CA Intermediate Direct Tax MCQ

1. Which of the following benefits are not allowable to Ms. Geetha, a non-resident, while computing her total income and tax liability for A.Y.2019-20 under the Income-tax Act, 1961?

2. Mr. Dinesh owns 7 goods vehicle and declares profit on presumptive basis under section 44AE for A.Y.2019-20. He is –

3. Sujata, aged 16 years, received scholarship of Rs.50,000 during the previous year 2018-19. Which of the following statements are true regarding taxability of such income:

4. Provision of rent free accommodation and motor car owned by Beta Ltd. to its employee Mr. Anand, where motor car is allowed to be used by Mr. Anand both for official and personal purposes, is a –

5. Mr. X, a resident, is due to receive Rs.4.50 lakhs on 31.3.2019, towards maturity proceeds of LIC policy taken on 1.4.2016, for which the sum assured is Rs.4 lakhs and the annual premium is Rs.1,25,000. Mr. Z, a resident, is due to receive Rs.95,000 on 1.10.2018 towards maturity proceeds of LIC policy taken on 1.10.2012 for which the sum assured is Rs.90,000 and the annual premium is Rs.10,000.

6. Mr. Prem earned income of Rs.22 lakhs from manufacture and sale of coffee grown, cured, roasted and grounded by him in India. The business income chargeable to tax in his hands would be –

7. Jenny has invested in debt securities of Haryali Pvt. Ltd., a company deriving its main source of income from business of growing and processing organic vegetables and fruits. Thus, the company has 80% of income exempt as agricultural income and 20% is taxable as business income. During the P.Y. 2018-19, Jenny derived Rs.5,000 as interest income from the above investments. Which of the following statements are correct on taxability:

8. Mr. Arvind gifted a house property to his wife, Ms. Meena and a flat to his daughter-in law, Ms. Seetha. Both of the properties were let out. Which of the following statements are correct?

9. A member of parliament is entitled to salary, constituency allowance and daily allowance when the Parliament is in session. Which of the following statements are correct?

10. Mr. Ramanan, a resident aged 40 years, has a total income of Rs.3,25,000 for A.Y.2019-20, comprising of his salary income and income from house property. His tax liability for A.Y.2019-20 would be –

11. Ashok took possession of property on 31st August 2018 booked by him three years back at Rs.25 lakhs, The Stamp Duty Value (SDV) of the property as on 31st August 2018 was Rs.31 lakh and on date of booking it was Rs.29 lakh. He had paid Rs.2 lakh by A/c payee cheque as down payment on date of booking. Which of the following will be considered as income, if any, and in which previous year

12. Mr. Arjun, aged 53 years, has a total income of Rs.51 lakhs for A.Y.2019-20. His total income comprises of salary, income from house property and interest on savings bank account. His tax liability for A.Y.2019-20 would be –

13. Rajan, a resident Indian, has incurred Rs.15,000 for medical treatment his dependent brother, who is a person with severe disability and has deposited Rs.20,000 with LIC for his maintenance. For A.Y.2019-20, Rajan would be eligible for deduction under section 80DD of an amount equal to –

14. Mr. X, a resident employee of Hindustan Company established in India, received a scholarship of Rs.5,00,000 from his employer to meet the cost of education of his children. X actually spent an amount of Rs.4,50,000 on education of his children. What will be the amount of income exempt in the hands of X?

15. Gross total income of Arpita for P.Y. 2018-19 is Rs.6,00,000. She had taken a loan of Rs.7,20,000 in the financial year 2015-16 from a bank for her husband who is pursuing MBA course from IIM, Kolkata. On 02.04.2018, she paid the first installment of loan of Rs.45,000 and interest of Rs.65,000. Compute her total income for A.Y. 2019-20.

16. Mr. Ravi incurred loss of Rs.4 lakh in the P.Y.2018-19 in retail trade business. Against which of the following incomes earned during the same year, can he set-off such loss?

17. For the purposes of computing exemption under section 10(10), in case of Mr. Anand, an employee of ABC Ltd., who is covered by the Payment of Gratuity Act, 1972, “salary” includes –

18. Mr. Devansh has agricultural income of Rs.2,30,000 and business income of Rs.2,45,000. Which of the following statements are correct?

19. Mr. Agarwal moved to Mumbai. He took a property on rent for his residential purpose. However, the property was not fully occupied by him. He let out the property to his friend at Rs.15,000 p.m. from 01.04.2018 to 31.03.2019. Mr. Agarwal is of the view that income from subletting of property is taxable as Income from House Property. As tax advisor of Mr. Agarwal, find out whether his view is correct?

20. Mr.Aarav gifted a house property valued at Rs.50 lakhs to his wife, Geetha, who in turn has gifted the same to her daughter-in-law Deepa. The house was let out at Rs.25,000 per month throughout the P.Y.2018-19. Compute income from house property for A.Y.2019-20. In whose hands is the income from house property chargeable to tax?

21. A registered firm pays salary and interest on capital to its resident partners. The salary and interest paid fall within the limits specified in section 40(b). Which of the following statements is true?

22. Who can verify the return of income of a non-resident company?

23. Mr. Joe, a foreign national, working with Mint Inc., a USA company, came India during the P.Y. 2018-19 for rendering services on behalf of the employer. He wishes to claim his salary income earned during his stay in India as exempt. Which of the following conditions are NOT necessary to be fulfilled to claim such remuneration as exempt income

24. Which of the following incomes is not deemed to accrue or arise in India under section 9(1)(i) of the Income-tax Act, 1961?

25. Mr. Anuj, a businessman, whose total income (after allowing deduction under chapter VI-A except under section 80GG) for AY 2019-20 is Rs.5,95,000. He does not own any house property and is staying in a rented accommodation in Patna for a monthly rent of Rs.9,000. Deduction allowance under section 80GG for A.Y. 2019-20 is:

26. In respect of loss from house property, which of the following statements are correct?

27. Mr. Shaleen, a businessman, whose total income (before allowing deduction under section 80GG) for A.Y.2019-20 is Rs.4,60,000, paid house rent at Rs.12,000 p.m. in respect of residential accommodation occupied by him at Chennai. The deduction allowable to him under section 80GG for A.Y.2019-20 is

28. Mr. Karan filed his return of income for A.Y.2019-20 showing total income of Rs.7 lakhs on 1.1.2020. The fee payable by him under section 234F is –

29. Mr. Kishore celebrated his 50th marriage anniversary. On this occasion, his wife received a diamond necklace worth Rs.5,00,000 from Kishore’s brother. Kishore’s son gifted him a luxurious car worth Rs.15,00,000, His grandchildren gifted them a new furniture set worth Rs.3,00,000. Also, he received cash gifts from his friends amounting collectively to Rs.80,000. Which of them the following statements stand true on taxability.

30. M/S Mohan & Sons paid Rs.35,000 to Mr. Goel on 01.05.2018 towards fee for legal advisory services without deduction of tax at source. Another payment of Rs.47,000 was due to Mr. Goel on 31.07.2018 and TDS on entire amount (i.e. Rs.35,000 plus Rs.47,000) was deducted and then the net amount was paid. However, the total tax deducted was deposited on 15.11.2018. The interest chargeable under section 201(1A) will be:

31. The benefit of payment of advance tax in one installment on or before 15th March is available to assessees computing profits on presumptive basis –

32. Mr. Happy, a US citizen, came to India for an assignment from 11.01.2015 to 09.10.2015 and went back to his home country on completion of the same. He thereafter, visited India on 05.07.2017 again for an assignment, which ended on 26.05.2018. What is the latest date by which Mr. Happy should depart from India after completing the assignment so as to qualify as non-resident for P.Y. 2018-19? (Assume that he shall not be visiting India again during the year)

33. Which of the following benefits are not allowable to Ms. Sakshi, a non-resident, while computing her total income and tax liability for A.Y. 2019-20 under the Income-tax Act, 1961?

34. During the P.Y. 2018-19, Mr. Samar, a non-resident, received Rs.75,00,000 on account of sale of agricultural land in Mauritius. The money was first received in Mauritius and then remitted to his Indian bank account. Is the sum taxable in India?

35. Two motor cars of the value of Rs.12 lakhs and Rs.8 lakhs was sold by a manufacturer to a distributor.

36. Virat, runs a business of manufacturing of shoes in P.Y. 2016-17. During the P.Y. 2016-17 and P.Y. 2017-18, Virat had incurred business losses. For P.Y. 2018-19, he earned business profit (computed) of Rs.3 lakhs. Considering he may/may not has sufficient business income to set off his earlier losses, which of the following order of set off shall be considered:
(He does not have income from any other source)

37. Mr. Harish, aged 40 years, earned income of Rs.15,000 during P.Y. 2018-19 from post office savings bank account. What portion of such income would be ultimately included in his total income?

38. M/S Thakural & Sons, paid Rs.11,00,000 as remuneration to its partner. The same was in accordance with partnership deed. Partners are also entitled to interest on capital @ 11% as per partnership deed. Total interest paid during the year is Rs.1,30,000. The book profit before interest on capital and remuneration is Rs.37,00,000. The salary allowable as deduction to M/S Thakural & Sons is:

39. Unexhausted basic exemption limit, if any, of a non-resident for A.Y. 2019-20 can be adjusted against –

40. Rs.2 lakh is paid to Mr. Vallish, a resident individual on 15.3.2019 by the State of Haryana on compulsory acquisition of his urban agricultural land.

41. Which of the following returns can be revised under section 139(5)?

42. Mr. Harini earned income of Rs.4,00,000 from sale of tea grown and manufactured in Shimla. Income from sapling and seedling grown in nursery at Cochin is Rs.80,000. The basic operations were not carried out by her on land. Her agricultural income is

43. Mr. Warner, an Indian citizen and a Government employee, left India for the first time on 31.01.2018 on account of his transfer to High Commission in United Kingdom. During P.Y. 2018-19, he visited India only for a week on occasion of his brother marriage. During F.Y. 2018-19, his income composition includes salary, foreign allowances, rent from property in Singapore and interest earned from fixed deposits maintained with SBI. His taxable income for P.Y. 2018-19 will include:

44. Mr. B acquires 1000 equity shares on 01.01.2016 at Rs.200. The Fair Market Value of the said shares on 31.01.2018 is Rs.500. Mr. B sells the said shares on 30.04.2018 at Rs.400. Calculate the amount of capital gain in the hands of Mr. B, assuming that securities transaction tax has been paid by Mr. B on acquisition and transfer of the said equity shares.

45. Mr. Shiva made a donation of Rs.50,000 to National Children’s Fund and Rs.20,000 to Rajiv Gandhi Foundation by cheque. He made a cash donation of Rs.10,000 to a public charitable trust. The deduction allowable to him under section 80G for A.Y.2019-20 is

46. Mr. Pulkit, aged 45 years, paid health insurance premium in lump sum of Rs.90,000 for three years on 01- 05-2018. Compute the amount of deduction allowable to him for A.Y. 2019-20.

47. Soumil, aged 47 years, paid medical insurance premium of Rs.15,000 and Rs.20,000 to insure health of himself and his spouse, respectively. He also paid medical insurance premium of Rs.43,000 to insure health of his father, aged 69 years, not dependant on him. He had also incurred Rs.4,000 in cash on preventive health check up of his father. Total deduction admissible under section 80D to Mr. Soumil is: