Dr.G.R.

DamodaranCollegeofScience
(Autonomous,affiliatedtotheBharathiarUniversity,recognizedbytheUGC)Re-
accredited at the 'A' Grade Level by the NAAC and ISO 9001:2008 Certified
CRISL rated 'A' (TN) for MBA and MIB Programmes

II B.COM
Semester IV
Core:TAXATION-302B
Multiple Choice Questions.

1. are empowered to levy and collect taxes.

A. Only public authorities
B. Anybody
C. Private Organisations
D. Partners
ANSWER:A

2. DirectTaxisgetting from .
A. customer
B. buyer
C. employees
D. persons
ANSWER:D

3. Income Tax Act was passed .

A. 1955
B. 1961
C. 1956
D. 1939
ANSWER:B

4. CBDT is controlled by .
A. central Government
B. State Government
C. both (A)and (b)
D. noneofthisabove
ANSWER: A

5. The basic objective of Taxation is .

A. Toprocureresources
B. Toprovideincentivesto save
C. Tocheckinflation
D. Toachievereductioninconsumptionofgoods
ANSWER: A

6. Previous year starts from .

A. 1st of April
B. 1st of March
C. 1st of January
D. 1st of September
A 1/21
 ANSWER: A

7. The total of all the incomes shown under the major heads of income is called as .
A. Taxableincome
B. Operating income
C. Net income
D. GrossTotalIncome
ANSWER: D

8. If a person is considered as an Assessee in place of another person due to valid reasons or causes, he is a
.
A. Replacement assessee
B. Deemed assessee
C. Assessee in due course
D. Assessee-in-default
ANSWER: B

9. As per the first basic condition under residential Status, an Individual must have stayed in India for
days.
A. 186
B. 182
C. 181
D. 180
ANSWER:B

10. A person is said to be an ordinarily Resident when the person is satisfying .

A. both basic and additional
B. only basic
C. only additional
D. notbasicandadditionalconditions
ANSWER: A

11. A person is said to be a non resident when the person is .

A. not fulfilling any one of the basic conditions
B. only basic conditions
C. only additional conditions
D. bothbasicandadditionalconditions
ANSWER: A

12. Who is assessee in HUF?

A. Father
B. spouse
C. karta
D. deemedkarta
ANSWER: C

13. Education cess on tax payable is at .

A. 2%
B. 1%
C. 3%
D. 5%
ANSWER:A

14. The person who has to pay tax or other sum of money payable under I.T.Act is .
A 2/21
 A. a client
B. a Debtor
C. an assessee
D. aCreditor
ANSWER: C

15. In case of shipping business income of a Non-Resident ship owners %oftaxistobepaidbythe

captain of ship.
A. 17.5
B. 7
C. 7.5
D. 70.5
ANSWER:C

16. Which income tax act is currently in force?

A. IT Act 1922
B. IT Act 1932
C. IT Act 1956
D. ITAct1961
ANSWER: D

17. Which of the following is an exempted salary?

A. Payment of Employer in kind
B. Salary from former employer
C. Salary received by UNO Employees
D. Leavesalary
ANSWER: C

18. Death cum retirement gratuity paid to a government employee is .

A. Fully taxable
B. partially taxable
C. fully exempted
D. governmentpaysthetax
ANSWER: C

19. Reimbursement of medical bill for treatment from an unrecognised hospital is .

A. Fully exempted
B. Exempted upto 15,000
C. Fully taxable
D. notanincome
ANSWER: B

20. Annual value of self occupied house is .

A. always nil
B. always fully taxable
C. higher of MRV/FRV
D. Noneofthese
ANSWER: A

21. Municipal taxes are deductible on .

A. Accrual basis
B. due basis
C. payment basis
D. not allowed
A 3/21
 ANSWER: C

22. Expected rent cannot exceed .

A. MRV
B. FRV
C. Actual Rent
D. StandaradRent
ANSWER: D

23. Whichsectionsoftheincometaxact1961dealswithincomeunderthehead"IncomefromHouse
Property"?
A. Sections 6 to 9
B. Sections 22 to 27
C. Sections 38 to 44
D. Sections61to68
ANSWER: B

24. Which of the following incomes from house property is not exempted from Tax?
A. Annual value of any one palace of ex-indian ruler.
B. Income of local authority
C. Income from house property of salaried employee
D. Incomeofcharitabletrust.
ANSWER: C

25. Income from rent of agricultural lands is .

A. Income from house property
B. Income from other sources
C. Business income
D. Agriculturalincome
ANSWER: D

26. No integration of agricultural income with non-agricultural income if agricultural income is below
.
A. 2,00,000
B. 5,000
C. 50,000
D. 2,50,000
ANSWER:B

27. In case of Individuals the exempted limit of income for assessment year 2019 - 2020 is
A. 2,50,000
B. 2,10,000
C. 2,00,000
D. 1,50,000
ANSWER:A

28. Agriculture Income in India is .

A. Taxable
B. Exempted
C. partly taxable
D. Rebateable
ANSWER: B

29. House rent allowances is .

A 4/21
 A. Fully taxable
B. partly taxable
C. fully exempted
D. Rebateable
ANSWER: B

30. IncomeTaxAuthoritiesaregroupedintotwomainwingsAdministrativeand.
A. Judicial.
B. Managerial.
C. Executives.
D. Clerical.
ANSWER: A

31. The highest Administrative Authority for Income Tax in India is .

A. Finance Minister.
B. CBDT.
C. President of India.
D. DirectorofIncomeTax.
ANSWER: B

32. Proceeds of benefit match received by a cricket player are .

A. professional income
B. casual income
C. not an income
D. exemptedincome
ANSWER: B

33. What are the exemption limit in Hostel Expenditure Allowance?

A. Rs.200pm
B. Rs.300pm
C. Rs.400pm
D. Rs.500pm
ANSWER: B

34. Determining the tax liability is .

A. Assessment
B. Scrutiny.
C. Enquiry.
D. Enquiry.
ANSWER:A

35. The net income of a self-occupied property can be .

A. in Negative only
B. in Possitive only
C. can be a Negative or Zero.
D. canbepositiveornegative
ANSWER: C

36. Thenumberallottedbyincometaxauthoritiestoassesseesforidentificationandwhichshouldbequoted in all

documents and correspondence is .
A. I.D. No.
B. Register No.
C. Permanent Account Number (PAN).
D. Licence No.
A 5/21
 ANSWER: C

37. Deduction of tax at source made for incomes which can be calculated in advance is called .
A. T.D.S.
B. PAS.
C. FAS.
D. MAS.
ANSWER: A

38. Due date of filing of return by a non business assessee is .

A. 30th June.
B. 31st August.
C. 31st July.
D. 30thNovember.
ANSWER: C

39. Under the income- tax act, the incidence of taxation depends on .
A. The citizenship of the tax-payer.
B. The age of the taxpayer
C. The residential status of the tax-payer.
D. Thegenderofthetaxpayer
ANSWER: C

40. Unabsorbed depreciation can be carried forward for set off for a period of .
A. four years only.
B. eight years only.
C. unlimited number of years.
D. eighteenyearsonly.
ANSWER: C

41. Dividend earned from Indian company are .

A. assessable under Income from other source.
B. Exempted income
C. assessable under Capital gain.
D. assessableunderCasualincome.
ANSWER: B

42. According to ScheduleoftheconstitutionofIndiaTaxesare levied.

A. Eighth
B. Seventh
C. Tenth
D. Seventeenth
ANSWER: B

43. Embezzlement of cash in a money lending business shall be treated as .

A. Business expenditure.
B. Revenue loss incidental to business.
C. Capital expenditure.
D. Capital loss.
ANSWER: B

44. Distinction between 'Capital' and "Revenue' is made based on .

A. Separate Act passed by government, and Tribunals.
B. DefinitionofthetermsgiveninIncomeTaxAct1961.
A 6/21
 C. Judicial precedents from courts.
D. None of the above.
ANSWER: C

45. Notified Limit for Gratuity is .

A. Rs. 2,00,000
B. Rs. 3,00,000
C. Rs. 5,00,000
D. Rs.10,00,000
ANSWER: D

46. Which of the following is not a capital receipt?

A. 'Salami' for settlement of Tenancy.
B. Insurance claim received on machinery lost by fire.
C. Lumpsum received on sale of shares.
D. Goodssoldforcash"Patentrights'.
ANSWER: D

47. Compensation for cancellation of a license by the government resulting in cessation of business is
.
A. a casual receipt.
B. a capital receipt.
C. a revenue receipt.
D. None of the above.
ANSWER: C

48. Compensation received for loss of trading asset is a .

A. Capital receipt.
B. Revenue receipt.
C. a casual receipt.
D. None of these.
ANSWER: A

49. Anypaymentmadetodischargearevenueliability,ifrefundedlateron,shallbe .
A. Revenue expenditure.
B. Capital expenditure.
C. Illegal expenditure.
D. Personal expenditure.
ANSWER: D

50. Which of the following is not a revenue expense?

A. Rentofofficebuilding
B. Sales tax and excise duty paid
C. Payment made on dismissal of company
D. Remunerationtopromotersofatemporaryemployee
ANSWER: A

51. Loss due to fire of hired machinery is .

A. Capital loss.
B. Revenue loss.
C. Capital expenditure
D. None of the above.
ANSWER: A

A 7/21
52. Embezzlement of cash by a cashier is .
A. a revenue loss.
B. a capital loss.
C. a casual loss.
D. None of these.
ANSWER: A

53. Remuneration paid to members of AOP is .

A. Inadmissible expense of AOP.
B. Allowable business expenses of AOP.
C. Expense for members.
D. None of these.
ANSWER: A

54. Share of income received from AOP is entitled to rebate at .

A. 10%
B. nil
C. Average
D. 20%
ANSWER:C

55. The following is not taxable as income under the head "Salaries".
A. Commission received by a full time director
B. Remuneration received by a partner
C. Allowances received by an employee
D. Freeaccommodationgiventoanemployee
ANSWER: B

56. Under the Seventh schedule of the constitution of India list dealsaboutthetaxesleviedby
Central government.
A. II
B. I
C. III
D. IV
ANSWER:B

57. A short term capital asset (except financial assets) is the one held for not more than .
A. 12 months
B. 36 months
C. 24 months
D. 20months
ANSWER: B

58. Capitalexpenditureonscientificresearchwhichcannotbeabsorbedonaccountofinsufficiencyofprofit in any

accounting year can be carried forward for .
A. 16
B. 8
C. indefinite
D. 12
ANSWER:C

59. Receipt of amount on maturity of LIC Policy is .

A. A revenue receipt.
B. A capital receipt.
A 8/21
 C. A casual receipt.
D. None of these.
ANSWER: B

60. Compensation received for loss of trading asset is a .

A. Capital receipt.
B. Revenue receipt.
C. Casual receipt.
D. None of these.
ANSWER: B

61. Salary paid by an employer out of capital will be .

A. a revenue receipt in the hands of employee
B. a capital receipt in the hands of employee
C. a casual receipt
D. None of the above.
ANSWER: A

62. Which of the following is not a capital expense?

A. Installation expenditure of plant of a company.
B. Legal expenses for reduction of capital.
C. Commission to employees to achieve sales Targets.
D. Expensesofpromotingacompany.
ANSWER: C

63. Amount paid as secret commission to employees of buyer of assessees goods is a .

A. Revenue expenditure.
B. Capital expenditure.
C. Illegal expenditure.
D. Personal expenditure.
ANSWER: A

64. Which of the following is not a revenue expense?

A. Rentofofficebuilding.
B. Sales tax and excise duty paid.
C. Payment made on dismissal of company.
D. Remunerationtopromotersofatemporaryemployee.
ANSWER: D

65. CBDT stands for

A. Central Board of Direct Taxes.
B. Central Bureau of Direct Taxes.
C. Central Branch of Direct Taxes
D. None of the above.
ANSWER: A

66. Residential status of an assessee is ascertained as per the provisions of .

A. Sec. 6.
B. Sec. 7.
C. Sec. 9.
D. Sec. 11.
ANSWER:A

67. An individual who wants to be resident of India must satisfy at least .

A 9/21
 A. OneoftheTwobasicconditions.
B. Both the basic conditions.
C. Both the additional conditions.
D. None of these.
ANSWER: A

68. ApersonwhoisofIndianoriginvisitingIndiaduringthepreviousyeartobecalledresidentmustsayin India for at

least .
A. 60 days in PY.
B. 6 days in PY and 365 days or more during 4 years preceding the PY.
C. 182 days in PY.
D. 730daysduring7yearsprecedingthePY.
ANSWER: C

69. SecondadditionalconditionforresidenttobeanordinarilyresidentisthathemusthavestayedinIndia during

the seven previous years proceeding the relevant previous year at least .
A. 182 days.
B. 365 days.
C. 60 days.
D. 730 days.
ANSWER: D

70. PaymentofGratuity Act(POGA) waspassed inthe year---------------

A. 1942
B. 1952
C. 1962
D. 1972
ANSWER:D

71. An Indian company is always in India.

A. Resident.
B. Non-Resident.
C. Ordinarily resident.
D. NotordinaryResident
ANSWER: A

72. Salary paid by an Indian company to its employees working in one of its branches outside India is
.
A. Salary accruing in India.
B. Salary deemed to accrue in India.
C. Salary accruing outside India.
D. None of these.
ANSWER: C

73. Income received in India is taxable in the hands of .

A. Not ordinary Resident only.
B. Resident and ordinarily resident only.
C. Non-resident only.
D. All assessees.
ANSWER: D

74. Income accrued in India is taxable in the hands of .

A. Non-resident only.
B. Resident but ordinarily resident only.
A 10/
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 C. All assesses.
D. Residentandordinarilyresidentonly.
ANSWER: C

75. Income accrued and received outside India is taxable in the hands of.
A. Non-resident.
B. Resident and ordinarily resident.
C. Resident but not ordinarily Resident.
D. None of these.
ANSWER: B

76. Past untaxed income brought to India is taxable in the hands of.
A. Resident but not ordinarily resident.
B. Resident and ordinarily resident.
C. Non-resident.
D. None of these.
ANSWER: D

77. Income received outside India from a business controlled from India is taxable in the hands of.
A. Resident and ordinarily resident and Resident but not ordinarily resident.
B. Non-resident only.
C. Not ordinarily resident only
D. None of these.
ANSWER: A

78. TreatmentofGratuitycomesundersection
A. Section 10(10)
B. Section 11
C. Section 12
D. Section13
ANSWER: A

79. Exempted incomes are defined under section.

A. 15 of income tax Act.
B. 18 of income tax Act
C. 10 of income tax Act.
D. 20 of income tax Act.
ANSWER: C

80. Scholarship received is.

A. Fully exempted.
B. Fully taxable.
C. Partly exempted.
D. None of these.
ANSWER: A

81. Any payments made under and awards instituted by central or state Governments are.
A. Fully exempted
B. Fully taxable
C. Partly exempted.
D. None of these.
ANSWER: A

82. Allowances of MP/M.L.A / or M.L.C are.

A 11/
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 A. Fully exempted.
B. Fully taxable.
C. Partly exempted.
D. None of these.
ANSWER: A

83. Incomeofpoliticalpartiesisnottobeincludedintotalincomeifcertainconditionsaresatisfied.The relevant

section of IT Act 1961 is.
A. Section 13A .
B. Sec. 10d.
C. Sec. 233B.
D. Sec.88G.
ANSWER: A

84. TaxHolidayis.
A. Income tax on holiday income.
B. Cancellation of tax for the entire country.
C. Taxexemptionforaspecifiedperiod.
D. None of the above.
ANSWER: C

85. Taxincentivesfor100%exportorientedunitsarespeciallyprovidedunderI.TActsection.
A. 20A.
B. 40(Z).
C. 1 CB.
D. 80(S).
ANSWER:C

86. Sum received by a co-parcener from Hindu undividual family is.

A. Exempted in the hands of co-parcener
B. Exempted in the hands of HUF.
C. Taxableinthehandsofco-parcener
D. None of these.
ANSWER: A

87. Share of income from firm is.

A. Taxableinthehandsofpartner
B. Exempted in the hands of partner.
C. Exempted in the hands of firm.
D. None of these.
ANSWER: B

88. Casual income is.

A. Fully taxable.
B. Partly taxable.
C. Fully exempted.
D. None of these.
ANSWER: A

89. Salary received by a member of parliament is.

A. Taxableassalaryincome
B. Exempt from tax sources.
C. Taxableasincomefromothersources.
D. None of these.
A 12/
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 ANSWER: C

90. Allowances received by a government employee posted abroad are.

A. Fully exempted.
B. Partly exempted.
C. Fully taxable.
D. Taxablebythecountrywhereposted.
ANSWER: A

91. Dearness allowance is taxable in the hands of.

A. Govt employees
B. Non Govt employees
C. All employees.
D. None of these.
ANSWER: C

92. House rent allowance is.

A. Fully exempted.
B. Partly taxable.
C. Fully taxable.
D. Actualrentpaidaloneistaxable.
ANSWER: B

93. Exempted limit of HRA in metropolitan cities is.

A. 50% of salary.
B. 40% of salary.
C. 15% of salary.
D. none of these.
ANSWER: A

94. Education allowance is exempted upto a maximum of.

A. One child.
B. Twochildren.
C. Three children.
D. Four children.
ANSWER: B

95. Children education allowance is exempted upto.

A. Rs. 200 p.m. per child.
B. Rs. 300 p.m. per child.
C. Rs. 100 p.m. per child.
D. Rs. 400 p.m. per child.
ANSWER: C

96. Entertainmentallowancetogovt,employeesisexempted,whichisleastof20%ofbasicsalaryoractual
allowance or.
A. Rs. 1,000.
B. Rs. 2,000.
C. Rs. 20,000.
D. Rs.5,000.
ANSWER: D

97. A Perk is.

A. Cash paid by employer to employee
A 13/
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 B. Facility provided by employer to employee
C. Amount credited to employees.
D. Noneoftheseaccounts.
ANSWER: B

98. PerquisitestoemployeesarecoveredintheI.T.Act1961under.
A. Sec 2a.
B. Sec. 17b.
C. Sec 28a.
D. Sec. 36 c.
ANSWER: B

99. ThevalueofInterestfreeconcessionalloanstoemployeesisdeterminedonthebasisoflendingratesfor the same

purpose of .
A. S.B.I.
B. R.B.I.
C. Central govt.
D. State govt.
ANSWER: A

100. Anemployeeisdeemedasspecifiedemployeeifheisadirectorinthecompanyorhassubstantialinthe company

or his monetary salary p.a. exceeds.
A. Rs. 5,00,000.
B. Rs. 2,00,000.
C. Rs. 1,00,000.
D. Rs.50,000.
ANSWER: D

101. ValueofRentFreeHouseincaseofGovt.employeeshallbetaxableupto .
A. 15% of employees salary.
B. 7.5% of employees salary.
C. License fee fixed by Govt.
D. 10%ofemployeessalary.
ANSWER: C

102. ValueofRentFreeHousewhichisownedbytheemployerincaseofnonGovt,employeesliveinthe place

where the population exceeds 25 lakhs is .
A. 10% of employees salary
B. 15% of employees salary.
C. 7.5% of employee salary
D. 20%ofemployeessalary.
ANSWER: B

103. Interest on RPF balance is exempted upto.

A. 9.75%.
B. 9.5%.
C. 10%.
D. 12%.
ANSWER:B

104. Employers contribution to RPF is exempted upto.

A. 10% of salary.
B. 13% of salary.
C. 12% of salary.
A 14/
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 D. 11%ofsalary.
ANSWER: C

105. Commuted value of pension is fully exempted in case of.

A. an employee of private sector.
B. an employee of a public sector undertaking.
C. a Govt, employee.
D. none of these.
ANSWER: C

106. Statutory limit for exemption of compensation received at the time of voluntary retirement (VRS) is.
A. Rs. 5,00,000.
B. Rs. 8,00,000.
C. Rs. 10,00,000.
D. Rs.15,00,000.
ANSWER: A

107. DeductionfromgrossTotalincomeisallowedunderSec.80CuptoloweroftheQualifyingamountora
maximum of.
A. Rs. 50,000.
B. Rs. 80,000.
C. Rs. 1,00,000.
D. Rs.2,00,000.
ANSWER: C

108. Profits earned from an illegal business are.

A. Taxable.
B. Taxfree.
C. IgnoredbyTaxAuthorities.
D. treatedasotherincome.
ANSWER: A

109. Contribution made to an approved research association is eligible for deduction upto.
A. 50%.
B. 80%.
C. 100%.
D. 125%.
ANSWER:D

110. Unabsorbed capital expenditure on scientific research can be carried forward for.
A. 15 years.
B. 14 years.
C. 8 years.
D. 10
ANSWER:C

111. A university teacher is a .

A. government employee
B. private employee
C. Semi-government employee
D. selfemployed
ANSWER: C

112. Excise duty and sales tax are allowed as deduction if paid before.
A 15/
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 A. Late date of filing of return.
B. Previous year end.
C. Before 31 st December of the previous year.
D. after31stDecemberofpreviousyear.
ANSWER: A

113. Technicalknow-howacquiredafter1.4.98iseligiblefordepreciationat.
A. 10% P.A.
B. 20% P.A.
C. 25% P.A.
D. 40%P.A.
ANSWER:C

114. GeneraldeductionsforBusinessorProfessionarecoveredintheI.T.Act1961under.
A. Sec.20.
B. Sec.31.
C. Sec.37.
D. Sec.45.
ANSWER: C

115. Specific disallowances while computing profits and gains of business or profession are included in the
I.T.Act1961.
A. Sec.20.
B. Sec.40.
C. Sec.60.
D. Sec.80.
ANSWER: B

116. Preliminary expenses shall be allowed as deduction in.

A. 5 Instalments.
B. 10 Instalments.
C. 15 Instalments
D. 12 Instalments.
ANSWER: A

117. Bad debts allowed earlier and recovered latter on is.

A. Business income.
B. Non business income.
C. Exempted income.
D. Incomefromothersources.
ANSWER: A

118. Under valuation of opening stock is.

A. deducted from net profit.
B. added to net profit.
C. credited to P & L A/c
D. none of these.
ANSWER: A

119. Gifts from clients are.

A. Professional income.
B. Income from other sources.
C. Non taxable item.
D. None of these.
A 16/
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 ANSWER: A

120. Repairs incurred before installation of an assets is.

A. Capital expenditure.
B. Revenue expenditure.
C. Non business expenditure.
D. None of these.
ANSWER: A

121. Ifadepreciableassetisacquiredandusedforlessthan180daysinafinancialyear,depreciationallowed on it is.

A. Normal Rate.
B. 50% of Normal Rate.
C. Nil.
D. None of these.
ANSWER: B

122. Rate of depreciation on residential building is.

A. 5%.
B. 10%
C. 15%
D. 20%.
ANSWER:A

123. Rate of depreciation on non residential building is.

A. 10%.
B. 15%.
C. 20%.
D. 25%
ANSWER:A

124. Rate of depreciation on furniture is .

A. 5%
B. 15%
C. 10%
D. 20%
ANSWER:C

125. Income from sale of house hold furniture is.

A. Taxablecapitalgain.
B. Exempted capital gain.
C. Short term capital gain.
D. Longtermcapitalgain.
ANSWER: B

126. Income from sale of rural Agricultural land is.

A. Taxablecapitalgain.
B. Exempted capital gain.
C. Taxableincome.
D. None of these.
ANSWER: B

127. WhatisthetimelimitforholdingofaFinancialAsset,tobecalledShortTermCapitalAsset?
A. Not more than 6 months.

A 17/
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 B. Not more than 12 months.
C. Not more than 24 months.
D. Notmorethan36months.
ANSWER: B

128. Tobealongtermcapitalasset,anonfinancialassetshouldbeheldmorethan.
A. 12 months.
B. 24 months.
C. 36 months.
D. 60 months.
ANSWER: C

129. Shares held for less than 12 months are.

A. Short term capital asset.
B. Long term capital asset.
C. Exempted capital asset.
D. projected capital asset.
ANSWER: A

130. House property held for less than 36 months is.

A. Long term capital asset.
B. Short term capital asset.
C. Exempted capital asset.
D. projected capital asset.
ANSWER: B

131. Indexation is applicable to.

A. Sale of short term capital assets.
B. Sale of long term debentures.
C. Sale of depreciable capital assets.
D. Saleoflongtermcapitalassetswhicharenotdepreciableassets
ANSWER: D

132. Cost of long term debentures are.

A. Eligible for indexing.
B. Not eligible for indexing.
C. None of these.
D. All the above.
ANSWER: B

133. WhatisthedateonwhichFairMarketValueofcapitalassetsacquiredisdetermined?
A. 1.4.2001.
B. 1.4.1971.
C. 1.4.1981.
D. 1.4.1971.
ANSWER:C

134. FMV on 1.4.81 is applicable to assets.

A. acquired prior to 1.4.81.
B. transferred prior to 1.4.81.
C. acquired after 1.4.81.
D. none of the above.
ANSWER: A

A 18/
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135. Cost of improvement incurred prior to 1.4.81 is.
A. Indexed separately.
B. Indexed along with cost of acquisition.
C. Ignored fully.
D. None of these.
ANSWER: C

136. Costinflationrulesforthepurposeoflongtermcapitalgainhasbeennotifiedbycentralgovernment every

year starting from the financial year.
A. 1991-92.
B. 1985-86.
C. 1981-82.
D. 1975-76.
ANSWER:C

137. Short term capital gain on sale of unlisted shares are.

A. Taxable.
B. Exempted.
C. Partially Exempted.
D. PartiallyTaxable.
ANSWER: A

138. Long term capital gain on sale of unlisted shares are.

A. Taxable.
B. Exempted.
C. Partially Exempted.
D. PartiallyTaxable.
ANSWER: A

139. Exemption u/s 54 is allowed.

A. on sale of land.
B. on sale of shares.
C. on sale of residential house.
D. saleofpersonaleffects.
ANSWER: C

140. Exemption u/s 54 is allowed for investment in.

A. another residential house.
B. land.
C. shares.
D. jewellery.
ANSWER: A

141. Taxonlongtermcapitalgainis.
A. 10%.
B. 20%.
C. 30%.
D. 25%.
ANSWER:B

142. Income from other sources is a.

A. Residuary head of income.
B. Major head of income.
C. Income from a single source.
A 19/
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 D. Constantandregularincome.
ANSWER: A

143. Which one of the following is not an income from other sources?
A. Interest on fixed deposit in bank.
B. Winningsfromcrossword puzzles.
C. gift in excess of Rs.50,000 from Non-Relatives.
D. profitonsaleofbuilding.
ANSWER: D

144. Which of the following income from other sources is not taxable?
A. Dividend from co-operative society.
B. Dividend from foreign company.
C. Dividend from domestic company.
D. Winningsfromlottery.
ANSWER: C

145. Dividends from co-operative society are.

A. Exempted.
B. Taxable.
C. Partially Exempted.
D. PartiallyTaxable.
ANSWER: B

146. Grossing up of interest on securities is required when.

A. Interest is received after T.D.S.
B. They are central govt. securities.
C. The interest on bank deposit is less than Rs. 10,000.
D. None of these.
ANSWER: A

147. Taxisreducedfromcasualincomesat.
A. 10%+surchargeandcesses.
B. 20%+surchargeandcesses.
C. 30%.
D. none of these.
ANSWER: C

148. InterestonBankTermDepositsissubjecttotaxdeductionatsourceiftheinterestamountduringthe relevant

previous year exceeds.
A. Rs.2,000.
B. Rs.5,000.
C. Rs.10,000.
D. Rs.30,000.
ANSWER: C

149. RateofT.D.Sforunlistedsecurities,includingcessesis.
A. 10.6%.
B. 15.6%.
C. 10%.
D. 30.6%.
ANSWER:C

150. Speculation Loss can be carried forward for.

A 20/
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 A. 8 years
B. 10years
C. 5years
D. 4years
ANSWER:D

A 21/
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