ELEMENTS OF DIRECT TAXES (EDT)(MCQS)
S.Y B.COM
SEMESTER - III
ELEMENTS OF DIRECT TAXES
(EDT)
MCQS = UNIT - II
1. Salary income is exempt from tax, if it is received from -
a) UNO
b) Indian government
c) Gujarat government
d) American government
2. Meaning of salary for the purpose of claiming deduction for entertainment allowance u/s 16(ii) in case of G in case of Government employees is ____________ .
a) Basic salary + D.A.
b) Basic salary only
c) Basic salary + D.A. + Commission
d). Basic salary + D.A. considered for retirement benefits
3. _________ is fully exempt in the hands of Government employees.
a) Commuted pension
b) Non - commuted pension
c) Commuted as well as Non - commuted pension
d) None of the above
4. Employer's contribution to RPF is exempted up to _________ % of salary.
a) 10
b) 9.5
c) 9. 25
d) 12
5. Interest on RPF is taxable above __________ %.
a) 11
b) 9
c) 9. 25
d) 9.5
6. If Value of unfurnished rent free accommodation is Rs.55,000 & cost of furniture is Rs.1,00,000 then value of furnished accommodation = ___________ .
a) 1,55,000
b) 55,000
c) 1,00,000
d) None of above
7. If accommodation is provided to employee in hotel & if such period of accommodation does not exceed 15 days, than such perquisite is not taxable.
a) True
b) False
8. Salary for the purpose of valuation of Rent free accommodation excludes taxable allowances.
a) True
b) False
9. Gratuity received during the tenure of the job is fully taxable.
a) True
b) False
- Mr. X entitled to basic salary of Rs.10,000 p.m., dearness allowance of Rs.2000 p.m., 40% of which forms part of retirement benefits. He is entitled to HRA of Rs.2000 p.m. He actually pays Rs.2000 p.m. as rent for house in Delhi. Considering this information answer following Q. 10 to Q. 12.
10. What is annual exemption allowed for HRA ? What is annual exemption allowed for HRA ?
a) Rs.24,000
b) Rs.11,040
c) Rs.64,080
d) None of above
11. What is taxable HRA annually ?
a) Rs.24,000
b) Zero
c) Rs.12,960
d) None of above
12. What is amount of annual salary for above calculation ?
a) Rs.24,000
b) Rs.1,68,000
c) Rs.1,29,600
d) Rs.1,44,000
13. An Employee of private sector, who was paid gratuity, also withdrawn 30% of his pension commuted and received a sum of Rs.1,20,000 as commuted pension. The exemption is -
a. Rs.1,20,000
b. Rs.40,000
c. Rs.80,000
d. Rs.1,33,333
14. Match the following :
Type of Salary Income | Maximum exemption limit |
i) Gratuity U/s 10(10)(ii) | a) Not defined |
ii) Leave Salary | b) Rs.5,00,000 |
iii) Compensation of voluntary retirement | c) Rs.3,00,000 |
iv) Pension | d) Rs.20,00,000 |
(a) i - d, ii - c, iii - b, iv - a
(b) i - d, ii - a, iii - b, iv -c
(c) i - c, ii - d, iii - b, iv - a
(d) i - b, ii - a, iii - d, iv - c
15. Match the following :
Type of Allowance | Taxability |
i) Research allowance | a) Fully taxable |
ii) Servant allowance | b) Taxable beyond certain limit |
iii) Children education allowance | c) Taxable beyond Expenditure incurred for the purpose for which it is granted |
(a) i - c, ii - a, iii - b
(b) i - a, ii - b, iii - c
(c) i - b, ii - c, iii - a
(d) None of above
16. In case the income of an individual includes the income of his minor child in terms of section 64 (1A), such individual shall be entitled to maximum exemption of -
(a) Rs.1000
(b) Rs.1500
(c) Rs.2000
(d) Rs.1700
17. Mr. A retires from a public limited company on 1-8-2019. He receives monthly pension of Rs.6000. w.e.f.16-12-2019 he receives ½ of the pension commuted for Rs.150000. He also receives gratuity from the company on his retirement. Answer the following -
(i) What is the amount of taxable uncommuted pension ?
(a) Rs.72000
(b) Rs.48000
(c) Rs.36000
(d) Rs.24000
(ii) What is the amount of taxable commuted pension ?
(a) Rs.150000
(b) Rs.100000
(c) Rs.50000
(d) Nil
18. Mr. P. an employee of XYZ Ltd. receives Rs.78000 as gratuity. He is covered by the Payment of Gratuity Act,1972. He retires on 12/12/2019 after rendering service of 38 years & 8 months. At the time of retirement his monthly basic salary & dearness allowance was Rs.2400 & 800 respectively.
(i) What is the amount of taxable gratuity.
(a) Rs.5000
(b) Rs.6000
(c) Rs.72000
(d) Rs.75000
(ii) What is the amount of gratuity exempt from tax.
(a) Rs.78000
(b) Rs.7000
(c) Rs.72000
(d) Rs.4000
19. Mrs. Rimpal has received Children Education Allowance @ Rs.90 per month per child for 3 children, amounting Rs.270 per month throughout the previous year; the allowance will be exempt to the extent of
a. Rs.2,340 per annum
b. Rs.2,160 per annum
c. Rs.3,240 per annum
d. Rs.2,610 per annum
20. Mr. Y, an employee of PQR Ld. (covered by the Payment of Gratuity Act, 1972), receives Rs.1,17,000 as gratuity. He retires on 12/12/2019, after service of 38 years and 8 months. At the time of retirement his monthly basic salary and dearness allowance was Rs.3,600 and Rs.1,200 respectively. What would be exempt amount of Gratuity
a. Rs.1,08,000
b. Rs.3,50,000
c. Rs.1,17,000
d. NIL
21. Mr. Z is entitled to Rs.12,000 as fixed medical allowance. He spends Rs.4,000 on his medical treatment and Rs.2,000 on the medical treatment of his major son not dependent on him. The amount of exemption of allowance would be
a. Nil
b. Rs.4,000
c. Rs.10,000
d. Rs.6,000
22. Leave travel concession is tax free perquisite for
a. One journey in block of 4 calendar years
b. One journey in block of 4 financial years
c. Two journeys in block of 4 calendar years
d. Two journeys in block of 4 financial years
23. The employee is provided with furniture costing Rs.3,00,000 along with accommodation with effect from 01-12-2019 to 31/03/2020. The value of the furniture to be included in valuation perquisite for furnished house shall be.
a. Rs.15,000
b. Rs.10,000
c. Rs.30,000
d. Rs.20,000
24. Employer's contribution to Statutory Provident Fund shall be
a. Fully exempt.
b. Exempt up to 12% of Salary
c. Exempt up to 9.5% of salary
d. Fully taxable.
25. Mr. Rakesh received Rs.15,000 as Conveyance Allowance during the Previous Year 2019-20 The amount of expenditure incurred towards journey between office and residence is Rs.2,000 and amount spent towards performance of duties of office is Rs.3,000. What would be taxable amount of Conveyance Allowance under the head Income under the head Salaries -
a. Rs.12,000
b. Rs.13,000
c. Rs.15,000
d. Rs.10,000
26. Salary of Ms. Alifia is Rs.30,000 p.m. who had taken Salary in advance for the month of April 2019 to June 2019 in March 2019 itself. The gross Salary of Ms. Alifia for Previous Year 2019-20 shall be
a. Rs.7,20,000.
b. Rs.5,40,000
c. Rs.2,70,000.
d. Rs.3,60,000.
27. Salary of Ms. Janki is Rs.20,000 p.m. who had taken salary in advance for the month of April 2019 to June 2019 in March 2019 itself. Professional tax of Rs.200 per month has been deducted. The gross salary of Ms. Janki for the previous year 2019-20 shall be:
a. 2,40,000
b. 1,80,000
c. Nil
d. 1,78,200
28. Salary income is taxable on ............... Salary income is taxable on ...............
a. due basis
b. receipt basis due basis b. receipt basis
c. due or receipt basis whichever is earlier
d. as per the wish of the assessee wish of the assessee
29. Mr. X retires from ABC LID on 31.03.2020. He receives monthly pension and also received gratuity from ABC LTD. On request of Mr. X, ABC Ltd pays a lump sum amount in lieu of commutation of 50% of pension from 01.02.2020. To what extent, the commuted pension will be exempt from tax for the assessment year 2019-20 ?
a. ½ of commuted value of full pension
b. 1/3 of commuted value of full pension
c. Fully exempt
d. ¼ of commuted value of full pension.
30. Leave salary received during c Leave salary received during continuity of employment is...............
a. Always taxable;
b. Always not taxable;
c. Taxable in the hands of Non Govt. employees only
d. Taxable in hands of Govt. employees only
31. Out of the following, which allowance is exempt on the basis of actual expenditure incurred by the employee?
a. Children education allowance
b. Hostel expenditure allowance
c. Uniform allowance
d. Medical allowance d. Medical allowance
32. In case of an employee who is blind or orthopedically handicapped, transport allowance exemption limit is __________ p.m.
a. Rs.1600;
b. Rs.1000;
c. Rs.800;
d. Rs.3200
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