Q1)Under the Income-tax Law, the residential status of a person is to be determined only once in

his life time

a) False [Your answer is correct]
b) True

Q2)Generally, the year in which income is earned is taxed is known as Assessment Year.
a) True [This is the Right Answer]
b) False [Your Answer is Wrong]

Q3)Loss under the head "Profits and gains of business or profession" can be carried forward even
if the return of income/loss of the year in which loss is incurred is not furnished on or before the
due date of furnishing the return, as prescribed under section 139(1).
a) False [Your answer is correct]
b) True

Q4)In case of non-Government employee, exemption in respect of commuted pension will be lower
of the following :
1) One third of full value of commuted pension
2) Actual amount of commuted pension
a) True [Your Answer is Wrong]
b) False [This is the Right Answer]

Q5)Which one of the following is true with respect to set off of losses ?
a) Capital loss, short term or long term, cannot be set off against any other head of income
[Your Answer is Wrong]
b) Short term capital loss can be set off against short term or long term capital gain
c) Long term capital loss can only be set off against long term capital gain
d) All of the above [This is the Right Answer]

Q6)Post-demise transmission of units is facilitated through

a) Nomination [Your answer is correct]
b) Pledge
c) ABSA
d) Demat

Q7)Power to levy service tax provides at present at present in the Constitution vide entry No :
a) 54 of the State List [Your answer is correct]
b) 84 of the Union List
c) 92C of the Union List
d) 97 of the Union List

Q8)What will be average monthly salary to be used in computation of exemption in respect of leave
encashment at the time of retirement in the case of a non-Government employee given
1) Monthly basic salary for the year 2014-15 was Rs. 9,400,
2) Monthly dearness allowance not a part of the salary was Rs. 18,000
3) Monthly dearness allowance forming as a part of the salary was Rs. 1,600? Employee retired in
the month of April, 2015.
a) Rs. 8,400 [Your Answer is Wrong]
b) Rs. 16,000
c) Rs. 11,000 [This is the Right Answer]
d) Rs. 27,000
Qid: 38760

Explanation

Only Basic + DA forming part of the salary is considered

Hence Rs 9,400 + 1,600 = Rs 11,000 is the answer

Q9)An Investor redeemed units of Monthly Income Plan 24 months after Investment.What is the
tax treatment for the capital gains he got?
a) Long Term Capital Gains taxed at 10% without Indexation or 20% with Indexation [Your
Answer is Wrong]
b) Short Term Capital Gains taxed at 15%
c) Short term capital gains which will be added to the income of the investor and taxed as per
investors tax slab [This is the Right Answer]
d) Long term capital gains and is completely tax free.
Qid: 5027

Explanation

MIP Funds are type of Debt Funds for the purpose of taxation since 80% of portfolio is in Debt.
They classify as Long Term after a period of 36 months. Here the period under question is 24
months. Hence it will qualify as Short term capital asset

Q10)All assessee are required to follow :

a) Uniform previous year which must be calendar year only [Your Answer is Wrong]
b) Uniform previous year which must be financial year only [This is the Right Answer]
c) Any period of 12 months
d) Period starting from 1st July to 30th June Only

Q11)For the purpose of Income-tax Law, a HUF will be treated as resident in India, if the control
and management of the affairs of the HUF is located ______in India.
a) Partly [Your Answer is Wrong]
b) Wholly
c) Exclusively
d) Partly or wholly [This is the Right Answer]
Q12)Payment of Payment of ₹ 2,00,000 made to Mr. A for purchase of diaries made according to
specification of S Ltd. However, no material was supplied for such diaries to Mr. A by M/s S Ltd.
The rate of tax to be deducted is No TDS since it is sale of goods.
a) True [Your answer is correct]
b) False
Q13)Loss from sale of mutual funds, this cannot be set off against
a) income from salary [Your Answer is Wrong]
b) income from residential property
c) income from dividends and interest
d) any other head of income [This is the Right Answer]

Q14)Where any relief has been allowed to an assessee under section 89 for any assessment year in
respect of any amount received or receivable on his voluntary retirement or termination of service
or voluntary separation, no exemption under section 10(10C) shall be allowed to him in relation to
such or any other assessment year.
a) True [Your answer is correct]
b) False
Q15)Which of the following is not the mode of revocation of a Will?
a) By Destruction [Your Answer is Wrong]
b) By Marriage
c) By another Will or Codicil
d) By Insolvency of the testator [This is the Right Answer]

Q16)Mr.Manohar is a resident senior citizen aged 65 years. Income tax basic exemption limit is Rs
3 Lakhs. His annual income is Rs 3,50,000 consisting of Rs 2,00,000 from Capital Gains and Rs
1,50,000 from other sources. Calculate the relief in capital gain available to him in this case.
a) Rs 1,50,000 [Your Answer is Wrong]
b) Rs 1,00,000 [This is the Right Answer]
c) Rs 2,00,000
d) Rs 50,000

Q17)Advance tax shall be payable during a financial year, only when the amount of such advance
tax payable by the assessee during that year is :
a) ₹ 10,000 or more [This is the Right Answer]
b) More than 0
c) ₹ 1,00,000 or more
d) ₹ 10,00,000 or more
Q18)Income accruing from agriculture in a foreign country is taxable in the case of an assessee who
is -
a) Resident [This is the Right Answer]
b) Non-ordinary resident
c) Non-resident
d) None of the above
Q19)STT payable on Purchase of Equity Mutual Fund Units by Investor is ________
a) 0.13%
b) 0.02%
c) 0.25%
d) NIL [This is the Right Answer]
Q20)Raman purchased a residential house property in Jaipur on loan for which he paid an interest
of ₹ 50,000 during the previous year. He is residing in his newly purchased house and is working in
Jaipur only, He is getting an HRA of ₹ 4,000 per month. He can claim exemption/deduction for -
a) Only interest paid during the year [This is the Right Answer]
b) Only HRA
c) Neither interest paid nor HRA received
d) Both HRA and interest paid during the year

Q21)An India company would :

a) be resident in India if its control and management is wholly situated in India
b) be resident in India if its control and management is wholly or partly situated in India
c) be resident in India if its control and management is wholly situated outside India
d) be always resident in India irrespective of control and management [This is the Right
Answer]
Q22)The stamp duty value of immovable property received by an individual without consideration
(i.e., as a gift) will be charged to tax if the same will exceed ________.
a) Rs 5000
b) Rs 10,000
c) Rs 25,000
d) Rs 50,000 [This is the Right Answer]
Q23)Cost of Acquisition in case of bonus shares allotted before 1.4.1981 will be :
a) Nil
b) Fair Market Value as on 1.4.1981 [This is the Right Answer]
c) ₹ 10,000
d) Cost of Original shares on the basis of which bounds shares are allotted.
Q24)The order passed by the Commissioner (Appeals) should be communicated to :
a) assessee
b) C.I.T. who has jurisdiction over the case
c) both to assessee and CIT [This is the Right Answer]
d) the assessee through C.I.T
Q25)Pension received from the former employer is classified under the head__________?
a) Income from Salaries [This is the Right Answer]
b) Income from other sources
c) Income from capital Gain
d) Gratuity [Your Answer is Wrong]
Q1)Deduction under section 24(b) is available on account of interest on capital borrowed for the
purpose of purchase, construction, repair, renewal or reconstruction of the property.
a) False [Your Answer is Wrong]
b) True [This is the Right Answer]
Q2)What will be half month’s average salary to be used while computing exemption in respect
of gratuity received by a non-Government employee not covered by the Payment of Gratuity
Act, 1972, if basic salary is Rs. 84,000 per month and dearness allowance is Rs. 20,000 (not a
part of salary)?
a) Rs. 42,000 [This is the Right Answer]
b) Rs. 52,000
c) Rs. 1,04,000
d) Rs. 48,417
Qid: 38795
Explanation

Half month’s average salary will be computed by dividing the average monthly salary by 2. In
this case, average monthly salary will come to Rs. 84,000 (basic salary only because DA is not a
part of salary).
Half month’s average salary = Rs. 84,000/2 = Rs. 42,000. Thus, option (a) is the correct option.

Q3)Long-term capital losses can be set-off against __________________?

a) Short Term Capital Gains only
b) Long Term Capital Gains only [This is the Right Answer]
c) Both short term & long term capital gains
d) None of the above
Q4)Which one of the following is true with respect to set off of losses ?
a) Capital loss, short term or long term, cannot be set off against any other head of income
b) Short term capital loss can be set off against short term or long term capital gain
c) Long term capital loss can only be set off against long term capital gain
d) All of the above [This is the Right Answer]
Q5)Which of the following is one of the limits to be used while computing exemption under
section 10(10AA)(ii) in respect of leave encashment in case of a non-Government employee?
a) Period of earned leave in days × Average monthly salary
b) 10 months’ average salary [This is the Right Answer]
c) Rs. 10,00,000
d) Half month’s salary for each completed year of service
Qid: 38614

Explanation

In case of non-Government employees, leave salary exempt from tax under section 10(10AA)(ii)
will be least of the following:
1. Period of earned leave in months × Average monthly salary
2. Average monthly salary × 10 (i.e., 10 months’ average salary)
3. Maximum amount as specified by the Central Government, i.e., Rs. 3,00,000.
4. Leave encashment actually received at the time of retirement.
Thus, option (b) is the correct option.

Q6)Which of the tax is applicable in the province of Alberta in Canada ?

a) Goods and Service Tax (GST) [This is the Right Answer]
b) Only Sales Tax (RST)
c) Harmonized Sales Tax (HST)
d) Value Added Tax (VAT)
Q7)Income generated by the Off-shore funds is taxable under section 115 AB
@_____________%
a) 5
b) 10 [This is the Right Answer]
c) 15
d) 20
Q8)The subsidy given by the government to a co-operative society for meeting managerial
expenses and admission fee collected by the society is liable to tax.
a) True [This is the Right Answer]
b) False
Q9)Anoop has received few gifts in the financial year 2011-12 and he wants to know about the
taxation of the same. He received a gift of Rs. 63,000 from a friend and another gift of Rs.
24,000 from his neighbor. He wants to know, what is the total taxable amount from the above
receipts on which Anoop will have to pay tax.
a) Rs. 63,000, as any amount received in excess of Rs. 50,000 is taxable.
b) Rs. 13,000, as the amount received over the limit of Rs. 50,000 is taxable.
c) Rs. 37,000, as the total amount in excess of the limit 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. [This is the Right Answer]
Q10)The basic exemption limit (for the assessment year 2016-17) in case of a resident individual
of the age of below 60 years is Rs. ___________.
a) Rs. 2,00,000
b) Rs. 2,50,000 [This is the Right Answer]
c) Rs. 3,00,000
d) Rs. 5,00,000
Q11)GAAR has been deferred and will be applicable in India from :
a) Assessment Year 2015-16
b) Assessment Year 2016-17
c) Assessment Year 2017-18
d) Assessment Year 2018-19 [This is the Right Answer]
Q12)As per the definition of the relative, brother or sister of the spouse of an individual will be
treated as relative of an individual. Hence, sum of money received from brother or sister of the
spouse of the individual will not be charged to tax in the hands of the individual.
a) True [This is the Right Answer]
b) False
Q13)If an individual is in occupation of a house for the purposes of his residence, the annual
value of property shall be considered to be ______________?
a) The sum for which the property might reasonably expect to be let out
b) The Standard Rent as set by Rent Control Act
c) Both a & b
d) NIL [This is the Right Answer]
Q14)Service tax has been imposed by amending Chapter-VI of the Finance Act, 1994.
a) True
b) False [This is the Right Answer]
Q15)Section 54B gives relief to a taxpayer who sells his agricultural land and acquires another
agricultural land from the sale proceeds.
a) False
b) True [This is the Right Answer]
Q16)Tax rates are fixed by the Income tax act and not by the annual finance act
a) False [This is the Right Answer]
b) True
Q17)Which of the following is one of the limits to be used while computing exemption in respect
of gratuity received by a non-Government employee not covered by the Payment of Gratuity
Act?
a) 15 days’ salary for each completed year of service (part of the year, in excess of 6 months,
shall be taken as one full year)
b) 10 months’ average salary
c) Rs. 3,50,000
d) Actual amount of gratuity received [This is the Right Answer]
Q18)All property under the will vests in him and he is the legal representative for all purposes of
the deceased person. Who is he?
a) Testator
b) Beneficiary
c) Executor [This is the Right Answer]
d) Testatrix
Q19)Voluntary contribution received by electoral trust shall be example in all cases.
a) True
b) False [This is the Right Answer]
Q20)Mr.Shenoy bought a house in 2001-02 for Rs 3 Lakhs and sold the same in 2006-07 for Rs
7 Lakhs. Calculate the capital gains using the following information. Cost Inflation Index for
2001-02 was 426 and for 2006-07 was 519
a) Rs 4 Lakhs
b) Rs 3,34,507 [This is the Right Answer]
c) Rs 66,900
d) Rs 3,57,507
Q21)Determine the resident status of a HUF if HUF's control and management is wholly situated
in India and Karta of HUF is a NOn-resident in India for that previous year.
a) Resident and Ordinary Resident (ROR)
b) Resident but not Ordinary Resident (RNOR)
c) Non-Resident (NR)
d) ROR or RNOR [This is the Right Answer]
Q22)Indexation benefit on Cost of acquisition is available on the long term capital asset.
However, in certain cases, indexation benefit is not available. In which of the following cases,
indexation benefit is allowed ?
a) Debentures issued by a company
b) Self generated goodwill of a business
c) Bonus shares allotted on 1.4.2000
d) jewellery [This is the Right Answer]
Q23)Under which of the following state Act, company Secretaries in practice are authorized to
conduct VAT audit :
a) Gujarat [This is the Right Answer]
b) Uttar Pradesh
c) Rajasthan
d) Kerala
Q24)STT payable on purchase of equity shares in stock exchange is ________
a) 0.1% [This is the Right Answer]
b) 0.017%
c) 0.25%
d) 0.03%
Q25)STT stands for ______.
a) Securities Trading Tax
b) Securities Transfer Tax
c) Securities Transaction Tax [This is the Right Answer]
d) Securities Takeover Tax
Q1)The taxpayer can claim deduction under section 80C in respect of amount paid by him
towards interest of housing loan.
a) True
b) False [This is the Right Answer]
Q2)Securities transaction tax is payable by mutual fund investors on:
a) Sale and repurchase of all units
b) Repurchase of all units
c) Purchase of equity-oriented units
d) Re-purchase of equity-oriented units [This is the Right Answer]
Q3)While computing exemption under section 10(10AA)(ii) in respect of leave encashment in
case of a non-Government employee, salary to be used to compute average monthly salary will
include which of the following item?
a) Dearness allowance not considered while computing retirement benefits
b) Dearness allowance considered while computing retirement benefits [This is the Right
Answer]
c) All allowances
d) Value of perquisite
Q4)Which of the following agency was appointed as the Nodal Agency to work out the
modalities of VAT ?
a) National Institute of Public Finance and Policy [This is the Right Answer]
b) National Institute of Finance
c) Institute of Financial Planning
d) Finance Ministry
Q5)Under which section of the Income Tax Act can an individual get a deduction from taxable
income for the interest paid on an education loan?
a) Section 80CCF
b) Section 80D.
c) Section 80E [This is the Right Answer]
d) Section 80F.
Q6)Prakash obtained interest-free loan ₹ 20,000 from his employer company for purchasing a
two-wheeler. The market rate of interest on such loan is 20% per annum. The lending rate of
State Bank of India is 15.5% and that of the private sector banks is 16%. The taxable amount of
this perquisite will be computed at the rate of -
a) 20%
b) 16%
c) 15.5%
d) Nil rate. [This is the Right Answer]
Q7)All income arises to the child shall be clubbed in the income of his/her_____________.
a) Parents [This is the Right Answer]
b) Siblings
c) Friends
d) Neighbors
Q8)Gratuity in the hands of government employee is
a) Fully taxable
b) Fully exempted from tax [This is the Right Answer]
c) Taxable on maturity
Q9)Interest-free loan to an employee, where the amount of loan does not exceed any one of the
following, shall be treated as the tax-free perquisite in all cases under section 17(2) -
a) ₹ 10,000
b) ₹ 15,000
c) ₹ 20,000 [This is the Right Answer]
d) ₹ 25,000
Q10)Section 10(2A) exempts
a) agricultural income from tax
b) tax concession received by an employee for proceeding on leave to any part of India
c) any amount received from an insurance policy, including bonus.
d) the income representing the share of a partner in a firm from tax [This is the Right
Answer]
Q11)To avail the benefit of section 54B, the assets transferred should be _______.
a) A residential house property
b) A non-agricultural land
c) An agricultural land [This is the Right Answer]
d) Bonds of National Highways Authority of India
Q12)Mr. Anil retired from Central Government service in December, 2015 and received Rs.
3,84,000 on account of gratuity. In this case Rs. 3,84,000 will be ______.
a) Charged to tax
b) Exempt from tax [This is the Right Answer]
c) Gratuity upto Rs 3 Lakh tax free and remaining Taxable
d) Gratuity upto Rs 2.5 Lakhs tax free and remaining taxable
Q13)Mr.Y is leaving India on 01.10.2012 for a six month visit to UK.Income from 01.04.2012 to
01.10.2012 will be taxed or assessed in_________
a) P.Y 2012-13
b) A.Y 2012-13
c) A.Y 2013-14 [This is the Right Answer]
d) A.Y 2014-15
Q14)Financial statement of A on 31.3.2017 reveals that the following expenses were due during
year ended 31.3.2017 but have been paid after 31.3.2017 :
Employee's contribution to provident fund : ₹ 55,000 (₹ 25,000 paid on 15.7.2017, ₹ 10,000 paid
on 31.7.2017 and ₹ 20,000 paid on 15.1.2018)
The due date of filing return is 31.7.2017. What would be the deduction for AY 2017-18 ?
a) ₹ 55,000
b) ₹ 35,000 [This is the Right Answer]
c) ₹ 10,000
d) ₹ 45,000
Q15)Exemption under section 54B will be_________
a) Amount of capital gains arising on transfer of agricultural land
b) Investment in new agricultural land [including the amount deposited in Capital Gains
Deposit Account Scheme]
c) Lower of the above two [This is the Right Answer]
d) Higher of the above two
Q16)If the aggregate value of gifts received during the year exceeds Rs. 50,000, then total value
of all such gifts received during the year will be charged to tax
a) False
b) True [This is the Right Answer]
Q17)Long-term capital gains from all funds are exempt from tax
a) TRUE
b) FALSE [This is the Right Answer]
Q18)Dividend distribution tax (DDT) for corporate investors in all types of Debt Mutual Funds
is
a) 12.50%
b) 25%
c) 30% [This is the Right Answer]
d) NIL
Q19)Short-term capital gain other than covered under section 111A is charged to tax at normal
rate of tax which is determined on the basis of the total taxable income of the taxpayer.
a) False
b) True [This is the Right Answer]
Q20)Securities Transaction Tax (STT) in case of Sale of a Futures Contract in securities is
payable by_______
a) Buyer
b) Seller [This is the Right Answer]
c) Both of the above
Q21)Loss from Business or Profession cannot be Set Off against
a) Profit from Business or Profession
b) Capital Gains
c) Salary [This is the Right Answer]
d) Loss from House Property
Q22)Which of the following is one of the limits to be used while computing exemption in respect
of gratuity received by a non-Government employee covered by the Payment of Gratuity Act?
a) 15 days’ salary for each completed year of service (part of the year, in excess of 6 months,
shall be taken as one full year) [This is the Right Answer]
b) 10 months’ average salary
c) Rs. 3,50,000
d) 1/3rd of the amount of gratuity
Q23)Any allowance or Perquisite paid outside India by any organisation or GOI to an Indian
citizen for rendering services outside India is exempt u/s 10(8A)
a) False [This is the Right Answer]
b) True
Q24)Wills which are mostly prevalent in the defence services.
a) Living Wills
b) Holographic Will
c) Conditional Will
d) Oral Will [This is the Right Answer]
Q25)Deductions under Chapter VIA are admissible only for sole proprietors and HUF
a) True
b) False [This is the Right Answer]
Q1)Withholding tax on Mutual Fund capital gains may be applicable for
a) All investors
b) Only investors who are resident in India
c) Only investors who are non-resident [This is the Right Answer]
d) Short term gains only
Qid: 4950

Explanation

Withholding tax refers to TDS. TDS is applicable only for NRI

Q2)Loss from house property can be carried forward and 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 [This is the Right Answer]
c) It does not matter when return is filed
d) Carry forward of loss from house property is not allowed at all.
Q3)Income tax in India charged at the rate prescribed by :
a) The Finance Act [This is the Right Answer]
b) The Income Tax Act
c) The Central Board of Direct Taxes
d) The Ministry of Finance
Q4)Short term capital gain tax for debt Schemes
a) Marginal rate of tax [This is the Right Answer]
b) 30%
c) 15%
d) 10%
Qid: 4998

Explanation

Short term capital gain tax for MF Debt Schemes - Added to the income of the investor and
taxed as per slab. This is also known as Marginal Tax

Q5)Which of the following income is not chargeable as income of business or profession ?

a) Profits and gain of business carried by an assessee during the previous year
b) Income derived by a trade, professional or similar association from specific service
performed for its members
c) Income from the activity of owning and maintaining race horses [This is the Right
Answer]
d) Salary received by a partner of a firm from the firm in which he is a partner
Q6)Which of the following investments eligible for deduction u/s 80 C _________ has the
shortest lock-in period?
a) Public Provident Fund (PPF)
b) Bank Fixed Deposits
c) Equity Linked Savings Schemes (ELSS) [This is the Right Answer]
d) National Savings Certificate (NSC IX issue)
Q7)Salary, fees, bonus received by a partner from the firm is Taxable in the hands of partner
under the head :
a) Salary
b) Business & Profession [This is the Right Answer]
c) Income from other sources
d) Exempt from tax
Q8)Short-term capital gains of Equity MF are taxable at 20% plus surcharge.
a) TRUE
b) FALSE [This is the Right Answer]
Q9)Dividend distribution tax (DDT) for corporate investors in Equity Funds is
a) 12.50%
b) 25%
c) 30%
d) NIL [This is the Right Answer]
Q10)What will be the amount of monthly salary to be used in deriving 15 days’ salary to be used
while computing exemption in respect of gratuity received by a non-Government employee
covered by the Payment of Gratuity Act, 1972, if he retires in the month of December, 2012 and
last drawn salary is Rs. 84,000, however, average monthly salary based on the salary of past 10
months amounted to Rs. 80,000?
a) Rs. 80,000
b) Rs. 84,000 [This is the Right Answer]
c) Rs 46,153
d) Rs 40,000
Qid: 38798

Explanation

Amount of monthly salary to be used in deriving15 days’ salary to be used while computing
exemption in respect of gratuity received by a non-Government employee covered by the
Payment of Gratuity Act, 1972, will be salary last drawn. Last drawn salary in this case is Rs.
84,000. Thus, option (b) is the correct option.
Q11)While computing exemption under section 10(10AA)(ii) in respect of leave encashment in
case of a non-Government employee, salary to be used to compute average monthly salary will
not include which of the following item?
a) Basic salary
b) Dearness allowance considered while computing retirement benefits
c) Commission based on fixed percentage of turnover achieved by the employee
d) Value of perquisite [This is the Right Answer]
Q12)Monthly pension i.e. uncommuted pension is fully taxable in the hands of a Government
employee.
a) True [This is the Right Answer]
b) False
Q13)Section 194A deals with the provisions relating to TDS on interest other than interest on
securities.
a) False
b) True [This is the Right Answer]
Q14)Section ______ gives relief to a taxpayer who sells his agricultural land and from the sale
proceeds he acquires another agricultural land.
a) 54
b) 54B [This is the Right Answer]
c) 54EC
d) 54F
Q15)To avail the benefit of section 54B, the assets transferred should be an agricultural land.
a) False
b) True [This is the Right Answer]
Q16)Registration is mandatory under the service tax.
a) True
b) False [This is the Right Answer]
Q17)Commuted pension is a lump sum payment in lieu of periodic pension.
a) True [This is the Right Answer]
b) False
Q18)Which of the following statements is true?
a) A Permanent Account Number (PAN) is Unique number allotted to a person whose total
income < the amount not chargeable to tax
b) PAN is Unique number allotted to a person whose total income = the amount not
chargeable to tax
c) PAN is Unique number allotted to a person whose total income > the amount not
chargeable to tax [This is the Right Answer]
d) PAN is Unique number is allotted to the deductor of tax at source for the purpose of
identification of every deductor
Q19)Leave salary means the salary for the period of leave not availed by the employee.
a) True [This is the Right Answer]
b) False
Q20)Which of the following schemes are exempt from paying DDT?
a) Liquid Fund
b) Gold ETF
c) GILT Fund
d) Equity Fund [This is the Right Answer]
Qid: 5044

Explanation

Only Equity Funds are exempted from paying Dividend Distribution Tax

Q21)Family pension received by the family members of the employee after the death of the
employee, is charged to tax in the hands of recipient under the head “Income from other salary”.
a) True
b) False [This is the Right Answer]
Q22)Employer provides a car (below 1.6 Ltr. capacity) along with a driver to X for official and
party for personal purpose. The expenses incurred by the company are :
running and maintenance expenses - ₹ 32,000
driver's salary - ₹ 36,000
Taxable value of perquisite is :
a) ₹ 21,600
b) ₹ 10,800
c) ₹ 32,400 [This is the Right Answer]
d) ₹ 39,600
Q23)The maximum exemption in respect of transport allowance granted to an employee to meet
his expenditure for the purpose of commuting between the place of his residence and the place of
his duty shall be -
a) ₹ 600 per month
b) ₹ 700 per month
c) ₹ 1600 per month [This is the Right Answer]
d) ₹ 900 per month
Q24)For Senior Citizens who are aged 80 and above, the Basic Limit for Exemption from
Income Tax is
a) Rs 2.5 lakhs
b) Rs 2 lakhs
c) Rs 5 lakhs [This is the Right Answer]
d) Rs 8 Lakhs
Q25)STT is not Charged in case of
a) Gold ETF [This is the Right Answer]
b) Equity Sector Fund
c) ELSS
d) Equity Index Funds
Q1)Sameer wants to purchase a medical insurance for a sum assured of Rs. 5 lakh for his parents
for Rs. 29,300 annual premium. Both parents are Senior Citizens . He wants to know how much
amount he can claim u/s 80D from his income from this insurance premium. According to you
the same is ______________.
a) Rs. 29,300 [This is the Right Answer]
b) Rs. 15,000
c) Rs. 25,000
d) Nil
Q2)On 30th December, 2016, Raju gets by gift a commercial flat from he elder brother of his
father-in-law (stamp duty value is ₹ 25,00,000). The amount chargeable to tax in the hands of
Raju is -
a) ₹ 25,00,000
b) ₹ 24,50,000
c) ₹ 20,00,000
d) Nil [This is the Right Answer]
Q3)Which of the following withrespect to STT is TRUE?
a) STT is payable when investors purchase units of Equity Mutual Fund Units
b) STT is payable when investors repurchase units of Equity Mutual Fund Units [This is the
Right Answer]
c) STT is payable when investors purchase units of Debt Mutual Fund Units
d) STT is payable when investors repurchase units of Debt Mutual Fund Units
Q4)If till the date of filing the return of income, the capital gain arising on transfer of the house
is not utilised (in whole or in part) to purchase or construct another house, then the benefit of
exemption available under section 54 cannot be availed by the taxpayer.
a) False [This is the Right Answer]
b) True
Q5)Which of the following income is an agriculture income -
a) Income from brick making
b) Income from agriculture land situated in Pakistan
c) Prize from government on account of higher crop yield
d) Compensation received from insurance company on account of loss of crop [This is the
Right Answer]
Q6)According to Hindu law, a joint Hindu family may consists of _______________.
a) Persons lineally descended from a common ancestor
b) Windows of the members of the family
c) Married daughters of a deceased person
d) All of the above [This is the Right Answer]
Q7)Income by way of winnings from lotteries in the hands of a regular business activity is not
chargeable to tax under the head ' profits and gains of business or profession'.
a) True
b) False [This is the Right Answer]
Q8)Which out of the following is not a condition to be fulfilled for claiming expenditure under
section 37(1) ?
a) Such expenditure should not be covered under the specific section i.e. Section 30 to 36
b) Expenditure should be of capital nature [This is the Right Answer]
c) Expenditure should not be of a personal nature
d) Expenditure should have been incurred wholly or exclusively for the purpose of the
business or profession.
Q9)The taxpayer (being individual/HUF) can claim deduction under section 80D in respect of
medical insurance premium paid by him in any mode (including cash).
a) True
b) False [This is the Right Answer]
Q10)Under which section of the Income Tax Act can an individual get a deduction from taxable
income for the premium paid towards a Life Insurance policy?
a) Section 80C. [This is the Right Answer]
b) Section 80D.
c) Section 80E
d) Section 80F.
Q11)Sham is the Manager of Beta Insurers. His Salary for the year 2011-12 was Rs.820,000 p.a.
He is provided with a house which is leased by Zeta @ a rent of Rs.120,000 p.a. What is the
value of the Taxable Perquisite?
a) 123,000
b) 120,000 [This is the Right Answer]
c) 82,000
d) 61,500
Q12)While computing exemption in respect of gratuity received by a non-Government employee
covered by the Payment of Gratuity Act, 1972, 15 days’ salary to be used will be computed by
dividing the monthly salary by 30 days.
a) True
b) False [This is the Right Answer]
Q13)The Negative list is specified under section :
a) 65
b) 66D [This is the Right Answer]
c) 64
d) 67
Q14)Under section 10(10), the maximum amount of gratuity received which is not changeable to
tax shall be ;
a) ₹ 3,50,000
b) ₹ 3,00,000
c) ₹ 2,50,000
d) ₹ 10,00,000 [This is the Right Answer]
Q15)Any amount received from Statutory Provident Fund is ______.
a) Fully exempt from tax [This is the Right Answer]
b) Charged to tax
c) 1/3rd is Tax Exempt
d) 2/3rd is Tax Free
Q16)Immovable property received without consideration by an individual on the occasion of
his/her marriage will always be charged to tax in the hands of the individual.
a) True
b) False [This is the Right Answer]
Q17)An individual will be said to be resident in India during a year if
a) He is in India for a period of 182 days or more in that year
b) He is in India for a period of 60 days or more in the year and for a period of 365 days or
more in immediately preceding 4 years
c) If he satisfies any of the above conditions [This is the Right Answer]
d) If he satisfies both of the above conditions
Q18)Rental income from a property being building or land appurtenant thereto of which the
taxpayer is owner is charged to tax under the head "Income from House Property"
a) False
b) True [This is the Right Answer]
Q19)Any securities held by a Foreign Institutional Investor which has invested in such securities
in accordance with the regulations made under the Securities and Exchange Board of India Act,
1992 will always be treated as capital asset, hence, such securities cannot be treated as stock-in-
trade.
a) True [This is the Right Answer]
b) False
Q20)If control and management of the affairs HUF is situated wholly outside India it would
become a Non-resident.
a) True [This is the Right Answer]
b) False
Q21)Salary of S (₹ 40,000 per month) becomes due on the last day of the month but is paid on
7th of next month. Also, salary of April, 2017 and May, 2017 is received in advance in March,
2017. What will be his gross income for Assessment Year 2017-18 ?
a) ₹ 5,60,000 [This is the Right Answer]
b) ₹ 4,80,000
c) ₹ 4,40,000
d) ₹ 5,20,000
Q22)For the purpose of full-time education, only tuition fees of any amount upto ₹ 1,50,000 per
child upto 2 children are allowed as deduction under section 80C.
a) True [This is the Right Answer]
b) False
Q23)In computing indexed cost of acquisition _____ is not required
a) Cost of acquisition
b) Cost inflation index of the year of improvement of capital asset [This is the Right
Answer]
c) Cost inflation index of the year of acquisition of capital asset
d) Cost inflation index of the year of transfer of capital asset
Q24)Prior to Financial Year 2005 - 06, transaction in derivatives were considered as speculative
transactions for the purpose of determination of tax liability under the Income-tax Act
a) TRUE [This is the Right Answer]
b) FALSE
Q25)Suraj wants to save tax over and above the deduction allowed under section 80C of the
Income Tax Act 1961, which allow deduction from taxable income. Which other instrument he
could consider?
a) Corporate Bond
b) Health Insurance [This is the Right Answer]
c) Shares
d) Term Insurance
Q1)After the expiry of specified period of 2 years/3 years, the unutilized amount remained in the
Capital Gains Account Scheme will be taxed as income by way of _______in the year in which
the specified period of 2 years/3 years gets over.
a) Short-term capital gains
b) Long-term capital gains [This is the Right Answer]
c) Profits and gains of business or profession
d) Income from other sources
Q2)Tax on non-monetary perquisites are payable by:
a) The Employer
b) The Employee
c) Neither by the Employer nor by the Employee
d) Either by the Employee or by the Employer [This is the Right Answer]
Q3)Service tax return can be revised within a period of 90 days, from the data of submission of
return.
a) True [This is the Right Answer]
b) False
Q4)The estate owner who wishes to pass on his estate to his legal heirs is called as
a) Testator [This is the Right Answer]
b) Beneficiary
c) Executor
d) Trustee
Q5)Any losses arising out of a speculative business can be set off against gains arising from
_____________ ?
a) Income from Salaries
b) Speculative business only [This is the Right Answer]
c) Income from business & profession
d) Income from any other head
Q6)Which of the following income is agricultural income -
a) Rent received from agricultural land [This is the Right Answer]
b) income from dairy farm
c) Income from poultry farm
d) Dividend from a company engaged in agriculture.
Q7)India follows which the approach for levying service tax at present :
a) Selective approach
b) Comprehensive approach [This is the Right Answer]
c) Hybrid approach
d) As per the direction of Central Board of Excise & Customs (CBEC)
Q8)Loss from the business of owning and maintaining race horses cannot be set off against any
income other than income from the business of owning and maintaining race horses.
a) False
b) True [This is the Right Answer]
Q9)As per Section 139(1) of the ITA the due date for filing a return of income in case of Non
Corporate Non Audit is
a) 31 July of the Previous Year
b) 31 July of the assessment year [This is the Right Answer]
c) 30 September of the assessment year
d) 15 September of the assessment year
Q10)Vinod invests Rs. 1,50,000 in an equity oriented scheme on 1st December 2003 and
receives a dividend of Rs.25,000 on 31st March 2004, the record date. The investment is sold on
2nd June 2004 for Rs. 1,20,000. How muchshort-term loss, if any, arising out of this investment
is allowable for set-off in FY 04-05?
a) It is a case of long-term Capital loss and not short-term loss
b) Nil
c) Rs. 30,000 [This is the Right Answer]
d) Rs. 5,000, since provisions of Sec. 94(7) will apply
Q11)For a person to be qualified as a NRI, he must have stayed outside India for a minimum
period of _____ days in a previous financial year.
a) 365
b) 280
c) 182 [This is the Right Answer]
d) 150
Q12)Income from asset transferred to spouse will be taxable in the hands of transferor if "
a) asset has been transferred in purchase of an agreement to live apart;
b) asset was been transferred for an adequate consideration
c) asset was transferred before marriage;
d) asset was transferred for inadequate consideration [This is the Right Answer]
Q13)In case of amount received from Un-recognised Provident Fund employer’s contribution is
__________.
a) Exempt from tax
b) Charged to tax [This is the Right Answer]
c) Charged as Income from Other Sources
d) Charged as Income from Capital Gains
Q14)If amount received from account in case of New Pension Scheme on closure is used for
purchasing an annuity plan in the same previous year, then such amount will be exempt from tax.
a) True [This is the Right Answer]
b) False
Q15)Which of the following indirect taxes were replaced by VAT in UK ?
A. Purchase Tax (PT)
B. Selective Employment Tax (SET)
C. Harmonized Sales Tax (HST)
D. Goods and Services Tax (GST)
a) A and B [This is the Right Answer]
b) B and D
c) C and D
d) A, B, C and D
Q16)Long-term capital gains tax rate on units of a debt-based Mutual Fund scheme is ________.
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 [This is the Right Answer]
d) Nil
Q17)In case of a female individual, who is of 59 years of age, what is the maximum exemption
limit for AY 2017-18 :
a) ₹ 2,50,000 [This is the Right Answer]
b) ₹ 2,00,000
c) ₹ 5,00,000
d) Nil
Q18)VAT system is applied by different states as an alternative to :
a) Central Sales Tax System [This is the Right Answer]
b) Excise
c) Service Tax
d) none of the above
Q19)Which of the following is not included in the income for the purpose of calculating income
tax?
a) Interest received on bonds
b) Dividend received from mutual fund schemes [This is the Right Answer]
c) Rent on let out property
d) Interest on Fixed Deposit in banks/post offices/societies
Q20)For a person to be deemed to be of Indian origin it is important that he or she or either of
his/her parents or any of his/her grand parents was born in Undivided India. Grand parents
include both maternal and paternal grandparents.
a) True [This is the Right Answer]
b) False
Q21)Family pension received by the family members of the employee after the death of the
employees is charged to tax in the hands of recipient under the head “Income from other
sources”.
a) True [This is the Right Answer]
b) False
Q22)(A) Interest income of the Employees' contribution in an Unrecognised Provident fund is
Tax exempt.
(B) The employee's contribution to an unrecognised Provident fund is tax exempt under Sec. 80
C upto the limit of Rs. 1,00,000.
a) (A) only is correct
b) (A) & (B) both are wrong. [This is the Right Answer]
c) (A) & (B) both are correct
d) (B) only is correct
Q23)Which of the following is True about WILL?
a) A WILL has to be compulsorily registered
b) WILL will come into effect once the Testator registers it.
c) A will cannot be revoked by the testator before his death.
d) The will comes into effect only after the death of the testator. [This is the Right Answer]
Q24)Mr. Ramesh retired from PTC Ltd after completing service of 29 years and 9 months. His
salary at the time of retirement was Rs 10, 500 per month while the average salary drawn for the
preceding 10 months worked out to Rs 9, 800 per month. The actual amount of gratuity received
by him at the time of retirement was Rs 3,25,000. Calculate the amount of gratuity exempt from
tax assuming that the provisions of Payment of Gratuity Act, 1972, cover him?
a) Rs. 1,81,730 [This is the Right Answer]
b) Rs. 175,673
c) Rs. 2,94,000
d) Rs. 3,15,000
Q25)Foe which of the following incomes of Off-shore Fund, the income tax shall be payable at
the rate of 10% ?
a) Income received in respect of units purchased in foreign currency
b) Income by way of long-term capital gains arising from the transfer of units purchased in
foreign currency
c) Both A and B [This is the Right Answer]
d) Neither A nor B