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Simulated Test 01

Question 1 Marks: 1
Your client is unsure of the meaning of the term codicil. A codicil is:

Choose one answer. a. A document use to make an alteration to a Will. b. A gift of land or real estate in a Will. c. A term used to cover grants of probate to the legal personal representative. d. The statement made at the end of a will that it has been duly attested. Question 2 Marks: 1
Your client Mr. Saxena expressed his intention to write his Will in his own handwriting. Such a Will which is wholly in the handwriting of the testator is known as:

Choose one answer. a. Holograph Will b. Nuncupative Will c. A handwritten Will is not allowed as establishing the authenticity of a handwritten document is difficult in the court of law. d. Lithographic Will Question 3 Marks: 1
An investor holds shares in a company that is not listed. Such shares would qualify as longterm assets if held for _______.

Choose one answer. a. More than 36 months b. 36 months or more c. More than 12 months d. None of the above Question 4 Marks: 1
Long-term capital gains tax rate on units of a debt-based Mutual Fund scheme is ________.

Choose one answer. a. 10% at all times b. 10% on sale value minus cost or 20% of sale value minus indexed cost whichever is lower c. 20% on indexed capital gains

d. Nil Question 5 Marks: 1


Mr. Billimoria, a chief executive of a company, finds that he had to undertake foreign tours for the companys work and had to remain out of India for as many as 300 days in FY 08 09. He has never been out of India for the five years preceding the FY 2008-09.His residential status for previous year 08-09 would be ________.

Choose one answer. a. Foreigner b. Resident but not Ordinarily Resident c. Non Resident d. Resident outside India Question 6 Marks: 1
What is the main benefit of Estate Planning?

Choose one answer. a. Peace of mind b. To avoid probate c. To ensure property passes to intended person d. To plan health care treatment Question 7 Marks: 1
For the Previous Year 10-11, XYZ Ltd., a domestic company, pays an interim dividend in October 2010 of 15% and a final dividend of 40%. The dividend distribution tax is payable on

Choose one answer. a. both interim and final dividend b. neither the interim nor the final dividend c. the final dividend only d. the interim dividend only Question 8 Marks: 1
Foreign income is tax-free in India the hands of _________.

Choose one answer. a. Residents and ordinarily residents b. except income from business and profession c. Non-Residents only d. None of the above

Question 9 Marks: 1
Mr. Das is an NRI working for a company in Dubai. The company desires to credit his monthly salary to his NRE account in India. Then such salary ________.

Choose one answer. a. Would be taxable in India since it is received in India. b. Would not be taxable in India since it is credited to the NRE account. c. Would not be taxable in India since it is earned by an NRI. d. Would not be taxable in India since it is earned from a foreign source. Question 10 Marks: 1
Mr. Yadav owns a small business worth Rs.4 crores. How should life insurance be held if Mr. Yadav is trying to benefit his minor grandson with the insurance policy?

Choose one answer. a. A revocable life insurance trust should be established for the grandchild b. An irrevocable trust should be set up with the grandchild as beneficiary c. Mr. Yadav.s spouse should be the owner. d. The grandson should be the owner. Question 11 Marks: 1
What are parties to Power of Attorney called? 1. Donor and Donee 2. Debtor and Receiver 3. Client and Attorney

Choose one answer. a. only 1 b. only 3 c. 1 & 3 only d. None of the above Question 12 Marks: 1
In the case of a Recognized Provident Fund, employers contribution in excess of what percent is taxable?

Choose one answer. a. 12% b. 8% c. 10% d. It is not taxable at all Question 13

Marks: 1
Which of the following statements is true in case of a Vakalatnama?

Choose one answer. a. A Vakalatnama is required to be registered in accordance with Indian Registration Act. b. A Vakalatnama is not required to be registered. c. A Vakalatnama creates a special power of agency. d. A Vakalatnama needs to be stamped in accordance with Article 48and 52 of the Indian Stamp Question 14 Marks: 1
Which of the following statements is true in case of a Vakalatnama?

Choose one answer. a. 8 years b. 4 years c. Indefinite period d. None of the above Question 15 Marks: 1
Mukesh has taken a loan from his employer, a PSU, for pursuing his higher studies. The amount that he pays to his employer for the loan for FY 2010-11 is Rs. 80,000. Out of this Rs. 30,000 is towards repayment of the capital amount of the loan and the rest is towards repayment of interest. Deduction available to Mukesh u/s 80E of IT Act would be _________.

Choose one answer. a. NIL b. Rs. 80,000 c. Rs. 50,000 d. 30,000 Question 16 Marks: 1
Vineeta is 63 years of age. In her case, the maximum income not chargeable to tax in India for AY 2011-12 would be ________.

Choose one answer. a. Rs. 1,00,000 b. Rs 190000 c. Rs. 1,10,000 d. Rs. 1,45,000

Question 17 Marks: 1
X is a property dealer who buys and sells housing property. He received some rent from a housing property held as stock-in-trade in the Assessment Year 2011-12. This rental income would come under the head:

Choose one answer. a. Income under the head capital gains. b. Business income. c. Income from other sources. d. Income from house property. Question 18 Marks: 1
Donation to a notified temple attracts a deduction of________ u/s 80G of Income Tax Act.

Choose one answer. a. 100% b. 50% (only if it is for renovation or repairs) c. 50% (for any purpose) d. NIL Question 19 Marks: 1
(A) Coparcenaries are restricted to four degrees from the common ancestor. (B) Coparcenaries are restricted to four degrees from the living holder of the HUF property.

Choose one answer. a. Only (A) is correct. b. Only (B) is correct. c. Restricted to five degrees from the common ancestor. d. Restricted to six degrees from the common ancestor. Question 20 Marks: 1
A) Share of profit which a partner receives from a firm shall be fully exempt in the hands of the partner.

(B) Interest and remuneration which was allowed as deduction to the firm shall be taxable in the hands of partners.

Choose one answer. a. is correct. b. is correct. c. Both (A) and (B) are correct. d. Both (A) and (B) are incorrect. Question 21 Marks: 1
As per section 89 of Indian Succession Act, a Will that is not expressive of any definite intention becomes void for uncertainty.

Choose one answer. a. The above statement is applicable to resident Indian only. b. The above statement is false. c. The above statement is correct. d. The above statement will apply to an NRI only. Question 22 Marks: 1
U/s 13A of the Income Tax Act the following incomes of political parties is/are included in computing their total income:

(A) Income from House property. (B) Income from other sources. (C) Income by way of Voluntary contribution from any person. (D) Any Income from Capital Gains.

Choose one answer. a. (A), (B), (C) and (D) b. (B) and (C) c. (A) and (B) d. None of the above Question 23 Marks: 1
Any perquisites or allowances paid or allowed, as such, outside India by the Government of India to a citizen of India, for rendering services outside India, are exempt u/s 10(7) of Income Tax Act.1961.

Choose one answer. a. The above statement will apply to an NRI only. b. The above statement is correct. c. The above statement is false.

d. The above exemption is applicable only to Government employees. Question 24 Marks: 1


(A) Receipt of an academic allowance or professional pursuits allowance by an employee is part of zero tax.

(B) Receipt of an academic allowance or professional pursuits allowance by an employee is part of taxable income.

Choose one answer. a. depend on the actual expenses incurred by employee b. only is correct. c. is correct only for limits more than Rs. 500 p.m. d. (B) is correct only for limits more than Rs. 750 p.m. Question 25 Marks: 1
(A) In India, only the lessor is allowed to charge depreciation on the assets and claim tax deductions.

(B) In India, only the lessee is allowed to charge depreciation on the assets and claim tax deductions.

Choose one answer. a. Statement (A) is correct. b. Statement (B) is correct. c. Both are correct. d. None of the above is correct Question 26 Marks: 1
Pension received from a former employer is classified under the head _________.

Choose one answer. a. Gratuity b. Income from other sources c. Salary d. Capital Gains Question 27 Marks: 1

Computing "salary" for the purpose of "Rent free accommodation. includes ____________.

Choose one answer. a. bonus b. advance salary c. both bonus and advance salary d. None of the above Question 28 Marks: 1
Which of the following is/are correct regarding budgeting ?

1. 2. 3. 4.

The budget should be adjusted yearly to reflect actual expenditures. Inflation should not be considered when budgeting. If clients are close to retirement age, budgeting is not useful. Budgeting requires planning for the unexpected.

Choose one answer. a. Only 2. b. 2and 4. c. Only 4. d. 1, 2and 4. Question 29 Marks: 1


You as a CFPCM certificant believe that there may be some illegal money laundering going on at the firm where you work. You have tried to investigate, but have been unable to ascertain if your assumptions are correct and have not yet notified anyone within your firm of your suspicions. You would make timely disclosure of the available evidence to any of the following except:

Choose one answer. a. Your direct supervisor. b. A partner in the firm. c. The FPSB, India. d. A co-owner of the firm. Question 30 Marks: 1
A client knows that her Planner, a CFPCM Certificant, has commingled her money with his own money. However he maintains good records and knows how much money belongs to whom. Which of the following Principles of Ethics has the CFPCM Certificant violated?

Choose one answer. a. Integrity b. Objectivity c. Professionalism d. Fairness Question 31 Marks: 1


A Client should be helped to set his/her financial goals in _________.

Choose one answer. a. both current & future money terms b. future money terms c. current money terms d. None of the above Question 32 Marks: 1
Calculate the GDP of India with the given figures: Consumption: $ 300 billion Investments: $ 400 billion Government spending: $ 300 billion Exports: $ 150 billion Imports: $ 200 billion

Choose one answer. a. $1,000 billion b. $650 c. $1,050 d. $ 950 Question 33 Marks: 1
The relationship of a Principal and an Agent may be created by _____. (A) Express appointment (B) The conduct of the parties (C) By a Court of law

Choose one answer. a. (C) Only

b. (A) & (B) c. (B) & (C) d. (A), (B) & (C) Question 34 Marks: 1
Deficit financing provision in the Budget will lead to the following/s. (A) Increase in money supply (B) Adjustment of interest rate (C) Rise in prices (D) Fall in national income.

Choose one answer. a. (A) only b. (A) & (C) only. c. (A), (B) & (C) only d. All the above Question 35 Marks: 1
Sumit, a Certified Financial Planner, is preparing a letter to circulate among prospective clients and the letter contains information on services provided by his firm. According to the Code of Ethics and Rules of Professional Conduct, all of the following information should appear in the letter except ________.

Choose one answer. a. the fees and commission sources of the firm b. details of firm.s portfolio size and composition c. any significant financial relationships or connections with product providers d. identity of the firm providing the service and the nature of services offered Question 36 Marks: 1
Which of the following statements is not entirely true?

Choose one answer. a. RBI controls interest rates in India. b. An increase in liquidity leads to softening of interest rates. c. An uncontrollable fall in the value of a countrys currency would usually trigger hardening in the d. A high inflation scenario usually pushes interest rates up. Question 37 Marks: 1
If Reserve Bank of India wants to lower the interest rates in the economy, it would consider which of the following option/s?

(A) Purchase government securities. (B) Increase the reserve requirement of member banks. (C)Increase the discount rate. (D) Decrease the reserve requirement of member banks.

Choose one answer. a. (A) & (B) only b. (A) & (D) only c. (B) & (C) only d. (A) only Question 38 Marks: 1
If Ajay takes a loan from an approved Financial Institution to meet cost of his study program in Financial Accounting, what are the tax benefits available on the interest and principal?

Choose one answer. a. The entire amount of interest and principal for the previous year is deductible from his totalincome. b. The entire amount of interest for the previous year is deductible from his total income. c. The deductions are applicable only after the year in which the entire principal is paid off. d. The deductions of principal and interest are applicable only if expenses are incurred for children to a maximum of Rs 100 per child per month. Question 39 Marks: 1
Raykar is an accomplished Financial Planner and is also an expert on derivatives and high yielding bonds. He understands client requirements well and is able to come up with appropriate portfolio restructuring ideas for clients. He believes in quickly moving clients from one investment to another through a dynamic process of research and recommendations. What according to the Rules relating to the Code of Ethics is the most applicable in this case?

Choose one answer. a. He does not violate the Rules if he explains to the client the reasons and is able to show that the moves are appropriate to the client. b. He does not violate the Rules since he conducts and has access to research and advises on products relevant to clients based on an understanding of their requirements. c. He does not violate the Rules since he is an acknowledged expert and knows what is best for his clients. d. He violates the Rules as it amounts to active churning of client portfolios. Question 40 Marks: 1
If the post tax rate of return on an investment is 8% and the inflation rate is 5% the real rate of return is_______________.

Choose one answer. a. 3.5% b. 3.0% c. 2.86% d. -3.0% Question 41 Marks: 2


Amitabh wins Rs. 3 lakh in a television quiz show. He has no other income for the particular FY. Can he contribute to PPF and claim deduction for this contribution?

Choose one answer. a. No b. Yes c. Limited to Rs 50,000 d. Limited to Rs 70,000 Question 42 Marks: 2
For claiming deduction u/s 80C of IT Act for AY 2011-12, the investment in an eligible instrument has to be out of the assesses.s income chargeable to tax in the FY 2010-11.

Choose one answer. a. Limited to Rs. 25,000 b. True. c. False. d. Limited to Rs. 50,000. Question 43 Marks: 2
An HUF consisted of a father, who is a widower, his three sons and a daughter. Upon death of the father, what will be the share of his daughter?

Choose one answer. a. Will not get any share. b. One fourth plus one sixteenth of HUF property. c. One fourth of HUF property. d. One sixteenth of HUF property. Question 44 Marks: 2
Vishal loans Rs. 5,00,000 to his HUF at the market rate of interest of 8%. During the FY 2008-09, the HUF earns Rs. 75,000 as profit (before paying the interest) on the amount advanced by Vishal. Determine the amount to be clubbed with the income of Vishal as per Sec. 64(2) of the IT Act.

Choose one answer.

a. Nil. b. Rs. 75,000. c. Rs. 35,000. d. Rs. 40,000. Question 45 Marks: 2


Income of a resident Indian for the FY 2010-11 is Rs. 1250000 (inclusive of interest on Government securities Rs. 15000). He invests Rs. 1 lakh in schemes and deposits qualified for deduction under section 80C. He pays Rs. 15000 on account of mediclaim insurance premium. Find out the tax liability for the AY 2011-12 if the taxpayer is a senior citizen

Choose one answer. a. 249775 b. 192095 c. 245140 d. None of the above Question 46 Marks: 2
Raghuveer has not done any Estate Planning as of now. Even his father has not prepared any Estate Planning documents. As Raghuveer is the only son of his parents, along with his 3 sisters, what is most suitable for him?

Choose one answer. a. Raghuveer's father should first prepare his Will and on the basis of that Will Raghuveer should prepare his own Will. b. Raghuveer should create his own Will without waiting for his fathers Will. c. There is no need for any Estate Planning as the family is a joint family & Raghuveer is the only son of his parents. d. Raghuveer should create his Will by including his fathers property but with an inbuilt provision for hisisters on account of that property. Question 47 Marks: 2
In an unfortunate incident, Mr. Charan.s plant catches fire and the machinery gets destroyed. Luckily, Mr. Charan had insured the factory against fire. The WDV of the machinery was Rs. 268000 and the replacement cost Rs. 5 lakh. The Insurance Company has paid compensation of Rs. 3 lakh. What is the taxable amount?

Choose one answer. a. Rs. 32000 as capital gains. b. Rs. 32000 as normal income. c. Rs. 200000 as capital loss. d. Nil. Question 48

Marks: 2
Rakesh is not sure about the tax treatment of shares proposed to him by the new company through ESOPs.He wants to know the tax treatment of the same at the time of vesting and selling. (Assume shares are soldthrough recognized stock exchange).

Choose one answer. a. Rakesh has to pay the normal rate of taxes as per prevailing legislation on both occasions. b. The employer pays FBT on the allotment price; Rakesh has to pay STCG if he sells within 12 months or Nil after that. c. The employer/employee pays FBT on the difference between allotment price and Fair market price at vesting at the time of exercise of the option; Rakesh has to pay STCG if he sells within 12 months or Nil after that. d. Rakesh pays a concessional FBT of 10% on the allotment price; Rakesh also has to pay STCG between allotment price and the vesting price and LTCG on difference between vesting price and his eventual selling price. Question 49 Marks: 2
Pramod redeemed 5,000 units of a debt oriented Mutual Fund on 31/07/2008 @ Rs. 43 per unit.These units were purchased by him in 1996-97 @ Rs. 10. Compute the long term Capital Gains tax. Cost of inflation index: 1996-97: 259, 1997-98: 281, 2006-07: 480, 2007-08: 497, 2008-09: 519. Ignore Education Cess.

Choose one answer. a. Rs. 16,500 b. Rs. 22,961 c. Nil. d. None of the above. Question 50 Marks: 2
Prasoon wants to know the status of tax liability on annuity withdrawals post-retirement from his invested pension scheme of mutual fund, the scheme being a debt-oriented balanced fund. The plan opted by Prasoon is dividend reinvestment. You advise that the dividend distribution tax will be paid by the scheme, pursuant to which they will be tax free in the hands of Prasoon. Further, ________.

Choose one answer. a. no taxes will be applicable on the amounts withdrawn either prior to or after retirement b. the redemption NAV would be compared with the NAV on which all investments as well as dividends are invested to arrive at LTCG, if any, and shall be taxed at the lower of 10%, or 20% with indexation c. the mutual fund scheme being a retirement scheme, post-retirement withdrawals are taxfree d. capital gains tax, as applicable, will be applicable only on investments made Question 51

Marks: 2
Jay wants to know how you would go about in the process of Estate Planning. What is the sequential process you would advise Jay regarding his Estate? 1. 2. 3. 4. Establish priorities for estate objectives. Prepare a written plan. Define problem areas including liquidity, taxes, etc. Gather client information and establish objectives.

Choose one answer. a. 1, 2, 3, 4. b. 2, 1, 3, 4 c. 4, 3, 1, 2. d. 3, 2, 1, 4 Question 52 Marks: 1


Jay received the following amounts in the FY 2008-09: 1. Gift of Rs. 63,000/- from a friend. 2. Gift of Rs. 24,000/- from his neighbour. What is the total taxable amount from the above receipts for Jay?

Choose one answer. a. Rs. 63,000/-, as the whole amount received from friend exceeded Rs. 50,000/-. b. Rs. 13,000/-, as the amount received from friend in excess of Rs. 50,000/c. Rs. 37,000/-, as the whole amount in excess of Rs. 50,000/- is taxable. d. The whole amount of Rs. 87,000/- as the aggregate value of gifts received from one person or more than one person exceeds Rs. 50,000/-. Question 53 Marks: 1
Dr. Suman has a Plot on her name purchased in Feb 1997 for Rs.4,50,000/- .She sells her Plot on 31st Dec. 2008 for Rs.10,00,000/- and pays a brokerage of 2%. What will be the Capital Gain / Loss and tax on the capital gains? Cost Inflation Index for various years is as follows- 1996-97 259, 1997-98 281, 2007-08 497, 2008-09 519.

Choose one answer. a. Long Term Capital Gain Rs.5,50,000/- and Tax Rs.1,10,000/b. Long Term Capital Gain Rs 86,950/-, Tax Rs 8,695/c. Long Term Capital Gain Rs.1,06,950/-, Tax Rs 10,695/d. Long Term Capital Gain Rs.78,262/-, Tax Rs 15,652/Question 54

Marks: 2
Mahesh did Bank FDR of Rs.5,00,000 on 1-04-2009 giving interest at 8.75%(compounding semi- annually). Mahesh wants to know the amount of TDS which is likely against this FDR for AY 2011-12.

Choose one answer. a. 5017 b. 5518 c. 4901 d. 5391 Question 55 Marks: 2


Rajesh is a Software professional and his wife is a house-wife. Rajesh's Father-in-law wants to gift a Bank FDR of Rs.2 lakh for the benefit of Rajesh's son (Age 11).From Income tax perpective how would you plan this gift for the family?

Choose one answer. a. FDR should be gifted in the name of Rajesh b. FDR should be gifted in the name of Rajesh's son c. FDR should be gifted in the name of Rajesh's wife d. All options will result in same tax incidences. Question 56 Marks: 2
Mohan invested a sum for 5 years @ 8% p.a where it was compounded annually for the first 4 years and quarterly for the last 1 year. He received Rs. 85,000 on maturity. What was the amount he had initially invested?

Choose one answer. a. Rs. 4,16,000 b. Rs. 78,527 c. Rs. 57,720 d. Rs. 57,203 Question 57 Marks: 2
Mrs. & Mr. Arora are aged 55 and 58 years respectively. Both expect to work till they turn 65. Their only goal is to fund their retirement. Which of the following is likely to be an appropriate asset allocation strategy for them?

Choose one answer. a. 10% sectoral equity, 20% diversified equity, 30% long-term debt, and 40% medium term debt b. 20% Sectoral equity, 60% diversified equity, 20% long-term debt c. 30% Sectoral equity, 30% diversified equity, 40% cash/ liquid investments.

d. 80% long-term debt, 20% medium term debt Question 58 Marks: 2


Any possible occurrence which may have a negative financial implication can be plotted on a graph with X axis measuring the frequency (low-high) and Y axis measuring the financial impact (lowhigh). You can view the classification in four quadrants. Quadrant I - Low frequency, Low Impact Quadrant II - Low frequency, High Impact Quadrant III - High frequency, High Impact Quadrant IV High frequency, Low Impact It would not be practical to purchase insurance for events falling in_________________.

Choose one answer. a. Quadrant I & IV b. Quadrant I, II & IV c. Quadrant I, III & IV d. Quadrant III Question 59 Marks: 2
A firm needs to borrow funds on a short term basis without reducing its current ratio below 1.25. The firms. current assets and current liabilities are Rs.2,500 and Rs.1,000 respectively. What amount can the fund borrow?

Choose one answer. a. Rs. 3,000 b. Rs. 2,000 c. Rs. 1,500 d. Rs. 1,000 Question 60 Marks: 2
Sudha invests Rs.5000 per year (at the beginning of each year) for 5 years @ 5% p.a. in a bank deposit. She then withdraws the accumulated sum over a period of 3 equal annual installments. What is the value of the deposit at the end of 5 years and the quantum of withdrawal each year?

Choose one answer. a. Rs. 28505, Rs. 9954 b. Rs. 29010, Rs. 10656 c. Rs. 29568, Rs. 11054 d. Rs. 28804, Rs. 10042 Question 61 Marks: 4
A client has the need to provide for the cost of his child.s college education. He envisages that four annual payments of Rs. 20,000, in current money terms, would be needed

beginning 15 years from now. Assuming level of inflation rated at 5% per annum and that the fund earns 8% per annum returns throughout, calculate the present value to be placed on this liability when carrying out a needs analysis for this client. (Round of your answer to the nearest .000.)

Choose one answer. a. Rs. 49,000 b. Rs. 50,000 c. Rs. 24,000 d. Rs. 23,000 Question 62 Marks: 4
From the given Financial details find out the liquidity ration of Mr. Sharma. Infrastructure Fund: Rs.1,00,000 Equity Diversified Fund: Rs.50,000 Money Market Instruments: Rs.60,000 Fixed Deposits: Rs.60,000 Cash in hand: Rs.60,000 Cash in savings account: Rs.120,000 Shares of SBI: Rs.10,000 Expenses Rs.60,000 monthly Outstanding liabilities Rs.40,000

Choose one answer. a. 2.4 b. 5 c. 3 d. 4 Question 63 Marks: 4


Assume non-agricultural income of Mr.Xfor the FY 2010-11 works out to be Rs. 2,95,000 . Further assume that he also earns Rs. 23,000 as agricultural income during the same year. Ignoring all other given data, what is the tax liability of Mr.X for the FY 2010-11 including surcharge and education cess?

Choose one answer. a. Rs. 18,600 b. Rs. 13905 c. Rs. 19,158 d. None of the Above Question 64

Marks: 4
Mukesh purchased a bungalow near Mumbai on Jun 1, 2010 for Rs. 8 lakh and immediately thereafter on Jun 2, 2008 leased the same to a public limited company for a period of 99 years on annual lease of Rs. 2 per annum. The terms of the lease provide that the lessee shall keep an interest free deposit of Rs. 22 lakh with the lessor during the period of lease. Further, after 25 years, the lessee shall have an option to cancel the lease agreement in which case the sum of Rs. 22 lakh shall be refunded immediately? What is the income under Capital Gains of Mukesh for FY 2010-11, if there is no other transaction?

Choose one answer. a. Nil as Mukesh has not sold the Bungalow but has leased it out. b. Rs. 14,00,000. c. The income of Mukesh will be Income from House Property of Rs 2 only. d. The income of Mukesh will be Income from House Property of Rs 2 only + Notional interest on Rs. 22 lakh@ 10% p.a. Question 65 Marks: 4
Madhuri sells shares in PQR Ltd on 14th June, 2008 (off market), for a net consideration of Rs. 20,00,000 and earns a long-term capital gain of Rs. 15,00,000. Within 3 months, she purchases a new residential house for Rs.10,00,000. She owns no other house other than the new house. Now if Madhuri were to sell the new house within one year of purchase for Rs. 15,00,000, the tax treatment in the year of sale would be ______.

Choose one answer. a. short-term capital gain of Rs. 5,00,000 and Long-term capital gain of Rs.7,50,000 b. short-term capital gain of Rs. 5,00,000 and Long-term capital gain of Rs. 10,00,000 c. short-term capital gain of Rs. 7,50,000 and Long-term capital gain of Rs. 5,00,000 d. long-term capital gain of Rs. 12,50,000 Question 66 Marks: 4
The net profits of a patnership firm for the previous year 2010-11 is Rs. 52,000 after providing interest and salary to partners.The firm has two working partners sharing profits and losses equally as per the partnership deed. Both partners draw a remuneration of Rs. 1,80,000 each .In respect of their total capital contribution of Rs. 8,00,000 the partners get interest @ 15% pa thereon amounting to Rs.120,000. Calculate the taxable income of the firm for A.Y. 2011-12:

Choose one answer. a. 4,36,000 b. 4,12,000 c. 185,100 d. None of the above Question 67 Marks: 4
Mr. Pashupati receives following salary and perquisites for the previous year 2010-11. Find the perquisite value of rent free furnished house.Basic salary = Rs. 15000 pm, Dearness

allowance = Rs. 6000 pm which is fully used for calculating retirement benefits, Bonus Rs. 15000, Entertainment allowance being paid since last 15 years = Rs. 6000 per annum, Transport allowance @ Rs. 800 pm. Rent free furnished house in Delhi for which employer has paid a rent of Rs. 5000 pm. Cost of furniture provided to Mr. Pashupati is Rs. 60000.

Choose one answer. a. Rs. 66,000 b. Rs. 40,950 c. Rs. 46950 d. Rs. 48390 Question 68 Marks: 4
On 15th September, 2003, Manisha purchases 500 shares of ABC Ltd. a listed company @Rs. 50 per share. Under a scheme of buy back of its own shares, on 15th June, 2008, ABC Ltd. buys back the shares from Manisha at a price of Rs. 75 per share. Calculate the capital gains tax payable by Manisha, if any. Assume Cost Inflation Indices are 2002-03: 406, 2003-04: 426 and 2008-09: 519.

Choose one answer. a. Rs. 1367. b. Rs. 1250. c. Nil. d. Rs. 1408. Question 69 Marks: 4
In Feb 2004 , Ajays father gifted him stocks of XYZ Ltd. Whose fair market value at the date of the gift was Rs. 36,000.Ajays father had himself purchased the same in 1987 for Rs 10,000 through IPO.If Ajay sells the shares of XYZ Ltd. in Jan 2009 for Rs 77,000 what is the Capital Gain earned by him? Consider Brokerage charges to be Rs. 1,500. Cost Inflation Index for various years is as below: 1983-84 = 100; 1987-88 = 140; 2003-04 = 426; 2004-05 = 447; and 2008-09 = 519.

Choose one answer. a. Long Term Capital Gain of Rs. 63,317 b. Long Term Capital Gain of Rs. 31,641 c. Short Term Capital Gain of Rs. 36,317 d. Long Term Capital Gain of Rs. 64,817 Question 70 Marks: 4
Ram's salary and perquisites for the Financial Year 2010-11 is as follows: Basic Salary: Rs. 18,000 p.m , Dearness allowance (100% eligible for calculating retirement benefits): Rs. 6,500 p.m, Bonus: Rs. 18,000 p.a , Entertainment allowance (being paid for the last 10 years): Rs. 8,000 p.a, Transport allowance: Rs. 800 p.m ,Other Income Rental from own house in Mumbai Rs. 9,000 p.m. Ram has been provided a rent free house in Mumbai for which his employer has been

paying a rent of Rs. 8,000 p.m. Cost of the furniture provided in this house is Rs. 80,000. Rananjoy wants to know the perquisite value of rent free house for AY 2011-12.

Choose one answer. a. Rs. 1,04,000 b. Rs. 56,000 c. Rs. 96,000 d. Rs. 57,200 Question 71 Marks: 4
Rananjoy's house in Kolkata has a Municipal Value of Rs. 1,00,000 and Fair Rental Value of Rs. 1,20,000. Municpal Tax is paid for the year Rs.20,000 . It was self-occupied by him from 1st April 2010 to 31st July 2010. With effect from 1st August 2010 it was rented out for the rest of the year. Rental from own house in Kolkata Rs. 9,000 p.m. Rananjoy wants to know the annual value of the house for the Assessment Year 2011-12.

Choose one answer. a. Rs. 88,000 b. Rs. 60,000 c. Rs. 1,00,000 d. Rs. 2,62,800 Question 72 Marks: 4
Ajay has working in two companies viz. A Co. and B Co. He retires from A Co. on November 30, 1990 (salary at the time of retirement Rs. 2,600 per month) and receives Rs. 22,000 a gratuity out of which Rs. 20,000 was exempted. He also retires from B Co. on December 10, 2010 after 28 years and 8 months of service and receives Rs. 2,90,000 as death-cumretirement gratuity. His average basic salary drawn from B Co. for the preceding 10 months ending on November 30, 2010 is Rs. 18,200 per month. Further he receives Rs. 1,000 per month as DA, 80% of which forms a part of his retirement benefits and 6% commission on turnover achieved by him. Total turnover achieved by him during 10 months ending November 30, 2010 is Rs. 2,00,000. What is the gratuity exempted from tax for Ajay for AY 2011-12? Assume neither of the companies A and B are not covered under payment of Gratuity Act 1972.

Choose one answer. a. Rs. 2,80,000 b. Rs. 2,82,800 c. Rs. 3,30,000 d. Rs. 2,62,800 Question 73 Marks: 4

A 10 year 8.0% bond (Face Value- Rs.1000, interest payable semi-annually) maturing 6 years from today is available at a yield to maturity of 6.0%. It is likely to be priced at _______________.

Choose one answer. a. Rs. 1100 b. Rs. 1149 c. Rs. 1168 d. Rs. 1498 Question 74 Marks: 4
Mrs. Shanti, aged 40 years, is a small retail trader. She has a net business income of Rs. 2,50,000 during the FY: 2010-11 and stays in a self occupied house acquired on 25 Jan 1999. She pays Rs. 35,000 as interest on a housing loan. She also pays Rs. 5,000 towards Prime Ministers. National Relief Fund and Rs. 5,000 towards National Children's Fund during the year. She also deposits Rs. 15,000 in PPF during the year. Find her tax liability for FY: 2010-11.

Choose one answer. a. Rs.1545 b. Rs.1030 c. Rs. 772.5 d. None of the above. Question 75 Marks: 4
Nirav, aged 30, wants to retire at 45. He wants to maintain his present living standard. He spends Rs. 3,25,000 a year. He is expected to live upto 85. Inflation is to be assumed at 4% p.a and expected returns are 7% p.a. What is the nest egg required by Nirav at his age 45 and what amount should he save every year end to meet his plan? His present investments are Rs. 10,00,000.

Choose one answer. a. Nest egg and savings required will be Rs. 1,41,82,828 and Rs. 4,54,606 respectively. b. Nest egg and savings required will be Rs. 1,47,73,065 and Rs. 7,40,530 respectively. c. Nest egg and savings required will be Rs. 1,27,73,065 and Rs. 4,38,300 respectively. d. Nest egg and savings required will be Rs. 2,51,00,065 and Rs. 5, 41,093 respectively.