Taxation - 9

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 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
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 long-term
capital asset
Your Answer Within six months from the date of transfer of the long-term
capital asset
True/False
Question Income from partnership firms is exempt from taxation for the partners
Correct Answer True
Your Answer False