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Direct and Indirect Taxes 1 BASIC CONCEPTS [S. 1 - 4] 4. MULTIPLE CHOICE QUESTIONS 1. Income-tax Act extends to (a) Whole of India (b) Whole of India except Jammu & Kashmir {c) Whole of Maharashtra only (d) None of these 2. Out of the following which is a revenue receipt ? a) Premium received on issue of new shares (©) Annuity received from former employer {) Interest from investments (a) None of these 8, A.O.P should consist of (a) Individual only (b) Persons other than individual only {c) Both the above (a) None of these 4, Body of individual should consist of {a) Individual only {b) Persons other than individual only {(¢) Both the above (4) None of these 5, Anew business was set up on 15-11-2008 and it commenced its business from 1-12-2008, The first previous year in this case shall be {a) 15-11-2009 to 91-3-2010 (©) 1-12-2009 to 31-3-2010 {) 2009-2010 (4) None of these 6. Shivali University is assessable under the Income Tax Act as (a) An individual (b) An artificial juridical person {¢) Alocal authority (@) None of these 2. MATCH THE FOLLOWING COLUMNS 1 Column A Column 1. Narayanan Murthy (@) Company 2. Infosys Echnologies Ltd. {b) Association of Persons 3. Solapur Gram-panchayat (ce) Firm 44. Andheri Sports Club (3) Individual 5. Kamataka University (@) Body of Individuals ()Atificial Juridical Person (9) Local Authority 2. Column A ‘Column & 4. Capital Gains (a) Assessment year 2009-10 2. Financial year immediately preceding (©) Income the assessment year () Assessee 3, 1-4-2009 to 31-83-2010 (d)_Assessee in default 4, Hindu Undivided Family (@) Previous year 5. Person with tax liability (Person (g) Remittance Direct and Indirect Taxes 2 RESIDENCE AND SCOPE OF TOTAL INCOME [S. 5-9] 4. MULTIPLE CHOICE QUESTIONS 1. Residential status is to be determined for (a) Previous year (©) Assessment year () Accounting year (@) None of these 2. Incomes which accrue or arise outside India but are received directly into India are taxable in case of (a) Resident only (©) Both ordinarily resident and NOR (©) Non-esident (2) All the assesses 8. Total Income of a person is determined on the basis of his (@) Residential status in India (©) Citizenship in Incia (6) None of these (2) Both of the above 4, ¥. Ltd, is an Indian company whose entire control and management of its affairs is situated ‘outside India. ¥. Ltd, shall be (@) Resident in ingia {b) Non-resident in India () Not ordinarily resident in India (d) None of these 5. A.Lid,,is registered in U.K. The control and management of its affairs is situated in India. R. Ltd. shall be (a) Resident in India (©) Non-resident (6) Not ordinarily resident in India (@) None of these 6. M, a foreign national visited India during previous year 2009-10 for 180 days. Earlier to this he ever visited India, Min this case shall be (a) Resident in India (0) Non-resident (6) Not ordinarily resident in India (4) None of these 7. M, a foreign national but a person of Indian ongin visited India during previous year 2008-10 for 181 days. During 4 preceding previous years he was in India for 366 days. M shall be (a) Resident in India (b) Non-resident in India (6) Not-ordinarily resident in India (8) None of the above 18, Income which accrue or arise outside India and also received outside India is taxable in case of. (a) Resident only (0) Not ordinarily resident fo). Bom prdlnariy tesident a HOF (@) None of the above ‘2. Income which accrue outside India from a business controlled from India is taxable in case of (@) Resident only (©) Not ordinarily resident only (6) Both ordinarily resident and NOR (8) Nonesident 10. Income deemed to accrue o arise in India is taxable is case of (a) Resident only (0) Both ordinarily resident and NOR (c} Non-resident (2) All the assesses, Direct and Indirect Taxes 3 2. MATCH THE FOLLOWING COLUMNS 1 ‘column A Column 8 1. Foreign income (@)_ Ordinary resident 2. Income received in India (0) Not ordinary resident 3. Foreign Business income cont (©) Non-resident from India (2) Taxable for OR, NOR, NR, 4, Remittance in India (e} Taxable for OR, NOR 5. Highest tax liability () Not taxable for non-resident 6. Least tax liability ) Not taxable 2 ‘Column ® Coun 8 1. Anindian company (a) Non-tesident 2. AHUF with NOR Karta (0) Always ordinary resident 3. Citizen of India, leaving India for (©) Resident firm ‘employment (3) Not ordinary resident frm 4, Apperson who is not resident (e) Not ordinary resident 5. Aforeign frm with 50% control and (f) Resident if stay in India in last management in India 4.yrs. exceeds 365 days, (a) Resident only if stayin india exceeds 182 days in previous year 4 Direct and Indirect Taxes 4 SALARIES [S. 15 - 17] 4. MULTIPLE CHOICE QUESTIONS 1. M, @ chartered accountant is employed with M Ltd,, as an internal auditor and requests the ‘employer to call the remuneration as internal audit fee. M shall be chargeable to tax for such fee Under the head. (a) Income from salaries, (b) Profit and gains from Business and Profession (6) Income from other sources (a) None of these 2. M, who is entitled to a salary of Rs. 20,000 p.m. took an advance of Fis. 60,000 against the ‘salary in the month of March 2010. The gross salary of M for assessment year 2010-11 shall be: (a) 2,99,000 (©) 2,40,000 (} 50,000 (@) None of these 3. M, who is entiled to salary of Rs. 12,000 p.m. took advance salary from his employer for the months of April and May 2010, along with salary of March, 2010 on 31-8-2010. The gross salary ‘of M for the assessment year 2010-11 shal be (a) Re. 1,44,000, (0) Re. 1,68,000 () Rs. 24,000 (@) None of these 4, Salary of M becomes due on 1st of next month and it is paid on 7th of that month, For the ‘assessment year 2010-1, the salary of M shall be taken from (a) April 2009 to March 2010 (©) March 2009 to February 2010 () April 2010 to March 2011 (4) None of these 5. M, Lid, announced increase in D.A. on 21-3-2009 with retrospective effect from 21-3-2004 and the same were paid on 6-04-2009. The arrears of D.A. shall be taxable in the previous year, (a) 2008-09 (©) 2009-10 (6) In respective previous years to which these relate (a) None of these 6. Un-commuted pension received by a Government employee is (@) Exempt (0) Taxable (6) 1/3 is exempt (2) None of these 7. M claimed the exemption of gratuly in the past to the extent of Rs. 2,50,000, He was entitled to the gratuity from the present employer amounting to Rs. 2,00,000 in the previous year 2008-10. Man claim exemption to the maximum extent of (@) Rs. 2,00,000 (©) Nil @) Rs. 1,00,000 (2) None of these 8, Employee M i neither a government employee nor covered under Payment of Gratuity Act, 1972. He has completed 16 years and 8 months of service. The number of completed years, ‘considered for gratuity exemption shall be (a) 17 years {b) 16 years (6) 16 years and 8 months (4) None of these 8. Compensation received on voluntary retirement is exempt under sec. 10 (10) to the maximum extent of (@) Rs. 2,40,000 (0) Rs. 3,00,000 (6) Re. §,00,000, (8) None of these 10. Mis entitied o children eduction allowance @ Rs. 80 p.m. per child for 3 children amounting Res. ‘240 p.m. It will be exempt to the extent of (a) Rs. 200 p.m. (b) Rs, 160 p.m (6) Res. 240 p.m (2) None of the above Direct and Indirect Taxes 11. Entertainment allowance in case of government employee is 2 {) Fully exempt (0) Fully taxable {¢) Exempt upto certain limits mentioned in sec. 16 (i) {@) First included in ful in gross salary and thereafter deduction allowed from gross salary under section 16 (i) MATCH THE FOLLOWING COLUMNS Column A Salary to partner by firm Salary of aM.P./ MLA Value of renttree accommodation Receipts ftom Keyman Insurance Policy Professional Tax Column B (a) ) © (a) e) ® @ Capital Gains Profits in lieu of salary Business Income Taxfree perquisites Perquisites Income from other sources Deduction from salary Column A, Notified amount of exempt gratuity Notified amount of exempt leave encashment Notified amount of exempt retrenchment ‘compensation Notified amount of exempt entertainment allowance to govt. employees Medical reimbursement not taxable upto 2 ‘Column B Fs. 5,000 Rs. 8,50,000 Rs. 2,00,000 Fis. 5,00,000 Re. 9,00,000 Rs, 15,000 Rs, 10,000 (a) ) ©) @ ee) 0 (9) 6 Direct and Indirect Taxes 5 INCOME FROM HOUSE PROPERTY [ S. 22-27] 4. MULTIPLE CHOICE QUESTIONS 1. Mhas taken a house on rent and sublets the same to A. Incame of M fram such house property shall be taxable under the head. (a) Income trom house property (b) Income from other sources (6) Business income (@) None of the above 2. Municipal valuation of the house is Rs. 1,00,000 fair rent Rs. 1,20,000, standard rent Rs. 1,10,000 ‘and actual rent received or receivable is Rs. 1,40,000. The Gross Annual Value inthis case shall be (a) Re. 1,10,000 (©) Re. 1,20,000 (6) Rs. 1,40,000, (4) None of the above 8. Municipal valuation of the house is Rs. 1,20,000, fair rent 1,40,000, standard rent Rs. 1,90,000 ‘and actual rent received or recawable is Rs. 1,25,000. The gross annual value in this case shall be (@) 1,30,000 () 1,25,000 () 1,40,000 (@) None of the above 4. Aras two house properties. Both are selt-cccupled. The annual value ot (@) Both house shall be nil (©) One house shall be nil (6) No house shall be nil (2) None of the above 5. An assessee has borrowed money for purchase of a house & Interest is payable outside India Such interest shall (@) Be allowed as deduction (©) Not to be allowed as deduction (6) Be allowed as deduction i the tax is deducted at source (a) None of the above 6. Municipal tax is deducted from (a) Net Annual Value (©) Gross Annual Value (6) Municipal Valuation (@) None of the above 7. Incase the property is owned by co-owners and its self cocupied by all co-owners. The annual value of such house property (a) be nil (b) For each co-owner shall be nil (¢) Onl for co-one owner will be nil (4) None of the above 8. Ahouse property with fair rent Rs. 1,20,000 is neither let out nor self occupied through out the previous year. lis annual value shall be (@) Rs. 1,20,000, (Ni (c) Rs. 60,000 (8) None of the above 9. Unrealised rent is a deduction from (@) Gross annual value {b) Net annual value (¢) Municipal Value (@) None of the above 10.A property is owned by co-owners and itis sel occupied by all co-owners. In this case interest ‘on money borrowed after 1-4-2001 for acquiring the house shall be alowed (a) B the extent of is. 1,50,000 as the case may be forthe total property income (0) Te wach co-owner, othe extent of Rs, 1 50,000 as the case may be {©) No deduction of interest shal be allowed (6) None ofthe above Direct and Indirect Taxes 2. MATCH THE FOLLOWING COLUMNS 1 ‘Column A Column B 1. Net Annual Value (@) Fully deductible 2. Gross Annual Value {&) Gross Annual Value less 8, Standard deduction on income from H.2 Municipal Taxes paid 4. Interest on loan for let out property (©) 1S of Net Annual Value 5. Pre-acquisition Interest on property (6) Fair Rent less Municipal Taxes {e) Higher of Fair Rent and Municipal Valuation, where standard rent is not applicable {Deductible in 5 equal instalments (9) 30% of Net Annual Value 2 ‘Column Al Column B 1. Unrealised rent received during the (a) No standard deduction alowed previous year (0) Zero for one SOP 2, Depreciation of house property (6) Cannot exceed fair rent 3, Interest on loan for SOP (4) Cannot exceed standard Rent 4, Reasonable letting value {@} Not allowed as deduction trom 5. Net Annual Value Income from HP (#) No restriction on deductible interest (9) Deduction restricted to 30,000 CF 1,50,000 as applicable 8 Direct and Indirect Taxes 6 PROFITS OF BUSINESS OR PROFESSION [ S. 28 - 44D | 1, MULTIPLE CHOICE QUESTIONS 1. Salary, bonus, commission or remuneration due to or received by a working partner from the firm is taxable under the head {@) Income from salaries (6) Other sources (©) Business Income (@) None of the above 2, Perquisite received by the assessee during the course of cariying on his business or profession is taxable under the head. (@) Salary (b) Other sources (6) Business / Professional Income (8) None of the above 3, Interest on capital or loan received by a partner from a firm is, (a) Exempt uis 10 (2A) (b) Taxable as business and profession income () Taxable as income from other sources (d) None of the above 4, Under the head Business or Profession, the method of accounting which an assessee can follow shall be (a) Mercantile system only (0) Cash system only (6) Mercantile or cash system (a) Hybrid system 5. Export incentives received by an assessee are (a) Exempt (0) Taxable as business income () Exempt upto certain limits (8) None of the above 6. M, who was carrying on agency business, received a sum of Rs. 5,00,000 from his principal for termination of agency. Compensation 0 received shall b= (a) Exempt as its capital receipt (©) Fully taxable as business income (6) Taxable as income from other sources (d) None of the above 7. Depreciation is allowed in case of (a) Tangible fixed assets only (b) Intangible assets only (6) Tangible and intangible assets (d} Wasting assets only &. Ii the asset of a particular block is acquired and put to use during the previous year for less than 180 days, the assessee shall be entitled to depreciation (a) At normal rate (b) At 50% of normal rate (6) No depreciation is allowed (2) None of these 9. Which of the following tax is allowed as a deduction while computing the business income ? (a) Wealth tax {b) Income tax () Sales tax (@) None of the above 10.Where the amount of an expenditure claimed as deduction exceeds As. 20,000, it should be pald by (@) Crossed cheque (©) Account payee cheque / drat (©) Cash (6) None of these ‘1. Where the amount of an expenditure claimed as deduction exceeds Rs. 20,000 and itis not mado by account payee choaue / drat. {@) 20% of such payment shall be disallowed (©) 100% of such payment shall be disallowed (©) 20% of the excess over Fis, 20,000 of such payment shall be disallowed (2) None of the above Direct and Indirect Taxes 12, Expenditure incurred on family planning amongst the employees is allowed to (a) Any assessee (b) Acompany assessee {c) An assessee which is a company or cooperative society (4) None of the above 49.3 MATCH THE FOLLOWING COLUMNS 1 ‘Column A Column B ‘Compensation received on termination of agency Capital expenditure on repairs of factory building (a) Set off against other incomes possible during subsequent years (b) Business Income (6) No depreciation claim 3. Nagative WOV of a Block of asset @) Deductible as expenditure when} 4. Unabsorbed Depreciation paid 5, Bonus to employees (2) Notallowed as business deduction ‘Column A Column B Interest on captal borrowed Discount on zero coupon bond Provision for Bad debt Fees for technical services paid outside India Interest on loan from any public financial institution (a) Deductibie on payment / due basis (©) Not deductible at all (©) Deductibie only on payment (€) Deductible on pro-rata basis (@) Deductibie f tax is deducted at 10 Direct and Indirect Taxes if CAPITAL GAINS [S. 45, 48 - 50, 54] 4. MULTIPLE CHOICE QUESTIONS 1. Capital gain arises from the transfer of (a) Any asset (0) Any fixed asset (6) Any capital asset (8) Land and buildings only 2. Which asset is not treated as capital asset for capital gain purposes. (@) Motor car for business use (©) Jewellery (6) Tenaney rights {@) Plant and Machinery held as stock in trade 8. Short-term capital gain arise on transfer of shares and units held by the assessee for not more than (a) 36 months from the date of acquisition (b) 12 months from the date of acquisition (6) 54 months trom the date of acquisition (a) None of the above 4, Tick from the following, the capital assets, where there will be long-term capital gain, # such ‘asset is transferred altar itis held for 14 months. (@) Plant and Machinery (0) Jewellery (6) Units of UTI (8) None of the above '5. Distribution of assets at the time of partial or complete partition of HUF shall (a) Be regarded as a transfer in the hands of HUF for capital gain purposes (©) Be regarded as a transfer in the hands of coparceners (members ot HUF) (6) Neither be regarded as transfer in the hands of HUF nor in the hands of coparceners (@) None of the above 6. The assessee is allowed to opt for market value as on 1-4-81 in case of (@) All capital assets, (0) All capital assets other than depreciable asset (6) Only house properties (2) None of the above 7. Cost of improvement of goodwill of a business shall be (@) Nil (0) The capital expenditure incurred () Capital expenditure incurted on or after 1-481 (4) None of the above &. In case of long term capital gain, the amount to be deducted from sale consideration shall be (a) Cost of acauisition (b) Indexed cost of acquisition (6) Market value on 1-4-81 (2) None of the above ‘9. Conversion af capital asset into stock in trade will sult into capital gain of the previous year (a) In which such conversion took place (©) In which such converted asset is sold or otherwise transferred (6) In which such converted asset was purchased (@) None of these 10.Where capital asset 's converted into stock in trade then for the purpose of computation of capital gain, the full value of consideration shall be (a) The market value of the asset on the date of sale of such asset (0) The market value of the asset on the date of conversion of such asset (6) The sale consideration (@) None of the above 11.1n case of compulsory acquisition, the indexation of cost of acquisition or improvement shall be one till the (a) Previous year of compulsory acquisition (©) Year in which full compensation is received (6) Year in which part oF full compensation is received (@) None of the above Direct and Indirect taxes un 12, Exemption under section 54, shall be available (a) All assesses (b) Individuals only (6) Individual + HUF (a) None of the above 18. The exemption under section 54, shall be available {a) 7 the extent of capital gain invested in the HP (©) Proportionate to the net consideration price invested (6) To the extent of amount actually invested {d) None of the above 14, For claiming exemption under Sec. 54, the assassee should purchase residential property (a) 2 years before the date of transfer (©) 3 years after the date of transfer {c) 1 year belore or 2 years after the date of transfer (a) None of the above 15. the assessee wishes to deposit money under capital gain scheme for claiming exemption under sec. 54, it should be deposited within {a) Six months from the date of transier (©) Within six months form the end of the relevant previous year (¢) Due date of furnishing the return of income us 139 (1) {d) None of the above 2. MATCH THE FOLLOWING COLUMNS 1 ‘Column A Column 8 House for personal use (a) Long term capital asset 1. 2. Personal Car (0) Short term capital asset 3. Compulsory acquisition of an asset (6) Not a capital asset 4, Equity shares of Infosys Ltd. held for (4) Capital asset 14 months (e) Not atransfer 5. cll () Treated as transter (@)_Cost inflation index 2 ‘Column Al Column B 4. Capital gain on conversion of capital asset| (a) Cost of acquisition and into stock ‘Computing gains on enhanced ‘compensation on compulsory acquisition improvement shall be taken as nil Indexation not applicable Not a capital asset () © 3. Computing gains on capital asset acquired] (d) Charged when stocks sold betore 1-4-81 {e) Nota tanster 4. Short term capital asset {) Fair Market Value on 1-4-81 can 5. Jewellery be substituted for cost of acquisition (@) Capital asset 2D Direct and Indirect Taxes 8 INCOME FROM OTHER SOURCES [S. 56-59 | MULTIPLE CHOICE QUESTIONS. 4. Income under the head income from other sources is taxable on (a) Due basis (b) Receipt basis (©) On the basis of method of accounting regularly employes by the assessee (8) None ofthe above 2. Dividends declared by Unit Twst of Inca is (2) Fuly exempt in the hands of unit holders (b) Ful taxable inthe hands of unit holders (©) Taxable but deduction is allowed under sec. 80 {@) None ofthe above 3, Tino system of accounting i flowed, interest on secuites is taxable on (a) Due basis: (b} Receipt basis (€) Hyrbid basis: (@) None of the above 4. For computing lottery income, the assessee shall {@) Be enttied to any deduction for purchase of lottery tickets {b) Not ented to any deduction for purchase of ftery tickets (c) Be entitled to deduction upto 10% of total purchase of tickets (3) None ofthe above 5. The legal heir of the deceased who receives family pension is allowed a standard deduction from such pension tothe extent of (@) 18 of such pension, subject to maximum of Ris. 25,000 {b) 18 of euch pension or Re. 1,000 whichever i lese {©) 18 of such pension or Rs. 16,000 whichever is more (a) None of the above 6, Git received by an individual Rs, 70,000 from his relative M shall be (@) Fully exempt b) Fully taxable (6) Exempt upto Rs. 50,000 (2) None of the above 2. MATCH THE FOLLOWING COLUMNS. Column A Column B 1, Dividend from Domestic Company (@) Lesser of ¥, or Rs. 15,000 2. Dividend from foreign Company (©) Exempt irom tax 3. Income from interest on securties by a dealer | (¢) Agricultural income 4, Taxable git to non-relatives (@) Sundry income 5. Standard deduction on family pension fe) Business income 6. Compensation received from insurance () Exceeding Re. 59,000 company for damage to crop (a) Trxable as other sources Manufacture of saltfrom sea-water {h) Lesser of ¥, 07 25,000 ()Non-agricuitural income Direct and Indirect Taxes 13 9 DEDUCTIONS FROM GROSS TOTAL INCOME [S. 80A, S. 80B, S. 80C, S. 80CCC, S. 80D, 80DD, 80E & S. 80U | 4. MULTIPLE CHOICE QUESTIONS 1. Deduction u/s 80 C in respect of LIP, Contribution to provident fund, etc. is allowed to (a) Any assessee {(®) An individual {) An individual or HUF (@) An individual or HUF who is resident in India 2. Deduction u's 80-C is allowed to the maximum of (a) Ris, 70,000 (b) Rs, 1,900,000, (c) Rs. 1,40,000 (a) None of the above 3, For claiming deduction uis 80 -C in respect cf fe insurance premium, itcan be paid by assessee for (a) Himself only (b) Himself or spouse (c) Himsetf, spouse and any child (d) None of the above 4, Inthe case of HUF, deduction ws 80 Cin respect of life insurance premium shall be allowed for (a) Karta of HUF (b) Any member of HUF {c) Karta and Coparcaner of the HUF (@) None of the above 5. An assessee has pad ite insurance premium of Rs. 25,000 during the previous year fora policy of Rs. 1,00,000. He shall {@) Not be allowed deduction ws 80 C (©) Be allowed Deduction u's 80 C to the extent of 20% of the capital sum assured ie. As 20,000 (6) Be allowed Deduction for the entire premium as per the provisions of section 80 C (a) None of the above 6, For claiming Deduction ws 80.C, the payment or deposit should be made {@) Out of any income (b) Outof any income chargeable to income tax {6) During the current year out of any source () None ofthe above 7. Annual interest accrued on NSCs Vill issue shall be (a) Exempt {0) Taxable oniy in VI" year {6) Taxable on the basis of annual accrual (d) None of the above 8, Deduction u/s 80 -C in respect of tition fee is allowed to {@) An individual only {b) Individual or HUF (6) Any assessee {6) None of the above 8. Deduction ws 80-C for tution fee shall be allowed for the purposes of {a) Any fulltime eduction in @ school or college (©) Any full or part time education (6) Any par time eduction in a college abroad (4) None ofthe above 10.Deduction u's 80 G in respect of tution fee is allowed to an individual for {@) Any of his children {b) Any of his minor children {6) Any two children of such individual _(¢) None of the above ‘11.Deduction ws 80 © in respect of term deposit with a scheduled bank is allowed ifthe term epost is for a period {@) Not less than 3 years {0) Not ess than 5 years (6) Not less than 2 years, (6) None of the above “ Direct and Indirect Taxes 12, Deduction under section 80 CCC is allowed to the extent of (@) Rs, 2,00,000 (©) Rs. 1,00,000 (©) Rs. 400,000 (@) Rs, 10,000 19.Deduction in respect of contribution for annuity plan to certain pension fund under 80 CCC is ‘allowed to (a) Any assessee (©) Individuals only (6) Individual or HUF (4) None of the above 414, Deduction ws 80 D in respect of medical insurance premium is allowed to (a) Any assessee (©) An individual or HUF (6) Individual only (4) None of the above 15.Deduction ws 80 D is allowed to an individual for premium paid to insure the health of (@) Individual himselt (©) Individual and his family (6) Individual, his spouse, parents and dependent children (4) None of the above 16. The payment for Insurance premium under section 80 D should be (a) In cash (©) By any mode other than cash () Cash/ by cheque {@) None of the above 17, The quantum of deduction allowed under section 80 D fer self and spouse shall be limited to (a) Res. 20,000 (©) Re. 10,000 (6) Rs. 15,000 (4) None of the above 18. Deduction ws 80 DD in case of dependent with severe disability shall be allowed (@) Tothe extent of actual expenditure (©) Rs. 50,000 (6) Rs. 1,00,000 irrespective of actual expenditure (4) None of the above 19, Deduction under section 80 DD shall be allowed (a) Bethe extent of actual expenditure / deposit or Rs. 40,000 whichever is less (©) 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 (2) None of the above 20. Deduction uis 80 E shall be allowed in respect of amount paid by way of interest cn loan taken from (a) Any person (©) Any relative (6) Financial insttution or approved chartable institution (@) None of the above 21. The deduction u/s 80 E is allowed for repayment of interest to the extent of (@) Rs. 25,000 (©) Rs. 40,000 (6) Any amount (@) None of the above 22, Deduction uis 80 E shall be allowed for the higher education of| (a) Assesses himself (©) Assessee, spouse and children (¢) Assessee and dependent children (d) None of the above 28, Deduction uis 80 U in case of person with disability i allowed to (2) An individual who is citizen of India (D) An individual who is resident of India (6) Any individual assessee (@) None of the above 24. The quantum of deduction allowed ws 80 U is (@) Rs. 40,000 (©) Rs. 50,000 (@) Rs. 60,000 () Rs. 70,000 Direct and Indirect taxes 2 1 MATCH THE FOLLOWING COLUMNS resident individual ‘Column A Coun 8 1. Deductions from GT), included in (a) Sec80E 2. Exempt incomes are laid down in (b) SecanU 8. Deduction based on contribution to pension | (c) Sec. 80 funds (d) Secaoc 4. Deduction based on interest paid on loan for | (e) Sec. 80 DD higher eduction (Sec. 10 5. Deduction for handicapped individual (g)_See. 89606 ‘Column A Column 8 1. Maximum total deductions (a) Amount paid 2. Maximum contribution to pension funds | (6) Gross Total Income 3. Maximum claim for medi-claim by a senior | (c) Re. 15,000 citizen (@) Rs. 50,000 4. Maximum interest claim on loan for higher | (e) As. 1,00,000 ‘eduction ws 89 (®) Res. 1,00,000 5. Deduction for a severely handicapped (a) Rs. 20,000 16 Direct and Indirect Taxes ut SERVICE TAX |. MULTIPLE CHOICE QUESTIONS 1. Service Tax is (a) a Direct Tax levied by the Central Government (0) an Indirect Tax levied by the State Government (c) an Indirect Tax levied by the Central Government (@) a Direct Tax levied by the State Government 2. Service tax was introduced in India in the year: (a) 199, (©) 1995, (©) 200 (@) 1994 3. Service tax is applicable to: (a) Whole of India (b) Whole of India except Jammu and Kashmir (¢) Whole of India, except Jammu and Kashmir and Union Territories of Dadra, Nagar Haveli Daman & Diu 4, Service Taxis normally {@) paid and borne by the person who provides the service. (©) paid and borne by the person who receives the service. (@) paid by the person who provides the service and borne by the person who receives the (@) paid and borne by the person who provides the service, and receives the service equally. 5. Service Tex law is governed by {@) The Income Tax Act () The Service Tax Act (6) The Excise Act (a) Chapier V of the Finance Act, 1994 6. Following are taxable services (@) service provided trom Jammu & Kashmir to the clients anywhere in India (6) services provided within Jammu & Kashmir (©) services provided within Jammu & Kashmir to non-ingians {@) service provided to residents cf Jammu & Kashmir from anywhere in india 7. When Service tax on a particular service comes into effect from the noted date (@) Services performed betore such noted date are not subjectto service tax though the payment may be recawved after such date. (©) Senvices performed before such notitied date are not subject to service tax only if payment is also received betore the notified date (c) Services performed before such notified date are subject to service taxi payment is received after the notiied date (@) None of the above 8, In the case of W/s ABC Techno-Services, the services may fall under () Management services (taxable we. 16-10-1998); or (i) Technical consultancy (taxable we.f. 16-7-2001); or (ii) Business Auxiliary services (taxable we.t. 1-7-2009) (a) The services would be classified under Technical consultancy since it occurs in its name. (0) The services would be classified under Business Auxilary services since t occurs last (the latest) in $.65(105). (} The services would be classified under Management consultant since it occurs first in 8.65(105). (@) None of the above ‘9. Aconsutting engineer gave advice in respect of production engineering and in ts course suggested ‘some changes which fell under the category of management consultancy. Direct and Indirect Taxes 7 (a) The services would be classified under Consulting Engineer (©) The services would be classified under Management Consultancy. (¢) The services would be classified under both - Consulting Engineer and Management Consultancy (4) None of the above. 410.A hotel renting out a conference room for a conference where lunch is also served can be categorised either as a ‘convention centre’ ora 'mandap keeper’. This service should fall under {a) the general and broader category of mandap keeper (©) both mandap keeper as well as convention centre {) the more specific category of a ‘convention centre’ {d) none of the above 11. When the provision of service is for a consideration in money, service tax chargeable on - (a) amount as may be determined in the prescribed manner. (©) gross amount charged by the service provider for such service provided or to be provided by im {c) net amount charged by the service provider for such service provided (d) None of the above 12, Where any taxable service is provided by a non-resident, service tax {a) is not payable (0) is payable by the service provider {c) is payable by the service recipient (2) is payable equally by the service provider and the service recipient 419. In case of Insurance Auxiliary services, related to general insurance and life insurance business, provided by an insurance agent, service tax is to be paid by {a) the insurance agent, (©) the policy holder (¢) the company, which appointed the agent (d) none of the above 14. In case of Goods Transport Agency, the service tax on freight is payable {a) by the consignor {b) by the consignee (¢) by the Goods Transport Agency (@) the consigner/consignee, who is making payment towards freight 15.Service tax is not payable if the aggregate value of taxable service does not exceed: a) Rs. 8,00,000 (©) Rs. 10,00,000 {) Rs. 4,00,000 (a) Rs. 6,00,000 16.Service tax is not payable on any service provided to: a) an undertaking in a free trade zone (©) an undertaking in a software technological park {c) an undertaking in backward area (@) a developer or unit in a special economic zone 17. The Service Tax for a particular period is payable on the amount / value {a) of taxable service billed to the client during that period, (0) of taxable service billed as well as received during that period, () of taxable service received during that period (@) of taxable service rendered during that period 16.1 the charges for the taxable service have been received in advance before rendering of the (a) no service tax is payable on receipt of advance (©) the Service Tax is payable on rendering of service (¢) the Service Tax is payable on receipt of advance {d) none of the above 19. The credit of the Service Tax paid on the input services is governed by- (a) The Service Tax Act (b) The Excise Act {c) The Finance Act, 1904 (@) The CENVAT Credit Rules, 2004 1s Direct and Indirect Taxes 20.CENVAT Credit of Education Cess availed can be ulilized for payment of (a) Service tax relating to output services (©) Service tax and Education Cess relating to output services () Only Education Cess relating to output service (@) None of the above 21. The interest and penalty amounts paid to service tax dept (a) can be utilized for payment of Service Tax on output services (©) can be utilized for payment of Education Gess on output services (c) cannot be taken as CENVAT credit (2) None of the above 22.Credit of Service Tax on the input services can be availed, (a) on use of the input service (©) on receipt of the invoice/bilvchallan () on payment of service tax by the provider of input service (4) only after making payment of the amount indicated in the invoice / bil/challans 23, Due date of payment of service tax, other than for the month of March, in case of a company Is: (a) Sth day of the month immediately following each quarter (©) Sth day of month immediately following the calendar month () 25th day of month immediately following the calendar month 24. Due date of payment of service tax other than for the quarter ending March in case of partnership firm is: (a) Sth day of the month immediately following each quarter (©) Sth day of the month immediately following the calendar month (6) None of the above 25. Due date of payment of service tax for the month/quarter ending 31st March is: (a) 31 st March (©) 5th day of the month immediately following March (6) None of the above 26. Retum of service tax has to be fled (a) monthly (©) quarterly (6) halt-yearly @) yearly 27.Due date of filing ceturn is: (a) Sth of the month following the particular half-year (©) 18th of the month following the particular half-year (6) 25th of the month following the particular halt-year (2) 30 days of the month folloving the particular haif-year 28. Return of service tax isto be filed in (a) Form $71 (©) Form ST3 (6) Form ST2 29. The following persons should apply for registration under the Service Tax Act- (a) Every person who has provided a taxable service of value exozeding Rs. 9 lakhs, in the preceding financial year (©) Arecipient who is liable to pay service tax. (6) The ‘Input Service Distributors! (@)Allthe above 80.Practising Chartered Accountant Service became taxable we.f. — (a) 16.10.1998 (©) 1.7.2003 (6) 1.6.2007 (@) 1.7.1997 81.Business Auxiliary Service became taxable we. (@) 16.10.1998, (©) 1.7.2003, () 1.8.2007 (@) 1.7.1997 82, Renting of immovable property became taxable we. (@) 16.10.1998 () 1.7.2003, (6) 1.6.2007 (@) 1.7.1997 Direct and Indirect Taxes 33.Mandap Keeper Service became taxable we.t. (b) 1.7.2003 (@) 1.7.1997 (a) 16.10.1998, (©) 1.62007 84.Commercial Training service became taxable weet (a) 16.10.1998, ) 1.6.2007 36."Reenfing of immovable property” includes (a) letting (6) licensing y (®) 1.7.2003 (@) 1.7.1997 () leasing (4) all above 2. MATCH THE FOLLOWING COLUMNS COLUMN A COLUMN B. 4. Value of any taxabie service for a ‘consideration in money 2. Value of any taxable service for a ‘consideration partly in money Value of any taxable service for a ‘consideration net ascertainable Practising Chartered Accountant Business Auxiliary Service Renting of immovable property Mandap Keeper 4, 5. 6 7. @ ) © @ ) 0 @ ‘Service became taxable mes. 1.6.2007 Service became taxable wet. 1.7.2003 Gross amount charged by the service provider for such service provided or to be provided by him ‘Amount as may be determined in the prescribed manner Service became taxable wet. 1.7.1997 ‘Such amount in money, with the adltion of service tax charged, as is equivalent tothe consideration Service became taxable wert. 16.10.1998 20 Direct and Indirect Taxes 12 MVAT: DEFINITIONS 4. MULTIPLE CHOICE QUESTIONS 1. VAT does not apply to (a) Importer () Retailer (©) Works contractor (¢) Consumer 2. VATis charged (@) only by first dealer who sells to ancther dealer (©) only by the last dealer who sells to the final consumer (¢) by all dealers (@) by the consumer 5. A Tax Invoice isto be issued (a) only by an importer (©) only by @ manutacturer (c) only by a registered dealer (@) by any dealer, whether registered or unregistered 4. In VAT laws (a) there is no concept of previous year and assessment year (©) sales made in the previous year are taxed in the assesement year (¢) sales made during year ending 31-3-2010 will be taxed as per laws as on 1-4-2009, Le, the first day of the financial year (@) none of the above 5, The rate of VAT depends upon (a) the person ie. the type of tax payer - whether an individual, a firm, HUF, etc. (0) the goods i.e. whether covered by schedule A or 8 or C etc. (6) the amount of turnover, ie. higher rate for higher turnover (4) none of the above 6. ‘Dealer’ as defined under MVAT, 2002 does not include (a) Insurance Companies (©) Shipping company (6) An agriculturist who sells agricultural produce grown on land cultivated by him (a) Airlines 7. ‘Goods'as defined under MVAT, 2002 include (a) immovable property (0) newspapers (€) growing crops (@) shares &. ‘Goods’as defined under MVAT, 2002 do not include (a) Patents {b) lottery tickets (6) livestock (a) tees: 9. ‘Sale’ as defined under MVAT, 2002 includes (@) Mortgage (©) hypothecation () pledge (4) transfer of property in goods involved in the execution of a works contract 10.’Sale Price’ as defined under MVAT, 2002 includes. (a) tax payable in respect of such sale (©) cost of insurance for transit (6) Depostt in connection with sale of goods (2) cost of instalation Direct and Indirect Taxes 2 MATCH THE FOLLOWING COLUMNS ‘Column Al ‘Column & 1. State Govermant can levy (@) Goods 2. Central Government can levy (b) Purchase price of goods purchased 3. Konkan Railway Corporation Limited from A by B 4. Goating of scant on raw agarbatti | (c) Excluded from detintion of Goods 5. Export permit (a) VAT 6. Sale subject to MVAT fe) Dealer 7. Sale price of goods sold by BtoA | (f) Not a Dealer (a) Manutacture (h) Service Tax i) Property Tax ) Does not amount to manufacture (k) Sale within Maharashtra 0 Sale within Goa, Daman and Dieu Direct and Indirect Taxes 13 MMAT : REGISTRATION 4. MULTIPLE CHOICE QUESTIONS 1, “Taxable sales for the purpose of registration exclude (a) Sales under Schedule B (b) Inter-State Sales (6) Sales under Schedule A (2) Exports 2. Taxable purchases for the purpose cf registration include (@) local purchases taxable under MVAT —_(b) Purchases under Schedule A (6) Imports from outside the Country (d) Purchases from other States 3. In case of an agent of a non-resident dealer, turnover for the purpose of registration will not include (a) turnover of sales of the agent himself (0) sales of non-resident dealer effected in the State (c) sales of non-resident dealer effected outside the State (@)all of the above 4. An auctioneer is liable to pay tax when he crosses the tumover limits, even i (a) the principal is not a registered dealer _(b) the principal is not disclosed (6) both the above (a) and (b) (d) none of the above (a) and (b) 5. An importer is liable to be registered under MVAT Act, 2002 if (a) the sales turnover exceeds Rs. 1,00,000 (©) taxable sales / purchases are at least Rs. 10,000 (6) both the above (a} and (b) (4) ether of the above (a) or (b) 6. Anonimporter is liable to be registered under MVAT Act, 2002 if (a) the sales turnover exceeds Rs. 5,00,000 (0) taxable sales / purchases are at least Rs. 10,000 (6) both the above (a} and (b) (4) none of the above (a) and (b) 7. Apperson wishing to obtain voluntary registration (a) is not required to full conditions regarding limits of turnover (©) is required to fulfil only the condition regarding limits of sales turnaver (1,00,000 or 5,010,090) (€) is required to fulfill only the condition regarding taxable purchases or sales of at least Rs. 10,000 (4) is required to fulfil concitions regarding limits of turnover within 6 months of registration, 43 MATCH THE FOLLOWING COLUMNS Column A Column B 1. Registration inrespective of turnover | (a) Liable 1o pay taxon sales before datel 2. Registration based on limits of turnover of registration 3. Dealer registered based on lirits of | (b) Goods specified in section 7 turnover (6) Successor of a dealer 4, Dealer obtaining voluntary registration} (d) Only Local Transactions 5. Taxtree goods (©) Interstate transactions 6. Taxable goods (Liable to pay tax on sales atter date 7. Trxable sales of registration 8, Taxable purchases (a) Goods specified in Schedule A {(h) Importer reaching limits atter 4-4-2005 Direct and Indirect Taxes 23 14 MMAT:: LEVY, COMPOSITION, SEF-OFF AND REFUND 4. MULTIPLE CHOICE QUESTIONS 1, Taxtree goods {a) Schedule A {b) Schedule B (6) Schedule © (a) Schedule E 2. Tax at Nil rate {a) Schedule A {) Schedule B {c) Schedule C (@) Schedule E 8. Tax at 1% {a) Schedule A (b) Schedule B {c) Schedule © (@) Exports 4, Taxat 12.5%, {a) Service tax () Schedule B {c} Schedule C {@) Schedule E 6. Tax at 4% (a) Central Sales Tax (©) Schedule B {c) Schedule C {@) Schedule E 6. Tax on material used for packing goods specified in Schedule A a) 1% (©) Nil (¢) Nilonly if charged separately (a) 4% 7. Export sales are {a) sale of tax-free goods (b) exempt sales (6) Sale of goods specitied in schedule A _(d) none of the above 8. For the purpose of section 42, a dealer shall be considered to be engaged in the business of selling at retail f — of his turnavar of sales consists of sales made to persons who are not dealers. (a) 50% (b) 75% (0) 90% (a) 80% 9. Composition Schemes under section 42 can be availed by (a) manufacturer () importer (¢) wholesaler {€) retailer 410, Under a Composition Schemes under section 42 rate of 8% is applicable to {a) Works Contract other than construction contracts, (©) Construction contracts (c) Mandap Keeper {d) None of the above 11.Undar a Composition Schemes under section 42 rate of 5% is applicable to (a) Works Contract other than construction contracts (©) Construction contracts (c) Mandap Keeper {d) None of the above 12, Under a Composition Schemes under section 42 rate of 1.5 fa) Works Contract other than construction contracts (©) Construction contracts (c) Mandap Keeper (a) None of the above 2 is applicable to Py Direct and Indirect Taxes 18, Under a Composition Schemes under section 42 rate of 12.5% is applicable to (a) Works Contract other than construction contracts, (©) Construction contracts (¢) Mandap Keeper (@) None of the above 14.The composition amount for an eligible restaurant is (a) § per cent of the turnover of sales in the case of a registered dealer (©) 10 per cent of the turnover of sales in the case of an unregistered dealer. (6) both (a) and (b) above (8) None of fa) and (0) above 15:11 the option to join oF to opt out of the composition scheme is exercised in any year then it can be changed (@) only at the beginning of the next year _(b) only at the end of the next year (6) any time during the next year (2) any time during the current year 16. The composition amount for an eligible Baker is (@) 4 per cent ofthe frst 30 Lakhs of spected turnover of sales in the case of a registered dealer (b) 6 per cent. ofthe frst 0 Lakhs of specified turnover of sales in the case of an unregistered dealer (¢) both (a) and (b) above (@) None of fa) and (@) above 17-The composition amount in case ofa eal of second hand vehicles shall be calculated @ (@) 12.5% ofthe sale price ofthe vehicle {b) 15% ofthe sale price ofthe vehicle {©) 15% on 12.5% ofthe sale price ofthe vehicle (3) 12.5% on 15% ofthe sale pice ofthe vehicle 18.No seo or relund shall be granted to any dealer in respect of any purchase made from a registered dealer after 1-4-2005, unless the clamant dealer produces {@) a dalivery challan {) a VAT Tax Payment Challan © ataxinvoice {@) None ofthe above 19.The set off can be adlusted or (@) against the tax payable according tothe return (©) against CST payable towards that period (©) against entry tax {@) all the above 20. Which o he following options is corect for computing tax ably under the Compostion Scheme fora retailer the rate of Taxis 875°? (a) Turnover x 8/108 (b) Turnover x 8% {© (lumover RO purchases) 2% —__(d) (Turnover ~ RD purchases) x@/108 21.As per composition scheme fr retailers, 8% fax is payable on (a) Sales — Purchases (b) Sales — (Purchases + Opening Stock — Closing Stock) (¢) Sales - (Purchases + Opening Stock) (3) Sales ~ Purchases ~ Closing Stock) 2. MATCH THE FOLLOWING COLUMNS. Column A ‘Column B 1. Schedule A @) 1% 2. Taxable Goods (©) Taxtree Goods 3. Schedule 8 (c) Not taxable vide section 8 of MVAT 4, Schedule C (a) 12.50% 5. Schedule & (@) Other than Schedule A Goods 6. Sale inthe course of inter-state trade |) 4%

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