4A. INCOME UNDER THE HEAD SALARY - CA Study

INCOME TAX MCQs BY CA PRANAV CHANDAK Queries @ t.me/pranavchandak 11

4A. INCOME UNDER THE HEAD SALARY

Q1. Mr. P is a CA is employee of PC Ltd. & is working as an internal auditor having contract of services with PC Ltd. Mr. P requests PC Ltd. to show his salary as Internal Audit fee. The amount shall be taxed u/h: (a) Salaries (b) PGBP (c) IFOS (d) None Q2. Income is taxable as Salary Income when there is employer & employee relationship. However in one exceptional case income is taxable as salary even in the absence of employer employee relationship which is ___. (a) Members of Parliament (b) Professors of college (c) Partner of a firm (d) Judges of HC & SC Q3. Mr. P was employed on 1.4.2008 in the grade of Rs. 15,000 - Rs. 500 - Rs. 17,000 - Rs. 750 - Rs. 21,500 - Rs. 1,000 - Rs. 31,500. His gross salary for AY 2019-20 is___. (a) Rs. 2.7 lac (b) Rs. 2.58 lac (c) Rs. 2.16 lac (d) Rs. 1.8 lac Q4. PC Ltd is a company paying salary of Rs. 4,50,000 to its employee Mr. P & in addition undertakes to pay the Income Tax amounting to Rs. 10,400 on his behalf during AY 2019-20. The gross Salary of Mr. P is: (a) Rs. 4.3 lac (b) Rs. 4.5 lac (c) Rs. 4.604 lac (d) None Q5. Read the following statements & state correct answer: (1) Contract b/w employer & employee is contract of service (2) Contract b/w employer & employee is contract for service (3) Contract b/w professional & client is contract for service (4) Contract b/w professional & client is Contract of Service

(a) 1 & 2 are correct (b) 2 & 3 are correct (c) 3 & 4 are correct (d) 1 & 3 are correct Q6. Salary is deemed to accrue at the place where _____. (a) Payment for services is received (b) Services are rendered (c) Either (a) or (b) (d) None of the above Q7. Mr. P is employed in AB Institute, Pune. He is eligible for Rs. 24,000 as dearness allowance to meet increased cost of living. The amount of DA taxable is ___. (a) Rs. 10,000 (b) Nil (c) Rs. 24,000 (d) Rs. 9,000 *Q8. Mr. P who is entitled to a Salary of Rs. 10,000 p.m. took advance of Rs. 20,000 against salary in the month of March 2019. Gross salary of Mr. P for AY 2019-20 shall be: (a) Rs. 1,00,000 (b) Rs. 1,20,000 (c) Rs. 1,40,000 (d) None of the above Q9. Inclusive definition of salary is given u/s: (a) 17(3) (b) 17 (c) 17(1) (d) None Q10. U/s 15 salary is taxable on __ basis. (a) Receipt (b) Due (c) Earlier of (a) or (b) (d) None *Q11. Mr. P who is entitled to Salary of Rs. 10,000 p.m. took advance salary from his employer for April & May 2019 along with Salary of March 2019 on 31.3.2019. Gross salary for Mr. P for AY 2019-20 shall be: (a) Rs. 1,20,000 (b) Rs. 1,40,000 (c) Rs. 1,00,000 (d) None of the above

*Q12. Salary of Mr. P is Rs. 10,000 p.m. Mr. P had taken Salary in advance for April to June 2018 in March 2018 itself. Gross salary of Mr. P for AY 2019-20 : (a) Rs. 1,20,000 (b) Rs. 70,000 (c) Rs. 1,00,000 (d) Rs. 90,000

Q13. Foregone salary is _____. (a) Exempt if surrendered to government (b) Taxable in other cases (c) Just an application of Income (d) All of the above

Q14. Pension/leave salary paid abroad for services rendered in India is deemed to accrue _____. (a) In India (b) Outside India

Q15. Which of the following allowance is fully Exempt? (a) Overtime allowance (b) Medical allowance (c) Allowances paid by UNO (d) HRA

Q16. HRA is given u/s ____. (a) 10(13A) Rule 2A (b) 10(15B) Rule 3B (c) 20(4) Rule 8B (d) 10(14A)

Q17. Salary paid by Government to Citizen of India (R.NR) for services rendered o/s India is deemed to accrue ____. (a) in India (b) O/s India (c) Depends on the discretion of Assessee (d) None

Q18. Allowance or Perquisites paid o/s India by GOI to a citizen of India for rendering services o/s India will be ____. (a) Taxable in India (b) Fully exempt u/s 10(7)

Q19. Government of India announced increase in DA on 15.3.2018 with retrospective effect from 1.5.2016 & the same were paid on 8.5.2018. Arrears of DA is taxable in - (a) PY 2017-18 (b) PY 2018-19 (c) PYs to which these are related to (d) PY as per AO

Q20. Salary paid to Partner by the firm is ___. (a) Taxable u/h Salaries (b) Taxable u/h PGBP (c) Always exempt (d) Always taxable

Q21. Bonus is taxable as salary income on ___ basis. (a) Due (b) Receipt (c) Earlier of (a) or (b) (d) Anytime at the choice of employer

Q22. Mr. P is entitled to a watchman allowance of Rs. 600 p.m. for the security of his residence. He pays Rs. 500 p.m. to the watchman employed by him. Taxable allowance = (a) 500 p.m (b) 100 p.m (c) 600 p.m (d) None

Q23. Medical expenditure reimbursed by the employer to the employee shall be exempt upto ____. (a) Rs. 15,000 pm (b) Rs. 1,00,000 pa (c) Fully Exempt (d) Fully taxable

Q24. Transport Allowance is ___. (a) Always Taxable (b) Exempt to handicapped Employees upto Rs. 3200 p.m (c) Always Taxable except to Handicapped employees. (d) Both (b) & (c) 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 ? (a) Warden Allowance (b) Servant Allowance (c) Non-Practicing Allowance (d) All of the above Q26. Which of the following allowances are fully exempt ? (a) Sumptuary allowance granted to HC.SC Judges. (b) Allowance paid by UNO. (c) Compensatory Allowance received by a judge (d) All of the above Q27. Which of the following is not the condition for claiming exemption for HRA ? (a) Employee is in receipt of HRA. (b) Location of the employer. (c) Rent paid by employee > 10% of salary. (d) Location of the accommodation of employees *Q28. Mr. P is entitled to a basic salary of Rs. 50,000 p.m. & DA of Rs. 10,000 p.m. 40% of which forms part of retirement benefits. He is also entitled to HRA of Rs. 20,000 pm. He actually lives with his parents in Mumbai & does not pay any rent. Market rent of that house is Rs. 20,000 pm in Mumbai. Calculate the exempt HRA. (a) NIL (b) Rs. 1,75,200 (c) Rs. 64,800 (d) Rs. 2,40,000 Q29. Mr. P purchased a residential house property in Ahmedabad on loan for which he paid an interest of Rs. 50,000 during the PY. He is working in Delhi & getting an HRA of 4,000 p.m. He can claim exemption.deduction for: (a) Only HRA (b) Only interest paid (c) Either Interest or HRA (d) Both HRA & interest paid Q30. Children education allowance is exempt upto: (a) Rs. 100 pa for 2 children (b) Rs. 100 pm for 2 children (c) Rs. 100 pm per child for 2 children each (d) Rs. 100 pa per child for 2 children each Q31. Hostel expenditure allowance is exempt upto (a) Rs. 300 p.a for 2 children (b) Rs. 300 p.m for 2 children (c) Rs. 300 p.m per child for 2 children each (d) Rs. 300 p.a per child for 2 children each Q32. Underground allowance to employee is exempt upto. (a) Rs. 700 p.m. (b) Rs. 900 p.m. (c) Rs. 1,000 p.m. (d) Rs. 800 pm Q33. Mr. P received basic salary of Rs. 20,000 p.m. from his employer. He also received children education allowance of Rs. 3,000 for 2 children & transport allowance of Rs. 1,800 p.m. The amount of salary taxable for AY 2019-20 is (a) Rs. 2,62,200 (b) Rs. 2,22,600 (c) Rs. 2,22,200 (d) Rs. 2,07,800 Q34. Transport allowance is exempt upto Rs. 3,200 pm for. (a) Govt. employees (b) Non-Govt. Employees (c) Handicapped Employee (d) Mentally handicapped Q35. Allowance for Transport is exempt upto (a) 70% of such Allowance; (b) Rs. 10,000 p.m (c) Lower of (a) or (b) (d) Rs. 5,000

Q36. Mr. P received 300 pm as children education allowance for each of his 3 children. The taxable & exempt part of children education allowance shall be? (a) Rs. 8,400 & Rs. 2,400 respectively (b) Rs. 2,400 & Rs. 8,400 respectively (c) Rs. 10,800 & NIL respectively (d) Nil & Rs. 10,800 respectively 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 allowance for meeting his personal expenditure in the course of running Goods Vehicle. Mr. P does not receive any other amount by way of daily allowance. The amount eligible for exemption is. (a) Rs. 1,80,000 (b) Rs. 1,20,000 (c) Rs. 1,26,000 (d) Rs. 1,75,000 Q38. The Gardner, Sweeper & Watchman are employed by the employer & provided to employee along with rent free accommodation owned by the employer. The salary of Rs. 5,000 p.m per person is paid by the employer. The valuation of this perquisite shall be (a) Rs. 1,80,000 (b) Rs. 1,20,000 (c) Rs. 60,000 (d) Not taxable at all Q39. Mr. P is Pilot with Jet Airways. He is entitled to outstation allowance of Rs. 10,000 p.m. He spends Rs. 4,000 every month. The exemption shall be (a) Rs. 1,20,000 (b) Rs. 48,000 (c) Rs. 84,000 (d) Rs. 72,000 Q40. Mr. P is entitled to a transport allowance of Rs. 1,000 p.m. For commuting from his residence to office & back he spends Rs. 600 pm. The exemption shall be (a) Rs. 1,000 p.m. (b) Rs. 600 p.m. (c) Rs. 400 p.m. (d) Nil Q41. Children born out of multiple birth after the first child will be treated as ___. (a) Two child & exemption will be granted only for 1 child (b) One child only & exemption will be granted only for both child (c) on the discretion of AO (d) None of the above

Q42. Rent Free Accommodation is covered in. (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) Q43. Accommodation at concessional rent is given u/s ____. (a) section 17(2)(ii) Rule 3(1) (b) sec 18(i) Rule 5(i) (c) section 16(ii) (d) section 16(iii) Q44. Value of perquisite in case of rent-free accommodation given to government employees will be__. (a) 10% of salary (b) 15% of salary (c) 7.5% of salary (d) License fees determined byovernment. Q45. Salary of employee is Rs. 2 lacs. Fair rent of house situated in Delhi given to employee is Rs. 1,30,000. Perquisite in case of Non-Government employee is: (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. 50,000 along with rent free accommodation w.e.f. 1.8.2018. The value of the furniture to be included in the value of rent-free accommodation shall be. (a) Rs. 15,000 (b) Rs. 30,000 (c) Rs. 10,000 (d) Rs. 20,000

Q47. Mr. P is provided with furniture to the value of Rs. 70,000 along with house from February, 2018. Furniture is not owned by employer but has been taken on rent by employer for which employer pays hire charges of Rs. 5,000 pa. The value of furniture to be included along with value of unfurnished house for AY 2019-20 is (a) Rs. 5,000 (b) Rs. 7,000 (c) Rs. 10,500 (d) Rs. 14,000

Q48. Salary of an employee is Rs. 2,00,000. Rent paid by the employer for the unfurnished house provided to employee at Faridabad is Rs. 3,000 p.m. The employer charges Rs. 2,000 p.m. as rent from the employee. The valuation of this perquisite shall be ____. (a) Rs. 24,000 (b) Rs. 36,000 (c) Rs. 30,000 (d) Rs. 6,000

Q49. Mr. P gets salary of Rs. 12,000 p.m. & is provided with rent free unfurnished accommodation at Pune (which has population of 20 lakh). House is owned by employer, fair rental value of which is Rs. 1,400 p.m. House was provided 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

Q50. Mr. P gets salary of Rs. 25,000 p.m. & is provided with accommodation at Pune on his transfer in hotel for a week. Value of the perquisite of rent-free accommodation will be. (a) Rs. 72,000 (b) Rs. 30,000 (c) Rs. 45,000 (d) Nil

Q51. If any employee has been transferred & employer has provided him accommodation at the new place also while the employee continuing to occupy the house at old place. In such cases ___. (a) Both houses will be charged to tax as perquisite. (b)Only one of the accommodation having lower perquisite value shall be taxable upto 90 days (three months) & after 90 days, both of the accommodations shall be taxable. (c) Depends upon the agreement between employee & employer (d) Depends upon the discretion of AO

Q52. Rent-free official residence provided to a Judge of HC.SC is ___ (a) Taxable (b) Exempt (c) Exempt upto Rs. 5,000 p.m (d) Taxable if such judge stays out of India after retirement.

Q53. Rent-free furnished house provided to an Officer of Parliament is ____. (a) Taxable (b) Exempt (c) Exempt upto Rs. 5,000 p.m (d) Taxable if such officer stays o/s India after retirement

Q54. Mr. P an employee of PC Ltd. of Delhi, received the following payments during the PY ended 31st March, 2019. Basic salary: Rs. 2,40,000 & DA: 40% of basic salary (40% forming part of salary). Rent-free unfurnished accommodation provided by employer for which rent paid by employer being Rs. 50,000. Taxable perquisite: (a) Rs. 41,760 (b) Rs. 50,000 (c) Rs. 36,000 (d) Rs. 52,500

Q55. Medical facility to employee in India is exempt if: (a) Hospital owned/maintained by employer or Government Hospital; (b) Private Hospital (if recommended by Government for treatment of its employees). (c) Specified facility for prescribed diseases in hospital approved by PCC/CC (d) All of the above

Q56. Mr. P is entitled to Rs. 8,000 p.m as Medical Allowance. He spends Rs. 4,000 p.m on his medical treatment & Rs. 1,000 on the medical treatment of his major son not dependent on him. Exemption = (a) Rs. 4,000 p.m (b) Rs. 5,000 p.m (c) Nil (d) Rs. 8,000 p.m

Q57. Mr. P is employed in PC Ltd. & his wife is suffering from a critical disease. The company has sent Mr. P & Mrs. S to USA for the medical treatment of Mrs. S . The company has incurred expenses on medical treatment of Mrs. S & 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 expenses amounted to Rs. 1,50,000. Salary of Mr. P was Rs. 5,00,000. The taxable perquisite in this case shall be. (a) Rs. 3,50,000 (b) Rs. 8,50,000 (c) Rs. 2,00,000 (d) Rs. 1,50,000

Q58. During AY 2019-20, the employee was reimbursed Rs. 14,000 as medical expenses incurred by him which includes Rs. 9,000 spent in Government hospital. The taxable perquisite in this case shall be. (a) Rs. 9,000 (b) Rs. 5,000 (c) Rs. Nil (d) Rs. 14,000

Q59. Health Insurance Premium paid by employer in approved scheme of CG/IRDA is ____. (a) Taxable (b) Exempt

Q60. Mr. P took an interest-free loan of Rs. 15,000 from PC Ltd. (the employer). Market rate of interest on similar loan is 10%, the taxable value of the perquisite for Mr. P : (a) Rs. 150 (b) Rs. 1,500 (c) Nil (d) None

Q61. For the purpose of determining the perquisite value of loan at concessional rate given to the employee, the lending rate of State Bank of India as on ____ is required; (a) 1st day of PY (b) Last day of PY (c) Day on which loan is given (d) 1st day of AY

Q62. In which of the following cases, Interest-free Loan is not treated as perquisite: (a) If the amount of loans ≤ Rs. 20,000. (b) If Loan is given for Medical Treatment of Prescribed Diseases (Cancer, tuberculosis, etc). (c) Both (a) & (b) (d) None of the above

Q63. Employee is on official tour & he takes his family member with him. Value of perquisite = (a) Amount incurred for employee & such family member (b) Amount incurred for such family member (c) It is illegal to take family member with him since it will distract him (d) He should ask for the permission of AO before taking his wife (family member).

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 perquisite = (a) Amount incurred for the total period. (b) Amount incurred for the extended period. (c) He cannot extend tour since he will have work in office. (d) He should ask for permission of AO. Q65. Training of employees is not a/an ____ perquisite. (a) Taxable (b) Exempt (c) Exempt upto Rs. 10,000 (d) Depends on the discretion of AO. Q66. Exemption from leave Salary is given u/s _____. (a) 10(10AB) (b) 10(10AA) (c) 10(15A) (d) 10(10A) Q67. Scholarship given by an employer-company to children of its employees is not a.an ____ perquisite. (a) Taxable (b) Exempt (c) Exempt upto Rs. 10,000 (d) Depends on the discretion of AO. Q68. Exemption in respect of Leave Travel Concession is available only for going anywhere ___ with ___. (a) In India.outside India; Family. (b) In India; family. (c) In India; friends or family. (d) In India; Alone Q69. Exemption in respect of Leave Travel Concession is available only on ____. (a) Hotel charges (b)Boarding expenses (c) Bus.Air.Rail Fare (d) All of the above Q70. Credit for ____ unavailed LTC is available in the first calendar year of Next block. (a) One (b) Two (c) Zero (d) Three Q71. PC Ltd. gives a gift in kind on the marriage of the son of the employee. Gift so made shall be ___. (a) Taxable if value is Rs. 6,000 or less (b) Exempt if value is Rs. 5,000 or less (c) Always fully taxable (d) Fully Exempt Q72. Cash gifts are ___. (a) Taxable if value is Rs. 6,000 or less (b) Exempt if value is Rs. 5,000 or less (c) Always fully taxable (d) Fully Exempt Q73. Tea & Snacks are provided by PC Ltd. to employees in the office during office hours. The value of this perquisite shall be (a) Fully taxable (b) Fully Exempt (c) Exempt upto Rs. 50 pm (d) Exempt upto Rs. 50 per round of tea & snacks Q74. An employee has been provided free meal worth Rs. 110 per meal for 295 days in the office, during office hours. Such facility provided to employees shall be taxable for: (a) Rs. 60 per day for 295 days (b) Rs. 110 per day for 295 days (c) Rs. 50 per day for 295 days (d) Not taxable at all Q75. Expenditure pertaining to health club, sports facilities etc.is ____. (a) Taxable Perquisite. (b) Exempt Perquisite. (c) Partly Exempt. (d) None of the above

Q76. Mr. P employed in PC Ltd. was permitted to admit his only son in the school run by the employer. No fee was charged on such education provided to the son of Mr. P. The cost of such education for other children is Rs. 1,800 per month. The perquisite value of free education shall be: (a) Rs. 1,600 (b) Rs. 12,000 (c) Rs. 36,000 (d) Rs. 9,600 Q77. Free or concessional tickets granted to Employees of an airline or the railways is ___. (a) Taxable Perquisite. (b) Exempt Perquisite. (c) Partly Exempt. (d) None of the above. Q78. A company has provided laptop worth Rs. 50,000 to its employee for official as well as personal purposes. The taxable amount of perquisite will be - (a) Rs. 5,000 (b) Rs. 25,000 (c) Rs. 10,000 (d) Nil Q79. Employer has given a video-camera for the personal use of the employee. The value of this perquisite is: (a) 10 % pa of historical cost (b) Nil (c) 10% pa of the WDV (d) Fully Exempt Q80. The employer had purchased a car for Rs. 8,00,000 2 years & 7 months ago. This car is sold to the employee for Rs. 2,02,000. The value of this perquisite shall be (a) Rs. 2,80,000 (b) Rs. 1,20,000 (c) Rs. 8,00,000 (d) Rs. 3,10,000 Q81. PC Ltd. acquired a motorcar for Rs. 8 lakh on 30th June, 2018. It sold the said motor car to its employee, Mr. P, for Rs. 6 lakh on 10th July, 2018. The company claimed depreciation @ 15% for the year ended 31st March, 2019. The perquisite value in the hands of Mr. P on sale of motor car would be (a) Rs. 8,00,000 (b) Rs. 6,00,000 (c) Rs. 2,00,000 (d) Rs. 1,40,000 Q82. Mr. P is an employee of JSPC Ltd. which is an oil manufacturing company. He is provided with free gas for his personal purpose by the employer. Perquisite value: (a) Fixed by employee (b) Fixed by the employer (c) Manufacturing cost per unit (d) Market rate of Gas per unit Q83. Employer provides a car (below 1600 CC) along with a driver to Mr. P & he uses the car partly for official & partly for personal purpose. Expenses incurred by employer are. (1) running & maintenance expenses of Rs. 84,000 (2) driver's salary of Rs. 1,20,000. Perquisite value: (a) Rs. 21,600 (b) Rs. 10,800 (c) Rs. 32,400 (d) Rs. 2,04,000 Q84. Mr. P is employee of PC Ltd. & he is provided a car of engine of 1.9 litre capacity along with driver. The expenses of running & maintenance of car are met by Mr. P himself. Besides using the car for official purpose, Mr. P also uses the car for his personal purpose. Perquisite value: (a) Rs. 2,400 pm (b) Rs. 1,800 pm (c) Rs. 600 pm (d) Rs. 900 pm

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 private purpose. All expenses of running & maintenance of the car are met by the employer. The perquisite shall (a) Be taxable in case of specified employee only (b) Be taxable in case of an employee other than specified employees (c) Be taxable in case of all type of employees (d) Not be taxable at all for any employee

Q86. Which of the following perquisites will be taxable in the hands of non-specified employees ? (a) Provision of sweeper, gardener, watchman or personal attendant or Use of motor car (b) Facility of use of gas, electricity or water supplied by employer (c) Free or concessional educational facilities or Free or concessional tickets (d) None of the above

Q87. Encashment of leave salary at the period of service is fully taxable in the case of ___. (a) CG employee (b) SG employee (c) Both CG & SG employees (d) Government employee & Non-Government employee

Q88. Encashment of leave salary at the time of retirement is fully exempt in the case of ___. (a) CG Employee (b) SG Employee (c) Both CG & SG Employees (d) Government employee & Non-Government employee

Q89. Maximum Exemption in case of leave encashment is: (a) Rs. 2.4 lac (b) Rs. 3.5 lac (c) Rs. 3 lac (d) Rs. 10 lac

Q90. Payment of premium on personal accident insurance policies of the employee by the employer is __. (a) Taxable perquisite (b) Exempt Perquisite since no immediate benefit would become payable to the employee (c) Partly Exempt (d) None of the above

Q91. Salary for exemption of leave encashment shall be taken as. (a) Last drawn Salary (b) Average Salary of 10 months immediately preceding the month of retirement (c) Average Salary of 10 months immediately preceding the date of retirement (d) Any of the above

Q92. Salary for the purpose of exemption of leave encashment shall be taken as. (a) Basic salary + DA (forming part of salary for retirement benefits or not) (b) Basic salary + DA (forming part of salary for retirement benefits) + monthly commission (c) Basic salary + DA (forming part of salary for retirement benefits) + commission (on % basis of sales) (d) Basic salary & commission.

Q93. An employee availed the exemption of leave encashment of Rs. 1,00,000 in the past. He received from the second employer a sum of Rs. 2,50,000 as encashment of leave. He will be entitled to exemption to the extent of (a) Nil (b) Rs. 2.5 lacs (c) Rs. 2 lacs (d) Rs. 1.4 lacs

Q94. An employee of a GGC public limited company received total Rs. 3,00,000 as encashment of leave salary at the time of retirement. He has 18 months leave to his credit at the time of retirement & his average salary for last 10 months is Rs. 24,000. Taxable Leave encashment is: (a) Rs. 2.4 lacs (b) Rs. 3 lacs (c) Rs. 60,000 (d) Nil Q95. Which of the following leave salary is exempt? (a) Leave salary paid to legal heir (b) Leave salary received by family of government servant who died in harness (on duty) (c) Both (a) & (b) (d) None of the above Q96. Gratuity shall be fully exempt in the case of ____. (a) CG & SG Employee (b) Employees of CG & SC & LA (c) Employees of CG & SG & LA & statuary corporation (d) Only central government employee Q97. Salary for the purposes of exemption of gratuity when employee is covered under Gratuity Act 1972 includes. (a) Basic salary + DA (forming part of salary for retirement benefits or not) (b) Basic salary + DA (forming part of salary for retirement benefits) + monthly commission (c) Basic salary + DA (forming part of salary for retirement benefits) + commission on % basis of sales (d) Basic salary & commission *Q98. An employee is covered under Payment of Gratuity Act, 1972. Salary for purpose of calculating 15 days salary for each completed year of service shall be. (a) Last drawn Salary (b) Avg. Salary of last 10 months (c) Average Salary of last 3 completed years (d) Average Salary of last 12 months Q99. An employee is covered under Payment of Gratuity Act, 1972 If the employee has completed service of 16 years 6 months & 5 days then to calculate exemption of Gratuity the number of completed years shall be taken as. (a) 16 years (b) 17 years (c) 16 years 6 months & 5 days (d) 16 years &7 months Q100. An employee is covered under Payment of Gratuity Act, 1972 For purpose of computing 15 days’ salary, the number of days in a month shall be taken as _____ days. (a) 30 (b) 26 (c) 31 (d) Any of the above Q101. The maximum ceiling limit for exemption u/s 10(10) in respect of gratuity for employees covered by the Payment of Gratuity Act, 1972 is: (a) Rs. 10 lac (b) Rs. 5 lac (c) Rs. 3.5 lac (d) Rs. 20 lac

Q102. An employee is Not Covered under Payment of Gratuity Act, 1972 For purpose of computing half month’s salary, number of days in a month shall be taken as ___ days. (a) 30 (b) 26 (c) 31 (d) Any of the above

Q103. An employee is Not Covered under Payment of Gratuity Act, 1972. Maximum exemption of gratuity is: (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 but was not entitled to any gratuity. He worked with the present employer for 8 years & 3 months. The completed years of service for calculating exemption of gratuity, if employee is covered under Gratuity Act shall be taken as__. (a) 11 years (b) 8 years (c) 3 years (d) None

Q105. Mr. P who claimed exemption of gratuity in past to the extent of Rs. 2,50,000 was entitled to gratuity from the present.second employer amounting to Rs. 20,00,000 in AY 2019-20. Both of employers are covered under the Payment of Gratuity Act 1972. Exemption to Mr. P shall be: (a) Rs. 10,00,000 (b) Rs. 15,00,000 (c) Rs. 20,00,000 (d) Rs. 17,50,000

Q106. Un-Commuted Pension received by ANY Employee: (a) Fully Exempt (b) Fully Taxable (c) Partially taxable (d) Partially exempt

Q107. An employee was entitled to gratuity. He got 50% of his pension commuted & received a sum of Rs. 1,00,000 as commuted pension. The exemption in his case shall be. (a) Rs. 50,000 (b) Rs. 33,337 (c) Rs. 1,00,000 (d) Rs. 66,667

Q108. A government employee was entitled to gratuity. He got 50% of his pension commuted & received a sum of Rs. 1,00,000 as commuted pension. The exemption shall be: (a) Rs. 50,000 (b) Rs. 33,337 (c) Rs. 1,00,000 (d) Rs. 66,667

Q109. An employee was not entitled to gratuity. He got 60% of his pension commuted & received a sum of Rs. 1,20,000 as commuted pension. The exemption shall be: (a) Rs. 1,20,000 (b) Rs. 66,667 (c) Rs. 80,000 (d) Rs. 1,00,000

Q110. Mr. P retires from private service on 30th April, 2018 & his pension has been fixed at Rs. 1,500 p.m. He gets a of his pension commuted during January, 2019 & receives Rs. 75,000. He also gets Rs. 60,000 as gratuity. The total pension taxable including commuted value will be. (a) Rs. 16,500 (b) Rs. 21,500 (c) Rs. 39,250 (d) Rs. 14,250

Q111. Pension received by gallantry award winner is. (a) Fully Taxable (b) Fully Exempt from tax (c) 50% Exempt & 50% taxable (d) 80% Exempt & 20% taxable

Q112. Mr. P employed in PC Ltd. took voluntary retirement in December 2018 & received Rs. 2,00,000 from NPS Trust. The amount so received chargeable to income tax is. (a) Nil as 100% is exempt (b) Rs. 1,20,000 as 40% is exempt (c) Rs. 1,00,000 as 50% is exempt (d) Rs. 80,000 as 60% is exempt

Q113. Compensation received on Voluntary retirement is exempt u/s 10(10C) to the maximum extent of ____. (a) Rs. 2.4 lac (b) Rs. 3.5 lac (c) Rs. 5 lac (d) Rs. 3 lac

Q114. Standard deduction is allowed from gross salary u/s (a) 16(i) (b) 16(ia) (c) 16(ii) (d) 16(iii)

Q115. Maximum Standard deduction u/h Salary shall be __. (a) Rs. 40,000 (b) Rs. 50,000 (c) Rs. 2,500 (d) Rs. 5,000

Q116. The standard deduction is allowed from gross salary to the maximum of Rs. 40,000 but (a) Employee has to prove his all expenses to income tax department (b) Employee has to prove his all expenses to the employer (c) Employee has to prove his all expenses to income tax department or employer as per his own discretion (d) Irrespective of any expenses that employee may or may not have incurred

Q117. Standard deduction is not allowed from ______. (a) Pension (b) Family pension (c) Arrear of salary (d) Gross salary

Q118. Standard deduction is allowed from ____. (a) Pension (b) Gross salary (c) Arrear of salary (d) All of the above

Q119. Max deduction for entertainment allowance u/s __. (a) Rs. 3,000 (b) Rs. 5,100 (c) Rs. 2,500 (d) Rs. 5,000

Q120. Deduction for entertainment allowance u/s 16(ii) is allowed to ____. (a) Every kind of employee (b) Every government employee (c) Every non-government employee (d) Every retired employee

Q121. Limit u/s 16(ii) for deduction of entertainment allowance in case of government employee is __% of salary (a) 12.5 % (b) 20 % (c) 15% (d) 7.5%

Q122. Entertainment allowance for govt. employee is. (a) Fully exempt & therefore not included in Gross Salary (b) Fully Taxable & therefore added in Gross Salary (c) Not added in Gross Salary but deduction is allowed as per limits of section 16(ii) (d) First added in full in Gross Salary & thereafter deduction allowed from Gross Salary is allowed u/s 16(ii)

Q123. Professional Tax is charged under which Article of Constitution of India (a) 274 (b) 275 (c) 276 (d) 277

Q124. Professional Tax is charged by ___. (a) CG (b) SG (c) LA (d) Statutory corporation

Q125. The deduction for Professional Tax u/s 16(iii) is for (a) Actual amount paid (b) Actual amount due (c) Actual amount charged by SG (d) Always 2,500

Q126. Employer’s contribution to SPF shall be (a) Fully Exempt (b) Exempt upto 12 % of salary (d) Fully Taxable (c) Exempt up to 10% of salary

Q127. Interest credited to SPF shall be ____. (a) Fully Exempt (b) Fully Taxable (c) Exempt up to 8.5 % p.a of total contribution (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 (b) Allowed as deduction u/s 80TTA (c) Allowed as deduction u/s 10 (d) Allowed as deduction u/s 16(ia)

Q129. Employer’s contribution to RPF shall be. (a) Fully Exempt (b) Exempt upto 12 % of salary (d) Fully Taxable (c) Exempt up to 10% of salary

Q130. Interest credited to RPF shall be. (a) Fully Exempt (b) Fully Taxable (c) Exempt up to 8.5 % p.a of total contribution (d) Exempt up to 9.5 % p.a of total contribution

Q131. Payment from RPF after 5 years of continuous service of employee shall be ___. (a) Fully Taxable (b) Fully Exempt (c) Taxable to the extent of employer’s contribution & interest thereon (d) Exempt up to Rs. 10,00,000

Q132. An employee received payment from URPF on his retirement. His own contribution to URPF & Interest on his own contribution will be. (a) Taxable, Taxable (b) Exempt, Exempt (c) Taxable, Exempt (d) Exempt, Taxable

Q133. The year in which URPF is converted in RPF ___. (a) The employer’s contribution till date & interest thereon shall be taxable (b) The employer’s contribution till date shall be taxable (c) It will be assumed as if the provident fund was recognized right from beginning & excess amount of employer’s contribution & interest thereon shall be taxable (d) None of the above

Q134. When interest on employee’s own UPRF is received by employee, it is ____. (a) Taxable u/h IFOS (b) Taxable u/h Salary (c) Exempt (d) Taxable if interest > Rs. 10,000

Q135. For PY 2018-19, Mr. P receives a salary of Rs. 2,80,000. Mr. P’s contribution to employees’ RPF account Rs. 59,000 & matching contribution has been made by employer. Taxable income of Mr. P will be ____. (a) Rs. 2,46,400 (b) Rs. 3,05,400 (c) Rs. 3,39,000 (d) Rs. 2,80,000

Q136. PC Ltd. contributed 15% of salary of Mr. P towards RPF. Taxable Amt to Mr. P is ___% of contribution. (a) 5 (b) 3 (c) Nil (d) 12

*Q137. Employer’s contribution to superannuation fund is (a) Not taxable to employee (b) Fully Taxable (c) Taxable to employee provided contribution > Rs. 1.5 lacs (c) Exempt upto 12% of salary

Q138. Which of the following is not correct about the 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.

Q139. Mr. P employed in PC Ltd. as accounts manager. The employer paid Rs. 1,60,000 as contribution to approved superannuation fund for the benefit Mr. P. The amount of such contribution liable to tax as perquisite is: (a) Nil (b) Rs. 10,000 (c) Rs. 1,60,000 (d) Rs. 60,000

Q140. Mr. P was employed since 1st July 2002 in an establishment. His salary was fixed at Rs. 14,800 in the grade of Rs. 14,000 - Rs. 400 - Rs. 22,000 w.e.f. 1.7.2012. He got the benefit of 15% of salary as DA which is treated as forming part of salary for retirement benefits. He retired on 1.2.2019 & received Rs. 3,40,000 as a Gratuity from his employer. Calculate his income under the head ‘Salary’ for AY 2019-20 if he is a Central Government employee. (a) Rs. 1,56,420 (b) Rs. 1,70,800 (c) Rs. 1,96,420 (d) Fully exempt

Q141. Anjan joins a service on 1.4.2018 with basic salary of Rs. 39,100 plus dearness allowance of 107 % of basic salary. He has no other income. His taxable income shall be: (a) Rs. 9,71,244 (b) Rs. 9,31,244 (c) Rs. 9,71,240 (d) Rs. 9,31,240

Q142. Mr. P joins service on 1st April, 2014 in the grade of Rs. 15,000 Rs. 1,000 - Rs. 18,000 - Rs. 2,000 - Rs. 26,000. Total taxable salary for year ended on 31st March, 2019: (a) Rs. 2,16,000 (b) Rs. 2,40,000 (c) Rs. 2,00,000 (d) Rs. 1,80,000

Q143. Mr. P who is a manager of PC Ltd. since 2001 was terminated by the company on 1st August, 2018 by paying a compensation of Rs. 200 lakhs. Such compensation is - (a) Chargeable under the Wealth-tax Act, 1957 (b) Not chargeable under the Income-tax Act, 1961 (c) Chargeable u/s 17(3)(i) (d) Chargeable u/s 28(ii)(a).

Q144. GGC is a LLP & had taken Keyman Insurance Policy on the life of it managing partner. The policy got matured on 13th September, 2018 & an amount of Rs. 75 lakh was paid by the insurers to the managing partner. The amount so received on maturity of the policy by the managing partner is - (a) Fully exempt u/s 10(10D) (b) 50% of Rs. 75 lakh exempt (c) Rs. 75 lakh taxable as profit in lieu of salary (d) Rs. 25 lakh exempt & Rs. 50 lakh taxable

Q145. Bimal is employed in a factory at a salary of Rs. 2,400 per month. He also gets dearness allowance @ Rs. 600 per month & bonus @ Rs. 200 per month. He retired on 31st December, 2018 & received Rs. 75,000 as gratuity under the Payment of Gratuity Act, 1972 after serving 31 years & 4 months in that factory. Exempt gratuity is: (a) Rs. 75,000 (b) Rs. 53,654 (c) Rs. 21,346 (d) Rs. 20,00,000

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


4D. CAPITAL GAINS

Q1. Which of the following is not a required for charging income tax on capital gains? (a) There must be a gain arising on transfer of capital asset. (b) Capital gains should not be exempt u/s 54 (c) Transfer must be of a capital asset. (d) The transfer must have been effected in relevant AY Q2. As per general rule, capital gain from transfer of capital asset is taxable in which year (a) PY in which transfer took place (b) Assessment year (c) PY next to year of transfer (d) None of the above Q3. Capital gains is calculated when ___. (a) Any asset is transferred (b) any capital asset is transferred (c) any asset is transferred or not transferred (d) any capital asset is transferred or not transferred Q4. Capital gain arises on___. (a) All type of asset (b) All type of capital asset (c) Land, Building & Shares only (d) All of the above Q5. Capital Asset is defined u/s: (a) 2(13) (b) 2(36) (c) 2(14) (d) 2(47) Q6. Capital Asset means: (a) Any Property (Movable.immovable), connected with assessee’s business,profession or not. (b) Any Securities held by FIIs (invested as per SEBI regulations). (c) Any Rights in Indian Company including Right of Management or control. (d) All of the above. Q7. Capital Asset excludes: (a) SIT/RM.Consumables stores (b) Movable Personal effects (c) Rural Agricultural Land in India (d) All of the above Q8. Mr. P purchased a car for his personal use for Rs. 5,00,000 in April, 2018 & sold the same for Rs. 5,50,000 in July, 2018. The taxable capital gains would be. (a) Nil (b) Rs. 5,50,000 (c) Rs. 50,000 (d) Rs. 4,00,000 Q9. Capital asset excludes all assets except ___. (a) Stock in trade (b) Gold deposit bonds (c) Jewellery (d) Rural agricultural land Q10. Which of the following is not a capital asset for Mr. P who is employed in a public sector bank? (a) Urban land (b) Plot of land (c) Gold Jewellery (d) Car Q11. Which of the following is capital asset ? (a) A maruti dealer holding cars for sale (b) A maruti dealer has honda city car for his personal use. (c) Jewellery held by a jeweller which has been held as SIT. (d) Jewellery held by a jeweller for his personal use.

Q12. Which of the following is not a capital asset? (a) Personal House (b) Personal Jewellery (c) Factory Building (d) Personal Car Q13. Gold utensils are ___ & silver utensils are ____. (a) Capital asset, capital asset (b) Not capital asset, capital asset (c) Capital asset, not capital asset (d) Not capital asset, not capital asset Q14. Which of the following assets is long term capital assets ? (a) Car used for 5 years for personal purposes before the date of sale. (b) Jewellery held for 10 years for personal use before its date of sale. (c) House property held by a property dealer for sale for 4 years before sale. (d) Shares held by Mr. P as investment & sold 11 months after date of purchase. Q15. As per the contention of Assessing Officer gold bars, sovereigns etc. used for Puja are capital asset & hence, attracts capital gains. Is the contention of Assessing Officer valid? (a) Valid (b) Invalid (c) Partially invalid (d) None Q16. Capital Gain on Transfer of Urban Agricultural Land is ___Agricultural Income & thus it is __. (a) treated as ; exempt u/s 10. (b) treated as ; taxable u/h capital gains. (c) not treated as ; exempt u/s 10 (d) not treated as ; taxable u/h capital gains. Q17. STCG is a gain arising from the transfer of a land & building which is held by the assessee for not more than ____ months from the date of its acquisition. (a) 36 (b) 12 (c) 24 (d) 48 Q18. Agricultural Land must be used for agricultural purposes for ___prior to transfer (a) 5 yrs (b) 3 yrs (c) 2 yrs (d) 10 yrs Q19. Listed securities (except bonds & units) are treated as LTCA, if they are held for more than ____ months . (a) 12 (b) 6 (c) 24 (d) 48 Q20. If unlisted debentures are sold after 12 months but before 36 months, the capital gain arising from such sale is (a) STCG (b) LTCG Q21. Unlisted equity shares are treated as LTCA, if they are held for more than ____ months. (a) 12 (b) 6 (c) 24 (d) 48 Q22. Units of debt-oriented Mutual funds are treated as LTCA, if they are held for more than ____ months . (a) 12 (b) 36 (c) 24 (d) 48

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 held for more than ____ months . (a) 12 (b) 36 (c) 24 (d) 48

Q24. Units of UTI or equity-oriented MF are treated as LTCA, if they are held for more than__months. (a) 12 (b) 36 (c) 24 (d) 48

Q25. Mr. P purchased 1 motor car for his personal use & subsequently it was sold by him within 6 months at profit. (a) It will be considered as STCG (b) It will be considered as LTCG (c) It is not a capital asset & therefore there shall be no capital gains (d) None of the above

Q26. Which of the following would be regarded as transfer? (a) Transfer of capital asset in scheme of reverse mortgage (b) Transfer of capital asset under gift/will or trust (c) Transfer by way of conversion of equity shares from preference shares (d) Redemption of ZCBs

Q27. Any transaction allowing possession of any ___ to be taken or retained in ___ of a contract of the nature referred to in section 53A of the Transfer of Property Act is regarded as a transfer (a) Movable property, whole performance (b) Immovable property, part performance (c) Movable property, Part performance (d) Any Property, Part Performance

Q28. Securities transaction tax paid by the seller of shares & units shall (a) be allowed as deduction as expenses of transfer (b) not be allowed as deduction as expenses of transfer (c) form part of cost in case of tangible assets only (d) form part of cost if asset is purchased before 1.4.2001

Q29. Brokerage paid on sale of shares ___ from the sale consideration. (a) Shall be reduced (b) May be reduced (c) Shall not be reduced (d) Shall be added

Q30. Cost of acquisition includes ___ (a) All the expenditures incurred to acquire the asset (b) Revenue expenditures incurred to acquire the asset (c) Only capital expenditures incurred for completing or acquiring title to the property. (d) None of the above

*Q31. Securities transaction tax paid by the purchaser of shares & units shall (a) form part of the cost of such shares & units (b) not form part of the cost of such shares & units (c) form part of cost in case of tangible assets only (c) form part of cost if asset is purchased before 1.4.2001

Q32. While computing indexed cost of acquisition, COA shall be divided by (a) CII for the year in which asset was held by the assessee (b) CII for the year in which asset was transferred (c) CII for the year being 1.4.2001 (d) CII for the year being later of (a) or (c)

Q33. Where capital asset became the property of the assessee in any mode given u/s 49(1), COA shall be: (a) FMV of asset on the date of acquisition by the assessee (b) Cost of acquisition in the hands of previous owner (c) Price which is decided by transferor & transferee (d) Nil *Q34. No indexation is done in case of. (a) Bonds/Debenture/ZCBs (b) Slump sale (c) LTCA specified u/s 112A. (d) All of the above. Q35. Cost of Improvement includes ___ (a) All the expenditures incurred in making any additions/improvements/protect capital asset (b) Revenue expenditures incurred in making any additions/improvements/protect capital asset (c) Capital expenditures incurred in making any additions/improvements/protect capital asset. (d) None of the above Q36. While computing indexed cost of improvement, it shall be divided by (a) CII for the year in which improvement took place (b) CII for year in which asset was transferred by assessee (c) CII for the year being 1.4.2001 (d) CII for the year in which asset was held by the assessed Q37. Cost of improvement means capital expenditure done on the value addition of capital asset. It shall be considered for calculation of capital gains & (a) It is always taken as Nil (b) always considered irrespective of period when it was incurred (c) considered when incurred on or after 1.4.2001 (d) considered when incurred before 1.4.2001 Q38. COI incurred before 1.4.2001________in all cases. (a) Shall be ignored (b) Shall always be considered (c) May be considered (d) Is at the discretion of AO Q39. COI incurred by the previous owner shall be ___. (a) Shall be ignored (b) May be considered (c) Shall be considered if incurred on or after 1.4.2001. (d) Is at the discretion of AO Q40. Assessee is allowed to opt for FMV on 1.4.2001 in case of ___. (a) All Capital assets (b) All Depreciable capital assets (c) All Capital assets other than Intangible assets & Depreciable assets (d) only self-generated assets Q41. Cost of Improvement shall be indexed if ___. (a) Improvement is done before 36 months from date of transfer (b) Improvement is done before 24 months from date of transfer (c) Improvement is done before 12 months from date of transfer (d) If the asset is LTCA. Q42. Amount deducted from sale consideration in LTCG is: (a) COA & COI (b) Indexed COA & Indexed COI (c) Market value as on 1.4.1981 of capital asset (d) only cost of improvement

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 this Gold for Rs. 10 lacs on 1.10.2018. Selling expenses have been 1% of the sale price. Calculate Capital Gains for PY 2018-2019. (a) Rs. 3,00,000 (b) Rs. 9,90,000 (c) Rs. 2,90,000 (d) None of the above Q44. On 15th November, 2018, Mr. P sold 1kg of gold, the sale consideration to which was Rs. 6,00,000. He had acquired the gold on 11th December, 1999 for Rs. 64,000. Fair market value of 1kg gold on 1st April, 2001 was Rs. 62,000. Taxable Capital gains for PY 2018-2019 shall be (a) Rs. 4,25,920 (b) Rs. 5,38,000 (c) Rs. 5,36,000 (d) Rs. 4,20,800 Q45. Mr. P purchased a house for Rs. 20 lacs on 1.1.2017. On 1.1.2018 he had constructed one additional floor at the cost of Rs. 5 lacs. On 30.10.2018 this house has been sold off for Rs. 51 lacs & selling expenses have been Rs. 1 lacs. Calculate Capital Gains for PY 2018-2019. (a) Rs. 14,00,000 (b) Rs. 23,00,000 (c) Rs. 50,00,000 (d) Rs. 25,00,000 Q46. U/s 50C, guideline value for stamp duty is taken as the full value of consideration only if - (a) the asset transferred is building & the actual consideration is less than the guideline value (b) the asset transferred is either land or building or both & guideline value exceeds the actual consideration (c) the asset transferred is either land or building or both & guideline value exceeds 105% of the actual consideration. (d) the asset transferred is land & the actual consideration is less than the guideline value Q47. On 1.6.2018 Mr. P transferred his vacant land to Mr. D for Rs. 12 lacs. The land was acquired on 1.9.2015 for Rs. 3 lacs. If indexation is applied, the indexed cost of acquisition would be Rs. 3.30 lacs. The taxable capital gain would be. (a) LTCG Rs. 8.70 lacs (b) STCG Rs. 9 lacs (c) LTCG Rs. 9 lacs (d) STCG Rs. 8.70 lacs Q48. Mr. P sold a vacant land to Mr. D for Rs. 36 lacs. For stamp duty purpose, the value of land was Rs. 41 lacs. The indexed cost of acquisition of land was computed at Rs. 20 lacs. The taxable LTCG would be. (a) Rs. 21 lacs (b) Rs. 16 lacs (c) Rs. 5 lacs (d) Rs. 20 lacs Q49. Miss Mohini transferred a house to her friend Ms. Ragini for Rs. 35 lacs on 1.10.2018. The sub-registrar valued the land @ Rs. 48 Lacs. Miss Mohini contested the valuation & the matter was referred to divisional revenue officer who valued the house @ Rs. 41 lacs. Ms. Mohini had purchased the house on 15 May, 2011 for Rs. 25 lacs & registration expenses were Rs 1,50,000. (a) Rs. 46,50,000 (b) Rs. 38,04,350 (c) Rs. 1,45,650 (d) None

Q50. When can AO refer valuation officer with a view to ascertain FMV of a capital asset? (a) Where the value of the asset claimed by the assessee is in accordance with valuation made by the registered valuer, but AO is of the opinion that value so claimed is less than FMV of the Asset. (b) Where the AO is of the opinion that FMV of the asset exceeds the value claimed by lower of (i) More than 15% of the value claimed by the assessee or (ii) Rs. 25,000. (c) Where the AO thinks that it is necessary to do so having regards to the nature of the asset & relevant circumstances. (d) All of the above Q51. If any advance money received by the assessee under the agreement of transfer which could not be matured is forfeited before 1.4.2014 then such money shall (a) Be taxable as the income of other sources in the year it is forfeited (b) Be deducted from the cost of acquisition of such asset after doing indexation (c) Be deducted from the cost of acquisition of such asset before doing indexation (d) it shall be ignored in all cases

Q52. If any advance money received by the assessee under the agreement of transfer which could not be matured is forfeited after 1.4.2014 then such money shall be ____. (a) Taxable u/h IFOS in the year it is forfeited (b) Deducted from COA of such asset after doing indexation (c) Deducted from COA of such asset before doing indexation (d) it shall be ignored in all cases

Q53. Mr. P entered into an agreement with Mr. D for sale of a building for Rs. 20 lac in June, 2018. Mr. P received advance of Rs. 2 lacs. Subsequently the agreement was cancelled & Mr. P forfeited the advance money. The advance money is ____. (a) To be reduced from the cost of acquisition (b) To be reduced from indexed cost of acquisition (c) Taxable as capital gains (d) Taxable u/h IFOS. Q54. Mr. P purchases a house property in Dec. 2006 for Rs. 10,25,000 & an amount of Rs. 7,05,000 was spent on the improvement & repairs of the property in March 2011. Property was proposed to be sold to Mr. Z in month of May, 2018 & advance of Rs. 40,000 was taken from him. As entire money was not paid in time, Mr. P forfeited the advance & subsequently sold property to Mr. Y in March, 2019 for Rs. 36,00,000. The FMV of the property on April 1, 2001 was Rs. 11,00,000. Taxable Capital Gain: (a) Rs. 65,505 (b) Rs. 65,550 (c) Rs. 65,055 (d) Rs. 65,500

Q55. Advance forfeited by the Previous owner shall be ___. (a) Reduced from original cost of acquisition. (b) Taxed u/h IFOS (c) Ignored (a) Taxed in the hands of current owner

Q56. In case of destruction of capital asset as specified u/s 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 1.5.1999 for Rs 3 lacs. It was destroyed by fire on 3.4.2018 & Mr. P received Rs. 48 lacs on 5.5.2019 from the Insurance Company. FMV of the property on 1.4.2001 was Rs. 4 lacs. The Stamp Duty Value was Rs. 60 lacs. Find the Capital Gain (a) 37.44 Lac (b) 36.8 Lac (c) 40 Lac (d) None

Q58. Conversion of capital asset into SIT will result into capital gain of PY in which ____. (a) conversion took place (b) converted asset is sold/transferred (c) both of the above (d) none of the above

Q59. Conversion of personal effect into stock in trade shall: (a) be subject to capital gain tax (b) not be subject to capital gain tax (c) shall be subject to tax under of PGBP income (d) shall be subject to tax under head of IFOS.

Q60. When capital asset is converted into SIT then for purpose of capital gain, the sale consideration shall be (a) FMV of the asset on the date of sale of such asset (b) FMV of the asset on the date of conversion of such asset (c) The price for which it is sold (d) The price for which it was acquired

Q61. Where the capital asset is converted into stock in trade, the indexation of cost of acquisition & cost of improvement shall be done ___. (a) till PY of conversion of such capital asset (b) till PY in which such asset is sold (c) Till 1.4.2001 (d) Any of the above

Q62. Mr. P converts his capital asset (acquired on June 10, 2009 for Rs. 60,000) into SIT in March 10, 2019. FMV on date of above conversion was Rs. 3 lacs. He subsequently sells stock-in-trade so converted for Rs. 4,00,000 on June 10, 2019. What is date of transfer of asset? (a) June 10, 2009 (b) March 10,2019 (c) June 10, 2019 (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 partner shall be. (a) FMV on the date of such transfer (b) price at which it was recorded in the books of the firm (c) cost of such asset to the partner (d) price which is mutually decided by partners

Q64. Where any capital asset is transferred by a firm to its partner by way of distribution on the dissolution of firm, the sale consideration of such asset to the firm shall be. (a) The price at which such asset was given to partner (b) Cost or W.D.V of such asset on the date of distribution (c) FMV of the asset on the date of such transfer (d) price which is mutually decided by partners

Q65. Where a capital asset other than urban agricultural land is compulsorily acquired then the capital gain shall arise in the previous year in which___. (a) compulsory acquisition took place (b) Full consideration is received (c) Part/full consideration is received (d) Any year at the discretion of the government

Q66. In case of compulsory acquisition, indexation shall be done till the __. (a) PY of compulsory acquisition (b) PY in which the full compensation received (c) PY in which part.full compensation is received (d) in any year at the discretion of the government

Q67. An interim order in relation to enhanced compensation was passed by court on 10 May, 2018, amount was also received in pursuance of order. Compensation so received shall be taxable (a) When the amount is received (b) When final order of the court is passed (c) Any of the above (d) None of the above

Q68. In case of compulsory acquisition, if an assessee receives enhanced compensation then enhanced compensation is taxable as. (a) STCG (b) LTCG (c) STCG/LTCG depending upon the original capital gain of compulsory acquisition. (d) Any kind of capital gains to be decided by the government.

Q69. In case of compulsory acquisition if enhanced compensation is received, then for purpose of computation of capital gain, cost of acquisition & cost improvement in that case shall be taken as. (a) always taken to be Nil (b) cost of acquisition or cost of improvement which was in excess of initial compensation earlier received (c) any amount of cost decided by the government (d) any amount of cost decided by the assessee Q71. Mr. P , while computing capital gain on enhanced compensation deducted litigation expenses incurred by him. AO contended that litigation expenses are non-deductible. Is contention of Assessing Officer valid? (a) Valid (b) Invalid (c) Partially invalid (d) None of the above Q72. Mr. P received Rs. 7 lacs by way of enhanced compensation in March, 2019. A further sum of Rs. 3 lac decreed by the Court tribunal is due but not received till 31st March, 2019. The amount of income chargeable to tax for PY 2018-2019 would be __. (a) Rs. 3,50,000 (b) Rs. 7,00,000 (c) Rs. 9,00,000 (d) Rs. 4,95,000 Q73. What amount of deduction is allowed to an assessee while taxing interest income on compensation or enhanced compensation ? (a) 50% of interest (b) 75% of interest (c) 25% of interest (d) No deduction is allowed Q74. Mr. P has received a sum of Rs. 3,40,000 as interest on enhanced compensation for compulsory acquisition of land by state government in May, 2018, of this, only Rs. 12,000 pertains to the current year & the rest pertains to earlier years. The taxable for PY 2018-2019 would be (a) Rs. 12,000 (b) Rs. 6,000 (c) Rs. 3,40,000 (d) Rs. 1,70,000

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 compensation or enhanced compensation is received by legal heir due to death of assessee, then capital gain shall. (a) not be taxable in the hands of legal heir (b) be taxable in the hands of legal heir (c) taxable for the dead assessee (d) for initial compensation the legal heir will be taxable as representative assessee & for enhanced compensation he shall be himself taxable. Q76. Where a capital asset being urban agricultural land is compulsorily acquired then capital gain shall arise in PY. (a) of compulsory acquisition (b) in which full consideration is received (c) in which part or full consideration is received (d) Exempt u/s 10(37) Q77. Section 45(5A) is applicable to __. (a) All Assessees (b) Company only (c) Individual or HUF (d) All of the above Q78. In case of specified agreement u/s 45(5A), Sale Consideration shall be (a) FMV of the asset given up (b) Actual cost of the asset given up (c) Stamp Duty Value of the share (being land or building or both) in the project on the date of issue of certificate of completion + Consideration received in cash (d) AO will decide. Q79. Benefit u/s 45(5A) is not available if assessee transfers his share in the project to any person ___ (a) Before 1.4.2001 (b) Before 1.4.2019 (c) on/before issue of completion certificate (d) Always available Q80. Mr. P has acquired 10,000 equity share of ABC Ltd on 1.04.2007 @ 300 per share. The company buybacks 10,000 shares on 30.1.2019 @ 750 per share. Compute the capital gain taxable in his hands for AY 2018-19. (a) Rs. 9,88,000 (b) Rs. 9,88,370 (c) Rs. 9,77,370 (d) Rs. 7,50,000 Q81. If the goodwill of a business, right to manufacture or produce, tenancy rights, route permit or loom hours is acquired before 1.4.2001, the cost of acquisition of such asset shall be. (a) Cost of acquisition (b) FMV as on 1.4.2001 (c) Always taken as Nil (d) Higher of (a) or (b) Q82. Cost of improvement of tenancy rights, route permits or loom hours shall be. (a) It is always taken as Nil (b) always considered irrespective of period when it was incurred (c) considered when incurred on or after 1.4.2001 (d) considered when incurred before 1.4.2001 Q83. If goodwill of a profession which is self-generated is transferred, there will (a) liable to capital gain (b) not be liable any capital gain (c) be a STCG (d) be a LTCG

Q84. Mr. P acquired 1,000 equity shares of GGC Ltd. for Rs. 4 lac in April, 2004. He received bonus shares on 1:1 basis in April, 2018 from the company. He sold all the shares in January, 2019 through RSE for Rs. 8 lacs. Capital gain taxable in the hands of Mr. P for PY 2018-2019 is - (a) Rs. 4 lacs (b) Nil since entire gain is exempt u/s 112A (c) Rs. 2 lacs (d) Rs. 80,000 *Q85. On January 31, 2019 Mr. P has transferred self-generated goodwill of his profession for a consideration of Rs. 70,000 & incurred expenses of Rs. 5,000 for such transfer. You are required to compute capital gains taxable in hands of Mr. P . (a) Rs. 65,000 (b) Nil (c) Rs. 70,000 (d) None of the above Q86. If the bonus shares are acquired before 1.4.2001, the cost of acquisition of such bonus share shall be. (a) Cost for which it was acquired by the assesse (b) FMV as on 1.4.2001 (c) Always taken as Nil (d) Higher of (a) or (b) Q87. If the bonus shares are acquired on or after 1.4.2001, the cost of acquisition of such shares shall be. (a) Cost for which it was acquired by the assesse (b) FMV as on 1.4.2001 (c) Always taken as Nil (d) Higher of (a) or (b) Q88. Mr. P acquired 1,000 equity shares of Rs. 10 each in a listed company for Rs. 35,000 on 1st July, 2012. The company issued 1,000 rights shares in April, 2014 at Rs. 15 per share. The company issued 2,000 bonus shares in June, 2018. The market price was Rs. 50 per share before bonus issue. The cost of acquisition of bonus shares would be ___. (a) Nil (b) Rs. 20,000 (c) Rs. 50,000 (d) Rs. 1,00,000 Q89. Period of holding of bonus share allotted shall be reckoned from ___. (a) Date of holding of original shares (b) The date of offer of bonus shares (c) Date of allotment of bonus shares (d) Date of approval from shareholders in AGM Q90. Cost of acquisition of right shares to existing shareholder shall be. (a) market value of right share are offered (b) price at which these shares are offered (c) price at which these shares are offered plus the amount paid to the person renouncing the right (d) always taken as NIL Q91. Cost of acquisition of the right shares to a person who purchased right to acquire share from the existing shareholder shall be. (a) market value of right share are offered (b) price at which these shares are offered (c) price at which these shares are offered + Amount paid to the person renouncing the right (d) always taken as NIL

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 shareholder shall be. (a) market value of right share are offered (b) price at which these shares are offered (c) price at which these shares are offered plus the amount paid to the person renouncing the right (d) always taken as NIL Q93. In case of sale of right, ____ will always arise (a) STCG (b) LTCG (c) STCG/LTCG depending on Period of holding (d) No capital gain will arise. Q94. Cost of acquisition of the shares given under ESOP plan shall be. (a) FMV of the equity shares on the date of issue. (b) FMV of equity shares on date of exercising option (c) always taken as Nil (d) Price at which it was offered to employee. Q95. If entire block of depreciable asset is transferred after 36 months of its use, there will be. (a) STCG (b) LTCG (c) STCG/STCL (d) LTCG/LTCL Q96. Capital gain on transfer of depreciable asset shall be- (a) LTCG, if held for more than 36 months (b) LTCG, if held for more than 24 months (c) LTCG, if held for more than 12 months (d) STCG, irrespective of the period of holding Q97. Mr. P owns two machineries in the block of assets which is depreciable at the rate of 15%. The WDV of the block as on 1.4.2018 was Rs. 65,000. No other asset was acquired during the year. One of these machines was sold during the previous year for Rs. 75,000. Compute CG: (a) STCG of Rs. 10,000 in hands of Mr. P . (b) STCL of Rs. 10,000 in hands of Mr. P (c) LTCG of Rs. 10,000 in hands of Mr. P (d) No capital gain as depreciation would be allowed on one of the machines left with Mr. P Q98. In which of the following cases, STCG/STCL will arise? (a) WDV of block is ZERO on the last day of the PY (b) Block is Empty on the last day of PY (c) Both (a) & (b) (d) None of the above Q99. Capital gain in case of slump sale would be- (a) LTCG, if the undertaking/division transferred is held for more than 36 months (b) LTCG, if the undertaking/division transferred is held for more than 24 months (c) LTCG, if the undertaking/division transferred is held for more than 24 months (d) STCG, irrespective of the period of holding Q100. Indexation benefit is ____ in case of slump sale. (a) Available if undertaking is acquired on or after 1.4.2001 (b)Available if undertaking is acquired on or after 1.4.1981 (c) Not available (d) Depends on the mood of AO.

Q101. Cost of acquisition & cost of improvement in case of slump sale is (a) Nil (b) Nil if acquired on or after 1.4.2001 (c) Net worth of the undertaking. division. (d) Actual cost of acquisition Q102. Indexation benefit is ____ in case of capital gains on shares & debentures acquired in foreign currency by a non-resident under 1st proviso to Section 48. (a) available if undertaking is acquired on or after 1.4.2001 (b)Available if undertaking is acquired on or after 1.4.1981 (c) Not available (d) Depends on the mood of AO. Q103. Cost of acquisition of securities held with depository is to be computed by (a) Average cost method (b) First in first out (FIFO) method (c) Last in first out (LIFO) method (d) Weighted average cost method Q104. In case of securities held in demat form, for sale ____ should be considered & for determination of period of holding ____ should be considered. (a) Original Date of acquisition; Date of Entry in Demat A/c (b) Original Date of acquisition; Original Date of acquisition (c) Date of Entry in Demat A/c; Date of Entry in Demat A/c (d) Date of Entry in Demat A/c; Original Date of acquisition Q105. Period of holding in case of Shares held in a company in liquidation shall ___ the period subsequent to the date of liquidation. (a) Include (b) Exclude (c) Depends on AO (d) None of the above Q106. Distribution of assets at the time of liquidation of a company (a) is not a transfer in the hands of the company or the shareholders (b) is not a transfer in the hands of the company but capital gains shall arise in the hands of the shareholders. (c) is not a transfer in the hands of the shareholders but capital gains is chargeable to tax on such distribution in the hands of the company (d) is a transfer both in the hands of shareholders & company Q107. In case of distribution of assets at the time of liquidation of the company, sale consideration in the hands of shareholder of the shares of the company shall be (a) FMV of the assets received in kind (b) Deemed dividend u/s 2(22)(c). (c) FMV of the shares given up (d) FMV of the assets received in kind - Deemed dividend u/s 2(22)(c) Q108. Distribution of assets at the time of partition of HUF shall (a) be regarded as a transfer in the hands of HUF (b) be regarded as a transfer in hands of family members (c) not be regarded as transfer in the hands of HUF. (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. (a) be regarded as transfer for donor & taxable for donor. (b) not be regarded as transfer for donor & not taxable. (c) be regarded as transfer for donor & taxable for receiver. (d) not be regarded as transfer for donor & taxable for receiver. Q110. Mr. P has purchased a land on 1.4.2001 for Rs. 50,000 & constructed one floor on this land at the cost of 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 house has been gifted by him to his son on 1.1.2019. Calculate Capital Gains for Mr. P for PY 2018-2019. (a) Rs. 2,88,339 (b) Rs. 2,38,839 (c) Rs. 2,38,389 (d) Nil Q111.Ms. J inherited a vacant site land consequent to the demise of her father on 10th June, 2000. The land was acquired by her father on 10th April, 1970 for Rs. 40,000. The fair market value of the land on 1st April, 2001 was Rs. 60,000 & on the date of inheritance i.e., 10th June, 2000 was Rs. 2,00,000. The cost of acquisition for Ms. Smita is: (a) Rs. 10,000 (b) Rs. 40,000 (c) Rs. 60,000 (d) Rs. 2,00,000 Q112. Mr. B purchased convertible debentures for Rs. 5,00,000 during August 2001. The debentures were converted into shares in September 2012. These shares were sold for Rs. 15,00,000 in August 2018. The brokerage expenses are Rs. 50,000. You are required to compute the CG in case of Mr. B for AY 2019-20. (a) Nil (b) Rs. 1,54,762 (c) Rs. 5 lacs (d) Rs. 15,47,620

Q113. Which of the following transactions are not regarded as transfer? (a) Transfer of Rupee denominated bond of Indian company issued outside India by NR to another NR [Section 47(viiaa)]. (b) Redemption of Sovereign Gold Bonds by Individual issued under Sovereign Gold Bond Scheme, 2015 [Section 47(viic)]. (c) Conversion of Preference shares into Equity shares: Any transfer by way of conversion of preference shares of a company into equity shares of that company [Sec 47(xb)]. (d) All of the above.

Q114. Any lumpsum amounts or instalments received as a loan under a scheme of reverse mortgage from the bank by senior citizens is __.

(a) Exempt u/s 10(43) (b) Taxable (c) Exempt u/s 10(38) (d) Exempt upto Rs. 2.5 lacs Q115. For claiming exemption u/s 10(37), urban agricultural land is used for ___ by HUF or individual or a parent of individual during the period of ___immediately preceding date of transfer (a) Any purpose, three year (b) Agricultural purpose, three years (c) Agricultural purpose, 2 years (d) Business purpose, two years

Q116. Exemption u/s 54 is available to_____. (a) All Assesses (b) Individuals only (c) Individual or HUF (d) HUF only Q117. For claiming exemption u/s 54, assessee should transfer __. (a) A self occupied residential house property (b) A let out residential house property (c) A vacant house property (d) Any of the above Q118. For claiming exemption u/s 54, the assessee should purchase/construct __. (a) 1 Residential house property (b) A big mall (c) 2 residential house property (d) Factory Building Q119. For claiming exemption u/s 54, the assesses should purchase residential property within (a) 2 years after the date of transfer (b) 3 years after the date of transfer (c) within 1 year before or 2 years after the date of transfer (d) 1 year before & 3 years after the date of transfer Q120. For claiming exemption u/s 54, assessee should complete construction of residential property ____. (a) within 1 year before or 2 years after the date of transfer (b) within 1 year before or 3 years after the date of transfer (c) within three years after the date of transfer (d) within two years after the date of transfer Q121. The exemption u/s 54 shall be available __ (a) to the extent of capital gain invested in the residential house property (b) proportionate to the net sale consideration invested in the residential house property (c) to the extent of amount actually invested in the residential house property (d) to the extent of amount of net sale consideration invested in the residential house property

Q122. The new house purchased/constructed for which exemption was claimed u/s 54 should not be transferred within 3 years ___ (a) From the date of transfer of original house (b) From the date of purchase.construction of new house (c) From the end of PY when such new house was acquired (d) From the end of PY in which old house was transferred

Q123. If a new house property for which exemption was claimed u/s 54 is transferred within 3 years. (a) Capital gain exempt u/s 54 earlier shall be separately taxable as capital gains (b) The entire capital gain on new transfer shall be taxable (c) Capital gain exempt u/s 54 earlier shall be reduced from cost of acquisition of new house property (d) Capital gain exempt u/s 54 earlier shall be added to the cost of acquisition of new house property

Q124. Residential house is sold for Rs. 90 lac & the LTCGs computed are Rs. 50 lac. The assesses bought two residential houses for Rs. 30 lac & Rs. 20 lac respectively. The amount eligible for exemption u/s 54 would be__lacs. (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. (a) Any assessee (b) Individual only (c) Individual or HUF (d) HUF only

Q126. For claiming exemption u/s 54B, the capital asset transferred should be __. (a) urban agricultural land (b) rural agricultural land (c) any of (a) or (b) (d) none of (a) or (b)

Q127. For claiming exemption u/s 54B, the agricultural land must have been used for agriculture purpose by the HUF or the individual or his parents for at least __. (a) Any period of 2 years prior to the date of transfer (b) A period of 2 years immediately preceding the date of transfer (c) A period of 3 years immediately preceding the date of transfer (d) Any period of 3 years prior to the date of transfer

Q128. For claiming exemption u/s 54B the assessee should acquire. (a) urban agricultural land (b) rural agricultural land (c) any of (a) or (b) (d) none of (a) or (b)

Q129. For claiming exemption u/s 54D the assessee should purchase &.or construct another land & building within ___. (a) 3 years from the date of compulsory acquisition (b) 3 years from the date of receipt of compensation (c) within 3 years from the end of the previous year in which compulsory acquisition took place (d) within 2 years from the end of the previous year in which compulsory acquisition took place

Q130. For claiming exemption u/s 54B the new agricultural land should be purchased. (a) within 3 years from the date of transfer (b) within 2 years from the date of transfer (c) within 2 years from the end of the relevant PY (d) within 3 years from the end of the relevant PY

Q131. If new agricultural land purchased for which exemption was claimed u/s 54B is transferred within 3 years then. (a) Capital gain exempt u/s 54B earlier shall be separately taxable as capital gains (b) The entire capital gain on new transfer shall be taxable (c) Capital gain exempt u/s 54B earlier shall be reduced from cost of acquisition of new house property (d) Capital gain exempt u/s 54B earlier shall be added to the cost of acquisition of new house property

Q132. Exemption u/s 54D is available to. (a) any assessee (b) any assessee owning an industrial undertaking (c) an individual or HUF owning an industrial undertaking (d) only Individual

Q133. Exemption u/s 54D is available if there is a compulsory acquisition of ____. (a) L&B used by assessee for industrial undertaking for at least 1 yrs immediately preceding date of compulsory acquisition (b) L&B used by assessee for industrial undertaking for at least 2 yrs immediately preceding date of compulsory acquisition (c) L&B used by assessee for industrial undertaking for at least 3 yrs immediately preceding date of compulsory acquisition (d) L&B used by assessee for industrial undertaking for at least 4 yrs immediately preceding date of compulsory acquisition

Q134. Exemption u/s 54EC shall be available to. (a) any assessee (b) individual only (c) company assessee only (d) HUF only

Q135. Exemption u/s 54EC shall be available for t.f of __. (a) Any LTCA (b) Residential house property (c) Land or building or both (d) Any LTCA other than residential house property

Q136. U/s 54EC, assessee shall be allowed exemption of __. (a) Capital gain invested maximum of Rs. 50 lacs per FY (b) proportionate to the net consideration price invested (c) to the extent of the capital gain invested (d) Capital gain invested subject to max. of Rs. 50 lacs in aggregate for the FY & next FY.

Q137. U/s 54EC, capital gains on transfer of land or building or both are exempted if invested in the bonds issued by NHAI & RECL or other notified bond— (a) within 6 months from the date of transfer of the asset (b) within 6 months from the end of the relevant PY (c) within 6 months from the end of PY or due date for filing the return of income u/s 139(1), whichever is earlier (d) At any time before the end of the relevant PY

Q138. For Section 54EC capital gain account scheme is. (a) Applicable (b) Not applicable (c) applicable with the approval of the government (d) applicable or not at the discretion of the assessee

Q139. For claiming exemption u/s 54EC, an assessee has to invest the resultant capital gains within a specified period. Which of the following is not eligible for such investment? Bonds of ____. (a) NHAI Ltd (b) RECL Ltd (c) PFC Ltd (d) NABARD

Q140. LTCGs on 15th Oct 2018 is Rs. 105 lac. Assessee invested Rs. 50 lac in RECI bonds on 31st March, 2018 & Rs. 55 lac in NHAI bonds on 18th May, 2018. Exemption eligible u/s 54EC is ___. (a) Nil (b) Rs. 50 lacs (c) Rs. 55 lacs (d) Rs. 105 lacs

Q141. For claiming exemption u/s 54F, investment shall be done within. (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 10.10.2018. The indexed cost of acquisition amount to Rs. 18 lacs. He deposited Rs. 50 lacs in RECI bonds in January 2019 & another Rs. 50 lacs in March, 2019. The amount of capital gain liable to tax after exemption u/s 54EC is. (a) Rs. 2 lacs (b) Rs. 52 lacs (c) Rs. 102 lacs (d) Rs. 18 lacs Q143. Exemption u/s 54F is available to. (a) any assessee (b) an individual (c) an individual or HUF (d) none of the above Q144. Exemption u/s 54F is available if the asset transferred is _______. (a) LTCA other than residential house property (b) LTCA including residential house property (c) LTCA other than residential house property (d) STCA including residential house property Q145. Exemption u/s 54F is available _____. (a) to the extent of amount invested (b) proportionate to the net sale consideration so invested (c) to the extent of amount actually invested (d) none of the above Q146. Exemption u/s 54F is available if the new asset acquired is ___. (a) Any residential house property (b) Any house property (c) Residential house property for self-occupation (d) Residential house property for let out purposes Q147. For claiming exemption u/s 54F, the amount to the extent of net sale consideration is to be invested in the purchase of residential house property within ___. (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 Q148. Where after depositing the amount under capital gain scheme, the individual assessee has died, the amount lying in the capital gain scheme. (a) shall be taxable in the hands of legal heir (b) should be utilized by the legal heir for the specified purpose (c) shall be exempt in the hands of legal heir (d) shall be taxable in the hands of the person who deposited the amount Q149. Exemption u/s 54F shall not be allowed if the assessee on the date of transfer owns. (a) any residential house (b) a residential house which is let out (c) a house which is self-occupied (d) more than one residential house

Q150. U/s 54F, capital gains are exempted if ___. (a) LTCG arising on transfer of residential house is invested in acquisition of one residential house situated in or outide India (b) LTCG arising on transfer of a capital asset other than a residential house is invested in acquisition of one residential house situated in or outside India (c) net sale consideration on transfer of a capital asset other than a residential house is invested in acquisition of one residential house situated in India (d) short term or LTCG arising on transfer of a capital asset other than a residential house is invested in acquisition of one residential house situated in India

Q151. Under which section the assesses has to reinvest the entire amount of net consideration to claim full exemption for the LTCGs earned during a previous year (a) Sec 54EC (b) Sec 54F (c) Sec 54B (d) Sec 54D Q152. In which section the benefit of the depositing in the capital gain account scheme is not available for claiming the exemption of capital gains. (a) Sec 54F (b) Sec 54 (c) Sec 54D (d) Sec 54EC Q153. Amount unutilized in capital gain scheme for which exemption u/s 54B was claimed shall be treated as ___. (a) LTCG (b) STCG (c) STCG or LTCG depending upon the original capital gains (d) any kind of capital gains as per wish of the assessee

Q154. If the assessee wishes to deposit money under capital gain scheme for claiming exemption u/s 54, it should be deposited within_____ (a) six months from the date of transfer (b) six months from the end of the relevant PY (c) the due date of furnishing the ITR u/s 139(1) (d) six months or within due date of furnishing the ITR, whichever is earlier

Q155. Mr. P has sold a residential house for Rs. 51 lacs on 27.2.2019 & selling expenses have been Rs. 1 lacs. The Indexed Cost of acquisition for this house is Rs. 27.8 lacs. Mr. P has deposited Rs. 15 lacs in the capital gain accounts scheme on 30.7.2019 & Rs. 7.5 lacs on 18.8.2019. The last date for filling of ITR is 31.7.2019. Calculate CG: (a) LTCG of Rs. 7,10,000 (b) LTCG of Rs. 7,20,000 (c) LTCG of Rs. 7,00,000 (d) LTCG of Rs. 7,30,000

Q156. Amount unutilized in the capital gain scheme which was deposited for construction of house property, for which exemption was claimed u/s 54 is treated a LTCG of PY in which period of ________ (a) 2 years has expired from date of deposit (b) 2 years has expired from the date of transfer (c) 3 years has expired from the date of deposit (d) 3 years has expired from the date of transfer

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 ___. (a) LTCG & STCG (b) STCG u/s 111A (c) LTCG (d) STCG *Q159. LTCG on sale of listed equity oriented mutual fund on which STT has been paid shall be taxable @ (a) 10% irrespective of amount of LTCG (b) 20% irrespective of amount of LTCG (c) 10% after allowing exemption of Rs. 1 Lac out of LTCG (d) 20% after allowing exemption of Rs. 1 lac out of LTCG

Q160. Mr. P has transferred equity shares of ABC Ltd (a listed company) on 1.3.2019 & paid securities transaction tax (STT) on the same. He earned LTCG of Rs. 1,38,000. What will be the taxability in hands of Mr. P ? (a) Rs. 1,38,000 is taxable @ 10% (b) Rs. 1,38,000 is taxable @ 20% (c) Rs. 38,000 is taxable @ 20% (d) Rs. 38,000 is taxable @ 10%

Q161. STCG arising from the transfer of equity share & units of equity oriented mutual fund shall be Taxable. (a) Taxable @ 15% irrespective of amount of STCG (b) Taxable @ 10% irrespective of amount of STCG (c) Taxable @ 10% after allowing exemption of Rs. 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

Q167. Total income for AY 2019-2020 of a NR Individual including LTCG u/s 112 of Rs. 60,000 is Rs. 2,60,000. The tax on total income shall be ____. (a) Rs. 12,480 (b) Rs. 12,360 (c) Rs. 520 (d) Rs. 515

Q168. Total income for AY 2019-2020 i.e. PY 2018-2019 of a resident individual aged 58 yrs including LTCG u/s 112 of Rs. 50,000 is Rs. 2,70,000. The tax on total income is: (a) Rs. 2,080 (b) Rs. 2,060 (c) Rs. 1,030 (d) Rs. 1,040

Q169. Mr. P purchased 100 listed equity shares of Reliance Industries Limited for Rs. 300 each on 15.4.2018. On 15.3.2019 he had sold all the shares for Rs. 410 each & brokerage paid has been 1%. CG for PY 2018-2019 shall be: (a) LTCG of Rs. 10,590 (b) STCG of Rs. 10,590 (c) LTCG of Rs. 41,000 (d) STCG of U 1,000

Q170. Compute taxable Capital Gains of P for PY 2018-19 Cost of Jewellery; Purchased in FY 2001-02 Rs. 1,82,000 Sale price of Jewellary sold in January 2019 Rs. 11,50,000 Expenses on transfer Rs. 7,000 Residential house purchased in March 2019 Rs. 10,00,000

(a) LTCG of Rs. 79,244 (b) LTCG of Rs. 79,442 (c) LTCG of Rs. 79,424 (d) LTCG of Rs. 79,200

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

4A. INCOME UNDER THE HEAD SALARY - CA Study

Documents

Transcript of 4A. INCOME UNDER THE HEAD SALARY - CA Study