CBES Board Class 11/CS Executive Tax Laws MCQs Set-5 Sample Test,Sample questions

A company engaged in manufacturing steel balls acquired computers at a cost of ₹ 3 lakh on 10th July 2020. The depreciation allowance for the AY 2021-22 under Income-tax Act, 1961 would be:

1. ₹ 1,80,000

2.₹ 1,20,000

3.₹ 3,00,000

4.₹ 45,000

Posted Date:-2022-08-20 04:13:09

A machine owned by AB & Co. was transferred to XYZ & Co. on 1st January 2021 for ₹ 5 lakh of which actual cost and WDV was of ₹ 3 lakh and 2 lakh respectively. However, the fair market value on the date of transfer of the machine was ₹ 4 lakh. XYZ & Co. will be allowed depreciation on such machine by taking value thereof at ₹…

1.5 Iakh

2. 2 iakh

3. 3 lakh

4. 4lakh

Posted Date:-2022-08-20 04:15:20

A professional is required to get his accounts audited under Section 44AB of the Income-tax Act, 1961 where the gross receipts from profession during the financial year 2021-22:

1.Exceeds ₹ 100 lakh

2. Equals to or exceeds ₹ 50 lakh

3.Equals to or exceeds ₹ 100 lakh

4. Exceeds ₹ 50 lakh

Posted Date:-2022-08-20 04:10:29

A residential house is sold for ₹ 90 lakh and the long-term capital gains computed are ₹ 50 lakh. The assessee bought two residential houses for ₹ 30 lakh and ₹ 20 lakh respectively. The amount eligible for exemption u/s 54 would be

1. ₹ 50 lakh

2. ₹ 20 lakh

3. ₹ 30 lakh


Posted Date:-2022-08-20 04:25:56

Additional depreciation on the factory building constructed during the PY 2020-21 and put to use for manufacturing of garments on 1st February 2021 having the cost of ₹ 100 lakh shall be allowed in AY 2021-22 at a rate of:




4. Nil

Posted Date:-2022-08-20 03:50:46

Aman entered into an agreement with Brij for the sale of a building for ₹ 20 lakh in June 2020. Aman received an advance of ₹ 2 lakh. Subsequently, the agreement was canceled and Aman forfeited the advance money. The advance money is

1.To be reduced from the cost of acquisition

2. To be reduced from the indexed cost of acquisition

3.Taxable as capital gains

4.Taxable as income under the head’s income from other sources.

Posted Date:-2022-08-20 04:27:05

Amount of ₹ 5,00,000 received by Ram & Co., as compensation for premature termination of the contract of agency is to be treated as:

1.Income from other sources

2.Taxable under section 28(n)(c)

3.Revenue receipt which is exempt

4. Capital receipt which is not chargeable to tax

Posted Date:-2022-08-20 03:51:19

An employee director of a company was paid ₹ 5 lakh as a lump sum consideration for resigning from the directorship by XYZ Ltd. The amount so paid shall be treated in the accounts of the company as

1. Deferred Revenue expenses

2.Revenue expenses

3. Capital expenses

4.Gift to employee director

Posted Date:-2022-08-20 03:54:11

Anirudh had made payment of (i) ₹ 30,000 to IIT, Kanpur for an approved scientific research program (ii) ₹ 45,000 revenue expenditure on in house R&D facility as approved by the prescribed authority and (iii) ₹ 1,00,000 to Indian Institute of Science, Bengaluru for scientific research, wants to know about the deduction available while computing the income under “Profits and gains from business’’ in the Assessment Year 2021-22.

1.₹ 2,40,000

2. ₹ 1,75,000

3.₹ 2,62,500

4.₹ 2,65,000

Posted Date:-2022-08-20 04:16:23

Any asset, on which depreciation is claimed on the basis of Straight Line Method (SLM) is sold and the amount by which money payable together with scrap value, fall short of the Written Down Value (WDV) of such asset, the amount of such deficiency in value of the asset is allowed to be written off in the year of sale as

1.Balancing charge

2. Terminal depreciation

3.Loss on sale of an asset

4.Residual value of asset

Posted Date:-2022-08-20 04:15:54

Assets put to use in business for more than 180 days during the previous year consisting
(i) Factory Building,
(ii) Computers,
(iii) Motor Vehicles used for Commercial Purposes, and
(iv) Intangible Assets shall be depreciated at the rate of respectively.

1. 596, 1596, 3096, 2596


3.1096, 1596, 2596, 2596

4.596, 4096, 1596, 2596

Posted Date:-2022-08-20 04:14:20

Capital asset excludes all except


2.Personal effects


4.Rural agricultural land in India

Posted Date:-2022-08-20 04:19:45

Cost of acquisition in case of bonus shares allotted before 1.4.2001 will be

1. Face value on the date of allotment

2. Nil

3.Market value as on 1.4.2001

4.Current market value

Posted Date:-2022-08-20 04:21:12

DAS Pvt. Ltd. fulfilling all the conditions as being specified in Section 3 5 AD of the Income-tax Act, 1961 has incurred capital expenditure of ₹ 30 lakh on purchase of land, ₹ 80 lakh (₹ 75 lakh by cheque and ₹ 5 lakh in cash) on the construction of the building and ₹ 10 lakh on the plant and machinery during the previous year 2020-21 for setting up and operating a warehouse for the storage of sugar. The warehouse became operational on 1st March 2021.
The amount of deduction which the company can claim for such capital expenditure as per Section 3 5AD in AY 2021-22 shall be

1.₹ 120 lakh

2.₹ 180 lakh

3. ₹ 85 lakh

4. ₹ 90 lakh

Posted Date:-2022-08-20 03:58:42

Deccan Ltd. incurred an amount of ₹ 16 lakh as preliminary expenses for setting up a project costing ₹ 100 lakh during the financial year 2020-21. The amount of amortization available as deduction during the AY 2021-22 for the preliminary expenses would be:

1.₹ 1,60,000

2.₹ 3,20,000

3.₹ 16,00,000

4.₹ 1,00,000

Posted Date:-2022-08-20 04:08:47

Depreciation whether to be allowed on the purchase and installation of a fire extinguisher by a practicing CS in his office, even when the same is not put to use or used during the year of acquisition as stipulated under section 32 the Income-tax Act, 1961:

1.No, Failure to use for the profession or business

2.Yes, Safety measures and kept stand by, treated as passive use and eligible for depreciation

3.Yes, Allowable @ 10% of the cost

4. Yes, Allowable @ 50% of the cost

Posted Date:-2022-08-20 03:59:19

For claiming exemption u/s 54G, an assessee has to invest the resultant capital gains within a specified period. Which of the following is not eligible .for such investment?


2. Land

3. Building

4. Plant or machinery

Posted Date:-2022-08-20 04:23:45

Hari Krishna Vidhyut Company Ltd. engaged in the business of generation and distribution of power and electricity has opted WD V method for claiming depreciation on its assets. The opening balance of the block of Plant and Machinery depreciated @ 1596 on 1st April 2020 was ₹ 15,00,000. New machines of an amount of ₹ 25,00,000 were purchased on 15th Nov. 2020 but put to use from 1st December 2020. Computers for ₹ 2,00,000 were purchased on 9th Sept. 2020 and put to use in business since that date. The depreciation including the additional depreciation available to the company on plant and machinery and on the computers shall be of an amount of for AY 2021-22.

1.₹ 4,92,500

2.₹ 5,32,500

3. ₹ 7,82,500

4.₹ 7,42,500

Posted Date:-2022-08-20 03:55:01

he WDV of a block of asset depreciated @ 1596 as of 1st April 2020 was ₹ 3,00,000. Out of this block, one machine was sold for ₹ 2,00,000 on 1st July 2020 and a new machine of ₹ 6,00,000 added on 1 st August 2020 was put to use only from 1 st Sept. 2020.
The amount of depreciation to be claimed (in the manner most beneficial to the assessee ignoring additional depreciation) in the AY 2021-22 shall be:

1.₹ 1,20,000

2. ₹ 96,000

3.₹ 1,05,000

4.₹ 60,000

Posted Date:-2022-08-20 03:51:54

In order to enjoy exemption u/s 54EC, the resultant long-term capital gains should be invested in specified
bonds within a period from the date of transfer.

1.36 Months

2.4 Months

3. 6 Months

4. 12 Months

Posted Date:-2022-08-20 04:22:25

In terms of Section 2(42A), unlisted securities are treated as a long-term capital asset, if they are held for a period of more than

1.24 Months

2. 36 Months

3.12 Months

4.48 Months

Posted Date:-2022-08-20 04:23:20

Income of a non-resident from airline business under section 44BBA of Income-tax Act, 1961 is calculated at the rate of percentage of the aggregate amounts specified, on a presumptive basis.

1. 7.5%


3. 10%


Posted Date:-2022-08-20 04:01:02

Kant is engaged in the business of purchase and sale of pieces of various lands. During the FY 2020-21, he sold pieces of land for ₹ 32 lakh. All these sales were made through cheques and Electronic Clearing System (ECS). The valuation of these pieces of land for stamp duty purposes was ₹ 41 lakh. He wants to pay tax on the income as per section 44AD.
The income as per this section for AY 2021-22 shall be:

1. ₹ 2,46,000

2. ₹ 3,28,000

3.₹ 2,56,000

4. ₹ 1,92,000

Posted Date:-2022-08-20 04:13:40

Long-term capital gains on zero-coupon bonds are chargeable to tax

1.@2096 computed after indexation of such bonds

2.@ 1096 computed without indexation of such bonds

3.Higher of (A) or (B)

4. Lower of (A) or (B)

Posted Date:-2022-08-20 04:24:19

Maintenance of books of account in the case of a HUF carrying business is mandatory if the turnover or gross receipts in any one of the three years immediately preceding the previous year exceeds:

1. ₹ 10 lakh

2. ₹ 15 lakh

3.₹ 25 lakh

4.₹ 100 lakh

Posted Date:-2022-08-20 04:12:07

Mr. Ramanad, engaged in the business of plying, hiring, or leasing of goods carriers as of 1st April 2020 was having 3 trucks of gross vehicles weight of fewer than 12,000 kgs. each. One truck out of these 3 trucks was sold by him on 23rd July 2020 and after its sale, 2 more trucks (1 of less than 12,000 kgs. and 1 of 16,900 kgs.) were purchased on 5th September 2020. He wants to declare the income of trucks as per provisions of section 44AE of the Act and be required to declare such income at ₹ in the return for A.Y. 2021 – 22 from plying of these vehicles during the previous year ended on 31st March 2020.

1.₹ 3,54,500

2.₹ 3,81,500

3.₹ 3,15,000

4. ₹ 3,74,000

Posted Date:-2022-08-20 04:18:05

Ms. Smita inherited a vacant site land consequent to the demise of her father on 10th June 2013. The land was acquired by her father on 10th April 1995 for ₹ 40,000. The fair market value of the land on 1 st April 2001 was ₹ 60,000 and on the date of inheritance, Le. 10th June 2013 was ₹ 2,00,000. The cost of acquisition for Ms. Smita is

1. ₹ 10,000

2. Nil

3. ₹ 60,000

4.₹ 2,00,000

Posted Date:-2022-08-20 04:28:05

On 15th November 2020, Mohan sold 1 kg of gold, the sale consideration of which was ₹ 1,19,760. He had acquired the gold on 11th December 2000 for ₹ 64,000. The fair market value of 1 kg gold on 1st April 2001 was ₹ 62,000. The number of capital gains chargeable to tax for the AY 2021-22 shall be


2. 50,000

3. (72,880) loss

4.(70,080) loss

Posted Date:-2022-08-20 04:20:27

Ping Pong is a Proprietorship firm of Pinga, resident in India having turnover from manufacturing and sale of Steel balls for the year 2020-21 of ₹ 148 lakh which is inclusive of the amount of ₹ 42 lakh received through electronic clearing system/RTGS/NEFT. The accounts are not properly maintained by Pinga and therefore he wants to pay tax on the income computed under section 44AD of the Act. Advise Pinga, how much income he will be required to pay tax for A.Y. 2021- 22 as per section 44AD :

1.₹ 11,84,000

2.Not allowed to opt 44AD being turnover above ₹ 100 lakh

3. ₹ 11,00,000

4. ₹ 8,88,000

Posted Date:-2022-08-20 04:17:33

Radha engaged in the trading business and had contributed a sum of ₹ 1 lakh to an approved university in July 2020 to be used for scientific research, which is not related to her business. The amount of deduction for which she is eligible under section 35 of income-taxAct, 1961 for Assessment Year 2020-2021 would be:

1. ₹ 1 lakh

2. ₹ 1.5 lakh

3. ₹ 1.75 lakh

4. ₹ 2 lakh

Posted Date:-2022-08-20 03:59:51

Radhey a trader having turnover of ₹ 90,00,000 from textile business inclusive of turnover of ₹ 20,00,000 carried through banking channel by way of drafts and online payments had opted to pay tax as per Section 44AD of the Income-tax Act. The amount of income which shall be taken for the purpose of tax for AY 2021-22 under the head income from business and profession is

1.₹ 9,00,000

2. ₹ 6,80,000

3. ₹ 7,20,000

4. ₹ 5,40,000

Posted Date:-2022-08-20 03:57:38

Raghav Housing Finance Ltd., an NBFC is eligible to claim a deduction in the case of provision made for bad and doubtful debts to the extent of total income.



3. 2%

4. 1%

Posted Date:-2022-08-20 04:02:44

Ramesh received ₹ 7 lakh by way of enhanced compensation in March 2021. A further sum of ₹ 2 lakh decreed by the Court is due but not received till 31st March 2021. The amount of income chargeable to tax for the AY 2021-22 would be

1.₹ 3,50,000

2. ₹ 7,00,000

3.₹ 9,00,000

4. ₹ 4,50,000

Posted Date:-2022-08-20 04:27:35

Sarathhasreceivedasum of ₹ 3,40,000 as interest on enhanced compensation for compulsory acquisition of land by the State Government in May 2020. Of this, only ₹ 12,000 pertains to the current year and the rest pertains to earlier years. The amount chargeable to tax for the AY 2021-22 would be

1. ₹ 12,000

2.₹ 6,000

3. ₹ 3,40,000

4.₹ 1,70,000

Posted Date:-2022-08-20 04:22:52

Sardar Sukhdev Singh engaged in the business of plying, hiring, or leasing of heavy goods carriages owned 6 vehicles during the period 1st April 2020 to 31st March 2021 which were given on lease for plying to GS Transport Company at a fixed rate of ₹ 5,000 p.m. per truck for a whole year. He had opted to pay tax as per Section 44AE of the Income-tax Act. The amount of income that shall be taken for all such trucks for the purpose of tax for AY 2021 -22 is

1. ₹ 5,40,000

2.₹ 3,60,000

3. ₹ 6,48,000

4.₹ 6,84,000

Posted Date:-2022-08-20 03:58:07

Section 50C makes special provision for determining the full value of consideration in cases of transfer of

1. Plant and machinery

2. Land or building

3. All movable property other than plant & machinery and computers


Posted Date:-2022-08-20 04:24:53

SH made three different cash payments of ₹ 10,000, ₹ 10,000, and ₹ 11,500 to a supplier for the purchase of goods and material on 11th Sept. The payments were made during different times in the day. Amount to be disallowed u/s 40A(3) is:

1.₹ 11,500

2.₹ 31,500


4. None of the above

Posted Date:-2022-08-20 03:53:35

Short-term capital gains arising from the transfer of equity shares in a company or units of an equity-oriented fund or units of a business trust charged with security transaction tax are subject to income tax at the rate of

1. 10%



4.Normal rate

Posted Date:-2022-08-20 04:29:14

The assessee opting to pay tax under the provisions of Section 44AD A is not be required to maintain books of accounts as per Section 44AA and gets the accounts audited under Section 44AB of the Income-tax Act, 1961 where

1. It claims that the profit and gains from the profession are higher than the deemed profit and gains

2. Total gross receipts should not exceed ₹ 60 lakh

3.Its income does not exceed the maximum amount which is not chargeable to income-tax

4.Both (A) and (C)

Posted Date:-2022-08-20 04:00:34

The WDV of the block of asset of plant & machinery depreciated @ 1596 as of 1st April 2020 was of ₹ 13,50,000. Out of this block, one machine was sold on 1st July 2020 for ₹ 4,50,000 and a new machine of ₹ 7,50,000 was purchased on 1st August 2020 which could be put to use from 1st March 2021. The amount of depreciation to be claimed on the block of plant & machinery in the computation of income for A.Y. 2021-22 shall be :

1. ₹ 1,35,000

2. ₹ 2,47,500

3.₹ 1,91,250

4. ₹ 2,53,125

Posted Date:-2022-08-20 04:14:49

Tulip & Co. is a partnership firm of two partners. The total turnover of the firm during the financial year 2020-21 is ₹ 160 lakh inclusive of ₹ 60 lakh made through account payee cheques and ECS. The partnership deed provided for the monthly working salary of ₹ 30,000 to each of the partners. The income of the firm by applying Section 44AD for AY 2021-22 would be:

1.₹ 11,60,000

2. ₹ 12,80,000

3. ₹ 5,00,000

4. ₹ 4,40,000

Posted Date:-2022-08-20 04:09:22

U/s 115E, the tax rate applicable for any income from investment or income from long-term capital gains of an asset other than a specified asset, for a non-resident as envisaged by Section 115C, is


2. 20%

3. 15%


Posted Date:-2022-08-20 04:25:20

Under which section, the assessee has to reinvest the entire net consideration to claim a full exemption for the long-term capital gains earned during a previous year

1.Section 54EC

2.Section 54F

3.Section 54GA

4.Section 54D

Posted Date:-2022-08-20 04:28:40

When shares of a listed company held for more than 36 months are transferred privately for ₹ 8 lakh, with the original cost of acquisition of ₹ 1 lakh whose indexed cost of acquisition is ₹ 2 lakh, the income-tax payable including cess would be

1. ₹ 1,44,200

2.₹ 72,800

3.₹ 1,23,600

4. ₹ 61,800

Posted Date:-2022-08-20 04:26:24

Which of the following is not a requisite for charging income tax on capital gains?

1. The transfer must have been effected in the relevant assessment year

2.There must be a gain arising on transfer of capital asset

3.Capital gains should not be exempt u/s 54

4.Capital gains should not be exempt u/s 54EC

Posted Date:-2022-08-20 04:21:55

XAB Ltd. has incurred an amount of ₹ 4,00,000 towards capital expenditure and ₹ 1,50,000 towards bona fide revenue expenditure for the purpose of promoting family planning amongst its employees during the year 2020-21. The company can claim a deduction of an amount of ₹ for such expenses in the return to be filed for A. Y. 2021 -22.

1.5096 of ₹ 5,50,000

2.₹ 2,30,000

3. Such expenses are not allowed

4. 2096 of ₹ 5,50,000

Posted Date:-2022-08-20 04:16:55

XYZ Ltd. paid ₹ 5 lakh on 22.1.2020 to a national level laboratory for carrying scientific research unrelated to the business of the company. The amount of deduction eligible under section 35(2AA) of the Income-tax Act, 1961 is:

1.₹ 5,00,000 @ 100%

2.₹ 6,25,000 @ 125%

3. ₹ 7,50,000 @ 150%

4. ₹ 10,00,000 @ 200%

Posted Date:-2022-08-20 04:03:23

XYZ Ltd., engaged in the manufacture of a product, has incurred an expenditure of ₹ 3 lakh on notified skill development project u/s 35CCD. The deduction available for such expenditure is lakh.

1.₹ 3

2.₹ 3.75

3.₹ 4.5

4.None of the above

Posted Date:-2022-08-20 03:53:03

Zed Ltd., a domestic company engaged in manufacturing activity in Mumbai acquired a plant for ₹ 5 lakh on 7th January 2021 which is eligible for depreciation @ 1596. It paid ₹ 4 lakh through the ECS system from the bank and balance ₹ 1 lakh in cash on 23rd February 2021. The plant was put to use on 12.3.2021.
The amount of depreciation (normal and additional) on this plant for AY 2021-22 shall be:

1.₹ 40,000

2. ₹ 30,000

3.₹ 70,000

4.₹ 60,000

Posted Date:-2022-08-20 04:09:55

Zing Zang is an individual, manufacturing a product. He has a turnover of ₹ 98,50,000 which is inclusive of the amount of ₹ 25 lakh received through the electronic clearing system. The accounts are not properly maintained and you have advised him to pay tax u/s 44AD of the Act. On how much income he will pay tax for AY 2021-22?

1. ₹ 7,88,000

2. ₹ 7,38,000

3. Manufacturers not allowed u/s 44AD

4.₹ 5,91,000

Posted Date:-2022-08-20 03:52:29


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