Taxation MNGT (Tejas Sir)

BIT- Baroda Institute of Technology
Compiled by Tejas Parekh
1) Cheptr-1
2) Direct taxes: Direct taxes are taxes on income or profits
A. Direct taxes
B. Private taxes
C. Indirect taxes
D. None of the above
3) Everyone who earns taxable income i.e. income above the exempted level
has to calculate the amount earned during the financial year
A. taxable income
B. Non taxable income
C. Transferable income
4) Indirect taxes are taxes on products and services and are payable on the
purchase, production and sale of products and purchase and delivery of
services. Prominent indirect taxes are excise duty, sales tax, customs duty
and value added tax.
A. direct taxes
B. Private taxes
C. Indirect taxes
5) The burden of Direct Taxes is actually borne by the person on whom they
are imposed and paid
A. Direct Taxes
B. Private taxes
C. Indirect taxes
E.
6) While the burden of Indirect Taxes can be shifted by the imposer to the
ultimate consumer.
A. Indirect Taxes
B. Private taxes
C. Indirect taxes
7) Tax planning involves a study of the exemptions, rebates, deductions and
reliefs given under the direct and indirect tax laws for specific business
decisions
A. Tax planning
B. Tax avoiding
C. Tax Evasion
8) income tax law allows a person to reduce from his taxable income certain
specific investments.
A. income tax law
B. Criminal Law
C. Sales Tax Law

9) Reduction of tax liability by utilizing the benefits available in the tax laws.
A. Reduction
B. Deduction
C. Addition
10)
Informed and pragmatic financial decisions: A person adds the
dimension of tax incidence in his decision-making on financial matters, and
this helps him optimize his decisions.
A. Informed and pragmatic financial decisions
B. Uninformed and pragmatic financial decision
C. Informed and non-pragmatic financial decision
E.
11) Multi-dimensional investment decisions: In a democratic welfare
state like India the government requires substantial investment in
infrastructure, education and healthcare.
A. Multi-dimensional investment decisions
B. Single-dimensional investment decisions
C. Multi-Functional investment decisions
12)
A temptation to hide income earned and skip paying income tax, or
make purchases without bills and escape sales tax.
A. A temptation
B. Assessment.
C. Legal action
13) Reducing pressure on the legal infrastructure: The long arm of the law
invariably catches up with economic offenders, but the process is tedious and
puts an enormous burden on the legal system.
A. legal system.
B. Financial system
C. Social system
D. None
14)
It is important for the taxpayer to know whether he is a resident or a
non-resident in a country in which he earns income.
A. resident or a non-resident
B. Resident
C. Non-Resident
D. none
15)
Income Tax Act provides specific heads of income under which income
earned has to be declared.
A. heads of income
B. Part of income
C. Deduction of income
D. None
16)
The basic Acts of law that stipulate taxes on income, wealth, products,
etc. are the Income Tax Act, the Wealth Tax Act and a set of indirect tax acts
such as Sales Tax Act.

A. stipulate taxes
B. Commercial tax
C. Governmental tax
D. None
17)
The taxpayer should be focused on the substance of a transaction, the
real intent, and not only with the form.
A. The taxpayer
B. Tax assessor
C. Tax adviser
D. Legal adviser
18)
Tax planning reduces tax, and so does tax evasion: but while tax
planning is perfectly legal, tax evasion is equally perfectly illegal.
A. Tax planning
B. Tax avoiding
C. Tax Evasion
19)
Tax evasion is non-payment of taxes through illegal means such as hiding
income earned, showing artificial expenses to reduce taxable profit,
smuggling goods into the country without paying customs duty, selling goods
without bills (and so not charging sales tax)
A.
B.
C.
D.
Tax planning
Tax avoiding
Tax Evasion
None of the above
20)
Tax avoidance is reduction of tax liability by exploiting loopholes in the
tax laws.
A. Tax avoidance
B. Tax planning
C. Tax Evasion
21)
Loss of tax revenues that cannot be acted upon, as it is legal.
A. Loss of tax
B. Addition of tax
C. Tax avoidance
D. Tax planning
E.
22)
As any legal entity is a distinct taxable person, tax avoiders create
separate entities for the same business.
A. legal entity
B. Social entity
C. Physical entity
D. None
23)
Legal entity is a trust, organization or foundation.
A. Legal entity
B. legal entity
C. Social entity

D. Physical entity
24)
Country of residency Here the taxpayer changes the tax residence to a
place which is a tax haven and which has either no income tax or much lower
tax rates.
A. Country of residency
B. Country of working
C. Foreign country
D. None
25)
When a person who is not a resident of a country earns income in that
country he is still liable to tax there, but he has to declare this income in the
country of his residence as well and pay tax on the income again. This is
known by the term double taxation.
A. double taxation
B. Tax planning
C. Single taxation
D. None
26) Income from house property is covered under Sections 22-27 of the
Income Tax Act.
A. house property
B. capital gain
C. other source
D. none
27)
The income from business and profession are the profits and gains
arrived at by deducting the expenses incurred from the revenues earned.
A. profits and gains arrived
B. expenses incurred
C. both
D. none
28)
Profits and gains of business or profession should be computed in
accordance with the method of accounting regularly employed by the
taxpayer accrual basis or receipt basis or a mixture of the two.
A. accrual basis or receipt basis
B. Accrual basis
C. Receipt basis
D. None
29)
expenditure is incurred in business or profession by payment of cash over
Rs. 20,000 in a day,
A. Rs. 20,000
B. 0
C. 40000
D. 10000
30)
Interest on delayed payments made to small-scale industries is not
allowable as deduction.
A. not allowable
B. Allowed
C. Partial
D. Not decided

Cheptr-2
31)
The income tax law in India is administered through the Income Tax Act,
1961
A. income tax
B. sales tax
C. service tax
D. none
32)
The Act is a repository of the basic income tax law, written in sections. It
covers all aspects including the following:
A. Incomes to be taxed
B. Rates to be charged
C. Exemptions and rebates
D. all of the above
33)
Each Rule is linked to a section of the Act, and elaborates the working
particulars of the topic.
A. section of the Act,
B. subsection of the act
C. both
D. none
34)
The Act states in many places that notifications will be issued to bring
into force the particular section.
A. notifications
B. certificate
C. intimation
D. none
35)
Circulars are intra-departmental advices to the officers responsible for
administering the Act and the Rules.
A. Circulars
B. Rules
C. Regulation
D. None
36)
The Finance Bill is a comprehensive document that comprises all the tax
initiatives proposed in the Budget.
A. Finance Bill
B. Commercial bill
C. Private bill
D. None
37)
Assessee: A person who has to pay tax, or whose income or loss has to
be assessed and tax refund given, either for himself or for someone else in
respect of whose income he is assessable.
A. Assessee
B. Tax assessor
C. Tax consultant
D. None

38)
Previous year (PY): A period of one year starting from 1st April, and
represents the 12 months, during which the income has been earned and has
to be assessed and taxed.
A. Previous year
B. Assessment year
C. End of the year
D. None
39)
Assessment year (AY): A period of one year starting from 1st April, and
represents the 12 months immediately following the previous year.
A. Assessment year
B. Previous year
C. Financial year
D. None
40)
Board: Refers to the Central Board of Direct Taxes (CBDT), the apex
Government body for making and administering direct tax laws.
A. Board
B. Branch
C. Committee
41)
Income: Income includes almost all receipts in the hands of the taxpayer,
including imputed income,
A. Income
B. Expenses
C. Revenue
D. None
42)
Assessing officer or income tax officer: The person appointed to
examine tax returns filed and conclude the assessments. This is the key
person for the taxpayer who ensures a trouble-free life with direct taxes.
A. Assessing officer or income tax officer
B. Assessing office
C. Tax officer
D. None
43)
Person: This includes individual, Hindu Undivided Family (HUF), firm,
company, cooperative society and any other association of persons or
artificial judicial person.
A. Person
B. Individual
C. Family
D. company
44)
Rates of taxes: These are the rates of income tax specified in the
Finance Act of the relevant year.
A. Rates of taxes
B. Rate of interest
C. Basic rate
D. Basis point

45)
called the charging section of the Act specifies that the total income
of the person during the previous year shall be taxed at the rates prescribed
A. charging section
B. Charging sub section
C. Charging law
46)
every person should declare all incomes earned and sum them up,
adjust the deductions permitted from those incomes, deduct rebates or
allowances if any provided, and arrive at taxable income.
A. incomes earned and sum them up
B. revenue earned
C. total expenses
D. none
47)
Tax rates are substantially lower for senior citizens (above 60 years old)
and very senior citizens (above 80 years old).
A. senior citizens
B. very senior citizen
C. young citizen
D. none
48)
Slab rates are fixed for taxing individuals with no tax at all for the first
slab.
A. Slab rates
B. Fix rate
C. Flexi rate
D. none
49)
Taxable income is defined as the total income either (a) received or
deemed to be received, or
A. Received
B. Paid
C. Distributed
D. shared
50)
(b) accrued or arising or deemed to accrue or arise.
A. accrued or arising
B. received
C. paid
D. none
51)
Amount: Section 5 states that the amount of income to be taxed is
subject to the provisions of this Act, which means all deductions, rebates,
and set-offs are to be adjusted
A. Amount
B. amount of income
C. amount of payment
D. none
52) Residential status: On the parameter of residence in India, there are
three categories: resident, non-resident, and not ordinarily resident.
A. Residential status
B. resident, non-resident, and not ordinarily resident.
C. All of the above


53)
domestic company or if its control and management is wholly done in
India, it is a resident company.
A. domestic company
B. state company
C. government company
D. none
54)
The category not ordinarily resident describes persons who have been
non-residents for nine out of ten years immediately before the relevant
previous year.
A. not ordinarily resident
B. Ordinary resident
C. NRI
D. None
55)
Residence makes one important difference to taxable income.
A. Residence
B. Non Resident
C. Both
D. none
56)
A tax holiday is a temporary reduction or waiver of tax.
A. tax holiday
B. Tax discount
C. Tax summery
D. none
57)
certain circumstances incomes of two persons may be clubbed in the
hands of one person and taxed as his income.
A. Clubbed
B. Separated
C. Added
D. none
58)
(sections 68-69D) cover the topic of aggregation of income, whereby
certain amounts may be added to or aggregated with the assessees
taxable income
A. added to or aggregated
B. segregated
C. deducted
D. none
59)
capital losses, which can be set off only against capital gains and not
against any other head of income
A. capital losses
B. Capital gain
C. Revenue losses
D. Revenue loss
60)
Carry-forward and set-off facility in respect of business losses is
crucial for companies and other business units. It is common for businesses to
incur losses in the initial years and make profits later.
A. Carry-forward and set-off facility
B. Cary forward
C. Set off facility

D. None
61)
carry-back and set-off is provided in US Tax laws, and it is possible for a
taxpayer to claim back tax paid by him in an earlier year,
A. carry-back and set-off
B. Cary forward
C. Set off facility
D. None
Cheptr-3
62)
Mere payment of tax is not compliance with the tax law, but filing of
returns and its assessment and approval are also required.
A. payment of tax
B. return of tax
C. declaration of tax
D. none
63)
The total of all deductions must be limited to the amount of the total
income of the assessee.
A. total of all deductions
B. total summation
C. both
D. none
64)
There must be no double-claiming of a deduction.
A. double-claiming
B. single claiming
C. both
D. none
65)
Deductions have to be specifically claimed by the assessee, and the
Assessing Officer is not bound to allow an unclaimed deduction.
A. Deductions
B. Addition
C. Payment
D. none
66)
The assessee must place all relevant material before the Assessing
Officer and convince him that he is entitled to the deductions claimed.
A. assessee
B. tax consultant
C. taxpayer
D. none
67)
When individuals in receipt of salary income save money in the form of
the following, the total of such savings, investments and pay-outs is allowed
as deduction:
A. receipt of salary income
B. expenses of the salary expenses
C. both
D. none
68)
Medical insurance to cover hospitalization and treatment of notified
illnesses of the assessee or dependents are costs that can be deducted from
the income.
A. Medical insurance

B. Medical bill
C. Life insurance
D. none
69)
Interest on education loans and cost of education of (upto two)
children are deductible.
A. education loans
B. personal loan
C. home loan
D. none
70)
Specified donations qualifying for tax exemption are deductible.
A. Specified donations
B. General donation
C. None
D. all
71)
Payments made by an individual for scientific research or to any
university for funding research work are also allowed as deductions.
A. scientific research
B. special research
C. both none
72) Companies in specific industries are given exemptions based on size,
geography and product or service.
A. size,
B. geography
C. product or service
D. all.
73)
Enterprises in the work of processing bio-degradable waste are allowed
deductions when determining their taxable incomes.
A. bio-degradable waste
B. chemical
C. both
D. none
74)
Certain premiums paid for life insurance are deductible from income tax
payable.
A. life insurance
B. general insurance
C. both
D. none
75)
Securities transaction tax paid by the assessee is deductible from the
tax on income from securities.
A. Securities transaction
B. Share transaction
C. Cash
D. bank
76)
Salary arrears received in a lump sum covering extended periods of over
one year are taxed at lower rates to provide relief to the taxpayer.
A. Salary arrears
B. Salary advance
C. None
D. all

77)
The taxable income of an individual for the year must be computed as
follows:
A . taxable income
B. Non taxable
C. Semi taxable
D. none
78)
ascertain the partnership firms taxable income.
A. firms taxable income
B. individual taxable income
C. partners taxable income
D. none
79)
Ascertain the book profit of the firm based on the firms Profit & Loss
account.
A. book profit of the firm
B. paid profit of the firm
C. both
D. none
80)
companies refers to companies incorporated under the Indian
Companies Act, 1956.
A. Companies
B. Firm
C. Business
D. none
81)
The tax audit has been handled elaborately in a different unit.
A. tax audit
B. tax collection
C. tax payment
D. none
82)
Individuals must file their return by 31st July every year, of their incomes
and tax payable and paid for the year ended 31st March.
A. Individuals
B. Company
C. Firm
D. partnership
83)
Partnerships, AOPs and HUFs: Partnerships, AOPs and HUFs are
required to file return by 30th September.
A. Partnerships,
B. AOPs and
C. HUFs
D. All
84)
Companies: Companies must file returns together with tax audit reports
by 30th September.
A. Companies
85)
All assessees filing returns either online or physically receive
acknowledgement in form ITR-V, the first page of the return duly receipted by
the Tax Authority.
A. Tax Authority.
B. Tax officer

C. Tax collector
D. none
86)
A taxpayer can file a revised return if some key information or document
was not available on the due date and came to light subsequently.
A. revised return
B. primary return
C. both
87)
A notice is sent by the assessing officer (AO) to an individual assessee in
relation to the return submitted by him.
A. assessing officer
B. Tax officer
C. Tax collector
D. none
88) Cheptr-4
89)
The existence of an employer-employee relationship is necessary for a
payment to be taxed under the head salaries.
A. employer-employee
B. boss -subordinate
C. partner -partner
D. none
90)
Family pension that is pension received by the members of the family of
an employee subsequent to his death: This is taxable under the head
Income from other sources.
A. Income from other sources.
B. Income from salary
C. Income from other source
D. Income from capital gain
91)
HRA is exempt from income tax to the extent prescribed in Rule 2A of the
Income Tax Rules, 1962,
A. HRA
B. DA
C. Both
D. none
92)
Salary includes DA but excludes all other allowances and perquisites.
A. allowances and perquisites
B. Incentive
C. Bonus
D. none
93)
The disbursing authorities should satisfy themselves in this regard by
insisting on production of evidence of actual payment of rent
A. The disbursing
B. Payment
C. Ordering
D. none
94)
The transport allowance given to an employee to meet his travel
expenses between the place of residence and the work place
A. The transport allowance
B. Other allowance
C. Private allowance

D. none
95)
LTC received by an employee for himself and his family in with regard to
his proceeding on leave to any place in India
A. LTC received
B. Travel allowance
C. Personal allowance
D. none
96)
Gratuity, leave salary and provident fund are some elements of
remuneration to which an employee is entitled when he leaves the services
A. Gratuity,
B. leave salary
C. provident fund
D. none
97)
Gratuity: This is payable to employees who have completed 5 years
service with the employer,
A. Gratuity
B. Provident fund
C. None
D. all
98)
Leave salary: This is also calculated on the basis of basic play and DA
and is exempt from income tax.
A. Leave salary
B. Due salary
C. Paid salary
D. None
99)
Provident fund: This is accumulated in the employees account
comprises employees and employers contribution plus interest accrual. This
is totally tax-free.
A. Provident fund
B. ESIC
C. Gratuity
D. None
100) Perquisites are benefits or amenities in cash or kind provided by the
employer to the employee in addition to the salary.
A. Perquisites
B. Salary
C. Advances
D. Drawings
101) The spouse and children of the employee, children may be dependent
or not dependent.
A. The spouse
B. Children
C. Both
D. None
102) The value of any benefit on amenity, service, right or privilege
provided by the employer is determined on the basis of cost to the employer
under an arms length transaction as reduced by the employees contribution,

A. Amenity
B. service,
C. right or privilege provided
D. All of the above
103) The amount of compensation due to or received by an assessed from his
employer or former employer at or in connection with
A. compensation due
B. compatation advance
C. payment
D. none
104) First-aid medical facility: The value of any medical treatment provided
to an employee or any member of his family in a hospital.
A. First-aid medical facility:
B. Madiclaim
C. LIC
D. None
105) Medical reimbursement: Any sum paid by the employer in respect of
any expenditure incurred by the employee on his medical treatment
A. Medical reimbursement
B. First-aid medical facility:
C. Madiclaim
D. LIC
106) Any foods or beverage provided by the employer to his employees in the
office or factory
A. office
B. factory
C. Both
D. None
107) Any foods or beverage provided by the employer to his employees through
paid vouchers which are not transferable and usable only at eating joints, up
to ` 50 per meal
A. up to ` 50 per meal
B. up to ` 20 per meal
C. up to ` 30 per meal
D. up to ` 40 per meal
108) For employees in high tax brackets it is important to structure the salary
into different taxable and non-taxable components,
A. tax bracket
B. tax basket
C. tax interval
D. none of the above
109) Avenues provided by the law include medical reimbursement,
conveyance, leave travel concession, telephone expenses, education and
food expenses as items forming part of salary that are exempt from tax.
A. Avenues
B. Venue
C. Transaction

110) The HRA exemption limits should be studied carefully and utilised. Rent
receipts should be taken from the landlord, and the landlords PAN should be
known.
A. HRA exemption
B. HRA allowance
C. HRA advance
D. HRA payment
111) Commuted pension is fully exempt from tax for government employees.
A. Commuted pension
B. Un commuted pension
C. Total commuted pension
D. None
112) The employers contribution toward recognised provided fund (PF) is
exempt from tax up to 12% of the salary
A. employers contribution
B. employees contribution
C. total contribution
113) Medical allowance is taxable. But, medical reimbursement against
actual bills is tax-free upto ` 15,000 per annum.
A. Medical allowance
B. Medical reimbursement
C. Medi claim
D. Medi assist
114) Pension received in India by a non-resident assessee from abroad is
taxable in India.
A. Pension
B. Graduity
C. Salary
115) For the purpose of valuation of perquisites with regard rent free house,
the term salary includes basic salary, bonus commission and all other taxable
allowances.
A. valuation of perquisites
B. valuation of assets
C. valuation of allowances
116) Optimum combination of allowances and perquisites depends upon the
individual requirements of each employee taking into consideration the
present take home pay and future benefits
A. allowances
B. perquisites
C. Both
117) Cheptr-5

118) Capital asset means property of any kind held by an assessee whether or
not connected with his business or profession.
A. Capital asset
B. Revenue asset
C. Noncapital asset
119) Short-term capital assets: According to Section 2(42A), a short-term
capital asset means a capital asset held by an assessee for not more than:
A. Short-term capital assets
B. Long term capital asset
C. Short term non capital assets
D. Long term non capital assets
120) Long-term capital assets: Any capital asset other than a short-term
capital asset is termed as a long-term capital asset.
A. Short-term capital assets
B. Long term capital asset
C. Short term non capital assets
D. Long term non capital assets
121) Short-term capital gains are included in the total income and taxed as
per normal rates while long-term capital gains are taxed at a flat rate of 20
per cent.
A. Short-term capital gains
B. Short-term capital loss
C. Long term capital asset
D. Short term non capital assets
122) The liability to tax on capital gains arises only if there is a transfer of
capital asset.
A. transfer of capital
B. Payment of capital
C. Receipt of payment
123) Any transaction which has the effect of allowing the possession of any
immovable property in part performance of a contract of the nature
referred to in Section 53 A of the Transfer of Property Act, 1882
A. immovable property
B. Movable property
C. Transferable property
124) Any transaction by way of becoming a member of shareholder in cooperative arrangements which has the effect of transferring or enabling
the enjoyment of any immovable property
A. co-operative arrangements
B. Bilateral arrangement
C. Corporate arrangement
125) The expression full value means the whole price without any deduction
whatsoever and it cannot refer to adequacy or inadequacy of price.

A.
B.
C.
D.
full value
fair value
total value
None of the above
126) Expenses incurred in connection with the transfer: This refers to

expenses necessary for effecting transfer.
A. Expenses incurred
B. Expenses paid
C. Expense received
127) The cost of acquisition of an asset would normally be taken to be the
price at which the asset was acquired by the assessee.
A. The cost of acquisition
B. Payment of acquisition
C. Consideration for acquisition
128) Cost inflation index: The government has notified the following cost of
inflation index vide notification dated 5th August,
A. Cost inflation index
B. Price index
C. Dividend index
D. Tax index
129) Capital gain arising from the transfer of residential house property is
exempt from tax
A. house property
B. business property
C. estate property
130) Construction of the house must be completed within three years from the
date of transfer.
A. three years
B. two year
C. one year
D. five year
131) Capital gains on transfer of agricultural land are exempt subject to the
following conditions:
A. transfer of agricultural
B. transfer of building
C. transfer of assets
132) Capital gains on compulsory acquisition of lands and buildings are
exempt
A. lands
B. buildings
C. both


133) Long-term capital gain in case of investment of capital gains in certain
bonds:
A. Long-term
B. Medium term
C. Short term
134) Capital gain on transfer of a long-term asset in the nature of a share or a
security is exempt subject to the following conditions:
A. Capital gain
B. Long term gain
C. Short term gain
135) Within six months from the date of transfer of the asset, the assessee
should invest the capital gains in specified equity shares
A. specified equity shares
B. specified preference shares
C. specified bond
D. specified debenture
136) Capital gain on transfer of long-term capital asset is exempted if net
consideration is invested in residential house subject to the following
conditions:
A. Capital gain
B. Capital loss
C. Revenue gain
D. Revenue loss
137) If the cost of the new house is more than the net consideration in respect
of the capital asset transferred, the entire capital gain arising from the
transfer will be exempt from tax.
A. exempt
B. may be exempted
C. both
D. none
138) Capital gains on shifting of industrial undertakings from urban area to
non-urban area are exempt if the following conditions are satisfied:
A. Capital gains on shifting
B. Capital gains on receiving
C. Capital gains on transferring
D. Capital gains on paying
139) Where the transfer of the original asset is by way of compulsory
acquisition under any law and the amount of compensation awarded for such
acquisition is not received by the assessee on the date of such transfer,
A. Extension of time limit for acquiring new asset
B. Extension of time limit for acquiring old asset

C. Extension of time limit for acquiring machine

D. Extension of time limit for acquiring new building
E.
140) Exemption of capital gains on transfer of assets in cases of shifting of
industrial undertaking from urban area to any Special Economic Zone
(SEZ):
A. Special Economic Zone
B. Semi economical zone
C. Super energy zone
Cheptr-6
141) when the profit is not large and the partners of the firm do not have any
other income except remuneration and interest from the firm, the taxable
profit of the firm and the individual partners incomes are moderate
A. profit is not large
B. profit is large
C. profit is minimum
D. profit is miximum
142) While computing the income of the firm under the head Profits and
Gains of Business or Profession,
A. Profits and Gains of Business or Profession
B. Profits and Gains of other source
C. Profits and Gains of house property
D. Profits and Gains of capital gain
143) The interest and remuneration paid to partners and allowed as a
deduction to the firm is taxable in the hands of the partners in their individual
assessment
A. interest and remuneration
B. interest and payment
C. interest and revenue
144) The firm will be assessed as a firm, also known as Firm Assessed as
Such (FAAS) if the some conditions are satisfied.
A. Firm Assessed as Such
B. Final assessed as such
C. Fund assessed as such
D. none
145) Once the firm is assessed as a firm it shall be assessed in the same
capacity for every subsequent year if there is no change in the constitution of
the firm or the share of the partners.
A. assessed as a firm
B. assessed as a partnership
C. assessed as a company
D. None
146) Payment of remuneration to a non-working partner shall not be
allowed.
A. Payment of remuneration
B. Receipt of remuneration

C. Total remuneration
D. None
147) Payment of remuneration/interest relating to a period prior to the date
of the partnership deed shall not be allowed.
A. Remuneration
B. interest
C. both
D. none
148) Interest payable to a partner shall be at the rate stipulated in the
partnership deed but subject to a maximum of 12% simple interest per
annum.
A. Interest payable
B. Interest receivable
C. Interest paid
D. none
149) CBDT has clarified in 1998 that the partnership deed should either specify
the amount of remuneration payable
A. CBDT
B. NBFC
C. CDBA
D. none
150) Compute the income of the firm under the head Profit and Gains of
Business or Profession as per Sections 28 to 44D
A. Profit and Gains of Business or Profession
B. Profits and Gains of other source
C. Profits and Gains of house property
D. Profits and Gains of capital gain
151) Set-off and carry-forward of losses for a firm are permitted for eight
years following the year in which a loss has been returned
A. Set-off
B. carry-forward
C. both
D. none
152) Unabsorbed depreciation of the firm is not covered under Section 78
and the entire unabsorbed depreciation will be allowed to be carried forward
in the hands of the firm,
A. Unabsorbed depreciation
B. absorbed depreciation
C. semi- absorbed depreciation
D. none
153) A HUF consists of all males lineally descended from a common ancestor,
their wives and unmarried daughters and daughters-in-law.
A. A HUF
B. Hindu family
C. Total family
D. none

154) The income of a HUF can be assessed in the hands of the HUF alone and
not in the hands of any of its members, unless specifically provided by law.
A. The income of a HUF
B. The income of a karta
C. The income of a family member
D. All of the above
155) AOPs can be either resident or non-resident. AOPs will be resident in India
if control and management of their affairs are wholly or partly in India during
the relevant year.
A. AOPs
B. HUF
C. SAP
D. None
156) If control and management of their affairs are wholly outside India, it
will be non-resident.
A. control
B. management
C. both
D. none
157) first the total income under the different heads i.e. Income from House
Property, Profits or Gains of Business or Profession, Capital Gains,
and Income from Other Sources is computed and Gross Total Income is
obtained. From this, prescribed deductions under the Act are made.
A. Income from House Property,
B. Profits or Gains of Business or Profession
C. , Capital Gains, and Income from Other
D. All of the above
158) The total income of the AOP is taxable, either at the rates applicable to an
individual, or at the maximum marginal rate or at a rate higher than
maximum marginal rate.
A. maximum marginal
B. minimum marginal
C. average marginal
D. none
Cheptr-7
159) 80G:Donations to certain funds/charitable institutions, etc.
A. 80G
B. 80C
C. 80CCC
D. none
160) 80GGA:Certain donations for scientific research or rural development
A. 80GGA
B. 80G
C. 80C
D. 80CCC
161) 80GGB:Contribution to political parties
A. 80GGB

B. 80G
C. 80C
D. 80CCC
162) 80IA:Profits and gains of new industrial undertakings or enterprises
engaged in infrastructural development, etc.
A. 80IA
B. 80G
C. 80C
D. 80CCC
163) 80IB:Profits gains from certain industrial undertakings other than
infrastructure development undertakings
A. 80IB
B. 80G
C. 80C
D. 80CCC
164)
A.
B.
C.
D.
80IC:Profits and gains of certain undertakings in certain states

80IC
80G
80C
80IB
165) 80ID:Deduction in respect of profits and gains from business of hotels and
convention centres in specified area.
A. 80ID
B. 80G
C. 80C
D. 80CCC
166)
A.
B.
C.
D.
80IE:Deduction in respect of certain undertakings in North Eastern states

80IE
80G
80C
80CCC
167) 80JJA:Deduction in respect of profits and gains from business of collecting

and processing of bio-degradable waste
A. 80JJAA
B. 80G
C. 80C
D. 80CCC
168)
A.
B.
C.
D.
Deduction in respect of employment of new workmen

80JJAA
80G
80C
80CCC

169) 80LA:Income of offshore banking Limit and international financial services

centre
A. 80LA
B. 80G
C. 80C
D. 80CCC
170) A rebate u/s 88E, if any, in respect of securities transaction tax to an
assessee dealing in securities shall be allowed from the tax computed.
A. 88E,
B. 80G
C. 80C
D. 80CCC
171)
A.
B.
C.
D.
172)
A.
B.
C.
D.
Domestic companies, 30%. Tax rate

30%.
40%
20%
25%
Life insurance companies 12.5% tax rate
12.5%
40%
20%
25%
173) The Minimum Alternative Tax (MAT) operates on the concept of

requiring a company to pay tax on its book profit,
A. Minimum Alternative Tax
B. Maximum Alternative Tax
C. Moderate Alternative Tax
174) In the case of closely held companies, loss can be carried forward and
set off only if the shares of the company carrying not less than 51% of the
voting power are held by the same persons. In the case of closely held
companies, loss can be carried forward and set off only if the shares of the
company carrying not less than 51% of the voting power are held by the
same persons.
A. carried forward
B. balance forward
C. total forward
D. none
175) Amalgamation or merger under the Income Tax Act, 1961 is said to
occur when two or more companies combine into one company
A. Amalgamation
B. Merger
C. Both
D. none
176) Demerger in relation to companies refers to the divestment of its assets
or undertakings by one company to another on a going concern basis.

A. Demerger
B. Merger
C. Amalgamation
D. none
177) Capital gains are computed by deducting the following from the full
value of the consideration received, or accrued as a result of the transfer of
the capital asset:
A. Capital gains
B. Capital loss
C. None
D. both
178) The amalgamated company will be permitted to set-off or carry forward
of loss and allowance for depreciation of amalgamating company
A. amalgamated company
B. amalgamating company
C. both
D. none
179) The accumulated loss and the allowance for unabsorbed
depreciation of the demerged company shall be allowed to be carried forward
and set off in the hands of the resulting company
A. accumulated loss
B. the allowance for unabsorbed
C. both
D. none
180) When there has been a reorganisation of a business, the accumulated
loss and the unabsorbed depreciation of the predecessor firm shall be
deemed
A. Re organization of a business
B. Re structuring
C. Payment
D. Receipt of tax
E. none
181) VC fund shall be chargeable to income tax in the same manner as if it
were the income received by such person had he made investments directly
in the venture undertaking.
A. VC fund shall
B. chargeable to income tax
C. both
D. none
182) Cheptr-8
183) Tax audit: For many taxpayers, especially individuals, the assessing
officer (A
A. Tax accounting
B. Tax assistance
C. Tax payment
D. none

184) Tax accounting: Accounting for the income tax paid and payable is
complicated for one simple reason each years tax story pans across two
years or more,
A. Tax accounting
B. Tax assistance
C. Tax exapmted
D. Tax payment
185) The purpose of tax audit is to ensure that books of accounts have been
maintained in accordance with the provisions of the Income Tax Act.
A. tax audit
B. Tax assistance
C. Tax payment
D. Tax payment
186)
A.
B.
C.
D.
A tax audit effectively curbs tax evasion and ensures tax compliance.
tax audit
Tax assistance
Tax payment
Tax payment
187) First category: This category covers persons carrying on business with a
total sales, turnover or gross receipts exceeding ` 60 lakh.
A. First category
B. Second category
C. Third category
D. none
188) Second category: This category covers persons carrying on a profession
with gross receipts exceeding ` 15 lakh.
A.
B.
C.
D.
First category
Second category
Third category
none
189) Third category: This category covers persons whose income is assessed
on a presumptive basis under Section 44AE, Section 44BB or Section 44BBB
A. First category
B. Second category
C. Third category
D. none
190) Fourth category: This category is of recent origin. It was introduced by
the Finance Act, 2009 with effect from 1st April, 2011.
A. First category
B. Second category
C. Third category
D. Fourth category
191) Section 44AB states that the accounts must be audited by a chartered
accountant.
A. chartered accountant

B. simple account
C. special account
D. none
192) Qualification of an auditor: A practicing chartered account is qualified to
be appointed as the auditor of a company.
A. an auditor
B. charted account
C. account assistance
D. none
193) The auditor must show integrity, objectivity and independence.
A. objectivity
B. independence
C. both
D. none
194) The auditor must have specialised skills and competence to carry out the
tax audit.
A. to carry out.
B. To perform
C. Finalize
D. paymant
195) First part: This part refers to the fact that the statutory audit of the
assessee is conducted by a duly appointed auditor in accordance with the
provisions of the relevant Act,
A. First part
B. Second part
C. Third part
D. none
196) Second part: The statement of particulars required to be furnished under
Section 44AB must be annexed with the particulars in Form No. 3CD.
A. First part
B. Second part
C. Third part
D. none
197) Third parts :This is a statement by the auditor, that in his opinion and to
the best of his information and according to the explanations given to him,
A. Third parts
B. First part
C. Second part
D. none
198) Fourth part: Item No. 4 of the notes to Form No. 3CA states that the
auditor must indicate his membership number and the authority under which
he is entitled to sign this report.
A. Fourth part
B. Third parts
C. First part
D. Second part
199) Form 3CA is prescribed for companies to be annexed in the tax audit
report signed by the chartered accountants.
A. Form 3CA

B. Form 3AB
C. Form 3DA
D. Form 3XX
200) Form 3CD is the main document to be completed, and contains all the
details of the assessee and taxable income for the period.
A. Form 3CD
B. Form 3AB
C. Form 3DA
D. Form 3XX
201) Status refers to the different class of assessees included in the definition
of person under Section 2(31) namely
A. Status
B. Style
C. Culture
D. none
202) Clause 7a: If it is a firm or association of persons, names of partners or
members and their profit and loss sharing ratio is based on the partnership
A. Clause 7a
B. Clause 7b
C. Clause 7c
D. Clause 7d
E.
203) Clause 7b: If there is any change in the partners or members or in their
profit sharing ratio since the last date of the preceding year, the particulars of
such change
A. Clause 7a
B. Clause 7b
C. Clause 7c
D. Clause 7d
E.
204) Clause8a: The nature of business or profession, if more than one business
or profession is carried on during the previous year, mention the nature of
every business or profession.
A. Clause8A
B. Clause8B
C. Clause8C
D. Clause8D
205) Clause 8b: If there is any change in the nature of business or profession,
particulars of such change
206) Clause8A
207) Clause8B
208) Clause8C
209) Clause8D
210) Clause 9a: Verify if the books of accounts are prescribed under Section
44AA. If yes, list of books prescribed
A. Clause 9a
B. Clause9b
C. Clause9c

D. Clause9d
211) Clause 9b: In case books of accounts are maintained in a computer
system, mention the books of accounts generated by the computer system.
A. Clause 9b
B. Clause 9a
C. Clause9c
D. Clause9d
212) Clause 9c: This clause refers to the list of books of accounts examined.
The statutory auditor puts check marks or identification at the time of
finalisation of accounts on all those records mentioned in Clause 9b.
A. Clause 9a
B. Clause9b
C. Clause9c
D. Clause9d
213) Clause 10: If the Profit and Loss account includes any profits and gains
assessable on presumptive basis, the amount and the relevant sections must
be indicated. This relates to civil construction,
A. Clause 10
B. Clause 11
C. Clause 13
D. Clause 14
214) Clause 11a: This clause refers to the method of accounting employed in
the previous year. The following are the two methods
A. Clause 11a
B. Clause 11b
C. Clause 11c
D. Clause 11d
215) Current tax: This is the amount of income tax determined to be payable
in respect of the taxable income for a period.
A. Current tax
B. Deferred tax
C. Post tax
D. none
216) Deferred tax: This is the tax effect of timing differences.
A. Current tax
B. Deferred tax
C. Post tax
D. none
217) Timing differences: These are the differences between taxable income
and accounting income for a period that originate in one period and are
capable of reversal in one or more subsequent periods.
A. Timing differences
B. Payment difference
C. Conversion difference
D. none

218) Permanent differences: These are the differences between taxable

income and accounting income for a period that originate in one period and
do not reverse subsequently.
A. Permanent differences
B. Payment difference
C. Conversion difference
D. none
Cheptr-9
219) wealthy persons could contribute to the governments social and
community development actions;
A. wealthy persons
B. rich person
C. poor person
D. none
220) individual who is a citizen of India and resident in India, a resident-HUF
and company resident in India, wealth tax is chargeable on net wealth that
consists of: all assets in India and outside India, less all debts in as well
as outside India.
A. assets in India
B. outside India
C. None
D. both
221) House (including farm house): Any building or land appurtenant
thereto, whether used for residential or commercial purposes or for the
purpose of maintaining a guest house or otherwise,
A. House
B. farm house
C. Both
D. none
222) Motor cars: All motor cars, whether Indian or foreign, other than the
following:Cars used by the assessee in the business of running them on hire.
A. Motor cars:
B. Building
C. Plant
D. none
223) Assets include jewellery, bullion, furniture, utensils or any other
article made wholly or partly of gold, silver, platinum or any other precious
metal or any alloy containing one or more of such precious metals
A. jewellery,
B. bullion,
C. furniture and utensils
D. all of above
224) Yachts, boats and aircrafts (other than those used by the assessee for
commercial purposes).
A. Yachts,
B. boats and
C. aircrafts
D. All of the above

225) any area which is comprised within the jurisdiction of a municipality or a

cantonment board which has a population of not less than 10,000;
A. 10,000
B. 20,000
C. 30,000
D. 40,000
226) Heirloom jewelry of an erstwhile ruler: Jewelery in the possession of any
Ruler, not being his personal property, which has been recognised before the
commencement of this Act
A. Heirloom jewelery
B. Simple jewelry
C. Golden jewelry
D. None
227) being a person of Indian origin or a citizen of India who was ordinarily
residing in a foreign country and who, on leaving such country, has returned
to India with the intention of permanently residing here,
A. ordinarily residing
B. non resident
C. non ordinary resident
D. none
228) If the Assessing Officer has reason to believe that the net wealth
chargeable to tax in respect of which any person is assessable under this Act
has escaped assessment for any assessment year
A. Assessing Officer
B. Assessing commissioner
C. Assessing police
D. none
229) The value of a house or a partial house belonging to the assessee and
exclusively used by him for residential purposes may at his option be taken
A. house
B. partial house
C. none
D. both
230) Where the assessing officer, with approval of the Deputy Commissioner,
is of the opinion that it is not practicable to do valuation as per Rules 3-7
A. Assessing Officer
B. Assessing commissioner
C. Assessing police
D. none
231) Valuation of jewellery shall be determined in accordance with its fair
market value (FMV) as estimated by the assessee.
A. jewellery shall
B. fair market value
C. both
D. none
232) Mere possession or joint possession unaccompanied by the right to, or
ownership of, property would therefore not be enough.

A. possession
B. joint possession
C. Both
D. none
233) all gifts received at the time of marriage were exempt from tax.
A. all gifts received
B. payment
C. tax
D. none
234) The gifts that one receives from relatives on the occasion of marriage,
gifts received from parents and grandparents, gifts received by a
daughter-in-law from her parents-in-law, gifts from hospitals,
educational institutions and trusts, and gifts received by way of a will and
inheritance are exempt.
A. marriage, gifts received from parents and grandparents,
B. gifts received by a daughter-in-law from her parents-in-law,
C. gifts from hospitals, educational institutions
D. All of the above
235) Gifts received in the names of one's minor children are clubbed with the
income of the parent with the higher income for taxation purposes.
A. of one's minor children
B. all minor children
C. both
D. none
236) Estate duty is the tax paid on the property left by a dead person.
A. Estate duty
B. Custom duty
C. Faire duty
D. Cost duty
237) Security Transactions Act was introduced in India a few years ago, to
check tax avoidance of capital gains tax.
A. Security Transactions Act
B. Security payment act
C. Security provision act
D. None
Cheptr-10
238) Every person is liable to pay income tax in respect of his total income for
the financial year at the rates specified in the Schedules to the DTC after
allowing credit for prepaid taxes.
A. Person
B. Artificial person
C. Company
D. none
239) Income from Special Sources includes specified income of nonresidents, winning from lotteries, horserace winnings, etc.
A. Income from Special Sources
B. Income House property
C. Income from capital good
D. none

240) The income of a person from employment shall be computed under the
head income from employment.
A. income from employment.
B. Income from Special Sources
C. Income House property
241) The income from letting of any house property owned by the taxpayer
shall be computed under the head Income from house property.
A. Income from house property
242) The income from any business carried on by the assessee at any time
during a financial year shall be computed under the head income from
business.
A. income from business
E.
243) The tax depreciation regime stipulates that depreciation to lessee in
case of a finance lease and payments for lease rent to be treated as payment
towards principal and interest.
A. depreciation regime
B. depreciation tax
C. both
D. none
244) Disallowance of expenditure for non-withholding of tax or non-payment
of tax would not be applicable if such tax is paid on or before the due date of
filing of return of income.
A. Disallowance of expenditure
B. Allowance of tax
C. None
D. both
245) The income from the transfer of any investment asset shall be computed
under the head capital gains.
A. capital gains
B. capital loss
C. both
D. none
246) Definition of capital asset has been replaced with the term investment
asset.
A. capital asset
B. capital loss
C. none of the above
D. all

247) Short-term capital gain on stocks: Only half of short-term gain will be
added to taxable income and taxed as per the category and tax slab of the
taxpayer.
A. Short-term capital gain
B. Short-term capital loss
C. Long-term capital gain
D. Long-term capital gain
248) The income of every kind falling under the class Income from ordinary
sources, shall be computed under the head Income from residuary
sources,
A. Income from ordinary sources
B. Income from residuary sources
C. Both
D. none
249) Total income of NPOs will be computed as gross receipts less outgoings as
per cash basis of accounting. In case of companies registered under Section
25 of the Companies Act 1956
A. NPOs
B. PBOs
C. NBFC
D. RBI
250) Outgoings inter alia will include amount accumulated or set apart for
charitable activity, for up to three years,
A. Outgoings
B. Incoming
C. All of the above
D. none
251) the book profit shall be computed in accordance with the formula A+B(C+D) where
A. A+B-(C+D)
B. A-B+C
C. All of the above
D. none
252) Every domestic company shall be liable to pay tax on any amount of
dividend declared, distributed or paid (whether interim or otherwise) to its
shareholders, whether out of current or accumulated profits.
A. domestic company
B. foreign company
C. both
D. none
253) Every mutual fund shall be liable to pay tax on any amount of income
distributed or paid to the unit holders of equity oriented fund.
A. mutual fund
B. term fund
C. total fund
D. all of the above

254) Every foreign company shall, in addition to income-tax payable, be liable

to branch profits tax In respect of branch profits of a financial year at the
rate of 15%.
A. branch profits tax
B. total profit tax
C. income tax
D. none
255) Every person, other than a NPO, is liable to pay wealth tax at the rate of
1% on net wealth exceeding ` 10 million.
A. 10 million.
B. 20 million.
C. 30 million.
D. 40 million.
256) An associated person shall not be allowed a deduction under this Code
in respect of so much of the expenditure, whether capital or revenue in
nature, as is considered by the Assessing Officer to be excessive or
unreasonable
A. associated person
B. artificial person
C. natural person
D. none
257) Determination of income from international transaction having regard

to arm's length price
A. Determination of income
B. Determination of expense
C. Both
D. none
258) Provisions relating to Advance Pricing Agreement (APA) mechanism
have been introduced.
A. Advance Pricing Agreement
B. Price agreement
C. Non pricing agreement
D. none
259) Transfer Pricing Officer will have the power to determine the arm's
length price after due verification;
A. Transfer Pricing Officer
B. Transfer Pricing Commissioner
C. Transfer Pricing agent
D. Transfer Pricing assistance
E.
260) Income Tax Appellate Tribunal cannot condone delay in filing of an
appeal if delay exceeds a period of one year from the date specified.
A. Income Tax Appellate Tribunal
B. Income Tax Department
C. None

D. both
261) CIT cannot cancel an assessment and direct a fresh assessment during
revisionary proceedings.
A. CIT
B. BIT
C. BOB
D. SBI
262) The due date for filing the return of income for non-corporate
taxpayers is 30 June of the year following the financial year and for other
assesses is 31 August.
A. due date for filing the return of income
B. After date for filing the return of income
C. Both
D. none
Cheptr-11
263) Central excise is the law which empowers Central Government to collect
excise duty on the goods manufactured or produced in India.
A. Central excise
B. Central tax
C. Both
D. none
264) term goods and when goods produced become dutiable. Central Excise
Act, 1944 does not define the expression goods.
A. goods
B. service
C. both
D. none
265) It is important to understand that levy of duty
A. Levy
B. Payment
C. Both
D. none
266) goods to be taxed and the rates for different classes are prescribed in
the Tariff Act & Rules.
A. rates for different classes
B. paymant different classes
C. both
D. none
267) The heading which provides the most specific description shall be
preferred to one providing a general description
A. general description.
B. Special description.
C. Ordinary description.
D. None
268) Goods which cannot be classified under an exact heading may be
classified under the heading appropriate to the goods to which they are most
akin.
A. exact heading
B. all heading

C. all
D. none
269) Packing material will be classified along with the article.
A. Packing material
B. Total material
C. Both
D. none
270) The basic concept of CENVAT Credit is to avoid the cascading effect of
duty. Cascading effect of duty (i.e., duty on duty) happens where excise duty
is levied at every manufacturing stage
A. CENVAT
B. VAT
C. CST
D. NONE
271) CENVAT credit can be availed on the input goods we purchase and use for
manufacturing, including capital goods.
A. capital goods
B. non CAPITAL good
C. both
D. none
272) Customs duty is the duty imposed on goods imported into the country. In
the years before globalisation it was difficult to import goods on account of
stiff duty rates and procedures, especially for less developed and developing
nations like India.
A. Customs duty
B. Payment duty
C. None
D. both
273) The Customs Act makes it clear that goods imported into or exported out
of India create a taxable event in which customs duty (import duty or
export duty) becomes payable.
A. taxable event
B. non taxable event
C. both
D. none
274) The taxable event with respect to imports is the day of crossing of the
customs barrier and not the date on which goods land in India or enter its
territorial waters.
A. customs barrier
B. communication barrier
C. none
D. both
275) The taxable event in case of warehoused goods is when goods are cleared
from customs-bonded warehouse by submitting sub-bill of entry.
A. customs-bonded
B. custom limit
C. non custom bonded
D. none
276) Bill of entry is presented before the entry inwards of the vessel or aircraft

A.
B.
C.
D.
Bill of entry
Bill of exit
None
Both
277) Service tax is a tax levied on services. There is no separate legislation for
levy of service tax.
A. Service tax
B. Sales tax
C. Payment tax
D. Income tax
278) The taxable turnover of the service provider during the previous year
exceeds the prescribed amount (for financial year 2012-13 the limit is Rs. 9
lakh).
A. taxable turnover
B. non taxable turn over
C. both
D. none
279) The service tax provider is acting as an input service distributor
irrespective of the turnover.
A. service tax
B. income tax
C. custom
D. salary tax
280) The service receiver is liable to pay service tax being recipient of service
under reverse charge.
A. service receiver
B. service provider
C. service distributer
D. none
281) Service tax has to be paid on a monthly/quarterly basis depending upon
the status of the service provider.
A. Service tax
B. income tax
C. custom
D. salary tax
282) E-payment of service tax meaning payment online - is mandatory in
case of all assessee who have paid ` 50 lakh or more in the preceding or
current financial year
A. E-payment of service tax
B. E-payment income tax
C. E-payment custom
D. E-payment salary tax
E.
283) The service provider shall assess his/her revenue and calculate the tax
payable himself/herself and then pay the tax. This process is known as selfassessment.
A. self-assessment

B. tax assessment
C. all of the above
D. none
284) Service tax is an important subject for everyone to understand,
especially middle managers and senior managers in Finance.
A. Service tax
B. income tax
C. custom
D. sales tax
285) Sales tax is a subject that is handled at two levels, the State and the
Centre.
A. Sales tax
B. income tax
C. custom
D. salary tax
286) Goods are produced using the materials purchased and then sold by the
manufacturer. Goods are bought and sold by a trader.
A. VAT
B. Sales tax
C. income tax
D. custom
287) Input credit can be claimed only if the purchases are for any of the
following purposesFor sale/resale both intra-state and inter-state
A. Purposes For sale/resale both intra-state and inter-state
B. Purposes For sale/resale in intra-state
C. Purposes For sale/resale in Inter-state
D. None
288) Ineligible purchases porches from unregister dealers
A. Ineligible purchase
B. eligible purchase
C. Ineligible sale
D. eligible purchase
289) The following includes a list of purchased which are not eligible.
A. Eligible
B. Not eligible
C. Both
D. none
290) Central Sales Tax (CST) is imposed subject to satisfaction of the
prescribed conditions. CST is levied @ 2% (financial year 2012-13) on sale by
the trader and is to be remitted to the Government of the State in which the
trader has a place of business.
A. Central Sales Tax
B. VAT
C. CUSTOM
D. NONE

291) Entry Tax is a tax on entry of goods into alocal area as specified by the
Legislations of respective States.
A. Entry Tax
B. EXIT TAX
C. PAYMANT tax
D. None
292) However, in certain situations the burden of paying tax to the Government
in a trade transaction falls on the buyer, and this is called purchase tax
A. purchase tax
B. EXIT TAX
C. PAYMANT tax
D. None
Cheptr-12
293) Service tax was introduced in India in 1994
A. 1994
B. 1992
C. 1999
D. 2000
294) budgetary changes relating to service tax this year are aimed at
addressing a number of basic issues: simplicity and certainty in tax
processes, neutrality of business to tax by mitigating cascading, encouraging
exports, optimizing compliance.
A. budgetary changes
B. budgetary control
C. budgetary tax
D. None
295) It has to be pointed out that service tax is a value-added tax in which at
every stage only the value addition is taxed. The concept of input tax credit
A. input tax credit
B. input tax Debit
C. input tax summery
D. input tax credit
296) Services provided by way of construction, maintenance, or
renovation
A. construction,
B. maintenance,
C. renovation
D. none
297) Exemptions (Section 93)If the Central Government is satisfied that it is
necessary in the public interest so to do, it may, by notification in the Official
Gazette, or individual special order,
A. Exemptions (Section 93)
B. Exemptions (Section 90)
C. Exemptions (Section 91)
D. Exemptions (Section 92)
E.

298) The amendment can be made by the Officer on his/her own or on

assessees request to reopen or orders from the Commissioner of Central
Excise or the Commissioner of Central Excise (Appeals).
A. assessees
B. Officer
C. None
D. both
299) Under this scheme, the service provider would have to pay service tax at
the applicable rate of 12.36% and would be entitled to CENVAT credit with
respect to inputs of capital goods and input services.
A. 12.36%
B. 15%
C. 14%
D. 20%
300) the service provider can opt for the entitled to exclude the value of goods
and materials used while computing the value of taxable services and would
still be entitled for CENVAT credit with respect to service tax paid on input
services,
A. CENVAT
B. VAT
C. CST
D. NONE
301) The service provider may claim abatement to the extent of 67% of the
value of services rendered by him/her, without availing himself/herself of any
CENVAT credit on inputs, capital goods, and input services.
A. CENVAT
B. VAT
C. CST
D. NONE
E.
302) Composition scheme Under a Composition Scheme, effective June 1,
2007, the service provider would be required to collect service tax @ 2.06%
on the value of services rendered and would be entitled for CENVAT credit
with respect to input services and capital goods only.
A. Composition scheme
B. Total discount
C. Payment discount
D. Service tax
303) Service tax is a tax levied on services rendered by a person and the
responsibility of payment of the tax is cast on the service provider.
A. Service tax
B. Composition scheme
C. Total discount
D. Payment discount

304) Service tax was introduced in India in 1994 by Chapter V of the Finance
Act, 1994. It was imposed on a set of three services to begin with and steadily
expanded in scope and coverage.
A. Service tax
B. Composition scheme
C. Total discount
D. Payment discount
305) Certain exemptions are allowed such as services of small-scale providers
whose revenue is less than ` 10 lakh in a financial year, export services, etc.
A. 10 LAKH
B. 15 LAKH
C. 20 LAKH
D. 14 LAKH
306) CBEC: Central Board of Excise and Customs
A. CBEC
B. BEC
C. IDB
D. GT1
307) Cheptr-13
308) The income tax law of a developing nation like India has to address a
number of objectives, some of which may conflict with one another.
A. The income tax law
B. Criminal law
C. Family law
D. none
309) the government needs active and thoughtful support from industry and
trade. Since a businessperson is primarily accountable for his investors
returns,
A. the government
B. public
C. none
D. both
310) Profits and gains derived by an undertaking from the export of articles
or things or computer software shall be exempt from income tax, subject to
the following conditions.
A. Profits and gains
B. Profit and gain
C. Both
D. none
311) The manufacture must take place in a designated free trade zone
A. free trade zone
B. Special economic zone
C. Both
D. none
312) electronic hardware technology park, software technology park or special
economic zone (SEZ).

A.
B.
C.
D.
special economic zone

free trade zone
Both
none
313) A further deduction for three more years is allowed to the extent of 50
percent of the profits as is debited to the Profit and Loss account
A. A further deduction
B. Total deduction
C. All
D. both
314) Profits and gains derived by an undertaking from the export of articles
or things or computer software shall be exempt from income tax, subject to
the following conditions.
A. Profits and gains
B. Profit and gain
C. Both
D. none
315) The manufacture must take place in a designated free trade zone
A. The manufacture
B. Producers
C. service
D. none
316) electronic hardware technology park, software technology park or
special economic zone (SEZ).
A. electronic hardware
B. plastic
C. none
D. chemical
317) A further deduction for three more years is allowed to the extent of 50
percent of the profits as is debited to the Profit and Loss account
A. 50 percent
B. 60 percent
C. 70 percent
D. 75 percent
318) The business of the undertaking and not for distribution by way of
dividends or for remittance outside India as profits or the creation of any
asset outside India.
A. The business
B. The company
C. Total profit
D. All of the above
319)
A.
B.
C.
D.
Industrial units established on or after 1st April, 2005

1st April, 2005
1st OCT 2005
1st April, 2006
1st April, 2007

E.
320) special economic zone by reason of conversion of a free trade zone,
A. economic zone
B. free trade zone
C. Both
D. None
321) An entrepreneur as referred to in Clause (v) of Section 2 of the Special
Economic Zones Act, 2005 is entitled to a deduction of 100 percent of
profits from exports for a period of five years
A. 100 percent of profits
B. 70 percent of profits
C. 50 percent of profits
D. 75 percent of profits
E.
322) Profits of new 100 percent export-oriented units are exempt for a period
of 10 consecutive years,
A. 100 percent of profits
B. 10 consecutive
C. Both
D. none
323)
324) income of a venture capital fund (VCF) or a venture capital company
(VCC) set up to raise funds for investment in a VCU is exempt from income
tax
A. income of a venture capital fund
B. income of a Business fund
C. income of a total fund
D. income of business
E.
325) Securities and Exchange Board of India (SEBI) and fulfil the conditions
laid down by the SEBI and the Central Government.
A. Securities and Exchange Board of India
B. RBI
C. SBI
D. NBFC
326) The amount deposited in a special account with National Bank for
Agriculture and Rural Development (NABARD) within a period of six
months from the end of the previous year,
A. Agriculture and Rural Development
B. Agriculture Development
C. Rural Development
D. None
327) Public financial corporations and public companies formed to provide
long-term finance for industrial, agricultural or infrastructure development in
India,
A. public companies
B. Private companies

C. Both
D. none
328) A special scheme is available for presumptive estimation of the profits
earned in the business of civil construction.
A. A special scheme
B. General scheme
C. Both
D. none
329) Gross receipts are the amounts paid or payable to the assessee by the
clients for the contract and does not include the value of the material
supplied by the client.
A. Gross receipts
B. Gross payment
C. Net receipts
D. Net paymant
330) Any deduction allowed under the provisions of Sections 30 to 38, for the
purpose of the income mentioned earlier, be considered already given in full.
Therefore, no further deduction under those Sections are allowed.
A. deduction allowed
B. deduction not allowed
C. both
D. none
331) If the assessee chooses not to opt for the scheme and wishes to return
an income lower than 8 percent of the gross receipts, he has to maintain
books of accounts and get them audited.
A. assesses
B. officer
C. both
D. none
332) (Section 44AF) A special scheme is available for estimating profits from
retail trade.
A. Section 44AF
B. Section 45AF
C. Section 46AF
D. Section 40AF
E.
333) (Section 44BBA) In the case of a non-resident engaged in the business of
operation of aircraft, income from such business is calculated at a flat rate of
five percent
A. Section 44BBA
B. Section 45AF
C. Section 46AF
D. Section 40AF
334) (Section 44BBB)When a foreign company is engaged in the business of
civil construction or erection, testing or commissioning of the plant or
machinery in connection
A. Section 44BBB
B. Section 45AF

C. Section 46AF
D. Section 40AF
335) Section 115AB includes the tax on income from units purchased in
foreign currency or capital gains arising from their transfer.
A. Section 115AB
B. Section 45AF
C. Section 46AF
D. Section 40AF
336) Section 115AC states that income of a non-resident assessee from bonds
or global depository receipts purchased in foreign currency or capital gains
from their transfer will be taxable at the rate of 10 percent.
A. Section 115AC
B. Section 45AF
C. Section 46AF
D. Section 40AF
337) Income received in respect of securities (other than units of mutual funds
covered u/s 10(23D) or of Unit Trust of India, 20 percent
A. 10(23D
B. 20 percent
C. Both
D. none
338) 115BBA covers income tax on non-resident sportsmen and sports
associations when the total income includes income received or receivable
through
A. 115BBA
B. 115BB
C. 115BA
D. 115AA
E.
339) Contribution of articles relating to any game or sport in India in
newspapers, magazines or journals
A. Contribution of articles
B. Collection of articles
C. Both
D. none
Cheptr-14
340) The primary objective of a business is to maximise shareholders
wealth. All business strategies should be planned and executed with this
objective in focus.
A. The primary objective
B. Secondary objective
C. Both
D. None
341) Financial strategy is a subset of business strategy; and it is even more
important to tie financial strategy to shareholder wealth.

A. Financial strategy
B. Business strategy
C. Both
D. none
342) The capital structure is said to be optimum when the firm has selected a
combination of equity and debt that minimises the cost of capital while
keeping the risk factor also at the minimum.
A. capital structure
B. Capital payment
C. Both
D. none
343) Risk of cash illiquidity: As a firm raises more debt, its risk of cash
illiquidity increases.
A. Risk of cash illiquidity
B. Risk of colid illiquidity
C. Risk of paymant illiquidity
D. Risk of hard illiquidity
E.
344) Risk of variation in the earnings to equity shareholders in relation to
expectation:
A. Risk of variation
B. Risk of differentiation
C. Both
D. none
345) Cost of capital is an important consideration in capital structure
decisions.
A. Cost of capital
B. Term of capital
C. General capital
D. none
346) Control: Along with cost and risk factors, the control aspect is also an
important consideration in planning the capital structure.
A. Control
B. Realize
C. Accrual
D. Payment
347) Trading on equity: A company may raise funds either by issue of shares
or by borrowing.
A. Trading on equity
B. Payment of equity
C. Bond on equity
D. none
348) While dividend on shares is declared and paid out of profit after tax,
interest paid on borrowed capital is allowed as deduction for computing
taxable income
A. Dividend
B. Interest
C. Cost
D. none

349) Government monetary and fiscal policy: The annual review by

Reserve Bank of India, the nations central bank, gives shape to the monetary
policy for the subsequent 12 months, which takes into account issues such as
inflation,
A. Government monetary
B. fiscal policy
C. both
D. none
350) Retention as a long-term financing decision: Payment of cash
dividends reduces funds available to finance growth and either restricts
growth or forces the firm to find other financing sources.
A. Retention as a long-term financing decision
B. Retention as a Short-term financing decision
C. Retention as a long-term strategic decision
D. Retention as a long-term leverage decision
E.
351) Dividend payment as an aid to maximisation of wealth:
A. Dividend payment
B. Interest payment
C. Cost payment
D. all
352) Capital appreciation: The investor expects an increase in the market
value of the common shares over time.
A. Capital appreciation
B. Capital depriciation
C. Capital increase
D. Capital decrease
353) Dividends: The investor expects at regular intervals distribution of the
firms earnings.
A. Dividends
B. Interest
C. Both
D. none
354) Deemed dividend: Dividend includes deemed dividend. Section 2 (22)
defines the term dividend which includes the following:
A. Deemed dividend
B. Total dividend
C. Both
D. none
355) Any distribution of accumulated profits entailing the release of assets of
the company.
A. Any distribution
B. Total distribution
C. All
D. none

356) The profile of a companys shareholders as taxpayers is an important

factor in the dividend decision.
A. profile
B. property
C. both
D. none
357) Constant payout ratio: Payout ratio is the dividend per share divided by
earnings per share. A constant payout ratio means the company pays a
constant percentage of net earnings as dividends.
A. Constant payout ratio
B. Constant rate ratio
C. Both
D. none
358) Regular dividend rate: The regular dividend rate policy is based on the
concept of a fixed rupee dividend in each period.
A. Regular dividend rate
B. Different rate dividend
C. Both
D. none
359) Low regular and extra dividend policy: Some companies pay a
regular, low dividend rate and an extra dividend when earnings are higher
than normal.
A. Low regular
B. extra dividend policy
C. both
D. none
360) Bonus shares are shares are issued on a pro-rata basis to the current
shareholders free of cost, by converting its free reserves to equity capital.
A. Bonus shares
B. Extra share
C. Additional share
D. None
361) nature and the size of the investment decision a firm has to evaluate
whether it will purchase an asset or acquire it on a lease.
A. nature
B. size
C. both
D. none
362) lease rental payments are similar to payments of debt instalments,
leasing in essence is an alternative to debt financing.
A. lease rental
B. hire rental
C. both
D. none
363) The hire purchase vendor buys the asset and gives it on hire to the
hirer.
A. hire purchase vendor

B. hire purchase seller

C. both
D. none
364)
A.
B.
C.
D.
The hirer pays instalments over a specified period of time.

EMI
Installment
Payment
none
365) more important aspect of new industrial units is the incentive offered
by the State government in regard to subsidy, deferment of sales tax
payment, etc. Favourable treatment is also sometimes given re: delayed
payment of central excise duty.
A. new industrial units
B. existing Industrial units
C. old industrial units
D. none
366) Income-tax aspects of a crucial decision a businessperson sometimes
takes, on closing down an undertaking, are relevant and important.
A. Income-tax
B. Sales tax
C. Service tax
D. custom
367) Unabsorbed depreciation, unabsorbed capital expenditure on scientific
research and family planning are not part of business losses and they can
also be carried forward.
A. depreciation,
B. unabsorbed capital
C. both
D. none
*********

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D. None of the above

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126) Expenses incurred in connection with the transfer: This refers to

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D. None of the above

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C. Extension of time limit for acquiring machine

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80IC:Profits and gains of certain undertakings in certain states

80IE:Deduction in respect of certain undertakings in North Eastern states

167) 80JJA:Deduction in respect of profits and gains from business of collecting

Deduction in respect of employment of new workmen

BIT- Baroda Institute of Technology

169) 80LA:Income of offshore banking Limit and international financial services

Domestic companies, 30%. Tax rate

173) The Minimum Alternative Tax (MAT) operates on the concept of

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218) Permanent differences: These are the differences between taxable

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225) any area which is comprised within the jurisdiction of a municipality or a

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254) Every foreign company shall, in addition to income-tax payable, be liable

257) Determination of income from international transaction having regard

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298) The amendment can be made by the Officer on his/her own or on

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special economic zone

Industrial units established on or after 1st April, 2005

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BIT- Baroda Institute of Technology