449

T p sB
t a n k

TEST BANK

OBJECTIVE QUESTIONS FROM EXAMS

mb
bjective questions asked in the latest Mumbai University T.Y.B.Com. Exams (Upto Noven
obje
2017)

APRIL 2010

A. MULTIPLE CHOICE QUESTIONS

95,000, the Net laxaDIe
1. If Gross lotal Income is 90,000 and Life Insurance Premium paid is
Income would be
(a) 90,000 (b) (-) 5,000
(c) NIL
S.N. College. He was
a Chartered Accountant is a full time Lecturer in
practising
2. Mr. Suhas, S.N. College and was paid Audit fees
or
appointed as Internal Auditor of Students' Council of
75,000. These fees are taxable under the head
Income from Business and Profession
(b) Income from Salary
(a)
(c) Income from Other sources
of a firm is taxed under
3. Remuneration received by a working partner and Professionn
(a) Income from Salary (b) Income from Business
(c) Income from Other sources
4. There is a Short Term Capital gain
if listed equity shares sold were held for
(b) Not more than 10 months
(a) Not more than 36 months
(c) Not more than 12 months
received by retiring employee is exempt u/s 10(10 C) to
5. Voluntary Retirement Compensation
the maximum extent of
(b) 1,00,000
(a) 3,50,000
(c) 5,00,000
COLUMNS
MATCH THE FOLLOWING
B.
Column B
Column A
Shares of Indian Company (a) Ordinarily Resident
1. Listed Equity
held for 18 months
(b) Non Resident
(c) 30%
An Indian Company
Company (d) 33/% or R 15,000
3. Dividend from Indian
whichever is less
4. Shivaji University
Maximum
Deduction under Chapter VIA (e) Gross Total Income
5.
Standard Deduction on Family Pension () 1,00,00o
6.
(g) Short Term Capital Asset
(h) Long Term Capital Asset
() Artificial Juridical Person
() Local Authority
(k) Taxable
() Exempt u/s 10
 OCTOBER 2010

A MULTIPLE CHOICE QUESTIONS

1. Export incentives received by the assessee are taxed under:
(a) Income from business and profession (b) Income from other sources
(c) Income from salary
2. Cost inflation index is applicable when there is
a) Long term capital gain (b) Business income
(c) Short term capital gain
3. The maximum deduction admis[ible against family pension received is 1/3 or
(a) 15,000 whicheveris more (b) 75,000 whichever is less
(c) 15,000 whichever is less
4. Dividend received from Credit Co-operative Society
(a) Fully exempt u/s 10 (b) Partly taxable
(c) Fully taxable
6. Mr. Ashok paid the Balmohan Vidya Mandir for his school going son's tuition fees 5,000 and
School Bus Fees 2,000. He is entitled to a deduction u/s 80C equal to
(a) 5,00o (6) 2,000
c) 7,000
6. Mr. Vilas had taken housing loan for his self occupied property from HDFC Bank on 18-11-1991.

During the Previous Year 2018-19 he interest on housing loan 1,60,000. He is entitled to
paid
a deduction from Net Annual Value equal to
(a) 1,50,000 (b) F 30,000
(c) 1,60,000

B. MATCH THE FOLLOWING COLUMNS

Column A Column B

1. Personal Car (a) Income from Salary

2. MIG Cricket Club (b) Business Income
3 Deduction for the handicapped assessee (c) Capital Asset
of more than 80% (d) Not a Capital Asset
having disability
Entire Office premises given on rent (e) Income from House Property
received by a partner from a fim () Income from Other Sources
Salary
where he is a partner (g) Company
the AOP
6. Ex-gratia declared but not paid before (h)
due date of filing return of Income Tax (i) T 80,000
1,25,000
(k) Allowable business expenditure
(1) Not allowable business
expenditure

Column A Column B
[21
1.
Rental income in case of dealer in property (a) Profit and Gains of Business or
Dividend on shares in case of a dealer Profession
2.
in shares (6) Income from House Property
partner from his partnership firm (c) Income from Other Sources
3. Salary by
(CA-PCC, Nov. 2010, adapted)
 451
e s tB a n k

MARCH 2011

A.
MULTIPLE CHOICE QUESTIONS
case
is taxable in
Income wnicn aCcrues or arise outside India and also received outside India
1, Resident
(a) Non Resident Resident but Not Ordinarily
(b)
(c) Resident and Ordinarily Resident advance salary for Ap
of C Ltd. drawing salary of 7 10,000 p.m. took
2. Mr. Sirsat, an employee 31-3-2019. The Gross Salary of Mr. Sirsat 1or A.
2019 alongwith salary of March, 2019 on
2019-20 is
(a)T 1,20,000 (b) 1,10,000
(c) 1,30,000
taxable amount of gift is
Nikhil received a gift of T 52,000 from his friend. The
3. Mr. (b) Nil
(a) 2,000
date of filling
(c) 52,000 before the due
from Non-scheduled bank not paid
Interest payable on
loan a

Income Tax Return is expenditu re

allowed as
allowed a s expenditure
(b) Partly
(a) Fully house. The
disallowed as expenditure of residential
(c) Fully interest on loan taken
for c o n s t r u c t i o n from Net Annual
Mr. Ashwat paid deduction of interest
5. On 10-3-2019, on 10-4-2019. He c a n claim
construction was completed
2019-20 equal to
in A.Y.
Value
(a) Nil T 2,00,000
of lInterest on Housing Loan upto
Full amount for
(b) Housing Loan 2018-19. She is eligible
Interest on the P.Y.
(c) 1/5th of of 7 81,000 during
received family pension
6. Smt. Vidya
standard deduction of (6) Nil

(a) 15,000
(c) 27,000
FOLLOWING
cOLUMNS
MATCH THE
BB. Column B
Business Income
ColumnA
(a)
Not a Business Income
An Indian Company
Employer
for (b)
Capital Asset
1. incurred by ()
Expenditure Asset
2. Treatment
of Dependent
d) Not a Capital
Medical Ordinarily Resident
Mother-in-law of Employee
Annual
Value (e) Not Ordinarily Resident
from Net
Deduction
(f)
Standard Customer
Taxable Perquisite
3 Gift
from (g)
Voluntary Tax Free Perquisite
4. Residential House (h) Value
30% of Net Annual
. ()
33/% of Net Annual Value
No Standard
Deduction Allowed
(k)
 452
Direct Tax (T. Y.B. Com.:
SEM-V)
OCTOBER 2011
A MULTIPLE CHOICE
QUESTIONS
1. Total income of a
person is determined
on the basis of his
(a) Citizenship
(c) Marital status (b) Residential status
2. Uncommuted Pension received a
(a) Exempt by Government employee is
(c) Partly Exempt (b) Taxable
3. Salary received by Manager of
(a) Fully exempt Agricultural Farm is
(c) Partly taxable (6) Fully taxable
4. Salary received by a partner from
(a) Income from Salary partnership firm is
(c) Income from Other Sources (b) Income from Business
5. Mr.
Gurdeep has let out his ownership flat to Mr.
were paid by Mr. Datta, a friend of Mr. Pradip. The municipal taxes due on 31-03-2019
3 (a) Claim the municipal taxes as the Gurdeep on 28-03-2019. Mr. Gurdeep cann
A
deduction from Gross Annual Value
(b) Not claim the municipal taxes as the
(c) Claim 50% of the deduction from Gross Annual Value
6. Mr. Shivaprasad
municipal taxes from Gross Annual
Value.
pays tuition fees of 10,000 for M.Com
under section 80C shall Part I for his wife. The amount
be deductible
(a) 10,000
(c) Nil (b) 5,000

B. MATCH THE FOLLOWING COLUMNS

Column A
-
Column B
1. Remittance in India
2. Value of Rent free (a) Treated as income of the
Accommodation year
(b) Not treated as income of the
3. Net Annual Value year
4. Bad debts written off earlier (c) Standard deduction not
recovered allowed
during the year (d) Taxable perquisite
5. Tax free perquisite
Agricultural land situated in Indonesia
) Not taxable
(g) Not taxable for non
resident
(h) Gross Annual Value
less
Municipal taxes
() Gross Annual
Value less
Municipal taxes
paid by the
) Capital Asset owner|
(k) Not a Capital Asset
T e s tB a n k

453

MARCH 2012
A. MULTIPLE CHOICE QUESTIONS
A new business was set
. up on 1-10-2018. It's first
(a) 31-3-2019 previous year will end on
(c) 31-12-2018 (b) 30-9-2019
2. Pu une University is assessed to Income Tax
(a) An Individual as

(c) A Local Authority (b) An Artificial Juridicial Person

3. Income earned and received
outside India is taxable in the case of
(a) Non Resident
c) None of the assessees (b) Resident and Ordinarily Resident
4, Dividend received is
exempt if it is received from
(a) An Indian Company
(6) A Co-operative Bank
(c) Any Company
5. Capital Gain arises out of transfer
of
(a) Capital Asset
(b) Any Asset
(c) Any Liability
6. Gift received from brother 1,00,000 is
(a) Taxable
(b) Exempt
c) Exempt upto T 50,000
7. Rajiv has let out his residential house for commercial
Rent received from such house is
purpose.
(a) Income from Business (b) Income from Other Sources
(c) Income from Home Property
8. Municipal Taxes paid by the owner is deducted from
(a) Gross Annual Value (b) Net Annual Value
(c) Net Income from House Property
9. Salary received by a working partner from the partnership firm is
(a) Income from Salary (6) Income from Business
(c)Income from Other Sources
10. Family Pension received is
(a) Income from Salary (b) Income from Business
(c) Income from Other Sources

OCTOBER 2012

A MULTIPLE CHOICE QUESTIONS

1. A new business was set up on 1-1-2019. If's first previous year will end on
(a) 31-3-2019 (b) 31-12-2019
c) 31-3-2020
Mumbai University is assessed to Income Tax as
(a) An Individual (b) An Artificial Juridicial
Person
(c) A Local Authority
3. otal determined on the basis of
income of a person is
(a) Citizenship (b) Residential Status
Residential Status
(C) Both Citizenship andreceived
Uncommuted Pension by a Government Employee is
(a) Taxable (b) Exempt
(c) Partly Exempt
 454 Direct Tax (T. Y.B.Com.: SEM-V
5. Capital
Asset for the purpose of capital gain does not include
(a) Stock in Trade (b) Residential flat used for commercial purpose
(c) Shares and Securities
6. Standard deduction of
family pension is limited for 15,000 or
(a) 25% of such pension whichever is less (b) 33/% of such pension whichever is less
(c) 50% of such pension whichever is less
7. Deduction on account of Entertainment
Allowance is allowed to
(a) Non-Government Employees (b) Government Employees
(c) Both Govemment Employees and Non-Government Employees
8. Mr. Mangesh, a Chartered Accountant lets out his ownership office to another Chartered
Accountant, rent received by him is
(a) Income from Business (b) Income from House Property
(c) Income from Other Source
9. Mr. Sunil, a businessman paid professional fees 7 25,000 by bearer cheque. This is allowed as
business expenditure to the extent of.
(a) 10,000 (b) 25,000
(c) Nil
1
10.Donation of Chief Minister's Relief Fund is
(a) Allowed as business expenditure (b) Not allowed as business expenditure
(c) Partly allowed as business expenditure

MARCH 2013

A MULTIPLE CHOICE QUESTIONS

1. Entertainment allowance in case of Government employee is
(a) Fully exempt (b) Fully taxable
(c) Deductible upto certain limits mentioned in Sec. 16 (i)
2. Nagpur University is assessable under the Income Tax Act as
(a) A Local Authority (6) An Artificial Juridical Person
c) An Individual
3. Share of Income received by a member of HUF is
(a) Fully exempt (b) Fully taxable
(c) 50% Taxable
4. Capital Gain arises from the transfer of
(a) Any Asset (b) Any Fixed Asset
(c) Any Capital Asset

B. MATCH THE FOLLOWING COLUMNS

Column A Column BB

1. Depreciation (a) Allowable U/S 80C

2 Housing Loan Repayment (b) Association of persons
3. Salary received from Govenment by a (c) Firm
Member of Legislative Assembly (MLA) (d) Allowable as business expenses
4. Darjeeling Sports Club (e) Exempted from tax
5. Uncommuted Pension Taxable as Income from Other
Source
(g) Taxable as Salary Income
 455
e s tB a n k

OCTOBER 2013

A FILLIN THE BLANKS

Assessment Year.
Previous year means the immediately preceding the
Shareof income received by a member of HUF is .

in lieu is taxable
Profits of salary Head. underthe
Maximum amount of deduction for entertainment allowance is.
d Head
received by partner from partnership firm is taxable under the
6. Commission
Value of SOP is
6. Net Annual
B. MATCH THE FOLLoWING COLUMNS
Column B
ColumnA
Business Income
Person with tax liability (a)
(b) Assessee
2. Salary of M.P. / M.L.A.
AOP
3 Exempt Income (c)
Capital Asset
4. MIG Cricket Club (d)
(e) Income from Other Sources
4. Residential House
Gift from Relative
5. Voluntary Gift from Customer (f)

MARCH 2014

MULTIPLE CHOICE QUESTIONS

A.
is
1. Gift received by Mr. Sharad from grandmother of his wife 1,00,000
(a) Fully taxable
(b) Fully exempt
c) Exempt uptoF 50,000 only
severe disability (85%) shall be
case of dependent with
2. Deduction under section 80DD in the
allowed (b)1,25,000 irrespective of actual expenditure
actual expenditure
a) To the extent of
(c) 75,0b00 the interest on the loan is
for repairs of selt ocCupied property,
3. If the housing loan is taken
Net Annual Value
(a) Not deductible from Net Annual Value
R 30,000 from
(6) Deductible upto installments trom the previous year
of repairs from Net Annual Value
(c) Deductible in 5 equal also
a full time lecturer in college. He w a s
4. Mr. Satish is a practising Chartered Accountant,
and was paid 25,000 a s professional
appointed as advisor of college in income axX matersand
taxable under the
head
would be
Tees. These fees (b) Income from other sources
profession
business and
Income from
(a) salary
(c) Income from is given on rental basis, the income
used for business purpose arising
. If full office building
as
therefrom is taxable (b) Income from other sources
(a) Business income
house property
Income from USA, received 10,00.000
(C) an agent of Microsot
Ltd.

Mr. Rajiv acting as This receipt is

Microsoft Ltd.
agency from (b) Fully taxable as business income
capital receipt
taxable being
(a) Not 5,00,000 being
retrernchment compensation

(c) Exempt upto by widow or deceased employee is taxed as

. received
Fam
amily pension (b) Income from business
salary
(a) Income from sources
other
(C) Income from
 Test.Bank

456 Direct Tax (T. Y.B.Com.: SEM.- Gift of 51,000

received from a
146 B.
Deduction under section 80C for tuition fees shall be allowed the same
(a) For full time education in school and college in lIndia only
if are paid (a)
(c) 50,000
1,000

(b) Even for part time education in school and college in India
5.2 (c) Even for full/ pat time education in college abroad 6.
Rent received from
open plot o
(a) Income from House
Q. B. MATCH THE FOLLOWING COLUMNs (c) Incomne from Other Proper
The standard
Sources
7.
(a) 50,000
deduction on afa
COLUMN A COLUMNB (c) Nil
Gift from customer If an assessee
pays life insur
(a) Not taxable upto 50,000 a.
section 80C of
. Drawing and paintings (b) Capital Asset
3. Wealth Tax (a) 90,000
c) Taxable Perquisite
4. GST (C) Ni
(d) T2,00,000
. Reimbursement of medical expenses
(e) 30,000 g. Mr. Anil is a person with a phy
from employer 80U of
() Allowable Business Expenditure
2 . Interest on housing loan taken after
(g) Not a Capital Asset (a) 75,000
21 1-4-1999 for acquisition of self (c) Nil
occupied (h) Disallowable Business
21 property Expenditure 10. Mr. Dinkar eams Saving Bar
7. Maintenance of entitled to a deduction under
22 handicapped dependent () Income from other sources
) Income from business (a) 90,000
2 (k) 50,000 (c) Nil
2
2
OCTOBER 2014

A. STATE WHETHER TRUE OR FALSE A STATEWHETHERT

1. An association of 1. An association of persons co
persons consist of individuals only.
2. Residential status depends only on citizenship. 2. Residential status does not o
3. Income earned in India is not taxed in the hands of Non 3. Income earned outside India.
Resident Assessee.
4. If the business is commenced on 4. If the business is commence
1-9-2018, the first previous year will end on 31-8-2019 for the
Assessment year 2019-20. Assessment year 2019-20.
5. Family pension received
by a widow of a deceasèd employee is income from other 5. Family pension received by
6. Bonus of earlier year received sources.
during the current previous year is not an income from 6. Bonus declared by the emp
that current year. salary for Considered as a part of gros
7. Advance against salary is not a
part of Gross Salary. 7, Advance against salary is a
8. Dividend received from Indian
Company upto R 10 lakh is fully Taxable at the 8. Dividend received from
Indles
9. Gift received from mother is fully taxable. highest rate.
9. Gift received from father is i
10.Gratuity received by Govt. employee on retirement is fully taxable. 10. Pension received by retired

B. MULTIPLE CHOICE QUESTIONS BMULTIPLE CHOICE

1. Income earned by minor on the investments made by his father is
(a) a minor
taxed in the hands of .Income eaned inlIndia by
(6) his father
(c) no person (a) Tax free in India
2. Commission on sales received in addition to (c) Not an income
salary by a salesman is income from Employer's contributionto
(a) Business (b) Salary prescribed limit is taxable
(c) Other Sources
3. Mediclaim premium paid by employer on the medical health
(a) Salaryy
policy of the employee is (c) Business
(a) Taxable perquisite (b) Taxfree perquisite 3. Reimbursement by employ
(c) Not a perquisite
4. If the residential property held for 15 months is sold, the from
resultant capital gain income
(a) Long Term (b) Short Term
will be a) Taxable as income from
(C) Taxable as
(c) Medium Term
 457

T e s tB a n k

received from a friend is taxable to the extent of

Gift of 51,000
(a)1,000 (b)R51,000
(c) 5 0 , 0 0 0

Rent received from open plot of land is

(a) Income from House Property (b) Income from Business

Income from Other Sources

c)
The standard
deduction on a family pension of 7 1,50,000 will be
,
(a) 5 0 , 0 0 0 (b) 15,000
(c) Nil deduction under
is entitled to a
If an assessee pays life insurance premium of 7 90,000, he
8. section 80C of

(a)90,000 (b) 1,00,000

(c) Nil
deduction under section
is a person with a physical disability of 50%. He is entitled to a
9. Mr. Anil
80U of
(a) 75,000 (b) 1,25,000
(c) Nil 2018-19. He is
Dinkar earns Interest of T 90,000
Saving Bank during the previous year
10.Mr. under section 80TTA of
entitled to a deduction
(a) T 90,000
(b) 10,000
() Nil

APRIL 2015

OR FALSE
STATE WHETHER TRUE
A
consists of any person.
1. An association of persons
on citizenship.
2. Residential status does not depend Assessee.
India is not taxed in the hands of Ordinarilyl Resident
3. Income earned outside the
on 1-8-2018, the
first previous year will end on 31-7-2019 for
If the business is commenced
Assessment year 2019-20.
deceased employee is income from salary.
a widow of a
5. Family pension received by the previous year is
but not received by an employee during
6. Bonus declared by the employer
Considered a s a part of gross
salary of that previous year.
is a part of Gross Salary.
Advance against salary Indian Company is fully exempt upto
10 lakhs only.
8. Dividend received from
taxable.
.Gift received from father is fully exempt from tax.
retired employee is fully
0.Pension received by

BB, MULTIPLE CHOICE QUESTIONS

is. Non-Resident'

Income earned in India by a (b) Taxable in India

(a)Tax free in India
c) Not an income Fund ACCOunt of an employee in e x c e s s af
Frovident the
2. Emplovers contribution to Recognised
from
as income
is taxable
prescribed limit (b) Other Sources
(a) Salary
c) Business the expeises uired Dy tne employee for employer's business
3. Reimbursement by employer of
S (b) Not taxable at all
business
from
Taxable as income
(a) from salary
(c) Taxable a s income
 Test
Direct Tar (T. Y.B. Com.: SEM-V
458
4. If the residential property acquired on 1-4-1970 is sold during previous year 2018-19 its cost of
a acquisition is taken at Fair Market Value as on
8.
(a) 1-4-1981 (b) 1-4-2001
9.
(C) 1-4-19970
10.L
5. Interest received on Public Provident Fund is
(a) Tax Free Income (b) Taxable Income
(c) Not an Income
6. If a part of commercial property is let out and the balance part of property is retained by the

owner for his business, the rent received will be .

(a) Income from House Property (b) Income from Business
(c) Income from Other Sources
7. The standard deduction on a family pension of 1,20,000 will be .
A
(a) 40,000 (b) 15,000 1.
(c) Nil 2.
8. If an assessee invests 70,000 in Public Provident Fund, he is entitled to a deduction under 3.
section 80C of . 4.
(a) 70,0o0 (b) 1,50,000
(c) Nil 5.
9. If Mr. Suresh, age 62 years pays mediclaim premium of 25,000, he is entitled to a deduction
under section 80D of .
(a)30,000 (b) 25,000 6.
(c)15,000 7.
10. Mr. Arjun earns saving bank interest of 7 12,000 during the previous year 2018-19. He is entitled
to a deduction under section 80TTA of 8.
(a) 12,000 (b) 10,000
(c) Nil 9.
10.

OCTOBER 2015

A FILL IN THE BLANKKS

1. Export incentives received in the form of Duty Drawback by an Indian exporteris chargeable as 3.
income from,
2. Cost infiation index is applicable for computing income from.
5.
3. Ifthe business is commenced on 31st December 2018, the first previous yearwill end on .
.
4. The legal status of Bar Council of India is .
5. Gift received from friend is chargeable under the head income from
6. Income earned outside India by non-resident Indian is fully . in India.
9.
7. An individual is considered as resident in India if his stay in India during the previous year is at
10
least. days.
8. An individual who does not satisfy both the basic conditions under section 6(1) of Income Tax
Act, 1961 is considered to be- in India during the previous year.
9. The house property is considered as long term capital asset, if it is held for at least
months.
10. Monthly remuneration received by Member of Parliament is chargeable under the head income
from.

B. STATE WHETHER TRUE OR FALSE

1. Interest on deposits of foreign company received in London by ordinarily resident individual is
fully taxable.
2. Residential status does not depend upon citizenship.
3. Dividend received from Dena Bank of 7 1 lakh is fully exempt.
4. Life insurance premium paid by employer on behalf of an employee is a taxable perquisite. 4.
5. Maximum deduction for interest on saving bank us 80 TTAis limted to 10,000.
Test
Bank
459

An Indian companyneed not

always be resident in India.
ent allowance received by a non-gov
Entertainmen overnment employee is exempt from tax.
Advance salary received by an employee from the employer is not a part of Gross salauy.
Mediclaim premium paid by cash 15,000 is allowed as deduction u/s 80D.
in respect of payment of life insurance premium, PPF etc. is also allowed to
10.Deductio us 0
partnership firms.

APRIL 2016

FILL IN THE BLANKS

A.
1. If the business is commenced on 1st March, 2019, the first previous year will end on -
2. Family pension received by widow of an employee is chargeable as income from
3. The legal status of Bank of India is .
4. Mr. Prakash, a partner of a firm P & Co. receives salary from a firm K & Co., where he is nota
partner, is chargeable as income from.
6. Mr. Abhay who has completed 60 years on 31-3-2019, paid medical premium of ? 28,000 duing
the previous year 2018-19. Maximum amount of deduction u/s 80D is allowable to the extent o

6. Profit on sale of import licence is taxed under the head

7. Fair rent of 3,00,000 and actual rent received 2,80,000. Municipal taxes paid is * 1,00,000
The net annual value of letout property shall be .
8. Municipal taxes paid by the is allowed as deduction for computing net annual value of
let out property.
9. An open plot of land given on rentis chargeable as income from.
in cash on 1-12-2018 is disallowed to the extent of .
10.Repair charges of T 30,000 paid
under the head income from business.

STATE WHETHER TRUE OR FALSE

B.
1. An Indian company is always treated as Resident in India.
2. Monthly pension is always taxable, if it crosses the minimum taxable limit.
3. Compensation received under voluntary retirement scheme is exempt from tax upto 5,00,000.
4. Entertainment allowance is allowed as deduction only to government employees.
5. Mediclaim premium paid by the employer on behalf of employee is a tax free perquisite.
court is tax perquisite.
6. Allowances to Judges of Supreme
7. Fixed medical allowance received by an employee from employer is fully taxable.

8. Advance against salary is not a part of Gross salary.

is fully exempt from tax.
9. Amount remitted to India from USA
bank is fully taxable.
10.Dividendreceived from Saraswat Co-operative

NOVEMBER 2016

BLANKS
A. FILL IN THE
1. Remuneration received by a MemDer or Parlament (MP) is taxable under the head Income fro

. An asset has to be put to

use for atleast. days in order to be eligible to claim depreciation
at full rate, as applicable.
3. Medical Insurance Premium is eligible tor deduction under section 80D unto a mo
in case of senior citizen.

of Mahindra Ltd., held for 24 months are. - Capital Assets.

Bonds
5. Gratuity received by non-government emoloyees, who are not covered under the Payment of
maximum of F.
Act, is exempt uptoa
Gratuity
 Test Bank&

460 Direct Tar (7. Y.B. Com.: SEM-

6. Dividend received on shares of Co-operative Society is

446 7. Re-imbursement of medical expenses to an employee is exempt upto a maximum of R.
8. Interest of 5,00.000/- on borrowings for a Deemed to be Let-Out Property is eligible for a
deduction of
9.Jewellery to be regarded as a Long-Tem Capital Asset, should be held for period more than MULTIPL
Q. months. 1. A new business
10.Residential Status of an Indian Company is. in India. (a) 31-3-2019
(c) 31-3-2020
B. STATE WHETHER TRUE OR
FALSE 2. Unrealised rent i
1. Hental income from an open plot of land is taxable underthe head Income from Other Sources (a) Net Annual w
2. Commuted Pension received
by a Government Employee is fully exempt. (c) Gross Annua
. Duty Drawback received by an exporter is taxable under the head 'Income from Other Sources. 3. Share of income
4. Stock of Finished Goods of a business, is not a
capital asset. (a) Fully exempt
5. Deduction under section 80u, available to a physically handicapped individual, is allowed to a
(c) 50% Taxabe
non-resident.
6. Deduction under section 80CCC, together with Section 80c, is allowed upto a maximum of 4. Agricultural incO
(a) Taxable
3.00.0000
7. Assets purchased and put to use on 1st January, 2019 will be eligible for depreciation claim, as (c) Partly taxable
applicable, at normal rate. 5. Mr. Pankaj paid
8. Gifts received exceeding 50,000 from non-relative is tuition fees F 5,0
a
not taxable.
2 9. Residential status of an individual is determined based on physical presence in India of such
individual. (a) 5,000
10. Income earned in India by a non-resident individual is not taxable in India. (c) 7,000
2
6. If the owned bui
APRIL 2017 as

(a) Business inc

C) Income from
7. Profit arising on
AA FILLIN THE BLANKS (a) Taxable as c
1. Income tax extends to. of the India.
(c) Not taxable b
2. If an individual does not satisfy the basic conditions of Residential status, he/she will be treated
as
8. Mr. Desai contrit
to a deduction.
3. Foreign agriculture income in India.
(a) u/s 80C
4. The total of five heads of income given under section 14 is called as.
(c) u/s 8OD
5. Salary 9given to partner by a firm is taxable underthe head.
9. Interest received
6. Profession tax deduction is allowed on basis.
7. Receipts from Statutory Provident und received by a non-government employee is. (a) Taxable
8. Income from the transfer of a capital asset is called (c) Partly taxabl
10 is not t
9 Share of income received by a member of HUF is income.
10.Deduction under section 80CCC is allowed to the (a) Profits in lie
extentof (c) legal incom
B. STATEWHETHER TRUE OR FALSE B STATE W
1. Income tax is a tax on tax.
2. Previous year is always of Twelve months. 1. Income tax is a
3. An Indian company is a non-resident in India. 2. Capital gain anis
4. Uncommuted pension received by government employee is exempt. . Loan received t
5. In case of short term capital asset indexation is applicable. Stock of finished
Previous year m
6. Investment under section 80C need not be out of taxable income.
7. Municipal tax paid by owner is allowed as deduction from deemed to be let out . All pensions are
property. .Awardreceived
8. Interest on income tax refund in an income from other sources.
9. Income can be in cash or in kind. 8. Exemption and
10. Any sum received under key-man insurance policy is taxable. 9. Municipal taxes
10.Service Tax pa
Test
Bank
461

NOVEMBER 2017

A.
MULTIPLE CHOICE QUESTIONS
1. A new business was set up on 1-10-2018. Its first previous year will end on
(a) 31-3-2019
(b) 30-9-2019
(c) 31-3-2020

2. Unrealised rent is a deduction from

(a) Net Annual Value (b) Municipal Value

(c) Gross Annual Value

3. Share of income received by a member of HUF from the HUF is .
(a) Fully exempt (b) Fully Taxable
(c) 50% Taxable
4. Agricultural income from land in Nepal is . for an ordinarily resident individual.

(a) Taxable (b) Tax free

(c) Partly taxable
5. Mr. Pankaj paid fees for his school going daughter to King George School; Fees consisted ot
tuition fees 5,000 and development fees 2,000. He is entitled to a deduction
u/s 80C equal to

(a) 5,0000 (b) 7 2,000

(c) 7,000
is let-out to be used as show room for display of goods, rent will be taxed
6. If the owned building
as
(a) Business income (b) Income from house propety

(c) Income from Other Sources

7. Profit arising of personal platinum jewellery is
on sale
.

(a) Taxable as capital gains (b) Not taxable being personal asset
in nature
c) Not taxable being non-recurring
8. Mr. Desai contributed for his girl child under the Sukanya Samridhi account scheme. He is entitled

to a deduction.
(b) u/s 80CCC
(a) u/s 80C
(c) u/s 8OD
on company
debenture is
Interest received
.

9.
(b) Tax free
(a) Taxable
(c) Partly taxable
10 - is not taxable.
(b) Gift from father
(a) Profits in lieu of salary
(c) legal income
TRUE OR FALSE
|B. STATE WHETHER

Income tax is an example ofdirect tax.

transfer of any asset.
. Capital gain arises on
against salary is taxable.
. Loan received from employer
a business, is not a capital asset.
. Stock of finished goods of
financial year.
Previous year means tax.
All pensions are exempt from
7. Award received from employer by an employee1s taxable in the hands of the employee.
are not same.
Exemption and deduction
9. Municinal taxes paid in advance are deducted trom Gross Annual Value in the year of payment.
disallowed as business expenditure.
0.Service Tax paid is
 Test.
462 Direct Tax (T. Y.B.Com.: SEM-

446
OCTOBER 2003 TO APRIL 2009 7.

5.2
Q. STATE WHETHER TRUE/FALSE GIVING REASONS IN SHORT
1. (1) Life Insurance Premium paid by cash 5,000 is eligible for deduction u/s 80C.
(2) The income eaned 10,000 in the USA by Resident Indian is nottaxable in India.
(3) The residential property let out for commercial purpose is not taxable as income from house
property. 8.
(4) Dr. Anand who is a full time employee of Jaslok Hospital receives 50,000 from Jaslok
Hospital. He can treat it as income from business and profession.
(5) Mr. Rajeev receives dividend of 7 15,000 from NKGSB Co-op. Bank Ltd. It is exempt us
10(34). (Oct. 03, adapted)
2. (1) Mr. Aditya sells his motor carfor 1,00,000 on 28-02-2019. He can claim depreciation for 11
months.
(2) Mr. Madhav spends 7 25,000 on medical treatment of his physically handicapped minor son
21 who is dependent on him. He can claim deduction of 75,000 u/s 80 U.
(3) Mr. Jawhar owns two houses both of which are not let out. Mr. Jawhar treats the annual value
21 of both the houses as "NIL" since both the houses are self occupied.
(4) Mr. Pinkesh has a gross total income of 7 1,75,000 and his allowable investments for Sec.
22 80C are 7 1,60,0000. He can claim deduction of 1,60,000.
9.
Mr. Q claim deduction of F 10,000 paid in cash as premium for his mediclaim insurance
(5) can

policy u/s 80D of the Income Tax Act 1961. (April 04, adapted)
3. (1) Mr. Raju earns 2,00,000 as interest on PPF account. This is taxed as Income from Other

Sources.
of 10,000 paid by him on
(2) Mr. Pawar can claim deduction u/s 80C for life insurance premium
behalf of his wife.
as Income from Salary'.
(3) Remuneration received by a Member of Parliament is taxable

(4) Mr. Sawant purchased a flat on 1st June 2017 for R7 4,00,000 and sold it on 1st February,
Kapil
2019 for7 4,75,000. These capital gains are "Long Term".
his partnership firms. It is "Income from other
(5) A partner has received interest on capital from
Sources".
(April 06, adapted)
(45%) certified by medical authorities. He
Mr. Manoj Shinde is physically handicapped as
4 (1)
1,25,000 U/s 80U.
can claim a deduction of
on rent of 7 1,00,000 p.m. This is his
(2) Mr. Yogesh Datey has given his commercial property
business income.
20,000 as P & LA/c which is unpaid till the due date of filling
GST to his
(3) Mr. P has debited claim this as a allowable deduction.
of his Income-tax return. He can

has paid Medical Insurance Premium of his brother who is totally

(4) Mr. Ameya Patwardhan deduction u/s 80D. (Oct.06, adapted)
claim
dependent on him. He can in his hands.
as a birthday gift from his father. This is not taxable
5. (1) Vinayak received 15,000 estate received 1,20,000 as salary. This is
manager of
an agricultural
(2) Manoj working as a
income.
B
exempt as his agricultural
Adarsha College Mumbai, received 7 8,000 as examinership fees
(3) Mr. Purohit, lecturer in
Mumbai. This is Income from other
sources.
from University of
before commencement of production in his business.
on loan of R 1,30,000
(4) Varun paid interest
a r e v e n u e expenditure.
He can claim this as
received a family pension ofR
60,000 during 2018-19. She can claim a standard
(5) Mrs. Savitribai of 1/3rd of such pension.
(April 07, adapted)
deduction to the extent is
on voluntary retirement. The entire amount
7,50,000 as compensation
6. (1) Rajaram received
exempt u/s 10 (10C). The
of a house property
which IS selt occupied by the c o - o w n e r s .
B and C are co-owners
(2) A, shall be Nil.
annual value for each
co-owner

E n c a s h m e n t to non-Government employees
in case of Leave
(3) The maximum amount exempt
is 10,00,000. for
of R 12,00,000 from his principal
business received a sum
Tushar carrying on an agency
(4) as it is a capital receipt.
termination of agency. It
shall be exempt
 s tB a n k
463

5) K purchased equty shares worth 80.000 on 18th November. 2017 and so te

1.c0.0 O e5th November, 2018. The gain is a short term capital gain. (Oct. 07, 3dapiea
21.000
Miss received a gift of ? 21.000 from her tather at the time of her marmage
(1) Sa
not taxable in her hands.
This dIvIdend
receved Dvidend of 5.000from XYZ Ltd an Indian company
(2) MrSaisn
income is exempt u/s 10(34)
10.000 on behalf of his
wife who is dependen
(3) Mr. Ambanish paid Life insurance Premium of
on him He can claim deduction u/s 80C
invested 1.50.000 N.S.C. Vii during the previous year 2018-19. He
(4) Mr. Joshi
has in issue
(April 08, adapted)
can claim? 1.50.000 as deduction u/s 8OC
He received pension
@5,000 p.m
8(1) Mr. Hamdas retired from a Govemment Organisation.
dunng the previous year 2018-19. The pension is exempt being received trom a GOvemine

Organisation. or
entertainment allowance
Pandhannath is working in a pivate organisation. He gets
(2) Mr. allowance deduction
000 dunng the previous year 2018-19. He can claim entertainment
u/s 16(i).
in cash. He
cannot claim deduction
Mr. paid his Life Insurance premium of 7 6,000
(3) Bnuvan
u/s 80 C for payment of premium in cash. taxed
vacant plot of land
owned by her. This is
(4) Miss Aalisha receives 750,000 as rent from a
as Income from house property June 20188
2016 and sold it on 1st
Mr. Nityanand purchased a house property on 1st May (Oct. 08, adapted)
(5)
asset.
This is transfer of long term capital which is
Account towards GST
Mohan had debited 50,000 to the Profit and Loss amount as an
9 (1) Shri return. He cannot
claim this
till the due date of filling Income Tax
unpaid
allowable business expenditure.
Vithal Co. Bank. This is an exempt
20.000 from Shamrao
(2) Miss. Anita received dividend of
income. is not taxable in
? 50,000 in USA. This
income
resident Indian earned
(3) Mr. Sonu an ordinarily
India as a deduction for purchase
ticket. He can claim? 500
Amar has earned ? 5,000 from a lottery
(4)
of lottery tickets. tax upto 1,00,000
Provident Fund is exempt from
Interestcredited to Public (April 09, adapted)
(5)

ANSWERS

APRIL 2010
(b) 4 (c) 5 (c)
1 (c)2. (b)3
(e). (6) (d)
(), (5)
-

(a), (3) (). (4)

8. (1)- (h), (2)

OCTOBER
2010
4 (c) |5. (c) 6. (b)
(c)
(a)3.
11 (a)2 (4) (e), (5) (b), (6)
-

(k)
8. (d). (2)
-
(h). (3) ) .
(1): (1) -

2]: (1) - (b). (2) (C), (3) (a)

 464
Direct Tax (T. Y.B. Com.: SEM-)
446 MARCH 2011

5.2
1. (c) 2. 3.
Q.
(c)
)4. (a) 5.
(a)6. (a)
B.
(1) (e). (2) (g). (3) (), (4) (a), (5) (c)
-

OCTOBER 2011
A.

1. (b) 2. (b) 3. (b)4. (b)|5. (b) 6. ( )

B. (1) (b), (2) -

(d), (3) - (i). (4) (a), (5) -

(k)
MARCH 2012
A

1. (a) (b) 3. (b) 4. (a) 5. (a) 6. (b) |7. ()

8. (a) (b) 10. (c)
22

2 OCTOBER 2012
A.

1. (a) (b) 3. (b) 4.

8. (b) (c) 10. (6) (a)5. (a)6. (b) 7. (b)

MARCH 2013
A.

1. (c)2. (b)3. (a)4 ()

B. (1) (d), (2) -

(a), (3) -

(), (4) -

(b), (5) (9)

OCTOBER 2013
A. (1) financial year (2) Exempt (3) Income from Salary (4) 7 5,000 (5) Profits and Gains of Business
or Profession (6) Nil
B. (1) (b), (2) (e), (3) (). (4) (c), (5) - (d), (6) -(a)
- -

MARCH 2014
A.

1. (b) 2. (b) 3. (b) 4. (c) 5. (c) 6. (b) 7. (c)

8. (a)
B. (1)-)., (2) (b), (3) (h), (4) (), (5) -(c), (6) (d), (7) (k)
- -

OCTOBER 2014
A. True:5, 7; False:1,2,3, 4, 6, 8, 9, 10

B.

(b) 2. (b) 3 (c) 4. (b) 5. (b)

10. (b)
|6. (c) 7. (b)
(a) (a)
T p s tB a n k
465

APRIL 2015
True: 1, 2, 8; False : 2, 3, 4, 5, 6, 7, 9, 10

2. (a) (b) 7. (b)

1 (b) 3. (6) 4. (b) 5. (a)6.
8. (a) 9. (b) 10 (b)

OCTOBER 2015
Oher
(4) Artificial Juridical Person (5)
A. (1) Business (2) Long Term Capital Gain (3) 31-3-2018
Sources (6) Exempt (7) 182 (8) Non Resident (9) 36 (10) Other Sources
8. True: 1,2, 3, 4, 5; False :6,7, 8, 9, 10

APRIL 2016
or
(6) Profit and Gains
A. (1)31st March 2019 (2) Other Sources (3) Company (4) Salary (5) 28,000
(7) 2,00,000 (8) Owner of H.P. (9) Other Souroes (10) 30,000
B. True:1,3, 4, 5, 7, 8, 9, 10; False :2, 6

NOVEMBER 2016
taxable (7)* Nil
Short-term (5) 7 20 lakhs (6)
A. (1) Other Sources (2) 180 (3) 7 50,000 (4)
(8) 5,00,000 (9) 36 (10) resident
B. True:1,2, 4, 9; False :3, 5, 6, 7, 8, 10

APRIL 2017 Business / Profession

taxable (4) Gross Total Income (5)
A. (1) whole (2) Non-resident (3)
gain (9) Exempt (10) 1,50,000
(6) Payment (7) wholly exempt (8) Capital
8, 9, 10; False:1,2, 3, 4, 5
B. True:6, 7,

NOVEMBER 2017
4 (a) 5. (a) 6. (b) 7. (a)
1. (a) 2. (c) 3 (a)
9. (a) 10. (b)
8 (a)
6, 10
B. True:1, 4, 5, 7, 8, 9;
False : 2, 3,

APRIL 2009
OCTOBER 2003 TO
must be paid by cheque for claim U/S 80D.
1. (1) TRUE; Only medical premium
Income of a resident is taxable.
FALSE; Indian + foreign
(2) from House Property irrespective of the purpose of lettina.
as Income
(3) FALSE: Taxable
from employer taxable as salaries.
(4) FALSE; any receipt
(5) FALSE: Only
dividends from companies so exempt. (It is assumed that the Co-op. Bank is
is

ACt and not under the Companies Act.)

the Co-op.
registered under
the block of assets is empty.
2. (1) FALSE, Since
avallable for dependent; but a claim can be made u/s 80DD
claim is not
(2) FALSE: 80U
can be sOP WItn Nil Annual Value; other will be Deemed to be Let
(8) FALSE: Only one House
Out Property. be R 1,50,000 (maximum limit u/s 80C).
(4) FALSE: The
deduction allowabie
toMr. Pinkesh will
premium must De paid by any mode other than cash for deduction u/s
(5) FALSE: medi-claim
80D.
466 Direct Tax (T. Y.B. Com.: SEM-n
3. (1) FALSE; Interest on PPF is exempt u/s 10, and hence is not subject
(2) TRUE; since LIP paid on the life of spouse is TO tax
eligible for deduction U/s ou
(3) FALSE; Remuneration of M.P. is taxable as Income from Other Sources, since ne is not an
employee of Govt./Parliament.
(4) FALSE; since the transfer is within 24
months, the capital gains shall de siort
(5) FALSE; Interest on capital from partnership firm is taxable as "Income tor Business as per
Sec. 28.
4. (1) FALSE; As Mr. Manoj Shinde is only 45%
deduction.
handicapped he would be allowed k /5,000 as
A higher deduction
of F 1,00,000 is allowed to a person with severe handicap (.e. over 80%).
(2) FALSE, Rent from property is taxed under the head "Income from House Property and not
Income from Business.
(3) FALSE, sales tax is outstanding till the due date of filing Income Tax returns and hence
cannot be allowed as deduction U/S 43B.
(4) FALSE, Medical Insurance Premium for brother is not eligible for deduction u/s B0OD.
5. (1) TRUE: Since
gift is from Father.
(2) FALE : It is Salary Income.
(3) TRUE : It is not salary since Mumbai University is not his employer.
(4) FALSE : Interest on loan before commencement of production is a Capital Expenditure.
(5) FALSE: The deduction in 1/3 or 15,000 whichever is lower.
6. (1) FALSE; exemption limited to 5,00,000 only.
(2) TRUE
(3) FALSE; 7 3,00,000
(4) FALSE; taxable as business income u/s 28 (ii).
(5) FALSE; it is long term capital gain, as shares were held for more than 1 year.
7. (1) TRUE; Gift received from relatives is not taxable.
(2) TRUE; Dividend from Indian Company is exempt u/s 10(34).
(3) TRUE; Payment of Life lInsurance Premium on behalf of wife qualifies for deduction u/s 80 C.
(4) TRUE; Mr. Joshi can claim a maximum deduction of 71,50,000 u/s 80C.
8. (1) FALSE; Pension is taxable as salary.
(2) FALSE; A private sector employee cannot claim deduction for entertainment allowance.
(3) FALSE; LIP paid in cash is allowed u/s 80C. Health insurance premium paid in cash is
disallowed u/s 80D.
(4) FALSE; Rent from plot is taxed as Income from other sources.
(5) FALSE; This is transfer of short term capital asset as House Property is held for less than 3
years.
9. (1) TRUE; Sales tax unpaid till the due date of filing of I.T. return is disallowed.
(2) FALSE; Dividend from Co-operative Bank is taxable.
(3) FALSE; World income is taxable for an individual who is Ror OR.
(4) FALSE; No deduction is allowed from lottery winnings.
(5) FALSE; Interest on PPF is fully exempt.