged by SG (d) Always 2,500 Q126. Employer’s contribution to SPF shall be (a) Fully Exempt (b) Exempt upto 12 % of salary (d) Fully Taxable (c) Exempt up to 10% of salary Q127. Interest credited to SPF shall be ____. (a) Fully Exempt (b) Fully Taxable (c) Exempt up to 8.5 % p.a of total contribution (d) Exempt up to 9.5 % p.a of total contribution 110: c 122: d

111: b 123: c

112: b 124: b

113: c 125: a

114: b 126: a

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Q128. Employee’s own contribution to RPF.PPF shall be (a) Allowed as deduction u/s 80C (b) Allowed as deduction u/s 80TTA (c) Allowed as deduction u/s 10 (d) Allowed as deduction u/s 16(ia) Q129. Employer’s contribution to RPF shall be. (a) Fully Exempt (b) Exempt upto 12 % of salary (d) Fully Taxable (c) Exempt up to 10% of salary Q130. Interest credited to RPF shall be. (a) Fully Exempt (b) Fully Taxable (c) Exempt up to 8.5 % p.a of total contribution (d) Exempt up to 9.5 % p.a of total contribution Q131. Payment from RPF after 5 years of continuous service of employee shall be ___. (a) Fully Taxable (b) Fully Exempt (c) Taxable to the extent of employer’s contribution & interest thereon (d) Exempt up to Rs. 10,00,000 Q132. An employee received payment from URPF on his retirement. His own contribution to URPF & Interest on his own contribution will be. (a) Taxable, Taxable (b) Exempt, Exempt (c) Taxable, Exempt (d) Exempt, Taxable Q133. The year in which URPF is converted in RPF ___. (a) The employer’s contribution till date & interest thereon shall be taxable (b) The employer’s contribution till date shall be taxable (c) It will be assumed as if the provident fund was recognized right from beginning & excess amount of employer’s contribution & interest thereon shall be taxable (d) None of the above Q134. When interest on employee’s own UPRF is received by employee, it is ____. (a) Taxable u/h IFOS (b) Taxable u/h Salary (c) Exempt (d) Taxable if interest > Rs. 10,000 Q135. For PY 2018-19, Mr. P receives a salary of Rs. 2,80,000. Mr. P’s contribution to employees’ RPF account Rs. 59,000 & matching contribution has been made by employer. Taxable income of Mr. P will be ____. (a) Rs. 2,46,400 (b) Rs. 3,05,400 (c) Rs. 3,39,000 (d) Rs. 2,80,000 Q136. PC Ltd. contributed 15% of salary of Mr. P towards RPF. Taxable Amt to Mr. P is ___% of contribution. (a) 5 (b) 3 (c) Nil (d) 12 *Q137. Employer’s contribution to superannuation fund is (a) Not taxable to employee (b) Fully Taxable (c) Taxable to employee provided contribution > Rs. 1.5 lacs (c) Exempt upto 12% of salary Q138. Which of the following is not correct about the approved superannuation fund ? (a) Employees’ contribution is deductible u/s 80C (b) Amount contributed by the employer is Exempt (c) Interest on accumulated balance is exempt (d) Under some circumstances, payments from the fund are chargeable to income tax. 128: a 138: b

129: b 139: c

130: d 140: a

131: a 141: a

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132: d 142: c

Q139. Mr. P employed in PC Ltd. as accounts manager. The employer paid Rs. 1,60,000 as contribution to approved superannuation fund for the benefit Mr. P. The amount of such contribution liable to tax as perquisite is: (a) Nil (b) Rs. 10,000 (c) Rs. 1,60,000 (d) Rs. 60,000 Q140. Mr. P was employed since 1st July 2002 in an establishment. His salary was fixed at Rs. 14,800 in the grade of Rs. 14,000 - Rs. 400 - Rs. 22,000 w.e.f. 1.7.2012. He got the benefit of 15% of salary as DA which is treated as forming part of salary for retirement benefits. He retired on 1.2.2019 & received Rs. 3,40,000 as a Gratuity from his employer. Calculate his income under the head ‘Salary’ for AY 2019-20 if he is a Central Government employee. (a) Rs. 1,56,420 (b) Rs. 1,70,800 (c) Rs. 1,96,420 (d) Fully exempt Q141. Anjan joins a service on 1.4.2018 with basic salary of Rs. 39,100 plus dearness allowance of 107 % of basic salary. He has no other income. His taxable income shall be: (a) Rs. 9,71,244 (b) Rs. 9,31,244 (c) Rs. 9,71,240 (d) Rs. 9,31,240 Q142. Mr. P joins service on 1st April, 2014 in the grade of Rs. 15,000 Rs. 1,000 - Rs. 18,000 - Rs. 2,000 - Rs. 26,000. Total taxable salary for year ended on 31st March, 2019: (a) Rs. 2,16,000 (b) Rs. 2,40,000 (c) Rs. 2,00,000 (d) Rs. 1,80,000 Q143. Mr. P who is a manager of PC Ltd. since 2001 was terminated by the company on 1st August, 2018 by paying a compensation of Rs. 200 lakhs. Such compensation is (a) Chargeable under the Wealth-tax Act, 1957 (b) Not chargeable under the Income-tax Act, 1961 (c) Chargeable u/s 17(3)(i) (d) Chargeable u/s 28(ii)(a). Q144. GGC is a LLP & had taken Keyman Insurance Policy on the life of it managing partner. The policy got matured on 13th September, 2018 & an amount of Rs. 75 lakh was paid by the insurers to the managing partner. The amount so received on maturity of the policy by the managing partner is (a) Fully exempt u/s 10(10D) (b) 50% of Rs. 75 lakh exempt (c) Rs. 75 lakh taxable as profit in lieu of salary (d) Rs. 25 lakh exempt & Rs. 50 lakh taxable Q145. Bimal is employed in a factory at a salary of Rs. 2,400 per month. He also gets dearness allowance @ Rs. 600 per month & bonus @ Rs. 200 per month. He retired on 31st December, 2018 & received Rs. 75,000 as gratuity under the Payment of Gratuity Act, 1972 after serving 31 years & 4 months in that factory. Exempt gratuity is: (a) Rs. 75,000 (b) Rs. 53,654 (c) Rs. 21,346 (d) Rs. 20,00,000

133: c 143: c

134: a 144: c

135: b 145: b

136: b

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4B. INCOME FROM HOUSE PROPERTY Q1. Chargeability of House Property is given u/s (a) 15 (b) 22 (c) 20 (d) None of the above

*Q12. PC Ltd. constructed staff quarters & let out the same during the AY 2019-20. Its rent received Rs. 7,50,000 by way of rent from employees during the year. The rental receipt is taxable as. (a) Income from house property (b) Income from business (c) Perquisite in the hands of employees (d) Income from other sources

Q2. The basis of chargeability of House Property is ____. (a) Annual Value (b) Municipal Value (c) Standard Rent (d) Fair Rent Q3. Under the head of house property, ____ is taxable. (a) Income from building (b) Income from land (c) Income from building & land attached to building (d) None of the above

Q13. Composite rent of let-out house property is taxable u/h (a) PGBP (b) IFOS (c) Income from HP (d) (a) or (b) above depending upon certain conditions

Q4. House property means _____. (a) Residential Houses (b) Shops or godowns (c) Cinema or hotel building (d) All of the above Q5. Mr. PC is having a plot of land. He has let out this to earn some extra income. Rent of such plot is taxable u/h (a) PGBP (b) Income from house property (c) IFOS (d) Any head at the choice of Mr. PC. Q6. Mr. PC has taken a house on rent & sublet it to Mr. A. Income of Mr. PC from such house property is taxed u/h __. (a) Income from house property (b) IFOS (c) Income from salary (d) Not taxed at all Q7. For any income from house property to be assessed u/h “Income from house property”, Assessee must have the ownership of land on which such building stands. (a) True (b) False Q8. For any income from house property to be assessed u/h “Income from house property”, Assessee must have the ownership of such house property in ____. (a) AY (b) PY (c) FY (d) None Q9. In case of House Property with Disputed Title of Ownership, income arising from such disputed house property will be assessed in the hands of: (a) Person having the possession of house property (b) Person living close to the house property. (c) It will be the decision of Department as to who is the owner till the court gives its decision. (d) Depends on the discretion of AO. Q10. For any income from house property to be assessed u/h “Income from house property”, Assessee must such house property for any purpose other than _____. (a) his business.profession (b) his personal use (c) Doing Illegal things (d) Gambling Q11. Annual value of HP held as SIT is _____. (a) Taxed u/h “PGBP” (b) Taxed u/h “Income from House Property” (c) Nil for 1 year from the end of FY in which completion certificate of the property is obtained from competent authority, if such property is not LOP during such period. (d) Both (b) & (c)

1: b 12: b

2: a 13: d

3: c 14: d

4: d 15: c

www.ClearIPCC.in

5: c 16: c

6: b 17: a

Q14. Mr. PC is the owner of a house property covered under the Rent Control Act. Municipal value Rs. 30,000, actual rent Rs. 25,000; fair rent Rs. 36,000 & standard rent is Rs. 28,000. GAV will be. (a) Rs. 30,000 (b) Rs. 36,000 (c) Rs. 25,000 (d) Rs. 28,000 Q15. Where SR is not applicable, GAV shall be higher of: (a) FR & MV (b) MV & AR (c) FR & MV & AR (d) none of the above Q16. Mr. PC is owner of the flat which has municipal value Rs. 45,000; fair rent Rs. 50,000; standard rent Rs. 48,000 & actual rent is Rs. 44,000 for 11 Months. There is a vacancy of 1 month. Calculate GAV. (a) Rs. 50,000 (b) Rs. 40,000 (c) Rs. 44,000 (d) Rs. 48,000 Q17. If ARR < ER due to vacancy, then GAV = ____. (a) ARR (b) ER (c) Higher of (a) or (b) Q18. In case of SOP, deduction of municipal taxes is ___ (a) available if paid by the owner (b) not available if paid by the tenant (c) available if tax is deducted at source (d) No deduction of Municipal taxes paid. Q19. Treatment of unrealized rent for determining income from house property (a) To be deducted from expected rent (b) To be deducted from actual rent (c) To be deducted u/s 24 from annual value (d) To be deducted from both expected rent & actual rent Q20. Unrealized rent is allowed as a deduction from ___. (a) GAV (b) NAV (c) Income from HP (d) Actual rent Q21. Municipal Taxes are deducted from ____. (a) NAV on payment basis (b) GAV on accrual basis (c) GAV on payment basis (d) not deductible Q22. Municipal taxes to be deducted from GAV should be (a) Paid by tenant during PY (b) Paid by owner during PY (c) Accrued during PY (d) None of the above

7: b 18: d

8: b 19: b

9: c 20: d

10: a 21: c

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Q23. Tax paid to foreign local authority is deductible if__. (a) Paid by owner (b) Tax is deducted at source (c) Both (a) & (b) (d) Not deductible at all Q24. Municipal tax shall not include. (a) House tax (b) Scavenging tax (c) State government tax (d) Water tax *Q25. Where an assessee has two house properties for self-occupation, the benefit of NIL annual value will be available in respect of: (a) Both the properties (b) Property which has been acquired.constructed first (c) Any one house at the option of the assessee (d) Any one of the properties & once option is exercised cannot be changed in subsequent years Q26. Mr. PC owns a house property which has fair rent of Rs. 1,50,000, standard rent Rs. 1,20,000 & actual rent of 1,30,000. Municipal taxes paid during the AY 2019-20 for the past 7 years is Rs. 1,40,000. NAV = (a) Rs. 20,000 (b) Nil (c) Rs. 10,000 (d) None *Q27. A house property whose fair rent is Rs. 1,20,000 is vacant throughout the previous year. Municipal taxes paid for the house property are Rs. 20,000. Its NAV = (a) Rs. 1,20,000 (b) Nil (c) Rs. 1,00,000 (d) (Rs. 20,000) *Q28. The maximum amount of deduction of Interest on borrowed capital in case of one house which is selfoccupied shall be (loan was taken on 15.12.1999) (a) Rs. 2 lacs (b) Rs. 30,000 (c) Rs. 3 lacs (d) Nil Q29. Unrealized rent realized subsequently then its tax treatment is given u/s. (a) 25C (b) 25B (c) 25A (d) 26 *Q30. Mr. PC is owner of a big house which is let out at the Rent of Rs. 20,000 pm. Municipal Value of the House Rs. 15,000 pm, Fair Rent Rs. 21,000 pm, Standard Rent Rs. 18,000 pm & Municipal Tax paid are Rs. 5,000 pa. Calculate NAV of the House. (a) Rs. 2,38,000 (b) Rs. 2,16,000 (c) Rs. 2,40,000 (d) Rs. 2,35,000 Q31. Mr. PC is owner of a big house which is let out at the Rent of Rs. 20,000 pm. Municipal Value of the House Rs. 15,000 pm, Fair Rent Rs. 21,000 pm, Standard Rent Rs. 18,000 pm & Municipal Tax paid are Rs. 5,000 pa. Calculate NAV of the house assuming that it was vacant for 2 months. (a) Rs. 1,95,000 (b) Rs. 2,35,000 (c) Rs. 2,00,000 (d) Rs. 1,76,000 Q32. Mr. PC is owner of a big house which is self-occupied for the full year. Municipal Value of the House Rs. 15,000 pm, Fair Rent Rs. 21,000 pm, Standard Rent Rs. 18,000 pm & Municipal Tax paid are Rs. 5,000 pa. Calculate NAV. (a) Rs. 2,00,000 (b) Rs. 2,16,000 (c) Nil (d) None of the above

23: c 34: b

24: c 35: c

25: c 36: c

26: b 37: b

www.ClearIPCC.in

27: d 38: b

28: a 39: b

Q33. Mr. PC is owner of a big house which is vacant for the full year. Municipal Value of the House Rs. 15,000 pm, Fair Rent Rs. 21,000 pm, Standard Rent Rs. 18,000 pm & Municipal Tax paid are Rs. 5,000 pa. Calculate NAV of the house. (a) Rs. 1,76,000 (b) (Rs. 5,000) (c) Nil (d) None of the above Q34. Deduction u/s 24(a) of statutory deduction under the head House Property is ____ % of NAV. (a) 35% (b) 30% (c) 25% (d) 40% Q35. Deduction for the Interest on Capital Borrowed in covered u/s (a) 24(a) (b) 24(c) (c) 24(b) (d) 24(d) Q36. If NAV of Let out house property is negative, then which deduction shall be allowed u/s 24 (a) 24(a) & 24(b) (b) Only 24(a) (c) Only 24(b) (d) 24(a) or 24(b) at the choice of assessee. Q37. Interest on borrowed capital accrued upto the end of PY prior to the PY of completion of construction: (a) allowed as a deduction in the year of completion of construction (b) allowed in 5 equal annual instalments from the year of completion of construction (c) allowed in the respective year in which the interest accrues (d) Not allowed Q38. Any person who has taken loan before 1.4.1999 for purchase or construction of the house which is selfoccupied, maximum deduction for the interest shall be. (a) Rs. 2 lacs (b) Rs. 30,000 (c) Rs. 3 lacs (d) Nil Q39. Municipal value is Rs. 1,20,000 whereas its annual rent received is Rs. 1,50,000. Municipal taxes of the house property is Rs. 20,000 out of which Rs. 15,000 has been paid during the AY 2019-20. NAV = (a) Rs. 1,30,000 (b) Rs. 1,35,000 (c) Rs. 1,20,000 (d) Rs. 1,50,000 Q40. Any person who has taken loan before 1.4.1999 for repairs, renovation, reconstruction, addition or alteration then interest allowed shall be. (a) Rs. 2 lacs (b) Rs. 30,000 (c) Rs. 3 lacs (d) Nil Q41. Deduction of unrealized rent is given if certain conditions are satisfied which are given under. (a) section 27 (b) rule 4 (c) section 29 (d) rule 2B *Q42. Mr. PC took loan from a bank for Rs. 10,00,000 on 1.11.2015 @ 8% p.a for the construction of the house which is self-occupied. Construction of the house got completed on 15.3.2019. Compute interest allowed as deduction u/s 24(b) for AY 2019-20. (a) Rs. 1,18,667 (b) Rs. 1,50,000c (c) Rs. 30,000 (d) Rs. 80,000

29: c 40: b

30: d 41: b

31:a 42: a

32: c

33: b

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Q43. Mr. PC borrowed Rs. 10,00,000 @ 12% p.a. on 1.4.2014 for construction of house property which was completed on 2.4.2018. The amount of loan is still unpaid. What will be the deduction of interest for AY 2019-20 if the house property is self-occupied? (a) Rs. 30,000 (b) Rs. 2,16,000 (c) Rs. 1,08,000 (d) Rs. 2,00,000

Q52. Mr. PC was allowed deduction of unrealized rent to the extent of Rs. 40,000 in the past when unrealized rent was also Rs. 40,000. He is able to recover from the tenant Rs. 35,000 as full & final settlement during AY 2019-20. Amount taxable u/s 25A: (a) Rs. 35,000 (b) Rs. 24,500 (c) Rs. 40,000 (d) Fully Exempt.

Q44. Mr. PC acquired a property in April, 2018 for selfresidential use. The loan interest payable to SBI for AY 2019-20 amounts to Rs. 2,10,000. The amount eligible for deduction u/s 24(b) = (a) Rs. 30,000 (b) Rs. 2,10,000 (c) Rs. 2,00,000 (d) Rs. 1,50,000

Q53. Mr. PC was allowed deduction of unrealized rent to the extent of Rs. 40,000 in the past when unrealized rent was Rs. 50,000. He is able to recover from the tenant Rs. 30,000 as full & final settlement during the AY 2019-20. He is liable for tax on. (a) Rs. 21,000 (b) Rs. 35,000 (c) Rs. 28,000 (d) Rs. 14,000

*Q45. Mr. PC borrowed Rs. 5 lacs @ 12% p.a. on 1.4.2014 for construction of house property which was completed on 15.3.2018. The amount is still unpaid. Deduction of interest for AY 2019-20__. (a) Rs. 60,000 (b) Rs. 96,000 (c) Rs. 36,000 (d) Rs. 2,40,000 *Q46. Mr. PC took loan from a bank for Rs. 1,00,000 on 1.1.2015 @ 12% p.a for the construction of the house which is self-occupied. Construction of the house got completed on 1.1.2019 & loan was repaid on 31.1.2018. Compute deduction u/s 24(b) for AY 2019-20. (a) Rs. 19,400 (b) Rs. 7,400 (c) Rs. 12,000 (d) Rs. 49,000 *Q47. Interest of borrowed capital from outside India is deductible while calculating Income from HP if condition given u/s ___ is satisfied (a) 25B (b) 22 (c) 25 (d) 25A Q48. If an assessee has borrowed money for purchase of a house & interest is payable outside India. Such interest shall be ____. (a) Allowed as deduction (b) not allowed as deduction (c) be allowed as deduction if tax is deducted at source (d) be allowed as deduction if the tax is deducted at source or receiver of interest has paid tax on it in India Q49. Which of the following interests are allowed as deduction while computing Income from HP: (a) Interest on unpaid interest (b) Interest on fresh loan taken to repay original loan. (c) Amount paid as brokerage for arrangement of loan (d) None of the above Q50. Mr. PC received Rs. 30,000 as arrears of rent during AY 2019-20. Amount taxable u/s 25A: (a) Rs. 30,000 (b) Rs. 21,000 (c) Rs. 20,000 (d) Rs. 15,000 Q51. Mr. PC received Rs. 90,000 in May, 2018 towards recovery of unrealised rent, which was deducted from actual rent during PY 2016-17 for determining annual value. Legal expense incurred in relation to unrealized rent is Rs. 20,000. Amount taxable u/s 25A for AY 2019-20 is: (a) Rs. 70,000 (b) Rs. 63,000 (c) Rs. 60,000 (d) Rs. 49,000 43: d 52: b

44: c 53: d

45: b 54: b

46: b 55: c

www.ClearIPCC.in

47: c 56: c

Q54. In case the property is owned by co-owners & it is let out, income from such property shall be computed. (a) separately for each co-owner (b) it will be first computed ignoring the co-ownership & then distributed amongst co-owners. (c) Shall not be calculated at all (d) None of the above *Q55. Mr. PC has taken a house property on lease for 15 years from Mr. Bharat & let out the same to Mr. Gattu. Income from such house earned by Mr. PC is taxable u/h__. (a) IFOS (b) PGBP (c) Income from House Property as Mr. PC is the deemed owner of house property. (d) None Q56. When share of each co-owner in a house property is not definite, the income from such property shall be. (a) Taxed equally (b) Exempt from tax (c) Taxed as AOP (d) Taxed as BOI Q57. Mr. PC & Mr. P are co-owners of a self- occupied property. They own 50% share each. Total Interest paid by the co-owners being Rs. 2,10,000. The interest paid by each co-owner during the previous year on loan (taken for acquisition of property during the year 2004) is Rs. 1,05,000 each. The amount of allowable deduction in respect of each co-owner is: (a) Rs. 1,05,000 (b) Rs. 2,10,000 (c) Rs. 2,00,000 (d) Rs. 1,00,000 Q58. Income from property owned by a partnership firm is assessed in the hands of ____. (a) Partners (b) Firm (c) Either partner or firm (d) Depends on the provision in deed. Q59. The concept of Deemed Ownership is given u/s ____. (a) 24 (b) 25 (c) 29 (d) 27 Q60. Which out of the following is not a case of deemed ownership of house property? (a) Transfer of house property to a spouse for inadequate consideration (b) Transfer of house property to a minor child for inadequate consideration (c) Individual who is holder of an impartible estate (d) Co-owner of a house property 48: d 57: a

49: b 58: b

50: b 59: d

51: b 60: c

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Q61. Mr. PC gifted his house property to his wife, Mrs. PC, in 2011. She has let out the house property @ Rs. 50,000 p.m. The Income from such house property will be taxable in the hands of. (a) Mrs. PC since she is the owner of the house. (b) Taxable for Mr. PC as he will be treated as deemed owner of the House Property & liable to tax. However income will be first computed as Mrs. PC’s income & thereafter clubbed in the income of Mr. PC. (c) Taxable for Mr. PC as he will be treated as deemed owner of the house property & liable to tax. (d) None of the above Q62. Mr. PC gifted his house property to his married minor daughter. The income from such house property shall be taxable in the hands of. (a) Taxable for Mr. PC as deemed owner (b) Taxable for Mr. PC. However, it will be first computed as minor daughter’s income & clubbed in income of Mr. PC. (c) Taxable as income of married minor daughter (d) None of the above Q63. When a house property is let-out throughout the year for Rs. 22,000 p.m & municipal tax paid for current year is Rs. 24,000 & for the earlier year paid now is Rs. 16,000, the income from house property = (a) Rs. 1,68,000 (b) Rs. 1,56,800 (c) Rs. 1,84,800 (d) Rs. 2,24,000 Q64. Mrs. PC let out a property for Rs. 20,000 per month during the AY 2019-20. The municipal tax on the let-out property was enhanced retrospectively. Hence, she paid Rs. 60,000 as municipal tax which included arrears of municipal tax of Rs. 45,000. Her income from house property is (a) Rs. 1,80,000 (b) Rs. 1,26,000 (c) Rs. 1,57,500 (d) Rs. 1,36,500 Q65. When a house property is let out for a monthly rent of Rs. 25,000 during the AY 2019-20 & maintenance expenses by way of salary to sweeper & watchman is Rs. 6,000 per month, income from house property would be. (a) Rs. 2,28,000 (b) Rs. 2,10,000 (c) Rs. 3,00,000 (d) Rs. 2,50,000

61: b

62: b

63: d

64: a

www.ClearIPCC.in

65: c

Q66. Mr. PC is owner of one self-occupied house property in Mumbai for his residence. Fair rent of that property is Rs. 5,06,000 per annum. Municipal valuation is Rs. 5,88,000. Municipal taxes paid are Rs. 50,000 including Rs. 1,000 for earlier year. House was constructed in December, 2010 with a loan of Rs. 12,00,000 from SBI taken in November, 2009. During AY 2019-20 Mr. PC paid interest of Rs. 2,30,000 which includes Rs. 1,68,000 as current year interest. Compute Income from HP for AY 2019-20. (a) Loss of Rs. 30,000 (b) Loss of Rs. 1,68,000 (c) Loss of Rs. 2,00,000 (d) Loss of Rs. 1,50,000 Q67. Mr. PC owns two house properties. First property was used half for running his business & the other half was let-out at Rs. 40,000 per month. The second property was wholly used as a residence by Mr. PC. Municipal value of the two properties was the same at Rs. 7,20,000 each p.a & municipal taxes paid are 10%. Mr. PC’s income from HP for AY 2019-20 will be (a) Rs. 3,13,600 (b) Rs. 3,10,800 (c) Rs. 2,28,560 (d) Rs. 6,32,160 *Q68. Mr. PC is owner the House which has two floors. The ground floor is let out at Rs. 40,000 pm & first floor is selfoccupied. Municipal Taxes paid for full house are Rs. 80,000 pa & interest on borrowed capital for full house payable is Rs. 45,000 pa. Calculate income from House Property AY 2019- 20. (a) 2,63,000 (b) Rs. 2,85,000 (c) Rs. 2,22,500 (d) Rs. 22,500 Q69. PC Ltd. is owner of the House Property which is let out on Rent @ Rs. 60,000 pm. PC Ltd. has paid Municipal Taxes of Rs. 80,000 pa. It took a loan from bank in Australia for purchasing this house. It has paid interest to the bank of Rs. 1,20,000 pa. Calculate House Property income if PC Ltd. has not done TDS on such interest & neither has Australian bank paid tax on this. (a) Rs. 4,98,000 (b) Rs. 7,20,000 (c) Rs. 4,48,000 (d) Rs. 6,40,000

66: c

67: b

68: a

69: c

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4C. PROFIT & GAINS FROM BUSINESS & PROFESSION Q1. The term “business” is defined u/s _______ (a) 2(36) (b) 2(13) (c) 2(14) (d) Not defined Q2. The term “Profession” is defined u/s _________ (a) 2(36) (b) 2(13) (c) 2(14) (d) Not defined Q3. The term ‘Profession’ includes Vocation is given in (a) 2(36) (b) 2(13) (c) 2(14) (d) 2(47) Q4. Business includes any ___ (a) Trade & Commerce (b) Manufacture (c) Any Adventure in the nature of Trade, Commerce, Manufacture. (d) All of the above Q5. ____ requires some degree of learning. (a) Business (b) Profession (c) Vocation (d) All of the above Q6. Under Income tax act, business, profession & vacation are ________ (a) Taxed under different head (b) Treated alike but taxed under different head (c) Treated alike & taxed under the same head (d) Not taxed at all Q7. Application of Profit from business or profession is ____ for Income Tax Act. (a) Material (b) Immaterial (c) Depends on the discretion of AO (d) Depends on the discretion of Assessee. Q8. Illegal incomes are ___ under Income Tax Act. (a) Taxable (b) Exempt (c) Taxable in certain cases only (d) Exempt in certain cases only Q9. Profits & Gains of any business or profession carried on ____ by the assessee is taxable u/h PGBP. (a) for the whole year (b) at any time during the year (c) in the last year (d) Consistently Q10. Capital Losses are ____ under Income Tax Act. (a) Taxable (b) Exempt (c) Not Deductible (d) Deductible

*Q12. Mr. P who was carrying on agency business, received a sum of Rs. 5,00,000 from his principal for termination of agency. Compensation amount so received shall be ________. (a) Exempt as it is capital receipt (b) Exempt as it is ex-gratia payment (c) Fully taxable u/h PGBP (d) Taxable u/h IFOS Q13. Income of a trade or professional association, from specific services performed for its members shall be. (a) Exempt (b) Taxable u/h PGBP (c) Taxable u/h IFOS (d) Partly taxable & partly exempt 2: d 13: b

3: a 14: b

4: d 15: d

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5: b 16: c

Q15. Export incentives received by an assessee includes (a) Profit on sale of import entitlements or Cash assistance against exports from GOI. (b) Customs duty or Excise repaid.repayable as drawback. (c) Profit on transfer of Duty Entitlement Passbook Scheme.Duty-Free Replenishment Certificate. (d) All of the above Q16. Any sum received under an agreement, for not carrying out any activity in relation to any business or profession or for not sharing any know-how, patent, copyright, trade mark likely to assist in the manufacture or processing of goods or provision for services etc is taxable u/h (a) IFOS (b) Salary (c) PGBP (d) Such agreement is void since it is in restrain of trade. *Q17. Remuneration to Partners is taxable in the hands of the Partner to the extent ____. (a) Always (b) Not taxable at all (c) deductible to the firm (d) not deductible to the firm Q18. Any payment received by the employer on the maturity of the Keyman Insurance Policy for which premium was paid by such employer shall be considered to be income of the employer u/h (a) PGBP (b) Salary (c) IFOS (d) None *Q19. In case of conversion of SIT into capital asset, ____ would be taxed u/h _____. (a) SDV on the date of conversion, Capital gains (b) FMV on the date of conversion, Capital gains (c) FMV on the date of conversion, PGBP (d) SDV on the date of conversion, PGBP Q20. Perquisite received by the assessee during the course of his business/profession is taxable u/h (a) PGBP (b) Salary (c) IFOS (d) None

Q11. Capital Receipt are ____ under Income Tax Act. (a) Taxable (b) Exempt (c) Taxable in certain cases only (d) Exempt in certain cases only

1: b 12: c

Q14. Export incentives received by an assessee are (a) Exempt (b) Taxable u/h PGBP (c) Exempt up to certain limits & balance is taxable u/h PGBP. (d) Taxable u/h IFOS

6: c 17: c

Q21. Which of the following income is not chargeable u/h PGBP? (a) Profits & gains of business carried by an assessee at any time during the previous year (b) Income derived by a trade, professional association from specific services performed for its members (c) Winnings from lottery (d) Salary received by a partner of a firm from the firm in which he is a partner Q22. Which of the following income is taxable u/h PGBP? (a) Cash Compensatory Support & Duty Drawback (b) Sum received under a keyman insurance policy (c) Both of the above (d) None of the above

7: b 18: a

8: a 19: c

9: b 20: a

10: c 21: c

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11: c 22: c

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Q23. Under the Income-tax Act, dividend derived from the shares held as SIT is taxable u/h ____. (a) IFOS (b) PGBP (c) Capital gains (d) Either capital gains or PGBP as the case may be

Q34. If the owner uses his own premises for his business, Notional Rent shall ___ as deduction. (a) be allowed (b) Not allowed (c) Depends on the AO (d) Depends on the Assessee.

Q24. Under the Income-tax Act, 1961 Profit from speculative business is taxable under the head: (a) PGBP (b) IFOS (c) IFOS or PGBP (d) Not taxable

Q35. An assessee uses P&M for carrying on his business. U/s 31, he shall be eligible for deduction on account of: (a) Both capital & revenue expenditure on repairs (b) Revenue expenditure on repairs (c) Revenue expenditure on repairs + l.5th of capital expenditure on repairs (d) both (a) & (b)

Q25. Which of the following transactions are not deemed to be speculative transactions? (a) Hedging Contract in respect of Raw Materials or Merchandise, stocks or shares (b) Forward contracts (c) Trading in derivatives or commodity derivatives (d) All of the above Q26. According to section 145, an assessee can follow ___. (a) only cash basis of accounting (b) only accrual basis of accounting (c) any of (a) or (b) (d) both (a) & (b) Q27. For computation of business income for some specified assessees, the assesses has to follow. (a) Accounting standards prescribed by ICAI (b) Accounting standards notified by the finance minister (c) No accounting standards (d) Accounting standard notified by CBDT in the name of ICDS. Q28. If assessee is following cash basis of accounting, then he can’t claim depreciation since it is a non-cash item. (a) True (b) False Q29. As per section 38(2), when asset is not used exclusively for the purpose of business, then deduction ___. (a) shall be restricted to a fair proportionate part (b) may be restricted to a fair proportionate part (c) shall not be restricted to a fair proportionate part & allowed fully (d) shall be restricted to a fair proportionate part thereof which AO may determine having regard to use of such asset for the purposes of business or profession. Q30. ______ Repairs for building are deductible u/s 30. (a) Capital (b) Revenue (current) (c) Both (a) & (b) (d) None of (a) & (b) Q31. If firm runs its business in the premises owned by one of its partners, rent payable to the partner will ____ as deduction. (a) be fully allowed (b) Not allowed (c) Allowed to the extent it is reasonable & is not excessive. (d) Firm cannot carry on business in partner’s premises. Q32. Rates & taxes paid to the government or local bodies are deductible u/s 30 on ___ (a) Due basis (b) Payment basis (c) Earlier of (a) or (b) (d) Later of (a) or (b) Q33. Incomes taxable u/h PGBP are given in section ___ (a) 28 (b) 41 (c) 176 (d) All of the above 23: a 35: b

24: a 36: c

25: d 37: a

26: c 38: b

27: d 39: b

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28: b 40: c

Q36. Computation of depreciation is given u/s (a) 30 (b) 31 (c) 32

(d) 33

Q37. It is mandatory to claim depreciation (a) True (b) False Q38. Depreciation is computed on a single asset rather than group (block) of asset. (a) True (b) False Q39. The depreciation is allowed to ___. (a) Owner of asset (b) Owner of asset, whether fully owned or partially owned (c) The lessee of the asset (d) The tenant of the asset Q40. The depreciation is allowed to ___. (a) Registered owner (b) Beneficial owner (c) Either (a) or (b) (d) Both (a) or (b) *Q41. If Tenant has incurred any Capital Expenditure on construction, renovation, extension of the building taken on lease.rent, ___. (a) He is allowed the deduction of rent paid (b) He cannot take depreciation on such capital expenditure (c) he can take depreciation on such capital expenditure. (d) he can take deduction of material incurred. Q42. To claim depreciation on building, ownership of land is: (a) Not Necessary (b) necessary (c) Land has nothing to do with building (d) None Q43. “Put to use” mean actual use of the asset rather making on asset ready to use. (a) True (b) False Q44. Even if the asset is used for ___ during the year, ____ shall be allowed Except for ___ of use of asset. (a) 180; 50% depreciation; last year (b) a single day; full depreciation; first year (c) 180; full depreciation; last (d) a single day; 50% depreciation; first year Q45. When shall depreciation be restricted to 50% of depreciation allowed? (a) If asset is put to use for less than 180 days in any year (b) If asset is put to use for less than 180 days in the year of acquisition (c) If asset is put to use for < 200 days in year of acquisition (d) None of the above

29: d 41: c

30: b 42: a

31: c 43: a

32: b 44: b

33: d 45: b

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34: b

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*Q46. An assessee purchased an asset on 21st September 2018 on which rate of depreciation is 40%. The asset was put to use on 30.11.19. How much depreciation shall be allowed to assessee on such asset during the period ended 31st March 2019 & 31st March, 2020? (a) Nil, 40% (b) 20%, 20% (c) 20%, Nil (d) Nil, 20% *Q47. If a new machinery is purchased on 15.4.2017 & put to use for the purpose of the business on 2.1.2019, depreciation would be allowable at the rate of. (a) 7.5% (b) 15% (c) 10% (d) 20% Q48. Use of asset includes ___. (a) Active use (c) Both (a) & (b)

(b) Passive use (d) Put to use

Q49. If the asset is used Partly for Business & partly for Personal purposes, then _____ depreciation is allowed as deduction u/s 32 & ____ depreciation should be deducted from WDV. (a) Full depreciation; Proportionate to business (b) Proportionate to business; Full depreciation (c) Proportionate to business; proportionate to business (d) Full depreciation; Full depreciation. Q50. Mr. P , deriving business income, owns a car whose WDV as on 01.04.17 was 3,00,000. This is the only asset in the block of assets with rate of 15%. It is estimated that one-third of the total usage of the car is for personal use in both years. WDV of the block of assets as on 31.03.19 is : (a) Rs. 2,16,750 (b) Rs. 2,55,000 (c) Rs. 2,43,000 (d) None of the above Q51. If asset is used Partly for Business & partly for agriculture, then _____ depreciation is allowed as deduction u/s 32 & depreciation ___should be deducted from WDV. (a) Full depreciation; Proportionate to business (b) Proportionate to business; Full depreciation (c) Proportionate to business; proportionate to business (d) Full depreciation; Full depreciation. Q52. Depreciation is allowed in case of ____. (a) Tangible assets (b) Intangible assets

(c) Both

Q53. Plant means any asset which is essential to carry out the business & includes ____. (a) Ships, vehicles (b) Scientific apparatus & surgical (c) books (d) All of the above Q54. Plant means any asset which is essential to carry out the business but does not includes (a) Tea bushes or livestock etc. (b) animal, human body (c) Stock- in-trade; Buildings. (d) All of the above Q55. _____ will not form part of the block of asset. (a) Land (b) Personal Assets (c) Intangible assets (d) Both (a) & (b) Q56. Mr. P acquired a building for Rs. 15 lakh in June, 2016 in addition to cost of land beneath the building of Rs. 3 lakh. It was used for personal purposes until he commenced business in June, 2017 & since then it was used for business purposes. Eligible Depreciation eligible is: (a) Rs. 1.5 lac (b) Rs. 75000 (c) Rs. 37500 (d) Rs. 121500 46: a 56: a

47: a 57: c

48: c 58: c

49: c 59: b

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50: c 60: b

Q57.Block of asset means assets having _____ (a) Same Class (b) Same rate (c) Same class & same Rate of depreciation (d) Same type Q58. Where a part of the block of asset is sold for a price less than the opening WDV + Cost of assets, if any, acquired during the year, the balance amount shall be treated as __. (a) Short-term capital loss (b) Terminal depreciation (c) WDV for purpose of charging current year depreciation (d) None of the above *Q59. While calculating WDV for depreciation, ____ shall be subtracted from Opening WDV in case of sale of asset. (a) Cost of the sold asset. (b) Sale value of the sold asset (c) FMV of the sold asset. (d) WDV of the sold asset. Q60. Dr. Johar has surgical equipment whose WDV as on 1.4.2018 was Rs. 4,10,000. He acquired some more equipment in December 2018 for Rs. 3,50,000. He sold equipment in March 2019 Rs. 2,00,000 whose original cost was Rs. 1,70,000. WDV of the block for depreciation is (a) Rs. 5,90,000 (b) Rs. 5,60,00 (c) Rs. 7,30,000 (d) Rs. 4,30,000 Q61. The W.D.V. of a block (Plant & Machinery, rate of depreciation 15%) as on 1.4.2018 is Rs. 3,20,000. A second hand ‘machinery costing Rs. 50,000 was acquired on 1.9.2018 but put to use on 1.11.2018. During Jan 2019, part of this block was sold for Rs. 2,00,000. The depreciation for AY 2019- 2020 is : (a) Rs. 21,750 (b) Rs. 25,500 (c) Rs. 21,125 (d) Rs. 12,750 *Q62. W.D.V. of block having 5 machines for which depreciation rate is 15% as on 1.4.2018 is Rs. 5,00,000. 1 new machine amounting to Rs. 1,00,000 was acquired on 1.1.2019 & put to use on 1.2.2019 . During the AY 20192020 i.e. PY 2018-2019, 2 old machinery are sold for Rs. 5,40,000. Depreciation to be allowed for this block: (a) Rs. 9,000 (b) Rs. 4,500 (c) Rs. 5,000 (d) Rs. 5,400 *Q63. When an asset has been destroyed in fire & assessee has received insurance compensation which is nonmonetary. The value of such compensation (a) Shall not be deducted from WDV (b) Shall be deducted from WDV in the year of receipt (c) Shall be deducted from WDV even if the same has not been actually received (d) None of the above *Q64. J Ltd. owns machinery (rate of depreciation is 15%), WDV of which as on 1st April, 2018 is Rs. 30 lacs. Due to fire, entire assets in the block were destroyed & insurer gave a similar machinery which has FMV of Rs. 22,00,000. The eligible depreciation in respect of this machinery is (a) Rs. 4.5 lac (b) Rs. 75,000 (c) Rs. 5 lac (d) Nil *Q65. J Ltd. owns machinery (rate of depreciation is 15%), WDV of which on 1st April, 2018 is Rs. 30 lacs. Due to fire, entire assets in the block were destroyed & insurer paid Rs. 25,00,000. Eligible depreciation on this machinery is (a) Rs. 4,50,000 (b) Rs. 75,000 (c) Rs. 5,00,000 (d) Nil 51: b 61: a

52: c 62: b

53: d 63: a

54: d 64: a

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55: d 65: d

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Q66. The rates of depreciation given u/s 32 & rule 5 are. (a) Minimum rates for depreciation (b) Maximum rates for depreciation (c) Only rates of deprecation (d) Can’t say

Q78. Printing or Printing & Publishing amounts to ____ & Assessee engaged in such business is ____ for Additional Depreciation u/s 32(1)(iia). (a) Services; not eligible (b) manufacture; eligible (c) Services; eligible (d) manufacture; not eligible

Q67. Rate of depreciation of furniture & fitting is. (a) 15% (b) 10% (c) 18% (d) 20%

*Q79. Additional depreciation on specified asset which has been put to use for less than 180 days during PY shall be: (a) 50% allowed in the current PY & 50% shall be allowed in next PY (b) 100% of additional depreciation in the current PY. (c) 50% will be deductible while computing WDV of the next previous year (d) Both (a) & (c)

Q68. Rate of depreciation chargeable on temporary wooden structure in the nature of building is (a) 25% (b) 10% (c) 40% (d) 100% Q69. Rate of depreciation of intangible assets is. (a) 15% (b) 10% (c) 25% (d) 20% Q70. A car is imported on 1.4.18 by J ltd. for use by its employee. J ltd is allowed depreciation on such car at: (a) 15% (b) 20% (c) 40% (d) Nil Q71. GGC Ltd. incurred capital expenditure of Rs. 1,50,000 on 1.4.2018 for acquisition of patents & copyrights. Such expenditure is ___. (a) Eligible for deduction in 14 years from AY 2019-2020. (b) Eligible for deduction in 5 years from AY 2019-2020. (c) Subject to depreciation @ 25% u/s 32 (d) Subject to depreciation @ 15% u/s 32 Q72. Any New P&M installed to Manufacture or Produce any Article by using any technology or other know-how developed in Laboratory owned.financed by government or by public sector company or University.recognized institution shall qualify for depreciation @ ___. (a) 15 % (b) 20 % (c) 40 % (d) Nil Q73. Additional depreciation is allowed to which assessee ? (a) Industrial undertaking (b) Industrial undertaking or assessee who is engaged in generation or generation & distribution of power. (c) Engaged in any kind of business (d) An electricity undertaking & is engaged in the business of generation or generation & distribution of power. Q74. Additional depreciation is allowed in case of (a) All assets acquired by the specified assessee (b) Eligible P&M acquired by the assessee (c) New Eligible P&M acquired by the specified assessee (d) New eligible P&M & F&F acquired by specified assessee Q75. Assessee purchased imported second-hand machinery & contends that additional depreciation shall be allowed on same. Is the contention of assessee correct? (a) Valid (b) Invalid Q76. Assessee purchased office appliances & contents that additional depreciation shall be allowed on same. Discuss. (a) Valid (b) Invalid Q77. Additional depreciation is not allowed ____. (a) When assessee is not engaged in manufacturing (b) When assessee purchases a second-hand machinery (c) When whole of cost of plant is allowed as deduction (d) All of the above 66: b 78: b

67: b 79: d

68: c 80: a

69: c 81: d

70: a 82: a

www.ClearIPCC.in

71: c 83: b

Q80. Additional Depreciation is available at the rate of ____ of actual cost of machinery (a) 20% (b) 15% (c) 18% (d) Nil Q81. If P Ltd invests Rs. 30 crore to acquire & install on 15.7.2018 specified new P&M during PY 2018 - 19. It shall be allowed additional depreciation of Rs. __? (a) Rs. 3 cr (b) Rs. 4.5 cr (c) Nil (d) Rs. 6 cr Q82. Additional Depreciation is available at the rate of ___ of actual cost of machinery in the state of Andhra Pradesh, Telangana, Bihar, West Bengal. (a) 35 % (b) 15% (c) 20 (d) Nil Q83. Additional depreciation will be ____ normal depreciation (a) Clubbed with (b) Over & above (c) included (d) None of the above Q84. Additional depreciation shall be _____ from WDV. (a) Included (b) Added (c) Reduced (d) Merged Q85. GGC Ltd. is located in a backward area in Andhra Pradesh & acquired some machinery for Rs. 20 lakhs on 10.8.2018. It was put to use from 1.1.2019. Total depreciation in respect of the said machinery will be: (a) Rs. 3,00,000 (b) Rs. 4,00,000 (c) Rs. 7,00,000 (d) Rs. 3,50,000 Q86. Investment allowance u/s 32AD shall be allowed to (a) Company Assessee engaged in manufacture or production on or after 1st April 2015 in specified backward area in Telangana, West Bengal, Andhra Pradesh or Bihar. (b) Individual & HUF (c) All Assessees (d) Any Assessee engaged in manufacture or production on or after the 1st April 2015 in specified backward area in Telangana, West Bengal, Andhra Pradesh or Bihar. Q87. Investment allowance u/s 32AD shall be allowed @ ________ of actual cost of machinery (a) 20% (b) 15% (c) 35% (d) Nil Q88. Lock in period u/s 32AD is _____. (a) 3 years from the date of installation (b) 5 years from the date of installation (c) 3 years from the date of purchase (d) 5 years from the date of purchase 72: c 84: c

73: b 85: d

74: c 86: d

75: b 87: b

76: b 88: b

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77: d

25

Q89. Lock in period u/s 32AD is not applicable in case of (a) Company Assessee (b) Assessee in specified backward area in Telangana, West Bengal, Andhra Pradesh or Bihar. (c) Amalgamation or Demerger or business re organisation u/s 47 (xii), (xiiib) or (xiv). However the lock in will be applicable for remaining period to the amalgamated or resulting company. (d) Lock-in is always applicable. Q90. Power generating/power generating & distributing company can claim depreciation as per SLM. (a) True (b) False Q91. Electricity companies are allowed depreciation on: (a) Block of asset (b) Each asset separately (c) Each asset separately unless the assessee opts for block of asset system in the first PY of its commencement. (d) Either on block of asset or each asset separately provided the option is exercised in the first previous year. Q92. In case of electricity companies charging depreciation on SLM basis on a single asset if such assets is sold for a price less than its WDV, then the assessee shall be chargeable for. (a) Balancing charge (b) Terminal Depreciation (c) Capital gains (d) Reduced from Block of asset Q93. An electricity company charging depreciation on straight line method on each asset separately, sells one of its machinery in April, 2018 at Rs. 1,20,000. The WDV of the machinery at the beginning of the year i.e. on 1st April, 2018 is Rs. 1,35,000. No new machinery was purchased during the year. The shortfall of Rs. 15,000 is treated as (a) Terminal depreciation (b) Short-term capital loss (c) Normal depreciation (d) Any of the above, at the option of the assessee Q94. In case of electricity companies charging depreciation on SLM basis on a single asset if such assets is sold for a price more than its value but less than its historical cost then the assessee shall be chargeable for. (a) Balancing charge (b) Terminal Depreciation (c) Capital gains (d) Reduced from Block of asset Q95. An electricity company charging depreciation on straight line method on each asset separately, sells one of its machinery in April, 2018 at Rs. 1,40,000. The WDV of the machinery at the beginning of the year i.e. on 1.4.2018 2018 is Rs. 1,35,000. No new machinery was purchased during the year. The excess of Rs. 5,000 is treated as (a) Terminal depreciation (b) Short-term capital loss (c) Balancing charge (d) Any of the above, at the option of the assessee Q96. In case of electricity companies charging depreciation on SLM basis on a single asset if such assets is sold for a price more than its historical cost then the assessee shall be chargeable as ____. (a) PGBP as Balancing charge upto cost & capital gains above cost (b) Terminal Depreciation (c) Balancing charge (d) IFOS 89: c 96: a

90: a 97: b

91: d 98: c

www.ClearIPCC.in

92: b 99: b

Q97. An electricity company charging depreciation on SLM on each asset separately, sells one of its machinery in April, 2018 at Rs. 2,00,000. WDV of the machinery at the beginning of the year i.e. on 1.4.2018 is Rs. 1,50,000. Cost of acquisition was Rs. 1,80,000. No new machinery was purchased during the year. The profit is treated as (a) Rs. 20,000 as balancing charge u/h PGBP & Rs. 30,000 as Capital gains. (b) Rs. 30,000 as balancing charge u/h PGBP & Rs. 20,000 as Capital gains. (c) Rs. 50,000 u/h PGBP (d) Rs. 50,000 u/h Capital gains. *Q98. In Case of Succession, Amalgamation, Demerger, Business Re-organization etc, depreciation shall be calculated on the assumption that ____ & then amount of depreciation so calculated shall be apportioned between predecessor & successor in the ratio of _____for which the asset is ___by them. (a) Separately for predecessor & successor (b) combined for predecessor & successor (c) no change in ownership has taken place; number of days ; used (d) Change in ownership has taken place; number of months ; held Q99. If ABC Ltd. has taken a loan of Rs. 40 lakhs @ 10% p.a. on 1.4.2018 for purchasing a particular P&M & the company has made additional payment as under: (i) Transportation charges - Rs. 2 lacs. (ii) Loading & unloading Expenses - Rs. 25,000 (iii) Payments for the expert staff to install P&M - Rs. 3 lacs. (iv) Company has incurred Rs. 4 lacs for construction of a platform for installing P&M. The asset was put to use on 1.1.2019. In this case actual cost of the asset shall be – (a) Rs. 40,00,000 (b) Rs. 52,25,000 (c) Rs. 49,00,000 (d) Rs. 49,25,000 Q100. Mr. P acquired an asset for Rs. 5 lacs which includes Rs. 80,000 as GST for which Mr. P has claimed Input Tax credit. Actual cost of acquisition shall be (a) Rs. 5,00,000 (b) Rs. 5,80,000 (c) Rs. 4,20,000 (d) none of the above Q101. Mr. P acquires an asset which was previously used for scientific research for Rs. 2,75,000. Deduction u/s 35(l)(iv) was claimed in PY 2014 - 2015. The asset was brought into use for the business of Mr. P , after the research was completed. The actual cost of the asset to be included in the block of assets is ___. (a) Nil (b) FMV on the date of transfer to business (c) Rs. 2,75,000 - Notional depreciation u/s 32 upto the date of transfer. (d) Actual cost of the asset Rs. 2,75,000 Q102. Actual cost in case of asset acquired by way of gift, will or inheritance is ___. (a) Actual cost of acquisition of the previous owner (b) WDV to the previous owner (c) FMV of the asset on the date of acquisition of asset from the previous owner. (d) FMV of the asset on the date of acquisition of asset by the previous owner. 93: a 100: a

94: a 101: a

95: c 102: b

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Q103. Mr. A transfers P&M used in his business for several years for Rs. 20,00,000 to Mr. B. WDV in the books of Mr. A of the said asset was Rs. 5,00,000. FMV of the asset on the date of transfer was Rs. 4,00,000. Determine Actual cost of asset to Mr. B for computing depreciation u/s. 32. (a) Rs. 20 lac (b) Rs. 4 lac (c) Rs. 16 lac (d) FMV Q104. If in above case, assessee has received a subsidy of Rs. 2 lac in connection with P&M because it was a nonpolluting plant, in this case, actual cost of asset shall be ___. (a) Rs. 50,25,000 (b) Rs. 52,25,000 (c) Rs. 49,00,000 (d) Rs. 49,25,000 Q105. Mr. A acquired an assets on 15.4.2017 for Rs. 2,00,000, on which depreciation is charged @ 10%. He sold the asset to Mr. B for Rs. 2,00,000 on 1.4.2018. Again on 16.9.2018, the same asset was re-acquired by Mr. A for Rs. 2 lac. Compute the actual cost in the hands of Mr. A. (a) Rs. 2 lac (b) Rs. 1.8 lac (c) Rs. 20,000 (d) FMV Q106. Mr. A owns an asset & uses it for the purpose of his business.profession. A has claimed depreciation in respect of such asset. The said asset is transferred by A to Mr. B. Mr. A then acquires the same asset back from B on lease. State (i) who will be entitled to claim depreciation & (ii) Cost of asset to claim depreciation. (a) Mr. A ; Sale price of the said asset (b) Mr. B ; Sale price of the said asset (c) Mr. A ; WDV of the said assets at the time of transfer. (d) Mr. B ; WDV of the said assets at the time of transfer. Q107. Dr. Sagar purchased a residential building on 1.12.2016 for Rs. 12,00,000 & it was put to use on same date. Till 1.12.2018, it was self-occupied as residence. On this date, building was brought into use for his medical profession. Calculate WDV on 1.4.2018 & depreciation allowable for AY 2019-20. ROD = 5%. (a) Rs. 11,11,500 ; Rs. 55,575 (b) Rs. 22,23,000 ; Rs. 1,11,150 (c) Rs. 12,00,000 ; Rs. 60,000 (d) Rs. 12,00,000; Nil Q108. In case of transfer in scheme of Amalgamation to Indian amalgamated company, Actual cost of the asset in the hands of amalgamated company shall be (a) WDV in the hands of transferor company. (b) WDV in the hands of transferee company. (c) Same cost as it would have been if the transferor company had continued to hold the asset. (d) None of the above Q109. Mr. P, a retailer acquired furniture on 10th May 2018 for Rs. 10,000 in cash & on 15th May 2018 for Rs. 15,000 & Rs. 20,000 by a bearer cheque & A/c payee cheque, respectively. Depreciation allowable for AY 2019-20 is: (a) Rs. 2,000 (b) Rs. 3,000 (c) Rs. 3,500 (d) Rs. 4,500 Q110. If a block of assets ceases to exist on last day of PY, but there is WDV left, depreciation allowed will be __. (a) Nil (b) 50% of the value of block of assets on 1st day of PY (c) Total value of the block of assets on 1st day of PY (d) 50% of value of the block of assets on last day of PY 103: b 111: a

104: a 112: b

105: b 113: d

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106: d 114: c

Q111. If WDV of the block of assets becomes Nil on the last day of the PY but block continue to exist, depreciation admissible for the block of assets will be ____. (a) Nil (b) 50% of the value of block of assets on 1 st day of PY (c) Total value of the block of assets on 1st day of PY (d) 50% of value of the block of assets on last day of PY Q112. Where a part of block of assets is sold for a price more than the opening WDV + Cost of asset acquired during the year, if any, the assesses shall be subject to (a) Balancing charge (b) Short-term capital gain (c) STCG or LTCG depending upon the period after which the block is transferred (d) None of the above Q113. Which of the following expenditure on scientific research is not allowed as deduction? (a) Revenue expenses incurred during the previous year (b) Revenue expenses on payment of salary to employees engaged in scientific research & purchase of material used in scientific research incurred during 3 years immediately preceding the commencement of business (c) Capital expenditure incurred on scientific research during the year related to the business (d) Expenditure incurred on acquisition of land during the year for scientific research Q114. Where the block of the depreciable asset is transferred after 36 months, there will be ___. (a) STCG (b) LTCG (c) STCG/STCL (d) LTCG/LTCL Q115. Mr. P owns 2 machineries eligible for depreciation @ 15%. WDV of these machines as on 1.4.2018 was Rs. 25,000 & Rs. 40,000 respectively. No other asset was acquired in this block during year. One of these machines were sold during PY for Rs. 75,000. Compute capital gain. (a) STCG of Rs. 10,000 (b) STCL of Rs. 10,000 (c) LTCG of Rs. 10,000 (d) No Cap gain as depreciation would be allowed on the machines left with Mr. P. Q116. Mr. P owns 2 machineries eligible for depreciation @ 15%. WDV of these machines as on 1.4.2018 was Rs. 25,000 & Rs. 40,000 respectively. No other asset was acquired in this block during year. Both the machines were sold during PY for Rs. 50,000. Compute capital gain. (a) STCG of Rs. 10,000 (b) STCL of Rs. 15,000 (c) LTCG of Rs. 10,000 (d) No Cap gain as depreciation would be allowed on the machines left with Mr. P. Q117. Unabsorbed depreciation which could not be set off in the same AY can be carried forward for __ years. (a) 8 (b) Indefinite period of time (c) 4 (d) 12 Q118. P Ltd. has unabsorbed depreciation of Rs. 4 lacs for PY 2018-19. This can be carried forward ___. (a) for a maximum period of 8 years & set-off against business income. (b) Indefinitely & set-off against business income. (c) Indefinitely & set-off against any head of income (d) Indefinitely & set-off against any head of income except salary. 107: a 115: a

108: c 116: b

109: b 117: b

110: a 118: d

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Q119. Expenditure on scientific research incurred by the assessee shall be allowed if such research _____. (a) is related to the business of the assessee (b) may or may not related to the business of the assesssee (c) is related to the research specified by the government (d) none of the above Q120. If an assessee carries on any scientific research related to his business, he shall be allowed deduction u/s 35 for. (a) revenue expenditure only (b) capital expenditure only (except land) (c) both revenue & capital expenditure (except land) (d) neither revenue nor capital expenditure Q121. Certain revenue & capital expenditure on scientific research incurred are allowed as deduction in PY of commencement of business even if these are incurred. (a) 5 year immediately before commencement of business (b) 3 year immediately before commencement of business (c) Any time prior to the commencement of the business (d) None of the above Q122. A company incurred capital expenditure on scientific research (i) Land Rs. 5 lacs (ii) Building Rs. 10 lacs (iii) Equipment - Rs. 7 lacs; Amount of expenditure eligible for deduction u/s 35 would be (a) Rs. 22 lakh (b) Rs. 15 lakh (c) Rs. 17 lakh (d) Rs. 5 lakh Q123. Weighted deduction of 150% for in house research is allowed to ___. (a) any assessee (b) Scientific association (c) Company (d) IIT Q124. Weighted deduction of 150% for in houses research is allowed for ____. (a) Revenue expenditures & capital expenditure incurred during the previous year (b) Revenue expenditures incurred during PY & during 3 years immediately prior to commencement of business. (c) Revenue & Capital expenditure incurred during PY & during 3 years immediately prior to commencement of business. (d) Revenue expenditures & capital expenditure (except cost of Land & Building) incurred during the previous year. Q125. If income of a business before claiming capital expenditure on scientific research is Rs. 150,000 & capital expenditure incurred on scientific research is Rs. 2,80,000, then Rs. 1,30,000 shall be ____. (a) Business loss (b) Unabsorbed capital expenditure on scientific research Q126. Brought forward unabsorbed capital expenditure on scientific research can be carried forward ____ years. (a) Indefinite time (b) 8 (c) 5 (d) 10 Q127. If any amount is donated for research, such research can be in the nature of _____. (a) Scientific research only (b) Social science research (c) Statistical science research (d) all of the above 119: a 129: d

120: c 130: b

121: b 131: b

122 c: 132: b

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123: c 133: a

Q128. If donation is made to a national Laboratory or a university or IIT, deduction shall be _____ of donation made (a) 125% (b) 100% (c) 175% (d) 150% Q129. Donation to approved association for scientific research shall allowed as deduction ____ of donation made. (a) 125% (b) 100% (c) 175% (d) 150% Q130. J Ltd. paid Rs. 10 lakh to an approved college to be used for scientific research which is unrelated to its business. Amount eligible for deduction u/s 35(1)(ii) is. (a) Rs. 5 lakh (b) Rs. 15 lakh (c) Nil (d) Rs. 11 lakh Q131. Donation to approved university.college for social or statistical research is deductible __of donation made (a) 125% (b) 100% (c) 175% (d) 150% Q132. Donation to university for research in social science is eligible for deduction at (a) 125% (b) 100% (c) 175% (d) 150% Q133. Where an asset used for scientific research for more than 3 years is sold without having been used for other purposes, then the sale proceeds to the extent of the cost of the asset already allowed as deduction u/s 35 in the past shall be treated as(a) Business income (b) Long-term capital gain (c) Short-term capital gain (d) Exempted income Q134. Which of the following is a specified business eligible for deduction u/s 35 AD? (a) Operating warehousing facility for storage of agriculture produce (b) Operating leather manufacturing unit (c) Operating unit for manufacture of tooth paste (d) Units operating in Jammu & Kashmir Q135. Where an assessee is carrying on a specified business referred to in section 35AD, he shall be allowed deduction. (a) only for revenue expenditure (b) both the revenue & capital expenditure (c) Capital expenditure other than goodwill, land & financial instruments (d) both for revenue & capital expenditure other than land, building & goodwill. Q136. Prior period expenditure shall be allowed as deduction if _____ in the books of accounts (a) Written off (b) Capitalized (c) Always (d) Incurred 3 years prior to commencement of business. *Q137. Assessee shall not be allowed _____ from the income mentioned u/s 35AD (a) Deduction u/c VI-A (b) Deduction u/s 16(ia) (c) Both (a) & (b) (d) None of (a) & (b) Q138. Expenditure incurred on agricultural extension project u/s 35CCC is eligible for deduction of ____ (a) 125% (b) 150% (c) 175% (d) 100% 124: d 134: a

125: b 135: c

126: a 136: b

127: d 137: a

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128: d 138: b

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Q140. Which of the following conditions are applicable in case of deduction u/s 35AD? (a) It is not set up by Splitting up or reconstruction of a business already in existence. (b) It is not set up by transfer of Second-hand Plant & Machinery. (c) No deduction shall be allowed under any other section (d) All of the above Q141. Expenditure on rural development programme u/s 35CCA is eligible for deduction of ____. (a) 125% except cost of Land & building (b) 150% except cost of Land & building (c) 100% of such expenditure incurred (d) 150% of such expenditure incurred Q142. Expenditure incurred on agricultural extension project u/s 35CCC is eligible for weighted deduction of __. (a) 125% except cost of Land & building (b) 150% except cost of Land & building (c) 125% of such expenditure incurred (d) 150% of such expenditure incurred Q143. Expenditure incurred on skill development project u/s 35CCD is eligible for weighted deduction of ____. (a) 125% except cost of Land & building (b) 150% except cost of Land & building (c) 125% of such expenditure incurred (d) 150% of such expenditure incurred

Q149. An assessee paid VRS as per the scheme of voluntary retirement amounting to Rs. 8,00,000 on 21st March 2019. How much deduction of same shall be allowed to assessee for PY 2018-19? (a) Rs. 1,60,000 (b) Rs. 1,00,000 (c) Rs. 1,20,000 (d) Rs. 1,50,000 Q150. X Ltd. made payment of VRS to its employee Y as under: PY 2018-19: Rs. 4 lacs; PY 2019-20: Rs. 3 lacs; PY 2020-21: Rs. 1.4 lacs. Calculate how much deduction will be allowed to X Ltd. for AY 2020-21 in respect of the VRS? (a) Rs. 28,000 (b) Rs. 1,40,000 (a) Rs. 80,000 (b) Rs. 60,000 Q151. Which of the following is allowed as deduction u/s 36? (a) Premium paid for insurance of stock (b) Premium paid on lives of partner (c) Insurance premium paid by any mode other than cash on health of employee to insurance company (d) All of the above Q152. Bonus.commission given to the Employees is deductible on ___. (a) Payment basis (b) if not payable as profit or dividend (c) Not deductible (d) Both (a) & (b)

Q144. Weighted deduction u/s 35CCD is allowed to ___. (a) all assesses (b) a company assessee only (c) all assessee other than a company (d) assessee being an Individual only

Q153. Interest on money borrowed for the purpose of acquiring a capital asset pertaining to the period after the asset is put to use is to be (a) Capitalized (b) Treated as revenue expenditure & deductible u/s 36(1)(iii). (c) Either capitalized or treated as revenue expenditure at the choice of assessee. (d) Neither capitalized or treated as revenue expenditure.

Q145. In the case of company assessee, the total preliminary expenses incurred are allowed as deduction to extent of 5% of ___. (a) Cost of the project (b) Aggregate capital employed (c) Cost of project or capital employed whichever is higher (d) None of the above

Q154. Interest incurred on the loan taken for purchase of the plant & machinery before the commencement of the production is to be (a) Capitalized (b) Treated as revenue expenditure (c) Either capitalized or treated as revenue expenditure at the choice of assessee (d) Neither capitalized or treated as revenue expenditure.

Q146. In the case of non-company assessee, the total preliminary expenses incurred are allowed deduction to the extent of ____ of the cost of the project (a) 2% (b) 5% (c) 10% (d) 7%

Q155. Provision for Bad debt is allowed to be debited to profit & loss account. (a) True (b) False

Q147. Preliminary expenses incurred are allowed deduction in ___. (a) 10 equal instalments (b) 5 equal instalments (c) Full amount (d) Not allowed at all Q148. The expenditure incurred on payment under voluntary retirement scheme shall be allowed as deduction in ___. (a) The previous year it is paid (b) Equal instalments in 5 AYs starting from AY in which it is paid (c) Not allowed at all (d) Allowed to the extent of Rs. 5,00,000 140: d 149: a

141: c 150: b

142: b 151: d

143: b 152: d

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144: b 153: b

Q156. PC & Co. engaged in trading activity could not recover Rs. 5 lakh from a customer. It claimed the entire amount as bad debt by writing off in the books of account. The aggregate sale made during the year to the party amounts to Rs. 30 lakhs. The amount eligible for deduction by way of bad debt is (a) Nil (b) Rs. 3 lakhs (c) Rs. 5,00,000 (d) Rs. 6,00,000 Q157. Which of the following interest are deductible? (a) Interest on own capital.

(b) Guaranteed interest paid to shareholder on paid-up capital.

(c) Interest paid on money borrowed for payment of dividend.

(d) Interest paid on money borrowed for payment of Tax. 145: c 154: a

146: b 155: b

147: b 156: c

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148: b 157: c

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Q158. Discount on a Zero-Coupon Bond is deductible ____ (a) In the year of issue of such bond (b) In the year of redemption of such bond (c) over the life of such bond (d) Not deductible Q159. Employer’s contribution to PF/SAF/GF is allowed as deduction in computing income u/h PGBP provided it has been paid (a) before the end of the previous year (b) on or before the due date by which the employer is required to credit an employee’s contribution to the employee’s account in the relevant fund. (c) on or before due date for filing ROI u/s 139(1). (d) before the end of the relevant assessment year Q160. Bad debt of business are allowed to be debited as per section ___ (a) 36 (b) 37 (c) 35 (d) 32 Q161. Bad debts incurred are allowed to be debited in the profit & loss account. (a) True (b) False Q162. Raju succeeded to the business of his father Ramu consequent to demise of Ramu 1.11.2018. Raju recovered Rs. 30,000 due from a customer which was written off by late Ramu as bad debt & allowed as deduction. The amount recovered is (a) Not taxable in the hands of Raju (b) Fully taxable as business income (c) Rs. 15,000 being 50% taxable as business income (d) To be set off against current year bad debts Q163. Expenditure incurred on family planning amongst the employees is allowed to (a) All assessee (b) A company assessee (c) An assessee which is a company or cooperative society (d) An assessee which is a company or a firm. Q164. Revenue expenditure incurred on family planning amongst employees of company is allowed as deduction___. (a) In full (b) In 5 equal instalments (c) In 10 equal instalments (d) None of the above Q165. Where a company has incurred a revenue expenditure of Rs. 1,00,000 towards promoting family planning amongst employees, ___ will be allowed as deduction in current year & balance in __ succeeding years (a) Rs. 20,000, 4 (b) Rs. 20,000, 5 (c) Rs. 1,00,000, Nil (d) None of the above

Q168. Business income of a company assesses before claiming Rs. 760,000 being 1.5th capital expenditure on family planning is Rs. 740,000. The balance 720,000 shall be treated as. (a) Business loss (b) Unabsorbed expenditure on family planning (c) Terminal depreciation (d) None of the above Q169. Capital expenditure is allowed as deduction u/s 37. This statement is _________. (a) Valid (b) Invalid (c) Partly valid & Partly invalid (d) None of the above Q170. Any expenditure incurred by an assessee for any purpose which is an offence __. (a) Shall be deemed to be incurred for the purpose of business or profession (b) Shall not be deemed to be incurred for the purpose of business or profession (c) May be deemed to be incurred for the purpose of business or profession (d) None of the above Q171. If a penalty is paid, it is ______u/s 37(1). (a) allowable as deduction (b) not allowable as deduction (c) May be allowed as deduction (d) None of the above Q172. Penalty in nature of compensation is ____ u/s 37(1). (a) allowable as deduction (b) not allowable as deduction (c) May be allowed as deduction (d) None of the above Q173. Which of the following statement is true? (a) Deduction u/s 37(1) is allowed in respect of capital expenditure (b) CSR expense is not allowed u/s 37(1) (c) Expense in nature of personal exp is allowed u/s 37(1) (d) None of the above Q174. Any sum paid under Act _____ as deduction. (a) Is allowable (b) Is not allowable (c) May be allowed (d) None of the above Q175. Which of the following are not allowed as deduction u/s 37? (a) Expenditure incurred on keyman insurance policy (b) Expenses incurred in providing freebees to medical practitioner (c) Rent of Plant & machinery (d) None of the above

Q166. Capital expenditure incurred on family planning amongst employees of the company assessee is allowed as deduction (a) In full (b) In 5 equal instalments (c) In 10 equal instalments (d) None of the above

Q176. Any expense on advertisement in any souvenir, brochure, pamphlet or the like publications by a political party ...................... u/h PGBP. (a) Shall be allowed as deduction (b) Shall not be allowed as deduction (c) May be allowed as deduction (d) None of the above

Q167. Where a company has incurred capital expenditure of Rs. 1 lac towards promoting family planning amongst employees, ____ will be allowed as deduction in the current year & balance in_____succeeding years (a) Rs. 20,000, four (b) Rs. 20,000, five (c) Rs. 1,00,000, four (d) None of the above

Q177. PC Ltd paid interest of Rs. 5 lacs to Mr. Charles in USA on 1.1.2019. Tax was deducted on 30 April 2019 & paid to the government on the same date. Calculate the amount of disallowance in PY 2018-19. (a) Nil (b) Rs. 1,50,000 (c) Rs. 5,00,000 (d) Rs. 2,50,000

158: c 168: b

159: c 169: b

160: a 170 b:

161: a 171: b

www.ClearIPCC.in

162: a 172: a

163: b 173: b

164: a 174: b

165: c 175: b

166: b 176: b

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167: a 177: c

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Q178. Which of following expenditure for which payment is made to a resident are disallowed to the extent of 30% unless the TDS has been done: (a) Interest, Royalty, FTS (b) Commission/brokerage/Rent (c) Payment to contractors (d) All expenses on which tax is deductible at source Q179. PC Ltd. paid fees for technical services of Rs. 6 lakh but omitted to do TDS & such omission continued till the due date for filing ROI. The amount of expenditure liable for disallowance: (a) Rs. 1,80,000 (b) Rs. 6,00,000 (c) Rs. 1,20,000 (d) Nil Q180. Income tax paid is ____. (a) Allowed as deduction (b) Not allowed as deduction Q181. Tax paid by employer on non-monetary perquisites is _____. (a) Allowed as deduction (b) Not allowed as deduction Q182. Salary, bonus, commission or remuneration due to or received by a working partner from the firm is taxable for the partner u/h income from: (a) Salaries (b) IFOS (c) PGBP (d) Cap Gain Q183. Deduction u/s 40(b) shall be allowed to the firm on account of remuneration paid to ___. (a) any partner (b) major partner only (c) working partner only (d) all partners Q184. Remuneration paid to working partner shall be allowed as deduction to a firm. (a) in full (b) subject to limit specified in section 40(b) (c) none (d) not allowed at all Q185. A firm’s business income is nil/negative. It shall be allowed as deduction on account of remuneration to working partner to the maximum extent of __. (a) Lower of Actual Remuneration or Rs. 1,50,000 (b) Rs. 150,000 (c) Rs. 125,000 (d) Actual remuneration Q186. Calculate what amount is disallowed u/s 40(b) where book profit of the firm is Rs. 5,00,000. Remuneration paid to working partner is Rs. 4,50,000 & that to non-working partner is Rs. 90,000. (a) Rs. 3.5 lac (b) Rs. 90,000 (c) Rs. 60,000 (d) Rs. 1.5 lac Q187. Interest on capital or loan from partner of a firm is allowed as deduction to the firm to the extent of __. (a) Rate mentioned in the partnership deed (b) 12% p.a. even if it is not mentioned in partnership deed (c) Lower of 12% p.a. or at the rate mentioned in deed (d) Any rate at the choice of partner Q188. Interests on capital or loan received by a partner from a firm is ____. (a) Exempt u/s 10(2A) (b) Taxable u/h PGBP to the extent it is disallowed as deduction to the firm u/s 40(b) (c) Taxable u/h PGBP to the extent it is allowed as deduction to the firm u/s 40(b) (d) Taxable u/h PGBP on account of interest on capital & IFOS on account of loan to the firm 178: d 189: b

179: a 190: c

180: b 191: c

181: b 192: d

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182: c 193: d

Q189. As per section 40A(2), what kind of expenditure is covered __? (a) Capital expenditure (b) Revenue expenditure (c) Both of the above (d) None of the above Q190. In case excess Payment for any Expenditure is made to a related person, ____. (a) Whole payment is disallowed (b) Whole payment is allowed (c) Excess payment is disallowed (d) Excess payment is allowed Q191. Cash payment in excess of Rs. 10,000 is disallowed as a deduction in P&L A/c as per section (a) 40A(2) (b) 40(b) (c) 40A(3) Rule 6DD (d) 40A(4) Q192. Cash payment of Rs. 17,000 was made by J Ltd against Bill No.l to a contractor engaged in plying of passenger carriage on 29th June 2018. How much amount is disallowed u/s 40A(3)? (a) Rs. 17,000 (b) Rs. 10,000 (c) Rs. 27,000 (d) Nil Q193. Limit of Rs. 10,000 U/s 40(A)(3) is applicable for (a) All Expenditure in a day to a person (b) All Expenditure in a PY to a person (c) All Expenditure in a day to all person (d) One expenditure in a day to a person Q194. J Ltd purchased goods on credit from D Ltd on 7.5.2018 for Rs. 86,000 for which payment of Rs. 5,000 is made in cash on 12.5.2018; Rs. 40,000 by bearer cheque on 30.5.2018 & Rs. 41,000 by A/c payee cheque on 13.6. 2018. Amount of disallowance u/s 40A(3) is ____. (a) Rs. 15,000 (b) Rs. 30,000 (c) Rs. 40,000 (d) Rs. 86,000 Q195. Where the payment of an expenditure claimed as deduction by any assessee carrying on business or profession other than who is in transport business exceeds Rs. 10,000, it should be paid by (a) Crossed Cheque/Crossed Draft (b) A/c Payee Cheque/Draft/Electronic clearing system (c) Bearer Cheque (d) Any Mode other Than Cash Q196. Where an assessee doing a business incurs any expenditure in respect of which payments made to a person in a day exceeds Rs. 10,000 should be paid through account payee cheque or demand draft to claim deduction for such expenditure. This restriction does not apply to payments made to: (a) RBI (b) cultivators (c) Terminal benefits to employees ≤ Rs. 50,000 (d) All of the above Q197. PC & Co. paid Rs. 40,000 by cash to Mr. Balu a supplier on 5.9.2018. The cash payment was made on the day on which the bank was on strike. The Amount of expenditure liable for disallowance u/s 40A(3) is ____. (a) Rs. 40,000 (b) Rs. 12,000 (c) Rs. 20,000 (d) Nil Q198. Contribution by employer to URPF is ____ . (a) Allowed as deduction (b) Not Allowed as deduction (c) Allowed as deduction if paid before DD u/s 139(1) (d) None of the above.

183: c 194: d

184: b 195: b

185: a 196: d

186: d 197: d

187: c 198: b

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188: c

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Q199. Where a scientific research asset is sold after having been used for the purpose of scientific research then the sale price upto the cost of acquisition of the asset which has been allowed as deduction in the past shall treated as ___. (a) Business income (b) STCG (c) LTCG (d) None of the above Q200. A business (not being a speculation business) is discontinued on 10.12.1986. At the time there is unadjusted business loss of Rs. 35,000 (i.e., Rs. 10,000 of PY 1985-86 & Rs. 25,000 pertaining to the period commencing on 1.4.1986 & ending on 10.12.1986). On 20.5.2018, he recovers a debt of Rs. 48,000 from a debtor which was allowed as bad debt in PY 1985-86 (or may be in some other year). Taxable profit for PY 2018-19 u/s 41. (a) Rs. 48,000 (b) Rs. 21,000 (c) Rs. 35,000 (d) Rs. 25,000 Q201. P Ltd is liable to pay bonus to its employees for the amount of Rs. 5,00,000 for PY 2018-19 but paid this amount on 5.11.2019 i.e. after the due date of ITR which was 30.9.2019. How much amount shall be allowed as deduction for bonus in PY 2018-19? (a) 100% of bonus (b) 50% of bonus (c) 30% of bonus (d) Nil Q202. Deduction of expenditure on the actual payment basis is allowed to be debited in P&L A/c u/s _____. (a) 44AB (b) 32(1) (c) 44AA (d) 43 B Q203. P Ltd is liable to pay bonus to its employees for the amount of Rs. 5 lacs for PY 2018-19 but paid this amount on 5.11.2019. How much amount shall be allowed as deduction for bonus in subsequent year? (a) 100% (b) 50% (c) 30% (d) Nil Q204. J Ltd. made provision of Rs. 12 lakh for bonus payable for the year ended 31st March, 2019. It paid Rs. 7 lakh on 3rd July 2019, Rs. 3 lakh on 30th September 2019, & Rs. 3 lakh on 15th December, 2019. The amount eligible for deduction u/s 43B would be ____ lacs (a) Rs. 10 (b) Rs. 12 (c) Rs. 7 (d) Rs. 3 Q205. GGC Ltd. contributed Rs. 8.7 lac towards PF A/c of its employees. It actually remitted Rs. 5 lac upto 31st March 2019 & Rs. 2.5 lac upto due date for filing ROI u/s 139(1). The amount liable to tax in its assessment would be (a) Rs. 3,70,000 (b) Rs. 1.2 lac (c) Nil (d) Rs. 8.7 lac Q206. Conversion of unpaid interest into Fresh Loan by Bank/FI is treated as __& thus allowed as_. (a) not treated as payment; not deductible (b) treated as payment; not deductible (c) not treated as payment; deductible (d) not treated as payment; not deductible Q207. A person carrying specified profession will have to maintain books of account prescribed by Rule 6F of the Income-tax Rules, 1962, if gross receipts > Rs. 1,50,000 for: (a) All preceding 5 years (b) Any of preceding 5 years (c) All preceding 3 years (d) Any of preceding 3 years

199: a 208: c

200: b 209: c

201: d 210: d

202: d 211: b

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203: a 212: c

Q208. Person carrying on specified profession is required to maintain ___. (a) Prescribed books of account in all cases (b) Prescribed books of A/c if gross receipt of all 3 Last PY > Rs. 1,50,000; otherwise No books of A/c to be maintained (c) Prescribed book of account if gross receipt of all 3 preceding PY > Rs. 1,50,000; otherwise such books of account as will enable AO to compute him business income. (d) Any kind of books of A/c as may be desired by assessee. Q209. If a person sets up a specified profession during the current previous year, he is _____. (a) Required to maintain prescribed books of account (b) Not required to maintain books of account (c) Required to maintain prescribed books of A/c if gross receipts of such profession is likely to exceed Rs. 1,50,000; otherwise such books to enable AO to compute his TI (d) Any books of A/c may be desired by the assessee. Q210. An Individual who has been carrying on nonspecified profession is ___. (a) not required to maintain any books of account (b) required to maintain book of account of the current previous year if the gross receipts of such profession exceed Rs. 1,50,000. (c) required to maintain books of account of the current previous year if the gross receipts of such profession of any of three preceding previous year exceeded Rs. 10 lakhs (d) required to maintain book of A/c of current PY if in any of the preceding 3 PYs, his total income exceeded Rs. 2,50,000 or gross receipts exceeded Rs. 25 lakhs. Q211. Books of accounts have to be maintained for minimum of __ years. (a) 8 (b) 6 (c) 3 (d) 10. Q212. For person carrying on business, tax audit is compulsory if the gross receipts of PY exceeds. (a) Rs. 50 lakhs (b) Rs. 25 lakhs (c) Rs. 100 lakhs (d) Rs. 30 lakhs Q213. For person carrying on profession, tax audit is compulsory if the gross receipts of PY exceeds. (a) Rs. 50 lakhs (b) Rs. 25 lakhs (c) Rs. 100 lakhs (d) Rs. 30 lakhs Q214. Tax audit is compulsory in case a person is carrying on business referred u/s 44AD which has gross turnover/sales/receipts, as the case may be, exceeds. (a) Rs. 140 lakhs (b) Rs. 100 lakhs (c) Rs. 150 lakhs (d) Rs. 200 lakhs Q215. Due date of furnishing audit report u/s 44AB is: (a) 31st July of AY (b) 30th September of AY th (c) 30 August of AY (d) None of the above Q216. Section 44AD relating to presumptive income of a business (excluding business covered u/s 44AE) is applicable in case of. (a) Any assessee (b) Individual or HUF or a firm (c) Resident Individual.HUF.firm but excluding LLP (d) Individual or HUF or a firm other than LLP. 204: a 213: a

205: b 214: d

206: d 215: b

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207: c 216: c

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Q217. Where the total turnover of an assessee, eligible for presumptive taxation u/s 44AD, is received entirely by A/c payee cheque during PY 2018-19, specified rate of presumptive business income is _____% of Total Turnover. (a) 5% (b) 6% (c) 7% (d) 8% Q218. Presumptive income of taxation referred to in section 44AD is not applicable to (a) Person carrying on profession referred to in sec 44AA (b) A person carrying on any agency business (c) A person earning income in the nature of commission or brokerage income (d) A person referred to in (a), (b) & (c) above Q219. If an eligible assesses is engaged in any business (other than plying, hiring or leasing of goods transport) & he has opted for presumptive income scheme u/s 44AD, the assesses shall (a) Be entitled to deduction u/s 30 to 37 (b) Not be entitled to any deduction u/s 30 to 37 (c) Not be entitled to deduction u/s 30 to 37 except on account of interest on capital & loan from partner & remuneration to working partner as per section 40(b). (d) None of the above *Q220. JSJ & Co. is a partnership firm with 3 partners. The capital of each partner was Rs. 2 lakh. The partnership deed authorized interest on capital @ 15% & working partner salary to each partner @ Rs. 10,000 per month for all the partners. The total sales amounted to Rs. 70 lakh. The total income of the firm u/s 44AD would be (a) Rs. 5,60,000 (b) Rs. 4,32,000 (c) Rs. 1,28,000 (d) Rs. 3,50,000 Q221. Mr. P engaged in retail trade reports a turnover of Rs. 43 lacs all of which is received in cash. He deposited Rs. 30,000 in his PPF A/c held with SBI. His total income is __. (a) Rs. 1.85 lac (b) Rs. 344000 (c) Rs. 314000 (d) Rs. 4 lac Q222. If an eligible assessee declares profit for any PY as per 44AD on presumptive basis & he does not declare profit on presumptive basis as per section 44AD(1) for any of the next 5 consecutive PY, then (a) He can claim benefit of presumptive income in next PY (b) He cannot claim the benefit of presumptive income during the lifetime. (c) he becomes ineligible to claim benefit of presumptive income as per AD(1) for next 5 AYs subsequent to PY in which profit has not been declared as per 44 AD. (d) None of the above Q223. Section 44 ADA relating to presumptive income is applicable in case of(a) Any assessee (b) Assessee engaged in profession referred to in Sec 44AA (c) Resident Assessee engaged in profession referred to in Sec 44AA (d) Any assesses who is engaged in any profession Q224. Section 44ADA, relating to presumptive income of the profession referred to in section 44AA, is applicable if gross receipts of the profession does not exceed ___. (a) 225 lacs (b)40 lacs (c)50 lacs (d)100 lacs 217: b 226: b

218: d 227: c

219: c 228: d

220: c 229: d

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Q225. In the case of section 44ADA, the minimum income shall be presumed to be ____% of gross receipts. (a) 25% (b) 40% (c) 50% (d) 60% Q226. If an eligible assesses is engaged in any profession referred to in section 44ADA & he had opted for presumptive income scheme u/s 44ADA, assesses shall be: (a) Be entitled to deduction u/s 30 to 37 (b) Not be entitled to deduction u/s 30 to 37 (c) Not be entitled to deduction u/s 30 to 37 except on account of interest on capital & loan from a partner & remuneration to working partner as per section 40(b). (d) None of the above Q227. Dr. P is practicing MBBS & has gross receipt of Rs. 18,40,000. His presumptive income u/s 44ADA would be. (a) Rs. 1,47,200 @ 8% (b) Rs. 92,000 @ 5% (c) Rs. 9,20,000 @ 50% (d) Rs. 4,60,000 @ 25% Q228. U/s 44AE, Rate per month or part of the month relevant for AY 2019-20 & maximum number specified are (a) Rs. 7,500 for each goods carriage for assessee owning not more than 10 goods carriages at any time during PY (b) Rs. 7,500 for each goods carriage in case of an assessee owning less than 10 goods carriages at any time during PY (c) Rs. 1,000 per ton of gross vehicle weight for p.m or part for a goods carriage for an assessee owning not more than 10 goods carriages at the end of PY. (d) Rs. 1,000 per ton of gross vehicle weight or unladen weight for p.m or part for heavy goods carriage & Rs. 7,500 p.m or part for other goods carriages in case of assessee owning not more than 10 carriages at any time during PY. Q229. If eligible assessee is engaged in any business other than plying, hiring or leasing of goods transport & he had opted for presumptive income scheme u/s 44A, He shall. (a) be entitled to deduction u/s 30 to section 37 (b) not be entitled to any deduction u/s 30 to section 37 (c) may be entitled to any deduction u/s 30 to section 37 (d) not be entitled to deduction u/s 30 to section 37 except on account of interest on capital & loan from a partner & remuneration to working partner as per section 40(b). Q230. Assessee engaged in business of leasing goods carriage, Sec 44AE is applicable if the assessee is the owner of maximum of _____ goods carriages. (a) 12 (b) 8 (c) 5 (d) 10 Q231. Mr. P has 5 goods carriage vehicles on 1.4.2018. He acquires 3 more vehicles on 11.9.2018. Presumptive income u/s 44AE if all are light goods carriage vehicles? (a) Rs. 8,10,000 (b) Rs. 2,02,500 (c) Rs. 3,64,500 (d) Rs. 6,07,500 *Q232. Mr. P owns 2 commercial vehicles. 1 is heavy good vehicles which can carry weight of 16 tones. This was owned for 9 months & 2 days. Other vehicle is light goods vehicle which is owned for 11 months & 12 days. Income from business of Mr S u/s 44AE is? (a) Rs. 2.5 lac (b) Rs. 4.2 lac (c) Rs. 4.05 lac (d) Rs. 3.9 lac Q233. Advance tax is payable by the Assessee opting for presumptive income in _____ installments. (a) 4 (b) 3 (c) 2 (d) 1 Before 15th March

221: c 230: d

222: c 231: d

223: c 232: a

224: c 233: d

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225: c

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4D. CAPITAL GAINS Q1. Which of the following is not a required for charging income tax on capital gains? (a) There must be a gain arising on transfer of capital asset. (b) Capital gains should not be exempt u/s 54 (c) Transfer must be of a capital asset. (d) The transfer must have been effected in relevant AY Q2. As per general rule, capital gain from transfer of capital asset is taxable in which year (a) PY in which transfer took place (b) Assessment year (c) PY next to year of transfer (d) None of the above Q3. Capital gains is calculated when ___. (a) Any asset is transferred (b) any capital asset is transferred (c) any asset is transferred or not transferred (d) any capital asset is transferred or not transferred Q4. Capital gain arises on___. (a) All type of asset (b) All type of capital asset (c) Land, Building & Shares only (d) All of the above Q5. Capital Asset is defined u/s: (a) 2(13) (b) 2(36) (c) 2(14)

(d) 2(47)

Q6. Capital Asset means: (a) Any Property (Movable.immovable), connected with assessee’s business,profession or not. (b) Any Securities held by FIIs (invested as per SEBI regulations). (c) Any Rights in Indian Company including Right of Management or control. (d) All of the above. Q7. Capital Asset excludes: (a) SIT/RM.Consumables stores (b) Movable Personal effects (c) Rural Agricultural Land in India (d) All of the above

Q9. Capital asset excludes all assets except ___. (a) Stock in trade (b) Gold deposit bonds (c) Jewellery (d) Rural agricultural land Q10. Which of the following is not a capital asset for Mr. P who is employed in a public sector bank? (a) Urban land (b) Plot of land (c) Gold Jewellery (d) Car Q11. Which of the following is capital asset ? (a) A maruti dealer holding cars for sale (b) A maruti dealer has honda city car for his personal use. (c) Jewellery held by a jeweller which has been held as SIT. (d) Jewellery held by a jeweller for his personal use. 2: a 13: a

3: b 14: b

4: b 15: a

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Q13. Gold utensils are ___ & silver utensils are ____. (a) Capital asset, capital asset (b) Not capital asset, capital asset (c) Capital asset, not capital asset (d) Not capital asset, not capital asset Q14. Which of the following assets is long term capital assets ? (a) Car used for 5 years for personal purposes before the date of sale. (b) Jewellery held for 10 years for personal use before its date of sale. (c) House property held by a property dealer for sale for 4 years before sale. (d) Shares held by Mr. P as investment & sold 11 months after date of purchase. Q15. As per the contention of Assessing Officer gold bars, sovereigns etc. used for Puja are capital asset & hence, attracts capital gains. Is the contention of Assessing Officer valid? (a) Valid (b) Invalid (c) Partially invalid (d) None Q16. Capital Gain on Transfer of Urban Agricultural Land is ___Agricultural Income & thus it is __. (a) treated as ; exempt u/s 10. (b) treated as ; taxable u/h capital gains. (c) not treated as ; exempt u/s 10 (d) not treated as ; taxable u/h capital gains. Q17. STCG is a gain arising from the transfer of a land & building which is held by the assessee for not more than ____ months from the date of its acquisition. (a) 36 (b) 12 (c) 24 (d) 48

Q8. Mr. P purchased a car for his personal use for Rs. 5,00,000 in April, 2018 & sold the same for Rs. 5,50,000 in July, 2018. The taxable capital gains would be. (a) Nil (b) Rs. 5,50,000 (c) Rs. 50,000 (d) Rs. 4,00,000

1: d 12: d

Q12. Which of the following is not a capital asset? (a) Personal House (b) Personal Jewellery (c) Factory Building (d) Personal Car

5: c 16: d

6: d 17: c

Q18. Agricultural Land must be used for agricultural purposes for ___prior to transfer (a) 5 yrs (b) 3 yrs (c) 2 yrs (d) 10 yrs Q19. Listed securities (except bonds & units) are treated as LTCA, if they are held for more than ____ months . (a) 12 (b) 6 (c) 24 (d) 48 Q20. If unlisted debentures are sold after 12 months but before 36 months, the capital gain arising from such sale is (a) STCG (b) LTCG Q21. Unlisted equity shares are treated as LTCA, if they are held for more than ____ months. (a) 12 (b) 6 (c) 24 (d) 48 Q22. Units of debt-oriented Mutual funds are treated as LTCA, if they are held for more than ____ months . (a) 12 (b) 36 (c) 24 (d) 48

7: d 18: c

8: a 19: a

9: c 20: a

10: d 21: c

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11: d 22: b

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Q23. Zero-coupon bonds are treated as LTCA, if they are held for more than ____ months . (a) 12 (b) 36 (c) 24 (d) 48 Q24. Units of UTI or equity-oriented MF are treated as LTCA, if they are held for more than__months. (a) 12 (b) 36 (c) 24 (d) 48 Q25. Mr. P purchased 1 motor car for his personal use & subsequently it was sold by him within 6 months at profit. (a) It will be considered as STCG (b) It will be considered as LTCG (c) It is not a capital asset & therefore there shall be no capital gains (d) None of the above Q26. Which of the following would be regarded as transfer? (a) Transfer of capital asset in scheme of reverse mortgage (b) Transfer of capital asset under gift/will or trust (c) Transfer by way of conversion of equity shares from preference shares (d) Redemption of ZCBs Q27. Any transaction allowing possession of any ___ to be taken or retained in ___ of a contract of the nature referred to in section 53A of the Transfer of Property Act is regarded as a transfer (a) Movable property, whole performance (b) Immovable property, part performance (c) Movable property, Part performance (d) Any Property, Part Performance Q28. Securities transaction tax paid by the seller of shares & units shall (a) be allowed as deduction as expenses of transfer (b) not be allowed as deduction as expenses of transfer (c) form part of cost in case of tangible assets only (d) form part of cost if asset is purchased before 1.4.2001 Q29. Brokerage paid on sale of shares ___ from the sale consideration. (a) Shall be reduced (b) May be reduced (c) Shall not be reduced (d) Shall be added Q30. Cost of acquisition includes ___ (a) All the expenditures incurred to acquire the asset (b) Revenue expenditures incurred to acquire the asset (c) Only capital expenditures incurred for completing or acquiring title to the property. (d) None of the above *Q31. Securities transaction tax paid by the purchaser of shares & units shall (a) form part of the cost of such shares & units (b) not form part of the cost of such shares & units (c) form part of cost in case of tangible assets only (c) form part of cost if asset is purchased before 1.4.2001 Q32. While computing indexed cost of acquisition, COA shall be divided by (a) CII for the year in which asset was held by the assessee (b) CII for the year in which asset was transferred (c) CII for the year being 1.4.2001 (d) CII for the year being later of (a) or (c) 23: a 33: b

24: a 34: d

25: c 35: c

26: d 36: a

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27: b 37: c

Q33. Where capital asset became the property of the assessee in any mode given u/s 49(1), COA shall be: (a) FMV of asset on the date of acquisition by the assessee (b) Cost of acquisition in the hands of previous owner (c) Price which is decided by transferor & transferee (d) Nil *Q34. No indexation is done in case of. (a) Bonds/Debenture/ZCBs (b) Slump sale (c) LTCA specified u/s 112A. (d) All of the above. Q35. Cost of Improvement includes ___ (a) All the expenditures incurred in making any additions/improvements/protect capital asset (b) Revenue expenditures incurred in making any additions/improvements/protect capital asset (c) Capital expenditures incurred in making any additions/improvements/protect capital asset. (d) None of the above Q36. While computing indexed cost of improvement, it shall be divided by (a) CII for the year in which improvement took place (b) CII for year in which asset was transferred by assessee (c) CII for the year being 1.4.2001 (d) CII for the year in which asset was held by the assessed Q37. Cost of improvement means capital expenditure done on the value addition of capital asset. It shall be considered for calculation of capital gains & (a) It is always taken as Nil (b) always considered irrespective of period when it was incurred (c) considered when incurred on or after 1.4.2001 (d) considered when incurred before 1.4.2001 Q38. COI incurred before 1.4.2001________in all cases. (a) Shall be ignored (b) Shall always be considered (c) May be considered (d) Is at the discretion of AO Q39. COI incurred by the previous owner shall be ___. (a) Shall be ignored (b) May be considered (c) Shall be considered if incurred on or after 1.4.2001. (d) Is at the discretion of AO Q40. Assessee is allowed to opt for FMV on 1.4.2001 in case of ___. (a) All Capital assets (b) All Depreciable capital assets (c) All Capital assets other than Intangible assets & Depreciable assets (d) only self-generated assets Q41. Cost of Improvement shall be indexed if ___.

(a) Improvement is done before 36 months from date of transfer (b) Improvement is done before 24 months from date of transfer (c) Improvement is done before 12 months from date of transfer

(d) If the asset is LTCA. Q42. Amount deducted from sale consideration in LTCG is: (a) COA & COI (b) Indexed COA & Indexed COI (c) Market value as on 1.4.1981 of capital asset (d) only cost of improvement 28: b 38: a

29: a 39: b

30: c 40: c

31: a 41: d

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Q43. Mr. P purchased Gold on 1.1.2017 for Rs. 7 lacs & sells this Gold for Rs. 10 lacs on 1.10.2018. Selling expenses have been 1% of the sale price. Calculate Capital Gains for PY 2018-2019. (a) Rs. 3,00,000 (b) Rs. 9,90,000 (c) Rs. 2,90,000 (d) None of the above Q44. On 15th November, 2018, Mr. P sold 1kg of gold, the sale consideration to which was Rs. 6,00,000. He had acquired the gold on 11th December, 1999 for Rs. 64,000. Fair market value of 1kg gold on 1st April, 2001 was Rs. 62,000. Taxable Capital gains for PY 2018-2019 shall be (a) Rs. 4,25,920 (b) Rs. 5,38,000 (c) Rs. 5,36,000 (d) Rs. 4,20,800 Q45. Mr. P purchased a house for Rs. 20 lacs on 1.1.2017. On 1.1.2018 he had constructed one additional floor at the cost of Rs. 5 lacs. On 30.10.2018 this house has been sold off for Rs. 51 lacs & selling expenses have been Rs. 1 lacs. Calculate Capital Gains for PY 2018-2019. (a) Rs. 14,00,000 (b) Rs. 23,00,000 (c) Rs. 50,00,000 (d) Rs. 25,00,000 Q46. U/s 50C, guideline value for stamp duty is taken as the full value of consideration only if (a) the asset transferred is building & the actual consideration is less than the guideline value (b) the asset transferred is either land or building or both & guideline value exceeds the actual consideration (c) the asset transferred is either land or building or both & guideline value exceeds 105% of the actual consideration. (d) the asset transferred is land & the actual consideration is less than the guideline value Q47. On 1.6.2018 Mr. P transferred his vacant land to Mr. D for Rs. 12 lacs. The land was acquired on 1.9.2015 for Rs. 3 lacs. If indexation is applied, the indexed cost of acquisition would be Rs. 3.30 lacs. The taxable capital gain would be. (a) LTCG Rs. 8.70 lacs (b) STCG Rs. 9 lacs (c) LTCG Rs. 9 lacs (d) STCG Rs. 8.70 lacs Q48. Mr. P sold a vacant land to Mr. D for Rs. 36 lacs. For stamp duty purpose, the value of land was Rs. 41 lacs. The indexed cost of acquisition of land was computed at Rs. 20 lacs. The taxable LTCG would be. (a) Rs. 21 lacs (b) Rs. 16 lacs (c) Rs. 5 lacs (d) Rs. 20 lacs Q49. Miss Mohini transferred a house to her friend Ms. Ragini for Rs. 35 lacs on 1.10.2018. The sub-registrar valued the land @ Rs. 48 Lacs. Miss Mohini contested the valuation & the matter was referred to divisional revenue officer who valued the house @ Rs. 41 lacs. Ms. Mohini had purchased the house on 15 May, 2011 for Rs. 25 lacs & registration expenses were Rs 1,50,000. (a) Rs. 46,50,000 (b) Rs. 38,04,350 (c) Rs. 1,45,650 (d) None

43: c 52: a

44: d 53: d

45: d 54: a

46: c 55: c

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47: a 56: c

Q50. When can AO refer valuation officer with a view to ascertain FMV of a capital asset? (a) Where the value of the asset claimed by the assessee is in accordance with valuation made by the registered valuer, but AO is of the opinion that value so claimed is less than FMV of the Asset. (b) Where the AO is of the opinion that FMV of the asset exceeds the value claimed by lower of (i) More than 15% of the value claimed by the assessee or (ii) Rs. 25,000. (c) Where the AO thinks that it is necessary to do so having regards to the nature of the asset & relevant circumstances. (d) All of the above Q51. If any advance money received by the assessee under the agreement of transfer which could not be matured is forfeited before 1.4.2014 then such money shall (a) Be taxable as the income of other sources in the year it is forfeited (b) Be deducted from the cost of acquisition of such asset after doing indexation (c) Be deducted from the cost of acquisition of such asset before doing indexation (d) it shall be ignored in all cases Q52. If any advance money received by the assessee under the agreement of transfer which could not be matured is forfeited after 1.4.2014 then such money shall be ____. (a) Taxable u/h IFOS in the year it is forfeited (b) Deducted from COA of such asset after doing indexation (c) Deducted from COA of such asset before doing indexation (d) it shall be ignored in all cases Q53. Mr. P entered into an agreement with Mr. D for sale of a building for Rs. 20 lac in June, 2018. Mr. P received advance of Rs. 2 lacs. Subsequently the agreement was cancelled & Mr. P forfeited the advance money. The advance money is ____. (a) To be reduced from the cost of acquisition (b) To be reduced from indexed cost of acquisition (c) Taxable as capital gains (d) Taxable u/h IFOS. Q54. Mr. P purchases a house property in Dec. 2006 for Rs. 10,25,000 & an amount of Rs. 7,05,000 was spent on the improvement & repairs of the property in March 2011. Property was proposed to be sold to Mr. Z in month of May, 2018 & advance of Rs. 40,000 was taken from him. As entire money was not paid in time, Mr. P forfeited the advance & subsequently sold property to Mr. Y in March, 2019 for Rs. 36,00,000. The FMV of the property on April 1, 2001 was Rs. 11,00,000. Taxable Capital Gain: (a) Rs. 65,505 (b) Rs. 65,550 (c) Rs. 65,055 (d) Rs. 65,500 Q55. Advance forfeited by the Previous owner shall be ___. (a) Reduced from original cost of acquisition. (b) Taxed u/h IFOS (c) Ignored (a) Taxed in the hands of current owner Q56. In case of destruction of capital asset as specified u/s 45(1A), sale consideration shall be (a) FMV on the date of destruction (b) Actual sale consideration (c) Insurance Compensation (d) Any of the above 48: a

49: c

50: d

51: c

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Q57. Mr. P owns a House which was purchased by him on 1.5.1999 for Rs 3 lacs. It was destroyed by fire on 3.4.2018 & Mr. P received Rs. 48 lacs on 5.5.2019 from the Insurance Company. FMV of the property on 1.4.2001 was Rs. 4 lacs. The Stamp Duty Value was Rs. 60 lacs. Find the Capital Gain (a) 37.44 Lac (b) 36.8 Lac (c) 40 Lac (d) None

Q66. In case of compulsory acquisition, indexation shall be done till the __. (a) PY of compulsory acquisition (b) PY in which the full compensation received (c) PY in which part.full compensation is received (d) in any year at the discretion of the government

Q58. Conversion of capital asset into SIT will result into capital gain of PY in which ____. (a) conversion took place (b) converted asset is sold/transferred (c) both of the above (d) none of the above

Q67. An interim order in relation to enhanced compensation was passed by court on 10 May, 2018, amount was also received in pursuance of order. Compensation so received shall be taxable (a) When the amount is received (b) When final order of the court is passed (c) Any of the above (d) None of the above

Q59. Conversion of personal effect into stock in trade shall: (a) be subject to capital gain tax (b) not be subject to capital gain tax (c) shall be subject to tax under of PGBP income (d) shall be subject to tax under head of IFOS. Q60. When capital asset is converted into SIT then for purpose of capital gain, the sale consideration shall be (a) FMV of the asset on the date of sale of such asset (b) FMV of the asset on the date of conversion of such asset (c) The price for which it is sold (d) The price for which it was acquired Q61. Where the capital asset is converted into stock in trade, the indexation of cost of acquisition & cost of improvement shall be done ___. (a) till PY of conversion of such capital asset (b) till PY in which such asset is sold (c) Till 1.4.2001 (d) Any of the above Q62. Mr. P converts his capital asset (acquired on June 10, 2009 for Rs. 60,000) into SIT in March 10, 2019. FMV on date of above conversion was Rs. 3 lacs. He subsequently sells stock-in-trade so converted for Rs. 4,00,000 on June 10, 2019. What is date of transfer of asset? (a) June 10, 2009 (b) March 10,2019 (c) June 10, 2019 (d) None of the above Q63. Where a partner transfers any capital asset into the business of firm, sale consideration of such asset to the partner shall be. (a) FMV on the date of such transfer (b) price at which it was recorded in the books of the firm (c) cost of such asset to the partner (d) price which is mutually decided by partners Q64. Where any capital asset is transferred by a firm to its partner by way of distribution on the dissolution of firm, the sale consideration of such asset to the firm shall be. (a) The price at which such asset was given to partner (b) Cost or W.D.V of such asset on the date of distribution (c) FMV of the asset on the date of such transfer (d) price which is mutually decided by partners Q65. Where a capital asset other than urban agricultural land is compulsorily acquired then the capital gain shall arise in the previous year in which___. (a) compulsory acquisition took place (b) Full consideration is received (c) Part/full consideration is received (d) Any year at the discretion of the government 57: 66: a

58: b 67: a

59: b 68: c

60: b 69: a

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61: a 71: b

Q68. In case of compulsory acquisition, if an assessee receives enhanced compensation then enhanced compensation is taxable as. (a) STCG (b) LTCG (c) STCG/LTCG depending upon the original capital gain of compulsory acquisition. (d) Any kind of capital gains to be decided by the government. Q69. In case of compulsory acquisition if enhanced compensation is received, then for purpose of computation of capital gain, cost of acquisition & cost improvement in that case shall be taken as. (a) always taken to be Nil (b) cost of acquisition or cost of improvement which was in excess of initial compensation earlier received (c) any amount of cost decided by the government (d) any amount of cost decided by the assessee Q71. Mr. P , while computing capital gain on enhanced compensation deducted litigation expenses incurred by him. AO contended that litigation expenses are nondeductible. Is contention of Assessing Officer valid? (a) Valid (b) Invalid (c) Partially invalid (d) None of the above Q72. Mr. P received Rs. 7 lacs by way of enhanced compensation in March, 2019. A further sum of Rs. 3 lac decreed by the Court tribunal is due but not received till 31st March, 2019. The amount of income chargeable to tax for PY 2018-2019 would be __. (a) Rs. 3,50,000 (b) Rs. 7,00,000 (c) Rs. 9,00,000 (d) Rs. 4,95,000 Q73. What amount of deduction is allowed to an assessee while taxing interest income on compensation or enhanced compensation ? (a) 50% of interest (b) 75% of interest (c) 25% of interest (d) No deduction is allowed Q74. Mr. P has received a sum of Rs. 3,40,000 as interest on enhanced compensation for compulsory acquisition of land by state government in May, 2018, of this, only Rs. 12,000 pertains to the current year & the rest pertains to earlier years. The taxable for PY 2018-2019 would be (a) Rs. 12,000 (b) Rs. 6,000 (c) Rs. 3,40,000 (d) Rs. 1,70,000 62: b 72: b

63: b 73: a

64: c 74: d

65: c

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Q75. In case of compulsory acquisition if initial compensation or enhanced compensation is received by legal heir due to death of assessee, then capital gain shall. (a) not be taxable in the hands of legal heir (b) be taxable in the hands of legal heir (c) taxable for the dead assessee (d) for initial compensation the legal heir will be taxable as representative assessee & for enhanced compensation he shall be himself taxable. Q76. Where a capital asset being urban agricultural land is compulsorily acquired then capital gain shall arise in PY. (a) of compulsory acquisition (b) in which full consideration is received (c) in which part or full consideration is received (d) Exempt u/s 10(37) Q77. Section 45(5A) is applicable to __. (a) All Assessees (b) Company only (c) Individual or HUF (d) All of the above Q78. In case of specified agreement u/s 45(5A), Sale Consideration shall be (a) FMV of the asset given up (b) Actual cost of the asset given up (c) Stamp Duty Value of the share (being land or building or both) in the project on the date of issue of certificate of completion + Consideration received in cash (d) AO will decide. Q79. Benefit u/s 45(5A) is not available if assessee transfers his share in the project to any person ___ (a) Before 1.4.2001 (b) Before 1.4.2019 (c) on/before issue of completion certificate (d) Always available Q80. Mr. P has acquired 10,000 equity share of ABC Ltd on 1.04.2007 @ 300 per share. The company buybacks 10,000 shares on 30.1.2019 @ 750 per share. Compute the capital gain taxable in his hands for AY 2018-19. (a) Rs. 9,88,000 (b) Rs. 9,88,370 (c) Rs. 9,77,370 (d) Rs. 7,50,000 Q81. If the goodwill of a business, right to manufacture or produce, tenancy rights, route permit or loom hours is acquired before 1.4.2001, the cost of acquisition of such asset shall be. (a) Cost of acquisition (b) FMV as on 1.4.2001 (c) Always taken as Nil (d) Higher of (a) or (b) Q82. Cost of improvement of tenancy rights, route permits or loom hours shall be. (a) It is always taken as Nil (b) always considered irrespective of period when it was incurred (c) considered when incurred on or after 1.4.2001 (d) considered when incurred before 1.4.2001 Q83. If goodwill of a profession which is self-generated is transferred, there will (a) liable to capital gain (b) not be liable any capital gain (c) be a STCG (d) be a LTCG 75: c 84: b

76: d 85: b

77: c 86: b

78: c 87: c

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79: c 88: a

Q84. Mr. P acquired 1,000 equity shares of GGC Ltd. for Rs. 4 lac in April, 2004. He received bonus shares on 1:1 basis in April, 2018 from the company. He sold all the shares in January, 2019 through RSE for Rs. 8 lacs. Capital gain taxable in the hands of Mr. P for PY 2018-2019 is (a) Rs. 4 lacs (b) Nil since entire gain is exempt u/s 112A (c) Rs. 2 lacs (d) Rs. 80,000 *Q85. On January 31, 2019 Mr. P has transferred selfgenerated goodwill of his profession for a consideration of Rs. 70,000 & incurred expenses of Rs. 5,000 for such transfer. You are required to compute capital gains taxable in hands of Mr. P . (a) Rs. 65,000 (b) Nil (c) Rs. 70,000 (d) None of the above Q86. If the bonus shares are acquired before 1.4.2001, the cost of acquisition of such bonus share shall be. (a) Cost for which it was acquired by the assesse (b) FMV as on 1.4.2001 (c) Always taken as Nil (d) Higher of (a) or (b) Q87. If the bonus shares are acquired on or after 1.4.2001, the cost of acquisition of such shares shall be. (a) Cost for which it was acquired by the assesse (b) FMV as on 1.4.2001 (c) Always taken as Nil (d) Higher of (a) or (b) Q88. Mr. P acquired 1,000 equity shares of Rs. 10 each in a listed company for Rs. 35,000 on 1st July, 2012. The company issued 1,000 rights shares in April, 2014 at Rs. 15 per share. The company issued 2,000 bonus shares in June, 2018. The market price was Rs. 50 per share before bonus issue. The cost of acquisition of bonus shares would be ___. (a) Nil (b) Rs. 20,000 (c) Rs. 50,000 (d) Rs. 1,00,000 Q89. Period of holding of bonus share allotted shall be reckoned from ___. (a) Date of holding of original shares (b) The date of offer of bonus shares (c) Date of allotment of bonus shares (d) Date of approval from shareholders in AGM Q90. Cost of acquisition of right shares to existing shareholder shall be. (a) market value of right share are offered (b) price at which these shares are offered (c) price at which these shares are offered plus the amount paid to the person renouncing the right (d) always taken as NIL Q91. Cost of acquisition of the right shares to a person who purchased right to acquire share from the existing shareholder shall be. (a) market value of right share are offered (b) price at which these shares are offered (c) price at which these shares are offered + Amount paid to the person renouncing the right (d) always taken as NIL 80: 89: c

81: a 90: b

82: a 91: c

83: b

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Q92. Cost of acquisition of the right to the existing shareholder shall be. (a) market value of right share are offered (b) price at which these shares are offered (c) price at which these shares are offered plus the amount paid to the person renouncing the right (d) always taken as NIL Q93. In case of sale of right, ____ will always arise (a) STCG (b) LTCG (c) STCG/LTCG depending on Period of holding (d) No capital gain will arise. Q94. Cost of acquisition of the shares given under ESOP plan shall be. (a) FMV of the equity shares on the date of issue. (b) FMV of equity shares on date of exercising option (c) always taken as Nil (d) Price at which it was offered to employee. Q95. If entire block of depreciable asset is transferred after 36 months of its use, there will be. (a) STCG (b) LTCG (c) STCG/STCL (d) LTCG/LTCL Q96. Capital gain on transfer of depreciable asset shall be(a) LTCG, if held for more than 36 months (b) LTCG, if held for more than 24 months (c) LTCG, if held for more than 12 months (d) STCG, irrespective of the period of holding Q97. Mr. P owns two machineries in the block of assets which is depreciable at the rate of 15%. The WDV of the block as on 1.4.2018 was Rs. 65,000. No other asset was acquired during the year. One of these machines was sold during the previous year for Rs. 75,000. Compute CG: (a) STCG of Rs. 10,000 in hands of Mr. P . (b) STCL of Rs. 10,000 in hands of Mr. P (c) LTCG of Rs. 10,000 in hands of Mr. P (d) No capital gain as depreciation would be allowed on one of the machines left with Mr. P Q98. In which of the following cases, STCG/STCL will arise? (a) WDV of block is ZERO on the last day of the PY (b) Block is Empty on the last day of PY (c) Both (a) & (b) (d) None of the above Q99. Capital gain in case of slump sale would be(a) LTCG, if the undertaking/division transferred is held for more than 36 months (b) LTCG, if the undertaking/division transferred is held for more than 24 months (c) LTCG, if the undertaking/division transferred is held for more than 24 months (d) STCG, irrespective of the period of holding Q100. Indexation benefit is ____ in case of slump sale. (a) Available if undertaking is acquired on or after 1.4.2001 (b)Available if undertaking is acquired on or after 1.4.1981 (c) Not available (d) Depends on the mood of AO. 92: d 101: c

93: a 102: c

94: b 103: b

95: a 104: d

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96: d 105: b

Q101. Cost of acquisition & cost of improvement in case of slump sale is (a) Nil (b) Nil if acquired on or after 1.4.2001 (c) Net worth of the undertaking. division. (d) Actual cost of acquisition Q102. Indexation benefit is ____ in case of capital gains on shares & debentures acquired in foreign currency by a non-resident under 1st proviso to Section 48. (a) available if undertaking is acquired on or after 1.4.2001 (b)Available if undertaking is acquired on or after 1.4.1981 (c) Not available (d) Depends on the mood of AO. Q103. Cost of acquisition of securities held with depository is to be computed by (a) Average cost method (b) First in first out (FIFO) method (c) Last in first out (LIFO) method (d) Weighted average cost method Q104. In case of securities held in demat form, for sale ____ should be considered & for determination of period of holding ____ should be considered. (a) Original Date of acquisition; Date of Entry in Demat A/c (b) Original Date of acquisition; Original Date of acquisition (c) Date of Entry in Demat A/c; Date of Entry in Demat A/c (d) Date of Entry in Demat A/c; Original Date of acquisition Q105. Period of holding in case of Shares held in a company in liquidation shall ___ the period subsequent to the date of liquidation. (a) Include (b) Exclude (c) Depends on AO (d) None of the above Q106. Distribution of assets at the time of liquidation of a company (a) is not a transfer in the hands of the company or the shareholders (b) is not a transfer in the hands of the company but capital gains shall arise in the hands of the shareholders. (c) is not a transfer in the hands of the shareholders but capital gains is chargeable to tax on such distribution in the hands of the company (d) is a transfer both in the hands of shareholders & company Q107. In case of distribution of assets at the time of liquidation of the company, sale consideration in the hands of shareholder of the shares of the company shall be (a) FMV of the assets received in kind (b) Deemed dividend u/s 2(22)(c). (c) FMV of the shares given up (d) FMV of the assets received in kind - Deemed dividend u/s 2(22)(c) Q108. Distribution of assets at the time of partition of HUF shall (a) be regarded as a transfer in the hands of HUF (b) be regarded as a transfer in hands of family members (c) not be regarded as transfer in the hands of HUF. (d) not be regarded as a transfer in hands of family members. 97: a 106: b

98: c 107: d

99: a 108: c

100: c

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Q109. Transfer of capital asset under a gift or will shall. (a) be regarded as transfer for donor & taxable for donor. (b) not be regarded as transfer for donor & not taxable. (c) be regarded as transfer for donor & taxable for receiver. (d) not be regarded as transfer for donor & taxable for receiver. Q110. Mr. P has purchased a land on 1.4.2001 for Rs. 50,000 & constructed one floor on this land at the cost of Rs. 3,00,000 on 1.1.2011. He constructed one additional floor on this on 1.1.2014 at the cost of Rs. 7,00,000. The house has been gifted by him to his son on 1.1.2019. Calculate Capital Gains for Mr. P for PY 2018-2019. (a) Rs. 2,88,339 (b) Rs. 2,38,839 (c) Rs. 2,38,389 (d) Nil Q111.Ms. J inherited a vacant site land consequent to the demise of her father on 10th June, 2000. The land was acquired by her father on 10th April, 1970 for Rs. 40,000. The fair market value of the land on 1st April, 2001 was Rs. 60,000 & on the date of inheritance i.e., 10th June, 2000 was Rs. 2,00,000. The cost of acquisition for Ms. Smita is: (a) Rs. 10,000 (b) Rs. 40,000 (c) Rs. 60,000 (d) Rs. 2,00,000 Q112. Mr. B purchased convertible debentures for Rs. 5,00,000 during August 2001. The debentures were converted into shares in September 2012. These shares were sold for Rs. 15,00,000 in August 2018. The brokerage expenses are Rs. 50,000. You are required to compute the CG in case of Mr. B for AY 2019-20. (a) Nil (b) Rs. 1,54,762 (c) Rs. 5 lacs (d) Rs. 15,47,620 Q113. Which of the following transactions are not regarded as transfer? (a) Transfer of Rupee denominated bond of Indian company issued outside India by NR to another NR [Section 47(viiaa)]. (b) Redemption of Sovereign Gold Bonds by Individual issued under Sovereign Gold Bond Scheme, 2015 [Section 47(viic)]. (c) Conversion of Preference shares into Equity shares: Any transfer by way of conversion of preference shares of a company into equity shares of that company [Sec 47(xb)]. (d) All of the above. Q114. Any lumpsum amounts or instalments received as a loan under a scheme of reverse mortgage from the bank by senior citizens is __. (a) Exempt u/s 10(43) (b) Taxable (c) Exempt u/s 10(38) (d) Exempt upto Rs. 2.5 lacs Q115. For claiming exemption u/s 10(37), urban agricultural land is used for ___ by HUF or individual or a parent of individual during the period of ___immediately preceding date of transfer (a) Any purpose, three year (b) Agricultural purpose, three years (c) Agricultural purpose, 2 years (d) Business purpose, two years 109: b 118: a

110: d 119: c

111: c 120: c

112: b 121: a

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113: d 122: b

Q116. Exemption u/s 54 is available to_____. (a) All Assesses (b) Individuals only (c) Individual or HUF (d) HUF only Q117. For claiming exemption u/s 54, assessee should transfer __. (a) A self occupied residential house property (b) A let out residential house property (c) A vacant house property (d) Any of the above Q118. For claiming exemption u/s 54, the assessee should purchase/construct __. (a) 1 Residential house property (b) A big mall (c) 2 residential house property (d) Factory Building Q119. For claiming exemption u/s 54, the assesses should purchase residential property within (a) 2 years after the date of transfer (b) 3 years after the date of transfer (c) within 1 year before or 2 years after the date of transfer (d) 1 year before & 3 years after the date of transfer Q120. For claiming exemption u/s 54, assessee should complete construction of residential property ____. (a) within 1 year before or 2 years after the date of transfer (b) within 1 year before or 3 years after the date of transfer (c) within three years after the date of transfer (d) within two years after the date of transfer Q121. The exemption u/s 54 shall be available __ (a) to the extent of capital gain invested in the residential house property (b) proportionate to the net sale consideration invested in the residential house property (c) to the extent of amount actually invested in the residential house property (d) to the extent of amount of net sale consideration invested in the residential house property Q122. The new house purchased/constructed for which exemption was claimed u/s 54 should not be transferred within 3 years ___ (a) From the date of transfer of original house (b) From the date of purchase.construction of new house (c) From the end of PY when such new house was acquired (d) From the end of PY in which old house was transferred Q123. If a new house property for which exemption was claimed u/s 54 is transferred within 3 years. (a) Capital gain exempt u/s 54 earlier shall be separately taxable as capital gains (b) The entire capital gain on new transfer shall be taxable (c) Capital gain exempt u/s 54 earlier shall be reduced from cost of acquisition of new house property (d) Capital gain exempt u/s 54 earlier shall be added to the cost of acquisition of new house property Q124. Residential house is sold for Rs. 90 lac & the LTCGs computed are Rs. 50 lac. The assesses bought two residential houses for Rs. 30 lac & Rs. 20 lac respectively. The amount eligible for exemption u/s 54 would be__lacs. (a) Rs. 50 (b) Rs. 20 (c) Rs. 30 (d) Nil 114: a 123: c

115: c 124: c

116: c

117: d

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Q125. The exemption u/s 54B is allowed to. (a) Any assessee (b) Individual only (c) Individual or HUF (d) HUF only Q126. For claiming exemption u/s 54B, the capital asset transferred should be __. (a) urban agricultural land (b) rural agricultural land (c) any of (a) or (b) (d) none of (a) or (b) Q127. For claiming exemption u/s 54B, the agricultural land must have been used for agriculture purpose by the HUF or the individual or his parents for at least __. (a) Any period of 2 years prior to the date of transfer (b) A period of 2 years immediately preceding the date of transfer (c) A period of 3 years immediately preceding the date of transfer (d) Any period of 3 years prior to the date of transfer Q128. For claiming exemption u/s 54B the assessee should acquire. (a) urban agricultural land (b) rural agricultural land (c) any of (a) or (b) (d) none of (a) or (b) Q129. For claiming exemption u/s 54D the assessee should purchase &.or construct another land & building within ___. (a) 3 years from the date of compulsory acquisition (b) 3 years from the date of receipt of compensation (c) within 3 years from the end of the previous year in which compulsory acquisition took place (d) within 2 years from the end of the previous year in which compulsory acquisition took place Q130. For claiming exemption u/s 54B the new agricultural land should be purchased. (a) within 3 years from the date of transfer (b) within 2 years from the date of transfer (c) within 2 years from the end of the relevant PY (d) within 3 years from the end of the relevant PY Q131. If new agricultural land purchased for which exemption was claimed u/s 54B is transferred within 3 years then. (a) Capital gain exempt u/s 54B earlier shall be separately taxable as capital gains (b) The entire capital gain on new transfer shall be taxable (c) Capital gain exempt u/s 54B earlier shall be reduced from cost of acquisition of new house property (d) Capital gain exempt u/s 54B earlier shall be added to the cost of acquisition of new house property Q132. Exemption u/s 54D is available to. (a) any assessee (b) any assessee owning an industrial undertaking (c) an individual or HUF owning an industrial undertaking (d) only Individual

125: c 134: a

126: a 135: c

127: b 136: d

128: c 137: a

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129: b 138: b

Q133. Exemption u/s 54D is available if there is a compulsory acquisition of ____. (a) L&B used by assessee for industrial undertaking for at least 1 yrs immediately preceding date of compulsory acquisition (b) L&B used by assessee for industrial undertaking for at least 2 yrs immediately preceding date of compulsory acquisition (c) L&B used by assessee for industrial undertaking for at least 3 yrs immediately preceding date of compulsory acquisition (d) L&B used by assessee for industrial undertaking for at least 4 yrs immediately preceding date of compulsory acquisition Q134. Exemption u/s 54EC shall be available to. (a) any assessee (b) individual only (c) company assessee only (d) HUF only Q135. Exemption u/s 54EC shall be available for t.f of __. (a) Any LTCA (b) Residential house property (c) Land or building or both (d) Any LTCA other than residential house property Q136. U/s 54EC, assessee shall be allowed exemption of __. (a) Capital gain invested maximum of Rs. 50 lacs per FY (b) proportionate to the net consideration price invested (c) to the extent of the capital gain invested (d) Capital gain invested subject to max. of Rs. 50 lacs in aggregate for the FY & next FY. Q137. U/s 54EC, capital gains on transfer of land or building or both are exempted if invested in the bonds issued by NHAI & RECL or other notified bond— (a) within 6 months from the date of transfer of the asset (b) within 6 months from the end of the relevant PY (c) within 6 months from the end of PY or due date for filing the return of income u/s 139(1), whichever is earlier (d) At any time before the end of the relevant PY Q138. For Section 54EC capital gain account scheme is. (a) Applicable (b) Not applicable (c) applicable with the approval of the government (d) applicable or not at the discretion of the assessee Q139. For claiming exemption u/s 54EC, an assessee has to invest the resultant capital gains within a specified period. Which of the following is not eligible for such investment? Bonds of ____. (a) NHAI Ltd (b) RECL Ltd (c) PFC Ltd (d) NABARD Q140. LTCGs on 15th Oct 2018 is Rs. 105 lac. Assessee invested Rs. 50 lac in RECI bonds on 31st March, 2018 & Rs. 55 lac in NHAI bonds on 18th May, 2018. Exemption eligible u/s 54EC is ___. (a) Nil (b) Rs. 50 lacs (c) Rs. 55 lacs (d) Rs. 105 lacs Q141. For claiming exemption u/s 54F, investment shall be done within. (a) two years from the date of transfer (b) three years from the date of transfer (c) one year before or two years after the date of transfer (d) one year before or three years after the date of transfer 130: b 139: d

131: c 140: b

132: b 141: c

133: b

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Q142. Mr. P sold a vacant land for Rs. 120 lacs on 10.10.2018. The indexed cost of acquisition amount to Rs. 18 lacs. He deposited Rs. 50 lacs in RECI bonds in January 2019 & another Rs. 50 lacs in March, 2019. The amount of capital gain liable to tax after exemption u/s 54EC is. (a) Rs. 2 lacs (b) Rs. 52 lacs (c) Rs. 102 lacs (d) Rs. 18 lacs Q143. Exemption u/s 54F is available to. (a) any assessee (b) an individual (c) an individual or HUF (d) none of the above Q144. Exemption u/s 54F is available if the asset transferred is _______. (a) LTCA other than residential house property (b) LTCA including residential house property (c) LTCA other than residential house property (d) STCA including residential house property Q145. Exemption u/s 54F is available _____. (a) to the extent of amount invested (b) proportionate to the net sale consideration so invested (c) to the extent of amount actually invested (d) none of the above Q146. Exemption u/s 54F is available if the new asset acquired is ___. (a) Any residential house property (b) Any house property (c) Residential house property for self-occupation (d) Residential house property for let out purposes Q147. For claiming exemption u/s 54F, the amount to the extent of net sale consideration is to be invested in the purchase of residential house property within ___. (a) two years from the date of transfer (b) three years from the date of transfer (c) one year before or two years after the date of transfer (d) one year before or three years after the date of transfer Q148. Where after depositing the amount under capital gain scheme, the individual assessee has died, the amount lying in the capital gain scheme. (a) shall be taxable in the hands of legal heir (b) should be utilized by the legal heir for the specified purpose (c) shall be exempt in the hands of legal heir (d) shall be taxable in the hands of the person who deposited the amount Q149. Exemption u/s 54F shall not be allowed if the assessee on the date of transfer owns. (a) any residential house (b) a residential house which is let out (c) a house which is self-occupied (d) more than one residential house

142: b 151: b

143: c 152: d

144: a 153: c

145: b 154: c

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146: a 155: b

Q150. U/s 54F, capital gains are exempted if ___. (a) LTCG arising on transfer of residential house is invested in acquisition of one residential house situated in or outide India (b) LTCG arising on transfer of a capital asset other than a residential house is invested in acquisition of one residential house situated in or outside India (c) net sale consideration on transfer of a capital asset other than a residential house is invested in acquisition of one residential house situated in India (d) short term or LTCG arising on transfer of a capital asset other than a residential house is invested in acquisition of one residential house situated in India Q151. Under which section the assesses has to reinvest the entire amount of net consideration to claim full exemption for the LTCGs earned during a previous year (a) Sec 54EC (b) Sec 54F (c) Sec 54B (d) Sec 54D Q152. In which section the benefit of the depositing in the capital gain account scheme is not available for claiming the exemption of capital gains. (a) Sec 54F (b) Sec 54 (c) Sec 54D (d) Sec 54EC Q153. Amount unutilized in capital gain scheme for which exemption u/s 54B was claimed shall be treated as ___. (a) LTCG (b) STCG (c) STCG or LTCG depending upon the original capital gains (d) any kind of capital gains as per wish of the assessee Q154. If the assessee wishes to deposit money under capital gain scheme for claiming exemption u/s 54, it should be deposited within_____ (a) six months from the date of transfer (b) six months from the end of the relevant PY (c) the due date of furnishing the ITR u/s 139(1) (d) six months or within due date of furnishing the ITR, whichever is earlier Q155. Mr. P has sold a residential house for Rs. 51 lacs on 27.2.2019 & selling expenses have been Rs. 1 lacs. The Indexed Cost of acquisition for this house is Rs. 27.8 lacs. Mr. P has deposited Rs. 15 lacs in the capital gain accounts scheme on 30.7.2019 & Rs. 7.5 lacs on 18.8.2019. The last date for filling of ITR is 31.7.2019. Calculate CG: (a) LTCG of Rs. 7,10,000 (b) LTCG of Rs. 7,20,000 (c) LTCG of Rs. 7,00,000 (d) LTCG of Rs. 7,30,000 Q156. Amount unutilized in the capital gain scheme which was deposited for construction of house property, for which exemption was claimed u/s 54 is treated a LTCG of PY in which period of ________ (a) 2 years has expired from date of deposit (b) 2 years has expired from the date of transfer (c) 3 years has expired from the date of deposit (d) 3 years has expired from the date of transfer Q157. In case of compulsory acquisition the period for investment in specified assets u/s 54,54B,54D & 54F shall be reckoned from ___ (a) The date of transfer (b) The date when the part or full compensation is received (c) The date as & when compulsory acquisition is done (d) From the date as when assessee desires 147: c 156: d

148: c 157: b

149: d

150: c

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Q158. Deduction u/s 80C to 80U are allowed from ___. (a) LTCG & STCG (b) STCG u/s 111A (c) LTCG (d) STCG *Q159. LTCG on sale of listed equity oriented mutual fund on which STT has been paid shall be taxable @ (a) 10% irrespective of amount of LTCG (b) 20% irrespective of amount of LTCG (c) 10% after allowing exemption of Rs. 1 Lac out of LTCG (d) 20% after allowing exemption of Rs. 1 lac out of LTCG Q160. Mr. P has transferred equity shares of ABC Ltd (a listed company) on 1.3.2019 & paid securities transaction tax (STT) on the same. He earned LTCG of Rs. 1,38,000. What will be the taxability in hands of Mr. P ? (a) Rs. 1,38,000 is taxable @ 10% (b) Rs. 1,38,000 is taxable @ 20% (c) Rs. 38,000 is taxable @ 20% (d) Rs. 38,000 is taxable @ 10% Q161. STCG arising from the transfer of equity share & units of equity oriented mutual fund shall be Taxable. (a) Taxable @ 15% irrespective of amount of STCG (b) Taxable @ 10% irrespective of amount of STCG (c) Taxable @ 10% after allowing exemption of Rs. 1,00,000 out of STCG (d) Taxable @ 20% after allowing exemption of Rs. 1,00,000 out of STCG

Q167. Total income for AY 2019-2020 of a NR Individual including LTCG u/s 112 of Rs. 60,000 is Rs. 2,60,000. The tax on total income shall be ____. (a) Rs. 12,480 (b) Rs. 12,360 (c) Rs. 520 (d) Rs. 515 Q168. Total income for AY 2019-2020 i.e. PY 2018-2019 of a resident individual aged 58 yrs including LTCG u/s 112 of Rs. 50,000 is Rs. 2,70,000. The tax on total income is: (a) Rs. 2,080 (b) Rs. 2,060 (c) Rs. 1,030 (d) Rs. 1,040 Q169. Mr. P purchased 100 listed equity shares of Reliance Industries Limited for Rs. 300 each on 15.4.2018. On 15.3.2019 he had sold all the shares for Rs. 410 each & brokerage paid has been 1%. CG for PY 2018-2019 shall be: (a) LTCG of Rs. 10,590 (b) STCG of Rs. 10,590 (c) LTCG of Rs. 41,000 (d) STCG of U 1,000 Q170. Compute taxable Capital Gains of P for PY 2018-19 Cost of Jewellery; Purchased in FY 2001-02 Sale price of Jewellary sold in January 2019 Expenses on transfer Residential house purchased in March 2019

(a) LTCG of Rs. 79,244 (c) LTCG of Rs. 79,424

Rs. 1,82,000 Rs. 11,50,000 Rs. 7,000 Rs. 10,00,000

(b) LTCG of Rs. 79,442 (d) LTCG of Rs. 79,200

Q162. Where the total income of an assesses includes income by way of LTCGs arising from transfer of listed securities (other than listed equity shares) applicable income tax rate on such income is (a) 20% of LTCG calculated after doing indexation (b) 10% of LTCG calculated without doing indexation (c) Higher of (a) or (b) (d) Lower of (a) or (b) Q163. LTCGs on zero coupon bonds are chargeable tot tax ___ (a) @ 20% computed after indexation of such bonds (b) @ 10% computed without indexation of such bonds (c) Higher of (a) or (b) (d) Lower of (a) or (b) Q164. Which of the following shall be considered to decide whether the asset is investment or SIT? (a) Holding period (b) Objective of investment (c) Method of valuation (d) Method of accounting *Q165. When shares of a listed company held for more than 36 months are transferred privately for Rs. 8 lac, with original cost of acquisition of Rs. 1 lac whose indexed cost of acquisition is Rs. 2 lac, the income tax payable would be. (a) Rs. 1,44,200 (b) Rs. 72,800 (c) Rs. 1,23,600 (d) Rs. 68,100 Q166. Mr. P purchased shares of GCC Pvt Ltd. for Rs. 5 lacs on 3rd April, 2017. The shares were sold on 5th June, 2018 for Rs. 7 lacs. She paid STT of Rs. 700 & brokerage of Rs. 500. The amount chargeable to tax is. (a) Rs. 2,00,000 (b) Nil (c) Rs. 1,99,500 (d) Rs. 1,98,700

158: d 167: a

159: c 168: a

160: d 169: b

161: a 170: a

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162: d

163: d

164: d

165: b

166: c

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4E. INCOME FROM OTHER SOURCES Q1. Income from other sources is also known as ____ head of income (a) Residuary head (b) Useless head (c) Complementary head (d) None of the these Q2. IFOS is chargeable to tax u/s (a) 15 (b) 56 (c) 22

(d) 28

Q3. Income u/h IFOS is taxable on (a) Due basis (b) Receipt basis (c) On the basis of method of accounting regularly employed by the assesses (d) None of the above Q4. Deemed Dividend u/s 2(22)(e) is taxable on (a) Due basis (b) Receipt basis (c) On the basis of method of accounting regularly employed by the assesses (d) None of the above Q5. Guest Lecturer’s remuneration is taxable under which head of income? (a) Other sources (b) Salary (c) House property (d) Not taxable at all Q6. Rent received by original tenant from subtenant is taxable u/ ______? (a) IFOS (b) Income from HP (c) Income from salary (d) None of the above Q7. Mr. A has taken a house on rent & sublets the same to Mr. B. Income from such house property is taxable u/h. (a) Income from house property (b) IFOS (c) Income from H.P or IFOS as decided by Mr. A. (d) None of the above *Q8. Which of the following incomes are taxable u/h IFOS? (a) Interest on Income Tax Refunds (b) Income from Undisclosed Sources (c) Rent from vacant piece of Land (Ground Rent) (d) All of the above *Q9. Which of the following incomes are not taxable u/h IFOS? (a) Income from Agricultural Land outside India (b) Remuneration received by MPs.MLAs (c) Director’s Sitting Fee (d) Remuneration received by government employees Q10. Employee’s Contribution to PF.SAF etc. received by Employer is taxable in the hands of employer (a) u/h Salary if remitted by the employer before due date (b) u/h IFOS if remitted by the employer before due date (c) u/h Salary if not remitted by employer before due date (d) u/h IFOS if not remitted by employer before due date Q11. Sum received under Keyman Insurance policy is taxable – (a) U/h Salary if received by employee (b) U/h PGBP if received by employer (c) U/h IFOS if received by any person other than employer & employee (d) All of the above 1: a 12: c

2: b 13: c

3: c 14: b

4: b 15: b

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5: a 16: b

6: a 17: c

Q12. Income from letting of machinery, plant furniture is (a) always chargeable to tax u/h “PGBP” (b) always chargeable to tax u/h “IFOS” (c)chargeable u/h “IFOS” only if not chargeable u/h “PGBP” (d) chargeable to tax u/h “Income from house property” Q13. Amount paid on account of any current repairs to the machinery, plant or furniture given on rent ____ as deduction u/h IFOS. (a) Shall not be (b) Is not allowed (c) Is allowed (d) None of the above *Q14. When Mr. P retired from GGC Ltd. on 1.1.2019, he was paid Rs. 5,00,000 for not doing a competing business for the next 5 years. The amount so received by Mr. P is taxable as. (a) Income from business & profession (b) IFOS (c) Income from salary (d) Not taxable as it is a capital receipt Q15. When Mr. P retired from GGC Ltd. on 1.1.2019, he was paid Rs. 5,00,000 for not doing a competing business for the next 5 years. The amount so received chargeable to tax in the hands of Mr. P is. (a) Nil (b) Rs. 5,00,000 (c) Rs. 1,00,000 (d) Rs. 2,50,000 Q16. Dividend from Domestic Company shall be exempt in the hands of shareholder u/s (a) 10(32) (b) 10(34) (c) 10(33) (d) None Q17. Dividend received on shares is taxable u/h IFOS if – (a) Shares are held as Investment (b) Shares are held as Stock-in-trade (c) Always irrespective of whether shares are held as Investment or SIT. (d) None of the above. Q18. Normal Dividend is taxable in the PY of __ (a) Declaration (b) Distribution/Payment (c) Accrual (d) Year in which dividend is unconditionally made available to shareholders Q19. Deemed Dividend is taxable in the PY of __ (a) Declaration (b) Distribution/Payment (c) Accrual (d) Year in which dividend is unconditionally made available to shareholders Q20. Interim Dividend is taxable in the PY of __ (a) Declaration (b) Distribution/Payment (c) Accrual (d) Year in which dividend is unconditionally made available to shareholders Q21. Dividend declared by Indian company o/s India is (a) Not Deemed to accrue.arise in India. (b) Deemed to accrue.arise in India. (c) Exempt u/s 10(34) (d) Both (b) & (c) 7: b 18: a

8: d 19: b

9: d 20: d

10: d 21: d

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Q22. Dividend declared by a domestic company is ___. (a) Fully exempt in the hands of shareholders (b) Fully exempt in the hands of shareholders subject to Section 115BBDA. (c) Fully taxable in the hands of shareholder (d) None of the above Q23. Dividends from foreign company is exempt from tax u/s 10(34). (a) True (b) False Q24. Dividends from foreign company is taxable to (a) Resident & ordinarily resident (b) Resident but not ordinarily resident if received in India (c) Non-Resident if received in India (d) All of the above Q25. Dividends declared by Unit Trust of India or Mutual fund is. (a) Fully exempt in the hands of unit holders (b) Fully taxable in the hands of unit holders (c) Taxable but deduction is allowed u/s 80C from GTI (d) Fully exempt in the hands of the unit holders except when it is taxable u/s 115BBDA. Q26. Deemed dividend referred u/s 2(22) is (a) Fully exempt in the hands of shareholders but taxable for the company as CDT (b) Fully exempt in the hands of shareholders (c) Fully taxable in the hands of shareholder (d) None of the above *Q27. Corporate dividend tax is not applicable on dividend distributed u/s (a) 2(22)(a) (b) 2(22)(e) (c) 2(22)(d) (d) None of the above Q28. Corporate dividend tax is applicable on (a) Final dividend (b) Interim dividend (c) Deemed dividend (d) all of the above Q29. Which of the following cases falls in the category of Deemed dividend u/s 2(22)? (a) Distribution of Accumulated profit by the company to its shareholders resulting into release of company’s asset (b) Distribution of Accumulated profit by company in form of debentures. debentures stock or bonus shares to preference shareholders (c) Distribution of accumulated profit at the time of liquidation or on reduction of share capital by the company (d) All of the above Q30. Release of Asset is necessary in case of which deemed dividend? (a) Distribution of Accumulated profit by the company to its shareholders u/s 2(22)(a). (b) Distribution of Accumulated profit by company in form of debenture/debentures stock or bonus shares to preference shareholders (c) Distribution of accumulated profit at the time of liquidation or on reduction of share capital by the company (d) All of the above 22: b 31: b

23: b 32: d

24: d 33: c

25: a 34: a

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26: a 35: d

Q31. If bonus shares are issued to equity shareholders, whether it will be deemed as dividend? (a) Yes (b) No Q32. Any payment by Closely held company by way of Advance.Loan to the following person shall be deemed as dividend u/s 2(22)(e) (a) Shareholder holding 10% shares/voting power in the company (b) Any person on behalf of Shareholder (c) Any Concern in which such shareholder has substantial interest or is a member or partner (d) All of the above *Q33. A private limited company engaged in manufacturing activity had general reserve of Rs. 20 lakh. It granted a loan of Rs. 5 lakh to a director who held 13% shareholding cum voting rights in the company. The said loan was re-paid by him before the end of the year. The amount of deemed dividend arising out of the above transaction is. (a) Rs. 2,60,000 (b) Rs. 2,40,000 (c) Rs. 5,00,000 (d) Nil Q34. GGC Private Limited gives a loan of 75,00,000 to Mr. P , who is not a shareholder. Mr. P uses the amount of loan for the benefit of Mr. A who is shareholder in GGC Private Limited holding 15% shares. Amount taxable as deemed dividends in the hands of Mr. P will be __ & that to Mr. A: (a) Nil, Nil (b) Nil, 75 lacs (c) 75,00,000, Nil (d) 75 lacs, 75 lacs Q35. Following shall not be treated as Deemed Dividend ? (a) Payment on Buy-back of shares. (b) Dividend does not include any distribution of shares in the scheme of Demerger. (c)Trade Advances in the nature of commercial transactions is not a Deemed Dividend. (d) All of the above Q36. Loan & advance paid by the closely held company to its shareholder having 10% voting power in the ordinary course of money leading business shall. (a) Be treated as deemed divided & taxable in the hands of the shareholder (b) Be treated as deemed divided & taxable in the hands of the company (c) Not be treated as deemed divided & thus not taxable for shareholder nor for the company (d) Be treated as deemed divided & taxable at the special rate of 10% *Q37. Where a closely held company gives a loan.advance to a shareholder who has 10% voting rights in the company, then amount of loan.advance so given shall be deemed divided to the maximum extent of (a) Accumulated profits whether capitalized or not (b) Accumulated profits excluding capitalized profits (c) The loan or advance so paid (d) None of the above

27: d 36: c

28: d 37: b

29: d

30: a

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Q38. Interest on securities is taxable u/h IFOS if – (a) Shares are held as Investment (b) Shares are held as Stock-in-trade (c) Always irrespective of whether shares are held as Investment or SIT. (d) None of the above. Q39. Mr. P aged, 61 years, received dividend of Rs. 12 lacs from a domestic company in AY 2019- 20. Tax is chargeable u/s 115BBDA @ 10% on (a) Rs. 12 lacs (b) Rs. 2 lacs (c) Nil (d) Rs. 9 lacs Q40. In respect of dividend received from domestic companies in excess of Rs. 10 lacs by Individual: (a) No deduction under Chapter VI-A is allowed but loss under other heads can be set-off against such income (b) No deduction under Chapter VI-A is allowed & no loss can be set-off against such income (c) Both deduction under Chapter VI-A & set off of losses against such income are allowed (d) Deduction under Chapter VI-A is allowed but set-off of losses under other heads against such income is not allowed Q41. Ms. J received dividend of Rs. 80,000 for her equity shareholding in GGC Ltd. (a listed domestic company). She paid interest of Rs. 12,500 for the amounts borrowed for investment in those shares. The taxable dividend income in hands of Ms. J would be – (a) Rs. 80,000 (b) Nil (c) Rs. 67,500 (d) Rs. 92,500 Q42. Ms. J received dividend of Rs. 80,000 for her equity shareholding in GGC Ltd. (a listed domestic company). She paid interest of Rs. 12,500 for the amounts borrowed for investment in those shares. The taxable dividend income in hands of GGC Ltd. would be (a) Rs. 80,000 (b) Nil (c) Rs. 67,500 (d) Rs. 92,500 *Q43. Deduction of expenses from the dividend which is exempt shall not be allowed to ___ (a) Company (b) Shareholder (c) Both of the above (d) None of the above *Q44. Corporate dividend tax shall be increased by (a) Surcharge (b) Health & education Ces (c) Both (a) & (b) (d) None of (a) & (b) Q45. Casual income is taxable u/s (a) 115BB (b) 115A (c) 115AB

(d) 115C

Q46. The lottery, crossword puzzle, races, card games incomes, etc. are taxable at. (a) Normal slab rate of income tax like any other income (b) Flat rate of 20% + HEC @ 4% (c) Flat rate of 30% + HEC @ 4%. (d) Flat rate of 30% + HEC @ 4% after the initial exemption of Rs. 2,50,000 *Q47. Bond washing transaction is given under. (a) sec 94 (b) sec 95 (c) sec 98 (d) sec 112 38: a 48: a

39: b 49: a

40: b 50: b

41: b 51: b

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42: a 52: a

Q48. Section 115BBDA is not applicable to (a) Domestic Company (b) Resident Individual (c) Resident HUF (d) Resident firm Q49. In respect of winnings from lottery, crossword puzzle or races or card game etc. (a) No deduction under Chapter VI-A is allowed and basic exemption limit cannot be exhausted (b) No deduction under Chapter VI-A is allowed but unexhausted basic exemption can be exhausted (c) Both deduction under Chapter VI-A and basic exemption are allowed (d) Deduction under Chapter VI-A is allowed but basic exemption limit cannot be exhausted Q50. For computing lottery, crossword puzzles races, card games income etc., the assesses shall. (a) Be entitled to deduction for any expenditure incurred for earning such income (b) Not entitled to any deduction for any expenditure (c) Be entitled to deduction up to certain limits (d) Be entitled to deduction to the extent of Rs. 10,000 Q51. Mr. P is non-resident of India and has age of 65 years. He won a prize on lottery ticket on 30.8.2018. The prize amount was Rs. 5,50,000. He had bought lottery tickets for Rs. 75,000 during the year. Determine his income tax liability for PY 2018-2019. (a) Rs. 1,69,950 (b) Rs. 1,71,600 (c) Rs. 1,65,000 (d) Rs. 23,400 Q52. Under a lucky draw competition, Mr. P won a car which has FMV of Rs. 7,00,000. What amount is taxable in his hands? (a) Rs. 7,00,000 (b) Rs. 4,90,000 (c) Rs. 2,10,000 (d) Nil Q53. Income by way of interest on securities is chargeable u/h (a) PGBP (b) HP (c) Salary (d) IFOS Q54. Interest on securities is taxable u/h PGBP if – (a) Shares are held as Investment (b) Shares are held as Stock-in-trade (c) Always irrespective of whether shares are held as Investment or SIT. (d) None of the above. Q55. If no regular system of accounting is followed by the assessee then interest on securities is taxable on. (a) Due basis (b) Receipts basis (c) Due or receipt basis at the option of the assesses (d) None Q56. Interest on Post Office Savings Bank A.a is exempt upto ____ for an individual A/c (a) Rs. 3,500 (b) Rs. 5,500 (c) Rs. 7,000 (d) Without limit Q57. Interest on Post Office Savings Bank A.c is exempt upto ____ for joint A/c (a) Rs. 3,500 (b) Rs. 5,500 (c) Rs. 7,000 (d) Without limit 43: b 53: d

44: c 54: b

45: a 55: a

46: c 56: a

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Q58. Section 56(2)(x) would apply only if Gift (Property) received is a ___ for recipient. (a) Personal Asset (b) Capital asset (c) Personal or Capital Asset (d) None of the above Q59. Provisions of section 56(2)(x) [Gift received] is applicable to___. (a) All Assessees. (b) Individual or HUF (c) All except Individual or HUF (d) Assessees whose GTI > Rs. 2,50,000. Q60. Which of the following movable property is not taxable u.s 56(2) when transferred without consideration? (a) Drawings (b) Paintings (c) Cars (d) Sculptures Q61. Any work of art or bullion is not a movable property for purpose of section 56(2). Discuss. (a) Correct (b) Incorrect (c) Partly correct (d) None of the above Q62. On 5th February 2019 , Mr. P gets a gift of motor car from his relative Mr. D. Fair market value of the car is Rs. 3,60,000. The amount taxable u.s 56(2) is (a) Rs. 3,60,000 (b) Rs. 3,10,000 (c) Rs. 50,000 (d) Nil Q63. A watch has been gifted to an individual which has FMV of Rs. 1 lac. Such FMV is (a) Exempt since received from a relative (b) Not taxable since watch is not movable property within the definition of section 56(2). (c) Taxable under head other sources (d) None of the above Q64. The limit of Rs. 50,000 for computing limit for amount of cash received without consideration has to be seen for (a) Separately for each transaction (b) Cumulatively for all transactions (c) Either of (a) and (b) (d) None of (a) and (b) Q65. In computation of limit of Rs. 50,000 for taxability of movable property received without consideration, ____ transaction shall be considered. (a) All transactions (b) Single Transaction (c) Either of (a) or (b) (d) None of (a) or (b) Q66. When any sum of money which exceeds Rs. 50,000 is received without consideration then the whole of such sum shall be taxable in the hands of: (a) all assesses (b) an individual (c) an individual or HUF (d) all assesses other than a company Q67. Mr. P received gift of Rs. 45,000 in cash from his friend. Amount shall be taxable in hands of (a) Mr. P (b) His friend (c) None of the above (d) Any of the above

58: b 67: c

59: b 68: b

60: c 69: c

61: b 70: b

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62: d 71: c

Q68. Mr. P received a gift of Rs. 35,000 each on 30.8.2018 from each of his three friends. The amount chargeable to tax in this case would be. (a) Rs. 50,000 (b) Rs. 1,05,000 (c) Nil (d) Rs. 55,000 Q69. Movable property shall be taxable in the hands of recipients if (a) It has been received without consideration & FMV exceeds Rs. 50,000. (b) It has been received for consideration & difference between FMV & consideration > Rs. 50,000. (c) Any of the above (d) None of the above Q70. In computation of limit of Rs. 50,000 for taxability of immovable property received without consideration ...................... transaction shall be considered. (a) All transactions (b) Single Transaction (c) Either of (a) or (b) (d) None of (a) or (b) Q71. Any immovable property received by any person without consideration shall be taxable to the extent of (a) Market value of the immovable property (b) SDV fixed by the stamp duty authority (c) Stamp duty value fixed by the stamp duty authority provided it exceeds Rs. 50,000 (d) Stamp duty value minus Rs. 50,000 Q72. Gift of immovable property received by an individual from unrelated person shall be. (a) Fully exempt whether the stamp duty value of such gift is less than or more than Rs. 50,000 (b) Fully taxable (c) Fully taxable if SDV of such gift > Rs. 50,000 (d) None *Q73. Any immovable property acquired by any person for a price less than SDV is taxable (a) If SDV > Purchase price by 15% of stamp duty value (b) If stamp duty value exceeds the purchase price by more than Rs. 50,000 (c) If stamp duty value exceeds the purchase price by 5% of stamp duty value (d) In all situations Q74. Which of the following income will be taxable as IFOS? (a) Purchase of house from husband for inadequate consideration (b) Purchase of painting from registered dealer at invoice value less than fair market value (c) Cash gift from a non-resident friend on marriage anniversary (d) All of the above *Q75. Mr. P has acquired a building from his friend on 10.10.2018 for Rs. 15 lacs. SDV of the building on the date of purchase is Rs. 15,70,000. Income chargeable to tax in the hands of Mr. P is (a) Rs. 70,000 (b) Rs. 50,000 (c) Nil (d) Rs. 20,000

63: b 72: c

64: b 73: d

65: a 74: d

66: c 75: c

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Q76. In which of the following case, gift received is not taxable? (a) Gift received from any relative (b) Gift received on occasion of marriage of individual (c) Gift Received in contemplation of death of payer or donor (d) All of the above

Q86. Mr. P has received a sum of Rs. 51,000 on 24.10.2018 from relatives on the occasion of his marriage. (a) Entire Rs. 51,000 is chargeable to tax. (b) Only Rs. 1,000 is chargeable to tax (c) Entire Rs. 51,000 is exempt from tax (d) Only 50% i.e. Rs. 25,500 is chargeable to tax

Q77. Which of the following are relative of an individual for the purpose of section 56(2)? (a) Spouse of the individual (b) Brother or sister of the Individual (c) Brother or sister of either of parents of the individual (d) All of the above

Q87. Mr. P has received a sum of Rs. 75,000 on 24.10.2018 from his friend on the occasion of his marriage anniversary. (a) Entire Rs. 75,000 is chargeable to tax. (b) Entire Rs. 75,000 is exempt from tax (c) Only Rs. 25,000 is chargeable to tax (d) Only 50% i.e. Rs. 37,500 is chargeable to tax

Q78. Gift exceeding Rs. 50,000 received by Mr. P from his spouse Mrs. S shall be. (a) Fully exempt (b) Fully taxable (c) Exempt upto Rs. 50,000 & the balance shall be taxable (d) None of the above.

Q88. A lady received gifts worth Rs. 1,00,000 from her relatives and Rs. 60,000 from her office colleagues on her marriage anniversary. Taxable amount of gifts would be (a) Rs. 1,60,000 (b) Rs. 10,000 (c) Rs. 60,000 (d) Rs. 1,10,000

Q79. Mr. P has received gift of Rs. 50,000 in cash from his mother’s sister. The amount shall be taxable in the hands of (a) Mr. P (b) His mother’s sister (c) Exempt for tax (d) Any of the above

Q89. Gift on the occasion of Marriage received from a nonrelative is ...................... to tax (a) Liable (b) Not Liable (c) Depends on gift (d) None of the above

*Q80. Mr. P has received gift of Rs. 1,50,000 in cash from his cousin brother. The amount (a) Shall be taxable (b) Exempt from tax (c) May be taxable (d) Not included in income

Q90. Mr. P received cash gift of Rs. 51,000 from Mr. P on the occasion of his 50th birthday. Mr. P is not his relative. The amount liable to tax in the hands of Mr. P would be. (a) Nil (b) Rs. 1,000 (c) Rs. 51,000 (d) Rs. 46,000

Q81. Gift exceeding Rs. 50,000 received by HUF from relative of the member of HUF shall be. (a) Fully taxable (b) Fully exempt (c) Taxable to the extent it exceeds Rs. 50,000 (d) None

Q91. Mr. P received cash gift of Rs. 51,000 from Mr. P on the occasion of his 50th birthday. Mr. P is his son. The amount liable to tax in the hands of Mr. P would be. (a) Nil (b) Rs. 1,000 (c) Rs. 51,000 (d) Rs. 46,000

Q82. Gift received by HUF from its members shall be. (a) Fully exempt (b) Fully taxable (c) Taxable if > Rs. 50,000 (d) None.

Q92. Which of the following statement is true? (a) Money received as gift shall be taxable in the hands of recipient if it exceeds Rs. 50,000 (b) SDV of immovable property if it is given without consideration and the stamp duty value exceeds Rs. 45,000 (c) Fair market value of the movable property if it is given without consideration and the fair market value exceeds Rs. 40,000 (d) None of the above

Q83. Mr. P has received gift of Rs. 1,50,000 in cash from his grandfather. The amount (a) Shall be taxable (b) Exempt from tax since amount is received from a relative (c) May be taxable (d) Not included in income 30th

Q84. On December 2018 Mr. P gets by gift a commercial flat (stamp duty value is Rs. 25,00,000) from elder brother of his father in law. The amount chargeable to tax in the hands of Mr. P is (a) Rs. 25,00,000 (b) Rs. 24,50,000 (c) Rs. 20,00,000 (d) Nil Q85. Gift, whether in cash or kind, received by an individual on the occasion of his/her marriage shall be. (a) Fully exempt even if it exceeds Rs. 50,000 (b) Fully taxable if it exceeds Rs. 50,000 (c) Exempt up to Rs. 50,000 and balance taxable (d) Fully exempt only if received from relatives 76: d 86: a

77: d 87: a

78: a 88: c

79: c 89: b

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80: a 90: c

Q93. Mr. P received Rs. 80,000 by way of gift from friends upon retirement from service. The amount of gift chargeable to income-tax would be (a) Nil (b) Rs. 30,000 (c) Rs. 70,000 (d) Rs. 80,000 Q94. Mr. P has received three gifts from his three friends (i) Rs. 55,000 in cash (ii) Land with market value Rs. 5,00,000, value for purpose of charging stamp duty Rs. 4,00,000 (iii) Jewellery with market value Rs. 3,00,000 What is the amount taxable as IFOS (a) Rs 7,55,000 (b) Rs. 7,00,000 (c) Rs. 4,55,000 (d) Rs. 3,55,000 81: a 91: a

82: b 92: a

83: b 93: d

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*Q95. Mr. P received following gifts on the occasion of his birthday. Determine the amount taxable as IFOS (i) cash gift from elder brother Rs. 30,000 (ii) Gold chain from younger sister which has market value of Rs. 38,000 (iii) cash gifts from friends Rs. 45,000 (iv) purchased shares from younger brother for Rs. 1,00,000 when FMV of the shares was Rs. 1,35,000. (a) Rs. 1,48,000 (b) Rs. 1,18,000 (c) Rs. 80,000 (d) Nil Q96. Mr. P received the following gifts during PY 20182019. Determine the amount of taxable gift u.h ‘IFOS’ (i) Rs. 50,000 from his employer (ii) Rs. 1,00,000 from mother’s sister (iii) Rs. 10,000 from his friend on the occasion of his marriage (iv) Rs. 60,000 in the form of scholarship from a registered charitable trust (a) Nil (b) Rs. 50,000 (c) Rs. 1,50,000 (d) Rs. 2,10,000 Q97. GGC Pvt. Ltd. issued equity shares of Rs. 10 each at Rs. 40 per share. The fair market value of the share on the date of issue was ascertained as Rs. 25 per share. The company issued 1,00,000 equity shares. The amount liable to tax in the hands of the company would be. (a) Rs. 15,00,000 (b) Rs. 30,00,000 (c) Nil (d) Rs. 40,00,000 Q98. GGC Pvt. Ltd. is a closely held company and has received from Mr. P shares of another closely held company but without any consideration (a) The whole of the FMV of the shares shall be taxable (b) The whole of the FMV is taxable if it exceeds Rs. 50,000. (c) The whole of FMV shall be exempt (d) The whole of the cost of such shares shall be exempt Q99. Interest received on compensation for compulsory acquisition of L&B is taxable on __ basis? (a) Due basis (b) Receipt Basis (d) Earlier of (a) or (b) (d) Later of (a) or (b) Q100. What is the amount of deduction available on interest received from enhanced compensation? (a) 60% of income by way of interest on enhanced compensation (b) 50% of income by way of interest on enhanced compensation (c) 70% of income by way of interest on enhanced compensation (d) Nil

Q102. When an advance received for transfer of capital asset is forfeited on or after 1.4.2014, such forfeited amount shall be (a) Deducted from the cost of asset (b) Exempt (c) Taxable as income u.h IFOS (d) None Q103. When an advance received for transfer of capital asset is forfeited before 1.4.2014, such forfeited amount shall be (a) Deducted from original cost of the asset (b) Exempt (c) Taxable u/h IFOS (d) None Q104. Which section states the deduction of expenses which is allowed from IFOS (a) Sec 58 (b) Sec 57 (c) Sec 56 (d) No expense incurred is allowed as deduction Q105. Which section states the deduction of expenses which is not allowed from IFOS? (a) Sec 58 (b) Sec 57 (c) Sec 56 (d) No expense incurred is allowed as deduction Q106. The deduction allowable in respect of family pension taxable under “IFOS” is (a) Rs. 15,000 or 1/3rd of family pension whichever is less (b) Rs. 15,000 or 1/2 of family pension whichever is less (c) Rs. 10,000 or 1/3rd of family pension whichever is less (d) No deduction is allowed Q107. Mr. P is in receipt of family pension of Rs. 15,000 p.m. in the PY 2018-19. Income chargeable to tax in the hands of Mr. P is (a) Rs. 1,80,000 (b) Rs. 1,20,000 (c) Rs. 1,65,000 (d) Nil Q108. Mr. P received the following income during AY 2019-2020. Determine his IFOS. (i) Director’s fees Rs. 5,000 (ii) Income from agricultural land in Pakistan Rs. 15,000 (iii) Rent from let-out land in Jaipur Rs. 20,000 (iv) Interest on deposit with HDFC Bank Rs. 1,000 (v) Divided from Indian company Rs. 5,000. (a) Rs. 21,000 (b) Rs. 46,000 (c) Rs. ,41000 (d) Rs. 26,000 Q109. Mr. P received cash gift of Rs. 2 lakh on occasion of his marriage. It includes gift from non-relative of Rs. 80,000. His lottery winnings is Rs. 3 lakh on which TDS has been done at 30%. He would be liable to pay tax of. (a) Rs. 87,500 (b) Rs. 90,000 (c) Rs. 1,000 (d) Rs. 92,700

Q101. An assessee received interest due to late payment of compensation for compulsory acquisition of capital asset amounting to Rs. 10,00,000. What amount is taxable under head Other Sources? (a) Rs. 7,00,000 (b) Rs. 5,00,000 (c) Rs. 3,50,000 (d) Nil

95: d 104: b

96: a 105: a

97: a 106: a

98: b 107: c

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99: b 108: c

100: b 109: b

101: b

102: c

103: a

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5. CLUBBING OF INCOME Q1. If there is a transfer of income by a person to another person without the transfer of the asset from which the income arises, such income shall be included in the income of _____. (a) Transferor (b) Transferee (c) Transferor irrespective of whether the transfer is revocable or irrevocable (d) Transferee if transfer is irrevocable Q2. Mr. P transfers income of Rs. 51,000 from rent to his major son without transfer of house property. Rent of Rs. 51,000 is (a) Taxable in the hands of the transferor-father (b) Taxable in the hands of his son (c) Taxable in the hands of the that parent whose total income is higher (d) Exempt from tax Q3. If there is revocable transfer of an asset by any person to another person, any income arising from such asset shall included in the income of. (a) Transferor (b) Transferee (c) Both transferor & transferee (d) None Q4. A transfer shall be deemed to be Revocable if (a) Transfer contains any provision for re-transfer of the Asset or Income to the transferor, during the life-time of beneficiary or transferee (b) Gives right to the transferor to re-assume power over the asset or income during the life-time of beneficiary or transferee. (c) Both (a) or (b) (d) None of the above

Q8. If both Husband & Wife have Substantial Interest & both are in Receipt of Remuneration without qualification from the Same Concern → Remuneration of other spouse will be clubbed in total income of Husband/Wife whose: (a) Total income excluding such remuneration is greater (b) Total income excluding such remuneration is lower (c) Not to be clubbed (d) None of these Q9. Mrs. S received salary of Rs. 74,00,000 from a firm where her husband has 16% profit share. Mrs. S does not have any qualification or experience or skill to match this remuneration. Apart from above amount, the income of Mrs. S is Rs. 3,50,000. Income taxable for Mr. P & Mrs. S is (a) Mr. P . 77,50,000, Mrs. S . Nil (b) Mr. P . Nil, Mrs. S . 77,50,000 (c) Mr. P . 74,00,000, Mrs. S . 3,50,000 (d) None of the above Q10. Mr. P & Mrs. S hold 15% & 10% shares in a concern & both are employed by that firm getting the monthly salary of Rs. 20,000 respectively. Their remuneration does not match their technical or professional skills or experience. Apart from the salary Income Mr. P has earned Rs. 2,00,000 from cloth business whereas Mrs. S has earned Rs. 2,00,000 as rent of the house property. Mr. P has invested Rs. 50,000 in PPF account & another Rs. 50,000 in NSC. While Mrs. S has invested Rs. 1,00,000 in NSC & has donated Rs. 10,000 to PMNRF. Whose total income will be higher for clubbing of remuneration of both of them? (a) Mr. P (b) Mrs. S (c) Both have equal income (d) NA

Q5. X transfers a house property to a trust for the benefit of A & B. However, X has a right to revoke the trust during the lifetime of A or B. It is a revocable transfer & income arising from house property shall be included in the hands of: (a) X (b) A (c) B (d) None

Q11. Mr. P is a Chartered Accountant & is working as Accounts Office in GGC Pvt. Ltd. on a salary of Rs. 20,000 p.m. He got married to Ms. J who holds 25% shares of this company. What will be the impact of salary paid to Mr. P by the company in the hands of Ms. J (a) 100% salary to be clubbed (b) 50% salary to be clubbed (c) No amount be clubbed (d) 25% salary to be clubbed

Q6. If there is a transfer of asset which is not revocable during the life time of the transferee, income arising from such asset shall be included in the income of. (a) Transferor (b) Transferee (c) Transferee till his death & thereafter in the hands of the transferor (d) Transferor or transferee at their mutual consent

Q12. As per section 64(1)(iv), there shall be included in the income of an individual, any income arising from the gift to the spouse of (a) Any capital asset (b) Any asset (c) Any asset other than house property (d) Any asset other than residential property

Q7. Where spouse of an individual gets any remuneration from a concern in which such individual has substantial interest, then such remuneration shall be included in the income of individual. (a) In all cases (b) Only when such remuneration is received by the spouse due to his/her technical or professional qualification (c) In all cases except when remuneration is received by the spouse due to his/her technical or professional qualifications (d) Clubbing shall not be done in any case 1: c 10: a

2: a 11: c

3: a 12: c

4: c 13: a

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5: a 14: d

Q13. Mr. P transferred shares of Indian companies to his wife, Mrs. S . The shares were sold by Mrs. S & Capital Gain was earned. The capital gains so computed shall be clubbed in the hands of Mr. P . (a) Correct (b) Incorrect (c) Clubbing not applicable (d) None of the above. Q14. Income from asset transferred to spouse will be taxable in the hands of transferor if. (a) Asset has been transferred in pursuance of an agreement to live apart (b) Asset was transferred for an adequate consideration (c) Asset was transferred before marriage (d) Asset was transferred for inadequate consideration 6: b

7: c

8: a

9: c

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Q15. To apply clubbing provisions u/s 64(1)(iv), the relation of husband & wife must exist at the time of. (a) Only at the time of transfer of asset (b) only at the time of accrual of income (c) Both at the time of transfer of asset & accrual of income (d) Shall be at any time of accrual or any time of transfer Q16. Which of the following statement is correct? (a) Transfer of asset in connection with agreement to live apart is deemed to be transfer with adequate consideration & thus, no clubbing. (b) If consideration is payable in parts then only proportionate income shall be clubbed (c) Both (a) & (b) (d) None of the above Q17. Income derived on the accretion of transferred property: (a) Shall be clubbed in the hands of transferor (b) Shall be clubbed in the hands of transferee (c) Cannot be clubbed (d) Not taxable Q18. Mr. P as on 1/10/2017 transferred shares without consideration to his fiancee, Ms J. They got married on 1/4/2018. For AY 2019-20 Income from share shall be assessed in hands of ___. (a) Mr. P (b) Ms. J (c) Any of the above, with their mutual consent (d) Neither of the above Q19. Shares of ABC Ltd were transferred by Mr. P to Mrs. S for 71,00,000, which is the FMV of such shares. Income from shares so transferred shall be taxable in the hands of (a) Mr. P (b) Mrs. S (c) Both (d) None Q20. Mr. P gifts Rs. 1,00,000 to Mrs. S on 10/4/2018, who invested the same in the business of cloth which is being run by her for last 3 years. Mrs. S earns Rs. 20,000 as profits from such business for the AY 2019-20. What amount will be in the income of Mr. P . (a) Rs. 20,000 (b) Rs. 10,000 (c) Rs. 1,20,000 (d) NIL Q21. Gold funds were transferred by Mr. P to Mrs. S under an agreement to live apart. Income from gold funds shall be assessed in the hands of (a) Mr. P (b) Mrs. S (c) Any of the above, with their mutual consent (d) Neither of the above Q22. Clubbing provisions u/s 64(1)(vi) are applicable where the asset is transferred by an individual without an adequate consideration to. (a) Daughter’s husband (b) Daughter in law (c) Minor child (d) Spouse Q23. Mr. Michael transferred his immovable property for an inadequate consideration to Jackson. Ltd. subject to a condition that, a sum of Rs. 50,000 per annum out of the rental income shall be utilized for the benefit of his son’s wife. Such income shall be taxable in the hands of: (a) Mr. Michael (b) Mr. Michael’s son (c) Mr. Michael’s daughter-in-law (d) None 15: c 24: c

16: c 25: d

17: c 26: a

18: b 27: b

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19: a 28: a

Q24. Mr. P transfers the house property to Mrs. S without adequate consideration, then income from such house property shall be subject to the provisions of. (a) Section 64(1)(iv) (b) Section 26 (c) Section 27 (d) Section 64(1 A) Q25. Mr. P transferred 2,000 shares of GGC Ltd. to Ms. J without any consideration. Later, Mr. P & Ms. J got married to each other. The dividend income from the shares transferred would be (a) Taxable in hands of Mr. P both before & after marriage (b) Taxable in hands of Mr. P before marriage but not after marriage (c) Taxable in hands of Mr. P after marriage but not before marriage (d) Never taxable in the hands of Mr. P Q26. Income of a minor child who is suffering from disability of the nature as specified in Section 80U is (a) to be assessed in the hands of the minor child (b) to be clubbed with the income of that parent whose total income, before including minor’s income, is higher (c) completely exempt from tax (d) to be clubbed with the income of father Q27. Income arising to a minor married daughter is (a) to be assessed in hands of the minor married daughter (b) to be clubbed with the income of that parent whose total income, before including minor’s income, is higher (c) completely exempt from tax (d) to be clubbed with the income of her husband Q28. Exemption is available u/s 10(32) when a minor’s income is clubbed with the income of the parent. The maximum exemption available is (a) upto Rs. 1,500 in respect of each minor child (b) upto Rs. 1,500 in respect of each minor child subject to maximum of two children (c) upto Rs. 2,000 in respect of each minor child (d) upto Rs. 2000 in respect of each minor child maximum of two children Q29. Scholarship received by a minor child is— (a) to be assessed in the hands of the minor child (b) to be clubbed with the income of that parent whose total income, before including minor’s income, is higher (c) completely exempt from tax (d) to be clubbed with the income of father Q30. Income of a minor child from a fixed deposit with a bank, made out of income earned from scholarship is (a) to be assessed in the hands of the minor child (b) to be clubbed with the income of that parent whose total income, before including minor’s income, is higher (c) completely exempt from tax (d) to be clubbed with the income of father

20: d 29: c

21: b 30: b

22: b

23: a

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Q31. Interest from a fixed deposit received by a minor married daughter is (a) to be assessed in the hands of the minor child (b) to be clubbed with the income of that parent whose total income, before including minor’s income, is higher (c) completely exempt from tax (d) to be clubbed with the income of her husband Q32. When income of minor child is clubbed in the income of the parent such parent will be allowed exemption of Rs. 1,500 pa per child u/s of. (a) 10(1) (b) 10(2) (c) 10(2A) (d) 10(32) Q33. Mr. P transfers the house property to his minor child without adequate consideration, then income such house property shall be. (a) clubbed in the income of Mr. P as per section 27 & exemption of Rs. 1,500 shall be allowed (b) clubbed in the income of Mr. P as per section 27 but exemption of Rs. 1,500 shall not be allowed (c) clubbed in the income of Mr. P as per section 64(1 A) but exemption of Rs. 1,500 shall not be allowed (d) clubbed in the income of Mr. P as per section 64(1 A) & exemption of Rs. 1,500 shall be allowed Q34. If both of the parents of child have died then his income shall be. (a) Exempt from tax. (b) Taxable for the guardian who maintains the child (c) Shall be taxable for child who has earned it (d) Taxable for dead parents. Q35. If marriage of the parents does not subsist, income of the minor child shall be clubbed in the income of. (a) Father or mother who is loved more (b) Parent who maintains the child (c) Father or mother whose income is higher (d) Neither with mother nor with father, but shall be taxable for child itself Q36. Mr. P has 4 minor children. 2 daughters & 2 sons. Annual income of 2 daughters was 77,500 & 75,000 & of sons was 75,500 & Rs. 1,250 respectively. The daughter having income of 75,000 is suffering from a disability specified u/s 80U. Work out the amount of income earned by minor children to be clubbed in the hands of Mr. P (a) Rs. 163,250 (b) 161,000 (c) 161,250 (d) 161,750 Q37. Income of a minor will not be clubbed with his/her parent’s income if (a) Such income is earned by that child by applying his/her physical labour, talent or any specialized knowledge (b) Child is illiterate (c) Parents are handicapped (d) The child does not give her consent Q38. If both parents are earning then income of a minor child will be clubbed with (a) Income of parent having higher income (b) Proportionately with both parent’s income (c) Income of parent having lower income (d) Will not be clubbed & will be taxable for child 31: b 40: b

32: d 41: c

33: b 42: c

34: c 43: a

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35: b 44: d

Q39. When the income of the individual includes Rs. 20,000 as the income of the minor child in terms of section 64(1 A), taxable income in this respect will be? (a) Nil (b) Rs. 20,000 (c) Rs. 18,500 (d) None of the above Q40. 710,00,000 earned by minor child from manual activity is invested in FDR. He earns 7 10,000 as interest from FDR during the AY 2019- 2020 i.e. PY 2018-2019. 710,00,000 & 710,000 shall be assessed in the hands of (a) Minor child, Minor child (b) Minor child, Parent (c) Parent, Parent (d) Parent, Minor child Q41. An individual has 3 minor children each having income of 72,000. What amount shall be taxable in the hands of individual? (a) 76,000 (b) 74,000 (c) 71,500 (d) Nil Q42. In which following situation, income of minor child shall be clubbed in the income of parents (a) Income of child suffering from disease u/s 80U (b) Income earned by child from manual work (c) Income of child from interest on FDR (d) Income earned from an activity involving skill Q43. Where a member of a HUF has transferred his selfacquired property for inadequate consideration into joint family property, income arising therefrom is (a) Taxable as the income of the transferor member. (b) Taxable in the hands of the HUF. (c) Taxable in the hands of the karta of the HUF. (d) Exempt from tax. Q44. If the converted property is subsequently partitioned among the members of the family, the income derived from such converted property as is received by the spouse of the transferor will be taxable (a) as the income of the karta of the HUF (b) as the income of the spouse of the transferor (c) as the income of the HUF. (d) as the income of the transferor-member Q45. Mr. P gifts a sum of Rs. 1,00,000 to his brother’s wife Mrs. B. Mr. B gifts a sum of Rs. 1,00,000 to Mrs. S . From the sum gifted to her, Mrs. B invests in a fixed deposit, income therefrom is Rs. 10,000. Aforesaid Rs. 10,000 will be included in the total income of (a) Mr. A (b) Mrs. A (c) Mrs. B (d) Mr. B Q46. Mr. P receives salary of Rs. 1,00,000 from GGC Ltd., Mrs. S receives salary of Rs. 1,50,000 from GGC Ltd. Both of them have substantial interest in company. Other Income of Mr. P & Mrs. S excluding such remuneration is Rs. 10,00,000 & Rs. 12,00,000 respectively. Taxable income of Mr. P & Mrs. S shall be (a) Rs. 11,50,000, Rs. 13,50,000 (b) Rs. 11,00,000, Rs. 13,50,000 (c) Rs. 12,50,000, Rs. 12,00,000 (d) Rs. 10,00,000, Rs. 13,70,000

36: b 45: d

37: a 46: d

38: a

39: c

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Q47. Mr. Phiva gifted a let-out building which fetches rental income on Rs. 10,500 per month to his son’s wife on 1/11/2018. The municipal Tax of Rs. 6,000 on the property was paid on 10/1/2019. The total income from all other sources (computed) amounts to Rs. 2,60,000 except income from above said property. His total income taxable is. (a) Rs. 3,11,450 (b) Rs. 2,92,550 (c) Rs. 3,80,000 (d) Rs. 3,33,500 Q48. Mr. P transferred his let out residential property to his wife by way of gift on 1/4/2018. During the AY 201920, she earned rental income of Rs. 30,000 per month. She made fixed deposit in a bank out of such rental income & earned interest income during the year of X21,000. The total amount of income liable for clubbing in the hands of Mr. P for the AY 2019-20 is. (a) Nil (b) Rs. 21,000 (c) Rs. 2,52,000 (d) Rs. 2,73,000 Q49. Mrs. S has invested Rs. 5,00,000 in firm. As on 1/4/2018, out of total investment of Rs. 5,00,000, Rs. 3,00,000 is on account of money given by her husband. During the AY 2019-20, she earned interest of Rs. 50,000 & profit of NIL from the firm. Out of this amount taxable for Mr. P should be (a) Nil, Rs. 30,000 (b) Rs. 30,000, Nil (c) Nil, Nil (d) Rs. 30,000, Rs. 30,000 Q50. Mr. P gifts Rs. 15,00,000 to his wife who invested the same in the partnership business. Mrs. S receives Rs. 3,35,000 as her share of profits from such firm. In this case amount to be clubbed in the income of Mr. P shall be. (a) Rs. 3,35,000 (b) Rs. 85,000 after giving maximum exemption of Rs. 2,50,000 to Mrs. S (c) No amount is to be clubbed (d) Rs. 15,00,000 Q51. For the provisions of clubbing of incomes to calculate substantial interest we consider the holding of. (a) the individual only (b) the individual & his spouse taken together (c) the individual along with his relatives (d) the individual & his spouse taken separately

47: b 55: c

48: c 56: b

49: b 57: b

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50: c 58: a

Q52. If any income has to be clubbed u/s 64, it will be clubbed under the. (a) head of income from other sources (b) relevant head to which it belongs (c) none of these two Q53. In certain cases, income of other person is included in the income of assesses. It is called (a) Clubbing of income (b) Increase in income (c) Addition to income (d) Set-off of income Q54. For the purpose of clubbing of income of the specified person in the income of the individual u/s 64, the word ‘income’ includes? (a) Loss (b) Expenses (c) Interest (d) All of the above Q55. Master J has earned an interest of Rs. 5,000 on bank fixed deposits. Mr. P has let out the house from which he has earned Rs. 2,00,000 as rent & has paid municipal taxes of Rs. 5,000 & Mrs. S is a government employee getting basic salary of Rs. 2,40,000 & the entertainment allowance of Rs. 60,000. Income of Master J will be clubbed in income of (a) Mr. P (b) Mrs. S (c) Any one of them at the choice of Master J (d) Any one of them at the choice of Assessing Officer Q56. Mr. P formed a trust for the benefit of his wife. The income of trust meant for the benefit of Mrs. shall be assessed in the hands of (a) Mrs. S (b) Mr. P (c) Both for Mr. P & Mrs. S (d) None of Mr. P & Mrs. S Q57. At the time of fixation of marriage of his son, Mr. P gifted land to his would-be daughter in law. The marriage was held in the month subsequent to the date of transfer. The income accruing on land after marriage shall be taxable in the hands of (a) Mr. P (b) Daughter in law (c) Equally in hands of (a) & (b) (d) None of the above Q58. Accretion of income will not be clubbed with the income of the assesses who transfers such income to some other person (a) True (b) False

51: c

52: b

53: a

54: d

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6. SET OFF & CARRY FORWARD OF LOSSES Q1. Intra head set off is done u/s. (a) Sec 70 (b) Sec 71 (c) Sec 72

(d) Sec 73

Q2. Section 70 enables set off of losses under one source of income against income from any other source under the same head. The exceptions to this section are(a) Loss under head Capital gains, loss from speculative business & loss from activity of owning & maintaining race horses (b) Loss under head Capital gains, loss from speculative business, loss from business specified u/s 3 5AD & loss from the activity of owning & maintaining race horses (c) Short-term capital loss, loss from business specified u/s 35AD & loss from speculative business. (d) None of the above Q3. Loss from a speculation business can be set off from. (a) Any head of income. (b) Profits & gains from any business. (c) Profits & gains from any business other than speculation business. (d) Income of speculation business. Q4. Loss on account of owing & maintaining the race horses can be set off from. (a) Any business income (b) Any income under the head other sources (c) Income from horse races (d) Income of owing & maintaining of race horses Q5. Short-term capital loss can be set off from. (a) STCG (b) LTCG (c) STCG or LTCG (d) IFOS Q6. Mr. P incurred long-term capital loss from sale of listed shares in recognized stock exchange & STT is paid at the time of acquisition & sale of such shares. Such loss can be set-off against: (a) LTCG (b) Both STCG & LTCG (c) any head of income (d) is not allowed to be set-off Q7. Choose the most appropriate answer from the given options. Short-term capital loss can be set-off from (a) STCG (b) LTCG (c) STCG or LTCG (d) IFOS Q8. Which of the following is correct? (a) LTCG can be set off from LTCG only. (b) LTCG can be set off from STCG only. (c) Loss of business can be set off from salary income (d) Loss of speculation business can be set off from income from normal business Q9. Loss under the head capital gains can. (a) be set off from any other head of income in same year (b) be carried forward only (c) neither be set off nor carried forward 1: a 11: d

2: b 12: b

3: d 13: c

4: d 14: c

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5: c 15:d

Q10. During the AY 2019-20, Mr. P has following incomes & brought forward losses. Short term capital gains on sale of shares (STT not paid) Rs. 1,50,000, Long term capital loss of AY 2017-2018 (Rs. 96,000), Short term capital loss of AY 2017-2018 (Rs. 37,000). What is the capital gain taxable in the hands of Mr. P & how much loss can be carried forward to AY 2020-21? (a) Rs. 1,13,000, Nil (b) Rs. 17,000, Nil (c) Rs. 1,13,000, Rs. 96,000 (d) Rs. 54,000, Rs. 37,000 Q11. During the AY 2019-20, Mr. P has following income & brought forward losses. Long term capital gain Rs. 1,75,000, Long term capital loss of AY 2017-2018 (Rs. 96,000), Short term capital loss of AY 2017-18 (Rs. 37,000). What is the capital gain taxable in the hands of Mr. P & how much loss can be carried forward to the AY 2020-2021? (a) Rs. 79,000, Nil (b) Rs. 1,38,000, Rs. 96,000 (c) Nil, Nil (d) Rs. 42,000, Nil Q12. Calculate capital gains income. LTCG - (Rs. 1,00,000); STCG - Rs. 2,00,000 (a) (Rs. 1,00,000) (b) Rs. 2,00,000 (c) Rs. 1,00,000 (d) None of the above Q13. Calculate capital gains income. LTCG - (Rs. 1,00,000); LTCG - Rs. 2,00,000 (a) (Rs. 1,00,000) (b) Rs. 2,00,000 (c) Rs. 1,00,000 (d) None of the above Q14. Calculate capital gain. LTCG on Sale of House Rs. 2.00. 000; LTCG on Sale of Gold (Rs. 1,00,000) (a) Rs. 3,00,000 (b) Rs. 2,00,000 (c) Rs. 1,00,000 (d) None of the above Q15. Calculate total income. CG (Rs. 2,00,000); Speculation business Rs. 3,00,000 (a) Rs. 1,00,000 (b) Rs. 2,00,000 (c) Rs. 5,00,000 (d) Rs. 3,00,000 Q16. Calculate total income. CG Rs. 3,00,000; Speculation business (Rs. 2,00,000) (a) Rs. 3,00,000 (b) Rs. 2,00,000 (c) Rs. 1,00,000 (d) Rs. 5,00,000 Q17. Inter head set off can be availed u/s 71 before availing the intra head set off u/s 70. (a) True (b) False Q18. Business loss of the current year cannot be set off against (a) Any income other than business income (b) LTCG (c) Either LTCG/STCG (d) Salary income Q19. Loss under the head business & profession can be set off from income under (a) any other head (b) income from lottery (c) any other head except salary & lottery income (d) any other head except H/P 6: a 16: a

7: c 17: b

8: a 18: d

9: b 19: c

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Q20. Brought forward loss of business & profession. (a) can be set off in any of the 8 succeeding years (b) must be set off in the immediate succeeding year if income is available & balance in the immediately next succeeding year & so on for 8 years (c) cannot be set off in the current year Q21. A business loss can be carried forward & set off in the subsequent assessment year when the business on account of which this loss has arisen. (a) Is continued in the AY in which the such loss is set off (b) Is continued or not (c) Is continued for any part of the previous year (d) None of the above Q22. Calculate PGBP income. Speculation business Rs. 2,00,000; Trading business - (Rs. 1,00,000) (a) Rs. 1,00,000 (b) Rs. 1,00,000) (c) Rs. 2,00,000 (d) None of the above Q23. Calculate PGBP income. Speculation business (Rs. 1,00,000); Trading business Rs. 2,00,000 (a) (1,00,000) (b) 1,00,000 (c) 2,00,000 (d) None of the above Q24. Calculate PGBP income. Cloth business - (Rs. 50.000); Steel business Rs. 75,000 (a) Rs. 1,25,000 (b) Rs. 1,50,000 (c) Rs. 25,000 (d) Rs. 75,000 Q25. Calculate PGBP income. Speculation business - Rs. 2,00,000 Normal business - (Rs. 1.25.000) (a) Rs. 3,25,000 (b) Rs. 1,25,000 (c) Rs. 2,00,000 (d) 75,000 Q26. Calculate total income. PGBP - (Rs. 2,00,000); CG - Rs. 3.00. 000 (a) Rs. 3,00,000 (b) Rs. 2,00,000 (c) Rs. 1,00,000 (d) Rs. 5,00,000 Q27. Calculate total income. PGBP Rs. 3,00,000; CG - (Rs. 2,00,000) (a) Rs. 3,00,000 (b) Rs. 2,00,000 (c) Rs. 1,00,000 (d) Rs. 5,00,000 Q28. Biren discontinued wholesale trade in medicines from 1st July, 2016. He recovered Rs. 1,50,000 in October, 2018 being a bad debt which was written-off & allowed in assessment year 2017-2018. He has eligible brought forward business loss of wholesale trade in medicines of Rs. 1,70,000. The consequence of bad debt recovery is that (a) It is taxable (b) It is eligible for set-off against brought forward business loss (c) The brought forward business loss is taxable now (d) 50% of the amount recovered now is taxable Q29. Brought forward loss from HP can be set-off (a) Against any head of income to the extent of Rs. 2,00,000 (b) Against income from HP to the extent of Rs. 2,00,000 (c) Against income from house property without any limit (d) Against any head of income without any limit 20: b 30: b

21: b 31: b

22: a 32: d

23: c 33: c

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24: c 34: c

Q30. Loss from one source/head cannot be adjusted against Income form other source/head subject to certain conditions. (a) True (b) False Q31. Loss from Exempt Source can be set-off against Profits from Taxable Source of Income. (a) True (b) False Q32. No loss can be set-off against income from: (a) Salaries (b) House property (c) Capital gains (d) Winnings from lotteries, etc. Q33. The first item in order of priority of set off between unabsorbed depreciation, capital expenditure on scientific research, current year depreciation, & brought forwarded business loss is? (a) Unabsorbed depreciation (b) capital expenditure on scientific research (c) Current year depreciation (d) Brought forwarded business loss Q34. If a person is eligible to claim. (1) Unabsorbed depreciation (2) Current scientific research expenditure (3) Current depreciation (4) Brought forward business loss The order of priority to set-off would be (a) (4), (3), (2) & (1) (b) (2), (3), (4) & (1) (c) (3), (4), (1) & (2) (d) (1), (2), (3) & (4) Q35. Loss under the head of house property ____. (a) can be carry forwarded for 8 years (b) can’t be carried forward (c) can be carry forwarded for 4 years (d) may be carry forwarded. Q36. Loss from house property can be carried forward & set off in the subsequent 8 Assessment years. (a) Only if return of loss is filed within due date (b) Even if return of loss is filed after due date (c) It does not matter whether or not return is filed (d) Carry forward of loss from house property is not allowed at all. Q37. During the previous year if assessee has incurred loss from his business amounting to Rs. 1,10,000 whereas his income from HP in Rs. 1,10,000. The assessee can. (a) carry forward business loss (b) set off business loss of Rs. 1,10,000 from house property income & pay no tax (c) at his option do any of (a) or (b) (d) have to pay tax on Rs. 1,10,000 ignoring set off of loss Q38. Compute the taxable income of Mr. P If his Income from salary is Rs. 4,00,000 & Loss from self- occupied property Rs. 2,70,000 (a) Rs. 4,00,000 (b) Rs. 1,30,000 (c) Rs. 3,65,000 (d) Rs. 2,00,000 25: d 35: a

26: c 36: b

27: a 37: b

28: b 38: d

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Q39. Calculate total income of the Assessee having Income from HP income (Rs. 1,50,000) & LTCG - Rs. 2,00,000. (a) Rs. 50,000 (b) Rs. 1,50,000 (c) Rs. 3,50,000 (d) None of the above

(c) 6 years but it should be set off in the subsequent assessment year(s) if there is any business income (d) Indefinitely but it should be set off in the subsequent assessment year(s) if there is any business income

Q40. Loss from house property of Rs. 3,10,000 of AY 20172018 is allowed to be set-off against income from house property of AY 2019-20. of Rs. 5,00,000 to the extent of (a) Rs. 2,00,000 (b) Rs. 3,10,000 (c) Rs. 2,50,000 (d) Rs. 1,00,000

Q50. Loss from specified business referred in section 3 5AD can be carried forward & set off from (a) Income of any business & profession (b) Income of a specified business only (c) Any head of income (d) Any heads of income other than salary

Q41. Speculation loss can be carried forward for the maximum of. (a) 8 AY (b) 4 AY (c) 10 AY (d) Infinite Q42. Calculate speculative income. Speculative in FOREX (Rs. 2,00,000) Speculative in Shares Rs. 5,00,000 (a) Rs. 3,00,000 (b) Rs. 2,00,000 (c) Rs. 2,50,000 (d) Rs. 5,00,000 Q43. Loss from lottery, gambling & card games can be carried forward for (a) next 8 assessment year (b) next 4 assessment year (c) indefinite period (d) Cannot be carried forward Q44. Loss on account of owing & maintaining the race horse can be carried forward. (a) for 8 assessment years (b) for 4 assessment years (c) indefinitely (d) nothing is mentioned in law Q45. Loss of specified business u/s 3 5 AD can be carried forward. (a) for 8 AY (b) indefinite period of time (c) for 4 AY (d) nothing is mentioned in law Q46. Losses from business other than speculative, owning & maintaining race horses & specified business u/s 35 AD can be carried forward for (a) next 8 AY (b) next 4 AY (c) indefinite period (d) Cannot be carried forward Q47. Losses from speculative business, losses of owning & maintaining race horses & losses of specified business u/s 35 AD can be carried forward & set off from income (a) of any business (b) any type of Capital gain (c) any source/ head except income from salary (d) only from respective nature of Income Q48. Losses from specified business u/s 3 5AD can be set off from income from (a) business u/s 3 5AD (b) Any business (c) Capital gains (d) Cannot be set off Q49. A business loss other than loss form a specified business referred to in section 35AD can be carried forward for maximum of (a) 8 years but it should be set off in the Subsequent assessment year(s) if the is any business income (b) 4 years but it should be set off in the subsequent assessment year(s) if there is any business income 39: a 48: a

40: b 49: a

41: b 50: b

42: a 51: c

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43: d 52: c

Q51. Mathur Storage (P) Ltd. engaged in chain cold storage (which is a specified business u/s 3 5AD) has brought forward business loss of Rs. 12 lakhs relating to assessment year 2017-2018. During the previous year 2018-2019, its income from the said business is Rs. 9 lakhs. It also has profit from trade in food grains ofRs. 6 lakhs. The total income of the company for the AY 2019-20 is ____. (a) Rs. 15 lakhs (b) Rs. 9 lakhs (c) Rs. 6 lakhs (d) Rs. 3 lakhs Q52. If an individual, having a sales turnover of Rs. 60 lakh files his return of income for the assessment year 20192020 after the due date, showing unabsorbed business loss of Rs. 23,000 & unabsorbed depreciation of Rs. 45,000, he can carry forward to the subsequent assessment years— (a) Both unabsorbed business loss of Rs. 23,000 & unabsorbed depreciation of Rs. 45,000 (b) Only unabsorbed business loss of Rs. 23,000 (c) Only unabsorbed depreciation of Rs. 45,000 (d) Neither unabsorbed business loss of Rs. 23,000 nor unabsorbed depreciation of Rs. 45,000 Q53. A partnership firm with 4 equal partners has brought forward depreciation of Rs. 3 lakh & business loss of Rs. 3 lakh relating to assessment year 2018-2019, On 1st April, 2018, two partners retired. The amount that assessee firm can set-off against its income for the assessment year 2019-2020 would be. (a) Unabsorbed depreciation of Rs. 3 lakh plus brought forward business loss of 3 lakh (b) Unabsorbed depreciation ‘nil’ plus brought forward business loss Rs. 3 lakh (c) Unabsorbed depreciation Rs. 3 lakh plus brought forward business Loss ‘nil’ (d) Unabsorbed depreciation Rs. 3 lakh plus brought forward business loss of Rs. 1.50 lakh Q54. The amount of depreciation not absorbed in the same year can be carried forward for a period: (a) 4 years (b) 8 years (c) 6 years (d) Indefinitely Q55. For Carry Forward of loss under various heads the assessee shall file a return of loss u/s 139(3) of Income Tax Act, 1961 within the prescribed time limit except loss under the head: (a) Capital gain (b) PGBP (c) HP (d) All the above

44: b 53: d

45: b 54: d

46: a 55: c

47: d

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Q56. For the previous year 2017-2018, an assessee suffered a business loss of Rs. 2,50,000. His income from other sources is Rs. 1,80,000. His due date of return was 31st July, 2018 but he submitted the return on 9th September, 2018. The assessee in this case (a) Shall be allowed to carry forward the loss of Rs. 70,000 (b) Shall not be allowed to carry forward any loss (c) Shall be allowed to set-off current year business loss to the extent of Rs. 1,80,000 but shall not be allowed to carry forward the balance loss of Rs. 70,000 (d) Shall not be allowed to set-off the business loss to the extent of Rs. 1,80,000 & would be liable to tax on Rs. 1,80,000 Q57. The loss is allowed to be carried forward only when an assessee has furnished _________. (a) return of loss at any time as per his wish (b) return of loss on or before the due date u/s 139 (c) Not furnished the return of loss Q58. According to section 80, no loss shall be carried forward for which ITR has not been filed u/s 139(3). The exceptions are ________. (a) only loss under the head “capital Gains” u/s 74 (b) Loss under head “capital Gains” & unabsorbed depreciation carried forward u/s 32(2) (c) Loss from house property & unabsorbed depreciation carried forward u/s 32(2) (d) Loss from house property; unabsorbed depreciation carried forward u/s 32(2) & the loss of specified business referred u/s 3 5AD Q59. Rohan engaged in multifarious activities reports the following. (i) Unabsorbed depreciation Rs. 80,000; (ii) Loss from house property Rs. 1,20,000; (iii) Long-term capital loss Rs. 70,000. He filed his return beyond the ‘due date’ specified in section 139(1). Which of the above loss(es) cannot be carried forward to subsequent assessment year? (a) Unabsorbed depreciation (b) Loss from house property (c) Long term capital loss (d) None of the above

Q62. Mr. Hussey for the previous year has (i) business loss of Rs. 1,30,000; (ii) income from salary Rs. 2,40,000; & (iii) Speculation gain of Rs. 1,10,000. His total income for income tax assessment is (a) Rs. 3,50,000 (b) Rs. 2,20,000 (c) Rs. 2,40,000 (d) Rs. 1,10,000 Q63. Calculate total income. PGBP (Rs. 37,000); Lottery Rs. 1,00,000 (a) Rs. 1,00,000 (b) Rs. 73,000 (c) Rs. 1,37,000 (d) None of the above Q64. Calculate total income. Speculative business Rs. 2,00,000; House property (Rs. 1,50,000) (a) Rs. 1,50,000 (b) Rs. 50,000 (c) Rs. 3,50,000 (d) None of the above Q65. Calculate total income. Agriculture income (Rs. 2,00,000); Trading business Rs. 3,00,000 (a) Rs. 2,00,000 (b) Rs. 3,00,000 (c) (Rs. 2,00,000) (d) Rs. 1,00,000 Q66. Calculate total income. Agriculture Income Rs. 3.00. 000; Trading business (Rs. 2,00,000) (a) Rs. 2,00,000 (b) Rs. 1,00,000 (c) (Rs. 2,00,000) (d) None of the above Q67. Calculate income of card games. Card Games on Diwali Night (750,000); Card Games on New Year Night 780,000 (a) Rs. 50,000 (b) Rs. 80,000 (c) Rs. 1,30,000 (d) None of the above Q68. Calculate income from other sources. Dividends from Indian Company Rs. 5,000; Card Games (Rs. 10,000) (a) Rs. 15,000 (b) (Rs. 10,000) (c) Rs. 5,000 (d) Nil

Q60. What is the taxable income & losses to be carried forward of Mr. P for the AY 2019-20? Income from nonspeculation business Rs. 60,000; Loss from nonspeculation business (Rs. 40,000); Short term capital gain Rs. 80,000; Long term capital loss of AY 2015-2016 (T30,000) (a) Rs. 70,000, Rs. 70,000 (b) Rs. 1,10,000, Rs. 40,000 (c) Rs. 1,00,000, Rs. 30,000 (d) Rs. 1,00,000, Rs. 40,000 Q61. Compute the total income & losses to be carried forward of Mr. P for the AY 2019-20. Loss from profession Rs. 1,05,000; short term capital loss on the sale of property Rs. 55,000; Long term Capital gains on sale of shares Rs. 2,05,000 (STT not paid); Winnings from lotteries Rs. 1,00,000; Loss from horse races in Mumbai Rs. 40,000 (a) Rs. 2,50,000, Rs. 1,45,000 (b) Rs. 1,45,000, Nil (c) Rs. 1,45,000, Rs. 40,000 (d) Rs. 3,05,000, Rs. 2,00,000 56: d 63:a

57: b 64:b

58: d 65:b

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59: c 66:c

60: c 67:b

61: b 68:b

62: c

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7. DEDUCTIONS FROM GROSS TOTAL INCOME Q1. Deductions u/s 80C to 80U are not allowed from (a) LTCG taxable u/s 112/u/s 112A (b) Casual Incomes (c) STCG taxable u/s 111A (d) All of the above Q2. As per section 80A aggregate of all deductions from section 80C to section 80U cannot exceed amount of (a) GTI (b) special incomes in GTI (c) casual incomes in GTI (d) capital gains in GTI Q3. Mr. P omitted to claim deduction u/s 80D from GTI while submitting his ITR on 31/7/2019 which was due date for AY 2019-20. Later AO has started his assessment & now Mr. P wants to claim deduction of sec 80D. (a) He will not be allowed deduction u/s 80D (b) He will be allowed deduction u/s 80D Q4. Mr. P is author of books, omitted to claim deductions u/s 80D & Section 80QQB from GTI while submitting his ITR on 31/7/2019 which was the due date for AY 20192020. Later on Mr. P submitted revised ITR on & claimed deduction of section 80D & section 80QQB. (a) He will not be allowed deduction u/s 80D & u/s 80QQB (b) He will be allowed deduction u/s 80D but not u/s 80QQB (c) He will be allowed deduction u/s 80QQB but not u/s 80D (d) He will be allowed deduction u/s 80D & u/s 80QQB Q5. Deduction u/s. 80C in respect of Life Insurance Policy, Contribution of employee to Provident Fund, etc. is allowed to ____. (a) Any Assesse (b) Individual assessee only (c) Individual or HUF who may be resident or non-resident (d) Individual or HUF who is resident in India Q6. Deduction u/s 80C is allowed to the maximum of. (a) Rs. 2,00,000 (b) Rs. 1,00,000 (c) Rs. 1,50,000 (d) Rs. 2,50,000 Q7. For claiming deduction u/s 80C in respect of life insurance premium, premium can be paid by assessee for (a) Himself & the spouse (b) Himself, spouse & minor children (c) Himself, spouse & dependent children (d) Himself, spouse & any child Q8. In case of HUF, deduction u/s 80C in respect of life insurance premium shall be allowed for. (a) Any coparcener of the HUF (b) Karta of HUF (c) Any member of the HUF (d) None of the above Q9. An assessee has paid life insurance premium of Rs. 45,000 during the previous year for a policy of Rs. 2,00,000 taken on 1/4/2000. He shall. (a) Not be allowed any deduction u/s 80C (b) Be allowed deduction u/s 80C to the extent of 10% of the capital sum assured (c) Be allowed deduction for the entire premium (d) Be allowed deduction u/s 80C to the extent of 20% of the capital sum assured 1: d 9: d

2: a 10: d

3: a 11: b

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4: c 12: c

Q10. An assessee has paid life insurance premium of Rs. 45,000 during the previous year for a policy of Rs. 2,00,000 taken on 1/4/2010. He shall. (a) Not be allowed any deduction u/s 80C (b) Be allowed deduction u/s 80C to the extent of 10% of the capital sum assured (c) Be allowed deduction for the entire premium (d) Be allowed deduction u/s 80C to the extent of 20% of the capital sum assured *Q11. An assessee suffering with disability specified u/s 80U has paid life insurance premium of Rs. 45,000 during the previous year for a policy of Rs. 2,00,000 taken on 1/6/2012. He shall. (a) Not be allowed any deduction u/s 80C (b) Be allowed deduction u/s 80C to the extent of 10% of the capital sum assured (c) Be allowed deduction u/s 80C to the extent of 15% of the capital sum assured (d) Be allowed deduction u/s 80C to the extent of 20% of the capital sum assured Q12. An assessee suffering with disability specified u/s 80U has paid life insurance premium of Rs. 45,000 during the previous year for a policy of Rs. 2,00,000 taken on 1/6/2013. He shall ________. (a) Not be allowed any deduction u/s 80C (b) Be allowed deduction u/s 80C to the extent of 10% of the capital sum assured (c) Be allowed deduction u/s 80C to the extent of 15% of the capital sum assured (d) Be allowed deduction u/s 80C to the extent of 20% of the capital sum assured Q13. An assessee has paid life insurance premium of Rs. 45,000 during the previous year for a policy of Rs. 2,00,000 taken on 1/4/2015. He shall __________. (a) Not be allowed any deduction u/s 80C (b) Be allowed deduction u/s 80C to the extent of 10% of the capital sum assured (c) Be allowed deduction for the entire premium (d) Be allowed deduction u/s 80C to the extent of 20% of the capital sum assured Q14. For claiming deduction u/s 80C in respect of PPF, contribution must be paid by the individual in the PPF account of. (a) Himself only (b) Himself & Spouse (c) Himself, spouse or any child (d) Himself, spouse or any dependent child Q15. For claiming deduction u/s 80C in respect of Sukanya Samridhi scheme, contribution must be paid by the individual in the name of (a) Himself only (b) Wife & Mother (c) Any child of such Individual (d) Girl child of such Individual

5: c 13: b

6: c 14: c

7: d 15: d

8: c

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Q16. Subscription to which of the following is deductible u/s 80C? (a) National Saving Scheme or NSC (VIII or IX Issue). (b) NABARD Bonds or Notified units of MF/UTI or Deposit Scheme/Pension Fund set up by National Housing Bank. (c) Approved Equity Shares/Debentures of wholly public company where such proceeds are utilized for infrastructure company. (d) All of the above Q17. For claiming deduction u/s 80C in respect of NSC of VIII/IX issue, NSC should be acquired by the individual in the name of ____ (a) His name only (b) His name or any spouse name (c) In his name or spouse name or the name of any child (d) In his name or spouse or in the name of minor child Q18. Annual Interest accrued on NSC VIII or NSC IX issue shall be ________. (a) Exempt u/s 10 (b) Taxable u/h IFOS (c) Taxable as income from IFOS & Interest so accrued shall also be eligible for deduction u/s 80C (d) None of the above Q19. Deduction u/s 80C in respect of terms deposit with a scheduled bank/ time deposit in post office is allowed if the term deposit is for a period _____. (a) Not less than 3 years. (b) Not less than 5 years. (c) Not less than 7 years. (d) Not less than 10 years. Q20. Deduction in respect of contribution for annuity plan to certain pension fund u/s 80CCC is allowed to. (a) Any assessee (b) Individual assessee only (c) Individual or HUF (d) Individual who is resident Q21. Deduction u/s 80C for education expenses of children shall be allowed for ____. (a) Any education expenses (b)Tuition fee except any payment towards any development fee or donation or payment of similar nature (c) Tuition fee & annual charges (d) Any development fee or donation or similar payment Q22. Deduction u/s 80C for tuition fee shall be allowed if such fee is paid to. (a) Any university, college, school or other educational institution situated within India or outside India (b) Any university, college, school or other educational institution situated within India (c) Any university, college, school or other educational institution situated outside India (d) Only to school situated within India or outside India Q23. Deduction u/s 80C for tuition fee shall be allowed for the purpose of _____. (a) Any full-time education (b) Any full or part time education (c) Full time education in a college (d) Full time education in a school

16: d 24: b

17: a 25: a

18: c 26: d

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19: b 27: d

Q24. Deduction u/s 80C in respect of tuition fee is allowed to an individual for ______. (a) Any of his children (b) Any two children of such individual (c) Any two minor children of such individual (d) Any two dependent children of such Individual Q25. Deduction u/s 80C in respect of tuition fee is allowed to ________. (a) An individual only (b) An individual or HUF (c) Both Individual & HUF (d) Neither Individual nor HUF Q26. Deduction u/s 80C in respect of tuition fee is allowed to the maximum extent of _______. (a) Rs. 1,20,000 per child for maximum of 2 children (b) Rs. 1,20,000 p.m. per child for maximum of 2 children (c) 1,50,000 pa per child (d) 1,50,000 pa for two children Q27. Contribution to which of the following is deductible u/s 80C? (a) Contribution to National Housing Bank (Tax Saving) Term Deposit Scheme, 2008 (b) Contribution in Unit-Link Insurance Plan of UTI or LIC Mutual Fund (c) Contribution to Approved Annuity Plan of LIC or Public Deposit Scheme of HUDCO. (d) All of the above Q28. Following payments are not deductible u/s 80C in respect of repayment of housing loan. (a) Stamp Duty & Registration fees (b) Repayment of the amount borrowed (c) Admission Fee, Cost of Share of co-operative society & Initial Deposit (d) All of the above Q29. For claiming deduction u/s 80C, the payment or deposit should be made ________. (a) Out of any type of income (b) Out of any income chargeable to income tax (c) Out of the current year’s income (d) Out of the exempted income Q30. Deduction u/s 80C is available on _____ Basis. (a) Accrual (b) Payment (c) Depends on the method of A/cing followed by the Assessee. (d) Earlier of (a) or (b) Q31. If an assessee discontinues the life insurance policy before completion of 2 years then, (a) No deduction shall be allowed in respect of the payment made in the year of termination. (b) No deduction shall be allowed u/s 80C in the year of termination. (c) Amount of the deduction claimed due to insurance premium during past years shall be liable to tax in the year of termination. (d) No tax treatment has been given under income tax act.

20: b 28: c

21: b 29: a

22: b 30: b

23: a 31: c

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Q32. Find out the deduction allowable Mr. P, an author of books u/s 80C for AY 2019-2020: Life Insurance Premium paid - Rs. 22,000 for the policy of Rs. 2,00,000 taken on 15/6/2018 on his own life; Contribution to URPF: Rs. 1,000; Contribution to PPF: Rs. 25,000; Subscription to NSC : Rs. 10,000; Accrued interest for one year completed NSC - Rs. 8,000; LIC premium on his mother’s life policy which has been issued before 1/4/2012 - Rs. 5,000; Repayment of bank loan borrowed for construction of the house - Rs. 21,000. (a) Rs. 85,000 (b) Rs. 84,000 (c) Rs. 88,000 (d) Rs. 83,000

Q39.Deduction u/s 80CCD is allowed to extent of. (a) Employee’s contribution up to 10% of salary (b) Employee’s contribution up to 15% salary (c) Employee’s & employer’s contribution each up to 10% salary & in case of self-employed person up to 20% of his gross total income (d) Employee’s & employer’s contribution each up to 15% of salary

Q33. Max. Deduction u/s 80CCC is ____. (a) Rs. 2,00,000 (b) Rs. 1,00,000 (c) Rs. 1,50,000 (d) Rs. 2,50,000

Q41. As per section 80CCE, deduction u/s 80C, 80CCC & 80CCD cannot exceed. (a) Rs. 1,00,000 including employer’s contribution to notified pension scheme referred to in section 80CCD (b) Rs. 1,00,000 exclusive of employer’s contribution to notified pension scheme referred to in section 80CCD (c) Rs. 1,50,000 including employer’s contribution to notified pension scheme referred to in section 80CCD (d) Rs. 1,50,000 exclusive of employer’s contribution to notified pension scheme referred to in section 80CCD

Q34. Deduction u/s 80CCC shall be allowed to. (a) Individual who is a resident or non-resident of India (b) Individual or HUF who is a resident of India (c) Individual who is resident & ordinary resident of India (d) Individual who is resident whether ordinary resident or non-ordinary resident HUF who is non-resident of India Q35. Annual interest accrued on Annuity plan of LIC is ____. (a) Exempt u/s 10 (b) Taxable u/h IFOS (c) Taxable as income from IFOS & Interest so accrued shall also be eligible for deduction u/s 80C (d) None of the above *Q36. Amount received from the surrender of annuity plan or amount received as pension from the annuity plan by the assessee or his nominee shall be _____. (a) Exempt u/s 10 (b) Taxable u/h IFOS (c) Exempt up to certain limit, balance Taxable (d) Taxable up to certain limit, balance exempt Q37. Deduction of section 80CCD is allowed to ____. (a) Individual who has joined the services of central government or state government or any other employer on or after 1.1.2004 (b) Individual who has joined the services of state government or any other employer on or after 1.1.2004 (c) Individual who has joined the services of central government or any other employer on or after 1.1.2004 (d) Individual who has joined the services of central government or state government or any other employer on or after 1.1.2004 or who is self employed. Q38. Deduction u/s 80CCG is allowed to ____. (a) Any individual who is resident in India & whose gross total income does not exceed Rs. 10,00,000 (b) Any individual whose gross total income does not exceedRs. 10,00,000 (c) Any individual who is resident in India & is a new retail investor & whose gross total income does not exceed Rs. 10,00,000 (d) Any individual who is a resident in India & is a new retail investor & whose gross total income does not exceed Rs. 12,00,000. 32: b 41: d

33: c 42: c

34: a 43: d

35: c 44: a

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36: c 45: c

Q40. As per section 80CCE deduction u/s 80C, 80CCC & 80CCD cannot exceed. (a) Rs. 1,10,000 (b) Rs. 2,10,000 (c) Rs. 1,50,000 (d) Rs. 1,00,000

Q42. Additional Deductions of Rs. 50,000 is allowed u/s (a) 80CCC (b) 80CCD (c) 80CCD(1B) (d) 80CCE Q43. Deduction u/s 80CCG is allowed for acquiring. (a) Any shares (b) Any Listed shares (c) Any listed shares in accordance with notified scheme (d) Any listed shares or units of equity oriented mutual fund as per notified scheme. Q44. Quantum of deduction u/s 80CCG is ____. (a) 50% amount invested or Rs. 25,000, whichever is less (b) 50% amount invested or Rs. 50,000, whichever is less (c) 50% amount invested in equity shares or Rs. 1,00,000, whichever is less (d) None of the above Q45. Deduction shall be allowed for_ beginning with AY relevant to PY in which Investment is made. (a) 5 consecutive AYs (b) 10 consecutive AYs (c) 3 consecutive AYs (d) 15 consecutive AYs Q46. Deduction u/s 80D in respect of medical insurance premium is allowed to ______. (a) Any assessee (b) An individual or HUF who is resident or non-resident (c) An Individual or HUF who is resident of India (d) Individual only Q47. Deduction u/s 80D is allowed if it is paid ____. (a) by cheque (b) by any mode other than cash (c) in any mode (d) in cash *Q48. Deduction u/s 80D on amount of preventive health check-up is allowed if it is paid ______. (a) by cheque (b) Any mode other than cash (c) any mode including cash (d) In Cash 37: d 46: b

38: d 47: b

39: c 48: c

40: c

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Q49. Deduction u/s 80D is allowed on account of payment of preventive health check- up of. (a) Assessee or his dependent spouse or his dependent parents or dependent children (b) Assessee or his dependent spouse or his parents or dependent children (c) Assessee or his spouse or his dependent parents or dependent children (d) Assessee or his spouse or his parents or dependent children Q50. Maximum deduction u/s 80D on amount of preventive health check-up is : (a) Rs. 25,000 (b) Rs. 5,000 (c) Rs. 5,000 which is in addition to Rs. 25,000 (d) Rs. 5,000 which is part of Rs. 25,000 Q51. Deduction u/s 80D is allowed if premium is paid to. (a) Life insurance corporation (b) General insurance corporation or any other insurer (c) Life insurance or general insurance corporation (d) General insurance corporation Q52. Mr. P , age 42 years, paid Medical Insurance premium of Rs. 10,000 to insure his health, health of his spouse & dependent children. He has incurred Rs. 7,000 for the preventive health check-up for himself & the amount was paid in cash. He also paid Medical Insurance premium of 1,00,000 during the year to insure the health of his father, aged 61 years, who is not dependent on him. He contributed Rs. 12,400 to Central Government Health Scheme during the year. Compute the deduction allowable u/s 80D for the PY 2018-2019. (a) Rs. 75,000 (b) Rs. 55,000 (c) Rs. 45,000 (d) Rs. 35,000 Q53. Maximum deduction allowed to individual for self (not a senior citizen) u/s 80D is. (a) Rs. 40,000 (b) Rs. 20,000 (c) Rs. 30,000 (d) Rs. 25,000 Q54. Where the Individual or his family or his parents or a member of HUF in case of HUF is a senior citizen the limit u/s 80D of Rs. 25,000 shall be substituted by(a) Rs. 40,000 (b) Rs. 20,000 (c) Rs. 30,000 (d) Rs. 50,000 Q55. Maximum Deduction for Preventive Health-Check up of Family + Parents is ____. (a) Rs. 50,000 (b) Rs. 25,000 (c) Rs. 5,000 (d) Rs. 30,000 Q56. Mr. Privastava, aged 72 years, paid medical insurance premium of Rs. 52,000 by cheque & Rs. 4,000 by cash during May, 2018 under a Medical Insurance Scheme of the General Insurance Corporation. The above sum was paid for insurance of his own health. He would be entitled to a deduction u/s 80D of a sum of (a) Rs. 30,000 (b) Rs. 50,000 (c) Rs. 52,000 (d) Rs. 56,000 49: d 58: d

50: d 59: d

51: b 60: c

52: a 61: c

www.ClearIPCC.in

53: d 62: c

Q57. Deduction u/s 80DD in respect of maintenance including medical treatment of dependent being a person with disability shall be allowed to. (a) All type of the assessee (b) An individual or HUF who is resident or non-resident (c) An individual or HUF who is resident in India (d) None of the above Q58. Deduction u/s 80DD allowed shall be. (a) Actual expenditure or Rs. 75,000 whichever is less (b) Rs. 1,25,00 irrespective of actual expenditure (c) Rs. 75,000 irrespective of actual expenditure (d) Flat deduction of Rs. 75,000 pa or Rs. 1,25,0000 pa depending on % of disability Q59. Deduction u/s 80DD in case of dependent with severe disability shall be allowed (a) To The extent of actual expenditure/deposit or Rs. 50,000 whichever is less (b) To The extent of actual expenditure/deposit or Rs. 1,00,000 whichever is less (c) For a sum of Rs. 50,000 irrespective of any expenditure incurred or actual amount deposited (d) For a sum of Rs. 1,25,000 irrespective of any expenditure incurred or actual amount deposited Q60. For the deduction u/s 80DD a person shall be known as severely disabled if he has disability of more than (a) 50 % disability (b) 75 % disability (c) 80 % disability (d) 25 % disability Q61. If Dependant Disabled dies before Assessee, ___. (a) Amount received is exempt in the hands of recipient (b) Amount received is exempt in the hands of legal representative of deceased person (c) Amount deposited is deemed as Income of the depositor in PY of receipt (d) None of the above Q62. Deduction u/s 80DDB in respect of medical treatment for specified disease is allowed to. (a) All type of the assessee (b) An individual or HUF who is resident or non-resident (c) An individual or HUF who is resident in India (d) None of the above Q63. Deduction u/s 80DDB to individual who is not a senior citizen shall be allowed (a) To extent of actual expenditure/deposit or Rs. 40,000 whichever is less (b) To extent of actual expenditure/deposit or Rs. 1,00,000 whichever is less (c) For a sum of Rs. 50,000 irrespective of any expenditure incurred or actual amount deposited (d) For a sum of Rs. 1,00,000 irrespective of any expenditure incurred or actual amount deposited Q64. Deduction u/s 80DDB shall be allowed for medical treatment of specified disease of (a) Any dependent relative (b) Any dependent handicapped relative (c) The assessee himself or any dependent relative (d) None of the above 54: d 63: a

55: c 64: c

56: b

57: c

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Q65. In case the assessee or dependent relative is a senior citizen then the deduction u/s 80DDB shall be allowed for a sum of (a) Rs. 40,000 irrespective of any expenditure (b) Rs. 40,000 or actual expenditure whichever is less (c) Rs. 1,00,000 irrespective of any expenditure (d) Rs. 1,00,000 or actual expenditure whichever is less Q66. If any amount is received under insurance or reimbursed by employer for Medical treatment, received amount shall be ___. (a) Fully Exempt (b) Fully taxable (c) reduced from the deduction allowable u/s 80DDB (d) Added to the deduction allowable u/s 80DDB Q67. Deduction u/s 80E shall be allowed to. (a) An individual who is resident or non-resident in India (b) An individual who is resident in India (c) An individual or HUF who is resident or non-resident (d) An individual or HUF who is resident in India Q68. Deduction u/s 80E is allowed on account of. (a) Repayment of loan taken from certain specified institutions for higher education (b) Repayment of loan & interest on loan taken from certain specified institutions for higher education (c) Payment of interest on loan taken from certain specified institutions for higher education (d) None of the above Q69. Deduction u/s 80E shall be allowed in respect of amount paid by way of interest on loan taken for higher education from. (a) Any person (b) Financial institutions (c)Financial institutions or approved charitable institution or any bank (d) Any bank Q70. Deduction u/s 80E shall be allowed for the higher education of. (a) Assessee himself (b) Assessee himself & his / her spouse (c) Assessee himself, his / her spouse & his / her children or student for whom the individual is a legal guardian (d) Assessee himself, his/her spouse & his/her children Q71. For claiming deduction of interest u/s 80E loan should be taken for doing (a) Any post graduate course (b) Any graduate or post graduate course is engineering, medicine, management & post graduate course in applied science or pure sciences including mathematics & pure sciences (c) For any course of study after passing the secondary examination or its equivalent (d) For any course of study after passing the senior secondary examination or its equivalent Q72. For claiming deduction of interest u/s 80E loan should be taken for doing. (a) Vocational studies (b) Part time studies (c) Full time studies (d) any of the above 65: d 75: d

66: c 76: a

67: a 77: c

68: c 78: d

www.ClearIPCC.in

69: c 79: b

Q73. The deduction u/s 80E is allowed for payment by way of interest on loan to the extent of. (a) Rs. 2,00,000 (b) Rs. 1,50,000 (c) Rs. 1,00,000 (d) Any amount Q74. For claiming deduction of interest u/s 80E interest amount should be paid out of (a) any taxable income (b)any exempted income (c) any of (a) or (b) (d) partially from (a) & partially from (b) loan should be taken for doing Q75. Deduction u/s 80E for payment by way of interest on loan for higher education is allowed for _____ Years. (a) 5 (b) 6 (c) 7 (d) 8 Q76. Deduction u/s 80EE shall be allowed to individual: (a) An individual who is resident or non-resident in India (b) An individual who is resident in India (c) An individual or HUF who is resident or non-resident (d) An individual or HUF who is resident in India Q77. Deduction u/s 80EE shall be allowed in respect of amount paid by way of interest on loan taken for acquisition of residential house property from (a) Any person (b) Financial institutions (c) Financial institutions or approved charitable institution or any bank (d) Any bank Q78. The deduction u/s 80EE is allowed for payment by way of interest on loan for residential house property to the extent of. (a) Rs. 2 Lac (b) Rs. 1.5 Lac (c) Rs. 1 Lac (d) Rs50,000 Q79. The deduction u/s 80EE is allowed for payment by way of interest on loan for residential house property. This deduction is (a) Within the limit of interest u/s 24(b) (b) Over & above the limit of interest u/s 24(b) (c) Within the limit of section 80C (d) Over & above the limit of section 80C Q80. Deduction u/s 80G on account of donation is allowed if donations are made in. (a) Any mode other than Cash (b) Cash payment upto Rs. 2,000 (c) Both (a) & (b) (d) Donation in Kind Q81. Donation u/s 80G should be paid out of (a) any taxable income (b) any exempted income (c) Income of earlier years (d) All of the above Q82. Deduction u/s 80EE for payment of interest on loan for acquisition of residential house property is allowed for: (a) 5 years (b) 6 years (c) Till repayment of loan (d) None of the above Q83. Deduction u/s 80G is allowed to. (a) A business assessee who is resident of India (b) Any assessee who is resident of India (c) Any assessee who is resident or non-resident of India (d) Resident or NR Individual or HUF 70: c 80: c

71: d 81: d

72: d 82: c

73: d 83: c

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Q84. The overall limit in case of deduction u/s 80G is. (a) 10% of GTI (b) 10% of adjustedGTI (c) 25% of GTI (d) 25% of adjusted GTI Q85. Adjusted GTI for the purpose of Sec 80G means _____. (a) Gross Total Income –All deductions under chapter VI-A (b) Gross Total Income - All deductions under chapter VIA except Deduction u/s 80G (c) Gross Total Income – STCG u/s 111A – LTCG u/s 112/112A – Exempt Incomes (d) Gross Total Income – STCG u/s 111A – LTCG u/s 112/112A – Exempt Incomes - All deductions under chapter VI-A except Deduction u/s 80G. Q86. Deduction u/s 80G shall be allowed. (a) Whether or not assessee has a nexus of donation with his business. (b) Only if assessee has a nexus of donation with his business. (c) Only if assessee has no kind of nexus of donation with his business. (d) None of the above Q87. U/s 80GGC, deduction is allowable in respect of contribution to political parties by (a) any person other than LA & every AJP wholly or partly funded by the Government (b) LA & every AJP wholly or partly funded by the Government (c) An Indian company (d) Any assessee Q88. Deduction u/s 80GGB & 80 GGC is allowed if donations are made in. (a) Any mode other than Cash (b) Cash upto Rs. 10,000 (c) Both (a) & (b) (d) Donation in Kind Q89. Deduction in respect of rent paid u/s 80GG is allowed to (a) An individual. (b) An individual who is self-employed. (c) Any individual who is self-employed or who is an employee but not entitled to HRA or Rent-free Accommodation. (d) Any individual who is self-employed or who is an employee but not entitled to HRA or Rent-Free Accommodation & who pays rent for his residential accommodation. Q90. Deduction u/s 80GG shall be limited to. (a) Rs. 1,50,000 pa (b) Rs. 2,00,000 pa (c) Rs. 24,000 pa (d) Rs. 60,000 pa Q91. Deduction u/s 80GG shall be limited to. (a) 10% of Adjusted GTI (b) 15% of Adjusted GTI (c) 20% of Adjusted GTI (d) 25% of Adjusted GTI Q92. Mr. Ramesh pays a rent of Rs. 5,000 per month. His total income is Rs. 2,80,000 (i.e. GTI as reduced by deductions u/c VI- A except u/s 80GG). He is also in receipt of HRA. He would be eligible for a deduction u/s 80GG of an amount of (a) Rs. 60,000 (b) Rs. 32,000 (c) Rs. 70,000 (d) Nil 84: b 92: d

85: d 93: d

86: a 94: c

www.ClearIPCC.in

87: a 95: c

Q93. Deduction u/s 80GG is allowed if (a) Rented House is occupied by the assessee for his own residence. (b) Assessee, spouse or minor child or HUF of which assessee is a member, does not own any residential accommodation at the place where assessee ordinarily resides or at the place where he works or carries on his business or profession. (c) If assessee owns any residential accommodation at any place, other than the place of residence or work of the assessee, then the concession in respect of self-occupied property is not claimed by the assessee. (d) All of the above Q94. In case of donation u/s 80GGA, the maximum amount of donation in cash allowed is. (a) Rs. 1,50,000 (b) Rs. 2,00,000 (c) Rs. 10,000 (d) Rs. 50,000 Q95. U/s 80GGB, deduction is allowable in respect of contribution to political parties by (a) any person other than LA & every AJP wholly or partly funded by the Government (b) LA & every AJP wholly or partly funded by the Government (c) An Indian company (d) Any assessee Q96. Adjusted GTI for the purpose of Sec 80 GG means ___. (a) Gross Total Income –All deductions under chapter VI-A (b) Gross Total Income - All deductions under chapter VIA except Deduction u/s 80G (c) Gross Total Income – STCG u/s 111A – LTCG u/s 112/112A – Exempt Incomes (d) Gross Total Income – STCG u/s 111A – LTCG u/s 112/112A – Exempt Incomes - All deductions under chapter VI-A except Deduction u/s 80GG. Q97. Deduction u/s 80GGA of donation for scientific research/rural development is allowed to – (a) Any assessee (b) Non-corporate business assessee (c) An assessee whose gross total income does not include income chargeable to PGBP. (d) Any professional Q98. Deduction u/s 80GGA , 80 GGB & 80 GGC shall be allowed to the extent. (a) 100% of the donation/contribution so made (b) 200% of the donation/contribution so made (c) 125% of the donation/contribution so made (d) 150% of the donation/contribution so made Q99. Deduction u/s 80TTA is allowed to ____. (a) Any Individual (b) Any individual who is a senior citizen (c) Any individual who is a super senior citizen (d) Any individual who is not a resident senior citizen

88: a 96: d

89: d 97: c

90: d 98: a

91: d 99: d

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Q100. Deduction u/s 80TTA shall be allowed if the Total Income includes (a) interest on deposits in a Savings Account with a Bank (b) interest on deposits in a Savings Account with a Cooperative Bank (c) Interest on deposits in Savings A/c with Post Office (d) any of the above Q101. Deduction u/s 80TTA shall be allowed if the Total Income includes interest on (a) Savings Account with a Bank (b) Fixed Deposit (c) Time Deposit (d) All of the above Q102. Maximum Deduction allowed u/s 80TTA shall be (a) Rs. 10,000 p.a. (b) Rs. 50,000 p.a. (c) Rs. 40,000 p.a. (d) Rs. 20,000 p.a. Q103. Deduction u/s 80TTB is allowed to ____. (a) Any Individual (b) Any individual who is a senior citizen (c) Any individual who is a super senior citizen (d) Any individual who is not a senior citizen Q104. Deduction u/s 80TTB shall be allowed if the Total Income includes (a) interest on deposits in a Savings Account with a Bank (b) interest on deposits in a Savings Account with a Cooperative Bank (c) interest on deposits in a Savings Account with a Post Office (d) any of the above Q105. Maximum Deduction allowed u/s 80TTB shall be (a) Rs. 10,000 p.a. (b) Rs. 50,000 p.a. (c) Rs. 40,000 p.a. (d) Rs. 20,000 p.a. Q106. Deduction u/s 80TTB shall be allowed if the Total Income includes interest on (a) Savings Account with a Bank (b) Fixed Deposit (c) Time Deposit (d) All of the above Q107. Deduction u/s 80RRB in respect of royalty on patents shall be allowed to (a) Individual who is resident in India & is a patentee including co-owner. (b) Individual (c) Individual who is resident (d) None of the above Q108. Deduction u/s 80QQB is allowed in respect of royalty income to ____. (a) Resident Individual who is author of any kind of book (b) Resident Individual & who is author of any kind of book (c) Resident Individual & who is author of any kind of book which is not a text book (d) Resident Individual & who is author of any kind of book which is a text book

100: d 109: d

101: a 110: b

102: a 111: b

103: b 112: d

www.ClearIPCC.in

104: d 113: b

Q109. Deduction u/s 80RRB & 80QQB is allowed upto: (a) 100 % of royalty income (b) 50% of royalty income (c) Lower of 100% of royalty income or Rs. 5 lacs (d) Lower of 100% of royalty income or Rs. 3 lacs *Q110. Deduction u/s 80U in case of permanent physical disabled is allowed to an individual (a) who is citizen of India (b) who is ROR in India (c) who is NOR in India (d)who can be ROR or RNOR Q111. Royalty from Foreign Country shall be allowed as Deduction u/s 80RRB & 80QQB if (a) Royalty is brought to India in Convertible Foreign Exchange within 12 Months (b) Royalty is brought to India in Convertible Foreign Exchange within 6 Months (c) Royalty is brought to India in Convertible Foreign Exchange within 18 Months (d) Royalty is brought to India in Convertible Foreign Exchange within 24 Months *Q112. Deduction allowed u/s 80U to Individual who has disability of less than 40% = (a) Rs. 30,000 (b) Rs. 50,000 (c) Rs. 75,000 (d) Nil Q113. Deduction allowed u/s 80U to Individual who has disability of 40% - 80 % = (a) Rs. 30,000 (b) Rs. 75,000 (c) Rs. 1,25,000 (d) Nil Q114. Deduction allowed u/s 80U to Individual who has disability of more than 80 % = (a) Rs. 30,000 (b) Rs. 75,000 (c) Rs. 1,25,000 (d) Nil Q115. Deduction u/s 80JJAA is available if the assessee is (a) Individual (b) Any Assessee (c) Company only (d) Any Assessee to whom Section 44AB Apply. Q116. Deduction u/s 80JJAA is limited to (a) 50% of Additional Employee Cost incurred in the PY or Rs. 5 Lacs whichever is lower (b) 50% of Additional Employee Cost incurred in the PY (c) 30% of Additional Employee Cost incurred in the PY or Rs. 3 Lacs whichever is lower (d) 30% of Additional Employee Cost incurred in the PY Q117. Additional Employee shall not include ____. (a) Employee whose Total Emoluments is more than Rs. 25,000 p.m or who does Not Participate in RPF. (b) Employee for whom Entire Contribution is paid by Government under Employees’ Pension Scheme; (c) Employee Employed for < 240 days during PY. (d) All of the above

105: b 114: c

106: d 115: d

107: a 116: d

108: c 117: d

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8.TAX DEDUCTED AT SOURCE & TAX COLLECTED AT SOURCE Q1. No Tax shall be secured if salary income is less than (a) Rs. 5 lacs (b) Rs. 2.5 Lacs (c) BEL (d) Rs. 10,000 p.m Q2. TDS from salary u/s 192 shall be @ __. (a) 10% of salary (b) Average rate of Income tax + HEC (c) Maximum marginal rate of tax (d) Average rate of Income tax excluding HEC

Q14. The rate of TDS u/s 194A is ____. (a) 10% (b) 5% (c) 2%

Q3. On application by employee, Employer shall consider ______ while calculating TDS on salary. (a) He shall only consider salary income (b) Income & Losses from All Heads (c) Income from all heads only (d) Income from all heads & Losses from HP only Q4. In case of TDS on salary, HEC shall be added for (a) Resident Company (b) NR Company (c) Resident assessee other than company (d) Non-resident assessee other than company Q5. If employee receives accumulated amount out of RPF , which is taxable due to non-fulfilment of conditions given u/s 10(12), then TDS shall be deducted u/s ___. (a) 192 (b) 192A (c) 194A (d) 197A Q6. Sec 192A is applicable for payment out of ____. (a) URPF (b) PPF (c) RPF (d) SAF Q7. If employee receives the accumulated amount out of RPF,TDS shall be deducted @ _____. (a) 10% (b) 5% (c) 20% (d) 30% Q8. If employee receives accumulated amount out of RPF & does not submit PAN, then TDS shall be deducted @ ___ (a) 10% (b) 20% (c) 30% (d) MMR Q9. No TDS from premature withdrawals from Employee RPF if the accumulated amount received is less than _____. (a) 10,000 (b) 20,000 (c) 10,000 (d) 50,000 Q10. No TDS on interest on listed debentures is to be done by the widely held company if interest is paid. payable ___. (a) by A/c Payee Cheque (b) during FY ≤ Rs. 5,000 (c) to Resident Individual (d) All of the above Q11. No tax shall be deducted on interest payable for ___. (a) 7-year NSC or National Development Bond/Notified Debentures; (b) Interest on Securities of CG/SG/Listed Securities held in DEMAT form (c) Payable to LIC/GIC/Any Insurance company on any securities owned by it. (d) All of the above *Q12. Rate of TDS in case of interest payable on listed debentures is ____. (a) 10% + HEC (b) 10% without HEC (c) 20% in case payment is made to domestic company & 10% in any other case (d) 20% in case payment is made to domestic company & 10% in any other person + HEC to be applied in both cases. 1: c 14: a

2: b 15: d

3: d 16: d

4: c 17: b

5: b 18: a

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Q13. Section 194A is applicable if the Deductor is ___. (a) Any Assessee (b) Any person other than Individual or HUF (c) Individual or HUF who was subject to tax Audit u/s 44AB (a)/(b) in last PY (d) Both (a) & (b)

6: c 19: b

(d)1%

Q15. No tax shall be deducted if _______. (a) Rs. 10,000 for every assessee (b) Aggregate Interest paid by any other person ≤ Rs 5,000. (c) Aggregate Interest paid by Bank or Co-operative Society or Post offices ≤ Rs 10,000 (d) Both (b) & (c) Q16. Limit of Rs. 10,000 is computed with reference to ____. (a) Whole bank (b) Each branch of bank (c) Whole bank if CBS is adopted (d) Both (b) & (c) Q17. No TDS will be made by a banking company u/s 194A if aggregate amount of interest paid or payable on time deposits to resident senior citizen if it does not exceed ___. (a) Rs. 10,000 (b) Rs. 50,000 (c) Rs. 20,000 (d) None Q18. Rate of TDS on Interest payable on securities____. (a) 10% (b) 5% (c) 2% (d)1% Q19. Mr. P has deposited a sum of Rs. 2,00,000 on 1.4.2018 with schedule bank for one year at interest rate of 10% pa. Bank should deduct tax at source amounting to ____. (a) Rs. 2,080 (b) Rs. 2,000 (c) Rs. 4,000 (d) Rs. 4,160 Q20. Mr. P has borrowed Rs. 10 lacs on 1.4.2018 @ 18% p.a. from SBI. Mr. P should deduct tax on such interest@ (a) 5% (b) 10% (c) 15% (d) Nil Q21. No TDS even if interest paid > Rs. 5,000 in _____: (a) Interest on loans given to Banks/Financial Institutions/LIC/UTI/Insurance company (b) Interest paid by Firm to partners & Interest on ZCBs (c) Interest paid on Refund of Tax by Government (d) All of the above Q22. No TDS on interest paid by co-operative society to ___. (a) Its members (b) Other co-operative society (c) Both (a) & (b) (d) No such exception. Q23. Interest on compensation awarded by Motor Accidents Claims Tribunal & paid by Insurance company, (a) No TDS at all (b) No TDS at time of credit. (c) No TDS at time of payment ≤ Rs. 50,000 in FY. (d) Both (b) & (c) Q24. In case of winnings from horse races, payments exceeding __ are subject to tax deduction at source @ ___ % (a) Rs. 5,000, 30% (b) Rs. 10,000, 30% (c) Rs. 5,000, 10% (d) Rs. 1,000, 10%. Q25. Mr. P, a resident Indian, wins Rs. 180,000 in Game Show. Which of the statement is true as per Sec 194B? (a) TDS @ 30% (b) TDS @ 31.2%. (c) TDS @ decided by winner (d) No TDS

7: a 20: d

8: d 21: d

9: d 22: c

10: d 23: d

11: d 24: b

12: b 25: b

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Q26. Mr. P has won Lottery of Rs. 1 Lac. TDS on it will be __. (a) Rs. 31,200 (b) Rs. 30,000 (c) Rs. 33,990 (d) Rs. 30,900

Q36. What shall be the rate at which TDS on insurance commission shall be deducted u/s 194D when the payee is a person other than a domestic company? (a) 20% (b) 10% (c) 30% (d) 5%

Q27. A company is engaged in real estate business conducted a lucky draw & gave Maruti Car to a prize winner. TDS shall be deducted u/s ____ @ the rate of ____. (a) 194B, 10% (b) 194A, 30% (c) 194B, 30% (d) 194G, 20%

Q37. What shall be the rate at which TDS on insurance commission shall be deducted u/s 194D when the payee is a domestic company? (a) 20% (b) 10% (c) 30% (d) 15%

Q28. Who shall not be liable to deduct TDS u/s 194C? (a) Any Individual (b) Any HUF (c) Any Individual & Any HUF whose accounts were not liable to audit in preceding FY (d) Any Individual & Any HUF whose accounts were liable to audit in preceding FY. Q29. What shall be the rate at which TDS on payment to contractor.sub-contractor be deducted u/s 194C when the payment is made to Individual or HUF? (a) 1% (b) 2% (c) 10% (d) 5% Q30.What is rate at which TDS on payment to contractor/sub-contractor be deducted u/s 194C when payment is made to any person other than Individual or HUF? (a) 1% (b) 2% (c) 10% (d) 5% Q31. No tax is to be deducted at source if the amount credited.paid to the contractor during the relevant previous year does not exceed __. (a) Rs. 30,000 (b) Rs. 1,00,000 (c) 1,30,000 (d) Rs. 30,000 at one time or Rs. 1,00,000 in aggregate during FY. Q32. When prize is given partly in cash & party in kind, Income tax is to be deducted only from cash? (a) True (b) False (c) Partly true (d) Partly false Q33. A company has given an advertising contract to an advertising agency which is also a company. On 30.11.2018, it has paid a sum of Rs. 2,40,000 to the advertising agency a firm. It should deduct tax for: (a) 4,800 (b) 4,992 (c) 4,400 (d) 2,496 Q34. A person makes payment of Rs. 35,000 to contractor who is a transport operator is not subject to TDS if __. (a) The recipient owns 10 or less than 10 goods carriages at any time during the previous year. (b) The recipient is engaged in the business of plying, hiring or leasing of goods carriage (c) the recipient has furnished declaration to this effect along with his PAN to the payer. (d) All of the above Q35. Mr. P an individual, whose turnover of the business for preceding year exceeded Rs. 100 lakhs, has engaged a contractor Mr. A for building his residential house. On 30.11.2018, he has made a payment of Rs. 10,00,000 to the contractor. Mr. P should deduct TDS of: (a) Rs. 20,800 (b) Rs. 10,400 (c) Rs. 20,000 (d) Nil 26: a 36: d

27: c 37: b

28: c 38: b

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30: b 40: b

Q38. Mr. P , resident, is due to receive Rs. 4.50 lakhs on 31.3.2019, towards maturity proceeds of LIC policy taken on 1.4.1992, for which sum assured was Rs. 4 lakhs & annual premium was Rs. 5,000. What will be applicability of provisions for tax deduction at source u/s 194DA? (a) Tax is deductible on Rs. 4,50,000 (b) Tax is not deductible on Rs. 4,50,000. (c) Tax is not deductible at all on maturity of LIC policy (d) None of the above Q39. Section ___ provides for deduction of tax at source in respect of any income referred to in section 115BBA payable to a non-resident sportsman (including an athlete) or an entertainer who is not a citizen of India or a nonresident sports association or institution. (a) Sec 194A (b) Sec 194A (c) Sec 194E (d) Sec 194I Q40. Mr. P , a resident of age of 70 years, is due to receive Rs. 2,20 lakhs on 31.3.2019 on LIC policy taken on 1.4.2010, for which the sum assured is Rs. 2 lakhs & the annual premium is Rs. 45,000. What will be applicability of provisions for tax deduction at source u/s 194DA? (a) Tax is deductible on Rs. 2,20,000 @ 1% since annual premium > 10% of sum assured (b) Tax is deductible on Rs. 2,20,000 @ 1% since annual premium > 20% of sum assured (c) Tax is deductible on Rs. 2,20,000 @ 1% since annual premium > 15% of sum assured (d) None of the above Q41. TDS on payment made to Lara, WI cricketer, by a newspaper for contribution of articles Rs. 50,000 is: (a) Rs. 5,000 (b) Rs. 1,000 (c) Rs. 10,400 (d) Rs. 500 Q42. If payment is made to legal heirs of a deceased depositor from National saving scheme, TDS @ ___. (a) 1% (b) 2% (c) 10% (d) Nil Q43. What shall be the rate at which TDS on commission on sale of lottery tickets shall be deducted u/s 194G? (a) 5% (b) 10% (c) 20% (d) 30% Q44. What is max amount upto which TDS on commission on sale of lottery tickets shall not be deducted? (a) Rs. 5,000 (b) Rs. 20,000 (c) Rs. 1,000 (d) Rs. 15,000 Q45. If an authorised lottery ticket agent purchases tickets in bulk at a discount from SG & sells the same at a price of his choice, tax is deductible @ ___ (a) 10% (b) 5% (c)1% (d) Sec 194G is not applicable

31: d 41: c

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Q46. What is maximum amount upto which TDS on commission.brokerage shall not be deducted? (a) Rs. 15,000 (b) Rs. 20,000 (c) Rs. 10,000 (d) Rs. 5,000

Q59. In case of payment on transfer of immovable property, TDS shall be done @ _____. (a) 2% (b) 5% (c) 1% (d) Nil

Q47. What is the rate of TDS on commission/brokerage? (a) 5% (b) 10% (c) 20% (d) 30%

Q60. Rate of TDS u/s 194-IA is ___ if No PAN is given. (a) 20% (b) 30% (c) 1% (d) 10

Q48. Who shall not be liable to deduct TDS u/s 194H? (a) Any Individual (b) Any HUF (c) Any Individual & Any HUF whose accounts were not liable to audit in preceding FY (d) Any Individual & Any HUF whose accounts were liable to audit in preceding FY

Q61. Tax is not required to be deducted at source where the total amount of consideration for the transfer of immovable property is less than Rs . (a) Rs. 50 lacs (b) Rs. 100 lacs (c) Rs. 10 lacs (d) Rs. 5 lacs

Q49. Sec 194H is not applicable to professional services. (a) True (b) False Q50. The relationship between the media company & the advertising agency is that of a 'principal-to-principal' &, therefore, not liable for TDS u/s 194H. (a) True (b) False Q51. The rate of TDS on rental payments of plant, machinery or equipment is (a) 2% (b) 5% (c) 10% (d) 1% Q52. The rate of TDS on rental payments of land & building, furniture is (a) 2% (b) 5% (c) 10% (d) 1% Q53. What is the total amount during PY upto which TDS on rent u/s 194-I shall not be deducted? (a) Rs. 30,000 (b) Rs. 75,000 (c) Rs. 2,00,000 (d) Rs. 1,80,000 Q54. Who shall not be liable to deduct TDS u/s 194I? (a) Any Individual (b) Any HUF (c) Any Individual & HUF whose accounts were not liable to audit in preceding FY (d) Any Individual & HUF whose accounts were liable to audit in preceding FY Q55. In case of rent paid to government, TDS @ ____. (a) 2% (b) 5% (c) 10% (d) Nil Q56. A company has taken a house on rent @ Rs. 20,000 pm. The company should deduct tax on account of such rent paid/credited on monthly basis amounting to ____. (a) Rs. 2,000 (b) Rs. 2,400 (c) Rs. 24,000 (d) Rs. 24,960 Q57. The provisions of 194-I are not applicable to: (a) Cooling charges paid by the customers of cold storage. (b) Payment of PSF by an airline to Airport operator. (c) Rent paid to REIT (d) All of the above Q58. The provisions of 194-I are applicable to _____. (a) Rent paid to any person ≤ Rs. 1,80,000 during PY. (b) Rent paid to the government (c) 'Lump sum lease premium' or 'one-time upfront lease charges" paid by an assesse for acquiring long-term leasehold rights for land or any other property. (d) All of the above 46: a 58: c

47: a 59: c

48: c 60: a

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Q62. Sum deducted u/s 194-IA shall be paid to the credit of the CG within a period of days from the end of the month in which the deduction is made. (a) 15 (b) 30 (c) 45 (d) 60 Q63. Every person responsible for deduction of tax u/s 194-IA shall also furnish to the DGIT (Systems) or any person authorized by him, a challan-cum-statement in Form No. electronically within 30 days from the end of the month in which the deduction is made. (a) 16A (b) 16B (c) 26QB (d) 26QA Q64. Every person responsible for deduction of tax u/s 194-IA shall furnish the TDS certificate in Form No. to the payee within 15 days from due date for furnishing the challan-cum-statement in Form No. 26QB. (a) 16A (b) 16B (c) 26QB (d) 26QA Q65. Section 194-IB requires any person, being an individual or a HUF, other than those individual or HUF whose gross receipts or turnover from the business or profession carried on by him exceed the monetary limits of tax audit in the immediately preceding FY, responsible for paying to a resident any income by way of rent of Land or building or both, to deduct income tax at the rate of ____. (a) 2% (b) 5% (c) 1% (d) Nil Q66. Sect 194-IA is not attracted in hands of transferee in case of compulsory acquisition of immovable property. (a) True (b) False Q67. U/s 194-IB, tax has to be deducted at source only if the amount of such rent exceeds Rs. for a month or part of a month during the previous year. (a) Rs. 10,000 (b) Rs. 25,000 (c) Rs. 50,000 (c) Rs. 1,00,000 Q68. If no PAN is provided, TDS u/s 194-IB shall not exceed the (a) 20% (b) 30% (c) 5 % (d) Rent payable for the last month of PY or last month of the tenancy, as the case may be. Q69. Mr. A, a salaried individual, pays rent of Rs. 51,000 p.m. to Mr. B from June, 2018. Which of statement is true? (a) No tax is deductible at source since Mr. A is not liable to tax audit u/s 44AB. (b) TDS every month @ 10% on rent paid to Mr. B. (c) TDS every month @ 5% on rent paid to Mr. B. (d) TDS @ 5% on annual rent from rent paid for March 2019. 52: c 64: b

53: d 65: b

54: c 66: a

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Q70. Sec 194-IC casts responsibility on any person responsible for paying to resident any sum by way of consideration, not being consideration in kind, under a specified agreement u/s 45(5A), to deduct tax @ ______. (a) 2% (b) 5% (c) 1% (d) 10% Q71. Who shall not be liable to deduct TDS u/s 194J? (a) Any Individual (b) Any HUF (c) Any Individual & Any HUF whose accounts were not liable to audit in preceding FY (d) Any Individual & Any HUF whose accounts were liable to audit in preceding FY. Q72. What shall be rate of TDS on fees for professional or technical service u/s 194-J? (a) 20% (b) 10% (c) 30% (d) 15% Q73. Mr. P paid fees for professional services of Rs. 40,000 to Mr. A. Mr. A is engaged only in business of operation of call center. Tax is to be deducted by Mr. P at the rate of ___. (a) 1% (b) 2% (c) 10% (d) 20% Q74. The limit of Rs. u/s 194J is applicable separately for fees for professional services, fees for technical services, royalty & non-compete fees referred to in section 28(VA). (a) Rs. 10,000 (b) Rs. 20,000 (c) Rs. 30,000 (d) Rs. 40,000 Q75. Exemption Limit of Rs. 30,000 is ___ for director’s fees. (a) Not Available (b) Available Q76. Section 194J will not apply to the transaction charges paid to BSE by its members are not for technical services but are in the nature of payments made for facilities provided by the stock exchange. (a) True (b) False Q77. Services rendered by coaches & trainers in relation to the sports activities are regarded as professional services for the purposes of section 194J. (a) True (b) False Q78. A HUF is carrying on business & whose turnover of the preceding PY was Rs. 165 lacs & got tax audit done from a firm of Chartered Accountants for the current PY. An audit fee of Rs. 40,000 was paid by HUF. It should deduct tax amounting to ____. (a) Rs. 2,060 (b) Rs. 2,000 (c) Rs. 4,000 (d) Rs. 4,160 Q79. Section provides for TDS by a person responsible for paying to resident any sum in nature of compensation or enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land). (a) 194LA (b) 194LB (c) 194LC (d) 194LD 70: d 81: a

71: c 82: d

72: b 83: b

73: b 84: d

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74: c 85: a

75: a 86: a

Q80. Any person responsible for paying to a resident any sum exceeding Rs. 2.5 lakh towards compensation for compulsory acquisition of his urban industrial land under any law has to deduct income-tax at the rate of (a) 10% (b) 15% (c) 20% (d) 2% Q81. No tax deduction is to be made u/s 192LA, if the amount of such payment or aggregate amount of such payment to a resident during the FY is less than . (a) 2,50,000 (a) 10,00,000 (a) 1,80,000 (a) 50,00,000 Q82. No Tax shall be deducted on any sum payable to (a) Government; RBI. (b) Corporation established by/under Central Act, which is exempt from Income-tax. (c) Specified Mutual Fund u/s 10(23D). (d) All of the above Q83. For lower tax deduction certificate, application is to be made to ___ u/s 197A. (a) CBDT (b) AO (c) CIT (d) CBEC Q84. Section 197 is not operative in Section ___. (a) 192 (b) 194A (c) 194 J (d) 194E Q85. Certificate for lower deduction of TDS is issued by ___ after receiving an application from___. (a) AO, Assessee (b) Assessee, AO (c) CIT, AO (d) AO, CIT Q86. No declaration u/s 197A shall be ____ unless the person furnishes his ___. (a) Valid, PAN (b) Invalid, PAN (c) Valid, TIN (d) Valid, PIN Q87. No deduction of tax at source shall be made from any payment to any person for, or on behalf of, NPS Trust referred in section 10(44). (a) True (b) False Q88. All sums deducted in accordance with the foregoing provisions shall, for the purpose of computing the income of an assessee, be deemed to be income received. (a) True (b) False Q89. After deduction of TDS, deductor must deposit such TDS to ___ within specified time. (a) CC (b) SG (c) Both (d) None Q90. When ____is government, TDS must be deposit on ___. (a) Payee, same day (b) Payer, 7th of next month of TDS (c) Payer, same day (d) None of the above Q91. When the payer is other than Government, TDS of March month shall be deposit upto ____. (a) 30th April (b) 7th April (c) Same day (d) None of the above 76: a 87: a

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Q92. Which of the following are correct due dates for deductor other than government for filling TDS returns ? (a) 31st July; 31st Oct; 31st Jan; 31st May (b) 15th July; 15th Oct; 15th Jan; 15th May (c) 15th July; 31st Oct; 31st Jan; 15th May (d) None of the above Q93. In order to process TDS statements on computer, electronic processing on the same lines as processing of income-tax returns has been provided in section . (a) 202 (b) 200A (c) 202A (d) 206 Q94. Fee for TDS has been provided in section(a) 202 (b) 200A (c) 234E

(d) 206

Q95. A fee of ___ per day is levied u/s 234E for late furnishing of TDS statement. (a) Rs. 200 (b) Rs. 2,000 (c) Rs. 1,000 (d) Rs. 100 Q96. Intimation will be prepared & generated & sent to deductor, specifying his tax liability or refund due, within year from end of the FY in which statement is filed. (a) 2 (b) 3 (c) 1 (d) 6 months Q97. An assessee is deemed to be Assessee in default u/s 201 if __. (a) Deductor has deducted but not deposited the tax deducted at source (b) Employer has failed to pay the tax wholly or partly, u/s 192(1A) (c) If a Resident Payee has filed ROI u/s 139 & has included such sum in computing his total income in ROI & has paid tax on such sum. (d) Both (a) & (b) Q98. No order u/s 201(1), deeming a person to be an assessee-in-default for failure to deduct the whole or any part of the tax from a person resident in India, shall be passed at any time after the expiry of years from the end of the FY in which the payment is made or credit is given. (a) 2 (b) 5 (c) 1 (d) 7

Q102. Form 16 is issued by the employer. (a) Annually (b) Quarterly (c) Half yearly (d) Monthly Q103. TDS certificate issued in cases other than salary income is in form _____. (a) 16A (b) 16B (c) 15 (d) 15H Q104. Due Date of furnishing of TDS certificate in case of salary is _____ of the following relevant FY. (a) 30th May (b) 15th May (c) 15th June (d) 30th June Q105. Form 16A issued once in __ (a) Month (b) Year (c) Quarter

(d) Half Year

Q106. Every banking company or co-operative society or public company referred to in proviso to sec 194A(3)(i) shall prepare prescribed statements if it is responsible for paying interest u/s 194 to a resident not exceeding ___ & ____in any other case. (a) Rs. 10,000; Rs. 5,000 (b) Rs. 5,000; Rs. 10,000 (c) Rs. 10,000; Rs. 10,000 (d) Rs. 5,000; Rs. 5,000 Q107. If PAN is not submitted, TDS will be deducted at __. (a) 20% (b) 30% (c) MMR (d) Higher of Rate specified in Act or 20%. Q108. Submission of PAN is mandatory for ___. (a) Payer to Payee (b) Payee to Payer (c) Company only (d) Individual only Q109. Which of the following statement is true? (a) If PAN not submitted, TDS is deducted at higher rate (b) Declaration of 197A is invalid if PAN not submitted (c) No certified issue u/s 197 if no PAN submitted (d) All the above Q110. SC & HEC is not added in rate of TDS in case of___. (a) Resident Company (b) Non-resident company (c) Both (a) & (b) (d) None of the above

Q99. In case of Salary, TDS certificate is issued in __ Form (a)16 (b)16A (c) 15 (d)15H

Q111. SC or HEC is added in rate of TDS in case of ____. (a) Foreign company (b) Any NR Assessee (c) Indian company (d) None of the above

Q100. A person deemed to be an assessee-in-default u/s 201(1), for failure to deduct tax or to pay the tax after deduction, is liable to pay simple interest @ % for every month or part of month on the amount of such tax from the date on which tax was deductible to the date on which such tax was actually deducted. (a) 2 (b) 5 (c) 1 (d) 1.5

Q112. The deduction of tax at source from the salary shall be made at the time of (a) Accrual of salary (b) Payment of salary (c) Credit or payment of the salary, whichever is earlier (d) Any of the above at the choice of employer

Q101. A person deemed to be an assessee-in-default u/s 201(1), is liable to pay simple interest @ % for every month or part of month on the amount of such tax from the date on which tax was deducted to the date on which such tax is actually paid [Section 201(1A)]. (a) 2 (b) 5 (c) 1 (d) 1.5

92: a 103: a

93: b 104: c

94: c 105: c

95: a 106: a

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Q113. Liability to deduct tax at source in case of interest on securities arises at the time of (a) Payment of interest (b) Accrual of interest (c) Credit of Interest to the account of the payee or payment thereof, whichever is earlier (d) Any of the above at the choice of the payer of Interest

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Q114. Rate of TCS u/s 206C for alcoholic liquor for human consumption is @ ___ %. (a) 2 (b) 5 (c) 1 (d) 2.5

Q125. Whether TCS limit is applicable on each sale of motor vehicle during the year? (a) Yes (b) No

Q115. Rate of TCS u/s 206C for tendu leaves is @ ___ %. (a) 2 (b) 5 (c) 1 (d) 2.5

Q126. Person responsible for collecting tax u/s 206C(1A) shall deliver or cause to be delivered to Chief Commissioner or Commissioner one copy of declaration on or before ___ of month next following the month in which the declaration is furnished to him. (a) 7th (b) 15th (c) 30th (d) 45th

Q116. Rate of TCS u/s 206C for timber obtained under a forest lease is @ ___ %. (a) 2 (b) 5 (c) 1 (d) 2.5 Q117. Rate of TCS u/s 206C for timber obtained other than under forest lease is _ %. (a) 2 (b) 5 (c) 1 (d) 2.5 Q118. Rate of TCS u/s 206C for scrap is @ ___ %. (a) 2 (b) 5 (c) 1

(d) 2.5

Q119. Rate of TCS u/s 206C for Minerals, being coal or lignite or iron ore is @ %. (a) 2 (b) 5 (c) 1 (d) 2.5 Q120. Rate of TCS u/s 206C by every person who grants a lease or a licence or enters into a contract or otherwise transfers any right or interest in any parking lot or toll plaza or a mine or a quarry to another person (other than a public sector company) for the use of such parking lot or toll plaza or mine or quarry for purposes of business @ ___ %. (a) 2 (b) 5 (c) 1 (d) 2.5 Q121. Sec 206C(IF) provides that every person, being a seller, who receives any amount as consideration for sale of motor vehicle of value exceeding Rs. 10 lacs shall collect tax from buyer @ ___ % of the sale consideration. (a) 2 (b) 5 (c) 1 (d) 2.5 Q122. Whether TCS @ 1% is on sale of motor vehicles by manufacturers to dealers. distributors? (a) Yes (b) No Q123. Whether TCS@1% on sale of motor vehicle is applicable only to luxury cars? (a) Yes (b) No Q124. Whether TCS @ 1% is applicable for sale to Gov.t Dept, Embassies, Consulates & United Nation Institutions of motor vehicle or goods. services? (a) Yes (b) No

114: c 123: a

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117: d 126: a

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Q127. Person responsible for collecting tax u/s 206C(1) being an officer of government where the tax is paid without production of challan shall deposit TCS on: (a) the same day (b) Within 7 days from end of month in which the collection is made (c) within 1 week from end of month in which the collection is made (d) Within 30 days from the end of the month in which the collection is made Q128. Person responsible for collecting tax u/s 206C(1) being an officer of government where the tax is paid with production of income tax challan shall deposit TCS on __. (a) Same day (b) Within 7 days from the end of the month in which the collection is made (c) within 1 week from the end of the month in which the collection is made (d) Within 30 days from the end of the month in which the collection is made Q129. Person responsible for collecting tax u/s 206C(1) other than government shall deposit TCS on _____ (a) the same day (b) Within 7 days from the end of the month in which the collection is made (c) within 1 week from the end of the month in which the collection is made (d) Within 30 days from the end of the month in which the collection is made Q130. Seller includes ___ (a) CG/SG/LA or corporation or (b) Authority established by Central/State/Provincial Act (c) Any Company or Firm or Co-operative society; Individual/HUF subject to Tax audit u/s 44AB(a)/(b) in last PY. (d) All of the above

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9. ADVANCE TAX & INTEREST U/S 234 Q1. Tax shall be payable in advance during any FY on ____. (a) Previous Income (b) Estimated Current Income (c) Past Income (d) Future Income Q2. Scheme of advance tax is known as ___. (a) Step towards nation building (b) Earn more pay more (b) Pay as much as you can (d) Pay as you earn Q3. Obligation to pay advance tax arises when tax payable is______. (a) Rs. 10,000 or more (b) Rs. 10,000 or less (c) Rs. 10,000 (d) Rs. 5,000 or more Q4. Advance tax shall not be payable by resident individual having income like interest, rent, etc. in India, who ____. (a) Does not have any income taxable u/h “PGBP” (b) Is of the age of 60 or more at any time during the PY (c) Both (a) & (b) (d) Either (a) or (b) Q5. How advance tax shall be computed? (a) Tax on TI – Rebate + TDS (b) Tax on TI - Rebate - TDS (c) Tax on TI – Rebate × TDS (d) Tax on TI/TDS Q6. Assessee is _____ to submit any estimate or statement of estimated income to AO. (a) Always required (b) not required in normal cases (c) Required if he has been served with notice by AO to submit the estimates (d) Both (c) & (d)

Q14. First instalment of advance tax in case of noncompany assesses should be made ____ (a) 15th June of relevant FY (b) 15th July of relevant FY th (c) 15 Aug of relevant FY (d) 15th Sep of relevant FY Q15. Advance tax to be paid upto 15th Dec of FY is _____. (a) 75% (b) 100% (c) 30% (d) 45% Q16. For PY 2018-19, X Ltd has estimated its tax payable to be Rs. 2 lacs. Advance tax payable upto 15th Dec 2018 is? (a) 90,000 (b) 30,000 (c) 1.5 lac (d) 2 lac Q17. Mr. P estimated his tax payable for PY 2018-19 @ Rs. 1 lac. Advance tax payable upto 15th Sep 2018 is ? (a) 45,000 (b) 75,000 (c) 15,000 (d) 1 lac Q18. Where no instalment is due & any income is earned after 15th March of PY, the entire tax is to be paid by _______ (a) 15th March (b) 31st March (c) 31st July (d) 15th Sep Q19. Advance tax can be paid ____ (a) After 15th march of relevant FY (b) cannot be paid after 15th March of relevant FY (c) be paid after 15th March but by 31st March of the FY (d) None of the above

Q7. Tax deductible but not so deducted ___ be reduced for computing Advance Tax liability of the payee. (a) Can (b) cannot (c) Must (d) None

Q20. Where the assessee does not pay____ by due date, he shall be deemed to be an____in respect of such installment. (a) Last installment, assessee in default (b) Any installment, assessee in default (c) Any installment, not assessee in default (d) Last installment, not assess in default

Q8. Estimated Net Agricultural Income of the PY has to be ____ for computing advance tax. (a) Ignored (b) Taxable (c) Considered only for tax purpose (d) None

Q21. Tax liability of assessee is Rs. 11,000. This sum is deposited on 16th March in lumpsum. This is treated as (a) SAT (b) Advance tax but subject to interest (c) Advance tax (d) None of the above

Q9. Assessee opting for presumptive scheme u/s 44AD shall be ____ payment of advance tax in 4 installments. (a) Subject to (b) Exempted from

Q22. Treatment of advance tax paid by Assessee is? (a) Added to SAT (b) Deducted from SAT (c) No adjustment in SAT (d) None of the above

Q10. Assessee opting for presumptive taxation scheme u/s 44ADA for PY 2018-19 is liable to pay advance tax (a) In one instalment on/before 15th march. (b) In two instalments on/after 15th march. (c) In three instalments on/before 15 th September. (d) In four instalments on/before 31st March.

Q23. Advance tax is payable by the assessee (a) on his own account (b) On Order of AO (c) on his own account or when the order for payment is passed by AO. (d) None of the above

Q11. Advance tax is payable in ..................... instalments by a non-corporate assessee (a) 3 (b) 2 (c) 4 (d) 1 Q12. Mr. A, whose total sales is Rs. 201 lacs declare profit of Rs. 10 lacs for PY 2018-19. He is liable to pay advance tax in ______ installments (a) 1 (b) 2 (c) 3 (d) 4 Q13. First instalment of advance tax in case of company is. (a) 15th June of relevant FY (b) 15th July of relevant FY th (c) 15 Aug of relevant FY (d) 15th Sep of relevant FY 1: b 14: a

2: d 15: a

3: a 16: c

4: c 17: a

5: b 18: b

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6: d 19: c

7: b 20: b

Q24. PY 2018- 19, GGC Ltd has not paid any advance tax till 10.2.2019 & in earlier years, company was assessed in the manner given below: 2015-16 - Scrutiny Assessment done for Rs. 6 lacs. 2016-17 – BJA done for Rs. 10 lacs 2017-18 - Income Tax Return submitted for Rs. 8 lacs. Income which can be used by AO as base for computation of advance tax is ? (a) Rs. 8 lacs (b) Rs. 10 lacs (c) Rs. 7 lacs (d) None Q25. Advance tax is payable by an assessee on his /its total income, which includes (a) Capital gains (b) Casual income (c) Both of the above (d) None of the above 8: c 21: b

9: b 22: b

10: a 23: c

11: c 24: b

12: d 25: c

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Q26. If casual income or capital gain arises ___ of any installment, then entire tax payable on such income should be paid in the ___ of advance tax which are due (a) After DD, last instalment (b) Before DD, last Installment (c) After DD, Remaining instalment (d) Before DD, Remaining installment Q27. If any person has paid income tax after expiry of last date of filing of ROI, Interest u/s 234A shall be payable ____ for period subsequent to last date of filing of ROI @ (a) 12% p.a (b) 1% p.m or part (c) 10% p.m Q28. Mr. P submitted his ROI for PY 2018-19 on 15.12.2019. Due date of filing ROI was 30.9.2019. Mr. P shall have to pay interest u/s 234A for _____months (a) 3 (b) 2 (c) 2.5 (d) 4 Q29. Interest u/s 234A shall ____ charged on SAT u/s 140A paid by assessee on or before DD of filing ROI even if ROI is submitted after DD of filing ROI. (a) be charged (b) Not be charged Q30. In what case, interest u/s 234B is attracted? (a) Non-payment of advance tax (b) Payment of advance tax of < 90% of Assessed Tax (c) Either (a) or (b) (d) None

Q38. What shall be payable by assessee for deferment of advance tax beyond due dates. (a) Interest (b) Penalty (c) Fine (d) All Q39. Interest liability u/s 234C would be ___ for a period of _____ for every deferment (a) 2%, 6 months (b) 1%, 1 month (c) 1%, 3 months (d) 2%, 3 months Q40. For last installment of 15th March PY, interest liability u/s 234C would be ____ for (a) 1%, 3 months (b) 1%, 1 month (c) 1%, 3 months (d) 2%, 3 months Q41. In case of company, if advance tax payable in second installment is ____ , no interest u/s 234C shall be payable. (a) 36% or less (b) 36% or more (c) 12% or more (d) 12% or less Q42. When advance tax is deposited on 16th Sep instead of 15th Sep, what would be the consequences u/s 234C? (a) Interest for one day shall be charged (b) Interest for one month shall be charged (c) No levy of interest shall be charged (d) Interest for three month shall be charged

Q31. Interest u/s 234B is calculate on difference b/w ____. (a) Advance tax paid & assessed tax (b) Advance tax paid & 90% of the assessed tax (c) Assessed by tax & advance tax paid (d) None of the above

Q43. If a person who is required to file ROI u/s 139 does not file ROI within DD u/s 139(1), fee payable u/s 234F shall be ___. (a) Rs. 5,000 if ROI is filed on/before 31st December of AY (b) Rs. 10,000 in any other case (c) Both (a) & (b) (d) None of (a) or (b)

Q32. Interest u/s 234B for default in payment of advance tax is payable for period starting from _____ (a) due date of return to the date of assessment (b) 1st April of relevant AY to the date of assessment (c) 1st April of relevant AY to date of submission of ROI

Q44. If Total Income of the person _____, fees payable shall not exceed ____. (a) < 5 Lacs; Rs. 1,000 (b) ≤ 5 Lacs; Rs. 1,000 (c) < Lacs; Rs. 5,000 (d) < 10 Lacs; Rs. 10,000

Q33. Interest liability u/s 234B would be ____ from 1st April following the FY up to the date of assessment of income. (a) 1% p.m (b) 1% p.m or part (c) 2% p.m or part Q34. 1st installment of Advance tax of Rs. 15,000 was due on 15.9.2018. Assessee deposited Rs. 10,000 on 14.8.2018 & balance on 16.11.2018. Interest payable @ 1% p.m on __. (a) Rs. 15,000 for 3 months (b) Rs. 5,000 for 3 months (c) Rs. 5,000 for 2 months (d) Rs. 15,000 for 2 months Q35. What shall be payable by assessee for deferment of advance tax beyond due dates given u/s 211. (a) Interest u/s 234A (b) Interest u/s 234B (c) Interest u/s 234C (d) None of the above

Q45. What are possible consequences of late filing of ROI ? (a) Late fees has to be paid u/s 234F (b) Losses cannot be carried forward (c) Both Q46. Mr. P has a total income of Rs. 7 lakhs for AY 2019-20. He files his return of income for AY 2019-20 on 13th January, 2020. He is liable to pay late fee of (a) Rs. 1,000 u/s 234F (b) Rs. 5,000 u/s 234F (c) Rs. 10,000 u/s 234F (d) Not liable to pay any fee Q47. Mr. P has total income of Rs. 4,90,000 for the AY 2019-20. If a return is filed after the due date u/s 139(1) then the late fees of shall be imposed u/s 234F upto ___. (a) 2,000 (b) 2,500 (c) 5,000 (d) 1,000

Q36. In case of company, if Advance tax payable in 1st installment is ____ , no interest u/s 234C shall be payable. (a) 12% or less (b) 10% or more (c) 12% or more (d) 36% or more

Q48. Mr. P has total income of Rs. 14,90,000 for the AY 2019-20. If a return is filed after the due date u/s 139(1) but before 31/12/AY then the late fees of ..................... shall be imposed u/s 234F. (a) 2,000 (b) 2,500 (c) 5,000 (d) 1,000

Q37. Interest u/s 234C is to be calculated on difference between ____ up to that date & ____. (a) Actual tax paid & advance tax payable (b) Advance tax payable & actual tax paid (c) Either of above (d) None of the above

*Q49. Late fees shall be imposed u/s 234F if ITR is submitted after the due date u/s 139(1). Such amount of late fees cannot be ____. (a) 2,000 (b) 1,0o0 (c) 5,000 (d) 10,000

26: c 38: a

27: b 39: c

28: a 40: b

29: b 41: a

30: c 42: b

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32: b 44: b

33: b 45: c

34: b 46: c

35: c 47: d

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10. RETURN OF INCOME Q1. As per section 139(1), filing of returns is compulsory (must) irrespective of whether profit is earned or loss is incurred, in case of (a) companies only (b) firms only (c) both companies & firms (d) All Assessees Q2. As per section 139(1), an individual shall file income tax return if (a) his total income exceeds Rs. 2,50,000 (b) his total income exceeds Rs. 3,00,000 (c) his total income exceeds Rs. 5,00,000 (d) his total income before allowing deduction u/s 80C to 80U exceeds BEL (Rs. 2,50,000). *Q3. Akash, who is 32 years old, has long-term capital gains on transfer of equity shares of Rs. 25,000 which is exempt u/s 112A & deduction of Rs. 80,000 u/s 80C. He has to file a ROI for AY 2019-20, only if his TI exceeds: (a) Rs. 1,70,000 (b) Rs. 1,45,000 (c) Rs. 1,50,000 (d) Rs. 2,50,000 Q4. Mr. P is a resident of India. During AY 2019-20, interest of Rs. 2,88,000 was credited to his Non-Resident external account with SBI. Rs. 30,000 being interest on FD with SBI was credited to his savings account & he also earned interest of Rs. 3,000 on his savings bank account. Is Mr. P required to file his ITR? (a) No (b) Yes *Q5. Mr. P dies on 15.11.2018 & his total income till this date was Rs. 2,55,000. Thereafter the business of Mr. P was inherited by his son Mr. P & his total income from such business was Rs. 2,88,000. The son does not have any other income. In this case the son (a) has to file a consolidated income tax return for the amount of Rs. 5,43,000. (b) has to file separate income tax returns, one on behalf of his father for Rs. 2,55,000 & other in his own capacity for Rs. 2,88,000. (c) has to file only one income tax return on behalf of his father for Rs. 2,55,000. (d) has to file only one income tax return on behalf of his father for Rs. 5,43,000. *Q6. ROI is required to be filed by every resident & ordinarily resident if (a) He has signing authority in any account located outside India or holds asset outside India (b) He is a beneficiary of any asset located outside India. (c) Both (a) & (b) (d) None of (a) & (b) since no asset is located in India. *Q7. ROI is required to be filed by every RNOR if (a) He has signing authority in any account located outside India or holds asset outside India (b) He is a beneficiary of any asset located outside India. (c) Both (a) & (b) (d) This proviso is not applicable to resident but not ordinarily resident. 1: c 10: b

2: d 11: a

3: d 12: c

4: a 13: a

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5: b 14: c

*Q8. An Individual who is a beneficiary of any asset located outside India is ____ if such income is includible in the Income of the Beneficial owner. (a) required to file ROI under 4th proviso to section 139(1) (b) Not required to file ROI under 4th proviso to sec 139(1) (c) Required to deduct TDS under 4th proviso to sec 139(1) (d)Not Required to deduct TDS under 4th proviso to sec 139(1) *Q9. Assessee having total income lower than Basic Exemption Limit is (a) Required to File ROI. (b)Not required to File ROI (c) May file ROI if he so desires. (d) Both (b) & (c). Q10. For filing returns of income in respect of various entities, Income-tax Act, 1961 has prescribed (a) Two due dates (b) Three due dates (c) Four due dates (d) Only one due date Q11. In case of every assessee, the ROI shall be filed: (a) On or before due date given u/s 139(1) (b) Before due date given u/s 139(1) (c) On due date given u/s 139(1) (d) After due date given u/s 139(1) Q12. The last date of filing ROI u/s 139(1) for AY 2019-20 in case of non-corporate assesses who does not have any income of PGBP is: (a) 30th September of PY (b) 30th September of AY (c) 31st July of AY (d) 31st July of the PY Q13. Last date of filing ROI u/s 139(1) for AY 2019-20 in case of a Company assesses is: (a) 30th September of PY (b) 30th September of AY (c) 31st July of AY (d) 31st July of the PY Q14. The last date of filing ROI u/s 139(1) for AY 2019-20 in case of non-corporate assesses whose accounts are not liable to be audited is: (a) 30th September of PY (b) 30th September of AY (c) 31st July of AY (d) 31st July of the PY Q15. Due date of furnishing return of income for a working partner of a firm whose accounts are required to be audited is: (a) 31st July of AY (b) 30th September of AY (c) 30th November of AY (d) 31st March of AY *Q16. The last date of filing ROI u/s 139(1) for AY 201920 in case of assessee who is required to furnish Transfer Pricing Report u/s 92E relating to International transaction/Specified Domestic transaction is: (a) 30th November of PY (b) 30th November of AY (c) 31st September of AY (d) 31st September of PY Q17. Due date of furnishing ROI for a non-working partner of a firm whose accounts are required to be audited is: (a) 31st July of AY (b) 30th September of AY (c) 30th November of AY (d) 31st March of AY 6: c 15: b

7: d 16: b

8: b 17: a

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Q18. Due date of furnishing return of ROI for a nonworking partner of a firm whose accounts are not required to be audited is: (a) 31st July of AY (b) 30th September of AY (c) 30th November of AY (d) 31st March of A Y Q19. If last date of filing of ROI/ROL is a public holiday, Assessee should/can file ROI/ROL on (a) Previous working day. (b) next working day. (c) On the same day (d) Assessee should ask AO for the suitable date to file ROI. *Q20. During AY 2019-20, Mr. P has Income u/h HP Rs. 107 Lakhs., his last date of filing of return shall be _____. (a) 31st July, 2019 (b) 31st July 2018 (c) 30th September 2019 (d) 30th September 2018 *Q21. During AY 2019-20 Mr. P has business turnover of Rs. 107 Lakhs., his last date of filing of return shall be ____. (a) 31st July, 2019 (b) 31st July 2018 (c) 30th September 2019 (d) 30th September 2018 Q22. The filling of return of loss in case of a person other than a company or firm is: (a) mandatory (b) not mandatory (c) mandatory if the assessee wants to carry forward loss (d) There is no provision regarding Return of Loss for a person other than a company or firm. Q23. If the assessee has to carry forward the loss, the return of loss must be submitted. (a) On or before the due date mentioned in section 139(1) (b) at any time before the end of the relevant AY (c) at any time before the expiry of one year from the end of the relevant of the assessment year (d) Time specified by AO. Q24. If there is a loss u/h “house property”, it will be allowed to be carried forward if the assessee: (a) has submitted the return of loss before the due date mentioned u/s 139(1). (b) has not submitted the return of loss. (c) has submitted the return of loss after the due date u/s 139(1) i. e. a belated return. (d) No set off is allowed for such loss. Q25. For AY 2019-20 the assessee suffered the loss u/h “house property” of Rs. 1,20,000. His business income for the same PY is Rs. 50,000. The due date of filing ROI is 31.7.2019 but he submitted his ROI on 9.9.2019. In this case the assesses : (a) Shall be allowed to carry forward the loss of Rs. 70,000. (b) Shall not be allowed to carry forward loss of Rs. 70,000. (c) No set off is allowed for such loss. (d) Depends on the discretion of AO. *Q26. Section 80 prohibits _____ of losses if ROL is not filed within DD of filing ROI u/s 139(1) but it does not prohibit _______ of losses. (a) Carry forward , Set off (b) Set off, Carry forward (c) Carry forward, Carry forward (d) Set off, Set off 18: a 27: c

19: b 28: a

20: a 29: c

21: c 30: c

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22: c 31: b

Q27. For AY 2019-20, business loss of the assessee was Rs. 1,00,000 & current year depreciation was 1,40,000. The assessee furnished ROI on 15.12.2019 although the due date was 30.9.2019. In this case, the assessee shall be: (a) allowed to carry forward business loss of Rs. 1,00,000 & unabsorbed depreciation of Rs. 1,40,000 (b) neither be allowed to carry forward business loss nor the unabsorbed depreciation (c) not be allowed to carry forward business loss but shall be allowed to carry forward unabsorbed depreciation. (d) allowed to carry forward business loss but not allowed to carry forward unabsorbed depreciation Q28. PGBP loss of the year for which return is filed after the due date u/s 139(1) ____ but PGBP loss of earlier years for which return was filed within due date u/s 139(1) _____. (a) Cannot be carried forward, can be carried forward. (b) Can be carried forward, can be carried forward. (c) Can be carried forward, cannot be carried forward. (d) Cannot be carried forward, cannot be carried forward. Q29. For AY 2017 - 2018, Mr. P incurred a loss of Rs. 40,000 u/h PGBP & filed return of loss within due date. He again incurred loss of Rs. 50,000 during AY 2018 - 2019 but for this year he did not file return. In AY 2019 - 20, he earned income of Rs. 5 lacs. How much loss can Mr. P carry forward & set off in this year ? (a) Rs. 90,000 (b) Rs. 50,000 (c) Rs. 40,000 (d) Nil. Q30. For AY 2019-20, assessee has suffered a business loss of Rs. 2,50,000. His income from house property is Rs. 1,80,000. Due date of ROI u/s 139(1) was 31.7.2019 but he submitted ITR on 9.9.2019. In this case, assessee (a) Shall be allowed to carry forward the loss of Rs. 70,000. (b) Shall not allowed to carry forward any loss. (c) Shall be allowed to set off current year business loss to the extent of Rs. 1,80,000 but shall not be allowed to carry forward the balance loss of Rs. 70,000. (d) Shall not allowed to set off business loss to the extent of Rs. 1,80,000 & would be liable to tax on Rs. 1,80,000. Q31. Brought Forward Losses can be carried forward if ___. (a) ROL is filed within due date u/s 139(1) during the relevant PY. (b) ROL was filed within DD in that year even if No ROL is filed in Current Year. (c) Brought Forward Losses cannot be carried forward. (d) None of the above. Q32. Current Year Business Loss: (Rs. 1 Lacs); B/F losses for AY 2018-19 (ROL filed w/I DD): (Rs. 3,00,000). In case of Mr. C, Due Date of filing ROI is 30.09.2020. Mr. C. has is filed on October 15, 2020. In this case, (a) Losses of AY 2018-19 of Rs. 3,00,000 are carried forward to next AY 2020-21 as ROI for AY 2018-19 has been filed within the due date of filing ROI u/s 139(1) for AY 2018-19. However, Loss of AY 2019-20 cannot be carried forward to AY 2020-21. (b) Losses of AY 2018-19 of Rs. 3,00,000 & AY 2019-20 cannot be carried forward to AY 2020-21. (c) Losses of AY 2018-19 of Rs. 3,00,000 & AY 2019-20 not be carried forward to AY 2020-21. (d) None of the above. 23: a 32: a

24: c

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Q33. Belated return can be filed by an assessee before end of ___ or before _____.whichever is earlier. (a) Relevant AY, Completion of Assessment (b) 1 year from the end of AY, Completion of Assessment (c) Relevant PY, Completion of Assessment (d) 1 year from the end of PY, Completion of Assessment Q34. Completion of Assessment means date of ____ (a) Passing Assessment order (b) Service of Assessment order (c) When AO notify about the assessment to the Assessee (d) None of the above Q35. The assessee could not file his ROI for AY 2019-20 within the time allowed u/s 139(1). No assessment has so far been made. In this case, assessee can file return of income till (a) 31.3.2018 (b) 31.3.2019 (c) 31.3.2020 (d) 31.3.2021 Q36. For PY 2018-19, no ROI has been filed. AO makes a BJA u/s 144 on 1.1.2020. Upto what date can assessee file Belated ROI u/s 139(4). (a) 31.3.2020 (b) 1.1.2020 (c) 30.9.2019 (d) 30.9.2020 Q37. ROI is treated as detective if it is not accompanied by: (a) Statement showing the computation of tax payable on the basis of the return. (b) Audit Report u/s 44AB. (c) Proof regarding the tax claimed to have been deducted or collected at source & Advance tax & SAT claimed to have been paid. (d) Any of the above Q38. Revised return can be filed by (a) End of relevant assessment year (b) Before completion of assessment year (c) Earlier of (a) & (b) (d) Belated return is not allowed to be filed Q39. A Person is required to obtain a PAN whose total sales turnover or gross receipts are or is likely to exceed ___ in any previous year? (a) Rs. 5 lac (b) Rs. 2.5 lac (c) Rs. 10 lac (d) Rs. 1 lac Q40. For AY 2019-20, Mr. P has filed original ROI on 11.11.2019 whose due date of filing of ROI was 31.7.2019, he can file revised return of income latest upto (a) 31.3.2020 (b) 31.3.2019 (c) 30.9.2020 (d) 31.3.2021 Q41. Revised return substitutes ___ & is deemed to be have been filed on the date on which original ROI was filed. (a) Original return (b) Revised return filed earlier (c) Original return or revised return filed earlier (d) None of the above

33: a 42: b

34: a 43: c

35: c 44: d

36: b 45: d

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37: d 46: b

Q42. If AO considers that return is defective, he may intimate the defect to the assessee & give him (a) Opportunity to rectify the defect within 30 days (b) Opportunity to rectify the defect within 15 days (c) No opportunity shall be given (d) None of the above Q43. If the defect is not rectified within 15 days or such further extended period as allowed by AO, then the return would be treated as _____ return & it would be deemed that the assessee had failed to furnish the return. (a) Valid (b) Illegal (c) Invalid (d) None Q44. PAN is compulsorily required in (a) Opening a Bank account (other than Time Deposit) (b) Total Cash Deposit > Rs. 50,000 in a day (c) Cash Payment for Hotels/Restaurants bills at any one time > Rs. 50,000 (d) All of the above Q45. Provisions relating to Compulsory Quoting of Aadhar number u/s Sec 139AA would not apply to Individual who does not possess Aadhar number or Enrolment ID & is: (a) Residing in States of Assam, J&K & Meghalaya; (b) Super Senior Citizen [Age ≥ 80 yr at any time during PY; (c) Non-Resident or Not a Citizen of India. (d) All of the above Q46. In case of company, ROI can be signed by (b) any member (b) Managing director (c) any manager (d) chief executive officer Q47. Who cannot be Tax Return Preparer? (a) Officer of Scheduled bank in which assessee maintain current A/c or has regular dealings. (b) Legal practitioner who is entitled to practice in any civil court in India. (c) Chartered Accountant & Employee of “Specified class of Person”. (d) All of the above. Q48. Specified class of persons means any person other than ___. (a) company; (b) person whose accounts are required to be audited u/s 44AB & is required to furnish ROI. (c) both (a) & (b) (d) None of the above Q49. ITR of Company was verified by Company Secretary. Such ITR shall be called as ____. (a) Valid ITR (b) Invalid ITR (c) Detective ITR (d) Any of the above Q50. Assesses filed his return of income in requisite form without making the payment of tax. The ITR so filed is (a) valid (b) not valid (c) defective (d) not defective

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