Taxation - 10

LIST OF ATTEMPTED QUESTIONS AND ANSWERS
Multiple Choice Single Answer
Question Foreign allowance received by an Indian national is exempt if it is paid by
:-
Correct Answer Government of India
Your Answer Government of India
Multiple Choice Multiple Answer
Question For the purpose of section 80IA, the term eligible business means :-
Correct Answer Developing, maintaining or operating any infrastructure facility
where the term infrastructure facility means a road (including a toll road, a bridge or a
rail system) or a highway project or a water supply project. , Developing, maintaining or
operating an industrial park or special economic zones notified by the Central
Government , Generation or distribution of power
Your Answer Developing, maintaining or operating an industrial park or special
economic zones notified by the Central Government , Generation or distribution of power
, Developing, maintaining or operating any infrastructure facility where the term
infrastructure facility means a road (including a toll road, a bridge or a rail system) or a
highway project or a water supply project.
True/False
Question For being resident of India, a person must be citizen of India.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question The due date prescribed for filing the returns of income in Form No. 2C is
Correct Answer 31st October of the respective Assessment year
Your Answer 31st October of the respective Assessment year
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.
True/False
Question A person who is a Senior Citizen who has attained the age of 65 years is
not entitled to the rebate u/s 88 of the Act.
Correct Answer False
Your Answer False
Multiple Choice Single Answer
Question The total amount of rebates under Section 88, Section 88B, Section 88C
and Section 88D of the Act. shall :-
Correct Answer Not exceed the amount of tax calculated on the total income.
Your Answer Not exceed the amount of tax calculated on the total income.
True/False
Question A company is resident of India if in any previous year it is an Indian
Company even though control & management are situated outside India.
Correct Answer False
Your Answer False
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 HHB profits and gains from projects outside
India , 80 IA profits and gains of infrastructure companies
True/False
Question Clause N0-30 of the Tax Audit requires that, if the cost Audit of the
company carried out, the report of such audit should be enclosed to the Tax Audit Report.
Correct Answer True
Your Answer True
Match The Following
Question Correct Answer Your Answer
Deductions of Rent, Rates, Repairs, Taxes and Insurance on Buildings are available
u/s 30 u/s 30
Deduction of Depreciation is available u/s 32 u/s 32
General deductions are allowed as deductions while calculating profits from business and
profession u/s 37 u/s 37
Deductions of Repairs & maintenance of machinery, plant & furniture are available
u/s 31 u/s 31
Multiple Choice Single Answer
Question In case of any contribution made by an individual or a HUF to notified
units of any approved mutual fund or of Unit Trust of India in accordance with a notified
scheme (Equity Linked Savings Scheme) :-
Correct Answer The maximum allowable limit is Rs. 10,000
Your Answer The maximum allowable limit is Rs. 10,000
True/False
Question The value of benefit resulting from the payment made by the employer in
a club for any expenditure incurred by the employee shall be taken as perquisites unless
the said expenses are incurred wholly and exclusively for official purposes.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question What is the treatment of principal amount of loan borrowed for the
purchase or construction of a residential house?
Correct Answer Rebate u/s 88 for such amount not exceeding Rs. 20,000
Your Answer Rebate u/s 88 for such amount not exceeding Rs. 20,000
True/False
Question Rebates as per the provisions of Section 88 of the Act are not available
from the tax on longterm capital gains.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Following specific incomes are taxable under the heading income from
other sources :-
Correct Answer Winning from betting , Interest on securities of local authority ,
Bonus from key man insurance policy
Your Answer Winning from betting , Interest on securities of local authority
True/False
Question Deductions available as per the provisions of Chapter VI of the Act are not
available for the long-term capital gains.
Correct Answer True
Your Answer True
True/False
Question 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 What is the due date for filing Annual return for TDS from Salaries?
Correct Answer 30th June of Assessment Year
Your Answer 30th June of Assessment Year
Multiple Choice Multiple Answer
Question The least of the following is the exemption available to an employee if he
is in receipt of house rent allowance :-
Correct Answer 50% of the Salary where such accommodation is situated in
Mumbai, Kolkata, Chennai and Delhi and 40% of the Salary when the accommodation is
situated at any other place. , Actual amount of HRA received by the employee. , Excess
of rent paid over 10% of the Salary.
Your Answer 50% of the Salary where such accommodation is situated in
Mumbai, Kolkata, Chennai and Delhi and 40% of the Salary when the accommodation is
situated at any other place. , Actual amount of HRA received by the employee.
Select The Blank
Question If the CC of the engine is more than 1..6 liters and the motor car is owned
or hired by the employer and is used partly of official and partly for personal purposes
and if running and maintenance expenses are borne by the employee then the value of
perquisite will be Rs.________ per month plus Rs.600 if car is chauffer driven car.
Correct Answer 600
Your Answer 600
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 Under the clause No-32 of the Act, in the Tax Audit Report, the Auditor is
required to give the accounting calculation in ratios of :-
Correct Answer Gross profit/turnover , Net profit/turnover , Stock in trade/turnover
Your Answer Gross profit/turnover , Net profit/turnover , Stock in trade/turnover
Multiple Choice Single Answer
Question If taxable income is less than 7.5% of book profit, income tax is payable
@ of :-
Correct Answer 0.1
Your Answer 0.1
Select The Blank
Question In case of foreign companies rate of tax is ________.
Correct Answer 0.35
Your Answer 0.2
True/False
Question Interest is payable by the assessee for not paying the Advance tax or if the
Advance tax paid by the assessee is less than 80% of the Assessed tax after adjusting the
amount of TDS and Advance tax Paid
Correct Answer False
Your Answer True
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
Multiple Choice Single Answer
Question Loss from owning and maintaining race horses can be adjusted against :-
Correct Answer Only the income arising out of the same activity
Your Answer Only the income arising out of the same activity
Multiple Choice Single Answer
Question Municipal taxes are payable on :-
Correct Answer Municipal valuation
Your Answer Municipal valuation
True/False
Question Dividend received from domestic company to its shareholders is taxable in
the hands of the shareholder.
Correct Answer False
Your Answer False
Select The Blank
Question Company means any ________ Company.
Correct Answer Indian
Your Answer Domestic Company
Multiple Choice Multiple Answer
Question Section 35D applies to the preliminary expenses incurred by a company,
which consists of :-
Correct Answer Expenditure in connection with the preparation of
feasibility/project report, engineering services, or conducting market survey , Legal
charges and fees for registering the company as per the provisions of company Act, 1956
, Charges in connection with drafting and printing of memorandum of association and
Articles of Association
Your Answer Expenditure in connection with the preparation of
feasibility/project report, engineering services, or conducting market survey , Legal
charges and fees for registering the company as per the provisions of company Act, 1956
, Charges in connection with drafting and printing of memorandum of association and
Articles of Association
Multiple Choice Multiple Answer
Question Perquisites which are taxable only in the hands of specified employee
include the following categories of perquisites :-
Correct Answer Motor Car , Services of sweeper, gardener, watchman or personal
attendant , Gas, electricity and water provided for personal consumption
Your Answer Motor Car , Gas, electricity and water provided for personal
consumption , Amount spent on training of employees or fees paid for refresher
management course
Select The Blank
Question Loss under the head Income from Capital Gains, to the extent it is long
term capital loss can be carried forward and set off in the subsequent Assessment Years
against the ________ subject to the limit of 8 Assessment years.
Correct Answer Long term Capital Gains
Your Answer Long term Capital Gains
Multiple Choice Single Answer
Question 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 The amount of telephone bills (including the mobile phone bills) of the
employee reimbursed by the employer is exempt from tax.
Correct Answer True
Your Answer True
True/False
Question The amount of expenses including membership fees and annual fees
incurred by the employee on credit card and which are paid by the employer shall be
added as the perquisites unless the said expenses are incurred wholly and exclusively for
official purposes.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question The amount of advance tax payable by corporate assessees before 15th
September of Previous year is :-
Correct Answer 45% of advance tax payable
Your Answer 45% of advance tax payable
Multiple Choice Single Answer
Question 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(1)
Select The Blank
Question ________ is the tax payable on the manufacturing of goods.
Correct Answer Excise duty
Your Answer Sales tax
Multiple Choice Single Answer
Question The return of income is required to be filed by all the companies, except
those covered under section 25 of the companies Act,1956 in the :-
Correct Answer Form No. 1
Your Answer Form No. 1
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 manufacture or any adventure or concern in
the nature of trade, commerce or manufacture Includes trade, commerce, or
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
Expenditure incurred by a company with the issue of rights shares
Multiple Choice Single Answer
Question The sum total of all the heads of income clubbed together gives the
amount of :-
Correct Answer Gross Total Income
Your Answer Gross Total Income
Select The Blank
Question Short term Capital Gains is taxed at ________.
Correct Answer Normal Tax rates
Your Answer Normal Tax rates
Multiple Choice Multiple Answer
Question From annual value, following deductions are allowed :-
Correct Answer Standard deduction , Interest on borrowed capital , Municipal taxes
Your Answer Standard deduction , Interest on borrowed capital , Municipal taxes
Multiple Choice Multiple Answer
Question The rebate u/s 88 is available to an :-
Correct Answer Individual , Hindu Undivided Family.
Your Answer Individual , Hindu Undivided Family.
Taxation-Saroj2
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 The due date prescribed for filing the returns of income in Form No. 2C is
Correct Answer 31st October of the respective Assessment year
Your Answer 31st October of the respective Previous year
Multiple Choice Single Answer
Question The payments for claiming the rebate u/s 88 should :-
Correct Answer Be made out of the income chargeable to tax.
Your Answer Be made out of the income chargeable to tax.
Multiple Choice Single Answer
Question 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(1)
Select The Blank
Question Mrs. X of 45 years has received salary of Rs 5,50,000 she can claim tax
rebate of ________u/s 88C of the IT Act.
Correct Answer Rs. 5,000
Your Answer Nil
Multiple Choice Multiple Answer
Question Rebate is allowed on any subscription made to National Saving Scheme by :-
Correct Answer An individual , A HUF
Your Answer An individual , A HUF , Partnership Firms
Multiple Choice Multiple Answer
Question 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
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
True/False
Question Deduction u/s 80E for repayment of loan taken for higher education is
available if the loan must have borrowed by the assessee himself or his Father
Correct Answer False
Your Answer False
True/False
Question The consideration for transfer of Capital Asset is received by the transferor is
not material while Capital gain chargeable to tax.
Correct Answer True
Your Answer True
Multiple Choice Multiple Answer
Question Any loans or deposits borrowed or repaid under section 269SS of the Act
provides that the said provisions will not apply to the loans or deposits accepted by :-
Correct Answer Banking company including cooperative bank and post office savings
bank , Government , Government company
Your Answer Government , Government company , Banking company including
cooperative bank and post office savings bank
Match The Following
Question Correct Answer Your Answer
Employee stock option plan ESOPS ESOPS
Uncommuted Pension Indicates the periodical payment of pension Indicates the
periodical payment of pension
Commuted Pension Indicates the lump sum received in lieu of the periodical
Indicates the lump sum received in lieu of the periodical
Treatment of Perquisite Taxed in the hands of employee as taxable salary Taxed in
the hands of employee as taxable salary
True/False
Question A person who is a Senior Citizen who has attained the age of 65 years is not
entitled to the rebate u/s 88 of the Act.
Correct Answer False
Your Answer True
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 long-term capital
asset
Your Answer Within six months from the date of transfer of the long-term capital asset
Select The Blank
Question Unabsorbed business loss can carried forward and set off in the subsequent
Assessment Years subject to the time limit of ________ Assessment years.
Correct Answer 8
Your Answer 3
Multiple Choice Single Answer
Question Mr. A whose Gross Total Income, before allowing deductions under Chapter
VI-A is Rs. 2,40,000 wants to make the investments in the following alternative forms
Rs. 50,000 in PPF and Rs. 50,000 in Infrastructure Bonds. The amount of rebate available
to him u/s 88 is :-
Correct Answer Rs. 15,000
Your Answer Rs. 15,000
Multiple Choice Single Answer
Question Annual value of any one palace in possession of a former ruler is :-
Correct Answer Exempt
Your Answer Exempt
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
Select The Blank
Question To claim sec 10A deduction unit must be established in ________.
Correct Answer Free Trade Zone
Your Answer Free Trade Zone
Select The Blank
Question Non resident individual satisfies ________ of the basic conditions.
Correct Answer None
Your Answer Any one
Multiple Choice Single Answer
Question Deduction from Capital Gains under Section 54 is for Capital Gains arising
from transfer of :-
Correct Answer House Property
Your Answer House Property
Select The Blank
Question 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 15
Select The Blank
Question Relief under section 89 is available to an employee in respect of the amount
of salary received ________.
Correct Answer In advance or in arrears
Your Answer In the immediately succeeding year.
Select The Blank
Question AOP id formed when two or more ________ come together to earn income.
Correct Answer Persons
Your Answer Persons
Multiple Choice Multiple Answer
Question 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
Multiple Choice Multiple Answer
Question Which of the following amounts credited to P & L Account but not taxable
from Income tax Purposes as Profits from Business and Profession?
Correct Answer Refund of Income tax , Capital Gains , Dividend Income
Your Answer Refund of Income tax , Capital Gains , Dividend Income
True/False
Question 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
Select The Blank
Question If assessee owns more than one house properties, he can get benefit of nil
annual value for any one house property ________.
Correct Answer As per his choice
Your Answer As per his choice
Multiple Choice Single Answer
Question What is the treatment of principal amount of loan borrowed for the purchase
or construction of a residential house?
Correct Answer Rebate u/s 88 for such amount not exceeding Rs. 20,000
Your Answer Rebate u/s 88 for such amount not exceeding Rs. 20,000
Multiple Choice Multiple Answer
Question 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
Multiple Choice Multiple Answer
Question If the Salary is less than Rs. 5,00,000, Standard Deduction will be the least of
the following :-
Correct Answer 40% of the Salary , Rs. 30,000
Your Answer 40% of the Salary , Rs. 30,000
Multiple Choice Single Answer
Question The amount of advance tax payable by non corporate assessees before 15th
December of Previous year is :-
Correct Answer 60% of advance tax payable
Your Answer 100% of advance tax payable
Select The Blank
Question 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
True/False
Question If assessee owns more than one house properties, annual value of any one of
the house property can be treated as nil, and such option can be changed year on year
basis.
Correct Answer True
Your Answer True
True/False
Question Income from subletting is treated as income from house property.
Correct Answer False
Your Answer False
Multiple Choice Multiple Answer
Question Following persons are deemed to be an assessee :-
Correct Answer Legal heir of deceased person , Parents of minor assessee , Agent of
NRI
Your Answer Legal heir of deceased person , Parents of minor assessee , Agent of NRI
Multiple Choice Single Answer
Question Income of notified news agencies is exempt provided :-
Correct Answer They apply their income for collection & distribution of news
Your Answer They apply their income for collection & distribution of news
Select The Blank
Question The rebate u/s 88B is available to an individual who has attained the age of
________ or more at any time during the previous year.
Correct Answer 65
Your Answer 65
Multiple Choice Multiple Answer
Question What is the tax treatment of the Lump sum received from unrecognized
provident fund on the retirement or resignation or death of the employee?
Correct Answer Employee's contribution to PF is exempt from tax , Interest on
employee's contribution is taxable as "Income from Other Sources" , Employer's
Contribution to PF and interest thereon is taxable as "Income from salaries"
Your Answer Employee's contribution to PF is exempt from tax , Interest on
employee's contribution is taxable as "Income from Other Sources" , Employer's
Contribution to PF and interest thereon is taxable as "Income from salaries"
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
True/False
Question A woman assessee below the age of 65 years is also entitled to rebate u/s 88.
Correct Answer True
Your Answer True
Multiple Choice Single Answer
Question Rent for other amenities like lift, electricity, telephone etc. is taxed under the
heading :-
Correct Answer Income from other sources
Your Answer Income from salaries
Multiple Choice Single Answer
Question The amount of advance tax payable by non corporate assessees before 15th
June of Previous year is :-
Correct Answer Nil
Your Answer 100% of advance tax payable
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 Rs. 5,000 , 1/5th of Salary , Actual amount of Entertainment
Allowance received.
Your Answer Rs. 5,000 , 1/5th of Salary , Actual amount of Entertainment Allowance
received.
True/False
Question Loss from house property can be adjusted against the income from any other
house property.
Correct Answer True
Your Answer True
True/False
Question Annual premium paid by the employer for the accident insurance policy
taken by the employer in the name of the employee is chargeable to tax.
Correct Answer False
Your Answer True
Multiple Choice Single Answer
Question Annual return for TDS from Salaries is to be filed in :-
Correct Answer Form No. 24
Your Answer Form No. 24