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MCQCA FINAL 2019
CA MEHUL THAKKER
Ahmedabad
CA MEHUL THAKKER
Congratulates
Rank Holders of May - 18
Other Rankers
2nd
12 - Devansh Shah Rank
41 - Yashvi Shah
47 - Parth Sheth
47 - Shobhit Daga
Aagam Dalal
DIRECT TAX
MCQ
ASSESSMENT YEAR 2019-20
Relevant for May 2019 / Nov 2019 Exam
CA MEHUL THAKKER
https://www.youtube.com/channel/UCbmK3daYbl-6unKnzthWFLQ
© CA Mehul Thakker
Special Thanks to CA Chetan V Chaudhary
Law stated in this book is as amended by the Finance Act, 2018
Every effort has been made to avoid errors and omissions in this publication. In spite of this, errors may
creep in. It is notified that neither the publisher nor the author or seller will be responsible for any
damage or loss of action to anyone, of any kind, in any manner, therefrom. It is suggested that to resolve
any doubts, the readers may cross-check the facts, the relevant law and contents of the publication with
Government publication or notifications.
Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the
next edition.
Further, no part of this book may be reproduced or copied in any form or by any means [graphic,
electronic or mechanical, including photocopying, recording, taping, or information retrieval systems] or
reproduced on any disc, tape , perforated media or other information storage device, etc., without the
written permission of the author. Breach of this condition is liable for legal action.
All disputes are subject to Ahmedabad Jurisdiction only.

PREFACE
With immense pleasure, we place before you, the first edition of “DIRECT TAX MCQ”.
In this book, two types of MCQs are covered:
(a) Knowledge based MCQ

(b) Application based MCQ
For CA Final Students, the weightage (in terms of Marks) and the expectancy (in terms of no. of MCQ) for each
type of MCQ would be as under:
Type of MCQ Weightage (Marks) Expectancy (No. of MCQ)

Knowledge based MCQ 1 Mark 10 to 16
Application based MCQ 2 Marks 7 to 10
This book is also useful for the students appearing for CS / CMA Final examinations to be conducted in the calendar
year 2019.
We are grateful to all our family members, friends, colleagues and students who supported us in bringing out this
publication.
We look forward to the readers for their valuable comments and suggestions on info@mtliveca.com
01/03/2019 CA Mehul Thakker
Ahmedabad
CHAPTER NO. TOPICS
1 Basics of Income Tax
2 Incomes which do not form part of Total Income
3 Salary
4 House Property
5 Profits and Gains from Business or Profession
6 Capital Gains
7 Income from other Sources
8 Clubbing of Income
9 Set off and carry forward of losses
10 Deductions from Gross Total Income
11 Computation of Total Income and Tax Liability
12 Assessment of Firms
13 Assessment of AOP or BOI
14 Assessment of Co-operative Societies
15 Assessment of Companies
16 Corporate Dividend Tax and Tax On Distributed Income
17 Alternative Minimum Tax [Chapter XII-BA]
18 Hindu Undivided Family (HUF)
19 Business Trust
20 Taxation of Trusts or Institutions
21 Permanent Account Number
22 E-Payment of Taxes
23 Filing of Returns of Income
24 Processing of Returns of Income
25 Assessment and Re-assessment
26 Rectification under section 154
27 Appeals
28 Income Tax Authorities and their Powers
29 Assessment In Search Cases
30 Collection and Recovery of Tax
31 Tax Deducted at Source
32 Advance Tax and Interest Payable
33 Settlement Commission and Advance Rulings
34 Requirement as to Mode of Acceptance of Payment or Repayment in Certain
Cases to Counteract Evasion of Tax
35 Penalty and Prosecution
36 Business Restructuring
37 Depreciation (Advanced Level)
38 Tax Planning, Tax Avoidance and Tax Evasion
39 Tonnage Taxation Scheme
40 Liability in Special Cases
41 Income Computation and Disclosure Standards (ICDS)
42 Refunds
43 Taxation of Mutual Concerns / Subsidies
44 Statement on Financial Transactions
45 International Taxation
Annexure Amendment made by Finance Act, 2018
MULTIPLE CHOICE QUESTIONS 1-BASICS OF INCOME TAX
1 – BASICS OF INCOME TAX

1. The Income Tax Act, 1961 came into force on the ________.
(a) 1st day of April, 1961 (b) 1st day of January, 1961
(c) 1st day of April, 1962 (d) 1st day of January, 1962
2. The Income Tax Act, 1961 extends to the ___________.

(a) Whole of India (b) Whole of India except Jammu and Kashmir
(c) Jammu and Kashmir Only (d) None of the above
3. ____________ of the Income Tax Act is a charging section.

(a) Section 1 (b) Section 2
(c) Section 3 (d) Section 4
4. The period of 12 months commencing on the 1st day of April every year and ending on 31st March
is termed as
(a) Prevous year (b) Financial year
(c) Calendar year (d) Assessment year
5. Given the previous year 2015-16, the assessment year shall be _____________ .
(a) 2017-18 (b) 2016-17
(c) 2015-16 (d) 2018-19
6. If new business is set up on 21-10-17 then the first previous year for that business will be period
starting from _________ to_______. And, therefore the first assessment year shall be 2018-19.
(a) 01-04-17, 31-03-18 (b) 01-04-18, 31-03-19
(c) 21-10-17, 31-03-18 (d) None of the above
7. The previous yer under Income Tax Act, may or may not be of ___ months, while Assessment
year is always of ____ months.
(a) 12,12 (b) 2,12
(c) 12,2 (d) 5,12
© CA MEHUL THAKKER
8. As per section 2(7) of the Act, the term “assessee” means a person -
(a) Who is deemed to be an assessee in (b) By whom any tax is payable under the Act
default
(c) Against whom any proceedings under (d) All of the above
the Act has been taken
9. As per section 2(7) of the Act, the term “assessee” does not mean a person -
(a) Who is deemed to be an assessee under (b) By whom any penalty is payable under the Act
any provision of the Income Tax Act
(c) Against whom assessment under section (d) None of the above
147 has been completed
10. The term “Income” is defined under section ____ of the Income Tax Act.
(a) 2(24) (b) 2(36)
(c) 2(15) (d) 2(47)
11. The term “Income” defined under the Income Tax Act is
(a) Inclusive (b) Exhaustive
(c) Descriptive (d) None of the above
12. The term “Income” does not include______.

(a) Profits and gains (b) Dividends
(c) Voluntary Contributions (d) Remittance of savings from U.K
13. The term “Income” defined under section 2(24) includes-

(i) The fair market value of inventory in case of conversion of inventory into capital asset
(ii) Any compensation on account of termination or modification of terms and conditions of
employment.
Choose the correct option with reference to above statement.
(a) Both (i) and (ii) (b) Only (i)
(c) Only (ii) (d) Neither (i) nor (ii)
14. The term “Person” includes ______.

(a) Mr. Ramesh, Individual (b) ABC & Co, Partnership firm
(c) Khurana Construction Pvt. Ltd. (d) All of the above
© CA MEHUL THAKKER
15. As per section 2(31) of the Act, the term “Person” does not include ______.
(a) An Individual (b) A Firm
(c) A company (d) A minor
16. Mr. Anil Jain, partner of Jain and Jain, is assessable as

(a) Firm (b) HUF
(c) An Individual (d) One Person Company
17. A municipal committee managing and controlling a municipal fund shall be assessed in the status
of:
(a) Association of Persons (b) Body of Individuals
(c) Local authority (d) Artificial judicial person
18. As per section 2(45) of the Income Tax Act, “Total Income” means ______ less deductions u/s.
80 C to 80 U
(a) Net Income (b) Gross Income
(c) Gross Total Income (d) Adjusted Total Income
19. The Total income of Mr. Suresh is Rs. 9,00,000 and deductions claimed u/s. 80 C to 80 U were Rs.
1,50,000, then Gross total income would be _________.
(a) Rs. 10,50,000 (b) Rs. 7,50,000
(c) Rs. 10,00,000 (d) None of the above
20. The territory of India is referred to in Article ____________ of the Constitution.

(a) 1 (b) 2
(c) 3 (d) 4
21. Rates of Income tax are fixed ________

(a) By an Ordinance (b) Under the Income Tax Act
(c) By the Finance Act (d) By CBDT
22. Under the Income Tax Act, residential status is determined for the _____________
(a) Previous Year (b) Assessment Year
(c) Calender year (d) None of the above
© CA MEHUL THAKKER
23. An individual is said to be resident in India if
(a) He is a citizen of India (b) He is in India atleast for a period of 182 days
or more in the previous year
(c) He is in India for a period of 30 days or (d) He got married with an Indian citizen
more during the previous year and for
150 or more days during 4 previous
years immediately preceding the
concerned previous year
24. An individual is said to be an ordinarily Resident when he satisfies ________________.

(a) both basic as well as additional (b) only basic conditions
conditions
(c) only additional conditions (d) None of the above
25. An individual is said to be a non- resident when he does not _______________.

(a) satisfy any one of the basic conditions (b) satisfies only basic conditions
(c) satisfies only additional conditions (d) satisfies basic as well as additional conditions
26. One of the additional conditions relevant for deciding “ordinary resident” is that an individual
has been resident in India at least for _________ years out of _______ years immediately
preceding the concerned previous year.
(a) 2,12 (b) 2,10
(c) 9,10 (d) None of the above
27. A citizen of India who leaves India for the purpose of employment may become resident only if
he stays in India at least for ............................. days.
(a) 90 (b) 165
(c) 180 (d) 182
28. Mr. Anand, an Indian Citizen, first time left India on 15/06/18 as a crew member of indian ship.
What is the residential status of Mr. Anand for P.Y. 2018-19?
(a) Resident and Ordinarily Resident (b) Resident but Not Ordinarily Resident
(c) Non-Resident (d) None of the above
© CA MEHUL THAKKER
29. Mr. Thomas, a foreign citizen (not being a person of Indian origin) first time visited India on
30/09/2018 and left India on 2/4/09. What shall be his residential status for the previous year
2018-19?
30. Mr. James, being foreign national, came to India first time on 01-02-2019 for seven months.
What will be his residential status for the previous year 2018-19?
(a) Non-resident (b) Resident and ordinarily resident in India
(c) Resident but not ordinarily resident in (d) Resident
India
31. H.U.F. can be regarded as Resident in India if

(a) Control and management is wholly (b) Control and management is partly situated in
situated in India India
(c) Control and management is wholly (d) (a) and (b) above
situated outside in India
32. Indian Company is always: -

(a) Resident (b) Resident but not Ordinarily Resident
(c) Non-resident (d) Reisdent and Ordinarily Resident
33. A partnership firm will be treated as resident in India, if the control and management of its affairs
is located ______in India.
(a) Partly (b) Wholly
(c) Exclusively (d) wholly or partly
34. Section 6(3) of the Act deans with the residential status of “every other person”, the
determination of which mainly depends on ____________.
(a) Place of effective management (b) Place of control and management
(c) Place of its operation (d) None of the above
35. Who among the following may have status of “Resident but not ordinarily resident”?
(a) Partnership firm (b) Association of persons
(c) Company (d) Hindu Undivided Family
© CA MEHUL THAKKER
36. Mr. Ramesh is resident in India in a previous year for “Business income”, then he shall be deemed
to be ________ in India in the previous year in respect of each of his other souces of income.
(a) Non-resident (b) Citizen
(c) Resident (d) None of the above
37. The incidence of income tax depends on__

(a) The citizenship of the tax-payer (b) The age of the taxpayer
(c) The residential status of the tax-payer (d) The nationality of the taxpayer
38. Scope of total income depends on _________.

(a) Citizenship of the person (b) Nationality of the person
(c) Residential status of the person (d) None of the above
39. Which of the following is not taxed in the hands of a resident and ordinarily resident?
(a) Income accrued in India (b) Income deemed to accrue or arise in India
(c) Income received or deemed to be (d) Remittance from other country
received in India
40. Income deemed to accrue or arise in India shall not be chargeable for
41. Non-resident shall not be chargeable to tax for the -

(a) Income received in India (b) Income deemed to accrue or arise in India
(c) Inome from business accrued in India (d) None of the above
though such business is controlled from
a place outside India
42. Identify the income(s) that may be taxable in the hands of a resident and ordinarily resident
(a) Bank interest from Punjab National (b) Rental Income from property located in
Bank, Ahmedabad Washington DC, USA
(c) Rental income from hotel located in (d) All of the above
Switzerland
© CA MEHUL THAKKER
43. Identify the income that may be taxable in the hands of a non-resident in India
(a) Bank interest from State Bank of (b) Rental Income from property located in
America, New Jersy Washington DC, USA
(c) Rental income from hotel located in (d) Rental income from property located in
Switzerland Ahmedabad
44. Which of the following incomes is not a deemed receipt as per section 7 of the Income Tax Act?
(a) Interest credited to recognised (b) Employer’s contribution to recognized
provident fund account of an employee provident fund in excess of 12%.
in excess of 9.5% per annum.
(c) Transfer balance in case of (d) Gift in kind received from non-relative
reorganisation of unrecognized
provident fund.
45. Interest credited to recognised provident fund account of an employee in excess of ____% per
annum will be treated as income deemed to be received in India.
(a) 8.5 (b) 9.5
(c) 12 (d) 12.5
46. Capital gain arising on transfer of property situated in India is treated as _______.
(a) Income deemed to accrue or arise in (b) Foreign income
India
(c) Tax free income (d) Net of tax Income
47. Mr. Bhushan is a non-resident since last twenty years. He owns a flat in Delhi. The flat is sold by
him during the previous year. Such capital gain shall be _________ in India.
(a) exempt from tax (b) Taxable
(c) Partially Taxable (d) None of the above
48. Agricultural income in Pakistan received there, is........................

(a) Taxable for resident and ordinarily (b) Taxable for not ordinarily resident persons
resident persons
(c) Taxable for non-resident persons (d) Not taxable
© CA MEHUL THAKKER
49. Under the Constitution of India, __________ is empowered to levy and collect income tax.
(a) State government (b) Central government
(c) RBI (d) Finance Minister
50. Out of the followings, which entry of Union list is the reason for levying tax on income other than
agricultural income?
(a) 82 (b) 92C
(c) 92D (d) 97
51. The method of accouting is relevant for determing income in respect of _______________
(a) Salaries (b) Business or profession
(c) Dividend (d) Interest on enhanced compensation
52. As per section 145 of the Act, the taxpayer can follow either _________ or ___________ method
of accounting under the Income Tax Act.
(a) Mercantile, cash (b) Mercantile, hybrid
(c) Cash, hybrid (d) None of the above
53. Income tax is a ........................

(a) Tax on business income (b) Tax on employment
(c) Direct tax (d) Indirect tax
54. Taxable income may be in _______.

(a) Cash (b) Kind
(c) Cash or kind (d) None of the above
55. Which of the following is not included in taxable income of the firm?
(a) Income from smuggling (b) Income reveived in kind
(c) Casual income (d) Partner’s contribution towards capital
56. Mrs. Kapoor is a housewife. During the previous year, she received Rs. 1,84,000 as pin money
from her husband out of which she saved Rs. 64,000. In this case, ______ shall be treated as
taxable income.
(a) Rs. 1,84,000 (b) Rs. Nil
(c) Rs. 64,000 (d) Rs. 1,20,000
© CA MEHUL THAKKER
57. Which of the following is not regarded as income under the Income Tax Act?
(a) Diversion of income by an overriding title (b) Application of income
(c) Gift from a friend exceeding Rs. 50,000 (d) Dividend from foreign company
58. _________ is not a head of income:

(a) Income from House Property (b) Salaries
(c) Income from Interest on securities (d) Capital Gains
59. There are __________ heads of income while computing total income under the Income Tax
Act.
(a) 5 (b) 6
(c) 1 (d) 2
60. Income tax is levied on all types of income other than

(a) Agricultural Income in India (b) Business Income
(c) Capital Gains (d) Salary Income
61. Which of the following is not a capital receipt?

(a) Amount received for transfer of right to (b) Insurance claim received on machinery lost by
carry on business fire
(c) Amount received on sale of machinery (d) Amount received on sale of goods held as
used for business prupose stock-in-trade
62. Embezzlement of cash by a cashier of the organization is.................

(a) a revenue loss (b) a deffered revenue expenditure
(c) a capital loss (d) None of the above
63. Identify the casual income.

(a) Interest income (b) Salary income
(c) Business income (d) Winnings from lotteries
64. The scope of term income is wide enough to cover

(a) Legal incomes only (b) Illegal incomes only
(c) (a) and (b) above (d) None of the above
© CA MEHUL THAKKER
ANSWERS
1. (c) 2. (a) 3. (d) 4. (d)

5. (b) 6. (c) 7. (a) 8. (d)
9. (d) 10. (a) 11. (a) 12. (d)
13. (a) 14. (d) 15. (d) 16. (c)
17. (c) 18. (c) 19. (a) 20. (a)
21. (c) 22. (a) 23. (b) 24. (a)
25. (a) 26. (b) 27. (d) 28. (c)
29. (b) 30. (a) 31. (d) 32. (a)
33. (d) 34. (b) 35. (d) 36. (c)
37. (c) 38. (c) 39. (d) 40. (d)
41. (d) 42. (d) 43. (d) 44. (d)
45. (b) 46. (a) 47. (b) 48. (a)
49. (b) 50. (a) 51. (b) 52. (a)
53. (c) 54. (c) 55. (d) 56. (b)
57. (a) 58. (c) 59. (a) 60. (a)
61. (d) 62. (a) 63. (d) 64. (c)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 2-INCOME WHICH DO NOT FORM PART OF TOTAL INCOME
2 – INCOME WHICH DO NOT FORM PART OF TOTAL INCOME

1. Incomes which do not form part of total income are called _________
(a) Exceptional incomes (b) Privileged incomes
(c) Exempt incomes (d) Taxable incomes
2. Section.................. of the Income Tax Act deals with exempt incomes.

(a) 2 and 3 (b) 4 to 7
(c) 10 to 13B (d) 80 C to 80 U
3. Income from a farm house is..........................

(a) Assessable as business income (b) Assessable as income from other sources
(c) An agricultural income subject to few (d) None of the above
conditions
4. Income by way of rent of agricultural land is ..............

(a) Business income (b) Agricultural income
(c) Income from other sources (d) House property income
5. Section _______ of the Act deals with exemption in respect of “Agriculutral Income”
(a) 10(2) (b) 11(1)
(c) 12(1) (d) 10(1)
6. Subject to certain conditions, in case of individual or HUF, the agriculture income (in India),
(a) is not forming part of total income (b) is not forming part of total income but included in
the total income for the rate purpose
(c) is taxable in India (d) is taxable at a flat rate of 20%
7. In case of an assessee engaged in the business of manufacturing of tea, his agricultural income
shall be:
(a) 60% of business income (b) 40% of business income
(c) Nil (d) 100% of business income
8. Out of the following, which receipt is exempt under Income Tax Act, 1961?
(a) Sum received under section 80 DD (3) (b) Sum received under Keyman Insurance Policy
© CA MEHUL THAKKER
(c) Sum received under an Insurance Policy (d) None of the above
in respect of which the premium payable
exceeds 10% of sum assured
9. Any payment from an account, opened in accordance with the ___________ is exempt in the
hands of an individual under section 10(11A) of the Act.
(a) Sukanya Samriddhi Account Rules, 2014 (b) Provident Fund Account
(c) Public Provident Fund Account (d) Post Office Savings Account
10. Any compensation received from State or Central Government on account of any disaster is
exempt under section 10(10BC) of the Act in the hands of_______.
(a) Any individual (b) Any person
(c) Any individual or his legal heirs (d) A company
11. Exemption under section 10(12A) shall not exceed _____________ of total amount payable to
an employee when he opts out of NPS.
(a) 10% (b) 25%
(c) 40% (d) 60%
12. Exemption under section 10(12B) shall not exceed _____________ of the amount of
contributions made by an employee when he effects partial withdrawal from NPS.
(a) 10% (b) 25%
(c) 40% (d) 60%
13. Under section 10(15) of the Act, interest on deposits with offshore banking unit is exempt in the
hands of __________.
(a) Resident persons only (b) Resident and ordinarily resident persons only
(c) Non-resident persons only (d) Non-resident or not ordinarily resident
persons only
14. Mr. Manan received educational scholarship of Rs. 60,000/- from Gujarat Secondary Education
Board. He saved Es. 20,000. Such saving is -
(a) Chargeable to tax (b) Exempt from Tax under section 10 (16)
(c) Not an income as per section 2(24) (d) None of the above.
© CA MEHUL THAKKER
15. Out of the following, which receipt is chargeable in the hands of member of State Legislature?
(a) Daily allowance. (b) Any constituency allowances.
(c) Agricultural Income from China. (d) Dividend Income from Indian Companies upto
Rs. 10 Lakh
16. Under section 10(17A) of the Act, any award or reward received in _____________ given in the
public interest by the Governemnt is exempt.
(a) Cash or Kind (b) Cash
(c) Kind (d) None of the above
17. Family pension received by a widow of a member of the armed forces where death of the
member has occurred in the course of the operational duties, is
(a) Exempt up to Rs. 3,00,000 (b) Exempt up to Rs. 10,00,000
(c) Totally exempt from tax under section 10 (19) (d) Totally chargeable to tax
18. Under section 10(19) of the Act, family pension received by widow, children or nominated heir
of member of __________ is exempt.
(a) Police force (b) Parliament
(c) Assembly (d) Armed force
19. Income of which entity is not exempt under section 10 of the Act?
(a) Insurance Regulatory and Development (b) Central Electricity Regulatory Commission
Authority RDA
(c) Prasar Bharati (d) Radio Mrichi
20. Under section 10(26AAA) of the Act, ______________is not eligible for exemption.
(a) Sikkimese man (b) Sikkimese woman
(c) Sikkimese woman marrying non- (d) Sikkimese woman marrying Sikkimese man
Sikkimese persons
21. Mr. X is liable for clubbing of income in respect of his three minor sons namely X1, X2, and X3.
Incomes of X1, X2 and X3 for the particular previous year were Rs. 1200, Rs.1500/- and Rs.1800
respectively. Find out the net income to be clubbed in the Hands of Mr. X after claiming
exemption u/s. 10(32).
(a) Rs. Nil (b) Rs. 300
(c) Rs. 1500 (d) None of the above
© CA MEHUL THAKKER
22. Dividend received from an Indian company which has suffered dividend distribution tax is
exempt under section__________ subject to section 115BBDA.
(a) 10(32) (b) 10(33)
(c) 10(34) (d) 10(34A)
23. Amount received on buy back of shares of _________ is exempt under section 10(34A) of the
Act, is eligible for exemption.
(a) Unlisted company (b) Listed company
(c) Foreign company (d) Listed or unlisted company
24. Capital gain on compulsory acquisition of urban agricultural land subject to some conditions
prescribed in section 10 (37) is exempt in the hands of :-
(a) Company (b) Individual or H.U.F.
(c) Partnership Firm (d) All of the above
25. Amount received as loan under _________ is exempt under section 10(43) of the Income Tax
Act.
(a) Reverse Charge (b) Reverse Mechanisam
(c) Reverse Mortgage (d) None of the above
26. Notificed allowances and perquisites received by the ____________ is exempt u/s. 10(45) of the
Act
(a) Employee of UPSC (b) Chairman of UPSC
(c) Member of UPSC (d) Chairman or member of UPSC
27. Under section 10(50) of the Act, exemption is available to any income arising from specified
services provided and chargeable to ___________________ is exempt in the hands of any
person.
(a) Security transaction tax (b) Banking Transaction Tax
(c) Equalization levey (d) Commodity transaction tax
28. Section 13A provides exemption in respect of income of ________.

(a) A political party (b) An electoral trust
(c) A public charitable or religious trust (d) Units established in SEZ
© CA MEHUL THAKKER
29. Out of the followings which income is not exempt?
(a) Income from property held for (b) Income from farm house subject to few
charitable purpose conditions
(c) Income from property gifted to spouse (d) Income from property owned by a political
party
30. Identify the income(s) which is (are) exempt under the Income Tax Act?
(a) Dividend paid by an Indian company out of (b) Share of Profit of a Partner from a firm
its surplus from agriculture operations engaged in an agriculture operation
(c) Interest received by a money lender in the (d) (a) and (b) above
form of agricultural produce.
ANSWERS
1. (c) 2. (c) 3. (c) 4. (b)

5. (d) 6. (b) 7. (c) 8. (d)
9. (a) 10. (c) 11. (c) 12. (b)
13. (d) 14. (b) 15. (c) 16. (a)
17. (c) 18. (d) 19. (d) 20. (c)
21. (b) 22. (c) 23. (a) 24. (b)
25. (c) 26. (d) 27. (c) 28. (a)
29. (c) 30. (d)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 3-SALARY
3 – SALARY
1. Advance salary of an employee is taxed in the year _________.
(a) Of receipt (b) To which it becomes due
(c) As decided by the employee (d) As decided by the employer
2. The salary of Member of Parliament shall be chargeable to tax under the head
(a) Profits and gains from Business or (b) Income from other sources
Profession
(c) Salary Income (d) Capital gains
3. Fees received by the employee from his employer shall be charged to tax as ______.
Profession
(c) Salary Income (d) Capital gains
4. Commission received by the employee from his employer shall be charged to tax as _______.
Profession
(c) Capital gains (d) Salary income
5. Salary in lieu of notice period is __________.

(a) Taxable as Salary Income (b) Exempt
(c) Taxable as Income from Other Sources (d) None of the above
6. Any gift received by the employee from the employer is charged to tax as _______.
(a) Salary income (b) Income from other sources
(c) Capital gains (d) Profits and gains from Business or Profession
7. Salary foregone by an employee is _______.

(a) Exempt (b) Taxable as Salary Income
(c) Taxable as Income from other sources (d) None of the above
8. Any payment received by an employee from his prospective employer shall be charged to tax
under the head ______.
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(c) Capital Gain (d) Profits and gains from Business or Profession
9. Any payment received by an employee from his former employer shall be charged to tax under
the head ______.
(c) Capital gains (d) Profits and gains from Business or Profession
10. Under section 89, an employee can claim relief from tax payable in respect of ______.
(a) Arrears of salary (b) Bonus
(c) Commission (d) None of the above
11. While computing relief under section 89 in respect of gratuity received after rendering service
of more than 5 years but of less than 15 years, the amount of gratuity shall be spread over past
______ years’ income.
(a) 2 (b) 3
(c) 4 (d) 5
12. While computing relief under section 89 in respect of gratuity received after rendering service
of more than 15 years, gratuity shall be spread over past ______ years’ income.
(a) 2 (b) 3
(c) 4 (d) 5
13. Arrears of salary received after the retirement of the employee is __________.
(a) taxed as Salary income (b) taxed as Income from other sources
(c) taxed as Capital gains (d) exempt from tax
14. Mr. Saurabh received bonus from his employer amounting to Rs. 2,00,000. In this case, out of
Rs. 2,00,000 what will be the amount of bonus charged to tax under the head “Income from
other sources”?
(a) Rs. 2,00,000 (b) Nil
(c) Rs. 1,00,000 (d) Rs. 1,60,000
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15. Exemption in respect of house rent allowance in case of metro cities is _____ of the following:
(1) 50% of salary
(2) HRA actually received
(3) Rent paid in excess of 10% of salary.
(a) Lower (b) Higher
(c) Any (d) None
16. Exemption in respect of house rent allowance in case of non-metro cities is lower of the
following:
(1)___ of salary.
(2) HRA actually received by the employee in respect of the period during which rental
accommodation is occupied by the employee during the previous year.
(3) Rent paid in excess of ___ of salary.
(a) 40%, 5% (b) 50%, 10%
(c) 40%,10% (d) None of the above
17. Basic salary Rs. 3,00,000 per annum, dearness allowance forming part of salary while computing
retirement benefits Rs. 2,00,000. House rent allowance (HRA) was Rs. 1,00,000 per annum.
Annual rent paid at Delhi Rs. 1,20,000. Taxable HRA will be Rs. _____.
(a) Rs. 2,50,000 (b) Rs. 1,00,000
(c) Rs. 70,000 (d) Rs. 30,000
18. The maximum exemption in respect of HRA is Rs. ______

(a) Rs. 2,000 per month (b) Rs. 5,000 per month
(c) Rs. 15,000 per month (d) None of the above
19. Mr. Mohit is a Government employee. He is in receipt of transport allowance of Rs. 1600 per
month. What will be the tax treatment of transport allowance in the hands of Mr. Mohit?
(a) Rs.1600 per month will be exempt from tax (b) Rs.1000 per month will be exempt from tax
(c) Rs.800 per month will be chargeable to tax (d) Rs.1600 per month will be charged to tax
20. Mr. Mohit is a private sector employee. He is in receipt of transport allowance of Rs. 1600 per
(a) Rs. 1600 per month will be exempt from tax (b) Rs. 1000 per month will be exempt from tax
(c) Rs. 800 per month will be chargeable to tax (d) Rs. 1600 per month will be charged to tax
© CA MEHUL THAKKER
21. Mr. Rahul is a blind person employed in CROMA Pvt. Ltd. He is in receipt of transport allowance
of Rs. 3,500 per month. What will be the tax treatment of transport allowance in the hands of
Mr. Rahul?
(a) Rs.1,600 per month will be exempt from tax (b) Rs.3,200 per month will be exempt from tax
(c) Rs. 800 per month will be exempt from tax (d) Rs. 3,200 per month will be taxable
22. Ms. Sonam is a Government employee. Her Salary is Rs.4,00,000 per annum. The Government
has provided her with rent free accommodation in Ahmedabad. The fair rent of the
accommodation is Rs. 96,000. The license fee of the accommodation is Rs. 36,000. In this case,
what will be the value of perquisite in the hands of Ms. Sonam?
(a) Rs. 96,000 (b) Rs. 36,000
(c) Rs. 60,000 (d) Rs. Nil
23. In case of non-Government employees, the value of perquisite in respect of rent free unfurnished
accommodation provided to the employee (the accommodation taken on lease by the employer)
shall be __________ if the accommodation is located in a city where the population is below 10
lakhs.
(a) 7.5% of the salary or actual rent, (b) 10% of the salary or actual rent, whichever is
whichever is lower. lower.
(c) 15% of the salary or actual rent, (d) None of the above.
whichever is lower.
24. In case of non-Government employees, the value of perquisite in respect of rent free furnished
accommodation provided to the employee will be value of unfurnished accommodation plus
10% of the _____ of the furniture if the furniture is owned by the employer.
(a) Cost (b) WDV
(c) Book value (d) None of the above
25. What will be the value of perquisite in respect of free education facility provided to the children
of the employee if the education facility is provided in the school of the employer?
(a) Rs. 1,000 (b) Cost of such education in a similar school
(c) Cost of such education in a similar school (d) None of the above.
less Rs. 1,000
26. The value of perquisite to the employee resulting from the use of any movable asset (electronics
items) belonging to the employer shall be determined at ___________ per annum of cost of such
an asset to the employer.
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(a) 15% (b) 10%
(c) 20% (d) 40%
27. On 1-3-2019, Mr. Amit purchased a television from his employer for Rs. 8,000. The television was
purchased by his employer on 2-7-2018 for Rs. 24,000. Identify the correct value of perquisite
which shall be taxed in the hands of Mr. Amit?
(a) Rs. 8,000 (b) Rs. 13,600
(c) Rs. 16,000 (d) Rs. 24,000
28. On 1-3-2019, Mr. Soham purchased old computer system from his employer for Rs. 11,000. The
computer was purchased by his employer on 20-7-2015 for Rs. 40,000. What will be the WDV of
the computer for the purpose of computation of value of perquisite?
(a) Rs. 11,000 (b) Rs. 5,000
(c) Rs. 20,480 (d) Rs. 6,000
29. Maximum amount of exemption in respect of leave encashment at the time of retirement in the
hands of a Government employee is ______.
(a) restricted upto Rs. 10,00,000 (b) restricted upto Rs. 5,00,000
(c) restricted upto Rs. 3,00,000 (d) without any restriction
30. Exemption in respect of leave encashment at the time of retirement of a non-Government

employee will be lower of the following :
(i) Cash equivalent to earned leave.
(ii) 10 months’ average salary.
(iii) Rs. 3,00,000
(iv) Leave encashment actually received at the time of retirement.
The above provision is
(a) Correct (b) Incorrect
(c) Partially Correct (d) Partially Incorrect
31. Mr. Ajay is a partner in Ajay Vijay & Co. He is a working partner and as per the terms of
partnership deed, he is paid a fixed monthly salary of Rs.30,000. In this case, such salary shall be
charged to tax under the head ____.
(a) Salaries (b) Profits and gains of business or profession
(c) Other sources (d) Capital gains
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32. Mr. Ram is a partner in Ayodhya & Co. Apart from being a partner, he is in part time employment
with Sigma Ltd. In this case, remuneration received by him from Sigma Ltd. Shall be charged to
tax under the head _______.
(a) Salaries (b) Profits and gains of business or profession
(c) Other sources (d) Capital gains
33. Mr. Aamir is an Indian citizen deputed as Branch Head of Infosys Ltd. in its UK office at a monthly
salary of 1,00,000$. Apart from that he is enjoying perquisites worth 30,000$. For the previous
year under consideration, he was a non-resident in India. In this case, what will be his taxable
salary in India assuming that salary was paid to Mr. Aamir in United Kingdom?
(a) Nil (b) 1,00,000$
(c) 1,00,000$ less Standard deduction of Rs. 40,000 (d) 1,30,000$
34. Mr. Mohsin is a CEO of AASSAM TEA Ltd. His monthly salary of Rs. 1,00,000. During the year, he
surrendered salary of one month. In this case what will be his Gross Salary?
(a) Rs. 12,00,000 (b) Rs. 11,00,000
(c) Rs. 11,60,000 (d) Rs. 10,60,000
35. Which of the following is not eligible for relief under section 89?
(a) Compensation received by the (b) Gratuity Payment
employee at the time of VRS
(c) Arrears of salary (d) Bonus Payment
36. The upper limit of relief under section 89 is ______.

(a) Rs. 3,00,000 (b) Rs. 5,00,000
37. Mr. Bhagat received arrears of salary of 2017-18 in the year 2018-19. He provides following
details :
• Tax on income of the year 2018-19, including arrears of salary : Rs. 85,000
• Tax on income of the year 2018-19, excluding arrears of salary : Rs. 65,000
• Tax on income of the year 2017-18, including arrears of salary : Rs. 64,000
• Tax on income of the year 2017-18, excluding arrears of salary : Rs. 44,000
Find out the relief under section 89(1) of the Act that Mr. Bhagat can claim for the year 2018-19.
(a) Rs. 20,000 (b) Rs. 41,000
(c) Rs. 21,000 (d) Nil
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38. Mr. Nrupesh is in receipt of travelling allowance of Rs. 48000 from his employer. He has spent
Rs. 50,200 on account of travelling. Identify the correct tax treatment of travelling allowance in
the hands of Mr. Nrupesh.
(a) Travelling allowance fully taxable. (b) Entire travelling allowance exempt from tax
(c) Rs. 2,200 shall be charged to tax (d) Rs. 2,200 shall be exempt from tax
39. Mr. Naimesh received conveyance allowance of Rs. 24,000 from his employer. Out of which, he
has spent Rs. 18,000 on account of conveyance for office purpose. Find out the taxable
conveyance allowance.
(a) Rs. 24,000 (b) Rs. 18,000
(c) Rs. 600 (d) Rs. 6,000
40. Mr. Babu received helper allowance of Rs. 1,500 per month from his employer. He has deputed
a servant at a monthly salary of Rs. 1,500 to help his wife in her domestic work. How much helper
allowance will be taxed in the hands of Mr.Babu?
(a) Rs. 18,000 p.a. (b) Rs. Nil
(c) Rs. 6,000 p.a. (d) None of the above
41. Mr. Yogi received research allowance of Rs. 1,20,000 from his employer. He had incurred an
expenditure of Rs. 90,000 on account of research. How much research allowance will be exempt
in the hands of Mr. Yogi?
(a) Rs. 1,20,000 (b) Rs. 30,000
(c) Rs. 90,000 (d) None of the above
42. Mr. Mahesh received uniform allowance of Rs. 24,000 from his employer. He had incurred
expenditure of Rs. 10,000 on account of maintenance of uniform. What will be the tax treatment
of uniform allowance in the hands of Mr. Mahesh?
(a) Rs. 24,000 shall be taxed. (b) Rs. 24,000 shall be exempt from tax.
(c) Rs. 10,000 shall be charged to tax. (d) Rs. 14,000 shall be charged to tax.
43. Mr. Balram is working with Dwarika Ltd. During the year, his employer provided him a
unfurnished accommodation in Mumbai. The relevant details are as under:
• Basic salary for the year: Rs. 4,00,000.
• Dearness allowance forming part of salary: Rs.3,00,000.
• Employer’s contribution to Provident Fund : Rs. 40,000.
• Value of other perquisites : Rs. 2,00,000.
• The accommodation is owned by the employer.
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What will be the value of accommodation provided by the employer?
(a) Rs. 70,000 (b) Rs. 1,05,500
(c) Rs. 1,05,000 (d) Rs. 1,50,000
44. Mr. Balram is working with Dwarika Ltd. During the year, his employer provided him a furnished
accommodation in Mumbai. The relevant details are as under:
• Basic salary for the year: Rs. 4,00,000.
• Dearness allowance forming part of salary: Rs.3,00,000.
• Employer’s contribution to Provident Fund : Rs. 40,000.
• Value of other perquisites : Rs. 2,00,000.
• The original cost of various furniture provided by the employer : Rs. 1,00,000.
• The accommodation and furniture are owned by the employer.
• The employer has recovered Rs. 5,000 p.a. from him salary towards rent of the
accommodation.
What will be the value of furnished accommodation provided by the employer?
(a) Rs. 1,30,000 (b) Rs. 1,10,000
(c) Rs. 80,000 (d) Rs. 75,000
45. Mr. Ramesh is an employee of Infotech Ltd. Infotech Ltd. maintains a school. The younger
brother of Mr. Ramesh is studying in the school of the employer. The annual school fees charged
by the similar school in the locality amounts to Rs. 18,000. What shall be the taxable value of
perquisite in the hand of Mr. Ramesh?
(a) Rs. 18,000 (b) Rs. 6,000
(c) Rs. 500 (d) None of the above.
46. Mr. Ranbir is an employee of “Idea thought Ltd.”. His employer directly pays the school fees of
his child. Annual school fees paid by the employer to the school amounted to Rs. 28,000. The
employer recovered Rs. 1,000 per month Ranbir’s from salary. What will be the taxable value of
perquisite in the hand of Mr. Ranbir?
(a) Rs. 12,000 (b) Rs. 16,000
47. Mr. Roop received tax free salary from his employer. As per employment agreement, income tax
on such salary shall be paid by his employer. In this case, what will be the taxable salary income?
(a) Tax free salary plus income tax borne by the employer (b) Tax free salary
(c) Tax free Salary less income tax borne by the employer (d) None of the above
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48. Mr. Kumar is an Indian citizen. He is deputed in USA by the Government of India. During the
previous year he received salary of Rs. 12,50,000 from Government of India. Apart from salary
he also received various allowances and perquisites amounting to Rs. 2,50,000. In this case, what
will be his taxable salary?
(a) Rs. 12,10,000 (b) Rs. 15,00,000
49. Employer’s contribution to superannuation fund for employee:

(a) is not taxable at all (b) is taxable in hands of employee provided
contribution to such fund exceeds Rs. 1,50,000
(c) in excess of 12% of salary, is taxable (d) Is fully taxable in the hands of employee
50. Employer’s contribution to unrecognized provident fund

(a) Is exempt from tax (b) is taxable in excess of 12% of Salary of employee
(c) is exempt excess of 12% of Salary of (d) Is fully taxable in the hands of employee
employee
51. If a domestic servant is engaged by the employer and salary is paid by him, the perquisite is
(a) Taxable in the hands of all employees (b) Not taxable at all
(c) Taxable in the hands of specified (d) not taxable upto Rs. 500 p.m. per servant
employees only
52. Assuming that the rate of Interest on employer’s contribution to Recognized Provident Fund is
12.5% p. a., then,
(a) entire interest accrued is taxable in (b) Total Interest accrued is exempt in the hands of
the hands of employee employee
(c) interest upto 9.5% is taxable in the (d) interest upto 3% is taxable in the hands of
hands of employee employee
53. Meaning of term “Salary” is defined under section _____ of the Act.
(a) 17(2) (b) 15
(c) 17(1) (d) 17(3)
54. The term “Salary” doe not include

(a) wages (b) annuity
(c) pension (d) fees received for rendering professional services
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55. As per section 15, salary shall be taxed on due basis or receipt basiss whichever is ______.
(a) Earlier (b) Later
(c) Suitable to the employee (d) None of the above
56. Under section 16(ia), salaried person is entitled to a standard deduction of _________.
(a) Rs. 30,000 (b) Rs. 40,000
(c) Rs. 80,000 (d) Rs. 1,00,000
57. Grautiy in the case of employees of _________ is fully exempt.

(a) An organization covered by Pamnent of (b) An organization not covered by Pamnent of
Gratuity Act, 1972 Gratuity Act, 1972
(c) Local Authority (d) Public sector undertakings
58. Uncommuted pension is ________ whether received by the Government employee or non-
government employee.
(a) Not taxable (b) Taxable
(c) Partly taxable (d) Partly not taxable
59. Commuted pension received by non-government employee who is in receipt of gratuity is

exempt upto _____ of full value of commuted pension.
(a) 1/3rd (b) 1/4th
(c) ½ (d) None of the above
60. Commuted pension received by non-government employee who is not in receipt of gratuity is
exempt upto _____ of full value of commuted pension.
(a) 1/3rd (b) 1/4th
(c) ½ (d) None of the above
61. Encashment of leave salary at the time of retirement is not exempt in the hands of employees of
______
(a) Central Government (b) State Government
(c) Local authority (d) None of the above
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62. While computing exemtption from House Rent Allowance, the term “salary” for that purose
includes ______
(a) Basic salary on ly (b) Basic Salary and dearness allowance
(c) Basica Salary, dearness allowance (if (d) Basic Salary, dearness allowance (if part of the
part of retirement benefit) retirement benefit) and commission based on
percentage of turnover
63. Education allowance is exempt upto Rs. ______ per month per child maxiumum 2 children.
(a) Rs. 100 (b) Rs. 200
(c) Rs. 300 (d) Rs. 800
64. Hostel allowance is exempt upto Rs. ______ per month per child maxiumum 2 children.
(a) Rs. 100 (b) Rs. 200
(c) Rs. 300 (d) Rs. 800
65. Underground allowance is exempt upto Rs. ______ per month

(a) Rs. 100 (b) Rs. 200
(c) Rs. 300 (d) Rs. 800
66. Exeption from leave travel concession (LTC) where journey is performed by air is the economy
class air fare of national carrier by ________ route or amount spent whichever is lower.
(a) Shortest (b) Longest
(c) Convenient (d) None of the above
67. Exeption from leave travel concession (LTC) where journey is performed by rail is the __________
rail fare by the shortest route or amount spent whichever is lower.
(a) Second class (b) General
(c) Air-conditioned first class (d) None of the above
68. Identify the employee who is not a specified employee?

(a) Employee who is a director of a company (b) Employee having substantial interest in the
company
(c) Employee drawing annual salary of Rs. (d) Employee drawing annual salary of Rs. 45,000
5,00,000
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69. Value of rent free unfurnished accommodation in the hands of Government employee is equal
to the ________.
(a) Licence fee charged for such (b) Fair rent
accommodation
(c) Municipal Valuation (d) Standard Rent
70. Value of rent free unfurnished accommodation in the hands of private sector employee (where
accommodation is owned by the employer) is dependent upon the ______________of the city.
(a) Area (b) Population
(c) Location (d) State
accommodation is owned by the employer) is _______% of salary where population of city
exceeds Rs. 10 lakhs but does not exceed 25 lakhs.
(a) 15 (b) 24
(c) 10 (d) 7.5
accommodation is owned by the employer) is _______% of salary where population of city is 8
lakhs.
(a) 15 (b) 24
(c) 10 (d) 7.5
73. The salary for the purpose of calculation of perquisite in respect of residential accommodation
in the hands of private sector employee does not include:
(a) Bonus (b) Commission
(c) Non-monetary payment (d) Monetary payment
74. The value of perquisite where accommodation has been provided in a hotel shall be lower of
____% of salary or actual charges paid to such hotel by the employer.
(a) 15 (b) 24
(c) 10 (d) 7.5
75. While computing perquisite in respect of interest free loan, the base interest rate of ______ shall
be taken into account.
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(a) UCO Bank (b) State Bank of India
(c) Dena Bank (d) Reserve Bank of India
76. While computing perquisite in respect of interest free loan, small loans upto Rs. ______/- in the
aggregate shall be ignored. (i.e. exempt).
(a) 20,000 (b) 2,00,000
(c) 25,000 (d) 2,50,000
77. Identify the loans which are exempt while computing perquisite in respect of interest free loans.
(a) Housing Loan (b) Car Loan
(c) White goods loans in aggregate Rs. (d) Loans for medical treatment of specified
25,000 diseases.
78. The travel cost of patient and one attendant is not included in salary when medical treatment is
undertaken abroad subject to the condition that Gross Total Inocme of employee does not
exceed Rs. __________.
(a) 20,00,000 (b) 5,00,000
(c) 2,00,000 (d) 50,00,000
79. The concession available while valuing perquisites in respect of meal provided to an employee is
Rs. ________ per meal.
(a) 200 (b) 20
(c) 25 (d) 50
80. The gift by the employer not exceeding Rs. ___________ in aggregate per annum would not be
taxed in the hands of employee.
(a) 2000 (b) 5000
(c) 50000 (d) 250000
81. Identify the item that falls under the definition of term “ Profits in lieu of salary” as defined under
section 17(3) of the Act.
(a) Wages (b) Annuity
(c) Pension (d) Sum payable under Keyman Insurance Policy
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82. Under which fund, employer does not contribute?
(a) Public Provident Fund (b) Statutory Provident Fund
(c) Recognised Provident Fund (d) Unrecognised Provident Fund
83. Contribution to which fund by an employee is not eligible for deduction u/s 80 C of the Act?
(c) Recognised Provident Fund (d) Unrecognised Provident Fund
84. Interest credited to which fund shall be taxable at the time of withdrawal of the amount from
such fund?
(c) Unrecognised Provident Fund (d) None of the above
85. Employer’s contribution to which fund may be taxable in the hands of employee if it exceeds
prescribed % of salary?
(a) Recognised Provident Fund (b) Statutory Provident Fund
(c) Unrecognised Provident Fund (d) None of the above
86. Out of the followings, which interest income is not exempt from tax?
(a) Interest on PPF balance (b) Interest on Superannuation Fund balance
(c) Interest on Unrecognised Provident (d) Interest on Statutory Provident Fund
Fund balance
87. While computing “Salary” for the purpose of valuation of rent-free accommodation in the hands
of private sector employees, such salary includes:
(a) Bonus (b) Advance salary
(c) All allowances (d) Employer’s contribution to PF
88. The following is not taxable as income under the head "Salaries".
(a) Commission received by an employee (b) Remuneration received by a partner
(c) Allowances received by an employee (d) Free accommodation given to an employee
89. Gratuity received by a government employee is _____________.

(a) Fully exempt (b) Fully taxable
(c) Exemptup to certain limit (d) None of the above
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ANSWERS
1. (a) 2. (b) 3. (c) 4. (d)

5. (a) 6. (a) 7. (b) 8. (a)
9. (a) 10. (a) 11. (a) 12. (b)
13. (a) 14. (b) 15. (a) 16. (c)
17. (d) 18. (d) 19. (d) 20. (d)
21. (b) 22. (b) 23. (c) 24. (a)
25. (b) 26. (b) 27. (c) 28. (b)
29. (d) 30. (a) 31. (b) 32. (a)
33. (a) 34. (a) 35. (d) 36. (d)
37. (d) 38. (b) 39. (d) 40. (a)
41. (c) 42. (d) 43. (c) 44. (b)
45. (a) 46. (b) 47. (a) 48. (a)
49. (b) 50. (a) 51. (c) 52. (d)
53. (c) 54. (d) 55. (a) 56. (b)
57. (c) 58. (b) 59. (a) 60. (c)
61. (c) 62. (d) 63. (a) 64. (c)
65. (d) 66. (a) 67. (c) 68. (d)
69. (a) 70. (b) 71. (c) 72. (d)
73. (c) 74. (b) 75. (b) 76. (a)
77. (d) 78. (c) 79. (d) 80. (b)
81. (d) 82. (a) 83. (d) 84. (c)
85. (a) 86. (c) 87. (a) 88. (b)
89. (a)
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MULTIPLE CHOICE QUESTIONS 4-HOUSE PROPERTY
4 – HOUSE PROPERTY
1. Section 22 of the Act is the charging section for taxing any income under the head ___________.
(a) Income from Other Sources (b) House Property
(c) Profits and gains from Business or Profession (d) Capital Gains
2. Annual value of a property being building or land appurtenant thereto of which the taxpayer is
________, is charged to tax under the head “Income from House Property” provided it is not
used by him for the purpose of business or profession carried on by him.
(a) Owner (b) Power of attorney holder
(c) Sub-tenant (d) Holder in due course
3. When the owner let out the house property and tenant used the same for carrying on his own
business, then under which head, the rental income in the hands of owner shall be taxable?
(a) Profit under Business or Profession (b) Income from House Property
(c) Income from Other Sources (d) None of the above
4. Gross Annual Value of a self-occupied property is:

(a) Fair Rent (b) Nil
(c) Expected Rent (d) None of the above
5. Which element has relevance for determing Gross Annual Value of house property under section
23?
(a) Sub-Standard Rent (b) Standard Rent
(c) Stressed Rent (d) None of the above
6. Which element has no bearing on determing net annual value of house property?
(a) Gross Annual Value (b) Municipal Taxes of house property
(c) Standard Rent (d) Standard Deduction
7. In case of a property covered under the Rent Control Act, the Gross Annual Value (GAV) of such
property shall be ___ municipal value or fair rent subject to standard rent of the said property.
(a) Lower of (b) Weighted Average of
(c) Higher of (d) Simple Average of
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8. Amount left after claiming deduction of Municipal taxes from Gross Annual Value is ______.
(a) Net Income (b) Net annual value
(c) Taxable GAV (d) Total Income
9. The standard deduction that can be claimed under section 24(a) is ___________ of NAV.
(a) 20% (b) 30%
(c) 40% (d) 50%
10. Deduction under section 24(b) is available on account of ___________

(a) Municipal taxes paid by the owner (b) Capital expenditure incurred by the owner
(c) Revenue expenditure incurred by (d) Interest incurred on capital borrowed for the
the owner purpose of purchase, construction, repair, renewal
or reconstruction of the house property
11. While computing income from house property, taxpayer can claim deduction on account of
municipal taxes ________ during the year.
(a) actually paid by him (b) actually paid by tenant
(c) incurred by him (d) incurred by tenant
12. Mr. Jaiswal owns a flat which is give on rent to Mr. Meghwal. Municipal taxes of such property
for the year amounted to Rs. 5,000, out of which Mr. Jaiswal paid Rs. 3,500 in the current year
and balance in subsequent year. In this case, while computing income from house property for
the current year, Mr. Jaiswal will be entitled to claim deduction on account of Municipal taxes of
_______.
(a) Rs. 5,000 (b) Rs. 3,500
(c) Rs. 1,500 (d) Nil
13. Mr. Jaiswal owns a flat which is give on rent to Mr. Meghwal. Municipal taxes of such property
for the year amounted to Rs. 5,000, out of which Mr. Jaiswal paid Rs. 3,500 in the current year
and balance in subsequent year. In this case, while computing income from house property for
the subsequent year, Mr. Jaiswal will be entitled to claim deduction on account of Municipal
taxes of _______.
(a) Rs. 5,000 (b) Rs. 3,500
(c) Rs. 1,500 (d) Nil
© CA MEHUL THAKKER
14. Following information is provided in respect of a rented property:
• Gross annual value: Rs. 3,15,000.
• Municipal taxes paid by the tenant during the previous year: Rs.15,000.
What will be the Net Annual Value of such property?
(a) Rs. 3,00,000 (b) Rs. 3,15,000
(c) Rs. 2,10,000 (d) Rs. 2,20,500
15. Following information is provided by the owner in respect of a rented property:

• Gross annual value of the property amounted to Rs. 9,80,000.
• Municipal taxes paid by the owner during the previous year Rs. 75,000.
• Interest paid by the owner during the previous to Municipal Corporation for delay in payment
of Municipal taxes : Rs. 5,000.
What will be the Net Annual Value of the property?
(a) Rs. 9,80,000 (b) Rs. 9,00,000
(c) Rs. 9,05,000 (d) Rs. 6,30,000
16. Following information is provided by the Owner in respect of a rented house property:
• Net annual value of the property amounted to Rs. 3,00,000.
• Municipal Taxes paid by the owner: Rs. 10,000.
What shall be the amount of deduction under section 24(a) which can be claimed by the owner?
(a) Nil (b) Rs. 10,000
(c) Rs. 90,000 (d) Rs. 87,000
17. Following information is provided by the owner in respect of a rented vacant plot of land:
• Annual rent : Rs. 5,10,000.
• Municipal taxes paid during the year : Rs. 10,000.
In this case, what will be the amount of deduction under section 24(a) which can be claimed by
the Owner while computing income from above rented plot?
(a) Nil (b) Rs. 1,50,000
(c) Rs. 3,50,000 (d) Rs. 1,53,000
18. Deduction under section 24(b) in respect of interest in case of let-out property cannot exceed
_________.
(a) There is no such limit (b) Rs. 30,000
(c) Rs. 1,50,000 (d) Rs. 1,80,000
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19. Mr. Kapoor has rented a flat at a monthly rent of Rs. 85,000. The flat is purchased by him from a
bank loan. Interest on bank loan for the current year amounted to Rs. 1,85,000. Out of Rs.
1,85,000, Rs. 85,000 is paid in current year and balance of Rs. 1,00,000 is paid in subsequent
year. In this case, Mr. Kapoor can claim deduction under section 24(b) of __________ in the
current year.
(a) Rs. 1,85,000 (b) Rs. 1,00,000
(c) Rs. 85,000 (d) Nil
20. Where the property is acquired or constructed with capital borrowed on or after 1.4.1999 and
such acquisition or construction is completed within 5 years from the end of financial year in
which amount has been borrowed then how much deduction owner can claim in respect of
interest on such borrowed fund assuming that it is self-occupied property?
(a) Rs. 2,00,000 (b) Rs. 30,000
21. Where the money is borrowed for repairs or renewal of house property, how much deduction is
available in respect of interest when such house property is self-occupied?
(a) Rs. 1,50,000 (b) Rs. 30,000
22. Mr. Mohan and his wife jointly own a house property. They are equal owners. For the year, the
total interest payable in respect of housing loan for this house property was Rs. 4 lakhs. How
much deduction can be claimed out of such interest of Rs. 4 lakhs and by whom?
(a) Rs. 4 lakhs by Mr. Mohan (b) Rs. 4 lakhs by his Wife
(c) Rs. 2 Lakh by Mr. Mohan and Rs. 2 Lakh by his wife (d) None of the above
23. Interest relating to pre-construction period is allowable under the head house property
(a) In 5 equal installments from the year in which it was (b) In the year in which it was
incurred incurred
(c) In the year in which house property was constructed (d) None of the above
24. When house property is self-occupied during the year, the gross annual value of such property
is __________.
(a) Nil (b) Negative
(c) Positive (d) None of the above
© CA MEHUL THAKKER
25. When assessee owns more than one house property and all reserved for self-occupation then
while computing income under the head “house property”, one property shall be taken as
_________ while other house properties shall be deemed to be _________.
(a) Letout, deemed to be let out (b) Self-occupied, let out
(c) Self- occupied, deemed to be let out (d) Deemed to be let out, self-occupied
26. Where the property consisting of any building or land appurtenant thereto is held as stock-in-
trade and the property or any part of the property is not let during the whole or any part of the
previous year, the annual value of such property or part of the property, for the period up
to_____ from the end of the financial year in which the certificate of completion of construction
of the property is obtained from the competent authority, shall be taken to be nil.
(a) Six months (b) Three Months
(c) One year (d) Three years
27. Section _________ deals with the computation metholodogy when house property is owned by
more than one owner.
(a) 26 (b) 22
(c) 27 (d) 28
28. Under section 25AA, arrears of rent shall be taxable in the year of ___________.
(a) Accrual (b) Agreement
(c) Receipt (d) Understanding
29. When the property is not occupied by the individual during the whole previous year due to
employment, business or profession carried on at some other place then computation shall be
done as if it is ________ property provided few conditions are satisfied:
(a) Let out (b) Self-occupied
(c) Partly let out, partly self-occupied (d) Vacant
30. When the property partly let out and partly self-occupied during the previous year, then
computation shall be done as if the property were _____ throught the previous year.
(a) Let out (b) Self-occupied
(c) Partly let out, partly self-occupied (d) Vacant
31. Under section 27, there are six situations which may give rise to the concept of “Deemed Owner”.
Identify the situation which does not fall under section 27.
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(a) Transfer of hpouse property to a spouse (b) Holder of impartible estate
(c) Transfer of house property to a brother (d) Transfer of house property to a minor child
32. If an individual transfers his or her house property to his/her minor child (not being married
daughter) without adequate consideration, then the _______ will be deemed as owner of the
property.
(a) Transferor (b) Transferee
(c) Transferor: 60% and transferee: 40% (d) Transferor: 50% and transferee: 50%
33. In case where letting is separable, rent of building (where the assessee is owner) shall be charged
to tax under the head ___________ and rent of other assets shall be charged to tax under the
head __________.
(a) Income from House Property, Income from (b) Profits and gains of business and
House Property profession, Income from Other Sources
(c) Income from House Property, Profits and (d) Profits and gains of business or
gains of business and profession” or “Income profession, Income from Houser
from other sources” (as the case may be) Property
34. Income from which house property is not exempt?

(a) House property of a political party (b) House property which has been let out by Mr.
Ramesh
(c) House property of a local authority (d) None of the Above
ANSWERS
1. (b) 2. (a) 3. (b) 4. (b)

5. (b) 6. (d) 7. (c) 8. (b)
9. (b) 10. (d) 11. (a) 12. (b)
13. (c) 14. (b) 15. (c) 16. (c)
17. (a) 18. (a) 19. (a) 20. (a)
21. (b) 22. (c) 23. (d) 24. (a)
25. (c) 26. (c) 27. (a) 28. (c)
29. (b) 30. (a) 31. (c) 32. (a)
33. (c) 34. (b)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 5- PROFITS AND GAINS FROM BUSINESS OR PROFESSION
5 – PROFITS AND GAINS FROM BUSINESS OR PROFESSION

1. Out of the followings which one is not chargeable under the head "PGBP"?
(a) Income from speculative transaction (b) Any sum received for not carrying out any
activity in relation to any business
(c) Dividend income from a Foreign Co. (d) Income derived by the trade, professional or
similar association from specified services
2. Assessee is engaged in scientific research related to his business and incurred following expenses
within three years before commencement of business. Which expenditure is not eligible for
deduction under section 35?
(a) capital expenditure not certified by (b) Revenue expenditure on purchase of
prescribed authority. material and salary to research personal to
the extent certified by prescribed authority
(c) Revenue expenditure in respect of (d) None of the above
benefits or amenities granted to research
personal
3. Out of followings which one is not a qualifying expenditure for the purpose of claiming deduction
under section 35D (Amortisation of preliminary expenses)?
(a) Expenses in connection with preparation (b) Expenses in connection with market survey
of feasibility report where work is done where survey is done by a concern who is
by assessee himself approved in this behalf by the Board.
(c) Expenses in connection with preparation (d) Expenses in connection with drafting of
of project report where work is done by memorandum and articles of association
chartered accountant who is not where work is done by company secretary
approved in this behalf by the Board. who is not approved in this behalf by the
Board.
4. The maximum ceiling on qualifying expenditure in case of company under section 35D is 5% of
cost project or 5% capital employed whichever is higher. Find out the correct meaning of capital
employed for the purpose of section 35D.
(a) Aggregate of paid up share capital, (b) Aggregate of subscribed share capital, reserve
short-term borrowings and long- term and surplus, debentures and long- term
borrowings. borrowings.
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(c) Aggregate of issued share capital, (d) Aggregate of issued share capital, debentures
reserve and surplus, short term and long-term borrowings as on last day of the
borrowings and long- term borrowings. previous year in which the business of the
company commences.
5. Out of the followings which shall be allowed as deduction while computing income under the
head PGBP?
(a) Securities Transaction Tax (b) Income Tax
(c) Corporate Dividend Tax (d) Interest under section 234 A/B/C of the Act
6. Out of followings who is not regarded as relative of Individual for the purpose of section 40A(2)?
(a) Husband (b) Brother in Law
(c) Sister (d) Any lineal ascedent or descedent of an
Individual
7. During previous year 2017-18, Mr. Tej, a trader sold the goods on credit worth Rs. 90,000 to
Miss Gita. Mr. Tej recovered Rs. 20,000 during previous year 2017-18 while written off Rs. 30,000
as Bad Debt. However, on 12/012/2018, Mr. Tej recovered Rs. 52,000 from Miss Gita as full and
final payment. Find out tax consequences for the previous year 2018-19.
(a) Rs. 18,000 shall be allowed as bad debt (b) Rs. 12,000 shall be taxable as business income
under section 41 (4)
(c) Rs. 6,000 shall be allowed as bad debt (d) None of the above
8. The presumptive taxation scheme of section 44AD can be adopted by __________.

(a) Resident Individual (b) Non-resident Individual
(c) Private Limited Company (d) Limited Liability Partnership Firm
9. In case of a person opting for section 44AD, business income shall be computed on presumptive
basis, i.e., @ _____________ of the turnover or gross receipts of the eligible business for the
year if turnover/gross receipt is received by an account payee cheque or an account payee bank
draft or use of electronic clearing system through a bank account during the previous year or
before the due date of filing of return under section 139(1).
(a) 5% (b) 6%
(c) 8% (d) 10%
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10. The presumptive taxation scheme of section 44ADA can be adopted by __________.
(a) Resident Individual (b) Resident HUF
(c) Resident Partnership Firm (d) all of the above
11. In case of a person adopting the provisions of section 44ADA, income will be computed on
presumptive basis, i.e., @ _________of gross receipts of the specified profession.
(a) 2% (b) 5%
(c) 50% (d) 10%
12. The presumptive taxation scheme of section 44AE can be opted by a person who is engaged in
the business of plying, hiring or leasing of goods carriages and who does not own more than
________ goods vehicles at any time during the year.
(a) 50 (b) 30
(c) 10 (d) 5
13. Disallowance of interest, royalty, fees for technical services or any other sum payable outside
India to any person or in India to non-residents, due to default in adhering TDS provisions is
governed by section_______.
(a) 40(a)(i) (b) 40(a)(ia)
(c) 40(a)(ii) (d) 40(a)(iii)
14. Any expenditure incurred by an assessee in respect of which payment has been made to the
specified persons is liable to be disallowed under section 40A(2) while computing income under
the head “Profits and Gains of business or profession” if such payment is__________ the fair
market value of goods or services or facilities, etc.
(a) Equal to (b) Less than
(c) Unreasonable or in excess of (d) Equal to or in excess of
15. Mr. Kapoor obtained services worth Rs. 1,00,000 from his relative while fair market value of
these goods is Rs. 80,000. In this case, Mr. Kapoor is entitled to claim deduction of ____________
on account of services procured from his relative.
(a) Rs. 1,00,000 (b) Rs. 80,000
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16. For the purpose of section 40A(2), person is said to have substantial interest in the company if
he holds beneficially ____ or more of the equity capital at any time during the previous year.
(a) 5% (b) 10%
(c) 20% (d) 51%
17. Mr. Kapoor purchased goods worth Rs. 2,00,000 from an unrelated dealer. The fair market value
of these goods is Rs. 1,50,000. In this case, what may be the amount of disallowance while
computing income under the head “PGBP”?
(a) Rs. 2,00,000 (b) Rs. 1,50,000
(c) Rs. 20,000 (d) Rs. 50,000
18. Payment (other than payment made for plying, hiring or leasing goods carriages) made in excess
of Rs._______ otherwise than by an account-payee cheque or an account-payee demand draft
is to be disallowed under section 40A(3).
(a) Rs. 10,000 (b) Rs. 20,000
(c) Rs. 35,000 (d) Rs. 50,000
19. Payment made for plying, hiring or leasing goods carriages in excess of _______ otherwise than
by an account-payee cheque or an account-payee demand draft is disallowed under section
40A(3).
(a) Rs. 20,000 (b) Rs. 35,000
(c) Rs. 10,000 (d) Rs. 50,000
20. In certain circumstances, the provisions of section 40A(3) shall not apply. These circumstances
are enumerated in Rule______.
(a) 6DC (b) 6DA
(c) 6DD (d) 6DB
21. Payment made to the producer for the purchase of the products manufactured or processed,
without the aid of power in a ____________, shall not attract disallowance under section 40A(3).
(a) SME (b) Industry situated in SEZ area
(c) Cottage Industry (d) Industry situated in FTZ area
22. Mr. Jay purchased goods in cash amounting to Rs. 1,10,000 from his relative while fair market
value of the goods is Rs. 90,000. In this case under which section(s) disallowance may be
attracted?
© CA MEHUL THAKKER
(a) Section 40(a) and 40(b) (b) Section 40A(2) only
(c) Section 40A(3) only (d) Section 40A(2) and section 40A(3)
23. Mr. Mohan purchased goods worth Rs. 1,00,000 from his sister. The fair market value of the
goods is Rs. 1,20,000. Entire amount of Rs. 1,00,000 was paid in cash. Ascertain the amount of
disallowance under section 40A(2)?
(a) Nil (b) Rs. 1,00,000
(c) Rs. 1,20,000 (d) Rs. 20,000
24. Mr. Mohan purchased goods worth Rs. 1,00,000 from his sister. The fair market value of the
goods is Rs. 1,20,000. Entire amount of Rs. 1,00,000 was paid in cash. Ascertain the amount of
(a) Nil (b) Rs. 1,00,000
(c) Rs. 1,20,000 (d) Rs. 20,000
25. Mr. Mohan purchased agricultural products from his sister who is the cultivator of these
agricultural produce. He purchased the same for Rs. 2,00,000 though fair market value was Rs.
1,80,000. Entire amount of Rs. 2,00,000 was paid in cash. Find out the amount which may be
(a) Nil (b) Rs. 2,00,000
(c) Rs. 1,80,000 (d) Rs. 20,000
26. Under section _______, certain payments are disallowed, if not paid on or before the due date
of filing the return of income.
(a) 41 (b) 37 (1)
(c) 43B (d) 30
27. Which of the following payment does not fall under section 43B?
(a) Any tax, duty, cess or fee, by whatever name (b) Employee’s contribution towards
called, under any law.Q provident Fund
(c) Any sum payable by the assessee as interest on (d) None of the above
any loan or borrowing from any public financial
institution or a State financial corporation or a
State industrial investment corporation.
© CA MEHUL THAKKER
28. ABC Ltd. maintains books of account on mercantile basis. For the previous year 2018-19, interest
payable on term loan taken from a Co-operative bank was Rs. 5,50,000. Out of Rs. 5,50,000, it
had not paid Rs. 55,000 till the due date of filing the return for the previous year 2018-19. In
which year can such Rs. 55,000 be deductible.
(a) 2018-19 (b) 2019-20
(c) 2020-21 (d) The year in which ABC Ltd. will pay the interest
29. Section ________ deals with the provisions relating to depreciation allowance while computing
income chargeable to tax under the head “Profits and Gains of business or profession”.
(a) 30 (b) 31
(c) 32 (d) 35
30. If the asset is acquired during the previous year by the taxpayer and the same is put to business
use for less than _____ days during that year, then taxpayer can claim depreciation at _______.
(a) 180, 100% of normal depreciation (b) 180, 50% of normal depreciation
(c) 240, 100% of normal depreciation (d) 240, 50% of normal depreciation
31. Mr. Raja is a practicing Chartered accountant in his individual capacity. He owns office building
used for his profession on which he can claim depreciation at the rate of_____?
(a) 5% (b) 10%
(c) 40% (d) 60%
32. MT Advisory Private Limited owns block of assets consisting plants P, Q and R (depreciation rate
15%). The opening WDV of the block was Rs. 20,00,000. Find out the amount of depreciation as
per the provisions of section 32.
(a) Rs. 30,000 (b) Rs. 3,00,000
(c) Rs. 35,000 (d) Rs. 3,50,000
15%). The opening WDV of the block was Rs. 20,00,000. The company acquired another plant S
of Rs. 1,00,000 during the previous year and it was put to use for a period less than 180 days
during the same previous year. Find out the amount of depreciation as per the provisions of
section 32.
(a) Rs. 37,500 (b) Rs. 3,07,500
(c) Rs. 3,00,000 (d) Rs. 3,15,000
© CA MEHUL THAKKER
during the same previous year. It sold out plant P for Rs. 1,00,000 during the previous year. Find
out the amount of depreciation as per the provisions of section 32.
(a) Rs. 2,92,500 (b) Rs. 3,00,000
(c) Rs. 3,07,500 (d) Rs. 3,15,000
during the same previous year. It sold out plant P and plant R for Rs. 22,00,000 during the
previous year. Find out the amount of depreciation as per the provisions of section 32
(a) Nil (b) Rs. 3,00,000
(c) Rs. 3,07,500 (d) Rs. 3,15,000
during the same previous year. It sold out all the plants for Rs. 8,00,000 on the last of previous
year. Find out the amount of depreciation as per the provisions of section 32.
(a) Nil (b) Rs. 1,80,000
(c) Rs. 1,72,500 (d) Rs. 3,00,000
37. Mr. Shlok purchased goods worth Rs. 1,00,000 from his friend Mr. Rudra for trading purpose.
The market value of such goods is Rs. 80,000. Find out the amount of disallowance under section
40A(2)?
(a) Nil (b) Rs. 20,000
(c) Rs. 80,000 (d) Rs. 1,00,000
38. Section _______ deals with the deductibility of expenditure incurred by the assessee in respect
of rent, rates, taxes, repairs and insurance for building under the head “Profits and Gains of
business or profession”.
(a) 28 (b) 30
(c) 29 (d) 31
© CA MEHUL THAKKER
39. As per the provisions of section 31, in respect of which of the following assets the expenditure
like repairs (not being a capital expenditure) and insurance are deductible?
(a) Machinery, plant and furniture (b) Only Machinery and plant
(c) Only furniture (d) Building
40. Which of the following expenses are deductible under section 31?
(a) Current repairs (b) Capital repairs
(c) Insurance (d) (a) and (c)
41. The provisions relating to deductibility of bonus or commission paid to employees are governed
by section_______.
(a) 36(1)(i) (b) 36(1)(ia)
(c) 36(1)(ii) (d) 36(1)(iii)
42. Provisions relating to deductibility of interest on capital borrowed for the purpose of the
business of the assessee are governed by section ________.
(a) 36(1)(i) (b) 36(1)(ii)
(c) 36(1)(iii) (d) 36(1)(iiia)
43. In few cases, the deductibility of interest on borrowed capital is subject to provisions of section
43B. Out of the followings, which one is not governed by provisions of section 43B?
(a) Interest on money borrowed from a (b) Any sum payable by the assessee as interest
friend. on any loan or borrowing from any public
financial institution or a State financial
corporation or a State industrial investment
corporation.
(c) Any sum payable by the assessee as (d) (b) and (c) both
interest on any loans or advances from a
scheduled bank (including a co-
operative bank).
44. The provisions relating to presumptive taxation scheme applicable to an assessee engaged in any
profession prescribed under section 44AA are given in section ________?
(a) 44AD (b) 44AB
(c) 44AE (d) 44ADA
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45. Mr. Kajju, resident, runs a small business. During the previous year, the turnover of his business
was Rs. 90,00,00. He wants to adopt the provisions of section 44AD. In this case what can be the
taxable income under the head PGBP?
(a) Rs. 5,40,000 (b) Rs. 4,50,000
(c) Rs. 9,00,000 (d) Rs. None of the above
46. The provisions relating to presumptive taxation scheme prescribed under section 44AD are not
applicable to ___________.
(a) A company (b) Residential individual
(c) Non-Resident partnership firm (d) (a) and (c) both
47. An assessee whose turnover does not exceed __________ can adopt the presumptive taxation
scheme of section 44AD subject to certain conditions.
(a) Rs. 2,00,00,000 (b) Rs. 1,00,00,000
(c) Rs. 1,50,00,000 (d) None of the above
48. The provisions of section 44AD cannot be adopted by an assessee who is ____ .
(a) Engaged in any profession as prescribed (b) Carrying on an agency business
under section 44AA
(c) Earning income in the nature of (d) All of the above
commission or brokerage
49. The provisions relating to presumptive taxation scheme applicable to an assessee engaged in the
business of passenger transportation may be governed by section ________?
(a) 44AE (b) 44AB
(c) 44AD (d) 44ADA
50. The provisions relating to presumptive taxation scheme prescribed under section 44AE are
applicable to an assessee engaged in the business of ___________
(a) Plying goods carriages (b) Hiring goods carriages
(c) Leasing goods carriages (d) All of the above
51. The provisions relating to presumptive taxation scheme prescribed under section 44AE are
applicable to an assessee engaged in the business of plying, hiring or leasing of carriages if the
assessee does not own more than ____ goods carriages at any time during the previous year.
© CA MEHUL THAKKER
(a) 5 (b) 10
(c) 15 (d) 20
52. Mr. Sunil is engaged in leasing of goods carriages and opted for section 44AE in the first year of
its business. The business was commenced in the month of April. He commenced this business
by investing Rs. 30,00,000 in goods carriages. In second year, he would like to opt out of Section
44AE. How much depreciation can he claim in second year of his business assuming that there
are no new purchase or sale of goods carriages after commencement of business?
(a) Rs. 6,00,000 (b) Rs. 4,80,000
(c) Rs. 6,30,000 (d) Rs. 9,00,000
53. Expenditure incurred by a company for the purpose of promoting family planning among its
employees, being of a capital nature,
(a) is not deductible at all (b) is eligible for depreciation at the rate of 40%
(c) shall be allowed in five equal (d) is deductible without any restriction
instalments
54. Deduction u/s 35AD is available in respect of expenditure on specified business, one of them is:
(a) Setting up and operating a cold chain facility (b) Setting up and operating a power plant
(c) Setting up and operating an industrial unit (d) None of the above
55. Which compensation may not be chargeable under section 28 of the Act?
(a) Compensation received by a person for (b) Compensation received by a person for
termination of management rights of an termination of management rights of affairs in
Indian company India of any other company.
(c) Compensation for termination of (d) Compensation at the time of voluntary
business agency retirement of an employee
56. Which income is not to be taxed under the head “Profits and gains from business or profession’?
(a) Profits on sale of import license (b) Cash assistance against exports under any
scheme of Government of India
(c) Duty drawback against exports under (d) Interest on delayed payment of Duty
the Drawback Rules Drawback
57. Which income is not to be taxed under the head “Profits and gains from business or profession’?
© CA MEHUL THAKKER
(a) Sum received for not carrying out any (b) Sum received on account of transfer of a
activity in relation to business or profession right to carry on business
(c) Sum received on account of duty drawback (d) Sum received under Keyman Insurance
Policy
58. The condition of “actual payment” is not relevant for claiming deduction under section _____.
(a) 35 AD (b) 35 ABB
(c) 43 A (d) 43 B
59. One of the upper limits for claiming deduction under section 33AB of the Act is ________% of
profits or gains of business or profession before making any deduction under this section and
u/s. 72.
(a) 40 (b) 20
(c) 30 (d) 10
60. One of the upper limits for claiming deduction u/s 33ABA of the Act is ________% of profits or
gains of business or profession before making any deduction under this section and u/s. 72.
(a) 40 (b) 20
(c) 30 (d) 10
61. The assessee can utilize the amount withdrawn from Tea Deposit Account under section 33AB
of the Act for the purchase of ___________.
(a) Office appliances (b) Computers
(c) Machinery installed in Office (d) Machinery installed in guest house
62. The amount withdrawn from Tea Deposit Account under section 33AB of the Act in the event of
__________ is taxable.
(a) Death of the assessee (b) Partition of HUF
(c) Liquidation of Company (d) Closure of Business
63. The amount withdrawn from Tea Deposit Account under section 33AB of the Act may not be
taxable if there is a ________.
(a) Misutilization of the amount withdrawn (b) Non-utilization of the amount withdrawn
(c) Subsequent sale of asset acquired in (d) Subsequent sale of asset acquired in
accordance with the scheme out of such accordance with the scheme out of such
deposit within 8 years deposit beyond 8 years
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64. Identify the person eligible to claim benefits under section 33AB of the Act.
(a) Person engaged in growing tea leaves (b) Person engaged in growing coffee
(c) Person engaged in growing and (d) Person engaged in growing rubber
manufacturing rubber
65. The amount withdrawn from Site Restoration Fund Account under section 33 ABA as reduced by
the amount payable to _____________ shall be deemed to be the business income in the year
in which it is withdrawn.
(a) Associate company (b) Local Authority
(c) Central Governemnt (d) State Government
66. The provisions relating to deduction for expenditure on in house research by companies in
special business is contained in section ____________.
(a) 35(2AB) (b) 35(1)
(c) 35(2) (d) 35(2AA)
67. Under which provision, the company cannot claim weighted deduction to the tune of 150% of
the expenditure?
(a) 35(2AB) (b) 35(1) (ii)
(c) 35(2AA) (d) 35(1)(iii)
68. Under which provision, the contribution to National Laboratory shall be eligible for weighted
deduction to the tune of 150% of the expenditure?
(a) 35(2AB) (b) 35(1) (ii)
(c) 35(2AA) (d) 35(1)(iii)
69. The treatment given to unabsorbed scientific research expenditure shall be similar to that of
given to carry forward of _________.
(a) Speculative nusiness losses (b) Unabsorbed depreciation
(c) Non-speculative business losses (d) Capital losses
70. The weighted deduction under various provisions of the head “profits and gains from business
or profession’ shall not be available from A.Y. ____________ onwards.
(a) 2018-19 (b) 2020-21
(c) 2019-20 (d) 2021-22
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71. Which one is not a general condition for claiming deduction under section 35AD?
(a) Assessee shall be carrying on specified (b) Business shall not be set up by splitting up of
business business already in existence
(c) Assessee must be an Indian Company (d) Books of account of the assessee shall be
audited
72. Which capital expenditure is eligible for deduction under section 35AD?
(a) Expenditure on plant and machinery (b) Land
(c) Goodwill (d) Financial Instrument
73. Once deduction under section 35AD has been claimed, the assessee cannot claim deductions in
respect of specified business under section ________.
(a) 10AA (b) 10AA and 80C to 80 U
(c) 80 C to 80 U (d) 10AA and 80 HH to 80 RRB
74. The provisions of deemed income under section 35 AD (7B) of the Act regarding misutilization of
assets of specified business shall not apply to the ________
(a) Partnership firm (b) Sick company
(c) Government Company (d) Industrial company
75. Out of the followings, which one is a deemed income in the hands of a person carrying on
business or profession?
(a) Employer’s Contribution to Provident (b) Interest on Employer’s Contribution
Fund
(c) Employee’s contribution to Provident (d) Interest on Employee’s contribution
Fund
76. In order to cliam deduction of expenditure under section 37(1), one of the conditions is that it
should not be in the nature as prescribed u/s. ________.
(a) 40 (b) 41
(c) 30 to 36 (d) 29
77. Identify the expenditure not eligible for deduction u/s. 37(1) of the Act.
(a) Capitan nature (b) Personal nature
(c) Expenditure on CSR activities (d) All of the above
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78. No allowance shall be made in respect of expenditure incurred by an assessee on advertisement

in any souvenir, brochure, tract, pamphlet or the like published by a political party. This
restriction is contained in section ________ of the Act
(a) 36 (b) 37(1)
(c) 37(2B) (d) 37(2)
79. Out of the followings, which one is not in relation to disallowance of expenditure due to non-
observation of TDS provisions?
(a) 40(a)(i) (b) 40(a)(ia)
(c) 40(a)(iii) (d) None of the above
80. A consultancy fee of Rs. 40,000 is credited by X Ltd. to the account of non-resident payee on 1st
February, 2019 but tax was deducted on April 1, 2019 and it is deposited on May 2, 2019. Due
date of filing return for X Ltd. is September 30, 2019. Tax consequence of such transaction while
computing income under the head “PGBP” is:
(a) consultancy fee of Rs. 40,000 shall be (b) consultancy fee of Rs. 12,000 shall be
disallowed for the previous year 2018- disallowed for the previous year 2018-19 and
19 and same shall be allowed as same shall be allowed as deduction in the
deduction in the previous year 2019-20 previous year 2019-20
(c) consultancy fee of Rs. 40,000 shall be (d) consultancy fee of Rs. 40,000 shall be allowed
disallowed for the previous year 2019- for the previous year 2018-19.
20 and same shall be allowed as
deduction in the previous year 2020-21
81. Interest of Rs. 80,000 on debenture is paid by Y Ltd. on January 10, 2019 to the account of non-
resident payee. Tax is deducted on the same day. Tax is deposited on August 10, 2019. Due date
of filing return for Y Ltd. is September 30, 2019. Tax consequence of such transaction while
(a) Interest expense of Rs. 80,000 shall be (b) Interest expense of Rs. 24,000 shall be
(c) Interest expense of Rs. 80,000 shall be (d) Interest expense of Rs. 80,000 shall be
disallowed for the previous year 2019- allowed for the previous year 2018-19.
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82. Suppose in the above MCQ, tax is deposited on October 10, 2019 then what would have been
the tax consequence?
83. A consultancy fee of Rs. 40,000 is credited by X Ltd. to the account of resident payee on 1st
February, 2019 but tax was deducted on April 1, 2019 and it is deposited on May 2, 2019. Due
date of filing return for X Ltd. is September 30, 2019. Tax consequence of such transaction while
(a) consultancy fee of Rs. 40,000 shall be (b) consultancy fee of Rs. 12,000 shall be
(c) consultancy fee of Rs. 40,000 shall be (d) consultancy fee of Rs. 40,000 shall be allowed
disallowed for the previous year 2019- for the previous year 2018-19.
84. Interest of Rs. 80,000 on debenture is paid by Y Ltd. on January 10, 2019 to the account of
resident payee. Tax is deducted on the same day. Tax is deposited on August 10, 2019. Due date
of filing return for Y Ltd. is September 30, 2019. Tax consequence of such transaction while
85. Suppose in the above MCQ, tax is deposited on October 10, 2019 then what would have been
the tax consequence?
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86. Tax borne by employer in respect of non-monetary perquisite provided to an employee as

referred to in section 10(10CC) shall be disallowed in the hands of employer u/s _______.
(a) 40(a)(iii) (b) 40(a)(ii)
(c) 40(a)(v) (d) 40(a) (iia)
87. No disallowance will be attracted under section 40A(3) in respect of cash payment made to an
employee on account of gratuity, retrenchment compensation or similar terminal benefit
provided aggregate of such sums payable to an employee does not exceed Rs.________.
(a) 50,000 (b) 10,000
(c) 20,000 (d) 35,000
88. No disallowance will be attracted under section 40A(3) in respect of cash payment made on a
day on which the __________ were closed either on account of holiday or strike.
(a) Government offices (b) Banks
(c) Supplier office (d) None of the above
89. No disallowance will be attracted under section 40A(3) in respect of cash payment made to an
employee after deduction of tax from such salary provided such employee is temporarily posted
for a continuous period of ______ or more in a place other than his normal place of duty and
does not maintain any account in any bank at such place.
(a) 1 month (b) 3 months
(c) 15 days (d) Seven days
90. Where deduction has been claimed in earlier year in respect of any liability incurred for any
expenditure and subsequently assessee makes payment in respect of such liability otherwise
than by an account payee cheque, draft or ECS, then payment so made shall be deemed to be an
income under the head “PGBP” if the payment or aggregate payments made to a person in a
day, exceeds Rs. 10,000. This deeming provision is contained under section __________.
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(a) 40A(2) (b) 40A(3)
(c) 40A(3A) (d) 40A(5)
91. Identify the provision for gratuity which shall not be allowed due to provisons of section 40A(7)
of the Act
(a) Provision for any contribution to an (b) Provision for any contribution to an
approved gratuity fund unapproved gratuity fund
(c) Provision for gratuity which has become (d) None of the above
due and payable
92. If any sum payable by an assessee as interest on any loan or borrowing or advance is converted
by the bank or financial institution into a fresh loan, the interest so converted shall not be
deemed to have been ____________________ for the purpose of this section and therefore
same shall not be allowed as deduction under the head PGBP due to provisions of section 43 B.
(a) Paid (b) Payable
(c) Actually paid (d) None of the above
93. As per section _________, remission of liability may be taxed under the head “PGBP” subject to
few conditions are satisfied.
(a) 41(1) (b) 41(2)
(c) 41(3) (d) 41(4)
94. Bad debts earlier allowed which has been subsequently recovered shall be taxed under section
41(4) in the previous year_____________.
(a) in which it has been recovered (b) in which assessee has claimed bad debt
(c) in which assessee wants to offer (d) in which debtor has written off in his books
of account
95. Tax treatment of an amount consequent to changes in rate of exchange of currency is governed
by section _________
(a) 43B (b) 43A
(c) 40A(3) (d) 40A(2)
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96. Person carrying on specified profession is required to maintain books of accounts if gross receipts
exceed Rs.______________in any of the three years immediately preceding the previous year.
(a) 5,00,000 (b) 10,00,000
(c) 1,50,000 (d) 8,00,000
97. Person other than individual or hindu undivided family is required to maintain books of accounts
if income from business or non-specified profession exceeds Rs.____________or total sales,
turnover or gross receipts exceed Rs. ___________ in any of the three years preceding the
previous year.
(a) 1,20,000, 10 lakhs (b) 1,50,000, 10 lakhs
(c) 2,50,000, 10 lakhs (d) 2,50,000, 25 lakhs
98. What would have been your answer in above MCQ, if person is an Individual or hindu undived
family?
(a) 1,20,000, 10 lakhs (b) 1,50,000, 10 lakhs
(c) 2,50,000, 10 lakhs (d) 2,50,000, 25 lakhs
99. As per provisions of section 44AB(a) of the Act, every person carrying on business shall, if his
total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds Rs.
_____ in any previous year, is required to get his accounts audited.
(a) 1 crore (b) 25 lakhs
(c) 2 crore (d) 50 lakhs
100. As per provisions of section 44AB(b) of the Act, every person carrying on profession shall, if his
gross receipts in profession exceed or exceeds Rs. _____ in any previous year, is required to get
his accounts audited.
(a) 1 crore (b) 25 lakhs
(c) 2 crore (d) 50 lakhs
101. As per provisions of section 44AB(c) of the Act, every person carrying on the business shall, if the
profits and gains from the business are deemed to be the profits and gains of such person
under section 44AE or section 44BB or section 44BBB, as the case may be, and he has claimed
his income to be _________ the profits or gains so deemed to be the profits and gains of his
business, as the case may be, in any previous year, is required to get his accounts audited.
(a) Lower than (b) Higher than
(c) Equal to (d) None of the above
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102. As per provisions of section 44AB(d) of the Act, every person carrying on the profession shall, if
the profits and gains from the profession are deemed to be the profits and gains of such person
under _________ and he has claimed such income to be lower than the profits and gains so
deemed to be the profits and gains of his profession and his total income exceeds the maximum
amount which is not chargeable to income-tax in any previous year, is required to get his
accounts audited.
(a) 44 ADA (b) 44ADA
(c) 44 AE (d) None of the above
103. As per provisions of section 44AB(e) of the Act, every person carrying on the business shall, if the
provisions of_______ are applicable in his case and his total income exceeds the maximum
amount which is not chargeable to income-tax in any previous year., is required to get his
accounts audited.
(a) Section 44AD(3) (b) Section 44AD(4)
(c) Section 44AD(1) (d) Section 44AD(2)
104. As per proviso to section 44AB, the provisions of tax audit under this section shall not apply to
the persons, who declares profits and gains for the previous year in accordance with the
provisions of section 44AD (1) and his total sales, turnover or gross receipts, as the case may be,
in business does not exceed ______ rupees in such previous year.
(a) One crore (b) Two crore
(c) Fifty lakhs (d) Twenty five lakhs
105. Every assessee who has incurred expenditure by way of payment of any sum to an employee in
connection with voluntary retirement under any scheme of VRS is entitled to claim deduction
under section 35DDA of the Act. Such deduction shall be allowed in __________eqaul
instalments starting from the previous year in which such payment is made.
(a) Two (b) Five
(c) Seven (d) Ten
106. Every person who is subject to tax audit under section 44AB shall obtain a statement of
particulars in form no. ______ on or before due date of filing return under section 139(1) of the
Act.
(a) 3CEB (b) 3CEC
(c) 3CD (d) None of the above
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107. Every person who carries on business or profession and who is required to get his account
audited under any law shall obtain tax audit report in form no._____.
(a) 3CEB (b) 3CEC
(c) 3CB (d) 3CA
108. Every individual who carries on business or profession and who is required to get his account
audited under section 44AB shall obtain tax audit report in form no._____.
(a) 3CB (b) 3CEC
(c) 3CD (d) 3CA
109. You are carrying out the tax audit of XYZ Ltd. Out of the followings, which set of forms are
relevant while issuing Audit report?
(a) Form No. 3CA and 3CB (b) Form No. 3CA and 3CC
(c) Form No. 3CA and 3CD (d) Form No. 3CB and 3CD
ANSWERS
1. (c) 2. (c) 3. (c) 4. (d)

5. (a) 6. (b) 7. (b) 8. (a)
9. (b) 10. (d) 11. (c) 12. (c)
13. (a) 14. (c) 15. (b) 16. (c)
17. (d) 18. (a) 19. (b) 20. (c)
21. (c) 22. (d) 23. (a) 24. (b)
25. (a) 26. (c) 27. (b) 28. (d)
29. (c) 30. (b) 31. (b) 32. (b)
33. (b) 34. (a) 35. (a) 36. (a)
37. (a) 38. (b) 39. (a) 40. (d)
41. (c) 42. (c) 43. (a) 44. (d)
45. (a) 46. (d) 47. (a) 48. (d)
49. (c) 50. (d) 51. (b) 52. (c)
53. (c) 54. (a) 55. (d) 56. (d)
57. (b) 58. (a) 59. (a) 60. (b)
61. (b) 62. (d) 63. (d) 64. (c)
65. (c) 66. (a) 67. (d) 68. (c)
69. (b) 70. (d) 71. (c) 72. (a)
73. (d) 74. (b) 75. (c) 76. (c)
77. (d) 78. (c) 79. (d) 80. (a)
81. (d) 82. (a) 83. (b) 84. (d)
85. (b) 86. (c) 87. (a) 88. (b)
89. (c) 90. (c) 91. (b) 92. (c)
93. (a) 94. (a) 95. (b) 96. (c)
97. (a) 98. (d) 99. (a) 100. (d)
101. (a) 102. (a) 103. (b) 104. (b)
105. (b) 106. (c) 107. (d) 108. (a)
109. (c)
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MULTIPLE CHOICE QUESTIONS 6- CAPITAL GAINS
6 - CAPITAL GAINS
1. Listed equity shares shall be treated as long-term capital assets only if they were held for a period
of more than_______ months immediately preceding the date of its transfer.
(a) 12 (b) 24
(c) 36 (d) None of the above
2. While measuring the indexed cost of acquisition, _____ is irrelevant.

(a) Cost of acquisition (b) Cost inflation index of the year of
improvement of capital asset
(c) Cost inflation index of the year of (d) Cost inflation index of the year of transfer of
acquisition of capital asset capital asset
3. As per section _____________, long-term capital gain arising in excess of Rs. 1 Lakh on transfer of equity
shares or units of equity oriented mutual fund or units of business trust is chargeable to tax @ ___ in the
hands of any person, if specific conditions are satisfied in this regard.
(a) 10(38), 10% (b) 112A, 20%
(c) 112A, 10% (d) 111A, 15%
4. Generally, long-term capital gain is charged to tax @ ________ .

(a) 15% (b) 25%
(c) 20% (d) 30%
5. To avail the benefit of section 54, the asset transferred shall be ____________.
(a) Short-term capital asset being (b) Long-term capital asset being residential
residential house property house property
(c) Any Short-term / long-term capital (d) Long-term capital asset being commercial
asset property
6. To avail the benefit of section 54, the assessee shall purchase residential house within a period
of ____________or________after the date of transfer of the eligible asset.
(a) 1 year prior, 3 years (b) 2 years prior, 2 years
(c) 1 year prior, 2 years (d) 3 years prior, 1 year
7. Exemption under section 54 will be _______the amount of capital gains arising on transfer of
eligible asset or amount invested in purchase/construction of new residential house property.
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(a) Lower of (b) Higher of
(c) Average of (d) Weighted Average of
8. After claiming benefit under section 54, if new house is transferred within a period of _____ from
the date of its acquisition/completion of construction, then the benefit granted under section 54
will be withdrawn and same shall be charged to tax as _____________ capital gain.
(a) 1 year, long-term (b) 3 years, short-term
(c) 5 years, short-term (d) 3 years, long-term
9. After the expiry of specified period of 3 years under section 54 of the Act, the unutilized amount
remained in the Capital Gains Account Scheme shall be taxed as _____________ in the year in
which the specified period of 3 years expires.
(a) Income from other sources (b) Long-term capital gain
(c) Profits and gains of business or (d) Short-term capital gain
profession
10. Section 111A is applicable in case of STCG arising on transfer of ________ which are transferred
on or after 1-10-2004 in are recognised stock exchange and such transaction is liable to securities
transaction tax (STT).
(a) Preference shares (b) Units of debt oriented mutual fund
(c) equity shares (d) Zero coupon bonds
11. Short-term capital gain other than covered under section 111A is charged to tax at_______.
(a) 10% (b) 15%
(c) 20% (d) Normal rate of tax applicable to assessee
12. While computing capital gain on sale of immovable property, full value of consideration shall be:
(a) Actual consideration agreed by the buyer (b) Actual consideration paid by the buyer
(c) Actual consideration or stamp duty value of (d) Stamp Value of the property transferred
the property transferred, whichever is higher
13. What shall be the cost of acquisition of capital asset being immovable property which has been
acquired without consideration (gift) and taxed under section 56 of the Act?
(a) Cost to the previous owner (b) Nil
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(c) Stamp duty value of the property as (d) Cost incurred by the assessee on
considered while computing income u/s 56(2) execution of Gift Deed.
14. Out of the following personal effects, which one is a capital asset?
(a) Paintings (b) Drawings
(c) Jewellery (d) All of the above
15. Surplus on sale of rural agricultural land is

(a) taxable under the head “ Income from (b) taxable under the head “ Profits and gains
Other Sources”. from business or profession”
(c) not taxable as rural agricultural land is (d) taxable only if transferor is a company
not a capital asset
16. Long term capital gain on sale of equity share through stock exchange
(a) is exempt u/s 10(38) (b) is exempt u/s 10(37)
(c) is taxable @ 15% u/s 111A. (d) is taxable @ 10% u/s. 112A
17. Option to adopt fair market value as on 01/04/2001 is available for-

(a) Depreciable assets (b) Bonus shares allotted on 15/05/2001
(c) Self Generated Assets (d) None of the above
18. Which asset is a specified asset for the purpose of section 54 EC ?

(a) NABARD Bonds (b) NHB Bonds
(c) SIDBI Bonds (d) NHAI Bonds
19. Capital gains deposit account scheme is not available under

(a) Section 54 (b) Section 54F
(c) Section 54B (d) None of the above.
20. _____________ is the charging section for the head “Capital Gains”
21. As per section 2(14), capital asset means property of any kind held by the assessee,
_____________ with his business or profession subject to few exceptions.
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(a) Not connected (b) Connected
(c) Whether or not connected (d) None of the above
22. Out of the followings, which one is not a capital asset?

(a) Jwellery (b) Archaeological collections
(c) Drawings (d) Furniture at residence
23. Out of the followings, which one is a capital asset?

(a) Stock-in-trade (b) Agricultural Land in India
(c) Residential House property (d) Gold Deposit bonds
24. As per section 2(47), the term “transfer” does not include:
(a) Sale, exchange, relingquishment of the (b) Extinguishment of rights in asset
asset
(c) Compulsory acquisition under any law. (d) None of the above
25. Surplus arising on maturity of Zero-Coupon Bonds shall be taxed under the head __________
(a) Capital gain (b) Income from Other sources
(c) Salary (d) None of the above
26. Listed securities held for not more than ____________, is treated as short-term capital asset.
(a) 12 (b) 24
(c) 36 (d) 48
27. Unlisted securities (not being shares) held for not more than ____________, is treated as short-
term capital asset.
(a) 12 (b) 24
(c) 36 (d) 48
28. Units of UTI (Listed) held for not more than ____________, is treated as short-term capital
asset.
(a) 12 (b) 24
(c) 36 (d) 48
29. Units of UTI (unlisted) held for not more than ________, is treated as short-term capital asset.
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(a) 12 (b) 24
(c) 36 (d) 48
30. Zero Coupon Bonds (unlisted) held for not more than ____________, is treated as short-term
capital asset.
(a) 12 (b) 24
(c) 36 (d) 48
31. Immovable property, being land or building or both, held for not more than ____________, is
treated as short-term capital asset.
(a) 12 (b) 24
(c) 36 (d) 48
32. Unlisted shares held for not more than ____________, is treated as short-term capital asset.
(a) 12 (b) 24
(c) 36 (d) 48
33. In order to claim deduction of expenditure incurred in relation transfer, what is timing of
incurring such expenditure?
(a) At the time of transfer (b) Before the date of transfer
(c) After the date of transfer (d) Any of the above
34. Cost inflation index for the financial year 2018-19 is ____.
(a) 272 (b) 280
(c) 148 (d) 202
35. If capital asset has been acquired by any mode referred to in section 49 (1), then in order to
find out whether a capital asset is a short-term or long-term capital asset, the period of holding
of the _______ shall be taken into consideration.
(a) Previous owner (b) Current owner
(c) Taxpayer (d) Assessee
36. As per section 55 (2), if capital asset has been acquired either by the previous owner or by the
taxpayer prior to April 1, 2001, then options is available to adopt fair market value as on______
as cost of acquisition.
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(a) April 1, 1981 (b) April 1, 2001
(c) January 1, 2001 (d) 31st March, 2001
37. As per section 51, if any advance, or other money received and forfeited by the taxpayer (not
by the previous owner), the it shall be reduced from the cost for which the asset was acquired
or from fair market value as on 1st April, 2001, as the case may be. This rule is applicable for
the advances received upto _________.
(a) 31st March, 2014 (b) 31st March, 2018
(c) 31st March, 2019 (d) 31st March, 2001
38. As per section 55 (1) (b), cost of improvement prior to _________, incurred either by the
previous owner or by the taxpayer shall be completely ignored.
(a) 31st March, 2001 (b) 1st April, 2001
(c) 1st April, 2010 (d) 1st April, 1981
39. First proviso to section 48 (popularly known as conversion rule) is applicable to ______ only.
(a) Resident taxpayer (b) Non-resident taxpayer
(c) Resident but not ordinarily resident taxpayer (d) Resident and ordinarily resident
taxpayer
40. Under first proviso to section 48 (popularly known as conversion rule) expenditure on transfer
shall be converted into foreign currency applying the average exchange rate on ________.
(a) Date of acquisition of capital asset (b) Date of incurring such expenditure
(c) Date of transfer of capital asset (d) None of the above
41. Under section 45(1A), the liability to capital gain may arise on damage to or destruction of
capital asset as a result of few factors. Which factor is not relevant for attracting the provisions
of section 45(1A)?
(a) Flood (b) Riot
(c) Personal enemy (d) accidental fire explosion
42. Under section 45(2), _________ of the capital asset on the date on which it was _______shall
be deemed ot be the full value of consideration.
(a) Cost, purchased (b) The fair market value, purchased
(c) The fair market value, converted into stock- (d) Cost, converted into stock-in-trade
in-trade
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43. Under section 45(3), _______shall be deemed to be the full value of consideration.
(a) The fair market value of the asset (b) The amount recorded in the books of
account of the firm
(c) Market value of the asset (d) Net realizable value of the asset
44. Under section 45(4), _______shall be deemed to be the full value of consideration.
(a) The fair market value of the asset on the (b) The amount recorded in the books of
date of transfer account of the firm
(c) Market value of the asset (d) Net realizable value of the asset
45. The provisions of section 45(5) shall be applicable when transfer of capital asset is by way of
_______.
(a) Sale to a third party (b) Sale to a friend
(c) Compulsory acquisition under any law (d) Sale to PSU
46. While computing capital gain at the time of receipt of enhanced compensation under section
45(5)(b), ________________ shall be taken as nil.
(a) Cost of acquisition (b) Cost of improvement
(c) Litigation expenditure incurred (d) (a) and (b)
47. Tax treatment prescribed under section 45(5A) is relevant when there is a transfer of
immovable property under ___________.
(a) Joint development agreement (b) Mutual agreement
(c) Contract of sale (d) Compulsory acquisition
48. The benefit of tax treatment prescribed under section 45(5A) is available to the _______.
(a) Individual taxpayers only (b) Individual or HUF taxpayers only
(c) Company taxpayers only (d) Taxpayer being a partnership firm
49. Under section 45(5A), the capital gain tax liability would arise in the previous year in which
_________for the whole or part of project is issued by _______.
(a) Certificate of quality of construction , (b) Certificate of fire safety, Competent
Competent Authority Authority
(c) Certificate of completion, Competent (d) Certificate of completion, Central Board of
Authority Direct Taxes
© CA MEHUL THAKKER
50. As per the provisions of section 46(1), where the assets of a _______ are distributed to its
______ on its liquidation, such distribution shall not be regarded as a transfer.
(a) Company, shareholders (b) Partnership firm, partners
(c) Assoociation of Persons, members (d) Body of Individuals, members
51. Section 50D provides that where the consideration received or accruing as a result of the
transfer of a capital asset by an assessee is not ascertainable or cannot be determined, then,
for the purpose of computing income chargeable to tax as capital gains, the fair market value
of the said asset on the date of transfer shall be deemed to be the __________ received or
accruing as a result of such transfer.
(a) full value of the consideration (b) Net consideration
(c) Sale consideration (d) Consideration
52. Identify the capital asset whose cost may not be taken as NIL while computing capital gain?
(a) Goodwill (b) Tenancy rights
(c) Right to manufacture any article (d) None of the above
53. Identify the capital asset whose cost of improvement may not be taken as NIL while computing
capital gain?
(a) Goodwill (b) Tenancy rights
(c) Right to manufacture any article (d) None of the above
54. If right entitlement letter which is renounced by the assessee in favour of a third person, then
cost of acquisition of such letter in the hands of assessee shall be ________
(a) The amount paid to the company for (b) The amount paid to obtain the rights
subscription of shares entitlement letter
(c) Nil (d) (a) plus (b)
55. If right shares are acquired by the taxpayer by exercising his right, then cost of acquisition shall
be ________
56. If right shares purchased by the third person in whose favour the rights entitlement has been
renounced, then cost of acquisition shall be __________
© CA MEHUL THAKKER
57. Out of the followings, which transaction is treated as transfer?

(a) Conversion of preference shares into (b) Conversion of debentures into equity
equity shares of that company shares of that company
(c) Conversion of debentures into (d) Converison of capital asset into stock-in-
debentures of that company trade
58. Under section 10(37A), exemption is available in resepct of capital gain arising on ________
(a) Transfer of capital asset being land or (b) Sale of LPOCs by the said persons received
building or both, under land pooling in lieu of land transferred under the
scheme. scheme.
(c) Sale of reconstituted plot or land by said (d) All of the above
persons within perido specified under
this section.
59. With effect from A.Y.________ benefit of exemption under section 10(38) is not available.
(a) 2018-19 (b) 2019-20
(c) 2020-21 (d) 2021-22
60. Exemption under section 54 is available to _______

(a) Individual taxpayers only (b) Hindu undivided family taxpayers only
(c) (a) and (b) above (d) Any taxpayer
61. To avail the benefit of section 54B, the asset transferred shall be ____________.
(a) Short-term capital asset being land used (b) Long-term capital asset being urban land
for non-agricultural purposes
(c) Short-term / long-term capital asset (d) Long-term capital asset being commercial
being land used for agricultural purposes property
62. To avail the benefit of section 54B, the assessee shall purchase another land within a period of
____________ after the date of transfer of the eligible asset.
(a) 3 years (b) 2 years
(c) 1 year (d) 5 years
© CA MEHUL THAKKER
63. Exemption under section 54B will be _______the amount of capital gains arising on transfer of
eligible asset or amount invested in purchase of another land.
64. After claiming benefit under section 54B, if new land is transferred within a period of _____ from
the date of its acquisition, then the benefit granted under section 54B will be withdrawn and
same shall be charged to tax as _____________ capital gain.
(a) 1 year, long-term (b) 3 years, short-term
(c) 5 years, short-term (d) 3 years, long-term
65. Exemption under section 54EE is available to _______

66. To avail the benefit of section 54EE, the asset transferred shall be ____________.
(a) Short-term capital asset being land (b) Any Long-term capital asset
(c) Any short-term / long-term capital asset (d) Long-term capital asset being residential
house property
67. To avail the benefit of section 54EE, the assessee shall acquire notified units within a period of
____________ from the date of transfer of the eligible asset.
(c) 1 year (d) 6 months
68. Exemption under section 54EE will be _______the amount of capital gains arising on transfer of
eligible asset or amount invested in notified bonds.
69. After claiming benefit under section 54EC, if new asset is transferred or loan is taken on the
security of new asset within __ from the date of its acquisition, then the benefit granted under
section 54EC will be withdrawn.
(a) 1 year (b) 3 years
(c) 5 years (d) 2 years
© CA MEHUL THAKKER
70. The upper limit for claiming exemption under section 54 EC in a financial year is______
(a) Rs. 50 Lakhs (b) Rs. 25 Lakhs
(c) Rs. 1 Crore (d) Rs. 75 lakhs
71. Exemption under section 54EC is available to _______

72. To avail the benefit of section 54EC, the asset transferred shall be ____________.
(a) Short-term capital asset being land (b) Long-term capital asset being land or building
or both
(c) Short-term / long-term capital asset (d) Long-term capital asset being residential
being land used for agricultural purposes house property
73. To avail the benefit of section 54EC, the assessee shall acquire notified bonds within a period of
____________ from the date of transfer of the eligible asset.
(c) 1 year (d) 6 months
74. Exemption under section 54EC will be _______the amount of capital gains arising on transfer of
eligible asset or amount invested in notified bonds.
75. After claiming benefit under section 54EC, if new asset is transferred or converted into money
or loan is taken on the security of new asset within___ from the date of its acquisition, then the
benefit granted under section 54EC will be withdrawn.
76. The upper limit for claiming exemption under section 54 EE in a financial year is______
(a) Rs. 50 Lakhs (b) Rs. 25 Lakhs
(c) Rs. 1 Crore (d) Rs. 75 lakhs
77. Exemption under section 54GB is available to _______
© CA MEHUL THAKKER
78. To avail the benefit of section 54GB, the asset transferred shall be ____________.
(a) Short-term capital asset being land (b) Long-term capital asset being land or building
or both
(c) Short-term/long-term capital asset (d) Long-term capital asset being residential
being land used for agricultural purposes house property or plot of land
ANSWERS
1. (a) 2. (b) 3. (c) 4. (c)

5. (b) 6. (c) 7. (a) 8. (b)
9. (b) 10. (c) 11. (d) 12. (c)
13. (c) 14. (d) 15. (c) 16. (d)
17. (d) 18. (d) 19. (d) 20. (a)
21. (c) 22. (d) 23. (c) 24. (d)
25. (a) 26. (a) 27. (c) 28. (a)
29. (a) 30. (a) 31. (b) 32. (b)
33. (d) 34. (b) 35. (a) 36. (b)
37. (a) 38. (b) 39. (b) 40. (c)
41. (c) 42. (c) 43. (b) 44. (a)
45. (c) 46. (d) 47. (a) 48. (b)
49. (c) 50. (a) 51. (a) 52. (d)
53. (b) 54. (c) 55. (a) 56. (d)
57. (d) 58. (d) 59. (b) 60. (c)
61. (c) 62. (b) 63. (a) 64. (b)
65. (d) 66. (b) 67. (d) 68. (a)
69. (c) 70. (a) 71. (d) 72. (b)
73. (d) 74. (a) 75. (c) 76. (a)
77. (c) 78. (d)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 7- INCOME FROM OTHER SOURCES
7 – INCOME FROM OTHER SOURCES

1. Sum of money received by a person without consideration, the aggregate value of which exceeds
__________ during the previous year shall be charged to tax under the head ____________.
(a) Rs. 10,000, Capital Gain (b) Rs. 25,000 , Income from other sources
(c) Rs.50,000, Income from other sources (d) Rs. 1,00,000, Profits and gains from business or
profession
2. If the aggregate value of sum of money received without consideration during the year exceeds
Rs. 50,000, then_______ shall be charged to tax.
(a) such sum of money in excess of Rs. 50,000 (b) such sum of money so received
(c) such sum of money upto Rs. 50,000 (d) None of the above
3. The stamp duty value of immovable property received by a person without consideration shall
be charged to tax if the same will exceed ________.
(a) Rs. 5,00,000 (b) Rs. 25,000
(c) Rs. 50,000 (d) Rs. 50,001
4. If the aggregate fair market value of movable properties received by the taxpayer without
consideration during the previous year exceeds Rs. 50,000, then _______ will be charged to tax.
(a) Fair market value up to Rs. 50,000 (b) Fair market value in excess of Rs. 50,000
(c) Entire fair market value (d) None of the above
5. As per section 2(22), dividend does not include________.

(a) Any distribution by company to its (b) Any distribution by a company to its
shareholders which entails the release shareholders at the time of liquidation of a
of the assets of the company to the company to the extent of accumulated profits
extent of accumulated profits
(c) Any distribution of debenture (whether (d) Any payment made by a company out of
with or without interest) to its accumulated profits for buy back of its shares
shareholders to the extent of
accumulated profits of the company
6. Dividend received from a foreign company is charged to tax under the head______.
(a) Profits and gains of business or profession (b) House Property
(c) Income from other sources (d) Capital gains
© CA MEHUL THAKKER
7. Dividend received from foreign by an individual shareholder shall be charged to tax
at___________.
(a) 10% (b) 15%
(c) 20% (d) Slab Rate
8. As per section _______, any income which does not fall under earlier four heads is charged to
tax under the head “Income from Other Sources”.
(a) 45 (b) 22
(c) 28 (d) 56 (1)
9. Which of the following incomes may not be charged to tax under the head “Income from other
sources”?
(a) Winning from lotteries (b) Gift
(c) Interest on securities (d) Dividend
10. Ms. Roma let out furniture along with residential building and such lettings were inseparable.
Under which head rental income from such letting would be taxable?
(a) Income from House property (b) Income from other sources
(c) Profits and gains of business or (d) “Income from other sources” if it is not
profession taxable under the head “Profits and gains of
business or profession”
11. Interest received on compensation or enhanced compensation is taxable under the head ______
(a) Profits and gains of business or (b) “Income from other sources” if it is not
profession taxable under the head “Profits and gains of
business or profession”
(c) Income from other sources (d) None of the above
12. As per section 57(iv), _______ of interest received on compensation or enhanced compensation
is deductible subject to the condition that no other expenditure is deductible against such
income.
(a) 25% (b) 50%
(c) 75% (d) 100%
© CA MEHUL THAKKER
13. Income from sub-letting is taxable under the head _________
(a) House property (b) Profits and gains of business or profession
(c) Income from other sources (d) None of the above
14. Mr. Mohan received Rs. 70,000 towards winning from horse race. What is the amount
chargeable to tax under the head “Income from other sources”?
(a) Rs. 70,000 (b) Rs. 1,01,744
15. Mrs. Thakker won a lottery. At what rate such winnings would be chargeable to tax?
(a) 10% (b) 20%
(c) 30% (d) 60%
16. During the previous year, Mr. Raghunath received cash gift of Rs. 21,000 from his father. He also
received cash gift of Rs. 30,000 from his friends on his birthday. Find out the amount chargeable
to tax under the head “Income from other sources”?
(a) Nil (b) Rs. 51,000
(c) Rs. 21,000 (d) Rs. 30,000
17. During the previous year, Mr. Raghunath received cash gift of Rs. 21,000 from his father and Rs.
1,00,000 from his friends on his marriage. Find out the amount chargeable to tax under the head
“Income from other sources”?
(a) Nil (b) Rs. 1,00,000
(c) Rs. 21,000 (d) Rs. 1,021,000
18. During the previous year, Mr. Ranbir received cash gift of Rs. 1,00,000 from his friends on the
occasion of his wedding anniversary. Find out the amount chargeable to tax under the head
“Income from other sources”?
(a) Nil (b) Rs. 50,000
(c) Rs. 1,00,000 (d) Rs. 50,001
19. Mr. Kush received Rs. 10,00,000 under will of his neighbor. Find out the amount chargeable to
tax under the head “Income from other sources”?
(a) Rs. 10,00,000 (b) Rs. 9,50,001
(c) Rs. 9,50,000 (d) Nil
© CA MEHUL THAKKER
20. Money/property received in contemplation of death of the payer is charged to tax under which
of the following head?
(a) Profits and Gains of business or (b) Income from other sources
profession
(c) Capital gains (d) Not chargeable to tax at all.
21. Out of the followings, which capital asset of the assessee does not fall within the meaning of
“Property” for the purpose of taxing gift of such property under the head “Income from Other
Sources”?
(a) Shares and securities (b) Jewellery
(c) Drawings (d) None of the above
22. During the previous year, Miss Manu received gold ornaments worth Rs. 71,000 from the in-laws
of her sister-in-law on the occasion of his brother’s marriage. What shall be the amount that
would be chargeable to tax?
(a) Rs. 71,000 (b) Rs. 50,000
(c) Rs. 21,000 (d) Nil
23. During the previous year, Mr. Ankur received painting having market value of Rs. 62,250 from
his father’s nephew. What will be the amount chargeable to tax under the head “Income from
other sources”?
(a) Rs. 12,250 (b) Rs. 50,000
(c) Rs. 62,250 (d) Nil
24. During the previous year, Mr. Kanha received a gift of brand new laptop from his employer which
was purchased for Rs. 58,500. Find out the amount chargeable to tax under the head “Income
from other sources”?
(a) Rs. 48,500 (b) Rs. 8,500
(c) Rs. 8,499 (d) Nil
25. During the previous year, Mr. Gyani received residential building without consideration from the
neighbor, the stamp duty value of which was Rs. 12,00,000. Find out the amount chargeable to
tax under the head “Income from other sources”?
(a) Rs. 12,00,000 (b) Rs. 12,50,000
(c) Rs. 50,000 (d) Rs. 12,49,999
© CA MEHUL THAKKER
26. During the previous year, Mr. Manan was allotted a residential flat from MT Construction, a
partnership firm whose partners are father and brother of of Mr. Manan. This flat was allotted
without consideration though stamp duty value of this flat was Rs. 24,50,000/-. Find out the
amount chargeable to tax in the hands of Mr. Manan while computing income chargeable to tax
under the head “Income from other sources”?
(a) Rs. 50,000 (b) Rs. 24,00,000
(c) Rs. 24,50,000 (d) Nil
27. Ms. Maya purchased 1000 shares of Vedanta Ltd. from her friend at Rs. 100 per share. The
market quotation in BSE and NSE on the date of purchase was Rs. 210 and Rs. 222 respectively.
Find out the amount liable to tax in the hands of Ms. Maya while computing income chargeable
to tax under the head “Income from other sources”?
(a) Rs. 2,20,000 (b) Rs. 2,22,000
(c) Rs. 1,10,000 (d) Rs. 1,12,000
28. During the previous year, ABC LTD. purchased a plot of land worth Rs. 8,50,000. The stamp duty
value of the plot was Rs. 10,00,000. What will be the amount chargeable to tax in the hands of
ABC LTD. while computing income chargeable to tax under the head “Income from other
sources”?
(a) Rs. 8,50,000 (b) Rs. 10,00,000
(c) Rs. 1,50,000 (d) Nil
29. During the previous, Mr. Don received gift of agricultural land situated in rural area. Stamp duty
value of such agricultural land was Rs. 1,44,000. Find out the amount chargeable to tax in the
hands of Mr. Don while computing income chargeable to tax under the head “Income from other
sources”?
(a) Rs. 1,44,000 (b) Rs. 94,000
(c) Rs. 93,999 (d) Nil
30. During the previous year, Mr. Rahul purchased a painting of Indira Gandhi from a registered
dealer at invoice value of Rs. 55,000. The same painting is sold by another registered dealer for
Rs. 1,25,000. Find out the amount chargeable to tax in the hands of Mr. Rahul while computing
income chargeable to tax under the head “Income from other sources”?
(a) Rs. 70,000 (b) Rs. 55,000
(c) Rs. 1,25,000 (d) Nil
© CA MEHUL THAKKER
31. Advance money forfeited by the assessee is:

(a) Taxable in the year of forfeiture under (b) not taxable at all.
the head “Income from Other Sources”
(c) to be reduced while computing capital (d) Considered as casual income and liable to tax
gain on transfer of capital asset. @ 30%.
32. Interest on delayed compensation or enhanced compensation is:

(a) taxable on accrual basis (b) taxable on receipt basis
(c) exempt from tax (d) taxable depending upon the method of
accounting adopted by the assessee.
ANSWERS
1. (c) 2. (b) 3. (c) 4. (c)

5. (d) 6. (c) 7. (d) 8. (d)
9. (c) 10. (d) 11. (c) 12. (b)
13. (c) 14. (c) 15. (c) 16. (a)
17. (a) 18. (c) 19. (d) 20. (d)
21. (d) 22. (a) 23. (c) 24. (d)
25. (a) 26. (c) 27. (c) 28. (c)
29. (d) 30. (d) 31. (a) 32. (b)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 8- CLUBBING OF INCOME
8 – CLUBBING OF INCOME
1. Income of minor is clubbed under section 64(1A) of the Act. However, such clubbing provision is
not applicable if
(a) Minor is a married daughter (b) Minor is suffering from disability specified u/s 80U
(c) marriage of parents does not subsist (d) all of the above
2. The clubbing provision enumerated under section 60 is applicable if

(a) there is a revocable transfer of asset (b) Income is transferred without transferring asset
(c) there is an irrevocable transfer of asset (d) there is a transfer of asset by one spouse to
another.
3. The exemption available under section 10(32) of Act while clubbing minor’s income is __ :
(a) Rs. 1,500 (b) the amount of income clubbed subject to
maximum of Rs. 1,500
(c) Rs. 1200 (d) Rs. 1800
4. Out of the followings, which income is to be clubbed with the income of minor’s either parents :
(a) Income of Rs. 10,000/- earned by minor (b) Income of Rs. 25,000/- earned by minor for
on account of manual work excellent dance performance in Tagore Hall
(c) Bank Interest of Rs.35,000/- earned by (d) Bank Interest of Rs. 15,000/- on deposit of
minor suffering from disability of nature Rs. 2,00,000 earned out of his skill and talent
referred to is section 80U
5. Chitrang transfers a house property to a chariable trust retaining his right to reassume the power
over the property. Income from such property shall be taxed in the hands of :
(a) Trust (b) Chitrang
(c) Income is exempt being an approved (d) None of the above
charitable trust
6. If Mr. Mohan transfers an asset to his wife without adequate consideration and his wife sells the
same at a profit, then capital gain arising on such sale is taxable in the hands of :
(a) Mohan's wife (b) Mohan
(c) Not chargeable to tax at all. (d) That spouse whose income is higher.
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 8- CLUBBING OF INCOME
7. Mr. Soham gifted Rs. 10,00,000 to his wife. She placed this fund in term deposit with State Bank
of India @ 8%. Then, interest income arising from such term deposit shall be taxed in the hands
of ______
(a) Soham’s wife (b) Mr. Soham
(c) Not chargeable to tax at all. (d) That spouse whose income is higher.
ANSWERS
1. (b) 2. (b) 3. (b) 4. (d)

5. (b) 6. (b) 7. (b)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 9- SET OFF AND CARRY FORWARD OF LOSSES
9 – SET OFF AND CARRY FORWARD OF LOSSES

1. The process of adjustment of loss from a source under a particular head of income against
income from other source under the same head of income is called __________.
(a) Inter-head adjustment (b) Intra-head adjustment
(c) Carry forward of loss (d) Clubbing of loss
2. While making intra-head adjustment, loss from the business of owning and maintaining race
horses can be set off against income from ____________ only.
(a) winnings from lotteries (b) crossword puzzles
(c) business of owning and maintaining race horses (d) card game
3. If loss under the head “Income from house property” cannot be fully set-off in the year in which
such loss is incurred, then such unadjusted loss can be carried forward for ___________
assessment years immediately succeeding the assessment year in which the loss is incurred.
(a) 2 (b) 6
4. In case of a Company, being a company in which public are not substantially interested but not
being an eligible start-up as referred to in section 80-IAC, if the person(s) beneficially holding
________ of the voting power as on the last day (i.e. 31st March) of the year in which the loss
was incurred and on the last day (i.e. 31st March) of the year in which the company wants to set
off the brought forward loss are different, then the company cannot set off and carry forward
such brought forward loss.
(a) 20% (b) 25%
(c) 50% (d) 51%
5. Unabsorbed non-speculative business losses cannot be carried for more than

(a) 4 assessment years (b) 8 assessment years
(c) 10 assessment years (d) None of the above
6. Long term capital loss can be adjusted against

(a) Any head of income (b) Any capital gain
(c) long term capital gain only (d) short term capital gain only
© CA MEHUL THAKKER
7. Loss from trading in derivative (being an eligible transaction) is generally classified as
(a) Capital Loss (b) Speculative business loss
(c) Non-speculative business loss (d) None of the above
8. Loss from specified business falling u/s 35AD can be adjusted against
(a) income from any business (b) income from any source except salary
(c) Income from specified business (d) income from owning and maintaining race horses
9. Unabsorbed depreciation can be carried forward for

(a) Indefinite period (b) 8 years
10. Provisions bonus stripping {i.e. section 94(8)} is applicable in case of transfer of
(a) Units only (b) Shares or securities
(c) Shares or securities or units (d) None of the above
11. One of the conditions for applicability of provisions of dividend stripping {i.e. section 94(7)} shall
be
(a) Any person acquires any shares within a (b) Any person acquires any units within a
period of 3 months before the record date period of 3 months before the record date
and such shares are transferred within a and such units are transferred within a
period of 9 months from record date. period of 3 months from record date
(c) Any person acquires any shares within a (d) None of the above.
period of 3 months before the record date
and such shares are transferred within a
period of 3 months from record date.
12. Out of the followings, which loss can be carried forward beyond 4 years?
(a) Loss from speculative business (b) Loss from activity of owning and maintaining
horse races.
(c) Loss under the head "Income from other (d) None of the above.
sources "
© CA MEHUL THAKKER
13. Mr. A derived profit from business A – Rs. 1,08,000, loss from business B – 1,18,000, Profit from
business C- Rs.1,11,000 and loss from business D-Rs. 1,23,000. What shall be the net business
income of Mr. A assuming that Business C and D are speculative business?
(a) Non- speculative business loss Rs. (b) Non-speculative business loss Rs. 10,000 and
22,000 Speculative business loss Rs. 12,000
(c) Speculative business loss Rs. 10,000 and (d) None of the above.
Non-speculative business loss Rs. 12,000
14. Mr. B derived profit from business A – Rs. 1,08,000, loss from business B – 1,18,000, Profit from
business C- Rs.1,11,000 and loss from business D-Rs. 11,000. What shall be the net business
income of Mr.B assuming that Business C and D are speculative business?
(a) Speculative business income- Rs. 90,000 (b) Non-speculative business loss Rs. 10,000 and
Speculative business Income Rs. 1,11,000
(c) Speculative business loss Rs. 11,000 and (d) None of the above.
Non-speculative business income Rs.
1,01,000
15. Mr. C derived short term capital gain on sale onf one asset Rs. 1,06,000 while short term capital
loss on sale of another asset Rs. 1,28,000 and also earned long term capital gain of Rs. 12,500.
What shall be the net capital gain in the hands of Mr. C while computing his total income?
(a) Short term capital loss to be carried (b) Short term capital loss to be carried forward
forward Rs. 22,000 and Long term Rs. 1,28,000
capital gain Rs. 12,500
(c) Short term capital gain Rs. 1,28,000 and (d) Net capital gain Rs. Nil, while short term
long term capital gain Rs. 12,500 capital loss to be carried forward Rs. 9,500.
16. Mr. D derived short term capital gain on sale onf one asset Rs. 1,26,000 while long term capital
loss on sale of another asset Rs. 1,28,000. What shall be the net capital gain in the hands of Mr.
D while computing his total income?
(a) Short term gain of Rs. 1,26,0000 and (b) Long term capital loss to be carried forward
long term capital loss to be carried Rs. 2,000
forward Rs. 1,28,000
(c) Short term capital gain Rs. 1,28,000 (d) None of the above
17. Mr. E derived non-speculative business loss of Rs. 4,00,000 while won a lottery of Rs. 3,00,000.
What would be his total income?
© CA MEHUL THAKKER
(a) Loss Rs. 1,00,000 (b) Loss Rs. 4,00,000
(c) Rs. 3,00,000 and carry forward of (d) None of the above
business loss of Rs. 4,00,000
18. Mr. F derived non-speculative business loss of Rs. 4,00,000 from specified business under section
35AD while earned a surplus from another business of Rs. 6,00,000. What would be his net
business income?
(a) Rs. 2,00,000 (b) Rs. 4,00,000
(c) Rs. 6,00,000 and carry forward of (d) None of the above
business loss of Rs. 4,00,000
19. The net results of head house property in the hands of Mr. G was Rs. 6,00,000(loss) while he
earned a businesss income of Rs. 8,00,000. What would be his total income?
(a) Rs. 2,00,000 (b) Rs. 6,00,000
(c) Rs. 8,00,000 and carry forward of house (d) None of the above
property loss of Rs. 4,00,000
20. Out of the followings, which loss can never be carried forward?
(a) Loss under the head house property (b) Loss under the head capital gain
(c) Loss under the head other sources (d) Loss under the head “PGBP”
21. Out of the followings, for which item return of income need not be filed in time u/s. 139(1)?
(a) Carry forward of loss under the head house (b) Carry forward of loss under the head
property capital gain
(c) Carry forward of loss under the head “PGBP” (d) None of the above
22. Out of the followings, for which item return of income need not be filed in time u/s. 139(1)?
(a) Carry forward of loss under the head house property (b) Unabsorbed depreciation
(c) Carry forward of loss under the head “PGBP” (d) (a) and (b) above
23. Out of the followings, which loss can never be carried forward without any time restriction?
(a) Loss under the head house property (b) Loss under the head capital gain
(c) Loss under the head other sources (d) Loss under the head “PGBP” from specified
business
© CA MEHUL THAKKER
24. What shall be the order of set off where assessee has (1) brought forward business loss, (2)
current depreciation and (3) unabsorbed depreciation?
(a) 1-2-3 (b) 1-3-2
(c) 2-1-3 (d) 2-3-1
25. ________________ can be carried forward even though the return of income is filed after due
date.
(a) Unabsorbed depreciation (b) Loss under the head “PGBP”
(c) Loss under the head “IFOS” (d) Loss under the head “Capital gain”
ANSWERS
1. (b) 2. (c) 3. (c) 4. (d)

5. (b) 6. (c) 7. (c) 8. (c)
9. (a) 10. (a) 11. (c) 12. (d)
13. (b) 14. (a) 15. (d) 16. (a)
17. (c) 18. (c) 19. (b) 20. (c)
21. (a) 22. (d) 23. (d) 24. (c)
25. (a)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 10- DEDUCTIONS FROM GROSS TOTAL INCOME
10 – DEDUCTIONS FROM GROSS TOTAL INCOME

1. In order to claim deduction under some of the provisions of section 80 C to 80 U, one of the
conditions is that payment has been made out of income chargeable to tax. Out of the followings
sections, to which section this condition is not applicable:
(a) Section 80 CCC (b) Section 80 D
(c) Section 80 G (d) None of the above
2. Under which section only individual can claim deduction:

(a) Sectionn 80 C (b) Section 80 CCC
(c) Section 80 D (d) Section 80 DD
3. Mr. Khanna would like to insure the life of one of the family members. Mr. Khanna seeks your
advice that in whose name policy shall be taken so that he is entitled for deduction under section
80 C.
(a) Dependant Father (b) Dependent Brother-in-law
(c) Dependent Sister (d) Independent Son
4. While computing adjusted total income for the purpose of section 80 GG, following shall not be
reduced from Gross Total income:
(a) Long term Capital Gain (b) Short Term Capital Gain under section 111A
(c) Winning from lotteries (d) None of the above.
5. Deduction under section 80 QQB can be claimed by :

(a) Only Resident Individual (b) All Resident Persons
(c) All Non-residents (d) All of the above.
6. Deduction under section 80C to 80U can be claimed from;

(a) Long term capital gain (b) Short term capital gain under section 111A
(c) Winning from lotteries (d) Short term capital gain.
7. Overall deduction u/s 80C together with deduction u/s 80CCC & 80CCD(1) shall not exceed Rs.
_______.
(a) 1,00,000 (b) 1,50,000
(c) 2,00,000 (d) 2,50,000
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8. Deduction under section 80C in respect of life insurance premium is restricted to ___ of capital
sum assured in respect of policies issued on or before31-3-2012 and ______% of capital sum
a.ssured in case of policies taken on or after 1-4-2012.
(a) 10, 5 (b) 20, 10
(c) 20, 15 (d) 10, 15
9. What is the minimum holding period in respect of residential house property whose principal
repayment of loan has been claimed as deduction under section 80C?
10. The taxpayer can claim deduction under section 80C in respect of amount paid by him during the
year towards tuition fees (excluding development fees, donation or similar payments) paid at
the time of admission or thereafter, to any university, school, college or other educational
institution situated __, for full time education of _____ child/ children of the taxpayer.
(a) In India, one (b) In India, two
(c) In India, three (d) anywhere, all
11. The deduction under section 80D is available in respect of expenditure up to Rs. _____ incurred
by the individual on preventive health check-up.
(a) 5,000 (b) 25,000
(c) 30,000 (d) 60,000
12. The upper limit of deduction u/s 80CCC is

(a) Rs. 50,000 (b) Rs. 75,000
(c) Rs.1,50,000 (d) Rs. 2,00,000
13. Deduction under the section 80E is allowed in respect of

(a) Donations made to charitable institutions (b) Medical treatment of handicapped person
(c) Interest on loan taken for education (d) payment made towards Mediclaim policy
14. Voluntary contributions made to ________ is eligible under section 80GGA

(a) Charitable Institutions (b) Educational Institutions
(c) Research Associations (d) Religious cum Charitable institutions
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15. Deduction u/s. 80JJA is available if the assessee
(a) Is engaged in scientific research (b) Sets up an industrial unit in a backward area
(c) Is engaged in start-up activities (d) Is engaged in the business of collecting and
processing biodegradable waste.
16. Out of the followings, which donation qualifies for deduction at 50% u/s.80G of the Income Tax
Act?
(a) Donation to Chief Minister Relief Fund (b) Prime Ministers National Relief Fund
(c) Rajiv Gandhi Foundation (d) Indian Olympic Association
17. The deduction under section 80QQB of the Income Tax Act is in respect of ___________
(a) Interest income on debentures (b) income by way of royalty of books
(c) income by way of Royalty from (d) income from start-up activities
patents
18. Deduction under section 80 QQB can be claimed by :

19. Deduction under section 80C to 80U can be claimed from;

(a) Long term capital gain (b) Short term capital gain under section 111A
(c) Winning from lotteries (d) Business Income
20. Mr. Suresh is a resident individual. He suffers from a severe disability. He is mainly dependent
upon his brother Mr. Ramesh for support and maintenance. Mr. Ramesh annually incurs a sum
of Rs. 40,000 on medical treatment of Mr. Suresh. Income of Mr. Suresh and Mr. Ramesh is Rs.
15,000 and Rs. 8,00,000. Find out total income of Mr. Ramesh.
(a) Rs. 7,60,000 (b) Rs. 6,75,000
(c) Rs. 15,000 (d) Rs. 7,25,000
21. The upper limit of deduction under section 80 DDB (not a senior citizen) is __________
(a) Rs. 40,000 (b) Rs. 75,000
(c) Rs. 1,25,000 (d) Rs. 1,25,000
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22. The upper limit of deduction under section 80 DDB (being a senior citizen) is __________
(a) Rs. 40,000 (b) Rs. 75,000
(c) Rs. 1,25,000 (d) Rs. 1,00,000
23. The upper limit of deduction under section 80 DD where dependent person is suffering from
disability is __________
(a) Rs. 40,000 (b) Rs. 75,000
(c) Rs. 1,25,000 (d) Rs. 1,00,000
24. The upper limit of deduction under section 80 DD where dependent person is suffering from
severe disability is __________
(a) Rs. 40,000 (b) Rs. 75,000
(c) Rs. 1,25,000 (d) Rs. 1,00,000
25. The upper limit of deduction under section 80 U where person is suffering from disability is
__________
(a) Rs. 40,000 (b) Rs. 75,000
(c) Rs. 1,25,000 (d) Rs. 1,00,000
26. The upper limit of deduction under section 80 U where person is suffering from severe disability
is __________
(a) Rs. 40,000 (b) Rs. 75,000
(c) Rs. 1,25,000 (d) Rs. 1,00,000
27. The time limit for claiming deduction under section 80 E is the initial assessment year and
________ immediately succeeding assessment years or until the interest on loan is paid in full,
whichever is earlier.
(a) Seven (b) Eight
(c) Nine (d) Ten
28. While computing deduction under section 80 G of the Act, the eligible donations shall aggregated
and the sum so arrived shall be limited to 10% of the_________.
(a) Gross total income (b) Total income
(c) Book profit (d) Adjusted total income
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29. Which one is not the limit prescribed under section 80 GG of the Act?
(a) Rs. 6,000 p.m. (b) 25% of total income
(c) Rent paid less 10% of total income (d) None of the above
30. The taxpayer is not entitled to deduction under section 80GG of the Act where _________
(a) Rent paid is more than 10% of total income (b) Total income is zero
(c) Rent paid is ore than 25% of total income (d) None of the above
31. Mr. Shiva, a businessman, whose total income (before allowing deduction under section 80GG)
for A.Y.2018-19 is Rs. 5,00,000, paid house rent at Rs. 10,000 p.m. in respect of residential
accommodation occupied by him at Mumbai. Find out the deduction allowable to him under
section 80GG for A.Y.2018-19.
(a) Rs. 1,25,000 (b) Rs. 70,000
(c) Rs. 60,000 (d) Rs. 1,20,000
32. No deduction shall be allowed under section _____ in respect of any sum contributed by way of
cash.
(a) 80GGA (b) 80GGB
(c) 80GG (d) None of the above
33. Deduction under section 80TTA is not available to __________

(a) A non-resident (b) A Senior citizen
(c) A resident (d) None of the above
34. Only senior citizen claim deduction under section __________

(a) 80 TTA (b) 80TTC
(c) 80TT (d) 80TTB
35. The upper limit of deduction under section 80TTA is _____

(a) Rs.15,000 (b) Rs.20,000
(c) Rs. 10,000 (d) Rs. 50,000
36. The upper limit of deduction under section 80TTB is _____

(a) Rs.15,000 (b) Rs.20,000
(c) Rs. 10,000 (d) Rs. 50,000
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37. The deduction under section 80TTA is not available in respect of interst on ____
(a) Time deposits (b) Saving deposits with a banking company
(c) Saving deposits with a co-operative bank (d) Saving deposits with a post office
38. The producer company can claim deduction under section ______
(a) 80P (b) 80PA
(c) 80DA (d) 80 RRB
39. The upper limit of deduction u/s 80QQB is __

(a) Rs. 3,00,000 (b) Rs. 75,000
(c) Rs.1,50,000 (d) Rs. 2,00,000
40. The upper limit of deduction u/s 80RRB is __

(a) Rs. 3,00,000 (b) Rs. 75,000
(c) Rs.1,50,000 (d) Rs. 2,00,000
41. The deduction under section 80TTA can be claimed by __________

(a) An Individuals only (b) HUFs only
(c) Invidual or HUF (d) Individual (not being senior citizen) or HUF
42. Deduction under section 80 RRB can be claimed by :

43. The deduction under section 80RRB of the Income Tax Act is in respect of ___________
(a) Interest income on debentures (b) income by way of royalty of books
(c) income by way of Royalty from patents (d) income from start-up activities
44. Out of the followings, which donation qualifies for deduction at 100% u/s.80G of the Income Tax
Act?
(a) Donation to Chief Minister Relief Fund (b) Jawaharlal Nehru Memorial fund
(c) Rajiv Gandhi Foundation (d) Indira Gandhi Memorial Trust
45. Out of the followings, which donation qualifies for deduction at 100% u/s.80G but subject to an
upper limit of contribution not exceeding 10% of adjusted total income?
© CA MEHUL THAKKER
(a) Donation to Chief Minister Relief Fund (b) Jawaharlal Nehru Memorial fund
(c) Indian Olympic Association (d) Indira Gandhi Memorial Trust
46. Out of the followings, which donation qualifies for deduction at 50% u/s.80G but subject to an
upper limit of contribution not exceeding 10% of adjusted total income?
(a) Donation to Rajiv Gandhi Foundation (b) Jawaharlal Nehru Memorial fund
(c) Indian Olympic Association (d) Charitable trust registered under section 80G(5)
ANSWERS
1. (c) 2. (b) 3. (d) 4. (c)

5. (a) 6. (d) 7. (b) 8. (b)
9. (d) 10. (b) 11. (a) 12. (c)
13. (c) 14. (c) 15. (d) 16. (c)
17. (b) 18. (a) 19. (d) 20. (b)
21. (a) 22. (d) 23. (b) 24. (c)
25. (b) 26. (c) 27. (a) 28. (d)
29. (a) 30. (b) 31. (c) 32. (b)
33. (b) 34. (d) 35. (c) 36. (d)
37. (a) 38. (b) 39. (a) 40. (a)
41. (d) 42. (a) 43. (c) 44. (a)
45. (c) 46. (d)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 11- COMPUTATION OF TOTAL INCOME AND TAX LIABILITY
11 – COMPUTATION OF TOTAL INCOME AND TAX LIABILITY

1. The normal tax rates applicable to a resident individual will depend on the _________.
(a) Age of the individual (b) Gender of the individual
(c) Caste of the individual (d) None of the above
2. For the assessment year 2019-20, the basic exemption limit in case of a resident individual of the
age of below 60 years is Rs. ___________ .
(a) Rs. 2,00,000 (b) Rs. 2,50,000
(c) Rs. 3,00,000 (d) Rs. 5,00,000
age of 60 years or above but below 80 years is Rs. ___________.
(a) Rs.2,00,000 (b) Rs.2,50,000
(c) Rs.3,00,000 (d) Rs.5,00,000
age of 80 years or above is Rs. ___________.
(a) Rs. 2,00,000 (b) Rs. 2,50,000
(c) Rs. 3,00,000 (d) Rs. 5,00,000
5. For the assessment year 2019-20, the basic exemption limit in case of a non-resident individual
irrespective of his age is Rs. ___________.
(a) Rs. 2,00,000 (b) Rs. 2,50,000
(c) Rs. 3,00,000 (d) Rs. 5,00,000
6. For the assessment year 2019-20, the basic exemption limit in case of a Hindu Undivided Family
is Rs. ___________.
(a) Rs. 2,00,000 (b) Rs. 2,50,000
(c) Rs. 3,00,000 (d) Rs. 5,00,000
7. In the case of an individual, surcharge @ ___ is levied on the amount of income-tax if total
income exceeds Rs._________
(a) 10%, 10 lakhs (b) 15%, 1 crore
(c) 10%, 1 crore (d) 10%, 10 crore
© CA MEHUL THAKKER
8. A resident individual, whose total income does not exceed Rs. 3,50,000 is eligible for rebate
under section 87A. The amount of rebate is income tax payable or Rs. _______, whichever is less.
(a) 5,000 (b) 2,500
(c) 2,000 (d) 10,00
9. As per section 115BBE, any cash credit found in the books of the assessee which remains
unexplained shall be charged to tax at a flat rate of __________ (plus surcharge and cess as
applicable).
(a) 10% (b) 20%
(c) 30% (d) 60%
10. “Health and Education cess (HEC)” is to be calculated at the rate of __________of income-tax
and surcharge.
(a) 4% (b) 2%
(c) 3% (d) 1%
11. The gross total income of Mr. X, a resident aged 30 years, comprises of salary (Rs.3,85,000) and
interest on savings bank (Rs.8,000). Compute his tax liability, assuming that he had deposited
Rs.50,000 in public provident fund.
(a) Rs. 4420 (b) Rs. 1820
(c) Rs. Nil (d) Rs. 6,240
12. Mr. X, resident, 35 years, has only income from business:- Rs.12,00,000. Compute his tax liability.
(a) Rs. 1,80,400 (b) Rs. 1,79,400

(c) Rs. 1,79,600 (d) Rs. 1,81,600
13. The gross total income of Mr. X, a resident aged 30 years, comprises of business income
(Rs.11,50,000) and Long term capital Gain (Rs.1,00,000). Compute his tax liability, assuming that
he had deposited Rs.50,000 in public provident fund.
(a) Rs. 1,69,000 (b) Rs. 1,79,400
(c) Rs. 1,80,400 (d) Rs. 1,81,600
14. Mr. X, resident, 35 years, has only income from business:- Rs.3,40,000. Compute his tax liability.
(a) Rs. Nil (b) Rs. 4,120
(c) Rs. 2,080 (d) Rs. 6,760
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(Rs.2,70,000) and Long term capital Gain (Rs.1,00,000). Compute his tax liability, assuming that
he had deposited Rs.30,000 in public provident fund.
(a) Rs. 2,180 (b) Rs. 4,120
(c) Rs. Nil (d) Rs. 16,120
16. The gross total income of Mr. X, a resident aged 62 years, comprises of pension income
(Rs.90,000) and Long term capital Gain (Rs.10,00,000). Compute his total income assuming that
he had deposited Rs.70,000 in public provident fund and paid life insurance premium on his own
life Rs. 82,000
(a) Rs. 9,40,000 (b) Rs. 10,00,000
17. The gross total income of Mr. X, a resident aged 62 years, comprises of pension income
(Rs.90,000) and Long term capital Gain (Rs.10,00,000). Compute his tax liability assuming that he
had deposited Rs.70,000 in public provident fund and paid life insurance premium on his own
life Rs. 82,000
(a) Rs. 1,17,000 (b) Rs. 1,56,000
(c) Rs. 2,08,000 (d) Rs. 1,45,600
(Rs.10,50,000) and Long term capital Gain u/s. 112 A (Rs.2,00,000). Compute his tax liability
assuming that he had deposited Rs.70,000 in public provident fund and paid life insurance
premium on his own life Rs. 82,000.
(a) Rs. 1,06,600 (b) Rs. 1,48,200
(c) Rs. 1,17,000 (d) Rs. 1,45,600
19. The gross total income of Mr. X, a resident aged 26 years, comprises of short term capital gain
(Rs.4,22,000) and short term capital Gain u/s. 111 A (Rs.1,20,000). Compute his tax liability
assuming that he had deposited Rs.12,000 in public provident fund.
(a) Rs. 19,240 (b) Rs. 20,800
(c) Rs. 27,040 (d) Rs.14,560
(Rs.1,52,000) and short term capital Gain u/s. 111 A (Rs.1,48,000). Compute his tax liability
assuming that he had deposited Rs.10,000 in public provident fund.
© CA MEHUL THAKKER
(a) Rs. 3,640 (b) Rs. 23,090
(c) Rs. Nil (d) None of the above
21. Mr. X, resident, has only income by way of winning from lottery:- Rs.50,000. Compute his tax
liability assuming that there is no tax was deducted at source.
(a) Rs. 15,600 (b) Rs. 13,000
(c) Rs. Nil (d) None of the above
22. During the previous year, Mr. KJ Shah, 28 years, resident , earned business income of Rs.3,10,000
and Rs. 30,000 under the head “Income from other sources”. He also earned agriculture income
of Rs. 5,00,000. Compute his tax liability.
(a) Rs. 2,080 (b) Rs. 16,120
(c) Rs. 18,720 (d) Rs. 80,500
23. During the previous year, Mr. KJ Shah, 28 years, resident , earned business income of Rs.3,10,000
and Rs. 30,000 under the head “Income from other sources”. He also earned agriculture income
of Rs. 10,00,000. Compute his tax liability.
(a) Rs. 2,080 (b) Rs. 16,120
(c) Rs. 18,720 (d) Rs. 25,480
24. During the previous year, Mr. Mahesh, 35 years, resident, earned business income of Rs.4,20,000
and Rs.2,80,000 under the head “Income from other sources”. He also earned agriculture income
of Rs. 4,00,000. Compute his tax liability assuming that he is eligible for deduction under section
80C of Rs. 22,000
(a) Rs. 1,35,900 (b) Rs. 93,400
(c) Rs. 97,140 (d) Rs. 42,500
25. During the previous year, Mr. Ganesh, 24 years, resident, earned business income of Rs.1,40,000
and agriculture income of Rs. 5,60,000. Compute his tax liability.
(a) Rs. Nil (b) Rs. 32,500
26. During the previous year, Mr. Kartikey, 31 years, resident, earned business income of Rs.5,00,000
and agriculture income of Rs. 5,000. Compute his tax liability.
© CA MEHUL THAKKER
(a) Rs. Nil (b) Rs. 13,000
(c) Rs. 13,250 (d) Rs. 14,000
27. During the previous year, Mr. X, 40 years, resident, earned business income of Rs.1,50,000, LTCG
Rs. 1,80,000 and agriculture income of Rs. 10,00,000. Compute his tax liability.
(a) Rs. 1,87,500 (b) Rs. 2,03,500
(c) Rs. 13,500 (d) Rs. 14,040
ANSWERS
1. (a) 2. (b) 3. (c) 4. (d)

5. (b) 6. (b) 7. (b) 8. (b)
9. (d) 10. (a) 11. (b) 12. (b)
13. (a) 14. (c) 15. (d) 16. (b)
17. (d) 18. (a) 19. (c) 20. (a)
21. (b) 22. (b) 23. (d) 24. (c)
25. (d) 26. (b) 27. (d)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 12- ASSESSMENT OF FIRMS
12 – ASSESSMENT OF FIRMS
1. As per section 2(23) of the Income Tax Act, firm shall include
(a) One person company (b) Sole Proprietorship
(c) Limited Liability Partnership (d) None of the above
2. General tax rate applicable to the partnership firm is ______.

(a) 30% (b) 25%
(c) 20% (d) 29%
3. Surcharge on income-tax is applicable to the firm if total income of the firm exceeds
(a) Rs. 1 Cr. (b) Rs. 10 Cr.
(c) Rs. 50 Lakhs (d) Rs. 30 Lakhs
4. Which of the following income is exempt in the hands of partner?

(a) Interest on Partner’s Capital (b) Interest on Partner’s Loan Account
(c) Remuneration derived by a working (d) Share of Profit
partner
5. While computing income under the head “PGBP”, firm shall not be entitled to the deduction in
respect of payment of interest, salary, bonus, commission or remuneration to its partners, if
there is a failure on the part of the firm as is mentioned in section _____________
(a) 143(2) (b) 142(1)
(c) 144 (d) 148
6. Subject to few conditions enumerated under section 40(b), firm shall be entitled to claim
deduction in respect of interest paid to partners if the amount of interest does not exceed the
amount calculated at the rate of ___________ per annum.
(a) Ten percent simple (b) Twelve percent simple
(c) Ten percent cumulative (d) Twelve percent cumulative
7. Subject to few conditions enumerated under section 40(b), firm shall be entitled to claim
deduction in respect of remuneration paid to partner if such partner is a _____________.
(a) Sleeping Partner (b) Sub-Partner
(c) Silent Partner (d) Working Partner
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8. Out of the followings, which is not a condition enumerated under section 40(b) of the Income
tax Act?
(a) Remuneration to a working partner (b) Remuneration to a working partner or interest to
or interest to any partner is in any partner shall not pertain to a period prior to
accordance with the terms of the the date of earlier partnership deed where such
partnership deed remuneration or interest was not authorized
(c) Remuneration to a working partner (d) None of the above
or interest to any partner shall not
exceed permissible limit.
9. Book profit reported by the firm for the relevant previous year is Rs. 5,00,000. What shall be the
maximum eligible remuneration under section 40(b) of the Act, if other conditions are satisfied.
(a) Rs. 3,50,000 (b) Rs. 2,70,000
(c) Rs. 1,50,000 (d) Rs. 3,90,000
10. Book profit reported by the firm for the relevant previous year is Rs. 1,50,000. What shall be the
(a) Rs. 1,35,000 (b) Rs. Nil
(c) Rs. 1,50,000 (d) Rs. 90,000
11. Book profit reported by the firm for the relevant previous year is a loss. What shall be the
(a) Rs. Nil (b) Amount equal to loss amount

(c) Rs. 1,50,000 (d) 90% of loss amount
12. While computing book profit under section 40(b), which is not a permissible adjustment?
(a) Unabsorbed depreciation (b) Brought forward business loss
(c) Disallowance under section 37(1) (d) Remuneration paid to partners and debited to
profit and loss account.
13. The provisions of section 78 is not applicable in case of ______________

(a) Admission of a partner (b) Death of a partner
(c) Retirement of partner (d) (b) and (c) above
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14. When there is a “change in constitution” of the firm as defined under section 187 of the Act, how
many assessments shall be made in the hands of the firm?
(a) One (b) Two
(c) Three (d) As many as equal to number of times “Change
in constitution” took place
15. “Change in constitution” of the firm as defined under section 187 of the Act does not cover the
situation of -
(a) Admission of a partner (b) Retirement of a parter
(c) All partners continue with a change in (d) Death of any of its partners
their respective shares
16. Where a firm is dissolved or business is discontinued, the provisions of section ______ shall
become operative.
(a) 186 (b) 187
(c) 188 (d) 189
ANSWERS
1. (c) 2. (a) 3. (a) 4. (d)

5. (c) 6. (b) 7. (d) 8. (d)
9. (d) 10. (c) 11. (c) 12. (b)
13. (a) 14. (a) 15. (d) 16. (d)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 13- ASSESSMENT OF AOP OR BOI
13 – ASSESSMENT OF AOP OR BOI

1. From the following information, find out interest to be disallowed in the hands of Dagu Magu &
Co., AOP (consisting of two members, Mr. Dagu and Mr. Magu) under section 40(ba).
- AOP paid interest to member Mr. Dagu Rs.35,000 while recovered on drawings Rs.4,000.
- AOP paid interest to member Mr. Magu Rs. 8,000 while recovered on drawings Rs. 3,000.
(a) Rs. 43,000 (b) Rs. 36,000
(c) Rs. 12,000 (d) Rs. Nil
2. PQRS & Co., an AOP provides following information:

Name of Member Interest paid to Member Interest recovered from Member
Mr. P Rs. 8,000 Nil
Mr. Q Rs. 10,000 Nil
Mr. R Rs. 13,000 Nil
Mr. S Nil Rs. 21,000
Find out interest to be disallowed under section 40(ba) in the hands of AOP
(a) Rs. 10,000 (b) Rs. Nil
(c) Rs. 21,000 (d) Rs. 31,000
3. An Association of Persons consisting of three members sharing profit/losses equally, all are
individuals and none of them having total income exceeding exemption limit. Then in this
situation, at what rate total income of the AOP shall be taxed?
(a) Slab Rate (b) Maximum Marginal Rate
(c) 30% (d) 20%
4. The “share from AOP” may be taxed in the hands of members in certain situation. Under which
head of income such “share from AOP” shall be offered to tax?
(a) Profits and Gains from business or profession (b) Capital Gain
(c) Various heads of income in the same manner in (d) None of the above
which income of AOP has been determined
5. An Association of Persons consisting of three members, all are individuals and none of them
having total income exceeding exemption limit. However, shares of members in the profit/loss
of AOP are indeterminate. Then in this situation, at what rate total income of the AOP shall be
taxed?
© CA MEHUL THAKKER
(c) 30% (d) 20%
6. An Association of Persons consisting of three members, one of them is a foreign company.

However, shares of members in the profit/loss of AOP are indeterminate. Then in this situation,
at what rate total income of the AOP shall be taxed?
(c) 30% (d) 40%
7. X and Y are equal partners of ABC & Co. On 1st day of previous year, Mr. X contributed capital of
Rs.10,00,000 @ 15% p.a. On the same day, Mr. X had given a loan of Rs. 25,00,000 to the firm
@18% p.a. While Mr. Y contributed capital of Rs. 5,00,000 @ 15% p.a. Find out the amount of
interest admissible under section 40(b) of the Act in the hands of firm.
(a) Rs. 1,80,000 (b) Rs. 4,80,000
(c) Rs. 45,000 (d) Rs. 1,95,000
8. Continuing above, find out the amount of interest income from the partnership firm - to be taxed
under the head PGBP in the hands of Mr. Y.
(a) Rs. 60,000 (b) Rs. 75,000
(c) Rs. 45,000 (d) Rs. 30,000
9. X and Y are equal partners of ABC & Co. On 1st day of previous year, Mr. X contributed capital of
Rs.10,00,000 @ 15% p.a. On the same day, X HUF had given a loan of Rs. 25,00,000 to the firm
@18% p.a. While Mr. Y contributed capital of Rs. 5,00,000 @ 15% p.a. Find out the amount of
interest admissible under section 40(b) of the Act in the hands of firm.
(a) Rs. 1,80,000 (b) Rs. 4,80,000
(c) Rs. 45,000 (d) Rs. 1,95,000
10. Continuing above, find out the correct statement regarding liability of firm to deduct tax at soure
under section 194A.
(a) Firm shall deduct TDS on interest (b) Firm shall deduct TDS on interest payable to X
payable to partners only HUF only
(c) Firm shall deduct TDS on interest (d) Firm shall not deduct TDS under section 194A
payable to partners as well as to X HUF
© CA MEHUL THAKKER
ANSWERS
1. (b) 2. (d) 3. (a) 4. (c)

5. (b) 6. (d) 7. (b) 8. (a)
9. (a) 10. (b)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 14- ASSESSMENT OF CO-OPERATIVE SOCIETIES
14 – ASSESSMENT OF CO-OPERATIVE SOCIEITES

1. Out of the followings, which activity of the co-operative society is not eligible for deduction under
section 80 P (2) (a) of the Act?
(a) Cottage Industry (b) Providing credit facilities to its members
(c) Collective disposal of labour (d) Processing of agricultural produce with aid of power
2. Co-operative society, being a primary society engaged in supplying milk, oilseeds, fruits or
vegetables raised or given by its members to __________ is eligible for deduction under section
80 P(2) (b).
(a) A Federal co-operative society (b) The Government or local authority
(c) Government Company (d) All of above
3. The consumer co-operative society is eligible for deduction under section 80 P (2) (c) of so much
of its profits and gains as does not exceed Rs. __________
(a) Rs. 1,00,000 (b) Rs. 50,000
(c) Rs. 75,000 (d) Whole of the profits and gains
4. How much deduction is available under section 80 P(2) (c) to any co-operative society other than
the consumer co-operative society?
(a) Rs. 1,00,000 (b) Rs. 50,000
(c) Rs. 75,000 (d) Whole of the profits and gains
5. Any income by way of interest or dividends derived by the co-operative society from its
investments in any other co-operative society is deductible under section __________.
(a) 80 P (2) (a) (b) 80 P (2) (e)
(c) 80 P (2) (b) (d) 80 P (2) (d)
6. Deduction under section 80 P(2) (f) is not available to a _______

(a) Housing society (b) Urban consumer’s society
(c) Society carrying on transport business (d) All of the above
7. One of the condition to avail deduction under section 80 P(2) (f) is that the gross total income of
the society shall not exceed Rs. _______
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 14- ASSESSMENT OF CO-OPERATIVE SOCIETIES
(a) Rs. 50,00 (b) Rs. 1,00,000
8. Section 80 P (4) provides that the benefit of section 80 P is not available to _________
(a) Any Co-operative Bank (b) Primary agricultural credit society
(c) Primary co-operative agricultural and (d) All of the above
rural development bank
9. Co-operative Society deriving total income not exceeding Rs. 10,000 shall be taxed at ___
(a) 10% (b) 20%
(c) 30% (d) MMR
10. Highest tax rate (excluding surcharge) applicable to co-operative society is -

(a) 10% (b) 20%
(c) 30% (d) MMR
ANSWERS
1. (d) 2. (d) 3. (a) 4. (b)

5. (d) 6. (d) 7. (c) 8. (a)
9. (a) 10. (c)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 15- ASSESSMENT OF COMPANIES
15 – ASSESSMENT OF COMPANIES
1. Indian Company is always _________
(a) Closely held company (b) Widely held company
(c) Foreign company (d) Domestic company
2. Foreign company means a company which is not a _________

(a) Closely held company (b) Widely held company
(c) Indian company (d) Domestic company
3. Out of the followings, which one is not a widely held company?

(a) Company owned by Government (b) A company without share capital but declared
by CBDT
(c) Nidhi or Mutual Benefit Society (d) Private Limited company
4. What shall be the tax rate applicable on book profit under section 115 JB generally?
(a) 15% (b) 8%
(c) 9.5% (d) 18.5%
5. What shall be the tax rate applicable on book profit under section 115 JB, if assessee is a unit
located in International Financial Service Center and derives its income solely in convertible
foreign exchange?
(a) 15% (b) 8%
(c) 9% (d) 18.5%
6. The provisions of MAT as enumerated under section 115 JB are not applicable to
(a) An enterprenuer in SEZ (b) A Life Insurance Company
(c) A General Insurance Company (d) A Developer of SEZ
7. Out of the followings, which one is not a positive adjustment to be done while computing book
profit under section 115JB?
(a) the amount of income-tax paid or payable (b) the amounts carried to any reserves
(c) the amount or amounts of dividends paid (d) Income tax refund
or proposed
© CA MEHUL THAKKER
8. Out of the followings, which one is not a negative adjustment to be done while computing book
profit under section 115JB?
(a) the amount of loss brought forward or (b) the amounts withdrawn from reserves
unabsorbed depreciation, whichever is
higher, as per books of account
(c) the amount of loss brought forward or (d) the amount of income by way of royalty in
unabsorbed depreciation, whichever is respect of patent chargeable to tax under
less, as per books of account section 115BBF
9. Compnay opted for special tax rate of 25% under section 115BA can claim
(a) Additional depreciation (b) Deduction under section 80JJAA
(c) Deduction under section 10AA (d) Deduction under section 35AD
10. Under section 115JAA of the Act, MAT credit will be allowed to be carried forward for a period
of __________assessment years immediately succeeding the assessment year in which MAT
credit is available.
(a) seven (b) ten
(c) fifteen (d) twenty
11. Under section 115JAA of the Act, where the amount of tax credit in respect of any income-tax
paid in any country or specified territory outside India, under____________, allowed against the
tax payable under MAT exceeds the amount of such tax credit admissible against the regular tax
payable by the assessee, then, while computing the amount of MAT credit, such excess amount
shall be ignored.
(c) Section 90A (d) All of the above
12. Every person who is a liquidator of any company which is being wound up or who has been
appointed the receiver of any assets of a company shall within ____ of such appointment give
notice of his appointment to the concerned Assessing Officer.
(a) 30 days (b) 60 days
(c) 2 months (d) 3 months
13. MAT stands for ___________

(a) Minimum Alternate Tax (b) Minimum Assured Tax
(c) Minimum Applicable Tax (d) Maximum Alternate Tax
© CA MEHUL THAKKER
14. "Book profit" for the purposes of section 115JB means net profit as shown in the statement of
profit and loss prepared in accordance with _______of the Companies Act as increased and
decreased by certain items prescribed under this section.
(a) Schedule VI (b) Schedule III
(c) Schedule IV (d) Schedule I
15. As per section 178(3), the ___________ of a company is under an obligation to intimate the
Commissioner of Income Tax before he parts with any of the assets of the company.
(a) Managing Director (b) Director
(c) Company Secretary (d) Liquidator
16. The provisions of section 115JB (MAT) shall not apply to any income accruing or arising to a
company from______
(a) Life insurance business (b) Banking business
(c) General insurance business (d) None of the above
17. Generally, tax rate applicable to a domestic company, is 30%. However, its turnover or gross
receipts for the previous year ______________ does not exceed 250 Cr, then tax rate applicable
shall be @ 25%
(a) 2015-16 (b) 2016-17
(c) 2017-18 (d) 2018-19
18. In the case of companies in which the public are not substantially interested (other than start-
up company referred to in section 80-IAC), loss will not be carried forward and set off unless the
shares of the company carrying not less than ____ per cent of the voting power were beneficially
held by the same person(s) both on the last day of the previous year in which loss occurred and
on the last day of the previous year in which brought forward loss is sought to be set off.
(a) 51 (b) 100
(c) 50 (d) 49
19. Section 79 shall not affect right of a closely held company to carry forward
(a) Non-speculative business losses (b) Unabsorbed depreciation
(c) Capital losses (d) Speculative business losses
© CA MEHUL THAKKER
ANSWERS
1. (d) 2. (d) 3. (d) 4. (d)

5. (c) 6. (b) 7. (d) 8. (a)
9. (b) 10. (c) 11. (d) 12. (a)
13. (a) 14. (b) 15. (d) 16. (a)
17. (b) 18. (a) 19. (b)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 16- CORPORATE DIVIDEND TAX AND TAX ON DISTRI…
16 – CORPORATE DIVIDEND TAX AND TAX ON DISTRIBUTED INCOME

1. As per section 115O, tax to the credit of Government in case of dividend distribution of domestic
company shall be deposited within _______ days from date of declaration of such dividend.
(c) 14 days (d) 30 days
2. A foreign company in which the Indian company holds ___________ in nominal value of the
equity share capital shall be treated as specified company for the purpose of section 115BBD of
the Act and dividend received from such company shall be taxed in the hands of Indian company
at the rate of ______.
(a) 25% or more, 10% (b) 26% or more, 15%
(c) 50% or more, 15% (d) 51% or more, 10%
3. Any amount declared, distributed or paid by a domestic company by way of dividend (whether
interim or otherwise) out of current or accumulated profits shall be charged to additional
income-tax which is popularly known as ____________.
(a) Corporate tax (b) Corporate Dividend Tax
(c) Minimum Alternate tax (d) Additional tax
4. The rate of dividend distribution tax under section 115-O is _________

(a) 15% (b) 20%
(c) 25% (d) 7.5%
5. Under section 115BBD of the Act, dividend received by Indian companies from specified foreign
company shall be taxed at concession rate of _______________
(a) 15% (b) 10%
(c) 5% (d) 20%
6. As per section 115QA, any amount of distributed income by the company on buy-back of unlisted
shares from a shareholder shall be charged to additional income-tax at the rate of _______.
(a) 10% (b) 20%
(c) 30% (d) 15%
ANSWERS
1. (c) 2. (b) 3. (b) 4. (a)

5. (a) 6. (b)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 17- ALTERNATIVE MINIMUM TAX [CHAPTER XII-BA]
17 - ALTERNATIVE MINIMUM TAX [CHAPTER XII-BA]

1. AMT stands for ___________
(a) Applicable Minimum Tax (b) Assured Minimum Tax
(c) Alternate Minimum Tax (d) Alternate Maximum Tax
2. The rate of AMT is _______% of adjusted total income.

(a) 18.00 (b) 18.50
(c) 15.00 (d) 10.00
3. Every taxpayer to whom the provisions of AMT apply, is required to obtain a report from a
chartered accountant in Form No. _____ on or before the due date of filing the return.
(a) 29 A (b) 29 B
(c) 29 D (d) 29 C
4. In the case of a non-corporate taxpayer who is subject to provisions of Alternate Minimum Tax
(AMT), tax payable by it cannot be less than __% (+SC+HEC) of __computed as per section 115JC.
(a) 15, Book Profit (b) 18, Book Profit
(c) 18.5, Adjusted total income (d) 20, Adjusted total income
5. While computing adjusted total income u/s 115JC, total income computed under the Act shall
be increased by:
(a) Deduction under sections 80 C to 80 U (b) Deduction under section 80P
(c) Deduction under sections u/s 80H to (d) Deduction under sections 80H to sec. 80RRB
sec. 80RRB other than section 80P
6. The provisions of chapter XII-BA(AMT) shall apply to a person who has claimed any deduction
under _______
(a) Section 80 H to 80 RRB except 80P (b) Section 10AA
(c) Section 35AD (d) All of the above
7. Under section 115JD of the Act, AMT credit will be allowed to be carried forward for a period of
___ assessment years immediately succeeding the assessment year in which AMT credit is
available.
(a) seven (b) ten
(c) fifteen (d) twenty
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 17- ALTERNATIVE MINIMUM TAX [CHAPTER XII-BA]
ANSWERS
1. (c) 2. (b) 3. (d) 4. (c)

5. (d) 6. (d) 7. (c)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 18- HINDU UNDIVIDED FAMILY (HUF)
18 – HINDU UNDIVIDED FAMILY (HUF)

1. Concept of “HUF” has been abolished in the State of __________ by special enactment.
(a) Kerala (b) Gujarat
(c) Maharastra (d) Madhya Pradesh
2. Dayabhaga school of Hindu law prevails in the State of __________.

(a) Kerala (b) West Bengal
(c) Assam (d) (b) and (c) above
3. Any sum received by an Individual as a member of HUF out of the income of the family is ______
under section _______
(a) Taxable, 28 (b) Exempt, 10(2)
(c) Taxable, 56 (d) Exmpt, 10(2A)
4. Tax treatment on partition of Hindu Undivided Family is governed by Section

(a) 171 (b) 163
(c) 161 (d) 169
ANSWERS
1. (a) 2. (d) 3. (b) 4. (a)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 19- BUSINESS TRUST
19 – BUSINESS TRUST
1. Subject to certain conditions, who is eligible to claim exemption under section 10(23FB) of the
Act?
(a) Venture Capital Compnay (b) Venture Capital Fund
(c) Venture Capital Scheme of UTI (d) All of the above
2. A Venture Capital Fund registered before 21-05-2012 derived income of Rs.17 lakh comprising
dividend of Rs.4 lakh from shares from a Venture Capital Undertaking and interest of Rs.13 lakh
on loan granted to such undertaking. G receives income of Rs.1.7 lakh from such fund. Examine
the taxability of the sum of Rs.1.7 lakh received by G.
(a) Rs. 1.70 lakh shall be exempt (b) Rs. 1.3 lakh shall be chargeable to tax
(c) Rs. 0.40 lakh shall be exempt (d) Rs. 1.70 Lakhs shall be chargeable to tax
3. As per section 10(23FBA), any income of Investment Fund other than ______ income is exempt
from tax.
(a) Capital Gain (b) Income under the head house property
(c) Income under the head Other Sources (d) PGBP
4. As per section 115UB(4), the total income of the investment fund being a company or firm is
chargeable to tax at the rate of:
(a) 30% (b) 25%
(c) 29% (d) MMR
5. As per section 115UB(4), the total income of the investment fund other than a company or firm
is chargeable to tax at the rate of:
(a) 30% (b) 25%
(c) 29% (d) MMR
6. As per section 194LBB, investment fund is required to deduct tax at source @ ____ on any
income (other than the proportion of income which is of the same nature as income chargeable
under the head “Profits and gains of business or profession”) when payee is resident.
(a) 10% (b) 20%
(c) 40% (d) MMR
© CA MEHUL THAKKER
7. As per section 10(23FC), following income(s) is/are exempt in the hands of REIT.
(a) Interest income from SPV (b) Dividend income from SPV in which Business Trust holds
100% equity
(c) (a) and (b) above (d) Rental income of any real estate directly owned by REIT
8. As per section 10(23FCA), following income(s) is/are exempt in the hands of REIT.
(a) Interest income from SPV (b) Dividend income from SPV in which Business Trust holds
100% equity
(c) (a) and (b) above (d) Rental income of any real estate directly owned by REIT
9. When SPV makes payment of interest to REIT-

(a) Tax deduction at source not reuired (b) Tax shall be deducted at the rate of 10%
(c) Tax shall be deducted at the rate of 10% (d) Tax shall be deducted at the rate of 20%
if interest amount exceeds Rs. 10,000
10. When tenant makes payment of rent to REIT-

if interest amount exceeds Rs. 1,80,000
11. When tenant makes payment of rent to REIT-

if interest amount exceeds Rs. 1,80,000
12. When REIT distributes rent portion to its resident unit holder, it must deduct tax at source
_________ under section 194LBA(1).
(a) 20% (b) 30%
(c) 10% (d) 40%
13. When REIT distributes rent portion to its non-resident unit holder (not being a foreign company),
it must deduct tax at source _________ plus SC and HEC under section 194LBA(3).
(a) 20% (b) 30%
(c) 10% (d) 40%
© CA MEHUL THAKKER
14. Any transfer of a capital asset, being share of a special purpose vehicle to a business trust in
exchange of units allotted by that trust to the transferor
(a) will attract capital gain (b) is not treated as transfer
(c) will attract capital gain but transferor (d) will attract capital gain but transferor can
can claim exemption under section 54 claim exemption under section 54 EC
15. When securitization trust distributes income to its non-resident investor (not being a foreign
company), it must deduct tax at source _________ plus SC and HEC under section 194LBC.
(a) 20% (b) 30%
(c) 10% (d) 40%
16. When securitization trust distributes income to its investor being a foreign company, it must
deduct tax at source _________ plus SC and HEC under section 194LBC.
(a) 20% (b) 30%
(c) 10% (d) 40%
ANSWERS
1. (d) 2. (d) 3. (d) 4. (a)

5. (d) 6. (a) 7. (c) 8. (d)
9. (a) 10. (a) 11. (a) 12. (c)
13. (b) 14. (b) 15. (b) 16. (d)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 20- TAXATION OF TRUSTS OR INSTITUTIONS
20 – TAXATION OF TRUSTS OR INSTITUTIONS

1. ABC charitable trust would like to accumulate the income for the purpose of construction of
school building in coming three years and therefore set apart Rs. 20 Lacs out of current year’s
income. In order to exclude Rs. 20 lacs from taxable income, the charitable trust is required to
inform the purpose and the period for which accumulation is made to the assessing officer in a
prescribed form? Out of the followings, which one is the prescribed form?
(a) Form No. 9 (b) Form No. 8
(c) Form No. 10 A (d) Form No. 10
2. Unless Trust is registered under section 12A of the Act, it will not be eligible for exemption under
section 11, 12 and 13 of the Act. For this purpose, trust is required to make application to the
Commissioner of Income tax in Form No. _____
(a) 9 (b) 8
(c) 10 A (d) 10
3. Out of the following objects of the trust, which object does not fall within the meaning of term
“Charitable Purpose” under section 2(15) of the Act?
(a) Relief of poor (b) Education
(c) Yoga (d) None of the above
4. The advancement of any other object of general public utility shall not be a charitable purpose,
if the aggregate receipts from such activity or activities during the previous year, exceeds
_______ of the total receipts, of the trust or institution undertaking such activity or activities, of
that previous year.
(a) 20% (b) 40%
(c) 15% (d) None of the above
5. In a case, trust or institution has been granted registration under section 12AA, and,
subsequently, it has adopted or undertaken modifications of the objects which do not conform
to the conditions of registration, then it shall be required to make an application, in the
prescribed form and manner, within a period of ______ from the date of said adoption or
modification, to the Principal Commissioner or Commissioner and thereupon obtain fresh
registration.
(c) 90 days (d) Six months
© CA MEHUL THAKKER
6. The accounts of the trust or institution for the previous year shall be audited if the total income
before claiming exemption under section 11 and 12 exceeds _______.
(a) Rs. Nil (b) Exemption limit
(c) Rs. 5,00,000 (d) Rs. 10,00,000
7. In order to claim benefit of exemption under section 11, the trust is required to furnish the return
of income in accordance with the provisions of section _________.
(a) 139(4B) (b) 139 (4C)
(c) 139 (4A) (d) 139 (4D)
8. The time limit for granting registration of trust under section 12 AA is __________ from the end
of month in which application is received by Pr. Commissioner.
(c) 3 months (d) Six months
9. A trust created for charitable purposes in February 2018, having filed application for registration
as per section 12A on 11.4.2018, can claim benefits of sections 11 and 12 from Assessment
Year__________.
(a) 2018-19 (b) 2019-20
(c) 2017-18 (d) 2020-21
10. Section 11(1) provides that if income of charitable or religious trust has been applied for the
objects in India, then amount set apart or accumulated upto ____of income shall not be included
in total income of the trust.
(a) 15% (b) 75%
(c) 85% (d) 100%
11. As per explanation to section 11(1) of the Act, voluntary contributions received by a trust are
treated as _________.
(a) Exempt income (b) Capital receipt
(c) Income (d) Income from business
12. Application of income under section 11(1) can be towards ______________ provided the same
shall be for the objects of the trust.
© CA MEHUL THAKKER
(a) Revenue expenditure only (b) Revenue expenditure or Capital expenditure
(c) Capital expenditure only (d) None of the above
13. As per section 12 of the Act, __________received by a trust are not treated as income.
(a) Voluntary contributions (b) Donations
(c) Interest income (d) Corpus donations
14. During the previous year, if charitable trust is not able to apply 85% of its income due to
_____________, then such income can be applied during the previous year in which income is
received or in the immediately following previous year.
(a) Any other reason (b) The reason that income has not been accrued
during that year
(c) The reason that income has not been (d) All of the above
received during that year
15. Under section 11(2), the period for which income can be accumulated shall not exceed
__________ years.
(a) Five (b) Seven
(c) Ten (d) Three
16. The money set apart or accumulated under section 11(2) shall be invested in any one or more of
the modes or forms specified under section ________ of the Act.
(a) 11(2) (b) 11(1)
(c) 11(3) (d) 11(5)
17. Work out from the following particulars, the amount of capital gain which shall be deemed to
have been applied for charitable or religious purpose arising out of sale of a capital asset utilized
for the purposes of trust.
Particulars Rs.
Cost of transferred asset 2,40,000
Sale consideration 3,80,000
Cost of new asset purchased 3,00,000
Expenses in connection with transfer 20,000
(a) Rs. 2,40,000 (b) Rs. 3,00,000
(c) Rs. 60,000 (d) Rs. 3,60,000
© CA MEHUL THAKKER
18. Section 11(4A) provides that income from business shall be eligible for exemption under section
11(1) or 11(2) subject to few condition(s). Identify such condition(s).
(a) The business is incidental to the (b) Separate books of accounts are maintained in
attainment of the objects of the trust or respect of such business.
institution.
(c) The accounts of the business shall be (d) (a) and (b) above
audited
19. Section 11(6) provides that while determining total income of the trust, no depreciation or
deduction shall be allowed in respect of an asset, cost of which has been claimed as an
application of income, in the _______________.The money set apart or accumulated under
section 11(2) shall be invested in any one or more of the modes or forms specified under section
________ of the Act.
(a) Same previous year (b) Same assessment year
(c) same or any other previous year (d) subsequent previous year
20. Identify the income in respect of which trust can claim straightaway exemption without being
spent?
(a) Dividend income (b) Long term capital gain u/s 10(38)
(c) Capital gain on buy of back of unlisted shares (d) Agricultural income
21. As per section 13 of the Act, which trust is not eligible for exemption under section 11 or 12 of
the Act?
(a) Trust for private religious (b) Trust for the benefit of particular religious
community
(c) Trust enuring benefit to the persons (d) All of the above
specified under section 13(3) of the Act
22. For the purpose of section 13(1) (c) read with section 13(2) of the Act, who is not an interested
person / specified person?
(a) Author of the trust (b) Founder of the institution
(c) Manager of the trust (d) Relative of the author of the trust
23. As per section 13(4) of the Act, the aggregate of the funds of the trust invested in a concern in
which any specified person has a substantial interest does not exceed___per cent of the capital
of that concern, exemption under section 11 will not be denied in relation to the application
of any income other than the income arising to the trust from such investment
© CA MEHUL THAKKER
(a) Five (b) Fifteen
(c) Eighty-five (d) One
24. Section 12AA(3) provides that where a Trust or an Institution has been granted registration and
subsequently the Commissioner is satisfied that the activities of such trust or Institution are
__________ or in __________, then the Commissioner has the power to pass an order in writing
canceling the registration after giving a reasonable opportunity of being heard.
(a) Not genuine, contravention of the objects (b) Genuine, contravention of the objects
(c) Improper, accordance with the objects (d) None of the above
25. If exemption is forfeited due to contravention u/s. 13(1) (c) or 13(1)(d), then such income shall
be taxed in the hands of chartiable trust or institution at the rate
(a) Applicable to AOP (b) 30%
(c) Maximum Marginal Rate (d) 20%
26. The provisions relating to anonymous donation enumerated under section 115BBC shall not
apply to _________
(a) Wholly charitable trusts (b) Partly religious and partly charitable trusts
(c) Wholly religious trusts (d) None of the above
27. Under section 115BBC, anonymous donation shall be taxed at __________

(a) 30% (b) 20%
(c) Maximum Marginal Rate (d) 40%
28. Under section 115BBC, some relaxation is given while taxing anonymous donation received by a
trust. That relaxation is:-
(a) 5% of total donations received by a trust (b) Rs. 1,00,000
(c) Lower of (a) and (b) above (d) Higher of (a) and (b) above
29. Under section 12AA, an order of granting or refusing registration of trust shall be passed within
_______ from the end of the month in which application is received.
(a) 24 months (b) 18 months
© CA MEHUL THAKKER
ANSWERS
1. (d) 2. (c) 3. (d) 4. (a)

5. (a) 6. (b) 7. (c) 8. (d)
9. (b) 10. (a) 11. (c) 12. (b)
13. (d) 14. (c) 15. (a) 16. (d)
17. (c) 18. (d) 19. (c) 20. (d)
21. (d) 22. (c) 23. (a) 24. (d)
25. (c) 26. (c) 27. (a) 28. (d)
29. (d)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 21- PERMANENT ACCOUNT NUMBER
21 – PERMANENT ACCOUNT NUMBER

1. Permanent Account Number (PAN) is a _________digit unique alphanumeric number.
(a) Twenty (b) Fifteen
(c) Ten (d) Five
2. The first ____characters represent the alphabetic series running from AAA to ZZZ.
(a) Five (b) Seven
(c) Three (d) Four
3. The tenth character of PAN is an_________.

(a) Identification (b) Symbol
(c) Alphabetic check digit (d) Numeric check digit
4. If a person fails to comply with the provisions relating to PAN (i.e. obtaining PAN, quoting PAN,
etc.), then penalty of Rs ________can be levied under section 272 B of the Act.
(a) Rs. 5,000 (b) Rs. 10,000

(c) Rs. 1,000 (d) Rs. 21,000
5. Application for obtaining PAN is to be made in Form _______ (in case of a resident).
(a) 49 (b) 49A
(c) 49B (d) 49C
6. The number allotted by income tax department to assessees for their identification and which
shall be quoted in all documents and correspondence is called ___________.
(a) TAN (b) PAN
(c) GIR (d) GSTN
7. Identify the transaction in which quoting PAN is not mandatory :

(a) Sale or purchase of a motor vehicle or (b) Making an application for issue of a credit or
vehicle other than two wheeled vehicles. debit card
(c) Purchase of grocery worth Rs. 20,000 in (d) Opening of a demat account with a
cash from D MART depository
© CA MEHUL THAKKER
8. Mr. Saif is planning to celebrate his birthday in a seven-star hotel and willing to discharge hotel
dues in cash. What shall be the threshold limit for quoting of PAN in this regard?
(a) Amount exceeding Rs. 1,00,000 (b) Amount exceeding Rs. 5,00,000
(c) Amount exceeding Rs. 10,000 (d) Amount exceeding Rs. 50,000
9. Mr. Gyani is planning to spend his summer vacation at United States of America and willing to
purchase foreign currency in cash. What shall be the threshold limit for quoting of PAN in this
regard?
(a) Amount exceeding Rs. 1,00,000 (b) Amount exceeding Rs. 50,000
(c) Amount exceeding Rs. 25,000 (d) Amount exceeding Rs. 2,50,000
10. Mr. Happy was quite worried about his retirement planning. He was advised to invest in mutual
funds. Mr. Happy is now willing to invest in mutual funds. Advise Mr. Happy regarding threshold
limit for quoting of PAN in this regard?
(a) Amount exceeding Rs. 50,000 (if it is in (b) Amount exceeding Rs. 50,000 (irrespective of
cash) mode of payment)
(c) Amount exceeding Rs. 10,00,000 (d) Amount exceeding Rs. 2,00,000
11. Mr. Smart is having cash in hand amounting to Rs.1,00,000. He would like to deposit Rs.10,000
in his saving account every day for next 10 working days. Advise him regarding threshold limit
for quoting of PAN in this regard?
(a) Amount exceeding Rs. 50,000 (b) Amount exceeding Rs. 20,000
(c) Amount exceeding Rs. 1,00,000 (d) Amount exceeding Rs. 10,000
12. Mr. Dull secured admission in a medical college where annual fee is Rs. 1,25,000. He approached
his banker to purchase bank draft in favour of medical college. Mr. Dull is planning to purchase
this bank draft in cash. Advise him regarding threshold limit for quoting of PAN in this regard?
(a) Amount exceeding Rs. 2,00,000 (b) Amount exceeding Rs. 20,000
(c) Amount exceeding Rs. 1,00,000 (d) Amount exceeding Rs. 50,000
13. Mr. Chaturvedi had made total time deposit with State Bank Of India, Ahmedabad Rs. 11,00,000
during the financial year. Mr. Chaturvedi had taken care that each time deposit does not exceed
Rs. 50,000. Whether Banker can ask for PAN from Mr. Chaturvedi?
(a) No, the annual threshold limit for (b) No, the annual threshold limit for submission
submission of PAN is Rs. 20,00,000 of PAN is Rs. 15,00,000
(c) Yes, the annual threshold limit for (d) Yes, the annual threshold limit for submission
submission of PAN is Rs. 10,00,000 of PAN is Rs. 5,00,000
© CA MEHUL THAKKER
14. Mr. Worried has purchased life insurance policy from LIC. The annual premium is Rs. 80,000. The
insurance agent asked Mr. Worried to provide copy of PAN. However, Mr. worried refused to
give the copy of PAN, because, according to him, no threshold limit is applicable for such
payment. Advise Mr. Worried.
(a) He should provide copy of PAN since (b) He should not provide copy of PAN since
annual threshold limit for LIP is Rs. 20,000 annual threshold limit for LIP is Rs. 1,00,000
(c) He should provide copy of PAN since (d) He should not provide copy of PAN since
annual threshold limit for LIP is Rs. 50,000 annual threshold limit for LIP is Rs. 2,00,000
15. Identify the transaction in which quoting PAN is mandatory due to threshold limit of Rs. 1lakh
per transaction.
(a) A contract for sale or purchase of (b) Sale or purchase of any immovable property
securities (other than shares)
(c) Sale or purchase, by any person, of (d) (a) and (c) above
shares of a company not listed
16. What shall be the threshold limit for quoting PAN while effecting sale or purchase of any
immovable property?
(a) Rs. 10 lakh (b) Rs. 30 lakh
(c) Rs. 25 lakh (d) Rs. 2 Lakh
17. What shall be the threshold limit for quoting PAN generally while effecting sale or purchase of
goods or services?
(a) Rs. 10 lakh (b) Rs. 50,000
(c) Rs. 1 lakh (d) Rs. 2 Lakh
18. Any person, who does not have PAN and enters into any of the specified transaction which
mandates PAN, can make a declaration in Form No _____
(a) 49A (b) 49B
(c) 60 (d) 61
ANSWERS
1. (c) 2. (c) 3. (c) 4. (b)

5. (b) 6. (b) 7. (c) 8. (d)
9. (b) 10. (b) 11. (a) 12. (d)
13. (d) 14. (c) 15. (d) 16. (a)
17. (d) 18. (c)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 22- E-PAYMENT OF TAXES
22 – E-PAYMENT OF TAXES
1. For making e-payment of taxes one should have only two things, an internet connection and a
______________in an authorised bank.
(a) Saving account (b) Current account
(c) Fixed deposit (d) Net banking enabled account
2. Identify the challan to be used for making payment of income-tax and Corporate tax?
(a) ITNS 280 (b) ITNS 281
(c) ITNS 282 (d) ITNS 284
3. Identify the challan to be used for making payment of TDS/TCS by corporate and non-corporate
deductors/collectors?
4. Identify the challan to be used for making payment of Securities Transaction Tax, Wealth Tax and
other direct taxes?
5. Identify the challan to be used for making payment of tax deducted at source in case of
immovable property?
(c) ITNS 282 (d) Form No. 26QB
6. Identify the challan to be used for making payment of income-tax in case of undisclosed foreign
income?
ANSWERS
1. (d) 2. (a) 3. (b) 4. (c)

5. (d) 6. (c)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 23- FILING OF RETURN OF INCOME
23 – FILING OF RETURNS OF INCOME

1. Mr. X (Resident: 82 years old) having income from salary Rs.48,00,000 and income from other
sources Rs.2,50,000 wants to file income tax return. Suggest the proper ITR form and the mode
of filing ITR from the followings:
(a) ITR 1 and Paper Form (b) ITR 1 and Electronically under Digital Signature
(c) Either (a) and (b) (d) None of the above
2. Mr. X (Resident: 58 years old) having income from salary Rs.24,00,000, income from two house
property Rs.55,000 and income from other sources Rs.70,000 wants to file income tax return.
Suggest the proper ITR form and the mode of filing ITR from the following
(a) ITR 1 and Paper Form (b) ITR 2 and Paper Form
(c) ITR 1 and Electronically under Digital (d) ITR 2 and Electronically under Digital
Signature Signature
3. Mr. Y (Non-Resident:32 years old) having salary income Rs.12,00,000, business income
Rs.5,00,000 and income from other sources Rs.15,000 wants to file income tax return. Suggest
the ITR form from the following:
(a) ITR 2 (b) ITR 3
(c) ITR 4 (d) ITR 4 Sugam
4. M/s. C P J & Associates LLP Chartered Accountants (Resident) having income from profession
Rs.25,00,000 (not opted for section 44ADA) and income from other sources Rs.59,000 wants to
file income tax return. Suggest the ITR form from the following:
(a) ITR 3 (b) ITR 4 Sugam
(c) ITR 5 (d) Any of the above
5. M/s. J K P Spaces, a partnership firm (Resident) having income from business Rs.13,50,000 (not
opted for section 44AD) and income from other sources Rs.12,000 wants to file income tax
return. Suggest the ITR form from the following:
(a) ITR 3 (b) ITR 4 Sugam
(c) ITR 5 (d) Any of the above
© CA MEHUL THAKKER
6. Zigzag Ceramics Private Limited having income from business Rs.59,00,000 and income from
other sources Rs.1,39,000 wants to file income tax return. Suggest the proper ITR form and the
mode of filing return from the following:
(a) ITR 5 and Electronically under Digital (b) ITR 5 and transmitting the data in the return
Signature electronically under electronic verification
code
(c) ITR 6 and transmitting the data in the (d) ITR 6 and Electronically under Digital
return electronically under electronic Signature
verification code
7. Identify the due date of filing the return of income in case of a company other than a company
who is required to furnish a report in Form No. 3CEB under section 92E?
(a) September 30 of the assessment year (b) November 30 of the assessment the year
(c) July 31 of the assessment year (d) None of the above
8. Identify the due date of filing the return of income in case of a person who is required to furnish
a report in Form No. 3CEB under section 92E?
9. Identify the due date of filing the return of income in case of a person other than a company
whose accounts are not required to be audited under the Income-tax Law or under any other
law?
10. Identify the due date of filing the return of income in case of a person whose accounts are to be
audited under the Income-tax Law or under any other law (other than a person who is required
to furnish a report in Form No. 3CEB under section 92E)?
11. The return of income is to be furnished in Form No. _______

(a) 26A (b) 26AS
(c) 24Q (d) ITR 1 – to 7 (as applicable to the taxpayer)
© CA MEHUL THAKKER
12. _______ is the acknowledgement of filing the return of income.
(a) ITR – 4 (b) ITR – V
(c) ITR – 1 (d) ITR – 2
13. Taxpayers with total income of more than Rs. _______ shall furnish the return of income
electronically with or without digital signature or by using electronic verification code. However
in a case where digital signature is mandatory return is to be mandatorily digital signed.
(a) 20,00,000 (b) 15,00,000
(c) 10,00,000 (d) 5,00,000
14. Every individual/HUF/AOP/BOI/artificial juridical person has to file the return of income if his
total income (including income of any other person in respect of which he is assessable) without
giving effect to the provisions of section 10(38), 10A or Chapter VIA (i.e. deduction under section
80C to 80U), exceeds ________
(a) Rs.2,00,000 (b) Rs.4,50,000
(c) Rs.5,00,000 (d) The maximum amount not chargeable to tax
15. Where the karta of a HUF is absent from India, the return of income can be signed by:
(a) any member of the family (b) any male member of the family
(c) any other adult member of the family (d) any member holding power of attorney
16. Where assessment has not been completed, belated return for the assessment year 2019-20 can
be filed upto
(a) 31.03.2020 (b) 31.03.2021
(c) 31.03.2022 (d) 31.12.2020
17. Identify the ITR No. applicable to an individual having business income
(c) Form No. 5 (d) Form No. 3
18. The Chief Executive Officer of every political party has to file the return of income of the party if
the total income of the party without giving effect to the provisions of section ____________
exceeds the maximum amount not chargeable to income-tax.
(a) 11 (b) 12
(c) 13B (d) 13A
© CA MEHUL THAKKER
19. As per section 140A(1) any tax due (after allowing credit for TDS, advance tax, etc.) along with
interest under section 234A, 234B and 234C (if any) and fee should be paid before filing the
return of income. Tax paid under this section is known as _________.
(a) Advance tax (b) Self assessment tax
(c) Regular assessment tax (d) Corporate tax
20. The return filed under section _____________ is called original return.
(a) 139(1) (b) 139(3)
(c) 139(4) (d) 139(5)
21. The return filed under section _____________ is called belated return.
(a) 139(1) (b) 139(3)
(c) 139(4) (d) 139(5)
c
22. The return filed under section _____________ is called revised return.
(a) 139(1) (b) 139(3)
(c) 139(4) (d) 139(5)
23. Return filed under section_________ can be revised u/s 139(5).

(a) 139(1) (b) 139(5)
(c) 139(4) (d) All of the above
24. Return filed under section_________ can be revised u/s 139(5).
(a) 139(1) (b) 139(5)

(c) 139(4) (d) All of the above
25. ______ shall furnish return of income irrespective of income or loss.

(a) A company (b) A firm
(c) An organization approved under section 35(1)(ii)/(iii) (d) All of the above
26. Furnishing of return of income is not mandatory for _______________

(a) A company (b) A firm
(c) An organization approved under section (d) A resident individual having gross total
35(1)(ii)/(iii) income of Rs. 2,10,000
© CA MEHUL THAKKER
27. Having filed return, if assessee discovers an omission or wrong statement therein, he can furnish
return under section _________
(a) 139(1) (b) 139(5)
(c) 139(3) (d) 139(4)
28. Section __________ deals with the defective retrun.

(a) 139(9) (b) 139(5)
(c) 139(3) (d) 139(4)
29. If assessee fails to rectify the defects pointed out within 15 days of such intimation or extended
time then such return shall be treated as __________ retrun.
(a) Original (b) Revised
(c) Invalid (d) Belated
30. In case of Limited Liability partnership firm, the return of income shall be verified by__________
(a) Working partner (b) Designated partner
(c) Any partner (d) Managing partner
31. In case of Local authority, the return of income shall be verified by__________
(a) Principal Officer (b) Chief Executive Officer
(c) Power of attorney holder (d) Managing person
32. In case of political party, the return of income shall be verified by__________
(a) Principal Officer (b) Chief Executive Officer
(c) Power of attorney holder (d) Managing person
33. Section ________ deals with self-assessment tax .

(a) 139A (b) 139B
(c) 140 (d) 140A
34. The provisions relating to linking of AADHAR with PAN are contained under section__________
(a) 139AA (b) 139A
(c) 140 (d) 140A
© CA MEHUL THAKKER
35. The provisions of section 139AA shall not apply to an individual who does not possess the
Aadhaar number and is
(a) A non-resident (b) Of the age of 80 years ormore
(c) Not a citizen of India (d) All of the above
ANSWERS
1. (a) 2. (d) 3. (d) 4. (c)

5. (c) 6. (d) 7. (a) 8. (b)
9. (c) 10. (a) 11. (d) 12. (b)
13. (d) 14. (d) 15. (c) 16. (a)
17. (d) 18. (d) 19. (b) 20. (a)
21. (c) 22. (d) 23. (d) 24. (d)
25. (d) 26. (d) 27. (b) 28. (a)
29. (c) 30. (b) 31. (a) 32. (b)
33. (d) 34. (a) 35. (a)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 24- PROCESSING OF RETURNS OF INCOME
24 – PROCESSING OF RETURNS OF INCOME

1. Mr. X filed return of income for assessment year 2018-19 claiming a refund of Rs.50,000. The
said refund was granted and paid to the assesse on March 1, 2019 after processing the return
under section 143(1). Later on, the case was taken up for regular assessment by issue of notice
under section 143(2) and the said assessment was completed on August 17, 2019 resulting in
demand of Rs.2,500. Is the assesse liable to interest on the amount of refund already granted to
him and if so, what is the amount of such interest?
(a) Yes, u/s. 234 D, Rs. 3000 (b) Yes, 234 D, Rs. 1350
(c) Yes, u/s. 234D, Rs.1500 (d) Assessee not liable to any such interest
2. While processing return under section 143(1) of the Act, no adjustments shall be made unless an
intimation is given to the assessee of such adjustments either in writing or in electronic mode:
Provided further that the response received from the assessee, if any, shall be considered before
making any adjustment, and in a case where no response is received within _______of the issue
of such intimation, such adjustments shall be made by CPC.
(a) 15 days (b) 1 month
3. No intimation shall be sent under section 143(1) of the Act after the expiry of ______ from the
end of the _________ in which the return is made.
(a) Six months, month (b) Two years, month
(c) One year, financial year (d) Two years, assessment year
4. The ______________ shall be deemed to be the intimation in a case where no sum is payable
by, or refundable to the assessee, and where no adjustment has been made under section 143(1)
of the Act.
(a) Certified copy of computation of total (b) Challan evidencing payment of self-
income assessment tax
(c) Self-certified copy of computation of (d) acknowledgment of return
total income
5. The processing of return under section 143(1) is mandatory even though notice
u/s.______________ has been issued.
(a) 148 (b) 142(1)
(c) 143(3) (d) 143(2)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 24- PROCESSING OF RETURNS OF INCOME
6. While processing return under section 143(1), if it is found that the assessee paid self‐assessment
tax short then the amount so paid shall be adjusted:
(a) first adjusted towards fee payable, if (b) first adjusted towards interest payable, if any,
any, then towards interest and balance, then towards tax payable and balance
if any left, towards tax payable. towards fee payable, if any
(c) first adjusted towards tax payable, then (d) first adjusted towards interest payable, if any,
towards interest and balance, if any left, then towards fee payable, if any and balance
towards fee payable. towards tax payable
7. Where any sum is determined to be payable by the assessee under section _____, then
intimation issued under this section shall be deemed to be a notice of demand for the purpose
of section 156.
(a) 143(1) (b) 142(1)

(c) 143(3) (d) 143(2)
ANSWERS
1. (c) 2. (c) 3. (c) 4. (d)

5. (d) 6. (a) 7. (a)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 25- ASSESSMENT AND RE-ASSESSMENT
25 – ASSESSMENT AND RE-ASSESSMENT

1. CAMA Ltd. has filed the return under section 139(1) of the Act. The assessing officer would like
to scrutinise this return of income. For that purpose, the assessing officer would like to assume
jurisdiction by issuing notice to CAMA Ltd. This notice shall be issued under:
(a) Section 142(1) of the Act (b) Section 143(2) of the Act
(c) Section 148 of the Act (d) None of the above
2. Moksha Ltd. has filed the return under section 139(4) of the Act. The CPC (Central Processing
Centre) would like to make adjustments while processing return under section 143(1) of the Act.
Out of the followings, which adjustment cannot be done by CPC?
(a) Arithmetical Error (b) Incorrect Claim
(c) Rejecting carry forward of loss (d) Incorporating Income corresponding to the tax
deduction at source reflected in Form No. 26AS.
3. Some income has escaped assessment and therefore, the assessing officer issued notice under
section 148 of the Act. In this notice, the assessing officer would direct assessee
(a) To accept the escaped income (b) To pay tax on such escaped income
(c) To pay tax, interest and penalty on such (d) To file return for the concerned assessment
escaped income year
4. In case of a company in liquidation, the return of income shall be verified by

(a) Director of the Company (b) Managing director of the company
(c) Company Secretary (d) Liquidator of the company
5. As per section 142(2A), the assessing officer can direct the taxpayer to get his accounts audited
from a _____________nominated by the Principal Chief Commissioner or Chief Commissioner
or Principal Commissioner or Commissioner.
(a) Cost Accountant (b) Company Secretary
(c) Chartered Accountant (d) Chartered Accountant or Cost Accountant
6. Notice under section 143(2) (i.e. notice of scrutiny assessment) may be served within a period
of _______from the end of the financial year in which the return is filed.
(a) six months (b) three months
(c) two years (d) eighteen months
© CA MEHUL THAKKER
7. Assessment under section 143(3) for assessment year 2019-20 shall be made within a period of
____ months from the end of the relevant assessment year.
(a) 18 (b) 36
(c) 12 (d) 24
8. Assessment under section 144 for assessment year 2019-20 shall be made within a period of
_____ months from the end of the relevant assessment year.
(a) 18 (b) 36
(c) 12 (d) 24
9. During the course of assessment, if tax authorities require fair market value of an asset under
section 56, then they may refer the matter to __________ to ascertain such value under section
142A of the Act.
(a) Registered valuer (b) Commissioner of Income-tax
(c) Valuation officer (d) Principal commissioner of Income-tax
10. When the Assessing Officer makes reference under section 142A to the valuation officer, a
valuation officer shall send a copy of the valuation report, to the Assessing Officer and to
assessee, within a period of _______ from the end of the month in which a valuation reference
is made.
(a) 2 months (b) 4 months
11. As per section 220(2), if the taxpayer fails to pay the amount specified in notice of demand under
section 156 within the time period allowed in this regard, then he shall be liable to pay simple
interest ________ for every month or part of a month.
(a) @ 0.5% (b) @ 1%
(c) @ 1.25% (d) @ 1.50%
12. As per section 220(2A), power to waive or reduce interest under section 220(2) is available with
___________.
(a) The Chief Commissioner (b) The Joint Commissioner
(c) The Additional Commissioner (d) The Assistant Commissioner
© CA MEHUL THAKKER
13. The provisions relating to tax treatment of unexplained cash credit are given in section _____.
(a) 69B (b) 69A
(c) 69 (d) 68
14. The condition of satisfactory explanation about the nature and source of credit by the person in
whose name credit of share application money, share capital, etc. is recorded in the books of a
closely held company, shall not apply if such closely held company is ________.
(a) A Start Up Company (b) A venture capital company as referred to in section 10(23FB)
(c) Investment Company (d) Foreign Company
15. “Where in a financial year the taxpayer has made investments, which are not recorded in the
books of account, if any, maintained by him for any source of income, and he offers no
explanation about the nature and source of these investments, then the value of these
investments shall be deemed to be the income of the taxpayer for such financial year.” This
deemed income shall be taxed under section ______.
(a) 68 (b) 69
(c) 69A (d) 69B
16. Section 69C aims to tax ________.

(a) Unexplained money, bullion, jwellery (b) Amount borrowed or repaid on Hundi
etc. otherwise than by an account payee cheque
(c) Unexplained expenditure (d) Investments not fully disclosed in books of
account
17. Assessment under section_____ is termed as scrutiny assessment.

(a) 143(3) (b) 144
18. Assessment under section_____ is termed as best judement assessment.

(a) 143(3) (b) 144
19. Assessment under section_____ is termed as income escaping assessment.

(a) 143(3) (b) 144
© CA MEHUL THAKKER
20. Assessment under section_____ is termed as regular assessment.
(a) 143(3) (b) 144
(c) 147 (d) 143(3) or 144
21. When any tax, interest, penalty or any other sum is payable in consequence of any order passed,
the Assessing Officer shall serve upon the assessee, a notice of demand under section
___________ in the prescribed form specifying the sum so payable, is issued to the assessee.
(a) 143(3) (b) 144
(c) 156 (d) 147
22. Powers to issue directions to the assessing officer under section 144A of the Act in respect of
assessment proceedings lie with ________________
(a) JCIT (b) DCIT
(c) ACIT (d) CIT
23. The provisions relating to Dispute Resolution Panel are contained in section ___________ of
the Act.
(a) 144 (b) 144A

(c) 144B (d) 144C
24. Dispute Resolution Panel means a collegium comprising of _____ Commissioners of Income-tax
constituted by the Board for this purpose.
(a) three (b) five
(c) seven (d) two
25. The provisions relating to forwarding a draft of proposed order of assessment to the eligible
assessee are contained in section ___________
(a) 144 (b) 143(3)
(c) 144C (d) 147
26. No Notice shall be issued under section 148 to agent of non – resident after expiry of__ years
from the end of the relevant assessment year.
(a) Six (b) Sixteen
(c) Four (d) None of the above
© CA MEHUL THAKKER
27. Where notice under section 148 is served on or after 1st April, 2019 then assessment under
section 147 shall be complted within ________ from the end of financial year in which notice
under section 148 is served.
(a) Six months (b) Nine months
(c) Twelve months (d) Eighteen months
28. Before issuing notice under section 148, the assessing officer __________
(a) Shall obtain appropriate sanction from (b) Shall not obtain any sanction from higher
higher authority authority
(c) Shall call the assessee and warn him (d) None of the above
ANSWERS
1. (b) 2. (d) 3. (d) 4. (d)

5. (c) 6. (a) 7. (c) 8. (c)
9. (c) 10. (c) 11. (b) 12. (a)
13. (d) 14. (b) 15. (b) 16. (c)
17. (a) 18. (b) 19. (c) 20. (d)
21. (c) 22. (a) 23. (d) 24. (a)
25. (c) 26. (a) 27. (c) 28. (a)
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MULTIPLE CHOICE QUESTIONS 26- RECTIFICATION UNDER SECTION 154
26 – RECTIFICATION UNDER SECTION 154

1. Any mistake which is apparent from the record in any order passed by the Assessing Officer can
be rectified under section ________.
(a) 143 (b) 147
(c) 154 (d) 156
2. No order of rectification can be passed after the expiry of ____________ from the end of the
financial year in which order sought to be rectified was passed.
(a) 1 (b) 2
(c) 3 (d) 4
3. In case of an application made by the taxpayer under section 154 of the Act, the authority
concerned shall amend the order/refuse the amendment within a period of __________ from
the end of the month in which the application is received by the authority.
(c) 1 years (d) 6 months
4. In case when there is a mistake apparent from record in the order of Commissioner of Income
Tax (Appeals), then application can be made under section 154 by ____________
(a) Taxpayer (b) Assessing officer
(c) Taxapyer and assessing officer (d) Deductor
5. Where an amendment is made under section 154, then such order shall be passed ______
(a) Orally by the assessing officer (b) In writing by the assessing officer
(c) As per the discretion of assessing officer (d) None of the above
6. Under section 154 of the Act, assessing officer can not rectify ___________
(a) Order passed under section 147 (b) Intimation issued under section 143(1)
(c) Intimation issued under section 200A(1) (d) Order passed by CIT (A) under section 250
7. Re–computing total income for succeeding year(s) in respect of loss or depreciation recomputed
u/s. 147 shall be done within ___ from the end of financial year in which order u/s 147 is passed.
(a) Six months (b) Three months
(c) Four years (d) 1 year
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MULTIPLE CHOICE QUESTIONS 26- RECTIFICATION UNDER SECTION 154
ANSWERS
1. (c) 2. (d) 3. (d) 4. (c)

5. (b) 6. (d) 7. (c)
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MULTIPLE CHOICE QUESTIONS 27- APPEALS
27 – APPEALS
1. A Ltd. was assessed under section 143(3) of the Act and raised demand of Rs. 13,12,500. Being
aggrieved, it would like to prefer an appeal under the Act. Such appeal shall lie before -
(a) CIT (A) (b) Income Tax Appellate Tribunal
(c) High Court (d) Supreme Court
2. In continuation of the above problem, what shall be the form of appeal in which appeal shall be
presented?
(c) Form No. 36 (d) Form No. 37
3. In continuation of above problem, what shall be the appeal fee?

(a) Rs. 500 (b) Rs. 1000
(c) Rs. 1312 (d) Rs. 2000
4. While filing an appeal to CIT(A), which document shall be submitted?

(a) Order of Assessing officer under section (b) Demand notice under section 156 in Original
143(3) of the Act
(c) Challan evidencing payment of Appeal fee (d) All of the above
5. The Bench of Income Tax Appellate Tribunal (ITAT) generally consists of:
(a) Revenue Members only (b) One Accountant Member and one Revenue Member
(c) Judicial Members only (d) One Accountant Member and one Judicial Member
6. When members of the bench of ITAT are equally divided on a particular issue then matter
(a) Shall be decided in favour of Revenue (b) Shall be decided in favour of Assessee
(c) Shall be reheard by the members who (d) Shall be referred to the President of ITAT
are equally divided
7. The Commissioner of Income-tax (Appeals) is the ________ appellate authority under the
Income Tax Act, 1961.
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(a) First (b) Second
(c) Third (d) Fourth
8. Section ________ specifies the orders against which an appeal can be filed (appealable orders)
before the Commissioner of Income-tax (Appeals) .
(a) 253 (b) 260A
(c) 261 (d) 246A
9. An appeal to the Commissioner of Income-tax (Appeals)shall be filed in Form No. ________.

(a) 34B (b) 35
(c) 34C (d) 28
10. Where assessed income (i.e. total income as determined in the assessment) is more than Rs.
1,00,000 but less than Rs. 2,00,000, the fees for filing the appeal before the Commissioner of
Income-tax (Appeals) are ___________.
(a) Rs. 250 (b) Rs. 500
(c) Rs. 1000 (d) Rs. 10,000
11. The Commissioner of Income-tax (Appeal), ________ dispose off the appeal within a period of
one year from the end of the financial year in which appeal is filed.
(a) may (b) shall
(c) where it is possible, may (d) None of the above
12. Departmental appeal means _______.
(a) Appeal filed by the taxpayer against the (b) Appeal filed by the Income-tax department
order of CIT (Appeals) to the ITAT against the order of CIT (Appeals) passed
under section 154 or 250 to the ITAT
(c) Appeal filed by the taxpayer against the (d) Appeal filed by the taxpayer against the order
order of assessing officer to CIT (A) of ITAT to the Supreme Court
13. The appeal to ITAT shall be filed in Form No. _______

(a) 28 (b) 35
(c) 36 (d) 34E
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14. Where assessed income is more than Rs. 2,00,000 then fess for filing an appeal to Income Tax
Appellate Tribunal is __________.
(a) Rs.500 (b) Rs.1,000
(c) Rs.1,500 (d) 1% of assessed income subject to a maximum of Rs. 10,000
15. Under section 254(2), the Tribunal may, at any time within _______from the end of the month
in which the order was passed, with a view to rectifying any mistake apparent from the record,
amend any order passed by it and shall make such amendment if the mistake is brought to its
notice by the assessee or the Assessing Officer.
(c) 4 years (d) Twelve months
16. The appeal shall lie to the High Court againstaAny order passed in appeal by the Appellate
Tribunal, if the High court is satisfied that the case involves a__________.
(a) substantial question of law (b) substantial question of fact
(c) dispute (d) comrpromise
17. The appeal to Commissioner of Income Tax (A) shall be presented within ______________
(a) 30 days of assessment order (b) 30 days of service of notice of demand relating
to assessment or penalty
(c) 30 days of penalty order (d) 60 days of service of notice of demand relating
to assessment or penalty
18. The appeal to Tribunal shall be presented within ______________

(a) 60 days of CIT(A)’s order (b) 30 days of service of notice of demand relating to
assessment or penalty
(c) 30 days of penalty order (d) 60 days of the date on which order sought to be appealed
against is communicated to the assessee/ Commissioner.
19. The appeal to High Court shall be presented within ______________

(a) 120 days of CIT(A)’s (b) 120 days from the date on which order of Tribunal is received
order by the assessee or the Chief Commissioner or Commissioner.
(c) 60 days of ITAT’s order (d) 90 days from the date on which order of Tribunal is received
by the assessee or the Chief Commissioner or Commissioner.
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20. Section _________ deals with the monetary limits for not filing appeal by the Income tax
Department.
(a) 246A (b) 252
(c) 268A (d) 260A
21. Where an assessee has presented an appeal under section 246A, then application for stay of
demand arising out of assessment order shall be made to __________.
(a) The assessing officer (b) CCIT
(c) PCIT (d) CIT
22. Where an assessee has presented an appeal under section 246A, then application for stay of
demand shall be made under section_______.
(a) 220(2) (b) 220(2A)
(c) 220(6) (d) 220(8)
23. Any order passed by the Assessing Officer which the Principal Commissioner or Commissioner
considers erroneous in so far as it is prejudicial to the interests of the revenue can be revised
under section __________
(a) 261 (b) 262
(c) 263 (d) 264
24. Orders other than orders to which section 263 applies passed by an authority subordinate to the
Commissioner can be revised under section
(a) 261 (b) 262
(c) 263 (d) 264
ANSWERS
1. (a) 2. (b) 3. (b) 4. (d)

5. (d) 6. (d) 7. (a) 8. (d)
9. (b) 10. (b) 11. (c) 12. (b)
13. (c) 14. (d) 15. (a) 16. (a)
17. (b) 18. (d) 19. (b) 20. (c)
21. (a) 22. (c) 23. (c) 24. (d)
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MULTIPLE CHOICE QUESTIONS 28- INCOME TAX AUTHORITIES AND THEIR POWERS
28 – INCOME TAX AUTHORITIES AND THEIR POWERS

1. ______________ is not an Income Tax Authority.
(a) CBDT (b) Income Tax Appellate Tribunal
(c) Commissioner of Income Tax (Appeals) (d) Inspectors of income tax
2. ______________ highest Income Tax Authority

(a) CBDT (b) Principal Director General of Income Tax
(c) Chief Commissioner of Income Tax (d) None of the above
3. Under section 117, _____________ is empowered to appoint such person as it thinks fit to be the Income
Tax Authorities.
(a) Additional Commissioner of Income Tax (b) Central Government
(c) Joint Director of Income Tax (d) Assistant Commissioner of Income Tax
4. Under section 119, ______________ has power to issue orders, instructions and directions to all Income
tax authorities.
(a) CBDT (b) CCIT
(c) Pr. CIT (d) CIT
5. Directions, instructions, orders issued under section 119 cannot interfere with the discretion of
___________ in the exercise of appellate functions.
(a) CCIT (b) CIT
(c) PR. CIT (d) CIT (A)
6. The Board, for avoiding __________ in any case or class of cases, by general or special order for
reasons to be specified therein, relax any requirements contained in any of the provisions of
Chapter IV or Chapter VIA, where the assessee has failed to comply with any requirement
specified in such provision for claiming deduction there under, subject to few conditions .
(a) genuine hardship (b) difficulty
(c) problem (d) hardship
7. __________________ is the assessing officer.

(a) Pr. CIT (b) CCIT
(c) DCIT (d) CIT
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8. The jurisdiction of income tax authorities assigned to them on the basis of _________
(a) Territorial area (b) Persons or classes of persons
(c) Incomes or classes of incomes (d) All of the above
9. Assessee having filed return of income can object the jurisdiction of assessing officer within
______from the date of service of notice u/s. 143(2) / 142(1) or before completion of assessment
whichever is earlier.
(a) Six months (b) Three months
(c) One month (d) None of the above
10. Under section 127 of the Act, where the case is transferred between Assessing Officers within
the same city or locality or place, opportunity of being heard _______.
(a) Not to be given (b) To be given
(c) May be given (d) None of the above
11. In case of incumbent of an office of the assessing officer u/s. 129 of the Act, if assessee demands
that he should be reheard then such opportunity of being heard ____________
(a) Not to be given (b) To be given
(c) May be given (d) None of the above
12. Under section 131 of the Act, the assessing officer shall not retain the books/documents for a
period exceeding____________ without prior permission of Pr. CIT
(a) 10 dyas (b) 15 days
13. The authorized officer acting under section 132(1), can search any person ____________
building, place, vessel, vehicle or aircraft.
(a) Who has got out of the (b) Who is about to get into the
(c) Who is in the (d) All of the above
14. As per the powers conferred under second proviso to section 132(1) of the Act, where, it is not
possible or practicable to take physical possession of any valuable article or thing and remove it
to a safe place due to its volume weight or other physical characteristics or due to its being of a
dangerous nature, the Authorised Officer may serve an order on the owner or the person who is
in immediate possession thereof that he shall not remove, part with or otherwise deal with it
except with the previous permission of such Authorised Officer and such action of the Authorised
Officer shall be _____________ of such valuable article or thing.
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(a) deemed to be seizure (b) seizure
(c) confiscation (d) All of the above
15. The presumptions made with regard to books of account, documents, money, bullion, jewelry
etc under section 132(4A) of the Act___________-
(a) Are not rebuttable (b) Are rebuttable
(c) Are to be accepted (d) None of the above
16. The power to requisition books of accounts are vested under section _________
(a) 132 (b) 133A
(c) 132A (d) 133B
17. The power to call for information are enumerated under section _________
(a) 132 (b) 133
(c) 132A (d) 133B
18. The place of survey under section 133A (1) shall be the place at which _________________ is
carried on.
(a) A business (b) A Profession
(c) A business or profession or activity for charitable purpose (d) A business or profession
19. The provisions relating to TDS/ TCS survey are enumerated under section ___________.
(a) 133A(1) (b) 133A (3)
(c) 133A(2A) (d) 133A(5)
20. The provisions relating to Power to Collect certain information are contained in ___________.
(a) 133A (b) 133
(c) 132 (d) 133 B
21. The disclosure of information respecting assessee may be made under section 138 of the Act if
______________.
(a) Public interest is involved (b) Applicant demands for the same
(c) Central Government may think fit (d) Parliament may think fit
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ANSWERS
1. (b) 2. (a) 3. (b) 4. (a)

5. (d) 6. (a) 7. (c) 8. (d)
9. (c) 10. (a) 11. (c) 12. (b)
13. (d) 14. (a) 15. (b) 16. (c)
17. (b) 18. (c) 19. (c) 20. (d)
21. (a)
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MULTIPLE CHOICE QUESTIONS 29- ASSESSMENT IN SEARCH CASES
29 – ASSESSMENT IN SEARCH CASES

1. Section ______ provides that in the case of any person, a search is initiated u/s 132 or requisition
is made u/s 132A, the Assessing Officer shall issue a notice to such person requiring him to
furnish a return of income in respect of specified assessment years.
(a) 153B (b) 143(2)
(c) 153C (d) 153A
2. Section ______ deals with the time limit for completion of assessment in search cases.
(a) 153B (b) 153D
(c) 153C (d) 153A
3. Section ______ deals with the assessment of other person where the assessing officer is satisfied
in accordance with the requirements contained in the said section.
(a) 153B (b) 153D
(c) 153C (d) 153A
4. Section ______ deals with the requirement of prior approval of Joint Commissioner while passing
order of assessment or reassessment in search cases.
(a) 153B (b) 153D
(c) 153C (d) 153A
5. Any assessment or reassessment relating to any assessment year falling within the period of six
assessment years (as per section 153A of the Act) pending on the date of initiation of the search
u/s 132 or making of requisition u/s 132A shall ____.
(a) Abate (b) Continue
(c) Continue subject to approval of CIT (d) Continue subject to approval of Pr. CIT
ANSWERS
1. (d) 2. (a) 3. (c) 4. (b)

5. (a)
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MULTIPLE CHOICE QUESTIONS 30- COLLECTION AND RECOVERY OF TAX
30 – COLLECTION AND RECOVERY OF TAX

1. As per section 220(1), any amount, otherwise than by way of ________, specified as payable in
a notice of demand under section 156 shall be paid within thirty days of the service of the notice
at the place and to the person mentioned in the notice.
(a) Advance Tax (b) Tax deducted at source
(c) Tax Collected at Source (d) Self-assessment Tax
2. As per proviso to section 220(1), where the Assessing Officer has any reason to believe that it
will be detrimental to revenue if the full period of thirty days is allowed, he may, with the
previous approval of the ____________, direct that the sum specified in the notice of demand
shall be paid within such period being a period less than the period of thirty days aforesaid, as
may be specified by him in the notice of demand.
(a) Assistant Commissioner (b) Deputy Commissioner
(c) Principal Commissioner (d) Joint Commissioner
3. As per the provisions of section 220(2) , if the amount specified in any notice of demand u/s 156
is not paid within the period mentioned under section 220(1), the assessee shall be liable to pay
simple interest at ____% for every month or part of a month comprised in the period
commencing from the day immediately following the end of the period mentioned in section
220(1) and ending with the day on which the amount is paid.
(a) 1.25 (b) 1
(c) 1.5 (d) 0.5
4. Power to waive or reduc interest under section 220(2) is not available to

(a) Joint Commissioner (b) Chief Commissioner
(c) Principal Chief Commissioner (d) Commissioner
5. Which one is not a pre-condition to waive or reduce interest levied under section 220(2)?
(a) The assessee has co-operated in (b) The payment of interest would cause genuine
appellate proceedings hardship
(c) Default in payment of interest is due to (d) The assessee has co-operated in recovery
circumstances beyond his control proceedings
6. The time limit for passing order u/s 220(2A) [waiver or reduction of interest] is ___ from the end
of month in which application for waiver or reduction is received by the appropriate authority.
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(a) 1 year (b) Tweleve months

(c) 2 years (d) Six months
7. As per section 220(6) of the Act, where an assessee has presented an appeal under section 246A
the Assessing Officer may, in his discretion, and subject to such conditions as he may think fit to
impose in the circumstances of the case, treat the assessee as not being in default in respect of
the _____________, even though the time for payment has expired, as long as such appeal
remains undisposed of.
(a) Whole amount (b) 50% amount
(c) 20% amount (d) amount of dispute in the appeal
8. As per section 221 of the Act, when an assessee is in default or is deemed to be in default in
making a payment of tax, he shall, in addition to the amount of the arrears and the amount of
interest payable Section 220(2), be liable, by way of penalty, to pay such amount as the Assessing
Officer may direct, and in the case of a continuing default, such further amount or amounts as
the Assessing Officer may, from time to time, direct, so however, that the total amount of penalty
does not exceed
(a) The amount of tax in arrears (b) 50% of tax in arrears
(c) 150% of tax in arrears (d) 200% of tax in arrears
9. As per the provisions of section 222 , when an assessee is in default or is deemed to be in default
in making a payment of tax, the ________ may draw up under his signature a statement in Form
No. 57 specifying the amount of arrears due from the assessee (such statement being hereafter
referred to as “certificate”) and shall proceed to recover from such assessee the amount
specified in the certificate by one or more of the modes mentioned below, in accordance with
the rules laid down in the Second Schedule.
(a) Commissioner of Income Tax (b) Tax Recovery Officer
(c) Assessing Officer (d) Principal Commissioner of Income Tax
10. Powers conferred on the authority under section 222 for collection and recovery tax are:
(a) attachment and sale of the assessee’s (b) attachment and sale of the assessee’s
movable property immovable property
(c) arrest of the assessee and his detention (d) all of the above
in prison
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11. Other modes of recovery of tax are prescribed under section 226 of the Act. Which mode cannot
be exercised by the assessing officer?
(a) Distraint and sale of the assessee’s (b) attachment and sale of the assessee’s
movable property immovable property
(c) Deduction from salary income where (d) Money belonging to assessee lying in court
defaulter get employed custody
12. Section 229 of the Act provides that any sum imposed by way of _________________, shall be
recoverable in the same manner as provided for the recovery of arrears of tax.
(a) Interest (b) Fine
(c) Penalty or any other sum payable under this Act (d) All of the above
ANSWERS
1. (a) 2. (d) 3. (b) 4. (a)

5. (a) 6. (b) 7. (d) 8. (a)
9. (b) 10. (d) 11. (b) 12. (d)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 31- TAX DEDUCTED AT SOURCE
31 – TAX DEDUCTED AT SOURCE

1. The taxpayer is in receipt of interest on debentures from ABC Ltd. The taxpayer wants to submit
From No. 15G for non-deduction of tax. Out of the following taxpayers who can submit this form
if other condition of section 197A are satisfied.
(a) X (HUF) (b) XYZ & Co. partnership firm
(c) X Ltd. (d) None of the above
2. Out of the followings, which section deals with the provisions relating to deduction of tax at
source on interest other than interest on securities paid to a resident?
(a) 192 (b) 193
(c) 192A (d) 194A
3. Out of the followings, which payment is subject to tax deduction under section 194J?
(a) Interest other than interest on (b) Interest on securities paid to non-resident
securities paid to resident
(c) Fees for professional/technical services (d) Fees for professional/technical services paid
paid to resident to non-residents
4. No tax is required to be deducted if the amount of professional fees or technical fees or royalty
or non-compete fees (excluding director’s fees) paid during the financial year unless such
payment exceeds prescribed limit. Such prescribed limit is______.
(a) Rs. 15,000 (b) Rs. 10,000
(c) Rs. 30,000 (d) Rs. 1,00,000
5. Tax deducted during the month other than March shall be paid to the credit of the Central
Government on or before ___________ from the end of the month in which such deduction is
made.
6. As per section 201(1A) of the Act, interest shall be charged at ___________ per month or part of
month, if there is a delay in deduction and __________ per month or part of month in case there
is a delay in remittance after deduction.
(a) @ 1.5%, @ 1% (b) @ 1.25%, @ 2%
(c) @ 1%, @ 1.5% (d) @ 2%, @ 1.25Q%
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7. Where the tax is collected by an office of the Government, it shall be paid to the credit of the
Central Government ________.
(a) On or before 7 days of the month (b) On or before 10 days of the month following
following the month in which the tax is the month in which the tax is collected
collected
(c) On the same day (d) On or before 30 days of the month following
the month in which the tax is collected
8. In respect of contract payments, when is tax to be deducted at source from the payment made
to the contractor?
(a) Only at the time of credit of sum to the account (b) Only at the time of actual payment of
of the contractor sum in cash or by issuance of a cheque
or draft or by any other mode
(c) At the time of credit of sum to the account of (d) None of the above
the contractor or at the time of payment
thereof in cash or by issuance of a cheque or
draft or by any other mode, whichever is earlier
9. Under section 194C, at which rate, tax is to be deducted if the payee is an individual or HUF?
(a) 1% (b) 2%
(c) 3% (d) 4%
10. Under section 194C, at which rate, tax is to be deducted if the payee is any person other than
individual or HUF?
(a) 1% (b) 2%
(c) 3% (d) 4%
11. Mr. Raj is required to deduct tax at source under section 194C. However, payee has not furnished
PAN to Mr. Raj. In this case, at what rate Mr. Raj shall deduct tax at source assuming that payee
is a proprietor?
(a) 1% (b) 2%
(c) 10% (d) 20%
12. Under section 194C of the Act, If any person being ________ or _______ or ____ or ________is
liable to audit of accounts under clause (a) or clause (b) of section 44AB during the financial year
immediately preceding the financial year in which contract payments are credited or paid, then
they are required to deduct tax at source.
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(a) An individual/HUF/AOP/BOI (b) An individual/partnership firm /AOP / BOI
(c) An individual/company / AOP / BOI (d) A partnership firm/HUF /AOP / BOI
13. No tax is to be deducted under section 194C if the single payment does not exceed Rs. 30,000.
(a) True Statement (b) False Statement
(c) Partly true and partly false statement (d) Correct Statement
14. During the previous year, ABC Ltd. gave an annual maintenance contract for maintenance of air
conditioners to Mr. Kirit. As per the agreed terms, the annual contract value is Rs. 58,000 and
same shall be paid to Mr. Kirit in two equal instalments on the interval of six months in a financial
year.
Find out the amount tax to be deducted by ABC Ltd. under section 194C?
(a) Rs. 580 (b) Rs. 290
(c) Rs. 1160 (d) Nil
15. During the previous year, ABC Ltd. gave an annual maintenance contract for maintenance of air
conditioners to Mr. Kirit. As per the agreed terms, the annual contract value is Rs. 62,000 and
same shall be paid to Mr. Kirit in two equal instalments on the interval of six months in a financial
year.
(a) Rs. 620 (b) Rs. 1,240
(c) Rs. 310 (d) Nil
16. During the previous year, Mr. Kirti Soni, a chartered accountant and subject to tax audit under
section 44AB(b) gave an annual maintenance contract for maintenance of air conditioners to ABC
Ltd.. As per the agreed terms, the annual contract value is Rs. 62,000 and same shall be paid to
ABC Ltd. in two equal instalments on the interval of six months in a financial year.
(a) Rs. 620 (b) Rs. 1,240
(c) Rs. 310 (d) Nil
17. Out of the followings, which section governs the TDS on rent payment?
(a) 194A (b) 194C
(c) 194LA (d) 194I
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18. MT Agro, a partnership firm, is required to pay rent of Rs. 1,90,000 in respect of office furniture.
Find out the rate at which TDS is required to be deducted.
(a) 1% (b) 2%
(c) 10% (d) 20%
19. MT Agro, a partnership firm, is required to pay rent of Rs. 1,90,000 in respect of office buidling.
Find out the amount on which TDS is required to be deducted.
(a) Rs. 1,90,000 (b) Rs. 10,000
(c) Rs. 1,80,000 (d) TDS not applicable
20. MT Agro, a partnership firm has taken office on rent. The annual rent is Rs. 1,80,000 plus GST.
Find out the amount of TDS to be made by MT Agro.
(a) Rs. 18,000 (b) 10% of (1,80,000 plus GST)
(c) Nil (d) 2% of (1,80,000 plus GST)
21. A partnership firm is under contractual obligation to hire charges in respect of Machinery to Mr.
Shyam. As per agreement, firm is required to pay Rs. 8,00,000 annually. Find out the amount of
TDS assuming that Mr. Shyam is resident.
(a) Rs. 8,000 (b) Rs. 80,000
(c) Rs. 16,000 (d) Nil
22. ABC Ltd. is required to pay hire charges of Rs. 1,70,000 in respect of equipments hired from Mr.
Shyam. Find out the amount of TDS to be deducted assuming that Mr. Shyam is resident.
(a) Rs.1,700 (b) Rs. 3,400
(c) Nil (d) Rs. 17,000
23. There is no liability to deduct tax under section 194I, if the payer being an individual or HUF was
not liable to audit of accounts under clause (a) or clause (b) of section 44AB during the
__________ in which the rent is paid or credited.
(a) Financial year (b) Financial year immediately preceding the financial year
(c) Preceding financial year (d) Preceding Year
24. In respect of contractual payments, identify the time-limit for deposit of tax with the Central
Government when tax is deducted in the month of March?
(a) 31st March (b) 7th April
(c) 15th April (d) 30th April
© CA MEHUL THAKKER
25. In respect of contractual payments, the deductor is required to issue Form No. 16A to the payee
on _____ basis.
(a) Monthly (b) Quarterly
(c) Half yearly (d) Yearly
26. Tax is required to be deducted at ……….. from payment made to a resident on winning from
lottery
(a) 30% (b) 31.20%
(c) 30.90% (d) 34.5% plus 4% education Cess
27. No tax is required to be deducted under section 194C of the Act if transport operator furnishes
a declaration that he does not own more than ___ goods carriage.
(a) 5 (b) 10
(c) 1 (d) 20
28. Tax is required to be deducted at ____ from interest payable to a resident. (Assuming PAN details
are available)
(a) 10% (b) 20% if payee is domestic company else 10%
(c) 20% (d) 40%
29. TDS is not required to be deducted u/s 194A if the amount of interest paid or payable does not
exceed:
(a) Rs.5,000 (b) Rs.2,500
(c) Rs.7,500 (d) Rs.10,000
30. TDS is not required to be deducted u/s 194B unless the payment in respect of winnning from
lotteries exceeds Rs.__________________
(a) Rs.10,000 (b) Rs.15,000
(c) Rs.17,500 (d) Rs.5,000
31. TDS is not required to be deducted u/s 194BB unless the payment in respect of winnning from
horse race exceeds Rs.__________________
(a) Rs.10,000 (b) Rs.15,000
(c) Rs.17,500 (d) Rs.5,000
© CA MEHUL THAKKER
32. TDS is not required to be deducted u/s 194H unless the payment of commission or brokerage
exceeds Rs.__________________
(a) Rs.10,000 (b) Rs.15,000
(c) Rs.17,500 (d) Rs.5,000
33. If resident payee is an individual than rate of TDS applicable under section 194H shall be
_________
(a) 10% (b) 1%
(c) 2% (d) 5%
34. Bharat Sanchar Nigam Limited or Mahanagar Telephone Nigam Limited _________ to deduct tax
at source on any commission or brokerage payable by them to their public call office franchises.
(a) Are required (b) are not required
(c) may be required (d) None of the above
35. No deduction shall be made under section 194 I where the amount of rent credited or paid or
likely to be credited or paid during the financial year to the account of the payee, does not exceed
________.
(a) 1,20,000 (b) 1,50,000
(c) 1,80,000 (d) 2,10,000
36. No tax is deductible under section 194-IA where the consideration paid or payable for the
transfer of an immovable property is less than Rs.________.
(a) 50,00,000 (b) 20,00,000
(c) 30,00,000 (d) 10,00,000
37. The rate of TDS applicable under section 194IA is ___________

(a) 10% (b) 1%
(c) 2% (d) 5%
38. The provisions of section 194 IB shall not be applicable to _________ who are liable to deduct
tax at source under section 194-I.
(a) The individual (b) the individual or Hindu undivided family
(c) company (d) partnership firm
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39. The rate of TDS applicable under section 194IB is ___________
(a) 10% (b) 1%
(c) 2% (d) 5%
40. The tax is deductible under section 194-IB if rent is exceeding Rs.______ for a month or part of
a month during the previous year.
(a) 50,000 (b) 15,000
(c) 1,00,000 (d) 75,000
41. The rate of TDS applicable under section 194IC is ___________

(a) 10% (b) 1%
(c) 2% (d) 5%
42. The tax is deductible under section 194-IC if amout paid or payable exceeds Rs.______.
(a) 50,000 (b) Nil
(c) 1,00,000 (d) 10,00,000
43. The rate of TDS applicable under section 194 LA is ___________

(a) 10% (b) 1%
(c) 2% (d) 5%
44. The tax is deductible under section 194 LA if amout paid or payable exceeds Rs.______.
(a) 2,50,000 (b) Nil
(c) 1,00,000 (d) 2,00,000
45. Mr. CA earned gross interest of Rs. 59,199 on fixed depsoits with State Bank Of India. What would
have been the amount of TDS, if any?
(a) 5,920 (b) 11,840
(c) 2,960 (d) 6,158
46. A Ltd. failed to deduct tax at source while making payment to Company Secretary. The TDS
Officer issued notice to A Ltd. asking to show cause that why it shall not be treated as assessee-
in-default? The contention of A Ltd. is that the company secretary has already incorporated this
payment while determining his taxable income and paid appropriate tax and furnished the
certificate in Form no._______ and requested assessing officer not to pass order under section
201 (1) of the Act.
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(a) 21 A (b) 21 B
(c) 24 Q (d) 26 A
47. Mr. A-resident, purchased property located at Delhi from Mr. N, non-resident. Under which
section, Mr. A is required to deduct tax at source?
(a) 194 I (b) 194 IA
(c) 194 IC (d) 195
48. Continuing above problem, advise Mr. A to file statement on tax deduction at source in Form No.
_____
(a) Form no. 24 Q (b) Form no. 26 Q
(c) Form No. 27 Q (d) None of the above
49. Section 192(2A) provides that deduction of tax at source is to be made after allowing ______
and after considering the _________agreed to be borne by employer.
(a) relief u/s 89(1), tax on perquisites (b) rebate u/s. 87A, tax on perquisites
(c) deduction u/s. 80 G, income tax (d) deduction u/s. 80 C, income tax
50. As per the provision of section 192(3), the person responsible for paying the salary may, at the
time of deducting tax at source, _______ or ________ the amount to be deducted for the
purpose of adjusting any _____ or _______ arising out of previous deduction or non-deduction.
(a) Increase, excess, deficiency, reduce (b) Excess, deficiency, reduce, increase
(c) increase, reduce, excess, deficiency (d) reduce, excess, deficiency, increase
51. Section 192A deals with the tax deduction from the payment to be made to the employee of
accumulated sum of PF. Out of such accumulated sum, which component is not subject to TDS?
(a) Employer’s contribution (b) Interest on employer’s contribution
(c) Employee’s contribution (d) Interest on employee’s contribution
52. In continuation of the above, what shall be the threshold limit for tax deduction and what shall
be the rate of TDS?
(a) Rs. 2,50,000, 10% (b) Rs. 50,0000, 10%
(c) Rs. 1,00,000, 10% (d) Rs. 2,00,000, 10%
© CA MEHUL THAKKER
53. Interest of Rs.4,800 paid by BBC Ltd. to Ms. Mohini by way of account payee cheque on account
of debentures of the company held by her. The BBC Ltd. is a company in which public are
substantially interested. However, its debentures are not listed. How much is the tax to be
deducted by BBC Ltd. under section ____ of the Act?
(a) Rs. Nil, 193 (b) Rs.480, 194A
(c) Rs. 960, 193 (d) Rs. Nil, 194A
54. ABC & Co. paid interest and salary to its resident partners in accordance with the provisions of
section 40(b) of the Act. Advise partnership with regard to its TDS obligation in this regard.
(a) Salary payment is subject to TDS u/s 192 (b) Interest payment is subject to TDS u/s 194A
while no TDS on interest portion while no TDS on salary payment
(c) Salary payment is subject to TDS under (d) No tax is required to be deducted at all
section 192 while interest payment is
subject to TDS under section 194A
55. No Tax is required to be deducted where the amount of interest paid on compensation awarded
by the Motor Accidents Claims Tribunal or the aggregate amount of such income paid during
financial year does not exceed _______;
(a) Rs.50,000 (b) Rs. 10,000
(c) Rs. 5,000 (d) Rs. 15,000
56. Identify the situation where tax is required to be deducted under section 194A of the Act.
(a) where interest is credited or paid by the Central (b) where interest is credited or paid by a
Government under any provision of the Direct co – operative society (Other than Co-
Taxes. operative Bank) to its members
(c) where interest is credited or paid by co-operative (d) Where interest is credited or paid to
society to any other co – operative society; Non-Banking Finance Companies
57. Alap Ltd. has made following payments on various dates to Vilambit Ltd. towards work done
under different contracts
Contract Number Date of Payment Amount (Rs.)
1. 05.05.2018 20,000
2. 06.06.2018 15,000
3. 08.08.2018 25,000
4. 10.12.2018 25,000
5. 29.01.2019 17,000
Identify the obligation of Alap Ltd. to deduct tax at source under section 194C, if any.
© CA MEHUL THAKKER
(a) Alap Ltd. is not required to deduct TDS (b) ALap Ltd. is not required to deduct TDS
at all. provided Vilambit Ltd. gives a declaration
(c) Alap Ltd is required to deduct TDS on the (d) Alap Ltd. required to deduct TDS on the last
whole amount of Rs. 1,02,000 from the payment of Rs. 17,000
last payment of Rs. 17,000.
58. Dabur Ltd. has entered into a contract to buy plastic bottles from Packaging Pvt. Ltd as per the
designs and specification given to it. For this purpose, Dabur Ltd. sold necessary raw material to
Packaging Pvt. Ltd. For the previous year 2018-19, Packaging Pvt. Ltd. has raised following
invoices on Dabur Ltd.
Date Invoice no. Qty. Value of Raw Labour Total Bill
Material Charges Rs.
14/10/18 1020/18-19 10,000 - - 60,000
31/11/18 1255/18-19 20,000 80,000 45,000 1,25,000
Identify the obligation of Dabur Ltd. to deduct tax at source under section 194C, if any.
(a) Dabur Ltd. is required to deduct TDS on Rs. (b) Dabur Ltd. is required to deduct TDS on Rs.
60,000 for the invoice no. 1020/18-19 while 60,000 for the invoice no. 1020/18-19
in case of invoice no. 1225/18-19 TDS to be while in case of invoice no. 1225/18-19
made on Rs. 1,25,000. TDS to be made on Rs. 45,000.
(c) Dabur Ltd. is required to deduct TDS on Rs. (d) Dabur Ltd. is not required to deduct TDS
60,000 for the invoice no. 1020/18-19 while for the invoice no. 1020/18-19 while in
in case of invoice no. 1225/18-19 TDS to be case of invoice no. 1225/18-19 TDS to be
made on Rs. 80,000. made on Rs. 45,000.
59. Times of India Ltd. is required to make payment of Rs. 1,00,000 to Imaran Khan (non-resident),
former captain of the Pakistan Cricket Team, for contributing articles relating to game in the
magazine published by the company. Then, Times of India Ltd. is required to deduct TDS u/s.
_____________ @ _______.
(a) 194J, 10% (b) 194J, 10% plus SC plus EC
(c) 195, 30% plus SC plus EC (d) 194E, 20% plus SC Plus EC
60. A commission of Rs.50,000 was retained by the consignee 'XYZ Agency, a partnership firm' and
not remitted to the consignor 'ABC Packaging Ltd. ', while remitting the sale consideration.
Examine the obligation of the consignor to deduct tax at source.
(a) Section 194C, 2% (b) Section 194 H, 5%
(c) Section 194 D, 5% (d) No TDS
© CA MEHUL THAKKER
61. Ramesh, resident, gave a building on sub-lease to Mac Ltd. with effect from 1-7-2018 on a rent
of Rs. 15,000 per month. The company also took on hire machinery from Ramesh with effect
from 1-11-2018 on hire charges of Rs. 10,000 per month. Discuss the liability for tax deduction
of Mac Ltd under section 194 I of the Act.
(a) No TDS since rent of building does not (b) TDS to be made on Rs. 1,35,000 only @10%
exceed Rs. 1,80,000
(c) TDS to be made on Rs. 1,35,000 @ 2% (d) TDS to be made on Rs. 1,35,000 @ 10% while
while on Rs. 50,000 @ 10% on Rs. 50,000 @ 2%
62. Ramesh, Mahesh and Naresh are the equal co-owners of commercial premise which was given
on rent to Jack Ltd. on annual rent of Rs. 4,80,000. Total income of Naresh including rental
income does not exceed exemption limit. Discuss the liability for tax deduction of Jack Ltd. under
section 194 I of the Act.
(a) No TDS since rent payable to each payee (b) TDS to be made on entire Rs. 4,80,000 in the
does not exceed Rs. 1,80,000 name of Ramesh, Mahesh and Naresh equally
(c) TDS to be made on entire Rs. 4,80,000 in (d) TDS to be made on Rs. 3,60,000 in the name
the name of Ramesh only (being the first of Ramesh and Mahesh equally.
name in the rent agreement)
63. Mr. X, a resident, acquired a house property at Mumbai from Mr. Y for a consideration of Rs. 90
lakhs (stamp duty value Rs. 98 lakhs), on 20.6.2018. On the same day, Mr. X made two separate
transactions, thereby acquiring an urban plot in Kolkata from Mr. C for a sum of Rs. 49.50 lakhs
(stamp duty value Rs. 54 lakhs) and rural agricultural land from Mr. D for a consideration of Rs.
60 lakhs.
Identify the obligation of Mr. X to deduct tax at source assuming that Mr. Y, Mr. C and Mr. D are
residents.
(a) No TDS to be made by Mr.X (b) Mr. X shall deduct TDS on Rs. 90 Lakhs while
making payment to Mr. Y while payment shall
be made to Mr. C and Mr. D without TDS.
(c) Mr. X shall deduct TDS on Rs. 98 lakhs (d) Mr. X shall deduct TDS on Rs. 98 lakhs, Rs. 54
and Rs. 54 Lakhs while making payment Lakhs and Rs. 60 lakhs while making payment
to Mr. Y and Mr. C respectively while to Mr. Y, Mr. C and Mr. D respectively.
payment shall be made to Mr. D without
TDS.
64. Mr. Madhukant is an employee of M/s. PQR Ltd. He had taken property on rent from Mr. Suresh,
resident, for his residential purpose for the monthly rent of Rs. 70,000 w.e.f. 1st February, 2019.
He claims that he is not required to deduct tax at source since (i) he is not an assessee covered
© CA MEHUL THAKKER
by tax audit under section 44AB(a)/(b) (ii) rent for the financial year 2018-19 does not exceed Rs.
1,80,000 (limit prescribed under section 194-I). Advise him with suitably.
(a) Mr. Madhukant shall not deduct TDS (b) Mr. Madhukant shall not deduct TDS under
section 194-I but shall deduct TDS under
section 194 IA @10%
(c) Mr. Madhukant shall not deduct TDS (d) Mr. Madhukant shall not deduct TDS under
under section 194-I but shall deduct section 194-I but shall deduct TDS under
TDS under section 194 IB @10% section 194 IB @5%
65. BCD Ltd. credited Rs. 28,000 towards fees for professional services and Rs.27,000 towards fees
for technical services to the account of HG in its books of account on 6.10.2018. The total sum
of Rs. 55,000 was paid by cheque to HG on 18.12.2018. Examine the obligation of BCD Ltd. in
respect of tax deduction at source.
(a) BCD Ltd. is not required to deduct TDS (b) BCD Ltd. shall deduct TDS under section 194 J
on Rs. 27,000 only.
(c) BCD Ltd. shall deduct TDS under section (d) BCD Ltd. shall deduct TDS under section 194 J
194 C on Rs. 28,000 only on Rs. 55,000.
66. KD, an independent director of DAF Pvt. Ltd. was paid an amount of Rs. 22,500 sitting fees for
attending the various meetings held during the financial year. Examine the obligation of DAF Pvt
Ltd. in respect of tax deduction at source.
(a) No TDS obligation under section 194 J since (b) No TDS obligation under section 192 since
payment does not exceed Rs. 30,000 payment does not exceed exemption limit
(c) TDS shall be deducted under section 192 (d) TDS shall be deducted under section 194 J
after considering the other payment, if any, on Rs. 22,500
made to him
67. Ma Agro Fresh Ltd. regularly stores fruits with Thanda Cold Storage Pvt. Ltd. It seeks your advice
with regard to tax deduction at source.
(a) Ma Agro shall not deduct TDS (b) Ma Agro shall deduct TDS u/s. 194C
(c) Ma Agro shall deduct TDS u/s. 194 I (d) Ma Agro shall deduct TDS u/s. 194 H
68. A television company (TC) pays Rs. 80,000 annually to a cameraman for shooting of a
documentary film on a contract basis. Discuss the liability for deduction of tax.
(a) TC shall deduct TDS under section 192 (b) TC shall deduct TDS under section 194 C
(c) TC shall deduct TDS under section 194 J (d) TC shall not deduct TDS
© CA MEHUL THAKKER
69. Taxpayer can apply in __________ to the Assessing officer to give him a certificate authorizing
the payer not to deduct tax or deduct tax at lower rate, as may be appropriate.
(a) Form No.13 (b) Form No. 15
(c) Form No. 15G (d) Form No. 27C
70. Loddha Properties Ltd. has deducted tax of a civil engineer u/s 194J of the Income- tax Act on
19th January, 2019. Identify the due date of deposit of tax deducted by Loddha Properties Ltd.
(a) 07th February, 2019 (b) 15th February,2019
(c) 30th April, 2019 (d) 18th February,2019
71. In continuation of the above, under which Form, the return of TDS would be filed and what shall
be the due date of submitting return?
(a) 24Q, 31st May, 2019 (b) 27Q, 31st May, 2019
(c) 26QB,31st May, 2019 (d) 26Q, 31st May, 2019
72. A motor car of the value of Rs.11 lakhs was sold by a dealer to a customer. The customer paid
Rs.2 lakhs in cash while balance by an account payee cheque. Advise motor car dealer with regard
to tax collection at source in this transaction.
(a) Tax collection @ 1% on Rs. 11 lakh. (b) Tax collection @ 1% on Rs. 2 lakh
(c) Tax collection @ 2% on Rs. 11 lakh (d) No collection at source because cash payment
does not exceed Rs. 2 lakh
73. Out of the followings, sale of which item is subject to TCS at the rate of 5%?
(a) Liquor (b) Scrap
(c) Tendu leaves (d) Minerals
74. As per section _____________of Income Tax Act, 1961, every person who deducts or collects
tax at source has to apply for the allotment of Tax Collection Account Number (TAN). Such TAN
is a_____ alpha-numeric number issued by the Income-tax Department
(a) 203, 5 digit (b) 203, 10 digit
(c) 204, 10 digit (d) 204, 7 digit
75. First 3 alphabets of TAN represent the_________.

(a) Name of the TAN holder (b) Surname of the TAN holder
(c) Jurisdiction code (d) Residential status of the TAN holder
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76. Section _____ deals with the penalty for failure to obtain TAN and such penalty is __________.
(a) 272BB(1A), Rs.10,000 (b) 272BB(1), Rs. 10,000
(c) 271H , Rs. 10,000 (d) 271C, Rs. 10,000
77. Which form is to be used for applying for TAN?

(a) Form 49A (b) Form 49B
(c) Form 49C (d) Form 49D
78. A person required to deduct tax under section __________ has to obtain PAN instead of TAN.
(a) 192 (b) 194IB
(c) 194LA (d) 194IA
79. Generally, TDS shall be made at the time of payment or at the time of credit to the payee
whichever is earlier. Out of the followings payments, which payment is not subject to this general
rule?
(a) Salary (b) Winning from lotteries
(c) Winning from horse races (d) All of the above.
80. Section 194 A requires payer to deduct TDS from interest other than interest on securities. Out
of the followings, which payment is subject to TDS under this section?
(a) Interest on Income-tax Refund (b) Interest on deposit made by consignee
(c) Interest on Saving Bank Account (d) Income in relation to Zero Coupon Bonds
81. Out of the followings, which payment is not subject to TDS Provisions?
(a) Winning from horse races (b) Winning from lottery
(c) Winning from camel races (d) Winning from card games
82. " Work " as defined under section 194 C does not Include:
(a) Advertising (b) Broadcasting and telecasting
(c) Catering (d) Carriage of goods by railways
83. " Commission or Brokerage " as defined under section 194 H does not include:
(a) Brokerage paid to real estate agent (b) Commission paid to consignee
(c) Brokerage paid to purchase agent (d) Brokerage paid to share broker
© CA MEHUL THAKKER
84. Section 206C provides for __________.
(a) Tax Collection at Source (b) Tax Deduction at Source
(c) Advance Tax (d) Self-Assessment Tax
85. As per section 194C, work includes:

(a) carriage of goods or passengers by any mode (b) Broadcasting and telecasting excluding
of transport other than railways production of programs for such
broadcasting or telecasting
(c) Manufacturing or supplying a product (d) All of the above
according to the requirement or specification
of a customer by using material purchased
from a person other than such customer
86. Under section 194-I, out of the followings, which component is not subject to TDS?
(a) Rent of a building (b) Non-refundable deposit
(c) Refundable deposit (d) Advance Rent
ANSWERS
1. (a) 2. (d) 3. (c) 4. (c)

5. (b) 6. (c) 7. (c) 8. (c)
9. (a) 10. (b) 11. (d) 12. (a)
13. (c) 14. (d) 15. (a) 16. (b)
17. (d) 18. (c) 19. (a) 20. (c)
21. (c) 22. (c) 23. (b) 24. (d)
25. (b) 26. (a) 27. (b) 28. (a)
29. (a) 30. (a) 31. (a) 32. (b)
33. (d) 34. (b) 35. (c) 36. (a)
37. (b) 38. (b) 39. (d) 40. (a)
41. (a) 42. (b) 43. (a) 44. (a)
45. (a) 46. (d) 47. (d) 48. (c)
49. (a) 50. (c) 51. (c) 52. (b)
53. (a) 54. (d) 55. (a) 56. (d)
57. (c) 58. (b) 59. (d) 60. (b)
61. (d) 62. (a) 63. (b) 64. (d)
65. (d) 66. (d) 67. (b) 68. (c)
69. (a) 70. (a) 71. (d) 72. (d)
73. (c) 74. (b) 75. (c) 76. (b)
77. (b) 78. (d) 79. (d) 80. (b)
81. (c) 82. (d) 83. (d) 84. (a)
85. (a) 86. (c)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 32- ADVANCE TAX AND INTEREST PAYABLE
32 – ADVANCE TAX AND INTEREST PAYABLE

1. As per section 208, every person whose estimated tax liability for the year is __________ or
more, shall pay “advance tax”.
(a) Rs. 5,000 (b) Rs. 10,000
(c) Rs. 15,000 (d) Rs. 50,000
2. Provisions relating to payment of advance tax shall not apply to

(a) A person opting for presumptive (b) An individual non-resident in India and is of 60
taxation years or more
(c) An individual resident in India and is of (d) An individual resident in India and is of 60
60 years or more and does not have years or more and does not have income
pension income chargeable under the head “Profits and Gains
of business or profession”
3. As per section 210(3) of the Act, in the case of a person who has been already assessed by way
of regular assessment in respect of the total income of any previous year, the Assessing Officer,
if he is of opinion that such person is liable to pay advance tax, may, by order in writing, require
such person to pay advance tax. Such order may be passed at any time during the financial year
but ______________.
(a) not later than the last day of February (b) not later than the last day of March
(c) on or before 1st January (d) None of the above
4. For the purpose of passing order under section 210(3) of the Act, the assessing officer shall
estimate current income based on:
(a) total income of the latest previous year in (b) the total income returned by the assessee
respect of which the assessee has been for any subsequent year
assessed by way of regular assessment
(c) (a) or (b) whichever is higher (d) (a) or (b) whichever is lower
5. If the estimate of advance tax payable by the assessee _____ the amount mentioned in the order
passed by the Assessing Officer under section 210(3) of the Act, the assessee shall pay higher tax
in accordance with his own estimate without filing any intimation.
(a) Exceeds (b) Does not exceed
(c) Less than (d) Equal to
© CA MEHUL THAKKER
6. All taxpayers (other than the eligible assessee as referred to in section 44AD or section 44ADA)
are required to pay up to 75% of advance tax by ___________.
(a) 15th June (b) 30th June
(c) 15th December (d) 15th September
7. Taxpayers opting for presumptive taxation scheme of Section 44AD / 44ADA are required to pay
up to_______ of advance tax by 15th June?
(a) 15% (b) 45%
(c) 75% (d) Nil
8. As per Rule 119A, the amount on which interest is payable shall be rounded off, always on
____________
(a) Lower side in multiple of Rs.100 (b) Higher side in multiple of Rs. 100
(c) Lower side in multiple of Rs.10 (d) Higher side in multiple of Rs. 10
9. Under section 234A of the Income Tax Act, interest is levied for _______.
(a) Delay in filing the return of income (b) Delay in payment of Advance tax
(c) Non-payment of advance tax (d) Short payment of advance tax
10. The rate of interest applicable for section 234A is _____ % per month or part of a month.
(a) 1.5 (b) 2
(c) 0.5 (d) 1
11. Section ______ provides for levy of interest for default in payment of instalment(s) of advance
tax i.e. deferment of advance tax.
(a) 234A (b) 234B
(c) 234C (d) 234D
12. As per section 207, ____________ not having any income from business or profession during the
previous year, is not liable to pay advance tax.
(a) A non-resident individual who is of the (b) A resident Hindu Undivided Family
age of 60 years or above.
(c) A non-resident individual (d) A resident senior citizen (i.e., an individual of
the age of 60 years or above)
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13. As per section 211(1), payment of advance tax made on or before _______ shall also be treated
as advance tax paid during the financial year.
(a) 30th June (b) 30th September
(c) 31st December (d) 31st March
14. First due date for payment of advance tax in case of an individual is ………… of the previous year
(a) 15-Dec (b) 15-June
(c) 15-Sept (d) 15-Mar
15. Interest under section 234B shall be attraceted if taxpayer fails to pay _________ of advance tax
payable during the previous year.
(a) 90% (b) 75%
(c) 100% (d) 50%
16. Second due date for payment of advance tax in case of a partnership firm is ………… of the
previous year
(a) 15-Dec (b) 15-June
(c) 15-Sept (d) 15-Mar
17. PINTU & Co., a partnership firm provides following information:

(a) Due date of filing income tax return for the assessment year 2019-20 : 30-09-2019
(b) The return was filed on : 16-03-2020
(c) Tax on returned Income: Rs. 61,800
(d) Tax deducted at source: Rs. 11,800
(e) Advance tax paid: Rs. 44,000
(f) Self-assessment tax together with applicable interest was duly deposited on 16-03-2020 .
You are required to find out interest payable under section 234 A of the Act.
(a) Rs. 360 (b) Rs. 480
(c) Rs. 720 (d) None of the above
18. PINTU & Co., a partnership firm provides following information:

(a) Due date of filing income tax return for the assessment year 2019-20 : 30-09-2019
(b) The return was filed on : 16-03-2020
(c) Tax on returned Income: Rs. 61,800
(d) Tax deducted at source: Rs. 11,800
(e) Advance tax paid: Rs. 44,000
(f) Self-assessment tax together with applicable interest was duly deposited on 16-03-2020 .
You are required to find out interest payable under section 234B of the Act.
© CA MEHUL THAKKER
(a) Rs. 360 (b) Rs. 480
(c) Rs. 720 (d) Rs. 120
19. Mr. Raghav provides following information:
(a) Scrutiny assessment for A.Y. 2015-16 under section 143(3) was completed on: 26-09-2016
(b) Tax on the total income assessed under section 143(3) was Rs. 75,000.
(c) A.O. issued notice under section 148 on 25-01-2018 requiring Mr. Raghav to file the income
tax return for the assessment year 2015-16 on or before 31-3-2018.
(d) Mr. Raghav furnished return of income on 18-6-2018 in response to the notice under section
148 of the Act.
(e) Tax on total income assessed under section 147 was Rs. 1,00,000.
(f) A.O. completed reassessment under section 147 on 15-12-2018.
You are required to find out interest payable under section 234A at the time of reassessment.
(a) Rs. 750 (b) Rs. 11,250
(c) Rs. Nil (d) Rs. 500
20. Mr. Raghav provides following information:

(i) Scrutiny assessment for A.Y. 2015-16 under section 143(3) was completed on: 26-09-2016
(ii) Tax on the total income assessed under section 143(3) was Rs. 75,000.
(iii) A.O. issued notice under section 148 on 25-01-2018 requiring Mr. Raghav to file the income
tax return for the assessment year 2015-16 on or before 31-3-2018.
(iv) Mr. Raghav furnished return of income on 18-6-2018 in response to the notice under
section 148 of the Act.
(v) Tax on total income assessed under section 147 was Rs. 1,00,000.
(vi) A.O. completed reassessment under section 147 on 15-12-2018.
You are required to find out interest payable under section 234B at the time of reassessment.
(a) Rs. 750 (b) Rs. 11,250
(c) Rs. Nil (d) Rs. 500
21. X Ltd. filed its return for the A.Y. 2016-17 declaring income of Rs. 10,00,000. On 10-10-2018, the
assessee was in receipt of notice under section 148 for the A.Y. 2016-17, whereby X Ltd. was
required to file return on or before 15-11-2018. X Ltd. filed an application to settlement
commission on 31-10-2018 declaring additional income of Rs. 60,00,000. Find out interest under
section 234B which shall be payable at the time of application. Assume tax rate 30% for the A.Y.
2016-17 and ignore education cess and surcharge for sake of simplicity.
© CA MEHUL THAKKER
(a) Rs. 5,40,000 (b) Rs. 5,72,000
(c) Rs. 5,58,000 (d) Rs. Nil
22. Subject to some condition, no interest under section 234C will be levied in respect of any shortfall
in the payment of advance tax due on the returned income where such shortfall is on account of
under-estimate or failure to estimate-
(a) The amount of capital gains (b) Income under the head “PGBP” when it
accrues or arises for the first time
(c) Income of the nature referred to in (d) All of the above
section 115BBDA
23. In certain situation, interest under section 234D shall be imposed for the period commencing on
(a) The date of grant of refund under (b) The date of grant of refund under section
section 143(1) of the Act to the date of 143(1) of the Act to the date of regular
order giving appeal effect assessment
(c) The date of grant of refund under (d) None of the abov
section 143(3) of the Act to the date of
order giving appeal effect
demand of Rs.2,500. Find out interest payable under section 234D of the Act, if any.
(a) Rs. 2,400 (b) Rs. 1,200

(c) Rs. 2,000 (d) Rs. Nil
refund of Rs.21,000 only. Find out interest payable under section 234D of the Act, if any.
(a) Rs. 600 (b) Rs. 1,200

(c) Rs. 720 (d) Rs. 1,440
© CA MEHUL THAKKER
26. Mr. Jitendra, a businessman, resident, 52 years, provides following information:
-Tax on current income: Rs. 15,500
-TDS on interest by ABC & Co.: Rs. 6,900
Advise him, whether he is liable to pay interest under section 234 B assuming that ABC & Co.
fails to deduct TDS while making payment of interest to Mr. Jitendra?
(a) Interest u/s. 234 B is not applicable (b) Interest u/s. 234 B is applicable because he is
liable to pay advance tax
(c) Interest u/s. 234 B is not applicable (d) More information is required to decide the
because there is no liability to pay applicability of section 234B
advance tax on Mr. Jitendra
27. In continuation of the above, what would have been your answer, if Mr. Jitendra does not carry
on any business or profession?
(a) Interest u/s. 234 B is not applicable (b) Interest u/s. 234 B is applicable because he is
because advance tax payable is Rs. 8,600 liable to pay advance tax
(c) Interest u/s. 234 B is not applicable (d) More information is required to decide the
because there is no liability to pay applicability of section 234B
advance tax on Mr. Jitendra
28. Identify the person not required to pay advance tax at all.
(a) Person having “advance tax payable”- (b) Person having “advance tax payable” Rs.
Rs. 20,000 and opted for presumptive 11,000 and opted for presumptive taxation
taxation under section 44AD under section 44ADA
(c) Company having “advance tax payable” (d) Individual having only income by way of
Rs. 12,000 winning from lotteries on which tax has been
deducted Rs. 30,000
29. At the time of calculation of interest payable under the Act, the amount on which interest is
payable, shall be rounded off, always on _____ side in multiple of Rs. ___.
(a) Higher, 100 (b) Lower, 100
(c) Higher, 50 (d) Lower, 1000
30. In order to avoid interest u/s. 234 C of the Act for the first instalment of advance tax, the
company shall ensure that it had paid atleast ___________% of tax due on returned income.
(a) 12 (b) 15
(c) 10 (d) 20
© CA MEHUL THAKKER
31. In order to avoid interest u/s. 234 C of the Act for the second instalment of advance tax, the
firm shall ensure that it had paid atleast ___________% of tax due on returned income.
(a) 36 (b) 15
(c) 45 (d) 75
32. Waiver or reduction of interest u/s. 234 A/B/C _________

(a) Is not possible at all. (b) Can be done by the assessing officer under
reasonable cause
(c) Can be done under section 119 of the (d) None of the above
Act
33. If the taxpayer’s estimate to pay advance tax is lower than the estimate of the Assessing Officer
under section 210(3), then he has to send intimation in Form No.________ to the Assessing
Officer.
(a) 35 (b) 36
(c) 36A (d) 28A
34. While processing return under section 143(1) of the Act, interest section 234 B is levied from the
first day of the_____________, till the date of determination of income under section 143(1).
(a) previous year (b) assessment year
(c) calendar year (d) financial year
35. Levy of interest on excess refund granted to the taxpayer has been provided under section
___________.
(a) 234A (b) 234B
(c) 234C (d) 234D
36. The rate of interest applicable for section 234D is _____ % per month or part of the month.
(a) ½ (b) 1
(c) 1.5 (d) 2
37. Interest u/s 234 D is levied from the date of grant of refund u/s 143(1) till the date of ____.
(a) Payment of tax (b) Regular assessment
(c) Re-assessment (d) payment of such interest
© CA MEHUL THAKKER
ANSWERS
1. (b) 2. (d) 3. (a) 4. (c)

5. (a) 6. (c) 7. (d) 8. (a)
9. (a) 10. (d) 11. (c) 12. (d)
13. (d) 14. (b) 15. (a) 16. (c)
17. (a) 18. (c) 19. (a) 20. (b)
21. (c) 22. (d) 23. (b) 24. (b)
25. (c) 26. (b) 27. (c) 28. (d)
29. (b) 30. (a) 31. (a) 32. (c)
33. (d) 34. (b) 35. (d) 36. (a)
37. (b)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 33- SETTLEMENT COMMISSION AND ADVANCE RULINGS
33 – SETTLEMENT COMMISSION AND ADVANCE RULINGS

1. Provisions relating to advance ruling under Income Tax Act are provided in section _______.
(a) 10 to 13B (b) 245A to 245L
(c) 245A to 245L (d) 245N to 245V
2. An application (in quadruplicate) for advance ruling by any person (resident or nonresident) for
determination whether an arrangement, is an impermissible avoidance agreement as referred
to in Chapter X-A is to be made in Form No._____.
(a) 34C (b) 34D
(c) 34E (d) 34EA
3. An application (in quadruplicate) for advance ruling by a resident applicant for determination of
his tax liability arising out of one or more transactions valuing Rs.100 crore or more in total which
has been undertaken or is proposed to be undertaken by him is to be made in Form No._____.
(a) 34D (b) 34DA
(c) 34E (d) 34EA
4. When an application is in a case where proceedings for assessment or reassessment have been
initiated for any assessment years referred to in Section 153A(1)(b) or Section 153B(1)(b), then
such application can be filed to settlement commission only if the additional amount of income-
tax payable exceeds______
(a) Rs. 10 lakhs (b) Rs.50 Lakhs
5. When an application is in a case othe than the mentioned above, then such application can be
filed to settlement commission only if the additional amount of income-tax payable
exceeds______
(a) Rs. 10 lakhs (b) Rs.50 Lakhs
ANSWERS
1. (d) 2. (d) 3. (b) 4. (b)

5. (a)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 34- REQUIREMENT AS TO MODE OF ACCEPTANCE…
34 – REQUIREMENT AS TO MODE OF ACCEPTANCE OF PAYMENT OR

REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX
1. As provided under section 269SS of the Act, no person shall take or accept from any other person,
any loan or deposit or any specified sum, otherwise than by an account payee cheque or account
payee bank draft or use of electronic clearing system through a bank account, if, the amount of
such loan or deposit or specified sum or the aggregate amount of such loan, deposit and specified
sum______________.
(a) Exceeds Rs. 10,000 (b) Exceeds Rs. 20,000
(c) Is Rs. 20,000 or more (d) Does not exceed Rs. 10,000
2. The provisions of section 269 SS shall not apply to ______________.

(a) The Government (b) Banking company
(c) Government company (d) All of the above
3. The provisions of section 269SS shall not apply to any loan or deposit or specified sum, where
the person from whom the loan or deposit or specified sum is taken or accepted and the person
by whom the loan or deposit or specified sum is taken or accepted, are both having
_______________________
(a) Agricultural income (b) Agricultural income and neither of them has any
income chargeable under the head “Profits and gains
from business or profession”.
(c) agricultural income and neither of (d) Agricultural income and both of them has an income
them has any income chargeable chargeable under any head of income other than the
to tax under this Act. head “Profits and gains from business or profession”.
4. For the purpose of section 269 SS, the term "loan or deposit" means loan or deposit _____
(a) Of money (b) In cash or in kind
(c) In kind (d) None of the above
5. For the purpose of section 269SS, "specified sum" means any sum of money receivable, whether
as advance or otherwise, in relation to transfer of _______________, whether or not the transfer
takes place.
(a) A movable property (b) An immovable property
(c) A movable property or an immovable property (d) Personal property
© CA MEHUL THAKKER
6. X & Co., Partnership Firm, accepted deposit of Rs. 5,000 from Mr. A on 10-05-2018 for the first
time. It further wants to accept another deposit of Rs. 18,000 on 10-08-2018 from Mr. A in cash.
Out of the followings, which statement is true?
(a) X & Co. has not violated provisions of (b) X & Co. has violated provisions of section
section 269SS 269SS
(c) X & Co. has violated provisions of section (d) X & Co. has violated provisions of section
269ST 269T
7. Alas Ltd. had taken loan from B Ltd. during previous year 2017-18 which is still outstanding. The
outstanding amount as on 1-4-2018 was Rs. 28,000. On 10-9-2018, Alas Ltd further taken loan of
Rs. 1,000 by way of bearer cheque from B Ltd. Out of the followings, which statement is true?
(a) Alas Ltd. has violated provisions of (b) Alas Ltd. has violated provisions of section
section 269SS 269T
(c) Alas Ltd. has violated provisions of (d) Alas Ltd. has not violated provisions of section
section 269ST 269SS
8. Mr. Mahesh would like to sell his residential house property to Mr. Mukesh and therefore
received advance of Rs. 1,50,000 from Mukesh in cash. Out of the followings, which statement
is true?
(a) Mahesh has not violated provisions of (b) Mahesh has violated provisions of section
section 269SS 269T
(c) Mahesh has violated provisions of (d) Mahesh has violated provisions of section
section 269SS 269ST
9. No branch of a banking company or a co-operative bank and no other company or co-operative

society and no firm or other person shall repay any loan or deposit made with it or any specified
advance received by it otherwise than by an account payee cheque or account payee bank draft
drawn in the name of the person who has made the loan or deposit or paid the specified
advance, or by use of electronic clearing system through a bank account if the amount of the
loan or deposit or specified advance together with the interest, if any, payable thereon_______
(a) Exceeds Rs. 10,000 (b) Is Rs. 20,000 or more
(c) exceeds Rs. 20,000 (d) Does not exceed Rs. 10,000
10. The provisions of section 269 T shall not apply to ______________.

(c) Government company (d) All of the above
© CA MEHUL THAKKER
11. For the purpose of section 269 T, the term "loan or deposit" means loan or deposit _____
(a) Of money (b) of money which is repayable after notice or repayable after
a period and, in the case of a person other than a company,
includes loan or deposit of any nature
(c) in cash or in kind (d) None of the above
12. ABC Ltd. had accepted deposit of Rs. 18,500 from Mr. Kanu. During the previous year 2017-18,
such deposit has become due for repayment (Interest payable Rs. 3,100). ABC Ltd. repaid such
amount by way of bearer cheque. Out of the followings, which statement is true?
(a) ABC Ltd. has not violated provisions of (b) ABC Ltd. has violated provisions of section
section 269T 269T
(c) ABC has violated provisions of section (d) ABC Ltd. has violated provisions of section
269SS 269ST
13. OPC Ltd. had accepted deposit of Rs. 12,000 from Mr. Jay on 01-05-2016 for a period of two
years (Rate of interest 12% p.a. payable annually). It further accepted deposit of Rs. 15,000 (Rate
of interest 10% p.a. payable annually). Date of second deposit was 01-06-2017. On 01-05-2018,
OPC Ltd. repaid Rs. 16,800 (together with interest) towards first deposit in cash. OPC Ltd. also
repaid Rs. 16,500 towards second deposit on 03-05-2018 in cash. Out of the followings, which
statement is true?
(a) OPC Ltd. has violated provisions of (b) OPC Ltd. has violated provisions of section
section 269SS 269T
(c) OPC Ltd. has violated provisions of (d) OPC Ltd. has not violated provisions of section
section 269ST 269T
14. In continuation of above, which statement would be correct if second deposit was in a joint name
of Mr. & Mrs. Jay.
(a) OPC Ltd. has violated provisions of (b) OPC Ltd. has violated provisions of section
section 269SS 269T
(c) OPC Ltd. has violated provisions of (d) OPC Ltd. has not violated provisions of section
section 269ST 269T
15. The provisions of section 269ST deals with mode of ______

(a) Accepting loan or deposit (b) Repayment of loan or deposit
(c) Undertaking transaction (d) None of the above
© CA MEHUL THAKKER
16. As provided under section 269ST, no person shall receive an amount_______ in aggregate from
a person in a day from a person otherwise than by an account payee cheque or an account
payee bank draft or use of electronic clearing system through a bank account.
(a) Exceeding Rs. 2,00,000 (b) of two lakh rupees or more
(c) of Rs. 20,000 or more (d) Exceeding Rs. 20,000
17. As provided under section 269ST, no person shall receive an amount_______ in respect of
___________ from a person otherwise than by an account payee cheque or an account payee
bank draft or use of electronic clearing system through a bank account.
(a) Exceeding Rs. 2,00,000, transactions (b) of two lakh rupees or more, a single
transaction
(c) of Rs. 20,000 or more, transactions (d) Exceeding Rs. 20,000, a single transaction
18. As provided under section 269ST, no person shall receive an amount____ in respect of ________
relating to one event or occasion from a person otherwise than by an account payee cheque or
an account payee bank draft or use of electronic clearing system through a bank account.
(a) Of two lakh rupees or more, transactions (b) of two lakh rupees or more, a single
transaction
(c) of Rs. 20,000 or more, transactions (d) Exceeding Rs. 20,000, a single transaction
19. The provisions of section 269 ST shall apply to ______________ .

(c) Government company (d) Co-operative Bank
20. Mr. Jagga received following payments in cash from Mr. Shetty on the occasion of marriage of
Anushka (daughter of Mr. Shetty):
Date of Payment Work undertaken by Mr. Jagga Amount (Rs.)
18th August, 2018 Decoration 1,45,000
20th August, 2018 Video Shooting 1,05,000
Out of the followings, which statement is true?
(a) Mr. Jagga has violated provisions of (b) Mr. Jagga has violated provisions of section
section 269SS 269T
(c) Mr. Jagga has violated provisions of (d) Mahesh has not violated provisions of section
section 269ST 269ST
© CA MEHUL THAKKER
ANSWERS
1. (c) 2. (d) 3. (c) 4. (a)

5. (b) 6. (b) 7. (a) 8. (c)
9. (b) 10. (d) 11. (b) 12. (b)
13. (b) 14. (b) 15. (c) 16. (b)
17. (b) 18. (a) 19. (c) 20. (c)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 35- PENALTY AND PROSECUTION
35 – PENALTY AND PROSECUTION

1. Penalty under section 270A shall be levied @ ________ of tax payable on under-reported income
if such under-reported income is in consequence of any misreporting.
(a) 50% (b) 100%
(c) 150% (d) 200%
2. If taxpayer fails to keep and maintain information and documents in respect of specified
domestic transactions, then he may subject to penalty under section 271AA of the Act which
shall be a sum equal to ___________.
(a) 2% of the value of each specified domestic (b) 1% of the value of each specified domestic
transaction entered into by the taxpayer transaction entered into by the taxpayer
(c) 3% of the value of each specified domestic (d) 4% of the value of each specified domestic
transaction entered into by the taxpayer transaction entered into by the taxpayer
3. Penalty under section 271BA for failure to furnish a report from an accountant as is required by
section 92E is ____________.
(a) Rs. 1,50,000 (b) 2% of the value of each specified domestic transaction entered
into by the taxpayer
(c) Rs. 1,00,000 (d) ½ % of the value of each specified domestic transaction entered
into by the taxpayer or Rs. 1,50,000 whichever is lower.
4. Section 234E provides for levy of late filing fees for the delay in filing of __________
(a) Return of income (b) TDS return
(c) TCS return (d) (b) or (c)
5. If the taxpayer fails to maintain books of account as per the provisions of section 44AA, then he
shall be liable to pay penalty under section 271A of _________.
(a) Rs.20,000 (b) Rs.25,000
(c) Rs.35,000 (d) Rs.50,000
6. If a taxpayer fails to get his accounts audited under section 44AB of the Act, then he shall be
liable for penalty under section 271B of one-half per cent of total sales, turnover or gross
receipts, etc., or ________, whichever is less.
(a) Rs. 1,00,000 (b) Rs. 1,50,000
(c) Rs. 1,50,000 (d) Rs. 2,50,000
© CA MEHUL THAKKER
7. Penalty under section 271FA shall be levied for failure to file statement of financial transaction
or reportable account. Such penalty is Rs.______ for every day during which the failure
continues.
(a) 300 (b) 200
(c) 500 (d) 50
8. Identify the rate of penalty for underreporting of income under Section 270A.
(a) 100% (b) 300%
(c) 150% (d) 50%
9. 272B provides penalty in case of default by the taxpayer in complying with the provisions of
section 139A or knowingly quoting incorrect PAN in any document referred to in section
139A(5)(c) or intimates incorrect PAN for the purpose of section 139A(5A)/(5C). Such penalty is
Rs. ________.
(a) 11,000 (b) 21,000
(c) 51,000 (d) 10,000
10. Section 272BB(1A) provides for penalty for quoting incorrect Tax Deduction Account Number or
Tax Collection Account Number (as the case may be). Penalty under section 272BB is
Rs.___________.
(a) 20,000 (b) 15,000
(c) 10,000 (d) 5,000
11. Commissioner of Income-tax is empowered to waive or reduce penalty subject to certain

conditions prescribed under section 273A(1) and ________.
(a) 273 B (b) 273A(4)
(c) 273BB (d) 273AB
12. If the amount of income in respect of which the penalty is imposed or imposable for the relevant
year(s) exceeds Rs. _______, then no order reducing or waiving the penalty under section
273A(1) shall be made by the Principal Commissioner or Commissioner, except with the previous
approval of the Principal Chief Commissioner or Chief Commissioner or Principal Director
General or Director General, as the case may be.
(a) 1,00,000 (b) 5,00,000

(c) 10,00,000 (d) 20,00,000
© CA MEHUL THAKKER
13. As per section _____________, a person who fails to submit the statement of TDS/TCS on or
before the due date prescribed in this regard is liable to pay a specific amount as late filing fees.
(a) 234E (b) 234D
(c) 271H (d) 234A
14. If a person fails to submit the statement of tax deducted/collect at source on or before the due
dates prescribed in this regard, then he, in addition to the late filing fees, may be liable to pay
penalty under section ________.
(a) 234A (b) 271C
(c) 271H (d) 234E
15. Under section 271H, minimum penalty can be levied of ________ which can go upto_______.
(a) Rs. 5,000, Rs. 10,000 (b) Rs. 10,000, Rs. 20,000
(c) Rs. 10,000, Rs. 50,000 (d) Rs. 10,000, Rs. 1,00,000
16. Apart from delay in filing of TDS/TCS return, section 271H also covers cases of ______________.
(a) Failure to deduct tax at source (b) Failure to collect tax at source
(c) Furnishing incorrect information in the (d) Failure to comply with the provisions of
statement of TDS/TCS section 269T
17. No penalty under section 271 H shall be levied under section 271H for the failure to file the
TDS/TCS return, if the person proves that after paying tax deducted/collected by him, along with
the fee and interest (if any), to the credit of the Central Government, he had filed the TDS/TCS
return before the expiry of a period of _____ from the due date of filing the TDS/TCS return.
(a) 6 months (b) 1 year
18. Under section __________ the Principal Commissioner of Income-tax or Commissioner of

Income-tax has power to waive or reduce the penalty levied under the Income-tax Act.
(a) 273A(4) (b) 273B
(c) 271C (d) 271H
19. If the taxpayer, fraudulently ___________ to any person, any property or any interest therein
(which can be attached, to recover his tax dues), intending thereby to prevent that property or
interest therein from being attached for recovery of tax, then prosecution proceedings shall be
initiated against such person under section 276.
© CA MEHUL THAKKER
(a) removes (b) conceals
(c) transfers or delivers (d) all of the above
20. The taxpayer may be prosecuted if there is a willful failure on his part to produce before the tax
authorities the accounts and documents as demanded under section __________.
(a) 148 (b) 154

(c) 155 (d) 142(1)
21. Before prosecuting a public servant, previous sanction of _____________under section 280(2)
is required.
(a) Central Government (b) State Government
(c) Chief Commissioner (d) Assistant Commissioner
22. Section ______ deals with the prosecution in case of wilful attempt to evade tax, penalty or
interest or under-reporting of income.
(a) 276B (b) 276C
(c) 276D (d) 276E
23. Section _____ deals with prosecution in case of failure to file the return of income.
(a) 276AA (b) 276BB
(c) 276CC (d) 276DD
24. Section _____ deals with the penalty for violation of provisions of section 269SS
(a) 271D (b) 271E
(c) 271F (d) 271FA
25. Section _____ deals with the penalty for violation of provisions of section 269T of the Income
Tax Act.
(a) 271D (b) 271E
(c) 271F (d) 271FA
© CA MEHUL THAKKER
ANSWERS
1. (d) 2. (a) 3. (c) 4. (d)

5. (b) 6. (b) 7. (c) 8. (d)
9. (d) 10. (c) 11. (b) 12. (b)
13. (a) 14. (c) 15. (d) 16. (c)
17. (b) 18. (a) 19. (d) 20. (d)
21. (a) 22. (b) 23. (c) 24. (a)
25. (b)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 37- BUSINESS RESTRUCTURING
36 – BUSINESS RESTRUCTURING
1. One of the conditions to be observed by the firm while coverting into company so that it is not
regarded as transfer is that the aggregate of the shareholding in the company of the partners of
the firm is ___________ of the total voting power in the company and their shareholding
continues to be as such for a period of ______ from the date of the succession.
(a) Not less than 51%, three years (b) Not less than 50%, three years
(c) Not less than 50%, five years (d) Not less than 51%, five years
2. Section 2(1B) defines the term “Amalgamation” as- either merger of one or more companies
with another company or the merger of two or more companies to form one company in such
a manner that:
(a) All the properties of the amalgamating (b) All liabilities of the amalgamating
company immediately before the company immediately before the
amalgamation become the property of the amalgamation become the liabilities of
amalgamated company by virtue of the the amalgamated company by virtue of
amalgamation. the amalgamation.
(c) Shareholders holding not less than three- (d) All of the above
fourths (in value) of the shares in the
amalgamating company (other than shares
already held by the amalgamated company
or by its nominee) become shareholders of
the amalgamated company by virtue of the
amalgamation.
3. By virtue of section 47 (vi), any transfer of a capital asset by the amalgamating company to the
amalgamated company is not treated as transfer :-
(i) if transfer has been done in the scheme of amalgamation and
(ii) _________________
(a) amalgamated company is an Indian (b) amalgamated company is a foreign company.
company.
(c) Amalgamating company is an Indian (d) Amalgamating company is a foreign company.
company.
4. By virtue of section 47(vii), any transfer by a shareholder, of share (s) held by him in
amalgamating company, is not treated as transfer:-
(i) if transfer has been done in the scheme of amalgamation and
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(ii) the transfer is made in the consideration of the allotment to him of any share(s) in the
amalgamated company and
(iii) ______________
(a) amalgamated company is an Indian (b) amalgamated company is a foreign company.
company.
(c) Amalgamating company is an Indian (d) Amalgamating company is a foreign
company. company.
5. Section 72A provides that non-speculative business loss and the unabsorbed depreciation of
amalgamating company shall be deemed to be the loss / depreciation of the amalgamated
company if few conditions are satisfied. Section 72A is not applicable if there is an amalgamation
of
(a) a company owning industrial undertaking, (b) a banking company with a SBI or any
ship or a hotel with another company subsidiary of SBI; or
(c) public sector airlines with other public (d) a company owning retail chain with
sector airlines another company
6. Section 72AA of the Act deals with carry forward of loss and unabsorbed depreciation in the
event of amalagamation of _________ with ____________ provided such amalgation has been
sanctioned and brought into force by the Central Government under section 45(7) of the Banking
Regulation Act, 1949.
(a) Banking institution, Banking Company (b) Banking Compnay, Banking Institution
(c) SBI, any subsidiary of SBI (d) Banking Company, Banking Company
7. As per section 2(19AAA) of the Act, “Demerged Company” means the company whose
__________ is transferred, pursuant to a demerger, to ______________.
(a) Business, a transferee company (b) Empire, resulting company
(c) Undertaking, resulting company (d) Undertaking, an amalgamated company
8. As per explanation to section 49(2C) of the Act, Networth for the purpose of “Demerger” shall
mean
(a) the aggregate of the paid up share (b) the aggregate of the paid up share capital and
capital and general reserves as reserve and surplus as appearing in the books
appearing in the books of account of the of account of the demerged company
demerged company immediately before immediately before the demerger
the demerger
(c) the aggregate of the paid up share (d) the aggregate of the paid up share capital and
capital and general reserves as reserve and surplus as appearing in the books
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appearing in the books of account of the of account of the resulting company
resulting company immediately before immediately before the demerger
the demerger
9. As per section 55(2), the cost of shares allotted to a shareholder of a recognized stock exchange
in India under a scheme for demutualisation or corporatisation shall be
(a) The cost of acquisition of its original (b) Nil
membership of the exchange
(c) The cost of acquisition of its original (d) The cost of acquisition of its original clearing
trading rights rights
10. As per section 55(2), the cost of trading or clearing rights acquired by a person pursuant to
demutualisation or corporatisation of the recognized Stock Exchange shall be deemed to be
____.
(a) The cost of acquisition of its original (b) Nil
membership of the exchange
(c) The cost of acquisition of its original (d) The cost of acquisition of its original clearing
trading rights rights
11. One of the conditions to be observed by the unlisted company while coverting into LLP so that it
is not regarded as transfer is that the total sales, turnover or gross receipts in business of the
company in any of the three previous years preceding the previous year in which the conversion
takes place does not exceed ________
(a) One crore rupees (b) Two crore rupees
(c) Seventy five lakh rupees (d) sixty lakh rupees
12. Section 47(iv) and (v) provides exemption from capital gain if capital asset is transferred between
holding and subsidiary company. However, the benefit of these provisions not available in the
case of transfer of a capital asset made after ___________ as stock-in-trade.
(a) February 29,1988 (b) February 29,1996
(c) February 29,2008 (d) February 29,1984
13. “Slump sale as defined under section 2(42C) means the transfer of one or more undertakings as
a result of the _____ for a lump sum consideration without values being assigned to the
individual assets and liabilities in such ____.”
(a) Sale (b) Sale, exchange
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(c) Sale, exchange and relinquishment (d) Sale, exchange, reqlinquishment and
extinguishment
14. While computing networth of the undertaking under section 50B of the Act for the purpose of
slump sale, value of capital asset for which deduction has been claimed under section 35AD shall
be taken to be ____
(a) Original cost of such asset (b) Nil
(c) Original cost of such asset as reduced by the (d) Fair market value on the date of
depreciation had benefit of section 35AD not claimed Slump Sale
slump sale, value of depreciable asset shall be taken to be ____
(a) Original cost of such asset (b) Nil
(c) Written down value as per books (d) Written down value as per sub-item (C) of section
43(6)(c)(i)
slump sale, value of other assets shall be taken to be ____
(a) Original cost of such asset (b) Book value
(c) Written down value as per income tax (d) Written down value as per sub-item (C) of
section 43(6)(c)(i)
17. While computing capital gain in the event of slump sale under section 50B of the Act, which
statement is not correct?
(a) A report of chartered accountant in (b) The benefit of indexation is available.
a prescribed form certifying
networth is required.
(c) Networth shall be taken to be the (d) Gain arising shall be deemed to be the long-term
cost of acquisition and cost of capital gain unless undertaking transferred is held
improvement for not more than 36 months
ANSWERS
1. (c) 2. (d) 3. (a) 4. (a)
5. (d) 6. (b) 7. (c) 8. (a)
9. (a) 10. (b) 11. (d) 12. (a)
13. (a) 14. (b) 15. (d) 16. (b)
17. (b)
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MULTIPLE CHOICE QUESTIONS 37- DEPRECIATION (ADVANCED LEVEL)
37 – DEPRECIATION (ADVANCED LEVEL)

1. One of the conditions for claiming depreciation under section 32 is that the assessee
___________ assets.
(a) Shall be the owner of (b) Is holding
(c) Is in possession of (d) None of the above
2. As per sixth proviso to section 32, if there is a change of ownership of assets because of
________, the depreciation shall be apportioned between predecessor and the successor in the
ratio of number of days for which assets were used by them.
(a) Conversion of firm into company (b) Conversion of sole proprietary into company
(c) Amalgamation (d) All of the above
3. As per proviso to section 43(1), where the assessee incurs any expenditure for acquisition of any
asset or part thereof in respect of which a payment or aggregate of payments made to a person
in a day, otherwise than by an account payee cheque drawn on a bank or an account payee bank
draft or use of electronic clearing system through a bank account, exceeds_____ thousand
rupees, such expenditure shall be ignored for the purposes of determination of actual cost.
(a) Twenty (b) Ten
(c) Thirty (d) Fifty
4. As per explanation 1 to section 43(1), where asset is used in business after it ceases to be used
for scientific research related to that business, then, actual cost of asset to the assessee shall be
__________
(a) Nil (b) The actual cost
(c) WDV of asset as if depreciation has been claimed (d) None of the above
5. As per explanation 2 to section 43(1), where asset is acquired by way of gift, then, actual cost in
the hands of receiver shall be _______________ less depreciation that would have been
allowable as if that asset is the only asset in the relevant block.
(a) Nil (b) The actual cost to the previous owner
(c) The actual cost (d) None of the above
6. As per explanation 3 to section 43(1), where, before the date of acquisition by the assessee, the
assets were used by any other person for the purpose of his business or profession and the
assessing Officer is satisfied that the main purpose of the transfer to the assessee was the
reduction of tax liability, then, actual cost shall be such an amount as determined _________
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(a) By assessing officer (b) In the hands of previous owner
(c) By assessing Officer with prior approval (d) In the hands of other person
of Joint Commissioner having regard to
all the circumstances of the case
7. As per explanation 4A to section 43(1), where asset previously used by any person (say first
person) for the purpose of his business or profession and on which depreciation has been
allowed to him, acquired by the assessee (say second person) but leased/hired back to the first
person, then, actual cost in the hands of assessee shall be the __________at the time of transfer.
(a) written down value of such asset to the (b) written down value of such asset to the
first person second person
(c) actual cost of such asset to the first (d) actual cost of such asset to the second person
person
8. As per explanation 5 to section 43(1), where a building previously the property of assessee is
subsequently brought into use for the purpose of business or profession, then, actual cost to the
assessee shall be_________
(a) the actual cost of the building to him (b) Nil
(c) The actual cost to him as increased by (d) the actual cost of the building to him less total
the cost improvement thereto depreciation that would have been allowable
had the building been used for the purpose of
business or profession since its acquisition.
9. As per explanation 8 to section 43(1), where any amount is paid or payable as interest in
connection with the acquisition of an asset, then, so much of the interest as is relatable to a
period after the asset is first put to use___________________.
(a) Shall be included in the actual cost (b) May be considered while computing actual cost
(c) shall not be included in the actual cost (d) None of the above
of asset
10. As per explanation 9 to section 43(1), if additional duty under section 3 of Customs Tariff Act is
leviable on asset acquired, then, actual cost shall be ___________ by the duty of customs for
which credit has been made and allowed under Rules.
(a) Increased (b) Reduced
(c) Multiplied (d) Divided
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11. As per explanation 10 to section 43(1), if asset is acquired where portion of cost is met by Govt
in the form of subsidy, then, actual cost shall be ____________by the subsidy amount.
(a) Increased (b) Multiplied
(c) Divided (d) Reduced
12. As per explanation 11 to section 43(1), where an asset acquired by a non-resident outside India
and brought by him to India for the purpose of business or profession, then, actual cost shall be
actual cost less depreciation that would have been allowable in India had the asset been used
for the purpose of business or profession since ________.
(a) the date of its acquisition (b) the date on which such asset is put to use.
(c) The date on which such asset has been (d) The date on which such asset has been
brought to India shipped to India
13. As per explanation 13 to section 43(1), if assessee claims deduction of an asset under section
35AD, then actual cost of such asset shall be _____________ in the hands of assessee.
(a) Actual cost (b) Nil
(c) Written down value as if depreciation (d) None of the above
has been claimed
14. Additional depreciation is not available to _____________.

(a) An assessee engaged in manufacturing (b) An assessee engaged in the business of
generation and distribution of power
(c) An assessee engaged in the business of (d) An assessee engaged in the trading business
transmission of power
15. Special rate of addition deprecation to the assessee setting up manufacturing units in notified
backward area of specified states is __________%.
(a) 10% (b) 20%
(c) 35% (d) Depends on the rate of normal depreciation
16. ___________________ can depreciate their assets under straight line method at the prescribed
rates under the Income Tax Rules.
(a) An assessee engaged in manufacturing (b) An assessee engaged in the trading business
(c) An assessee engaged in the business of (d) None of the above
generation and distribution of power
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17. Explanation 7 to section 43(6) of the Act provides that in case of an assessee who derives in part
agriculture income and in part non-agriculture income, then, for computing the written down
value, the depreciation shall be computed as if the entire income is chargeable to tax and the
depreciation so computed shall be deemed ______________ under this Act.
(a) To be Allowed (b) To be actually allowed
(c) To be disallowed (d) To have been derived
18. Explanation 6 to section 43(6) of the Act provides that where assessee was not required to
compute his total income for the purpose of Income Tax Act for any preceding year, then, total
amount of depreciation_____________ in respect of such preceding years when assessee was
not required to compute his total income, shall be deemed to be depreciation actually allowed
under the Income Tax Act and, consequently it shall be deducted from actual cost to find out
WDV of the relevant previous year.
(a) provided in the books of account (b) calculated as per the provisions of Income Tax
Act
(c) calculated @ 10% of actual cost (d) calculated @20% of actual cost
ANSWERS
1. (a) 2. (d) 3. (b) 4. (a)

5. (b) 6. (c) 7. (a) 8. (d)
9. (c) 10. (b) 11. (d) 12. (a)
13. (b) 14. (d) 15. (c) 16. (c)
17. (b) 18. (a)
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MULTIPLE CHOICE QUESTIONS 38- TAX PLANNING, TAX AVOIDANCE AND TAX EVASION
38 -TAX PLANNING, TAX AVOIDANCE AND TAX EVASION

1. The arrangement of one’s financial affairs in such a way that, without violating in any way the
legal provisions, full advantage is taken of all tax exemptions, deductions, concessions, rebates,
allowances and other reliefs or benefits permitted under the Act so that the burden of taxation
on the assessee is reduced to the minimum – is called _________
(a) Tax management (b) Tax planning
(c) Tax avoidance (d) Tax evasion
2. Use of element of deceit, misrepresentation of facts, falsification of accounting calculations or

downright fraud for reduction of taxes – is called _____
3. Assessee paid 1,00,000 insurance premium on his life to reduce his total income from Rs.
3,50,000 to Rs. 2,50,000. It is an example of _____
4. SQL Ltd. submits return of tax deduction at source effected by it in time. It is an example of _____
5. A partnership firm obtaining declaration from lenders/depositors in Form No. 15G/15H and
forwarding the same to income-tax authorities. It is an example of _________
6. A company installed an air-conditioner costing Rs. 75,000 at the residence of a director as per
terms of his appointment but treats it as fitted in quality control section in the factory. This is
with the objective to treat it as plant for the purpose of computing depreciation. It is an example
of ____
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MULTIPLE CHOICE QUESTIONS 38- TAX PLANNING, TAX AVOIDANCE AND TAX EVASION
7. A company remitted outstanding GST on 31-03-2018 before due date of filing income tax return.
It is an example of _____
ANSWERS
1. (b) 2. (d) 3. (b) 4. (a)

5. (a) 6. (d) 7. (a)
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MULTIPLE CHOICE QUESTIONS 39- TONNAGE TAXATION SCHEME
39 - TONNAGE TAXATION SCHEME

1. Benefit of “Tonnage Taxagtion Scheme” can be availed by
(a) A partnership firm (b) Any assessee
(c) A qualifying company (d) A LLP
2. The income computed under Tonnage Taxation Scheme shall be deemed to be business income
chargeable under the head ____________.
(a) Income from Other Sources (b) Profits and Gains of business or profession
(c) House Property (d) Capital Gains
3. Qualifying ship must be a seagoing ship or vessel of ________ net tonnage or more.
(a) Fifteen (b) Fifty
(c) Twenty-Five (d) Hundread
4. Out of the followings, which cannot be a “Qualifying ship” for the purose of Tonnage Taxation
Scheme.
(a) Fishing Vessel (b) Factory Ship
(c) Pleasure crafts (d) All of the above
5. The daily tonnage income (TI) for each qualifying ship having net tonnage capacity upto 1,000
tonnage is Rs.___________ for each 100 tons
(a) 70 (b) 53
(c) 42 (d) 29
6. The daily tonnage income (TI) for each qualifying ship having net tonnage capacity between
1,001 – 10,000 tonnage is Rs.___________ for each additional 100 tons beyond 1,000.
(a) 70 (b) 53
(c) 42 (d) 29
7. The daily tonnage income (TI) for each qualifying ship having net tonnage capacity between
10,001 – 25,000 tonnage is Rs.___________ for each additional 100 tons beyond 10,000.
(a) 70 (b) 53
(c) 42 (d) 29
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8. The daily tonnage income (TI) for each qualifying ship having net tonnage capacity above 25,000
tonnage is Rs.___________ for each additional 100 tons beyond 25,000.
(a) 70 (b) 53
(c) 42 (d) 29
9. Section 115VI provides that Relevant Shipping Income is a sum total of

(a) Profits from core activities and profits (b) Taxable income and exempt income
from incidental activities
(c) Profits from qualifying ship operations (d) None of the above
and non-qualifying ship operations
10. As per section 115VJ(1), in case, a tonnage tax company carrying on any business or activity
other than the tonnage tax business, common costs attributable to the tonnage tax business are
to be determined on
(a) An adhoc basis (b) A reasonable basis
(c) The basis of turnover from qualifying (d) None of the above
and non-qualifying operations
11. As per section 115VP, a qualifying company, desirous to join TTS, has to make an application to
the concerned joint commissioner of income-tax withing ___________ of it becoming a
qualifying company.
(c) Twelve months (d) three months
12. As per section 115VQ, once company opts for TTS, the option remains in force for ___________
generally.
(a) Three years (b) Fiver years
(c) Ten years (d) Fifteen years
13. As per section 115VT, tonnage tax company shall be required to credit at least _________ from
core and incidental activities to the tonnage tax reserve account.
(a) 20% of total income derived (b) 25% of total tonnage income derived
(c) 20% of its book profits derived (d) 25% of total income derived
© CA MEHUL THAKKER
14. A tonnage tax company has provided following information for the relevant previous year
(i) Relevant Shipping Income Rs. 120 lakh;
(ii) Total Tonnage Income Rs. 90 lakh and
(iii) Book profits derived from tonnage tax activities Rs. 150 lakh.
You are required to calculate the minimum reserve requirement of the company as per Sec.
115VT.
(a) Rs. 24 lakhs (b) Rs. 30 Lakhs
(c) Rs. 18 Lakhs (d) Rs. 37.50 lakhs
15. As per section 115VU, a tonnage tax company is required to comply with the minimum training
requirement in respect of its trainee officers in accordance with the guidelines framed by the
Director General of Shipping. In case of non-compliance for___ consecutive years, the option for
TTS will cease to have effect from the year following the such ____ year.
(a) Three, third (b) Ten, tenth
(c) Five, fifth (d) Five, sixth
16. As per section 115VV, a tonnage tax company is restricted from chartering in more than ____ of
the average net tonnage of the qualifying ships operated by it. (average net tonnage shall be
computed in consultation with Director General of Shipping as prescribed)
(a) 49% (b) 50%
(c) 51% (d) None of the abov
17. Where the amalgamating companies are tonnage tax companies, the provisions shall apply to
the amalgamated company for such period as the option for tonnage tax scheme which has the
_____________ continues to be in force.
(a) Shortest unexpired period (b) Longest unexpired period
(c) Balance period (d) Total of unexpired period of amalgamating
company and amalgamated company
18. Under section 115VZC of the Act, in the event of abuse of the tonnage tax scheme, the
__________ shall, by an order in writing, exclude such company from the TTS.
(a) Principal Commissioner of Income tax (b) Additional Commissioner of Income Tax
(c) Commissioner of Income Tax (d) Assessing officer
© CA MEHUL THAKKER
ANSWERS
1. (c) 2. (b) 3. (a) 4. (d)

5. (a) 6. (b) 7. (c) 8. (d)
9. (a) 10. (b) 11. (d) 12. (c)
13. (c) 14. (b) 15. (c) 16. (a)
17. (b) 18. (d)
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MULTIPLE CHOICE QUESTIONS 40- LIABILITY IN SPECIAL CASES
40 - LIABILITY IN SPECIAL CASES

1. Under section 159 of the Act, the liability of a legal representative of deceased
(a) Is unlimited (b) shall be limited to the extent to which, the estate
of the deceased is capable of meeting the liability
(c) shall be limited to the extent to (d) none of the above
which, his assets are capable of
meeting the liability
2. As per section 161(1) of the Act, private trust where shares of beneficiaries are known and does
not have business income then trustees are assessable
(a) At maximum marginal rate (b) At the rates applicable to each beneficiary
(c) At slab rate (d) At special rate at the discretion of assessing officer
3. As per section 161(1A) of the Act, private trust where shares of beneficiaries are known and its
total income includes business income then such trust shall be assessable
4. As per section 164(1) of the Act, private trust where shares of beneficiaries are not known and
its total income includes business income then such trust shall be assessable
5. As per section 164(1) of the Act, private trust where shares of beneficiaries are not known and
does not have business income and none of the beneficiaries has income execeeding exemption
limit nor is a beneficiary in some other trust, then such trust shall be assessable
(c) At the rates applicable to an AOP (d) At special rate at the discretion of assessing officer
6. As per section 164A of the Act, if a statement containing purpose, particulars and details of trust,
beneficiaries & property is forwarded, within 3 months from the date of declaration of the trust
to the Assessing Officer and if such statement indicates the share of beneficiaries, then such trust
shall be assessable
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MULTIPLE CHOICE QUESTIONS 40- LIABILITY IN SPECIAL CASES
7. As per section 164A of the Act, if no statement containing purpose, particulars and details of
trust, beneficiaries & property is forwarded to the Assessing Officer, then such trust shall be
assessable
8. Liability of successor when predecessor is not found is enumerated under section _________of
the Act.
(a) 159 (b) 161
(c) 170 (d) 181
9. Generally, income of the previous year shall be assessed in the assessment year. However, there
are exceptions to it. Identify-
(a) Assessment of persons leaving India- (b) Assessment of persons likely to transfer
Section 174 property to avoid tax – section 175
(c) Assessment of discontinued business- (d) All of the above
Section 176
10. Any person discontinuing any business or profession shall give to the Assessing Officer notice of
such discontinuance within ____ thereof.
(c) Six months (d) One year
ANSWERS
1. (b) 2. (b) 3. (a) 4. (a)

5. (c) 6. (b) 7. (a) 8. (c)
9. (d) 10. (a)
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MULTIPLE CHOICE QUESTIONS 42- REFUNDS
41 – INCOME COMPUTATION AND DISCLOSURE STANDARDS (ICDS)

1. Under ______, the Central Government is empowered to notify in the Official Gazette from time
to time, income computation and disclosure standards (ICDSs) to be followed by particular class
of assessees or in respect of particular class of income.
(a) Section 145(1) (b) Section 145A
(c) section 145(2) (d) Section 144
2. The ICDSs have to be followed by all assessees following the mercantile system of accounting,
for the purposes of computation of income chargeable to income-tax under the head “Profits
and gains of business or profession” or _____________.
(a) Income from salary (b) Income under the head “ House Property”
(c) Income under the head “ Capital Gain” (d) Income from other sources
3. The ICDSs are not required to be followed by __________________ who is not required to get
his accounts of the previous year audited in accordance with the provisions of section 44AB.
(a) An individual (b) An individual or a Hindu undivided family
(c) Partnership firm (d) All of the above
4. The ICDS III deals with ______

(a) Valuation of Inventories (b) Construction Contracts
(c) Accounting Policy (d) Borrowing Cost
5. Under ICDS, the inventory on the date of dissolution to be valued at the __________,
notwithstanding whether business is discontinued or not.
(a) Cost (b) Cost or net realizable value whichever is higher

(c) Net realizable value (d) Cost or net realizable value whichever is lower
6. Paragraph 4(2) of ICDS VII provides that recognition of government grant shall not be postponed
beyond _________.
(a) the date of actual receipt (b) the date of approval
(c) the date of fulfilment of conditions (d) the date of sanction
attached to such grant
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7. ICDS ______ deals with “Tangible Fixed Assets”
(a) I (b) II
(c) IV (d) V
8. “Inventories” as defined under ICDS to mean asset held for ______

(a) sale in the ordinary course of business (b) in the process of production for such sale
(c) in the form of materials or supplies to (d) all of the above
be consumed in the production process
or in the rendering of services
9. Recognition of contingent assets and related income is required only when inflow of economic
benefit is _______.
(a) Virtually certain (b) Highly certain
(c) Reasonably certain (d) Almost certain
ANSWERS
1. (a) 2. (d) 3. (b) 4. (b)

5. (c) 6. (a) 7. (d) 8. (d)
9. (c)
© CA MEHUL THAKKER
42 – REFUNDS
1. The provisions relating to interest on delay in payment of _____ are given in section 244A
(a) advance tax (b) self-assessment tax
(c) tax deducted at source (d) refund
2. Interest for delay in payment of refund arising due to any TDS / TCS / advance tax is granted @
____ % for every month or part of a month.
(a) 1.5 (b) 1
(c) 1.75 (d) ½
3. Interest for delay in payment of refund arising due to self-assessment tax is granted @ ____ % for every
month or part of a month.
(a) 1.5 (b) 1
(c) ½ (d) 1.75
ANSWERS
1. (d) 2. (d) 3. (c)
© CA MEHUL THAKKER
MULTIPLE CHOICE QUESTIONS 43- TAXATION OF MUTUAL CONCERNS/SUBSIDIES
43 - TAXATION OF MUTUAL CONCERNS / SUBSIDIES

1. Which are the express provisions taxing mutual concerns under the Act?
(a) Income received by a trade or (b) The profits and gains of any business of
professional or similar association from insurance carried on by a mutual insurance
specific services rendered to members company or by a co-operative society
(c) The profits and gains of any business of (d) All of the above
banking (including providing credit
facilities) carried on by a co-operative
society with its members.
2. As per section 2(24) (xviii) of the Act, assistance in the form of a ___________, by whatever name
called, by the Central Government or a State Government or any authority or body or agency in
cash or kind to the assessee is included in the definition of income
(a) Subsidy or grant (b) Cash incentive or duty drawback
(c) Waiver or concession or reimbursement (d) All of the above
3. Which subsidy is taxable in the hands of assessee?

(a) Subsidy received from tea Board (b) Subsidy received from coffee / Rubber Board
(c) Subsidy received from the Central (d) None of the above
Government for the purpose of corpus of
a trust
ANSWERS
1. (d) 2. (d) 3. (d)
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MULTIPLE CHOICE QUESTIONS 44- STATEMENT ON FINANCIAL TRANSACTIONS
44 – STATEMENT ON FINANCIAL TRANSACTIONS

1. A banking company or co-operative bank is required to furnish SFT in respect of payments made
in cash for purchase of bank drafts or banker’s cheque or pay orders of amount aggregating to
___________ or more in a financial year.
(a) Rs. 50,000 (b) Rs. 1,00,000
(c) Rs. 10,00,000 (d) Rs. 5,00,000
2. A banking company or co-operative bank is required to furnish SFT in respect of cash deposits or
cash withdrawals aggregating to Rs. 50,00,000 or more in a financial year, in or from one or more
_________ account of a person.
(a) Current (b) Saving
(c) Cash Credit (d) Time deposit
3. A banking company or co-operative bank is required to furnish SFT in respect of cash deposits
aggregating to ________or more in one or more accounts (other than a current account and time
deposit) of a person.
(a) Rs. 5,00,000 (b) Rs. 1,00,00,000
(c) Rs. 10,00,000 (d) Rs. 50,00,000
4. Post Master General is required to furnish SFT in respect of one or more-time deposits (other
than a time deposit made through renewal) of a person aggregating to ________or more in a
financial year of a person.
(a) Rs. 2,00,000 (b) Rs. 10,00,000
(c) Rs. 50,00,000 (d) Rs. 5,00,000
5. Company issuing credit card is required to furnish SFT in respect of payment made by any person
of an aggregating to ________or more in cash against bills raised in respect of one or more credit
cards issued to that person, in a financial year.
(a) Rs. 1,00,000 (b) Rs. 10,00,000
(c) Rs. 5,00,000 (d) Rs. 50,000
6. Company issuing bonds or debentures is required to furnish SFT in respect of receipt from any
person of an amount aggregating to ________or more in a financial year for acquiring bonds or
debentures issued by the company.
(a) Rs. 10,00,000 (b) Rs. 1,00,000
(c) Rs. 5,00,000 (d) Rs. 50,000
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MULTIPLE CHOICE QUESTIONS 44- STATEMENT ON FINANCIAL TRANSACTIONS
7. Company issuing shares is required to furnish SFT in respect of receipt from any person of an
amount aggregating to ________or more in a financial year for acquiring shares issued by the
company.
(a) Rs. 10,00,000 (b) Rs. 1,00,000
(c) Rs. 5,00,000 (d) Rs. 50,000
8. Registrar appointed under section 6 of Registration Act, 1908 is required to furnish SFT in respect
of purchase or sale by any person of immovable property for an amount of ________or more
valued by the stamp valuation authority.
(a) Rs. 10,00,000 (b) Rs. 30,00,000
(c) Rs. 25,00,000 (d) Rs. 50,00,000
9. Any person who is liable for audit under section 44AB of the Act is required to furnish SFT in
respect of receipt of cash payment exceeding _______ for sale, by any person, of goods or
services of any nature.
(a) Rs. 1,00,000 (b) Rs. 3,00,000
(c) Rs. 2,00,000 (d) Rs. 5,00,000
10. Rule 114 E specifies that the statement of financial transaction required to be furnished under
section 285BA(1) shall be furnished in Form No. _______.
(a) 65 (b) 61
(c) 61 A (d) 65A
ANSWERS
1. (c) 2. (a) 3. (c) 4. (b)

5. (a) 6. (a) 7. (a) 8. (b)
9. (c) 10. (c)
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MULTIPLE CHOICE QUESTIONS 45- INTERNATIONAL TAXATION
45 – INTERNATIONAL TAXATION
1. "Place of effective management" means a place where ____________________ that are
necessary for the conduct of the business of an entity as a whole, are in substance made.
(a) Control and Management (b) Management decisions
(c) Commercial decisions (d) key management and commercial decisions
2. Out of the followings, which income is not taxable in the hands of non-resident?
(a) Income received in India (b) Income deemed to be received in India
(c) Income received and accrued outside (d) Income deemed to accrue or arise in India
India
3. As per section 9(1)(ii) of the Act, salary income shall be deemed to accrue or arise in India if
_________in India.
(a) Services are rendered in India (b) Employer is
(c) Employee is (d) Payment is received
4. As per section 9(1)(v), interest payable by government shall always be __________.

(a) Received in in India (b) Deemed to be received in India
(c) Deemed to accrue or arise in India (d) Accrue in India
5. Any transfer of a capital asset, being ______________, made by a non-resident to another non-
resident is not treated as transfer provided that transfer is made outside India.
(a) bonds or Global Depository (b) rupee denominated bond of an Indian
Receipts referred to in section 115AC(1) company
(c) Government Security carrying a periodic (d) All of the above
payment of interest
6. Subject to certain conditions mentioned under first proviso to section 48, the benefit of
indexation is not available to the non-resident assessee while computing capital gain on transfer
of ____________.
(a) Shares of Indian company (b) Immovable property in India
(c) Gold in India (d) Silver in India
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7. Section 44B of the Act provides that notwithstanding anything to the contrary contained in
section 28 to 43A in the case of an assessee, who is a non-resident and is engaged in the business
of operation of ships, a sum equal to ________% of prescribed amount shall be deemed to be
the profits of such business.
(a) Five (b) Seven and half
(c) Ten (d) Eight
8. Section 44BBA of the Act provides that notwithstanding anything to the contrary contained in
section 28 to 43A in the case of an assessee, who is a non-resident and is engaged in the business
of operation of aircraft, a sum equal to ________% of prescribed amount shall be deemed to be
the profits of such business.
(a) Five (b) Seven and half
(c) Ten (d) Eight
9. Under section 44 C of the Act, maximum deduction in respect of head office expenses of a non-
resident assessee shall not exceed ________.
(a) 5% of gross total income (b) 5% of total income
(c) 7.5% gross total income (d) 5% of adjusted total income
10. As per section 115A(1)(b) of the Act, royalty or fees for technical services earned by non-resident
shall be taxed at _________.
(a) 10% of gross income (b) 20% of gross income
(c) 30% of net income (d) 10% of net income
11. As per section 115BBA of the Act, income from participation in any game or sport earned by non-
resident foreign national sportsman shall be taxed at _________.
(a) 20% (b) 10%
(c) 30% (d) 5%
12. As per section 115Eof the Act, income arising from “Foreign Exchange Asset” in the hands of non-
resident Indian shall be taxed at _________.
(a) 20% (b) 10%
(c) 5% (d) 40%
13. Identify the income which is exempt in the hands of non-resident.
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(a) Interest on securities (b) Interest on fixed deposits
(c) Interest on moneys lying with NRE account (d) Interest on saving deposits
14. Identify the person who may be regarded as representative assessee as defined under section
160 of the Act.
(a) Agent of non-resident (b) Guardian of lunatic or idiot
(c) Trustee appointed under oral trust (d) All of the above
15. Identify the person who may not be regarded as agent of non-resident as defined under section
163 of the Act.
(a) Employee of non-resident (b) Person having business connection with the non-resident
(c) Trustee of non-resident (d) Relative of non-resident
16. While taxing income India follows:

(a) Source rule only (b) Residence rule only
(c) Mixture of (a) and (b) (d) None of the above
17. Coverage of agreement entered into section 90 may include provisions for:
(a) grant of double taxation (b) exchange of information
(c) recovery of income-tax (d) all of the above
18. The provisions relating to unilateral relief are contained in section ______.
(a) 90 (b) 91
(c) 90A (d) 92
19. Out of the following forms, which form is not relevant for making an application to Authority of
Advance Rulings?
(a) 34C (b) 34 D
(c) 34 E (d) 35
20. International transaction means specified transactions between two or more associated
enterprises where, either or both of whom are ________.
(a) Residents (b) Non-residents
(c) Residents but not ordinarily residents (d) Resident and ordinarily residents
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21. Out of the followings, which method has no relevance in determining Arm’s Length Price under
section 92 C of the Act.
(a) Comparable Uncontrolled Price (b) Cost Plus
(c) Resale Price (d) Deductive Value
22. ______________ has been empowered to formulate safe harbor rules i.e. to provide the
circumstances in which the income-tax authorities shall accept the transfer price declared by the
assessee.
(a) CBDT (b) Central Government
(c) State Government (d) President of India
23. Advance pricing agreements (APA) may be ______________.

(a) Unilateral APA (b) Bi-lateral APA
(c) Multilateral APA (d) Any of the above
24. Secondary adjustment under section 92CE is not required to be done where a primary
adjustment to the transfer price,
(a) has been made suo motu by the (b) made by the Assessing Officer has been
assessee accepted by the assessee
(c) made by the Assessing Officer has been (d) is made as per the safe harbour rules
contested by the assessee
25. Every person who has entered into an international transaction or specified domestic transaction
during a previous year shall obtain a report from an accountant and furnish such report on or
before the specified date in Form No. _____ duly signed and verified in the prescribed manner
by such accountant and setting forth such particulars as may be prescribed.
(a) 3CEB (b) 3CEFA
(c) 3CBB (d) 3CEFB
26. Every person who has entered into an international transaction or specified domestic transaction
during a previous year shall obtain a report from an accountant and furnish such report on or
before the ___________ in the prescribed form duly signed and verified in the prescribed
manner by such accountant and setting forth such particulars as may be prescribed.
(a) 30th September (b) 30th November
(c) 30th November of assessment year (d) 30th September of assessment year
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27. The assessing officer has made an addition of Rs. 50 lakh due to application of arm’s length price
in the hands of Jamuna Cleaning Services Ltd. (JCSL) Against such addition, -
(a) Appeal can be filed to High Court (b) Deduction cannot be claimed under chapter VI A in
respect of such enhanced income
(c) Set-off cannot be claimed even if (d) Rectification application can be filed under section
JCSL has brought forward business 154 alleging that the interpretation done by the
losses Assessing officer is debatable point of law.
28. In respect of payment made to a person located in a Notified Jurisdictional Area (NJA), tax is
deductible at higher of the rate specified in the Income-tax Act 1961 or rates in force or
(a) 30% (b) 40%
(c) MMR (d) 60%
29. Section 92 requires that international transaction carried out between ____________ must be
at arm’s length price
(a) related parties (b) unrelated parties
(c) associated enterprises (d) closely held enterprises
30. The law relating to transfer pricing as provided under section 92 shall apply only if the aggregate
value of specified domestic transactions entered into by the taxpayer during the year
exceeds_________.
(a) Rs. One Crore (b) Rs. Twenty crore
(c) Rs. Five crore (d) None of the above
31. Section ________ deals with various methods of computation of arm’s length price.
(a) 90C (b) 91
(c) 93 (d) 92C
32. One of the methods to determine arm’s length price is _______.

(a) Cost plus Method (b) Fair Market Value Method
(c) Stamp Duty Value Method (d) None of the above
33. Income from shipping business of a non-resident is charged to tax in the previous year itself; in
such a case, as per section 172 of the Act, ________% of the amount paid or payable on account
of such carriage to the non-resident shall be deemed to be income accruing in India to the non-
resident.
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(a) 5 (b) 10
(c) 7 (d) 7.5
34. Income from shipping business of a non-resident is charged to tax in the previous year itself. In
such a case, prescribed percentage of the amount paid or payable on account of such carriage
to the non-resident shall be deemed to be income accruing in India to the non resident and tax
on such income is payable at the rates applicable to a ________.
(a) Foreign company (b) Domestic company
(c) Partnership firm (d) Limited Liability Partnership
35. Section 92 D provides that every person entering into a specified domestic transaction shall keep
and maintain such information and documents as may be prescribed in this regard under rule
10D. Such information and documents shall be maintained for a period of ________ from the
end of ___________.
(a) 8 years, previous year (b) 6 years, previous year
(c) 7 years, assessment year (d) 8 years, assessment year
ANSWERS
1. (d) 2. (c) 3. (a) 4. (c)

5. (d) 6. (a) 7. (b) 8. (a)
9. (d) 10. (a) 11. (a) 12. (a)
13. (c) 14. (d) 15. (d) 16. (c)
17. (d) 18. (b) 19. (d) 20. (b)
21. (d) 22. (a) 23. (d) 24. (c)
25. (a) 26. (c) 27. (b) 28. (a)
29. (c) 30. (b) 31. (d) 32. (a)
33. (d) 34. (a) 35. (d)
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MULTIPLE CHOICE QUESTIONS ANNEXURE- AMENDMENT MADE BY FINANCE ACT, 2018
ANNEXURE - AMENDMENT MADE BY FINANCE ACT, 2018
 1 – BASICS OF INCOME TAX >
1. Out of the followings, which is not an amendment made by Finance Act, 2018 in the definition
of income?
(a) Compensation on termination of (b) In case of conversion of stock-in-trade into
employment or modification of terms of capital asset, the fair market value of such
employment inventory
(c) (a) and (b) above (d) In case of conversion of capital asset into
stock-in-trade, the fair market value of such
capital asset
 2 – INCOME WHICH DO NOT FORM PART OF TOTAL INCOME >
2. Under section 10(12A), __________% of the amount payable to __________ at the time of
closure of his account under NPS or opting out of the pension scheme referred to in section
80CCD is exempt.
(a) 50%, employee (b) 40%, assessee
(c) 50%, employee (d) 50%, assessee
3. While determining the application of income in the hands of institution referred to in section
10(23C) (iv)/(v)/(vi)/(via), which provision(s) of the head “Profits and gains of business or
profession” is (are) relevant?
(a) Section 40 A(3) (b) Section 40 A(3A)
(c) Section 40(a) (ia) (d) All of the above
4. Subject to certain conditions, section 10(48B) provides exemption to foreign company in respect
of income accruing or arising on account of _________
(a) Sale of crude oil (b) Sale of leftover stock of crude oil after
expiry/termination of agreement.
(c) Storage of crude oil (d) Rendering of services notified by Central Government
 3 – SALARY >
5. Under section 16(ia), salaried person is entitled to a standard deduction of _________.

(a) Rs. 30,000 (b) Rs.40,000
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(c) 1/3rd of Salary or Rs. 40,000 whichever (d) 1/3rd of Salary or Rs. 40,000 whichever is less
is higher
6. Mr. Mohit is a Government employee. He is in receipt of transport allowance of Rs. 1600 per
(a) Rs. 1600 per month will be exempt from tax (b) Rs. 1000 per month will be exempt from
tax
(c) Rs. 800 per month will be chargeable to tax (d) Rs. 1600 per month will be charged to tax
7. Mr. Rahul is a blind person employed in CROMA Pvt. Ltd. He is in receipt of transport allowance
of Rs. 3,500 per month. What will be the tax treatment of transport allowance in the hands of
Mr. Rahul?
(a) Rs. 1,600 per month will be exempt (b) Rs. 3,200 per month will be exempt from tax
from tax
(c) Rs. 800 per month will be exempt from (d) Rs. 3,200 per month will be taxable
tax
8. Mr. Shyam employed with Vijay Sales, Ahmedabad. Vijay Sales paid Rs. 17,300 to a private
hospital for medical treatment of Shyam’s wife. What shall be amount of perquisite to be taxed
in the hands of Mr. Shyam?
(a) Rs. 2,300 (b) Rs. 15,000
(c) Rs. 17,300 (d) Rs. Nil
 5 – PROFITS AND GAINS FROM BUSINESS OR PROFESSION >
9. Which compensation may not be chargeable under section 28 of the Act?

(a) Compensation received by a person for (b) Compensation for termination of
termination of management rights of an Indian business agency
company
(c) Compensation received by a person for (d) Compensation at the time of
termination of a contract relating to his business voluntary retirement of an employee
10. Mr. Gyani incurred following losses during the concerned previous year. You are required to
identify the loss which is not of a speculative nature.
(a) Loss from trading in stock derivatives (b) Loss from trading in commodity derivatives
where transactions were carried out in where transactions were carried out in an
an unrecognized stock exchange association which is not recognized.
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(c) Loss from trading in agricultural (d) Loss from buying and selling goods where
commodity derivatives where contracts were settled without actual delivery
transactions were carried out in an of goods.
association which was recognized.
11. As per the proviso to section 43CA(1), where the ________________ does not exceed 105% of
the ______________ , the consideration received as a result of the transfer shall, for the
purposes of computing profits and gains from transfer of such asset, be deemed to be the full
value of consideration.
(a) value adopted for the purpose of (b) consideration received or accruing as a result
payment of stamp duty, consideration of transfer, value adopted for the purpose of
received or accruing as a result of payment of stamp duty
transfer
(c) fair market value of the property, actual (d) actual consideration, fair market value of the
consideration property
12. As per the provisions of section 43CB (1), profits and gains arising from a contract for providing
services with duration of not more than ________ shall be determined on the basis of project
completion method instead of percentage completion method.
(a) 1 month (b) 120 days
(c) 2 months (d) 90 days
13. While measuring income under section 43CB, the contract costs shall not be reduced by any
incidental income in the nature of ___________
(a) Interest (b) Dividend
(c) Capital gains (d) All of the above
 6 – CAPITAL GAINS >
14. Mr. Rajesh Shah is a proprietor of “Abhushan Jewelers”. He closed down this shop w.e.f. 10 th
July, 2018 and converted stock-in-trade into capital asset with immediate effect. On such date,
the book value of jewelry was Rs. 30,00,000 while fair market value of such jewelry was Rs.
30,62,000. Later on, he sold out such jewelry on 10th March, 2020 for Rs. 31,12,000. Find out the
period of holding for determining the nature of capital asset sold by Mr. Rajesh assuming that
such jewelry was purchased on 2nd April, 2018.
(a) 10-07-2018 to 10-03-2020 (b) 02-04-2018 to 10-07-2018
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(c) 02-04-2018 to 10-03-2020 (d) 01-04-2018 to 10-03-2020
15. Mr. Thomas inherited a house in Jaipur under will of his father in May, 2011. The house was sold
by him in November, 2018 for Rs. 37,50,000. The valuation adopted by the registration
authorities for charge of stamp duty was Rs. 47,25,000 which was not contested by the buyer,
but as per assessee’s request, the Assessing Officer made a reference to Valuation Officer. The
value determined by the Valuation Officer was Rs. 47,50,000. You are required to ascertain full
value of consideration as per provisions of section 50 C of the Act.
(a) Rs. 37,50,000 (b) Rs. 47,25,000
(c) Rs. 47,50,000 (d) 105% of 37,50,000
16. Mr. Ram sold the open plot being long-term capital asset on 10-08-2017. In order to reduce
capital gain tax liability, he purchased bonds of Rural Electrification Corporation Ltd on 10-01-
2018. What shall be the lock-in-period for such bonds so that Mr. Ram may not loose exemption
claimed under section 54EC of the Act.
17. Identify the asset (s), the transfer of which is eligible to claim benefit of section 54EC assuming
that other conditions of the said section are satisfied.
(a) Only Land (b) Only Building
(c) Any Capital Assets (d) Land or building
 7 – INCOME FROM OTHER SOURCES >
18. As per the explanation to section 2(22), which statement is not correct for accumulated profits.
(a) In case of a company, which is not in (b) In case of a company, which is in
liquidation, it includes all profits of a company liquidation, it includes all profits of the
up to the date of distribution or payment. company up to the date of liquidation.
(c) In the case of an amalgamated company, (d) An accumulated profit does not include
accumulated profits or loss in the hands of the capital gains arising before April 1, 1946
amalgamated company shall not be increased and after March 31, 1948 but before
by the accumulated profits of the April 1, 1956.
amalgamating company on the date of
amalgamation.
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19. Section 56(2)(x) (b) provides that if a person receives immovable property for a consideration
then subject to some condition, the difference between stamp duty value and the consideration
(to be termed as excess) may be taxed under the head “Income from Other Sources”. Identify
that condition from the following.
(a) Such excess is more than the amount of (b) Such excess is more than the amount equal to
Rs. 50,000 five percent of the consideration
(c) Such excess is more than the higher of (d) Such excess is more than the higher of (a) and
(a) or (b) (b)
20. Identify the compensation that shall be chargeable to tax under the head “Income from other
sources”.
(a) Compensation on termination of (b) Compensation on termination of business
employment agency
(c) Compensation on termination of (d) Compensation on termination of
business contract management rights of an Indian company
 10 – DEDUCTIONS FROM GROSS TOTAL INCOME >
21. Mr. Agam, resident individual, aged 39 years, paid medical insurance premium of
(a) Rs. 28,000 to insure his health as well as the health of his spouse.
(b) Rs. 48,000 to insure the health of his father, being resident, aged 63 years, who is not
dependent on him.
Compute the deduction allowable under section 80D.
(a) Rs. 76,000 (b) Rs. 55,000
(c) Rs. 73,000 (d) Rs. None of the above
22. Mr. Shrenik, aged 44 years, paid medical insurance premium of

(a) to insure his health as well as the health of his spouse and dependent children.
(b) to insure the health of his mother, aged 67 years, who is not dependent on him.
He also contributed some amount to Central Government Health Scheme during the year.
He also incurred medical expenditure on his father, aged 71 years, who is not covered under
mediclaim policy. His father is also not dependent upon him.
What shall be the maximum deduction Mr. Shrenik Can claim under section 80D.
(a) Rs. 60,000 (b) Rs. 1,00,000
(c) Rs. 55,000 (d) Rs. 80,000
23. Mr. Jagrut (44 years) is a resident individual. During the previous year, he incurs Rs. 1,08,000 on
medical treatment of his dependent father (66 years) for specified disease. The insurance
company reimbursed Rs. 25,000 while employer of Mr. Jagrut reimbursed Rs. 10,000 for such
© CA MEHUL THAKKER
medical treatment of his father. Find out deduction under section 80 DDB assuming that the
father of Mr. Jagrut is a resident.
(a) Rs.65,000 (b) Rs. 73,000
(c) Rs. 1,00,000 (d) Rs. 5,000
24. Mr. Jagrut (44 years) is a resident individual. During the previous year, he incurs Rs. 1,08,000 on
medical treatment of his dependent father (66 years) for specified disease. The insurance
company reimbursed Rs. 25,000 while employer of Mr. Jagrut reimbursed Rs. 10,000 for such
medical treatment of his father. Find out deduction under section 80 DDB assuming that the
father of Mr. Jagrut is a non-resident.
(a) Rs. 65,000 (b) Rs. 73,000
(c) Rs. 40,000 (d) Rs. 5,000
25. The benefit of section 80-IAC is available to a start-up company or LLP which is incorporated on
or after ____________ but before ___________.
(a) 1st April, 2016, 31st March 2021 (b) 1st April, 2016, 1st April 2021
(c) 1st April, 2016, 31st March 2019 (d) 1st April, 2016, 1st April 2019
26. The total turnover of the company or LLP does not exceed _______ in the previous year relevant
to the assessment year for which deduction under section 80-IAC (1) is claimed.
(a) Rs.25 crore (b) Rs. 2.5 crore

(c) Rs. 1 crore (d) Rs. 2 crore
27. Identify the full-fledged definition of eligible business for the purpose of claiming deduction
under section 80-IAC of the Act. It means:
(a) a business which involves innovation, (b) business carried out by an eligible start-up
development, deployment or engaged in innovation of products or
commercialisation of new products, processes or services or a scalable business
processes or services driven by technology model with a high potential of employment
or intellectual property generation or wealth creation only
(c) business carried out by an eligible start-up (d) business carried out by an eligible start-up
engaged in innovation, development or engaged in improvement of products or
improvement of products or processes or processes or services or a scalable business
services or a scalable business model with model with a high potential of employment
a high potential of employment generation or wealth creation only
generation or wealth creation
© CA MEHUL THAKKER
28. For the purpose of section 80JJJAA, additional employee does not include an employee
employed for a period less than 150 days during the previous year if assessee is engaged in the
business of manufacturing of
(a) Apparel (b) Footwear

(c) Leather products (d) All of the above.
29. Which income is additionally qualified for deduction under section 80TTB as compared to the
provisions of section 80TTA of the Act?
(a) Interest on deposits in a savings (b) Interest on deposits in a savings account with a
account with a banking company co-operative society engaged in carrying on the
business of banking
(c) Interest on deposits in a savings (d) Interest on time-deposits with a banking
account with a post-office company / co-operative society engaged in
banking business / post-office
30. A senior citizen (who can avail of deduction u/s 80TTB) shall not eligible for the deduction under
section _______ of the Income Tax Act.
(a) Section 80 TTA (b) Section 80 U
(c) Section 80 G (d) Section 80 C
 11 – COMPUTATION OF TOTAL INCOME AND TAX LIABILITY >
31. “Health and Education cess (HEC)” is to be calculated at the rate of ____of income-tax and
surcharge, if any.
(a) 1% (b) 2%
(c) 3% (d) 4%
32. The provisions of section 112A has an overriding effect over the provisions of
(a) section 112 (b) section 111A
(c) section 115BBE (d) all of the above
33. Which is one of the conditions to attract provisions of section 112A of the Act?
(a) Securities transaction tax has, in a case (b) Securities transaction tax has, in a case where
where the long-term capital asset is in the long-term capital asset is in the nature of
the nature of an equity share in a
© CA MEHUL THAKKER
company, been paid on acquisition and an equity share in a company, been paid on
transfer of such capital asset. acquisition of such capital asset.
(c) Securities transaction tax has, in a case (d) Securities transaction tax has, in a case where
where the long-term capital asset is in the long-term capital asset is in the nature of
the nature of an equity share in a a unit of an equity-oriented fund or a unit of a
company, been paid on transfer of such business trust, been paid on acquisition of
capital asset. such capital asset.
34. Tax rate applicable on the long-term capital gain falling under section 112A is____
(a) 5% (b) 10%
(c) 15% (d) 20%
35. Rebate under section 87A shall not be allowed from the income-tax on
(a) Long-term capital gains under section 112 (b) Long-term capital gains under section 112A
(c) Winnings from Lotteries under section (d) Income referred to in section
115BB 68/69/69A/B/C/D
36. The requirement of payment of securities transaction tax is not applicable for the long-term
capital gains falling under 112A of the Act if transfer has been undertaken on a recognized stock
exchange located in any _________ and where the consideration for such transfer is received or
receivable in foreign currency.
(a) Special Economic Zone (b) Notified Zone
(c) International Financial Service Centre (d) Free Trade Zone
37. As per provisions of section 55(2) (ac), cost of acquisition for the purpose of computing capital
gains referred to section 112A(1) in respect of long-term capital asset acquired by the assessee
before the 1st day of February, 2018, shall be deemed to be-
(a) The actual cost of acquisition (b) Fair market value as on 31st day of January, 2018
(c) Lower of (d) Higher of (a) or (c) above
(i) Fair market value as on 31st day of
January, 2018
(ii) Full value of consideration
38. From the following information, compute cost of acquisition as per provisions of section
55(2)(ac)
© CA MEHUL THAKKER
Particulars Rs. in thousands
Actual cost of acquisition 100
Fair market value as on 31-01-2018 200
Sale Consideration 250
(a) 200 (b) 100
(c) 250 (d) 50
39. From the following information, find out capital gain chargeable to tax under section 112A
Particulars Rs. In thousands
Actual cost of acquisition 100
Fair market value as on 31-01-2018 200
Sale Consideration 50
(a) (50) (b) 100
(c) 200 (d) 50
40. Mr. Mohan (35 years), resident provides the following information. Find out his tax liability
Particulars Rs.
Income under the head house property 3,00,000
Business Income 7,00,000
Long term capital gain u/s 112A 2,00,000
(a) Rs.1,37,800 (b) Rs. 1,27,400
(c) Rs. 1,58,600 (d) Rs. 1,79,400
41. Section 112A(2) prescribes that the tax shall be calculated on long-term capital gains exceeding
______ at the rate of ___.
(a) Rs. 1,00,0000, 5% (b) Rs. 50,000, 10%
(c) Rs. 2,00,000, 20% (d) Rs. 1,00,000, 10%
42. As per section 115BBE, income from undisclosed sources (section 68/69/69A/B/C/D) shall be
chargeable to tax at a flat rate of _______ .
(a) 10% (b) 60%
(c) 30% (d) 25%
© CA MEHUL THAKKER
 15 – ASSESSMENT OF COMPANIES >
43. Radha-Raman cotton mills private Limited has opted for applicability of section 115BA. It seeks
your advice on the tax rate applicable in respect of dividend income from specified foreign
companies.
(a) 25% (b) 10%
(c) 15% (d) 29%
44. MAT is not applicable in respect of foreign companies where its total income comprises solely
from the business referred to in _____ provided presumptive income has been offered to tax at
the rates specified in the said section.
(a) Section 44DA (b) Section 44BBB
(c) Section 44C (d) Section 44D
45. From the following information, find out the amount of negative adjustment to be done during
previous year 2018-19 while computing book profit u/s 115JB if application for corporate
insolvency resolution process has been admitted by the Adjudicating Authority under section 7
or section 9 or section 10 of the Insolvency and Bankruptcy Code, 2016 against the company.
Previous Year Brought forward loss as Unabsorbed Depreciation
per books (Rs.in lacs) as per books(Rs.in lacs)
2015-16 as per books
2 (Rs.in lacs) 5
2016-17 - 3
2017-18 10 2
(a) 22 Lacs (b) 10 Lacs
(c) 12 Lacs (d) 8 Lacs
46. As per section 115 – O of the Income Tax Act, domestic company is required to pay dividend tax
on deemed dividend u/s. 2(22)(e) at the rate of ______ increased by surcharge and HEC.
(a) 15% (b) 10%
(c) 25% (d) 30%
47. Despite of the change in the shareholding takes place in a previous year pursuant to a
resolution plan approved under the Insolvency and Bankruptcy Code, 2016, after affording a
reasonable opportunity of being heard to the jurisdictional Principal Commissioner or
Commissioner, provisions of ________ shall not be applicable to the closely held companies.
© CA MEHUL THAKKER
48. As per section 115JC(1), Where the regular income-tax payable for a previous year by a unit
located in an International Financial Services Centre and derives its income solely in
convertible foreign exchange, not being a company, is less than the alternate minimum tax
payable for such previous year, the adjusted total income shall be deemed to be the total income
of that person for such previous year and he shall be liable to pay income-tax on such total
income at the rate of ___________percent.
(a) 18% (b) 18.5%
(c) 9.5% (d) 9%
 20 – RETURN, ASSESSMENT, REASSESSMENT AND RECTIFICATION >
49. Assessee is a company newly incorporated on 14-02-2019 and entered into a financial
transaction of Rs. 5 lac as in the form of share capital. There are no other transactions for the
year ending on 31-03-2019. Identify the person required to obtain PAN mandatorily as per the
provisions of section 139A.
(a) Company (b) Managing director of the company
(c) Director of the company (d) All of above
50. Assessee is a company whose application has been admitted by the Adjudicating Authority in
under section 7 of the Insolvency and Bankruptcy Code, 2016. Return of such company shall
be verified by
(a) Insolvency Professional (b) Adjudicating Authority
(c) Managing Director (d) Company Secretary
51. While processing return under section 143(1) of the Act, which adjustment cannot be made
when such return is filed after the due date specified under section 139(1) of the Act?
(a) Disallowance of deduction under section (b) Addition of income appearing in Form 26AS
80IA but not included in total income in the return
(c) Disallowance of deduction under section (d) (b) and (c) above
80IAC
52. Purpose behind introducing the provisions enabling E-Assessment under section 143(3A) are
(a) Greater efficiency (b) Transparency
(c) Accountability (d) All of the above
© CA MEHUL THAKKER
 21 – APPEALS >
53. Identify the order not appealable before Income Tax Appellate Tribunal.
(a) Order passed by AO under section (b) Order passed by CIT(A) under section 250
115VZC
(c) Order passed by CIT(A) under section (d) Order passed by AO under section 271J
271J
 27 – TAX DEDUCTION AND COLLECTION AT SOURCE >
54. Under section 193 of the Act, tax is deducted at source when interest exceeding Rs. 10,000 during
the year has been credited or paid on
(a) Central Government Security (b) 7% Savings (Taxable) Bonds
(c) 7.75% Savings (Taxable) Bonds, 2018 (d) Debentures
55. Mr. Ramesh, a resident senior citizen, opened recurring deposit account with State Bank of India
and requested not to deduct tax at source on interest amounting to Rs.42,000. Manager, SBI
agreed not to deduct tax at source under section 194A because
(a) Interest amount does not exceed Rs. 50,000 (b) Interest on recurring deposit is outside
the purview of Section 194A
(c) TDS is to be made only on interest from time (d) All of the above.
deposit and not from recurring deposit
 31 – ADVANCE RULINGS >
56. A Bench of Authority for Advance Rulings (AAR) shall consist of the
(a) Chairman and Law Member (b) Chairman and Revenue Member
(c) Chairman or the Vice-chairman and one (d) Revenue Member and Law Member
Revenue Member and one Law Member
 33 – PENALTIES >
57. Penalty for not furnishing the statement of financial transactions as required under section
285BA(1) is Rs._________
(a) 100 per day (b) 500 per day
(c) 1,000 per day (d) 1,00,000
© CA MEHUL THAKKER
58. Penalty for not furnishing the statement of financial transactions within the period specified in
notice under section 285BA(5) is Rs._________
(a) 100 per day (b) 500 per day
(c) 1000 per day (d) 1,00,000
 34– PROSECUTIONS >
59. Proviso to section 276CC states that the person shall not be proceeded against under section
276CC in a case where the return of income is not filed within the due date under section 139(1),
if
(a) The return is furnished by him before the expiry of the assessment year; or
(b) the tax payable by the person on the total income determined on regular assessment, as
reduced by the advance tax, if any, paid and any tax deducted at source, does not exceed
Rs.3,000.
The benefit of above proviso is not available to the
(a) Partnership firm (b) Individual
(c) Company (d) Hindu Undivided Family
c
 45 – DEPRECIATION >
60. ABC Ltd. is engaged in manufacturing “8 Color C.I. Flexo Printing Machines” since 10 years. The
company set up “Printing Service Division” and decided to provide printing services on
polyethylene films and therefore shifted five machines to “Printing Service Division”. The book
value of each such machine was Rs. 1 Cr. though fair market value was Rs. 1.40 Cr. What shall be
the actual cost of each machine for the purpose of computing depreciation under section 32 of
the Act?
(a) Rs. 1.40 Cr. (b) Rs. 1 Cr.
(c) Rs. 7.00 Cr. (d) Rs. 5 Cr.
 48 – INCOME COMPUTATION AND DISCLOSURE SCHEME (ICDS) >
61. As per the requirements of section 145A of the Act, inventory (being securities held by a
scheduled bank or financial institution) shall be valued in accordance with ICDS after taking into
account extant guidelines issued by ____.
(a) Central Government (b) Reserve Bank of India
(c) SEBI (d) CBDT
© CA MEHUL THAKKER
62. Interest received by an assessee on any compensation or on enhanced compensation, as the
case may be, shall be deemed to be the income of the previous year in which it is received
(a) shall be deemed to be the income of (b) shall be deemed to be the income of the
the previous year in which it is received previous year to which in pertains
(c) shall not be chargeable to tax (d) shall be deemed to be the income of the
previous year in which Court passes order
 54 – TAXATION OF NON-RESIDENT >
63. As per Explanation 2 to section 9(1) (i), “business connection” shall include any business activity
carried out through a person who, acting on behalf of the non-resident has
(a) an authority to conclude contracts on (b) habitually concludes contracts
behalf of the non-resident
(c) habitually plays the principal role (d) All of the above
leading to conclusion of contracts
64. Explanation 2A to section 9(1)(i) provides that “For the removal of doubts, it is hereby clarified
that the ____________________ shall constitute "business connection" in India.
(a) Significant presence of a non-resident (b) Significant presence of a non-resident in India
across the globe
(c) Significant economic presence of a non- (d) Significant Global presence of a non-resident
resident in India
65. To measure significant economic presence of a non-resident in India, one of the criteria is the
aggregate payments of __________ exceeds prescribed amount during the previous year.
(a) Sale of goods, services or property in (b) Purchase of goods, services or property in
India India
(c) Transaction in respect of goods in India (d) Transaction of goods, services or property in
India including download of data or software
in India
66. As per section 47(viiiab), any transfer of a capital asset, being _________ made by a non-
resident on a recognised stock exchange located in any International Financial Services Centre
and where the consideration for such transaction is paid or payable in foreign currency, is not
treated as transfer
© CA MEHUL THAKKER
(a) bond or Global Depository Receipt (b) rupee denominated bond of an Indian
referred to in section 115AC(1) company
(c) derivative (d) all of the above
67. Long term capital gains on transfer of capital asset referred to in section 112A of the Act earned
by FII
(a) Shall not be chargeable to tax as per the (b) Shall be chargeable to tax @ 10%
provisions of section 115 AD
(c) Shall be chargeable to tax @ 10% for the (d) Shall be chargeable to tax @ 20% without
amount exceeding Rs. 1 Lakh indexation
 57 – TRANSFER PRICING AND OTHER ANTI-AVOIDANCE MEASURES >
68. Under section 286 of the Act, the time limit for submitting Country by Country Report (CbC
report) in case of an International Group “INFY” having Parent Company: Infosys Ltd., an Indian
Company and its subsidiaries in US, UK, Singapore, Malaysia & China shall be
(a) 12 months from the end of reporting (b) Six months from the end of reporting
accounting year accounting year
(c) Three months from the end of reporting (d) None of the above
accounting year
69. As per section 286 of the Act, the time limit for submitting Country by Country Report (CbC)
report by a constituent entity in India of an International Group where parent entity is not
obliged to file the similar report in its country shall be
(a) 12 months from the end of reporting (b) Six months from the end of reporting
accounting year accounting year
accounting year
70. As per section 286 of the Act, the time limit for submitting Country by Country Report (CbC) by
a constituent entity in India of an International Group where there is a systematic failure of the
country of which the parent entity is resident, shall be
(a) 12 months from the end of reporting (b) Six months from the end of the month in
accounting year such failure has been reported
accounting year
© CA MEHUL THAKKER
LIFE IS A MATTER
OF CHOICES, AND
EVERY CHOICE YOU
MAKE MAKES YOU.
- john C. Maxwell

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MCQCA FINAL 2019

Relevant for May 2019 / Nov 2019 Exam

Special Thanks to CA Chetan V Chaudhary

Law stated in this book is as amended by the Finance Act, 2018

All disputes are subject to Ahmedabad Jurisdiction only.

In this book, two types of MCQs are covered:

(a) Knowledge based MCQ

Type of MCQ Weightage (Marks) Expectancy (No. of MCQ)

01/03/2019 CA Mehul Thakker

1 – BASICS OF INCOME TAX

2. The Income Tax Act, 1961 extends to the ___________.

3. ____________ of the Income Tax Act is a charging section.

12. The term “Income” does not include______.

13. The term “Income” defined under section 2(24) includes-

14. The term “Person” includes ______.

16. Mr. Anil Jain, partner of Jain and Jain, is assessable as

20. The territory of India is referred to in Article ____________ of the Constitution.

21. Rates of Income tax are fixed ________

24. An individual is said to be an ordinarily Resident when he satisfies ________________.

25. An individual is said to be a non- resident when he does not _______________.

31. H.U.F. can be regarded as Resident in India if

32. Indian Company is always: -

37. The incidence of income tax depends on__

38. Scope of total income depends on _________.

41. Non-resident shall not be chargeable to tax for the -

48. Agricultural income in Pakistan received there, is........................

53. Income tax is a ........................

54. Taxable income may be in _______.

58. _________ is not a head of income:

60. Income tax is levied on all types of income other than

61. Which of the following is not a capital receipt?

62. Embezzlement of cash by a cashier of the organization is.................

63. Identify the casual income.

64. The scope of term income is wide enough to cover

1. (c) 2. (a) 3. (d) 4. (d)

2 – INCOME WHICH DO NOT FORM PART OF TOTAL INCOME

2. Section.................. of the Income Tax Act deals with exempt incomes.

3. Income from a farm house is..........................

4. Income by way of rent of agricultural land is ..............

28. Section 13A provides exemption in respect of income of ________.

1. (c) 2. (c) 3. (c) 4. (b)

5. Salary in lieu of notice period is __________.

7. Salary foregone by an employee is _______.

18. The maximum exemption in respect of HRA is Rs. ______

30. Exemption in respect of leave encashment at the time of retirement of a non-Government

36. The upper limit of relief under section 89 is ______.

49. Employer’s contribution to superannuation fund for employee:

50. Employer’s contribution to unrecognized provident fund

54. The term “Salary” doe not include

57. Grautiy in the case of employees of _________ is fully exempt.

59. Commuted pension received by non-government employee who is in receipt of gratuity is

65. Underground allowance is exempt upto Rs. ______ per month

68. Identify the employee who is not a specified employee?

89. Gratuity received by a government employee is _____________.

1. (a) 2. (b) 3. (c) 4. (d)

4. Gross Annual Value of a self-occupied property is:

10. Deduction under section 24(b) is available on account of ___________

15. Following information is provided by the owner in respect of a rented property:

34. Income from which house property is not exempt?

1. (b) 2. (a) 3. (b) 4. (b)

5 – PROFITS AND GAINS FROM BUSINESS OR PROFESSION

8. The presumptive taxation scheme of section 44AD can be adopted by __________.

78. No allowance shall be made in respect of expenditure incurred by an assessee on advertisement