Exam-preparation4u: EDT

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MCQ of Elements of direct tax in salary

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 An Employee of private sector, who was paid gratuity, also withdrawn 30% of his pension commuted and received a sum of Rs.1,20,000 as commuted pension.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

(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

(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

(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

(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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Bcom sem 3 || ELEMENTS OF DIRECT TAX (EDT) MCQ INTRODUCTION AND IMPORTANT DEFINITIONS

ELEMENTS OF DIRECT TAX (EDT) MCQS

S.Y B.COM

SEMESTER - 3

ELEMENTS OF DIRECT TAX

(EDT)

INTRODUCTION AND IMPORTANT DEFINITIONS

MCQ

(1) The rates of income tax are mentioned in -

(A) Partly in the income tax Act, 1961 and partly in the Annual Finance Act

(B) Income Tax Act, 1961

(D) The tax rates are declared by the CBDT

(2) Determine the status of X and Y who are the legal heirs of Z.

(A) A Local Authority

(B) BOI

(D) An individual

(3) The way to reduce tax liability by taking full advantage provided by the Act is-

(A) Tax Exasion

(B) Tax Planning

(D) Tax Avoidance

(4) Which of the following is Causal Income ?

(A) Pension recieved

(B) Dividend income

(D) Winning from lotteries

(5) The surcharge applicable in case of an individual is -

(A) 10% of tax payable

(B) 10% of tax payable if total income exceeds Rs. 100 lakh

(D) Nil

(6) A Partnership Firm is taxable at rate of -

(A) 20%

(B) Slab Rale

(C) 30%

(D) Profit of the firm shall be clubbed in hands of the partner

(7) Out of the following whichone is not a capital receipt ?

(A) Compensation received for vacating business place

(B) Bonus Shares

(C) Dividend on investment

(D) Sale of know - how

(8) The charging section of the Income tax Act is -

(A) Section 3

(B) Section 2

(D) Section 4

(9) The term income includes the following type of incomes-

(A) Legal

(B) Legal income from India only

(D) Legal and Illegal both

(10) Which of the following receipt is not included in the term 'Income' under the Income-tax Act, 1961?

(A) Profits and gains of Business or Profession

(B) Profit in lieu of salary

(C) Reimbursement of travelling expenses

(D) Dividend

(11) Which of the following income is not exempt under section 10?

(A) Bonus on life insurance

(B) Income from mutual funds

(D) Income from agriculture in Lahore

(12) Financial Year 2017-2018 shall be considered as -

(A) Assessment Year for the previous year 2017-2018 and previous year for the assessment year 2018-19

(B) Assessment Year for the previous year 2017-2018 and previous year for the assessment year 2019-20

(D) Previous year for the assessment year 2018-2019

(13) For the purpose of levying tax on income other than agricultural income, Union List contained entry...

(A) 92E

(B) 92C

(D) 82

(14) .............. is not a head of income.

(A) Salaries

(B) Income from House Property

(D) Income from Interest on securities

(15) Income tax is a -

(A) State Tax

(B) Entertainment Tax

(C) Direct Tax

(D) Indirect Tax

(16) Mr. X, partner of M/s XYZ, is assessable as-

(A) Body of Individual

(B) An individual

(D) Firm

(17) Every assessee is a person, and-

(A) Every person is also an assessee

(B) A HUF is always an assessee

(D) Every person need not be an assessee

(18) X and Y are legal heirs of Z. Z died in 2016 and X and Y carry on his business without entering into a parntership. What will the status?

(A) Limited Liability Parntership

(B) Body of Individual

(D) Company

(19) Assessment year can be a period of-

(A) 12 months or less than 12 months

(B) More than 12 month

(D) Only 12 months

(20) Year in which income is taxable is known as ............. and year in which income is earned is known as..............

(A) Assessment year, Previous year

(B) Previous year, Assessment year

(D) Assessment year, Assessment Year

(21) All assessees are required to follow -

(A) Uniform previous year and that must be calendar year

(B) Uniform previous year and that must be financial year

(D) Period starting from 1st July to 30th June only

(22) First previous year in case of a business/profession newly set up on 31.3.2017 would-

(A) Start from 1st April, 2016 and end on 31st March, 2017

(B) Start from 31.3.2017 and will end in 31.3.2017

(D) Start from 1st January, 2017 and will end on 31st March, 2017

(23) A person follows Calendar year for accounting. For taxation, he has to follow-

(A) Calendar year only - 1st January to 31st December

(B) Finanicial year only - 1st April to 31st March

(D) He will to follow extenses year from 1st January to next 31st March (a period of 15 months)

(24) In which of the following cases, income of previous year is assessable in the previous year itself ?

(A) A person in employment in India

(B) A person leaving India

(D) A person who is into ilegal business

(25) Gross Total Income is arrived after-

(A) Adding Income under five heads of income;

(B) Adding income under fived heads of income excluding losses;

(C) Adding Income under five heads of Income, after applying clubbing provisions and making adjustment of set off and carry forward of losses

(D) Adding Income under five heads of Income, after applying clubbing provisions and making adjustment of set off and carry forward of losses and after allowing deduction under section 80C to 80U.

(26) ............. of the First Schedule attached to the Finance Bill prescribes the rates of the advance income-tax.

(A) Part IV

(B) Part llI

(C) Part II

(D) Part l

(27) Part Il of the First Schedule of Finance Bill gives -

(A) Rates of TDS

(B) Rates of income-tax

(D) Rates of agricultural income

(28) Direct tax is -

(A) Regressive in nature

(B) Progressive in nature

(D) Retrogressive in nature

(29) Tax on agricultural income is covered under -

(A) Union List (i.e. List I)

(B) State List (i.e. List ll)

(D) None of the above as tax is not levied on an agricultural income

(30) The Income-tax Act, 1961 became effective from ........

(A) 01-04-1963

(B) 01-04-1981

(C) 01-04-1962

(D) 01-04-1961

(31) Who among the following is the administrative body of the Income tax Act ?

(A) RBI

(B) CBDT

(C) CBEC

(D) SEBI

(32) The circular issued by the Board have binding effect On -

(A) Assessee

(B) ITAT

(C) Income-tax-Authorities

(D) All of the above

(33) Circular under Income-tax Law can be issued by -

(A) Central Government

(B) State Government

(C) CBDT

(D) CBEC

(34) Any decision given by the Supreme Court shall be binding on -

(A) Assessee

(B) ITAT

(D) All of the above

(35) The term 'person' is defined under section ........... of the Income-tax Act.

(A) 2(7)

(B) 4

(D) 2(31)

(36) Partnership firm includes -

(A) Limited Company

(B) Limited Liability Partnership

(C) Body of Individual

(D) Group of individual

(37) In case of Body of Individual,

........... can be the member.

(A) Any person

(B) Any person other than individual

(D) None of these

(38) In case of association of person,

........... can be the member.

(A) Individual

(B) Any person other than individual

(D) None of these

(39) Kolkatta Municipal Corporation is assessed as -

(A) Local authority

(B) Body of Individual

(D) Association of person

(40) ........... means a group of persons who join together for common purpose(s) with the object of earning income.

(A) Co-ownership

(B) Body of Individual

(C) Association of Person

(D) Partnership

(41) Company in which public are substantially interested includes -

(A) Listed Company

(B) Any Public Company

(D) None of the these

(42) Out of the following, who became member of HUF?

(A) Any person with whom HUF have a contract

(B) An Individual with whom HUF have a contract

(D) An Individual by status

(43) ............ Of the previous year of a person in charged to tax in.............

(A) Total income; the immediately following assessment year

(B) Gross Total Income; the previous year

(D) Total Income; the previous year

(44) In terms of Income-tax, a period of 12 months always commencing from 1st April is -

(A) Assessment Year

(B) Previous Year

(D) Accounting year

(45) Under the Income-tax Act, 1961, income is divided into ......... heads.

(A) 5

(B) 6

(D) No headwise division

(46) Marginal relief is available to -

(A) Resident Individual only

(B) Resident Person only

(C) Any person

(D) Resident Company only

(47) AS per sec. 2(41), relative in relation to an individual means ..........

(A) The spouse or any lineal ascendant or descendant of that individual

(B) The spouse, brother, sister or any lineal ascendant or descendant of that individual

(D) The spouse, brother, sister or parents or children of that individual

(48) What will be the order of following in computing income and tax liability of an assessee:

(i) Deduct various deduction available under chapter VIA

(ii) Determine gross total incone

(iii) Apply tax rate

(iv) Determine income under various heads

(V) Determine total income

(A) The correct order is (iv); (ii); (i); (v) and (iii)

(B) The correct order is (iv);: (i); (ii); (v) and (iii)

(D) The correct order is (ii); (iv); (i): (v) and (iii)

(49) The provisions of Income tax extends to the ..............

(A) Whole of India excluding Jammu & Kashmir

(B) Whole of India

(D) Whole of India excluding territorial water of India

(50) .........means to discharge an obligation (which is gratutious of self-imposed) after such income reaches the assessee.

(A) Diversion of income

(B) Application of income

(D) Exempted Income

(51) Which of the following is not an example of capital receipt

(A) Money received on sale of land

(B) Money received on issue of shares

(C) Money received on sale of goods

(D) None of the above

(52) Income-tax in India is charged at the rate(s) prescribed by

(A) The Income-tax Act

(B) The Financial Act

(D) The Central Board of Direct Taxes

(53) Income of a business commenced on 1st March, 2018 will be assessed during the asssessemt year....

(A) A.Y. 2016-17

(B) A.Y. 2019-20

(D) A.Y. 2018-19

(54) Commissioner of Income-tax is appointed by......

(A) RBI

(B) CBDT

(55) The maximum income of Rs.2,50,000 is not chargeable to income-tax in case of citizen woman of 60 years age.

(A) False

(B) True

AGRICULTURALINCOME

(56) Which of the following is an agriculture income?

(A) Dividend paid by a company to its shareholders out of agricultural income

(B) Share of Profit of a Partner from a firm engaged in an agriculture operation

(D) Interest received by a money lender in the form of agricultural produce

(57) Which of the following income received by an assessee are exempt under section 10 of the income-tax Act, 1961?

(A) Salary of a partner from a firm

(B) Salary received by a member of a ship's crew

(D) Agriculture Income

(58) In case of an individual or HUF, agricultural income is -

(A) Exempted but included in the total income for the rate purpose

(B) Exempted

(D) Fully taxable provided it is earned from India

(59) Remuneration to partner of a fim engaged in the business of growing and Manufacturing of rubber in india is

(A) Partly agricultural income and partly non-agricultural income

(B) Non-agricultural income

(D) Exempted income

(60) Out of the following, which activity shall be considered as agricultural activity?

(A) Subsequent operation on the agricultural land

(B) Basic operation on the agricultural land

(D) None of the above

(61) Agricultural Income is exempted u/s.............. of the indian income-tax Act, 1961.

(A) 10(2A)

(B) 10A

(D) 10(1)

(62) Income from saplings shall be considered as ............. .

(A) Business income

(B) Agricultural income

(D) Partly agricultural income and partly business income

(63) Which of the following is not an agricultural income?

(A) Rent received from a land situated in India for agriculture purpose

(B) Income derived from agriculture produce

(C) Income derived from land being let out for marriage of a farmer

(D) Income from producing of tea leaves

(64) Any rent or revenue derived from land may be treated as an agricultural income if -

(A) The land is used for agricultural purpose

(B) The land is situated in India

(D) All of the above conditions are satisfied

(65) Income accruing from agriculture in a foreign country is taxable in the case of an assessee who is -

(A) Not ordinary resident

(B) Ordinary resident

(D) None of the above

(66) Which of the following is an agricultural income ?

(A) Income from agricultural land situated in Pakistan

(B) Income from brick making

(D) Compensation received from insurance company on account of loss of crop

(67) Receipts from TV serial shooting in farm house is -

(A) Agricultural income

(B) Non agricultural income

(D) None of the above

(68) Profit on sale of agricultural land is -

(A) Taxable as 'Capital Gain'

(B) Exempt as agricultural income

(D) Taxable as 'ncome from Other Sources'

(69) Agricultural Income is exempt provided that the -

(A) Land is situated in any rural area of India

(B) Land is situated whether in India or outside India

(D) Land is situated in India

(70) Sandeep, a trader, purchases standing crops and sells it after harvesting. His income will be treated as

agricultural income.

(A) True

(B) False

(71) Income from lease of land for grazing of cattle required for agricultural pursuits is agricultural income.

(A) True

(B) False

(72) Which of the following income is agricultural income -

(A) Income from dairy farm

(B) Dividend from a company engaged in agriculture

(C) Rent received from agricultural land

(D) Income from poulty farm

INCOME WHICH DO NOT FORM

PART OF TOTAL INCOME

(73) Which out of the following income is exempt from tax ?

(A) Sum received by a member from HUF

(B) Dividend received from a foreign company

(D) Salary lncome from a Non Profitable Organisation

(74) Dividend received by a shareholder from an Indian company is exempt. Interest or any other expenditure incurred for earning such dividend Income shall -

(A) Be allowed as deduction

(B) Not be allowed as deduction

(D) Be allowed only if AO is satisfied that it is only interest expenditure

(75) Which of the following income is not exempt uls 10?

(A) Share in total income of firm

(B) Income from agriculture in Lahore

(D) Bonus on life insurance

(76) Section 10 of the Income-tax Act, 1961 provides certain income which is exempt from tax. Which income is exempted under section 10(26AAA)

(A) Income of an agricultural produce market committee

(B) Income of Sikkimese-individual

(D) Income of the Coffee Board

(77) The annual value in respect of any one palace, which is in the occupation of an exruler is exempt. Such exemption is provided in which section of the Income-tax Act ?

(A) Sec. 10(19)

(B) Sec. 10(21)

(C) Sec. 10 (19A)

(D) Sec. 10 (20)

(78) Any income by way of pension received by an individual who has been in the service of the Central or State Government and has been awarded "Mahavir Chakra" is exempted under section ...........

(A) There is no such award thus pension is not exempted

(B) 10(17A)

(D) 10(18)

(79) Employer's contribution to Statutory Provident Fund is exempt under section ..........

(A) 10(13)

(B) 10(12)

(C) 10(11)

(D) None of the above

(80) As per section 10(48), any income received in India in Indian currency by a foreign company on account of sale of crude oil or other notified goods or service to any person in India is exempt provided-

(A) Receipt of such income in India by the foreign company is pursuant to an agreement or an arrangement entered into by the Central Government or approved by the Central Government

(B) Having regard to be national interest, the foreign company and the agreement or arrangement are notified by the Central Government in this behalf

(D) All of the above

(81) Any Income arising to notified foreign company by way of royalty or fees for technical services received in pursuance of an agreement entered into with Central Government for providing services in or outside India in projects connected with security of India is exempt u/s .........

(A) 10 (6)

(B) 10 (6B)

(82) Any Sum received under insurace policy including Keyman insurance policy is exempt u/s 10(10D).

(A) True

(B) False

(83) Any Sum received under an insurance poiicy issued on or after 1-4-2012 in respect of which the premium payable for any of the years during the term of the policy exceeds 10% of the actual capital sum assured is exempt u/s 10(10D).

(A) True

(B) False

(84) Interest on Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 is ..........

(A) Exempt

(B) Taxable

(D) None of these

(85) Daily allowance received by any person by reason of his membership of Parliament or of any State Legislature or of any Committee tihere of is .......... .

(A) Exempt

(B) Taxable

(D) None of these

(86) Out of the following, which statement is not correct ?

(A) Family pension received by the widow or children or nominated heirs, of a member of the armed Forces (including para-military forces) of the Union, where the death of such member has Occured in

the course of operational duties, in such circumstances and subject to such conditions, as may be prescribed is exempt u/s 10(19C)

(B) The annual value in respect of any one palace, which is in the occupation of an exruler is exempt u/s 10 (19A)

(D) Constituency Allowance received by any person by reason of his membership of State legislature is exempt u/s 10(17)

(87) Any income of a Mutual Fund registered under the Securities and Exchange Board of India Act, 1992 or regulation made there under is exempt u/s 10(23D).

(A) True

(B) False

(88) Income of an agricultural produce market committee or board consititued under any law For the time being in force for the purpose of regulating the market of agricultural produce is exempt u/s 10(26AB).

(A) False

(B) True

(89) Any income by way of dividend as specified u/s 2(22) declared, paid or distributed by a domestic company is exempt u/s 10(34).

(A) False

(90) Remuneration earned by a member of HUF for the services rendered by him is.......... Income of the member.

(A) Exempt

(B) Taxable as salary income

(D) None of these

(91) Literary Awards institued by the Central government are exempted from income-tax.

(A) Incorrect

(B) Correct

(92) An income derived from land situated in India is agricultural income.

(93) Allowances payable to Central Government employees for serving outside India are fully taxable as salary.

(A) False

(B) True

INCOME FROM OTHER SOURCES

(94) An individual purchased a painting for Rs.5,00,000 though fair market value of the asset is Rs. 2,25,000. Income taxable u/s 56(2)(vii) is -

(A) Rs. 25,000 i.e., difference between market value and actual consideration

(B) Nil as this is not gift

(C) Nil as difference between market value and actual consideration does not exceed Rs.50,000

(D) The provision of sec. 56(2)(vii) is not applicable for such transaction

(95) The provision of sec.56(2)(vii) is applicable -

(A) All assessee

(B) Only on corporate assessee

(D) On an individual and HUF only

(96) Tax is deducted at source on Winning from lottery, the rate for such deduction in case of resident individual deducted is -

(A) 30.9%

(B) Maximum marginal rate of tax

(C) 30% if such winning exceeds Rs.10,000

(D) 33.99%

(97) While computing income from other sources, deduction is not allowed to the assessee for -

(A) Personal expenditure

(B) Direct tax

(D)All of the above

(98) Gift received by an individual in certain circumstances is not taxable, one of them is -

(A) Any gift received from farmily friend

(B) Any gift received on the occasion of any marriage in the family

(C) Any gift received on the occasion of the marriage of the individual assessee

(D) All of the above

(99) Generally, dividend is exempt from tax. Exceptions to this rule is-

(A) Dividend distributed by foreign company

(B) Dividend convered uls 2(22)(e)

(D) All of the above

(100) Which of the following income is not chargeable under income from other Sources

(A) Lotterty held as stock in trade

(B) Dividend income

(D) None of the above

(101) On the occasion of marriage of Mr. A, he received a gift of Rs.60,000 from a relative. Such amount shall be -

(A) Taxable subject to standard deduction @ 50%

(B) Taxable

(C) Not Taxable

(D) None of the above

(102) In respect of winning from lottery, crossword puzzle or race including horse race or card game etc.

(A) No deduction under Chapter VIA is allowed and basic exemption limit cannot be exhausted

(B) No deduction under Chapter VIA but unexhausted basic exemption can be exhausted

(D) None of the above

(103) Which of the following dividend is exempt from tax ?

(A) Dividend income received from foreign county

(B) Dividend income referred to in sec. 10(34) and 10(35)

(D) None of the above

(104) Which of the following income is not chargeable under the head income from other sources?

(A) Income from sub-letting

(B) Fees received by a school teacher from the school

(D) Private tution fees received

(105) Which of the following expenditure is not allowed as deduction?

(A) Personal expenses

(B) Wealth tax

(C) Both (a) and (b)

(D) None of the above

(106) The rate of tax applicable on casual income is -

(A) 25%

(B) Exempt

(D) 30%

(107) Which of the following is not covered uls 56(2)(ib)

(A) Winning from gambling and betting of any nature or form

(B) Winning from races including horse races

(C) Income from undislosed sources

(D) None of the above

(108) Which of the following statement is not correct?

(A) Income of jockey from his prefession is not treated as winning from horse races

(B) Deduction u/s 80C to 80U is not available from winning from lotterty

(C) Card game and other game of any sort includes any game show, an entertainment programme on television or electronic mode, in which people complete to win prizes or any other similar gain

(D) None of these

(109) As on 12-11-2017, Mr. Ajay received cash gift of Rs.25,000 each from his 3 friends (one of them is a non resident). Taxable amount u/s 56(2) in hands of Mr. Ajay shall be -

(A) Rs.75,000

(B) Rs. 25,000

(D) Nill

(110) Mr. Anand received cash gift of Rs.1,00,000 from his friend Mr. Lathi as on 10-10-2017. Taxable amount u/s 56(2) in hands of Mr. Anand shall be

(A) Rs. 1,00,000

(B) Rs. 50,000

(D) None of the above

(111) Property for the purpose of sec. 56(2)(vii) does not includes one of the following capital asset -

(A) Bullion

(B) Motor car

(D) Shares

(112) Provision of sec. 56(2)(viia) is not applicable in case of shares received by way of a transacion not regarded as transfer u/s 47(via) or (vic) or (vicb) or (vid) or (vii).

(A) True

(B) False

(113) Any distribution of accumulated profits (whether capitalized or not) by a company, which results in the

release of assets of the company is..........

(A) Capital reduction

(B) Dividend

(D) None of the above

(114) Any payment (whether in cash or in kind) by a company in which public are not substantially interested to the extent or accumulated proft (excluding capitalized profit) by way of loan or advance to its equity shareholder, who is registered as well as beneficial owner of the shares, holding not less than ............... of voting power in the company is treated as dividend.

(A) 10%

(B) 25%

(D) 5%

(115) Provision of sec.2(22) is not applicable where -

(A) Any payment made by a company on buy-back of shares

(B) Any distribution of shares made in accordance with the scheme of demerger

(C) Either (a) or (b)

(D) None of the above

(116) A domestic company for any amount declared as dividends [other than dividend specified u/s 2(22)(e)] shall be charged to additional income tax @ ................ + Surcharge @ 10% + education cess & SHEC @ 3%.

(A) 15%

(B) 10%

(D) 16%

(117) The amount of dividend, if any, paid to the .......... referred to sec. 10(44) is exempted.

(A) New Pension System Trust

(B) Pension System Trust

(D) New Pension System

(118) DIvidend shall be deemed to accrue or arise in India, if it is declared by an Indian company.

(A) True

(B) False

(119) No tax is required to be deducted from winning from race-horse, if such winning does not exceed Rs.5,000.

(A) True

(B) False

(120) Cash gift of Rs.1,00,000 from uncle's son is not taxable.

(A) True

(B) False

(121) Family pension received by widow of deceased employee is taxable after allowing standard deduction being lower of Rs. 15,000 or 1/3rd of the pension amount.

(A) True

(B) False

(122) Gift of movable property received from a local authority [as defined u/s 10(20) of the income-tax Act] will always be charged to tax.

(A) True

(B) False

(123) If the aggregate fair market value of prescribed movable property received by the taxpayer during the year exceeds Rs.50,000, than.............. will be charged to tax.

(A) Fair market value up to Rs.50,000

(B) Fair market value in excess of Rs.50,000

(D) Entire fair market value

(124) Gift of motor car (fair market value is Rs.84,000) received by an individual from his friends will be charged to tax since the fair market value exceeds Rs. 50,000.

(A) True

(B) False

(125) If an immovable property acquired by an individual for a consideration which is less than the Stamp duty value and the difference exceeds Rs.50,000, than the excess of stamp duty value over the purchase price of the property will be treated as income of the seller.

(A) True

(B) False

(126) Immovable property received without consideration by an individual on the occasion of his/ner marriage will always be charged to tax in the hands of the individual.

(A) True

(B) False

(127) Sushil a resident received Rs.18,000 by way of tax at source. The amount includible income of Sushil will be -

(A) Rs. 20,000

(B) Rs. 18,000

(D) None of the above

(128) The Stamp duty value of immovable property received by an individual without consideration (i.e., as a gift) will be charged to tax if the same will exceed ................

(A) Rs. 51,000

(B) Rs. 5,000

(D) Rs. 50,000

(129) lf the agreegate value of gifts received during the year exceeds Rs.50,000, then ............ received during the year will be charged to tax.

(A) Value of gifts in excess of Rs.50,000

(B) Total value of all such gifts

(D) Value of gifts upto Rs. 50,000

(130) Money received by a HUF from its members will be charged to tax in the hands of HUF since members cannot be treated as relatives of a HUF.

(A) True

(B) False

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