Taxation - 2

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single Answer
Question 48 Deduction in respect of Contribution to certain pension funds is related to :-
Correct Answer Section 80CCC
Your Answer Section 80CCC
True/False
Question 49 The rebate u/s 88B is allowed before the rebate u/s 88 is allowed.
Correct Answer True
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Your Answer False
Select The Blank
Question 50 Expenditure incurred in connection with the local festivals like Diwali etc. are
________ as business expenditure.
Correct Answer Allowed
Your Answer Allowed
Select The Blank
Question 51 Deduction is available for income from foreign sources under Section 80RR if
such remuneration brought into India in convertible foreign exchange within a
period of________ months from the end of the previous year.
Correct Answer 6
Your Answer 6
Multiple Choice Multiple Answer
Question 52 Short Term Capital Loss can be adjusted against :-
Correct Answer Short Term Capital Gains. , Long term Capital Gains
Your Answer Short Term Capital Gains. , Long term Capital Gains
Multiple Choice Single Answer
Question 53 Income from winning from lotteries / crossword puzzles/ horse races is taxed at
flat rate of :-
Correct Answer 0.3
Your Answer 0.35
Select The Blank
Question 54 Section 35D of the Act provides that the preliminary expenses can be ________
over a period of 5 years commencing from the year of commencement of
business.
Correct Answer Amortized and written off to profit and loss account
Your Answer Amortized and written off to profit and loss account
Select The Blank
Question 55 Section 43B of the IT Act provides that the certain payments are allowed as
deduction only if they are ________.
Correct Answer Actually paid
Your Answer Reasonable
Multiple Choice Multiple Answer
Question 56 The rebate u/s 88 is available to an :-
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Correct Answer Individual , Hindu Undivided Family.
Your Answer Individual , Hindu Undivided Family.
Multiple Choice Single Answer
Question 57 Income from other sources covers agricultural income from land situated :-
Correct Answer Outside India
Your Answer Outside India
Multiple Choice Multiple Answer
Question 58 A return is considered to be defective returns under section 139(9) unless :-
Correct Answer The computation of income under each head, Gross Total Income are properly
filed in , The return is accompanied by the tax audit report under section 44AB ,
The return is accompanied by copies of required financial statements of the
assessee
Your Answer The computation of income under each head, Gross Total Income are properly
filed in , The return is accompanied by the tax audit report under section 44AB ,
The return is accompanied by copies of required financial statements of the
assessee
Multiple Choice Single Answer
Question 59 If an employee does not avail of this leave travel concession or assistance
during a block of four calendar years :-
Correct Answer Only one journey can be carried forward to the next block.
Your Answer Only one journey can be carried forward to the next block.
Select The Blank
Question 60 The person who does not deduct the tax source as required by the Act or after
deducting fails to pay the tax as required by the Act, shall be liable to pay the
simple interest @________ % per month on the amount of such tax from the
date on which the tax was deductible till the date on which such tax is actually
paid.
Correct Answer 1
Your Answer 1.25
Multiple Choice Multiple Answer
Question 61 The assessing officer may allot the Permanent Account Number(PAN) to :-
Correct Answer Person whose Total Income during previous year exceeds the maximum
amount, chargeable to tax , Person carrying on the business or profession
whose turnover exceeds Rs.5 lakhs in any previous year , Any other person by
whom tax is payable
Your Answer Person carrying on the business or profession whose turnover exceeds Rs.5
lakhs in any previous year , Any other person by whom tax is payable , Any
person not applying for permanent account number but, tax is payable by him
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Multiple Choice Multiple Answer
Question 62 The provisions for payment of gratuity is not allowed under section 40A(7) but,
under the head, profits from business and profession, the amount of gratuity will
be allowed as deduction only when :-
Correct Answer The amount of gratuity has actually become payable to the employees during
the previous year , The provision has been made for the payment of a sum by
way of contribution to an approval gratuity , The other than the above two
situations, any provision made for the payment of gratuity is not allowed as
deduction
Your Answer The amount of gratuity has actually become payable to the employees during
the previous year , The provision has been made for the payment of a sum by
way of contribution to an approval gratuity , The other than the above two
situations, any provision made for the payment of gratuity is not allowed as
deduction
Multiple Choice Multiple Answer
Question 63 For the purpose of taxability of perquisite a specified employee means :-
Correct Answer The person who is director of a company , The employee who has substantial
interest in the company by having 20% or more of the voting power , The
employee whose income under the head salaries (including all the taxable
monetary payments of salary but excluding the value of any non-monetary
benefits or perquisites), after allowing deductions under Section 16, exceeds
Rs. 50,000
Your Answer The person who is director of a company , The employee who has substantial
interest in the company by having 20% or more of the voting power , The
employee whose income under the head salaries (including all the taxable
monetary payments of salary but excluding the value of any non-monetary
benefits or perquisites), after allowing deductions under Section 16, exceeds
Rs. 50,000
True/False
Question 64 Sum received under a will / inheritance is not exempt.
Correct Answer True
Your Answer False
Select The Blank
Question 65 It should be noted that the tax liability of an individual having the total income of
less than Rs ________ is Nil u/s 88D.
Correct Answer 1,00,000
Your Answer 1,00,000
Match The Following
Question 66 Correct Answer Your Answer
All intangible assets like
Patents, Trademarks, Copy
Rights, Licenses etc.
Rate of depreciation is 25% Rate of depreciation is 25%
Temporary Structures Rate of depreciation is 100% Rate of depreciation is 10%
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Computers Rate of depreciation is 60% Rate of depreciation is 40%
Containers made of glass or
plastic used as refills
Rate of depreciation is 40% Rate of depreciation is 60%
Select The Blank
Question 67 In case of foreign companies rate of tax is ________.
Correct Answer 0.35
Your Answer 0.35
Multiple Choice Single Answer
Question 68 Which of the following expenditure is in the nature of revenue expenditure?
Correct Answer Expenditure incurred as discount on issue of debentures
Your Answer Expenditure incurred as discount on issue of debentures
Multiple Choice Multiple Answer
Question 69 For the purpose of Section 40 A (2) of the IT Act, if assessee is a firm, the term
"Specified Persons" may include :-
Correct Answer Any partner of the firm or his relative , Any person having the substantial interest
in the business or profession of the firm or any director or partner of such
company or firm or any relative of such person. , Any person who carries on
business or profession and in his business or profession the assessee or any
partner of such firm or relative of such partner has substantial interest.
Your Answer Any partner of the firm or his relative , Any person having the substantial interest
in the business or profession of the firm or any director or partner of such
company or firm or any relative of such person. , Any person who carries on
business or profession and in his business or profession the assessee or any
partner of such firm or relative of such partner has substantial interest.
Multiple Choice Single Answer
Question 70 For charging the income in the form of salaries :-
Correct Answer There needs to be an employer-employee relationship between the payer and
the payee.
Your Answer There needs to be an employer-employee relationship between the payer and
the payee.
True/False
Question 71 For claiming the deduction under section 80IA, the industrial undertaking should
be owned by a company registered in India or a consortium of such companies.
Correct Answer True
Your Answer True
Select The Blank
Question 72 Any expenditure incurred by the assessee for any purpose which is ________
or which is prohibited by law shall not be allowed as business expenditure
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Correct Answer Offence
Your Answer Offence
Multiple Choice Single Answer
Question 73 As a general principle, the Basic Salary or Wages, Dearness Allowance and
Bonus / Commission is :-
Correct Answer Fully taxable.
Your Answer Fully taxable.
True/False
Question 74 Rebates as per the provisions of Section 88 of the Act are not available from the
tax on long-term capital gains.
Correct Answer True
Your Answer True
True/False
Question 75 MAT is applicable if there is a difference of 7.5% between net profit & book
profit.
Correct Answer True
Your Answer False
Multiple Choice Multiple Answer
Question 76 For the purpose of Section 40 A (2) of the IT Act, if assessee is an individual,
the term "Specified Persons" may include :-
Correct Answer Any relative of such individual , Any person (individual, company, firm etc.)
having a substantial interest in the business or profession of the individual or
any director or partner of such company or firm or any relative of such person. ,
Any person who carries on a business or profession and in his business or
profession, the assessee himself or his relative has a substantial interest.
Your Answer Any relative of such individual , Any person (individual, company, firm etc.)
having a substantial interest in the business or profession of the individual or
any director or partner of such company or firm or any relative of such person. ,
Any person who carries on a business or profession and in his business or
profession, the assessee himself or his relative has a substantial interest.
Select The Blank
Question 77 Deduction for remuneration from foreign sources for professors, teachers etc
under Section 80R is limited to ________% of such remuneration brought in
India.
Correct Answer 15
Your Answer 10
True/False
Question 78 Any expenditure incurred for earning the income which is included under the
head income from other sources will be allowed as deduction from such income
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provided that certain conditions are satisfied
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question 79 Deduction from Capital Gains from the transfer of residential house property
under Section 54 is available to :-
Correct Answer Individual , HUF
Your Answer Individual , HUF , Company
True/False
Question 80 Income earned & received outside India & remitted to India is taxable for
resident & ordinary resident
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question 81 Mr X has received Rs 200000 as income from salary, Rs 50000 income from
house property and he also received Rs 100000 income from specified units of
the mutual fund. What will be his total income
Correct Answer Rs 250000
Your Answer Rs 250000
Multiple Choice Multiple Answer
Question 82 Standard deduction takes care of :-
Correct Answer Repairs & maintenance , Insurance premium , Ground rent
Your Answer Insurance premium
Match The Following
Question 83 Correct Answer Your Answer
Individual partners & firms Are separate taxable entities Losses are shared equally
Partnership firm Companies can be partners Are separate taxable entities
Company partners Can not get salaries Companies can be partners
Individual partners Can be partners in any number
of firms
Can be partners in any number
of firms
Multiple Choice Multiple Answer
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Question 84 Capital Gains arise on account of excess of transfer consideration over the
following amounts
Correct Answer Cost of acquisition , Cost of improvement , Expenditure incurred wholly and
exclusively in connection with the transfer
Your Answer Cost of acquisition , Cost of improvement , Expenditure incurred wholly and
exclusively in connection with the transfer
True/False
Question 85 Income of a mutual fund is taxable even if it is authorized by RBI.
Correct Answer False
Your Answer False
Select The Blank
Question 86 If sum received is net of TDS then it is ________ to include in income from other
sources.
Correct Answer Grossed up
Your Answer Grossed up
Multiple Choice Multiple Answer
Question 87 What is the tax treatment of Statutory Provident Fund?
Correct Answer Employer's Contribution to PF is not liable for any tax payment , Interest
credited to the employee's account is not liable for any tax payment. , The lump
sum received at the time of retirement or resignation or death is also exempt
under section 10(11) and 10(12).
Your Answer Employer's Contribution to PF is not liable for any tax payment , Interest
credited to the employee's account is not liable for any tax payment. , The lump
sum received at the time of retirement or resignation or death is also exempt
under section 10(11) and 10(12).
True/False
Question 88 Interest paid on the loan for acquiring a capital asset will be considered to be a
part of cost of acquisition.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question 89 What is the manner in which Income from Salaries is taxable?
Correct Answer Due basis or 'receipt' basis whichever is earlier.
Your Answer Due basis or 'receipt' basis whichever is earlier.
Multiple Choice Single Answer
Question 90 Deduction from Capital Gains under Section 54F is for Capital Gains arising
from transfer of :-
Correct Answer Any Long Term Capital Asset
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Your Answer Any Long Term Capital Asset
Multiple Choice Single Answer
Question 91 In case the assessee is not a company, a person(other than a company) who is
falling under One by Six economic criteria, the last date for filing the return is
prescribed as :-
Correct Answer 31st July of the Assessment year
Your Answer 31st July of the Assessment year
Select The Blank
Question 92 Registration charges in connection with the increasing of ________ share
capital of the company is not allowed as revenue expenditure.
Correct Answer Authorized
Your Answer Authorized
True/False
Question 93 The amount of telephone bills (including the mobile phone bills) of the employee
reimbursed by the employer is taxable in the hands of the employee.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question 94 As per which provision and section, every person, company or any other person
shall furnish his returns of income in the prescribed form on or before the
specified due date?
Correct Answer Section 139(1)
Your Answer Section 139(2)