Tax MCQS - Part 2

CA Inter DT - MCQs (PART 2)
Chapter 16: INCOME U/H SALARIES

MULTIPLE CHOICE QUESTIONS
(1) Kamlesh an employee of ABC Ltd. receives Rs. 25,000 p.m. as basic salary. In addition, he gets Rs. 12,000 p.m. as
dearness allowance and Rs. 15,000 p.m as uniform allowance. He has expended Rs. 60,000 to meet expenditure incurred on
purchase and maintenance of uniform during the previous year. His GROSS salary is -
(a) Rs. 3,00,000 (c) Rs. 6,24,000
(b) Rs. 4,44,000 (d) Rs. 5,64,000
(2) Sachin an employee of XYZ Ltd. receives Rs. 25,000 p.m. as basic salary. In addition, he gets Rs. 15,000 p.m. as dearness
allowance and Rs. 240 p.m as for three children as education allowance. His GROSS salary is -
(a) Rs. 4,80,000 (c) Rs. 4,80,480
(b) Rs. 4,86,240 (d) Rs. 4,80,960
(3) Nikhil an employee of XYZ Ltd. receives Rs. 30,000 p.m. as basic salary. In addition, he gets Rs. 10,000 p.m. as dearness
allowance, not forming part of salary and Rs. 2,000 p.m as fixed medical allowance. His GROSS salary is -
(a) Rs. 5,04,000 (c) Rs. 4,80,000
(b) Rs. 4,89,000 (d) Rs. 3,84,000
(4) Siddhi is an employee in a private company. In the previous year she received salary Rs. 1,80,000 and entertainment
allowance Rs. 12,000. She spent Rs. 6,000 on entertainment. Under section 16(ii), she is entitled to deduction of -
(a) Rs. 12,000 (c) Rs. 5,000
(b) Rs. 6,000 (d) Nil.
(5) Manan receives Rs. 50,000 as basic salary from the government during the financial year 2018-19 and receives Rs. 9,000
by way of entertainment allowance which he spends in full for official purposes. The amount deductible under section 16(ii)
in respect of the allowance will be -------------
(a) Rs. 5,000 (c) Rs. 10,000
(b) Rs. 9,000 (d) None of the above.
(6) Any salary due from an employer or a former employer to an assessee in the previous year whether paid or not is
known as -
(a) Salary due (c) Arrears of Salary
(b) Advance Salary (d) All of these.
(7) Income is taxable under the head salaries only if there exists ________________ relationship between the payer and
payee.
(a) Employer - Employee (c) Agent - Principal
(b) Principal- Agent (d) All of the above.
(8) Which is the charging section of Income under the head salaries?
(a) Section 10 (b) Section 15
(c) Section 5 (d) Section 4
(9) Which of the following income is chargeable to income tax under the head salaries?
(a) Salary due (b) Advance Salary (c) Arrears of Salary (d) All of these.
Compiled by CA Nitin Guru Page 1. 1

(10) Mr. Amit joins a job on 1-7-2018 at monthly salary of Rs.25,000. His salary becomes due on last day of each month. His
GROSS salary for A Y 2019-20 will be -
(a) Rs.3,00,000 (c) Rs.2,50,000
(b) Rs.2,25,000 (d) Rs.2,00,000
(11) Mr. Ajay joins a job on 1-7-2018 at monthly salary of Rs.20,000. His salary becomes due on first day of next month. His
GROSS salary for AY 2019-20 will be-
(a) Rs.1,60,000 (c) Rs.2,20,000
(b) Rs.1,80,000 (d) Rs.2,40,000
(12) For an employee in receipt of hostel expenditure allowance for his three children, the maximum annual allowance
exempt under Section 10(14) is-
(a) Rs. 10,800 (c) Rs. 9,600
(b)Rs. 7,200 (d) Rs. 3,600
(13) For an employee in receipt of education allowance for his three children, the maximum annual allowance exempt
under Section 10(14) is ---------------------
(a) Rs. 1,200 (c) Rs. 4,800
(b) Rs.2,400 (d) Rs.1,600
(14) A teacher receives remuneration for setting question paper for examination. What is the chargeability position of this
remuneration?
(a) It will be chargeable under the head salaries.
(b) It will be chargeable under the head income from other sources.
(c) It will not be charged to tax under any head.
(d) It will be allowed as deduction.
(15) Which section gives the definition of salary?

(a) Section 15 (c) Section 10
(b) Section 17(1) (d) None of these.
(16) Which amongst the following is not included under the inclusive definition of salary?
(a) Wages
(b) Any annuity or pension
(c) Employer's contribution in RPF in excess of 12 % of salary
(d) None of these.
(17) Chandu, a handicapped employee receives Rs. 1,500 per month as transport allowance from his employer. His actual
expenditure on transport is Rs. 1,000 per month. The amount of transport allowance taxable under the head income from
salaries will be ------
(a) Rs. 18,000 (c) Rs. 6,000
(b) Nil (d) Rs. 8,000.
(18) Calculate the exempt HRA from the following details : Ram is entitled to a basic salary of Rs. 50,000 p.m. and dearness
allowance of Rs. 10,000 p.m., 40 of which forms part of retirement benefits. He is also entitled to HRA of Rs. 20,000 p.m. He
actually lives with his parents in Mumbai and pays rent of Rs. 20,000 p.m.
(a) Nil (c) Rs. 64,800

(b) Rs.1,75,200 (d) Rs. 2,40,000
(19) Ramesh purchased a residential house property in Hyderabad on loan for which he paid an interest of Rs. 50,000
during the previous year. He is working in Delhi and getting an HRA of Rs. 4,000 per month. He can claim exemption/
deduction for -----------
(a) Only HRA (c) Either interest paid or HRA but not both
(b) Only interest paid (d) Both HRA and interest paid.
(20) Yash received children education allowance of Rs. 500 pm for 1 of his children. Calculate taxable amount of children
education allowance for the assessment year 2019-20 if entire Rs. 500 is spent by Yash.
(a) Nil (c) Rs. 6,000
(b) Rs. 4,800 (d) Rs. 3,600
(21) Any benefit or an amenity provided to the employee by the employer directly or indirectly whether in cash on in kind in
addition to salary & wages is known as ------------------
(a) Perquisite (c) Deduction
(b) Allowance (d) Exemption
(22) Who amongst the following is considered to be a specified employee?

(a) Any director employee of the company.
(b) An employee having the substantial interest in the company.
(c) An employee whose income chargeable under the head salary excluding value of all non-monetary benefits exceeds Rs.
50,000.
(d) All of the above.
(23) Any sum paid by the employer in respect of any obligation, for which such payment would have been payable by the
employee is
(a) Exempt from tax.
(b) Taxable in case of specified employees only.
(c) Taxable in case of non-specified employee.
(d) Taxable whether the employee is a specified employee or non-specified employee.
(24) The amount of any contribution to an approved superannuation fund by the employer in respect of the employee is
exempt from tax upto -
(a) Rs. 1,00,000 (c) Rs. 2,00,000
(b) Rs. 1,50,000 (d) Nil
(25) Credit card facility provided to employee by the employer is _

(a) Exempt from tax.
(b) Taxable in case of specified employees only.
(c) Taxable in case of non-specified employees only.
(d) Taxable whether the employee is a specified employee or non-specified employee.
(26) Mohit receives Rs. 50,000 p.m. as basic salary from the government during the financial year 2018-19 and has been
provided rent free accommodation in Jaipur (population exceeds 25 lakhs). The license fee determined by the Government
for such accommodation is Rs. 1,000 p.m. The market rent of such accommodation is Rs. 5,000 p.m. The taxable value of
rent free accommodation will be _
(a) Rs. 12,000 (c) Rs. 90,000

(b) Rs. 60,000 (d) Nil
(27) Pawan receives Rs. 25,000 p.m. as basic salary from ABC Ltd. He is also provided dearness allowance of Rs. 10,000 p.m.
(not forming part of retirement benefit) and has been provided rent free accommodation in Jaipur (population exceeds 25
lakhs) which is owned by employer. The market rent of such accommodation is Rs. 5,000 p.m. The taxable value of rent free
accommodation will be ----------
(a) Rs. 63,000 (c) Rs. 60,000
(b) Rs. 45,000 (d) Rs. 30,000
(28) Rakesh a resident of Jaipur, receives Rs. 25,000 p.m. as basic salary. In addition, he gets Rs. 10,000 p.m. as dearness
allowance, which form part of basic salary and Rs. 18,000 p.m as house rent allowance. He, however, pays Rs. 20,000 p.m.
as house rent. The quantum of house rent allowance taxable is ----------------------------
(a) Rs. 48,000 (c) Nil
(b) Rs. 6,000 (d) Rs. 24,000
(29) 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) Rs. 1,200 per month (c) Nil
(b) Rs. 1,400 per month (d) Rs. 1,800 per month
(30) The maximum exemption in respect of transport allowance granted to an blind 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) Rs. 1,600 per month (c) Rs. 3,200 per month
(b) Nil (d) Rs. 20,000 per month
(31) Mr. Anil joins a job on 1-7-2017 at monthly salary of Rs.20,000 in A Ltd. He got an increment of Rs.1,000 in the month
of July 2018. His salary becomes due on last day of each month. His GROSS salary for AY 2019-20 will be-
(a) Rs.2,49,000 (c) Rs.2,40,000
(b) Rs.2,48,000 (d) Rs.2,52,000
(32) Salary of Sam (Rs.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, 2019 and May, 2019 is received in advance in March, 2019. What will be his GROSS salary for A.Y. 2019-20?
(a) Rs.5,60,000 (c) Rs.4,40,000
(b) Rs.4,80,000 (d) Rs.5,20,000
(33) Mr. Ankit joins a job in the grade of Rs.20,000-500-25,000-1,000-40,000-1,500-60,000 on 1-7-2007 which becomes due
on last day of each month. His GROSS salary for AY 2019-20 will be ----------
(a) Rs.3,09,000 (c) Rs.3,08,000
(b) Rs.2,97,000 (d) Rs.3,21,000
(34) Shikha is an employee in a private company. In the previous year she received salary Rs. 1,80,000 and house rent
allowance of Rs. 60,000. She is residing with her parents. Her taxable house rent allowance will be -
(a) Nil (c) Rs. 42,000
(b) Rs. 60,000 (d) Rs. 18,000
(35) Mridul employed in Manika Ltd., Delhi. He is paid house rent allowance of Rs. 9,000 per month in financial year 2018-
19. His salary for the purpose of computation of house rent allowance relief may be taken as Rs. 20,000 per month. Mridul
pays actual rent of Rs. 10,000 per month. How much of the house rent allowance is tax-free -

(a) Rs. 108,000 (c) Rs. 96,000
(b) Rs. 1,20,000 (d) Rs. 60,000
(36) Chhaya receives Rs. 25,000 p.m. as basic salary from ABC Ltd. She is also provided dearness allowance of Rs.15,000
p.m. forming part of retirement benefit and has been provided rent free accommodation, which is taken on rent, in Delhi
(population exceeds 25 lakhs). The employer has paid monthly rent of Rs. 10,000. The taxable value of rent free
accommodation will be -
(a) Rs. 36,000 (c) Rs.72,000
(b) Rs. 48,000 (d) Rs. 1,20,000
(37) Chahat receives Rs. 25,000 p.m. as basic salary from ABC Ltd. She is also provided dearness allowance of Rs. 15,000
p.m. forming part of retirement benefit and has been provided, accommodation owned by employer in Delhi (population
exceeds 25 Iakhs). The employer has charged rent of Rs. 4,000 p.m. from Chahat. The taxable value of concessional
(a) Rs. 24,000 (c) Rs. 72,000
(b) Rs. 48,000 (d) Nil
(38) Kavita receives Rs. 25,000 p.m. as basic salary from ABC Ltd. She is also provided dearness allowance of Rs.15,000 p.m.
forming part of retirement benefit. She has been provided accommodation owned by employer with effect from 1st
October 2018 in Delhi (population exceeds 25Iakhs). The market rent of such accommodation is Rs.2,000 p.m. The taxable
value of rent free accommodation for AY 2019-20 will be -
(a) Rs. 36,000 (c) Rs.72,000
(b) Rs.12,000 (d) Rs. 48,000
(39) Children education allowance received by an employee from his employer is Rs. 80 per month per child for 3 children.
Taxable education allowance will be -
(a) Rs. 960 (c) Nil
(b) Rs. 480 (d) Rs.1,200
(40) Which of the following income is taxable under the head 'income from salary' -
(a) Salary received by a partner from firm (c) Salary of a Government Officer
(b) Salary received by a Member of Parliament (d) None of the above.
(41) Mr. Amar joins a job in the grade of Rs. 20,000-500-25,000-1,000-40,000-1,500-60,000 on 1-7-2007 which becomes
due on first day of next month. He is also dearness allowance of 100% of salary. His GROSS salary for AY 2019-20 will be-
(a) Rs. 6,18,000 (c) Rs. 6,16,000
(b) Rs. 5,94,000 (d) Rs. 6,42,000
(42) ------------------- is granted to an employee by his employer to meet expenditure actually incurred on payment of rent.
(a) Dearness Allowance (c) City Compensatory Allowance
(b) House Rent Allowance (d) None of these.
(43) Ravit is receiving Rs. 10,000 as medical allowance from his employer. Out of this, he spends Rs. 5,000 on his own
medical treatment, Rs. 2,000 on the medical treatment of his dependent wife and another Rs. 3,000 for the medical
treatment of his major son who is not a dependent on him. The amount of medical allowance taxable in his hand is -
(a) Rs. 10,000 (c) Rs. 3,000
(b) Rs. 5,000 (d) Nil

(44) Ram receives Rs. 25,000 p.m. as basic salary from ABC Ltd. He is also provided dearness allowance of Rs. 10,000 p.m.
(forming part of retirement benefit) and has been provided rent free accommodation in Alwar (population is Rs. 15lakhs)
which is owned by employer. The market rent of such accommodation is Rs. 5,000 p.m. The taxable value of rent free
(a) Rs. 42,000 (c) Rs. 60,000
(b) Rs.31,500 (d) Rs. 63,000
(45) Savita receives Rs. 25,000 p.m. as basic salary from ABC Ltd. She is also provided dearness allowance of Rs.15,000 p.m.
forming part of retirement benefit. She has been provided accommodation in Delhi (population exceeds 25 lakhs) with
effect from 01-04-2018. The accommodation is owned by employer. The employer has also provided furniture original cost
Rs. 50,000 (WDV Rs. 40,500) with effect from 1-10-2018. The market rent of such accommodation is Rs.12,000 p.m. The
taxable value of concessional accommodation for AY 2019-20 will be -
(a) Rs. 74,500 (c) Rs. 76,050
(b) Rs.77,500 (d) Rs. 74,025
(46) Shreya receives Rs.30,000 p.m. as basic salary from ABC Ltd. She is also provided dearness allowance of Rs.15,000 p.m.
forming part of retirement benefit. She has been provided motor car (engine capacity exceeds 1.6 Its) owned by employer
for her official use. The original cost of car is Rs. 3,50,000 (WDV Rs.3,15,000). Expenditure incurred by the employer on
running and maintenance of the motor car during the relevant previous year amounted Rs. 25,000. The salary of driver paid
by the employer - Rs. 48,000. The taxable value of car facility for A Y 2018-20 will be -
(a) Nil (b) Rs.84,000 (c) Rs.80,500 (d) Rs.32,400
(47) Priya receives Rs. 30,000 p.m. as basic salary from ABC Ltd. She is also provided dearness allowance of Rs.15,000 p.m.
forming part of retirement benefit. She has been provided motor car (engine capacity exceeds 1.6lts) owned by employer
for her personal use. The car is self driven by her. The original cost of car is Rs. 3,50,000 (WDV Rs. 3,15,000). Expenditure
incurred by the Priya on running and maintenance of the motor car during the relevant previous year amounted Rs. 25,000.
The taxable value of car facility for AY 2019-20 will be-
(a) Rs. 31,500 (b) Rs.10,800 (c) Rs.35,000 (d) Rs.21,600
(48) Sushil receives Rs. 30,000 p.m. as basic salary from ABC Ltd. He is also provided dearness allowance of Rs.15,000 p.m.
forming part of retirement benefit. He has been provided motor car (engine capacity exceeds 1.6lts) owned by employer for
his personal as well as official use. The car is self driven by him. The original cost of car is Rs. 3,50,000 (WDV Rs. 3,15,000).
Expenditure incurred by Sushil on running and maintenance of the motor car during the relevant previous year amounted
Rs.25,000. The taxable value of car facility for AY 2019-20 will be -
(a) Rs. 31,500 (b) Rs.10,800 (c) Rs. 35,000 (d) Rs.21,600
(49) Parmish receives Rs. 30,000 p.m. as basic salary from ABC Ltd. He is also provided dearness allowance of Rs. 15,000
p.m. forming part of retirement benefit. He has been provided motor car (engine capacity does not exceed 1.6lts) owned by
employer for his personal as well as official use. The original cost of car is Rs. 3,50,000 (WDV Rs. 3,15,000). Expenditure
incurred by Parmish on running and maintenance of the motor car during the relevant previous year amounted Rs. 25,000.
The salary of driver paid by the employer amounted Rs. 48,000. The taxable value of car facility for A Y 2019-20 will be _
(a)Rs.83,000 (c) Rs. 10,800
(b) Rs. 18,000 (d) Rs. 7,200
(50) Sahil receives Rs. 30,000 p.m. as basic salary from ABC Ltd. He is also provided dearness allowance of Rs. 15,000 p.m.
forming part of retirement benefit. He owns a motor car (engine capacity does not exceed 1.6 Its) which is used by him for
personal purposes. The original cost of car is Rs. 3,50,000. Expenditure incurred by employer on running and maintenance

of the motor car during the relevant previous year amounted Rs. 25,000. The salary of driver paid by the employer
amounted Rs. 48,000. The taxable value of car facility for A Y 2019-20 will be -
(a) Rs.73,000 (c) Rs. 40,600
(b) Rs. 55,000 (d) Nil
(51) Where on account of transfer of employee from one place to another, he is provided with accommodation at the new
place of posting while retaining the accommodation at the other place, the value of perquisite shall be determined with
reference to only one such accommodation which has the lower value for a period not exceeding days.
(a) 60 (c) 30
(b) 90 (d) 120
(52) Rajesh, an employee of Gauri & Co. of Delhi, received the following payments during the previous year ended 3rt
March, 2019 : Basic salary : Rs. 2,40,000 and dearness allowance: 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. The value of taxable
perquisite in the hands of Ramesh will be ------------------
(a) Rs. 41,760 (c) Rs. 36,000
(b) Rs.50,000 (d) Rs. 52,500.
(53) Employer provides a car (below 1.6 Ltr. capacity) alongwith a driver to X partly for official and partly for personal
purpose. The expenses incurred by the company are: Running and maintenance expenses - Rs. 32,000 & Driver's salary : Rs.
36,000.The Taxable value of LAR taxability for assessment year 2019-20 will be-
(a) Rs. 21,600 (c) Rs. 32,400
(b) Rs. 10,800 (d) Rs. 39,600
(54) Surekha receives Rs. 50,000 p.m. as basic salary from ABC Ltd. She is also provided dearness allowance of Rs. 25,000
p.m. forming part of retirement benefit. She has been provided motor car (engine capacity exceeds 1.6lts) owned by
employer for her personal use as well as official use. The original cost of car is Rs. 6,00,000 (WDV Rs. 5,10,000). Expenditure
incurred by the employer on running and maintenance of the motor car during the relevant previous year amounted Rs.
75,000. The salary of driver paid by the employer – Rs. 96,000. The taxable value of car facility for A Y 2019-20 will be --------
-----
(a) Rs. 2,31,000 (b) Rs. 39,600 (c) Rs. 2,22,000 (d) Rs. 1,71,000
(55) Navya receives Rs.25,000 p.m. as basic salary from ABC Ltd. She is also provided dearness allowance of Rs.15,000 p.m.
forming part of retirement benefit. She has been provided motor car (engine capacity does not exceed 1.6lts) owned by
employer for her personal use. The original cost of car is Rs. 3,50,000 (WDV Rs.3,15,000). Expenditure incurred by the
employer on running and maintenance of the motor car during the relevant previous year amounted Rs.25,000. The salary
of driver paid by the employer - Rs. 48,000. The employer recovers Rs. 2,000 p.m. from the employee. The taxable value of
car facility for AY 2019-20 will be-
(a) Rs.1,08,000 (b) Rs.84,000 (c) Rs.80,500 (d) Rs.32,400
(56) Mr. Anil is provided with two cars, to be used for official and personal work by his employer ABC Ltd. The following
information is available from the company records:
Car 1Rs. Car2 Rs.
Engine Capacity I.8Its 1.8lts
Cost of the Car 6,00,000 4,00,000
Running and maintenance (Borne by the company) 40,800 28,000
Salary of driver (Borne by the company) 24,000 24,000

The taxable monetary emoluments of Mr. Anil are Rs. 90,000. The taxable 'Perk' in respect of Cars on the assumption car 2,
is exclusively used by 'N for personal purpose will be -
(a) Rs. 1,31,600 (c) Rs. 72,000
(b) Rs. 1,57,200 (d) Rs. 2,16,800
(57) During the previous year 2018-19, Varun received a watch worth Rs. 20,000 from his employer. The taxable value of
the watch will be
(a) Rs. 15,000 (c) Nil
(58) Ramesh receives Rs. 30,000 p.m. as basic salary from Delhi Public School. He is also provided dearness allowance of Rs.
15,000 p.m. forming part of retirement benefit. His son is studying in the school for which the employer charges Rs. 200
p.m. The cost of such education in a similar institution in the locality is Rs. 1,200 p.m. The taxable value of education facility
will be-
(a) Rs. 14,400 (c) Rs. 16,800
(b) Rs. 12,000 (d) Nil
(59) Sumit is pilot of Jet airways. He receives Rs. 30,000 p.m. as basic salary. He is also provided dearness allowance of Rs.
15,000 p.m. forming part of retirement benefit. He has been provided transport facility in the conveyance owned by the
company. The amount charged to general public on account of such facility is Rs. 25,000. The employer has recovered Rs.
5,000 from Sumit. The cost to employer is Rs. 18,500. The taxable value of transport facility will be -
(a) Rs. 25,000 (c) Rs. 18,500
(b) Rs. 20,000 (d) Nil
(60) Abdul is an employee of Moon Public School. His daughter, Zara, is studying in the said school at a concessional fees of
Rs. 600 per month (Actual fee : Rs. 4,000 per month). The amount taxable in the hands of Abdul will be
(a) Rs. 48,000 (c) Nil
(b) Rs. 7,200 (d) Rs. 40,800.
(61) Anand took an interest-free loan of Rs. 15,000 from B Ltd. (the employer). Assuming that the market rate of interest on
similar loan is 10. the taxable value of the perquisite in the hands of Anand will be
(a) Rs. 150 (c) Nil
(62) Jasbeer receives Rs. 30,000 p.m. as basic salary from ABC Ltd. He is also provided dearness allowance of Rs. 15,000
p.m. forming part of retirement benefit. He has been provided cook for which the actual cost to employer is Rs. 60,000
Jasbeer has paid Rs. 20,000 to the cook. The taxable value of cook perquisite will be -
(a) Rs. 60,000 (c) Rs. 40,000
(b) Rs. 80,000 (d) Nil
(63) Aakash obtained interest-free loan of Rs. 2,00,000 from his employer company for purchasing a four-wheeler on 1-10-
2018. The market rate of interest on such loan is 20 per annum. The lending rate of State Bank of India is 12.5 and that of
the private sector banks is 16. The entire loan is outstanding as on 31-03-2019. The taxable amount of this perquisite for AY
2019-20 will be-
(a) Rs. 12,500 (c) Rs. 20,000
(b) Rs.25,000 (d) Rs. 16,000

(64) Gift to an employee, where the amount of gift is below anyone of the following, shall be treated as the tax-free
perquisite in all cases under section 17(2) -
(a) Rs. 5,000 (c) Rs. 25,000 (b) Rs. 50,000 (d) Rs. 20,000
(65) The value of free food and non-alcoholic beverages provided by the employer to an employee during working hours
provided in a remote area shall be -
(a) Exempt upto Rs. 50 per meal. (c) Fully exempt
(b) Fully taxable (d) Exempt upto Rs. 20,000
(66) Ramesh is employee of ABC Pvt. Ltd. He receives Rs. 30,000 p.m. as basic salary. He is also provided dearness allowance
of Rs. 15,000 p.m. forming part of retirement benefit. The employer has provided free lunch during office hours and cost
per meal is Rs. 150. The company works for 300 days during the year. The taxable value of perquisite will be -
(a) Rs. 45,000 (c) Rs. 15,000
(b) Rs. 30,000 (d) Nil
(67) Sachin is employee of ABC Pvt. Ltd. He receives Rs.30,000 p.m. as basic salary. He is also provided dearness allowance
of Rs.15,000 p.m. forming part of retirement benefit. The employer has provided health club facility for which expenditure
incurred by the employer is Rs.45,000 and Rs.15,000 is recovered from the employee. The taxable value of perquisite will
be -
(a) Rs.45,000 (c) Rs.60,000
(b) Rs.30,000 (d) Nil
(68) Gyanesh is employee of ABC Pvt. Ltd. He receives Rs.30,000 p.m. as basic salary. He is also provided dearness
allowance ofRs.15,000 p.m. forming part of retirement benefit. The employer has paid credit card fees of Rs.15,000 and
also amount of Rs.35,000 on account of credit card bills of purchases made by Gyanesh for his personal purposes. Rs.5,500
is recovered from Gyanesh by the employer. The taxable value of perquisite will be -
(a) Rs.44,500 (c) Rs.29,500
(b) Rs.50,000 (d) Nil
(69) Ananya is an employee of ABC Pvt. Ltd. She receives Rs.50,000 p.m. as basic salary. She is also provided dearness
allowance of Rs.15,000 p.m. forming part of retirement benefit. The employer has provided computer original cost
Rs.65,000 (WDV Rs.26,000) for her personal use with effect from lSI July 2018. The taxable value of perquisite for AY 2019-
20 will be-
(a) Rs.6,500 (c) Rs.4,875
(b) Rs.2,600 (d) Nil
(70) Manjot receives Rs. 30,000 p.m. as basic salary from ABC Ltd. He is also provided dearness· allowance of Rs. 15,000
p.m. forming part of retirement benefit. He has been provided free electricity facility for which the actual cost to employer
is Rs. 58,000. The employer has recovered Rs. 8,000 from Manjot on account of such facility. The taxable value of electricity
perquisite will be -
(a) Rs. 58,000 (c) Rs. 50,000
(b) Rs. 66,000 (d) Nil
(71) Manav receives Rs. 30,000 p.m. as basic salary from Delhi Public School. He is also provided dearness allowance of Rs.
15,000 p.m. forming part of retirement benefit. His son is studying in the school for which the employer charges Rs. 200
p.m. The cost of such education in a similar institution in the locality is Rs. 3,500 p.m. The taxable value of education facility
will be -
(a) Rs. 39,600 (c) Rs. 42,000

(b) Rs. 27,600 (d) Nil
(72) "Family" for the purpose of medical facility means –

(a) spouse of that individual
(b) children of that individual
(c) Parents, brothers and sisters of the individual
(d) All of the above or any of them wholly or mainly dependent on the individual.
(73) Any sum paid by the employer in respect of an expenditure incurred by an employee on his medical treatment or
treatment of any of his family member in private hospital is exempt upto -
(a) Rs.25,000 (c) Rs.30,000
(b) Nil (d) Rs.60,000
(74) Kamlesh Ltd. reimburses the following expenditure on medical treatment of the son of an employee Karan. The
treatment was done at UK :
(i) Travelling expenses Rs.1,15,000.
(ii) Stay expenses at UK permitted by RBI Rs.45,000 (Actual expenses Rs.70,000).
(iii) Medical expenses permitted by RBI Rs.50,000 (Actual expenses Rs.70,000).
The taxable perquisites in the hands of Karan, if his annual income from salary was Rs.1,56,000 will be -
(a) Rs.2,55,000 (b) Rs.45,000 (c) Rs.1,60,000 (d) Nil
(75) Ashish is employee of ABC Pvt. Ltd. He receives Rs. 30,000 p.m. as basic salary. He is also provided dearness allowance
of Rs. 15,000pm. forming part of retirement benefit. The employer has provided interest free loan of Rs. 1,00,000 on 1-4-
2018 for medical treatment of specified diseases. The rate of interest charged by SBI on such loan is 12% p.a. The entire
loan is outstanding during the previous year. The taxable value of perquisite will be -
(a) Rs. 12,000 (b) Rs. 1,00,000 (c) Rs. 1,12,000 (d) Nil
(76) Prakash obtained interest-free loan of Rs. 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 12.5 and that of the private
sector banks is 16. The taxable amount of this perquisite will be computed at the rate of -
(a) 20% (c) 12.5%
(b) 16% (d) Nil rate.
(77) Saurabh is an employee of XYZ Ltd. He retired on 17th Nov. 2018 after rendering service of 38 years, 6 month and 1
day. Calculate the number of completed years if Saurabh is covered under the Payment of Gratuity Act.
(a) 37 years (b) 39 years (c) 38 years (d) 38 years 6 months 7 days.
(78) Mr. Kalicharan is a private sector employee. He received Rs. 18,00,000 as gratuity. He retired on 16th February 2019
after rendering 25 years and 7 months of service. His basic salary was Rs. 30,000 p.m. His dearness allowance was Rs.
15,000 p.m. He is covered under Payment of Gratuity Act, 1972. The amount of gratuity exempt will be -
(a) Nil (b) Rs. 10,00,000 (c) Rs. 18,00,000 (d) Rs. 6,75,000
(79) Aaysha is an employee of ABC Pvt. Ltd. She receives Rs.50,000 p.m. as basic salary. She is also provided dearness
allowance of Rs.15,000 p.m. forming part of retirement benefit. The employer has transferred furniture on 1st September
2018 for Rs.5,000. The furniture was purchased by the employer on 1st October, 2015 for Rs.2,00,000. The taxable value of
perquisite for AY 2019-20 will be
(a) Rs.1,55,000 (c) Rs.1,36,667

(b) Rs.1,57,000 (d) Rs.1,42,150
(80) Mr. Pranav is a private sector employee. He received Rs. 12,00,000 as gratuity. He retired on 16th February 2017 after
rendering 25 years and 7 months of service. His basic salary was Rs. 30,000 p.m. His dearness allowance was Rs. 15,000
p.m. (40% forms part of retirement benefit). He is not covered under Payment of Gratuity Act, 1972. The amount of gratuity
taxable will be -
(a) Rs.4,50,000 (c) Rs.7,50,000
(b) Rs.10,00,000 (d) Rs. 12,00,000
(81) The maximum exemption under section 10(10AA) in case of leave encashment is -
(a) Rs. 3,50,000 (c) Rs. 10,00,000
(b) Rs.3,00,000 (d) Rs.5,00,000
(82) What is the annual leave entitlement specified in the Income Tax Act?
(a) 1.5 months (b) 40 days (c) 30 days (d) None of these.
(83) The amount of exemption for leave encashment in case of Government employee is -
(a) Actual amount of leave encashment received.
(b) Fully exempted from tax
(c) Rs. 3,00,000
(d) 10 months average salary preceding the month of retirement
(84) Salary received in lieu of unavailed leave during service shall be -

(a) Fully taxable (b) Fully exempted (c) Partially taxable (d) None of the above.
(85) Joy Ltd. transfers a honda city car to hits employee Happy after using it for 4 years and 10 months, for Rs.2,10,000. Cost
of the car is Rs.10,00,000. The value of taxable perquisite in the hands of Happy is
(a) Rs.1,17,680 (c) Nil
(b) Rs.1,99,600 (d) Rs.7,90,000
(86) Palak is an employee of ABC Pvt. Ltd. She receives Rs.50,000 p.m. as basic salary. She is also provided dearness
allowance of Rs.15,000 p.m. forming part of retirement benefit. The employer has transferred computer on 1st September
2018 for Rs.5,000. The computer was purchased by the employer on 1st October, 2017 for Rs.50,000. The taxable value of
perquisite for AY 2019-20 will be-
(a) Rs.45,000 (c) Rs.50,000
(b) Rs.17,917 (d) Nil
(87) In which of the following case the gratuity received is not taxable?
(a) Government employees
(b) Employees covered by Payment of Gratuity Act, 1872
(c) Any other employee
(d) None of these.
(88) What is the specified limit in case of employees covered by the Payment of Gratuity Act, 1972?
(a) Rs. 3,00,000 (c) Rs. 20,00,000
(b) Rs. 3,50,000 (d) Rs. 5,00,000

(89) Aman retired on 15-4-2018 from a company. He was entitled to a pension of Rs.4,000 p.m. At the time of retirement,
he got 75% of the pension commuted and received Rs.1,20,000 as commuted pension. Compute the taxable portion of the
commuted pension if he is entitled to gratuity.
(a) Rs. 66,667 (c) Rs. 1,20,000
(b) Rs. 53,333 (d) Rs. 78,667
(90) Amit is entitled to get a pension of Rs. 6,000 per month from a private company. He gets 60% of the pension
commuted and receives Rs. 3,60,000. He also receives Rs. 2,00,000 as gratuity from the same employer. The taxable portion
of commuted value of pension will be -
(a) Rs. 1,60,000 (c) Rs. 3,60,000
(b) Nil (d) Rs. 60,000
(91) Ankush is entitled to get a pension of Rs. 600 per month from a private company. He gets three-fifth of the pension
commuted and received Rs. 36,000. He did not receive gratuity. The taxable portion of commuted value of pension is
(a) Rs. 16,000 (c) Rs. 18,000
(b) Rs. 6,000 (d) Rs. 12,000.
(92) An employee of a company, who was entitled for a gratuity of Rs. 8,00,000, also received Rs. 12,00,000 by commuting
40 of his pension. The taxable amount of commuted pension is -
(a) Rs. 2,00,000 (c) Rs. 12,00,000
(b) Rs. 4,00,000 (d) Rs. 22,00,000
(93) Mr. Kanojia was employed in M/ s. RST & Associates. After completing 40 years and 7 months of service he retired on
3st October 2018. The particulars are as under-
(i) Salary at the time of retirement - Rs. 10,000 p.m,
(ii) Average monthly salary for 10 months ending on 31st October 2018 - Rs.9,500 p.m.
(iii) Leave entitlement – 1.5 months for each completed year of service.
(iv) Leave encashment received for 25 months on basis of salary at the time of retirement - Rs.2,50,000. The amount of
Leave encashment exempt will be -
(a) Rs.2,50,000 (c) Rs. 47,500
(b) Rs.95,000 (d) Rs.3,00,000
(94) Mr. Kamlesh was employed in M/ s XYZ & Associates. He received Rs.1,00,000 as earned leave salary. He retired on
16th February 2018 after rendering 24 years and 7 months of service. His basic salary was Rs.15,000 p.m. His dearness
allowance was Rs.10,000 p.m (forms part of retirement benefit). Leave entitlement 1.5 months for each completed year of
service. The amount of taxable earned leave salary:
(a) Nil (c) Rs.25,000
(b) Rs.1,00,000 (d) Rs.50,000
(95) Where the employee is not in receipt of gratuity what will be the exemption?
(a) 1/3rd of the commuted value of the pension which he is entitled to receive
(b) 1/2 of Commuted value of the pension which he is entitled to receive
(c) Wholly exempt
(d) Wholly taxable
(96) Mr. Jain retires from a Private service on 1st August 2018. At the time of his retirement after 28 years and 4 months of
service, he was getting the salary of Rs. 34,000 per month. He gets Rs. 5,00,000 (including accumulated interest of Rs.

1,00,000) from unrecognised provident fund. The employer and Mr. Jain has made a matching contribution. Compute his
GROSS salary for Assessment Year 2019-20 :
(a) Rs. 1,36,000 (c) Rs. 3,86,000
(b) Rs. 6,36,000 (d) Rs. 3,36,000
(97) Government of India paid salary of Rs. 5lakh and allowances/perquisites valued at Rs. 2.20 lakh to a person who is
citizen of India for the services rendered by him outside India for 5 months during the previous year. His GROSS salary
chargeable to tax would be
(a) Rs. 7,20,000 (c) Rs. 6,10,000
(b) Rs. 5,00,000 (d) Nil
(98) Deduction u/s 80C on employee's contribution is not available in case of :

(a) Statutory Provident Fund (c) Unrecognised Provident Fund
(b) Recognised Provident Fund (d) Public Provident Fund
(99) Employer's contribution to recognised provident fund is taxable in excess of ______________ of salary:
(a) 12% (b) 9.50% (c) 9 % (d) 8.50%
(100) Lump sum payment at the time of retirement or termination of service received from unrecognised provident fund to
the extent it consists of interest on employees contribution is :
(a) Taxable as salary (c) Fully exempt from tax
(b) Taxable under Income from other sources (d) Taxable as business Income
(101) Rohit retires from private service on 30th April, 2018 and his pension has been fixed at Rs. 1,500 p.m. He gets 1/2 of
his pension commuted during January, 2019 and 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 (c) Rs. 39,250
(b) Rs. 41,500 (d) Rs. 14,250
(102) What is the specified limit in case of exemption for retrenchment compensation under section 10(10B).
(a) Rs. 3,00,000 (c) Rs. 3,50,000
(b) Rs. 4,00,000 (d) Rs. 5,00,000
(103) The maximum amount of compensation received at the time of voluntary retirement exempt from tax is -
(a) Rs. 2,00,000 (c) Rs. 10,00,000
(b) Rs. 5,00,000 (d) The actual amount received as compensation.
(104) Mr. Aniket avails the benefit of LTC and went by air (economy class) on a holiday in India on 25-01-2019 along with his
wife and three children consisting of son aged 2 years and twin daughters of 6 years age. Total cost of tickets reimbursed by
his employer was Rs.1,00,000 (Rs. 55,000 for 2 adults and Rs. 45,000 for the three children). The amount taxable in hands of
Aniket will be -
(a) Rs. 15,000 (c) Rs. 45,000
(b) Rs. 1,00,000 (d) Rs. 55,000
(105) Statutory provident fund is set up under the provisions of the Provident Funds Act, 1925 is applicable to _
(a) Government organizations (c) Local authorities
(b) Semi-Government organizations, (d) All of the above

(106) Mr. Jatin retires from a Private service on 1st August 2018. At the time of his retirement after 28 years and 4 months
of service, he was getting the salary of Rs. 34,000 per month. He gets Rs. 5,00,000 (including accumulated interest of Rs.
1,00,000) from recognised provident fund. The employer and Mr. Jatin has made a matching contribution. Compute his
GROSS salary for Assessment Year 2017-18-
(a) Rs. 1,36,000 (c) Rs. 3,86,000
(b)Rs. 6,36,000 (d) Rs. 3,36,000
(107) Mrs. Meenakshi retired from service with Sky Ltd. on 31st January, 2019. She received the following amounts from
unrecognised provident fund:
(i) Own contribution Rs. 1,50,000;
(ii) Interest on own contribution Rs. 21,000;
(iii) Employer's contribution Rs. 1,10,000; and
(iv) interest on employer's contribution Rs. 15,000. How much of the receipt is chargeable to tax under the head salary -
(a) Rs. 21,000 (c) Rs. 1,25,000
(b) Rs. 15,000 (d) Rs. 1,71,000
(108) Raman Kumar, a chartered accountant is employed with Ram Ltd., as an internal auditor and requests the employer
to call the remuneration as internal audit fee. Raman shall be chargeable to tax for such fee under the head:
(A) Income from Salaries
(B) Profit and gains from Business and Profession
(C) Income from other Sources.
(D) Income from Salaries or Profit and gains from Business and Profession as desired by Raman
(109) T Ltd, pays a salary of Rs.2,80,000 to his employee Girish and undertakes to pay the Income Tax amounting to
Rs.3,090 during the previous year 2018-19 on behalf of Girish. The GROSS Salary of Girish shall be:
(A) Rs.2,80,000 (B) Rs.2,83,090 (C) Rs.2,76,910 (D) Rs.2,83,400
(110) Ronak was employed from 1.8.2015 in the grade of Rs.15,000-400-17,000-500-22,000 and his salary was fixed at
Rs.16,200 from the date of joining. His GROSS salary for the assessment year 2019-20 shall be:
(A) Rs.1,99,200 (B) Rs.2,04,000 (C) Rs.2,08,000 (D) Rs.2,10,000

Answers to the MCQ
1. D 41. C 81. B
2. D 42. B 82. C
3. A 43. A 83. B
4. D 44. A 84. A
5. A 45. A 85. B
6. A 46. A 86. A
7. A 47. C 87. A
8. B 48. B 88. C
9. D 49. B 89. A
10. B 50. A 90. A
11. A 51. B 91. B
12. B 52. A 92. A
13. B 53. C 93. C
14. B 54. B 94. B
15. B 55. B 95. B
16. D 56. A 96. C
17. B 57. B 97. B
18. B 58. D 98. C
19. D 59. D 99. A
20. B 60. D 100. B
21. A 61. C 101. C
22. D 62. A 102. D
23. D 63. A 103. B
24. B 64. C 104. A
25. D 65. D 105. D
26. A 66. B 106. A
27. A 67. D 107. C
28. A 68. A 108. A
29. C 69. D 109. B
30. C 70. C 110. C
31. A 71. A
32. A 72. D
33. A 73. B
34. B 74. C
35. C 75. D
36. C 76. D
37. A 77. B
38. A 78. D
39. A 79. A
40. C 80. C

Chapter 17: INCOME U/H PGBP

(1) An assessee made a capital expenditure on purchase of land amounting to Rs. 150 lacs during the previous year on
scientific research related to the business carried on by him. Amount of deduction available to assessee for this expenditure
is:
(a) 1 x expenditure incurred (c) 1.5 x expenditure incurred
(b) 1.25 x sum paid (d) NIL
(2) According to Section 35(2AA) the amount of deduction claimed for sum paid to a National Laboratory for approved
programme is :
(a) Amount of expenditure incurred (c) 2 x expenditure incurred
(b) 1.5 x expenditure incurred (d) None of these
(3) Assessee company engaged in the business of bio-technology incurred an expenditure of Rs. 10,00,000 on scientific
research which includes cost of land of Rs. 2,00,000. Compute the amount of deduction available.
(a) Rs. 10,00,000 (c) Rs. 12,00,000
(b) Rs. 8,00,000 (d) Rs. 20,00,000
(4) The amount of deduction available for the expenditure incurred (other than cost of land or building) on scientific
research, in-house research and development facility, by a company engaged in the business of bio-technology or
manufacture or production of article or thing (other than article or thing specified in XI Schedule) will be:
(a) 100% (c) 150%
(b) 125% (d) None of these
(5) Transaction in which a contract for the purchase or sale of any commodity including stocks and shares is periodically or
ultimately settled otherwise than by the actual delivery or transfer of the commodity or scrips is known as :
(a) Wagering transaction (c) Deemed Speculation business
(b) Speculative transaction (d) None of these
(6) Jeevan, Manager of Pharma Ltd. since 2004 was terminated by the company on 1st August, 2018 by paying a
compensation of 200 lakh. Such compensation is -----------------
(a) Chargeable under the Wealth-tax Act, 1957 (c) Chargeable under section 17(3)(i)
(b) Not chargeable under the Income-tax (d) Chargeable under section 28.
(7) Doogar & Associates, a partnership firm, received Rs. 5,00,000 from an insurance company under keyman insurance
policy consequent to demise of partner Pramod. The amount of premium Rs. 2,30,000 paid earlier was claimed as
deduction under section 37 by the firm. The amount received from the insurance company is -
(a) Tax-free under section 10(10D) (c) Rs. 2,70,000 is taxable
(b) Fully taxable as income (d) Rs. 2,30,000 is taxable
(8) Which is the charging section of income under the head profits and gains of business or profession?
(a) Section 15 (b) Section 24 (c) Section 28 (d) Section 17
(9) Which of the following conditions are to be fulfilled for charging an income under the head profits and gains of business
or profession

(a) There should be profits and gains.
(b) Business or profession must be carried on by the assessee.
(c) Business or profession should be carried on at any time during previous year.
(10) As per section 30, which expenditure incurred for a building used for the business or profession shall not be allowed as
deduction?
(a) Rent, rates and taxes
(b) Insurance of building
(c) Repairs of building
(d) Capital expenditure
(11) Group of assets falling within a class of assets comprising of tangible & intangible assets is known as :
(a) Group of assets (b) Block of assets (c) Set of assets (d) None of these
(12) Which of the following condition should be fulfilled for claiming depreciation u/ s 32 ?
(a) Asset must be owned wholly or partly by the assessee.
(b) Asset must be used for the purpose of business or profession of the assessee.
(c) Asset should be used during the relevant Assessment year.
(13) Depreciation available, if asset is used for less than 180 days during the year of acquisition shall be of what % of normal
depreciation rate:
(a) 50% (c) 100%
(b) 20% (d) 15%
(14) If the Plant & Machinery is used for less than 180 days in the year of its acquisition, then, at what rate the depreciation
on that asset should be provided under section 32?
(a) 7.5% (c) 20% (b) 15% (d) 10%
(15) The transfer of one or more undertakings as a result of the sale for a lump sum consideration without values being
assigned to the individual assets and liabilities in the sale is known as :
(a) Lump sum sale (b) Slump sale (c) Aggregate sale (d) Total sale
(16) Under the Income-tax Act, 1961, depreciation on machinery is charged on -

(a) Purchase price of the machinery (b) Market price of the machinery
(c) Written down value of the machinery (d) All of the above.
(17) If a block of assets ceases to exist on the last day of the previous year, depreciation admissible for block of assets will
be _
(a) Nil
(b) 50% of the value of the block of assets on the first day of the previous year
(c) The total value of the block of assets on the first day of the previous year
(d) 50% of the value of the block of assets on the last day of the previous year.
(18) Opening WDV of the block of assets was Rs. 15,00,000. During the year, asset was acquired under this block on 15th
June 2018 amounting to Rs. 10,00,000. Rate of depreciation of the block is 15%. Calculate the amount of depreciation
available during the previous year for the block.
(a) Rs. 3,25,000 (c) Rs. 3,00,000

(b) Rs. 3,75,000 (d) Rs. 2,25,000
June 2018 amounting to Rs. 10,00,000. One of the asset falling within the block was sold for Rs. 5,50,000 on 14-01-2019.
Rate of depreciation of the block is 10%. Calculate the amount of depreciation available during the previous year for the
block.
(a) Rs. 1,95,000 (b) Rs. 2,50,000 (c) Rs. 1,45,000 (d) Rs. 2,22,500
October 2018 amounting to Rs. 15,00,000. Also, moneys payable in respect of asset falling within this block was Rs.
38,00,000. Rate of depreciation of the block is 10%.
Calculate the amount of depreciation available during the previous year for the block.
(a) Rs. 20,000 (c) Rs. 1,50,000
(b) Rs.10,000 (d) Rs. 15,000
(21) Rama Ltd. owns machinery (rate of depreciation is 15), the written down value of which as on 1st April, 2018 is Rs.
30,00,000. Due to fire, entire assets in the block were destroyed and the insurer paid Rs. 25,00,000. The eligible
depreciation in respect of this machinery is -
(a) Rs. 4,50,000 (c) Rs. 5,00,000
(b) Rs. 75,000 (d) Nil
(22) While computing the actual cost of any asset falling within a block, direct costs attributable to bring asset to its present
location and working condition for its intended use (i.e. expenses incurred for acquiring the asset e.g. - freight, insurance,
loading and handling etc. and expenses incurred in connection with the installation of the asset.) shall:
(a) be added to the purchase price (c) be subtracted from WDV
(b) be subtracted from the purchase price (d) be claimed as revenue expenditure.
(23) Chance Pvt. Ltd. was engaged in the business of manufacturing fertilizers. Opening WDV of the block of plant and
machinery was Rs. 80 crores. During the year, asset was acquired under this block on 11th July 2018 amounting to Rs. 50
crore. Second hand machinery was also purchased amounting to Rs. 70 crores. Rate of depreciation of the block is 15%.
Calculate the amount of investment allowance available.
(a) Rs. 18 crore
(b) Nil
(c) Rs. 7.5 crore
(d) Rs. 10 crore
(24) Mr. Rajesh has incurred revenue expenditure of Rs.5,00,000 during the previous year, on scientific research related to
the business. The amount of deduction admissible under Section 35 will be :
(a) Rs.5,00,000 (c) Rs.7,50,000
(b) Rs. 10,00,000 (d) None of these
(25) Mr. Patial has incurred capital expenditure of Rs. 5,00,000 (which includes Rs. 1,00,000 on cost of land) during the
previous year, on scientific research related to the business. The amount of deduction admissible under Section 35 will be :
(a) Rs.4,00,000 (c) Rs. 6,00,000
(b) Rs. 8,00,000 (d) Rs. 10,00,000

(26) Where the assessee does not himself carry on scientific research but makes contributions to an approved university,
college or institution, to be used for scientific research related or unrelated to the business of assessee, hence the amount
of deduction from income of business shall be allowed on such contribution to the extent of -
(a) 125% (c) 100%
(b) 150% (d) 200%
(27) Mr. Raju has incurred expenditure of Rs. 5,00,000 by way of payment of sum to approved scientific research
association whose object is undertaking of scientific research. The amount of deduction admissible under Section 35 will be
:
(a) Rs. 7,50,000 (c) Rs. 5,00,000
(b) Rs. 8,50,000 (d) Rs. 10,00,000
(28) While computing the actual cost of any asset falling within a block, portion of cost of asset which has been met directly
by the Central Government or a State Government or any authority under any law or any other person, in the form of a
subsidy or grant or reimbursement, shall be:
(a) Added to the purchase price (b) Subtracted from the purchase price
(c) Added to the WDV (d) Claimed as revenue expenditure
(29) Which of the following are included in business according to section 2(13) :
(a) Trade (c) Manufacture
(b) Commerce (d) All of the above
(30) Assessee is having stock existing in the business. Valuation of stock will be at:
(a) Cost price (c) Cost or market price, whichever is less
(b) Market price (d) Cost or market price, whichever is more
(31) Method of accounting to be followed for computing income chargeable under the head PGBP shall be :
(a) Cash system (b) Mercantile system (c) Cash or mercantile system at the option of assessee (d) None of the above
(32) Depreciation claimed by Mr. Goel while computing profit in profit and loss account: Rs. 50,000. Depreciation allowable
as per Income Tax Rules : Rs. 58,000. Calculate the amount of depreciation allowable while computing gross total income of
Mr. Goel.
(a) Rs. 50,000 (c) Rs. 1,08,000
(b) Rs. 58,000 (d) Rs. 8,000
(33) An assessee was engaged in the business of manufacture of chemicals in Rajasthan. New machinery amounting to Rs.
5,50,000 was purchased by it on 1st June, 2018. Calculate the additional depreciation available.
(a) Rs. 1,10,000 (c) Rs. 55,000
(b) Rs. 82,500 (d) Nil
(34) Specified business under section 35AD includes:

(a) Cross-country crude or petroleum oil pipeline
(b) Slum redevelopment housing project network.
(c) Bee-keeping and production of honey and beeswax.
(35) The amount of deduction available under section 35AD for capital expenditure incurred in business of Cold chain
facilities will be :

(a) 150% (c) 100%
(b) 125% (d) None of these
(36) If in the above case the new machinery was purchased on 4th October, 2018, calculate the additional depreciation
available.
(a) Rs. 1,10,000 (c) Rs. 55,000
(b) Rs. 82,500 (d) Nil
(37) Calculate the additional depreciation available in the above case for the financial year 2019-20.
(a) Rs. 1,10,000 (c) Rs. 55,000
(b) Rs. 82,500 (d) Nil
(38) An assessee was engaged in trading of goods. New machinery amounting to Rs. 10,00,000 was purchased by it on 1st
June, 2018. Calculate the additional depreciation available.
(a) Rs. 1,00,000 (b) Rs. 2,00,000 (c) Nil (d) Rs. 2,50,000
(39) Unabsorbed depreciation can be carried forward for:

(a) 10 years (b) 8 years (c) 0 years (d) Indefinite period
(40) Compute the amount of investment allowance under Section 32AD available to industries located in notified backward
areas in State of Andhra Pradesh or Bihar or Telangana or West Bengal if amount invested in new plant and machinery is
Rs. 30 crore on 1st April 2018 :
(a) Rs. 3 crore (c) Rs. 6 crore
(b) Rs. 4.5 crore (d) Rs. 2.25 crore
(41) What would be your answer if in the above case amount is invested on 17th October 2018 :
(a) Rs. 3 crore (c) Rs. 6 crore
(b) Rs. 4.5 crore (d) Rs. 2.25 crore
(42) Cifford Pvt. Ltd. was engaged in the business of manufacturing fertilizers located in the backward area of State of West
Bengal. Opening WDV of the block of plant and machinery was Rs. 80 crores. During the year, asset was acquired under this
block on 11th July 2018 amounting to Rs. 150 crore. Rate of depreciation of the block is 15%. Calculate the WDV of the
block of asset.
(a) Rs. 100 crore (c) Rs. 165.5 crore
(b) Rs. 143 crore (d) Rs. 150 crore
(43) In which of the following case no depreciation is allowable _

(a) Block exists but WDV ceases to exist. (c) WDV & Block both ceases to exist.
(b) WDV exists but the block ceases to exist. (d) All of the above.
(44) Garvit 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, 2018 and since then it was used for business
purposes. The amount of depreciation (@ 10%) eligible in his case for the assessment year 2019-20 would be -
(a) Rs. 1,50,000 (c) Rs. 37,500
(b) Rs. 75,000 (d) Rs. 1,21,500
(45) R, an assessee carries on business in respect of which it holds tenancy rights. It carries out improvements to the said
building at a cost of Rs. 2lakhs and claims depreciation@ 10% thereon. Which is the correct answer?

(a) No depreciation available on the ground that the assessee is not the owner of the building.
(b) Depreciation allowed of Rs. 20,000.
(c) Deduction of Rs. 2,00,000 available.
(d) The amount of Rs. 2,20,000 will be capitalised.
(46) Where an asset used for scientific research for more than three 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 under section 35 in the
past shall be treated as _
(a) Business income (c) Short-term capital gain
(b) Long-term capital gain (d) Exempted income.
(47) In the case of any new machinery or plant (other than ships and aircraft), acquired by an assessee engaged in the
business of manufacture or production of any article or thing as well as assessees engaged in the business of generation or
generation and distribution of power, how much additional depreciation of actual cost of such plant and machinery is
available?
(a) 10% (c) 5%
(b) 25% (d) 20%
(48) In the case of any new machinery or plant (other than ships and aircraft), acquired by an assessee on 01-04-2018
engaged in the business of manufacture or production of any article or thing in the backward areas of the State of Andhra
Pradesh, how much additional depreciation of actual cost of such plant and machinery is available in AY 2019-20?
(a) 17.5% (c) 10%
(b) 20% (d) 35%
(49) In the case of any new machinery or plant is acquired by an assessee engaged in the business of manufacture or
production of any article or thing is put to use for less than 180 days, the additional depreciation admissible in FY 2018-19
and FY 2019-20 will be and respectively.
(a) 10%,10% (c) 20%, Nil
(b) Nil,20% (d) 15%, Nil
(50) In the case of any new machinery or plant amounting Rs. 25,00,000 is acquired by an assessee on 10-12-2018 engaged
in the business of manufacture or production of any article or thing, the additional depreciation admissible in FY 2018-19
and FY 2019-20 will be _______ and ________ respectively. .
(a) Rs. 5,00,000 , NIL (c) Rs. 2,50,000 , Rs. 2,50,000
(b) Nil, Rs. 5,00,000 (d) Rs. 3,75,000, Nil
(51) Amazon Ltd. paid Rs. 10 lakh to an approved college to be used for scientific research unrelated to its business. The
amount eligible for deduction under section 35(1)(ii) is ----------
(a) Rs. 5 lakh (c) Rs. 15 lakh
(b) Rs. 10 lakh (d) Nil
(52) The amount of deduction available for the sum paid to a company having as its main object 'scientific research and
development' to be used by it for scientific research; or Sum paid for social science or statistical research to a university,
college, or institution will be :
(a) 125% of sum paid (c) 150% of sum paid
(b) 200% of sum paid (d) 100% of sum paid

(53) The amount of deduction available under section 35AD for capital expenditure incurred in business of Inland Container
Depot or a Container Freight Station:
(a)100% (b) 125% (c) 150% (d) None of these
(54) Which of the following is not one of the Specified businesses under section 35AD:
(a) Slurry pipe line
(b) Semi-conductor wafer manufacturing unit fabrication
(c) Hotel
(d) Sugar factory
(55) Minimum holding period of capital asset acquired under section 35AD is :
(a) 8 years (b) 10 years (c) 5 years (d) 15 years
(56) What is the qualifying expenditure for deduction in relation to preliminary expenses u] s 35D :
(a) Aggregate amount of eligible expenditure (c) Higher of (a) or (b)
(b) 5% of cost of project (d) Lower of (a) or (b)
(57) In year 2018-19 an assessee incurred Rs. 6 lacs as preliminary expenditure in respect of extension of the industrial
undertaking. The cost of fixed assets acquired out of such extension was Rs. 100 lacs as on 31st March 2019. Calculate the
amount of deduction to be allowed to him in computation of his income for the A.Y. 2019-20.
(a) Nil (c) Rs. 1,20,000
(b) Rs. 1,00,000 (d) Rs. 6,00,000
(58) Proportion of expenditure allowed as deduction each year in regard to expenditure incurred on Amalgamation or
Demerger or Voluntary retirement scheme:
(a) 1/5th for each 5 successive previous years (c) 1/10th for each 10 successive previous years
(b) 1/2 for each 2 successive previous years (d) Nil
(59) One of the employees of an organization took voluntary retirement on 15 January 2019 and he was paid Rs. 15 lacs as
compensation. Calculate the amount of deduction to be allowed in computation of income for the A.Y. 2019-20.
(a) Nil (c) Rs. 3,00,000
(b) Rs. 15,00,000 (d) Rs. 1,50,000
(60) Expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section
135 of the Companies Act, 2013 is :
(a) An Allowable expenditure (c) Deferred revenue expenditure
(b) Illegal expenditure (d) Not an allowable expenditure
(61) An assessee paid insurance premium against risk of damage or destruction of stocks or stores used for the purposes of
his business or profession. Such expenditure shall be considered as :
(a) Revenue expenditure (c) Deferred revenue expenditure
(b) Capital expenditure (d) Illegal expenditure
(62) An assessee purchased a computer on which depreciation is admissible. Such expenditure shall be considered as : (a)
Revenue expenditure (b) Capital expenditure (c) Deferred revenue expenditure (d) None of the above

(63) One of the employees of the organization was terminated in the interest of business and was paid one time
compensation of Rs. 75,000. For the organization such expenditure shall be considered as:
(b) Capital expenditure (d) None of the above
(64) M/s. Joyalukkas and Company paid Rs. 84,000 as advertisement in the annual magazine of Bhartiya Janata Party. For
the organization such expenditure shall be:
(a) Considered as revenue expenditure (c) Considered as deferred revenue expenditure
(b) Considered as capital expenditure (d) Disallowed under Section 37(2B)
(65) Which of the following business commenced during August, 2018 will not be eligible for deduction under section 35AD
-
(a) Setting-up and operating a cold chain facility (c) Operating of a 1 star hotel in a village
(b) A production unit of fertilizer in India (d) Building a hospital of 200 beds.
(66) Amount of deduction available u/s 35CCC for expenditure incurred on notified Agricultural Extension Project :
(a) 1 times (b) 1.25 times (c) 1.5 times (d) Nil
(67) Amount of deduction available under section 35CCD for expenditure (excluding expenditure incurred on cost of land or
building) incurred by companies on notified Skill Development Project:
(a) 100% (b) 125% (c) 150% (d) Nil
(68) Mr. Anish took a loan of Rs. 10,00,000 on 15th June 2018 for acquisition of an asset and immediately put the asset on
use. Interest paid for the Previous Year 2018-19 on such loan amounted to Rs. 65,000. Payment of Rs. 55,000 against the
interest amount was made on 11th May, 2019 and balance amount was paid on 11th October 2019. The amount of revenue
expenditure available to assessee in Previous Year 2018-19:
(a) Nil (c) Rs. 55,000
(b) Rs. 65,000 (d) Rs. 10,00,000
(69) The employer made a contribution of Rs. 25,000 to recognised provident fund for the previous year 2018-19. Such
payment was made on 12th March, 2019. Such expenditure shall be considered as:
(b) Capital expenditure (d) None of the above
(70) M/s. Pai & Company paid Rs. 75,000 as customs duty and Rs. 84,000 as income tax during the previous year. Calculate
the amount of expenditure allowable:
(a) Rs. 1,59,000 (c) Rs. 75,000
(b) Rs. 84,000 (d) Nil
(71) Mr. Ravinder made a contribution of Rs. 45,000 to a Pension Scheme referred under section 80CCD. The salary of the
employee was of Rs. 4,00,000 in the previous year. Calculate the amount of deduction available to employer in Previous
Year 2018-19.
(a) NIL (c) Rs. 40,000
(b) Rs. 45,000 (d) Rs. 4,00,000
(72) In the case of companies, capital expenditure incurred for the purpose of promoting family planning amongst the
employees would be deductible to the extent _
(a) Equal to 1/ 5th in each year for 5 years (c) Equal to 1/4th in each year for 4 years

(b) Equal to 1/6th in each year for 6 years (d) Equal to 1/10th in each year for 10 years.
(73) Assessee company incurred revenue expenditure of Rs. 15,000 for promoting family planning amongst its employees.
Calculate the amount of deduction available.
(a) Rs. 3,000 (c) Rs. 18,000
(b) Rs. 15,000 (d) No deduction available
(74) Assessee firm incurred revenue expenditure of Rs.15,000 for promoting family planning amongst its employees.
(a) Rs. 3,000 (c) Rs. 18,000
(75) An employer paid an amount of Rs. 10,000 as insurance premium on the health of his employees under a scheme
framed by GIC. Such payment was made by cheque. The insurance amount was of Rs. 10,00,000. The amount of deduction
available to employer:
(a) Rs. 10,000 (c) Rs. 1,00,000
(b) Rs. 10,00,000 (d) Nil
(76) Axis Ltd. paid a sum of Rs. 25,000 to Mrs. Geetanjali as employee bonus for services rendered by her during the
Previous Year 2018-19. Such amount was actually paid to her on 15th October 2019. The amount allowable as per section
40A(2) was Rs. 20,000. Calculate the amount of deduction available to her in Previous Year 2018-19.
(a) Rs. 25,000 (c) Rs. 5,000
(b) Rs. 20,000 (d) Nil
(77) HDFC Ltd. paid a sum of 25,000 to Mrs. Renuka as employee bonus for services rendered by her during the Previous
Year 2018-19. Such amount was actually paid to her on 15th August 2019. The amount allowable as per section 40A(2) was
Rs. 28,000. Calculate the amount of deduction available to her in Previous Year 2018-19.
(a) Rs. 25,000 (c) Rs. 3,000
(b) Rs. 28,000 (d) Nil
(78) Avinash made two separate payments for plying, hiring or leasing goods amounting to Rs. 32,000 and Rs. 39,000.
Discuss about the allowability of the two payments made.
(a) Both the payments will be allowed.
(b) Payment amounting to Rs. 32,000 will be allowed and the other one will be disallowed.
(c) Payment amounting to Rs. 39,000 will be allowed the other one will be disallowed.
(d) Both the payments will be disallowed.
(79) Payment of Rs. 50,000 by using credit card for fire insurance. The amount of disallowance under section 40A(3) is -
(a) Rs. 50,000
(b) Rs. 30,000
(c) Nil
(d) Rs. 20,000
(80) Payment of Rs. 50,000 made in cash towards purchases of medicines. The amount of disallowance under section
40A(3) is -
(a) Rs. 50,000
(b) Rs.30,000

(c) Nil
(d) Rs.20,000
(81) An assessee made a provision of Rs. 5,00,000 for the payment of gratuity to his employees on their retirement. The
gratuity fund was unapproved. Calculate amount of deduction allowable to assessee in respect of this provision.
(a) Rs. 5,00,000 (c) Rs. 1,00,000
(b) Rs. 10,00,000 (d) NIL
(82) Assessee company incurred capital expenditure of Rs. 75,000 for promoting family planning amongst its employees.
(a) Rs. 75,000 (c) Rs. 60,000
(83) Assessee company incurred capital expenditure of Rs. 50,000 and revenue expenditure of Rs. 7,000 for promoting
family planning amongst its employees. Calculate the amount of deduction available.
(a) Rs. 50,000 (c) Rs. 17,000
(84) Contribution was made by PFI towards Credit Guarantee Fund Trust. Such expenditure shall be considered as:
(85) An assessee was engaged in the business of dealing in securities. He had paid Securities Transaction Tax of Rs. 25,000
on the securities. Income arising from taxable securities transactions computed under the head "Profits and Gains of
Business or Profession" was of Rs. 2,50,000. Such expenditure of payment of Securities Transaction Tax shall be considered
as:
(a) Revenue expenditure (c) Speculative transaction expenditure
(86) To claim deduction of an expenditure u/s 37, the expenditure incurred must be:
(a) In respect of the business or profession carried on by the assessee.
(b) Not capital in nature.
(c) Not of nature described u] s 30 to 36.
(87) An assessee paid penalty of Rs. 42,000 paid for non-compliance of the provisions of Customs Act. Such expenditure
shall be considered as:
(a) Revenue expenditure (c) Speculative transaction expenditure
(b) Capital expenditure (d) Disallowed under Section 37(1)
(88) An assessee incurred expense of tax on non monetary perquisites of employees. Such expenditure shall be considered
as:
(a) Revenue expenditure (c) Deferred revenue
(b) Capital expenditure (d) Expressly disallowed
(89) Expenditure incurred by a hotelier on replacement of linen and carpets in his hotel. Such expenditure shall be
considered as:

(90) An assessee made a payment of Rs. 25,000 as a secret commission, prohibited by law, for some offensive purpose.
Such expenditure shall be considered as:
(b) Capital expenditure (d) Non-deductible expenditure
(91) An assessee incurred a sum of Rs. 35,000 for perfecting title or removing defects in title. Such expenditure shall be
considered as:
(92) An assessee incurred a sum of Rs. 1,10,000 for alteration of the memorandum and articles of association. Such
expenditure shall be considered as:
(93) Payments to residents on which tax has not been deducted/ paid shall be disallowed to the extent of
________________ _
(a) 0% (c) 100%
(b) 30% (d) 50%
(94) Ashwin Ltd. has made a payment of Rs.10,00,000 to Mr. Charlie a contractor on which tax was not deducted at source
during the previous year. The amount of expenditure to be disallowed under Section 40(a) will be-
(a) Rs.10,00,000 (c) Rs.5,00,000
(b) Rs.3,00,000 (d) Nil
(95) Laxmi & Co. paid Rs.6,10,000 as contract payments to Montu Ltd. during the financial year 2018-19. It did not deduct
tax at source under section 194C. The amount liable for disallowance is -
(a) Rs.6,10,000 (c) Rs.12,200
(b) Rs.3,05,000 (d) Rs.1,83,000
(96) The books of accounts are to be kept and maintained for a period of how many years from the end of the relevant
assessment year.
(a) 6 years (c) 8 years
(b) 5 years (d) Unlimited period
(97) A person carrying specified profession will have to maintain books of account prescribed by Rule 6F of the Income-tax
Rule, 1962, if gross receipts are more than Rs. 1,50,000 for -
(a) All preceding 5 years (c) All preceding 3 years
(b) Any of the preceding 5 years (d) Any of the preceding 3 years.
(98) Diamond Ltd. has credited a sum of Rs.10,00,000 to Mr. C a contractor on which tax was deducted at source during the
previous year 2018-19. The payment of such TDS was made on 30-09-2019 being the due date of filing return of income.
The amount of expenditure to be disallowed under Section 40(a) in previous year 2018-19 will be :
(a) Rs.10,00,000 (c) Rs.5,00,000
(b) Rs.3,00,000 (d) Nil

(99) Son of Mr. Ram was appointed as a manager in his firm. Ram made a payment of salary of Rs.30,00,000 to his son
whereas Assessing Officer is of opinion that such expenditure is excessive or unreasonable having regard to the FMV which
comes to be of Rs.24,00,000. Calculate the amount to be disallowed.
(a) Rs.24,00,000 (c) Rs.6,00,000
(b) Rs.30,00,000 (d) Nil
(100) An assessee incurred a loss of Rs. 50,000 on account of foreign exchange fluctuations on loans taken from foreign
banks for revenue purposes or trading liabilities. Such loss/ expenditure shall be considered as:
(a) Revenue expenditure (b) Capital expenditure (c) Deferred revenue expenditure (d) Non-deductible expenditure
(101) An assessee incurred an expenditure of Rs. 35,000 on shifting of its administrative office. Such loss/ expenditure shall
be considered as:
(102) Mr. Ravit during the previous year 2018-19 made a payment outside India to a non-resident on which TDS was not
paid upto time allowed under section 200. However, such TDS was deducted and paid on 15th February 2020. When shall
deduction of this expenditure be allowed to assessee?
(a) Previous Year 2017-18 (b) Previous Year 2018-19 (c) Previous Year 2019-20 (d) Not allowed deduction
(103) 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 ------
(a) Payments made to RBI
(b) Payments made to cultivators
(c) Payment of terminal benefits to employees not exceeding Rs. 50,000
(d) All of the above
(104) Mr. Kishore claims the deduction (on accrual basis) of payment to Lalit of Rs. 25,000. Next year he paid this amount to
Lalit through a crossed cheque. What are the consequences of this transaction?
(a) This deduction is already claimed.
(b) It will be disallowed and deemed to be the profit and gains of Business and Profession of the next year.
(c) Deduction can be claimed in next year too.
(d) None of these
(105) Assessee incurred an expenditure of municipal tax of Rs. 51,000 relating to office building for the Previous Year 2018-
19 but did not pay the same till 30-09-2019. Such sum was paid on 15th March, 2020. In which assessment year deduction
shall be allowed to assessee?
(a) AY.2018-19 (c) A.Y.2020-21
(b) AY.2019-20 (d) Nil
(106) Apoorva Ltd. contributed Rs. 8,70,000 towards provident fund account of its employees. It actually remitted Rs.
5,00,000 upto 3rd March and Rs. 2,50,000 upto the due date for filing the return specified in section 139(1). The amount
liable to tax in its assessment would be -------
(a) Rs. 3,70,000 (c) Nil
(b) Rs.1,20,000 (d) Rs. 8,70,000

(107) An assessee transferred his land (stock in trade) on 15th May 2018 for Rs. 75,00,000. However, the value adopted by
State Government authority for the purpose of payment of stamp duty in respect of such transfer was Rs. 90,00,000. What
shall be the full value of the consideration received or accruing as a result of such transfer for the purposes of computing
profits and gains from transfer of such asset.
(a) Rs.75,00,000 (c) Rs. 15,00,000
(b) Rs. 90,00,000 (d) Rs. 1,65,00,000
(108) Mahinder transferred his land (stock in trade) on 21st June 2018 for Rs. 80,00,000. However, the value adopted by
State Government authority for the purpose of payment of stamp duty in respect of such transfer was Rs. 72,00,000. What
shall be the full value of the consideration received or accruing as a result of such transfer for the purposes of computing
profits and gains from transfer of such asset.
(a) Rs. 72,00,000 (c) Rs. 8,00,000
(b) Rs. 80,00,000 (d) Rs. 1,52,00,000
(109) Which amongst the following are specified books of account?

(a) Cash Book (b) Carbon copies or counterfoils of bills
(c) Original bills issued (d) All of the above
(110) For computation of profits of business on presumptive basis under section 44AD, the deemed profits shall be
calculated at the rate of the total turnover or gross receipts of such business:
(a) 8% for cash sales & 6% for non-cash sales
(b) 10%
(c) 20%
(d) 5%
(111) The total turnover of the business of assessee was of Rs. 30,00,000. The assessee declared a profit of Rs. 2,80,000.
What shall be the deemed profits of assessee under section 44AD?
(a) Rs. 2,80,000 (b) Rs. 2,40,000 (c) Rs. 40,000 (d) Rs. 2,60,000
(112) The provisions of section 44AD shall not apply to :

(a) Person carrying on specified profession as commission or brokerage.
(b) A person earning income the nature of referred to Section 44AA.
(c) Person carrying on any agency business.
(113) Accounts of a person carrying on business are required to be audited for previous year in which total sales, turnover
or gross receipts exceeds ____________ _
(a) Rs. 60,00,000 (c) Rs. 15,00,000
(b) Rs. 1,00,00,000 (d) Rs. 50,00,000
(114) A person carrying on profession is required to get his accounts compulsorily audited by a Chartered Accountant if his
gross receipts from profession for the previous year exceed -
(a) Rs. 10,00,000 (c) Rs. 50,00,000
(b) Rs. 25,00,000 (d) Rs. 1,00,00,000
(115) Accounts of a person carrying on business referred to u/ s 44AD are required to be audited for previous year if -
(a) The assessee has claimed profits.
(b) Profits from such business to be lower than the profits and gains deemed u/ s 44AD.

(c) The "total income" exceeds maximum amount, which is not chargeable to tax in any PY.
(116) Provisions of section 44AD for computation of presumptive income are not applicable to ------------
(a) Limited liability partnership (c) Resident Hindu Undivided Family
(b) Partnership firm (d) Resident individual.
(117) For computation of profits of profession on presumptive basis under section 44ADA, the deemed profits shall be
calculated at the rate of the gross receipts of such profession:
(a) 8 (c) 20
(b) 50 (d) 5
(118) When a person carries on the business of carrying goods for hire for the whole year with 5 self-owned and 3 leasehold
light goods vehicles, the presumptive income chargeable to tax under section 44AE would be -
(a) Rs.4,80,000 (c) Rs. 3,96,000
(b) Rs.7,20,000 (d) Rs. 3,36,000
(119) Assessee who owns not more than -------- goods carriages at any time during the previous year and engaged in the
business of plying, hiring or leasing such goods carriages shall be eligible to compute profits under Section 44AE
(a) 10 (c) 6
(b) 8 (d) 15
(120) For computing deemed profits under section 44AE in case of goods carriage being a light goods vehicle the amount
with which per vehicle per month has to be multiplied is:
(a) Rs. 10,000 (c) Rs. 50,000
(b) Rs. 7,500 (d) Rs. 1,50,000
(121) Abhinav made a cash payment of Rs. 2,85,000 on 28th March, 2019 as the banks were on strike that day and the
payment was to be made urgently. Calculate the amount of expenditure to be disallowed u/s 40A(3).
(a) Rs. 2,85,000
(b) Rs.2,65,000
(c) Nil
(d) Rs. 20,000
(122) Under section 40A(3) which of the following payment for an expenditure incurred would not be admissible as
deduction from business income _
(a) Rs. 15,000 paid in cash to a transporter
(b) Rs. 15,000 paid in cash to a dealer in the morning and Rs. 10,000 paid in cash to the same dealer in the evening
(c) Rs. 40,000 sent through NEFT to the bank account of the dealer for goods purchased
(d) Rs. 9,000 paid through bearer cheque to the dealer for goods purchased.
(123) When a cash payment of Rs. 30,000 is made on 10th May, 2018 towards purchase of raw material effected in the
earlier year, i.e., on 5th June, 2016, the amount liable for disallowance under section 40A(3A) would be -
(a) Nil (c) 20% of such payment
(b) 100% of payment (d) 30% of such payment

(124) An assessee discontinued his textile business during the previous year 2017-18 and incurred a loss of Rs. 1,50,000.
During the previous year 2018-19 assessee earned deemed profits in the discontinued business of Rs. 1,75,000. Calculate
the amount taxable as business income.
(a) Rs. 1,75,000 (c) Rs. 25,000
(b) Rs. 1,50,000 (d) NIL
(125) As per section 43B, certain payments are to be allowed as deduction only on actual payment. Such sums include:
(a) Any sum payable by the assessee to the Indian Railways for the use of railway assets.
(b) Employer's contribution to provident fund or superannuation fund or gratuity fund or any other fund for the welfare of
employees.
(c) Bonus or commission to employees for services rendered as referred uls 36(1)(ii).

Answers to the MCQs
1. D 26. B 51. C 76. D 101. A

2. B 27. A 52. D 77. A 102. C
3. C 28. B 53. A 78. B 103. D
4. C 29. D 54. D 79. C 104. B
5. B 30. C 55. A 80. A 105. C
6. D 31. C 56. D 81. D 106. C
7. B 32. B 57. B 82. B 107. B
8. C 33. A 58. A 83. C 108. B
9. D 34. D 59. C 84. A 109. D
10. D 35. C 60. D 85. A 110. A
11. B 36. C 61. A 86. D 111. A
12. D 37. C 62. B 87. D 112. D
13. A 38. C 63. A 88. D 113. B
14. A 39. D 64. D 89. A 114. C
15. B 40. B 65. C 90. D 115. D
16. C 41. B 66. C 91. B 116. A
17. A 42. C 67. C 92. A 117. B
18. B 43. D 68. C 93. B 118. B
19. A 44. D 69. A 94. B 119. A
20. B 45. B 70. C 95. D 120. B
21. D 46. A 71. C 96. A 121. C
22. A 47. D 72. A 97. C 122. B
23. C 48. D 73. B 98. D 123. B
24. A 49. A 74. D 99. C 124. C
25. A 50. C 75. A 100. A 125. D

Chapter 18: INCOME U/H CAPITAL GAINS

(1) Transfer of which of the following assets will not be considered as capital gain -
(a) Jewellery
(b) Gold deposit bonds
(c) Paintings
(d) Sculpture
(2) Which of the following are included in the jewellery -

(a) Ornaments made of gold, silver and platinum.
(b) Precious metals whether or not worked or sewn into any wearing apparel.
(c) Semi-precious stones.
(3) Capital asset excludes all except

(a) Stock-in-trade
(b) Personal effects
(c) Jewellery
(d) Agricultural land in India.
(4) The charging section of the income under the head capital gains is :
(a) Section 15
(b) Section 17
(c) Section 10
(d) Section 45
(5) What are the conditions to be fulfilled for charging of income under the head capital gains:
(a) There must be a capital asset.
(b) There must be a transfer of such capital asset.
(c) The transfer of such capital asset has been affected during the previous year.
(6) The following shall not be regarded as capital asset:

(a) Urban Land
(b) Securities held by a Foreign Institutional Investor as per SEBI Act, 1992
(c) Archaeological Collections
(d) Motor Car
(7) The following shall not be regarded as capital asset:

(a) Jewellery
(b) Rural Agricultural land
(d) Personal residential house
(8) The following shall be regarded as capital asset:

(a) Jewellery
(b) Sculptures
(d) All of the above
(9) Rural area means any area which is outside-------------Kilometers from the local limits of the jurisdiction of a municipality
or a cantonment board, if the population of municipality or cantonment board is more than 10,00,000.
(a) 2
(b) 4
(c) 6
(d) 8
(10) For claiming exemption under Section 54B, Short term or long term capital asset being land which, in the immediately -
---------- preceding the date on which the transfer took place, was being used by the HUF or individual or his parents for
agricultural purposes.
(a) 1 year
(b) 2 years
(c) 3 years
(d) 4 years
(11) The benefit of exemption under Section 54D in respect of Capital gain on compulsory acquisition of land and buildings
in certain cases is admissible to -
(a) Individual
(b) HUF
(c) AOP
(d) Any person
(12) The exemption available on investment in certain bonds u/s 54EC is available to :
(a) Individual
(b) HUF
(c) AOP
(d) Any person
(13) In order to enjoy exemption under section 54EC, the resultant long-term capital gains should be invested in specified
bonds within a period of ______ from the date of transfer.
(a) 36 Months
(b) 4 Months
(c) 6 Months
(d) 12 Months
(14) The maximum amount of investment in bonds during any of the financial year for claiming exemption u/s 54EC is -
(a) Rs.10 lakhs
(b) No limit
(c) Rs.25lakhs
(d) Rs. 50 lakhs

(15) A residential house is sold for Rs. 90 lakh and the long-term capital gains computed are Rs. 50 lakh. The assessee
bought two residential house for Rs. 30 lakh and Rs. 20 lakh respectively. The amount eligible for exemption u/ s 54 would
be-
(a) Rs.50 lakh
(b) Rs.20 lakh
(c) Rs. 30 lakh
(d) Nil.
(16) For claiming exemption under section 54EC the investment must be made in bonds of -
(a) NHAI or NABARD
(b) REC or NABARD
(c) NABARD or PFC
(d) NHAI or REC
(17) For claiming exemption under section 54F, the assessee must not own _____ on the date of transfer of the original
asset:
(a) more than 1 residential house, other than the new house
(b) more than 2 residential house, other than the new horse
(c) more than 3 residential house, other than the new house
(d) more than 4 residential house, other than the new house
(18) Which of the following is a long term capital asset if held for more than 12 months but less than 36 months?
(a) Painting
(b) Shares of a listed company
(e) Shares of an unlisted company.
(d) Gold Jewellery
(19) Which of the following is included in the definition of transfer u/s 2(47)?
(a) Sale, exchange or relinquishment of the asset.
(b) Extinguishment of any rights therein.
(c) Compulsory acquisition thereof under any law.
(20) Which of the following transactions shall not be regarded as transfer as per the provisions of section 47:
(a) Transfer of a capital asset, being a Government Security carrying a periodic payment of interest, made outside India
through an intermediary dealing in settlement of securities, by a non-resident to another non-resident shall not be
regarded as transfer as per IT Act.
(b) Compulsory acquisition thereof under any law.
(c) Extinguishment of rights in respect of capital asset.
(d) Conversion of capital asset into stock in trade.
(21) Which of the following transactions shall not be regarded as transfer as per the provisions of section 47:
(a) Any distribution of capital assets on the total or partial partition of a Hindu Undivided Family.
(b) Any transfer of a capital asset by a company to its subsidiary company, if the parent company or its nominees hold the
whole of the share capital of the subsidiary company, and the subsidiary company is an Indian company.
(c) Any transfer, in a scheme of amalgamation, of a capital asset by the amalgamating company to the amalgamated
company if the amalgamated company is an Indian company.

(22) Which of the following conditions are to be fulfilled for the transaction not to be regarded as transfer, where a sole
proprietary concern is succeeded by a company in the business carried on by it as a result of which, the sole proprietary
concern sells or otherwise transfers any capital asset or intangible asset to the company.
(a) All the assets and liabilities of the sole proprietary concern relating to the business immediately before the succession
become the assets and liabilities of the company;
(b) The shareholding of the sole proprietor in the company is not less than 50 of the total voting power in the company and
his shareholding continues to remain as such for a period of 5 years from the date of the succession;
(c) The sole proprietor does not receive any consideration or benefit, directly or indirectly, in any form or manner, other
than by way of allotment of shares in the company.
(d) All of these.
(23) A transfer in demerger of a capital asset by the ___________ co-operative bank to the ________ co-operative bank
will not be regarded as transfer -
(a) Demerged, Resulting
(b) Successor, Predecessor
(c) Holding, Subsidiary
(d) Subsidiary, holding
(24) Ramesh sold his painting to National Museum for Rs. 20,000 on 1-6-2014. What will be the amount of capital gain on
this transaction?
(a) Rs. 20,000
(b) Rs. 10,000
(c) Nil
(d) None of these
(25) In which of the following transfer the benefit of indexation is available in case of long term capital asset:
(a) Transfer of securities by foreign institutional investors u/s 115AD.
(b) Transfer of undertaking or division in a slump sale u/s 50B.
(c) Transfer of a foreign exchange asset by a non- resident Indian u/s 115D.
(d) Transfer of equity or preference shares in a company.
(26) Ms. Sumita inherited a vacant site land consequent to the demise of her father on 10th June, 1990. 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
and on the date of inheritance, i.e., 10th June, 1990 was Rs. 20,000. The cost of acquisition for Ms. Sumita is -
(a) Rs. 10,000
(b) Nil
(c) Rs. 60,000
(d) Rs. 2,00,000
(27) Rural area means any area which is outside--------------------Kilometers from the local limits of the jurisdiction of a
municipality or a cantonment board, if the population of municipality or cantonment board is more than 1,00,000 but not
exceeding 10,00,000.
(a) 2
(b) 4
(c) 6
(d) 8

(28) Rural area means any area which is outside----------------------Kilometers from the local limits of the jurisdiction of a
municipality or a cantonment board, if the population of municipality or cantonment board is more than 10,000 but not
exceeding 1,00,000.
(a) 2
(b) 4
(c) 6
(d) 8
(29) A short term capital asset means a capital asset held by the assessee for not more than:
(a) 10 months immediately preceding the month of its transfer.
(b) 20 months immediately preceding the date of its transfer.
(c) 36 months immediately preceding the date of its transfer.
(d) None of the above.
(30) In terms of section 2(42A), unlisted securities are treated as long-term capital asset, if they are held for a period of
more than-
(a) 12 Months
(b) 36 Months
(c) 24 Months
(d) 48 Months
(31) In terms of section 2(42A), listed securities are treated as long-term capital asset, if they are held for a period of more
than -
(a) 12 Months
(b) 36 Months
(c) 24 Months
(d) 48 Months
(32) Compute the capital gains for AY 2019-20 if Mr. Ravi, a property dealer, sells a commercial plot of land on 1-3-2019 for
Rs. 50,00,000 lakhs which was acquired by him on 1-8-2016 for Rs. 25,00,000 for selling of offices constructed therein. He
had incurred land development charges of Rs. 10,00,000 on 1-10-2016. He incurred Rs. 1,00,000 for selling the plot of land.
(a) 11,87,879
(b) 15,00,000
(c) 14,00,000
(d) 25,00,000
(33) Ashish owns a house of Rs. 20,00,000, which he transfers for Rs. 22,00,000 to Suraj on 5-4-2018. What will be the full
value of consideration?
(a) Rs. 22,00,000
(b) Rs. 20,00,000
(c) Rs. 2,00,000
(d) Nil
(34) Compute the capital gains for assessment year 2019-20 if Mr. Ronit sells his personal motorcar on 11-4-2018 for Rs.
2,55,000, which was acquired on 31-1-2017 for Rs. 6,50,000. The expenses on transfer are 2% of selling price.
(a) Nil
(b) 3,95,000
(c) Rs. 3,82,000

(d) Rs.4,00,100
(35) Compute the capital gains for assessment year 2019-20 if Mr. Kamal sells his personal Jewellery on 11-4-2018 for Rs.
12,50,000, which was acquired on 31-1-2017 for Rs. 6,50,000. The expenses on transfer are 2% of selling price. The capital
gains chargeable to tax for Assessment Year 2019-20.
(a) Nil
(b) 5,75,000
(c) Rs. 6,00,000
(d) Rs. 6,25,000
(36) Any profits or gains arising from the slump sale effected in the previous year shall be chargeable to income-tax as: (a)
Short term capital gain only
(b) Short term capital gains or Long term capital gains depending upon the period of holding of the undertaking.
(c) Long term capital gain only
(d) No capital gain but the same will be taxable as business profits.
(37) Slump sale is a result of which of the following type of consideration?

(a) Lump sum Payment
(b) Adhoc Payment
(c) Accurate Payment
(d) Actual Payment
(38) Cost of Acquisition in case of bonus shares allotted before 1-4-2001 will be:
(a) Nil
(b) FMV as on 1-4-2001
(c) Rs. 10,000
(d) Cost of Original shares on the basis of which bonus shares are allotted.
(39) Cost of acquisition in case of bonus shares allotted after 1-4-2001 will be-
(a) Face value on the date of allotment
(b) Market value as on 1-4-2001
(c) Nil
(d) Current market value.
(40) In case of distribution of capital asset on liquidation of the company, the capital gains is chargeable to tax:
(a) In hands of shareholders
(b) In hands of the company
(c) In hands of shareholders as well as company
(d) Either in hands of shareholder or in hands of company
(41) Milan owns two machineries eligible for depreciation at the rate of 15%. The WDV of block of asset on 1-4-2018 was
Rs.75,000. No other asset was acquired in this block during the year. Such machines were sold during the previous year for
Rs.65,000. Compute the capital gain.
(a) Short term capital gain of Rs. 10,000
(b) Short term capital loss of Rs.10,000
(c) Long term capital gain of' Rs.10,000
(d) No capital gain as depreciation would be allowed on one of the machines left with M.

(42) Zafi Limited has transferred its Unit N to York Limited by way of slump sale on November 30, 2018 for lump sum
consideration of Rs. 400 lakhs. The undertaking was acquired on 1-4-2010 for Rs. 120 lakhs. The net worth of the
undertaking on the date of transfer is Rs. 200 lakhs. Find out the taxable Capital gains.
(a) Rs. 200 lakhs
(b) Rs. 180 lakhs
(c) Rs. 80.49 lakhs
(d) Rs.132.5 lakhs
(43) Mr. X received an advance of Rs. 51,000 occasion of agreement of sale of a capital asset on 15-07-2018. The same was
forfeited by him. The said advance money will be and shall __________________
(a) Taxable as Income from other sources, be reduced from cost of acquisition of the asset.
(b) Taxable as Income from other sources, not be reduced from cost of acquisition of the asset.
(c) Taxable as Capital Gains, be reduced from cost of acquisition of the asset.
(d) Taxable as Capital Gains, be reduced from cost of acquisition of the asset.
(44) Bonus shares were allotted to Mr. Kanan for Rs. 2,00,000 on 1st April 2000. The Fair market value of the shares on
2001 was Rs. 2,25,000. What will be the cost of acquisition?
(a) Rs. 2,00,000
(b) Rs. 2,25,000
(c) Nil
(d) None of these
(45) For claiming exemption under section 54F, the assessee has to invest _______________ for purchase or construction
of residential house property :
(a) Full value of consideration
(b) Net Consideration
(c) The amount of capital gains
(d) Cost of asset transferred
(46) The exemption under section 54EC is withdrawn if the transfer of new asset, conversion thereof in money or taking
loan or advance on its security within _____ years from the date of its acquisition.
(a) 1
(b) 2
(c) 3
(d) 4
(47) Compute the tax liability for assessment year 2019-20 of resident individual who is having long term capital gains of Rs.
5,00,000 and has no other income -
(a) Rs. 1,03,000
(b) Rs. 46,350
(c) Rs. 52,000
(d) Rs. 23,690
(48) Compute the tax liability for assessment year 2019-20 of non-resident individual who is having long term capital gains
of Rs. 5,00,000 and has no other income -
(a) Rs. 1,04,000
(b) Rs. 49,440

(c) Rs. 51,500
(d) Rs. 23,690
(49) Compute the tax liability for assessment year 2019-20 of resident individual who is having income from short term
capital gains of Rs. 5,00,000 arising on transfer of equity shares listed in recognized stock exchange on which securities
transaction is paid and has no other income;
(a) Rs. 39,000
(b) Rs. 36,570
(c) Rs. 38,630
(d) Rs. 75,190
(50) Compute the tax liability for assessment year 2019-20 of resident individual who is having income from short term
capital gains of Rs. 2,00,000 arising on transfer of equity shares listed in recognized stock exchange on which securities
transaction is paid and long term capital gains of Rs. 3,00,000 on transfer of land and has no other income _
(a) Rs. 39,140
(b) Rs. 41,600
(c) Rs.49,440
(d) Rs. 51,500
(51) Where an urban agricultural land owned by an individual, continuously used by him for agricultural purposes for a
period of __________ prior to the date of transfer, is compulsorily acquired under law and the compensation is
determined by the Central Government, resultant capital gain is exempt.
(a) One year
(b) Two years
(c) Three years
(d) 6 months
(52) Short-term capital gains arising from the transfer of equity shares in a company or units of an equity oriented fund or
units of a business trust charged with security transaction tax are subject to income-tax at the rate of -
(a) 10%
(b) 15%
(c) 20%
(d) Normal rate
(53) Capital gain on sale of residential house property is exempted u/ s 54 if it is :

(a) Long term capital gain
(b) Short term capital gain
(c) Any of the above two
(d) None of these
(54) The benefit of exemption under Section 54 is available to :

(a) Individual
(b) HUF
(c) Both Individual and HUF
(d) Any person
(55) The benefit of exemption under Section 54 is available when following capital asset is transferred
(a) Long term residential house property

(b) Short term residential house property
(c) Long term residential plot of land
(d) Short term residential plot of land
(56) For claiming the benefit of exemption under Section 54 __ new residential house property must be purchased within 2
years of transfer of capital asset:
(a) 1
(b) 2
(c) 3
(d) Any number of
(57) In computing capital gains in case of slump sale ---------will be taken as cost of acquisition of the undertaking so
transferred.
(a) Book value
(b) Net worth
(c) WDV
(d) FMV as on 01-04-2001
(58) Mr. Maninder has sold his land for a consideration ofRs.25,00,000 to Mr. Vishal. Mr. Vishal has paid stamp duty
ofRs.3,00,000 @ 10 of stamp value. The full value of consideration for computing capital gains in hands of Mr. Maninder in
accordance with the provisions of Section 50C will be -
(a) Rs.25lakhs
(b ) Rs.30lakhs
(c) Rs.281akhs
(d) Rs.33 lakhs
(59) Section 50C makes special provision for determining the full value of consideration in case of transfer of _
(a) Plant and machinery
(b) Land or building
(c) All movable property other than plant & machinery and computers
(d) Computers.
(60) Mr. Lalit has sold his land for a consideration of Rs.25,00,000 to Mr. Mukesh on 15-04-2018. Mr. Mukesh has paid
stamp duty of Rs. 3,00,000 @ 10% of stamp value. The said land was acquired by Mr. Lalit on 15-07-2017 for Rs.12 lakhs.
Mr. Lalit was not satisfied with the stamp value and his case was referred to Valuation officer. The valuation officer
determined the value Rs.35 lakhs. The taxable capital gains in hands of Mr. Lalit will be -
(a) Rs.23 lakhs
(b) Rs. 14lakhs
(c) Rs.10 lakhs
(d) Rs.18 lakhs
(61) Where any capital asset was on any previous occasion the subject of negotiations for its transfer, any advance or other
money received and retained by the assessee in respect of such negotiation shall be:
(a) Deducted from cost of acquisition
(b) Treated as income from other sources
(c) Deducted from full value of consideration
(d) Treated as Business Income

(62) For claiming the benefit of exemption under Section 54 one new residential house property must be purchased within
___ of transfer of capital asset:
(a) 1 year
(b) 2 years
(c) 3 years
(d) 4 years
(63) For claiming the benefit of exemption under Section 54 one new residential house property must be constructed
within ---------------of transfer of capital asset:
(a) 1 year
(b) 2 years
(c) 3 years
(d) 4 years
(64) Under section 54, in case if the new asset is transferred within of its purchase or construction, then its cost of
acquisition shall be reduced by the amount of the capital gains exempted earlier for the purpose of computing capital gains
on transfer of such new asset.
(a) 1 year
(b) 2 years
(c) 3 years
(d) 4 years
(65) Under which section, the assessee has to reinvest the entire net consideration to claim full exemption for the long-
term capital gains earned during a previous year -
(a) Section 54EC
(b) Section 54F
(c) Section 54GA
(d) Section 54D
(66) Mr. Sumit has sold his land for a consideration of Rs.25,00,000 to Mr. Naveen. on 15-04-2018. Mr. Naveen has paid
stamp duty ofRs.3,00,000 @ 10 of stamp value. The said land was acquired by Mr. Sumit on 15-07-2017 for Rs. 12 lakhs. The
taxable capital gains in hands of Mr. Sumit will be ______________
(a) Rs.13 lakhs
(b) Rs. 18 lakhs
(c) Rs.16 lakhs
(d) Rs. 10 lakhs
(67) Mr. X has sold his land for a consideration ofRs.25,00,000 to Mr. Y. on 15-04-2018. Mr. Y has paid stamp duty of
Rs.3,00,000 @ 10% of stamp value. The said land was acquired by Mr. X on 15-07-2017 for Rs.12lakhs. M. X was not
satisfied with the stamp value and his case was referred to Valuation officer. The valuation officer determined the value
Rs.26 lakhs. The taxable capital gains in hands of Mr. X will be -
(a) Rs.13lakhs
(b) Rs.14 lakhs
(c) Rs.1 lakhs
(d) Rs. 18 lakhs

Answers to the MCQs
1. B 26. C 51. B
2. D 27. C 52. B
3. C 28. A 53. A
4. D 29. C 54. C
5. D 30. C 55. A
6. D 31. A 56. A
7. B 32. A 57. B
8. D 33. A 58. B
9. D 34. A 59. B
10. B 35. B 60. D
11. D 36. B 61. B
12. D 37. A 62. B
13. C 38. B 63. C
14. D 39. C 64. C
15. C 40. A 65. B
16. D 41. B 66. B
17. A 42. A 67. B
18. B 43. B
19. D 44. B
20. A 45. B
21. D 46. C
22. D 47. B
23. A 48. A
24. C 49. A
25. D 50. B

Tax MCQS - Part 2

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Tax MCQS - Part 2

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CA Inter DT - MCQs (PART 2)

Chapter 16: INCOME U/H SALARIES

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(15) Which section gives the definition of salary?

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(22) Who amongst the following is considered to be a specified employee?

(25) Credit card facility provided to employee by the employer is _

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(72) "Family" for the purpose of medical facility means –

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(84) Salary received in lieu of unavailed leave during service shall be -

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(98) Deduction u/s 80C on employee's contribution is not available in case of :

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Answers to the MCQ

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Chapter 17: INCOME U/H PGBP

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(16) Under the Income-tax Act, 1961, depreciation on machinery is charged on -

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(34) Specified business under section 35AD includes:

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(39) Unabsorbed depreciation can be carried forward for:

(43) In which of the following case no depreciation is allowable _

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(109) Which amongst the following are specified books of account?

(112) The provisions of section 44AD shall not apply to :

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Answers to the MCQs

1. D 26. B 51. C 76. D 101. A

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Chapter 18: INCOME U/H CAPITAL GAINS

(2) Which of the following are included in the jewellery -

(3) Capital asset excludes all except

(6) The following shall not be regarded as capital asset:

(7) The following shall not be regarded as capital asset:

(8) The following shall be regarded as capital asset:

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(37) Slump sale is a result of which of the following type of consideration?

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