Income Tax MCQ Compilation PDF

INDEX
SN Name of the Chapter Page No. No. of MCQs
1 Basic Concepts of Income Tax 1–3 79
2 Residential Status & Scope of Total Income 4-6 70
3 Exempt Incomes & Agricultural Income 7 - 10 75
4 HEADS OF INCOME 726
4A Salaries 11 - 17 145
4B House Property 18 - 21 69
4C Profits & Gains of Business & Profession 22 - 33 233
4D Capital Gains 34 - 43 170
4E Income from other Sources 44 - 49 109
5 Clubbing of Income 50 - 53 58
6 Set off & Carry Forward of Losses 54 - 57 68
7 Chapter VI-A Deductions 58 - 64 117
8 TDS & TCS 65 - 70 130
9 Advance Tax & Interest u/s 234 71 - 72 49
10 Return of Income 73 - 75 50
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1. BASIC CONCEPT OF INCOME TAX
Q1. Income Tax is imposed by _____. Q15. Part 3 of schedule I of The Finance Act, 2018 gives
(a) State Government (b) Central Government rate of advance tax payable for the AY ___.
(c) Both of the above (d) Constitution of India (a) 2018-19 (b) 2019-20 (c) 2017-18 (d) 2016-17
Q2. Parliament has the power to levy tax on incomes other Q16. Notifications issued by CBDT are binding on ____.
than ___. (a) Assessee (b) Income Tax Authority
(a) Exempt Incomes (b) Income of poor people (c) Both of above (d) None of the above
(c) Agricultural Income (d) All incomes are taxable
Q17. Circulars issued by CBDT are binding on ___.
Q3. Which Entry of Union List gives the power to (a) Assessee (b) Income Tax Authority
Parliament to levy tax on incomes? (c) Both of above (d) None of the above
(a) Entry 81 of List I to Seventh schedule
(b) Entry 81 of List II to Seventh schedule Q18. Circulars are issued by the CBDT to _____ the scope &
(c) Entry 82 of List I to Seventh schedule meaning of the provisions of Law.
(d) Entry 82 of List II to Seventh schedule (a) Clarify the doubts (b) Exceptions
(c) Proper Administration (d) None of these
Q4. Highest Administrative Authority for Income Tax in
India is ___. Q19. As per Section 2(7), “Assesses” means ____ a person
(a) Finance Minister (b) CBDT (a) By whom any tax or other sum of money is payable
(c) President of India (d) Director of Income Tax (b) Against whom proceeding has been taken under the act
(c) A person deemed to be assessee in default
Q5. Income-tax Act, 1961 applies to ____. (d) All of the above
(a) Whole of India (b) Whole of India excluding J&K
(c) Maharashtra (d) All of the above Q20. A person includes ____.
(a) Individual & HUF (b) Firm & Company
Q6. The basic source of income-tax law is ____. (c) AOP/BOI, LA, Every AJP (d) All of the above.
(a) Income-tax Act, 1961 (b) Income-tax Rules, 1962
(c) Circulars/Notifications (d) Judgments of Courts Q21. Every assessee is a person, & every person is ____.
(a) Also an assessee (b) Need not be an assessee
Q7. Income Tax Act came into force on _____.
(a) 1.4.1961 (b) 1.4.1962 (c) 1.4.1956 (d) 1.4.1965 Q22. The term “Person” includes ____.
(a) Registered Firm (b) Unregistered Firm
Q8. Income Tax Act contains ____ sections (c) Both of (a) & (b) (d) None of (a) or (b)
(a) XIV (b) 297 (c) XV (d) 298
Q23. Association of persons consists of ____.
Q9. Income Tax Act contains ____ schedules. (a) Individuals (only) (b) Company
(a) XIV (b) 297 (c) XV (d) 298 (c) Any Person other than (a) (d) Any kind of person
Q10. Proviso gives _____ to the main provision. Q24. Body of Individuals consists of.
(a) Clarification (b) Exceptions (a) Individuals (only) (b) Company
(c) Proper Administration (d) None of these (c) Any Person other than (a) (d) Any kind of person
Q11. Explanation gives _____ to the main provision. Q25. As per Section 2(31), the following is not included in
(a) Clarification (b) Exceptions the definition of ‘person’.
(c) Proper Administration (d) None of these (a) Individual (b) HUF (c) Company (d) Minor
Q12. Part 1 of schedule I of the Finance Act, 2018 gives rate Q26. A municipal corporation legally entitled to manage &
of income tax for AY ____. control a municipal fund is taxable in the status of :
(a) 2018-19 (b) 2019-20 (c) 2017-18 (d) 2016-17 (a) Individual (b) AOP (c) LA (d) AJP
Q13. Finance Bill becomes the Finance Act when it is Q27. A & B are legal heirs of C. After death of C, A & B carry
passed by ____. on his business without entering into a partnership. What
(a) Lok Sabha (b) Both Lok Sabha & Rajya Sabha is their Status?
(c) Both House of Parliament & signed by President. (a) Company (b) LLP (c) AOP (d) Firm
(d) Both House of Parliament & signed by Prime Minister.
Q28. As per sec. 2(24) definition of ‘income’ is:
Q14. Part 2 of schedule of I of the Finance Act, 2018 gives (a) Inclusive (b) Exhaustive
rate of tax deductible of source for the PY ____. (c) Exclusive (d) Descriptive
(a) 2018-19 (b) 2019-20 (c) 2017-18 (d) 2016-17
1: d 2: c 3: c 4: b 5: a 6: a 7: b 8: d 9: a 10: b 11: a 12: b 13: c 14: a

15: b 16: c 17: b 18: a 19: d 20: d 21: b 22: c 23: d 24: a 25: d 26: c 27: c 28: a
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Q29. A domestic company means ____. Q39. Assessment Year is the period of 12 month
(a) Indian company only commencing on 1st day of ___.
(b) Both Indian company & foreign company (a) April every year (b) December every year
(c) Both Indian company & a foreign company having (c) July every year (d) January every year
business connection in India
(d) Both Indian company & a foreign company which has *Q40. Previous Year can be a period of _____.
made the prescribed arrangement for declaration & (a) > 12 months or < 12 months (b) only 12 months
payment of dividends in India out of the income chargeable (c) 12 months or < 12 months (d) ≥ 12 months.
to tax in India.
Q41. Assessment year can be a period of ____.
Q30. ‘Income’ includes the following types _________. (a) > 12 months or < 12 months (b) only 12 months
(a) Legal (b) Illegal (c) Both (d) None (c) 12 months or < 12 months (d) ≥ 12 months.
Q31. ‘Income’ u/s 2(24) includes ____. Q42. Mr. P sets up a new business on 15.7.2018 & he
(i) Profits of any business carried on by a person. commenced his business from 1.2.2019. First PY shall be:
(ii) Any advance money forfeited in the course of (a) 15.7.2018 to 31.3.2019 (b) PY 2018-19
negotiations for transfer of capital asset. (c) 1.2.2018 to 31.3.2019 (d) PY 2019-20
Choose the correct option:
(a) Both (i) & (ii) (b) Only (i) *Q43. First previous year in case of a business or
(c) Only (ii) (d) Neither (i) nor (ii). profession newly set up on 31.3.2019 would be ____.
(a) Start from 1.4.2018 & end on 31.03.2019
Q32. Which of the following income is not included in the (b) Start from 31.3.2019 & will end on 31.3.2019
term ‘income’ ? (c) Start from 1.1.2019 & end on 31.12.2019
(a) Profit & gains (b) Dividend (c) Profit in lieu of salary (d) Start from 1.1.2019 & end on 31.3.2019
(d) Reimbursement of travelling expenses
Q44. All Assessees are required to follow:
Q33. Cash gift received from a non-relative is regarded as (a) Uniform PY which must be calendar year only
income. But Exempt amount is _____p.a. (b) Uniform PY which must be FY only
(a) Rs. 25,000 (b) Rs. 75,000 (c) Rs. 50,000 (d) Rs. 25,000 (c) Any period of 12 months as previous year
(d) Period starting from 1st July to 30th June as PY
*Q34. What is not included in taxable Income ?
(a) Income from smuggling activity Q45. A person follows Calendar year for accounting
(b) Casual income purpose. For taxation, he has to follow ___
(c) Capital Receipt, except gains on transfer of capital asset (a) Calendar year only – 1 Jan to 31 December
(d) Income received in kind. (b) FY only - 1 April to 31 March
(c) Any Calendar or FY as per his choice
*Q35. A & Co. received Rs. 2 lacs as compensation from B (d) He will follow extended year from 1 st January to next
& Co. for premature termination of contract of agency. 31st March (a period of 15 months)
Amount so received is ____.
(a) Capital receipt & taxable Q46. Mr. P. maintains his accounts of the basis of calendar
(b) Capital receipt & not taxable year. For PY 2018-19, his AY shall be.
(c) Revenue receipt & taxable (a) 2018-19 (b) 2018 (c) 2019-20 (d) 2019
(d) Revenue receipt & not taxable
Q47. In which of the following cases, income of PY is
*Q36. Mr. P has taken a loan of Rs. 5,00,000 from HDFC assessable in the previous year itself.
bank for purchasing a car. His rental income is Rs. 50,000 (a) A persons leaving India (b) Salaried Employee
pm out of which Rs. 5,000 pm directly goes to the bank as (c) Illegal business (d) Charitable institution
an instalment of loan. Discuss the tax treatment.
(a) Rs. 5,000 p.m is treated as diversion of Income. *Q48. If the master of the ship belonging to a NR could not
(b) Rs. 5,000 p.m is an application of income. file return of income before the departure of ship from
(c) Rs. 5,000 p.m is not treated as his income. India then it can be filed after the ship has left India but
(d) None of the above. within ____ days.
(a) 30 (b) 45 (c) 60 (d) 90
Q37. Year in which income is taxable is known as __& year
in which income is earned is known as__. *Q49. In case of shipping business of NR, Income =
(a) PY, AY (b) AY, PY (c) AY, AY (d) PY, PY (a) 10% of the fare & freight collected by the ship.
(b) 20% of the fare & freight collected by the ship.
Q38. Pick-the correct one. (c) 25% of the fare & freight collected by the ship.
(a) AY & PY are same concepts. (d) 7.5% of the fare & freight collected by the ship.
(b) AY is the year next to the PY.
(c) PY is the year next to the AY. Q50. Income of NR from shipping business in India is taxed
(d) None of the above (a) 30% + SC + HEC (b) 40% + SC + HEC
(c) 50% + SC + HEC (d) 60% + SC + HEC
29: d 30: c 31: a 32: d 33: c 34: c 35: a 36: b 37: b 38: b 39: a
40: c 41: b 42: a 43: b 44: b 45: b 46: c 47: a 48: a 49: d 50: b
50
*Q51. Individual leaves India permanently on 1.9.2018. AY Q66. SC is payable by Domestic Company @ ___.
for incomes earned till 1.9.2018 = (a) 7% of Tax provided its TI > Rs. 10,00,000.
(a) 2017-18 (b) 2018 -19 (c) 2019-20 (d) None (b) 7% of Tax irrespective of its income
(c) 7% of Tax provided its TI > Rs. 1 crore & 12% of Tax if
Q52. In which of the following cases, AO has the discretion TI > Rs. 10 Crores.
to assess the income of PY in PY itself or in subsequent AY. (d) 7% of Tax provided its TI > Rs. 1 crore.
(a) Shipping business of NR (b) Income of Non-Resident
(c) Income of AOP/BOI formed for particular event Q67. SC is payable by foreign company @ ___.
(d) Discontinued business (a) 2% or 5% of income tax if TI > Rs. 1 cr or 10 cr resp.
(b) 5% of income-tax if TI > Rs. 1 crore.
Q53. Undisclosed Sources of Income is taxable @ ____ % (c) 2 % of income-tax if TI > Rs. 1 crore
(a) 30 (b) MMR (c) 10 (d) 78 (d) 2% of income-tax always
Q54. The rates of income-tax are mentioned in ____. Q68. Health & Education Cess is leviable on ___.
(a) IT Act, 1961 only (b) IT Act, 1961 & IT Rules, 1962 (a) Income tax (b) Income tax + SC (if any)
(c) 1st Schedule to the Annual FA (d) Both (a) & (c) (c) Only Surcharge (d) Not applicable at all
Q55. Maximum amount on which income tax is not Q69. The rate of HEC for AY 2019-2020 is ____.
chargeable for AY 2019-2020 in case of an individual who (a) 2% (b) 3% + 1% (c) 3% (d) 4%
is resident in India other than senior citizen is ____.
(a) Rs. 1.9 lac (b) Rs. 2 lac (c) Rs. 2.5 lac (d) Rs. 1.8 lac Q70. In case of Individual, HEC is leviable only when total
income of such assessee exceeds ___.
Q56. Maximum amount exempt from tax in case HUF is __. (a) Rs. 10 lacs (b) Rs. 1 cr (c) Rs. 2.5 lac (d) None
(a) Rs. 1.8 lac (b) Rs. 2 lac (c) Rs. 2.2 lac (d) Rs. 2.5 lac
Q71. Tax liability is rounded off in multiples of __ u/s 288B.
Q57. Maximum amount which is not taxable for AY 2019- (a) Rs. 10 (b) Rs. 100 (c) Rs. 1 (d) None
20 in case of individual who is resident in India & is more
than 60 years old but is less than 80 years old is ____. Q72. Direct & Indirect Tax is ___& ___ in nature respectively.
(a) Rs. 2.5 lac (b) Rs. 3 lac (c) Rs. 2 lac (d) Rs. 5 lac (a) Progressive; Progressive (b) Regressive; Regressive
(c) Progressive; Regressive (d) Regressive; Progressive
Q58. The maximum amount on which income tax is not
chargeable for the AY 2019-2020 in case of an individual Q73. If total income of AJP is Rs. 3,25,000, income-tax
who is resident in India & is more than 80 years old is. payable is____ & surcharge payable is____.
(a) Rs. 2 lac (b) Rs. 5 lac (c) Rs. 2.5 lac (d) Rs. 3 lac (a) Rs. 3,750; SC – nil (b) Rs. 7,500; SC - nil.
(c) Rs. 1,250; SC – nil (d) Rs. 75,000; SC - Rs. 3,750.
Q59. Max. amount which is not taxable in case of firm is__.
(a) Rs. 3,00,000 (b) Rs. 5,00,00 (c) Rs. 2,50,000 (d) Nil Q74. Mr. P is 55 years old & is a resident of India & has
earned a total income of Rs. 7,12,500. Calculate his tax
Q60. The rate of tax applicable to a partnership firm for liability for the AY 2019-2020.
AY 2019-2020 i.e. PY 2018-2019 is- (a) Rs. 51,000 (b) Rs. 57,200 (c) Rs. 40,820 (d) None
(a) 25% (b) 30% (c) 35% (d) 40%
Q75. Mrs. S (age 87) is a NR & has earned total income of
Q61. BEL in case of co-operative society is ___. Rs. 4,00,000. Calculate her tax liability for AY 2019-20.
(a) Rs. 5 lac (b) Rs. 2.5 lac (c) Nil (d) Rs. 3 lac (a) Rs. Nil (b) Rs. 5,200 (c) Rs. 7,800 (d) None
Q62. In case of domestic company whose gross receipts for Q76. Mrs. S , 37 years of age, is a non-resident of India &
PY 2016-2017 is Rs. 251 Cr, Tax Rate for AY 2019-2020 is has earned total income of Rs. 2,70,000. Calculate her tax
(a) 29% (b) 25% (c) 30% (d) None liability for AY 2019-20.
(a) Rs. Nil (b) Rs. 2,080 (c) Rs. 1,040 (d) None
Q63. Surcharge on income tax is payable by ____.
(a) Company (b) Individual (c) Firm (d) All assesses Q77. M.s ABC is a partnership firm having business income
of Rs. 6,00,000. Income from other sources is Rs. 1,50,000.
Q64. Surcharge applicable in case of Individual is: Specified Donations eligible for deduction u/s 80G is Rs.
(a) 10% of tax if TI > Rs. 50 lacs but ≤ Rs. 1 cr 2.5 lacs. Calculate tax liability for AY 2019-20.
(b) 10% of tax if TI > Rs. 1 cr (a) Rs. 13,000 (b) Rs. 65,000 (c) Rs. 1,56,000 (d) Nil
(c) 15% of tax if TI > Rs. 1 cr
(d) Both (a) & (c), as the case may be. Q78. Total income of XYZ Ltd. is Rs. 3 lacs. During PY 2016-
17, XYZ has made the total turnover of Rs. 255 crores. Find
Q65. For AY 2019-2020, rate of tax for firm is the tax liability for AY 2019-20.
(a) 30% + SC @ 12% if TI > Rs. 1 cr + HEC @ 4% (a) Nil (b) Rs. 2,600 (c) Rs. 93,600. (d) None.
(b) 30% + SC @ 10% if TI > Rs. 1 cr + HEC @ 4%
(c) 30% + SC @ 5% if TI > Rs. 1 cr + HEC @ 4% Q79. Average rate of tax for the income of Rs. 5,00,000 is
(d) 30% + SC @ 7% if TI > Rs. 1 crore + HEC @ 4% (a) 5% (b) 20% (c) Nil (d) 2.5%
51: b 52: d 53: d 54: d 55: c 56: d 57: b 58: b 59: d 60: b 61; c 62: b 63: d 64: d 65: a
66: c 67: a 68: b 69: d 70: c 71: a 72: c 73; a 74: b 75: c 76: c 77: c 78: c 79: d
2. RESIDENTIAL STATUS & SCOPE OF TOTAL INCOME
Q1. Residential status is to be determined for each Q14. Mr. P was born in India in 1989. His father was born
(a) PY (b) AY (c) A/cing (d) None in India in 1974 & his mother was born in England in 1976.
His Grandfather was born in England in 1944 & his
Q2. Every year, residential status of an assessee ___ change Grandmother was born in China in 1946. Mr. P along with
(a) May (b) Will (c) Will not (d) None parents took the Citizenship of England in 1995. Mr. P is.
(a) A person of India origin (b) Citizen of India
Q3. Total income of a person is determined on basis of his (c) A foreign national (d) None of these
(a) Residential status (b) Citizenship in India
(c) Both (a) & (b) (d) None of the above Q15. Mr. P was born in UK, his parent were born in India
in 1941. His Grandparents were born in USA in 1915. X is:
Q4. Non-resident is defined u/s ___. (a) A person of India origin (b) Citizen of India
(a) 2(30) (b) 2(34) (c) 2(35) (d) None (c) A foreign national (d) None of These
Q5. Which of the following may be RNOR in India? Q16. Mr. P was born in India in 1979 & later on took
(a) Individual (b) HUF (c) Company (d) (a) & (b) citizenship of Australia. His parents were born in India in
Q6. To be resident in India, Individual has to satisfy____ 1949. His Grandfather was born in Rawalpindi in 1916 but
basic condition: his Grandmother was born in London in 1920. Mr. P is:
(a) First (b) Second (c) Both (d) Either of (a) & (b) (a) A person of India origin (b) Citizen of India
(c) A foreign national (d) None of These
Q7. Mr. P is a citizen of India & is employed on an Indian
ship. During PY 2018-2019, he leaves for Germany on Q17. Mr. P is a person of Indian origin & comes to India on
15.9.2018 & did not return during the year. He had been 29.10.2018 & plans to stay here for 185 days. During 4
non-resident for past 3 years. Earlier to that, he was years prior to PY 2018-19 he was in India for 750 days. He
permanently in India. For AY 2019-2020, Mr. P shall be ___. was never in India before this. For AY 2019-20, he shall be:
(a) ROR (b) RNOR (c) NR (d) None (a) ROR (b) RNOR (c) NR (d) None
*Q8. Mr. P, an Indian citizen & is working as a crew Q18. Mr. P is a foreign citizen. His father was born in Delhi
member on Indian ship. During PY 2018-19, he leaves in 1951 & mother was born in England in 1950. His
India for Germany on 15.9.2018 for holidays & returned on grandfather was born in Delhi in 1922. Mr. P visited India
1.4.2019. He had been NR for past 3 PYs. Earlier to that he to see Taj Mahal & other historical places. He came to India
was permanently in India. For AY 2019- 2020, he shall be: on 1st Nov, 2018 for 200 days. He has never come to India
(a) ROR (b) RNOR (c) NR (d) None before. His residential status for AY 2019-2020 will be:
(a) ROR (b) RNOR (c) NR (d) None
Q9. Mr. P who was born & brought up in India left for
employment in Dubai on 20th August, 2018. His residential Q19. Additional conditions are to be satisfied to be ROR is:
status for AY 2019- 2020 would be: (a) He is a resident in at least any 2 PY out of the 10 PYs
(a) ROR (b) RNOR (c) NR (d) None immediately preceding the relevant PY.
(b) He has been in India for 730 days or more during 7 PYs
*Q10. Mr. P is Citizen of India & left India for USA on immediately preceding the relevant PY
16.8.2018 for doing business meetings on behalf of his (c) Both (a) & (b) (d) None of the above
employer, which is India company, for exporting goods to
USA. He came back to India on 15.9.2018. He has been Q20. If Anirudh has stayed in India in PY 2018-19 for 181
resident in India for past 10 years. For AY 2019-20, X is __. days, & he is NR in 9 out of 10 PYs immediately preceding
(a) ROR (b) RNOR (c) NR (d) None the current PY & he has stayed in India for 365 days in 4
years immediately preceding the current PY & 420 days in
*Q11. Mr. P is a CA at P Ltd. left India for 1st time on all in 7 years immediately preceding the current PY, his
10.8.2018 for treatment of his wife. For AY 19-20, Mr. P is: residential status for AY 2019-20 would be:
(a) ROR (b) RNOR (c) NR (d) None (a) ROR (b) RNOR (c) NR (d) None
Q12. An Indian company deputes its employee Mr. P to UK Q21. Mr. P a foreign national comes to India on 5.10.18 for
for 2 years starting from 1.7.2018 & he leave India for the 210 days. This is his first visit to India & before this he
first time in his life. Income tax authorities contended that never visited India. Mr. P shall be.
Mr. P is not unemployed at the time of leaving India, hence (a) ROR (b) RNOR (c) NR (d) None
2nd basic condition will be applicable & therefore Mr. P is a
resident in India. Decide whether he is: *Q22. Karta of a HUF is NR in AY 2019-20 & thus HUF is
(a) ROR (b) RNOR (c) NR (d) None (a) NR (b) RNOR (c) ROR (d) Any of the above
Q13. Mr. P is a foreign national but a person of India origin. *Q23. Determine the residential status of a HUF if HUF's
He visited India during PY 2018-19 for 81 days. During 4 control & management is wholly situated in India & Karta
preceding PY, he was in India for 400 days, Mr. P shall be: of HUF is NR in India for that PY.
(a) ROR (b) RNOR (c) NR (d) None (a) ROR (b) RNOR (c) NR (d) ROR/RNOR
1: a 2: a 3: a 4: a 5: d 6: d 7: c 8: a 9: c 10: a 11: a 12: c
13: c 14: c 15: a 16: a 17: c 18: c 19: c 20: b 21: c 22: d 23: d
Q24. HUF of Mr. P consisting of himself, his wife & 2 sons Q37. Income received in India during the previous year is
is assessed to tax. Residential status of HUF = NR when __. taxable in the case of ____.
(a) Its management & control is wholly in India (a) ROR (b) RNOR (c) NR (d) All
(b) Its management & control is wholly o/s India
(c) The status of Karta is non-resident for that year Q38. Foreign income received in India during the previous
(d) When majority of the members are NR. year is taxable in the case of ____.
(a) ROR (b) RNOR (c) NR (d) All
Q25. If Karta is ROR in India but control & management of
HUF is situated partly outside India in PY, HUF is: Q39. Incomes which accrues in India but received outside
(a) ROR (b) RNOR (c) NR (d) None India are taxable in case of ____.
(a) ROR (b) RNOR (c) NR (d) All
Q26. Mr. P is Karta of HUF doing business at Pune. Mr. P is
residing in Dubai for past 10 years & visited India for 20 Q40. Income which accrue or arise outside India & also
days every year for filing Income tax return of HUF. His 2 received outside India is taxable in case of ___.
major sons take care of the day to day affairs of business in (a) ROR (b) RNOR (c) NR (d) ROR & RNOR
India. Residential status of HUF for AY 2019-20 is:
(a) ROR (b) RNOR (c) NR (d) None Q41. Income accruing in London & received there is
taxable in India in the case of ____.
*Q27. Residential status of company is determined (a) ROR (b) RNOR (c) NR (d) ROR & RNOR
(a) u/s 6(4) (b) u/s 6(1) (c) u/s 6(6) (d) u/s 6(3)
Q42. Income accruing from agriculture in a foreign
Q28. A company is considered to be resident if: country is taxable in India in case of an assesses who is:
(a) It is an Indian Company (a) ROR (b) RNOR (c) NR (d) ROR & RNOR
(b) During PY, foreign company’s POEM is situated in India
(c) Both (a) & (b) (d) Any of the above Q43. Which Income is taxable in India to ROR Individual?
(a) Any Income accrued or Received in India
Q29. Indian company would be Resident in India if its____. (b) Any Income accrued outside India
(a) POEM is in India (b) POEM is outside India (c) Any Income received outside India
(c) All shareholders are ROR (d) All directors are ROR (d) All Incomes are Taxable
Q30. A company incorporated outside India having its
Q44. Which Income is taxable in India to RNOR Individual?
place of effective management fully situated in India in the
(a) Business income accruing outside India
previous year will be treated as ____.
(b) Property income accruing outside India
(a) NR (b) ROR (c) RNOR (d) Resident
(c) Interest income accruing outside India
Q31. PC Ltd. is registered in Australia & has head office in (d) Income accruing outside India if it is derived from a
Australia. POEM of its business affairs is situated in India. business controlled in India.
PC Ltd. shall be:
(a) Resident (b) ROR (c) NR (d) None *Q45. Income which accrue outside India from business
controlled from India is not taxable in India in case of:
Q32. PC Ltd. is registered in India but it has POEM in Nepal. (a) ROR (b) RNOR (c) NR (d) All
D Ltd. is registered in Nepal but it has POEM in India.
(a) PC Ltd. – Resident; D Ltd. – NR (b) Both are NR Q46. Which Income is taxable in India to NR Individual?
(c) Both D & PC Ltd. are resident of India. (a) Any Income accrued or Received in India
(d) PC Ltd. is a NR but D Ltd. is resident of India (b) Any Income accrued outside India
(c) Any Income received outside India
Q33. PC Ltd. is an Indian company. It carries its business in (d) No Income is Taxable in India in the hands of NR.
Delhi & London. The POEM of the company is situated in
London. More than 85% of its business income is from the *Q47. Income earned & received outside India but later on
business in England. If so, its residential status will be- remitted to India, is taxable to:
(a) NR (b) ROR (c) RNOR (d) Resident (a) ROR (b) RNOR (c) NR (d) None
Q34. Income deemed to be received in India is given u/s Q48. Past untaxed profit of PY 2017-18 brought to India in
(a) 10 (b) 7 (c) 12 (d) 5 PY 2018-19 is taxable in AY 2019-20 to
(a) All the assesses (b) ROR
Q35. Indian Income means ____. (c) Non-resident in India (d) None of the above
(a) Income accrued.deemed to be accrued in India
(b) Income received.deemed to be received in India *Q49. Profits of Rs. 1,00,000 for PY 2017-18 of a business
(c) Both (a) & (b) (d) None of the above. in Australia remitted to India during PY 2018-2019 (not
taxed earlier) would be.
Q36. Foreign Income means ____. (a) Taxable in India for ROR only
(a) Income accrued.deemed to be accrued in India (b) Not taxable in India for all (ROR, NOR & NR)
(b) Income received.deemed to be received in India (c) Taxable in India for all (ROR, NOR & NR)
(c) Both (a) & (b) (d) None of the above. (d) Taxable only for NOR & NR
24: b 25: a 26: b 27: c 28: c 29: b 30: d 31: a 32: c 33: d 34: b 35: c 36: d
37: d 38: d 39: d 40: a 41: a 42: a 43: d 44: d 45: c 46: a 47: d 48: d 49: b
Q50. Income of NR from business connection in India is : Q63. Mr. P an Indian citizen, who is appointed as Tax
(a) Exempt in India (b) Partly Exempt (c) Ignored consultant (free liaison) by a reputed company of USA &
(d) Taxable in India as it is deemed to accrue in India leaves India for the first time on 13.9.2017. During PY
2018-19, he comes to India on a visit for 175 days.
Q51. Income earned from a contract negotiated by agent Determine residential status of Mr. P for AY 2019-2020.
in India in name of NR but approved by such NR shall be: (a) ROR (b) RNOR (c) NR (d) None
(a) Exempt in India (b) Partly Exempt (c) Ignored
(d) Taxable in India as it is deemed to accrue in India Q64. Mr. P is a citizen of Australia & has been staying in
India since 1.1.2012. He leaves India on 16.7.2018 to visit
Q52. Where a NR has its operation confined to purchase of Australia & returns on 4.1.2019. Determine his residential
goods in India for export, such income shall be ___in India. status for the AY 2019-20.
(a) Taxable as it is deemed to accrue in India (a) ROR (b) RNOR (c) NR (d) None
(b) Not taxable as it shall not be deemed to accrue in India
Q53. STCG on sale of shares of Indian company but Q65. HUF is situated in Delhi whose Karta is Mr. P. Mr. P.
received in Australia is taxable in case of: has been in India since 1.1.2014 & before that he was in UK.
(a) ROR (b) RNOR (c) NR (d) All Mr. P takes all decisions regarding the working of HUF in
India. Determine residential status of HUF for AY 2019-20.
Q54. Dividend < Rs. 10 lacs paid by Indian company o/s (a) ROR (b) RNOR (c) NR (d) None
India is _____ to recipient & _____ to company
(a) Taxable; Taxable (b) Exempt; Exempt Q66. Raman was employed in HUL Ltd. He received a
(c) Exempt & Taxable (c) Taxable ; Exempt salary of Rs. 40,000 p.m from 1.4.2018 to 27.9.2018. He
resigned & left for Dubai for the first time on 1.10.2018 &
Q55. Fees for technical services paid by the Central got salary of Rs. 80,000 p.m from 1.10.2018 to 31.3.2019.
Government will be taxable in case of- His salary for October to December 2018 was credited in
(a) ROR (b) RNOR (c) NR (d) All his Dubai bank account & the salary for January to March
2019 was credited in his Bombay account directly. He is
Q56. Royalty paid by resident to NR o/s India is ___ in India. liable to tax in India in respect of:
(a) Taxable unless it is paid for acquisition of any right or (a) Income received in India from HUL Ltd;
information.property used for business o/s India. (b) Income received in India & in Dubai;
(b) Taxable whether such right.information.property is (c) Income received in India from HUL Ltd. & income
used for business.profession in India or outside India. directly credited in India;
(d) Income received in Dubai
Q57. FTS paid o/s India by NR to another NR in India is -
(a) Never taxable in India (b) Always taxable in India Q67. HUF is situated in Goa. Its Karta is X (age: 95) has
(c) Taxable in India provided know-how for which royalty delegated power to his eldest son Y. X is in USA for his
was paid was used for any business or profession in India medical treatment & left India for first time on 18.9.2017.
(d) None of the above Y has full controls over affairs of HUF. Y excises partial
Q58. X Ltd of USA borrowed money from companies in control from India & partially from Nepal. Calculate
USA for doing business in India by name P Ltd. Mumbai. X residential status of HUF & Karta Mr. P for AY 2019-20:
Ltd paid interest of Rs. 5 lacs. Interest paid is.has: (a) HUF – ROR; X – NR (b) HUF – RNOR; X – NR.
(a) Deemed to Accrued in India (b) Exempt from tax (c) HUF – NR; X – NR (d) HUF – NR; X – ROR.
(c) Not accrue in India (d) Taxable in USA
Q68. Mr. P earns the following Income during the PY ended
Q59. Remuneration for rendering services on a foreign 31st March, 2019. Interest on UK Development Bonds (1.4th
ship is not taxable in India in the case of: being received in India) - Rs. 2,00,000. Profits on sale of a
(a) Resident (b) ROR (c) Indian Citizen (d) NR building in India but received in Holland - Rs. 2 lacs.
Taxable Income for AY 2019-20 if Mr. P is RNOR is
*Q60. Income from a business in Canada, controlled from (a) Rs. 2,50,000 (b) Rs. 4,00,000
Canada is taxable in case of ____. (c) Rs. 2,00,000 (d) Rs. 50,000
Q69. Dividend of Rs. 5,000 was received from foreign
*Q61. Mr. P, an Indian citizen, who is living in Delhi since company, outside India by a ROR out of which Rs. 4,000 is
1980, left for Japan on 1st July, 2016 for employment. He remitted to India. Income taxable in India is:
came back to India on 1st January, 2019 on a visit & stayed (a) Rs. 1,000 (b) Rs. 4,000 (c) Rs. 5,000 (d) Nil
for 4 months. His residential status for AY 2019-20 is:
(a) ROR (b) RNOR (c) NR (d) None Q70. Dividend of Rs. 5,000 was received from foreign
company, outside India by a RNOR out of which Rs. 4,000
Q62. Mrs. X citizen of US, famous astronaut, comes to India is remitted to India. Income taxable in India is:
on 31.10.2018 to visit her grandmother who was born in (a) Rs. 1,000 (b) Rs. 4,000 (c) Rs. 5,000 (d) Nil
MP in 1935. She stays in India till 26.1.2019 & then leaves
for USA. Her residential status for AY 2019-20 will be:
50: d 51: d 52: b 53: d 54: c 55: d 56: a 57: c 58: a 59: d 60: a
61: c 62: c 63: c 64: a 65: a 66: b 67: a 68: a 69: c 70: d
3. EXEMPT INCOMEs & AGRICULTURAL INCOME
Q1. Incomes which are not included in total income of the Q11. _____ Paid by Government of India to a Citizen of India
assessee are called ____. for rendering services outside India is Exempt u/s 10(7).
(a) Exempt Incomes (c) Taxable Incomes (a) Salary (b) Allowance & perquisites
(b) Incomes deductible u/c VI-A. (d) None of the above (c) Both (a) & (b) (d) None of the above.
Q2. Gross Total Income means Aggregate of Incomes under Q12. Government of India paid salary of Rs. 5 lacs &
all heads of Income _____. Allowances.perquisites of Rs. 2.20 lacs to a person who is
(a) After claiming deduction u/c VI-A citizen of India for services rendered by him outside India.
(b) Before claiming deduction u/c VI-A. His taxable income will be____.
(c) Income for which no deduction u/c VI-A. (a) 7.2 Lacs (b) 5 Lacs (c) 6.1 Lacs (d) Nil
(d) None of the above.
Q13. Any compensation received or receivable by a victim
Q3. Total (taxable) Income means Aggregate of Incomes of Bhopal Gas leak disaster is _____.
under all heads of Income ____. (a) Taxable (b) Fully exempt (c) Exempt upto Rs. 10 lacs.
(a) After claiming deduction u/c VI-A (d) Exempt except to the extent of amount received or
(b) Before claiming deduction u/c VI-A. receivable which has been allowed as deduction for any
(c) Income for which no deduction u/c VI-A. loss.damage caused by such disaster.
Q14. Any amount received from CG.SG.LA by Individual or
Q4. Any Expenditure incurred to earn Exempt Income shall his legal heir as compensation for any disaster is ____.
be allowed as____while computing income under any head. (a) Taxable (b) Fully exempt (c) Exempt upto Rs. 10 lacs.
(a) Deduction (b) not allowed as deduction (d) Exempt except to the extent of amount received or
(c) Exemption. (d) None of the above receivable which has been allowed as deduction for any
loss.damage caused by such disaster.
Q5. Any sum received by an Individual as a member of HUF
from the income of HUF shall be ___. Q15. Tax paid by the employer on non-monetary
(a) Fully taxable (b) Fully exempt u/s 10(2) perquisites provided to the employee is exempt u/s ____.
(c) Fully taxable u/h “Salary” (d) Taxable @ 15%. (a) 17(2) (b) 10(14) (c) 10(10CC) (d) None
Q6. Share of the profits from the firm by the partner is:
Q16. Amount received from recognized provident fund
(a) Fully taxable (b) Fully Exempt u/s 10(2A)
after 5 years of continuous service is -
(c) Fully taxable u/h “Salary” (d) Exempt upto Rs. 2.5 lacs
(a) Exempt u/s 10(12) (b) Fully taxable
Q7. Interest on any money standing to any Individual’s
credit in Non-Resident External A/c in any bank in India is: Q17. Which of the following payment received from
(a) Taxable to person in whose name A/c is being operated Sukanya Samriddhi scheme is.are Exempt?
(b) Exempt to person in whose name A/c is being operated (a) Interest (b) Maturity amount (withdrawals)
(c) Taxable to person who withdraws Amt from such A/c (c) Both (a) & (b) (d) None of the above.
(d) Exempt to person who withdraws Amt from such A/c
Q18. Amount payable at the time of closure or opting out
Q8. Exemption is available on Interest received by NR on of National Pension Scheme referred to in section 80CCD
money standing in NRE A/c only if __ to maintain such A/c. shall be exempt to the extent of ___ total amount payable.
(a) such NR person is permitted by AO (a) 30% (b) 100% (c) 40% (d) 25%
(b) such NR person is permitted by RBI
Q19. Amount payable at the time of partial withdrawal out
(c) such NR person is permitted by CG.SG
of National Pension Scheme referred to in section 80CCD
(d) No such permission is required
shall be exempt to the extent of ____ total amount payable.
Q9. Which of the following incomes are exempt u/s 10(6) (a) 30% (b) 100% (c) 40% (d) 25%
in the hands of an Individual who is not a citizen of India ?
Q20. Amount received by the nominee at the time of
(a) Remuneration of Foreign Diplomats & Employees of a
closure.opting out of NPS referred to in sec 80CCD due to
Foreign Enterprise for services rendered in India
death of Assessee is exempt upto___ total amount payable
(b) Salary received by NR Non-citizen of India as a crew
(a) 30% (b) 40% (c) 100% (d) 25%
Member of Foreign Ship
(c) Remuneration received by Foreign Government Q21. Interest on Gold Deposit Bonds & bonds issued by LA:
Employees from foreign government for specified training (a) Exempt (b) Taxable (c) Partly Exempt
in India. (d) All of the above
Q22. Mr. P traced a missing person & was awarded a sum
*Q10. Royalty.FTS received by non-corporate NR & foreign of Rs. 1 lac but there was no agreement. Such sum is ____.
companies for services rendered in or o/s India to National (a) Casual income & fully taxable without BEL
Technical Research Organisation (NTRO) is - (b) Casual income & exempt up to Rs. 2,50,000
(a) Exempt. (b) Taxable (c) Fully exempt (d) Exempt up to 2,50,000
1: a 2: b 3: a 4: b 5: b 6: b 7: b 8: b 9: d 10: a 11:b
12:b 13: b 14: b 15: c 16: a 17: c 18: c 19: d 20: c 21: a 22: a
Q23. Scholarship received by a student is : Q34. Where the income of an individual includes the
(a) Casual income (b) Fully exempt u/s 10(16) income of minor children, such individual shall be entitled
(c) Fully taxable (d) Exempt if AO deems fit to an exemption of _____.
(a) Rs. 1,500 (b) Rs. 1,500 per minor child.
Q24. Scholarship received by a student was Rs. 75,000 p.m. (c) Lower of Rs. 1,500 per minor child or Income of minor
He spends Rs. 70,000 for meeting the cost of education, ___ child included in the total income of the assessee.
(a) Rs. 75,000 is taxable (b) Rs. 75,000 is exempt (d) Rs. 1,500 per minor child upto maximum of 2 children.
(c) Rs. 5,000 is taxable (d) Rs. 5,000 is exempt
Q35. Dividend received by shareholder from a domestic
Q25. Daily Allowance & Constituency Allowance received company is ____.
by a Member of Parliament & MLAs is. (a) Fully exempt u/s 10(34) (b) Taxable u/h IFOS
(a) Exempt (b) Taxable (d) Spent amount is Exempt (c) Exempt upto Rs. 10 lacs (d) Exempt upto Rs. 5 lacs
(c) Included in total income for rate purpose
Q36. Dividend received by a shareholder from foreign
Q26. MP received Rs. 1.5 lacs p.m as salary & Rs. 4.5 lacs company is ______.
p.a as daily allowances during PY 2018-19. Taxable Amt = (a) Exempt u/s 10(34) (b) Taxable u/h IFOS
(a) Salary - Rs. 18 lacs (b) PGBP - Rs. 22,50,000 (c) Exempt upto Rs. 10 lacs (d) Taxable @ 15%
(c) IFOS - Rs. 18 lacs (d) Nil
Q37. Income on buyback of___is Exempt to a shareholder.
Q27. An author was awarded by CG Rs. 10 lacs for writing (a) Listed shares (b) Unlisted shares
a book. Such award given by CG in public interest is ____. (c) All shares (d) Not exempt
(a) Casual Income (b) Fully Exempt (c) Fully taxable
Q38. Income from units of UTI.MF notified u/s 10(23D) is
Q28. Family pension received by legal heir of army ____ & Income on transfer of units of UTI.MF _____.
personnel who died during operational duties is ____. (a) Exempt; Exempt (b) Taxable; Exempt
(a) Exempt u/s 10(18) (b) Exempt u/s 10(19) (c) Exempt; Taxable (d) Taxable; Taxable.
(c) Exempt u/s 10(20) (d) None of the above
Q39. Capital gain arising from compulsory acquisition of
urban agricultural land shall be ____.
Q29. NAV of ____ palace of Ex-ruler is exempt u/s 10(19A).
(a) Taxable u/h Capital Gains (b) Taxable u/h IFOS
(a) One (b) Two (c) Nothing is taxable to the ex-ruler
(c) Exempt u/s 10(37) if certain conditions are satisfied
Q30. Income of certain funds of National Importance set
*Q40. Income from LTCG from transfer of equity shares is:
up by CG is exempt. Which are these funds?
(a) Fully exempt if shares are sold through NSE
(a) Swachh Bharat Kosh (b) Clean Ganga Fund
(b) Fully exempt if shares are sold through BSE
(c) Both (a) & (b) (d) None of (a) & (b)
(c) Fully exempt if such share are sold through any RSE in
Q31. Any pension received by Individual or family pension India & such transaction is subject to STT
received by any member of his family is taxable if ___. (d) Taxable at special rate u/s 112A.
(a) Such Individual is awarded Param Vir Chakra Q41. Specified Income from International Sporting Event
(b) Such Individual is awarded Maha Vir Chakra held in India is ____.
(c) Such Individual is awarded Vir Chakra (a) Taxable (b) Exempt
(d) Such Individual is awarded Bharat Ratna
Q42. Amount received by Individual as loan under Reverse
*Q32. Income which accrues or arises to a member of Mortgage Scheme is ____ in the hands of recipient.
scheduled tribes in specified areas is exempt ____. (a) Taxable (b) Exempt
(a) In all cases (c) Not an income since it is a loan (d) Both (b) & (c)
(b) Never Exempt
(c) To the extent such income is derived from any source Q43. Any sum received under Life Insurance Policy
in the specified states or areas. including bonus shall be exempt u/s 10(10D) ______
(d) To the extent such income is derived from any source (a) In all kinds of policies
in the specified states or areas & income by way of (b) In all kinds of policies except when received under a
dividend or interest on securities. Keyman Insurance Policy
(c) In all kinds of policies except when received under
*Q33. Income which accrues or arises to a Sikkimese Keyman Policy or covered u/s 80DD(3).
individual in specified areas is exempt: (d) In all kinds of policies except when received under
(a) In all cases Keyman Insurance Policy or covered u/s 80DD(3) or Policy
(b) Never Exempt issued, if the premium paid for any year exceeds 10% or
(c) If Income is derived from any source in Sikkim & 15% of actual capital sum assured, except on death.
income by way of dividend.Interest on securities.
(d) If Income is derived from any source in Sikkim & Q44. Tax holiday u/s 10AA for newly established units in
income by way of dividend.interest on securities & income SEZ is allowed for total period of ____.
from house property (a) 5 Yrs (b) 10 Yrs (c) 15 Yrs (d) 20 Yrs
23: b 24: b 25: a 26: c 27: b 28: b 29: a 30: c 31: d 32: d 33: c
34: c 35: c 36: b 37: b 38: c 39: c 40: d 41: b 42: d 43: d 44: c
Q45. Deduction available u/s 10AA in respect of profits & Q55. Which of the following income is agricultural income?
gains derived by a SEZ unit from export of articles is - (a) Rent received from agricultural land
(a) 100% of Export profits for first 10 consecutive AYs & (b) Income from dairy farm
50% for next 5 consecutive AYs (c) Income from poultry farm
(b) 100% of Export profits for first 5 consecutive AYs & (d) Dividend from a company engaged in agriculture
50% for next 10 consecutive AYs
(c) 100% of Export profits for first 15 AYs Q56. If any person earns income from allied activities like
(d) 100% of Export profits for first 5 AYs, 50% for export animal husbandry, diary farming, fishery etc. then it is ___.
profits for next 5 AYs & upto 50% of export profits for next (a) Agricultural Income (b) Income of PGBP
5 AYs, if credited to SRR A/c. (c) Both (a) & (b) (d) None of (a) & (b)
Q46. Deduction u/s 10AA is available if the eligible entity Q57. Which of the following is an agricultural income?
begins to manufacture.produce articles or things or (a) Income from breeding of livestock
provide services ________ but not later than _____ in SEZ. (b) Income from poultry farming
(a) during AY 2020-21 or after ; PY 2005-06 (c) Rent received from land used for movie shooting
(b) during PY 2005-06 or after ; AY 2020-21 (d) Rent received from land used for grazing of cattle
(c) during PY 2006-07 or after ; AY 2021-22 required for agricultural activities.
(d) None of the above
Q58. If any partner has received share of profits from a
Q47. No Deduction u/s 10AA is available if business is
firm having agricultural Income, such share is:
formed by _____.
(a) Agricultural Income & exempt (b) PGBP
(a) Splitting up of business
(c) PGBP & exempt from tax u/s 10(2A) (d) Fully Taxable
(b) Reconstruction of business already in existence.
(c) Both (a) & (b) (d) Deduction is always available
Q59. X is employed in an Agricultural University & getting
Q48. Amount credited to SEZ Re-investment Reserve a Basic Pay of Rs. 20,000 p.m & claims that it is his
Account should be utilized for ____. Agricultural Income? It is a.an ___.
(a) Acquiring P&M which is first put to use before expiry (a) Exempt as Agriculture income (b) Salary
of 3 years following the PY in which reserve was created; (c) Taxable u/h PGBP (d) None
(b) Business of the undertaking until acquisition of P&M
(c) Distribution of dividend.remittance o/s India as profits Q60. Income derived from sugarcane plantation in US but
(d) Both (a) & (b) received in India shall be treated as _____.
(a) Agricultural income & hence exempt
Q49. Income of a foreign company received in India in (b) Agricultural income but taxable u/h “IFOS”
Indian currency on account of sale of crude oil or any other (c) Exempt as earned outside India.
notified goods or rendering notified services to any person (d) Taxable as Income from business & profession
in India shall be____.
(a) Exempt (b) Taxable (c) Partly Exempt Q61. LTCG on sale of urban agricultural land in is ____
(d) Exempt if certain conditions u/s 10(48) are satisfied Income & thus _____.
(a) Agricultural & exempt (b) Agricultural & taxable
Q50. Agricultural Income is _____ in India. (c) Non-agricultural & exempt
(a) Exempt (b) Taxable (c) Partly Exempt (d) Non-agricultural & taxable u/h Capital gains
(d) Fully Exempt but it is to be aggregated with Non-
agricultural Income for determining the rate of tax. *Q62. If an assessee uses the agriculture produce grown by
him for his own consumption then _____.
Q51. Agriculture Income is Exempt in India provided ____. (a) Agricultural Income = FMV of Agriculture produce
(a) land is situated in anywhere in India (b) Agricultural Income = FMV of Agriculture produce -
(b) land is situated in any rural area in India Cost of cultivation (c) Agricultural Income = Nil.
(c) land is situated in any urban area in India
(d) land is situated whether in.outside India. Q63. Assessee has incurred Rs. 1,00,000 on cultivation of
agricultural produce. 50% of produce is sold for Rs.
Q52. Agriculture Income from outside India is ___.
1,10,000 & the balance 50% has been used for self-
(a) Fully Exempt from tax (b) Partly Taxable
consumption. Agricultural income shall be ____.
(c) Fully Taxable u/h IFOS (d) None of the above
(a) Rs. 1.1 lac (b) Rs. 60,000 (c) Rs. 1.2 lac (d) Rs. 1 lac
Q53. Definition of Agriculture Income is given u/s ____.
(a) 2(1A) (b) 2(1B) (c) 2(1C) (d) 2(1D) Q64. If the assessee uses its own agricultural produce for
manufacturing certain products other than tea, rubber or
Q54. Any rent/revenue derived from land may be treated coffee, cost of such agricultural produce for the purpose of
as agricultural income & will be fully exempt u/s 10(1) if__. computing business income of manufacturing shall be ___.
(a) It is derived from Land (a) Cost of producing such agriculture produce
(b) Land is situated in India (b) FMV of such agriculture produce as on the date use
(c) Land is used for agricultural purpose (c) Any suitable method which Assessee wants to adopt.
(d) All the above conditions are satisfied. (d) none of the above
45: d 46: b 47: c 48: d 49: d 50: d 51: a 52: c 53: a 54: d
55: a 56: b 57: d 58: c 59: b 60: b 61: d 62: c 63: b 64: b
Q65. The proportion of agricultural & business income in
case of income derived by the assessee from growing of tea Q71. There will be no partial integration of if the non-
leaves in India & manufacturing of tea is ____. agricultural income does not exceed __.
(a) 65% & 35% (b) 75% & 25% (a) Rs. 5,000 (b) Rs. 10,000 (c) Rs. 50,000 (d) BEL
(c) 60% & 40% (d) 70% & 30%
Q72. There will be no partial integration, if the agricultural
Q66. If the assessee is engaged in the business of growing income does not exceed ___.
& curing of coffee, the agriculture income shall be ____ % of (a) Rs. 50,000 (b) Rs. 1 lac (c) Rs. 5,000 (d) None
the income from such business.
(a) 40% (b) 60% (c) 65% (d) 75% Q73. If partnership firm earns agriculture income, ____.
(a) It will be exempt in the hands of firm
Q67. If the assessee is engaged in the business of (b) It will be exempt in the hands of firm but taxable in the
manufacturing of rubber, the agricultural income shall be hands of the partners
____ % of the income from such business. (c) It will be exempt in the hands of firm & partners
(a) 40% (b) 60% (c) 65% (d) 75% (d) It will be taxable in the hands of firm but exempt in the
hands of the partners
Q68. Income derived from rubber plantation in Australia
but received in India shall be treated as. Q74. A person holds shares of ABC Ltd which is an India
(a) agricultural income & hence exempt company & the company is engaged in agricultural
(b) agricultural income but taxable u/h “IFOS" operation & person has received dividends of Rs. 12,000 &
(c) Taxable in Singapore & thus not taxable in India he claims it is his agricultural Income. Discuss:
(d) None of the above (a) Fully Taxable
(b) Fully Exempt as an agricultural income
Q69. The partial integration of agriculture income with (c) Fully Exempt as it is dividends of Indian company
non-agricultural income is done in case of: (d) None of the above
(1) any assessee other than who is liable to be taxable at
flat rate of income tax Q75. If a company declares dividend out of agriculture
(2) Individual, HUF, AOP-BOI & AJP income, such dividend declared by the company shall be -
(a) (1) is correct (2) is incorrect (b) Both are correct (a) Exempt in the hands of the shareholder but dividend
(c) (1) is incorrect (2) is correct (d) Both are incorrect tax will be payable by the company
(b) not be subject to any income tax, either in the hands of
*Q70. Partial integration of agriculture income is done to company or in the hands of shareholders
compute tax on ____. (c) Exempt in the hands of the company but taxable in the
(a) Agricultural Income (b) Non-Agricultural Income hands of shareholders
(c) Both Agricultural & Non-Agricultural Income (d) None of the above
(d) None of Agricultural & Non-Agricultural Income
65: c 66: d 67: c 68: b 69: b 70: b 71: d 72: c 73: c 74: c 75: a
4A. INCOME UNDER THE HEAD SALARY
Q1. Mr. P is a CA is employee of PC Ltd. & is working as an *Q12. Salary of Mr. P is Rs. 10,000 p.m. Mr. P had taken
internal auditor having contract of services with PC Ltd. Salary in advance for April to June 2018 in March 2018
Mr. P requests PC Ltd. to show his salary as Internal Audit itself. Gross salary of Mr. P for AY 2019-20 :
fee. The amount shall be taxed u/h: (a) Rs. 1,20,000 (b) Rs. 70,000
(a) Salaries (b) PGBP (c) IFOS (d) None (c) Rs. 1,00,000 (d) Rs. 90,000
Q2. Income is taxable as Salary Income when there is Q13. Foregone salary is _____.
employer & employee relationship. However in one (a) Exempt if surrendered to government
exceptional case income is taxable as salary even in the (b) Taxable in other cases
absence of employer employee relationship which is ___. (c) Just an application of Income (d) All of the above
(a) Members of Parliament (b) Professors of college
(c) Partner of a firm (d) Judges of HC & SC Q14. Pension/leave salary paid abroad for services
rendered in India is deemed to accrue _____.
Q3. Mr. P was employed on 1.4.2008 in the grade of Rs. (a) In India (b) Outside India
15,000 - Rs. 500 - Rs. 17,000 - Rs. 750 - Rs. 21,500 - Rs. Q15. Which of the following allowance is fully Exempt?
1,000 - Rs. 31,500. His gross salary for AY 2019-20 is___. (a) Overtime allowance (b) Medical allowance
(a) Rs. 2.7 lac (b) Rs. 2.58 lac (c) Rs. 2.16 lac (d) Rs. 1.8 lac (c) Allowances paid by UNO (d) HRA
Q4. PC Ltd is a company paying salary of Rs. 4,50,000 to its Q16. HRA is given u/s ____.
employee Mr. P & in addition undertakes to pay the Income (a) 10(13A) Rule 2A (b) 10(15B) Rule 3B
Tax amounting to Rs. 10,400 on his behalf during AY 2019- (c) 20(4) Rule 8B (d) 10(14A)
20. The gross Salary of Mr. P is:
(a) Rs. 4.3 lac (b) Rs. 4.5 lac (c) Rs. 4.604 lac (d) None Q17. Salary paid by Government to Citizen of India (R.NR)
for services rendered o/s India is deemed to accrue ____.
Q5. Read the following statements & state correct answer: (a) in India (b) O/s India
(1) Contract b/w employer & employee is contract of service (c) Depends on the discretion of Assessee (d) None
(2) Contract b/w employer & employee is contract for service
(3) Contract b/w professional & client is contract for service Q18. Allowance or Perquisites paid o/s India by GOI to a
(4) Contract b/w professional & client is Contract of Service citizen of India for rendering services o/s India will be ____.
(a) 1 & 2 are correct (b) 2 & 3 are correct (a) Taxable in India (b) Fully exempt u/s 10(7)
(c) 3 & 4 are correct (d) 1 & 3 are correct
Q19. Government of India announced increase in DA on
Q6. Salary is deemed to accrue at the place where _____. 15.3.2018 with retrospective effect from 1.5.2016 & the
(a) Payment for services is received same were paid on 8.5.2018. Arrears of DA is taxable in -
(b) Services are rendered (a) PY 2017-18 (b) PY 2018-19
(c) Either (a) or (b) (d) None of the above (c) PYs to which these are related to (d) PY as per AO
Q7. Mr. P is employed in AB Institute, Pune. He is eligible Q20. Salary paid to Partner by the firm is ___.
for Rs. 24,000 as dearness allowance to meet increased (a) Taxable u/h Salaries (b) Taxable u/h PGBP
cost of living. The amount of DA taxable is ___. (c) Always exempt (d) Always taxable
(a) Rs. 10,000 (b) Nil (c) Rs. 24,000 (d) Rs. 9,000
Q21. Bonus is taxable as salary income on ___ basis.
*Q8. Mr. P who is entitled to a Salary of Rs. 10,000 p.m. (a) Due (b) Receipt (c) Earlier of (a) or (b)
took advance of Rs. 20,000 against salary in the month of (d) Anytime at the choice of employer
March 2019. Gross salary of Mr. P for AY 2019-20 shall be: Q22. Mr. P is entitled to a watchman allowance of Rs. 600
(a) Rs. 1,00,000 (b) Rs. 1,20,000 p.m. for the security of his residence. He pays Rs. 500 p.m.
(c) Rs. 1,40,000 (d) None of the above to the watchman employed by him. Taxable allowance =
(a) 500 p.m (b) 100 p.m (c) 600 p.m (d) None
Q9. Inclusive definition of salary is given u/s:
(a) 17(3) (b) 17 (c) 17(1) (d) None Q23. Medical expenditure reimbursed by the employer to
the employee shall be exempt upto ____.
Q10. U/s 15 salary is taxable on __ basis. (a) Rs. 15,000 pm (b) Rs. 1,00,000 pa
(a) Receipt (b) Due (c) Earlier of (a) or (b) (d) None (c) Fully Exempt (d) Fully taxable
*Q11. Mr. P who is entitled to Salary of Rs. 10,000 p.m. took Q24. Transport Allowance is ___.
advance salary from his employer for April & May 2019 (a) Always Taxable
along with Salary of March 2019 on 31.3.2019. Gross salary (b) Exempt to handicapped Employees upto Rs. 3200 p.m
for Mr. P for AY 2019-20 shall be: (c) Always Taxable except to Handicapped employees.
(a) Rs. 1,20,000 (b) Rs. 1,40,000 (d) Both (b) & (c)
(c) Rs. 1,00,000 (d) None of the above
1: a 2: d 3: c 4: c 5: a 6: b 7: c 8: b 9: c 10: c 11: b 12: d
13: d 14: a 15: c 16: a 17: a 18: b 19: b 20: b 21: b 22: c 23: d 24: d
Q25. Which of the following allowances are fully taxable ? Q36. Mr. P received 300 pm as children education
(a) Warden Allowance (b) Servant Allowance allowance for each of his 3 children. The taxable & exempt
(c) Non-Practicing Allowance (d) All of the above part of children education allowance shall be?
(a) Rs. 8,400 & Rs. 2,400 respectively
Q26. Which of the following allowances are fully exempt ? (b) Rs. 2,400 & Rs. 8,400 respectively
(a) Sumptuary allowance granted to HC.SC Judges. (c) Rs. 10,800 & NIL respectively
(b) Allowance paid by UNO. (d) Nil & Rs. 10,800 respectively
(c) Compensatory Allowance received by a judge
(d) All of the above Q37. Mr. P is employed in PC Ltd. - Transporters as cabin
driver. He is paid Rs. 15,000 p.m during AY 2019-20 as
Q27. Which of the following is not the condition for allowance for meeting his personal expenditure in the
claiming exemption for HRA ? course of running Goods Vehicle. Mr. P does not receive
(a) Employee is in receipt of HRA. any other amount by way of daily allowance. The amount
(b) Location of the employer. eligible for exemption is.
(c) Rent paid by employee > 10% of salary. (a) Rs. 1,80,000 (b) Rs. 1,20,000
(d) Location of the accommodation of employees (c) Rs. 1,26,000 (d) Rs. 1,75,000
*Q28. Mr. P is entitled to a basic salary of Rs. 50,000 p.m. Q38. The Gardner, Sweeper & Watchman are employed by
& DA of Rs. 10,000 p.m. 40% of which forms part of the employer & provided to employee along with rent free
retirement benefits. He is also entitled to HRA of Rs. accommodation owned by the employer. The salary of Rs.
20,000 pm. He actually lives with his parents in Mumbai & 5,000 p.m per person is paid by the employer. The
does not pay any rent. Market rent of that house is Rs. valuation of this perquisite shall be
20,000 pm in Mumbai. Calculate the exempt HRA. (a) Rs. 1,80,000 (b) Rs. 1,20,000
(a) NIL (b) Rs. 1,75,200 (c) Rs. 60,000 (d) Not taxable at all
(c) Rs. 64,800 (d) Rs. 2,40,000
Q39. Mr. P is Pilot with Jet Airways. He is entitled to
Q29. Mr. P purchased a residential house property in outstation allowance of Rs. 10,000 p.m. He spends Rs.
Ahmedabad on loan for which he paid an interest of Rs. 4,000 every month. The exemption shall be
50,000 during the PY. He is working in Delhi & getting an (a) Rs. 1,20,000 (b) Rs. 48,000
HRA of 4,000 p.m. He can claim exemption.deduction for: (c) Rs. 84,000 (d) Rs. 72,000
(a) Only HRA (b) Only interest paid
(c) Either Interest or HRA (d) Both HRA & interest paid Q40. Mr. P is entitled to a transport allowance of Rs. 1,000
p.m. For commuting from his residence to office & back he
Q30. Children education allowance is exempt upto: spends Rs. 600 pm. The exemption shall be
(a) Rs. 100 pa for 2 children (b) Rs. 100 pm for 2 children (a) Rs. 1,000 p.m. (b) Rs. 600 p.m.
(c) Rs. 100 pm per child for 2 children each (c) Rs. 400 p.m. (d) Nil
(d) Rs. 100 pa per child for 2 children each
Q41. Children born out of multiple birth after the first child
Q31. Hostel expenditure allowance is exempt upto will be treated as ___.
(a) Rs. 300 p.a for 2 children (b) Rs. 300 p.m for 2 children (a) Two child & exemption will be granted only for 1 child
(c) Rs. 300 p.m per child for 2 children each (b) One child only & exemption will be granted only for
(d) Rs. 300 p.a per child for 2 children each both child
(c) on the discretion of AO (d) None of the above
Q32. Underground allowance to employee is exempt upto.
(a) Rs. 700 p.m. (b) Rs. 900 p.m. Q42. Rent Free Accommodation is covered in.
(c) Rs. 1,000 p.m. (d) Rs. 800 pm (a) Sec 17(2)(ii) Rule 3(a) (b) Sec 17(2)(i) Rule 3(1)
(c) Section 18(i) Rule 3(1) (d) Section 17(2)(vi)
Q33. Mr. P received basic salary of Rs. 20,000 p.m. from his
employer. He also received children education allowance Q43. Accommodation at concessional rent is given u/s ____.
of Rs. 3,000 for 2 children & transport allowance of Rs. (a) section 17(2)(ii) Rule 3(1) (b) sec 18(i) Rule 5(i)
1,800 p.m. The amount of salary taxable for AY 2019-20 is (c) section 16(ii) (d) section 16(iii)
(a) Rs. 2,62,200 (b) Rs. 2,22,600
(c) Rs. 2,22,200 (d) Rs. 2,07,800 Q44. Value of perquisite in case of rent-free
accommodation given to government employees will be__.
Q34. Transport allowance is exempt upto Rs. 3,200 pm for. (a) 10% of salary (b) 15% of salary (c) 7.5% of salary
(a) Govt. employees (b) Non-Govt. Employees (d) License fees determined byovernment.
(c) Handicapped Employee (d) Mentally handicapped
Q45. Salary of employee is Rs. 2 lacs. Fair rent of house
Q35. Allowance for Transport is exempt upto situated in Delhi given to employee is Rs. 1,30,000.
(a) 70% of such Allowance; (b) Rs. 10,000 p.m Perquisite in case of Non-Government employee is:
(c) Lower of (a) or (b) (d) Rs. 5,000 (a) Rs. 2,00,000 (b) Rs. 30,000
(c) Rs. 70,000 (d) Rs. 1,30,000
25: d 26: d 27: b 28: a 29: d 30: c 31: c 32: d 33: c 34: c 35: c
36: a 37: b 38: c 39: a 40: d 41: b 42: b 43: a 44: d 45: b
Q46. Employee is provided with furniture costing Rs. Q55. Medical facility to employee in India is exempt if:
50,000 along with rent free accommodation w.e.f. (a) Hospital owned/maintained by employer or
1.8.2018. The value of the furniture to be included in the Government Hospital;
value of rent-free accommodation shall be. (b) Private Hospital (if recommended by Government for
(a) Rs. 15,000 (b) Rs. 30,000 (c) Rs. 10,000 (d) Rs. 20,000 treatment of its employees).
(c) Specified facility for prescribed diseases in hospital
Q47. Mr. P is provided with furniture to the value of Rs. approved by PCC/CC (d) All of the above
70,000 along with house from February, 2018. Furniture is
not owned by employer but has been taken on rent by Q56. Mr. P is entitled to Rs. 8,000 p.m as Medical
employer for which employer pays hire charges of Rs. Allowance. He spends Rs. 4,000 p.m on his medical
5,000 pa. The value of furniture to be included along with treatment & Rs. 1,000 on the medical treatment of his
value of unfurnished house for AY 2019-20 is major son not dependent on him. Exemption =
(a) Rs. 5,000 (b) Rs. 7,000 (c) Rs. 10,500 (d) Rs. 14,000 (a) Rs. 4,000 p.m (b) Rs. 5,000 p.m
(c) Nil (d) Rs. 8,000 p.m
Q48. Salary of an employee is Rs. 2,00,000. Rent paid by
the employer for the unfurnished house provided to Q57. Mr. P is employed in PC Ltd. & his wife is suffering
employee at Faridabad is Rs. 3,000 p.m. The employer from a critical disease. The company has sent Mr. P & Mrs.
charges Rs. 2,000 p.m. as rent from the employee. The S to USA for the medical treatment of Mrs. S . The company
valuation of this perquisite shall be ____. has incurred expenses on medical treatment of Mrs. S &
(a) Rs. 24,000 (b) Rs. 36,000 (c) Rs. 30,000 (d) Rs. 6,000 stay outside India of Mrs. S & of Mr. P. amounting to Rs.
17,00,000 but RBI permitted only Rs. 15,00,000. The travel
Q49. Mr. P gets salary of Rs. 12,000 p.m. & is provided with expenses amounted to Rs. 1,50,000. Salary of Mr. P was Rs.
rent free unfurnished accommodation at Pune (which has 5,00,000. The taxable perquisite in this case shall be.
population of 20 lakh). House is owned by employer, fair (a) Rs. 3,50,000 (b) Rs. 8,50,000
rental value of which is Rs. 1,400 p.m. House was provided (c) Rs. 2,00,000 (d) Rs. 1,50,000
from 1st July, 2018. Value of the perquisite will be.
(a) Rs. 21,600 (b) Rs. 10,800 (c) Rs. 16,200 (d) Rs. 12,600 Q58. During AY 2019-20, the employee was reimbursed
Rs. 14,000 as medical expenses incurred by him which
Q50. Mr. P gets salary of Rs. 25,000 p.m. & is provided with includes Rs. 9,000 spent in Government hospital. The
accommodation at Pune on his transfer in hotel for a week. taxable perquisite in this case shall be.
Value of the perquisite of rent-free accommodation will be. (a) Rs. 9,000 (b) Rs. 5,000
(a) Rs. 72,000 (b) Rs. 30,000 (c) Rs. 45,000 (d) Nil (c) Rs. Nil (d) Rs. 14,000
Q51. If any employee has been transferred & employer has Q59. Health Insurance Premium paid by employer in
provided him accommodation at the new place also while approved scheme of CG/IRDA is ____.
the employee continuing to occupy the house at old place. (a) Taxable (b) Exempt
In such cases ___.
(a) Both houses will be charged to tax as perquisite. Q60. Mr. P took an interest-free loan of Rs. 15,000 from PC
(b)Only one of the accommodation having lower Ltd. (the employer). Market rate of interest on similar loan
perquisite value shall be taxable upto 90 days (three is 10%, the taxable value of the perquisite for Mr. P :
months) & after 90 days, both of the accommodations shall (a) Rs. 150 (b) Rs. 1,500 (c) Nil (d) None
be taxable.
(c) Depends upon the agreement between employee & Q61. For the purpose of determining the perquisite value
employer of loan at concessional rate given to the employee, the
(d) Depends upon the discretion of AO lending rate of State Bank of India as on ____ is required;
(a) 1st day of PY (b) Last day of PY
Q52. Rent-free official residence provided to a Judge of (c) Day on which loan is given (d) 1st day of AY
HC.SC is ___
(a) Taxable (b) Exempt (c) Exempt upto Rs. 5,000 p.m Q62. In which of the following cases, Interest-free Loan is
(d) Taxable if such judge stays out of India after retirement. not treated as perquisite:
(a) If the amount of loans ≤ Rs. 20,000.
Q53. Rent-free furnished house provided to an Officer of (b) If Loan is given for Medical Treatment of Prescribed
Parliament is ____. Diseases (Cancer, tuberculosis, etc).
(a) Taxable (b) Exempt (c) Exempt upto Rs. 5,000 p.m (c) Both (a) & (b) (d) None of the above
(d) Taxable if such officer stays o/s India after retirement
Q63. Employee is on official tour & he takes his family
Q54. Mr. P an employee of PC Ltd. of Delhi, received the member with him. Value of perquisite =
following payments during the PY ended 31st March, 2019. (a) Amount incurred for employee & such family member
Basic salary: Rs. 2,40,000 & DA: 40% of basic salary (40% (b) Amount incurred for such family member
forming part of salary). Rent-free unfurnished (c) It is illegal to take family member with him since it will
accommodation provided by employer for which rent paid distract him
by employer being Rs. 50,000. Taxable perquisite: (d) He should ask for the permission of AO before taking
(a) Rs. 41,760 (b) Rs. 50,000 his wife (family member).
(c) Rs. 36,000 (d) Rs. 52,500
46: c 47: a 48: d 49: b 50: d 51: b 52: b 53:b 54: a
55: d 56: d 57: c 58: b 59: b 60: c 61: a 62: c 63: b
Q64. Any official tour is extended as a vacation. Value of Q76. Mr. P employed in PC Ltd. was permitted to admit his
perquisite = only son in the school run by the employer. No fee was
(a) Amount incurred for the total period. charged on such education provided to the son of Mr. P.
(b) Amount incurred for the extended period. The cost of such education for other children is Rs. 1,800
(c) He cannot extend tour since he will have work in office. per month. The perquisite value of free education shall be:
(d) He should ask for permission of AO. (a) Rs. 1,600 (b) Rs. 12,000
(c) Rs. 36,000 (d) Rs. 9,600
Q65. Training of employees is not a/an ____ perquisite.
(a) Taxable (b) Exempt (c) Exempt upto Rs. 10,000 Q77. Free or concessional tickets granted to Employees of
(d) Depends on the discretion of AO. an airline or the railways is ___.
(a) Taxable Perquisite. (b) Exempt Perquisite.
Q66. Exemption from leave Salary is given u/s _____. (c) Partly Exempt. (d) None of the above.
(a) 10(10AB) (b) 10(10AA) (c) 10(15A) (d) 10(10A)
Q78. A company has provided laptop worth Rs. 50,000 to
Q67. Scholarship given by an employer-company to its employee for official as well as personal purposes. The
children of its employees is not a.an ____ perquisite. taxable amount of perquisite will be -
(a) Taxable (b) Exempt (c) Exempt upto Rs. 10,000 (a) Rs. 5,000 (b) Rs. 25,000
(d) Depends on the discretion of AO. (c) Rs. 10,000 (d) Nil
Q68. Exemption in respect of Leave Travel Concession is Q79. Employer has given a video-camera for the personal
available only for going anywhere ___ with ___. use of the employee. The value of this perquisite is:
(a) In India.outside India; Family. (b) In India; family. (a) 10 % pa of historical cost (b) Nil
(c) In India; friends or family. (d) In India; Alone (c) 10% pa of the WDV (d) Fully Exempt
Q69. Exemption in respect of Leave Travel Concession is Q80. The employer had purchased a car for Rs. 8,00,000 2
available only on ____. years & 7 months ago. This car is sold to the employee for
(a) Hotel charges (b)Boarding expenses Rs. 2,02,000. The value of this perquisite shall be
(c) Bus.Air.Rail Fare (d) All of the above (a) Rs. 2,80,000 (b) Rs. 1,20,000
(c) Rs. 8,00,000 (d) Rs. 3,10,000
Q70. Credit for ____ unavailed LTC is available in the first
calendar year of Next block. Q81. PC Ltd. acquired a motorcar for Rs. 8 lakh on 30 th
(a) One (b) Two (c) Zero (d) Three June, 2018. It sold the said motor car to its employee, Mr.
P, for Rs. 6 lakh on 10th July, 2018. The company claimed
Q71. PC Ltd. gives a gift in kind on the marriage of the son depreciation @ 15% for the year ended 31st March, 2019.
of the employee. Gift so made shall be ___. The perquisite value in the hands of Mr. P on sale of motor
(a) Taxable if value is Rs. 6,000 or less car would be
(b) Exempt if value is Rs. 5,000 or less (a) Rs. 8,00,000 (b) Rs. 6,00,000
(c) Always fully taxable (d) Fully Exempt (c) Rs. 2,00,000 (d) Rs. 1,40,000
Q72. Cash gifts are ___. Q82. Mr. P is an employee of JSPC Ltd. which is an oil
(a) Taxable if value is Rs. 6,000 or less manufacturing company. He is provided with free gas for
(b) Exempt if value is Rs. 5,000 or less his personal purpose by the employer. Perquisite value:
(c) Always fully taxable (d) Fully Exempt (a) Fixed by employee (b) Fixed by the employer
(c) Manufacturing cost per unit
Q73. Tea & Snacks are provided by PC Ltd. to employees in (d) Market rate of Gas per unit
the office during office hours. The value of this perquisite
shall be Q83. Employer provides a car (below 1600 CC) along with
(a) Fully taxable (b) Fully Exempt a driver to Mr. P & he uses the car partly for official & partly
(c) Exempt upto Rs. 50 pm for personal purpose. Expenses incurred by employer are.
(d) Exempt upto Rs. 50 per round of tea & snacks (1) running & maintenance expenses of Rs. 84,000
(2) driver's salary of Rs. 1,20,000. Perquisite value:
Q74. An employee has been provided free meal worth Rs. (a) Rs. 21,600 (b) Rs. 10,800
110 per meal for 295 days in the office, during office hours. (c) Rs. 32,400 (d) Rs. 2,04,000
Such facility provided to employees shall be taxable for:
(a) Rs. 60 per day for 295 days Q84. Mr. P is employee of PC Ltd. & he is provided a car of
(b) Rs. 110 per day for 295 days engine of 1.9 litre capacity along with driver. The expenses
(c) Rs. 50 per day for 295 days (d) Not taxable at all of running & maintenance of car are met by Mr. P himself.
Besides using the car for official purpose, Mr. P also uses
Q75. Expenditure pertaining to health club, sports the car for his personal purpose. Perquisite value:
facilities etc.is ____. (a) Rs. 2,400 pm (b) Rs. 1,800 pm
(a) Taxable Perquisite. (b) Exempt Perquisite. (c) Rs. 600 pm (d) Rs. 900 pm
(c) Partly Exempt. (d) None of the above
64: b 65: a 66: b 67: a 68: b 69: c 70: a 71: b 72: c 73: b 74: a
75: b 76: d 77: b 78: d 79: a 80: d 81: c 82: c 83: c 84: b
Q85. Mr. P an employee owns a car which he used for his Q94. An employee of a GGC public limited company
private purpose. All expenses of running & maintenance of received total Rs. 3,00,000 as encashment of leave salary
the car are met by the employer. The perquisite shall at the time of retirement. He has 18 months leave to his
(a) Be taxable in case of specified employee only credit at the time of retirement & his average salary for last
(b) Be taxable in case of an employee other than specified 10 months is Rs. 24,000. Taxable Leave encashment is:
employees (a) Rs. 2.4 lacs (b) Rs. 3 lacs (c) Rs. 60,000 (d) Nil
(c) Be taxable in case of all type of employees
(d) Not be taxable at all for any employee Q95. Which of the following leave salary is exempt?
(a) Leave salary paid to legal heir
Q86. Which of the following perquisites will be taxable in (b) Leave salary received by family of government servant
the hands of non-specified employees ? who died in harness (on duty)
(a) Provision of sweeper, gardener, watchman or personal (c) Both (a) & (b)
attendant or Use of motor car (d) None of the above
(b) Facility of use of gas, electricity or water supplied by
employer Q96. Gratuity shall be fully exempt in the case of ____.
(c) Free or concessional educational facilities or Free or (a) CG & SG Employee (b) Employees of CG & SC & LA
concessional tickets (d) None of the above (c) Employees of CG & SG & LA & statuary corporation
(d) Only central government employee
Q87. Encashment of leave salary at the period of service is
fully taxable in the case of ___. Q97. Salary for the purposes of exemption of gratuity
(a) CG employee (b) SG employee when employee is covered under Gratuity Act 1972
(c) Both CG & SG employees includes.
(d) Government employee & Non-Government employee (a) Basic salary + DA (forming part of salary for retirement
benefits or not)
Q88. Encashment of leave salary at the time of retirement (b) Basic salary + DA (forming part of salary for retirement
is fully exempt in the case of ___. benefits) + monthly commission
(a) CG Employee (b) SG Employee (c) Basic salary + DA (forming part of salary for retirement
(c) Both CG & SG Employees benefits) + commission on % basis of sales
(d) Government employee & Non-Government employee (d) Basic salary & commission
Q89. Maximum Exemption in case of leave encashment is: *Q98. An employee is covered under Payment of Gratuity
(a) Rs. 2.4 lac (b) Rs. 3.5 lac (c) Rs. 3 lac (d) Rs. 10 lac Act, 1972. Salary for purpose of calculating 15 days salary
Q90. Payment of premium on personal accident insurance for each completed year of service shall be.
policies of the employee by the employer is __. (a) Last drawn Salary (b) Avg. Salary of last 10 months
(a) Taxable perquisite (c) Average Salary of last 3 completed years
(b) Exempt Perquisite since no immediate benefit would (d) Average Salary of last 12 months
become payable to the employee
(c) Partly Exempt (d) None of the above Q99. An employee is covered under Payment of Gratuity
Act, 1972 If the employee has completed service of 16
Q91. Salary for exemption of leave encashment shall be years 6 months & 5 days then to calculate exemption of
taken as. Gratuity the number of completed years shall be taken as.
(a) Last drawn Salary (a) 16 years (b) 17 years
(b) Average Salary of 10 months immediately preceding (c) 16 years 6 months & 5 days (d) 16 years &7 months
the month of retirement
(c) Average Salary of 10 months immediately preceding Q100. An employee is covered under Payment of Gratuity
the date of retirement (d) Any of the above Act, 1972 For purpose of computing 15 days’ salary, the
number of days in a month shall be taken as _____ days.
Q92. Salary for the purpose of exemption of leave (a) 30 (b) 26 (c) 31 (d) Any of the above
encashment shall be taken as.
(a) Basic salary + DA (forming part of salary for retirement Q101. The maximum ceiling limit for exemption u/s
benefits or not) 10(10) in respect of gratuity for employees covered by the
(b) Basic salary + DA (forming part of salary for retirement Payment of Gratuity Act, 1972 is:
benefits) + monthly commission (a) Rs. 10 lac (b) Rs. 5 lac (c) Rs. 3.5 lac (d) Rs. 20 lac
(c) Basic salary + DA (forming part of salary for retirement
benefits) + commission (on % basis of sales) Q102. An employee is Not Covered under Payment of
(d) Basic salary & commission. Gratuity Act, 1972 For purpose of computing half month’s
salary, number of days in a month shall be taken as ___ days.
Q93. An employee availed the exemption of leave (a) 30 (b) 26 (c) 31 (d) Any of the above
encashment of Rs. 1,00,000 in the past. He received from
the second employer a sum of Rs. 2,50,000 as encashment Q103. An employee is Not Covered under Payment of
of leave. He will be entitled to exemption to the extent of Gratuity Act, 1972. Maximum exemption of gratuity is:
(a) Nil (b) Rs. 2.5 lacs (c) Rs. 2 lacs (d) Rs. 1.4 lacs (a) Rs. 10 lac (b) Rs. 3.5 lac (c) Rs. 20 lac (d) None
85: a 86: d 87: d 88: c 89: c 90: b 91: c 92: c 93: c 94: c
95: c 96: c 97: a 98: b 99: b 100: b 101: d 102: a 103: a
Q104. Mr. P worked with a previous employer for 3 years Q115. Maximum Standard deduction u/h Salary shall be __.
but was not entitled to any gratuity. He worked with the (a) Rs. 40,000 (b) Rs. 50,000
present employer for 8 years & 3 months. The completed (c) Rs. 2,500 (d) Rs. 5,000
years of service for calculating exemption of gratuity, if
employee is covered under Gratuity Act shall be taken as__. Q116. The standard deduction is allowed from gross
(a) 11 years (b) 8 years (c) 3 years (d) None salary to the maximum of Rs. 40,000 but
(a) Employee has to prove his all expenses to income tax
Q105. Mr. P who claimed exemption of gratuity in past to department
the extent of Rs. 2,50,000 was entitled to gratuity from the (b) Employee has to prove his all expenses to the employer
present.second employer amounting to Rs. 20,00,000 in AY (c) Employee has to prove his all expenses to income tax
2019-20. Both of employers are covered under the department or employer as per his own discretion
Payment of Gratuity Act 1972. Exemption to Mr. P shall be: (d) Irrespective of any expenses that employee may or may
(a) Rs. 10,00,000 (b) Rs. 15,00,000 not have incurred
(c) Rs. 20,00,000 (d) Rs. 17,50,000
Q117. Standard deduction is not allowed from ______.
Q106. Un-Commuted Pension received by ANY Employee: (a) Pension (b) Family pension
(a) Fully Exempt (b) Fully Taxable (c) Arrear of salary (d) Gross salary
(c) Partially taxable (d) Partially exempt
Q118. Standard deduction is allowed from ____.
Q107. An employee was entitled to gratuity. He got 50% of (a) Pension (b) Gross salary
his pension commuted & received a sum of Rs. 1,00,000 as (c) Arrear of salary (d) All of the above
commuted pension. The exemption in his case shall be.
(a) Rs. 50,000 (b) Rs. 33,337 Q119. Max deduction for entertainment allowance u/s __.
(c) Rs. 1,00,000 (d) Rs. 66,667 (a) Rs. 3,000 (b) Rs. 5,100
(c) Rs. 2,500 (d) Rs. 5,000
Q108. A government employee was entitled to gratuity. He
got 50% of his pension commuted & received a sum of Rs. Q120. Deduction for entertainment allowance u/s 16(ii) is
1,00,000 as commuted pension. The exemption shall be: allowed to ____.
(a) Rs. 50,000 (b) Rs. 33,337 (a) Every kind of employee
(c) Rs. 1,00,000 (d) Rs. 66,667 (b) Every government employee
(c) Every non-government employee
Q109. An employee was not entitled to gratuity. He got (d) Every retired employee
60% of his pension commuted & received a sum of Rs.
1,20,000 as commuted pension. The exemption shall be: Q121. Limit u/s 16(ii) for deduction of entertainment
(a) Rs. 1,20,000 (b) Rs. 66,667 allowance in case of government employee is __% of salary
(c) Rs. 80,000 (d) Rs. 1,00,000 (a) 12.5 % (b) 20 % (c) 15% (d) 7.5%
Q110. Mr. P retires from private service on 30th April, Q122. Entertainment allowance for govt. employee is.
2018 & his pension has been fixed at Rs. 1,500 p.m. He gets (a) Fully exempt & therefore not included in Gross Salary
a of his pension commuted during January, 2019 & (b) Fully Taxable & therefore added in Gross Salary
receives Rs. 75,000. He also gets Rs. 60,000 as gratuity. The (c) Not added in Gross Salary but deduction is allowed as
total pension taxable including commuted value will be. per limits of section 16(ii)
(a) Rs. 16,500 (b) Rs. 21,500 (d) First added in full in Gross Salary & thereafter
(c) Rs. 39,250 (d) Rs. 14,250 deduction allowed from Gross Salary is allowed u/s 16(ii)
Q111. Pension received by gallantry award winner is. Q123. Professional Tax is charged under which Article of
(a) Fully Taxable (b) Fully Exempt from tax Constitution of India
(c) 50% Exempt & 50% taxable (a) 274 (b) 275 (c) 276 (d) 277
(d) 80% Exempt & 20% taxable
Q124. Professional Tax is charged by ___.
Q112. Mr. P employed in PC Ltd. took voluntary retirement (a) CG (b) SG (c) LA (d) Statutory corporation
in December 2018 & received Rs. 2,00,000 from NPS Trust.
The amount so received chargeable to income tax is. Q125. The deduction for Professional Tax u/s 16(iii) is for
(a) Nil as 100% is exempt (a) Actual amount paid (b) Actual amount due
(b) Rs. 1,20,000 as 40% is exempt (c) Actual amount charged by SG (d) Always 2,500
(c) Rs. 1,00,000 as 50% is exempt Q126. Employer’s contribution to SPF shall be
(d) Rs. 80,000 as 60% is exempt (a) Fully Exempt (b) Exempt upto 12 % of salary
Q113. Compensation received on Voluntary retirement is (d) Fully Taxable (c) Exempt up to 10% of salary
exempt u/s 10(10C) to the maximum extent of ____. Q127. Interest credited to SPF shall be ____.
(a) Rs. 2.4 lac (b) Rs. 3.5 lac (c) Rs. 5 lac (d) Rs. 3 lac (a) Fully Exempt (b) Fully Taxable
Q114. Standard deduction is allowed from gross salary u/s (c) Exempt up to 8.5 % p.a of total contribution
(a) 16(i) (b) 16(ia) (c) 16(ii) (d) 16(iii) (d) Exempt up to 9.5 % p.a of total contribution
104: a 105: d 106: b 107: d 108: d 109: d 110: c 111: b 112: b 113: c 114: b 115: a
116: d 117: b 118: d 119: d 120: b 121: b 122: d 123: c 124: b 125: a 126: a 127: a
Q128. Employee’s own contribution to RPF.PPF shall be
(a) Allowed as deduction u/s 80C Q139. Mr. P employed in PC Ltd. as accounts manager. The
(b) Allowed as deduction u/s 80TTA employer paid Rs. 1,60,000 as contribution to approved
(c) Allowed as deduction u/s 10 superannuation fund for the benefit Mr. P. The amount of
(d) Allowed as deduction u/s 16(ia) such contribution liable to tax as perquisite is:
(a) Nil (b) Rs. 10,000
Q129. Employer’s contribution to RPF shall be. (c) Rs. 1,60,000 (d) Rs. 60,000
(a) Fully Exempt (b) Exempt upto 12 % of salary
(d) Fully Taxable (c) Exempt up to 10% of salary Q140. Mr. P was employed since 1st July 2002 in an
establishment. His salary was fixed at Rs. 14,800 in the
Q130. Interest credited to RPF shall be. grade of Rs. 14,000 - Rs. 400 - Rs. 22,000 w.e.f. 1.7.2012. He
(a) Fully Exempt (b) Fully Taxable got the benefit of 15% of salary as DA which is treated as
(c) Exempt up to 8.5 % p.a of total contribution forming part of salary for retirement benefits. He retired
(d) Exempt up to 9.5 % p.a of total contribution on 1.2.2019 & received Rs. 3,40,000 as a Gratuity from his
employer. Calculate his income under the head ‘Salary’ for
Q131. Payment from RPF after 5 years of continuous
AY 2019-20 if he is a Central Government employee.
service of employee shall be ___.
(a) Rs. 1,56,420 (b) Rs. 1,70,800
(a) Fully Taxable (b) Fully Exempt
(c) Rs. 1,96,420 (d) Fully exempt
(c) Taxable to the extent of employer’s contribution &
interest thereon (d) Exempt up to Rs. 10,00,000 Q141. Anjan joins a service on 1.4.2018 with basic salary
Q132. An employee received payment from URPF on his of Rs. 39,100 plus dearness allowance of 107 % of basic
retirement. His own contribution to URPF & Interest on his salary. He has no other income. His taxable income shall be:
own contribution will be. (a) Rs. 9,71,244 (b) Rs. 9,31,244
(a) Taxable, Taxable (b) Exempt, Exempt (c) Rs. 9,71,240 (d) Rs. 9,31,240
(c) Taxable, Exempt (d) Exempt, Taxable
Q142. Mr. P joins service on 1st April, 2014 in the grade of
Q133. The year in which URPF is converted in RPF ___. Rs. 15,000 Rs. 1,000 - Rs. 18,000 - Rs. 2,000 - Rs. 26,000.
(a) The employer’s contribution till date & interest thereon Total taxable salary for year ended on 31st March, 2019:
shall be taxable (a) Rs. 2,16,000 (b) Rs. 2,40,000
(b) The employer’s contribution till date shall be taxable (c) Rs. 2,00,000 (d) Rs. 1,80,000
(c) It will be assumed as if the provident fund was
Q143. Mr. P who is a manager of PC Ltd. since 2001 was
recognized right from beginning & excess amount of
terminated by the company on 1st August, 2018 by paying
employer’s contribution & interest thereon shall be taxable
a compensation of Rs. 200 lakhs. Such compensation is -
(a) Chargeable under the Wealth-tax Act, 1957
Q134. When interest on employee’s own UPRF is received (b) Not chargeable under the Income-tax Act, 1961
by employee, it is ____. (c) Chargeable u/s 17(3)(i) (d) Chargeable u/s 28(ii)(a).
(a) Taxable u/h IFOS (b) Taxable u/h Salary
Q144. GGC is a LLP & had taken Keyman Insurance Policy
(c) Exempt (d) Taxable if interest > Rs. 10,000
on the life of it managing partner. The policy got matured
Q135. For PY 2018-19, Mr. P receives a salary of Rs. on 13th September, 2018 & an amount of Rs. 75 lakh was
2,80,000. Mr. P’s contribution to employees’ RPF account paid by the insurers to the managing partner. The amount
Rs. 59,000 & matching contribution has been made by so received on maturity of the policy by the managing
employer. Taxable income of Mr. P will be ____. partner is -
(a) Rs. 2,46,400 (b) Rs. 3,05,400 (a) Fully exempt u/s 10(10D)
(c) Rs. 3,39,000 (d) Rs. 2,80,000 (b) 50% of Rs. 75 lakh exempt
(c) Rs. 75 lakh taxable as profit in lieu of salary
Q136. PC Ltd. contributed 15% of salary of Mr. P towards (d) Rs. 25 lakh exempt & Rs. 50 lakh taxable
RPF. Taxable Amt to Mr. P is ___% of contribution.
(a) 5 (b) 3 (c) Nil (d) 12 Q145. Bimal is employed in a factory at a salary of Rs.
2,400 per month. He also gets dearness allowance @ Rs.
*Q137. Employer’s contribution to superannuation fund is 600 per month & bonus @ Rs. 200 per month. He retired
(a) Not taxable to employee (b) Fully Taxable on 31st December, 2018 & received Rs. 75,000 as gratuity
(c) Taxable to employee provided contribution > Rs. 1.5 under the Payment of Gratuity Act, 1972 after serving 31
lacs (c) Exempt upto 12% of salary years & 4 months in that factory. Exempt gratuity is:
(a) Rs. 75,000 (b) Rs. 53,654
Q138. Which of the following is not correct about the (c) Rs. 21,346 (d) Rs. 20,00,000
approved superannuation fund ?
(a) Employees’ contribution is deductible u/s 80C
(b) Amount contributed by the employer is Exempt
(c) Interest on accumulated balance is exempt
(d) Under some circumstances, payments from the fund
are chargeable to income tax.
128: a 129: b 130: d 131: a 132: d 133: c 134: a 135: b 136: b 137: b
138: b 139: c 140: a 141: a 142: c 143: c 144: c 145: b
4B. INCOME FROM HOUSE PROPERTY
Q1. Chargeability of House Property is given u/s *Q12. PC Ltd. constructed staff quarters & let out the same
(a) 15 (b) 22 (c) 20 (d) None of the above during the AY 2019-20. Its rent received Rs. 7,50,000 by
way of rent from employees during the year. The rental
Q2. The basis of chargeability of House Property is ____. receipt is taxable as.
(a) Annual Value (b) Municipal Value (a) Income from house property
(c) Standard Rent (d) Fair Rent (b) Income from business
(c) Perquisite in the hands of employees
Q3. Under the head of house property, ____ is taxable. (d) Income from other sources
(a) Income from building (b) Income from land
(c) Income from building & land attached to building Q13. Composite rent of let-out house property is taxable
(d) None of the above u/h
(a) PGBP (b) IFOS (c) Income from HP
Q4. House property means _____. (d) (a) or (b) above depending upon certain conditions
(a) Residential Houses (b) Shops or godowns
(c) Cinema or hotel building (d) All of the above Q14. Mr. PC is the owner of a house property covered
under the Rent Control Act. Municipal value Rs. 30,000,
Q5. Mr. PC is having a plot of land. He has let out this to actual rent Rs. 25,000; fair rent Rs. 36,000 & standard rent
earn some extra income. Rent of such plot is taxable u/h is Rs. 28,000. GAV will be.
(a) PGBP (b) Income from house property (a) Rs. 30,000 (b) Rs. 36,000
(c) IFOS (d) Any head at the choice of Mr. PC. (c) Rs. 25,000 (d) Rs. 28,000
Q6. Mr. PC has taken a house on rent & sublet it to Mr. A. Q15. Where SR is not applicable, GAV shall be higher of:
Income of Mr. PC from such house property is taxed u/h __. (a) FR & MV (b) MV & AR
(a) Income from house property (b) IFOS (c) FR & MV & AR (d) none of the above
(c) Income from salary (d) Not taxed at all
Q16. Mr. PC is owner of the flat which has municipal value
Q7. For any income from house property to be assessed Rs. 45,000; fair rent Rs. 50,000; standard rent Rs. 48,000 &
u/h “Income from house property”, Assessee must have actual rent is Rs. 44,000 for 11 Months. There is a vacancy
the ownership of land on which such building stands. of 1 month. Calculate GAV.
(a) True (b) False (a) Rs. 50,000 (b) Rs. 40,000
(c) Rs. 44,000 (d) Rs. 48,000
Q8. For any income from house property to be assessed
u/h “Income from house property”, Assessee must have Q17. If ARR < ER due to vacancy, then GAV = ____.
the ownership of such house property in ____. (a) ARR (b) ER (c) Higher of (a) or (b)
(a) AY (b) PY (c) FY (d) None
Q18. In case of SOP, deduction of municipal taxes is ___
Q9. In case of House Property with Disputed Title of (a) available if paid by the owner
Ownership, income arising from such disputed house (b) not available if paid by the tenant
property will be assessed in the hands of: (c) available if tax is deducted at source
(a) Person having the possession of house property (d) No deduction of Municipal taxes paid.
(b) Person living close to the house property.
(c) It will be the decision of Department as to who is the Q19. Treatment of unrealized rent for determining income
owner till the court gives its decision. from house property
(d) Depends on the discretion of AO. (a) To be deducted from expected rent
(b) To be deducted from actual rent
Q10. For any income from house property to be assessed (c) To be deducted u/s 24 from annual value
u/h “Income from house property”, Assessee must such (d) To be deducted from both expected rent & actual rent
house property for any purpose other than _____.
(a) his business.profession (b) his personal use Q20. Unrealized rent is allowed as a deduction from ___.
(c) Doing Illegal things (d) Gambling (a) GAV (b) NAV (c) Income from HP (d) Actual rent
Q11. Annual value of HP held as SIT is _____. Q21. Municipal Taxes are deducted from ____.
(a) Taxed u/h “PGBP” (a) NAV on payment basis (b) GAV on accrual basis
(b) Taxed u/h “Income from House Property” (c) GAV on payment basis (d) not deductible
(c) Nil for 1 year from the end of FY in which completion
certificate of the property is obtained from competent Q22. Municipal taxes to be deducted from GAV should be
authority, if such property is not LOP during such period. (a) Paid by tenant during PY (b) Paid by owner during PY
(d) Both (b) & (c) (c) Accrued during PY (d) None of the above
1: b 2: a 3: c 4: d 5: c 6: b 7: b 8: b 9: c 10: a 11: d
12: b 13: d 14: d 15: c 16: c 17: a 18: d 19: b 20: d 21: c 22: b
Q23. Tax paid to foreign local authority is deductible if__. Q33. Mr. PC is owner of a big house which is vacant for the
(a) Paid by owner (b) Tax is deducted at source full year. Municipal Value of the House Rs. 15,000 pm, Fair
(c) Both (a) & (b) (d) Not deductible at all Rent Rs. 21,000 pm, Standard Rent Rs. 18,000 pm &
Municipal Tax paid are Rs. 5,000 pa. Calculate NAV of the
Q24. Municipal tax shall not include. house.
(a) House tax (b) Scavenging tax (a) Rs. 1,76,000 (b) (Rs. 5,000)
(c) State government tax (d) Water tax (c) Nil (d) None of the above
*Q25. Where an assessee has two house properties for Q34. Deduction u/s 24(a) of statutory deduction under the
self-occupation, the benefit of NIL annual value will be head House Property is ____ % of NAV.
available in respect of: (a) 35% (b) 30% (c) 25% (d) 40%
(a) Both the properties
(b) Property which has been acquired.constructed first Q35. Deduction for the Interest on Capital Borrowed in
(c) Any one house at the option of the assessee covered u/s
(d) Any one of the properties & once option is exercised (a) 24(a) (b) 24(c) (c) 24(b) (d) 24(d)
cannot be changed in subsequent years
Q36. If NAV of Let out house property is negative, then
Q26. Mr. PC owns a house property which has fair rent of which deduction shall be allowed u/s 24
Rs. 1,50,000, standard rent Rs. 1,20,000 & actual rent of (a) 24(a) & 24(b) (b) Only 24(a) (c) Only 24(b)
1,30,000. Municipal taxes paid during the AY 2019-20 for (d) 24(a) or 24(b) at the choice of assessee.
the past 7 years is Rs. 1,40,000. NAV =
(a) Rs. 20,000 (b) Nil (c) Rs. 10,000 (d) None Q37. Interest on borrowed capital accrued upto the end of
PY prior to the PY of completion of construction:
*Q27. A house property whose fair rent is Rs. 1,20,000 is (a) allowed as a deduction in the year of completion of
vacant throughout the previous year. Municipal taxes paid construction
for the house property are Rs. 20,000. Its NAV = (b) allowed in 5 equal annual instalments from the year of
(a) Rs. 1,20,000 (b) Nil completion of construction
(c) Rs. 1,00,000 (d) (Rs. 20,000) (c) allowed in the respective year in which the interest
accrues (d) Not allowed
*Q28. The maximum amount of deduction of Interest on
borrowed capital in case of one house which is self- Q38. Any person who has taken loan before 1.4.1999 for
occupied shall be (loan was taken on 15.12.1999) purchase or construction of the house which is self-
(a) Rs. 2 lacs (b) Rs. 30,000 (c) Rs. 3 lacs (d) Nil occupied, maximum deduction for the interest shall be.
(a) Rs. 2 lacs (b) Rs. 30,000 (c) Rs. 3 lacs (d) Nil
Q29. Unrealized rent realized subsequently then its tax
treatment is given u/s. Q39. Municipal value is Rs. 1,20,000 whereas its annual
(a) 25C (b) 25B (c) 25A (d) 26 rent received is Rs. 1,50,000. Municipal taxes of the house
property is Rs. 20,000 out of which Rs. 15,000 has been
*Q30. Mr. PC is owner of a big house which is let out at the paid during the AY 2019-20. NAV =
Rent of Rs. 20,000 pm. Municipal Value of the House Rs. (a) Rs. 1,30,000 (b) Rs. 1,35,000
15,000 pm, Fair Rent Rs. 21,000 pm, Standard Rent Rs. (c) Rs. 1,20,000 (d) Rs. 1,50,000
18,000 pm & Municipal Tax paid are Rs. 5,000 pa. Calculate
NAV of the House. Q40. Any person who has taken loan before 1.4.1999 for
(a) Rs. 2,38,000 (b) Rs. 2,16,000 repairs, renovation, reconstruction, addition or alteration
(c) Rs. 2,40,000 (d) Rs. 2,35,000 then interest allowed shall be.
(a) Rs. 2 lacs (b) Rs. 30,000 (c) Rs. 3 lacs (d) Nil
Q31. Mr. PC is owner of a big house which is let out at the
Rent of Rs. 20,000 pm. Municipal Value of the House Rs. Q41. Deduction of unrealized rent is given if certain
15,000 pm, Fair Rent Rs. 21,000 pm, Standard Rent Rs. conditions are satisfied which are given under.
18,000 pm & Municipal Tax paid are Rs. 5,000 pa. Calculate (a) section 27 (b) rule 4
NAV of the house assuming that it was vacant for 2 months. (c) section 29 (d) rule 2B
(a) Rs. 1,95,000 (b) Rs. 2,35,000
(c) Rs. 2,00,000 (d) Rs. 1,76,000 *Q42. Mr. PC took loan from a bank for Rs. 10,00,000 on
1.11.2015 @ 8% p.a for the construction of the house
Q32. Mr. PC is owner of a big house which is self-occupied which is self-occupied. Construction of the house got
for the full year. Municipal Value of the House Rs. 15,000 completed on 15.3.2019. Compute interest allowed as
pm, Fair Rent Rs. 21,000 pm, Standard Rent Rs. 18,000 pm deduction u/s 24(b) for AY 2019-20.
& Municipal Tax paid are Rs. 5,000 pa. Calculate NAV. (a) Rs. 1,18,667 (b) Rs. 1,50,000c
(a) Rs. 2,00,000 (b) Rs. 2,16,000 (c) Rs. 30,000 (d) Rs. 80,000
(c) Nil (d) None of the above
23: c 24: c 25: c 26: b 27: d 28: a 29: c 30: d 31:a 32: c 33: b
34: b 35: c 36: c 37: b 38: b 39: b 40: b 41: b 42: a
Q43. Mr. PC borrowed Rs. 10,00,000 @ 12% p.a. on Q52. Mr. PC was allowed deduction of unrealized rent to
1.4.2014 for construction of house property which was the extent of Rs. 40,000 in the past when unrealized rent
completed on 2.4.2018. The amount of loan is still unpaid. was also Rs. 40,000. He is able to recover from the tenant
What will be the deduction of interest for AY 2019-20 if the Rs. 35,000 as full & final settlement during AY 2019-20.
house property is self-occupied? Amount taxable u/s 25A:
(a) Rs. 30,000 (b) Rs. 2,16,000 (a) Rs. 35,000 (b) Rs. 24,500
(c) Rs. 1,08,000 (d) Rs. 2,00,000 (c) Rs. 40,000 (d) Fully Exempt.
Q44. Mr. PC acquired a property in April, 2018 for self- Q53. Mr. PC was allowed deduction of unrealized rent to
residential use. The loan interest payable to SBI for AY the extent of Rs. 40,000 in the past when unrealized rent
2019-20 amounts to Rs. 2,10,000. The amount eligible for was Rs. 50,000. He is able to recover from the tenant Rs.
deduction u/s 24(b) = 30,000 as full & final settlement during the AY 2019-20. He
(a) Rs. 30,000 (b) Rs. 2,10,000 is liable for tax on.
(c) Rs. 2,00,000 (d) Rs. 1,50,000 (a) Rs. 21,000 (b) Rs. 35,000
(c) Rs. 28,000 (d) Rs. 14,000
*Q45. Mr. PC borrowed Rs. 5 lacs @ 12% p.a. on 1.4.2014
for construction of house property which was completed Q54. In case the property is owned by co-owners & it is let
on 15.3.2018. The amount is still unpaid. Deduction of out, income from such property shall be computed.
interest for AY 2019-20__. (a) separately for each co-owner
(a) Rs. 60,000 (b) Rs. 96,000 (b) it will be first computed ignoring the co-ownership &
(c) Rs. 36,000 (d) Rs. 2,40,000 then distributed amongst co-owners.
(c) Shall not be calculated at all
*Q46. Mr. PC took loan from a bank for Rs. 1,00,000 on (d) None of the above
1.1.2015 @ 12% p.a for the construction of the house
which is self-occupied. Construction of the house got *Q55. Mr. PC has taken a house property on lease for 15
completed on 1.1.2019 & loan was repaid on 31.1.2018. years from Mr. Bharat & let out the same to Mr. Gattu.
Compute deduction u/s 24(b) for AY 2019-20. Income from such house earned by Mr. PC is taxable u/h__.
(a) Rs. 19,400 (b) Rs. 7,400 (a) IFOS (b) PGBP
(c) Rs. 12,000 (d) Rs. 49,000 (c) Income from House Property as Mr. PC is the deemed
owner of house property. (d) None
*Q47. Interest of borrowed capital from outside India is
deductible while calculating Income from HP if condition Q56. When share of each co-owner in a house property is
given u/s ___ is satisfied not definite, the income from such property shall be.
(a) 25B (b) 22 (c) 25 (d) 25A (a) Taxed equally (b) Exempt from tax
(c) Taxed as AOP (d) Taxed as BOI
Q48. If an assessee has borrowed money for purchase of a
house & interest is payable outside India. Such interest Q57. Mr. PC & Mr. P are co-owners of a self- occupied
shall be ____. property. They own 50% share each. Total Interest paid by
(a) Allowed as deduction (b) not allowed as deduction the co-owners being Rs. 2,10,000. The interest paid by each
(c) be allowed as deduction if tax is deducted at source co-owner during the previous year on loan (taken for
(d) be allowed as deduction if the tax is deducted at source acquisition of property during the year 2004) is Rs.
or receiver of interest has paid tax on it in India 1,05,000 each. The amount of allowable deduction in
respect of each co-owner is:
Q49. Which of the following interests are allowed as (a) Rs. 1,05,000 (b) Rs. 2,10,000
deduction while computing Income from HP: (c) Rs. 2,00,000 (d) Rs. 1,00,000
(a) Interest on unpaid interest
(b) Interest on fresh loan taken to repay original loan. Q58. Income from property owned by a partnership firm
(c) Amount paid as brokerage for arrangement of loan is assessed in the hands of ____.
(d) None of the above (a) Partners (b) Firm (c) Either partner or firm
(d) Depends on the provision in deed.
Q50. Mr. PC received Rs. 30,000 as arrears of rent during
AY 2019-20. Amount taxable u/s 25A: Q59. The concept of Deemed Ownership is given u/s ____.
(a) Rs. 30,000 (b) Rs. 21,000 (a) 24 (b) 25 (c) 29 (d) 27
(c) Rs. 20,000 (d) Rs. 15,000
Q60. Which out of the following is not a case of deemed
Q51. Mr. PC received Rs. 90,000 in May, 2018 towards ownership of house property?
recovery of unrealised rent, which was deducted from (a) Transfer of house property to a spouse for inadequate
actual rent during PY 2016-17 for determining annual consideration
value. Legal expense incurred in relation to unrealized rent (b) Transfer of house property to a minor child for
is Rs. 20,000. Amount taxable u/s 25A for AY 2019-20 is: inadequate consideration
(a) Rs. 70,000 (b) Rs. 63,000 (c) Individual who is holder of an impartible estate
(c) Rs. 60,000 (d) Rs. 49,000 (d) Co-owner of a house property
43: d 44: c 45: b 46: b 47: c 48: d 49: b 50: b 51: b

52: b 53: d 54: b 55: c 56: c 57: a 58: b 59: d 60: c
Q61. Mr. PC gifted his house property to his wife, Mrs. PC, Q66. Mr. PC is owner of one self-occupied house property
in 2011. She has let out the house property @ Rs. 50,000 in Mumbai for his residence. Fair rent of that property is
p.m. The Income from such house property will be taxable Rs. 5,06,000 per annum. Municipal valuation is Rs.
in the hands of. 5,88,000. Municipal taxes paid are Rs. 50,000 including Rs.
(a) Mrs. PC since she is the owner of the house. 1,000 for earlier year. House was constructed in December,
(b) Taxable for Mr. PC as he will be treated as deemed 2010 with a loan of Rs. 12,00,000 from SBI taken in
owner of the House Property & liable to tax. However November, 2009. During AY 2019-20 Mr. PC paid interest
income will be first computed as Mrs. PC’s income & of Rs. 2,30,000 which includes Rs. 1,68,000 as current year
thereafter clubbed in the income of Mr. PC. interest. Compute Income from HP for AY 2019-20.
(c) Taxable for Mr. PC as he will be treated as deemed (a) Loss of Rs. 30,000 (b) Loss of Rs. 1,68,000
owner of the house property & liable to tax. (c) Loss of Rs. 2,00,000 (d) Loss of Rs. 1,50,000
Q67. Mr. PC owns two house properties. First property
Q62. Mr. PC gifted his house property to his married minor was used half for running his business & the other half was
daughter. The income from such house property shall be let-out at Rs. 40,000 per month. The second property was
taxable in the hands of. wholly used as a residence by Mr. PC. Municipal value of
(a) Taxable for Mr. PC as deemed owner the two properties was the same at Rs. 7,20,000 each p.a &
(b) Taxable for Mr. PC. However, it will be first computed municipal taxes paid are 10%. Mr. PC’s income from HP for
as minor daughter’s income & clubbed in income of Mr. PC. AY 2019-20 will be
(c) Taxable as income of married minor daughter (a) Rs. 3,13,600 (b) Rs. 3,10,800
(d) None of the above (c) Rs. 2,28,560 (d) Rs. 6,32,160
Q63. When a house property is let-out throughout the year *Q68. Mr. PC is owner the House which has two floors. The
for Rs. 22,000 p.m & municipal tax paid for current year is ground floor is let out at Rs. 40,000 pm & first floor is self-
Rs. 24,000 & for the earlier year paid now is Rs. occupied. Municipal Taxes paid for full house are Rs.
16,000, the income from house property = 80,000 pa & interest on borrowed capital for full house
(a) Rs. 1,68,000 (b) Rs. 1,56,800 payable is Rs. 45,000 pa. Calculate income from House
(c) Rs. 1,84,800 (d) Rs. 2,24,000 Property AY 2019- 20.
(a) 2,63,000 (b) Rs. 2,85,000
Q64. Mrs. PC let out a property for Rs. 20,000 per month (c) Rs. 2,22,500 (d) Rs. 22,500
during the AY 2019-20. The municipal tax on the let-out
property was enhanced retrospectively. Hence, she paid Q69. PC Ltd. is owner of the House Property which is let
Rs. 60,000 as municipal tax which included arrears of out on Rent @ Rs. 60,000 pm. PC Ltd. has paid Municipal
municipal tax of Rs. 45,000. Her income from house Taxes of Rs. 80,000 pa. It took a loan from bank in Australia
property is for purchasing this house. It has paid interest to the bank
(a) Rs. 1,80,000 (b) Rs. 1,26,000 of Rs. 1,20,000 pa. Calculate House Property income if PC
(c) Rs. 1,57,500 (d) Rs. 1,36,500 Ltd. has not done TDS on such interest & neither has
Australian bank paid tax on this.
Q65. When a house property is let out for a monthly rent (a) Rs. 4,98,000 (b) Rs. 7,20,000
of Rs. 25,000 during the AY 2019-20 & maintenance (c) Rs. 4,48,000 (d) Rs. 6,40,000
expenses by way of salary to sweeper & watchman is Rs.
6,000 per month, income from house property would be.
(a) Rs. 2,28,000 (b) Rs. 2,10,000
(c) Rs. 3,00,000 (d) Rs. 2,50,000
61: b 62: b 63: d 64: a 65: c 66: c 67: b 68: a 69: c
4C. PROFIT & GAINS FROM BUSINESS & PROFESSION
Q1. The term “business” is defined u/s _______ Q14. Export incentives received by an assessee are -
(a) 2(36) (b) 2(13) (c) 2(14) (d) Not defined (a) Exempt (b) Taxable u/h PGBP
(c) Exempt up to certain limits & balance is taxable u/h
Q2. The term “Profession” is defined u/s _________ PGBP. (d) Taxable u/h IFOS
(a) 2(36) (b) 2(13) (c) 2(14) (d) Not defined
Q15. Export incentives received by an assessee includes -
Q3. The term ‘Profession’ includes Vocation is given in (a) Profit on sale of import entitlements or Cash assistance
(a) 2(36) (b) 2(13) (c) 2(14) (d) 2(47) against exports from GOI.
Q4. Business includes any ___ (b) Customs duty or Excise repaid.repayable as drawback.
(a) Trade & Commerce (b) Manufacture (c) Profit on transfer of Duty Entitlement Passbook
(c) Any Adventure in the nature of Trade, Commerce, Scheme.Duty-Free Replenishment Certificate.
Manufacture. (d) All of the above (d) All of the above
Q5. ____ requires some degree of learning. Q16. Any sum received under an agreement, for not
(a) Business (b) Profession carrying out any activity in relation to any business or
(c) Vocation (d) All of the above profession or for not sharing any know-how, patent,
copyright, trade mark likely to assist in the manufacture or
Q6. Under Income tax act, business, profession & vacation processing of goods or provision for services etc is taxable
are ________ u/h
(a) Taxed under different head (a) IFOS (b) Salary (c) PGBP
(b) Treated alike but taxed under different head (d) Such agreement is void since it is in restrain of trade.
(c) Treated alike & taxed under the same head
(d) Not taxed at all *Q17. Remuneration to Partners is taxable in the hands of
the Partner to the extent ____.
Q7. Application of Profit from business or profession is ____ (a) Always (b) Not taxable at all
for Income Tax Act. (c) deductible to the firm (d) not deductible to the firm
(a) Material (b) Immaterial
(c) Depends on the discretion of AO Q18. Any payment received by the employer on the
(d) Depends on the discretion of Assessee. maturity of the Keyman Insurance Policy for which
premium was paid by such employer shall be considered
Q8. Illegal incomes are ___ under Income Tax Act. to be income of the employer u/h
(a) Taxable (b) Exempt (a) PGBP (b) Salary (c) IFOS (d) None
(c) Taxable in certain cases only
(d) Exempt in certain cases only *Q19. In case of conversion of SIT into capital asset, ____
Q9. Profits & Gains of any business or profession carried would be taxed u/h _____.
on ____ by the assessee is taxable u/h PGBP. (a) SDV on the date of conversion, Capital gains
(a) for the whole year (b) at any time during the year (b) FMV on the date of conversion, Capital gains
(c) in the last year (d) Consistently (c) FMV on the date of conversion, PGBP
(d) SDV on the date of conversion, PGBP
Q10. Capital Losses are ____ under Income Tax Act.
(a) Taxable (b) Exempt Q20. Perquisite received by the assessee during the course
(c) Not Deductible (d) Deductible of his business/profession is taxable u/h
(a) PGBP (b) Salary (c) IFOS (d) None
Q11. Capital Receipt are ____ under Income Tax Act.
(a) Taxable (b) Exempt Q21. Which of the following income is not chargeable u/h
(c) Taxable in certain cases only PGBP?
(d) Exempt in certain cases only (a) Profits & gains of business carried by an assessee at any
time during the previous year
*Q12. Mr. P who was carrying on agency business, (b) Income derived by a trade, professional association
received a sum of Rs. 5,00,000 from his principal for from specific services performed for its members
termination of agency. Compensation amount so received (c) Winnings from lottery
shall be ________. (d) Salary received by a partner of a firm from the firm in
(a) Exempt as it is capital receipt which he is a partner
(b) Exempt as it is ex-gratia payment
(c) Fully taxable u/h PGBP (d) Taxable u/h IFOS Q22. Which of the following income is taxable u/h PGBP?
(a) Cash Compensatory Support & Duty Drawback
Q13. Income of a trade or professional association, from (b) Sum received under a keyman insurance policy
specific services performed for its members shall be. (c) Both of the above (d) None of the above
(a) Exempt (b) Taxable u/h PGBP
(c) Taxable u/h IFOS (d) Partly taxable & partly exempt
1: b 2: d 3: a 4: d 5: b 6: c 7: b 8: a 9: b 10: c 11: c
12: c 13: b 14: b 15: d 16: c 17: c 18: a 19: c 20: a 21: c 22: c
Q23. Under the Income-tax Act, dividend derived from the Q34. If the owner uses his own premises for his business,
shares held as SIT is taxable u/h ____. Notional Rent shall ___ as deduction.
(a) IFOS (b) PGBP (c) Capital gains (a) be allowed (b) Not allowed
(d) Either capital gains or PGBP as the case may be (c) Depends on the AO (d) Depends on the Assessee.
Q24. Under the Income-tax Act, 1961 Profit from Q35. An assessee uses P&M for carrying on his business.
speculative business is taxable under the head: U/s 31, he shall be eligible for deduction on account of:
(a) PGBP (b) IFOS (c) IFOS or PGBP (d) Not taxable (a) Both capital & revenue expenditure on repairs
(b) Revenue expenditure on repairs
Q25. Which of the following transactions are not deemed (c) Revenue expenditure on repairs + l.5th of capital
to be speculative transactions? expenditure on repairs (d) both (a) & (b)
(a) Hedging Contract in respect of Raw Materials or
Merchandise, stocks or shares Q36. Computation of depreciation is given u/s
(b) Forward contracts (a) 30 (b) 31 (c) 32 (d) 33
(c) Trading in derivatives or commodity derivatives
(d) All of the above Q37. It is mandatory to claim depreciation
(a) True (b) False
Q26. According to section 145, an assessee can follow ___.
(a) only cash basis of accounting Q38. Depreciation is computed on a single asset rather
(b) only accrual basis of accounting than group (block) of asset.
(c) any of (a) or (b) (d) both (a) & (b) (a) True (b) False
Q27. For computation of business income for some Q39. The depreciation is allowed to ___.
specified assessees, the assesses has to follow. (a) Owner of asset
(a) Accounting standards prescribed by ICAI (b) Owner of asset, whether fully owned or partially owned
(b) Accounting standards notified by the finance minister (c) The lessee of the asset (d) The tenant of the asset
(c) No accounting standards
(d) Accounting standard notified by CBDT in the name of Q40. The depreciation is allowed to ___.
ICDS. (a) Registered owner (b) Beneficial owner
(c) Either (a) or (b) (d) Both (a) or (b)
Q28. If assessee is following cash basis of accounting, then
he can’t claim depreciation since it is a non-cash item. *Q41. If Tenant has incurred any Capital Expenditure on
(a) True (b) False construction, renovation, extension of the building taken
on lease.rent, ___.
Q29. As per section 38(2), when asset is not used (a) He is allowed the deduction of rent paid
exclusively for the purpose of business, then deduction ___. (b) He cannot take depreciation on such capital expenditure
(a) shall be restricted to a fair proportionate part (c) he can take depreciation on such capital expenditure.
(b) may be restricted to a fair proportionate part (d) he can take deduction of material incurred.
(c) shall not be restricted to a fair proportionate part &
allowed fully Q42. To claim depreciation on building, ownership of land is:
(d) shall be restricted to a fair proportionate part thereof (a) Not Necessary (b) necessary
which AO may determine having regard to use of such (c) Land has nothing to do with building (d) None
asset for the purposes of business or profession.
Q43. “Put to use” mean actual use of the asset rather
Q30. ______ Repairs for building are deductible u/s 30. making on asset ready to use.
(a) Capital (b) Revenue (current) (a) True (b) False
Q44. Even if the asset is used for ___ during the year, ____
Q31. If firm runs its business in the premises owned by one shall be allowed Except for ___ of use of asset.
of its partners, rent payable to the partner will ____ as (a) 180; 50% depreciation; last year
deduction. (b) a single day; full depreciation; first year
(a) be fully allowed (b) Not allowed (c) 180; full depreciation; last
(c) Allowed to the extent it is reasonable & is not excessive. (d) a single day; 50% depreciation; first year
(d) Firm cannot carry on business in partner’s premises. Q45. When shall depreciation be restricted to 50% of
depreciation allowed?
Q32. Rates & taxes paid to the government or local bodies
(a) If asset is put to use for less than 180 days in any year
are deductible u/s 30 on ___
(b) If asset is put to use for less than 180 days in the year
(a) Due basis (b) Payment basis
of acquisition
(c) Earlier of (a) or (b) (d) Later of (a) or (b)
(c) If asset is put to use for < 200 days in year of acquisition
Q33. Incomes taxable u/h PGBP are given in section ___ (d) None of the above
(a) 28 (b) 41 (c) 176 (d) All of the above
23: a 24: a 25: d 26: c 27: d 28: b 29: d 30: b 31: c 32: b 33: d 34: b
35: b 36: c 37: a 38: b 39: b 40: c 41: c 42: a 43: a 44: b 45: b
*Q46. An assessee purchased an asset on 21st September Q57.Block of asset means assets having _____
2018 on which rate of depreciation is 40%. The asset was (a) Same Class (b) Same rate
put to use on 30.11.19. How much depreciation shall be (c) Same class & same Rate of depreciation (d) Same type
allowed to assessee on such asset during the period ended
31st March 2019 & 31st March, 2020? Q58. Where a part of the block of asset is sold for a price
(a) Nil, 40% (b) 20%, 20% (c) 20%, Nil (d) Nil, 20% less than the opening WDV + Cost of assets, if any, acquired
during the year, the balance amount shall be treated as __.
*Q47. If a new machinery is purchased on 15.4.2017 & put (a) Short-term capital loss (b) Terminal depreciation
to use for the purpose of the business on 2.1.2019, (c) WDV for purpose of charging current year depreciation
depreciation would be allowable at the rate of. (d) None of the above
(a) 7.5% (b) 15% (c) 10% (d) 20%
*Q59. While calculating WDV for depreciation, ____ shall be
Q48. Use of asset includes ___. subtracted from Opening WDV in case of sale of asset.
(a) Active use (b) Passive use (a) Cost of the sold asset. (b) Sale value of the sold asset
(c) Both (a) & (b) (d) Put to use (c) FMV of the sold asset. (d) WDV of the sold asset.
Q49. If the asset is used Partly for Business & partly for Q60. Dr. Johar has surgical equipment whose WDV as on
Personal purposes, then _____ depreciation 1.4.2018 was Rs. 4,10,000. He acquired some more
is allowed as deduction u/s 32 & ____ depreciation should equipment in December 2018 for Rs. 3,50,000. He sold
be deducted from WDV. equipment in March 2019 Rs. 2,00,000 whose original cost
(a) Full depreciation; Proportionate to business was Rs. 1,70,000. WDV of the block for depreciation is -
(b) Proportionate to business; Full depreciation (a) Rs. 5,90,000 (b) Rs. 5,60,00
(c) Proportionate to business; proportionate to business (c) Rs. 7,30,000 (d) Rs. 4,30,000
(d) Full depreciation; Full depreciation.
Q61. The W.D.V. of a block (Plant & Machinery, rate of
Q50. Mr. P , deriving business income, owns a car whose depreciation 15%) as on 1.4.2018 is Rs. 3,20,000. A second
WDV as on 01.04.17 was 3,00,000. This is the only asset in hand ‘machinery costing Rs. 50,000 was acquired on
the block of assets with rate of 15%. It is estimated that 1.9.2018 but put to use on 1.11.2018. During Jan 2019, part
one-third of the total usage of the car is for personal use in of this block was sold for Rs. 2,00,000. The depreciation for
both years. WDV of the block of assets as on 31.03.19 is : AY 2019- 2020 is :
(a) Rs. 2,16,750 (b) Rs. 2,55,000 (a) Rs. 21,750 (b) Rs. 25,500
(c) Rs. 2,43,000 (d) None of the above (c) Rs. 21,125 (d) Rs. 12,750
Q51. If asset is used Partly for Business & partly for *Q62. W.D.V. of block having 5 machines for which
agriculture, then _____ depreciation is allowed as deduction depreciation rate is 15% as on 1.4.2018 is Rs. 5,00,000. 1
u/s 32 & depreciation ___should be deducted from WDV. new machine amounting to Rs. 1,00,000 was acquired on
(a) Full depreciation; Proportionate to business 1.1.2019 & put to use on 1.2.2019 . During the AY 2019-
(b) Proportionate to business; Full depreciation 2020 i.e. PY 2018-2019, 2 old machinery are sold for Rs.
(c) Proportionate to business; proportionate to business 5,40,000. Depreciation to be allowed for this block:
(d) Full depreciation; Full depreciation. (a) Rs. 9,000 (b) Rs. 4,500
(c) Rs. 5,000 (d) Rs. 5,400
Q52. Depreciation is allowed in case of ____.
(a) Tangible assets (b) Intangible assets (c) Both *Q63. When an asset has been destroyed in fire & assessee
has received insurance compensation which is non-
Q53. Plant means any asset which is essential to carry out monetary. The value of such compensation
the business & includes ____. (a) Shall not be deducted from WDV
(a) Ships, vehicles (b) Scientific apparatus & surgical (b) Shall be deducted from WDV in the year of receipt
(c) books (d) All of the above (c) Shall be deducted from WDV even if the same has not
been actually received (d) None of the above
Q54. Plant means any asset which is essential to carry out
the business but does not includes *Q64. J Ltd. owns machinery (rate of depreciation is 15%),
(a) Tea bushes or livestock etc. (b) animal, human body WDV of which as on 1st April, 2018 is Rs. 30 lacs. Due to fire,
(c) Stock- in-trade; Buildings. (d) All of the above entire assets in the block were destroyed & insurer gave a
similar machinery which has FMV of Rs. 22,00,000. The
Q55. _____ will not form part of the block of asset.
eligible depreciation in respect of this machinery is -
(a) Land (b) Personal Assets
(a) Rs. 4.5 lac (b) Rs. 75,000 (c) Rs. 5 lac (d) Nil
(c) Intangible assets (d) Both (a) & (b)
*Q65. J Ltd. owns machinery (rate of depreciation is 15%),
Q56. Mr. P acquired a building for Rs. 15 lakh in June, 2016
WDV of which on 1st April, 2018 is Rs. 30 lacs. Due to fire,
in addition to cost of land beneath the building of Rs. 3 lakh.
entire assets in the block were destroyed & insurer paid Rs.
It was used for personal purposes until he commenced
25,00,000. Eligible depreciation on this machinery is -
business in June, 2017 & since then it was used for
(a) Rs. 4,50,000 (b) Rs. 75,000
business purposes. Eligible Depreciation eligible is:
(c) Rs. 5,00,000 (d) Nil
(a) Rs. 1.5 lac (b) Rs. 75000 (c) Rs. 37500 (d) Rs. 121500
46: a 47: a 48: c 49: c 50: c 51: b 52: c 53: d 54: d 55: d
56: a 57: c 58: c 59: b 60: b 61: a 62: b 63: a 64: a 65: d
Q66. The rates of depreciation given u/s 32 & rule 5 are. Q78. Printing or Printing & Publishing amounts to ____ &
(a) Minimum rates for depreciation Assessee engaged in such business is ____ for Additional
(b) Maximum rates for depreciation Depreciation u/s 32(1)(iia).
(c) Only rates of deprecation (a) Services; not eligible (b) manufacture; eligible
(d) Can’t say (c) Services; eligible (d) manufacture; not eligible
Q67. Rate of depreciation of furniture & fitting is. *Q79. Additional depreciation on specified asset which has
(a) 15% (b) 10% (c) 18% (d) 20% been put to use for less than 180 days during PY shall be:
(a) 50% allowed in the current PY & 50% shall be allowed
Q68. Rate of depreciation chargeable on temporary in next PY
wooden structure in the nature of building is (b) 100% of additional depreciation in the current PY.
(a) 25% (b) 10% (c) 40% (d) 100% (c) 50% will be deductible while computing WDV of the
next previous year
Q69. Rate of depreciation of intangible assets is. (d) Both (a) & (c)
(a) 15% (b) 10% (c) 25% (d) 20%
Q80. Additional Depreciation is available at the rate of ____
Q70. A car is imported on 1.4.18 by J ltd. for use by its of actual cost of machinery
employee. J ltd is allowed depreciation on such car at: (a) 20% (b) 15% (c) 18% (d) Nil
(a) 15% (b) 20% (c) 40% (d) Nil
Q81. If P Ltd invests Rs. 30 crore to acquire & install on
Q71. GGC Ltd. incurred capital expenditure of Rs. 1,50,000 15.7.2018 specified new P&M during PY 2018 - 19. It shall
on 1.4.2018 for acquisition of patents & copyrights. Such be allowed additional depreciation of Rs. __?
expenditure is ___. (a) Rs. 3 cr (b) Rs. 4.5 cr (c) Nil (d) Rs. 6 cr
(a) Eligible for deduction in 14 years from AY 2019-2020.
(b) Eligible for deduction in 5 years from AY 2019-2020. Q82. Additional Depreciation is available at the rate of ___
(c) Subject to depreciation @ 25% u/s 32 of actual cost of machinery in the state of Andhra Pradesh,
(d) Subject to depreciation @ 15% u/s 32 Telangana, Bihar, West Bengal.
(a) 35 % (b) 15% (c) 20 (d) Nil
Q72. Any New P&M installed to Manufacture or Produce
any Article by using any technology or other know-how Q83. Additional depreciation will be ____ normal depreciation
developed in Laboratory owned.financed by government (a) Clubbed with (b) Over & above
or by public sector company or University.recognized (c) included (d) None of the above
institution shall qualify for depreciation @ ___.
(a) 15 % (b) 20 % (c) 40 % (d) Nil Q84. Additional depreciation shall be _____ from WDV.
(a) Included (b) Added
Q73. Additional depreciation is allowed to which assessee ? (c) Reduced (d) Merged
(a) Industrial undertaking
(b) Industrial undertaking or assessee who is engaged in Q85. GGC Ltd. is located in a backward area in Andhra
generation or generation & distribution of power. Pradesh & acquired some machinery for Rs. 20 lakhs on
(c) Engaged in any kind of business 10.8.2018. It was put to use from 1.1.2019. Total
(d) An electricity undertaking & is engaged in the business depreciation in respect of the said machinery will be:
of generation or generation & distribution of power. (a) Rs. 3,00,000 (b) Rs. 4,00,000
(c) Rs. 7,00,000 (d) Rs. 3,50,000
Q74. Additional depreciation is allowed in case of
(a) All assets acquired by the specified assessee Q86. Investment allowance u/s 32AD shall be allowed to
(b) Eligible P&M acquired by the assessee (a) Company Assessee engaged in manufacture or
(c) New Eligible P&M acquired by the specified assessee production on or after 1st April 2015 in specified backward
(d) New eligible P&M & F&F acquired by specified assessee area in Telangana, West Bengal, Andhra Pradesh or Bihar.
(b) Individual & HUF (c) All Assessees
Q75. Assessee purchased imported second-hand (d) Any Assessee engaged in manufacture or production on
machinery & contends that additional depreciation shall or after the 1st April 2015 in specified backward area in
be allowed on same. Is the contention of assessee correct? Telangana, West Bengal, Andhra Pradesh or Bihar.
(a) Valid (b) Invalid
Q87. Investment allowance u/s 32AD shall be allowed @
Q76. Assessee purchased office appliances & contents that ________ of actual cost of machinery
additional depreciation shall be allowed on same. Discuss. (a) 20% (b) 15% (c) 35% (d) Nil
Q88. Lock in period u/s 32AD is _____.
Q77. Additional depreciation is not allowed ____. (a) 3 years from the date of installation
(a) When assessee is not engaged in manufacturing (b) 5 years from the date of installation
(b) When assessee purchases a second-hand machinery (c) 3 years from the date of purchase
(c) When whole of cost of plant is allowed as deduction (d) 5 years from the date of purchase
(d) All of the above
66: b 67: b 68: c 69: c 70: a 71: c 72: c 73: b 74: c 75: b 76: b 77: d
78: b 79: d 80: a 81: d 82: a 83: b 84: c 85: d 86: d 87: b 88: b
Q89. Lock in period u/s 32AD is not applicable in case of Q97. An electricity company charging depreciation on SLM
(a) Company Assessee on each asset separately, sells one of its machinery in April,
(b) Assessee in specified backward area in Telangana, 2018 at Rs. 2,00,000. WDV of the machinery at the
West Bengal, Andhra Pradesh or Bihar. beginning of the year i.e. on 1.4.2018 is Rs. 1,50,000. Cost
(c) Amalgamation or Demerger or business re organisation of acquisition was Rs. 1,80,000. No new machinery was
u/s 47 (xii), (xiiib) or (xiv). However the lock in will be purchased during the year. The profit is treated as -
applicable for remaining period to the amalgamated or (a) Rs. 20,000 as balancing charge u/h PGBP & Rs. 30,000
resulting company. as Capital gains.
(d) Lock-in is always applicable. (b) Rs. 30,000 as balancing charge u/h PGBP & Rs. 20,000
as Capital gains.
Q90. Power generating/power generating & distributing (c) Rs. 50,000 u/h PGBP (d) Rs. 50,000 u/h Capital gains.
company can claim depreciation as per SLM.
(a) True (b) False *Q98. In Case of Succession, Amalgamation, Demerger,
Business Re-organization etc, depreciation shall be
Q91. Electricity companies are allowed depreciation on: calculated on the assumption that ____ & then amount of
(a) Block of asset (b) Each asset separately depreciation so calculated shall be apportioned between
(c) Each asset separately unless the assessee opts for block predecessor & successor in the ratio of _____for which the
of asset system in the first PY of its commencement. asset is ___by them.
(d) Either on block of asset or each asset separately (a) Separately for predecessor & successor
provided the option is exercised in the first previous year. (b) combined for predecessor & successor
(c) no change in ownership has taken place; number of
Q92. In case of electricity companies charging days ; used
depreciation on SLM basis on a single asset if such assets is (d) Change in ownership has taken place; number of
sold for a price less than its WDV, then the assessee shall months ; held
be chargeable for.
(a) Balancing charge (b) Terminal Depreciation Q99. If ABC Ltd. has taken a loan of Rs. 40 lakhs @ 10% p.a.
(c) Capital gains (d) Reduced from Block of asset on 1.4.2018 for purchasing a particular P&M & the
company has made additional payment as under:
Q93. An electricity company charging depreciation on (i) Transportation charges - Rs. 2 lacs.
straight line method on each asset separately, sells one of (ii) Loading & unloading Expenses - Rs. 25,000
its machinery in April, 2018 at Rs. 1,20,000. The WDV of (iii) Payments for the expert staff to install P&M - Rs. 3 lacs.
the machinery at the beginning of the year i.e. on 1st April, (iv) Company has incurred Rs. 4 lacs for construction of a
2018 is Rs. 1,35,000. No new machinery was purchased platform for installing P&M.
during the year. The shortfall of Rs. 15,000 is treated as - The asset was put to use on 1.1.2019. In this case actual
(a) Terminal depreciation (b) Short-term capital loss cost of the asset shall be –
(c) Normal depreciation (a) Rs. 40,00,000 (b) Rs. 52,25,000
(d) Any of the above, at the option of the assessee (c) Rs. 49,00,000 (d) Rs. 49,25,000
Q100. Mr. P acquired an asset for Rs. 5 lacs which includes

Q94. In case of electricity companies charging Rs. 80,000 as GST for which Mr. P has claimed Input Tax
depreciation on SLM basis on a single asset if such assets is credit. Actual cost of acquisition shall be -
sold for a price more than its value but less than its (a) Rs. 5,00,000 (b) Rs. 5,80,000
historical cost then the assessee shall be chargeable for. (c) Rs. 4,20,000 (d) none of the above
(a) Balancing charge (b) Terminal Depreciation
(c) Capital gains (d) Reduced from Block of asset Q101. Mr. P acquires an asset which was previously used
for scientific research for Rs. 2,75,000. Deduction u/s
Q95. An electricity company charging depreciation on 35(l)(iv) was claimed in PY 2014 - 2015. The asset was
straight line method on each asset separately, sells one of brought into use for the business of Mr. P , after the
its machinery in April, 2018 at Rs. 1,40,000. The WDV of research was completed. The actual cost of the asset to be
the machinery at the beginning of the year i.e. on 1.4.2018 included in the block of assets is ___.
2018 is Rs. 1,35,000. No new machinery was purchased (a) Nil (b) FMV on the date of transfer to business
during the year. The excess of Rs. 5,000 is treated as - (c) Rs. 2,75,000 - Notional depreciation u/s 32 upto the
(a) Terminal depreciation (b) Short-term capital loss date of transfer.
(c) Balancing charge (d) Actual cost of the asset Rs. 2,75,000
(d) Any of the above, at the option of the assessee
Q102. Actual cost in case of asset acquired by way of gift,
Q96. In case of electricity companies charging will or inheritance is ___.
depreciation on SLM basis on a single asset if such assets is (a) Actual cost of acquisition of the previous owner
sold for a price more than its historical cost then the (b) WDV to the previous owner
assessee shall be chargeable as ____. (c) FMV of the asset on the date of acquisition of asset from
(a) PGBP as Balancing charge upto cost & capital gains the previous owner.
above cost (d) FMV of the asset on the date of acquisition of asset by
(b) Terminal Depreciation (c) Balancing charge (d) IFOS the previous owner.
89: c 90: a 91: d 92: b 93: a 94: a 95: c
96: a 97: b 98: c 99: b 100: a 101: a 102: b
Q103. Mr. A transfers P&M used in his business for several Q111. If WDV of the block of assets becomes Nil on the last
years for Rs. 20,00,000 to Mr. B. WDV in the books of Mr. A day of the PY but block continue to exist, depreciation
of the said asset was Rs. 5,00,000. FMV of the asset on the admissible for the block of assets will be ____.
date of transfer was Rs. 4,00,000. Determine Actual cost of (a) Nil
asset to Mr. B for computing depreciation u/s. 32. (b) 50% of the value of block of assets on 1 st day of PY
(a) Rs. 20 lac (b) Rs. 4 lac (c) Rs. 16 lac (d) FMV (c) Total value of the block of assets on 1st day of PY
(d) 50% of value of the block of assets on last day of PY
Q104. If in above case, assessee has received a subsidy of
Rs. 2 lac in connection with P&M because it was a non- Q112. Where a part of block of assets is sold for a price
polluting plant, in this case, actual cost of asset shall be ___. more than the opening WDV + Cost of asset acquired
(a) Rs. 50,25,000 (b) Rs. 52,25,000 during the year, if any, the assesses shall be subject to -
(c) Rs. 49,00,000 (d) Rs. 49,25,000 (a) Balancing charge (b) Short-term capital gain
(c) STCG or LTCG depending upon the period after which
Q105. Mr. A acquired an assets on 15.4.2017 for Rs. the block is transferred (d) None of the above
2,00,000, on which depreciation is charged @ 10%. He sold
the asset to Mr. B for Rs. 2,00,000 on 1.4.2018. Again on Q113. Which of the following expenditure on scientific
16.9.2018, the same asset was re-acquired by Mr. A for Rs. research is not allowed as deduction?
2 lac. Compute the actual cost in the hands of Mr. A. (a) Revenue expenses incurred during the previous year
(a) Rs. 2 lac (b) Rs. 1.8 lac (c) Rs. 20,000 (d) FMV (b) Revenue expenses on payment of salary to employees
Q106. Mr. A owns an asset & uses it for the purpose of his engaged in scientific research & purchase of material used
business.profession. A has claimed depreciation in respect in scientific research incurred during 3 years immediately
of such asset. The said asset is transferred by A to Mr. B. preceding the commencement of business
Mr. A then acquires the same asset back from B on lease. (c) Capital expenditure incurred on scientific research
State (i) who will be entitled to claim depreciation & (ii) during the year related to the business
Cost of asset to claim depreciation. (d) Expenditure incurred on acquisition of land during the
(a) Mr. A ; Sale price of the said asset year for scientific research
(b) Mr. B ; Sale price of the said asset
(c) Mr. A ; WDV of the said assets at the time of transfer. Q114. Where the block of the depreciable asset is
(d) Mr. B ; WDV of the said assets at the time of transfer. transferred after 36 months, there will be ___.
(a) STCG (b) LTCG (c) STCG/STCL (d) LTCG/LTCL
Q107. Dr. Sagar purchased a residential building on
1.12.2016 for Rs. 12,00,000 & it was put to use on same Q115. Mr. P owns 2 machineries eligible for depreciation
date. Till 1.12.2018, it was self-occupied as residence. On @ 15%. WDV of these machines as on 1.4.2018 was Rs.
this date, building was brought into use for his medical 25,000 & Rs. 40,000 respectively. No other asset was
profession. Calculate WDV on 1.4.2018 & depreciation acquired in this block during year. One of these machines
allowable for AY 2019-20. ROD = 5%. were sold during PY for Rs. 75,000. Compute capital gain.
(a) Rs. 11,11,500 ; Rs. 55,575 (a) STCG of Rs. 10,000 (b) STCL of Rs. 10,000
(b) Rs. 22,23,000 ; Rs. 1,11,150 (c) LTCG of Rs. 10,000 (d) No Cap gain as depreciation
(c) Rs. 12,00,000 ; Rs. 60,000 would be allowed on the machines left with Mr. P.
(d) Rs. 12,00,000; Nil
Q116. Mr. P owns 2 machineries eligible for depreciation
Q108. In case of transfer in scheme of Amalgamation to @ 15%. WDV of these machines as on 1.4.2018 was Rs.
Indian amalgamated company, Actual cost of the asset in 25,000 & Rs. 40,000 respectively. No other asset was
the hands of amalgamated company shall be - acquired in this block during year. Both the machines were
(a) WDV in the hands of transferor company. sold during PY for Rs. 50,000. Compute capital gain.
(b) WDV in the hands of transferee company. (a) STCG of Rs. 10,000 (b) STCL of Rs. 15,000
(c) Same cost as it would have been if the transferor (c) LTCG of Rs. 10,000 (d) No Cap gain as depreciation
company had continued to hold the asset. would be allowed on the machines left with Mr. P.
Q117. Unabsorbed depreciation which could not be set off
Q109. Mr. P, a retailer acquired furniture on 10th May 2018 in the same AY can be carried forward for __ years.
for Rs. 10,000 in cash & on 15th May 2018 for Rs. 15,000 & (a) 8 (b) Indefinite period of time (c) 4 (d) 12
Rs. 20,000 by a bearer cheque & A/c payee cheque,
respectively. Depreciation allowable for AY 2019-20 is: Q118. P Ltd. has unabsorbed depreciation of Rs. 4 lacs for
(a) Rs. 2,000 (b) Rs. 3,000 (c) Rs. 3,500 (d) Rs. 4,500 PY 2018-19. This can be carried forward ___.
(a) for a maximum period of 8 years & set-off against
Q110. If a block of assets ceases to exist on last day of PY, business income.
but there is WDV left, depreciation allowed will be __. (b) Indefinitely & set-off against business income.
(a) Nil (c) Indefinitely & set-off against any head of income
(b) 50% of the value of block of assets on 1st day of PY (d) Indefinitely & set-off against any head of income except
(c) Total value of the block of assets on 1st day of PY salary.
(d) 50% of value of the block of assets on last day of PY
103: b 104: a 105: b 106: d 107: a 108: c 109: b 110: a

111: a 112: b 113: d 114: c 115: a 116: b 117: b 118: d
Q119. Expenditure on scientific research incurred by the Q128. If donation is made to a national Laboratory or a
assessee shall be allowed if such research _____. university or IIT, deduction shall be _____ of donation made
(a) is related to the business of the assessee (a) 125% (b) 100% (c) 175% (d) 150%
(b) may or may not related to the business of the assesssee
(c) is related to the research specified by the government Q129. Donation to approved association for scientific
(d) none of the above research shall allowed as deduction ____ of donation made.
(a) 125% (b) 100% (c) 175% (d) 150%
Q120. If an assessee carries on any scientific research
related to his business, he shall be allowed deduction u/s Q130. J Ltd. paid Rs. 10 lakh to an approved college to be
35 for. used for scientific research which is unrelated to its
(a) revenue expenditure only business. Amount eligible for deduction u/s 35(1)(ii) is.
(b) capital expenditure only (except land) (a) Rs. 5 lakh (b) Rs. 15 lakh
(c) both revenue & capital expenditure (except land) (c) Nil (d) Rs. 11 lakh
(d) neither revenue nor capital expenditure
Q131. Donation to approved university.college for social
Q121. Certain revenue & capital expenditure on scientific or statistical research is deductible __of donation made
research incurred are allowed as deduction in PY of (a) 125% (b) 100% (c) 175% (d) 150%
commencement of business even if these are incurred.
(a) 5 year immediately before commencement of business Q132. Donation to university for research in social science
(b) 3 year immediately before commencement of business is eligible for deduction at -
(c) Any time prior to the commencement of the business (a) 125% (b) 100% (c) 175% (d) 150%
Q122. A company incurred capital expenditure on Q133. Where an asset used for scientific research for more
scientific research (i) Land Rs. 5 lacs (ii) Building - than 3 years is sold without having been used for other
Rs. 10 lacs (iii) Equipment - Rs. 7 lacs; Amount of purposes, then the sale proceeds to the extent of the cost
expenditure eligible for deduction u/s 35 would be - of the asset already allowed as deduction u/s 35 in the past
(a) Rs. 22 lakh (b) Rs. 15 lakh shall be treated as-
(c) Rs. 17 lakh (d) Rs. 5 lakh (a) Business income (b) Long-term capital gain
(c) Short-term capital gain (d) Exempted income
Q123. Weighted deduction of 150% for in house research
is allowed to ___. Q134. Which of the following is a specified business
(a) any assessee (b) Scientific association eligible for deduction u/s 35 AD?
(c) Company (d) IIT (a) Operating warehousing facility for storage of
agriculture produce
Q124. Weighted deduction of 150% for in houses research (b) Operating leather manufacturing unit
is allowed for ____. (c) Operating unit for manufacture of tooth paste
(a) Revenue expenditures & capital expenditure incurred (d) Units operating in Jammu & Kashmir
during the previous year
(b) Revenue expenditures incurred during PY & during 3 Q135. Where an assessee is carrying on a specified
years immediately prior to commencement of business. business referred to in section 35AD, he shall be allowed
(c) Revenue & Capital expenditure incurred during PY & deduction.
during 3 years immediately prior to commencement of (a) only for revenue expenditure
business. (b) both the revenue & capital expenditure
(d) Revenue expenditures & capital expenditure (except (c) Capital expenditure other than goodwill, land &
cost of Land & Building) incurred during the previous year. financial instruments
(d) both for revenue & capital expenditure other than land,
Q125. If income of a business before claiming capital building & goodwill.
expenditure on scientific research is Rs. 150,000 & capital
expenditure incurred on scientific research is Rs. 2,80,000, Q136. Prior period expenditure shall be allowed as
then Rs. 1,30,000 shall be ____. deduction if _____ in the books of accounts
(a) Business loss (a) Written off (b) Capitalized (c) Always
(b) Unabsorbed capital expenditure on scientific research (d) Incurred 3 years prior to commencement of business.
Q126. Brought forward unabsorbed capital expenditure *Q137. Assessee shall not be allowed _____ from the income
on scientific research can be carried forward ____ years. mentioned u/s 35AD
(a) Indefinite time (b) 8 (c) 5 (d) 10 (a) Deduction u/c VI-A (b) Deduction u/s 16(ia)
Q127. If any amount is donated for research, such research
can be in the nature of _____. Q138. Expenditure incurred on agricultural extension
(a) Scientific research only (b) Social science research project u/s 35CCC is eligible for deduction of ____
(c) Statistical science research (d) all of the above (a) 125% (b) 150% (c) 175% (d) 100%
119: a 120: c 121: b 122 c: 123: c 124: d 125: b 126: a 127: d 128: d
129: d 130: b 131: b 132: b 133: a 134: a 135: c 136: b 137: a 138: b
Q140. Which of the following conditions are applicable in Q149. An assessee paid VRS as per the scheme of voluntary
case of deduction u/s 35AD? retirement amounting to Rs. 8,00,000 on 21st March 2019.
(a) It is not set up by Splitting up or reconstruction of a How much deduction of same shall be allowed to assessee
business already in existence. for PY 2018-19?
(b) It is not set up by transfer of Second-hand Plant & (a) Rs. 1,60,000 (b) Rs. 1,00,000
Machinery. (c) Rs. 1,20,000 (d) Rs. 1,50,000
(c) No deduction shall be allowed under any other section
(d) All of the above Q150. X Ltd. made payment of VRS to its employee Y as
under: PY 2018-19: Rs. 4 lacs; PY 2019-20: Rs. 3 lacs; PY
Q141. Expenditure on rural development programme u/s 2020-21: Rs. 1.4 lacs. Calculate how much deduction will
35CCA is eligible for deduction of ____. be allowed to X Ltd. for AY 2020-21 in respect of the VRS?
(a) 125% except cost of Land & building (a) Rs. 28,000 (b) Rs. 1,40,000
(b) 150% except cost of Land & building (a) Rs. 80,000 (b) Rs. 60,000
(c) 100% of such expenditure incurred
(d) 150% of such expenditure incurred Q151. Which of the following is allowed as deduction u/s 36?
(a) Premium paid for insurance of stock
Q142. Expenditure incurred on agricultural extension (b) Premium paid on lives of partner
project u/s 35CCC is eligible for weighted deduction of __. (c) Insurance premium paid by any mode other than cash
(a) 125% except cost of Land & building on health of employee to insurance company
(b) 150% except cost of Land & building (d) All of the above
(c) 125% of such expenditure incurred
(d) 150% of such expenditure incurred Q152. Bonus.commission given to the Employees is
deductible on ___.
Q143. Expenditure incurred on skill development project (a) Payment basis (b) if not payable as profit or dividend
u/s 35CCD is eligible for weighted deduction of ____. (c) Not deductible (d) Both (a) & (b)
(a) 125% except cost of Land & building
(b) 150% except cost of Land & building Q153. Interest on money borrowed for the purpose of
(c) 125% of such expenditure incurred acquiring a capital asset pertaining to the period after the
(d) 150% of such expenditure incurred asset is put to use is to be -
(a) Capitalized
Q144. Weighted deduction u/s 35CCD is allowed to ___. (b) Treated as revenue expenditure & deductible u/s
(a) all assesses 36(1)(iii).
(b) a company assessee only (c) Either capitalized or treated as revenue expenditure at
(c) all assessee other than a company the choice of assessee.
(d) assessee being an Individual only (d) Neither capitalized or treated as revenue expenditure.
Q145. In the case of company assessee, the total Q154. Interest incurred on the loan taken for purchase of
preliminary expenses incurred are allowed as deduction to the plant & machinery before the commencement of the
extent of 5% of ___. production is to be -
(a) Cost of the project (a) Capitalized (b) Treated as revenue expenditure
(b) Aggregate capital employed (c) Either capitalized or treated as revenue expenditure at
(c) Cost of project or capital employed whichever is higher the choice of assessee
(d) None of the above (d) Neither capitalized or treated as revenue expenditure.
Q146. In the case of non-company assessee, the total Q155. Provision for Bad debt is allowed to be debited to
preliminary expenses incurred are allowed deduction to profit & loss account.
the extent of ____ of the cost of the project (a) True (b) False
(a) 2% (b) 5% (c) 10% (d) 7%
Q156. PC & Co. engaged in trading activity could not
Q147. Preliminary expenses incurred are allowed recover Rs. 5 lakh from a customer. It claimed the entire
deduction in ___. amount as bad debt by writing off in the books of account.
(a) 10 equal instalments (b) 5 equal instalments The aggregate sale made during the year to the party
(c) Full amount (d) Not allowed at all amounts to Rs. 30 lakhs. The amount eligible for deduction
by way of bad debt is -
Q148. The expenditure incurred on payment under (a) Nil (b) Rs. 3 lakhs
voluntary retirement scheme shall be allowed as (c) Rs. 5,00,000 (d) Rs. 6,00,000
deduction in ___.
(a) The previous year it is paid Q157. Which of the following interest are deductible?
(b) Equal instalments in 5 AYs starting from AY in which it (a) Interest on own capital.
is paid (b) Guaranteed interest paid to shareholder on paid-up capital.
(c) Not allowed at all (c) Interest paid on money borrowed for payment of dividend.
(d) Allowed to the extent of Rs. 5,00,000 (d) Interest paid on money borrowed for payment of Tax.
140: d 141: c 142: b 143: b 144: b 145: c 146: b 147: b 148: b
149: a 150: b 151: d 152: d 153: b 154: a 155: b 156: c 157: c
Q158. Discount on a Zero-Coupon Bond is deductible ____ Q168. Business income of a company assesses before
(a) In the year of issue of such bond claiming Rs. 760,000 being 1.5th capital expenditure on
(b) In the year of redemption of such bond family planning is Rs. 740,000. The balance 720,000 shall
(c) over the life of such bond (d) Not deductible be treated as.
(a) Business loss
Q159. Employer’s contribution to PF/SAF/GF is allowed (b) Unabsorbed expenditure on family planning
as deduction in computing income u/h PGBP provided it (c) Terminal depreciation (d) None of the above
has been paid -
(a) before the end of the previous year Q169. Capital expenditure is allowed as deduction u/s 37.
(b) on or before the due date by which the employer is This statement is _________.
required to credit an employee’s contribution to the (a) Valid (b) Invalid
employee’s account in the relevant fund. (c) Partly valid & Partly invalid (d) None of the above
(c) on or before due date for filing ROI u/s 139(1).
(d) before the end of the relevant assessment year Q170. Any expenditure incurred by an assessee for any
purpose which is an offence __.
Q160. Bad debt of business are allowed to be debited as (a) Shall be deemed to be incurred for the purpose of
per section ___ business or profession
(a) 36 (b) 37 (c) 35 (d) 32 (b) Shall not be deemed to be incurred for the purpose of
business or profession
Q161. Bad debts incurred are allowed to be debited in the (c) May be deemed to be incurred for the purpose of
profit & loss account. business or profession
(a) True (b) False (d) None of the above
Q162. Raju succeeded to the business of his father Ramu Q171. If a penalty is paid, it is ______u/s 37(1).
consequent to demise of Ramu 1.11.2018. Raju recovered (a) allowable as deduction (b) not allowable as deduction
Rs. 30,000 due from a customer which was written off by (c) May be allowed as deduction (d) None of the above
late Ramu as bad debt & allowed as deduction. The amount
recovered is - Q172. Penalty in nature of compensation is ____ u/s 37(1).
(a) Not taxable in the hands of Raju (a) allowable as deduction (b) not allowable as deduction
(b) Fully taxable as business income (c) May be allowed as deduction (d) None of the above
(c) Rs. 15,000 being 50% taxable as business income
(d) To be set off against current year bad debts Q173. Which of the following statement is true?
(a) Deduction u/s 37(1) is allowed in respect of capital
Q163. Expenditure incurred on family planning amongst
expenditure
the employees is allowed to
(b) CSR expense is not allowed u/s 37(1)
(a) All assessee (b) A company assessee
(c) Expense in nature of personal exp is allowed u/s 37(1)
(c) An assessee which is a company or cooperative society
(d) An assessee which is a company or a firm.
Q164. Revenue expenditure incurred on family planning Q174. Any sum paid under Act _____ as deduction.
amongst employees of company is allowed as deduction___. (a) Is allowable (b) Is not allowable
(a) In full (b) In 5 equal instalments (c) May be allowed (d) None of the above
(c) In 10 equal instalments (d) None of the above
Q175. Which of the following are not allowed as deduction
Q165. Where a company has incurred a revenue u/s 37?
expenditure of Rs. 1,00,000 towards promoting family (a) Expenditure incurred on keyman insurance policy
planning amongst employees, ___ will be allowed as (b) Expenses incurred in providing freebees to medical
deduction in current year & balance in __ succeeding years practitioner
(a) Rs. 20,000, 4 (b) Rs. 20,000, 5 (c) Rent of Plant & machinery (d) None of the above
(c) Rs. 1,00,000, Nil (d) None of the above
Q176. Any expense on advertisement in any souvenir,
Q166. Capital expenditure incurred on family planning brochure, pamphlet or the like publications by a political
amongst employees of the company assessee is allowed as party ...................... u/h PGBP.
deduction (a) Shall be allowed as deduction
(a) In full (b) In 5 equal instalments (b) Shall not be allowed as deduction
(c) In 10 equal instalments (d) None of the above (c) May be allowed as deduction (d) None of the above
Q167. Where a company has incurred capital expenditure Q177. PC Ltd paid interest of Rs. 5 lacs to Mr. Charles in
of Rs. 1 lac towards promoting family planning amongst USA on 1.1.2019. Tax was deducted on 30 April 2019 &
employees, ____ will be allowed as deduction in the current paid to the government on the same date. Calculate the
year & balance in_____succeeding years amount of disallowance in PY 2018-19.
(a) Rs. 20,000, four (b) Rs. 20,000, five (a) Nil (b) Rs. 1,50,000 (c) Rs. 5,00,000 (d) Rs. 2,50,000
(c) Rs. 1,00,000, four (d) None of the above
158: c 159: c 160: a 161: a 162: a 163: b 164: a 165: c 166: b 167: a
168: b 169: b 170 b: 171: b 172: a 173: b 174: b 175: b 176: b 177: c
Q178. Which of following expenditure for which payment Q189. As per section 40A(2), what kind of expenditure is
is made to a resident are disallowed to the extent of 30% covered __?
unless the TDS has been done: (a) Capital expenditure (b) Revenue expenditure
(a) Interest, Royalty, FTS (b) Commission/brokerage/Rent (c) Both of the above (d) None of the above
(c) Payment to contractors
(d) All expenses on which tax is deductible at source Q190. In case excess Payment for any Expenditure is made
to a related person, ____.
Q179. PC Ltd. paid fees for technical services of Rs. 6 lakh (a) Whole payment is disallowed
but omitted to do TDS & such omission continued till the (b) Whole payment is allowed
due date for filing ROI. The amount of expenditure liable (c) Excess payment is disallowed
for disallowance: (d) Excess payment is allowed
(a) Rs. 1,80,000 (b) Rs. 6,00,000 (c) Rs. 1,20,000 (d) Nil
Q191. Cash payment in excess of Rs. 10,000 is disallowed
Q180. Income tax paid is ____. as a deduction in P&L A/c as per section
(a) Allowed as deduction (b) Not allowed as deduction (a) 40A(2) (b) 40(b) (c) 40A(3) Rule 6DD (d) 40A(4)
Q181. Tax paid by employer on non-monetary perquisites Q192. Cash payment of Rs. 17,000 was made by J Ltd
is _____. against Bill No.l to a contractor engaged in plying of
(a) Allowed as deduction (b) Not allowed as deduction passenger carriage on 29th June 2018. How much amount
is disallowed u/s 40A(3)?
Q182. Salary, bonus, commission or remuneration due to (a) Rs. 17,000 (b) Rs. 10,000 (c) Rs. 27,000 (d) Nil
or received by a working partner from the firm is taxable
for the partner u/h income from: Q193. Limit of Rs. 10,000 U/s 40(A)(3) is applicable for
(a) Salaries (b) IFOS (c) PGBP (d) Cap Gain (a) All Expenditure in a day to a person
(b) All Expenditure in a PY to a person
Q183. Deduction u/s 40(b) shall be allowed to the firm on (c) All Expenditure in a day to all person
account of remuneration paid to ___. (d) One expenditure in a day to a person
(a) any partner (b) major partner only
(c) working partner only (d) all partners Q194. J Ltd purchased goods on credit from D Ltd on
7.5.2018 for Rs. 86,000 for which payment of Rs. 5,000 is
Q184. Remuneration paid to working partner shall be made in cash on 12.5.2018; Rs. 40,000 by bearer cheque on
allowed as deduction to a firm. 30.5.2018 & Rs. 41,000 by A/c payee cheque on 13.6. 2018.
(a) in full (b) subject to limit specified in section 40(b) Amount of disallowance u/s 40A(3) is ____.
(c) none (d) not allowed at all (a) Rs. 15,000 (b) Rs. 30,000 (c) Rs. 40,000 (d) Rs. 86,000
Q185. A firm’s business income is nil/negative. It shall be Q195. Where the payment of an expenditure claimed as
allowed as deduction on account of remuneration to deduction by any assessee carrying on business or
working partner to the maximum extent of __. profession other than who is in transport business exceeds
(a) Lower of Actual Remuneration or Rs. 1,50,000 Rs. 10,000, it should be paid by -
(b) Rs. 150,000 (c) Rs. 125,000 (d) Actual remuneration (a) Crossed Cheque/Crossed Draft
(b) A/c Payee Cheque/Draft/Electronic clearing system
Q186. Calculate what amount is disallowed u/s 40(b) (c) Bearer Cheque (d) Any Mode other Than Cash
where book profit of the firm is Rs. 5,00,000.
Remuneration paid to working partner is Rs. 4,50,000 & Q196. Where an assessee doing a business incurs any
that to non-working partner is Rs. 90,000. expenditure in respect of which payments made to a
(a) Rs. 3.5 lac (b) Rs. 90,000 (c) Rs. 60,000 (d) Rs. 1.5 lac person in a day exceeds Rs. 10,000 should be paid through
account payee cheque or demand draft to claim deduction
Q187. Interest on capital or loan from partner of a firm is for such expenditure. This restriction does not apply to
allowed as deduction to the firm to the extent of __. payments made to:
(a) Rate mentioned in the partnership deed (a) RBI (b) cultivators
(b) 12% p.a. even if it is not mentioned in partnership deed (c) Terminal benefits to employees ≤ Rs. 50,000
(c) Lower of 12% p.a. or at the rate mentioned in deed (d) All of the above
(d) Any rate at the choice of partner
Q197. PC & Co. paid Rs. 40,000 by cash to Mr. Balu a
Q188. Interests on capital or loan received by a partner supplier on 5.9.2018. The cash payment was made on the
from a firm is ____. day on which the bank was on strike. The Amount of
(a) Exempt u/s 10(2A) expenditure liable for disallowance u/s 40A(3) is ____.
(b) Taxable u/h PGBP to the extent it is disallowed as (a) Rs. 40,000 (b) Rs. 12,000 (c) Rs. 20,000 (d) Nil
deduction to the firm u/s 40(b)
(c) Taxable u/h PGBP to the extent it is allowed as Q198. Contribution by employer to URPF is ____ .
deduction to the firm u/s 40(b) (a) Allowed as deduction (b) Not Allowed as deduction
(d) Taxable u/h PGBP on account of interest on capital & (c) Allowed as deduction if paid before DD u/s 139(1)
IFOS on account of loan to the firm (d) None of the above.
178: d 179: a 180: b 181: b 182: c 183: c 184: b 185: a 186: d 187: c 188: c
189: b 190: c 191: c 192: d 193: d 194: d 195: b 196: d 197: d 198: b
Q199. Where a scientific research asset is sold after having Q208. Person carrying on specified profession is required
been used for the purpose of scientific research then the to maintain ___.
sale price upto the cost of acquisition of the asset which has (a) Prescribed books of account in all cases
been allowed as deduction in the past shall treated as ___. (b) Prescribed books of A/c if gross receipt of all 3 Last PY
(a) Business income (b) STCG > Rs. 1,50,000; otherwise No books of A/c to be maintained
(c) LTCG (d) None of the above (c) Prescribed book of account if gross receipt of all 3
preceding PY > Rs. 1,50,000; otherwise such books of
Q200. A business (not being a speculation business) is account as will enable AO to compute him business income.
discontinued on 10.12.1986. At the time there is (d) Any kind of books of A/c as may be desired by assessee.
unadjusted business loss of Rs. 35,000 (i.e., Rs. 10,000 of
PY 1985-86 & Rs. 25,000 pertaining to the period Q209. If a person sets up a specified profession during the
commencing on 1.4.1986 & ending on 10.12.1986). On current previous year, he is _____.
20.5.2018, he recovers a debt of Rs. 48,000 from a debtor (a) Required to maintain prescribed books of account
which was allowed as bad debt in PY 1985-86 (or may be (b) Not required to maintain books of account
in some other year). Taxable profit for PY 2018-19 u/s 41. (c) Required to maintain prescribed books of A/c if gross
(a) Rs. 48,000 (b) Rs. 21,000 (c) Rs. 35,000 (d) Rs. 25,000 receipts of such profession is likely to exceed Rs. 1,50,000;
otherwise such books to enable AO to compute his TI
Q201. P Ltd is liable to pay bonus to its employees for the (d) Any books of A/c may be desired by the assessee.
amount of Rs. 5,00,000 for PY 2018-19 but paid this
amount on 5.11.2019 i.e. after the due date of ITR which Q210. An Individual who has been carrying on non-
was 30.9.2019. How much amount shall be allowed as specified profession is ___.
deduction for bonus in PY 2018-19? (a) not required to maintain any books of account
(a) 100% of bonus (b) 50% of bonus (b) required to maintain book of account of the current
(c) 30% of bonus (d) Nil previous year if the gross receipts of such profession
exceed Rs. 1,50,000.
Q202. Deduction of expenditure on the actual payment (c) required to maintain books of account of the current
basis is allowed to be debited in P&L A/c u/s _____. previous year if the gross receipts of such profession of any
(a) 44AB (b) 32(1) (c) 44AA (d) 43 B of three preceding previous year exceeded Rs. 10 lakhs
(d) required to maintain book of A/c of current PY if in any
Q203. P Ltd is liable to pay bonus to its employees for the of the preceding 3 PYs, his total income exceeded Rs.
amount of Rs. 5 lacs for PY 2018-19 but paid this amount 2,50,000 or gross receipts exceeded Rs. 25 lakhs.
on 5.11.2019. How much amount shall be allowed as
deduction for bonus in subsequent year? Q211. Books of accounts have to be maintained for
(a) 100% (b) 50% (c) 30% (d) Nil minimum of __ years.
(a) 8 (b) 6 (c) 3 (d) 10.
Q204. J Ltd. made provision of Rs. 12 lakh for bonus
payable for the year ended 31st March, 2019. It paid Rs. 7 Q212. For person carrying on business, tax audit is
lakh on 3rd July 2019, Rs. 3 lakh on 30th September 2019, compulsory if the gross receipts of PY exceeds.
& Rs. 3 lakh on 15th December, 2019. The amount eligible (a) Rs. 50 lakhs (b) Rs. 25 lakhs
for deduction u/s 43B would be ____ lacs (c) Rs. 100 lakhs (d) Rs. 30 lakhs
(a) Rs. 10 (b) Rs. 12 (c) Rs. 7 (d) Rs. 3
Q213. For person carrying on profession, tax audit is
Q205. GGC Ltd. contributed Rs. 8.7 lac towards PF A/c of compulsory if the gross receipts of PY exceeds.
its employees. It actually remitted Rs. 5 lac upto 31st March (a) Rs. 50 lakhs (b) Rs. 25 lakhs
2019 & Rs. 2.5 lac upto due date for filing ROI u/s 139(1). (c) Rs. 100 lakhs (d) Rs. 30 lakhs
The amount liable to tax in its assessment would be
(a) Rs. 3,70,000 (b) Rs. 1.2 lac (c) Nil (d) Rs. 8.7 lac Q214. Tax audit is compulsory in case a person is carrying
on business referred u/s 44AD which has gross
Q206. Conversion of unpaid interest into Fresh Loan by turnover/sales/receipts, as the case may be, exceeds.
Bank/FI is treated as __& thus allowed as_. (a) Rs. 140 lakhs (b) Rs. 100 lakhs
(a) not treated as payment; not deductible (c) Rs. 150 lakhs (d) Rs. 200 lakhs
(b) treated as payment; not deductible
(c) not treated as payment; deductible Q215. Due date of furnishing audit report u/s 44AB is:
(d) not treated as payment; not deductible (a) 31st July of AY (b) 30th September of AY
(c) 30 August of AY
th (d) None of the above
Q207. A person carrying specified profession will have to
maintain books of account prescribed by Rule 6F of the Q216. Section 44AD relating to presumptive income of a
Income-tax Rules, 1962, if gross receipts > Rs. 1,50,000 for: business (excluding business covered u/s 44AE) is
(a) All preceding 5 years (b) Any of preceding 5 years applicable in case of.
(c) All preceding 3 years (d) Any of preceding 3 years (a) Any assessee (b) Individual or HUF or a firm
(c) Resident Individual.HUF.firm but excluding LLP
(d) Individual or HUF or a firm other than LLP.
199: a 200: b 201: d 202: d 203: a 204: a 205: b 206: d 207: c
208: c 209: c 210: d 211: b 212: c 213: a 214: d 215: b 216: c
Q217. Where the total turnover of an assessee, eligible for Q225. In the case of section 44ADA, the minimum income
presumptive taxation u/s 44AD, is received entirely by A/c shall be presumed to be ____% of gross receipts.
payee cheque during PY 2018-19, specified rate of (a) 25% (b) 40% (c) 50% (d) 60%
presumptive business income is _____% of Total Turnover.
(a) 5% (b) 6% (c) 7% (d) 8% Q226. If an eligible assesses is engaged in any profession
referred to in section 44ADA & he had opted for
Q218. Presumptive income of taxation referred to in presumptive income scheme u/s 44ADA, assesses shall be:
section 44AD is not applicable to - (a) Be entitled to deduction u/s 30 to 37
(a) Person carrying on profession referred to in sec 44AA (b) Not be entitled to deduction u/s 30 to 37
(b) A person carrying on any agency business (c) Not be entitled to deduction u/s 30 to 37 except on
(c) A person earning income in the nature of commission account of interest on capital & loan from a partner &
or brokerage income remuneration to working partner as per section 40(b).
(d) A person referred to in (a), (b) & (c) above (d) None of the above
Q219. If an eligible assesses is engaged in any business Q227. Dr. P is practicing MBBS & has gross receipt of Rs.
(other than plying, hiring or leasing of goods transport) & 18,40,000. His presumptive income u/s 44ADA would be.
he has opted for presumptive income scheme u/s 44AD, (a) Rs. 1,47,200 @ 8% (b) Rs. 92,000 @ 5%
the assesses shall (c) Rs. 9,20,000 @ 50% (d) Rs. 4,60,000 @ 25%
(a) Be entitled to deduction u/s 30 to 37
Q228. U/s 44AE, Rate per month or part of the month
(b) Not be entitled to any deduction u/s 30 to 37
relevant for AY 2019-20 & maximum number specified are
(c) Not be entitled to deduction u/s 30 to 37 except on
(a) Rs. 7,500 for each goods carriage for assessee owning
account of interest on capital & loan from partner &
not more than 10 goods carriages at any time during PY
remuneration to working partner as per section 40(b).
(b) Rs. 7,500 for each goods carriage in case of an assessee
owning less than 10 goods carriages at any time during PY
*Q220. JSJ & Co. is a partnership firm with 3 partners. The (c) Rs. 1,000 per ton of gross vehicle weight for p.m or part
capital of each partner was Rs. 2 lakh. The partnership for a goods carriage for an assessee owning not more than
deed authorized interest on capital @ 15% & working 10 goods carriages at the end of PY.
partner salary to each partner @ Rs. 10,000 per month for (d) Rs. 1,000 per ton of gross vehicle weight or unladen
all the partners. The total sales amounted to Rs. 70 lakh. weight for p.m or part for heavy goods carriage & Rs. 7,500
The total income of the firm u/s 44AD would be - p.m or part for other goods carriages in case of assessee
(a) Rs. 5,60,000 (b) Rs. 4,32,000 owning not more than 10 carriages at any time during PY.
(c) Rs. 1,28,000 (d) Rs. 3,50,000
Q229. If eligible assessee is engaged in any business other
Q221. Mr. P engaged in retail trade reports a turnover of than plying, hiring or leasing of goods transport & he had
Rs. 43 lacs all of which is received in cash. He deposited Rs. opted for presumptive income scheme u/s 44A, He shall.
30,000 in his PPF A/c held with SBI. His total income is __. (a) be entitled to deduction u/s 30 to section 37
(a) Rs. 1.85 lac (b) Rs. 344000 (c) Rs. 314000 (d) Rs. 4 lac (b) not be entitled to any deduction u/s 30 to section 37
(c) may be entitled to any deduction u/s 30 to section 37
Q222. If an eligible assessee declares profit for any PY as (d) not be entitled to deduction u/s 30 to section 37 except
per 44AD on presumptive basis & he does not declare on account of interest on capital & loan from a partner &
profit on presumptive basis as per section 44AD(1) for any remuneration to working partner as per section 40(b).
of the next 5 consecutive PY, then
(a) He can claim benefit of presumptive income in next PY Q230. Assessee engaged in business of leasing goods
(b) He cannot claim the benefit of presumptive income carriage, Sec 44AE is applicable if the assessee is the owner
during the lifetime. of maximum of _____ goods carriages.
(c) he becomes ineligible to claim benefit of presumptive (a) 12 (b) 8 (c) 5 (d) 10
income as per AD(1) for next 5 AYs subsequent to PY in
which profit has not been declared as per 44 AD. Q231. Mr. P has 5 goods carriage vehicles on 1.4.2018. He
(d) None of the above acquires 3 more vehicles on 11.9.2018. Presumptive
income u/s 44AE if all are light goods carriage vehicles?
Q223. Section 44 ADA relating to presumptive income is (a) Rs. 8,10,000 (b) Rs. 2,02,500
applicable in case of- (c) Rs. 3,64,500 (d) Rs. 6,07,500
(a) Any assessee
(b) Assessee engaged in profession referred to in Sec 44AA *Q232. Mr. P owns 2 commercial vehicles. 1 is heavy good
(c) Resident Assessee engaged in profession referred to in vehicles which can carry weight of 16 tones. This was
Sec 44AA owned for 9 months & 2 days. Other vehicle is light goods
(d) Any assesses who is engaged in any profession vehicle which is owned for 11 months & 12 days. Income
from business of Mr S u/s 44AE is?
Q224. Section 44ADA, relating to presumptive income of (a) Rs. 2.5 lac (b) Rs. 4.2 lac (c) Rs. 4.05 lac (d) Rs. 3.9 lac
the profession referred to in section 44AA, is applicable if
gross receipts of the profession does not exceed ___. Q233. Advance tax is payable by the Assessee opting for
(a) 225 lacs (b)40 lacs (c)50 lacs (d)100 lacs presumptive income in _____ installments.
(a) 4 (b) 3 (c) 2 (d) 1 Before 15th March
217: b 218: d 219: c 220: c 221: c 222: c 223: c 224: c 225: c

226: b 227: c 228: d 229: d 230: d 231: d 232: a 233: d
4D. CAPITAL GAINS
Q1. Which of the following is not a required for charging Q12. Which of the following is not a capital asset?
income tax on capital gains? (a) Personal House (b) Personal Jewellery
(a) There must be a gain arising on transfer of capital asset. (c) Factory Building (d) Personal Car
(b) Capital gains should not be exempt u/s 54
(c) Transfer must be of a capital asset. Q13. Gold utensils are ___ & silver utensils are ____.
(d) The transfer must have been effected in relevant AY (a) Capital asset, capital asset
(b) Not capital asset, capital asset
Q2. As per general rule, capital gain from transfer of capital (c) Capital asset, not capital asset
asset is taxable in which year (d) Not capital asset, not capital asset
(a) PY in which transfer took place (b) Assessment year
(c) PY next to year of transfer (d) None of the above Q14. Which of the following assets is long term capital
assets ?
Q3. Capital gains is calculated when ___. (a) Car used for 5 years for personal purposes before the
(a) Any asset is transferred date of sale.
(b) any capital asset is transferred (b) Jewellery held for 10 years for personal use before its
(c) any asset is transferred or not transferred date of sale.
(d) any capital asset is transferred or not transferred (c) House property held by a property dealer for sale for 4
years before sale.
Q4. Capital gain arises on___. (d) Shares held by Mr. P as investment & sold 11 months
(a) All type of asset (b) All type of capital asset after date of purchase.
(c) Land, Building & Shares only (d) All of the above
Q15. As per the contention of Assessing Officer gold bars,
Q5. Capital Asset is defined u/s: sovereigns etc. used for Puja are capital asset & hence,
(a) 2(13) (b) 2(36) (c) 2(14) (d) 2(47) attracts capital gains. Is the contention of Assessing Officer
valid?
Q6. Capital Asset means: (a) Valid (b) Invalid (c) Partially invalid (d) None
(a) Any Property (Movable.immovable), connected with
assessee’s business,profession or not. Q16. Capital Gain on Transfer of Urban Agricultural Land
(b) Any Securities held by FIIs (invested as per SEBI is ___Agricultural Income & thus it is __.
regulations). (a) treated as ; exempt u/s 10.
(c) Any Rights in Indian Company including Right of (b) treated as ; taxable u/h capital gains.
Management or control. (d) All of the above. (c) not treated as ; exempt u/s 10
(d) not treated as ; taxable u/h capital gains.
Q7. Capital Asset excludes:
(a) SIT/RM.Consumables stores Q17. STCG is a gain arising from the transfer of a land &
(b) Movable Personal effects building which is held by the assessee for not more than
(c) Rural Agricultural Land in India ____ months from the date of its acquisition.
(d) All of the above (a) 36 (b) 12 (c) 24 (d) 48
Q8. Mr. P purchased a car for his personal use for Rs. Q18. Agricultural Land must be used for agricultural
5,00,000 in April, 2018 & sold the same for Rs. 5,50,000 in purposes for ___prior to transfer
July, 2018. The taxable capital gains would be. (a) 5 yrs (b) 3 yrs (c) 2 yrs (d) 10 yrs
(a) Nil (b) Rs. 5,50,000
(c) Rs. 50,000 (d) Rs. 4,00,000 Q19. Listed securities (except bonds & units) are treated
as LTCA, if they are held for more than ____ months .
Q9. Capital asset excludes all assets except ___. (a) 12 (b) 6 (c) 24 (d) 48
(a) Stock in trade (b) Gold deposit bonds
(c) Jewellery (d) Rural agricultural land Q20. If unlisted debentures are sold after 12 months but
before 36 months, the capital gain arising from such sale is
Q10. Which of the following is not a capital asset for Mr. P (a) STCG (b) LTCG
who is employed in a public sector bank?
(a) Urban land (b) Plot of land Q21. Unlisted equity shares are treated as LTCA, if they are
(c) Gold Jewellery (d) Car held for more than ____ months.
(a) 12 (b) 6 (c) 24 (d) 48
Q11. Which of the following is capital asset ?
(a) A maruti dealer holding cars for sale Q22. Units of debt-oriented Mutual funds are treated as
(b) A maruti dealer has honda city car for his personal use. LTCA, if they are held for more than ____ months .
(c) Jewellery held by a jeweller which has been held as SIT. (a) 12 (b) 36 (c) 24 (d) 48
(d) Jewellery held by a jeweller for his personal use.
1: d 2: a 3: b 4: b 5: c 6: d 7: d 8: a 9: c 10: d 11: d
12: d 13: a 14: b 15: a 16: d 17: c 18: c 19: a 20: a 21: c 22: b
Q23. Zero-coupon bonds are treated as LTCA, if they are Q33. Where capital asset became the property of the
held for more than ____ months . assessee in any mode given u/s 49(1), COA shall be:
(a) 12 (b) 36 (c) 24 (d) 48 (a) FMV of asset on the date of acquisition by the assessee
(b) Cost of acquisition in the hands of previous owner
Q24. Units of UTI or equity-oriented MF are treated as (c) Price which is decided by transferor & transferee
LTCA, if they are held for more than__months. (d) Nil
(a) 12 (b) 36 (c) 24 (d) 48
*Q34. No indexation is done in case of.
Q25. Mr. P purchased 1 motor car for his personal use & (a) Bonds/Debenture/ZCBs (b) Slump sale
subsequently it was sold by him within 6 months at profit. (c) LTCA specified u/s 112A. (d) All of the above.
(a) It will be considered as STCG
(b) It will be considered as LTCG Q35. Cost of Improvement includes ___
(c) It is not a capital asset & therefore there shall be no (a) All the expenditures incurred in making any
capital gains (d) None of the above additions/improvements/protect capital asset
(b) Revenue expenditures incurred in making any
Q26. Which of the following would be regarded as additions/improvements/protect capital asset
transfer? (c) Capital expenditures incurred in making any
(a) Transfer of capital asset in scheme of reverse mortgage additions/improvements/protect capital asset.
(b) Transfer of capital asset under gift/will or trust (d) None of the above
(c) Transfer by way of conversion of equity shares from
preference shares (d) Redemption of ZCBs Q36. While computing indexed cost of improvement, it
shall be divided by
Q27. Any transaction allowing possession of any ___ to be (a) CII for the year in which improvement took place
taken or retained in ___ of a contract of the nature referred (b) CII for year in which asset was transferred by assessee
to in section 53A of the Transfer of Property Act is (c) CII for the year being 1.4.2001
regarded as a transfer (d) CII for the year in which asset was held by the assessed
(a) Movable property, whole performance
(b) Immovable property, part performance Q37. Cost of improvement means capital expenditure done
(c) Movable property, Part performance on the value addition of capital asset. It shall be considered
(d) Any Property, Part Performance for calculation of capital gains &
Q28. Securities transaction tax paid by the seller of shares (a) It is always taken as Nil
& units shall (b) always considered irrespective of period when it was
(a) be allowed as deduction as expenses of transfer incurred
(b) not be allowed as deduction as expenses of transfer (c) considered when incurred on or after 1.4.2001
(c) form part of cost in case of tangible assets only (d) considered when incurred before 1.4.2001
(d) form part of cost if asset is purchased before 1.4.2001
Q38. COI incurred before 1.4.2001________in all cases.
Q29. Brokerage paid on sale of shares ___ from the sale (a) Shall be ignored (b) Shall always be considered
consideration. (c) May be considered (d) Is at the discretion of AO
(a) Shall be reduced (b) May be reduced
(c) Shall not be reduced (d) Shall be added Q39. COI incurred by the previous owner shall be ___.
(a) Shall be ignored (b) May be considered
Q30. Cost of acquisition includes ___ (c) Shall be considered if incurred on or after 1.4.2001.
(a) All the expenditures incurred to acquire the asset (d) Is at the discretion of AO
(b) Revenue expenditures incurred to acquire the asset
(c) Only capital expenditures incurred for completing or Q40. Assessee is allowed to opt for FMV on 1.4.2001 in
acquiring title to the property. case of ___.
(d) None of the above (a) All Capital assets (b) All Depreciable capital assets
(c) All Capital assets other than Intangible assets &
*Q31. Securities transaction tax paid by the purchaser of Depreciable assets (d) only self-generated assets
shares & units shall
(a) form part of the cost of such shares & units Q41. Cost of Improvement shall be indexed if ___.
(b) not form part of the cost of such shares & units (a) Improvement is done before 36 months from date of transfer
(c) form part of cost in case of tangible assets only (b) Improvement is done before 24 months from date of transfer
(c) Improvement is done before 12 months from date of transfer
(c) form part of cost if asset is purchased before 1.4.2001
(d) If the asset is LTCA.
Q32. While computing indexed cost of acquisition, COA
shall be divided by Q42. Amount deducted from sale consideration in LTCG is:
(a) CII for the year in which asset was held by the assessee (a) COA & COI (b) Indexed COA & Indexed COI
(b) CII for the year in which asset was transferred (c) Market value as on 1.4.1981 of capital asset
(c) CII for the year being 1.4.2001 (d) only cost of improvement
(d) CII for the year being later of (a) or (c)
23: a 24: a 25: c 26: d 27: b 28: b 29: a 30: c 31: a 32: d
33: b 34: d 35: c 36: a 37: c 38: a 39: b 40: c 41: d 42: b
Q43. Mr. P purchased Gold on 1.1.2017 for Rs. 7 lacs & sells Q50. When can AO refer valuation officer with a view to
this Gold for Rs. 10 lacs on 1.10.2018. Selling expenses ascertain FMV of a capital asset?
have been 1% of the sale price. Calculate Capital Gains for (a) Where the value of the asset claimed by the assessee is
PY 2018-2019. in accordance with valuation made by the registered
(a) Rs. 3,00,000 (b) Rs. 9,90,000 valuer, but AO is of the opinion that value so claimed is less
(c) Rs. 2,90,000 (d) None of the above than FMV of the Asset.
(b) Where the AO is of the opinion that FMV of the asset
Q44. On 15th November, 2018, Mr. P sold 1kg of gold, the exceeds the value claimed by lower of (i) More than 15%
sale consideration to which was Rs. 6,00,000. He had of the value claimed by the assessee or (ii) Rs. 25,000.
acquired the gold on 11th December, 1999 for Rs. 64,000. (c) Where the AO thinks that it is necessary to do so having
Fair market value of 1kg gold on 1st April, 2001 was Rs. regards to the nature of the asset & relevant
62,000. Taxable Capital gains for PY 2018-2019 shall be circumstances. (d) All of the above
(a) Rs. 4,25,920 (b) Rs. 5,38,000
(c) Rs. 5,36,000 (d) Rs. 4,20,800 Q51. If any advance money received by the assessee under
the agreement of transfer which could not be matured is
Q45. Mr. P purchased a house for Rs. 20 lacs on 1.1.2017. forfeited before 1.4.2014 then such money shall
On 1.1.2018 he had constructed one additional floor at the (a) Be taxable as the income of other sources in the year it
cost of Rs. 5 lacs. On 30.10.2018 this house has been sold is forfeited
off for Rs. 51 lacs & selling expenses have been Rs. 1 lacs. (b) Be deducted from the cost of acquisition of such asset
Calculate Capital Gains for PY 2018-2019. after doing indexation
(a) Rs. 14,00,000 (b) Rs. 23,00,000 (c) Be deducted from the cost of acquisition of such asset
(c) Rs. 50,00,000 (d) Rs. 25,00,000 before doing indexation
(d) it shall be ignored in all cases
Q46. U/s 50C, guideline value for stamp duty is taken as
the full value of consideration only if - Q52. If any advance money received by the assessee under
(a) the asset transferred is building & the actual the agreement of transfer which could not be matured is
consideration is less than the guideline value forfeited after 1.4.2014 then such money shall be ____.
(b) the asset transferred is either land or building or both (a) Taxable u/h IFOS in the year it is forfeited
& guideline value exceeds the actual consideration (b) Deducted from COA of such asset after doing indexation
(c) the asset transferred is either land or building or both (c) Deducted from COA of such asset before doing
& guideline value exceeds 105% of the actual indexation (d) it shall be ignored in all cases
consideration. Q53. Mr. P entered into an agreement with Mr. D for sale
(d) the asset transferred is land & the actual consideration of a building for Rs. 20 lac in June, 2018. Mr. P received
is less than the guideline value advance of Rs. 2 lacs. Subsequently the agreement was
cancelled & Mr. P forfeited the advance money. The
Q47. On 1.6.2018 Mr. P transferred his vacant land to Mr. advance money is ____.
D for Rs. 12 lacs. The land was acquired on 1.9.2015 for Rs. (a) To be reduced from the cost of acquisition
3 lacs. If indexation is applied, the indexed cost of (b) To be reduced from indexed cost of acquisition
acquisition would be Rs. 3.30 lacs. The taxable capital gain (c) Taxable as capital gains (d) Taxable u/h IFOS.
would be.
(a) LTCG Rs. 8.70 lacs (b) STCG Rs. 9 lacs Q54. Mr. P purchases a house property in Dec. 2006 for Rs.
(c) LTCG Rs. 9 lacs (d) STCG Rs. 8.70 lacs 10,25,000 & an amount of Rs. 7,05,000 was spent on the
improvement & repairs of the property in March 2011.
Q48. Mr. P sold a vacant land to Mr. D for Rs. 36 lacs. For Property was proposed to be sold to Mr. Z in month of May,
stamp duty purpose, the value of land was Rs. 41 lacs. The 2018 & advance of Rs. 40,000 was taken from him. As
indexed cost of acquisition of land was computed at Rs. 20 entire money was not paid in time, Mr. P forfeited the
lacs. The taxable LTCG would be. advance & subsequently sold property to Mr. Y in March,
(a) Rs. 21 lacs (b) Rs. 16 lacs 2019 for Rs. 36,00,000. The FMV of the property on April
(c) Rs. 5 lacs (d) Rs. 20 lacs 1, 2001 was Rs. 11,00,000. Taxable Capital Gain:
(a) Rs. 65,505 (b) Rs. 65,550
Q49. Miss Mohini transferred a house to her friend Ms. (c) Rs. 65,055 (d) Rs. 65,500
Ragini for Rs. 35 lacs on 1.10.2018. The sub-registrar
valued the land @ Rs. 48 Lacs. Miss Mohini contested the Q55. Advance forfeited by the Previous owner shall be ___.
valuation & the matter was referred to divisional revenue (a) Reduced from original cost of acquisition.
officer who valued the house @ Rs. 41 lacs. Ms. Mohini had (b) Taxed u/h IFOS (c) Ignored
purchased the house on 15 May, 2011 for Rs. 25 lacs & (a) Taxed in the hands of current owner
registration expenses were Rs 1,50,000.
(a) Rs. 46,50,000 (b) Rs. 38,04,350 Q56. In case of destruction of capital asset as specified u/s
(c) Rs. 1,45,650 (d) None 45(1A), sale consideration shall be
(a) FMV on the date of destruction
(b) Actual sale consideration
(c) Insurance Compensation (d) Any of the above
43: c 44: d 45: d 46: c 47: a 48: a 49: c 50: d 51: c
52: a 53: d 54: a 55: c 56: c
Q57. Mr. P owns a House which was purchased by him on Q66. In case of compulsory acquisition, indexation shall be
1.5.1999 for Rs 3 lacs. It was destroyed by fire on 3.4.2018 done till the __.
& Mr. P received Rs. 48 lacs on 5.5.2019 from the Insurance (a) PY of compulsory acquisition
Company. FMV of the property on 1.4.2001 was Rs. 4 lacs. (b) PY in which the full compensation received
The Stamp Duty Value was Rs. 60 lacs. Find the Capital Gain (c) PY in which part.full compensation is received
(a) 37.44 Lac (b) 36.8 Lac (c) 40 Lac (d) None (d) in any year at the discretion of the government
Q58. Conversion of capital asset into SIT will result into Q67. An interim order in relation to enhanced
capital gain of PY in which ____. compensation was passed by court on 10 May, 2018,
(a) conversion took place amount was also received in pursuance of order.
(b) converted asset is sold/transferred Compensation so received shall be taxable
(c) both of the above (d) none of the above (a) When the amount is received
(b) When final order of the court is passed
Q59. Conversion of personal effect into stock in trade shall: (c) Any of the above (d) None of the above
(a) be subject to capital gain tax
(b) not be subject to capital gain tax Q68. In case of compulsory acquisition, if an assessee
(c) shall be subject to tax under of PGBP income receives enhanced compensation then enhanced
(d) shall be subject to tax under head of IFOS. compensation is taxable as.
(a) STCG (b) LTCG
Q60. When capital asset is converted into SIT then for (c) STCG/LTCG depending upon the original capital gain of
purpose of capital gain, the sale consideration shall be compulsory acquisition.
(a) FMV of the asset on the date of sale of such asset (d) Any kind of capital gains to be decided by the
(b) FMV of the asset on the date of conversion of such asset government.
(c) The price for which it is sold
(d) The price for which it was acquired Q69. In case of compulsory acquisition if enhanced
compensation is received, then for purpose of computation
Q61. Where the capital asset is converted into stock in of capital gain, cost of acquisition & cost improvement in
trade, the indexation of cost of acquisition & cost of that case shall be taken as.
improvement shall be done ___. (a) always taken to be Nil
(a) till PY of conversion of such capital asset (b) cost of acquisition or cost of improvement which was
(b) till PY in which such asset is sold in excess of initial compensation earlier received
(c) Till 1.4.2001 (d) Any of the above (c) any amount of cost decided by the government
(d) any amount of cost decided by the assessee
Q62. Mr. P converts his capital asset (acquired on June 10,
2009 for Rs. 60,000) into SIT in March 10, 2019. FMV on
Q71. Mr. P , while computing capital gain on enhanced
date of above conversion was Rs. 3 lacs. He subsequently
compensation deducted litigation expenses incurred by
sells stock-in-trade so converted for Rs. 4,00,000 on June
him. AO contended that litigation expenses are non-
10, 2019. What is date of transfer of asset?
deductible. Is contention of Assessing Officer valid?
(a) June 10, 2009 (b) March 10,2019
(c) June 10, 2019 (d) None of the above
(c) Partially invalid (d) None of the above
Q63. Where a partner transfers any capital asset into the
business of firm, sale consideration of such asset to the Q72. Mr. P received Rs. 7 lacs by way of enhanced
partner shall be. compensation in March, 2019. A further sum of Rs. 3 lac
(a) FMV on the date of such transfer decreed by the Court tribunal is due but not received till
(b) price at which it was recorded in the books of the firm 31st March, 2019. The amount of income chargeable to tax
(c) cost of such asset to the partner for PY 2018-2019 would be __.
(d) price which is mutually decided by partners (a) Rs. 3,50,000 (b) Rs. 7,00,000
(c) Rs. 9,00,000 (d) Rs. 4,95,000
Q64. Where any capital asset is transferred by a firm to its
partner by way of distribution on the dissolution of firm, Q73. What amount of deduction is allowed to an assessee
the sale consideration of such asset to the firm shall be. while taxing interest income on compensation or
(a) The price at which such asset was given to partner enhanced compensation ?
(b) Cost or W.D.V of such asset on the date of distribution (a) 50% of interest (b) 75% of interest
(c) FMV of the asset on the date of such transfer (c) 25% of interest (d) No deduction is allowed
(d) price which is mutually decided by partners
Q74. Mr. P has received a sum of Rs. 3,40,000 as interest
Q65. Where a capital asset other than urban agricultural on enhanced compensation for compulsory acquisition of
land is compulsorily acquired then the capital gain shall land by state government in May, 2018, of this, only Rs.
arise in the previous year in which___. 12,000 pertains to the current year & the rest pertains to
(a) compulsory acquisition took place earlier years. The taxable for PY 2018-2019 would be
(b) Full consideration is received (a) Rs. 12,000 (b) Rs. 6,000
(c) Part/full consideration is received (c) Rs. 3,40,000 (d) Rs. 1,70,000
(d) Any year at the discretion of the government
57: 58: b 59: b 60: b 61: a 62: b 63: b 64: c 65: c
66: a 67: a 68: c 69: a 71: b 72: b 73: a 74: d
Q75. In case of compulsory acquisition if initial Q84. Mr. P acquired 1,000 equity shares of GGC Ltd. for Rs.
compensation or enhanced compensation is received by 4 lac in April, 2004. He received bonus shares on 1:1 basis
legal heir due to death of assessee, then capital gain shall. in April, 2018 from the company. He sold all the shares in
(a) not be taxable in the hands of legal heir January, 2019 through RSE for Rs. 8 lacs. Capital gain
(b) be taxable in the hands of legal heir taxable in the hands of Mr. P for PY 2018-2019 is -
(c) taxable for the dead assessee (a) Rs. 4 lacs
(d) for initial compensation the legal heir will be taxable as (b) Nil since entire gain is exempt u/s 112A
representative assessee & for enhanced compensation he (c) Rs. 2 lacs (d) Rs. 80,000
shall be himself taxable.
*Q85. On January 31, 2019 Mr. P has transferred self-
Q76. Where a capital asset being urban agricultural land is generated goodwill of his profession for a consideration of
compulsorily acquired then capital gain shall arise in PY. Rs. 70,000 & incurred expenses of Rs. 5,000 for such
(a) of compulsory acquisition transfer. You are required to compute capital gains taxable
(b) in which full consideration is received in hands of Mr. P .
(c) in which part or full consideration is received (a) Rs. 65,000 (b) Nil
(d) Exempt u/s 10(37) (c) Rs. 70,000 (d) None of the above
Q77. Section 45(5A) is applicable to __. Q86. If the bonus shares are acquired before 1.4.2001, the
(a) All Assessees (b) Company only cost of acquisition of such bonus share shall be.
(c) Individual or HUF (d) All of the above (a) Cost for which it was acquired by the assesse
(b) FMV as on 1.4.2001
Q78. In case of specified agreement u/s 45(5A), Sale (c) Always taken as Nil (d) Higher of (a) or (b)
Consideration shall be
(a) FMV of the asset given up Q87. If the bonus shares are acquired on or after 1.4.2001,
(b) Actual cost of the asset given up the cost of acquisition of such shares shall be.
(c) Stamp Duty Value of the share (being land or building (a) Cost for which it was acquired by the assesse
or both) in the project on the date of issue of certificate of (b) FMV as on 1.4.2001
completion + Consideration received in cash (c) Always taken as Nil (d) Higher of (a) or (b)
(d) AO will decide.
Q88. Mr. P acquired 1,000 equity shares of Rs. 10 each in
Q79. Benefit u/s 45(5A) is not available if assessee a listed company for Rs. 35,000 on 1st July, 2012. The
transfers his share in the project to any person ___ company issued 1,000 rights shares in April, 2014 at Rs. 15
(a) Before 1.4.2001 (b) Before 1.4.2019 per share. The company issued 2,000 bonus shares in June,
(c) on/before issue of completion certificate 2018. The market price was Rs. 50 per share before bonus
(d) Always available issue. The cost of acquisition of bonus shares would be ___.
(a) Nil (b) Rs. 20,000
Q80. Mr. P has acquired 10,000 equity share of ABC Ltd on (c) Rs. 50,000 (d) Rs. 1,00,000
1.04.2007 @ 300 per share. The company buybacks
10,000 shares on 30.1.2019 @ 750 per share. Compute the Q89. Period of holding of bonus share allotted shall be
capital gain taxable in his hands for AY 2018-19. reckoned from ___.
(a) Rs. 9,88,000 (b) Rs. 9,88,370 (a) Date of holding of original shares
(c) Rs. 9,77,370 (d) Rs. 7,50,000 (b) The date of offer of bonus shares
(c) Date of allotment of bonus shares
Q81. If the goodwill of a business, right to manufacture or (d) Date of approval from shareholders in AGM
produce, tenancy rights, route permit or loom hours is
acquired before 1.4.2001, the cost of acquisition of such Q90. Cost of acquisition of right shares to existing
asset shall be. shareholder shall be.
(a) Cost of acquisition (b) FMV as on 1.4.2001 (a) market value of right share are offered
(c) Always taken as Nil (d) Higher of (a) or (b) (b) price at which these shares are offered
(c) price at which these shares are offered plus the amount
Q82. Cost of improvement of tenancy rights, route permits paid to the person renouncing the right
or loom hours shall be. (d) always taken as NIL
(a) It is always taken as Nil
(b) always considered irrespective of period when it was Q91. Cost of acquisition of the right shares to a person who
incurred purchased right to acquire share from the existing
(c) considered when incurred on or after 1.4.2001 shareholder shall be.
(d) considered when incurred before 1.4.2001 (a) market value of right share are offered
(b) price at which these shares are offered
Q83. If goodwill of a profession which is self-generated is (c) price at which these shares are offered + Amount paid
transferred, there will to the person renouncing the right
(a) liable to capital gain (b) not be liable any capital gain (d) always taken as NIL
(c) be a STCG (d) be a LTCG
75: c 76: d 77: c 78: c 79: c 80: 81: a 82: a 83: b
84: b 85: b 86: b 87: c 88: a 89: c 90: b 91: c
Q92. Cost of acquisition of the right to the existing Q101. Cost of acquisition & cost of improvement in case of
shareholder shall be. slump sale is
(a) market value of right share are offered (a) Nil
(b) price at which these shares are offered (b) Nil if acquired on or after 1.4.2001
(c) price at which these shares are offered plus the amount (c) Net worth of the undertaking. division.
paid to the person renouncing the right (d) Actual cost of acquisition
(d) always taken as NIL
Q102. Indexation benefit is ____ in case of capital gains on
Q93. In case of sale of right, ____ will always arise shares & debentures acquired in foreign currency by a
(a) STCG (b) LTCG non-resident under 1st proviso to Section 48.
(c) STCG/LTCG depending on Period of holding (a) available if undertaking is acquired on or after 1.4.2001
(d) No capital gain will arise. (b)Available if undertaking is acquired on or after 1.4.1981
(c) Not available (d) Depends on the mood of AO.
Q94. Cost of acquisition of the shares given under ESOP
plan shall be. Q103. Cost of acquisition of securities held with
(a) FMV of the equity shares on the date of issue. depository is to be computed by
(b) FMV of equity shares on date of exercising option (a) Average cost method
(c) always taken as Nil (b) First in first out (FIFO) method
(d) Price at which it was offered to employee. (c) Last in first out (LIFO) method
(d) Weighted average cost method
Q95. If entire block of depreciable asset is transferred after
36 months of its use, there will be. Q104. In case of securities held in demat form, for sale ____
(a) STCG (b) LTCG should be considered & for determination of period of
(c) STCG/STCL (d) LTCG/LTCL holding ____ should be considered.
(a) Original Date of acquisition; Date of Entry in Demat A/c
Q96. Capital gain on transfer of depreciable asset shall be- (b) Original Date of acquisition; Original Date of acquisition
(a) LTCG, if held for more than 36 months (c) Date of Entry in Demat A/c; Date of Entry in Demat A/c
(b) LTCG, if held for more than 24 months (d) Date of Entry in Demat A/c; Original Date of acquisition
(c) LTCG, if held for more than 12 months
(d) STCG, irrespective of the period of holding Q105. Period of holding in case of Shares held in a
company in liquidation shall ___ the period subsequent to
Q97. Mr. P owns two machineries in the block of assets the date of liquidation.
which is depreciable at the rate of 15%. The WDV of the (a) Include (b) Exclude
block as on 1.4.2018 was Rs. 65,000. No other asset was (c) Depends on AO (d) None of the above
acquired during the year. One of these machines was sold
during the previous year for Rs. 75,000. Compute CG: Q106. Distribution of assets at the time of liquidation of a
(a) STCG of Rs. 10,000 in hands of Mr. P . company
(b) STCL of Rs. 10,000 in hands of Mr. P (a) is not a transfer in the hands of the company or the
(c) LTCG of Rs. 10,000 in hands of Mr. P shareholders
(d) No capital gain as depreciation would be allowed on (b) is not a transfer in the hands of the company but capital
one of the machines left with Mr. P gains shall arise in the hands of the shareholders.
(c) is not a transfer in the hands of the shareholders but
Q98. In which of the following cases, STCG/STCL will capital gains is chargeable to tax on such distribution in the
arise? hands of the company
(a) WDV of block is ZERO on the last day of the PY (d) is a transfer both in the hands of shareholders &
(b) Block is Empty on the last day of PY company
(c) Both (a) & (b) (d) None of the above
Q107. In case of distribution of assets at the time of
Q99. Capital gain in case of slump sale would be- liquidation of the company, sale consideration in the hands
(a) LTCG, if the undertaking/division transferred is held of shareholder of the shares of the company shall be
for more than 36 months (a) FMV of the assets received in kind
(b) LTCG, if the undertaking/division transferred is held (b) Deemed dividend u/s 2(22)(c).
for more than 24 months (c) FMV of the shares given up
(c) LTCG, if the undertaking/division transferred is held (d) FMV of the assets received in kind - Deemed dividend
for more than 24 months u/s 2(22)(c)
(d) STCG, irrespective of the period of holding
Q108. Distribution of assets at the time of partition of HUF
Q100. Indexation benefit is ____ in case of slump sale. shall
(a) Available if undertaking is acquired on or after 1.4.2001 (a) be regarded as a transfer in the hands of HUF
(b)Available if undertaking is acquired on or after 1.4.1981 (b) be regarded as a transfer in hands of family members
(c) Not available (c) not be regarded as transfer in the hands of HUF.
(d) Depends on the mood of AO. (d) not be regarded as a transfer in hands of family members.
92: d 93: a 94: b 95: a 96: d 97: a 98: c 99: a 100: c
101: c 102: c 103: b 104: d 105: b 106: b 107: d 108: c
Q109. Transfer of capital asset under a gift or will shall. Q116. Exemption u/s 54 is available to_____.
(a) be regarded as transfer for donor & taxable for donor. (a) All Assesses (b) Individuals only
(b) not be regarded as transfer for donor & not taxable. (c) Individual or HUF (d) HUF only
(c) be regarded as transfer for donor & taxable for receiver.
(d) not be regarded as transfer for donor & taxable for Q117. For claiming exemption u/s 54, assessee should
receiver. transfer __.
(a) A self occupied residential house property
Q110. Mr. P has purchased a land on 1.4.2001 for Rs. (b) A let out residential house property
50,000 & constructed one floor on this land at the cost of (c) A vacant house property (d) Any of the above
Rs. 3,00,000 on 1.1.2011. He constructed one additional
floor on this on 1.1.2014 at the cost of Rs. 7,00,000. The Q118. For claiming exemption u/s 54, the assessee should
house has been gifted by him to his son on 1.1.2019. purchase/construct __.
Calculate Capital Gains for Mr. P for PY 2018-2019. (a) 1 Residential house property (b) A big mall
(a) Rs. 2,88,339 (b) Rs. 2,38,839 (c) 2 residential house property (d) Factory Building
(c) Rs. 2,38,389 (d) Nil
Q119. For claiming exemption u/s 54, the assesses should
Q111.Ms. J inherited a vacant site land consequent to the purchase residential property within
demise of her father on 10th June, 2000. The land was (a) 2 years after the date of transfer
acquired by her father on 10th April, 1970 for Rs. 40,000. (b) 3 years after the date of transfer
The fair market value of the land on 1st April, 2001 was Rs. (c) within 1 year before or 2 years after the date of transfer
60,000 & on the date of inheritance i.e., 10th June, 2000 was (d) 1 year before & 3 years after the date of transfer
Rs. 2,00,000. The cost of acquisition for Ms. Smita is:
(a) Rs. 10,000 (b) Rs. 40,000 Q120. For claiming exemption u/s 54, assessee should
(c) Rs. 60,000 (d) Rs. 2,00,000 complete construction of residential property ____.
(a) within 1 year before or 2 years after the date of transfer
Q112. Mr. B purchased convertible debentures for Rs. (b) within 1 year before or 3 years after the date of transfer
5,00,000 during August 2001. The debentures were (c) within three years after the date of transfer
converted into shares in September 2012. These shares (d) within two years after the date of transfer
were sold for Rs. 15,00,000 in August 2018. The brokerage
expenses are Rs. 50,000. You are required to compute the Q121. The exemption u/s 54 shall be available __
CG in case of Mr. B for AY 2019-20. (a) to the extent of capital gain invested in the residential
(a) Nil (b) Rs. 1,54,762 house property
(c) Rs. 5 lacs (d) Rs. 15,47,620 (b) proportionate to the net sale consideration invested in
the residential house property
Q113. Which of the following transactions are not (c) to the extent of amount actually invested in the
regarded as transfer? residential house property
(a) Transfer of Rupee denominated bond of Indian (d) to the extent of amount of net sale consideration
company issued outside India by NR to another NR invested in the residential house property
[Section 47(viiaa)].
(b) Redemption of Sovereign Gold Bonds by Individual Q122. The new house purchased/constructed for which
issued under Sovereign Gold Bond Scheme, 2015 [Section exemption was claimed u/s 54 should not be transferred
47(viic)]. within 3 years ___
(c) Conversion of Preference shares into Equity shares: (a) From the date of transfer of original house
Any transfer by way of conversion of preference shares of (b) From the date of purchase.construction of new house
a company into equity shares of that company [Sec 47(xb)]. (c) From the end of PY when such new house was acquired
(d) All of the above. (d) From the end of PY in which old house was transferred
Q123. If a new house property for which exemption was

Q114. Any lumpsum amounts or instalments received as
claimed u/s 54 is transferred within 3 years.
a loan under a scheme of reverse mortgage from the bank
(a) Capital gain exempt u/s 54 earlier shall be separately
by senior citizens is __.
taxable as capital gains
(a) Exempt u/s 10(43) (b) Taxable (b) The entire capital gain on new transfer shall be taxable
(c) Exempt u/s 10(38) (d) Exempt upto Rs. 2.5 lacs (c) Capital gain exempt u/s 54 earlier shall be reduced
from cost of acquisition of new house property
Q115. For claiming exemption u/s 10(37), urban (d) Capital gain exempt u/s 54 earlier shall be added to the
agricultural land is used for ___ by HUF or individual or a cost of acquisition of new house property
parent of individual during the period of ___immediately
preceding date of transfer Q124. Residential house is sold for Rs. 90 lac & the LTCGs
(a) Any purpose, three year computed are Rs. 50 lac. The assesses bought two
(b) Agricultural purpose, three years residential houses for Rs. 30 lac & Rs. 20 lac respectively.
(c) Agricultural purpose, 2 years The amount eligible for exemption u/s 54 would be__lacs.
(d) Business purpose, two years (a) Rs. 50 (b) Rs. 20 (c) Rs. 30 (d) Nil
109: b 110: d 111: c 112: b 113: d 114: a 115: c 116: c 117: d

118: a 119: c 120: c 121: a 122: b 123: c 124: c
Q125. The exemption u/s 54B is allowed to. Q133. Exemption u/s 54D is available if there is a
(a) Any assessee (b) Individual only compulsory acquisition of ____.
(c) Individual or HUF (d) HUF only (a) L&B used by assessee for industrial undertaking for at
least 1 yrs immediately preceding date of compulsory
Q126. For claiming exemption u/s 54B, the capital asset acquisition
transferred should be __. (b) L&B used by assessee for industrial undertaking for at
(a) urban agricultural land (b) rural agricultural land least 2 yrs immediately preceding date of compulsory
(c) any of (a) or (b) (d) none of (a) or (b) acquisition
(c) L&B used by assessee for industrial undertaking for at
Q127. For claiming exemption u/s 54B, the agricultural least 3 yrs immediately preceding date of compulsory
land must have been used for agriculture purpose by the acquisition
HUF or the individual or his parents for at least __. (d) L&B used by assessee for industrial undertaking for at
(a) Any period of 2 years prior to the date of transfer least 4 yrs immediately preceding date of compulsory
(b) A period of 2 years immediately preceding the date of acquisition
transfer
Q134. Exemption u/s 54EC shall be available to.
(c) A period of 3 years immediately preceding the date of
(a) any assessee (b) individual only
transfer
(c) company assessee only (d) HUF only
(d) Any period of 3 years prior to the date of transfer
Q135. Exemption u/s 54EC shall be available for t.f of __.
Q128. For claiming exemption u/s 54B the assessee (a) Any LTCA (b) Residential house property
should acquire. (c) Land or building or both
(a) urban agricultural land (b) rural agricultural land (d) Any LTCA other than residential house property
(c) any of (a) or (b) (d) none of (a) or (b)
Q136. U/s 54EC, assessee shall be allowed exemption of __.
Q129. For claiming exemption u/s 54D the assessee (a) Capital gain invested maximum of Rs. 50 lacs per FY
should purchase &.or construct another land & building (b) proportionate to the net consideration price invested
within ___. (c) to the extent of the capital gain invested
(a) 3 years from the date of compulsory acquisition (d) Capital gain invested subject to max. of Rs. 50 lacs in
(b) 3 years from the date of receipt of compensation aggregate for the FY & next FY.
(c) within 3 years from the end of the previous year in
which compulsory acquisition took place Q137. U/s 54EC, capital gains on transfer of land or
(d) within 2 years from the end of the previous year in building or both are exempted if invested in the bonds
which compulsory acquisition took place issued by NHAI & RECL or other notified bond—
(a) within 6 months from the date of transfer of the asset
Q130. For claiming exemption u/s 54B the new (b) within 6 months from the end of the relevant PY
agricultural land should be purchased. (c) within 6 months from the end of PY or due date for filing
(a) within 3 years from the date of transfer the return of income u/s 139(1), whichever is earlier
(b) within 2 years from the date of transfer (d) At any time before the end of the relevant PY
(c) within 2 years from the end of the relevant PY
Q138. For Section 54EC capital gain account scheme is.
(d) within 3 years from the end of the relevant PY
(a) Applicable (b) Not applicable
(c) applicable with the approval of the government
Q131. If new agricultural land purchased for which (d) applicable or not at the discretion of the assessee
exemption was claimed u/s 54B is transferred within 3
years then. Q139. For claiming exemption u/s 54EC, an assessee has
(a) Capital gain exempt u/s 54B earlier shall be separately to invest the resultant capital gains within a specified
taxable as capital gains period. Which of the following is not eligible for such
(b) The entire capital gain on new transfer shall be taxable investment? Bonds of ____.
(c) Capital gain exempt u/s 54B earlier shall be reduced (a) NHAI Ltd (b) RECL Ltd (c) PFC Ltd (d) NABARD
from cost of acquisition of new house property
(d) Capital gain exempt u/s 54B earlier shall be added to Q140. LTCGs on 15th Oct 2018 is Rs. 105 lac. Assessee
the cost of acquisition of new house property invested Rs. 50 lac in RECI bonds on 31st March, 2018 & Rs.
55 lac in NHAI bonds on 18th May, 2018. Exemption eligible
Q132. Exemption u/s 54D is available to. u/s 54EC is ___.
(a) any assessee (a) Nil (b) Rs. 50 lacs (c) Rs. 55 lacs (d) Rs. 105 lacs
(b) any assessee owning an industrial undertaking
Q141. For claiming exemption u/s 54F, investment shall
(c) an individual or HUF owning an industrial undertaking
be done within.
(d) only Individual
(a) two years from the date of transfer
(b) three years from the date of transfer
(c) one year before or two years after the date of transfer
(d) one year before or three years after the date of transfer
125: c 126: a 127: b 128: c 129: b 130: b 131: c 132: b 133: b

134: a 135: c 136: d 137: a 138: b 139: d 140: b 141: c
Q142. Mr. P sold a vacant land for Rs. 120 lacs on Q150. U/s 54F, capital gains are exempted if ___.
10.10.2018. The indexed cost of acquisition amount to Rs. (a) LTCG arising on transfer of residential house is invested in
18 lacs. He deposited Rs. 50 lacs in RECI bonds in January acquisition of one residential house situated in or outide India
2019 & another Rs. 50 lacs in March, 2019. The amount of (b) LTCG arising on transfer of a capital asset other than a
capital gain liable to tax after exemption u/s 54EC is. residential house is invested in acquisition of one residential
(a) Rs. 2 lacs (b) Rs. 52 lacs house situated in or outside India
(c) Rs. 102 lacs (d) Rs. 18 lacs (c) net sale consideration on transfer of a capital asset other
than a residential house is invested in acquisition of one
Q143. Exemption u/s 54F is available to. residential house situated in India
(d) short term or LTCG arising on transfer of a capital asset
(a) any assessee (b) an individual
other than a residential house is invested in acquisition of one
(c) an individual or HUF (d) none of the above
residential house situated in India
Q144. Exemption u/s 54F is available if the asset
Q151. Under which section the assesses has to reinvest the
transferred is _______.
entire amount of net consideration to claim full exemption
(a) LTCA other than residential house property
for the LTCGs earned during a previous year
(b) LTCA including residential house property
(a) Sec 54EC (b) Sec 54F (c) Sec 54B (d) Sec 54D
(c) LTCA other than residential house property
(d) STCA including residential house property
Q152. In which section the benefit of the depositing in the
capital gain account scheme is not available for claiming
Q145. Exemption u/s 54F is available _____.
the exemption of capital gains.
(a) to the extent of amount invested
(a) Sec 54F (b) Sec 54 (c) Sec 54D (d) Sec 54EC
(b) proportionate to the net sale consideration so invested
(c) to the extent of amount actually invested
Q153. Amount unutilized in capital gain scheme for which
(d) none of the above
exemption u/s 54B was claimed shall be treated as ___.
(a) LTCG (b) STCG
Q146. Exemption u/s 54F is available if the new asset
(c) STCG or LTCG depending upon the original capital gains
acquired is ___.
(d) any kind of capital gains as per wish of the assessee
(a) Any residential house property
(b) Any house property Q154. If the assessee wishes to deposit money under
(c) Residential house property for self-occupation capital gain scheme for claiming exemption u/s 54, it
(d) Residential house property for let out purposes should be deposited within_____
(a) six months from the date of transfer
Q147. For claiming exemption u/s 54F, the amount to the (b) six months from the end of the relevant PY
extent of net sale consideration is to be invested in the (c) the due date of furnishing the ITR u/s 139(1)
purchase of residential house property within ___. (d) six months or within due date of furnishing the ITR,
(a) two years from the date of transfer whichever is earlier
(b) three years from the date of transfer
(c) one year before or two years after the date of transfer Q155. Mr. P has sold a residential house for Rs. 51 lacs on
(d) one year before or three years after the date of transfer 27.2.2019 & selling expenses have been Rs. 1 lacs. The
Indexed Cost of acquisition for this house is Rs. 27.8 lacs.
Q148. Where after depositing the amount under capital Mr. P has deposited Rs. 15 lacs in the capital gain accounts
gain scheme, the individual assessee has died, the amount scheme on 30.7.2019 & Rs. 7.5 lacs on 18.8.2019. The last
lying in the capital gain scheme. date for filling of ITR is 31.7.2019. Calculate CG:
(a) shall be taxable in the hands of legal heir (a) LTCG of Rs. 7,10,000 (b) LTCG of Rs. 7,20,000
(b) should be utilized by the legal heir for the specified (c) LTCG of Rs. 7,00,000 (d) LTCG of Rs. 7,30,000
purpose
(c) shall be exempt in the hands of legal heir Q156. Amount unutilized in the capital gain scheme which
(d) shall be taxable in the hands of the person who was deposited for construction of house property, for
deposited the amount which exemption was claimed u/s 54 is treated a LTCG of
PY in which period of ________
Q149. Exemption u/s 54F shall not be allowed if the (a) 2 years has expired from date of deposit
assessee on the date of transfer owns. (b) 2 years has expired from the date of transfer
(a) any residential house (c) 3 years has expired from the date of deposit
(b) a residential house which is let out (d) 3 years has expired from the date of transfer
(c) a house which is self-occupied
(d) more than one residential house Q157. In case of compulsory acquisition the period for
investment in specified assets u/s 54,54B,54D & 54F shall
be reckoned from ___
(a) The date of transfer
(b) The date when the part or full compensation is received
(c) The date as & when compulsory acquisition is done
(d) From the date as when assessee desires
142: b 143: c 144: a 145: b 146: a 147: c 148: c 149: d 150: c
151: b 152: d 153: c 154: c 155: b 156: d 157: b
Q158. Deduction u/s 80C to 80U are allowed from ___. Q167. Total income for AY 2019-2020 of a NR Individual
(a) LTCG & STCG (b) STCG u/s 111A (c) LTCG (d) STCG including LTCG u/s 112 of Rs. 60,000 is Rs. 2,60,000. The
tax on total income shall be ____.
*Q159. LTCG on sale of listed equity oriented mutual fund (a) Rs. 12,480 (b) Rs. 12,360 (c) Rs. 520 (d) Rs. 515
on which STT has been paid shall be taxable @
(a) 10% irrespective of amount of LTCG Q168. Total income for AY 2019-2020 i.e. PY 2018-2019 of
(b) 20% irrespective of amount of LTCG a resident individual aged 58 yrs including LTCG u/s 112
(c) 10% after allowing exemption of Rs. 1 Lac out of LTCG of Rs. 50,000 is Rs. 2,70,000. The tax on total income is:
(d) 20% after allowing exemption of Rs. 1 lac out of LTCG (a) Rs. 2,080 (b) Rs. 2,060 (c) Rs. 1,030 (d) Rs. 1,040
Q160. Mr. P has transferred equity shares of ABC Ltd (a Q169. Mr. P purchased 100 listed equity shares of
listed company) on 1.3.2019 & paid securities transaction Reliance Industries Limited for Rs. 300 each on 15.4.2018.
tax (STT) on the same. He earned LTCG of Rs. 1,38,000. On 15.3.2019 he had sold all the shares for Rs. 410 each &
What will be the taxability in hands of Mr. P ? brokerage paid has been 1%. CG for PY 2018-2019 shall be:
(a) Rs. 1,38,000 is taxable @ 10% (a) LTCG of Rs. 10,590 (b) STCG of Rs. 10,590
(b) Rs. 1,38,000 is taxable @ 20% (c) LTCG of Rs. 41,000 (d) STCG of U 1,000
(c) Rs. 38,000 is taxable @ 20%
(d) Rs. 38,000 is taxable @ 10% Q170. Compute taxable Capital Gains of P for PY 2018-19
Cost of Jewellery; Purchased in FY 2001-02 Rs. 1,82,000
Q161. STCG arising from the transfer of equity share & Sale price of Jewellary sold in January 2019 Rs. 11,50,000
units of equity oriented mutual fund shall be Taxable. Expenses on transfer Rs. 7,000
(a) Taxable @ 15% irrespective of amount of STCG Residential house purchased in March 2019 Rs. 10,00,000
(b) Taxable @ 10% irrespective of amount of STCG (a) LTCG of Rs. 79,244 (b) LTCG of Rs. 79,442
(c) Taxable @ 10% after allowing exemption of Rs. (c) LTCG of Rs. 79,424 (d) LTCG of Rs. 79,200
1,00,000 out of STCG
(d) Taxable @ 20% after allowing exemption of Rs.
1,00,000 out of STCG
Q162. Where the total income of an assesses includes

income by way of LTCGs arising from transfer of listed
securities (other than listed equity shares) applicable
income tax rate on such income is
(a) 20% of LTCG calculated after doing indexation
(b) 10% of LTCG calculated without doing indexation
(c) Higher of (a) or (b) (d) Lower of (a) or (b)
Q163. LTCGs on zero coupon bonds are chargeable tot tax

___
(a) @ 20% computed after indexation of such bonds
(b) @ 10% computed without indexation of such bonds
(c) Higher of (a) or (b) (d) Lower of (a) or (b)
Q164. Which of the following shall be considered to decide

whether the asset is investment or SIT?
(a) Holding period (b) Objective of investment
(c) Method of valuation (d) Method of accounting
*Q165. When shares of a listed company held for more

than 36 months are transferred privately for Rs. 8 lac, with
original cost of acquisition of Rs. 1 lac whose indexed cost
of acquisition is Rs. 2 lac, the income tax payable would be.
(a) Rs. 1,44,200 (b) Rs. 72,800
(c) Rs. 1,23,600 (d) Rs. 68,100
Q166. Mr. P purchased shares of GCC Pvt Ltd. for Rs. 5 lacs
on 3rd April, 2017. The shares were sold on 5th June, 2018
for Rs. 7 lacs. She paid STT of Rs. 700 & brokerage of Rs.
500. The amount chargeable to tax is.
(a) Rs. 2,00,000 (b) Nil
(c) Rs. 1,99,500 (d) Rs. 1,98,700
158: d 159: c 160: d 161: a 162: d 163: d 164: d 165: b 166: c

167: a 168: a 169: b 170: a
4E. INCOME FROM OTHER SOURCES
Q1. Income from other sources is also known as ____ head Q12. Income from letting of machinery, plant furniture is -
of income (a) always chargeable to tax u/h “PGBP”
(a) Residuary head (b) Useless head (b) always chargeable to tax u/h “IFOS”
(c) Complementary head (d) None of the these (c)chargeable u/h “IFOS” only if not chargeable u/h “PGBP”
(d) chargeable to tax u/h “Income from house property”
Q2. IFOS is chargeable to tax u/s -
(a) 15 (b) 56 (c) 22 (d) 28 Q13. Amount paid on account of any current repairs to the
machinery, plant or furniture given on rent ____ as
Q3. Income u/h IFOS is taxable on - deduction u/h IFOS.
(a) Due basis (b) Receipt basis (a) Shall not be (b) Is not allowed
(c) On the basis of method of accounting regularly (c) Is allowed (d) None of the above
employed by the assesses (d) None of the above
*Q14. When Mr. P retired from GGC Ltd. on 1.1.2019, he
Q4. Deemed Dividend u/s 2(22)(e) is taxable on - was paid Rs. 5,00,000 for not doing a competing business
(a) Due basis (b) Receipt basis for the next 5 years. The amount so received by Mr. P is
(c) On the basis of method of accounting regularly taxable as.
employed by the assesses (d) None of the above (a) Income from business & profession
(b) IFOS (c) Income from salary
Q5. Guest Lecturer’s remuneration is taxable under which (d) Not taxable as it is a capital receipt
head of income?
(a) Other sources (b) Salary Q15. When Mr. P retired from GGC Ltd. on 1.1.2019, he
(c) House property (d) Not taxable at all was paid Rs. 5,00,000 for not doing a competing business
for the next 5 years. The amount so received chargeable to
Q6. Rent received by original tenant from subtenant is tax in the hands of Mr. P is.
taxable u/ ______? (a) Nil (b) Rs. 5,00,000
(a) IFOS (b) Income from HP (c) Rs. 1,00,000 (d) Rs. 2,50,000
(c) Income from salary (d) None of the above
Q16. Dividend from Domestic Company shall be exempt in
Q7. Mr. A has taken a house on rent & sublets the same to the hands of shareholder u/s
Mr. B. Income from such house property is taxable u/h. (a) 10(32) (b) 10(34) (c) 10(33) (d) None
(a) Income from house property (b) IFOS
(c) Income from H.P or IFOS as decided by Mr. A. Q17. Dividend received on shares is taxable u/h IFOS if –
(d) None of the above (a) Shares are held as Investment
(b) Shares are held as Stock-in-trade
*Q8. Which of the following incomes are taxable u/h IFOS? (c) Always irrespective of whether shares are held as
(a) Interest on Income Tax Refunds Investment or SIT.
(b) Income from Undisclosed Sources (d) None of the above.
(c) Rent from vacant piece of Land (Ground Rent)
(d) All of the above Q18. Normal Dividend is taxable in the PY of __
(a) Declaration (b) Distribution/Payment
*Q9. Which of the following incomes are not taxable u/h (c) Accrual
IFOS? (d) Year in which dividend is unconditionally made
(a) Income from Agricultural Land outside India available to shareholders
(b) Remuneration received by MPs.MLAs
(c) Director’s Sitting Fee Q19. Deemed Dividend is taxable in the PY of __
(d) Remuneration received by government employees (a) Declaration (b) Distribution/Payment
(c) Accrual
Q10. Employee’s Contribution to PF.SAF etc. received by (d) Year in which dividend is unconditionally made
Employer is taxable in the hands of employer available to shareholders
(a) u/h Salary if remitted by the employer before due date
(b) u/h IFOS if remitted by the employer before due date Q20. Interim Dividend is taxable in the PY of __
(c) u/h Salary if not remitted by employer before due date (a) Declaration (b) Distribution/Payment
(d) u/h IFOS if not remitted by employer before due date (c) Accrual
(d) Year in which dividend is unconditionally made
Q11. Sum received under Keyman Insurance policy is available to shareholders
taxable –
(a) U/h Salary if received by employee Q21. Dividend declared by Indian company o/s India is
(b) U/h PGBP if received by employer (a) Not Deemed to accrue.arise in India.
(c) U/h IFOS if received by any person other than employer (b) Deemed to accrue.arise in India.
& employee (d) All of the above (c) Exempt u/s 10(34) (d) Both (b) & (c)
1: a 2: b 3: c 4: b 5: a 6: a 7: b 8: d 9: d 10: d 11: d
12: c 13: c 14: b 15: b 16: b 17: c 18: a 19: b 20: d 21: d
Q22. Dividend declared by a domestic company is ___. Q31. If bonus shares are issued to equity shareholders,
(a) Fully exempt in the hands of shareholders whether it will be deemed as dividend?
(b) Fully exempt in the hands of shareholders subject to (a) Yes (b) No
Section 115BBDA.
(c) Fully taxable in the hands of shareholder Q32. Any payment by Closely held company by way of
(d) None of the above Advance.Loan to the following person shall be deemed as
dividend u/s 2(22)(e)
Q23. Dividends from foreign company is exempt from tax (a) Shareholder holding 10% shares/voting power in the
u/s 10(34). company
(a) True (b) False (b) Any person on behalf of Shareholder
(c) Any Concern in which such shareholder has substantial
Q24. Dividends from foreign company is taxable to interest or is a member or partner
(a) Resident & ordinarily resident (d) All of the above
(b) Resident but not ordinarily resident if received in India
(c) Non-Resident if received in India *Q33. A private limited company engaged in
(d) All of the above manufacturing activity had general reserve of Rs. 20 lakh.
It granted a loan of Rs. 5 lakh to a director who held 13%
Q25. Dividends declared by Unit Trust of India or Mutual shareholding cum voting rights in the company. The said
fund is. loan was re-paid by him before the end of the year. The
(a) Fully exempt in the hands of unit holders amount of deemed dividend arising out of the above
(b) Fully taxable in the hands of unit holders transaction is.
(c) Taxable but deduction is allowed u/s 80C from GTI (a) Rs. 2,60,000 (b) Rs. 2,40,000
(d) Fully exempt in the hands of the unit holders except (c) Rs. 5,00,000 (d) Nil
when it is taxable u/s 115BBDA.
Q34. GGC Private Limited gives a loan of 75,00,000 to Mr.
Q26. Deemed dividend referred u/s 2(22) is - P , who is not a shareholder. Mr. P uses the amount of loan
(a) Fully exempt in the hands of shareholders but taxable for the benefit of Mr. A who is shareholder in GGC Private
for the company as CDT Limited holding 15% shares. Amount taxable as deemed
(b) Fully exempt in the hands of shareholders dividends in the hands of Mr. P will be __ & that to Mr. A:
(c) Fully taxable in the hands of shareholder (a) Nil, Nil (b) Nil, 75 lacs
(d) None of the above (c) 75,00,000, Nil (d) 75 lacs, 75 lacs
*Q27. Corporate dividend tax is not applicable on dividend Q35. Following shall not be treated as Deemed Dividend ?
distributed u/s (a) Payment on Buy-back of shares.
(a) 2(22)(a) (b) 2(22)(e) (b) Dividend does not include any distribution of shares in
(c) 2(22)(d) (d) None of the above the scheme of Demerger.
(c)Trade Advances in the nature of commercial
Q28. Corporate dividend tax is applicable on transactions is not a Deemed Dividend.
(a) Final dividend (b) Interim dividend (d) All of the above
(c) Deemed dividend (d) all of the above
Q36. Loan & advance paid by the closely held company to
Q29. Which of the following cases falls in the category of its shareholder having 10% voting power in the ordinary
Deemed dividend u/s 2(22)? course of money leading business shall.
(a) Distribution of Accumulated profit by the company to (a) Be treated as deemed divided & taxable in the hands of
its shareholders resulting into release of company’s asset the shareholder
(b) Distribution of Accumulated profit by company in form (b) Be treated as deemed divided & taxable in the hands of
of debentures. debentures stock or bonus shares to the company
preference shareholders (c) Not be treated as deemed divided & thus not taxable for
(c) Distribution of accumulated profit at the time of shareholder nor for the company
liquidation or on reduction of share capital by the company (d) Be treated as deemed divided & taxable at the special
(d) All of the above rate of 10%
Q30. Release of Asset is necessary in case of which deemed *Q37. Where a closely held company gives a loan.advance
dividend? to a shareholder who has 10% voting rights in the
(a) Distribution of Accumulated profit by the company to company, then amount of loan.advance so given shall be
its shareholders u/s 2(22)(a). deemed divided to the maximum extent of -
(b) Distribution of Accumulated profit by company in form (a) Accumulated profits whether capitalized or not
of debenture/debentures stock or bonus shares to (b) Accumulated profits excluding capitalized profits
preference shareholders (c) The loan or advance so paid
(c) Distribution of accumulated profit at the time of (d) None of the above
liquidation or on reduction of share capital by the company
22: b 23: b 24: d 25: a 26: a 27: d 28: d 29: d 30: a
31: b 32: d 33: c 34: a 35: d 36: c 37: b
Q38. Interest on securities is taxable u/h IFOS if – Q48. Section 115BBDA is not applicable to
(a) Shares are held as Investment (a) Domestic Company (b) Resident Individual
(b) Shares are held as Stock-in-trade (c) Resident HUF (d) Resident firm
(c) Always irrespective of whether shares are held as
Investment or SIT. (d) None of the above. Q49. In respect of winnings from lottery, crossword puzzle
or races or card game etc.
Q39. Mr. P aged, 61 years, received dividend of Rs. 12 lacs (a) No deduction under Chapter VI-A is allowed and basic
from a domestic company in AY 2019- 20. Tax is exemption limit cannot be exhausted
chargeable u/s 115BBDA @ 10% on - (b) No deduction under Chapter VI-A is allowed but
(a) Rs. 12 lacs (b) Rs. 2 lacs unexhausted basic exemption can be exhausted
(c) Nil (d) Rs. 9 lacs (c) Both deduction under Chapter VI-A and basic
exemption are allowed
Q40. In respect of dividend received from domestic (d) Deduction under Chapter VI-A is allowed but basic
companies in excess of Rs. 10 lacs by Individual: exemption limit cannot be exhausted
(a) No deduction under Chapter VI-A is allowed but loss
under other heads can be set-off against such income Q50. For computing lottery, crossword puzzles races, card
(b) No deduction under Chapter VI-A is allowed & no loss games income etc., the assesses shall.
can be set-off against such income (a) Be entitled to deduction for any expenditure incurred
(c) Both deduction under Chapter VI-A & set off of losses for earning such income
against such income are allowed (b) Not entitled to any deduction for any expenditure
(d) Deduction under Chapter VI-A is allowed but set-off of (c) Be entitled to deduction up to certain limits
losses under other heads against such income is not (d) Be entitled to deduction to the extent of Rs. 10,000
allowed
Q51. Mr. P is non-resident of India and has age of 65 years.
Q41. Ms. J received dividend of Rs. 80,000 for her equity He won a prize on lottery ticket on 30.8.2018. The prize
shareholding in GGC Ltd. (a listed domestic company). She amount was Rs. 5,50,000. He had bought lottery tickets for
paid interest of Rs. 12,500 for the amounts borrowed for Rs. 75,000 during the year. Determine his income tax
investment in those shares. The taxable dividend income liability for PY 2018-2019.
in hands of Ms. J would be – (a) Rs. 1,69,950 (b) Rs. 1,71,600
(a) Rs. 80,000 (b) Nil (c) Rs. 1,65,000 (d) Rs. 23,400
(c) Rs. 67,500 (d) Rs. 92,500
Q52. Under a lucky draw competition, Mr. P won a car
Q42. Ms. J received dividend of Rs. 80,000 for her equity which has FMV of Rs. 7,00,000. What amount is taxable in
shareholding in GGC Ltd. (a listed domestic company). She his hands?
paid interest of Rs. 12,500 for the amounts borrowed for (a) Rs. 7,00,000 (b) Rs. 4,90,000
investment in those shares. The taxable dividend income (c) Rs. 2,10,000 (d) Nil
in hands of GGC Ltd. would be -
(a) Rs. 80,000 (b) Nil Q53. Income by way of interest on securities is chargeable
(c) Rs. 67,500 (d) Rs. 92,500 u/h
(a) PGBP (b) HP (c) Salary (d) IFOS
*Q43. Deduction of expenses from the dividend which is
exempt shall not be allowed to ___ Q54. Interest on securities is taxable u/h PGBP if –
(a) Company (b) Shareholder (a) Shares are held as Investment
(c) Both of the above (d) None of the above (b) Shares are held as Stock-in-trade
(c) Always irrespective of whether shares are held as
*Q44. Corporate dividend tax shall be increased by Investment or SIT. (d) None of the above.
(a) Surcharge (b) Health & education Ces
(c) Both (a) & (b) (d) None of (a) & (b) Q55. If no regular system of accounting is followed by the
assessee then interest on securities is taxable on.
Q45. Casual income is taxable u/s (a) Due basis (b) Receipts basis
(a) 115BB (b) 115A (c) 115AB (d) 115C (c) Due or receipt basis at the option of the assesses
(d) None
Q46. The lottery, crossword puzzle, races, card games
incomes, etc. are taxable at. Q56. Interest on Post Office Savings Bank A.a is exempt
(a) Normal slab rate of income tax like any other income upto ____ for an individual A/c
(b) Flat rate of 20% + HEC @ 4% (a) Rs. 3,500 (b) Rs. 5,500
(c) Flat rate of 30% + HEC @ 4%. (c) Rs. 7,000 (d) Without limit
(d) Flat rate of 30% + HEC @ 4% after the initial exemption
of Rs. 2,50,000 Q57. Interest on Post Office Savings Bank A.c is exempt
upto ____ for joint A/c
*Q47. Bond washing transaction is given under. (a) Rs. 3,500 (b) Rs. 5,500
(a) sec 94 (b) sec 95 (c) sec 98 (d) sec 112 (c) Rs. 7,000 (d) Without limit
38: a 39: b 40: b 41: b 42: a 43: b 44: c 45: a 46: c 47: a
48: a 49: a 50: b 51: b 52: a 53: d 54: b 55: a 56: a 57: c
Q58. Section 56(2)(x) would apply only if Gift (Property) Q68. Mr. P received a gift of Rs. 35,000 each on 30.8.2018
received is a ___ for recipient. from each of his three friends. The amount chargeable to
(a) Personal Asset (b) Capital asset tax in this case would be.
(c) Personal or Capital Asset (d) None of the above (a) Rs. 50,000 (b) Rs. 1,05,000
(c) Nil (d) Rs. 55,000
Q59. Provisions of section 56(2)(x) [Gift received] is
applicable to___. Q69. Movable property shall be taxable in the hands of
(a) All Assessees. (b) Individual or HUF recipients if
(c) All except Individual or HUF (a) It has been received without consideration & FMV
(d) Assessees whose GTI > Rs. 2,50,000. exceeds Rs. 50,000.
(b) It has been received for consideration & difference
Q60. Which of the following movable property is not between FMV & consideration > Rs. 50,000.
taxable u.s 56(2) when transferred without consideration? (c) Any of the above (d) None of the above
(a) Drawings (b) Paintings
(c) Cars (d) Sculptures Q70. In computation of limit of Rs. 50,000 for taxability of
immovable property received without consideration
Q61. Any work of art or bullion is not a movable property ...................... transaction shall be considered.
for purpose of section 56(2). Discuss. (a) All transactions (b) Single Transaction
(a) Correct (b) Incorrect (c) Either of (a) or (b) (d) None of (a) or (b)
(c) Partly correct (d) None of the above
Q71. Any immovable property received by any person
Q62. On 5th February 2019 , Mr. P gets a gift of motor car without consideration shall be taxable to the extent of
from his relative Mr. D. Fair market value of the car is Rs. (a) Market value of the immovable property
3,60,000. The amount taxable u.s 56(2) is (b) SDV fixed by the stamp duty authority
(a) Rs. 3,60,000 (b) Rs. 3,10,000 (c) Stamp duty value fixed by the stamp duty authority
(c) Rs. 50,000 (d) Nil provided it exceeds Rs. 50,000
(d) Stamp duty value minus Rs. 50,000
Q63. A watch has been gifted to an individual which has
FMV of Rs. 1 lac. Such FMV is Q72. Gift of immovable property received by an individual
(a) Exempt since received from a relative from unrelated person shall be.
(b) Not taxable since watch is not movable property within (a) Fully exempt whether the stamp duty value of such gift
the definition of section 56(2). is less than or more than Rs. 50,000
(c) Taxable under head other sources (b) Fully taxable
(d) None of the above (c) Fully taxable if SDV of such gift > Rs. 50,000 (d) None
Q64. The limit of Rs. 50,000 for computing limit for *Q73. Any immovable property acquired by any person for
amount of cash received without consideration has to be a price less than SDV is taxable
seen for (a) If SDV > Purchase price by 15% of stamp duty value
(a) Separately for each transaction (b) If stamp duty value exceeds the purchase price by more
(b) Cumulatively for all transactions than Rs. 50,000
(c) Either of (a) and (b) (d) None of (a) and (b) (c) If stamp duty value exceeds the purchase price by 5%
of stamp duty value
Q65. In computation of limit of Rs. 50,000 for taxability of (d) In all situations
movable property received without consideration, ____
transaction shall be considered. Q74. Which of the following income will be taxable as
(a) All transactions (b) Single Transaction IFOS?
(c) Either of (a) or (b) (d) None of (a) or (b) (a) Purchase of house from husband for inadequate
consideration
Q66. When any sum of money which exceeds Rs. 50,000 is (b) Purchase of painting from registered dealer at invoice
received without consideration then the whole of such sum value less than fair market value
shall be taxable in the hands of: (c) Cash gift from a non-resident friend on marriage
(a) all assesses (b) an individual anniversary (d) All of the above
(c) an individual or HUF
(d) all assesses other than a company *Q75. Mr. P has acquired a building from his friend on
10.10.2018 for Rs. 15 lacs. SDV of the building on the date
Q67. Mr. P received gift of Rs. 45,000 in cash from his of purchase is Rs. 15,70,000. Income chargeable to tax in
friend. Amount shall be taxable in hands of the hands of Mr. P is
(a) Mr. P (b) His friend (a) Rs. 70,000 (b) Rs. 50,000
(c) None of the above (d) Any of the above (c) Nil (d) Rs. 20,000
58: b 59: b 60: c 61: b 62: d 63: b 64: b 65: a 66: c

67: c 68: b 69: c 70: b 71: c 72: c 73: d 74: d 75: c
Q76. In which of the following case, gift received is not Q86. Mr. P has received a sum of Rs. 51,000 on 24.10.2018
taxable? from relatives on the occasion of his marriage.
(a) Gift received from any relative (a) Entire Rs. 51,000 is chargeable to tax.
(b) Gift received on occasion of marriage of individual (b) Only Rs. 1,000 is chargeable to tax
(c) Gift Received in contemplation of death of payer or (c) Entire Rs. 51,000 is exempt from tax
donor (d) All of the above (d) Only 50% i.e. Rs. 25,500 is chargeable to tax
Q77. Which of the following are relative of an individual Q87. Mr. P has received a sum of Rs. 75,000 on 24.10.2018
for the purpose of section 56(2)? from his friend on the occasion of his marriage
(a) Spouse of the individual anniversary.
(b) Brother or sister of the Individual (a) Entire Rs. 75,000 is chargeable to tax.
(c) Brother or sister of either of parents of the individual (b) Entire Rs. 75,000 is exempt from tax
(d) All of the above (c) Only Rs. 25,000 is chargeable to tax
(d) Only 50% i.e. Rs. 37,500 is chargeable to tax
Q78. Gift exceeding Rs. 50,000 received by Mr. P from his
spouse Mrs. S shall be. Q88. A lady received gifts worth Rs. 1,00,000 from her
(a) Fully exempt relatives and Rs. 60,000 from her office colleagues on her
(b) Fully taxable marriage anniversary. Taxable amount of gifts would be
(c) Exempt upto Rs. 50,000 & the balance shall be taxable (a) Rs. 1,60,000 (b) Rs. 10,000
(d) None of the above. (c) Rs. 60,000 (d) Rs. 1,10,000
Q79. Mr. P has received gift of Rs. 50,000 in cash from his Q89. Gift on the occasion of Marriage received from a non-
mother’s sister. The amount shall be taxable in the hands relative is ...................... to tax
of (a) Liable (b) Not Liable
(a) Mr. P (b) His mother’s sister (c) Depends on gift (d) None of the above
(c) Exempt for tax (d) Any of the above
Q90. Mr. P received cash gift of Rs. 51,000 from Mr. P on
*Q80. Mr. P has received gift of Rs. 1,50,000 in cash from the occasion of his 50th birthday. Mr. P is not his relative.
his cousin brother. The amount The amount liable to tax in the hands of Mr. P would be.
(a) Shall be taxable (b) Exempt from tax (a) Nil (b) Rs. 1,000
(c) May be taxable (d) Not included in income (c) Rs. 51,000 (d) Rs. 46,000
Q81. Gift exceeding Rs. 50,000 received by HUF from Q91. Mr. P received cash gift of Rs. 51,000 from Mr. P on
relative of the member of HUF shall be. the occasion of his 50th birthday. Mr. P is his son. The
(a) Fully taxable (b) Fully exempt amount liable to tax in the hands of Mr. P would be.
(c) Taxable to the extent it exceeds Rs. 50,000 (a) Nil (b) Rs. 1,000
(d) None (c) Rs. 51,000 (d) Rs. 46,000
Q82. Gift received by HUF from its members shall be. Q92. Which of the following statement is true?
(a) Fully exempt (b) Fully taxable (a) Money received as gift shall be taxable in the hands of
(c) Taxable if > Rs. 50,000 (d) None. recipient if it exceeds Rs. 50,000
Q83. Mr. P has received gift of Rs. 1,50,000 in cash from (b) SDV of immovable property if it is given without
his grandfather. The amount consideration and the stamp duty value exceeds Rs. 45,000
(a) Shall be taxable (c) Fair market value of the movable property if it is given
(b) Exempt from tax since amount is received from a without consideration and the fair market value exceeds
relative Rs. 40,000 (d) None of the above
(c) May be taxable (d) Not included in income
Q93. Mr. P received Rs. 80,000 by way of gift from friends
Q84. On 30th December 2018 Mr. P gets by gift a upon retirement from service. The amount of gift
commercial flat (stamp duty value is Rs. 25,00,000) from chargeable to income-tax would be
elder brother of his father in law. The amount chargeable (a) Nil (b) Rs. 30,000
to tax in the hands of Mr. P is (c) Rs. 70,000 (d) Rs. 80,000
(a) Rs. 25,00,000 (b) Rs. 24,50,000
(c) Rs. 20,00,000 (d) Nil Q94. Mr. P has received three gifts from his three friends
(i) Rs. 55,000 in cash
Q85. Gift, whether in cash or kind, received by an (ii) Land with market value Rs. 5,00,000, value for purpose
individual on the occasion of his/her marriage shall be. of charging stamp duty Rs. 4,00,000
(a) Fully exempt even if it exceeds Rs. 50,000 (iii) Jewellery with market value Rs. 3,00,000 What is the
(b) Fully taxable if it exceeds Rs. 50,000 amount taxable as IFOS
(c) Exempt up to Rs. 50,000 and balance taxable (a) Rs 7,55,000 (b) Rs. 7,00,000
(d) Fully exempt only if received from relatives (c) Rs. 4,55,000 (d) Rs. 3,55,000
76: d 77: d 78: a 79: c 80: a 81: a 82: b 83: b 84: a 85: a
86: a 87: a 88: c 89: b 90: c 91: a 92: a 93: d 94: a
*Q95. Mr. P received following gifts on the occasion of his Q102. When an advance received for transfer of capital
birthday. Determine the amount taxable as IFOS asset is forfeited on or after 1.4.2014, such forfeited
(i) cash gift from elder brother Rs. 30,000 amount shall be
(ii) Gold chain from younger sister which has market value (a) Deducted from the cost of asset (b) Exempt
of Rs. 38,000 (c) Taxable as income u.h IFOS (d) None
(iii) cash gifts from friends Rs. 45,000
(iv) purchased shares from younger brother for Rs. Q103. When an advance received for transfer of capital
1,00,000 when FMV of the shares was Rs. 1,35,000. asset is forfeited before 1.4.2014, such forfeited amount
(a) Rs. 1,48,000 (b) Rs. 1,18,000 shall be
(c) Rs. 80,000 (d) Nil (a) Deducted from original cost of the asset (b) Exempt
(c) Taxable u/h IFOS (d) None
Q96. Mr. P received the following gifts during PY 2018-
2019. Determine the amount of taxable gift u.h ‘IFOS’ Q104. Which section states the deduction of expenses
(i) Rs. 50,000 from his employer which is allowed from IFOS
(ii) Rs. 1,00,000 from mother’s sister (a) Sec 58 (b) Sec 57 (c) Sec 56
(iii) Rs. 10,000 from his friend on the occasion of his (d) No expense incurred is allowed as deduction
marriage
(iv) Rs. 60,000 in the form of scholarship from a registered Q105. Which section states the deduction of expenses
charitable trust which is not allowed from IFOS?
(a) Nil (b) Rs. 50,000 (a) Sec 58 (b) Sec 57 (c) Sec 56
(c) Rs. 1,50,000 (d) Rs. 2,10,000 (d) No expense incurred is allowed as deduction
Q97. GGC Pvt. Ltd. issued equity shares of Rs. 10 each at Rs. Q106. The deduction allowable in respect of family
40 per share. The fair market value of the share on the date pension taxable under “IFOS” is
of issue was ascertained as Rs. 25 per share. The company (a) Rs. 15,000 or 1/3rd of family pension whichever is less
issued 1,00,000 equity shares. The amount liable to tax in (b) Rs. 15,000 or 1/2 of family pension whichever is less
the hands of the company would be. (c) Rs. 10,000 or 1/3rd of family pension whichever is less
(a) Rs. 15,00,000 (b) Rs. 30,00,000 (d) No deduction is allowed
(c) Nil (d) Rs. 40,00,000
Q107. Mr. P is in receipt of family pension of Rs. 15,000
Q98. GGC Pvt. Ltd. is a closely held company and has p.m. in the PY 2018-19. Income chargeable to tax in the
received from Mr. P shares of another closely held hands of Mr. P is -
company but without any consideration (a) Rs. 1,80,000 (b) Rs. 1,20,000 (c) Rs. 1,65,000 (d) Nil
(a) The whole of the FMV of the shares shall be taxable
(b) The whole of the FMV is taxable if it exceeds Rs. 50,000. Q108. Mr. P received the following income during AY
(c) The whole of FMV shall be exempt 2019-2020. Determine his IFOS.
(d) The whole of the cost of such shares shall be exempt (i) Director’s fees Rs. 5,000
(ii) Income from agricultural land in Pakistan Rs. 15,000
Q99. Interest received on compensation for compulsory (iii) Rent from let-out land in Jaipur Rs. 20,000
acquisition of L&B is taxable on __ basis? (iv) Interest on deposit with HDFC Bank Rs. 1,000
(a) Due basis (b) Receipt Basis (v) Divided from Indian company Rs. 5,000.
(d) Earlier of (a) or (b) (d) Later of (a) or (b) (a) Rs. 21,000 (b) Rs. 46,000 (c) Rs. ,41000 (d) Rs. 26,000
Q100. What is the amount of deduction available on Q109. Mr. P received cash gift of Rs. 2 lakh on occasion of
interest received from enhanced compensation? his marriage. It includes gift from non-relative of Rs.
(a) 60% of income by way of interest on enhanced 80,000. His lottery winnings is Rs. 3 lakh on which TDS has
compensation been done at 30%. He would be liable to pay tax of.
(b) 50% of income by way of interest on enhanced (a) Rs. 87,500 (b) Rs. 90,000
compensation (c) Rs. 1,000 (d) Rs. 92,700
(c) 70% of income by way of interest on enhanced
compensation (d) Nil
Q101. An assessee received interest due to late payment of

compensation for compulsory acquisition of capital asset
amounting to Rs. 10,00,000. What amount is taxable under
head Other Sources?
(a) Rs. 7,00,000 (b) Rs. 5,00,000
(c) Rs. 3,50,000 (d) Nil
95: d 96: a 97: a 98: b 99: b 100: b 101: b 102: c 103: a

104: b 105: a 106: a 107: c 108: c 109: b
5. CLUBBING OF INCOME
Q1. If there is a transfer of income by a person to another Q8. If both Husband & Wife have Substantial Interest &
person without the transfer of the asset from which the both are in Receipt of Remuneration without qualification
income arises, such income shall be included in the income from the Same Concern → Remuneration of other spouse
of _____. will be clubbed in total income of Husband/Wife whose:
(a) Transferor (b) Transferee (a) Total income excluding such remuneration is greater
(c) Transferor irrespective of whether the transfer is (b) Total income excluding such remuneration is lower
revocable or irrevocable (c) Not to be clubbed (d) None of these
(d) Transferee if transfer is irrevocable
Q9. Mrs. S received salary of Rs. 74,00,000 from a firm
Q2. Mr. P transfers income of Rs. 51,000 from rent to his where her husband has 16% profit share. Mrs. S does not
major son without transfer of house property. Rent of Rs. have any qualification or experience or skill to match this
51,000 is - remuneration. Apart from above amount, the income of
(a) Taxable in the hands of the transferor-father Mrs. S is Rs. 3,50,000. Income taxable for Mr. P & Mrs. S is
(b) Taxable in the hands of his son (a) Mr. P . 77,50,000, Mrs. S . Nil
(c) Taxable in the hands of the that parent whose total (b) Mr. P . Nil, Mrs. S . 77,50,000
income is higher (d) Exempt from tax (c) Mr. P . 74,00,000, Mrs. S . 3,50,000
Q3. If there is revocable transfer of an asset by any person
to another person, any income arising from such asset shall Q10. Mr. P & Mrs. S hold 15% & 10% shares in a concern
included in the income of. & both are employed by that firm getting the monthly
(a) Transferor (b) Transferee salary of Rs. 20,000 respectively. Their remuneration does
(c) Both transferor & transferee (d) None not match their technical or professional skills or
experience. Apart from the salary Income Mr. P has earned
Q4. A transfer shall be deemed to be Revocable if Rs. 2,00,000 from cloth business whereas Mrs. S has
(a) Transfer contains any provision for re-transfer of the earned Rs. 2,00,000 as rent of the house property. Mr. P
Asset or Income to the transferor, during the life-time of has invested Rs. 50,000 in PPF account & another Rs.
beneficiary or transferee 50,000 in NSC. While Mrs. S has invested Rs. 1,00,000 in
(b) Gives right to the transferor to re-assume power over NSC & has donated Rs. 10,000 to PMNRF. Whose total
the asset or income during the life-time of beneficiary or income will be higher for clubbing of remuneration of both
transferee. of them?
(c) Both (a) or (b) (d) None of the above (a) Mr. P (b) Mrs. S (c) Both have equal income (d) NA
Q5. X transfers a house property to a trust for the benefit Q11. Mr. P is a Chartered Accountant & is working as
of A & B. However, X has a right to revoke the trust during Accounts Office in GGC Pvt. Ltd. on a salary of Rs. 20,000
the lifetime of A or B. It is a revocable transfer & income p.m. He got married to Ms. J who holds 25% shares of this
arising from house property shall be included in the hands company. What will be the impact of salary paid to Mr. P
of: by the company in the hands of Ms. J
(a) X (b) A (c) B (d) None (a) 100% salary to be clubbed (b) 50% salary to be clubbed
(c) No amount be clubbed (d) 25% salary to be clubbed
Q6. If there is a transfer of asset which is not revocable Q12. As per section 64(1)(iv), there shall be included in the
during the life time of the transferee, income arising from income of an individual, any income arising from the gift to
such asset shall be included in the income of. the spouse of
(a) Transferor (b) Transferee (a) Any capital asset (b) Any asset
(c) Transferee till his death & thereafter in the hands of the (c) Any asset other than house property
transferor (d) Any asset other than residential property
(d) Transferor or transferee at their mutual consent
Q13. Mr. P transferred shares of Indian companies to his
Q7. Where spouse of an individual gets any remuneration wife, Mrs. S . The shares were sold by Mrs. S & Capital Gain
from a concern in which such individual has substantial was earned. The capital gains so computed shall be
interest, then such remuneration shall be included in the clubbed in the hands of Mr. P .
income of individual. (a) Correct (b) Incorrect
(a) In all cases (c) Clubbing not applicable (d) None of the above.
(b) Only when such remuneration is received by the
spouse due to his/her technical or professional Q14. Income from asset transferred to spouse will be
qualification taxable in the hands of transferor if.
(c) In all cases except when remuneration is received by (a) Asset has been transferred in pursuance of an
the spouse due to his/her technical or professional agreement to live apart
qualifications (b) Asset was transferred for an adequate consideration
(d) Clubbing shall not be done in any case (c) Asset was transferred before marriage
(d) Asset was transferred for inadequate consideration
1: c 2: a 3: a 4: c 5: a 6: b 7: c 8: a 9: c
10: a 11: c 12: c 13: a 14: d
Q15. To apply clubbing provisions u/s 64(1)(iv), the Q24. Mr. P transfers the house property to Mrs. S without
relation of husband & wife must exist at the time of. adequate consideration, then income from such house
(a) Only at the time of transfer of asset property shall be subject to the provisions of.
(b) only at the time of accrual of income (a) Section 64(1)(iv) (b) Section 26
(c) Both at the time of transfer of asset & accrual of income (c) Section 27 (d) Section 64(1 A)
(d) Shall be at any time of accrual or any time of transfer
Q25. Mr. P transferred 2,000 shares of GGC Ltd. to Ms. J
Q16. Which of the following statement is correct? without any consideration. Later, Mr. P & Ms. J got married
(a) Transfer of asset in connection with agreement to live to each other. The dividend income from the shares
apart is deemed to be transfer with adequate transferred would be
consideration & thus, no clubbing. (a) Taxable in hands of Mr. P both before & after marriage
(b) If consideration is payable in parts then only (b) Taxable in hands of Mr. P before marriage but not after
proportionate income shall be clubbed marriage
(c) Both (a) & (b) (d) None of the above (c) Taxable in hands of Mr. P after marriage but not before
marriage
Q17. Income derived on the accretion of transferred (d) Never taxable in the hands of Mr. P
property:
(a) Shall be clubbed in the hands of transferor Q26. Income of a minor child who is suffering from
(b) Shall be clubbed in the hands of transferee disability of the nature as specified in Section 80U is
(c) Cannot be clubbed (d) Not taxable (a) to be assessed in the hands of the minor child
(b) to be clubbed with the income of that parent whose
Q18. Mr. P as on 1/10/2017 transferred shares without total income, before including minor’s income, is higher
consideration to his fiancee, Ms J. They got married on (c) completely exempt from tax
1/4/2018. For AY 2019-20 Income from share shall be (d) to be clubbed with the income of father
assessed in hands of ___.
(a) Mr. P (b) Ms. J Q27. Income arising to a minor married daughter is
(c) Any of the above, with their mutual consent (a) to be assessed in hands of the minor married daughter
(d) Neither of the above (b) to be clubbed with the income of that parent whose
total income, before including minor’s income, is higher
Q19. Shares of ABC Ltd were transferred by Mr. P to Mrs. (c) completely exempt from tax
S for 71,00,000, which is the FMV of such shares. Income (d) to be clubbed with the income of her husband
from shares so transferred shall be taxable in the hands of
(a) Mr. P (b) Mrs. S (c) Both (d) None Q28. Exemption is available u/s 10(32) when a minor’s
income is clubbed with the income of the parent. The
Q20. Mr. P gifts Rs. 1,00,000 to Mrs. S on 10/4/2018, who maximum exemption available is
invested the same in the business of cloth which is being (a) upto Rs. 1,500 in respect of each minor child
run by her for last 3 years. Mrs. S earns Rs. 20,000 as (b) upto Rs. 1,500 in respect of each minor child subject to
profits from such business for the AY 2019-20. What maximum of two children
amount will be in the income of Mr. P . (c) upto Rs. 2,000 in respect of each minor child
(a) Rs. 20,000 (b) Rs. 10,000 (c) Rs. 1,20,000 (d) NIL (d) upto Rs. 2000 in respect of each minor child maximum
of two children
Q21. Gold funds were transferred by Mr. P to Mrs. S under
an agreement to live apart. Income from gold funds shall Q29. Scholarship received by a minor child is—
be assessed in the hands of (a) to be assessed in the hands of the minor child
(a) Mr. P (b) Mrs. S (b) to be clubbed with the income of that parent whose
(c) Any of the above, with their mutual consent total income, before including minor’s income, is higher
(d) Neither of the above (c) completely exempt from tax
(d) to be clubbed with the income of father
Q22. Clubbing provisions u/s 64(1)(vi) are applicable
where the asset is transferred by an individual without an Q30. Income of a minor child from a fixed deposit with a
adequate consideration to. bank, made out of income earned from scholarship is -
(a) Daughter’s husband (b) Daughter in law (a) to be assessed in the hands of the minor child
(c) Minor child (d) Spouse (b) to be clubbed with the income of that parent whose
total income, before including minor’s income, is higher
Q23. Mr. Michael transferred his immovable property for (c) completely exempt from tax
an inadequate consideration to Jackson. Ltd. subject to a (d) to be clubbed with the income of father
condition that, a sum of Rs. 50,000 per annum out of the
rental income shall be utilized for the benefit of his son’s
wife. Such income shall be taxable in the hands of:
(a) Mr. Michael (b) Mr. Michael’s son
(c) Mr. Michael’s daughter-in-law (d) None
15: c 16: c 17: c 18: b 19: a 20: d 21: b 22: b 23: a
24: c 25: d 26: a 27: b 28: a 29: c 30: b
Q31. Interest from a fixed deposit received by a minor Q39. When the income of the individual includes Rs.
married daughter is 20,000 as the income of the minor child in terms of section
(a) to be assessed in the hands of the minor child 64(1 A), taxable income in this respect will be?
(b) to be clubbed with the income of that parent whose (a) Nil (b) Rs. 20,000
total income, before including minor’s income, is higher (c) Rs. 18,500 (d) None of the above
(c) completely exempt from tax
(d) to be clubbed with the income of her husband Q40. 710,00,000 earned by minor child from manual
activity is invested in FDR. He earns 7 10,000 as interest
Q32. When income of minor child is clubbed in the income from FDR during the AY 2019- 2020 i.e. PY 2018-2019.
of the parent such parent will be allowed exemption of Rs. 710,00,000 & 710,000 shall be assessed in the hands of
1,500 pa per child u/s of. (a) Minor child, Minor child (b) Minor child, Parent
(a) 10(1) (b) 10(2) (c) 10(2A) (d) 10(32) (c) Parent, Parent (d) Parent, Minor child
Q33. Mr. P transfers the house property to his minor child Q41. An individual has 3 minor children each having
without adequate consideration, then income such house income of 72,000. What amount shall be taxable in the
property shall be. hands of individual?
(a) clubbed in the income of Mr. P as per section 27 & (a) 76,000 (b) 74,000 (c) 71,500 (d) Nil
exemption of Rs. 1,500 shall be allowed
(b) clubbed in the income of Mr. P as per section 27 but Q42. In which following situation, income of minor child
exemption of Rs. 1,500 shall not be allowed shall be clubbed in the income of parents
(c) clubbed in the income of Mr. P as per section 64(1 A) (a) Income of child suffering from disease u/s 80U
but exemption of Rs. 1,500 shall not be allowed (b) Income earned by child from manual work
(d) clubbed in the income of Mr. P as per section 64(1 A) (c) Income of child from interest on FDR
& exemption of Rs. 1,500 shall be allowed (d) Income earned from an activity involving skill
Q34. If both of the parents of child have died then his
Q43. Where a member of a HUF has transferred his self-
income shall be.
acquired property for inadequate consideration into joint
(a) Exempt from tax.
family property, income arising therefrom is
(b) Taxable for the guardian who maintains the child
(a) Taxable as the income of the transferor member.
(c) Shall be taxable for child who has earned it
(b) Taxable in the hands of the HUF.
(d) Taxable for dead parents.
(c) Taxable in the hands of the karta of the HUF.
Q35. If marriage of the parents does not subsist, income of (d) Exempt from tax.
the minor child shall be clubbed in the income of.
(a) Father or mother who is loved more Q44. If the converted property is subsequently
(b) Parent who maintains the child partitioned among the members of the family, the income
(c) Father or mother whose income is higher derived from such converted property as is received by the
(d) Neither with mother nor with father, but shall be spouse of the transferor will be taxable -
taxable for child itself (a) as the income of the karta of the HUF
(b) as the income of the spouse of the transferor
Q36. Mr. P has 4 minor children. 2 daughters & 2 sons. (c) as the income of the HUF.
Annual income of 2 daughters was 77,500 & 75,000 & of (d) as the income of the transferor-member
sons was 75,500 & Rs. 1,250 respectively. The daughter
having income of 75,000 is suffering from a disability Q45. Mr. P gifts a sum of Rs. 1,00,000 to his brother’s wife
specified u/s 80U. Work out the amount of income earned Mrs. B. Mr. B gifts a sum of Rs. 1,00,000 to Mrs. S . From the
by minor children to be clubbed in the hands of Mr. P sum gifted to her, Mrs. B invests in a fixed deposit, income
(a) Rs. 163,250 (b) 161,000 therefrom is Rs. 10,000. Aforesaid Rs. 10,000 will be
(c) 161,250 (d) 161,750 included in the total income of
(a) Mr. A (b) Mrs. A (c) Mrs. B (d) Mr. B
Q37. Income of a minor will not be clubbed with his/her
parent’s income if Q46. Mr. P receives salary of Rs. 1,00,000 from GGC Ltd.,
(a) Such income is earned by that child by applying his/her Mrs. S receives salary of Rs. 1,50,000 from GGC Ltd. Both
physical labour, talent or any specialized knowledge of them have substantial interest in company. Other
(b) Child is illiterate (c) Parents are handicapped Income of Mr. P & Mrs. S excluding such remuneration is
(d) The child does not give her consent Rs. 10,00,000 & Rs. 12,00,000 respectively. Taxable
income of Mr. P & Mrs. S shall be
Q38. If both parents are earning then income of a minor (a) Rs. 11,50,000, Rs. 13,50,000
child will be clubbed with (b) Rs. 11,00,000, Rs. 13,50,000
(a) Income of parent having higher income (c) Rs. 12,50,000, Rs. 12,00,000
(b) Proportionately with both parent’s income (d) Rs. 10,00,000, Rs. 13,70,000
(c) Income of parent having lower income
(d) Will not be clubbed & will be taxable for child
31: b 32: d 33: b 34: c 35: b 36: b 37: a 38: a 39: c

40: b 41: c 42: c 43: a 44: d 45: d 46: d
Q47. Mr. Phiva gifted a let-out building which fetches Q52. If any income has to be clubbed u/s 64, it will be
rental income on Rs. 10,500 per month to his son’s wife on clubbed under the.
1/11/2018. The municipal Tax of Rs. 6,000 on the property (a) head of income from other sources
was paid on 10/1/2019. The total income from all other (b) relevant head to which it belongs
sources (computed) amounts to Rs. 2,60,000 except (c) none of these two
income from above said property. His total income taxable
is. Q53. In certain cases, income of other person is included
(a) Rs. 3,11,450 (b) Rs. 2,92,550 in the income of assesses. It is called
(c) Rs. 3,80,000 (d) Rs. 3,33,500 (a) Clubbing of income (b) Increase in income
(c) Addition to income (d) Set-off of income
Q48. Mr. P transferred his let out residential property to
his wife by way of gift on 1/4/2018. During the AY 2019- Q54. For the purpose of clubbing of income of the specified
20, she earned rental income of Rs. 30,000 per month. She person in the income of the individual u/s 64, the word
made fixed deposit in a bank out of such rental income & ‘income’ includes?
earned interest income during the year of X21,000. The (a) Loss (b) Expenses
total amount of income liable for clubbing in the hands of (c) Interest (d) All of the above
Mr. P for the AY 2019-20 is.
(a) Nil (b) Rs. 21,000 Q55. Master J has earned an interest of Rs. 5,000 on bank
(c) Rs. 2,52,000 (d) Rs. 2,73,000 fixed deposits. Mr. P has let out the house from which he
has earned Rs. 2,00,000 as rent & has paid municipal taxes
Q49. Mrs. S has invested Rs. 5,00,000 in firm. As on of Rs. 5,000 & Mrs. S is a government employee getting
1/4/2018, out of total investment of Rs. 5,00,000, Rs. basic salary of Rs. 2,40,000 & the entertainment allowance
3,00,000 is on account of money given by her husband. of Rs. 60,000. Income of Master J will be clubbed in income
During the AY 2019-20, she earned interest of Rs. 50,000 of
& profit of NIL from the firm. Out of this amount taxable for (a) Mr. P (b) Mrs. S
Mr. P should be (c) Any one of them at the choice of Master J
(a) Nil, Rs. 30,000 (b) Rs. 30,000, Nil (d) Any one of them at the choice of Assessing Officer
(c) Nil, Nil (d) Rs. 30,000, Rs. 30,000
Q56. Mr. P formed a trust for the benefit of his wife. The
Q50. Mr. P gifts Rs. 15,00,000 to his wife who invested the income of trust meant for the benefit of Mrs. shall be
same in the partnership business. Mrs. S receives Rs. assessed in the hands of
3,35,000 as her share of profits from such firm. In this case (a) Mrs. S (b) Mr. P
amount to be clubbed in the income of Mr. P shall be. (c) Both for Mr. P & Mrs. S (d) None of Mr. P & Mrs. S
(a) Rs. 3,35,000
(b) Rs. 85,000 after giving maximum exemption of Rs. Q57. At the time of fixation of marriage of his son, Mr. P
2,50,000 to Mrs. S gifted land to his would-be daughter in law. The marriage
(c) No amount is to be clubbed (d) Rs. 15,00,000 was held in the month subsequent to the date of transfer.
The income accruing on land after marriage shall be
Q51. For the provisions of clubbing of incomes to calculate taxable in the hands of
substantial interest we consider the holding of. (a) Mr. P (b) Daughter in law
(a) the individual only (c) Equally in hands of (a) & (b) (d) None of the above
(b) the individual & his spouse taken together
(c) the individual along with his relatives Q58. Accretion of income will not be clubbed with the
(d) the individual & his spouse taken separately income of the assesses who transfers such income to some
other person
(a) True (b) False
47: b 48: c 49: b 50: c 51: c 52: b 53: a 54: d

55: c 56: b 57: b 58: a
6. SET OFF & CARRY FORWARD OF LOSSES
Q1. Intra head set off is done u/s. Q10. During the AY 2019-20, Mr. P has following incomes
(a) Sec 70 (b) Sec 71 (c) Sec 72 (d) Sec 73 & brought forward losses.
Short term capital gains on sale of shares (STT not paid)
Q2. Section 70 enables set off of losses under one source of Rs. 1,50,000, Long term capital loss of AY 2017-2018 (Rs.
income against income from any other source under the 96,000), Short term capital loss of AY 2017-2018 (Rs.
same head. The exceptions to this section are- 37,000). What is the capital gain taxable in the hands of Mr.
(a) Loss under head Capital gains, loss from speculative P & how much loss can be carried forward to AY 2020-21?
business & loss from activity of owning & maintaining race (a) Rs. 1,13,000, Nil (b) Rs. 17,000, Nil
horses (c) Rs. 1,13,000, Rs. 96,000 (d) Rs. 54,000, Rs. 37,000
(b) Loss under head Capital gains, loss from speculative
business, loss from business specified u/s 3 5AD & loss Q11. During the AY 2019-20, Mr. P has following income
from the activity of owning & maintaining race horses & brought forward losses.
(c) Short-term capital loss, loss from business specified u/s Long term capital gain Rs. 1,75,000, Long term capital loss
35AD & loss from speculative business. of AY 2017-2018 (Rs. 96,000), Short term capital loss of AY
(d) None of the above 2017-18 (Rs. 37,000).
What is the capital gain taxable in the hands of Mr. P & how
Q3. Loss from a speculation business can be set off from. much loss can be carried forward to the AY 2020-2021?
(a) Any head of income. (a) Rs. 79,000, Nil (b) Rs. 1,38,000, Rs. 96,000
(b) Profits & gains from any business. (c) Nil, Nil (d) Rs. 42,000, Nil
(c) Profits & gains from any business other than
speculation business. Q12. Calculate capital gains income.
(d) Income of speculation business. LTCG - (Rs. 1,00,000); STCG - Rs. 2,00,000
(a) (Rs. 1,00,000) (b) Rs. 2,00,000
Q4. Loss on account of owing & maintaining the race (c) Rs. 1,00,000 (d) None of the above
horses can be set off from.
(a) Any business income Q13. Calculate capital gains income.
(b) Any income under the head other sources LTCG - (Rs. 1,00,000); LTCG - Rs. 2,00,000
(c) Income from horse races (a) (Rs. 1,00,000) (b) Rs. 2,00,000
(d) Income of owing & maintaining of race horses (c) Rs. 1,00,000 (d) None of the above
Q5. Short-term capital loss can be set off from. Q14. Calculate capital gain. LTCG on Sale of House Rs. 2.00.
(a) STCG (b) LTCG 000; LTCG on Sale of Gold (Rs. 1,00,000)
(c) STCG or LTCG (d) IFOS (a) Rs. 3,00,000 (b) Rs. 2,00,000
Q6. Mr. P incurred long-term capital loss from sale of listed
shares in recognized stock exchange & STT is paid at the Q15. Calculate total income. CG (Rs. 2,00,000);
time of acquisition & sale of Speculation business Rs. 3,00,000
such shares. Such loss can be set-off against: (a) Rs. 1,00,000 (b) Rs. 2,00,000
(a) LTCG (c) Rs. 5,00,000 (d) Rs. 3,00,000
(b) Both STCG & LTCG
(c) any head of income Q16. Calculate total income. CG Rs. 3,00,000; Speculation
(d) is not allowed to be set-off business (Rs. 2,00,000)
(a) Rs. 3,00,000 (b) Rs. 2,00,000
Q7. Choose the most appropriate answer from the given (c) Rs. 1,00,000 (d) Rs. 5,00,000
options. Short-term capital loss can be set-off from
(a) STCG (b) LTCG Q17. Inter head set off can be availed u/s 71 before
(c) STCG or LTCG (d) IFOS availing the intra head set off u/s 70.
(a) True (b) False
Q8. Which of the following is correct?
(a) LTCG can be set off from LTCG only. Q18. Business loss of the current year cannot be set off
(b) LTCG can be set off from STCG only. against
(c) Loss of business can be set off from salary income (a) Any income other than business income
(d) Loss of speculation business can be set off from income (b) LTCG (c) Either LTCG/STCG (d) Salary income
from normal business
Q19. Loss under the head business & profession can be set
Q9. Loss under the head capital gains can. off from income under
(a) be set off from any other head of income in same year (a) any other head (b) income from lottery
(b) be carried forward only (c) any other head except salary & lottery income
(c) neither be set off nor carried forward (d) any other head except H/P
1: a 2: b 3: d 4: d 5: c 6: a 7: c 8: a 9: b 10: c
11: d 12: b 13: c 14: c 15:d 16: a 17: b 18: d 19: c
Q20. Brought forward loss of business & profession. Q30. Loss from one source/head cannot be adjusted
(a) can be set off in any of the 8 succeeding years against Income form other source/head subject to certain
(b) must be set off in the immediate succeeding year if conditions.
income is available & balance in the immediately next (a) True (b) False
succeeding year & so on for 8 years
(c) cannot be set off in the current year Q31. Loss from Exempt Source can be set-off against
Profits from Taxable Source of Income.
Q21. A business loss can be carried forward & set off in the (a) True (b) False
subsequent assessment year when the business on account
of which this loss has arisen. Q32. No loss can be set-off against income from:
(a) Is continued in the AY in which the such loss is set off (a) Salaries (b) House property
(b) Is continued or not (c) Capital gains (d) Winnings from lotteries, etc.
(c) Is continued for any part of the previous year
(d) None of the above Q33. The first item in order of priority of set off between
unabsorbed depreciation, capital expenditure on scientific
Q22. Calculate PGBP income. Speculation business Rs. research, current year depreciation, & brought forwarded
2,00,000; Trading business - (Rs. 1,00,000) business loss is?
(a) Rs. 1,00,000 (b) Rs. 1,00,000) (a) Unabsorbed depreciation
(c) Rs. 2,00,000 (d) None of the above (b) capital expenditure on scientific research
(c) Current year depreciation
Q23. Calculate PGBP income. Speculation business (Rs. (d) Brought forwarded business loss
1,00,000); Trading business Rs. 2,00,000
(a) (1,00,000) (b) 1,00,000 Q34. If a person is eligible to claim.
(c) 2,00,000 (d) None of the above (1) Unabsorbed depreciation
(2) Current scientific research expenditure
Q24. Calculate PGBP income. Cloth business - (Rs. 50.000); (3) Current depreciation
Steel business Rs. 75,000 (4) Brought forward business loss
(a) Rs. 1,25,000 (b) Rs. 1,50,000 The order of priority to set-off would be
(c) Rs. 25,000 (d) Rs. 75,000 (a) (4), (3), (2) & (1)
(b) (2), (3), (4) & (1)
Q25. Calculate PGBP income. Speculation business - Rs. (c) (3), (4), (1) & (2)
2,00,000 Normal business - (Rs. 1.25.000) (d) (1), (2), (3) & (4)
(a) Rs. 3,25,000 (b) Rs. 1,25,000
(c) Rs. 2,00,000 (d) 75,000 Q35. Loss under the head of house property ____.
(a) can be carry forwarded for 8 years
Q26. Calculate total income. PGBP - (Rs. 2,00,000); (b) can’t be carried forward
CG - Rs. 3.00. 000 (c) can be carry forwarded for 4 years
(a) Rs. 3,00,000 (b) Rs. 2,00,000 (d) may be carry forwarded.
(c) Rs. 1,00,000 (d) Rs. 5,00,000
Q36. Loss from house property can be carried forward &
Q27. Calculate total income. PGBP Rs. 3,00,000; set off in the subsequent 8 Assessment years.
CG - (Rs. 2,00,000) (a) Only if return of loss is filed within due date
(a) Rs. 3,00,000 (b) Rs. 2,00,000 (b) Even if return of loss is filed after due date
(c) Rs. 1,00,000 (d) Rs. 5,00,000 (c) It does not matter whether or not return is filed
(d) Carry forward of loss from house property is not
Q28. Biren discontinued wholesale trade in medicines allowed at all.
from 1st July, 2016. He recovered Rs. 1,50,000 in October,
2018 being a bad debt which was written-off & allowed in Q37. During the previous year if assessee has incurred loss
assessment year 2017-2018. He has eligible brought from his business amounting to Rs. 1,10,000 whereas his
forward business loss of wholesale trade in medicines of income from HP in Rs. 1,10,000. The assessee can.
Rs. 1,70,000. The consequence of bad debt recovery is that (a) carry forward business loss
(a) It is taxable (b) set off business loss of Rs. 1,10,000 from
(b) It is eligible for set-off against brought forward house property income & pay no tax
business loss (c) at his option do any of (a) or (b)
(c) The brought forward business loss is taxable now (d) have to pay tax on Rs. 1,10,000 ignoring set off of loss
(d) 50% of the amount recovered now is taxable
Q38. Compute the taxable income of Mr. P If his Income
Q29. Brought forward loss from HP can be set-off from salary is Rs. 4,00,000 & Loss from self- occupied
(a) Against any head of income to the extent of Rs. 2,00,000 property Rs. 2,70,000
(b) Against income from HP to the extent of Rs. 2,00,000 (a) Rs. 4,00,000 (b) Rs. 1,30,000
(c) Against income from house property without any limit (c) Rs. 3,65,000 (d) Rs. 2,00,000
(d) Against any head of income without any limit
20: b 21: b 22: a 23: c 24: c 25: d 26: c 27: a 28: b 29: b
30: b 31: b 32: d 33: c 34: c 35: a 36: b 37: b 38: d
Q39. Calculate total income of the Assessee having Income (c) 6 years but it should be set off in the subsequent
from HP income (Rs. 1,50,000) & LTCG - Rs. 2,00,000. assessment year(s) if there is any business income
(a) Rs. 50,000 (b) Rs. 1,50,000 (d) Indefinitely but it should be set off in the subsequent
(c) Rs. 3,50,000 (d) None of the above assessment year(s) if there is any business income
Q40. Loss from house property of Rs. 3,10,000 of AY 2017- Q50. Loss from specified business referred in section 3
2018 is allowed to be set-off against income from house 5AD can be carried forward & set off from
property of AY 2019-20. of Rs. 5,00,000 to the extent of (a) Income of any business & profession
(a) Rs. 2,00,000 (b) Rs. 3,10,000 (b) Income of a specified business only
(c) Rs. 2,50,000 (d) Rs. 1,00,000 (c) Any head of income
(d) Any heads of income other than salary
Q41. Speculation loss can be carried forward for the
maximum of. Q51. Mathur Storage (P) Ltd. engaged in chain cold storage
(a) 8 AY (b) 4 AY (c) 10 AY (d) Infinite (which is a specified business u/s 3 5AD) has brought
forward business loss of Rs. 12 lakhs relating to
Q42. Calculate speculative income. Speculative in FOREX assessment year 2017-2018. During the previous year
(Rs. 2,00,000) Speculative in Shares Rs. 5,00,000 2018-2019, its income from the said business is Rs. 9 lakhs.
(a) Rs. 3,00,000 (b) Rs. 2,00,000 It also has profit from trade in food grains ofRs. 6 lakhs. The
(c) Rs. 2,50,000 (d) Rs. 5,00,000 total income of the company for the AY 2019-20 is ____.
(a) Rs. 15 lakhs (b) Rs. 9 lakhs
Q43. Loss from lottery, gambling & card games can be (c) Rs. 6 lakhs (d) Rs. 3 lakhs
carried forward for
(a) next 8 assessment year (b) next 4 assessment year Q52. If an individual, having a sales turnover of Rs. 60 lakh
(c) indefinite period (d) Cannot be carried forward files his return of income for the assessment year 2019-
2020 after the due date, showing unabsorbed business loss
Q44. Loss on account of owing & maintaining the race of Rs. 23,000 & unabsorbed depreciation of Rs. 45,000, he
horse can be carried forward. can carry forward to the subsequent assessment years—
(a) for 8 assessment years (b) for 4 assessment years (a) Both unabsorbed business loss of Rs. 23,000 &
(c) indefinitely (d) nothing is mentioned in law unabsorbed depreciation of Rs. 45,000
(b) Only unabsorbed business loss of Rs. 23,000
Q45. Loss of specified business u/s 3 5 AD can be carried (c) Only unabsorbed depreciation of Rs. 45,000
forward. (d) Neither unabsorbed business loss of Rs. 23,000 nor
(a) for 8 AY (b) indefinite period of time unabsorbed depreciation of Rs. 45,000
(c) for 4 AY (d) nothing is mentioned in law
Q53. A partnership firm with 4 equal partners has brought
Q46. Losses from business other than speculative, owning forward depreciation of Rs. 3 lakh & business loss of Rs. 3
& maintaining race horses & specified business u/s 35 AD lakh relating to assessment year 2018-2019, On 1st April,
can be carried forward for 2018, two partners retired. The amount that assessee firm
(a) next 8 AY (b) next 4 AY can set-off against its income for the assessment year
(c) indefinite period (d) Cannot be carried forward 2019-2020 would be.
(a) Unabsorbed depreciation of Rs. 3 lakh plus brought
Q47. Losses from speculative business, losses of owning & forward business loss of 3 lakh
maintaining race horses & losses of specified business u/s (b) Unabsorbed depreciation ‘nil’ plus brought forward
35 AD can be carried forward & set off from income business loss Rs. 3 lakh
(a) of any business (c) Unabsorbed depreciation Rs. 3 lakh plus brought
(b) any type of Capital gain forward business Loss ‘nil’
(c) any source/ head except income from salary (d) Unabsorbed depreciation Rs. 3 lakh plus brought
(d) only from respective nature of Income forward business loss of Rs. 1.50 lakh
Q48. Losses from specified business u/s 3 5AD can be set Q54. The amount of depreciation not absorbed in the same
off from income from year can be carried forward for a period:
(a) business u/s 3 5AD (b) Any business (a) 4 years (b) 8 years (c) 6 years (d) Indefinitely
(c) Capital gains (d) Cannot be set off
Q55. For Carry Forward of loss under various heads the
Q49. A business loss other than loss form a specified assessee shall file a return of loss u/s 139(3) of Income Tax
business referred to in section 35AD can be carried Act, 1961 within the prescribed time limit except loss
forward for maximum of under the head:
(a) 8 years but it should be set off in the Subsequent (a) Capital gain (b) PGBP (c) HP (d) All the above
assessment year(s) if the is any business income
(b) 4 years but it should be set off in the subsequent
assessment year(s) if there is any business income
39: a 40: b 41: b 42: a 43: d 44: b 45: b 46: a 47: d

48: a 49: a 50: b 51: c 52: c 53: d 54: d 55: c
Q56. For the previous year 2017-2018, an assessee Q62. Mr. Hussey for the previous year has (i) business loss
suffered a business loss of Rs. 2,50,000. His income from of Rs. 1,30,000; (ii) income from salary Rs. 2,40,000; & (iii)
other sources is Rs. 1,80,000. His due date of return was Speculation gain of Rs. 1,10,000. His total income for
31st July, 2018 but he submitted the return on 9th income tax assessment is
September, 2018. The assessee in this case - (a) Rs. 3,50,000 (b) Rs. 2,20,000
(a) Shall be allowed to carry forward the loss of Rs. 70,000 (c) Rs. 2,40,000 (d) Rs. 1,10,000
(b) Shall not be allowed to carry forward any loss
(c) Shall be allowed to set-off current year business loss to Q63. Calculate total income. PGBP (Rs. 37,000); Lottery Rs.
the extent of Rs. 1,80,000 but shall not be allowed to carry 1,00,000
forward the balance loss of Rs. 70,000 (a) Rs. 1,00,000 (b) Rs. 73,000
(d) Shall not be allowed to set-off the business loss to the (c) Rs. 1,37,000 (d) None of the above
extent of Rs. 1,80,000 & would be liable to tax on Rs.
1,80,000 Q64. Calculate total income. Speculative business Rs.
2,00,000; House property (Rs. 1,50,000)
Q57. The loss is allowed to be carried forward only when (a) Rs. 1,50,000 (b) Rs. 50,000
an assessee has furnished _________. (c) Rs. 3,50,000 (d) None of the above
(a) return of loss at any time as per his wish
(b) return of loss on or before the due date u/s 139 Q65. Calculate total income. Agriculture income (Rs.
(c) Not furnished the return of loss 2,00,000); Trading business Rs. 3,00,000
(a) Rs. 2,00,000 (b) Rs. 3,00,000
Q58. According to section 80, no loss shall be carried (c) (Rs. 2,00,000) (d) Rs. 1,00,000
forward for which ITR has not been filed u/s 139(3). The
exceptions are ________. Q66. Calculate total income. Agriculture Income Rs. 3.00.
(a) only loss under the head “capital Gains” u/s 74 000; Trading business (Rs. 2,00,000)
(b) Loss under head “capital Gains” & unabsorbed (a) Rs. 2,00,000 (b) Rs. 1,00,000
depreciation carried forward u/s 32(2) (c) (Rs. 2,00,000) (d) None of the above
(c) Loss from house property & unabsorbed depreciation
carried forward u/s 32(2) Q67. Calculate income of card games. Card Games on
(d) Loss from house property; unabsorbed depreciation Diwali Night (750,000); Card Games on New Year Night
carried forward u/s 32(2) & the loss of specified business 780,000
referred u/s 3 5AD (a) Rs. 50,000 (b) Rs. 80,000
Q59. Rohan engaged in multifarious activities reports the
following. Q68. Calculate income from other sources. Dividends from
(i) Unabsorbed depreciation Rs. 80,000; Indian Company Rs. 5,000; Card Games (Rs. 10,000)
(ii) Loss from house property Rs. 1,20,000; (a) Rs. 15,000 (b) (Rs. 10,000)
(iii) Long-term capital loss Rs. 70,000. (c) Rs. 5,000 (d) Nil
He filed his return beyond the ‘due date’ specified in
section 139(1). Which of the above loss(es) cannot be
carried forward to subsequent assessment year?
(a) Unabsorbed depreciation (b) Loss from house property
(c) Long term capital loss (d) None of the above
Q60. What is the taxable income & losses to be carried

forward of Mr. P for the AY 2019-20? Income from non-
speculation business Rs. 60,000; Loss from non-
speculation business (Rs. 40,000); Short term capital gain
Rs. 80,000; Long term capital loss of AY 2015-2016
(T30,000)
(a) Rs. 70,000, Rs. 70,000 (b) Rs. 1,10,000, Rs. 40,000
(c) Rs. 1,00,000, Rs. 30,000 (d) Rs. 1,00,000, Rs. 40,000
Q61. Compute the total income & losses to be carried

forward of Mr. P for the AY 2019-20. Loss from profession
Rs. 1,05,000; short term capital loss on the sale of property
Rs. 55,000; Long term Capital gains on sale of shares Rs.
2,05,000 (STT not paid); Winnings from lotteries Rs.
1,00,000; Loss from horse races in Mumbai Rs. 40,000
(a) Rs. 2,50,000, Rs. 1,45,000
(b) Rs. 1,45,000, Nil
(c) Rs. 1,45,000, Rs. 40,000
(d) Rs. 3,05,000, Rs. 2,00,000
56: d 57: b 58: d 59: c 60: c 61: b 62: c
63:a 64:b 65:b 66:c 67:b 68:b
7. DEDUCTIONS FROM GROSS TOTAL INCOME
Q1. Deductions u/s 80C to 80U are not allowed from Q10. An assessee has paid life insurance premium of Rs.
(a) LTCG taxable u/s 112/u/s 112A 45,000 during the previous year for a policy of Rs. 2,00,000
(b) Casual Incomes taken on 1/4/2010. He shall.
(c) STCG taxable u/s 111A (d) All of the above (a) Not be allowed any deduction u/s 80C
(b) Be allowed deduction u/s 80C to the extent of 10% of
Q2. As per section 80A aggregate of all deductions from the capital sum assured
section 80C to section 80U cannot exceed amount of (c) Be allowed deduction for the entire premium
(a) GTI (b) special incomes in GTI (d) Be allowed deduction u/s 80C to the extent of 20% of
(c) casual incomes in GTI (d) capital gains in GTI the capital sum assured
Q3. Mr. P omitted to claim deduction u/s 80D from GTI *Q11. An assessee suffering with disability specified u/s
while submitting his ITR on 31/7/2019 which was due 80U has paid life insurance premium of Rs. 45,000 during
date for AY 2019-20. Later AO has started his assessment the previous year for a policy of Rs. 2,00,000 taken on
& now Mr. P wants to claim deduction of sec 80D. 1/6/2012. He shall.
(a) He will not be allowed deduction u/s 80D (a) Not be allowed any deduction u/s 80C
(b) He will be allowed deduction u/s 80D (b) Be allowed deduction u/s 80C to the extent of 10% of
the capital sum assured
Q4. Mr. P is author of books, omitted to claim deductions (c) Be allowed deduction u/s 80C to the extent of 15% of
u/s 80D & Section 80QQB from GTI while submitting his the capital sum assured
ITR on 31/7/2019 which was the due date for AY 2019- (d) Be allowed deduction u/s 80C to the extent of 20% of
2020. Later on Mr. P submitted revised ITR on & claimed the capital sum assured
deduction of section 80D & section 80QQB.
(a) He will not be allowed deduction u/s 80D & u/s 80QQB Q12. An assessee suffering with disability specified u/s
(b) He will be allowed deduction u/s 80D but not u/s 80QQB 80U has paid life insurance premium of Rs. 45,000 during
(c) He will be allowed deduction u/s 80QQB but not u/s 80D the previous year for a policy of Rs. 2,00,000 taken on
(d) He will be allowed deduction u/s 80D & u/s 80QQB 1/6/2013. He shall ________.
(a) Not be allowed any deduction u/s 80C
Q5. Deduction u/s. 80C in respect of Life Insurance Policy, (b) Be allowed deduction u/s 80C to the extent of 10% of
Contribution of employee to Provident Fund, etc. is the capital sum assured
allowed to ____. (c) Be allowed deduction u/s 80C to the extent of 15% of
(a) Any Assesse (b) Individual assessee only the capital sum assured
(c) Individual or HUF who may be resident or non-resident (d) Be allowed deduction u/s 80C to the extent of 20% of
(d) Individual or HUF who is resident in India the capital sum assured
Q6. Deduction u/s 80C is allowed to the maximum of. Q13. An assessee has paid life insurance premium of Rs.
(a) Rs. 2,00,000 (b) Rs. 1,00,000 45,000 during the previous year for a policy of Rs. 2,00,000
(c) Rs. 1,50,000 (d) Rs. 2,50,000 taken on 1/4/2015. He shall __________.
(a) Not be allowed any deduction u/s 80C
Q7. For claiming deduction u/s 80C in respect of life
(b) Be allowed deduction u/s 80C to the extent of 10% of
insurance premium, premium can be paid by assessee for -
(a) Himself & the spouse
(c) Be allowed deduction for the entire premium
(b) Himself, spouse & minor children
(d) Be allowed deduction u/s 80C to the extent of 20% of
(c) Himself, spouse & dependent children
(d) Himself, spouse & any child
Q8. In case of HUF, deduction u/s 80C in respect of life Q14. For claiming deduction u/s 80C in respect of PPF,
insurance premium shall be allowed for. contribution must be paid by the individual in the PPF
(a) Any coparcener of the HUF (b) Karta of HUF account of.
(c) Any member of the HUF (d) None of the above (a) Himself only (b) Himself & Spouse
(c) Himself, spouse or any child
Q9. An assessee has paid life insurance premium of Rs. (d) Himself, spouse or any dependent child
45,000 during the previous year for a policy of Rs. 2,00,000
taken on 1/4/2000. He shall. Q15. For claiming deduction u/s 80C in respect of Sukanya
(a) Not be allowed any deduction u/s 80C Samridhi scheme, contribution must be paid by the
(b) Be allowed deduction u/s 80C to the extent of 10% of individual in the name of
the capital sum assured (a) Himself only (b) Wife & Mother
(c) Be allowed deduction for the entire premium (c) Any child of such Individual
(d) Be allowed deduction u/s 80C to the extent of 20% of (d) Girl child of such Individual
1: d 2: a 3: a 4: c 5: c 6: c 7: d 8: c
9: d 10: d 11: b 12: c 13: b 14: c 15: d
Q16. Subscription to which of the following is deductible Q24. Deduction u/s 80C in respect of tuition fee is allowed
u/s 80C? to an individual for ______.
(a) National Saving Scheme or NSC (VIII or IX Issue). (a) Any of his children
(b) NABARD Bonds or Notified units of MF/UTI or Deposit (b) Any two children of such individual
Scheme/Pension Fund set up by National Housing Bank. (c) Any two minor children of such individual
(c) Approved Equity Shares/Debentures of wholly public (d) Any two dependent children of such Individual
company where such proceeds are utilized for
infrastructure company. (d) All of the above Q25. Deduction u/s 80C in respect of tuition fee is allowed
to ________.
Q17. For claiming deduction u/s 80C in respect of NSC of (a) An individual only (b) An individual or HUF
VIII/IX issue, NSC should be acquired by the individual in (c) Both Individual & HUF (d) Neither Individual nor HUF
the name of ____
(a) His name only Q26. Deduction u/s 80C in respect of tuition fee is allowed
(b) His name or any spouse name to the maximum extent of _______.
(c) In his name or spouse name or the name of any child (a) Rs. 1,20,000 per child for maximum of 2 children
(d) In his name or spouse or in the name of minor child (b) Rs. 1,20,000 p.m. per child for maximum of 2 children
(c) 1,50,000 pa per child
Q18. Annual Interest accrued on NSC VIII or NSC IX issue (d) 1,50,000 pa for two children
shall be ________.
(a) Exempt u/s 10 (b) Taxable u/h IFOS Q27. Contribution to which of the following is deductible
(c) Taxable as income from IFOS & Interest so accrued shall u/s 80C?
also be eligible for deduction u/s 80C (a) Contribution to National Housing Bank (Tax Saving)
(d) None of the above Term Deposit Scheme, 2008
(b) Contribution in Unit-Link Insurance Plan of UTI or LIC
Q19. Deduction u/s 80C in respect of terms deposit with a Mutual Fund
scheduled bank/ time deposit in post office is allowed if the (c) Contribution to Approved Annuity Plan of LIC or Public
term deposit is for a period _____. Deposit Scheme of HUDCO.
(a) Not less than 3 years. (b) Not less than 5 years. (d) All of the above
(c) Not less than 7 years. (d) Not less than 10 years.
Q28. Following payments are not deductible u/s 80C in
Q20. Deduction in respect of contribution for annuity plan respect of repayment of housing loan.
to certain pension fund u/s 80CCC is allowed to. (a) Stamp Duty & Registration fees
(a) Any assessee (b) Individual assessee only (b) Repayment of the amount borrowed
(c) Individual or HUF (d) Individual who is resident (c) Admission Fee, Cost of Share of co-operative society &
Initial Deposit (d) All of the above
Q21. Deduction u/s 80C for education expenses of children
shall be allowed for ____. Q29. For claiming deduction u/s 80C, the payment or
(a) Any education expenses deposit should be made ________.
(b)Tuition fee except any payment towards any (a) Out of any type of income
development fee or donation or payment of similar nature (b) Out of any income chargeable to income tax
(c) Tuition fee & annual charges (c) Out of the current year’s income
(d) Any development fee or donation or similar payment (d) Out of the exempted income
Q22. Deduction u/s 80C for tuition fee shall be allowed if Q30. Deduction u/s 80C is available on _____ Basis.
such fee is paid to. (a) Accrual (b) Payment
(a) Any university, college, school or other educational (c) Depends on the method of A/cing followed by the
institution situated within India or outside India Assessee. (d) Earlier of (a) or (b)
(b) Any university, college, school or other educational
institution situated within India Q31. If an assessee discontinues the life insurance policy
(c) Any university, college, school or other educational before completion of 2 years then,
institution situated outside India (a) No deduction shall be allowed in respect of the
(d) Only to school situated within India or outside India payment made in the year of termination.
(b) No deduction shall be allowed u/s 80C in the year of
Q23. Deduction u/s 80C for tuition fee shall be allowed for termination.
the purpose of _____. (c) Amount of the deduction claimed due to insurance
(a) Any full-time education premium during past years shall be liable to tax in the year
(b) Any full or part time education of termination.
(c) Full time education in a college (d) No tax treatment has been given under income tax act.
(d) Full time education in a school
16: d 17: a 18: c 19: b 20: b 21: b 22: b 23: a

24: b 25: a 26: d 27: d 28: c 29: a 30: b 31: c
Q32. Find out the deduction allowable Mr. P, an author of Q39.Deduction u/s 80CCD is allowed to extent of.
books u/s 80C for AY 2019-2020: (a) Employee’s contribution up to 10% of salary
Life Insurance Premium paid - Rs. 22,000 for the policy of (b) Employee’s contribution up to 15% salary
Rs. 2,00,000 taken on 15/6/2018 on his own life; (c) Employee’s & employer’s contribution each up to 10%
Contribution to URPF: Rs. 1,000; salary & in case of self-employed person up to 20% of his
Contribution to PPF: Rs. 25,000; gross total income
Subscription to NSC : Rs. 10,000; (d) Employee’s & employer’s contribution each up to 15%
Accrued interest for one year completed NSC - Rs. 8,000; of salary
LIC premium on his mother’s life policy which has been
issued before 1/4/2012 - Rs. 5,000; Repayment of bank Q40. As per section 80CCE deduction u/s 80C, 80CCC &
loan borrowed for construction of the house - Rs. 21,000. 80CCD cannot exceed.
(a) Rs. 85,000 (b) Rs. 84,000 (a) Rs. 1,10,000 (b) Rs. 2,10,000
(c) Rs. 88,000 (d) Rs. 83,000 (c) Rs. 1,50,000 (d) Rs. 1,00,000
Q33. Max. Deduction u/s 80CCC is ____. Q41. As per section 80CCE, deduction u/s 80C, 80CCC &
(a) Rs. 2,00,000 (b) Rs. 1,00,000 80CCD cannot exceed.
(c) Rs. 1,50,000 (d) Rs. 2,50,000 (a) Rs. 1,00,000 including employer’s contribution to
notified pension scheme referred to in section 80CCD
Q34. Deduction u/s 80CCC shall be allowed to. (b) Rs. 1,00,000 exclusive of employer’s contribution to
(a) Individual who is a resident or non-resident of India notified pension scheme referred to in section 80CCD
(b) Individual or HUF who is a resident of India (c) Rs. 1,50,000 including employer’s contribution to
(c) Individual who is resident & ordinary resident of India notified pension scheme referred to in section 80CCD
(d) Individual who is resident whether ordinary resident (d) Rs. 1,50,000 exclusive of employer’s contribution to
or non-ordinary resident HUF who is non-resident of India notified pension scheme referred to in section 80CCD
Q35. Annual interest accrued on Annuity plan of LIC is ____. Q42. Additional Deductions of Rs. 50,000 is allowed u/s
(a) Exempt u/s 10 (b) Taxable u/h IFOS (a) 80CCC (b) 80CCD
(c) Taxable as income from IFOS & Interest so accrued shall (c) 80CCD(1B) (d) 80CCE
also be eligible for deduction u/s 80C
(d) None of the above Q43. Deduction u/s 80CCG is allowed for acquiring.
(a) Any shares (b) Any Listed shares
*Q36. Amount received from the surrender of annuity plan (c) Any listed shares in accordance with notified scheme
or amount received as pension from the annuity plan by (d) Any listed shares or units of equity oriented mutual
the assessee or his nominee shall be _____. fund as per notified scheme.
(a) Exempt u/s 10 (b) Taxable u/h IFOS
(c) Exempt up to certain limit, balance Taxable Q44. Quantum of deduction u/s 80CCG is ____.
(d) Taxable up to certain limit, balance exempt (a) 50% amount invested or Rs. 25,000, whichever is less
(b) 50% amount invested or Rs. 50,000, whichever is less
Q37. Deduction of section 80CCD is allowed to ____. (c) 50% amount invested in equity shares or Rs. 1,00,000,
(a) Individual who has joined the services of central whichever is less
government or state government or any other employer on (d) None of the above
or after 1.1.2004
(b) Individual who has joined the services of state Q45. Deduction shall be allowed for_ beginning with AY
government or any other employer on or after 1.1.2004 relevant to PY in which Investment is made.
(c) Individual who has joined the services of central (a) 5 consecutive AYs (b) 10 consecutive AYs
government or any other employer on or after 1.1.2004 (c) 3 consecutive AYs (d) 15 consecutive AYs
(d) Individual who has joined the services of central
government or state government or any other employer on Q46. Deduction u/s 80D in respect of medical insurance
or after 1.1.2004 or who is self employed. premium is allowed to ______.
(a) Any assessee
Q38. Deduction u/s 80CCG is allowed to ____. (b) An individual or HUF who is resident or non-resident
(a) Any individual who is resident in India & whose gross (c) An Individual or HUF who is resident of India
total income does not exceed Rs. 10,00,000 (d) Individual only
(b) Any individual whose gross total income does not
exceedRs. 10,00,000 Q47. Deduction u/s 80D is allowed if it is paid ____.
(c) Any individual who is resident in India & is a new retail (a) by cheque (b) by any mode other than cash
investor & whose gross total income does not exceed Rs. (c) in any mode (d) in cash
10,00,000
(d) Any individual who is a resident in India & is a new *Q48. Deduction u/s 80D on amount of preventive health
retail investor & whose gross total income does not exceed check-up is allowed if it is paid ______.
Rs. 12,00,000. (a) by cheque (b) Any mode other than cash
(c) any mode including cash (d) In Cash
32: b 33: c 34: a 35: c 36: c 37: d 38: d 39: c 40: c

41: d 42: c 43: d 44: a 45: c 46: b 47: b 48: c
Q49. Deduction u/s 80D is allowed on account of payment Q57. Deduction u/s 80DD in respect of maintenance
of preventive health check- up of. including medical treatment of dependent being a person
(a) Assessee or his dependent spouse or his dependent with disability shall be allowed to.
parents or dependent children (a) All type of the assessee
(b) Assessee or his dependent spouse or his parents or (b) An individual or HUF who is resident or non-resident
dependent children (c) An individual or HUF who is resident in India
(c) Assessee or his spouse or his dependent parents or (d) None of the above
dependent children
(d) Assessee or his spouse or his parents or dependent Q58. Deduction u/s 80DD allowed shall be.
children (a) Actual expenditure or Rs. 75,000 whichever is less
(b) Rs. 1,25,00 irrespective of actual expenditure
Q50. Maximum deduction u/s 80D on amount of (c) Rs. 75,000 irrespective of actual expenditure
preventive health check-up is : (d) Flat deduction of Rs. 75,000 pa or Rs. 1,25,0000 pa
(a) Rs. 25,000 (b) Rs. 5,000 depending on % of disability
(c) Rs. 5,000 which is in addition to Rs. 25,000
(d) Rs. 5,000 which is part of Rs. 25,000 Q59. Deduction u/s 80DD in case of dependent with severe
disability shall be allowed
Q51. Deduction u/s 80D is allowed if premium is paid to. (a) To The extent of actual expenditure/deposit or Rs.
(a) Life insurance corporation 50,000 whichever is less
(b) General insurance corporation or any other insurer (b) To The extent of actual expenditure/deposit or Rs.
(c) Life insurance or general insurance corporation 1,00,000 whichever is less
(d) General insurance corporation (c) For a sum of Rs. 50,000 irrespective of any expenditure
incurred or actual amount deposited
Q52. Mr. P , age 42 years, paid Medical Insurance premium (d) For a sum of Rs. 1,25,000 irrespective of any
of Rs. 10,000 to insure his health, health of his spouse & expenditure incurred or actual amount deposited
dependent children. He has incurred Rs. 7,000 for the
preventive health check-up for himself & the amount was Q60. For the deduction u/s 80DD a person shall be known
paid in cash. as severely disabled if he has disability of more than
He also paid Medical Insurance premium of 1,00,000 (a) 50 % disability (b) 75 % disability
during the year to insure the health of his father, aged 61 (c) 80 % disability (d) 25 % disability
years, who is not dependent on him.
He contributed Rs. 12,400 to Central Government Health Q61. If Dependant Disabled dies before Assessee, ___.
Scheme during the year. Compute the deduction allowable (a) Amount received is exempt in the hands of recipient
u/s 80D for the PY 2018-2019. (b) Amount received is exempt in the hands of legal
(a) Rs. 75,000 (b) Rs. 55,000 representative of deceased person
(c) Rs. 45,000 (d) Rs. 35,000 (c) Amount deposited is deemed as Income of the
depositor in PY of receipt (d) None of the above
Q53. Maximum deduction allowed to individual for self
(not a senior citizen) u/s 80D is. Q62. Deduction u/s 80DDB in respect of medical
(a) Rs. 40,000 (b) Rs. 20,000 treatment for specified disease is allowed to.
(c) Rs. 30,000 (d) Rs. 25,000 (a) All type of the assessee
(b) An individual or HUF who is resident or non-resident
Q54. Where the Individual or his family or his parents or a (c) An individual or HUF who is resident in India
member of HUF in case of HUF is a senior citizen the limit (d) None of the above
u/s 80D of Rs. 25,000 shall be substituted by-
(a) Rs. 40,000 (b) Rs. 20,000 Q63. Deduction u/s 80DDB to individual who is not a
(c) Rs. 30,000 (d) Rs. 50,000 senior citizen shall be allowed
(a) To extent of actual expenditure/deposit or Rs. 40,000
Q55. Maximum Deduction for Preventive Health-Check up whichever is less
of Family + Parents is ____. (b) To extent of actual expenditure/deposit or Rs. 1,00,000
(a) Rs. 50,000 (b) Rs. 25,000 whichever is less
(c) Rs. 5,000 (d) Rs. 30,000 (c) For a sum of Rs. 50,000 irrespective of any expenditure
incurred or actual amount deposited
Q56. Mr. Privastava, aged 72 years, paid medical insurance (d) For a sum of Rs. 1,00,000 irrespective of any
premium of Rs. 52,000 by cheque & Rs. 4,000 by cash expenditure incurred or actual amount deposited
during May, 2018 under a Medical Insurance Scheme of the
Q64. Deduction u/s 80DDB shall be allowed for medical
General Insurance Corporation. The above sum was paid
treatment of specified disease of -
for insurance of his own health. He would be entitled to a
(a) Any dependent relative
deduction u/s 80D of a sum of
(b) Any dependent handicapped relative
(a) Rs. 30,000 (b) Rs. 50,000
(c) The assessee himself or any dependent relative
(c) Rs. 52,000 (d) Rs. 56,000
49: d 50: d 51: b 52: a 53: d 54: d 55: c 56: b 57: c

58: d 59: d 60: c 61: c 62: c 63: a 64: c
Q65. In case the assessee or dependent relative is a senior Q73. The deduction u/s 80E is allowed for payment by way
citizen then the deduction u/s 80DDB shall be allowed for of interest on loan to the extent of.
a sum of - (a) Rs. 2,00,000 (b) Rs. 1,50,000
(a) Rs. 40,000 irrespective of any expenditure (c) Rs. 1,00,000 (d) Any amount
(b) Rs. 40,000 or actual expenditure whichever is less
(c) Rs. 1,00,000 irrespective of any expenditure Q74. For claiming deduction of interest u/s 80E interest
(d) Rs. 1,00,000 or actual expenditure whichever is less amount should be paid out of
(a) any taxable income (b)any exempted income
Q66. If any amount is received under insurance or (c) any of (a) or (b)
reimbursed by employer for Medical treatment, received (d) partially from (a) & partially from (b) loan should be
amount shall be ___. taken for doing
(a) Fully Exempt (b) Fully taxable
(c) reduced from the deduction allowable u/s 80DDB Q75. Deduction u/s 80E for payment by way of interest on
(d) Added to the deduction allowable u/s 80DDB loan for higher education is allowed for _____ Years.
(a) 5 (b) 6 (c) 7 (d) 8
Q67. Deduction u/s 80E shall be allowed to.
(a) An individual who is resident or non-resident in India Q76. Deduction u/s 80EE shall be allowed to individual:
(b) An individual who is resident in India (a) An individual who is resident or non-resident in India
(c) An individual or HUF who is resident or non-resident (b) An individual who is resident in India
(d) An individual or HUF who is resident in India (c) An individual or HUF who is resident or non-resident
(d) An individual or HUF who is resident in India
Q68. Deduction u/s 80E is allowed on account of.
(a) Repayment of loan taken from certain specified Q77. Deduction u/s 80EE shall be allowed in respect of
institutions for higher education amount paid by way of interest on loan taken for
(b) Repayment of loan & interest on loan taken from acquisition of residential house property from -
certain specified institutions for higher education (a) Any person (b) Financial institutions
(c) Payment of interest on loan taken from certain (c) Financial institutions or approved charitable
specified institutions for higher education institution or any bank (d) Any bank
Q78. The deduction u/s 80EE is allowed for payment by
Q69. Deduction u/s 80E shall be allowed in respect of way of interest on loan for residential house property to
amount paid by way of interest on loan taken for higher the extent of.
education from. (a) Rs. 2 Lac (b) Rs. 1.5 Lac (c) Rs. 1 Lac (d) Rs50,000
(a) Any person (b) Financial institutions
(c)Financial institutions or approved charitable institution Q79. The deduction u/s 80EE is allowed for payment by
or any bank (d) Any bank way of interest on loan for residential house property. This
deduction is
Q70. Deduction u/s 80E shall be allowed for the higher (a) Within the limit of interest u/s 24(b)
education of. (b) Over & above the limit of interest u/s 24(b)
(a) Assessee himself (c) Within the limit of section 80C
(b) Assessee himself & his / her spouse (d) Over & above the limit of section 80C
(c) Assessee himself, his / her spouse & his / her children
or student for whom the individual is a legal guardian Q80. Deduction u/s 80G on account of donation is allowed
(d) Assessee himself, his/her spouse & his/her children if donations are made in.
(a) Any mode other than Cash
Q71. For claiming deduction of interest u/s 80E loan (b) Cash payment upto Rs. 2,000
should be taken for doing (c) Both (a) & (b) (d) Donation in Kind
(a) Any post graduate course
(b) Any graduate or post graduate course is engineering, Q81. Donation u/s 80G should be paid out of
medicine, management & post graduate course in applied (a) any taxable income (b) any exempted income
science or pure sciences including mathematics & pure (c) Income of earlier years (d) All of the above
sciences
(c) For any course of study after passing the secondary Q82. Deduction u/s 80EE for payment of interest on loan
examination or its equivalent for acquisition of residential house property is allowed for:
(d) For any course of study after passing the senior (a) 5 years (b) 6 years
secondary examination or its equivalent (c) Till repayment of loan (d) None of the above
Q83. Deduction u/s 80G is allowed to.

Q72. For claiming deduction of interest u/s 80E loan
(a) A business assessee who is resident of India
should be taken for doing.
(b) Any assessee who is resident of India
(a) Vocational studies (b) Part time studies
(c) Any assessee who is resident or non-resident of India
(c) Full time studies (d) any of the above
(d) Resident or NR Individual or HUF
65: d 66: c 67: a 68: c 69: c 70: c 71: d 72: d 73: d 74: a
75: d 76: a 77: c 78: d 79: b 80: c 81: d 82: c 83: c
Q84. The overall limit in case of deduction u/s 80G is. Q93. Deduction u/s 80GG is allowed if -
(a) 10% of GTI (b) 10% of adjustedGTI (a) Rented House is occupied by the assessee for his own
(c) 25% of GTI (d) 25% of adjusted GTI residence.
(b) Assessee, spouse or minor child or HUF of which
Q85. Adjusted GTI for the purpose of Sec 80G means _____. assessee is a member, does not own any residential
(a) Gross Total Income –All deductions under chapter VI-A accommodation at the place where assessee ordinarily
(b) Gross Total Income - All deductions under chapter VI- resides or at the place where he works or carries on his
A except Deduction u/s 80G business or profession.
(c) Gross Total Income – STCG u/s 111A – LTCG u/s (c) If assessee owns any residential accommodation at any
112/112A – Exempt Incomes place, other than the place of residence or work of the
(d) Gross Total Income – STCG u/s 111A – LTCG u/s assessee, then the concession in respect of self-occupied
112/112A – Exempt Incomes - All deductions under property is not claimed by the assessee.
chapter VI-A except Deduction u/s 80G. (d) All of the above
Q86. Deduction u/s 80G shall be allowed. Q94. In case of donation u/s 80GGA, the maximum amount
(a) Whether or not assessee has a nexus of donation with of donation in cash allowed is.
his business. (a) Rs. 1,50,000 (b) Rs. 2,00,000
(b) Only if assessee has a nexus of donation with his (c) Rs. 10,000 (d) Rs. 50,000
business.
(c) Only if assessee has no kind of nexus of donation with Q95. U/s 80GGB, deduction is allowable in respect of
his business. (d) None of the above contribution to political parties by
(a) any person other than LA & every AJP wholly or partly
Q87. U/s 80GGC, deduction is allowable in respect of funded by the Government
contribution to political parties by (b) LA & every AJP wholly or partly funded by the
(a) any person other than LA & every AJP wholly or partly Government
funded by the Government (c) An Indian company (d) Any assessee
(b) LA & every AJP wholly or partly funded by the
Government Q96. Adjusted GTI for the purpose of Sec 80 GG means ___.
(c) An Indian company (d) Any assessee (a) Gross Total Income –All deductions under chapter VI-A
(b) Gross Total Income - All deductions under chapter VI-
Q88. Deduction u/s 80GGB & 80 GGC is allowed if A except Deduction u/s 80G
donations are made in. (c) Gross Total Income – STCG u/s 111A – LTCG u/s
(a) Any mode other than Cash (b) Cash upto Rs. 10,000 112/112A – Exempt Incomes
(c) Both (a) & (b) (d) Donation in Kind (d) Gross Total Income – STCG u/s 111A – LTCG u/s
112/112A – Exempt Incomes - All deductions under
Q89. Deduction in respect of rent paid u/s 80GG is allowed chapter VI-A except Deduction u/s 80GG.
to -
(a) An individual. Q97. Deduction u/s 80GGA of donation for scientific
(b) An individual who is self-employed. research/rural development is allowed to –
(c) Any individual who is self-employed or who is an (a) Any assessee
employee but not entitled to HRA or Rent-free (b) Non-corporate business assessee
Accommodation. (c) An assessee whose gross total income does not include
(d) Any individual who is self-employed or who is an income chargeable to PGBP.
employee but not entitled to HRA or Rent-Free (d) Any professional
Accommodation & who pays rent for his residential
accommodation. Q98. Deduction u/s 80GGA , 80 GGB & 80 GGC shall be
allowed to the extent.
Q90. Deduction u/s 80GG shall be limited to. (a) 100% of the donation/contribution so made
(a) Rs. 1,50,000 pa (b) Rs. 2,00,000 pa (b) 200% of the donation/contribution so made
(c) Rs. 24,000 pa (d) Rs. 60,000 pa (c) 125% of the donation/contribution so made
(d) 150% of the donation/contribution so made
Q91. Deduction u/s 80GG shall be limited to.
(a) 10% of Adjusted GTI (b) 15% of Adjusted GTI Q99. Deduction u/s 80TTA is allowed to ____.
(c) 20% of Adjusted GTI (d) 25% of Adjusted GTI (a) Any Individual
(b) Any individual who is a senior citizen
Q92. Mr. Ramesh pays a rent of Rs. 5,000 per month. His (c) Any individual who is a super senior citizen
total income is Rs. 2,80,000 (i.e. GTI as reduced by (d) Any individual who is not a resident senior citizen
deductions u/c VI- A except u/s 80GG). He is also in receipt
of HRA. He would be eligible for a deduction u/s 80GG of
an amount of
(a) Rs. 60,000 (b) Rs. 32,000
(c) Rs. 70,000 (d) Nil
84: b 85: d 86: a 87: a 88: a 89: d 90: d 91: d
92: d 93: d 94: c 95: c 96: d 97: c 98: a 99: d
Q100. Deduction u/s 80TTA shall be allowed if the Total Q109. Deduction u/s 80RRB & 80QQB is allowed upto:
Income includes (a) 100 % of royalty income
(a) interest on deposits in a Savings Account with a Bank (b) 50% of royalty income
(b) interest on deposits in a Savings Account with a Co- (c) Lower of 100% of royalty income or Rs. 5 lacs
operative Bank (d) Lower of 100% of royalty income or Rs. 3 lacs
(c) Interest on deposits in Savings A/c with Post Office
(d) any of the above *Q110. Deduction u/s 80U in case of permanent physical
disabled is allowed to an individual -
Q101. Deduction u/s 80TTA shall be allowed if the Total (a) who is citizen of India (b) who is ROR in India
Income includes interest on (c) who is NOR in India (d)who can be ROR or RNOR
(a) Savings Account with a Bank (b) Fixed Deposit
(c) Time Deposit (d) All of the above Q111. Royalty from Foreign Country shall be allowed as
Deduction u/s 80RRB & 80QQB if
Q102. Maximum Deduction allowed u/s 80TTA shall be (a) Royalty is brought to India in Convertible Foreign
(a) Rs. 10,000 p.a. (b) Rs. 50,000 p.a. Exchange within 12 Months
(c) Rs. 40,000 p.a. (d) Rs. 20,000 p.a. (b) Royalty is brought to India in Convertible Foreign
Exchange within 6 Months
Q103. Deduction u/s 80TTB is allowed to ____. (c) Royalty is brought to India in Convertible Foreign
(a) Any Individual Exchange within 18 Months
(b) Any individual who is a senior citizen (d) Royalty is brought to India in Convertible Foreign
(c) Any individual who is a super senior citizen Exchange within 24 Months
(d) Any individual who is not a senior citizen
*Q112. Deduction allowed u/s 80U to Individual who has
Q104. Deduction u/s 80TTB shall be allowed if the Total disability of less than 40% =
Income includes (a) Rs. 30,000 (b) Rs. 50,000
(a) interest on deposits in a Savings Account with a Bank (c) Rs. 75,000 (d) Nil
(b) interest on deposits in a Savings Account with a Co-
operative Bank Q113. Deduction allowed u/s 80U to Individual who has
(c) interest on deposits in a Savings Account with a Post disability of 40% - 80 % =
Office (a) Rs. 30,000 (b) Rs. 75,000
(d) any of the above (c) Rs. 1,25,000 (d) Nil
Q105. Maximum Deduction allowed u/s 80TTB shall be Q114. Deduction allowed u/s 80U to Individual who has
(a) Rs. 10,000 p.a. (b) Rs. 50,000 p.a. disability of more than 80 % =
(c) Rs. 40,000 p.a. (d) Rs. 20,000 p.a. (a) Rs. 30,000 (b) Rs. 75,000
(c) Rs. 1,25,000 (d) Nil
Q106. Deduction u/s 80TTB shall be allowed if the Total
Income includes interest on Q115. Deduction u/s 80JJAA is available if the assessee is
(a) Savings Account with a Bank (b) Fixed Deposit (a) Individual (b) Any Assessee
(c) Time Deposit (d) All of the above (c) Company only
(d) Any Assessee to whom Section 44AB Apply.
Q107. Deduction u/s 80RRB in respect of royalty on
patents shall be allowed to - Q116. Deduction u/s 80JJAA is limited to
(a) Individual who is resident in India & is a patentee (a) 50% of Additional Employee Cost incurred in the PY or
including co-owner. Rs. 5 Lacs whichever is lower
(b) Individual (b) 50% of Additional Employee Cost incurred in the PY
(c) Individual who is resident (d) None of the above (c) 30% of Additional Employee Cost incurred in the PY or
Rs. 3 Lacs whichever is lower
Q108. Deduction u/s 80QQB is allowed in respect of (d) 30% of Additional Employee Cost incurred in the PY
royalty income to ____.
(a) Resident Individual who is author of any kind of book Q117. Additional Employee shall not include ____.
(b) Resident Individual & who is author of any kind of book (a) Employee whose Total Emoluments is more than Rs.
(c) Resident Individual & who is author of any kind of book 25,000 p.m or who does Not Participate in RPF.
which is not a text book (b) Employee for whom Entire Contribution is paid by
(d) Resident Individual & who is author of any kind of book Government under Employees’ Pension Scheme;
which is a text book (c) Employee Employed for < 240 days during PY.
100: d 101: a 102: a 103: b 104: d 105: b 106: d 107: a 108: c

109: d 110: b 111: b 112: d 113: b 114: c 115: d 116: d 117: d
8.TAX DEDUCTED AT SOURCE & TAX COLLECTED AT SOURCE
Q1. No Tax shall be secured if salary income is less than Q13. Section 194A is applicable if the Deductor is ___.
(a) Rs. 5 lacs (b) Rs. 2.5 Lacs (c) BEL (d) Rs. 10,000 p.m (a) Any Assessee
(b) Any person other than Individual or HUF
Q2. TDS from salary u/s 192 shall be @ __. (c) Individual or HUF who was subject to tax Audit u/s
(a) 10% of salary 44AB (a)/(b) in last PY (d) Both (a) & (b)
(b) Average rate of Income tax + HEC
(c) Maximum marginal rate of tax Q14. The rate of TDS u/s 194A is ____.
(d) Average rate of Income tax excluding HEC (a) 10% (b) 5% (c) 2% (d)1%
Q3. On application by employee, Employer shall consider Q15. No tax shall be deducted if _______.
______ while calculating TDS on salary. (a) Rs. 10,000 for every assessee
(a) He shall only consider salary income (b) Aggregate Interest paid by any other person ≤ Rs 5,000.
(b) Income & Losses from All Heads (c) Aggregate Interest paid by Bank or Co-operative
(c) Income from all heads only Society or Post offices ≤ Rs 10,000 (d) Both (b) & (c)
(d) Income from all heads & Losses from HP only
Q16. Limit of Rs. 10,000 is computed with reference to ____.
Q4. In case of TDS on salary, HEC shall be added for (a) Whole bank (b) Each branch of bank
(a) Resident Company (b) NR Company (c) Whole bank if CBS is adopted (d) Both (b) & (c)
(c) Resident assessee other than company
(d) Non-resident assessee other than company Q17. No TDS will be made by a banking company u/s 194A
if aggregate amount of interest paid or payable on time
Q5. If employee receives accumulated amount out of RPF , deposits to resident senior citizen if it does not exceed ___.
which is taxable due to non-fulfilment of conditions given (a) Rs. 10,000 (b) Rs. 50,000 (c) Rs. 20,000 (d) None
u/s 10(12), then TDS shall be deducted u/s ___.
(a) 192 (b) 192A (c) 194A (d) 197A Q18. Rate of TDS on Interest payable on securities____.
(a) 10% (b) 5% (c) 2% (d)1%
Q6. Sec 192A is applicable for payment out of ____.
(a) URPF (b) PPF (c) RPF (d) SAF Q19. Mr. P has deposited a sum of Rs. 2,00,000 on 1.4.2018
with schedule bank for one year at interest rate of 10% pa.
Q7. If employee receives the accumulated amount out of Bank should deduct tax at source amounting to ____.
RPF,TDS shall be deducted @ _____. (a) Rs. 2,080 (b) Rs. 2,000 (c) Rs. 4,000 (d) Rs. 4,160
(a) 10% (b) 5% (c) 20% (d) 30%
Q20. Mr. P has borrowed Rs. 10 lacs on 1.4.2018 @ 18%
Q8. If employee receives accumulated amount out of RPF p.a. from SBI. Mr. P should deduct tax on such interest@
& does not submit PAN, then TDS shall be deducted @ ___ (a) 5% (b) 10% (c) 15% (d) Nil
(a) 10% (b) 20% (c) 30% (d) MMR
Q21. No TDS even if interest paid > Rs. 5,000 in _____:
Q9. No TDS from premature withdrawals from Employee (a) Interest on loans given to Banks/Financial
RPF if the accumulated amount received is less than _____. Institutions/LIC/UTI/Insurance company
(a) 10,000 (b) 20,000 (c) 10,000 (d) 50,000 (b) Interest paid by Firm to partners & Interest on ZCBs
(c) Interest paid on Refund of Tax by Government
Q10. No TDS on interest on listed debentures is to be done (d) All of the above
by the widely held company if interest is paid. payable ___.
(a) by A/c Payee Cheque (b) during FY ≤ Rs. 5,000 Q22. No TDS on interest paid by co-operative society to ___.
(c) to Resident Individual (d) All of the above (a) Its members (b) Other co-operative society
(c) Both (a) & (b) (d) No such exception.
Q11. No tax shall be deducted on interest payable for ___.
(a) 7-year NSC or National Development Bond/Notified Q23. Interest on compensation awarded by Motor
Debentures; Accidents Claims Tribunal & paid by Insurance company,
(b) Interest on Securities of CG/SG/Listed Securities held (a) No TDS at all (b) No TDS at time of credit.
in DEMAT form (c) No TDS at time of payment ≤ Rs. 50,000 in FY.
(c) Payable to LIC/GIC/Any Insurance company on any (d) Both (b) & (c)
securities owned by it.
(d) All of the above Q24. In case of winnings from horse races, payments
exceeding __ are subject to tax deduction at source @ ___ %
*Q12. Rate of TDS in case of interest payable on listed (a) Rs. 5,000, 30% (b) Rs. 10,000, 30%
debentures is ____. (c) Rs. 5,000, 10% (d) Rs. 1,000, 10%.
(a) 10% + HEC (b) 10% without HEC
(c) 20% in case payment is made to domestic company & Q25. Mr. P, a resident Indian, wins Rs. 180,000 in Game
10% in any other case Show. Which of the statement is true as per Sec 194B?
(d) 20% in case payment is made to domestic company & (a) TDS @ 30% (b) TDS @ 31.2%.
10% in any other person + HEC to be applied in both cases. (c) TDS @ decided by winner (d) No TDS
1: c 2: b 3: d 4: c 5: b 6: c 7: a 8: d 9: d 10: d 11: d 12: b 13: d

14: a 15: d 16: d 17: b 18: a 19: b 20: d 21: d 22: c 23: d 24: b 25: b
Q26. Mr. P has won Lottery of Rs. 1 Lac. TDS on it will be Q36. What shall be the rate at which TDS on insurance
__. commission shall be deducted u/s 194D when the payee is
(a) Rs. 31,200 (b) Rs. 30,000 a person other than a domestic company?
(c) Rs. 33,990 (d) Rs. 30,900 (a) 20% (b) 10% (c) 30% (d) 5%
Q27. A company is engaged in real estate business Q37. What shall be the rate at which TDS on insurance
conducted a lucky draw & gave Maruti Car to a prize commission shall be deducted u/s 194D when the payee is
winner. TDS shall be deducted u/s ____ @ the rate of ____. a domestic company?
(a) 194B, 10% (b) 194A, 30% (a) 20% (b) 10% (c) 30% (d) 15%
(c) 194B, 30% (d) 194G, 20%
Q38. Mr. P , resident, is due to receive Rs. 4.50 lakhs on
Q28. Who shall not be liable to deduct TDS u/s 194C? 31.3.2019, towards maturity proceeds of LIC policy taken
(a) Any Individual (b) Any HUF on 1.4.1992, for which sum assured was Rs. 4 lakhs &
(c) Any Individual & Any HUF whose accounts were not annual premium was Rs. 5,000. What will be applicability
liable to audit in preceding FY of provisions for tax deduction at source u/s 194DA?
(d) Any Individual & Any HUF whose accounts were liable (a) Tax is deductible on Rs. 4,50,000
to audit in preceding FY. (b) Tax is not deductible on Rs. 4,50,000.
(c) Tax is not deductible at all on maturity of LIC policy
Q29. What shall be the rate at which TDS on payment to (d) None of the above
contractor.sub-contractor be deducted u/s 194C when the
payment is made to Individual or HUF? Q39. Section ___ provides for deduction of tax at source in
(a) 1% (b) 2% (c) 10% (d) 5% respect of any income referred to in section 115BBA
payable to a non-resident sportsman (including an athlete)
Q30.What is rate at which TDS on payment to or an entertainer who is not a citizen of India or a non-
contractor/sub-contractor be deducted u/s 194C when resident sports association or institution.
payment is made to any person other than Individual or (a) Sec 194A (b) Sec 194A (c) Sec 194E (d) Sec 194I
HUF?
(a) 1% (b) 2% (c) 10% (d) 5% Q40. Mr. P , a resident of age of 70 years, is due to receive
Rs. 2,20 lakhs on 31.3.2019 on LIC policy taken on
Q31. No tax is to be deducted at source if the amount 1.4.2010, for which the sum assured is Rs. 2 lakhs & the
credited.paid to the contractor during the relevant annual premium is Rs. 45,000. What will be applicability of
previous year does not exceed __. provisions for tax deduction at source u/s 194DA?
(a) Rs. 30,000 (b) Rs. 1,00,000 (c) 1,30,000 (a) Tax is deductible on Rs. 2,20,000 @ 1% since annual
(d) Rs. 30,000 at one time or Rs. 1,00,000 in aggregate premium > 10% of sum assured
during FY. (b) Tax is deductible on Rs. 2,20,000 @ 1% since annual
premium > 20% of sum assured
Q32. When prize is given partly in cash & party in kind, (c) Tax is deductible on Rs. 2,20,000 @ 1% since annual
Income tax is to be deducted only from cash? premium > 15% of sum assured
(a) True (b) False (c) Partly true (d) Partly false (d) None of the above
Q33. A company has given an advertising contract to an Q41. TDS on payment made to Lara, WI cricketer, by a
advertising agency which is also a company. On newspaper for contribution of articles Rs. 50,000 is:
30.11.2018, it has paid a sum of Rs. 2,40,000 to the (a) Rs. 5,000 (b) Rs. 1,000 (c) Rs. 10,400 (d) Rs. 500
advertising agency a firm. It should deduct tax for:
(a) 4,800 (b) 4,992 (c) 4,400 (d) 2,496 Q42. If payment is made to legal heirs of a deceased
depositor from National saving scheme, TDS @ ___.
Q34. A person makes payment of Rs. 35,000 to contractor (a) 1% (b) 2% (c) 10% (d) Nil
who is a transport operator is not subject to TDS if __.
(a) The recipient owns 10 or less than 10 goods carriages Q43. What shall be the rate at which TDS on commission
at any time during the previous year. on sale of lottery tickets shall be deducted u/s 194G?
(b) The recipient is engaged in the business of plying, (a) 5% (b) 10% (c) 20% (d) 30%
hiring or leasing of goods carriage
Q44. What is max amount upto which TDS on commission
(c) the recipient has furnished declaration to this effect
on sale of lottery tickets shall not be deducted?
along with his PAN to the payer. (d) All of the above
(a) Rs. 5,000 (b) Rs. 20,000 (c) Rs. 1,000 (d) Rs. 15,000
Q35. Mr. P an individual, whose turnover of the business Q45. If an authorised lottery ticket agent purchases tickets
for preceding year exceeded Rs. 100 lakhs, has engaged a in bulk at a discount from SG & sells the same at a price of
contractor Mr. A for building his residential house. On his choice, tax is deductible @ ___
30.11.2018, he has made a payment of Rs. 10,00,000 to the (a) 10% (b) 5% (c)1% (d) Sec 194G is not applicable
contractor. Mr. P should deduct TDS of:
(a) Rs. 20,800 (b) Rs. 10,400 (c) Rs. 20,000 (d) Nil
26: a 27: c 28: c 29: a 30: b 31: d 32: b 33: a 34: d 35: d
36: d 37: b 38: b 39: c 40: b 41: c 42: d 43: a 44: a 45: d
Q46. What is maximum amount upto which TDS on Q59. In case of payment on transfer of immovable
commission.brokerage shall not be deducted? property, TDS shall be done @ _____.
(a) Rs. 15,000 (b) Rs. 20,000 (c) Rs. 10,000 (d) Rs. 5,000 (a) 2% (b) 5% (c) 1% (d) Nil
Q47. What is the rate of TDS on commission/brokerage? Q60. Rate of TDS u/s 194-IA is ___ if No PAN is given.
(a) 5% (b) 10% (c) 20% (d) 30% (a) 20% (b) 30% (c) 1% (d) 10
Q48. Who shall not be liable to deduct TDS u/s 194H? Q61. Tax is not required to be deducted at source where
(a) Any Individual (b) Any HUF the total amount of consideration for the transfer of
(c) Any Individual & Any HUF whose accounts were not immovable property is less than Rs .
liable to audit in preceding FY (a) Rs. 50 lacs (b) Rs. 100 lacs (c) Rs. 10 lacs (d) Rs. 5 lacs
(d) Any Individual & Any HUF whose accounts were liable
to audit in preceding FY Q62. Sum deducted u/s 194-IA shall be paid to the credit
of the CG within a period of days from the end of the
Q49. Sec 194H is not applicable to professional services. month in which the deduction is made.
(a) True (b) False (a) 15 (b) 30 (c) 45 (d) 60
Q50. The relationship between the media company & the Q63. Every person responsible for deduction of tax u/s
advertising agency is that of a 'principal-to-principal' &, 194-IA shall also furnish to the DGIT (Systems) or any
therefore, not liable for TDS u/s 194H. person authorized by him, a challan-cum-statement
(a) True (b) False in Form No. electronically within 30 days from the
end of the month in which the deduction is made.
Q51. The rate of TDS on rental payments of plant, (a) 16A (b) 16B (c) 26QB (d) 26QA
machinery or equipment is -
(a) 2% (b) 5% (c) 10% (d) 1% Q64. Every person responsible for deduction of tax u/s
194-IA shall furnish the TDS certificate in Form No.
Q52. The rate of TDS on rental payments of land & to the payee within 15 days from due date for
building, furniture is - furnishing the challan-cum-statement in Form No. 26QB.
(a) 2% (b) 5% (c) 10% (d) 1% (a) 16A (b) 16B (c) 26QB (d) 26QA
Q53. What is the total amount during PY upto which TDS Q65. Section 194-IB requires any person, being an
on rent u/s 194-I shall not be deducted? individual or a HUF, other than those individual or HUF
(a) Rs. 30,000 (b) Rs. 75,000 whose gross receipts or turnover from the business or
(c) Rs. 2,00,000 (d) Rs. 1,80,000 profession carried on by him exceed the monetary limits of
tax audit in the immediately preceding FY, responsible for
Q54. Who shall not be liable to deduct TDS u/s 194I? paying to a resident any income by way of rent of Land or
(a) Any Individual (b) Any HUF building or both, to deduct income tax at the rate of ____.
(c) Any Individual & HUF whose accounts were not liable (a) 2% (b) 5% (c) 1% (d) Nil
to audit in preceding FY
(d) Any Individual & HUF whose accounts were liable to Q66. Sect 194-IA is not attracted in hands of transferee in
audit in preceding FY case of compulsory acquisition of immovable property.
(a) True (b) False
Q55. In case of rent paid to government, TDS @ ____.
(a) 2% (b) 5% (c) 10% (d) Nil Q67. U/s 194-IB, tax has to be deducted at source only if
the amount of such rent exceeds Rs. for a month or
Q56. A company has taken a house on rent @ Rs. 20,000 part of a month during the previous year.
pm. The company should deduct tax on account of such (a) Rs. 10,000 (b) Rs. 25,000
rent paid/credited on monthly basis amounting to ____. (c) Rs. 50,000 (c) Rs. 1,00,000
(a) Rs. 2,000 (b) Rs. 2,400
(c) Rs. 24,000 (d) Rs. 24,960 Q68. If no PAN is provided, TDS u/s 194-IB shall not
exceed the
Q57. The provisions of 194-I are not applicable to: (a) 20% (b) 30% (c) 5 %
(a) Cooling charges paid by the customers of cold storage. (d) Rent payable for the last month of PY or last month of
(b) Payment of PSF by an airline to Airport operator. the tenancy, as the case may be.
(c) Rent paid to REIT (d) All of the above
Q69. Mr. A, a salaried individual, pays rent of Rs. 51,000
Q58. The provisions of 194-I are applicable to _____. p.m. to Mr. B from June, 2018. Which of statement is true?
(a) Rent paid to any person ≤ Rs. 1,80,000 during PY. (a) No tax is deductible at source since Mr. A is not liable to
(b) Rent paid to the government tax audit u/s 44AB.
(c) 'Lump sum lease premium' or 'one-time upfront lease (b) TDS every month @ 10% on rent paid to Mr. B.
charges" paid by an assesse for acquiring long-term (c) TDS every month @ 5% on rent paid to Mr. B.
leasehold rights for land or any other property. (d) TDS @ 5% on annual rent from rent paid for March 2019.
46: a 47: a 48: c 49: a 50: a 51: a 52: c 53: d 54: c 55: d 56: a 57: d
58: c 59: c 60: a 61: a 62: b 63: c 64: b 65: b 66: a 67: c 68: d 69: c
Q70. Sec 194-IC casts responsibility on any person Q80. Any person responsible for paying to a resident any
responsible for paying to resident any sum by way of sum exceeding Rs. 2.5 lakh towards compensation for
consideration, not being consideration in kind, under a compulsory acquisition of his urban industrial land under
specified agreement u/s 45(5A), to deduct tax @ ______. any law has to deduct income-tax at the rate of
(a) 2% (b) 5% (c) 1% (d) 10% (a) 10% (b) 15%
(c) 20% (d) 2%
Q71. Who shall not be liable to deduct TDS u/s 194J?
(a) Any Individual (b) Any HUF Q81. No tax deduction is to be made u/s 192LA, if the
(c) Any Individual & Any HUF whose accounts were not amount of such payment or aggregate amount of such
liable to audit in preceding FY payment to a resident during the FY is less than .
(d) Any Individual & Any HUF whose accounts were liable (a) 2,50,000 (a) 10,00,000
to audit in preceding FY. (a) 1,80,000 (a) 50,00,000
Q72. What shall be rate of TDS on fees for professional or Q82. No Tax shall be deducted on any sum payable to
technical service u/s 194-J? (a) Government; RBI.
(a) 20% (b) 10% (c) 30% (d) 15% (b) Corporation established by/under Central Act, which is
exempt from Income-tax.
Q73. Mr. P paid fees for professional services of Rs. 40,000 (c) Specified Mutual Fund u/s 10(23D).
to Mr. A. Mr. A is engaged only in business of operation of (d) All of the above
call center. Tax is to be deducted by Mr. P at the rate of ___.
(a) 1% (b) 2% (c) 10% (d) 20% Q83. For lower tax deduction certificate, application is to
be made to ___ u/s 197A.
Q74. The limit of Rs. u/s 194J is applicable separately (a) CBDT (b) AO (c) CIT (d) CBEC
for fees for professional services, fees for technical
services, royalty & non-compete fees referred to in section Q84. Section 197 is not operative in Section ___.
28(VA). (a) 192 (b) 194A (c) 194 J (d) 194E
(a) Rs. 10,000 (b) Rs. 20,000
(c) Rs. 30,000 (d) Rs. 40,000 Q85. Certificate for lower deduction of TDS is issued by ___
after receiving an application from___.
Q75. Exemption Limit of Rs. 30,000 is ___ for director’s (a) AO, Assessee (b) Assessee, AO
fees. (c) CIT, AO (d) AO, CIT
(a) Not Available (b) Available
Q86. No declaration u/s 197A shall be ____ unless the
Q76. Section 194J will not apply to the transaction charges person furnishes his ___.
paid to BSE by its members are not for technical services (a) Valid, PAN (b) Invalid, PAN
but are in the nature of payments made for facilities (c) Valid, TIN (d) Valid, PIN
provided by the stock exchange.
(a) True (b) False Q87. No deduction of tax at source shall be made from any
payment to any person for, or on behalf of, NPS Trust
Q77. Services rendered by coaches & trainers in relation to referred in section 10(44).
the sports activities are regarded as professional services (a) True (b) False
for the purposes of section 194J.
(a) True (b) False Q88. All sums deducted in accordance with the foregoing
provisions shall, for the purpose of computing the income
Q78. A HUF is carrying on business & whose turnover of of an assessee, be deemed to be income received.
the preceding PY was Rs. 165 lacs & got tax audit done from (a) True (b) False
a firm of Chartered Accountants for the current PY. An
audit fee of Rs. 40,000 was paid by HUF. It should deduct Q89. After deduction of TDS, deductor must deposit such
tax amounting to ____. TDS to ___ within specified time.
(a) Rs. 2,060 (b) Rs. 2,000 (a) CC (b) SG (c) Both (d) None
(c) Rs. 4,000 (d) Rs. 4,160
Q90. When ____is government, TDS must be deposit on ___.
Q79. Section provides for TDS by a person responsible (a) Payee, same day (b) Payer, 7th of next month of TDS
for paying to resident any sum in nature of compensation (c) Payer, same day (d) None of the above
or enhanced compensation or the consideration or the
enhanced consideration on account of compulsory Q91. When the payer is other than Government, TDS of
acquisition, under any law for the time being in force, of March month shall be deposit upto ____.
any immovable property (other than agricultural land). (a) 30th April (b) 7th April
(a) 194LA (b) 194LB (c) Same day (d) None of the above
(c) 194LC (d) 194LD
70: d 71: c 72: b 73: b 74: c 75: a 76: a 77: a 78: c 79: a 80: a
81: a 82: d 83: b 84: d 85: a 86: a 87: a 88: a 89: a 90:c 91: a
Q92. Which of the following are correct due dates for Q102. Form 16 is issued by the employer.
deductor other than government for filling TDS returns ? (a) Annually (b) Quarterly
(a) 31st July; 31st Oct; 31st Jan; 31st May (c) Half yearly (d) Monthly
(b) 15th July; 15th Oct; 15th Jan; 15th May
(c) 15th July; 31st Oct; 31st Jan; 15th May Q103. TDS certificate issued in cases other than salary
(d) None of the above income is in form _____.
(a) 16A (b) 16B (c) 15 (d) 15H
Q93. In order to process TDS statements on computer,
electronic processing on the same lines as processing of Q104. Due Date of furnishing of TDS certificate in case of
income-tax returns has been provided in section . salary is _____ of the following relevant FY.
(a) 202 (b) 200A (c) 202A (d) 206 (a) 30th May (b) 15th May (c) 15th June (d) 30th June
Q94. Fee for TDS has been provided in section- Q105. Form 16A issued once in __
(a) 202 (b) 200A (c) 234E (d) 206 (a) Month (b) Year (c) Quarter (d) Half Year
Q95. A fee of ___ per day is levied u/s 234E for late
Q106. Every banking company or co-operative society or
furnishing of TDS statement.
public company referred to in proviso to sec 194A(3)(i)
(a) Rs. 200 (b) Rs. 2,000 (c) Rs. 1,000 (d) Rs. 100
shall prepare prescribed statements if it is responsible for
Q96. Intimation will be prepared & generated & sent to paying interest u/s 194 to a resident not exceeding ___ &
deductor, specifying his tax liability or refund due, within ____in any other case.
year from end of the FY in which statement is filed. (a) Rs. 10,000; Rs. 5,000 (b) Rs. 5,000; Rs. 10,000
(a) 2 (b) 3 (c) 1 (d) 6 months (c) Rs. 10,000; Rs. 10,000 (d) Rs. 5,000; Rs. 5,000
Q97. An assessee is deemed to be Assessee in default u/s Q107. If PAN is not submitted, TDS will be deducted at __.
201 if __. (a) 20% (b) 30% (c) MMR
(a) Deductor has deducted but not deposited the tax (d) Higher of Rate specified in Act or 20%.
deducted at source
(b) Employer has failed to pay the tax wholly or partly, u/s Q108. Submission of PAN is mandatory for ___.
192(1A) (a) Payer to Payee (b) Payee to Payer
(c) If a Resident Payee has filed ROI u/s 139 & has included (c) Company only (d) Individual only
such sum in computing his total income in ROI & has paid
tax on such sum. (d) Both (a) & (b) Q109. Which of the following statement is true?
(a) If PAN not submitted, TDS is deducted at higher rate
Q98. No order u/s 201(1), deeming a person to be an (b) Declaration of 197A is invalid if PAN not submitted
assessee-in-default for failure to deduct the whole or any (c) No certified issue u/s 197 if no PAN submitted
part of the tax from a person resident in India, shall be (d) All the above
passed at any time after the expiry of years from the
end of the FY in which the payment is made or credit is Q110. SC & HEC is not added in rate of TDS in case of___.
given. (a) Resident Company (b) Non-resident company
(a) 2 (b) 5 (c) 1 (d) 7 (c) Both (a) & (b) (d) None of the above
Q99. In case of Salary, TDS certificate is issued in __ Form Q111. SC or HEC is added in rate of TDS in case of ____.
(a)16 (b)16A (c) 15 (d)15H (a) Foreign company (b) Any NR Assessee
(c) Indian company (d) None of the above
Q100. A person deemed to be an assessee-in-default u/s
201(1), for failure to deduct tax or to pay the tax after Q112. The deduction of tax at source from the salary shall
deduction, is liable to pay simple interest @ % for be made at the time of -
every month or part of month on the amount of such tax (a) Accrual of salary (b) Payment of salary
from the date on which tax was deductible to the date on (c) Credit or payment of the salary, whichever is earlier
which such tax was actually deducted. (d) Any of the above at the choice of employer
(a) 2 (b) 5 (c) 1 (d) 1.5
Q113. Liability to deduct tax at source in case of interest
Q101. A person deemed to be an assessee-in-default u/s on securities arises at the time of -
201(1), is liable to pay simple interest @ % for (a) Payment of interest (b) Accrual of interest
every month or part of month on the amount of such tax (c) Credit of Interest to the account of the payee or
from the date on which tax was deducted to the date on payment thereof, whichever is earlier
which such tax is actually paid [Section 201(1A)]. (d) Any of the above at the choice of the payer of Interest
(a) 2 (b) 5 (c) 1 (d) 1.5
92: a 93: b 94: c 95: a 96: c 97: d 98: d 99: a 100: c 101: d 102: a
103: a 104: c 105: c 106: a 107: d 108: b 109: d 110: a 111: b 112: b 113:c
Q114. Rate of TCS u/s 206C for alcoholic liquor for human Q125. Whether TCS limit is applicable on each sale of
consumption is @ ___ %. motor vehicle during the year?
(a) 2 (b) 5 (c) 1 (d) 2.5 (a) Yes (b) No
Q115. Rate of TCS u/s 206C for tendu leaves is @ ___ %. Q126. Person responsible for collecting tax u/s 206C(1A)
(a) 2 (b) 5 (c) 1 (d) 2.5 shall deliver or cause to be delivered to Chief
Commissioner or Commissioner one copy of declaration
Q116. Rate of TCS u/s 206C for timber obtained under a on or before ___ of month next following the month in
forest lease is @ ___ %. which the declaration is furnished to him.
(a) 2 (b) 5 (c) 1 (d) 2.5 (a) 7th (b) 15th (c) 30th (d) 45th
Q117. Rate of TCS u/s 206C for timber obtained other than Q127. Person responsible for collecting tax u/s 206C(1)
under forest lease is _ %. being an officer of government where the tax is paid
(a) 2 (b) 5 (c) 1 (d) 2.5 without production of challan shall deposit TCS on:
(a) the same day
Q118. Rate of TCS u/s 206C for scrap is @ ___ %. (b) Within 7 days from end of month in which the
(a) 2 (b) 5 (c) 1 (d) 2.5 collection is made
(c) within 1 week from end of month in which the
Q119. Rate of TCS u/s 206C for Minerals, being coal or collection is made
lignite or iron ore is @ %. (d) Within 30 days from the end of the month in which
(a) 2 (b) 5 (c) 1 (d) 2.5 the collection is made
Q128. Person responsible for collecting tax u/s 206C(1)
Q120. Rate of TCS u/s 206C by every person who grants a being an officer of government where the tax is paid with
lease or a licence or enters into a contract or otherwise production of income tax challan shall deposit TCS on __.
transfers any right or interest in any parking lot or toll (a) Same day
plaza or a mine or a quarry to another person (other than (b) Within 7 days from the end of the month in which the
a public sector company) for the use of such parking lot or collection is made
toll plaza or mine or quarry for purposes of business @ ___ (c) within 1 week from the end of the month in which the
%. collection is made
(a) 2 (b) 5 (c) 1 (d) 2.5 (d) Within 30 days from the end of the month in which the
collection is made
Q121. Sec 206C(IF) provides that every person, being a
seller, who receives any amount as consideration for sale Q129. Person responsible for collecting tax u/s 206C(1)
of motor vehicle of value exceeding Rs. 10 lacs shall other than government shall deposit TCS on _____
collect tax from buyer @ ___ % of the sale consideration. (a) the same day
(a) 2 (b) 5 (c) 1 (d) 2.5 (b) Within 7 days from the end of the month in which the
collection is made
Q122. Whether TCS @ 1% is on sale of motor vehicles by (c) within 1 week from the end of the month in which the
manufacturers to dealers. distributors? collection is made
(a) Yes (b) No (d) Within 30 days from the end of the month in which the
Q123. Whether TCS@1% on sale of motor vehicle is collection is made
applicable only to luxury cars?
(a) Yes (b) No Q130. Seller includes ___
(a) CG/SG/LA or corporation or
Q124. Whether TCS @ 1% is applicable for sale to Gov.t (b) Authority established by Central/State/Provincial Act
Dept, Embassies, Consulates & United Nation Institutions (c) Any Company or Firm or Co-operative society;
of motor vehicle or goods. services? Individual/HUF subject to Tax audit u/s 44AB(a)/(b) in
(a) Yes (b) No last PY.
114: c 115: b 116: d 117: d 118: c 119: c 120: a 121: c 122: b

123: a 124: b 125: a 126: a 127: a 128: b 129: c 130: d
9. ADVANCE TAX & INTEREST U/S 234
Q1. Tax shall be payable in advance during any FY on ____. Q14. First instalment of advance tax in case of non-
(a) Previous Income (b) Estimated Current Income company assesses should be made ____
(c) Past Income (d) Future Income (a) 15th June of relevant FY (b) 15th July of relevant FY
(c) 15 Aug of relevant FY
th (d) 15th Sep of relevant FY
Q2. Scheme of advance tax is known as ___.
(a) Step towards nation building (b) Earn more pay more Q15. Advance tax to be paid upto 15th Dec of FY is _____.
(b) Pay as much as you can (d) Pay as you earn (a) 75% (b) 100% (c) 30% (d) 45%
Q3. Obligation to pay advance tax arises when tax payable Q16. For PY 2018-19, X Ltd has estimated its tax payable
is______. to be Rs. 2 lacs. Advance tax payable upto 15th Dec 2018 is?
(a) Rs. 10,000 or more (b) Rs. 10,000 or less (a) 90,000 (b) 30,000 (c) 1.5 lac (d) 2 lac
(c) Rs. 10,000 (d) Rs. 5,000 or more
Q17. Mr. P estimated his tax payable for PY 2018-19 @ Rs.
Q4. Advance tax shall not be payable by resident individual 1 lac. Advance tax payable upto 15th Sep 2018 is ?
having income like interest, rent, etc. in India, who ____. (a) 45,000 (b) 75,000 (c) 15,000 (d) 1 lac
(a) Does not have any income taxable u/h “PGBP”
(b) Is of the age of 60 or more at any time during the PY Q18. Where no instalment is due & any income is earned
(c) Both (a) & (b) (d) Either (a) or (b) after 15th March of PY, the entire tax is to be paid by _______
(a) 15th March (b) 31st March (c) 31st July (d) 15th Sep
Q5. How advance tax shall be computed?
(a) Tax on TI – Rebate + TDS (b) Tax on TI - Rebate - TDS Q19. Advance tax can be paid ____
(c) Tax on TI – Rebate × TDS (d) Tax on TI/TDS (a) After 15th march of relevant FY
(b) cannot be paid after 15th March of relevant FY
Q6. Assessee is _____ to submit any estimate or statement (c) be paid after 15th March but by 31st March of the FY
of estimated income to AO. (d) None of the above
(a) Always required (b) not required in normal cases
(c) Required if he has been served with notice by AO to Q20. Where the assessee does not pay____ by due date, he
submit the estimates (d) Both (c) & (d) shall be deemed to be an____in respect of such installment.
(a) Last installment, assessee in default
Q7. Tax deductible but not so deducted ___ be reduced for (b) Any installment, assessee in default
computing Advance Tax liability of the payee. (c) Any installment, not assessee in default
(a) Can (b) cannot (c) Must (d) None (d) Last installment, not assess in default
Q8. Estimated Net Agricultural Income of the PY has to be Q21. Tax liability of assessee is Rs. 11,000. This sum is
____ for computing advance tax. deposited on 16th March in lumpsum. This is treated as
(a) Ignored (b) Taxable (a) SAT (b) Advance tax but subject to interest
(c) Considered only for tax purpose (d) None (c) Advance tax (d) None of the above
Q9. Assessee opting for presumptive scheme u/s 44AD Q22. Treatment of advance tax paid by Assessee is?
shall be ____ payment of advance tax in 4 installments. (a) Added to SAT (b) Deducted from SAT
(a) Subject to (b) Exempted from (c) No adjustment in SAT (d) None of the above
Q10. Assessee opting for presumptive taxation scheme Q23. Advance tax is payable by the assessee
u/s 44ADA for PY 2018-19 is liable to pay advance tax - (a) on his own account (b) On Order of AO
(a) In one instalment on/before 15th march. (c) on his own account or when the order for payment is
(b) In two instalments on/after 15th march. passed by AO. (d) None of the above
(c) In three instalments on/before 15 th September.
(d) In four instalments on/before 31st March. Q24. PY 2018- 19, GGC Ltd has not paid any advance tax till
10.2.2019 & in earlier years, company was assessed in the
Q11. Advance tax is payable in ..................... instalments by a manner given below:
non-corporate assessee 2015-16 - Scrutiny Assessment done for Rs. 6 lacs.
(a) 3 (b) 2 (c) 4 (d) 1 2016-17 – BJA done for Rs. 10 lacs
2017-18 - Income Tax Return submitted for Rs. 8 lacs.
Q12. Mr. A, whose total sales is Rs. 201 lacs declare profit Income which can be used by AO as base for computation
of Rs. 10 lacs for PY 2018-19. He is liable to pay advance of advance tax is ?
tax in ______ installments (a) Rs. 8 lacs (b) Rs. 10 lacs (c) Rs. 7 lacs (d) None
(a) 1 (b) 2 (c) 3 (d) 4
Q25. Advance tax is payable by an assessee on his /its total
Q13. First instalment of advance tax in case of company is.
income, which includes
(a) 15th June of relevant FY (b) 15th July of relevant FY
(a) Capital gains (b) Casual income
(c) 15 Aug of relevant FY
th (d) 15th Sep of relevant FY
(c) Both of the above (d) None of the above
1: b 2: d 3: a 4: c 5: b 6: d 7: b 8: c 9: b 10: a 11: c 12: d 13: a
14: a 15: a 16: c 17: a 18: b 19: c 20: b 21: b 22: b 23: c 24: b 25: c
Q26. If casual income or capital gain arises ___ of any Q38. What shall be payable by assessee for deferment of
installment, then entire tax payable on such income should advance tax beyond due dates.
be paid in the ___ of advance tax which are due (a) Interest (b) Penalty (c) Fine (d) All
(a) After DD, last instalment (b) Before DD, last Installment
(c) After DD, Remaining instalment Q39. Interest liability u/s 234C would be ___ for a period
(d) Before DD, Remaining installment of _____ for every deferment
(a) 2%, 6 months (b) 1%, 1 month
Q27. If any person has paid income tax after expiry of last (c) 1%, 3 months (d) 2%, 3 months
date of filing of ROI, Interest u/s 234A shall be payable ____
for period subsequent to last date of filing of ROI @ Q40. For last installment of 15th March PY, interest liability
(a) 12% p.a (b) 1% p.m or part (c) 10% p.m u/s 234C would be ____ for
(a) 1%, 3 months (b) 1%, 1 month
Q28. Mr. P submitted his ROI for PY 2018-19 on (c) 1%, 3 months (d) 2%, 3 months
15.12.2019. Due date of filing ROI was 30.9.2019. Mr. P
shall have to pay interest u/s 234A for _____months Q41. In case of company, if advance tax payable in second
(a) 3 (b) 2 (c) 2.5 (d) 4 installment is ____ , no interest u/s 234C shall be payable.
(a) 36% or less (b) 36% or more
Q29. Interest u/s 234A shall ____ charged on SAT u/s 140A (c) 12% or more (d) 12% or less
paid by assessee on or before DD of filing ROI even if ROI
is submitted after DD of filing ROI. Q42. When advance tax is deposited on 16th Sep instead of
(a) be charged (b) Not be charged 15th Sep, what would be the consequences u/s 234C?
(a) Interest for one day shall be charged
Q30. In what case, interest u/s 234B is attracted? (b) Interest for one month shall be charged
(a) Non-payment of advance tax (c) No levy of interest shall be charged
(b) Payment of advance tax of < 90% of Assessed Tax (d) Interest for three month shall be charged
(c) Either (a) or (b) (d) None
Q43. If a person who is required to file ROI u/s 139 does
Q31. Interest u/s 234B is calculate on difference b/w ____. not file ROI within DD u/s 139(1), fee payable u/s 234F
(a) Advance tax paid & assessed tax shall be ___.
(b) Advance tax paid & 90% of the assessed tax (a) Rs. 5,000 if ROI is filed on/before 31st December of AY
(c) Assessed by tax & advance tax paid (b) Rs. 10,000 in any other case
(d) None of the above (c) Both (a) & (b) (d) None of (a) or (b)
Q32. Interest u/s 234B for default in payment of advance Q44. If Total Income of the person _____, fees payable shall
tax is payable for period starting from _____ not exceed ____.
(a) due date of return to the date of assessment (a) < 5 Lacs; Rs. 1,000 (b) ≤ 5 Lacs; Rs. 1,000
(b) 1st April of relevant AY to the date of assessment (c) < Lacs; Rs. 5,000 (d) < 10 Lacs; Rs. 10,000
(c) 1st April of relevant AY to date of submission of ROI
Q45. What are possible consequences of late filing of ROI ?
Q33. Interest liability u/s 234B would be ____ from 1st April (a) Late fees has to be paid u/s 234F
following the FY up to the date of assessment of income. (b) Losses cannot be carried forward (c) Both
(a) 1% p.m (b) 1% p.m or part (c) 2% p.m or part
Q46. Mr. P has a total income of Rs. 7 lakhs for AY 2019-20.
Q34. 1st installment of Advance tax of Rs. 15,000 was due He files his return of income for AY 2019-20 on 13th
on 15.9.2018. Assessee deposited Rs. 10,000 on 14.8.2018 January, 2020. He is liable to pay late fee of
& balance on 16.11.2018. Interest payable @ 1% p.m on __. (a) Rs. 1,000 u/s 234F (b) Rs. 5,000 u/s 234F
(a) Rs. 15,000 for 3 months (b) Rs. 5,000 for 3 months (c) Rs. 10,000 u/s 234F (d) Not liable to pay any fee
(c) Rs. 5,000 for 2 months (d) Rs. 15,000 for 2 months
Q47. Mr. P has total income of Rs. 4,90,000 for the AY
Q35. What shall be payable by assessee for deferment of 2019-20. If a return is filed after the due date u/s 139(1)
advance tax beyond due dates given u/s 211. then the late fees of shall be imposed u/s 234F upto ___.
(a) Interest u/s 234A (b) Interest u/s 234B (a) 2,000 (b) 2,500 (c) 5,000 (d) 1,000
(c) Interest u/s 234C (d) None of the above
Q36. In case of company, if Advance tax payable in 1st Q48. Mr. P has total income of Rs. 14,90,000 for the AY
installment is ____ , no interest u/s 234C shall be payable. 2019-20. If a return is filed after the due date u/s 139(1)
(a) 12% or less (b) 10% or more but before 31/12/AY then the late fees of ..................... shall
(c) 12% or more (d) 36% or more be imposed u/s 234F.
(a) 2,000 (b) 2,500 (c) 5,000 (d) 1,000
Q37. Interest u/s 234C is to be calculated on difference
between ____ up to that date & ____. *Q49. Late fees shall be imposed u/s 234F if ITR is
(a) Actual tax paid & advance tax payable submitted after the due date u/s 139(1). Such amount of
(b) Advance tax payable & actual tax paid late fees cannot be ____.
(c) Either of above (d) None of the above (a) 2,000 (b) 1,0o0 (c) 5,000 (d) 10,000
26: c 27: b 28: a 29: b 30: c 31: a 32: b 33: b 34: b 35: c 36: c 37: b
38: a 39: c 40: b 41: a 42: b 43: c 44: b 45: c 46: c 47: d 48: c 49: a
10. RETURN OF INCOME
Q1. As per section 139(1), filing of returns is compulsory *Q8. An Individual who is a beneficiary of any asset located
(must) irrespective of whether profit is earned or loss is outside India is ____ if such income is includible in the
incurred, in case of - Income of the Beneficial owner.
(a) companies only (b) firms only (a) required to file ROI under 4th proviso to section 139(1)
(c) both companies & firms (d) All Assessees (b) Not required to file ROI under 4th proviso to sec 139(1)
(c) Required to deduct TDS under 4th proviso to sec 139(1)
Q2. As per section 139(1), an individual shall file income (d)Not Required to deduct TDS under 4th proviso to sec
tax return if - 139(1)
(a) his total income exceeds Rs. 2,50,000
(b) his total income exceeds Rs. 3,00,000 *Q9. Assessee having total income lower than Basic
(c) his total income exceeds Rs. 5,00,000 Exemption Limit is
(d) his total income before allowing deduction u/s 80C to (a) Required to File ROI. (b)Not required to File ROI
80U exceeds BEL (Rs. 2,50,000). (c) May file ROI if he so desires. (d) Both (b) & (c).
*Q3. Akash, who is 32 years old, has long-term capital Q10. For filing returns of income in respect of various
gains on transfer of equity shares of Rs. 25,000 which is entities, Income-tax Act, 1961 has prescribed
exempt u/s 112A & deduction of Rs. 80,000 u/s 80C. He (a) Two due dates (b) Three due dates
has to file a ROI for AY 2019-20, only if his TI exceeds: (c) Four due dates (d) Only one due date
(a) Rs. 1,70,000 (b) Rs. 1,45,000
(c) Rs. 1,50,000 (d) Rs. 2,50,000 Q11. In case of every assessee, the ROI shall be filed:
(a) On or before due date given u/s 139(1)
Q4. Mr. P is a resident of India. During AY 2019-20, (b) Before due date given u/s 139(1)
interest of Rs. 2,88,000 was credited to his Non-Resident (c) On due date given u/s 139(1)
external account with SBI. Rs. 30,000 being interest on FD (d) After due date given u/s 139(1)
with SBI was credited to his savings account & he also
earned interest of Rs. 3,000 on his savings bank account. Is Q12. The last date of filing ROI u/s 139(1) for AY 2019-20
Mr. P required to file his ITR? in case of non-corporate assesses who does not have any
(a) No (b) Yes income of PGBP is:
(a) 30th September of PY (b) 30th September of AY
*Q5. Mr. P dies on 15.11.2018 & his total income till this (c) 31st July of AY (d) 31st July of the PY
date was Rs. 2,55,000. Thereafter the business of Mr. P was
inherited by his son Mr. P & his total income from such Q13. Last date of filing ROI u/s 139(1) for AY 2019-20 in
business was Rs. 2,88,000. The son does not have any other case of a Company assesses is:
income. In this case the son - (a) 30th September of PY (b) 30th September of AY
(a) has to file a consolidated income tax return for the (c) 31st July of AY (d) 31st July of the PY
amount of Rs. 5,43,000.
(b) has to file separate income tax returns, one on behalf of Q14. The last date of filing ROI u/s 139(1) for AY 2019-20
his father for Rs. 2,55,000 & other in his own capacity for in case of non-corporate assesses whose accounts are not
Rs. 2,88,000. liable to be audited is:
(c) has to file only one income tax return on behalf of his (a) 30th September of PY (b) 30th September of AY
father for Rs. 2,55,000. (c) 31st July of AY (d) 31st July of the PY
(d) has to file only one income tax return on behalf of his
father for Rs. 5,43,000. Q15. Due date of furnishing return of income for a working
partner of a firm whose accounts are required to be
*Q6. ROI is required to be filed by every resident &
audited is:
ordinarily resident if
(a) 31st July of AY (b) 30th September of AY
(a) He has signing authority in any account located outside
(c) 30th November of AY (d) 31st March of AY
India or holds asset outside India
(b) He is a beneficiary of any asset located outside India.
*Q16. The last date of filing ROI u/s 139(1) for AY 2019-
(c) Both (a) & (b)
20 in case of assessee who is required to furnish Transfer
(d) None of (a) & (b) since no asset is located in India.
Pricing Report u/s 92E relating to International
*Q7. ROI is required to be filed by every RNOR if transaction/Specified Domestic transaction is:
(a) He has signing authority in any account located outside (a) 30th November of PY (b) 30th November of AY
India or holds asset outside India (c) 31st September of AY (d) 31st September of PY
(b) He is a beneficiary of any asset located outside India.
(c) Both (a) & (b) Q17. Due date of furnishing ROI for a non-working partner
(d) This proviso is not applicable to resident but not of a firm whose accounts are required to be audited is:
ordinarily resident. (a) 31st July of AY (b) 30th September of AY
(c) 30th November of AY (d) 31st March of AY
1: c 2: d 3: d 4: a 5: b 6: c 7: d 8: b 9: c
10: b 11: a 12: c 13: a 14: c 15: b 16: b 17: a
Q18. Due date of furnishing return of ROI for a non- Q27. For AY 2019-20, business loss of the assessee was Rs.
working partner of a firm whose accounts are not required 1,00,000 & current year depreciation was 1,40,000. The
to be audited is: assessee furnished ROI on 15.12.2019 although the due
(a) 31st July of AY (b) 30th September of AY date was 30.9.2019. In this case, the assessee shall be:
(c) 30th November of AY (d) 31st March of A Y (a) allowed to carry forward business loss of Rs. 1,00,000
& unabsorbed depreciation of Rs. 1,40,000
Q19. If last date of filing of ROI/ROL is a public holiday, (b) neither be allowed to carry forward business loss nor
Assessee should/can file ROI/ROL on the unabsorbed depreciation
(a) Previous working day. (b) next working day. (c) not be allowed to carry forward business loss but shall
(c) On the same day be allowed to carry forward unabsorbed depreciation.
(d) Assessee should ask AO for the suitable date to file ROI. (d) allowed to carry forward business loss but not allowed
to carry forward unabsorbed depreciation
*Q20. During AY 2019-20, Mr. P has Income u/h HP Rs.
107 Lakhs., his last date of filing of return shall be _____. Q28. PGBP loss of the year for which return is filed after
(a) 31st July, 2019 (b) 31st July 2018 the due date u/s 139(1) ____ but PGBP loss of earlier years
(c) 30th September 2019 (d) 30th September 2018 for which return was filed within due date u/s 139(1) _____.
(a) Cannot be carried forward, can be carried forward.
*Q21. During AY 2019-20 Mr. P has business turnover of (b) Can be carried forward, can be carried forward.
Rs. 107 Lakhs., his last date of filing of return shall be ____. (c) Can be carried forward, cannot be carried forward.
(a) 31st July, 2019 (b) 31st July 2018 (d) Cannot be carried forward, cannot be carried forward.
(c) 30th September 2019 (d) 30th September 2018
Q29. For AY 2017 - 2018, Mr. P incurred a loss of Rs.
Q22. The filling of return of loss in case of a person other 40,000 u/h PGBP & filed return of loss within due date. He
than a company or firm is: again incurred loss of Rs. 50,000 during AY 2018 - 2019
(a) mandatory (b) not mandatory but for this year he did not file return. In AY 2019 - 20, he
(c) mandatory if the assessee wants to carry forward loss earned income of Rs. 5 lacs. How much loss can Mr. P carry
(d) There is no provision regarding Return of Loss for a forward & set off in this year ?
person other than a company or firm. (a) Rs. 90,000 (b) Rs. 50,000 (c) Rs. 40,000 (d) Nil.
Q30. For AY 2019-20, assessee has suffered a business loss

Q23. If the assessee has to carry forward the loss, the of Rs. 2,50,000. His income from house property is Rs.
return of loss must be submitted. 1,80,000. Due date of ROI u/s 139(1) was 31.7.2019 but he
(a) On or before the due date mentioned in section 139(1) submitted ITR on 9.9.2019. In this case, assessee -
(b) at any time before the end of the relevant AY (a) Shall be allowed to carry forward the loss of Rs. 70,000.
(c) at any time before the expiry of one year from the end (b) Shall not allowed to carry forward any loss.
of the relevant of the assessment year (c) Shall be allowed to set off current year business loss to
(d) Time specified by AO. the extent of Rs. 1,80,000 but shall not be allowed to carry
forward the balance loss of Rs. 70,000.
Q24. If there is a loss u/h “house property”, it will be (d) Shall not allowed to set off business loss to the extent
allowed to be carried forward if the assessee: of Rs. 1,80,000 & would be liable to tax on Rs. 1,80,000.
(a) has submitted the return of loss before the due date
mentioned u/s 139(1). Q31. Brought Forward Losses can be carried forward if ___.
(b) has not submitted the return of loss. (a) ROL is filed within due date u/s 139(1) during the
(c) has submitted the return of loss after the due date u/s relevant PY.
139(1) i. e. a belated return. (b) ROL was filed within DD in that year even if No ROL is
(d) No set off is allowed for such loss. filed in Current Year.
(c) Brought Forward Losses cannot be carried forward.
Q25. For AY 2019-20 the assessee suffered the loss u/h (d) None of the above.
“house property” of Rs. 1,20,000. His business income for
the same PY is Rs. 50,000. The due date of filing ROI is Q32. Current Year Business Loss: (Rs. 1 Lacs); B/F losses
31.7.2019 but he submitted his ROI on 9.9.2019. In this for AY 2018-19 (ROL filed w/I DD): (Rs. 3,00,000). In case
case the assesses : of Mr. C, Due Date of filing ROI is 30.09.2020. Mr. C. has is
(a) Shall be allowed to carry forward the loss of Rs. 70,000. filed on October 15, 2020. In this case,
(b) Shall not be allowed to carry forward loss of Rs. 70,000. (a) Losses of AY 2018-19 of Rs. 3,00,000 are carried
(c) No set off is allowed for such loss. forward to next AY 2020-21 as ROI for AY 2018-19 has
(d) Depends on the discretion of AO. been filed within the due date of filing ROI u/s 139(1) for
AY 2018-19. However, Loss of AY 2019-20 cannot be
*Q26. Section 80 prohibits _____ of losses if ROL is not filed carried forward to AY 2020-21.
within DD of filing ROI u/s 139(1) but it does not prohibit (b) Losses of AY 2018-19 of Rs. 3,00,000 & AY 2019-20
_______ of losses. cannot be carried forward to AY 2020-21.
(a) Carry forward , Set off (b) Set off, Carry forward (c) Losses of AY 2018-19 of Rs. 3,00,000 & AY 2019-20 not
(c) Carry forward, Carry forward (d) Set off, Set off be carried forward to AY 2020-21.
18: a 19: b 20: a 21: c 22: c 23: a 24: c 25: a 26: a
27: c 28: a 29: c 30: c 31: b 32: a
Q33. Belated return can be filed by an assessee before end Q42. If AO considers that return is defective, he may
of ___ or before _____.whichever is earlier. intimate the defect to the assessee & give him
(a) Relevant AY, Completion of Assessment (a) Opportunity to rectify the defect within 30 days
(b) 1 year from the end of AY, Completion of Assessment (b) Opportunity to rectify the defect within 15 days
(c) Relevant PY, Completion of Assessment (c) No opportunity shall be given (d) None of the above
(d) 1 year from the end of PY, Completion of Assessment
Q43. If the defect is not rectified within 15 days or such
Q34. Completion of Assessment means date of ____ further extended period as allowed by AO, then the return
(a) Passing Assessment order would be treated as _____ return & it would be deemed that
(b) Service of Assessment order the assessee had failed to furnish the return.
(c) When AO notify about the assessment to the Assessee (a) Valid (b) Illegal (c) Invalid (d) None
Q44. PAN is compulsorily required in
Q35. The assessee could not file his ROI for AY 2019-20 (a) Opening a Bank account (other than Time Deposit)
within the time allowed u/s 139(1). No assessment has so (b) Total Cash Deposit > Rs. 50,000 in a day
far been made. In this case, assessee can file return of (c) Cash Payment for Hotels/Restaurants bills at any one
income till - time > Rs. 50,000 (d) All of the above
(a) 31.3.2018 (b) 31.3.2019
(c) 31.3.2020 (d) 31.3.2021 Q45. Provisions relating to Compulsory Quoting of Aadhar
number u/s Sec 139AA would not apply to Individual who
Q36. For PY 2018-19, no ROI has been filed. AO makes a does not possess Aadhar number or Enrolment ID & is:
BJA u/s 144 on 1.1.2020. Upto what date can assessee file (a) Residing in States of Assam, J&K & Meghalaya;
Belated ROI u/s 139(4). (b) Super Senior Citizen [Age ≥ 80 yr at any time during PY;
(a) 31.3.2020 (b) 1.1.2020 (c) Non-Resident or Not a Citizen of India.
(c) 30.9.2019 (d) 30.9.2020 (d) All of the above
Q37. ROI is treated as detective if it is not accompanied by: Q46. In case of company, ROI can be signed by
(a) Statement showing the computation of tax payable on (b) any member (b) Managing director
the basis of the return. (c) any manager (d) chief executive officer
(b) Audit Report u/s 44AB.
Q47. Who cannot be Tax Return Preparer?
(c) Proof regarding the tax claimed to have been deducted
(a) Officer of Scheduled bank in which assessee maintain
or collected at source & Advance tax & SAT claimed to have
current A/c or has regular dealings.
been paid. (d) Any of the above
(b) Legal practitioner who is entitled to practice in any
civil court in India.
Q38. Revised return can be filed by
(c) Chartered Accountant & Employee of “Specified class
(a) End of relevant assessment year
of Person”. (d) All of the above.
(b) Before completion of assessment year
(c) Earlier of (a) & (b) Q48. Specified class of persons means any person other
(d) Belated return is not allowed to be filed than ___.
(a) company;
Q39. A Person is required to obtain a PAN whose total sales (b) person whose accounts are required to be audited u/s
turnover or gross receipts are or is likely to exceed ___ in 44AB & is required to furnish ROI.
any previous year? (c) both (a) & (b) (d) None of the above
(a) Rs. 5 lac (b) Rs. 2.5 lac (c) Rs. 10 lac (d) Rs. 1 lac
Q49. ITR of Company was verified by Company Secretary.
Q40. For AY 2019-20, Mr. P has filed original ROI on Such ITR shall be called as ____.
11.11.2019 whose due date of filing of ROI was 31.7.2019, (a) Valid ITR (b) Invalid ITR
he can file revised return of income latest upto (c) Detective ITR (d) Any of the above
(a) 31.3.2020 (b) 31.3.2019 (c) 30.9.2020 (d) 31.3.2021
Q50. Assesses filed his return of income in requisite form
Q41. Revised return substitutes ___ & is deemed to be have without making the payment of tax. The ITR so filed is
been filed on the date on which original ROI was filed. (a) valid (b) not valid (c) defective (d) not defective
(a) Original return (b) Revised return filed earlier
(c) Original return or revised return filed earlier
33: a 34: a 35: c 36: b 37: d 38: c 39: a 40: a 41: c

42: b 43: c 44: d 45: d 46: b 47: d 48: c 49: c 50: c

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INDEX

SN Name of the Chapter Page No. No. of MCQs

1 Basic Concepts of Income Tax 1–3 79

2 Residential Status & Scope of Total Income 4-6 70

3 Exempt Incomes & Agricultural Income 7 - 10 75

4 HEADS OF INCOME 726

4C Profits & Gains of Business & Profession 22 - 33 233

4D Capital Gains 34 - 43 170

4E Income from other Sources 44 - 49 109

6 Set off & Carry Forward of Losses 54 - 57 68

7 Chapter VI-A Deductions 58 - 64 117

8 TDS & TCS 65 - 70 130

9 Advance Tax & Interest u/s 234 71 - 72 49

1: d 2: c 3: c 4: b 5: a 6: a 7: b 8: d 9: a 10: b 11: a 12: b 13: c 14: a

43: d 44: c 45: b 46: b 47: c 48: d 49: b 50: b 51: b

61: b 62: b 63: d 64: a 65: c 66: c 67: b 68: a 69: c

Q100. Mr. P acquired an asset for Rs. 5 lacs which includes

103: b 104: a 105: b 106: d 107: a 108: c 109: b 110: a

217: b 218: d 219: c 220: c 221: c 222: c 223: c 224: c 225: c

Q123. If a new house property for which exemption was

109: b 110: d 111: c 112: b 113: d 114: a 115: c 116: c 117: d

125: c 126: a 127: b 128: c 129: b 130: b 131: c 132: b 133: b

Q162. Where the total income of an assesses includes

Q163. LTCGs on zero coupon bonds are chargeable tot tax

Q164. Which of the following shall be considered to decide

*Q165. When shares of a listed company held for more

158: d 159: c 160: d 161: a 162: d 163: d 164: d 165: b 166: c

58: b 59: b 60: c 61: b 62: d 63: b 64: b 65: a 66: c

Q101. An assessee received interest due to late payment of

95: d 96: a 97: a 98: b 99: b 100: b 101: b 102: c 103: a

31: b 32: d 33: b 34: c 35: b 36: b 37: a 38: a 39: c

47: b 48: c 49: b 50: c 51: c 52: b 53: a 54: d

39: a 40: b 41: b 42: a 43: d 44: b 45: b 46: a 47: d

Q60. What is the taxable income & losses to be carried

Q61. Compute the total income & losses to be carried

16: d 17: a 18: c 19: b 20: b 21: b 22: b 23: a

32: b 33: c 34: a 35: c 36: c 37: d 38: d 39: c 40: c

49: d 50: d 51: b 52: a 53: d 54: d 55: c 56: b 57: c

Q83. Deduction u/s 80G is allowed to.

100: d 101: a 102: a 103: b 104: d 105: b 106: d 107: a 108: c

1: c 2: b 3: d 4: c 5: b 6: c 7: a 8: d 9: d 10: d 11: d 12: b 13: d

114: c 115: b 116: d 117: d 118: c 119: c 120: a 121: c 122: b

Q30. For AY 2019-20, assessee has suffered a business loss

33: a 34: a 35: c 36: b 37: d 38: c 39: a 40: a 41: c

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