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
Ans c
2. Additional surcharge (education cess) of 3% per cent is payable on
a) Income tax
b) Income tax plus surcharge
c) Surcharge
Ans b
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
Ans c
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
Ans d
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
Ans b
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%
Ans b
7. For an employee in receipt of hostel expenditure allowance for his three children, the maximum annual allowance exempt under section 10(14) is
a) Rs.10, 800
b) Rs.7,200
c) Rs.9,600
d) Rs.3,600
Ans b
8. For an industrial undertaking fulfilling the conditions, additional depreciation in respect of a machinery costing Rs.10 lakh acquired and installed on October 3, 2005 is
a) Rs.75,000
b) Rs.1,50,000
c) Rs.1,00,000
d) None of the above
Ans c
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
16. Surcharge in case of an individual or HUF for assessment year 2009-10 is payable at the rate of :
a) 12% of the income-tax payable provided the total income exceed Rs.60,000.
b) 10% of the income-tax payable provided the total income exceeds Rs.10,00,000
c) 5% of the income-tax payable if the total income exceeds Rs.8,50,000
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
19. The maximum amount on which income-tax is not chargeable in case a co-operative society is:
a) Rs.50,000
b) Rs.30,000
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
27. A’s TI for the A.Yr.2009-10 is Rs.2,50,000.His tax liability shall be
a) 10,000
b) 10,300
c) 11,330
Ans b
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
45. There will be no partial integration of agricultural income with non agricultural income, if the
non agricultural income does not exceed:
a) Rs.1,50,000
b) Rs. 1,00,000
c) Rs.1,10,000
Ans a
46. There will be no partial integration, if the agricultural income does not exceed:
a) Rs.40,000
b) Rs.50,000
c) Rs.5,000
Ans c
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
50. A is entitled to children education allowance @ Rs. 80 p.m. per child for 3 children amounting Rs. 240 p.m. It will be exempt to the extent of :
a) Rs.200 p.m.
b) Rs.160 p.m.
c) Rs. 240 p.m.
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