Taxation - 3

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Multiple Answer
Question The entertainment allowance received by the
Government employees is included in their salaries
and the deduction is allowed to the extent of least of
the following amounts :-
Correct Answer Actual amount of Entertainment Allowance received. ,
Rs. 5,000 , 1/5th of Salary
Your Answer Actual amount of Entertainment Allowance received. ,
Rs. 5,000 , 1/5th of Salary
True/False
Question Income Tax Act, 1961 recognizes Written Down Value
(WDV) method as well as straight line method for the
computation of depreciation u/s 32 this act.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Profits earned by an Industrial Undertaking engaged
in other than infrastructure development is available
under Section 80IB for :-
Correct Answer Operation of Ship , Hotels situated in hilly area, rural
area or place of pilgrimage , Company engaged in
scientific and industrial research
Your Answer Operation of Ship , Hotels situated in hilly area, rural
area or place of pilgrimage
Multiple Choice Single Answer
Question 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
Select The Blank
Question 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
True/False
Question 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 Mr. A whose Gross Total Income, before allowing
deductions under Chapter VI-A is Rs. 1,45,000, wants
to make the investments in the following alternative
forms Rs. 80,000 in PPF and Rs. 20,000 in
Infrastructure Bonds. The amount of rebate available
to him u/s 88 is :-
Correct Answer Rs. 18,000
Your Answer Rs. 18,000
Multiple Choice Single Answer
Question Interest on specified securities or premium on
redemption is exempt for :-
Correct Answer Non resident Indian
Your Answer Non resident Indian
True/False
Question As per section 2(11) of the Income Tax Act, Block of
Assets includes both tangible as well as intangible
assets.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Deductions in respect of Certain Incomes received
under Section 80L is available in respect of
Correct Answer Interest on Central or State Government Securities ,
Interest on National Saving Certificates (NSCs)
Interest on National Saving Scheme, 1992 (NSS) ,
Bank Interest
Your Answer Interest on Central or State Government Securities ,
Interest on National Saving Certificates (NSCs)
Interest on National Saving Scheme, 1992 (NSS) ,
Bank Interest
Multiple Choice Single Answer
Question Tax liability of a person is based on :-
Correct Answer Residential status
Your Answer Residential status
Multiple Choice Multiple Answer
Question For the purpose of income tax, the perquisites can be
classified into :-
Correct Answer Perquisites which are taxable in case of all types of
employees , Perquisites which are taxable only in the
hands of specified employee
Your Answer Perquisites which are taxable in case of all types of
employees , Perquisites which are taxable only in the
hands of specified employee
Select The Blank
Question For an individual as a citizen of India who leaves India
in the relevant previous year for the purpose of
employment has to be in India for ________ days or
more during previous year.
Correct Answer 182
Your Answer 182
Multiple Choice Single Answer
Question Income earned in previous year is subjected to tax in
:-
Correct Answer Assessment year
Your Answer Assessment year
Multiple Choice Multiple Answer
Question Following professional institutions have their incomes
exempt from tax :-
Correct Answer Town planning , Company secretary , Accounting
Your Answer Town planning , Company secretary , Accounting
Select The Blank
Question ________ of the Tax Audit Report refers to the details
of various payments which are allowed as deduction
only if they are actually paid for.
Correct Answer Section 43B Clause No-21
Your Answer Section 43B Clause No-21
Multiple Choice Multiple Answer
Question 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
Select The Blank
Question To claim sec 10A deduction unit must be established
in ________.
Correct Answer Free Trade Zone
Your Answer Free Trade Zone
Multiple Choice Single Answer
Question Assessment year is the period of 12 months starting
from :-
Correct Answer 1st April to 31st March
Your Answer 1st April to 31st March
Multiple Choice Single Answer
Question Combined total of five heads of income equals :-
Correct Answer Gross total income
Your Answer Gross total income
Multiple Choice Single Answer
Question 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 To acquire PAN, a person shall apply in ________ to
the assessing officer.
Correct Answer Form No. 49A
Your Answer Form No. 49A
Multiple Choice Single Answer
Question Deduction from Capital Gains under Section 54F is for
Capital Gains arising from transfer of :-
Correct Answer Any Long Term Capital Asset
Your Answer House Property
Select The Blank
Question Where an assessee files or submits the returns as per
provisions of section 139 or in response to the notice
under section 142, the assessment officer undertakes
________ as per section 143(2) and section 143(3).
Correct Answer Scrutiny Assessment
Your Answer Scrutiny Assessment
Multiple Choice Multiple Answer
Question Income of a professional association is exempt if its
objectives are :-
Correct Answer Supervision , Control , Encouragement
Your Answer Supervision , Control , Encouragement
True/False
Question While computing the profits from Business and
profession, the business or profession must be carried
out during the previous year.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question In respect of leave travel concession If Mr. A has
availed the exemption only once or has not availed
any exemption at all, in the block of four years i.e.
1998-2001 then :-
Correct Answer He can carry over the exemption to the next block of
four years i.e. 2002-2005 provided that he avails the
exemption of LTC in the first calendar year of the next
block i.e. 2002.
Your Answer He can carry over the exemption to the next block of
four years i.e. 2002-2005 provided that he avails the
exemption of LTC in the first calendar year of the next
block i.e. 2002.
Multiple Choice Multiple Answer
Question The amount accumulated to the credit of the
employee's provident fund account is paid at the time
of :-
Correct Answer Retirement , Resignation
Your Answer Retirement , Resignation
Multiple Choice Multiple Answer
Question From annual value, following deductions are allowed :-
Correct Answer Standard deduction , Interest on borrowed capital ,
Municipal taxes
Your Answer Interest on borrowed capital , Municipal taxes
Multiple Choice Single Answer
Question As a general principle, the Basic Salary or Wages,
Dearness Allowance and Bonus / Commission is :-
Correct Answer Fully taxable.
Your Answer Fully taxable.
Multiple Choice Multiple Answer
Question From GTI of a company following deductions under
chapter VI A are allowed
Correct Answer 80 G Donations , 80 HHB profits and gains from
projects outside India , 80 IA profits and gains of
infrastructure companies
Your Answer 80 G Donations , 80 IA profits and gains of
infrastructure companies
Multiple Choice Single Answer
Question Annual value of any one palace in possession of a
former ruler is :-
Correct Answer Exempt
Your Answer Taxable
Select The Blank
Question If the Salary is more than Rs. 5,00,000, Standard
Deduction will be Rs.________.
Correct Answer 20000
Your Answer 20000
Multiple Choice Single Answer
Question The amount of accumulated interest on NSCs
purchased in the earlier years is assumed to be
reinvested :-
Correct Answer And qualifies for tax rebate under section 88.
Your Answer And qualifies for tax rebate under section 88.
Select The Blank
Question Deduction u/s ________B is available for 10
consequent assessment years from the year of
commencement of production.
Correct Answer 10
Your Answer 10
True/False
Question Income from subletting is treated as income from
house property.
Correct Answer False
Your Answer False
Select The Blank
Question Section 80U allows the deduction in respect of the
________ .
Correct Answer Permanent physical disability
Your Answer Permanent physical disability
Match The Following
Question Correct Answer Your Answer
Disallowable
Expenditure
Litigation Expenses in
connection with
recovery of a debt
which is not a trading
debt
Litigation Expenses in
connection with
recovery of a debt
which is not a trading
debt
Business Includes trade,
commerce, or
Includes trade,
commerce, or
manufacture or any
adventure or concern
in the nature of trade,
commerce or
manufacture
manufacture or any
adventure or concern in
the nature of trade,
commerce or
manufacture
Profession Includes vocation Includes vocation
Capital Expenditure Expenditure incurred
by a company with the
issue of rights shares
Premium on
redemption of
Debentures
True/False
Question Any recreational facility provided by the employer to a
group of employees (not being restricted to a select
few employees) is not exempt from tax.
Correct Answer False
Your Answer False
True/False
Question In case of deductions for medical treatment under
Section 80DDB the amount of deduction will be
reduced by the amount received under an insurance
policy or the amount reimbursed by the employer.
Correct Answer True
Your Answer True
True/False
Question Any advance tax paid before 31st March is treated as
advance tax paid during the previous year.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Municipal taxes paid is allowed as deduction from :-
Correct Answer Gross annual value
Your Answer Gross annual value
True/False
Question Entertainment Allowance received by the employees
from the private sector is taxable in the hands of the
employee.
Correct Answer True
Your Answer True
Match The Following
Question Correct Answer Your Answer
Any subscription made
to National Saving
Scheme
By an individual or a
HUF is eligible for
rebate u/s 88
By an individual or a
HUF is eligible for
rebate u/s 88
Mr. A, a 70 years old
Senior Citizen, has the
Gross Total Income of
Rs. 2,50,000 during
the Assessment Year
2005-2006. He
invested Rs. 50,000 in
the tax saving bonds of
ICICI on 10th June
2004. His tax liability
for the A Y 2005-2006.
RS.12,500 RS.12,500
During the
Assessment Year
2005-2006, Mrs. A,
age 58 years, has the
Gross Total Income of
Rs. 1,45,000 including
the dividend from
Indian companies
amounting to Rs.
10,000. She invests
Rs. 50,000 in PPF
during the said
Assessment Year. her
tax liabilit is
Rs. 1,000 Rs. 1,000
Any contribution made
to a Public Provident
Fund
Is eligible for rebate
u/s 88
Is eligible for rebate u/s
88
Multiple Choice Multiple Answer
Question Following incomes of local authorities are exempt :-
Correct Answer Capital gains , Other income , House property
Your Answer Capital gains , Other income , House property
Multiple Choice Multiple Answer
Question For Deduction u/s 54EC from Capital Gains the
assessee should invest the whole or part of the capital
gains in the specified assets :-
Correct Answer Within six months from the date of transfer of the longterm
capital asset
Your Answer Within six months from the date of transfer of the longterm
capital asset
True/False
Question Income from partnership firms is exempt from taxation
for the partners
Correct Answer True
Your Answer False