RAHI’s PRACTICE SET 4

Number of questions: 100 Time Allowed: 120 minutes

Important Notice All questions carry equal mark. However, for every wrong answer marked .25 mark will be
deducted.
Minimum mark required to be qualified is 50
1. Minimum Alternate Tax (MAT) was first implemented to take the zero tax-paying companies into the
taxation bracket from the
a. FY 1987-88 b. FY 1988-89
c. FY 1990-91 d. FY 1995-96
2. MAT provisions under Section 115JB shall
a. not be applicable to a foreign company, whose total income comprises of profits and gains arising from
business referred to in section 44AB, 44BB, 44BBA, or 44BBB and such income has been offered to tax at the
rates specified in those sections
b. not be applicable to an Indian company, whose total income comprises of profits and gains arising from
business referred to in section 44AB, 44BB, 44BBA, or 44BBB and such income has been offered to tax at the
rates specified in those sections
c. not be applicable to any company be it Indian company or foreign company, whose total income
comprises of profits and gains arising from business referred to in section 44AB, 44BB, 44BBA, or 44BBB and
such income has been offered to tax at the rates specified in those sections
d. be applicable to all company be it Indian company or foreign company, whose total income comprises of
profits and gains arising from business referred to in section 44AB, 44BB, 44BBA, or 44BBB and such income
has been offered to tax at the rates specified in those sections
3. Period for which MAT credit can be carried forward has been increased from 10 years to 15 years by
a. Finance Act 2015 b. Finance Act 2016
c. Finance Act 2017 d. Finance Act 2018
4. Pick the correct regarding MAT credit and carry forward (115JAA)
a. If in any year the company pays liability as per MAT, then it is entitled to claim credit of MAT paid over
and above the normal tax liability in the subsequent year(s)
b. The set off in respect of brought forward MAT credit shall be allowed in the subsequent year(s) to the
extent of the difference between the tax on total income as per the normal provisions and liability as per
the MAT provisions.
c. After set off of MAT credit, the liability of the company cannot be less than liability as per the provisions
of MAT
d. All of the above
5. Minimum Alternate Tax rate is levied on
a. Gross total income b. Adjusted total income
c. Total income d. Gross profit from business & profession
6. Pick the incorrect one
a. Reference to Transfer Pricing Officer for computation of ALP shall be made by AO with the previous
approval of the CBDT
b. TPO is empowered to determine ALP of international transactions even if not referred by AO.
c. TPO to pass order at least 60 days before the time-limit for completion of assessment.
d. None of the given
7. Chairman of Authority for Advance Ruling (AAR) shall be a Judge of the Supreme Court or the Chief Justice of
a High Court or for at least
a. three (3) years a Judge of a High Court b. five (5) years a Judge of a High Court
c. seven (7) years a Judge of a High Court d. no such period has been defined
8. Who can apply for advance ruling?
a. non-resident person
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 b. resident person
c. person of both resident and non-resident categories
d. person of both resident, non-resident categories and foreign nationals
9. An Associated enterprise should hold borrowing guarantee
a. not less than 51% b. not less than 10%
c. not less than 26% d. not less than 15%
10. Deemed International Transaction means a transaction entered into by an enterprise with a person other
than an associated enterprise but
a. there exists a prior agreement in relation to the relevant transaction between such other person and the
associated enterprise
b. Where the enterprise or the associated enterprise or both of them are non-residents irrespective of
whether such other person is a non-resident or not.
c. Both A&B
d. None of the given
11. Which of the following may be a 'not ordinarily resident' in India
a. Partnership firm b. Association of persons
c. Joint stock company d. Hindu Undivided Family.
12. Pick the correct one
a. An assessee can approach the Settlement Commission at any stage of the proceedings for assessment
pending before an Assessing Officer, subject to certain prescribed conditions
b. The additional tax payable on the income disclosed in the application must be more than ₹ 3 lakh
c. Both A&B
d. None of the above
13. How many categories of person are defined in Section 2(31)
a. five b. seven
c. three d. four
14. Rates given in Part I of First Schedule of Finance Act 2018 are applicable for
a. AY 2018-19 b. FY 2018-19
c. AY 2017-18 d. All of the above
15. Treatment of income from Coffee grown, cured, roasted and grounded under Rule 7B (1A)
a. Business (40%) and Agricultural (60%) b. Business (60%) and Agricultural (40%)
c. Business (25%) and Agricultural (75%) d. Business (75%) and Agricultural (25%)
16. Residential Status of Firm, Association of Person (AOP), Body of Individuals (BOI) will be
a. either ROR or RNOR b. either resident or non-resident
c. either Indian or foreign d. either ROR, RNOR or NR
17. Subsidy if given as assistance to carry on business already commenced shall be treated as
a. Revenue Receipt b. Capital Receipt
a. Deferred Revenue Receipt b. Deferred Capital Receipt
18. Pick the incorrect item of revenue expenditure
a. fee paid for issue of bonus share.
b. Forfeiture of amount for purchase of raw-materials
c. Forfeiture of amount for purchase of assets
d. None of the given
19. Any other object of General Public Utility shall be a charitable purpose if it involves the carrying on of any
activity in nature of Trade, commerce or business or, any activities of rendering of any service related to these
provide aggregate receipts from such activity during the PY, do not exceed
a. 75% of the total receipts, of the trust or institution undertaking such activity or activities, of that PY

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

 b. 10% of the total receipts, of the trust or institution undertaking such activity or activities, of that PY.
c. 50% of the total receipts, of the trust or institution undertaking such activity or activities, of that PY
d. 20% of the total receipts, of the trust or institution undertaking such activity or activities, of that PY.
20. Pick the correct one regarding Section 11
a. Business income arising from business carried on by trust is 100% exempt
b. If income shown in accounts of such business undertaking is less than income determined by AO, then
such excess will not be exempt.
c. Both A&B
d. None of the given
21. Under Section 115-O every Domestic Company shall pay Corporate Dividend tax (CDT) @
a. 30% b. 15%
c. 10% d. NIL
22. Income from letting of Plant, Machinery or Furniture, shall be chargeable under the head
a. Capital Gain b. Other Sources
c. PGBP d. Either PGBP or Others Sources
23. Where the total income of Eligible Assessee includes royalty income in respect of a patent developed &
registered in India, income-tax payable on such income shall be @ 10% without any deduction of any expenditure.
The eligible assessee means
a. Resident b. Nor Resident
c. Both Resident and Non-Resident d. Only Resident Ordinarily Resident
24. Pension exempt from Income Tax
a. Pension received by a Government Servant awarded with Vir Chakra or Mahavir Chakra or Param Vir
Chakra or other notified gallantry awards or Family Pension by family member of such Government Servant
b. Family pension received by widow or children or heir on death of member of armed forces including para
military forces of the Union during operational duty
c. Both A&B
d. None of the given
25. Sum of money received by Individual or HUF without consideration that shall be exempt from income tax is
a. Rs. 5000 b. Rs. 50000
c. Rs. 15000 d. NIL
26. ICDS that deals with Provisions, Contingent Liabilities and Contingent Assets is
a. ICDS X b. ICDS IX
c. ICDS V d. ICDS VI
27. Disclosure requirements provided in ICDS and shall be given in theTax Audit Report (TAR) except pertaining to
a. ICDS VI b. ICDS VIII
c. ICDS VI and ICDS VIII d. ICDS VI, ICDS VIII and ICDS IX
28. ICDS stands for
a. Income Computation and Disclosure Standard
b. Income Calculation and Disclosure System
c. Income Computation and Disclosure System
d. Income Calculation and Disclosure Standard
29. The stage of completion of a contract shall be determined with reference to
a. the proportion that contract costs incurred for work performed up-to the reporting date bear to the
estimated total contract costs
b. Surveys of work performed
c. Completion of a physical proportion of the contract work.
d. Any of the above
30. ICDS-X says that a provision shall be recognised when except
a. a person has a present obligation as a result of a future event
b. it is reasonably certain that an outflow of resources embodying economic benefits will be required to
settle the obligation; and
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 c. a reliable estimate can be made of the amount of the obligation.
d. None of the given
31. Where tax has not been deducted at source or after deduction has not been deposited Up-to Due Date of
Return in respect any expenditure made to resident
a. sum equal to such expenditure shall be disallowed
b. 30% of such expenditure shall be disallowed.
c. 50% of such expenditure shall be disallowed.
d. double the sum equal to such expenditure shall be disallowed
32. Expenditure on advertisement in any Newspaper, Magazine, souvenir, pamphlet etc. of a political party is
a. allowable as deduction
b. not allowable as deduction
c. one-half of such expenditure allowable as deduction
d. one-third of such expenditure allowable as deduction
33. Treatment of Loss from specified business
a. Can be set off against profits of other business only whether specified or not.
b. Unabsorbed loss can be carried forward for 8 subsequent years immediately succeeding the PY in which
loss incurred
c. Both A&B
d. None of the given
34. Basis of Depreciation for Tangible assets
a. % of written down value (WDV) of the assets as on last day of the PY
b. % of acquisition cost of the assets as on last day of the PY
c. % of written down value (WDV) of the assets as on first day of the PY
d. % of acquisition cost of the assets as on first day of the PY
35. if Plant and machinery, for which deduction under Section 32AC/32AD availed, is transferred
a. within 5 years from date of its installation, deduction allowed shall be deemed as Business Income of PY
of transfer + capital gain if it exceed the deduction allowed including transfer under amalgamation or
demerger
b. within 8 years from date of its installation, deduction allowed shall be deemed as Business Income of PY
of transfer + capital gain if it exceed the deduction allowed including transfer under amalgamation or
demerger
c. within 5 years from date of its installation, deduction allowed shall be deemed as Business Income of PY
of transfer + capital gain if it exceed the deduction allowed except under amalgamation or demerger
d. within 8 years from date of its installation, deduction allowed shall be deemed as Business Income of PY
of transfer + capital gain if it exceed the deduction allowed except under amalgamation or demerger
36. Pick the correct one
a. Revenue expenditure on In-house scientific Research is 100% allowed as deduction irrespective of profits.
b. Capital expenditure on scientific research are allowed as deduction subject to availability of profit.
c. For post commencement period, all revenue expenditure pertaining to research is admissible whereas
Capital expenditure except Land is admissible
d. All of the above
37. Capital Expenditure for obtaining license/spectrum to operate telecommunication services before
commencement of business
a. Deduction shall be available from PY in which business commences to PY in which license expire
b. Deduction shall be available from PY in which license obtained to PY in which license expire
c. Deduction shall be available from PY in which business commences to PY in which license expire subject to
maximum 10 years

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

 d. Deduction shall be available from PY in which license obtained to PY in which license expire subject to
maximum 10 years
38. Amortisation of certain preliminary expenses i.e. before commencement of business or After
commencement of business for Extension of existing undertaking or setting up of new unit shall be allowed for
deduction
a. Indian company or Resident Person
b. 1/5th of such expenditure for 5 successive PY beginning with the PY in business commences subject to
maximum 10% of the cost of project or capital employed.
c. Both A&B
d. None of the given
39. Treatment of sale of asset used for scientific research after using the same for business
a. The actual cost of the asset to be included in the relevant block of asset shall be taken as nil
b. If such asset is sold then the value of block shall be reduce by the sale value of the asset
c. Both A&B
d. None of the given
40. Security Transaction Tax is levied on
a. Listed and unlisted Equity Shares
b. Listed Equity Shares & Listed units of Equity Oriented Mutual Funds
c. Unlisted Equity Shares & Unlisted units of Equity Oriented Mutual Funds
d. Equity Shares and Equity Oriented Mutual Funds whether listed or unlisted
41. Pick the incorrect one
a. Cost of acquisition of Right Shares subscribed by original shareholder will be amount actually paid to the
company
b. Cost of acquisition for Person purchasing renounced offer will be amount paid to Seller of right and
Company
c. Cost of acquisition of Bonus Shares/Other Asset allotted free of cost will be the issue price
d. None of the given
42. Where a Capital Asset is compulsorily acquired under ANY law or Where consideration for transfer is to be
determined or approved by Central Government or RBI, the income arising out of it shall be chargeable under the
head
a. Other sources b. PGBP
c. either of PGBP or Other Sources d. Capital Gain
43. Tax on sale of immovable property land or building under Section 50(C)
i. Stamp duty valuation or value stated in instrument of transaction shall be the sale consideration.
ii. If amount fixed by valuation officer is higher than the selling price but lower than the stamp duty, then
stamp duty valuation will be taken as sale consideration.
iii. Where such valuation exceeds stamp duty valuation, then stamp duty valuation will considered as sale
consideration.
iv. If value as stamp duty is within 105% of selling price, the selling price may be considered as sale
consideration.

a. i, ii and iii b. ii, iii and iv

c. i, iii and iv d. All of the above
44. Pick the correct one
a. Transfer of equity shares in a company or units of equity oriented fund (LTCA), subjected to security
transaction tax shall be exempt from capital gain
b. Transfers of STCA being Equity shares or Units in Equity oriented Mutual Fund and such transaction is
chargeable to security transaction Tax, then such STCG shall be chargeable @ 15% u/s 111A
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 c. Short-term capital gain other than those chargeable under Section 111A shall be taxed @ Applicable slab
rate for Resident Individual/HUF.
d. All of the above
45. Where amount of compensation is increased by any Court or tribunal, such increased amount shall be
deemed as
a. Capital Gain in the PY of declared. b. Capital Gain in the PY of receipt.
c. Other source in the PY of receipt. c. Other sources in the PY of declared.
46. The amount withdrawn from the Capital Gain Scheme Accounts has to be utilised within
a. 30 days of withdrawal only for the eligible purpose.
b. 60 days of withdrawal only for the eligible purpose.
c. 90 days of withdrawal only for the eligible purpose.
d. 120 days of withdrawal only for the eligible purpose.
47. Exemption to capital gain arising out of Long-term Capital Assets under Section 54EC
a. Available to any assessee
ii. For claiming exemption investment to be made in specified bonds of NHAI or RECL before the due date of
return of income prescribed under Section 139 (1)
iii. Exemption available is the lower of ₹ 50 lakh or amount invested or actual capital gain
iv. Sale of new assets so acquired within 3 years or taken loan on securities exemption allowed will be
taxable.

a. i, ii and iii b. ii, iii and iv

c. i, iii and iv d. All of the above
48. Pick the correct one
a. Security Transaction Tax (STT), paid at the time of purchase alone is considered as cost of acquisition, is
allowed as deduction from gain.
b. Security Transaction Tax (STT), paid at the time of sale alone is considered as cost of acquisition, is
allowed as deduction from gain.
c. Security Transaction Tax (STT), paid both at the time of purchase and sale, is considered as cost of
acquisition is allowed as deduction from gain.
d. Security Transaction Tax (STT) whether paid at the time of purchase or sale is not considered as cost of
acquisition, is not allowed as deduction from gain.
49. Loss in respect of any Source of income under any head shall be set off against income of other source
under same head is called
a. Intra Head Set off u/s 70 b. Intra Head Set off u/s 71
c. Inter Head Set off u/s 71 d. Inter Head Set off u/s 70
50. Pick the correct one
a. Where Loss under House property could not be set off under Sec.70 & Sec.71 that loss can be Carried
forward u/s 71B for maximum period of subsequent 8 AY
b. Where the loss under the Head House Property is carried forward for subsequent AYs, the loss can be set
off against the income from any head except casual income
c. Both A&B
d. None of the given
51. Submission of return of losses is mandatory for carrying forward the loss for setting in subsequent AY under
a. Section 79 b. Section 80
c. Section 78 d. Section 81
52. Where a change has occurred in the constitution of a firm due to Retirement or Death of partner the Firm
shall
a. be entitled to carried forward and set off the loss as usual
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 b. not be entitled to carried forward and set off so much of the loss proportionate to the share of a retired
or deceased partner which exceeds his share of profits, if any, in the firm in respect of previous year.
c. not be entitled to carried forward and set off so much of the loss proportionate to the share of a retired
or deceased partner which did not exceed his share of profits, if any, in the firm in respect of previous year.

d. not be entitled to carried forward and set off the loss at all.
53. Where a change in shareholding has taken place in a previous year in the case of a company, not being a
company in which the public are substantially interested, loss incurred in any year prior to the previous year shall be
carried forward and set off against the income of previous year if
a. at-least 75% equity shares were held by same persons as on the last day of the previous year in which the
loss was incurred & last day of previous year in which C/F & set off is to be done
b. at-least 67% equity shares were held by same persons as on the last day of the previous year in which the
loss was incurred & last day of previous year in which C/F & set off is to be done
c. at-least 51% equity shares were held by same persons as on the last day of the previous year in which the
loss was incurred & last day of previous year in which C/F & set off is to be done
d. at-least 26% equity shares were held by same persons as on the last day of the previous year in which the
loss was incurred & last day of previous year in which C/F & set off is to be done
54. Mr. Sinha a person of Indian origin who has been visiting India for 110 days every year since last 15 years
will be a
a. Non-Resident b. Resident Ordinarily Resident
c. Resident Not Ordinarily Resident d. Any of the above at the discretion of AO
55. Dividend of Rs. 5 lakh was received in London from a Foreign Company will be taxable in case of
a. All (ROR, RNOR and NR) b. ROR & RNOR
c. ROR only d. None
56. Which of following shall not be treated as business connection in India except
a. Operations confined to purchase of goods in India for purpose of exports
b. Dividend paid by an Indian company outside India
c. Operations confined to collection of news and views for transmission outside India by or on behalf of Non-
resident who is engaged in the business of running news agency or publishing newspaper, magazines or
journals;
d. Operations confined to shooting of cinematograph films in India by foreign citizen who is a non-resident
57. Pick the correct one
i. Capital expenditures are of non-recurring nature whereas revenue expenditures are of recurring nature
ii. Capital expenditure provides economic benefit over one year whereas revenue expenditure provides
economic benefits only for the accounting year in which incurred
iii. Capital expenditure may be shown Income Statement & Balance Sheet whereas revenue expenditure is
shown only in Income Statement.
iv. Capital expenditure is matched with capital receipt of the year whereas revenue expenditure is not
matched with revenue receipt of the year

a. ii, iii and iv b. i, iii and iv

c. i, ii and iii d. All of the above
58. Section that deal with Procedure for registration of trust
a. Section 11A b. Section 12A
c. Section 11AA d. Section 12AA
59. Cases under Section 13 when Exemption u/s 11 or 12 is not available
i. Income used for private religious purpose, not for public benefit
ii. Trust created for benefit of particular religious community
iii. During P/Y income used for benefit of specified person u/s. 13(3)
iv. Funds not invested in specified manner
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 a. ii, iii and iv b. i, ii and iii
c. i, iii and iv d. All of the above
60. Income of a political party is exempt from income tax provided EXCEPT
a. For voluntary contribution in excess of ₹ 2000, name & address of contributor is maintained
b. Accounts of such political party are audited by CA
c. Treasurer submits a report under Representation of the People Act, for financial year
d. None of the given
61. Exemption to an electoral trust is applicable under
a. Section 13 b. Section 13A
c. Section 13B d. Section 10 (13)
62. Foreign income received in India during the previous year is taxable in the case of
a. Resident b. Non-resident
c. Not-ordinarily resident d. All of the above
63. Relevant AY in terms of Section 153A (Assessment in case of search or requisition) shall mean an
assessment year preceding the AY relevant to the PY in which search is conducted or requisition is made which falls
a. beyond 3 AYs but not later than 6 AYs from the end of the AY relevant to the PY in which search is
conducted or requisition is made
b. beyond 6 AYs but not later than 10 AYs from the end of the AY relevant to the PY in which search is
conducted or requisition is made
c. beyond 5 AYs but not later than 10 AYs from the end of the AY relevant to the PY in which search is
conducted or requisition is made
d. beyond 10 AYs but not later than 15 AYs from the end of the AY relevant to the PY in which search is
conducted or requisition is made
64. Donation made by a company under Corporate Social Responsibility (CSR) is admissible for deduction under
a. Section 30 b. Section 36
c. Section 80G d. Section 37(1)
65. Section that deals with other allowable deductions for Rent, Repairs, taxes & Insurance for Buildings used
for B&P is
a. Section 30 b. Section 36
c. Section 80G d. Section 37(1)
66. Expenditure of revenue nature incurred by Company for promoting Family Planning among Employees shall
a. not be allowed for deduction
b. be allowed for 100% deduction in PY in which incurred
c. be allowed 100% deduction in 5 equal installments from PY in which incurred
d. Both B&C
67. A person carrying on Medical Profession in addition to Specified books of accounts shall also a stock register
showing inventory as on
a. Stock of drugs, medicines and other consumable accessories used for profession as on the last day of PY
b. Stock of drugs, medicines and other consumable accessories used for profession as on the first day of PY
c. Stock of drugs, medicines and other consumable accessories used for profession as on the first and the
last day of PY
d. Stock of drugs, medicines and other consumable accessories used for profession as on the first and the
last day of each quarters of PY.
68. Presumptive Income scheme for Specified professions under Section 44 ADA
i. Total gross receipts from profession should not exceed Rs 50 lakh for a financial year
ii. 50% of the gross receipt will be presumptive income

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

 iii. No need to maintain any books of account nor get their accounts audited unless the profit and gains are
lower than the presumptive limit.
iv. Deduction u/s 30 to 38 is allowed

a. i, ii and iii b. ii, iii and iv

c. i, iii and iv d. All of the above
69. For claiming deduction for Business of Prospecting or Extraction or production of Petroleum or Natural Gas
or both in India under Section 33ABA, a deposit/special accounts shall be opened with
a. the State Bank of India
b. the Reserve Bank of India
c. the State Bank of India or a site restoration account
d. the Reserve Bank of India or a site restoration account
70. Premium by employer for Health insurance of his employees
a. qualifies for deduction provided it is made by any mode other than cash under an approved scheme
b. qualifies for deduction in all cases whether it is made in cash or by any other mode
c. does not qualify for deduction
d. All of the above
71. Grant of Relief from double taxation where no double taxation avoidance agreement exists subject to
a. The assessee should a resident in India during the relevant previous year.
b. Lower of doubly taxed income x Indian rate of tax or doubly taxed income x Rate of tax paid in other
country shall be deductible to income
c. It is also applicable to any NON-RESIDENT person for his income of registered firm assessed as RESIDENT.
d. All of the above
72. Where AO is satisfied that appropriate method has not been applied to determine the international
transaction/specified domestic transaction or information/document not maintained by the assessee under 92D, he
may do the following except
a. Computation of total income by AO.
b. No deduction on excess income under section 10AA or under Chapter VI-A.
c. No re-computation of income of other associated enterprise.
d. None of the given
73. Under Advance Pricing Agreement (APA) pending assessment are to be completed in accordance with
modified return and so time limit to be extended by
a. 18 months for completion of assessment b. 21 months for completion of assessment
c. 12 months for completion of assessment d. 9 months for completion of assessment
74. Permanent establishment includes
a. a fixed place of business through which the business of the enterprise is wholly or partially carried on.
b. a fixed place of business through which the business of the enterprise is wholly carried on.
c. a place of business whether fixed or not through which the business of the enterprise is wholly or partially
carried on.
d. a place of business whether fixed or not through which the business of the enterprise is wholly carried on.
75. An agreement between a taxpayer and a taxing authority on an appropriate transfer pricing methodology
for a set of transactions over a fixed period of time in future is called
a. Arms’ Length Pricing Agreement b. Advance Pricing Agreement
c. Primary adjustment Agreement d. Safe Harbour Agreement
76. Cost of Improvement in respect of Goodwill of Business Right to manufacture, produce or process any
article or thing –and right to carry on any business shall be
a. NIL whether capital asset is Self-generated or purchased
b. NIL when capital asset is Self-generated and actual cost when purchased
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 c. Market value when capital asset is Self-generated and actual cost when purchased
d. Fair Market Value whether capital asset is Self-generated or purchased
77. Pick the incorrect one
a. Full value of consideration in case of slump sale shall be Sale price of the undertaking
b. In case of Slump Sale, indexation of the undertaking shall not be allowed.
c. Cost of acquisition in case of slump sale shall be the amount paid.
d. None of the given
78. Section 54GB is related to
a. Exemption from income tax for capital gain arising from any Long term capital assets except residential
building
b. Exemption from income tax for capital gain arising from Residential House or land being Long term Capital
Assets
c. Exemption to capital gain arising out of Compulsory Acquisition of Land & Building
d. Exemption to capital gain arising out of Long-term Capital Asset
79. Capital Gain Scheme Accounts
a. The scheme was introduced in 1988.
b. Rural branches of bank notified for this purpose are not authorised to open such account.
c. The interest earned is chargeable.
d. All of the above
80. Exemption to capital gain arising out of shifting of an industrial undertaking from urban to non-urban areas
Under Section 54G
a. Available to any assessee
b. Sale Land, Building and Plant & Machinery only and such assets must be used for Business for 2 years
immediately prior to date of acquisition
c. New Assets should be Land, Building, Plant & Machinery and shifting expense in Rural Area only within 1
year prior or within 2 years of transfer
d. On sale within 3 years-Short term capital gain. Cost of acquisition reduced by exemption allowed

a. i, ii and iv b. ii, iii and iv

c. i, ii and iii d. All of the above
81. Pick the correct one
a. Where any asset of a Company is distributed to its shareholders on its liquidation, such distribution in the
hand of the company will not be treated as transfer
b. Where a shareholder on liquidation of a company receives any money or other assets from a company, he
shall be chargeable under Capital Gain in the Previous year in which above is received
c. Both A&B
d. None of the given
82. Categorisation of Capital assets in form of Listed Security (other than unit of MF) on recognised stock
exchange in India, Unit of UTI or Equity oriented fund and Zero Coupon Bonds
a. Short term if holding period is less than 24 months and Long-term if holding period is more than 24 month
b. Short term if holding period is less than 12 months and Long-term if holding period is more than 12
month
c. Short term if holding period is less than 36 months and Long-term if holding period is more than 36 month
d. Short term if holding period is less than 60 months and Long-term if holding period is more than 60
month
83. The first appellate authority is
a. CIT (appeal) b. Income Tax Appellate Tribunal
c. Settlement Commission d. High Court
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84. Decisions given by the Supreme Court binding on
a. all the high Courts & Appellate Tribunal
b. the income-tax authorities and the assessee.
c. all the high Courts & Appellate Tribunal & the income-tax authorities
d. all the high Courts & Appellate Tribunal, the income-tax authorities and the assessees
85. Income Tax Act, 1961 came into force effect from
a. 1st April 1960 b. 1st April 1960
c. 1st April 1962 d. 1st January 1962
86. How many parts are there under the First Schedule of Finance Act?
a. three b. four
c. five d. six
87. Shipping business of non-residents u/s 172
a. 7.5% of amount paid/payable to owner on account of such carriage will be deemed income chargeable to
Income tax.
b. 5% of amount paid/payable to owner on account of such carriage will be deemed income chargeable to
Income tax.
c. 8.5% of amount paid/payable to owner on account of such carriage will be deemed income chargeable to
Income tax.
d. 10% of amount paid/payable to owner on account of such carriage will be deemed income chargeable to
Income tax.
88. Companies other than companies claiming exemption under section 11 are to submit return of income in
a. ITR 7 b. ITR 6
c. ITR 8 d. ITR 5
89. Interest for deferment of advance tax u/s 234C except
a. If the amount of advance paid in by 15th June and 15th Sep is not less than 10% and 30% respectively, no
interest will be charged.
b. For shortfall in first 3 quarters below the above limit-@1% month or part of the month for 3 months
c. For last quarter Jan-March -1% a month
d. None of the given
90. The tax exemption limit for senior citizen is
a. Resident and Non Resident-Rs. 300000
b. Resident-500000 and Non-Resident-Rs. 250000
c. Resident-300000 and Non-Resident- Rs. 250000
d. Resident and Non Resident-Rs. 500000
91. Deepak was born in London in 1976 and his father was born in Auckland in 1948 whereas his grandfather
was born in India in 1932. Deepak has been visiting India for 200 days each year from 2010 to 2017. In 2018 Deepak
visited India for on 1st July 2018 and left for London 31st Oct 2018 and again came back on 1st March 2019 for 200
days. His residential status for AY 2019-20 is-
a. Resident Ordinarily Resident b. Resident Not Ordinarily Resident
c. Not Resident d. Any of the given
92. Income accrue or arises or deemed to accrue or arises outside India, but first receipt in India shall be
a. Taxable for ROR & RNOR b. Taxable for RNOR & NR only
c. Taxable for RNOR d. Taxable for all ROR, RNOR and NR
93. Business Income
a. includes business losses provided they are of revenue nature, real losses & are incidental to carrying on
business
b. includes business losses provided they are of capital nature, real losses & are incidental to carrying on
business
c. includes business losses provided they are of both capital and revenue nature, real losses & are incidental
to carrying on business
d. does not include business losses whether of revenue nature or capital nature.

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

94. The undertaking has the option either to claim depreciation on W.D.V basis on block of assets or on S.L.M
basis on the actual Cost of assets
a. Mineral Prospecting Companies b. Power Generating Undertaking
c. Telecom Companies d. All of the above
95. Pick the incorrect rate of depreciation
a. Building Residential- 5%, b. Non-Residential Building- 10%
c. Air Pollution Control Equipment-30% d. None of the given
96. Basic conditions for claiming additional depreciation
i. Plant & Machinery should not be used by any person in India or outside India before date of installation by
assessee.
ii. Plant & Machinery not installed in office premises or in residential accommodation including a guest
house.
iii. Plant & Machinery should not be an office appliance or road transport vehicle.
iv. Whole of actual cost of Plant & Machinery not allowed as deduction under PGBP of any one PY

a. ii, iii and iv b. i, ii and iii

c. i, iii and iv d. All of the above
97. In case sale of asset used for scientific research without using for business when sale price exceeds Cost
price of the assets, the same will be treated as
a. Short-term or long-term Capital gain as the case may be depending upon period of hold.
b. Short-term capital gain irrespective of period of hold.
c. Long-term capital gain irrespective of period of hold.
d. Business income under the head PGBP
98. Interest on Loan from Public Financial Institution, State Financial Corporation or state industrial investment
corporation and Interest on any loan or advance from schedule bank are eligible for deduction on the basis of
a. due basis b. actual payment basis
c. either A or B as opted by the assessee d. either A or B as decided by the Assessing Officer
99. In terms of Section 43CB Contract Revenue shall
a. include retention money and contract cost shall not be reduced by incidental interest, dividend and
capital gains.
b. not include retention money and contract cost shall not be reduced by incidental interest, dividend and
capital gains.
c. include retention money and contract cost shall be reduced by incidental interest, dividend and capital
gains.
d. not include retention money and contract cost shall be reduced by incidental interest, dividend and
capital gains.
100. Which of the following do not fall under Plant?
a. Live Stock b. Building
c. Furniture & fixtures d. All of the above

Pattern
Sl. No. Topics No. of Ques. Sl. No.
Ques
1 Basic 30 11-20, 54-63 & 83-92
2 Profit and Gain from Business & Profession 25 31-40, 64-70 & 93-100
3 Capital Gains 15 41-48 & 76-82
4 Incomes from Other Sources 5 21-25
5 Set-off and Carry Forward of Losses 5 49-53
6 International Taxation 10 6-10 & 71-75

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

7 ICDS 5 26-30
8 Special Provisions to Certain Companies 5 1-5
TOTAL 100

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)