Indicate the correct answer:

1. As per AS – 14 purchase consideration is what is payable to

(a) Shareholders
(b) Creditors
(c) Debentureholders
(d) Shareholders and Debentureholders
Ans: (a) Shareholders

2. When amalgamation is in the nature of merger, the accounting method to be followed is:
(a) Equity method
(b) Purchase method
(c) Pooling of interests method
(d) Consolidated method
Ans: (c) Pooling of interests method

3. When amalgamation is in the nature of Purchase, the accounting method to be followed

is:
(a) Equity method
(b) Purchase method
(c) Pooling of interests method
(d) Consolidated method
Ans: (b) Purchase method

4. Amalgamation is said to be in the nature of merger if:

(a) All assets and liabilities of transferor company are taken over by the transferee
company.
(b) Business of transferor company is intended to be carried on by the transferee
company.
(c) Purchase consideration must be paid in equity shares by the transferee
company except for fraction shares.
(d) All of the above
Ans: (d) All of the above
5. Amalgamate adjustment account is opened in the books of transferee company to
incorporate:
(a) The assets of the transferor company
(b) The liabilities of the transferor company
(c) The statutory reserves of the transferor company
(d) The non – statutory reserves of the transferor company
Ans: (c) The statutory reserves of the transferor company

6. Goodwill arising on amalgamation is to be

(a) Retained in the books of the transferee company
(b) Amortised to income on a systematic basis normally five years
(c) Adjusted against reserves or profit and loss account balance
(d) All of the above
Ans: (b) Amortised to income on a systematic basis normally five years

7. Under pooling of interest method the difference between the purchase consideration and
share capital of the transferee company should be adjusted to:
(a) General reserve
(b) Amalgamation adjustment account
(c) Goodwill or capital reserve
(d) None of the above
Ans: (a) General reserve

8. Under purchase method the difference between the purchase consideration and share
capital of the transferee company should be adjusted to:
(a) General reserve
(b) Amalgamation adjustment account
(c) Goodwill or capital reserve
(d) None of the above
Ans: (c) Goodwill or capital reserve

9. For amalgamation in the nature of merger, the shareholders holding at least ______ or
more of the equity shares of the transferor company becomes the equity shareholders of
the transferee company.
(a) 51%
(b) 90%
(c) 99%
(d) 100%
Ans: (b) 90%

10. AS – 14 is not applicable if when transferee company acquires transferor company and
transferor company:
(a) Ceases to exist
(b) Separate entiry is Continue to exist
(c) Applied in all cases
(d) None of the above
Ans: (b) Separate entiry is Continue to exist

11. A Ltd. and B Ltd. go into liquidation and a new company X Ltd. is formed. It is a case of:
(a) Absorption
(b) External reconstruction
(c) Amalgamation.
Ans.(c) Amalgamation.

12. X Ltd. goes into liquidation and a new company Z Ltd. is formed to take over the business
of X Ltd. It is a case of:
(a) Absorption
(b) External reconstruction
(c) Amalgamation.
Ans.(b) External reconstruction

13. X Ltd. goes into liquidation and an existing company Z Ltd. purchases the business of X
Ltd. It is a case of:
(a) Absorption
(b) External reconstruction
(c) Amalgamation.
Ans.(a) Absorption

14. Accumulated profits include:

(a) Provision for doubtful debts
(b) Superannuation fund
(c) Workmen's compensation fund.
Ans.(c) Workmen's compensation fund.

15. Liabilities (not accumulated profits) of a company include—

(a) General reserve
(b) Pension fund
(c) Dividend equalisation fund.
Ans. (b) Pension fund

16. When the expenses of liquidation are to be borne by the vendor company, then the
vendor company debits:
(a) Realisation account
(b) Bank account
(c) Goodwill account.
Ans. (a) Realisation account

17. When the expenses of liquidation are to be borne by the purchasing company, then the
purchasing company debits:
(a) Vendor company's account
(b) Bank account
(c) Goodwill account.
Ans. (c) Goodwill account.

18. When the purchasing company makes payment of the purchase consideration, it debits:
(a) Business purchase account
(b) Assets account
(c) Vendor company's account.
Ans. (c) Vendor company's account.

19. The vendor company transfers preliminary expenses (at the time of absorption) to:
(a) Equity shareholders' account
(b) Realisation account
(c) Purchasing company's account.
Ans. (a) Equity shareholders' account

20. For paying liabilities not taken over by the purchasing company, the vendor company
credits:
(a) Realisation account
(b) Bank account
(c) Liabilities account.
Ans.(b) Bank account

21. In case of inter-company holdings, the purchasing company, at the time of payment of
the purchase consideration, surrenders the shares in the vendor company by crediting:
(a) Vendor company's account
(b) Shares in the vendor company account
(c) Share capital account.
Ans.(b) Shares in the vendor company account

22. The share capital, to the extent already held by the purchasing company, is closed by the
vendor company by crediting it to:
(a) Share capital account
(b) Purchasing company's account
(c) Realisation account.
Ans.(c) Realisation account.
 1. Income tax is levied on-
(A) Monthly basis (B) Quarterly basis
(C) Half-yearly basis (D) Yearly basis

2. Income tax is payable on-

(A) Earned income (B) Salary
(C) Taxable income (D) Every income

3. Assessee includes-
(A) Individual (B) HUF
(C) Company (D) All of the above

4. Exempted income does not includes-

(A) Agricultural income in India (B) Post office saving bank interest
(C) Indian company dividend (D) T.V prices

5. Income tax is-

(A) Direct tax (B) Indirect tax
(C) Corporate tax (D) A and C both

6. The authority on whose recommendation the amt. collected as income tax is

distributed to state govt.–
(A) CBDT (B) Planning Commission
(C) Finance Commission (D) Chief Minister

7. Income tax was first time levied in the year-

(A) 1960 (B) 1950
(C) 1860 (D) 1881

8. In case of delay payment of income tax penalty shall be charged as-

(A) 2% per annum (B) 1% per month
(C) 3% per month (D) 1.5% per annum

9. Number of digits in a PAN card are-

(A) 9 (B) 8
(C) 10 (D) 12

10. Income tax department works under-

(A) State govt. (B) President
(C) Income tax commission (D) CBDT
11. Agricultural income is-
(A) Income from sale of crop (B) Income from nursery
(C) Income from preparation of crop (D) All of above

12. Non-agricultural income is-

(A) Dairy income (B) Mining
(C) Fishery (D) All of above

13. Partly agricultural income is-

(A) Tea garden (B) Nursery
(C) Self growing trees (D) none of above

14. Agricultural income is considered when calculating tax if it is-

(A) More than rs. 5000
(B) More than rs. 10000
(C) More than rs. 5000 & total income is exceeding exemption limit
(D) Huge amount

15. Percentage of income from growing & manufacturing tea in India is considered as
agricultural income-
(A) 50% (B) 60%
(C) 65% (D) 70%

16. Agricultural income is not integrated with non-agricultural income in case of-
(A) Firm (B) Cooperative society
(C) Individual (D) A & B both

17. Income related to land but not agricultural income-

(A) Income of a purchaser of standing crop
(B) Income from mines
(C) Income from royalty on mines
(D) All of above

18. Sum of various heads is called-

(A) Taxable income (B) Total income
(C) Gross total income (D) Adjusted income

19. A person can earn income from-

(A) One head (B) Two heads
(C) Various heads (D) any of above

20. Previous year is-

(A) Preceding year (B) Income earning year
(C) Tax calculating year (D) Income computation year
21. Exempted income is-
(A) Not taxable under income tax (B) Not included in total income
(C) Agricultural income (D) All of above

22. Not tax-free for member of parliament-

(A) Daily allowance (B) Committee allowance
(C) Constituency allowance (D) Salary as M.P.

23. Minor income is exempt to the extent of-

(A) Rs. 1000 (B) Rs. 1500
(C) Rs. 5000 (D) fully exempt

24. It is exempted income-

(A) Dividend from Indian company (B) Interest from Indian company
(C) Dividend from foreign company (D) cooperative dividend

25. In which section of the income tax act exempted incomes have been mentioned-
(A) Sec.10 (B) Sec. 80C
(C) Sec.13 (D) Sec.2

26. Types of assessees are from residential point of view-

(A) 2 (B) 3
(C) 4 (D) Many

27. Which sec. is related to residential status-

(A) 2 (B) 4
(C) 5 (D) 6

28. Residents includes-

(A) NRI (B) Ordinarily resident
(C) Not ordinarily resident (D) B & C both

29. Company may be-

(A) Resident (B) Non-resident
(C) Not ordinarily resident (D) Resident or non-resident

30. Basic condition will be for a person who leaves India for employment-
(A) At least 182 days in India
(B) At least 60 days in previous year & 365 days in preceding 4 years
(C) At least 730 days in preceding 7 years
(D) All of above

31. Section related to computation of income from salary is-

(A) Sec 15 to17 (B) Sec 5 to 8
(C) Sec 11 to 15 (D) Sec 17 to 20
32. Non-Monetary salary includes-
(A) Allowances (B) Bonus
(C) Commission (D) Perquisites

33. Transfer of old movable assets will be tax-free if it is used for-

(A) 1 year (B) 5 years
(C) 10 years (D) 20 years

34. In HRA, Salary includes-

(A) Basic salary (B) Commission
(C) A and B both (D) Allowances

35. Entertainment allowance will be deducted from gross salary in case of-
(A) Govt. employee (B) Non-govt. employee
(C) A and C both (D) None of the above

36. Deduction from salary is allowed under-

(A) Sec 14 (B) Sec 15
(C) Sec 16 (D) Sec 17

37. Interest credited to RPF is taxable if it is more than-

(A) Bank interest rate (B) 10%
(C) 9.5% (D) Whole amount

38. Education allowance is exempted for children-

(A) 1 (B) 4
(C) 2 (D) No limit

39. Medical bills reimbursed regarding private hospital are exempt-

(A) Up to Rs. 10000 (B) Up to Rs. 15000
(C) Up to Rs. 20000 (D) Whole amount

40. Deduction allowed against gross salary-

(A) Professional tax (B) Entertainment tax
(C) Income tax (D) Insurance premium

41. In which section gratuity has been mentioned-

(A) Sec 9(6) (B) Sec 10(10)
(C) Sec 12(5) (D) Sec 7(2)

42. Maximum limit for gratuity is-

(A) 3 lakhs (B) 5 lakhs
(C) 10 lakhs (D) 8 lakhs
43. Exemption is available for govt. employee at retirement-
(A) Gratuity (B) Statutory P.F
(C) Leave entrenchment (D) All of above

44. Regular pension is taxable for-

(A) Govt. employee (B) Private employee
(C) Govt. & private both (D) None

45. Gratuity received by a govt. employee is-

(A) Fully exempted (B) Partly exempted
(C) Fully taxable (D) Exempted up to Rs. 100000

46. House property includes-

(A) Farm house income (B) Sub-tenant income
(C) House for self-business (D) none of the above

47. Property income is exempt for-

(A) Local authority (B) Political party
(C) Trade union (D) All of the above

48. Annual value is determined under which section of Income Tax Act-
(A) Sec 21 (B) Sec 23
(C) Sec25 (D) Sec 27

49. In case of rental house property only such municipal tax is deducted which is-
(A) Paid by tenant (B) Actual payable amount
(C) Paid by owner (D) All of the above

50. Deduction from annual value is allowed under section-

(A) Sec 24 (B) Sec 25
(C) Sec27 (D) Sec 28

51. Standard deduction from annual value is allowed as-

(A) 20%of AV (B) 15% of AV
(C) 25% of AV (D) 30% of AV

52. Interest on loan for self-occupied house taken before 1st April, 1999 will be allowed up
to-
(A) Rs 50000 (B) Rs 100000
(C) Rs 30000 (D) Rs 150000

53. Deduction allowed from annual value-

(A) Statutory deduction (B) Interest on loan for constitution
(C) Interest on loan for repair (D) All of above
54. Income from house for self-business is-
(A) Net profit (B) Fair rent
(C) Municipal value (D) Nil

55. An individual assessee can show maximum loss from a self-occupied residential house
property-
(A) Rs. 30000 (B) Rs. 50000
(C) Rs. 150000 (D) No limit

56. Give the full form of STT-

(A) Security Transaction Tax (B) State Toll Tax
(C) Share Transfer Tax (D) Security Transmission Tax

57. The rate of depreciation allowed on machinery is-

(A) 10% (B) 5%
(C) 15% (D) 20%

58. What part of preliminary expense is disallowed if whole amount is debited to P&L a/c-
(A) 1/5 (B) 1/2
(C) 1/4 (D) 4/5

59. Cash payment over 20000 in a single day is-

(A) Fully allowed (B) Partly allowed
(C) Fully disallowed (D) Allowed for special persons

60. Disallowed expenses includes –

(A) Interest on own capital (B) Owner’s life insurance premium
(C) Provision (D) All of the above

62. Sec.45 is related to-

(A) Capital gain (B) Capital assets
(C) Assets (D) Capital expenses

63. Capital assets includes-

(A) Stock in trade (B) Personal effects
(C) Gold deposit bonds (D) Shares

64. Types of capital gains are-

(A) 1 (B) 2
(C) 3 (D) 4

65. Indexation will be done on-

(A) Debentures (B) Other Securities
(C) Shares (D) All of the above
66. Index no. before 31st march, 1981 is-
(A) 0 (B) 20
(C) 100 (D) 150

67. Exemption is not allowed in which section?

(A) 54 (B) 54B
(C) 54E (D) 54EC

68. Indexation will be allowed to –

(A) STCG (B) LTCG
(C) Both (D) None of the above

69. The maximum amount of deduction on family pension is-

(A) 15000 (B) 20000
(C) 25000 (D) 10000

70. T.D.S is not deducted on lottery income up to-

(A) Rs.5000 (B) Rs.10000
(C) Rs.15000 (D) Rs.20000

71. Income from other sources includes-

(A) Indian company dividend (B) Dividend from units
(C) Foreign company dividend (D) All of the above

72. Interest from tax-free govt. securities is made-

(A) Gross-up (B) Net up
(C) Not included (D) Included as it is

73. Income of Indian cricketers for playing test match is taxable under the head-
(A) Professional income (B) Income from salary
(C) Income from other sources (D) None

74. Clubbing of income means-

(A) Addition income of two partners
(B) Inclusion of income of other person in assessee’s income
(C) Total of income of various heads
(D) Collection of income

75. Minor’s income is clubbed to-

(A) Father’s income (B) Mother’s income
(C) Father’s or mother’s income, whichever is greater
(D) Both mother’s & father’s income

76. The income of minor is not clubbed to the following limit-

(A) Rs. 1000 (B) Rs. 1500
(C) Rs. 10000 (D) whole income
77. Sections related to clubbing of income-
(A) sec.60-69 (B) sec.60-64
(C) sec.60-67 (D) sec.68-69

78. Deemed incomes mentioned in-

(A) sec.60-64 (B) sec.65-67
(C) sec.68-69 (D) All of above

79. Loss from speculated business can be carried forward for-

(A) 2years (B) 4years
(C) 8years (D) Unlimited years

80. Loss from owning and maintaining race horses can be set up against-
(A) All heads (B) All heads except salary
(C) Same type of income (D) Speculated business profit

81. Which loss can be set up against income from salary-

(A) H.P Loss (B) Loss from business
(C) STCL (D) Owning and maintaining race horse

82. From which head of income an assessee never occur any loss?
(A) HP (B) Salary
(C) Capital gain (D) Business and profession

83. Unabsorbed depreciation can be set off to the extent of-

(A) 4 years (B) 8 years
(C) No time limit (D) Never

84. Maximum deduction allowed for donation to P.M Drought relief fund
(A) 100% (B) 40%
(C) 50% (D) 75%

85. Deduction u/s 80 ‘C’ is allowed in connection with-

(A) LIP (B) Contribution to PPF
(C) Tuition fees (D) All of the above

86. Maximum deduction allowed u/s 80’C’-

(A) RS.50000 (B) RS.100000 (Rs. 1.50 Lakh from A.Y. 2015-16)
(C) RS.20000 (D) Whole amount

87. Deduction in respect of medical insurance premium is allowed under which section-
(A) 80C (B) 80D
(C) 80DD (D) 80U
88. Maximum deduction allowed for senior citizen under sec. 80D is-
(A) 5000 (B) 15000
(C) 25000 (D) 20000

89. Maximum deduction in respect of royalty income of author u/s QQB is-
(A) 300000 (B) 200000
(C) 100000 (D) 50000

90. Person with disability is allowed a fixed deduction of-

(A) 20000 (B) 50000
(C) 100000 (D) 150000

91. Expenditure on severe disease u/s 80DDB is allowed up to-

(A) 20000 (B) 15000
(C) 40000 (D) 50000

92. Which of the following donations is eligible for 100% deduction?

(A) National children fund (B) National sports fund
(C) Rajeev Gandhi Foundation (D) J.L. Nehru Memorial Fund

93. Mr. Varun Roy contributed to a political party, he can avail deduction-
(A) 80G (B) 80GGB
(C) 80GGC (D) 80GGD

94. The total income will be round off to the nearest multiple of-
(A) 5 (B) 10
(C) 100 (D) 1000

95. Total income of an individual does not includes-

(A) Foreign company dividend (B) Salary of a partner in a firm
(C) Commission (D) Agricultural income

96. Gross total income means-

(A) Sum of heads of income (B) Total income after deducting deductions
(C) Income on which tax calculated (D) none of these

97. Sum of various heads called-

(A) Taxable income (B) Total income
(C) Gross total income (D) Adjusted income

98. A person can earn income from-

(A) One head (B) Two heads
(C) Various heads (D) Any of above
99. The tax rate of long term capital gain is-
(A) 10% (B) 15%
(C) 20% (D) 25%

100. The income tax rate on STCG on shares sold through stock exchange is-
(A) 10% (B) 15%
(C) 20% (D) 25%

101. Tax deducted on lottery is-

(A) 20% (B) 25%
(C) 30% (D) 35%

102. Education cess is calculated on-

(A) Total income (B) Tax on total income
(C) Taxable income (D) Agricultural income

103. Rate of education cess on total income is-

(A) 2% (B) 3%
(C) 2.5% (D) 4%

104. Minimum age for super senior citizen is-

(A) 65 years (B) 70 years
(C) 75 years (D) 80 years

105. Items are taxed at special rates-

(A) Long-term capital gains (B) Short -term capital gains on shares
(C) Lottery & horse race (D) All of above

106. This is rounded off for tax purpose-

(A) Total income (B) Gross income
(C) Net income (D) Agricultural income

107. Tax-free limit for women assessee for assessment year 18-19 is-
(A) 350000 (B) 200000
(C) 250000 (D) 300000

108. The deduction for donation to National Foundation for communal harmony is-
(A) 100% (B) 50%
(C) 100% of qualifying amount (D) 50% of qualifying amount

109. The types of partition of a HUF includes-

(A) Complete (B) Partial
(C) A AND B both (D) Not allowed
110. Partial partition in HUF affected after which year is not recognized for tax purpose –
(A) 31 march, 1960 (B) 31 march, 1970
(C) 31 march, 1978 (D) 31 march, 1982

111. What is the place of Karta in HUF-

(A) Major member (B) Minor member
(C) Male member only (D) any one of above

112. Interest of member in HUF is decided by-

(A) Hindu law (B) Indian constitution
(C) Muslim law (D) Income tax authority

113. Under which section HUF is not entitle to deduction from GTI-
(A) 80C (B) 80G
(C) 80E (D) 80DD

114. Who is liable to pay tax in HUF-

(A) Karta (B) Coparceners
(C) Minor member (D) None of the above

115. Income included in the income of family-

(A) Only family business income (B) Only ancestral property income
(C) Income from other head except salary (D) Karta’s income

116. Income of property transferred after 31st Dec. 1969 by member to family shall be-
(A) Included (B) Not included
(C) Partially included (D) none of above

117. Interest on capital of a partner is allowed@-

(A) 9% (B) 10%
(C) 11% (D) 12%

118. Remuneration allowed to partners is-

(A) Amount allowed u/s 40(b) (B) Whole amount of deed
(C) Up to 150000 (D) No remuneration

119. Rate of tax applicable on the total income of firm is-

(A) 10% (B) 20%
(C) 30% (D) 40%

120. Surcharge on tax on firm’s total income is-

(A) Applicable (B) Not applicable
(C) Applicable if total income crosses 1crore (D) Applicable if there is capital gain
121. Interest is paid to partners u/s-
(A) 40(a) (B) 40(b)
(C) 40(c) (D) 40(d)

122.”Tax planning is a moral way of tax saving, in it a tax payer reduce tax liability
honestly and it’s along term process.” This definition is given by-
(A) Prof. Coldar (B) Prof. Dalton
(C) Alderson (D) Andrew

123. Nature of tax planning includes-

(A) Legal (B) Moral
(C) Honest effort (D) All of these

124. Object of tax planning is-

(A) Avoidance of tax (B) Minimize of tax liability
(C) Payment of tax at time (D) Differment of tax

125. In the tax avoidance the provisions law-

(A) Not abided (B) Misused
(C) Wrong interpretation (D) All of above

126. Causes of tax evasion-

(A) Higher tax rates (B) Complex of provisions
(C) Corruption (D) All of above

127. Better way of reducing tax liability is-

(A) Tax evasion (B) Tax avoidance
(C) Tax planning (D) Both (A) and (B)

128. Valuation of rent free house will be according to-

(A) Salary (B) Area
(C) Owner (D) Population

129. Free travel concession will be allowed-

(A) Once in a year (B) 2 times in one year
(C) 4 times in 2 years (D) 2 times in 4 years

130. LTCG in case of transfer of listed shares is-

(A) Taxable @15% (B) Taxable @20%
(C) Tax-free (D) Taxable @10%

131. One self- occupied house is-

(A) Taxable (B) Partly taxable
(C) Taxable in some cases (D) Tax-free
132. The provision regarding TDS is given under which sec. of income tax-
(A) Sec.192-206 (B) Sec.90-120
(C) Sec.126-150 (D) Sec.185-204

133. The rate of TDS on securities other than govt. securities is-
(A) 5% (B) 10%
(C) 15% (D) 20%

134. TDS rate for lottery is only available if the winning amount is more than-
(A) Rs.1000 (B) Rs.5000
(C) Rs.10000 (D) Rs.50000

135. Form no. applicable for TDS in respect of salary is-

(A) 15 (B) 16
(C) 17 (D) 18

136. Which section is related to liability to payment of advance tax?

(A) 206 (B) 207
(C) 208 (D) 209

137. Due date for filing returns are-

(A) 15 Sept. (B) 15 Dec.
(C) 15 mar. (D) All of above

138. Advance tax will not be paid if tax payable after TDS is more than or equal to –
(A) Rs.5000 (B) Rs.10000
(C) Rs.15000 (D) Rs.20000

139. Liability of advance tax arises when-

(A) Total income is more than exemption limit
(B) Probable tax liability in the current year is 10000 or more
(C) The Assessee leaves India
(D) All of above

140. Return form related to individual & HUF not having business/profession income is-
(A) ITR-1 (B) ITR-2
(C) ITR-3 (D) ITR-4

141. Sec. related to self-assessment-

(A) Sec.140 (B) Sec.140 (A)
(C) Sec.140 (B) (D) Sec.140(C)

142. Which sec. deal with PAN-

(A) 139A (B) 140A
(C) 147A (D) 154A
143. If filing of return within assessment year is not done then penalty will be charged as-
(A) Rs 1000 (B) Rs 5000
(C) Rs 2000 (D) Rs 10000

144. ITR-7 is related to-

(A) Individual assessee (B) firm
(C) Company (D) Charitable institution

145. Due date for filing of return in case of company or firm-

(A) 30 June (B) 31 July
(C) 30 Sept. (D) 31 Dec.

146. Re-assessment section is-

(A) 145 (B) 147
(C) 148 (D) 154

147. In which year Central Board of Revenue Act came into existence-
(A) 1950 (B) 1956
(C) 1963 (D) 1972

148. Maximum no. of members in CBDT is-

(A) 4 (B) 5
(C) 6 (D) unlimited

149. Most important authority in income tax department is-

(A) Inspectors (B) Assessing officer
(C) Tax recovery officer (D) Commissioner of IT

150. Commissioner of Income Tax is appointed by-

(A) Income tax dept. (B) Ministry of finance
(C) Central govt. (D) Chairman of CBDT

151. Rights of CBDT are-

(A) Budget preparation (B) Determine IT rates
(C) Preparing income tax rules (D) All of above

152. Form no. of appeal-

(A) 30 (B) 35
(C) 38 (D) 40

153. Time limit for appeal-

(A) 30 days (B) 60 days
(C) 90 days (D) 15 days
154. Appeal may be made to-
(A) Commissioner (B) Appellate tribunal
(C) High court (D) All of above

155. National tax tribunal is also known as-

(A) High court (B) Appellate tribunal
(C) Supreme court (D) Revenue court

156. Sec. related to offence of making false statement-

(A) 250 (B) 268
(C) 277 (D) 284

157. Max. penalty for concealment of particulars is-

(A) 50% (B) 100%
(C) 200% (D) 300%

158. Sec. related to failure to furnish report is-

(A) 92 F (B) 271(F)
(C) 271(CA) (D) 271(A)

159. Which sec. of IT act defines cooperative society?-

(A) 2(17) (B) 2(18)
(C) 2(19) (D) 2(21)

160. Cooperative society cannot earn its income from the head-
(A) Salary (B) Business & profession
(C) Capital gain (D) other sources

161. Deduction under sec. 80P is available to-

(A) Company (B) Firm
(C) Cooperative society (D) All of the above

162. Special provision relating to non-resident is given u/s-

(A) 110-112 (B) 111A-111C
(C) 115C-115I (D) 116A-116E

163. Non-resident’s income outside India is-

(A) Fully taxable (B) Fully tax-free
(C) Partly taxable (D) Taxable in some cases

164. Foreign individual assessee may be-

(A) Ordinary resident (B) not-ordinarily resident
(C) Non-resident (D) Any one of above
165. Under which of income tax act, company is describe-
(A) 2(10) (B) 2(15)
(C) 2(17) (D) 2(20)

166. Minimum alternate tax is defined u/s-

(A) 110A (B) 110AB
(C) 115J (D) 115JB

167. Flat rate on foreign company’s income is-

(A) 10% (B) 20%
(C) 30% (D) 40%

168. Surcharge is levied on company assessee if the total income exceeds-

(A) Rs.10 lakhs (B) Rs.50 lakhs
(C) Rs.1 crores (D) Rs.10 crores

169. Sec. 11A is related to-

(A) Minimum alternate tax (B) Surcharge
(C) Transaction tax (D) Donation to political party

1. Surcharge of 10 per cent is payable by an individual where the total income exceeds:
a) Rs.7,50,000
b) Rs.8,50,000
c) Rs.10,00,000
d) None of the three

2. Additional surcharge (education cess) of 3% per cent is payable on

a) Income tax
b) Income tax plus surcharge
c) Surcharge

3. Family pension received by a widow of a member of the armed forces where the death of
the member has occurred in the course of the operational duties, is
a) Exempt up to Rs.3,00,000
b) Exempt up to Rs. 3,50,000
c) Totally exempt under section 10(19)
d) Totally chargeable to tax

4. In respect of shares held as investment, while computing the capital gains, securities
transaction tax paid in respect of sale of listed shares sold in a recognized stock exchange,
a) Is deductible up to Rs.1,00,000
b) Is deductible up to Rs.2,00,000
c) Is deductible if C.G.’s is < 5,00,000
d) Is not deductible at all
5. Gift of Rs 5,00,000 received on 10 July, 2008 through account payee cheque from a non-
relative regularly assessed to income-tax, is
a) A capital receipt not chargeable to tax
b) Chargeable as other sources
c) Chargeable to tax as business income
d) Exempt up to Rs.50,000 and balance chargeable to tax as income from other source

6. The rate of tax that is leivable on STCG arising from transfer of Equity shares of a
Company or units of an Equity oriented fund is
a) 10%
b) 15%
c) 20%

9. Assessee is always a person but a person may or may not be an assessee.

a) True
b) False
Ans a

10. A person may not have assessable income but may still be assessee.
a) True
b) False
Ans a

11. In some cases assessment year and previous year can be same financial year.
a) True
b) False
Ans a

12. A.O.P should consist of :

a) Individual only
b) Persons other than individual only
c) Both the above
Ans c

13. Body of individual should consist of :

a) Individual only
b) Persons other than individual only
c) Both the above
Ans a

14. A new business was set up on15-11-2008 and it commenced its business from 1-12-
2008.The
first previous year in this case shall be:
a) 15-11-2008 to 31-3-2009
b) 1-12-2008 to 31-3-2009
c) 2008-2009
Ans a

15. A person leaves India permanently on 15-11-2008.The assessment year for income
earned till 15-11-2008 in this case shall be:
a) 2007-08
b) 2008-09
c) 2009-10
Ans b

17. Surcharge in case of a firm for assessment year 2009-10 is payable at the rate:
a) 2.5% of income-tax payable
b) 5% of income-tax payable
c) 10% of income-tax payable
Ans c

18. The maximum amount on which income-tax is not chargeable in case of firm is:
a) Rs.1,00,000
b) Rs. 90,000
c) Nil
Ans c

20. A local authority is taxable at flat rate of income-tax.

a) True
b) False
Ans a

21. A co-operative society is taxable at flat rate of 30% on TI.

a) True
b) False
Ans b

22. Education cess is leviable @:

a) 3%
b) 5%
c) 2.5%
Ans a

23. Education cess is leviable in case of:

a) An individual and HUF
b) A company assessee only
c) All assesses
Ans c

24. In case of an individual and HUF education cess is leviable only when the total income of
such assessee
a) Exceeds Rs.10,00,000
b) No income limit
Ans b

25. The TI of the assessee has been computed as Rs.2,53,494.90. For rounding off ,the TI will
be
taken as:
a) Rs.2,53,500
b) Rs.2,53,490
c) Rs.2,53,495
Ans a

26. Income tax is rounded off to:

a) Nearest ten rupees
b) Nearest one rupee
c) No rounding off of tax is done
Ans a

28. Residential status to be determined for :

a) Previous year
b) Assessment year
c) Accounting year
Ans a

29. Incomes which accrue or arise outside India but are received directly into India are
taxable in case of
a) Resident only
b) Both ordinarily resident and NOR
c) Non-resident
d) All the assesses
Ans d

30. Income deemed to accrue or arise in India is taxable in case of :

a) Resident only
b) Both ordinarily resident and NOR
c) Non-resident
d) All the assesses
Ans d

31. Income which accrue outside India from a business controlled from India is taxable in
case of:
a) Resident only
b) Not ordinarily resident only
c) Both ordinarily resident and NOR
d) Non-resident
Ans c

32. Income which accrue or arise outside India and also received outside India taxable in
case of:
a) resident only
b) not ordinarily resident
c) both ordinarily resident and NOR
d) none of the above
Ans a

33. TI of a person is determined on the basis of his:

a) residential status in India
b) citizenship in India
c) none
d) both of the above
Ans a

34. Once a person is a resident in a P.Yr. he shall be deemed to be resident for subsequent
P. Yr.
a) True
b) False
Ans b

35. Once a person is resident for a source of income in a particular P. Y r. he shall be

deemed to be
resident for all other sources of income in the same P. Yr :
a) True
b) False
Ans b

36. R Ltd., is an Indian company whose entire control and management of its affairs is
situated
outside India. R Ltd., shall be :
a) Resident in India
b) Non-resident in India
c) Not ordinarily resident in India
Ans a

37. R Ltd., is registered in U.K. The control and management of its affairs is situated in India
.R Ltd
shall be :
a) Resident in India
b) Non-resident
c) Not ordinarily resident in India
Ans b

38. R, a foreign national visited India during previous year 2008-09 for 180 days. Earlier to
this he
never visited India. R in this case shall be:
a) Resident in India
b) Non-resident
c) Not ordinarily resident in India
Ans b

39. An Indian company is always resident in India

a) True
b) False
Ans a

40. Dividend paid by an Indian company is:

a) Taxable in India in the hands of the recipient
b) Exempt in the hands of recipient
c) Taxable in the hands of the company and exempt in the hands of the recipient
Ans c

41. Agricultural income is exempt provided the:

a) Land is situated in India
b) Land is situated in any rural area India
c) Land is situated whether in India or outside India.
Ans a

42. If the assessee is engaged in the business of growing and manufacturing tea in India ,the
agricultural income in that case shall be:
a) 40% of the income from such business
b) 60% of the income from such business
c) Market value of the agricultural produce minus expenses on cultivation of such produce
Ans b

43. Agricultural income is :

a) Fully exempt
b) Partially exempt
c) Fully taxable
Ans a

44. The partial integration of agricultural income, is done to compute tax on:
a) Agricultural income
b) non agricultural income
c) Both agricultural and non agricultural income
Ans b

47. A local authority has earned income from the supply of commodities outside its own
jurisdictional area. It is :
a) Exempt
b) Taxable
Ans b

48. R, a chartered accountant is employed with R Ltd., as an internal auditor and requests
the employer to call the remuneration as internal audit fee. R shall be chargeable to tax for
such fee under the head.
a) Income from salaries
b) Profit and gains from Business and Profession
c) Income from other sources.
Ans a

49. R, who is entitled to a salary of Rs.10,000 p.m. took an advance of Rs.20,000 against the
salary in the month of March 2009.The gross salary of R for assessment year 2009-10 shall
be:
a) Rs.1,40,000
b) Rs.1,20,000
c) None of these two
Ans a

51. R gifted his house property to his wife in 2000. R has let out the house property @
Rs.5,000 p.m. The income from such house property will be taxable in the hands of :
a) Mrs. R
b) R. However , income will be computed first as Mrs. R’s income and thereafter clubbed in
the income of R
c) R as he will be treated as deemed owner & liable to tax
Ans c

52. R transferred his house property to his wife under an agreement to live apart. Income
from such house property shall be taxable in the hands of :
a) R as deemed owner
b) R. However, it will be first computed as Mrs. R income & Thereafter clubbed in the hands
of R
c) Mrs. R
Ans c

53. R gifted his house property to his married minor daughter. The income from such house
property shall be taxable in the hands of :
a) R as deemed owner.
b) R. However, it will be first computed as minor daughters income & clubbed in the income
of R.
c) Income of married minor daughter.
Ans c

54. A has two house properties. Both are self-occupied. The annual value of
a) Both house shall be nil
b) One house shall be nil
c) No house shall be nil
Ans b

55. An assessee has borrowed money for purchase of a house & Interest is payable outside
India. Such interest shall:
a) Be allowed as deduction
b) Not to be allowed on deduction
c) Be allowed as deduction if the tax is deducted at source
Ans c

56. Salary, bonus, commission or remuneration due to or received by a working partner

from the firm is taxable under the head.
a) Income from salaries
b) Other sources
c) PGBP
Ans c

57. Perquisite received by the assessee during the course of carrying on his business or
profession is taxable under the head.
a) Salary
b) Other sources
c) PGBP
Ans c

58. Interest on capital or loan received by a partner from a firm is:

a) Exempt U/S 10(2A)
b) Taxable U/H business and profession
c) Taxable U/H income from other sources
Ans b

59. Under the head Business or Profession, the method of accounting which an assessee can
follow
shall be :
a) Mercantile system only
b) Cash system only
c) Mercantile or cash system only
d) Hybrid system
Ans c

60. An asset which was acquired for Rs. 5, 00, 000 was earlier used for scientific research.
After the research was completed, the machinery was brought into the business of the
assessee. The actual cost of the asset for the purpose of inclusion in the block of asset shall
be :
a) Rs.5,00,000
b) Nil
c) Market value of the asset on the date it was brought into business
Ans b

61. A car is imported after 1- 4- 2005 by R Ltd. from London to be used by its employee. R
Ltd. shall be allowed depreciation on such car at:
a) 15%
b) 40%
c) Nil
Ans c
62. Unabsorbed depreciation which could not be set off in the same assessment year, can
be carried forward for:
a) 8 Years
b) Indefinitely
c) 4Years
Ans b

63. Certain revenue and capital expenditure on scientific research are allowed as deduction
in the previous year of commencement of business even if these are incurred:
a) Five years immediately before the commencement of business
b) 3 years immediately before the commencement of the business
c) Any time prior to the commencement of the business.
Ans b

64. If any amount is donate for research, such research should be in nature of:
a) Scientific research only
b) Social or statistical research only
c) Scientific or social or statistical research
Ans c

65. Preliminary expenses incurred are allowed deduction in:

a) 10 equal annual installments
b) 5 equal annual installments
c) full
Ans b

66. In case the assessee follows mercantile system of accounting, bonus or commission to
the employee are allowed as deduction on:
a) Due basis
b) Payment basis
c) Due basis but subject to section 43B
Ans c

67. Interest on money borrowed for the purpose of acquiring a capital asset pertaining to
the period after the asset is put to use is to be:
a) Capitalized
b) Treated as revenue expenditure
Ans b

68. Expenditure incurred on purchase of animals to be used by the assessee for the purpose
of carrying on his business& profession is subject to
a) Depreciation
b) Deduction in the previous year in which animal dies or become permanently useless
c) Nil deduction
Ans b

69. Expenditure incurred on family planning amongst the employees is allowed to

a) Any assessee
b) A company assessee
c) An assessee which is a company or cooperative society
Ans b

70. Interest on capital of or loan from partner of a firm is allowed as deduction to the firm to
the extent of:
a) 18% p.a.
b) 12% p.a. even if it is not mentioned in partnership deed
c) 12% p.a. or at the rate mentioned in partnership deed whichever is less.
Ans c

71. Deduction under section 40(b) shall be allowed on account of salary /remuneration paid
to :
a) Any partner
b) Major partner only
c) Working partner only
Ans c

72. Remuneration paid to working partner shall be allowed as deduction to a firm:

a) In full
b) Subject to limits specified in section 40(b)
c) None of these two
Ans b

73. A firm business income is nil /negative. It shall still be allowed as deduction on account of
remuneration to working partner to the maximum extent of:
a) Actual remuneration paid as specified in partnership deed
b) Rs.50,000
c) Nil
Ans b

74. For person carrying on profession, tax audit is compulsory, if the gross receipts of the
previous
year exceeds:
a) Rs.50 lakhs
b) Rs.40 lakhs
c) Rs.10 lakhs
Ans c

75. Tax audit is compulsory in case a person is carrying on business whose gross
turnover/sales/receipts, as the case may be, exceeds:
a) Rs. 10 lakhs
b) Rs. 40 lakhs
c) 1 crore
Ans b
76. In case an assessee is engaged in the business of civil construction, presumptive income
scheme is applicable if the gross receipts paid or payable to him in the previous year does
not exceed:
a) Rs.10 lakhs
b) Rs. 40 lakhs
c) Rs. 50 lakhs
Ans b

77. In the aforesaid case ,the income shall be presumed to be :

a) 5% of gross receipts
b) 8% of gross receipts
c) 10% of gross receipts
Ans b

78. In case an assessee is engaged in the business of plying hiring or leasing goods carriage,
presumption income scheme under section 44AE is applicable if the assessee is the owner
of maximum of :
a) 8 goods carriages
b) 10 goods carriages
c) 12 goods carriages
Ans b

79. In case an assessee is engaged in the business of retail trade, presumptive income
scheme is applicable if the total turnover of such retail trade of goods does not exceed:
a) Rs.10 lakhs
b) Rs.30 lakhs
c) Rs.40 lakhs
d) Rs.50 lakhs
Ans c

80. In the above case the income to be presumed under section 44AF shall be :
a) 8% of total turnover
b) 5% of total turnover
c) 10% of total turnover
Ans b

81. If the assessee opts for section 44AD or 44AF or 44AE,then the assessee shall:
a) Not be entitled to any deduction under sections 30 to 37
b) Be entitled to deduction under sections 30 to 37
c) Not be entitled to deduction under sections 30 to 37except for interest on capital or loan
from partner and remuneration to a working partner subject to conditions laid down under
section 40(b)
Ans c

82. The period of holding of shares acquired in exchange of convertible debentures shall be
reckoned from:
a) The date of holding of debentures
b) The date of when the debentures were converted into shares
c) None of these two
Ans b

83. Securities transaction tax paid by the seller of shares and units shall
a) Be allowed as deduction as expenses of transfer
b) Not be allowed as deduction
Ans b

84. The cost inflation index number of the P.Yr.2008-09 is :

a) 480
b) 519
c) 551
d) 582
Ans d

85. Conversion of capital asset into stock in trade will result into capital gain of the previous
year:
a) In which such conversion took place
b) In which such converted asset is sold or otherwise transferred
c) None of these two
Ans b

86. Where a partner transfers any capital asset into the business of firm ,the sale
consideration of such asset to the partner shall be :
a) Market value of such asset 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
Ans b

87. Where the entire block of the depreciable asset is transferred after 36 months, there will
be:
a) Short-term capital gain
b) Long-term capital gain
c) Short-term capital gain or loss
d) Long-term capital gain or loss
Ans c

88. In the case of compulsory acquisition, the indexation of cost of acquisition or

improvement shall be done till the :
a) Previous year of compulsory acquisition b) In which the full compensation received
c) In which part or full consideration is received
Ans a

89. If good will of a profession which is self generated is transferred, there will:
a) Be capital gain
b) Not be any capital gain c) Be a short-term capital gain
Ans b
90. Exemption under section 54 is available to :
a) All assesses
b) Individuals only
c) Individual HUF.
Ans c

91. The exemption under section 54 ,shall be available:

a) To the extent of capital gain invested in the HP
b) Proportionate to the net consideration price invested
c) To the extent of amount actually invested
Ans a

92. The exemption u/s 54B, is allowed to :

a) Any assessee
b) Individual only
c) Individual or HUF
Ans b

93. For claiming exemption under section 54B the assessee should acquire:
a) Urban agricultural land
b) Rural agricultural land
c) Any agricultural land
Ans c

94. New assets acquired for claiming exemption u/s 54, 54B or 54D,if transferred within 3
years, will result in:
a) Short-term capital gain
b) long-term capital gain
c) ST or LTCG depending upon original transfer
Ans a

95. Loss from a speculation business of a particular A. Yr. can be set off in the same A. Yr.
from:
a) Profit and gains from any business
b) Profit and gains from any business other than speculation business
c) Income of speculation business
Ans c

96. Loss under the head capital gain in a particular assessment year can:
a) Be set off from other head of income in the same assessment year.
b) Be carried forward c) Neither be set off nor carried forward
Ans b

97. The loss is allowed to be carried forward only when as assessee has furnished:
a) Return of loss
b) Return of loss before the due date mentioned u/s 139(1)
c) Or not furnished the return of loss
Ans b
98. Loss under the head income from house property can be carried forward:
a) Only if the return is furnished before the due date mentioned u/s 139(1)
b) Even if the return is not furnished
c) Even if the return is furnished after the due date
Ans c

99. Deduction u/s 80C in respect of LIP, Contribution to provident fund, etc. is allowed to :
a) Any assessee
b) An individual
c) An individual of HUF
d) An individual or HUF who is resident in India
Ans c

100. Deduction under section 80C is allowed from:

a) Gross total income
b) Total income
c) Tax on total income
Ans a

101. An assessee has paid life insurance premium of Rs.25,000 during the previous year for a
policy
of Rs.1,00,000.He shall:
a) Not be allowed deduction u/s 80C
b) Be allowed Deduction u/s 80C to the extent of 20% of the capital sum assured
i.e.Rs.20,000
c) Be allowed Deduction for the entire premium as per the provisions of section 80C
Ans b

102. For claiming Deduction u/s 80C, the payment or deposit should be made:
a) Out of any income
b) Out of any income chargeable to income tax
c) During the current year out of any source
Ans b

103. Deduction under section 80C shall be allowed for :

a) Any education fee
b) Tution fee exclusive of any payment towards any development fee or donation or
payment of
similar nature
c) Tution fee and annual charges
Ans b

104. Deduction under section 80CCC is allowed to the extent of :

a) Rs. 2,00,000
b) Rs. 1,00,000
c) Rs. 4,00,000
Ans b
105. Deduction under section 80D in respect of medical insurance premium is allowed to:
a) Any assessee
b) An individual or HUF
c) Individual or HUF who is resident in India d) Individual only
Ans b

106. Deduction u/s 80D is allowed if the premium is paid to :

a) Life insurance Corporation
b) General insurance Corporation or any other insurer approved by IRDA
c) Life insurance or General insurance corporation
Ans b

107. The payment for Insurance premium under section 80D should be paid:
a) In cash
b) By any mode other than cash
c) Cash/by cheque
Ans b

108. The quantum of deduction allowed under section 80D shall be limited to:
a) Rs.20,000
b) Rs.10,000
c) Rs. 15,000
Ans c

109. Deduction U/s 80G on account of donation is allowed to:

a) A business assessee only
b) Any assessee
c) Individual or HUF only
Ans b

110. The maximum deduction u/s 80GG shall be limited to:

a) Rs. 1,000 p.m.
b) Rs. 2,000 p.m.
c) Rs. 3,000 p.m.
Ans b

111. Deduction u/s 80GGA in respect of certain donation for scientific research or rural
development is allowed to:
a) any assessee
b) non corporate business assessee
c) an assessee whose income does not include PGBP income.
Ans c

112. Deduction under section 80DD shall be allowed:

a) To the extent of actual expenditure/deposit or Rs.40,000 whichever is less
b) For a sum of Rs.50,000 irrespective of actual expenditure or deposit
c) For a sum of Rs.40,000 irrespective of any expenditure incurred or actual deposited
Ans b

113. The deduction u/s 80E is allowed for repayment of interest to the extent of :
a) Rs.25,000
b) Rs.40,000
c) Any amount repaid
Ans c

114. The quantum of deduction allowed u/s 80U is :

a) Rs. 40,000
b) Rs. 50,000
c) Rs. 60,000
Ans b

115. As per Sec.139(1), a company shall have to file return of income:

a) When its total income exceeds Rs.50,000
b) When its total income exceeds the maximum amount which is not chargeable to income
tax
c) In all cases irrespective of any income or loss earned by it.
Ans c

116. The last date of filing the return of income u/s 139(1) for A. Yr. 2009-10 in case of a
company
assessee is
a) 30th November of the assessment year
b) 30th September of the assessment year
c) 31st July of the assessment year
d) 31st October of the assessment year
Ans b

117. The last date of filing the return of income u/s 139(1) for assessment year 2009-10 in
case of a non corporate business assessee whose accounts are not liable to be audited shall
be:
a) 31st July of the assessment year
b) 30th June of assessment year
c) 31st October of the assessment year d) 30th September of the assessment year
Ans a

118. For the P.Y. 2008-09 the business income of the assessee before providing C.Yr.
depreciation of Rs. 3,50,000 is Rs. 1,50,000. His due date of return was 30-09-2009 but he
submitted the return on 16-12-2009, the assessee in this case:
a) Be allowed to carry forward unabsorbed depreciation of Rs. 2,00,000
b) Not allowed to carry forward unabsorbed depreciation of Rs.2,00,000
Ans b

119. K finds some mistake in the return of income submitted by him on 05-06-2008 for
assessment year 2009-10, he wishes to revised such return. No assessment has been done
in this case. K can revise such return till:
a) 31-03-2009
b) 31-03-2010
c) 31-03-2011
Ans b

Question 1

Mr. Ramappa is having two types of business, a retail shop and construction
services. During the year ending March 2014, he made a profit of Rs.480000 in
retail business and a loss of Rs.120000 in construction business. He wants to know
whether he can set off the loss against his income?
Yes

No

Explanation:

Under the IT Act, loss from one source of income can be set-off against another source of income
under the same head [Section 70(1)]

Question 2
The general rule is that any loss in respect of one source shall be set-off against
income from any other source under the same head of income. However, the
following is an exception to the aforesaid rule -
Long term capital loss

Short term capital loss

Loss from non-speculative business

Explanation:

Long term capital loss can be set off only against long-term capital gain in the same assessment year
[Section 70(3)]

Question 3
The second rule is that loss under one head of income can be set-off against
income assessable under any other head of income. However, the following is an
exception to the aforesaid rule –
 Loss from business

Loss from House property

Question 3 Explanation:

Loss under the head ‘Profits and gains of business or profession cannot be set off against income
under the head ‘salaries’ [Section 71(2A)]

Question 4
Mr. Appu Rao has incurred long term capital loss of Rs.540000 during the Financial
Year ending March 2014. During the same year, he has earned rental income of
Rs.260000 from the let-out property. Can you suggest on what income he has to
pay Income tax?
Rs. 2,60,000

NIL Income

Question 4 Explanation:

Loss under the head Capital Gain cannot be set-off against income under any other head [Section
71(3)]

Question 5

Ms Preetha has made a short term capital loss of Rs.240000 and a long term capital
profit of Rs.600000. Can she pay taxes on net amount Rs.360000?
Yes

No

Question 5 Explanation:

Any short term capital loss can be set off against any capital gain (both long-term and short-term) in
the same assessment year (section 70(2))

Question 6
Long-term capital loss on sale of equity shares where STT is paid can be adjusted
against long term gain on sale of House property
True

False

Question 6 Explanation:

Long term capital gain on sale of listed securities in stock exchange is exempt u/s 10(38). Therefore
loss from such transaction shall not be eligible for setoff.