BIT- Baroda Institute of Technology Compiled by Tejas Parekh

1) Cheptr-12) Direct taxes: Direct taxes are taxes on income or profitsA. Direct taxesB. Private taxesC. Indirect taxesD. None of the above3) Everyone who earns taxable income i.e. income above the exempted level has to calculate the amount earned during the financial yearA. taxable incomeB. Non taxable incomeC. Transferable incomeD. None of the above

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 taxesB. Private taxesC. Indirect taxesD. None of the above

5) The burden of Direct Taxes is actually borne by the person on whom they are imposed and paid A. Direct Taxes B. Private taxesC. Indirect taxesD. None of the aboveE. 6) While the burden of Indirect Taxes can be shifted by the imposer to the ultimate consumer.A. Indirect TaxesB. Private taxesC. Indirect taxesD. None of the above

7) Tax planning involves a study of the exemptions, rebates, deductions and reliefs given under the direct and indirect tax laws for specific business decisionsA. Tax planningB. Tax avoidingC. Tax EvasionD. None of the above

8) income tax law allows a person to reduce from his taxable income certain specific investments.A. income tax lawB. Criminal LawC. Sales Tax LawD. None of the above9) Reduction of tax liability by utilizing the benefits available in the tax laws.A. ReductionB. DeductionC. AdditionD. None of the above10) 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 decisionsB. Uninformed and pragmatic financial decisionC. Informed and non-pragmatic financial decisionD. None of the aboveE. 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 decisionsB. Single-dimensional investment decisionsC. Multi-Functional investment decisionsD. None of the above12) A temptation to hide income earned and skip paying income tax, or make purchases without bills and escape sales tax.A. A temptationB. Assessment.C. Legal actionD. None of the above13) 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 systemC. Social systemD. 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-residentB. ResidentC. Non-ResidentD. none15) Income Tax Act provides specific heads of income under which income earned has to be declared.A. heads of incomeB. Part of incomeC. Deduction of incomeD. None16) 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 taxesB. Commercial taxC. Governmental taxD. None17) The taxpayer should be focused on the substance of a transaction, the real intent, and not only with the form.A. The taxpayerB. Tax assessorC. Tax adviserD. Legal adviser18) Tax planning reduces tax, and so does tax evasion: but while tax planning is perfectly legal, tax evasion is equally perfectly illegal.A. Tax planningB. Tax avoidingC. Tax EvasionD. None of the above

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. Tax planningB. Tax avoidingC. Tax EvasionD. None of the above

20) Tax avoidance is reduction of tax liability by exploiting loopholes in the tax laws.A. Tax avoidanceB. Tax planningC. Tax EvasionD. None of the above

21) Loss of tax revenues that cannot be acted upon, as it is legal.A. Loss of taxB. Addition of taxC. Tax avoidanceD. Tax planningE. 22) As any legal entity is a distinct taxable person, tax avoiders create separate entities for the same business.A. legal entityB. Social entityC. Physical entityD. None23) Legal entity is a trust, organization or foundation.A. Legal entityB. legal entityC. Social entityD. Physical entity24) 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 residencyB. Country of workingC. Foreign countryD. None25) 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 taxationB. Tax planningC. Single taxationD. None

26) Income from house property is covered under Sections 22-27 of the Income Tax Act.A. house propertyB. capital gainC. other sourceD. none27) 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 arrivedB. expenses incurredC. bothD. none28) 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 basisB. Accrual basisC. Receipt basisD. None

29) expenditure is incurred in business or profession by payment of cash over Rs. 20,000 in a day,A. Rs. 20,000B. 0C. 40000D. 1000030) Interest on delayed payments made to small-scale industries is not allowable as deduction.A. not allowableB. AllowedC. PartialD. Not decided

Cheptr-231) The income tax law in India is administered through the Income Tax Act, 1961A. income taxB. sales taxC. service taxD. 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 taxedB. Rates to be chargedC. Exemptions and rebatesD. all of the above33) 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 actC. bothD. none34) The Act states in many places that notifications will be issued to bring into force the particular section.A. notificationsB. certificateC. intimationD. none

35) Circulars are intra-departmental advices to the officers responsible for administering the Act and the Rules.A. CircularsB. RulesC. RegulationD. None

36) The Finance Bill is a comprehensive document that comprises all the tax initiatives proposed in the Budget.A. Finance BillB. Commercial billC. Private billD. 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. AssesseeB. Tax assessorC. Tax consultantD. 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 yearB. Assessment yearC. End of the yearD. None39) Assessment year (AY): A period of one year starting from 1st April, and represents the 12 months immediately following the previous year.A. Assessment yearB. Previous yearC. Financial yearD. None

40) Board: Refers to the Central Board of Direct Taxes (CBDT), the apex Government body for making and administering direct tax laws.A. BoardB. BranchC. Committee41) Income: Income includes almost all receipts in the hands of the taxpayer, including imputed income,A. IncomeB. ExpensesC. RevenueD. None42) 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 officerB. Assessing officeC. Tax officerD. 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. PersonB. IndividualC. FamilyD. company

44) Rates of taxes: These are the rates of income tax specified in the Finance Act of the relevant year.A. Rates of taxesB. Rate of interestC. Basic rateD. Basis point45) 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 prescribedA. charging sectionB. Charging sub sectionC. Charging law46) 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 upB. revenue earnedC. total expensesD. none

47) Tax rates are substantially lower for senior citizens (above 60 years old) and very senior citizens (above 80 years old). A. senior citizensB. very senior citizenC. young citizenD. none48) Slab rates are fixed for taxing individuals with no tax at all for the first slab.A. Slab ratesB. Fix rateC. Flexi rateD. none49) Taxable income is defined as the total income either (a) received or deemed to be received, orA. ReceivedB. Paid C. DistributedD. shared50) (b) accrued or arising or deemed to accrue or arise.A. accrued or arisingB. receivedC. paidD. 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 adjustedA. AmountB. amount of incomeC. amount of paymentD. none

52) Residential status: On the parameter of residence in India, there are three categories: resident, non-resident, and not ordinarily resident.A. Residential statusB. resident, non-resident, and not ordinarily resident.C. All of the aboveD. None of the above

53) domestic company or if its control and management is wholly done in India, it is a resident company.A. domestic companyB. state companyC. government companyD. none54) 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 residentB. Ordinary residentC. NRID. None55) Residence makes one important difference to taxable income.A. ResidenceB. Non ResidentC. BothD. none56) A tax holiday is a temporary reduction or waiver of tax.A. tax holidayB. Tax discountC. Tax summeryD. none57) certain circumstances incomes of two persons may be clubbed in the hands of one person and taxed as his income.A. ClubbedB. SeparatedC. AddedD. none58) (sections 68-69D) cover the topic of aggregation of income, whereby certain amounts may be added to or aggregated with the assessees taxable incomeA. added to or aggregatedB. segregatedC. deductedD. none59) capital losses, which can be set off only against capital gains and not against any other head of incomeA. capital lossesB. Capital gainC. Revenue lossesD. Revenue loss60) 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 facilityB. Cary forwardC. Set off facilityD. 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-offB. Cary forwardC. Set off facilityD. None

Cheptr-362) 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 taxC. declaration of taxD. none63) The total of all deductions must be limited to the amount of the total income of the assessee.A. total of all deductionsB. total summationC. bothD. none64) There must be no double-claiming of a deduction.A. double-claimingB. single claimingC. bothD. none65) Deductions have to be specifically claimed by the assessee, and the Assessing Officer is not bound to allow an unclaimed deduction.A. DeductionsB. AdditionC. PaymentD. none66) 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 consultantC. taxpayerD. none67) 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 incomeB. expenses of the salary expensesC. bothD. none68) 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 insuranceB. Medical billC. Life insuranceD. none69) Interest on education loans and cost of education of (upto two) children are deductible.A. education loansB. personal loanC. home loanD. none70) Specified donations qualifying for tax exemption are deductible.A. Specified donationsB. General donationC. NoneD. all71) Payments made by an individual for scientific research or to any university for funding research work are also allowed as deductions.A. scientific researchB. special researchC. both none72) Companies in specific industries are given exemptions based on size, geography and product or service.A. size, B. geography C. product or serviceD. all.73) Enterprises in the work of processing bio-degradable waste are allowed deductions when determining their taxable incomes.A. bio-degradable wasteB. chemicalC. bothD. none

74) Certain premiums paid for life insurance are deductible from income tax payable.A. life insuranceB. general insuranceC. bothD. none75) Securities transaction tax paid by the assessee is deductible from the tax on income from securities.A. Securities transactionB. Share transactionC. CashD. bank76) 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 arrearsB. Salary advanceC. NoneD. all77) The taxable income of an individual for the year must be computed as follows:A . taxable incomeB. Non taxableC. Semi taxableD. none78) ascertain the partnership firms taxable income.A. firms taxable incomeB. individual taxable incomeC. partners taxable incomeD. none

79) Ascertain the book profit of the firm based on the firms Profit & Loss account.A. book profit of the firmB. paid profit of the firmC. both D. none80) companies refers to companies incorporated under the Indian Companies Act, 1956.A. CompaniesB. FirmC. BusinessD. none81) The tax audit has been handled elaborately in a different unit.A. tax auditB. tax collectionC. tax paymentD. 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. IndividualsB. CompanyC. FirmD. partnership83) Partnerships, AOPs and HUFs: Partnerships, AOPs and HUFs are required to file return by 30th September.A. Partnerships, B. AOPs and C. HUFsD. All84) Companies: Companies must file returns together with tax audit reports by 30th September.A. Companies85) 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 officerC. Tax collectorD. none86) 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 returnB. primary returnC. both87) A notice is sent by the assessing officer (AO) to an individual assessee in relation to the return submitted by him.A. assessing officerB. Tax officerC. Tax collectorD. none

88) Cheptr-489) The existence of an employer-employee relationship is necessary for a payment to be taxed under the head salaries.A. employer-employeeB. boss -subordinateC. partner -partnerD. none90) 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 salaryC. Income from other sourceD. Income from capital gain91) HRA is exempt from income tax to the extent prescribed in Rule 2A of the Income Tax Rules, 1962,A. HRAB. DAC. BothD. none92) Salary includes DA but excludes all other allowances and perquisites.A. allowances and perquisitesB. IncentiveC. BonusD. none93) The disbursing authorities should satisfy themselves in this regard by insisting on production of evidence of actual payment of rentA. The disbursingB. PaymentC. OrderingD. none94) The transport allowance given to an employee to meet his travel expenses between the place of residence and the work placeA. The transport allowanceB. Other allowanceC. Private allowanceD. none95) LTC received by an employee for himself and his family in with regard to his proceeding on leave to any place in IndiaA. LTC receivedB. Travel allowanceC. Personal allowanceD. none96) Gratuity, leave salary and provident fund are some elements of remuneration to which an employee is entitled when he leaves the servicesA. Gratuity,B. leave salary C. provident fundD. none97) Gratuity: This is payable to employees who have completed 5 years service with the employer,A. GratuityB. Provident fundC. NoneD. all98) Leave salary: This is also calculated on the basis of basic play and DA and is exempt from income tax.A. Leave salaryB. Due salaryC. Paid salaryD. 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 fundB. ESICC. GratuityD. None

100) Perquisites are benefits or amenities in cash or kind provided by the employer to the employee in addition to the salary.A. PerquisitesB. SalaryC. AdvancesD. Drawings101) The spouse and children of the employee, children may be dependent or not dependent.A. The spouse B. ChildrenC. BothD. None102) 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. AmenityB. service,C. right or privilege providedD. All of the above103) The amount of compensation due to or received by an assessed from his employer or former employer at or in connection withA. compensation dueB. compatation advanceC. paymentD. none104) 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. MadiclaimC. LICD. None105) Medical reimbursement: Any sum paid by the employer in respect of any expenditure incurred by the employee on his medical treatmentA. Medical reimbursementB. First-aid medical facility:C. MadiclaimD. LIC106) Any foods or beverage provided by the employer to his employees in the office or factoryA. office B. factoryC. BothD. None107) 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 mealA. up to ` 50 per mealB. up to ` 20 per mealC. up to ` 30 per mealD. 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 bracketB. tax basketC. tax intervalD. none of the above109) 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. AvenuesB. VenueC. TransactionD. none of the above110) 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 exemptionB. HRA allowanceC. HRA advanceD. HRA payment111) Commuted pension is fully exempt from tax for government employees.A. Commuted pensionB. Un commuted pensionC. Total commuted pensionD. None112) The employers contribution toward recognised provided fund (PF) is exempt from tax up to 12% of the salaryA. employers contributionB. employees contributionC. total contributionD. none of the above

113) Medical allowance is taxable. But, medical reimbursement against actual bills is tax-free upto ` 15,000 per annum.A. Medical allowanceB. Medical reimbursementC. Medi claimD. Medi assist114) Pension received in India by a non-resident assessee from abroad is taxable in India.A. Pension B. GraduityC. SalaryD. none of the above

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 perquisitesB. valuation of assetsC. valuation of allowancesD. none of the above

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 benefitsA. allowances B. perquisitesC. BothD. none of the above

117) Cheptr-5118) Capital asset means property of any kind held by an assessee whether or not connected with his business or profession.A. Capital assetB. Revenue assetC. Noncapital assetD. none of the above

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 assetsB. Long term capital assetC. Short term non capital assetsD. Long term non capital assets120) 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 assetsB. Long term capital assetC. Short term non capital assetsD. Long term non capital assets121) 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 gainsB. Short-term capital lossC. Long term capital assetD. 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 capitalB. Payment of capitalC. Receipt of paymentD. None of the above123) 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, 1882A. immovable propertyB. Movable propertyC. Transferable propertyD. None of the above124) Any transaction by way of becoming a member of shareholder in co-operative arrangements which has the effect of transferring or enabling the enjoyment of any immovable propertyA. co-operative arrangementsB. Bilateral arrangementC. Corporate arrangementD. None of the above 125) The expression full value means the whole price without any deduction whatsoever and it cannot refer to adequacy or inadequacy of price.A. full valueB. fair valueC. total valueD. None of the above

126) Expenses incurred in connection with the transfer: This refers to expenses necessary for effecting transfer.A. Expenses incurredB. Expenses paidC. Expense receivedD. None of the above 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 acquisitionB. Payment of acquisitionC. Consideration for acquisitionD. None of the above

128) Cost inflation index: The government has notified the following cost of inflation index vide notification dated 5th August,A. Cost inflation indexB. Price indexC. Dividend indexD. Tax index129) Capital gain arising from the transfer of residential house property is exempt from taxA. house propertyB. business propertyC. estate propertyD. None of the above

130) Construction of the house must be completed within three years from the date of transfer.A. three yearsB. two yearC. one yearD. five year

131) Capital gains on transfer of agricultural land are exempt subject to the following conditions:A. transfer of agriculturalB. transfer of buildingC. transfer of assetsD. none of the above132) Capital gains on compulsory acquisition of lands and buildings are exemptA. lands B. buildingsC. bothD. None of the above

133) Long-term capital gain in case of investment of capital gains in certain bonds:A. Long-termB. Medium termC. Short termD. None of the above

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 gainB. Long term gainC. Short term gainD. None of the above

135) Within six months from the date of transfer of the asset, the assessee should invest the capital gains in specified equity sharesA. specified equity sharesB. specified preference sharesC. specified bondD. specified debenture136) 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 gainB. Capital lossC. Revenue gainD. Revenue loss137) 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 exemptedC. bothD. 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 shiftingB. Capital gains on receivingC. Capital gains on transferringD. 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 assetB. Extension of time limit for acquiring old assetC. Extension of time limit for acquiring machineD. Extension of time limit for acquiring new buildingE. 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 zoneC. Super energy zone Cheptr-6141) 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 moderateA. profit is not largeB. profit is largeC. profit is minimumD. 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 ProfessionB. Profits and Gains of other sourceC. Profits and Gains of house propertyD. 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 assessmentA. interest and remunerationB. interest and paymentC. interest and revenueD. none of the above144) 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 SuchB. Final assessed as suchC. Fund assessed as suchD. none145) 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 firmB. assessed as a partnershipC. assessed as a companyD. None146) Payment of remuneration to a non-working partner shall not be allowed.A. Payment of remunerationB. Receipt of remunerationC. Total remunerationD. None147) Payment of remuneration/interest relating to a period prior to the date of the partnership deed shall not be allowed.A. RemunerationB. interestC. bothD. none148) 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 payableB. Interest receivableC. Interest paidD. none149) CBDT has clarified in 1998 that the partnership deed should either specify the amount of remuneration payableA. CBDTB. NBFCC. CDBAD. none150) Compute the income of the firm under the head Profit and Gains of Business or Profession as per Sections 28 to 44DA. Profit and Gains of Business or ProfessionB. Profits and Gains of other sourceC. Profits and Gains of house propertyD. 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 returnedA. Set-off B. carry-forwardC. bothD. none152) 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 depreciationB. absorbed depreciationC. semi- absorbed depreciationD. 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 familyC. Total familyD. none154) 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 HUFB. The income of a kartaC. The income of a family memberD. 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. AOPsB. HUFC. SAPD. None156) If control and management of their affairs are wholly outside India, it will be non-resident.A. control B. managementC. bothD. none157) 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 ProfessionC. , Capital Gains, and Income from OtherD. All of the above158) 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 marginalB. minimum marginalC. average marginalD. none

Cheptr-7159) 80G:Donations to certain funds/charitable institutions, etc.A. 80GB. 80CC. 80CCCD. none160) 80GGA:Certain donations for scientific research or rural developmentA. 80GGAB. 80GC. 80CD. 80CCC

161) 80GGB:Contribution to political partiesA. 80GGBB. 80GC. 80CD. 80CCC

162) 80IA:Profits and gains of new industrial undertakings or enterprises engaged in infrastructural development, etc.A. 80IAB. 80GC. 80CD. 80CCC

163) 80IB:Profits gains from certain industrial undertakings other than infrastructure development undertakingsA. 80IBB. 80GC. 80CD. 80CCC

164) 80IC:Profits and gains of certain undertakings in certain statesA. 80ICB. 80GC. 80CD. 80IB

165) 80ID:Deduction in respect of profits and gains from business of hotels and convention centres in specified area.A. 80IDB. 80GC. 80CD. 80CCC

166) 80IE:Deduction in respect of certain undertakings in North Eastern statesA. 80IEB. 80GC. 80CD. 80CCC

167) 80JJA:Deduction in respect of profits and gains from business of collecting and processing of bio-degradable wasteA. 80JJAAB. 80GC. 80CD. 80CCC

168) Deduction in respect of employment of new workmenA. 80JJAAB. 80GC. 80CD. 80CCC

169) 80LA:Income of offshore banking Limit and international financial services centreA. 80LAB. 80GC. 80CD. 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. 80GC. 80CD. 80CCC

171) Domestic companies, 30%. Tax rateA. 30%.B. 40%C. 20%D. 25%172) Life insurance companies 12.5% tax rateA. 12.5%B. 40%C. 20%D. 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 TaxB. Maximum Alternative TaxC. Moderate Alternative TaxD. None of the above174) 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 forwardB. balance forwardC. total forwardD. none175) Amalgamation or merger under the Income Tax Act, 1961 is said to occur when two or more companies combine into one companyA. Amalgamation B. MergerC. BothD. none176) 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. DemergerB. MergerC. AmalgamationD. none177) 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 gainsB. Capital lossC. NoneD. both178) The amalgamated company will be permitted to set-off or carry forward of loss and allowance for depreciation of amalgamating companyA. amalgamated companyB. amalgamating companyC. bothD. none179) 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 companyA. accumulated lossB. the allowance for unabsorbedC. bothD. none180) When there has been a reorganisation of a business, the accumulated loss and the unabsorbed depreciation of the predecessor firm shall be deemedA. Re organization of a businessB. Re structuringC. PaymentD. Receipt of taxE. none181) 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 shallB. chargeable to income taxC. bothD. none182) Cheptr-8183) Tax audit: For many taxpayers, especially individuals, the assessing officer (AA. Tax accountingB. Tax assistanceC. Tax paymentD. 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 accountingB. Tax assistanceC. Tax exapmtedD. 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 auditB. Tax assistanceC. Tax paymentD. Tax payment

186) A tax audit effectively curbs tax evasion and ensures tax compliance.A. tax auditB. Tax assistanceC. Tax paymentD. 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 categoryB. Second categoryC. Third categoryD. none188) Second category: This category covers persons carrying on a profession with gross receipts exceeding ` 15 lakh.

A. First categoryB. Second categoryC. Third categoryD. none

189) Third category: This category covers persons whose income is assessed on a presumptive basis under Section 44AE, Section 44BB or Section 44BBBA. First categoryB. Second categoryC. Third categoryD. none190) Fourth category: This category is of recent origin. It was introduced by the Finance Act, 2009 with effect from 1st April, 2011.A. First categoryB. Second categoryC. Third categoryD. Fourth category191) Section 44AB states that the accounts must be audited by a chartered accountant.A. chartered accountantB. simple accountC. special accountD. none192) Qualification of an auditor: A practicing chartered account is qualified to be appointed as the auditor of a company.A. an auditorB. charted accountC. account assistanceD. none193) The auditor must show integrity, objectivity and independence.A. objectivity B. independenceC. bothD. none194) The auditor must have specialised skills and competence to carry out the tax audit.A. to carry out.B. To performC. FinalizeD. paymant195) 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 partB. Second partC. Third partD. none196) 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 partB. Second partC. Third partD. none197) 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 partC. Second partD. none198) 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 partB. Third parts C. First partD. Second part

199) Form 3CA is prescribed for companies to be annexed in the tax audit report signed by the chartered accountants.A. Form 3CAB. Form 3ABC. Form 3DAD. 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 3CDB. Form 3ABC. Form 3DAD. Form 3XX

201) Status refers to the different class of assessees included in the definition of person under Section 2(31) namelyA. Status B. StyleC. CultureD. none202) 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 partnershipA. Clause 7aB. Clause 7bC. Clause 7cD. Clause 7dE. 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 changeA. Clause 7aB. Clause 7bC. Clause 7cD. Clause 7dE. 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. Clause8AB. Clause8BC. Clause8CD. Clause8D205) Clause 8b: If there is any change in the nature of business or profession, particulars of such change206) Clause8A207) Clause8B208) Clause8C209) Clause8D210) Clause 9a: Verify if the books of accounts are prescribed under Section 44AA. If yes, list of books prescribedA. Clause 9aB. Clause9bC. Clause9cD. Clause9d211) 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 9bB. Clause 9aC. Clause9cD. 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 9aB. Clause9bC. Clause9cD. Clause9d213) 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 10B. Clause 11C. Clause 13D. Clause 14

214) Clause 11a: This clause refers to the method of accounting employed in the previous year. The following are the two methodsA. Clause 11aB. Clause 11bC. Clause 11cD. 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 taxB. Deferred taxC. Post taxD. none216) Deferred tax: This is the tax effect of timing differences.A. Current taxB. Deferred taxC. Post taxD. none217) 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 differencesB. Payment differenceC. Conversion differenceD. none218) 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 differencesB. Payment differenceC. Conversion differenceD. none

Cheptr-9219) wealthy persons could contribute to the governments social and community development actions;A. wealthy personsB. rich personC. poor personD. none220) 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 IndiaC. NoneD. both221) 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 houseC. BothD. none222) 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. BuildingC. PlantD. none223) 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 metalsA. jewellery, B. bullion, C. furniture and utensilsD. all of above224) Yachts, boats and aircrafts (other than those used by the assessee for commercial purposes).A. Yachts, B. boats andC. aircraftsD. All of the above225) 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. 20,000C. 30,000D. 40,000226) 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 ActA. Heirloom jeweleryB. Simple jewelryC. Golden jewelryD. 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 residingB. non residentC. non ordinary residentD. none228) 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 yearA. Assessing OfficerB. Assessing commissionerC. Assessing policeD. 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 takenA. house B. partial houseC. noneD. both230) 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 3-7A. Assessing OfficerB. Assessing commissionerC. Assessing policeD. none231) Valuation of jewellery shall be determined in accordance with its fair market value (FMV) as estimated by the assessee.A. jewellery shallB. fair market valueC. bothD. none232) 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. BothD. none233) all gifts received at the time of marriage were exempt from tax.A. all gifts receivedB. paymentC. taxD. none234) 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 institutionsD. All of the above235) 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 childrenB. all minor childrenC. bothD. none236) Estate duty is the tax paid on the property left by a dead person.A. Estate dutyB. Custom dutyC. Faire dutyD. Cost duty237) Security Transactions Act was introduced in India a few years ago, to check tax avoidance of capital gains tax.A. Security Transactions ActB. Security payment actC. Security provision actD. None

Cheptr-10238) 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. PersonB. Artificial personC. CompanyD. none239) Income from Special Sources includes specified income of non-residents, winning from lotteries, horserace winnings, etc.A. Income from Special SourcesB. Income House propertyC. Income from capital goodD. none240) The income of a person from employment shall be computed under the head income from employment.A. income from employment.B. Income from Special SourcesC. Income House propertyD. Income from capital gain

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 propertyB. Income from Special SourcesC. Income House propertyD. Income from capital gain

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 businessB. Income from Special SourcesC. Income House propertyD. Income from capital gainE. 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 regimeB. depreciation taxC. bothD. none244) 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 expenditureB. Allowance of taxC. NoneD. both245) The income from the transfer of any investment asset shall be computed under the head capital gains.A. capital gainsB. capital lossC. bothD. none246) Definition of capital asset has been replaced with the term investment asset.A. capital assetB. capital lossC. none of the aboveD. all247) 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 gainB. Short-term capital lossC. Long-term capital gainD. 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 sourcesB. Income from residuary sourcesC. BothD. none249) 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 1956A. NPOsB. PBOsC. NBFCD. RBI250) Outgoings inter alia will include amount accumulated or set apart for charitable activity, for up to three years,A. OutgoingsB. IncomingC. All of the aboveD. none251) the book profit shall be computed in accordance with the formula A+B-(C+D) whereA. A+B-(C+D)B. A-B+CC. All of the aboveD. none252) 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 companyB. foreign companyC. bothD. 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 fundB. term fundC. total fundD. all of the above254) 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 taxB. total profit taxC. income taxD. 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 unreasonableA. associated personB. artificial personC. natural personD. none

257) Determination of income from international transaction having regard to arm's length priceA. Determination of incomeB. Determination of expenseC. BothD. none258) Provisions relating to Advance Pricing Agreement (APA) mechanism have been introduced.A. Advance Pricing AgreementB. Price agreementC. Non pricing agreementD. none259) Transfer Pricing Officer will have the power to determine the arm's length price after due verification;A. Transfer Pricing OfficerB. Transfer Pricing CommissionerC. Transfer Pricing agentD. Transfer Pricing assistanceE. 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 TribunalB. Income Tax DepartmentC. NoneD. both261) CIT cannot cancel an assessment and direct a fresh assessment during revisionary proceedings.A. CITB. BITC. BOBD. SBI262) 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 incomeB. After date for filing the return of incomeC. BothD. noneCheptr-11263) Central excise is the law which empowers Central Government to collect excise duty on the goods manufactured or produced in India.A. Central exciseB. Central taxC. BothD. none264) term goods and when goods produced become dutiable. Central Excise Act, 1944 does not define the expression goods.A. goodsB. serviceC. bothD. none265) It is important to understand that levy of dutyA. LevyB. PaymentC. BothD. none266) goods to be taxed and the rates for different classes are prescribed in the Tariff Act & Rules.A. rates for different classesB. paymant different classesC. bothD. none267) The heading which provides the most specific description shall be preferred to one providing a general descriptionA. 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 headingB. all headingC. allD. none269) Packing material will be classified along with the article.A. Packing materialB. Total materialC. BothD. none270) 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 stageA. CENVATB. VATC. CSTD. NONE271) CENVAT credit can be availed on the input goods we purchase and use for manufacturing, including capital goods.A. capital goodsB. non CAPITAL goodC. bothD. none272) 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 dutyB. Payment dutyC. NoneD. both273) 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 eventB. non taxable eventC. bothD. none274) 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 barrierB. communication barrierC. noneD. both275) 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-bondedB. custom limitC. non custom bondedD. none276) Bill of entry is presented before the entry inwards of the vessel or aircraftA. Bill of entryB. Bill of exitC. NoneD. Both

277) Service tax is a tax levied on services. There is no separate legislation for levy of service tax.A. Service taxB. Sales taxC. Payment taxD. Income tax278) 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 turnoverB. non taxable turn overC. bothD. none279) The service tax provider is acting as an input service distributor irrespective of the turnover.A. service taxB. income taxC. customD. salary tax280) The service receiver is liable to pay service tax being recipient of service under reverse charge.A. service receiverB. service providerC. service distributerD. none281) Service tax has to be paid on a monthly/quarterly basis depending upon the status of the service provider.A. Service taxB. income taxC. customD. 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 yearA. E-payment of service taxB. E-payment income taxC. E-payment customD. E-payment salary taxE. 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 self-assessment.A. self-assessmentB. tax assessmentC. all of the aboveD. none284) Service tax is an important subject for everyone to understand, especially middle managers and senior managers in Finance.A. Service taxB. income taxC. customD. sales tax

285) Sales tax is a subject that is handled at two levels, the State and the Centre.A. Sales taxB. income taxC. customD. 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. VATB. Sales taxC. income taxD. 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-stateA. Purposes For sale/resale both intra-state and inter-stateB. Purposes For sale/resale in intra-state C. Purposes For sale/resale in Inter-state D. None288) Ineligible purchases porches from unregister dealersA. Ineligible purchaseB. eligible purchaseC. Ineligible saleD. eligible purchase

289) The following includes a list of purchased which are not eligible.A. EligibleB. Not eligibleC. BothD. none290) 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 TaxB. VATC. CUSTOMD. NONE291) Entry Tax is a tax on entry of goods into alocal area as specified by the Legislations of respective States.A. Entry TaxB. EXIT TAXC. PAYMANT taxD. None292) 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 taxA. purchase taxB. EXIT TAXC. PAYMANT taxD. NoneCheptr-12293) Service tax was introduced in India in 1994A. 1994B. 1992C. 1999D. 2000294) 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 changesB. budgetary controlC. budgetary taxD. None295) 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 creditA. input tax creditB. input tax DebitC. input tax summeryD. input tax credit

296) Services provided by way of construction, maintenance, or renovationA. construction, B. maintenance, C. renovationD. none297) 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. assesseesB. OfficerC. NoneD. both299) 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. CENVATB. VATC. CSTD. 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. CENVATB. VATC. CSTD. NONEE. 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 schemeB. Total discountC. Payment discountD. 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 taxB. Composition schemeC. Total discountD. 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 taxB. Composition schemeC. Total discountD. 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 LAKHB. 15 LAKHC. 20 LAKHD. 14 LAKH306) CBEC: Central Board of Excise and CustomsA. CBECB. BECC. IDBD. GT1

307) Cheptr-13308) 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 lawB. Criminal lawC. Family lawD. none309) the government needs active and thoughtful support from industry and trade. Since a businessperson is primarily accountable for his investors returns,A. the governmentB. publicC. noneD. both310) 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 gainsB. Profit and gainC. Both D. none311) The manufacture must take place in a designated free trade zoneA. free trade zoneB. Special economic zoneC. BothD. none312) electronic hardware technology park, software technology park or special economic zone (SEZ).A. special economic zoneB. free trade zoneC. BothD. 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 accountA. A further deductionB. Total deductionC. AllD. both314) 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 gainsB. Profit and gainC. Both D. none

315) The manufacture must take place in a designated free trade zoneA. The manufactureB. ProducersC. serviceD. none316) electronic hardware technology park, software technology park or special economic zone (SEZ).A. electronic hardwareB. plasticC. noneD. chemical317) 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 accountA. 50 percentB. 60 percentC. 70 percentD. 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 businessB. The companyC. Total profitD. All of the above

319) Industrial units established on or after 1st April, 2005A. 1st April, 2005B. 1st OCT 2005C. 1st April, 2006D. 1st April, 2007E. 320) special economic zone by reason of conversion of a free trade zone,A. economic zoneB. free trade zoneC. BothD. None321) 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 yearsA. 100 percent of profitsB. 70 percent of profitsC. 50 percent of profitsD. 75 percent of profitsE. 322) Profits of new 100 percent export-oriented units are exempt for a period of 10 consecutive years,A. 100 percent of profitsB. 10 consecutiveC. BothD. none323) 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 taxA. income of a venture capital fundB. income of a Business fundC. income of a total fundD. income of businessE. 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 IndiaB. RBIC. SBID. NBFC326) 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 DevelopmentB. Agriculture DevelopmentC. Rural DevelopmentD. None327) Public financial corporations and public companies formed to provide long-term finance for industrial, agricultural or infrastructure development in India,A. public companiesB. Private companiesC. BothD. none328) A special scheme is available for presumptive estimation of the profits earned in the business of civil construction.A. A special schemeB. General schemeC. BothD. none329) 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 receiptsB. Gross paymentC. Net receiptsD. Net paymant330) 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 allowedB. deduction not allowedC. bothD. none331) 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. officerC. bothD. none332) (Section 44AF) A special scheme is available for estimating profits from retail trade.A. Section 44AFB. Section 45AFC. Section 46AFD. Section 40AFE. 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 percentA. Section 44BBAB. Section 45AFC. Section 46AFD. 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 connectionA. Section 44BBBB. Section 45AFC. Section 46AFD. 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 115ABB. Section 45AFC. Section 46AFD. 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 115ACB. Section 45AFC. Section 46AFD. 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 percentA. 10(23DB. 20 percentC. BothD. none338) 115BBA covers income tax on non-resident sportsmen and sports associations when the total income includes income received or receivable throughA. 115BBAB. 115BBC. 115BAD. 115AAE. 339) Contribution of articles relating to any game or sport in India in newspapers, magazines or journalsA. Contribution of articlesB. Collection of articlesC. BothD. noneCheptr-14340) 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 objectiveB. Secondary objectiveC. BothD. 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 strategyB. Business strategyC. BothD. none342) 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 structureB. Capital paymentC. BothD. none343) Risk of cash illiquidity: As a firm raises more debt, its risk of cash illiquidity increases.A. Risk of cash illiquidityB. Risk of colid illiquidityC. Risk of paymant illiquidityD. Risk of hard illiquidityE. 344) Risk of variation in the earnings to equity shareholders in relation to expectation:A. Risk of variationB. Risk of differentiationC. BothD. none345) Cost of capital is an important consideration in capital structure decisions.A. Cost of capitalB. Term of capitalC. General capitalD. none346) Control: Along with cost and risk factors, the control aspect is also an important consideration in planning the capital structure.A. ControlB. RealizeC. AccrualD. Payment347) Trading on equity: A company may raise funds either by issue of shares or by borrowing.A. Trading on equityB. Payment of equityC. Bond on equityD. none348) 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 incomeA. DividendB. Interest C. CostD. none349) 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 policyC. bothD. none350) 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 decisionB. Retention as a Short-term financing decisionC. Retention as a long-term strategic decisionD. Retention as a long-term leverage decisionE. 351) Dividend payment as an aid to maximisation of wealth:A. Dividend paymentB. Interest paymentC. Cost paymentD. all

352) Capital appreciation: The investor expects an increase in the market value of the common shares over time.A. Capital appreciationB. Capital depriciationC. Capital increaseD. Capital decrease

353) Dividends: The investor expects at regular intervals distribution of the firms earnings.A. DividendsB. InterestC. BothD. none

354) Deemed dividend: Dividend includes deemed dividend. Section 2 (22) defines the term dividend which includes the following:A. Deemed dividendB. Total dividendC. BothD. none355) Any distribution of accumulated profits entailing the release of assets of the company.A. Any distributionB. Total distributionC. AllD. none356) The profile of a companys shareholders as taxpayers is an important factor in the dividend decision.A. profileB. propertyC. bothD. none357) 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 ratioB. Constant rate ratioC. BothD. none358) Regular dividend rate: The regular dividend rate policy is based on the concept of a fixed rupee dividend in each period.A. Regular dividend rateB. Different rate dividendC. BothD. none359) 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 policyC. bothD. none360) 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 sharesB. Extra shareC. Additional shareD. 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. sizeC. bothD. none362) lease rental payments are similar to payments of debt instalments, leasing in essence is an alternative to debt financing.A. lease rentalB. hire rentalC. bothD. none

363) The hire purchase vendor buys the asset and gives it on hire to the hirer.A. hire purchase vendorB. hire purchase sellerC. bothD. none

364) The hirer pays instalments over a specified period of time.A. EMIB. InstallmentC. PaymentD. 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 unitsB. existing Industrial unitsC. old industrial unitsD. none366) Income-tax aspects of a crucial decision a businessperson sometimes takes, on closing down an undertaking, are relevant and important. A. Income-taxB. Sales taxC. Service taxD. custom367) 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 capitalC. bothD. none*********