Chapter 1 Tax - Introduction-Combined

TYBCOM REGULAR (SEM V)DIRECT TAXES
Chapter – 1: Introduction
Sr.No Multiple Choice Question ANS
1 The constitution of India Empowers ___________ to levy tax on income.
A State Government
B Central Government YES
C Parliament
D Finance Minister
2 Income Tax is a tax on ___________.

A Income YES
B Profit
C Turnover
D Expenditure
3 The Income Tax Act, 1961 has 298 _____________.

A Sections YES
B Sub – sections
C Clauses
D Sub – clauses
4 The _____________ makes the amendment in the form of omission, insertions

and substitutions in the Income Tax Act.
A Finance Bill
B Finance Minister
C Finance Act YES
D Parliament
5 The Income Tax Act extends to __________ of India.

A States
B Union Territories
C Citizens
D Whole YES
6 Gross Tax Liability in calculated on __________.

A Gross Total Income
B Net Taxable Income YES
C Income
D Salary
TYBCOM REGULAR (SEM V) DIRECT TAXES
Chapter – 2: Definitions (Sections 2 and 3 )
1 The term H.U.F. stands for :
A Hindu divided family
B Human undivided family
C Hindu undivided family Yes
D Human divided family
2 Residential has nothing to do with :

A Constitution
B Citizenship Yes
C Censorship
D Change
3 A.O.P. is the abbreviation used for :

A Association of persons Yes
B Association of professors
C Association
D Associate of person
4 A.O.P. should consist of :

A Individual only
B Persons other than individual also
C Both of the above Yes
D None of the above
5 Body of individual should consist of :

A Individual only Yes
B Persons other than individual only
C Both of the above
D None of the above
6 Residential status of an individual depends on the stay of the assesses in India

during the-- :
A Calendar year
B Accounting year
C Assessment year
D Previous year Yes
7 A person by whom any tax is payable under Income Tax Act 1961 is called as :
A Individual
B Tax Receiver
C Assessee Yes
D None of the above
8 The financial year in which the income is earned is called as the :

A Assessment year
B Present year
C Previous year Yes
D Current year
9 An company is always resident in India :

A Industrial
B Individual
C Indian Yes
D Investment
10 Income Tax Act extends to ____

A Whole of India Yes
B Whole of India except Jammu & Kashmir
C India and Sri Lanka
D None of these
11 A new business was set up on 15-11-2016 and it commended its business

from 1-12-2016. The first previous year in this case shall be :
A 15-11-2016 to 31-3-2017 Yes
B 1-12-2016 to 31-3-2017
C 2016-2017
D None of these
12 Shivaji University is assessable under the Income Tax Act as _____

A A Individual
B An Artificial Juridical Person Yes
C A Local Authority
D None of these
13 Income Tax Act has ____________ schedules.

A 23
B 14 Yes
C 298
D 40
14 58 (1) (a) (ii) is read as __________

A Section 58 schedule (1) clause (a) sub-clause (ii)
B Section 58 schedule (1) clause (a) sub-clause (ii)
C Section 58 schedule (1) clause (a) sub-clause (ii) Yes
D Section 58 schedule (1) clause (a) sub-clause (ii)
15 In 59 (3) (b) (iv), (b) is _________________
A Section
B Sub –section
C A Local Authority Yes
D None of these
16 ___________ are definite, specific, complete and full.

A Exhaustive definition Yes
B Inclusive definition
C Sections
D Clauses
17 A firm is regarded as a unit of assessment as per _______________

A Income Tax Act Yes
B Partnership Act
C Companies Act
D Finance Act
18 _____________ is chargeable u/s 45.

A Capital Gain Yes
B Profit and Gains
C Dividend
D Voluntary Contribution
19 Income includes ______________

A Dividend
B Voluntary Contribution
C Capital Gains
D All of the above Yes
20 Any sum of money received in excess of Rs. ______ without consideration is chargeable
to tax.
A 5,000/-
B 50,000/- Yes
C 5,00,000/-
D 55,000/-
21 Previous year can be of ____________ 12 months.

A More than
B Less than Yes
C Only
D Any
22 Any sum received or receivable in cash or kind under an agreement for not carrying
out an activity in relation to a business is called as ______________.
A Pin Money
B Mutual Activity
C No Competition Deal
D Non-compete Agreement Yes
23 ______________ is expected to be a periodical monetary return.

A Salary
B Profit
C Income Yes
D Interest
24 _____________ are not taxable.

A Losses
B Personal Gifts Yes
C Illegal Income
D Awards
25 ______________ received by wife is not taxable.

A Pin Money Yes
B Compensation
C Gift
D Salary
26 The term 'Person' includes ___________

A HUF
B AOP
C BOI
D All of them Yes
27 Partners are liable to pay tax on ___________ received from firm.

A Salary
B Profit
C Income
D Both (A) & (B) Yes
Chapter – 3: Basis of Charge (Sections 4, 5, 6, 7, 8 and 9)
1 Income deemed to accrue or arise in India is taxable is case of :
A Resident only
B Both R & OR and R but NOR
C Non-resident
2 Income which accrue or arise outside India and also received outside India is
taxable in case of:
A Resident only Yes
B Not ordinary resident
C Both R & OR and R but NOR
D None of the above
3 Income which accrue outside India from a business controlled from India is
taxable in case of:
A Residential only
B Not ordinary resident only
C Both R & OR and R but NOR Yes
D None of the Above
4 Residential status is determined based on nos. of days stay in :

A Previous year Yes
B Assessment year
C Accounting year
D None of these
5 Total Income of a person is determined on the basis of :

A Residential status in India Yes
B Citizenship in India
C None of the above
D Both of the above
6 Infourge Ltd. is registered in London the control and management of its affairs
is situated in India Infourge Ltd. shall be :
A Resident only Yes
B Both ordinarily resident and NOR
C Not ordinarily resident in India
D None of the above
7 Incomes which accrue or arise outside India but are received directly into India
are taxable for case of :
A Resident only
B Both ordinary resident and NOR
C Non-resident
D All the assesses Yes
8 Success Ltd. is an Indian company whose entire control and management of

its affairs is situated outside India success Ltd is :
A Resident in India Yes
B Non-resident in India
D None of these
9 Martin Crow a foreign national visited India during previous year for 180 days.
Earlier to this he never visited India. Martin Crow in this case shall be :
A Resident in India
B Non-resident Yes
D None of these
10 Residential status is to be determined for :

A Previous year Yes
B Assessment year
C Accounting year
D None of these
11 Infaurge Ltd. Is an Indian company whose entire control and management of its affairs is
situated
outside India. Infaurge shall be :
B Non-resident in India
D None of these
12 Success Ltd. Is registered in U.K. The control and management of its affairs is
situated in India. Success Ltd. shall be :
B Non-resident
D None of these
13 Manoj a foreign national visited India during previous year 2016-17 for 150 days.
Earlier to this he never visited India. Manoj in this case shall be :
A Resident in India
B Non-resident Yes
D None of these
14 Raja a foreign national but a person of Indian origin visited India during previous
year 2016-17 for 181 days. During 4 preceding previous years he was in India
for 365 days. Raja shall be :
A Resident in India
B Non-resident in India Yes
C Not-ordinarily resident in India
D None of the above
15 If an individual satisfies any of the basic conditions and satisfies only

one additional condition, then also he shall be considered as _____
A R & OR
B Non-Resident Yes
C R but NOR
D None of the above
16 Special individuals would become non-resident if their stay in India during

previous year is __________
A Equal to 182 days
B Less than 182 days Yes
C More than 182 days
D None of the above
17 Dividend received from a foreign company in London, taxable in case of

following individuals __________.
A R & OR Yes
B Non-Resident
C R but NOR
D All of the above
18 Fees for technical services rendered in India but received in London, taxable
in case of _________
A R but NOR
B R & OR
C Non-Resident
19 In case of following individuals, global income is taxable __________

A R & OR Yes
B R but NOR
C NR
D None of the above
Chapter – 4: Income Exempted from Tax (U/S 10)
1 An Assessee claimed the exemption of gratuity in the past to the extent of
2, 50,000 from his previous employer. He was entitled to How much exemption
can he claim to the maximum extent :
A 10,00,000
B Nil
C 7,50,000 YES
D None of the above
2 Un-commuted pension received by a Government employee is :

A Exempt
B Taxable YES
C 1/3 is exempt
D None of these
3 An employee is neither a government nor covered under the payment of

Gratuity Act, 1972.He has completed 16 years and 8 months of service.
The number of completed years considered for gratuity exemption shall be :
A 17 years
B 16 years YES
C 16 years and 8 months
D None of the above
4 Compensation received on voluntary is exempt under sec. 10 (10 C) to the

maximum extent of :
A Rs. 2,40,000
B Rs.3,00,000
C Rs.5,00,000 YES
D None of the above
5 Dividend is exempt in case :

A It is paid by an Indian Company YES
B It is paid by a foreign company
C It is paid by a multinational company
D It is paid by a joint venture unit.
6 Gratuity received by the Government employee is :

A Fully taxable
B Fully exempt YES
C Party taxable
D None of the above
7 Gallantry award means :
A Param Vir Chakra

B Mahavir Chakra
C Vir Chakra
D All of the above YES
8 The items of incomes which are totally exempt from tax are covered u/s __________.
A 80
B 10 YES
C 8
D None of the above
9 Upper monetary limit for claiming exemption from gratuity for "other" category is ___
A 5,00,000
B 1,00,000
C 10,00,000 YES
D None of the above
10 Minors Income which is clubbed with that of his parent is exempted up to ______
A 1,500 per minor child YES
B 1,200 per minor child
C 1,300 per minor child
D None of the above
11 The dividend income in the hands of the shareholders will be exempt from tax u/s ___
A 10 (35)
B 10 (34) YES
C 10 (32)
D 10 (33)
12 Un commuted pension is taxable in the hands of ___________.

A Non-Government Employees
B Government Employees
C Both (A) & (B) YES
D None of the above
13 Leave salary received during the period of service is __________.

A Exempt u/s 10 (10 AA)
B Exempt u/s 10 (10 A)
C Taxable YES
D None of the above
14 Tax borne by the employer on non-monetary perquisite provided to employee

is exempt u/s ______
A 10 (10 C)
B 10 (10 CC) YES
C 10 (10 BC)
D 10 (10 CCC)
Chapter – 5: HEADS OF INCOME (Section 14)
1 The total of 5 heads of income given u/s 14 is termed as _______
A Total Income
B Gross Total Income YES
C Net Total Income
D None of the above
2 Provisions applicable under each head of income are _______

A Same
B Similar
C Different YES
D None of the above
Chapter – 6: SALARIES (Section 15 TO 17)
1 Salary of Sushil Kumar becomes due on 1st of next month and it is paid on
10th that month. For the assessment year 2017-18, the salary of Sushil Kumar
shall be taken from :
A April 2016 to March 2017
B March 2016 to February 2017 YES
C April 2017 to March 2018
D March 2017 to February 2018
2 Ramu who is entitled to salary of Rs. 10,000 p.m. took advance salary from his
employer for the months of April and May 2017, along with salary of March, 2017
on 31-3-2017. The gross salary of Ramu for the assessment year 2017-18 shall be :
A Rs. 1,20,000
B Rs. 1,40,000 YES
C Rs. 20,000
D Rs. 1,00,000
3 Ramu who is entitled to a salary of Z 10,000 p.m. took an advance of Rs. 50,000
against the salary in the month of March 2017. The gross salary of Ramu for
assessment year 2017-18 shall be :
A Rs. 1,70,000
B Rs.1,20,000 YES
C Rs.50,000
D Rs.70,000
4 Prof. Vineet received 6th Pay arrears on 14th May, 2016 retrospectively from
1st Jan, 2013. The arrears would be taxable in the previous year :
A 2016-17 YES
B 2012-13, 2013-14, 2014-15 respectively
C 2012-13
D None of the above
5 Entertainment allowance in case of government employee is :

A Fully exempt
B Fully taxable
C Exempt up to certain limits mentioned in sec. 16 (ii)
D First included in full in gross salary and thereafter deduction allowed from YES
gross salary under section 16 (ii) subject to certain parameters.
6 The life insurance Policy taken by a person on the life of another person who
is connected & key to the business as employee is called :
A Key man Insurance policy YES
B Key Insurance Policy
C LIC
D Employed Insurance
7 Entertainment allowance is deductable to the extent of Rs. 5,000 for a ___________

A Private company employee
B Government employee YES
C Both of the above
D None of the above
8 Perquisite can be :
A The same as allowance
B Any reimbursement to an employee in respect of an obligation which would be YES
payable by the employee
C Any expenditure incurred by the employer for staff welfare
D None of the above
9 Manthan a chartered accountant is employed with Mayuri Ltd., and internal

auditor and requests the employer to call the remuneration as internal audit
fee. Manthan shall be chargeable to tax for such fee under the head.
A Income from Salaries YES
B Profits and Gains from Business and Profession
C Income from other Sources
D None of these.
10 A Raja who is entitled to salary of Rs. 40,000 p.m. took an advance of Rs. 80,000
against the salary in the month of March 2017. The gross salary of Raja for
assessment year 2017-18 shall be :
A Rs.5,60,000
B Rs.4,80,000 YES
C Rs.4,00,000
D None of these
11 Lalit who is entitled to salary of Rs. 12,000 p.m. took advance salary from his
employer for the months of April and May 2017, along with salary of March, 2017
on 31-3-2017. The gross salary of Lalit for the assessment year 2017-18 shall be :
A Rs. 1,44,000
B Rs. 1,68,000 YES
C Rs. 1,56,000
D Rs. 1,20,000
12 Salary of shaila becomes due on 1' of next month and it is paid on 7th of that month.
For the assessment year 2017-18, the salary of Shaila shall be taken from:
A April. 2016 to March, 2017
B March 2016 to February, 2017 YES
C April, 2017 to March, 2018
D None of these
13 Progressive Ltd. announced increase in D.A. on 21:3-2017 with retrospective effect

from 21-3-2010 and the same paid on 6-04-2017. The arrears of D.A. shall be taxable
in the previous year.
A 2015-16
B 2016-17 YES
C In respective previous years to which these relate
D 2017-18
14 Kumar is neither a government employee nor covered under payment of

Gratuity Act. 1972. He has completed 21 years and 8 months of service.
The number of completed years considered for gratuity exemption shall be _____
A 22 years
B 21 years YES
C 21 years and 8 months
D Average of (A) & (B)
15 Employer's contribution to statutory provident fund is ___________.

A Exempt up to 12% of salary
B Exempt up to 9.5% of salary
C Fully exempt YES
D None of the above
16 Interest credited to RPF is __________.

A Fully exempt
B Exempt up to 8.5% p. a
C Fully Taxable
D exempt up to 9.5% YES
17 Medical reimbursement by employer is not taxable upto __________.

A 5,000
B 10,000
C 15,000 YES
D 20,000
18 Compensation on termination of employment will be taxable under the head _______

A Income from other sources
B Income from salary YES
C Not taxable as it is capital receipt
D Fully Exempt
19 Profession tax deducted is allowed on _______

A Accrual basis
B Payment basis YES
C Both (A) & (B)
D Non-deductible
20 Maximum amount of deduction for entertainment allowance is __________.

A Rs. 1,500
B Rs. 2,500
C Rs.5,000 YES
D Rs. 3,000
21 Deductions in respect of salary are covered uls __________.

A 17
B 16 YES
C 15
D None of the above
Chapter – 8: INCOME FROM HOUSE PROPERTY (Section 22 TO 27)
1 Municipal valuation of the source is 1,20,000 and actual rent received is
Rs 1, 25,000 fair Rent is 1, 40,000. The gross annual value in this case shall be.
Assuming that reduction in rent is due to vacancy.
A Rs.1,20,000
B Rs. 1,40,000
C Rs. 1,25,000 YES
D None of the above.
2 Municipal valuation of the house is R 1,00,000 fair rent Rs. 1,20,000 and actual
rent received or receivable is 1,40,000. The Gross Annual Value in this case
shall be --
A Rs. 1,00,000
B Rs. 1,20,000
C Rs. 1,40,000 YES
D None of the above
3 Municipal valuation of the house is Rs. 1,20,000 fair rent 1,40,000 and actual
rent received or receivable is Rs. 1,25,000. The gross annual value in this
case shall be assuming that reduction in rent is not due to vacancy.
A Rs. 1,25,000
B Rs. 1,25,000
C Rs.1,40,000 YES
D None of the above
4 A house property with fair rent Rs.1,00,000 is neither let out nor self occupied
throughout the previous year. Its annual value shall be.
A Rs. 1,00,000/- YES
B Rs. Nil
C Rs. 85,000/-
D None of the above
5 Un realized rent is a deduction from______

A Gross annual Value YES
B net annual value
C Municipal Value
D Non of the above
6 A property is owned by co-owners and it is self occupied house property.

In this case interest on money borrowed after 1-4-1999 for acquiring the house
shall be allowed.
A To the extent of 2, 00,000 as the case may be for the total property income.
B To each co-owner, to the extent of Rs. 2,00,000 as the case may be YES
C No deduction of interest shall be allowed.
7 A has two house properties. Both are self-occupied. The Gross annual
value of _____
A Both house shall be nil
B One house shall be nil YES
C No house shall be nil
D None of the above
8 An assessee has borrowed money for purchase of a house property & Interest
is paid outside India. Such interest shall :
A Be allowed as deduction
B Not to be allowed as deduction
C Be allowed as deduction if the tax is deduction at source YES
D None of the above
9 Municipal tax is deducted from

A Net Annual Value
B Gross Annual Value YES
C Municipal Valuation
D None of the above
10 In case the property is owned by co-owners and it is self occupied by all

co-owners the annual value of_____
A Such house property be nil
B For each co-owners shall be nil YES
C Only for co-one owner will be nil
D None of the above
11 Municipal Tax paid is allowed as deduction for ______

A SOUP only
B LOHP only
C LOHP and DLOH YES
D All of the above
12 Mandan has taken a house on rent and sublets the same to Anil. Income from
such house property shall be taxable under the head.
A Income from house property
B Income from other sources YES
C Business Income
D None of the above Municipal tax is deducted from
13 Municipal tax is deducted from _______

A Net Annual Value
B Gross Annual Value YES
C Municipal Valuation
D None of the above

co-owners the annual value of _________
D None of the above
15 A house property with fair rent Rs. 1,20,000 is neither let out nor self occupied
throughout the previous Its annual value shall be _____
A Rs.1,20,000 YES
B Nil
C Rs. 60,000
D None of the above
16 Unrealized rent is a deduction from _______

A Gross annual value YES
B Net annual value
C Municipal Value
D None of the above
17 A has two house properties. Both are self-occupied.

A Both house are SOHP
B One is SOHP and other is DLOP YES
C One house is LOHP
D None of the above

co-owners the annual value of _________
D None of the above
19 Municipal Tax paid is allowed as deduction for ___________

A SOHP only
B LOHP only
C LOHP and DLOH YES
D All of the above
20 Municipal tax is a deduction allowed on ____________

A Accrual basis
B Payment basis YES
C Both (A) & (B)
D None of the above
21 Municipal tax paid in respect of house property is allowed as deduction if

paid by ___
A Tenant
B Owner YES
C Both (A) & (B)
D None of the above
22 Mr. Varun is owner of two houses namely "Genaraje" at Mulund & "Om Sai" at
Thane which are self—occupied. However, apartment at "Om Sai" was let out for
2 months. The computation of this property would be ________
A Let out YES
B Self-occupied
C Partly let out & partly SOHP
D Deemed let out
23 Unadjusted loss from house property can be carried forward & set off in
subsequent years subject to limit of _________
A 7 Years
B 8 Years YES
C 6 Years
D 9 Years
Chapter – 9: Profits and Gains of Business or Profession (Sections 28 to 43 B)
1 Where the amount of an expenditure claimed as deduction exceed 20,000,
it should be paid by
A Crossed cheque
B Account payee cheque /draft YES
C Cash
D None of these
2 Where the amount of an expenditure claimed as deduction exceed Rs. 20,000,

it is not made by account payee cheque/draft.
A 20% of such payment shall be disallowed
B 100% of such payment shall be disallowed YES
C 20% of the excess over 20,000 of such payment shall be disallowed
D None of the above
3 In the case, asset of a particular block is acquired and put to use during the
previous year for less than 180 days, depreciation will be charged
A At normal rate
B At 50% of normal rate YES
C No depreciation is allowed
D None of these
4 Tax is allowed as a deduction while computing the business income.

A Wealth tax,
B Income tax,
C Sales tax, YES
D All of the above
5 Export incentives received by an assessee are

A Exempt
B Taxable as business income YES
C Exempt up to certain limits Wine
D None of the above
6 Mr. Richard who was carrying on agency of sell computation business, received
a sum of Rs. 80,000 from his principal for termination of agency. Compensation
so received shall be
A Exempt as it is capital receipt
B Taxable as business income YES
C Taxable as income from other source
D None of the above
7 Salary, bonus, commission or remuneration due to or received by a working partner

from the firm is taxable under the head.
A Income from salaries
B Other source
C Business Income YES
D None of the above
8 Mobile handset received by the assessee Doctor during the course of carrying on
his profession is taxable under the head.
A Salary
B Other sources
C Professional Income YES
D None of the above
9 An amount paid to a company to be used for scientific research shall be allowed

a deduction equal to ______
A 100%
B 125% YES
C 150%
D None of the above
10 Bonus paid to employee is allowed as deduction on ________

A Accrual basis
B Payment basis YES
C Declaration
D None of the above
11 Capital Expenditure incurred on repairs of factory building is _________

A Not allowed as business deduction YES
B Allowed as business deduction
C is allowed 50%
D None of the above
12 Salary, bonus, commission or remuneration due to or received by a working partner from the firm
is taxable under the head.
A Income from salaries
B Other source
C Business Income YES
D None of the above
13 Perquisite received by the assessee during the course of carrying on his business
or profession is taxable under the head.
A Salary
B Other source
C Business / Professional Income YES
D None of the above
14 Interest on capital or loan received by a partner from a firm is :
A Exempt u/s 10 (2A)
B Taxable as business and profession Income YES
C Taxable as income from other sources
D None of the above
15 Under the head Business or Profession, the method accounting which an

assessee can follow shall be :
A Mercantile system only
B Cash system only
C Mercantile or cash system YES
D Hybrid system
16 Depreciation is allowed in case of _____

A tangible fixed assets only
B Intangible assets only
C Tangible and intangible assets YES
D Wasting assets only
17 Which of the following tax is allowed as deduction while computing the

business income?
A Wealth tax
B Income tax
C Sales tax YES
D None of the above
18 Where the amount of an expenditure claimed as deduction exceeds Rs. 20,000

it should be paid by
A Crossed cheque
B Account payee cheque / draft YES
C Cash
D None of these
19 Expenditure incurred on family planning amongst the employees is allowed to

A Any assessee
B A company assessee YES
C An assessee which is a company or co-operative society
D None of the above
20 Any activity carried on with a view to earn profit is called _________.

A Commerce
B Trade
C Business YES
D All of the above
21 If any asset is- used for more than 180 days in the year of purchase, the
depreciation rate will be of the normal rate.
A 50%
B 100% YES
C 75%
D None of the above
22 Expenses exceeding Z 20,000 paid in cash are disallowed u/s ________

A 40 A (2)
B 40 AB
C 40 A (3) YES
D 43 B
23 Any sum received under non-compete agreement is taxable under the head _______
A Income from other sources
B Business Income YES
C Capital Gain
D Not Taxable
24 Machinery is acquired on 20-10-2016 & put to use on 01-04-2017.

The rate of depreciation to be applied in the P.Y. 2016-17 _______
A 15%
B 7.5%
C 30%
D None of the above YES
25 Unabsorbed depreciation can be carried forward to subsequent assessment

years for _______
A 8 Years -
B 7 Years
C 5 Years
D No Limit YES
26 In the subsequent years, unabsorbed depreciation can be set off against chargeable
A Business Income YES
B Income from other sources
C Capital Gains
D Any Head of Income
27 Eligible assesses for claiming deduction u/s 35 D are

A Indian and foreign companies
B Foreign companies and non-resident non-corporate assesses
C Indian companies and resident non-corporate assesses YES
D None of the above
28 The qualifying amount of the preliminary expenditure can be claimed as
deduction over period of years in equal installments___________
A Four
B Five YES
C Eight
D Ten
29 Insurance premium paid in respect of insurance against risk of damage or

destruction of stocks or stores can be claimed as deduction u/s
A 36 (1) (i) YES
B 36 (1) (iii)
C 36 (1) (iv)
D 36 (1) (ii)
30 Income Tax, Wealth Tax & Fringe Benefit tax are __________
A Allowed u/s 40 (b)
B Disallowed YES
C Allowed u/s 40 (a)
D None of the above
31 All the firms will be charged to tax at the __________

A Minimum Marginal Rate
B Average Rate
C maximum Marginal Rate YES
D None of the above
32 Payments to specified persons which are unreasonable are __________

A Allowed u/s 40 A (2)
B Disallowed YES
C Allowed u/s 40 A (3)
D Disallowed u/s 40 A (3)
Chapter – 10:Capital Gains (Sections 2 (14), 2(47), 45, 48, 49, 50, 54 & 54 EC)
1 Short-term capital gain arise on transfer of listed shares and units held by the
date of assessee for not more than
A 36 months from the date of acquisition
B 12 months from the date of acquisition YES
C 24 months from the date of acquisition
D None of the above
2 There will be long-term capital gain, if one of the following asset is transferred
after it is held for 12 months and 1 days
A Plant and Machinery
B Jewellery
C Listed Unit of Mutual fund YES
D None of the above
3 Which asset is not treated as capital asset for capital gain purposes.
A Motor car for business use
B Jewellery
C House Property
D Plant and Machinery held as stock in trade YES
4 Capital gain arises from the transfer of _____________

A An asset
B Any fixed asset
C capital asset YES
D House property only
5 The assessee is allowed to opt for market value as on 1- 4 - 81 in case of __________

A All capital asset
B All capital assets other than depreciation asset YES
C Only house properties
D None of the above
6 In case of long term capital gain, the amount to be deducted from sale
consideration shall be
A Indexed cost of improvement
B Indexed cost of acquisition
C Brokerage
D All of the above YES
7 In case of compulsory acquisition, the indexation of cost of acquisition

or improvement shall be done till be
A Previous year of compulsory acquisition YES
B Year in which full compensation is received
C Year in which part or full compensation is received
D None of the above
8 Conversion of capital asset into stock in trade will result into capital gain
of the previous year :
A In which such conversion took place
B In which such converted asset is sold or otherwise transferred YES
C In which such converted asset was purchase
D None of the above
9 Where capital asset is converted into stock in trade then for the purpose
of computation of capital gain, the full value of consideration shall be
A The market value of the asset on the date of sale asset
B The market value of the asset on the date of conversation of such asset YES
C The sale consideration
D None of the above
10 For claiming exemption under Sec. 54, the assessee should purchase
residential property
A 2 years before the date of transfer
B 3 years after the date of transfer
C 1 year before or 2 years after the date of transfer YES
D None of the above
11 If the assessee wishes to deposit money under capital gain scheme for
claiming exemption under sec. 54, it should be deposited within _____
A Six months from the date of transfer
B Within six months from the end of the relevant previous year
C Due date of furnishing the return of income u/s 139 (1) YES
D None of the above
12 The exemption under section 54, shall be available :

A To the extent of capital gain invested in the House Property YES
B Proportionate to the net consideration price invested
C To the extent of amount actually invested
D None of the above
13 Exemption under section 54, shall be available :

A All assesses
B Individual only
C Individual and HUF YES
D None of the above
14 Which asset is not treated as capital asset for capital gain purchases,
A Motor car for business use
B Jewellery
C Tenancy rights
D Plant and machinery held as stock in trade YES
15 Tick from the following, the capital assets, where there will be long-term
Capital gain, if gain asset is transferred after it is held for 14 months.
A Plant and Machinery
B Jewellery
C Shares YES
D None of the above
16 Distribution of assets at the time of partial or complete partition of HUF shall

A Be regarded as a transfer in the hands of HUF for capital gain, purposes YES
B Be regarded as a transfer in the hands of coparceners (members of HUF)
C Neither be regarded as transfer in the hands of HUF nor in the hands of coparceners
D None of the above
17 Cost of improvement of goodwill of a business shall be

A Nil YES
B The capital expenditure incurred
C Capital expenditure incurred on or after 1-4-81
D None of the above
18 In case of long term capital gain, the amount to be deducted from sale
consideration shall be
A Cost of acquisition
B Indexed cost of acquisition YES
C Market value on 1-4-81
D None of the above
19 Income from transfer of capital asset is termed ______

A Capital Gain YES
B Capital Profit
C Net Profit
D None of the above
20 Capital asset is classified into two categories on the basis of

A Type of the assets
B Holding period of the asset YES
C CII Block of assets refers to
D None of the above
21 CII refers to __________

A Cost Inflation Index YES
B Cost Improvement Index
C Cost Income Index
D None of the above
22 The method of computation of capital gain is provided u/s

A 47
B 48 YES
C 46
D 45
23 Personal effects of assessee include__________

A Gold
B Silver Coins
C Precious Stones
24 Capital gain on transfer of depreciable asset is always

A Short Term Gain
B Short Term Loss
C either (A) or (B) YES
D Long Term Loss
25 Long term capital loss can be set off against

A Short term capital gain
B Long term capital gain YES
C Both (a) & (b)
D Under any other head of income
26 Short term capital loss can be set off against ______

A Short term capital gain
B Long term capital gain
C Both (A) & (B) YES
D Winnings from lotteries
27 After availing the exemption u/s 54EC, the assessee has to retain the
Long term specified asset for a minimum period of _______ from the
date of its acquisition.
A 1 year
B 5 years
C 3 years YES
D 2 years
28 Limit of Investment in the 'Long term specified asset' U/S. 54EC by an assessee
during any financial year should not exceed _______.
A Rs. 50,00,000 YES
B Rs. 25,00,000
C Rs. 30,00,000
D No Limit
29 Where the cost Long-term specified asset is also eligible for deduction
will ________ allowed, if the exemption is availed u/s. 54EC.
A also be
B not be YES
C proportionately
D separately
Chapter – 11: Income from Other Sources (Section 56 to 59)
1 Sushant has taken a house on rent and sublets the same to A. Income from
such house property shall be taxable under the head.
A Income from house property
B Income from other sources YES
C Business income
D None of the above
2 Dividends declared by Unit Trust of India is

A Fully exempt in the hands of unit holders YES
B Fully taxable in the hands of unit holders
C Taxable but deduction is allowed under sec. 80
D None of the above
3 For computing lottery income, the assessee shall

A Be entitled to any deduction for purchase of lottery tickets
B Not entitled to any deduction for purchase of lottery tickets YES
C Be entitled to deduction up to 10% of total purchase of tickets
D None of the above
4 The legal heir of the deceased who received, family pension is allowed a
standard deduction from such pension to the extent of
A 33 1/3% of such pension
B 33 1/3% of such pension or 15,000 whichever is less YES
C 33 1/3% of such pension or 15,000 whichever is more
D None of the above
5 Gift received by an individual 70,000 from his relatives Rajendra shall be

A Exempt up to Rs.25,000
B Fully taxable
C Exempt up to Rs.50,000
6 Income under the head income from other sources is taxable on _____
A Due basis
B Receipt basis
C On the basis of method of accounting regularly employed by the assesses YES
7 Expenses admissible under the head income from other sources are covered u/s ____
A 56
B 58
C 59
D 57 YES
8 Gift received by an individual / HUF from relatives shall be

A Exempt up to 50,000
B Exempt up to 25,000
C Fully Exempt YES
D Fully Taxable
9 Gift received by Mr. Mohan from his friend amounts to 80,000, shall be_______
A Exempt up to 50,000 YES
B Fully Exempt
C Fully taxable as received from friend
D Exempt up to 30,000
10 Interest received on compensation or on enhanced compensation shall be

taxable under the head ___________
A Income from other sources YES
B Capital Gains
C Casual Income
D None of the above
Chapter – 12: Deductions to be Made in Computing Total Income
(Sections 80 A, 80 C, 80 CCC, 80 CCE, 80 D, 80 DD, 80 E, 80 U, 80 TTA)
1 For claiming deduction u/s 80C the payment or deposit should be made
A Out of any income
B Out of income chargeable to tax YES
C Out of current years income chargeable to tax
D Out of exempt income
2 Deduction u/s 80C in respect of LIP, Contribution to provident fund, etc. is allowed to :
A Any assessee
B An individual
C An individual and/or HUF YES
D An individual or HUF who is resident in India.
3 Deduction u/s 80C is allowed to the maximum limit of a

A Rs. 70,000
B Rs. 1,50,000 YES
C Rs. 30,000
D None of the above
4 An assessee has paid life insurance premium of Rs. 1,25,000 during the
previous year for a policy of Rs. 5,00,000. He shall :
A Not be allowed deduction u/s 80C
B Be allowed Deduction u/s 80C to the extent of 20% of the capital sum assured YES
i.e. Rs. 1,00,000
C Be allowed Deduction for the entire premium as per the provisions of section 80C
D None of the above
5 For claiming deduction u/s 80C in respect of life insurance premium, it can be
paid by assessee for
A Self only
B Self spouse, brothers & sisters
C Self, spouse and any child YES
D None of the above
6 Deduction u/s 80C in respect of term deposit with a scheduled bank is allowed if
the term deposit is for a period
A Not less than 3 years
B Not less than 5 years YES
C Not less than 10 years
D None of the above
7 Deduction u/s 80C in respect of tuition fee is allowed to an individual for
A Any of his children
B Any of his minor children
C Any two children of such individual YES
D None of the above
8 Deduction u/s 80C in respect of tuition fee is allowed to

A An individual only YES
B Individual or HUF
C An HUF only
D None of the above
9 For claiming Deduction u/s 80D, the payment or deposit should be made
A Out of past income
B Out of any income chargeable to income tax YES
C During the current year out of any source
D None of the above
10 Deduction u/s 80D in respect of medical insurance premium is allowed tO

A Any assessee
B An individual and/or HUF YES
C Individual only
D None of the above
11 Deduction under section 80DD shall be allowed

A To the extent of actual expenditure/deposit or Rs. 1,50,000 whichever is less
B For a sum of Rs. 75,000 irrespective of actual expenditure or deposit YES
C For a sum of Rs. 1,50,000 irrespective of any expenditure incurred or actual deposited
D None of the above
12 Deduction u/s 80DD in case of dependent with serve disability shall be allowed
A To the extent of actual expenditure
B Rs. 75,000
C 1,25,000 irrespective of actual expenditure YES
D None of the above
13 The payment for Insurance premium under section 80D should be

A In cash
B By any mode other than cash YES
C None of the above
D All the above
14 The quantum of deduction allowed under section 80D shall be limited to

A Rs. 20,000
B Rs. 10,000
C Rs. 25,000 YES
D None of the above
15 Deduction u/s 80D is allowed to an individual for premium paid to insure the health of
A Assessee himself
B Assessee and his family
C Assessee, his spouse, parents and dependent children YES
D None of the above
16 Deduction under section 80CCC is allowed to the extent of

A Rs. 2,00,000
B Rs. 7 1,50,000 YES
C Rs. 4,00,000
D Rs. 10,000
17 Deduction in respect of contribution for annuity plan to certain pension fund under
u/s. 80CCC is allowed to
A Any company
B Individuals only YES
C Individual or HUF
D A& B
18 The quantum of deduction u/s 80D shall be limited to in case of senior citizens
A Rs. 20,000
B Rs. 15,000
C Rs.30,000 YES
D Rs. 25,000
19 Senior citizens for section 80D means attaining years anytime during the
previous year or more.
A 60 years YES
B 75 years
C 55 years
D 65 years
20 Deduction u/s 80E shall be allowed in respect of amount paid by way of interest
on loan taken from
A Any person
B Any relative
C Financial institution or approved charitable institution YES
D None of the above
21 The deduction u/s 80E is allowed for repayment of interest to the extent of :
A Rs. 50,000
B Rs. 1,00,000
C An amount paid as interest during the year YES
D None of the above
22 Deduction u/s 80E shall be allowed for the higher education of

A Assessee himself
B Assessee, spouse and children YES
C Assessee and dependent children
D None of the above
23 Person with severe disability means person with _______or more of one or
more disability as referred under equal opportunity, protect of right and
full participation act, 1995.
A 50%
B 75%
C 80% YES
D 60%
24 Deduction u/s 80U in case of person with disability is allowed to

A An individual who is citizen of India
B An individual who is resident of India YES
C Any individual assessee
D None of the above
25 The quantum of deduction allowed u/s 80U is

A Rs. 80,000
B Rs. 75,000 YES
C Rs. 50,000
D Rs. 70,000
26 Annual interest accrued on NSCs VIII issue shall be

A Exempt from tax
B Taxable only on receipt
C Taxable on the basis of annual accrual YES
D None of the above
27 For claiming deduction u/s 80 — C in respect of life insurance premium shall be

all be allowed for :
A self only
B self or spouse
C self, spouse and any child YES
D None of the above
28 In the case of HUF, deduction u/s 80 C in respect of life insurance premium

shall be allowed for :
A Karta of HUF
B Any member of HUF YES
C karta and Coparcaner of the HUF
D None of the above
29 An assessee has paid life insurance premium of 25,000 during the previous year
for a policy of Rs. 1,00,000. He shall :
A Not be allowed deduction u/s 80C
B Be allowed Deduction uls 80 C to the extent of 20% of the capital sum YES
assured i.e. 20,000.
C Be allowed Deduction for the entire premium as per the-provisions of section
80-C.
D None of the above
30 Annual interest accrued on NSCs VIII issue shall be

A Exempt
B Taxable only in VII year
C Taxable on the basis of annual accrual YES
D None of the above
31 Deduction u/s 80-C in respect of tuition fee is allowed for the purposes of :
A An individual only YES
B Individual of HUF
C Any assessee
D None of the above
32 Deduction u/s 80-C for tuition fee shall be allowed for the purposes of :
A Any full time education in a school or college YES
B Any full or part time education
C Any part time education in a college abroad
D None of the above
33 Deduction in respect of contribution for annuity plan to certain pension

fund under 80 CCC is allowed to
A Any assesse
B Individual only YES
C Individual or HUF
D None of the above
34 Deduction u/s 80 DD shall be allowed :

A To the extent of actual expenditure
B Rs. 75,000 YES
C Rs. 1,25,000 irrespective of actual expenditure
D None of the above
35 The deduction u/s 80 E is allowed for repayment of interest to the extent of :
A Rs. 25,000
B Rs. 40,000
C an amount of interest during the P.Y. YES
D None of the above
36 The aggregate amount of the deduction under chapter VI A shall not

exceed the _________
A Gross total income YES
B Net total income
C Rs.10,00,000
D None of the above
37 As per section 80 CCE, the total deduction an assessee can claim u/s 80C,
80 CCC & 80 CCD is restricted to ____________
A Rs.10,00,000
B Rs. 1,50,000 YES
C Rs.5,00,000
D Rs. 8,00,000
38 The deduction u/s 80E for payment of interest on loan for higher education is
allowed for maximum period of ______________
A 8 Years YES
B 6 Years
C 7 Years
D 5 Years
39 The quantum of deduction of 1,00,000 u/s 80U can be claimed if a person is

with disability of _________.
A 30% or more
B 80% or more YES
C 40% or more
D None of the above
40 Interest on deposits (not being time deposits) in a saving account with a bank
deduction shall be allowed u/s. 8OTTA with reference to such income not exceeding
A Rs. 5,000
B Rs. 10,000 YES
C Rs. 25,000
D Rs. 50,000
41 The maximum quantum of deduction u/s 80 D for senior citizen not covered
under insurance policy is up to
A 25,000
B 30,000 YES
C 55,000
D None of the above
42 Very senior citizen u/s 80 D means attaining years any time during the previous year.
A 75
B 80 YES
C 85
D None of the above
No.1 for CA/CWA & MEC/CEC MASTER MINDS
7. CAPITAL GAINS
SOLUTIONS TO ASSIGNMENT PROBLEMS
Problem No. 1
Since car is a personal asset, conversion or treatment of the same as the stock-in-trade of his business will not
be trapped by the provisions of section 45(2). Hence A is not liable to capital gains tax.
Problem No. 2
Since the capital asset is converted into stock-in-trade during the previous year relevant to the A.Y. 2014-15, it
will be a transfer under section 2(47) during the P.Y.2013-14. However, the profits or gains arising from the
above conversion will be chargeable to tax during the A.Y. 2015-16, since the stock-in-trade has been sold only
on June 10, 2014. For this purpose, the fair market value on the date of such conversion (i.e. 10th March, 2014)
will be the full value of consideration.
The capital gains will be computed after deducting the indexed cost of acquisition from the full value of
consideration. The cost inflation index for 1988-89 i.e., the year of acquisition is 161 and the index for the year
of transfer i.e., 2013-14 is 939. The indexed cost of acquisition is 60,000 × 939/161 = ` 3,49,938. Hence, `
2,00,062 (i.e. ` 5,50,000 – ` 3,49,938) will be treated as long term capital gains chargeable to tax during the
A.Y.2015-16. During the same assessment year, ` 50,000 (` 6,00,000 - ` 5,50,000) will be chargeable to tax as
business profits.
Problem No. 3
We know that capital gains arise only when we transfer a capital asset. The liability of capital gains tax in the
situations given above is discussed as follows:
i) As per the provisions of section 47(iii), transfer of a capital asset under a gift is not regarded as transfer for
the purpose of capital gains. Therefore, capital gains tax liability does not arise in the given situation.
ii) As per the provisions of section 47(i), transfer of a capital asset (being in kind) on the total or partial
partition of Hindu undivided family is not regarded as transfer for the purpose of capital gains. Therefore,
capital gains tax liability does not arise in the given situation.
iii) As per the provisions of section 47(x), transfer by way of conversion of bonds or debentures, debenture
stock or deposit certificates in any form of a company into shares or debentures of that company is not
regarded as transfer for the purpose of capital gains. Therefore, capital gains tax liability does not arise in
the given situation.
Problem No. 4
Computation of Capital Gains of Mr. B for the A.Y.2015-16
Particulars `
Sale consideration 15,00,000
Less: Expenses on transfer i.e. Brokerage paid 50,000
Net consideration
14,50,000
Less: Indexed cost of acquisition (`5,00,000 x 1024/447)
11,45,414
Long term capital gain 3,04,586
Note: For the purpose of computing capital gains, the holding period is considered from the date of allotment of
these shares i.e. September 2002 – August 2014.
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MASTER MINDS, Guntur
To
IPCC_33e_DT_Capital Gains_Assignment Solutions __________________________________23

Ph: 98851 25025/26 www.mastermindsindia.com
Problem No. 5
Computation of total income and tax liability of Mr. Mithun for A.Y. 2015-16
Particulars `
Short term capital gains on sale of bonus shares
Gross sale consideration (100 x `4,000) 4,00,000
Less: Brokerage @ 1% 4,000
Net sale consideration 3,96,000
Less: Cost of acquisition of bonus shares NIL
Total income (Short term Capital Gains) 3,96,000
Tax Liability
15% of (`3,96,000-`3,00,000) 14,400
Less: Rebate U/s 87A 2,000
12,400
Add: Education cess @ 2% 248
Secondary and higher education cess @ 1% 124
Tax payable 12,772
Tax payable (Rounded off) 12,770
Notes:
1. Long-term capital gains on sale of original shares through a recognized stock exchange (STT paid) is
exempt under section 10(38).
2. Since bonus shares are held for less than 12 months before sale, the gain arising there from is a short term
capital gain chargeable to tax@15% as per section 111A after adjusting the unexhausted basic exemption
limit. Since Mr. Mithun is over 60 years of age, he is entitled for a higher basic exemption limit of ` 3,00,000
for A.Y. 2015-16.
3. Dividend income is exempt under section 10(34).
4. Brokerage paid is allowable since it is an expenditure incurred wholly and exclusively in connection with the
transfer. Hence, it qualifies for deduction under section 48(i).
5. Cost of bonus shares will be Nil as such shares are allotted after 1.04.1981.
6. Securities transaction tax is not allowable as deduction.
Problem No. 6
The transfer of self-generated goodwill of profession is not chargeable to tax. It is based upon the Supreme
Court’s ruling in CIT vs. B.C. Srinivasa Shetty.
Problem No. 7
Capital gains in the hands of Mr. X for the A.Y.2015-16 are computed as under:
Particulars `
Sale proceeds 40,00,000
Less: Indexed cost of acquisition [Note 1] 35,84,000
Indexed cost of improvement [Note 2] -
Note 1: Computation of indexed cost of acquisition

Cost of acquisition 3,90,000
(higher of fair market value as on April 1, 1981 and the actual cost of acquisition)
Less: Advance taken and forfeited 40,000
Cost for the purposes of indexation 3,50,000
Indexed cost of acquisition (` 3,50,000 x 1024/100) 35,84,000
Note 2: Any improvement cost incurred prior to 1.4.1981 is to be ignored when fair market value as on 1.4.1981
is taken into consideration.

Problem No. 8
The house is sold before 36 months from the date of purchase. Hence, the house is a short term capital asset
and no benefit of indexation would be available.
Particulars `
Less: Cost of acquisition 10,00,000
Cost of improvement 2,00,000
Short term capital gain 4,16,000
Note: The exemption of capital gains under section 54 is available only in case of long-term capital asset. As
the house is short-term capital asset, Mr. Cee cannot claim exemption under section 54. Thus, the amount of
taxable short-term capital gains is ` 8,00,000.
Problem No. 9
Computation of capital gains in the hands of PQR Ltd. for the A.Y.2015-16
Particulars `
Sale proceeds (Compensation received) 12,00,000
Less : Indexed cost of acquisition [` 4,00,000 × 1024/463] 8,84,665
3,15,335
Less: Exemption under section 54D (Cost of acquisition of new undertaking) 2,00,000
Taxable long term capital gain
1,15,335
Problem No. 10
a) Assessing officer is not correct. Since the value determined by the valuation officer is more than the value
adopted by the assessing authority.
b) Computation of capital gain:
Particulars `
Full value of consideration
Sale proceeds or stamp duty value whichever is higher 12,50,000
less: expenses in connection with transfer Nil
Net consideration 12,50,000
Less: indexed cost of acquisition (2,25,000X1024/161) 14,31,056
Long term capital loss (1,81,056)
Problem No. 11
Computation of taxable capital gains for A.Y.2015-16
Particulars `
Gross Consideration 11,50,000
Less: Expenses on transfer 7,000
Less: Indexed cost of acquisition (`1,82,000 x 1024/182) 10,24,000
1,19,000
Less: Exemption under section 54F (`1,19,000 x `5,00,000/` 11,43,000) 52,056

Taxable capital gains 66,944
Consequences if the new house is transferred within a period of 3 years

a) Short-term capital gains would arise on transfer of the new house; and
b) The capital gains exempt earlier under section 54F would be taxable as long-term capital gains.

c) In the given illustration, if the new residential house is sold for ` 6,00,000 after say, 1 year, then
d) ` 1,00,000 [i.e. ` 6,00,000 (-) ` 5,00,000] would be chargeable as short-term capital gain of that year in
which the new house is sold.
e) ` 52,056, being the capital gains exempt earlier, would be taxable as long-term capital gains of that year in
which the new house is sold.
Problem No. 12
Computation of Capital Gains of Ms. Anshu for the A.Y. 2015-16
Particulars ` `
Full value of consideration [See Notes (i) & (ii) below] 25,00,000
Less: Indexed Cost of acquisition [See Note (iii) below]
Indexed Cost of land (`1,10,000 x 1024/100) 11,26,400
Indexed Cost of building (`3,20,000 x 1024/447) 7,33,065 18,59,465
Long-term capital gain 6,40,535
Less: Brought forward short-term capital loss set off [See Note (iv) below] 1,50,000
Taxable capital gains (Amount to be invested in NHAI bonds to get full
exemption for tax on capital gains) [See Note (v) below] 4,90,535
Notes:
i) As per section 50C(1), where the consideration received or accruing as a result of transfer of a capital
asset, being land or building or both, is less than the value adopted by the Stamp Valuation Authority for the
purpose of payment of stamp duty, such value adopted by the Stamp Valuation Authority shall be deemed
to be the full value of the consideration received or accruing as a result of such transfer. Accordingly, full
value of consideration would be ` 25 lacs in this case.
ii) As per section 50C(3), where the valuation is referred by the Assessing Officer to Valuation Officer and the
value ascertained by such Valuation Officer exceeds the value adopted by the Stamp Valuation Authority
for the purpose of payment of stamp duty, the value adopted by the Stamp Valuation Authority shall be
taken as the full value of the consideration received or accruing as a result of the transfer. Since the value
ascertained by the Valuation Officer (i.e. ` 27 lakhs), is higher than the value adopted by the Stamp
Valuation Authority (i.e. ` 25 lakhs), the full value of consideration in this case would be ` 25 lakhs.
iii) Since the cost of land acquired by Anshu on 1.4.1981 is not given in the question, the fair market value as
on 1.4.1981 is taken as the cost of acquisition. Indexation benefit is available since land and building are
both long-term capital assets, as they are held by Anshu for more than 36 months.
iv) As per section 74, brought forward unabsorbed short term capital loss can be set off against any capital
gains, short term or long term, for 8 assessment years immediately succeeding the assessment year for
which the loss was first computed. Therefore, short term capital loss on sale of shares during the F.Y.2009-
10 can be set-off against the current year long-term capital gains on sale of land and building.
v) As per section 54EC, an assessee can avail exemption in respect of long-term capital gains, if such capital
gains are invested in the bonds issued by the NHAI redeemable after 3 years. Such investment is required
to be made within a period of 6 months from the date of transfer of the asset. The exemption shall be the
amount of capital gains or the amount of such investment made, whichever is less. Therefore, in this case,
if Anshu invests the entire capital gains in bonds of NHAI, she can get full exemption from tax on capital
gains.
Problem No. 13
Computation of Capital Gains Chargeable to tax for A.Y. 2015-16
Particulars ` `
Sale consideration (i.e. Stamp Duty Value) (Note 1) 80,00,000
Less: Indexed Cost of Acquisition
` 10,00,000 X 1024/389 26,32,391
Indexed Cost of Improvement
`2,00,000 X 1024/480 4,26,667 30,59,058
49,40,942
Less: Exemption under section 54 (Note 2) 25,00,000
Taxable Capital Gains 24,40,942

Notes:
1. As per the provisions of section 50C, in case the stamp duty value adopted by the stamp valuation authority
is higher than the actual sale consideration, the stamp duty value shall be deemed as the full value of
consideration.
2. Exemption under section 54 is available if a new residential house is purchased within one year before or
two years after the date of transfer. Since the cost of new residential house is less than the capital gain,
capital gain to the extent of cost of new asset is exempt under section 54.
3. Exemption under section 54EC is available in respect of investment in bonds of National Highways
Authority of India only if the investment is made within a period of six months after the date of such transfer.
In this case, since the investment is made after six months, exemption under section 54EC would not be
available.
If the new asset purchased by the assessee on the basis of which exemption under section 54 is claimed, is
transferred within 3 years from the date of its acquisition, then for computing the taxable short-term capital
gain on such transfer, the cost of acquisition of such asset shall be taken as Nil.
Particulars (A.Y.2016-17) `
Less: Cost of acquisition Nil
_________
Short-term capital gains 40,00,000
Problem No. 14
Computation of net taxable capital gains of Smt. Megha for the A.Y.2015-16
Particulars `
Less: Indexed cost of acquisition (See Working note below) 11,75,589
Less: Exemption under section 54 (See Note 1 below) 4,00,000
Taxable long term capital gain 24,411
Working Note:
Indexed cost of acquisition `
Purchase price 4,50,000
Less: Amount forfeited (See Note 2 below) 70,000
Cost of acquisition 3,80,000
Indexed cost of acquisition ` 3,80,000 X 1024/331 11,75.589
Notes:
1. Exemption under section 54 is available if one new residential house is purchased within two years from the
date of transfer of existing residential house, which is a long-term capital asset. Since the cost of new
residential house is less than the long-term capital gains, capital gains to the extent of cost of new house,
i.e., ` 4 lakh, is exempt under section 54.
2. As per section 51, any advance received and retained by the assessee, as a result of earlier negotiations
for sale of the asset, shall be deducted from the purchase price for computing the cost of acquisition of the
asset.
Problem No. 15
a) Computation of depreciation for the A.Y.2015-16
Particulars `
Opening WDV as on 01.04.2014 6,50,000
Add: additions as on 30.092014 6,50,000
Less: sale of asset on 10.06.2014 9,00,000
Depreciable value 4,00,000
Less: depreciation @ 15% 60,000
Closing WDV as on 31.03.2015 3,40,000

b) Computation of capital gain for the A.Y.2015-16
Particulars `
Sale proceeds 14,00,000
Less: opening WDV + additions 13,00,000
Short term capital gain 1,00,000
Note: There is no depreciable value if the capital asset is sold for `14,00,000. Then sec.50 is applicable.
Problem No. 16
Conversion of a capital asset into stock-in-trade is a transfer within the meaning of section 2(47) in the previous
year in which the asset is so converted. However, the capital gains will be charged to tax only in the year in
which the stock-in-trade is sold.
The cost inflation index of the financial year in which the conversion took place should be considered for
computing indexed cost of acquisition. Further, the fair market value on the date of conversion would be
deemed to be the full value of consideration for transfer of the asset as per section 45(2). The sale price less
the fair market value on the date of conversion would be treated as the business income of the year in which
the stock-in-trade is sold.
Therefore, in this problem, both capital gains and business income would be charged to tax in the A.Y. 2015-16.
Particulars `
Capital Gains
Sale consideration (Fair market value on the date of conversion) 1,90,000
Less: Indexed cost of acquisition (`80,000 X 939/447) 1,68,054
Long-term capital gain 21,946
Profits & Gains of Business or Profession
Sale price of stock-in-trade 2,25,000
Less: Fair market value on the date of conversion 1,90,000
35,000
Computation of taxable income of Mr. Aarav for A.Y.2015-16
Particulars `
Profits and gains from business or profession 35,000
Long term capital gains 21,946
56,946
Problem No. 17
Computation of Capital Gains of Mr. A for the Assessment Year 2015-16
Particulars ` `
Full value of consideration (deemed) (See Note-1&2) 19,50,000
(Indexation benefit is available since land and buildings are long-term capital
assets)
Less: Indexed cost of land (` 1,10,000 X 1024/100) 11,26,400
Indexed cost of building (`3,20,000 X 1024/463) 7,07,732 18,34,132
Less: Brought forward short-term capital loss set off (See Note-4) 75,000
Amount to be invested in NHAI / RECL bonds 40,868
Notes:
1. Where the consideration received or accruing as a result of transfer of a capital asset, being land or building
or both, is less than the value adopted or assessed by any authority of a State Government (Stamp
Valuation Authority) for the purpose of payment of stamp duty in respect of such asset and the same is not
contested by the assessee, such value adopted or assessed shall be deemed to be the full value of the
consideration received or accruing as a result of such transfer [Section 50C(1)]. Accordingly, the full value
of consideration will be ` 19.5 lakhs in this case.

2. It is further provided in section 50C(3) that where the valuation is referred by the Assessing Officer to
Valuation Officer and the value ascertained by such Valuation Officer exceeds the value adopted or
assessed by the Stamp Valuation Authority, the value adopted or assessed by the Stamp Valuation
Authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.
Since the value ascertained by the valuation officer (i.e. ` 20 lakhs) is higher than the value adopted by the
stamp valuation authority (i.e. ` 19.5 lakhs), the full value of consideration in this case is ` 19.5 lakhs.
3. Cost of land which is acquired on partition of HUF is the cost to the previous owner. Since date and cost of
acquisition to the previous owner are not given, fair market value as on 1.4.1981 is taken as the cost and
indexed.
4. Brought forward unabsorbed short term capital loss can be set off against any capital gains, short term or
long term, for 8 assessment years immediately succeeding the assessment year for which the loss was first
computed.
5. As per section 54EC, an assessee can avail exemption in respect of long-term capital gains, if such capital
gains are invested in the bonds issued by the NHAI / RECL redeemable after 3 years. Such investment is
required to be made within a period of 6 months from the date of transfer of the asset. The exemption shall
be the amount of capital gain or the amount of such investment made, whichever is less.
Problem No. 18
Computation of total income of Mr. Sagar for the A.Y. 2014-15
Particulars ` `
Capital Gains
Less: Indexed cost of land (`75,000 X 1024/389) 1,97,429
Indexed cost of building (`1,25,000 X 1024/426) 3,00,469 4,97,898
10,02,102
Less: Exemption under section 54 (See Note 2 below) 8,00,000
Profit and gains from business or profession / Income from other sources
Insurance agency commission earned (Gross) (`45,000 + `5,000) 50,000
Gross Total Income 2,52,102
Less: Deduction under Chapter VI-A
Section 80C – Investment in NSC VIII 20,000
Total Income 2,32,102
Notes:
1. Since the building and the land are held for more than 36 months, the same are long-term capital assets
and the capital gain arising on sale of such assets is a long-term capital gain.
2. As per the provisions of section 54, the capital gain arising on transfer of a long-term residential property
shall not be chargeable to tax to the extent such capital gain is invested in the purchase of a residential
house property one year before or two years after the date of transfer of original asset or constructed a
residential house property within three years after such date. Since Mr. Parri has purchased another
residential house in June, 2014 for ` 8,00,000, the capital gain arising on transfer of residential house
property in May, 2014 is exempt under section 54 to that extent.
Problem No. 19
Computation of capital gains of Bala kumari for the A.Y.2015-16
Particulars `
Deemed sale consideration as per section 50C 13,00,000
Less: Indexed cost of acquisition (`1,50,000 X 1024/281) 5,46,619
Taxable long term capital gain 7,53,381
Note: According to section 50C(1), where the consideration received or accruing as a result of the transfer of
land or building or both is less than the value adopted or assessed or assessable by the State Stamp Valuation
Authority for the purpose of payment of stamp duty in respect of such transfer, then the value so adopted or
assessed or assessable by the State Stamp Valuation Authority shall be deemed to be the full value of the
consideration received or accruing as a result of the transfer.
In this case, since the consideration of ` 7,00,000 received on transfer of land is less than the value of `
13,00,000 fixed by the State Stamp Valuation Authority, the value adopted by the State Stamp Valuation
Authority is deemed to be the full value of consideration and capital gains is calculated accordingly.
Problem No. 20
Computation of taxable capital gain of Ms. Susheela for A.Y.2015-16
Particulars ` `
Sale price of residential building 15,00,000
Less: Brokerage @ 2% 30,000
Less: Indexed cost of acquisition `1,50,000 X 1024/331 4,64,048
10,05,952
Less: Deduction under section 54 for purchase of new residential house in
December, 2014 7,00,000
Note: One of the conditions for claiming exemption under section 54EC for the investment in RECL/NHAI
Capital Gains bonds is that the deposit should be made within 6 months from the date of transfer. In this case,
the transfer took place on 1.7.2014 and the 6 months period within which the deposit should be made for the
purpose of section 54EC would expire by 1.1.2015. The investment in REC/NHAI Capital Gains bonds was
made only in March 2015. Therefore, the assessee is not eligible for exemption under section 54EC.
Problem No. 21
Computation of Long term Capital Gain for A.Y. 2015-16
Particulars ` `
Sale consideration as per section 50C (Note-1) 47,25,000
Less: Expenses incurred on transfer being brokerage @ 1% of sale
consideration of ` 37.50 lacs 37,500
46,87,500
Less: Indexed cost of acquisition (Note-2) (`2,70,000X1024/463) 5,97,149
Indexed cost of improvement (`7,00,000 X 1024/497) 14,42,254 20,39,403
Notes:
1. As per section 50C, where the consideration received or accruing as a result of transfer of a capital asset,
being land or building or both, is less than the valuation by the stamp valuation authority, such value
adopted or assessed by the stamp valuation authority shall be deemed to be the full value of consideration.
Where a reference is made to the valuation officer, and the value ascertained by the valuation officer
exceeds the value adopted by the stamp valuation authority, the value adopted by the stamp valuation
authority shall be taken as the full value of consideration.
Sale consideration ` 37,50,000
Valuation made by registration authority for stamp duty ` 47,25,000
Valuation made by the valuation officer on a reference ` 47,50,000
Applying the provisions of section 50C to the present case, ` 47,25,000,
Being, the value adopted by the registration authority for stamp duty, shall be taken as the sale
consideration for the purpose of charge of capital gain.
2. The house was inherited by Mr. Thomas under the will of his father and therefore, the cost incurred by the
previous owner shall be taken as the cost. Fair market value as on 01.04.81, accordingly, shall be adopted
as the cost of acquisition of the house property. However, indexation benefit will be given from the year in
which Mr. Thomas first held the asset i.e. P.Y.2003-04.
Alternative view: In the case of CIT v. Manjula J. Shah 16 Taxmann 42 (Bom.), the Bombay High Court
held that the indexed cost of acquisition in case of gifted asset can be computed with reference to the year
in which the previous owner first held the asset.
As per this view, the indexation cost of acquisition of house would be ` 27,64,800 and long term capital gain
would be ` 4,80,446.
Problem No. 22
Computation of total income of Mr. Kumar for the A.Y.2015-16
Particulars ` `
Capital Gains:
Sale price of the residential house 24,00,000
Valuation as per Stamp Valuation authority 40,00,000
(Value to be taken is the higher of actual sale price or valuation adopted for
stamp duty purpose as per section 50C)
Therefore, Consideration for the prupose of Capital Gains 40,00,000
Less: Indexed Cost of Acquisition `5,00,000 X 1024/244 20,98,361
19,01,639
Less: Exemption under section 54 ` 10,00,000
Exemption under section 54EC ` 5,00,000 15,00,000
Long-term capital gains 4,01,639
Income from other sources:
Interest on bank deposits 32,000
Gross Total Income 4,33,639
Less: Deduction under Chapter VI-A Section 80C – Deposit in PPF
(restricted to ` 32,000) 32,000
Total Income 4,01,639
Computation of Tax liability of Mr. Kumar for A.Y. 2015-16
Tax on ` 1,51,639 @ 20% [i.e. long term capital gain less basic exemption limit 30,328
(`4,01,639 - ` 2,50,000)]
Less: Rebate u/s 87A 2,000
28,327
Add: Education Cess @ 2% & SHEC @ 1% 850
Tax Payable 29,177
Tax Payable (Rounded off) 29,180
Notes:
1. The basic exemption limit of ` 2,50,000 can be adjusted against long term capital gains.
2. Deduction under section 80C should be restricted to gross total income excluding long term capital gain.
Problem No. 23
Computation of business loss:
Particulars Amount(`)
Insurance compensation 5,15,000
Less: value of goods 7,30,000
PGBP loss 2,15,000
Computation of capital loss for loss of machinery:

Full value of consideration 8,07,000
Less: WDV of the machinery 12,35,000
Short term capital loss 4,28,000
Computation capital loss for loss for jewellary:

Full value of consideration 2,05,000
Less: indexed cost of acquisition (1,45,000X1024/ 480) 3,09,333
Long term capital loss 1,04,333

Problem No. 24
Section 10(37) exempts the capital gains arising to an individual or a Hindu Undivided Family from transfer of
agricultural land by way of compulsory acquisition, or a transfer, the consideration for which is determined or
approved by the RBI or the Central Government.
Such exemption is available where the compensation or the enhanced compensation or consideration, as the
case may be, is received on or after 1st April, 2004 and the land has been used for agricultural purposes during
the preceding two years by such individual or a parent of his or by such Hindu undivided family.
Since all the above conditions are fulfilled in this case, Cheeku is entitled to exemption under section 10(37) of
the entire capital gains arising on sale of agricultural land.
Problem No. 25
Computation of taxable capital gain of Mr. Murad for A.Y. 2015-16
Particulars Amount(`) Amount(`)
Sale consideration received on sale of 8,000 shares @ 48,00,000
` 600 each
Less: Indexed cost of acquisition
- 4,000 shares received as gift from father on 5.10.1980 16,38,400
Indexed cost (4,000 x ` 40 x 1024/100)
- 2,000 bonus shares received from Batliboi Ltd Nil
(Bonus shares are acquired on 31.8.1985
i.e. after 01.04.1981. Hence, the cost is Nil.)
- 2000 shares purchased on 18.5.1995 @ ` 150 per share. (2000 x ` 10,93,238
150 x 1024/281) 27,31,638
Less : Exemption under section 54F (See Note below)
` 20,68,362 x ` 30,00,000 / ` 48,00,000 12,92,726
Note:
Exemption under section 54F can be availed by the assessee subject to fulfillment of the following conditions:
a) The assessee should not own more than one residential house on the date of transfer of the long-term
capital asset;
b) The assessee should purchase a residential house within a period of 1 year before or 2 years after the date
of transfer or construct a residential house within a period of 3 years from the date of transfer of the long-
term capital asset.
In this case, the assessee has fulfilled the above mentioned conditions. Therefore, he is entitled to exemption
under section 54F.
Problem No. 26
The buyback of unlisted shares would attract additional income-tax under section 115QA in the hands of the
domestic company, i.e., Alpha Ltd. in this case. Consequently, the income arising to Mr. Gurmeet in respect of
such buyback of unlisted shares by Alpha Ltd. would be exempt under section 10(34A).
Problem No. 27
1. False: The exemption under section 54EC has been restricted, by limiting the maximum investment in long
term specified assets (i.e. bonds of NHAI or RECL, redeemable after 3 years) to ` 50 lakh during any
financial year.
Therefore, in this case, the exemption under section 54EC can be availed only to the extent of ` 50 lakh,
provided the investment is made within six months from the date of transfer.
2. True: As per section 47(xa), any transfer by way of conversion of bonds referred to in section 115AC into
shares and debentures of any company is not regarded as transfer. Therefore, there will be no capital gains
on conversion of foreign currency exchangeable bonds into shares or debentures.

Problem No. 28
Computation of capital gains and business income of Ms. Gunjan for A.Y.2015-16
Capital Gains 3,20,00,000
Fair market value of land on the date of conversion deemed as the full value of
consideration for the purposes of section 45(2)
Less: Indexed cost of acquisition [` 50,00,000 × 852/406] 1,04,92,611
2,15,07,389
Proportionate capital gains arising during the A.Y. 2015-16 (2,15,07,389 x 5/8) 1,34,42,118
Less: Exemption under section 54EC (restricted to ` 50 lakh) 50,00,000
Capital gains chargeable to tax for A.Y.2015-16 84,42,118
Business Income
Sale price of flats [5 × ` 90 lakh] 4,50,00,000
Less: Cost of flats
Fair market value of land on the date of conversion (3,20,00,000 x 5/8) 2,00,00,000
Cost of construction of flats [5 × ` 36 lakh] 1,80,00,000
70,00,000
Notes:
1. The conversion of a capital asset into stock-in-trade is treated as a transfer under section 2(47). It would be
treated as a transfer in the year in which the capital asset is converted into stock-in-trade.
2. However, as per section 45(2), the capital gains arising from the transfer by way of conversion of capital
assets into stock-in-trade will be chargeable to tax only in the year in which the stock-in-trade is sold.
3. The indexation benefit for computing indexed cost of acquisition would be available only up to the year of
conversion of capital asset to stock-in-trade and not up to the year of sale of stock-in-trade.
4. For the purpose of computing capital gains in such cases, the fair market value of the capital asset on the
date on which it was converted into stock-in-trade shall be deemed to be the full value of consideration
received or accruing as a result of the transfer of the capital asset.
In this case, since only 5/8th of stock-in trade (5 flats out of 8 flats) is sold in the P.Y. 2013-14 only
proportionate capital gains (i.e. 5/8th) would be chargeable to tax in the A.Y. 2014-15.
5. On sale of such stock-in-trade (i.e., flats, in this case), business income would arise. The business income
chargeable to tax would be the price at which the flats are sold as reduced by the fair market value on the
date of conversion of the capital asset (i.e., land) into stock-in-trade and the cost of construction of flats.
6. In case of conversion of capital asset into stock-in-trade and subsequent sale of stock-in-trade, the period
of 6 months, for the purpose of exemption under section 54EC, is to be reckoned from the date of sale of
stock-in-trade [CBDT Circular No.791 dated 2.6.2000]. In this case, since the investment in bonds of NHAI
has been made within 6 months of sale of flats, the same qualifies for exemption under section 54EC,
subject to a maximum of ` 50 lakh.
Problem No. 29
Computation of taxable capital gains of Mr. Ubdhbav Kumar for A.Y.2015-16
Gross consideration 80,00,000
Less: Expenses on transfer (1% of the gross consideration) 80,000
Less: Indexed cost of acquisition (` 20,00,000 × 939/426) 44,08,450
35,11,550
Less: Exemption under section 54GB
(` 65,00,000 × ` 35,11,550 / ` 79,20,000) 28,81,954
Taxable capital gains 6,29,596

Deemed cost of new plant and machinery for exemption under section 54GB
Particulars Amount(`) Amount(`)
Purchase cost of new plant and machinery acquired in August, 2014 70,00,000
Less: Cost of office appliances, i.e., computers 6,00,000
Cost of vehicles, i.e., cars 8,00,000
Cost of air-conditioners installed at the residence of Mr. 1,00,000
Ubdhbav Kumar 15,00,000
55,00,000
Amount deposited in the specified bank before the due date of filing of 10,00,000
return
Deemed cost of new plant and machinery for exemption under 65,00,000
section 54GB
Note – Mr. Ubdhbav Kumar can avail exemption under section 54GB on long-term capital gains on transfer of a
residential house, since all the conditions given below are satisfied:
1. The sale proceeds are used for subscription in the equity shares of an eligible company, being a newly
incorporated SME company engaged in the business of manufacturing of any article or thing,
2. He holds more than 50% of the share capital in the said SME.
3. Further, the amount of subscription as share capital has been utilized by the eligible company for purchase
of new plant and machinery within a period of one year from the date of subscription in the equity shares.
Problem No. 30
Computation of taxable capital gain of Mr. Amit for A.Y. 2015-16
Particulars ` `
Sale consideration received on sale of 9,500 shares @ ` 300 each 28,50,000
Less: Indexed cost of acquisition
(a) 3,500 shares received as gift from father on 27.9.1980 Indexed cost `
3500 x 40 x 1024/100 14,33,600
(b) 3,500 bonus shares received from Paras Ltd. Bonus shares are acquired
on 27.8.1985. Hence, the cost is Nil. Nil
(c) 2500 shares purchased on 2.2.1994 @ ` 120 per share. The indexed
cost is 2500 x 120 x 1024/244 12,59,016 26,92,616
Less : Exemption under section 54F (See Note below)
` 1,57,384 x ` 20,00,000 / ` 28,50,000 1,10,445
Taxable long term capital gain 46,939
Note - Exemption under section 54F can be availed by the assessee subject to fulfillment of both the following
conditions:
a) The assessee should not own more than one residential house on the date of transfer of the long-term
capital asset;
b) The assessee should purchase a residential house within a period of 1 year before or 2 years after the date
of transfer or construct a residential house within a period of 3 years from the date of transfer of the long-
term capital asset.
In this case, Mr. Amit has fulfilled the two conditions mentioned above. Therefore, he is entitled to exemption
under section 54F.
THE END
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TYBCOM REGULAR (SEM V)DIRECT TAXES

2 Income Tax is a tax on ___________.

3 The Income Tax Act, 1961 has 298 _____________.

4 The _____________ makes the amendment in the form of omission, insertions

5 The Income Tax Act extends to __________ of India.

6 Gross Tax Liability in calculated on __________.

2 Residential has nothing to do with :

3 A.O.P. is the abbreviation used for :

4 A.O.P. should consist of :

5 Body of individual should consist of :

6 Residential status of an individual depends on the stay of the assesses in India

8 The financial year in which the income is earned is called as the :

9 An company is always resident in India :

10 Income Tax Act extends to ____

11 A new business was set up on 15-11-2016 and it commended its business

12 Shivaji University is assessable under the Income Tax Act as _____

13 Income Tax Act has ____________ schedules.

14 58 (1) (a) (ii) is read as __________

16 ___________ are definite, specific, complete and full.

17 A firm is regarded as a unit of assessment as per _______________

18 _____________ is chargeable u/s 45.

19 Income includes ______________

21 Previous year can be of ____________ 12 months.

23 ______________ is expected to be a periodical monetary return.

24 _____________ are not taxable.

25 ______________ received by wife is not taxable.

26 The term 'Person' includes ___________

27 Partners are liable to pay tax on ___________ received from firm.

4 Residential status is determined based on nos. of days stay in :

5 Total Income of a person is determined on the basis of :

8 Success Ltd. is an Indian company whose entire control and management of

10 Residential status is to be determined for :

15 If an individual satisfies any of the basic conditions and satisfies only

16 Special individuals would become non-resident if their stay in India during

17 Dividend received from a foreign company in London, taxable in case of

19 In case of following individuals, global income is taxable __________

2 Un-commuted pension received by a Government employee is :

3 An employee is neither a government nor covered under the payment of

4 Compensation received on voluntary is exempt under sec. 10 (10 C) to the

5 Dividend is exempt in case :

6 Gratuity received by the Government employee is :

A Param Vir Chakra

12 Un commuted pension is taxable in the hands of ___________.

13 Leave salary received during the period of service is __________.

14 Tax borne by the employer on non-monetary perquisite provided to employee

2 Provisions applicable under each head of income are _______

5 Entertainment allowance in case of government employee is :

7 Entertainment allowance is deductable to the extent of Rs. 5,000 for a ___________

9 Manthan a chartered accountant is employed with Mayuri Ltd., and internal

13 Progressive Ltd. announced increase in D.A. on 21:3-2017 with retrospective effect

14 Kumar is neither a government employee nor covered under payment of

15 Employer's contribution to statutory provident fund is ___________.

16 Interest credited to RPF is __________.

17 Medical reimbursement by employer is not taxable upto __________.

18 Compensation on termination of employment will be taxable under the head _______

19 Profession tax deducted is allowed on _______

20 Maximum amount of deduction for entertainment allowance is __________.

21 Deductions in respect of salary are covered uls __________.

5 Un realized rent is a deduction from______

6 A property is owned by co-owners and it is self occupied house property.

9 Municipal tax is deducted from

10 In case the property is owned by co-owners and it is self occupied by all

11 Municipal Tax paid is allowed as deduction for ______