CS – EXECUTIVE
MOCK TEST PAPER – 3
TAX LAWS & PRACTICE
(This question paper for practice and self Study only based on ICSI New Pattern)
Time Allowed : 3 Hours
Max Marks : 100
PART – A
1. Where an assessee is carrying on a specified business referred to in section 35AD, he shall
be allowed deduction :
(A) Only for revenue expenditure
(B) Both the revenue and capital expenditure
(C) Both for revenue and capital expenditure other than goodwill, land and financial
instruments.
(D) Both for revenue and capital expenditure other than land, building and good will
2. Where the payment of an expenditure claimed as deduction by any assessee carrying on
business or profession other than who is in transport business exceeds Rs 20,000, it should
be paid by:
(A) Crossed Cheque/draft
(B) Account Payee cheque/account payee draft
(C) Account payee cheque
(D) Any mode other than cash
3. Which of the following taxes are allowed as deduction while computing the business
income
(A) Wealth Tax
(B) Income Tax
(C) Sales Tax & Securities transaction tax
(D) none of the above
4. In case of non-resident, who is engaged in the business of operation of aircraft, his
income shall be presumed to be:
(A) 7 ½ % of certain amount
(B) 5 % of certain amount
(C) 10 % of certain amount
(D) None of the above
5. As per presumptive income scheme under section 44AE, the presumed income shall be:
(A) Rs.7500 p.m. or part of month per goods carriage
(B) Rs.5,000 p.m. or part of month per heavy goods vehicle and Rs.4,500 p.m. or part
of month per vehicle other than heavy goods vehicle
(C) Rs.3,500 p.m. per heavy goods vehicle; Rs.3,150 p.m. for medium goods vehicle
and Rs.2,000 p.m. per light commercial vehicle
(D) None of the above
8. A person who sets up a non-specified profession or commences a business during the
current PY is required to maintain books of account if his:
(A) total income of the current year exceeds or is likely to exceed Rs.1,20,000
(B) his gross turnover or sales of any of 3 preceding PY exceeded Rs.10 lakh
(C) if condition mentioned either in (a) or (b) is satisfied
(D) none of the above
9. Remuneration paid to working partner shall be allowed as deduction to a firm:
a. in full
b. subject to limits specified in section 40(b)
c. none of these two
d. none of the above
10. The business income of a company assessee before claiming deduction of revenue and
capital expenditure is Rs.6,00,000. The revenue and capital expenditure incurred during the
year are Rs.7,00,000 and Rs.10,00,000 respectively. The unabsorbed expenditure on family
planning in this case shall be:
(A) Rs.3,00,000
(B) Rs.11,00,000
(C) Rs.2,00,000 and Rs.1,00,000 shall be business loss
(D) None of the above
11. Expenditure incurred on prospecting, etc., of minerals shall be allowed as deduction in:
a. 5 equal instalments
b. 10 equal instalments
c. Full
d. None of the above
12. In the case of non-company assessee, the total preliminary expenses incurred are allowed
deduction to the extent of:
a.
2 % of the cost of the project
b.
5 % of the cost of the project
c.
10 % of the cost of the project
d.
None of the above
13. If the goodwill of a business, right to manufacture or produce, tenancy rights, route permit
or loom hours is acquired before 1.4.1981, the cost of acquisition of such asset shall be:
a.
cost for which it was acquired by the assessee
b.
market value as on 1.4.1981
c.
nil
14. Conversion of capital asset into stock-in-trade will result into capital gain of the PY:
a. in which such conversion took place
b. in which such converted asset is sole or otherwise transferred
c.
none of these two
15. Conversion of capital asset into stock-in-trade will result into capital gain of the PY:
a.
in which such conversion took place
b.
in which such converted asset is sole or otherwise transferred
c.
none of these two
16. For claiming exemption under section 54, the assessee should construct the residential
property within:
a.
one year before or two years after the date of transfer
b.
one year before or three years after the date of transfer
c.
within three years after the date of transfer
d.
within two years after the date of transfer
17. The new house purchased or constructed for which exemption was claimed under section
54, should not be transferred within 3 years:
a. from the date of transfer of original house
b. from the date of its purchase/construction
c.
from the end of the PY
18. Exemption u/s 54F is available if the new asset acquired is:
a.
one residential house property in india
b.
any house property
c.
residential house property for self-occupation
19. Deduction u/s 80C to 80U is allowed from:
a.
income from long-term capital gain as well as short-term capital gain
b.
short-term
capital
gain other
than
short-term capital
gain
from
shares
transferred through a recognized stock exchange
c.
long-term capital gain
d.
neither from income from long-term or short-term capital gain
20. Short-term capital gain arising for the transfer of equity shares and units of equity oriented
fund shall be taxable:
a. at the normal rate
b. at the rate of 20 %
c.
at the rate of 10 % if transferred on or after 1.10.2004
d. at the rate of 15 % if transferred on or after 1.10.2004 through a recognised stock
exchange and such transaction is chargeable to securities transaction tax
21. Transfer of capital asset in the scheme of demerger shall not be regarded as transfer for
the purpose of capital gain if:
a.
the demerged company is an Indian company
b.
the resulting company is an Indian company
c.
both demerged and resulting company should be an Indian company
d.
none of the above
22. The amendment of an order u/s 154 can be made:
(A) within 4 years from the date when the order sought to be amended was
passed
(B) within 4 years from the date of receipt of such order by the assessee
(C) within 4 years from the end of the FY in which the order sought to be amended
was passed
(D) None of the above
23. The notice u/s 143(2) must be served within:
a. 12 months from the date of filing the return
b. 12 months from the due date of filing the return u/s 139(1) or from the date of
filing of return of income
c.
6 months from the end of the financial year in which the return was
furnished
24. The Assessing Officer has issued a notice u/s 142(1)(ii) for production of books of
account. Such notice relates to the assessment of PY 2015-16. In this case the assessing
officer can ask for books of accounts of:
a.
any past previous year
b.
previous years 2015-16, 2014-15 and 2013-14
c.
previous years 2015-16, 2014-15, 2013-14 and 2012-13
25. R, who submitted his return of income for the AY 2016-17 on 31.7.2016, finds some
mistake in the return submitted by him. The assessment orders u/s 143(3) for such return
was passed on 15.2.2017 and were served to R on 18.2.2017. He could, in this case,
revise the return till:
(A) 14.2.2017
(B) 17.2.2017
(C) 31.3.2018
(D) None of the above
26. Salary of ‘R’ becomes due on 1st of next month and it is paid on 7th of that month. For
assessment year 2016-17, the salary of ‘R’ shall be taken from:
a.
April 2015 to March 2016
b.
March 2015 to February 2016
c.
Any of the above
d.
None of the above
27. Commuted pension received shall be fully exempt in case of:
a.
Government employee
b.
Government employee or an employee of local authority
c.
Government employee or an employee of local authority or an employee of
statutory corporation
d.
None of the above
28. During the previous year, the employee was reimbursed Rs.24,000 as medical expenses
incurred by him which includes Rs.7,000 spent in Government hospital. The taxable
perquisite in this case shall be:
a.
Rs.9,000
b.
Rs. NIL
c.
Rs.2,000
d.
Rs.24,000
29. An employer has provided a motor car of 1.5 litre capacity to his employee which the
employee is allowed to use for official purpose and for travelling from office to residence
and back. The expenses of running and maintenance of Motor Car are met by the
employer. The value of this perquisite shall be:
a.
Rs.1,800 p.m.
b.
Rs.600 p.m.
c.
Rs.NIL
d.
Rs.2,400 p.m.
30. R is an employee of Indian Oil Corporation Ltd. He is provided with free gas for his
personal purposes by the employer. The value of this perquisite shall be:
a.
NIL
b.
6 1/4 % of the salary
c.
Manufacturing cost per unit
d.
Market rate of gas
31. R is provided with interest free loan by the employer for purchase of a house. The value
of this perquisite shall be determined as the sum equal to:
(A) simple interest computed @ 10 % p.a.
(B) simple interest computed @ 13 % p.a.
(C) simple interest computed at the rate charged by SBI on the 1st of the relevant
previous year on the maximum outstanding monthly balance
(D) simple interest computed at the rate charged by SBI on the last day of the month
32. The employer has purchased a car for Rs.3,00,000 which was being used for official
purposes. After 2 years and 6 months of its use, the car is sold to R, the employee, for
Rs.1,20,000. The value of this perquisite shall be:
(A) Rs.72,000
(B) Rs.60,000
(C) 1,80,000
(D) Rs.1,23,000
33. An employee is neither a Government employee nor covered under Payment of Gratuity Act,
1972. Salary for the purpose of calculating half month shall be taken as:
(A) last drawn salary
(B) average salary of 10 months preceding the month of retirement
(C) average salary of each completed year
34. Employer’s contribution to recognized provident fund shall be:
a.
fully exempt
b.
fully taxable
c.
exempt up to 12 % of salary
35. A has two house properties. Both are self-occupied. The annual value of:
a.
both the houses shall be nil
b.
one house shall be nil
c.
no house shall be nil
d.
none of the above
36. If the annual value of the let house property is negative then tick the deduction which
shall be allowed under section 24.
a. All deductions
b. No deduction
c.
Deduction on account of interest of money borrowed
d. None of the above
37. An assessee was allowed deduction of unrealized rent to the extent of Rs.40,000 in the
past although the total unrealized rent was Rs.60,000. He is able to recover from the
tenant Rs.45,000 during the PY on account of such unrealized rent. He shall be liable to
tax to the extent of:
a.
Rs.45,000
b.
Rs. NIL
c.
Rs.25,000
d.
None of the above
38. An assessee has borrowed money for purchase of a house and interest is payable outside
India. Such interest shall:
a. be allowed as deduction
b. not be allowed as deduction
c.
be allowed as deduction if the tax is deducted at source
d. none of the above
39. Tick from the under mentioned, the cases where annual value can be negative.
a. let out property , deemed let-out property , partly let-out & partly self-occupied
property
b. one self-occupied property, deemed let-out property
c.
deemed let-out property
d. one property which could not be occupied due to employment elsewhere
40. For the assessment year 2016-17, a firm is subject to income-tax at a flat rate of:
a. 30 % + EC @ 2 %+SHEC @1%
b. 30 % + 5 % SC + EC @ 2 %+SHEC@1%
c.
30 % + 10 % SC + EC @ 2 % + SHEC @ 1 %
d. 30 % + 12 % SC if its total income exceeds Rs. 1 crore + EC @ 2 % + SHEC
@ 1 %
41. Mrs. A a non-resident in India is 56 years old. Her total income for the assessment year
2016-17 is Rs 6,35,440. Her tax liability shall be –
(A) Rs 53,650
(B) Rs 52,090
(C) Rs 77,090
(D) None of the above
42. A’s total income for the assessment year 2016-17 is Rs 7,90,000. His tax liability shall be
(A) Rs 85,490
(B) Rs 83,000
(C) Rs 1,08,000
(D) None of the above
43. Astha Ltd., a domestic company assuming the total income is 1,02,00,000 compute the tax
liability of Astha Ltd –
(A) 32,96,000
(B) 32,00,000
(C) 30,00,000
(D)None of the above
44. Income tax is levied on(A) Monthly basis
(B) Quarterly basis
(C) Half-yearly basis
(D) Yearly basis
45. Income tax is payable on(A) Earned income
(B) Salary
(C) Taxable income
(D) Every income
46. The authority on whose recommendation the amt. collected as income tax is distributed to
state govt.(A) CBDT
(B) Planning Commission
(C) Finance Commission
(D) Chief Minister
47. Income tax department works under(A) State govt.
(C) Income tax commission
(B) President
(D) CBDT
48. Where an individual has substantial interest in a concern, there shall be included in his
total income any remuneration paid by such concern to:
(A) the wife of such individual
(B) the husband of such individual
(C) the spouse of such individual
49. If there is a transfer of asset which is not revocable during the life time of the transferee,
income arising from such asset shall be included in the income of:
(A) transferor
(B) transferee
(C) transferee till his death and thereafter in the hands of the transferor
50. When income of a minor child is clubbed in the income of the parent concerned, such
parent will be allowed exemption of:
(A) Rs.1,500
(B) Rs.1,500 per minor child
(C) to the extent of actual income clubbed or Rs.1,500 per minor child whichever is
less
51. On 5th February 2015, R gets a gift of motor car from his relative M. Fair market value of
the car is ` 3,60,000.The amount taxable u/s 56(2)(vii) is
a) ` 3,60,000
b) ` 3,10,000
c) Nil
d) ` 50,000
52. Income from other sources is also known as ……………………………………. head of income.
a) residuary head
b) useless head
c) complementary head
d) none of the above
53. Guest Lecture salary is taxable under which head of income
a) Other sources
b) Salary
c) House property
d) Not taxable at all
54. A watch has been gifted to an individual whose fair market value is ` 1,00,000. The fair
market value of watch is
a) exempt since received from a relative
b) not taxable since watch is not property within the definition of section 56(2)(vii)
c) taxable under head other sources
d) None of the above
55. On 5th February, 2014 Vivek gets a gift of motor car from a relative Sumit. Fair market value
of car is 3,60,000. The amount of taxable in hands of Vivek under section 56(2)(vii) is?
a) 3,60,000
56. On 30
th
b) 3,10,000
c) 50,000
d) Nil
December, 2013 Vivek gets by gift a commercial flat from the elder brother of his
father-in-law (SDV is 25,00,000). The amount chargeable to tax in hands of Raju is?
a) 25,00,000
b) 24,50,000
c) 20,00,000
d) Nil
57. Deduction u/s 80C can be claimed for fixed deposit made in any scheduled bank, if the
minimum period of deposit
a) 5 years
b) 8 years
c) 10 years
d) 12 years
58. Deduction under section 80C is allowed to
a) All assessee
b) Individual and HUF
c) Individual only
d) Assessee, being company
59. If house property for which loan has been taken for construction or purchase and
deduction is claimed under section 80Cis transferred before …………….. from end of the
………………. for such property was taken by him, no deduction shall be allowable in the
previous year in which the house property has been transferred.
a) 8 years, financial year when loan
b) 5 years, financial year when loan
c) 5 years, financial year when possession
d) 7 years, financial year when possession Mr.
60. A, aged about 61 years, has earned a lottery income of ` 1,20,000 (gross) during the PY
2014-15. He also has a business income of ` 30,000. He invested an amount of ` 10,000 in
Public Provident Fund account and ` 24,000 in National Saving Certificates. What is the total
taxable income of Mr. A for the A.Y.2016-17
a) 1,16,000
b) 1,20,000
c) 14,0,000
d) 1,26,000
61. An individual resident assessee has gross total income of ` 9,00,000 and has made
investment in listed shares in accordance with a notified scheme of ` 1,00,000. What
amount of deduction is available under section 80CCG
a) ` 50,000
b) ` 25,000
c) `30,000
d) Nil
62. Ganesh paid premium of ` 18,000 for health insurance and has incurred expenditure of
`3,000 on preventive health checkup. Amount of deduction allowed u/s 80D shall be
a) 16,000
b) 21,000
c) 15,500
d) 20,000
63. If amount incurred by assessee for the treatment of specified disease of spouse is `
37,000. A claim of ` 10,000 have been received under mediclaim policy. What amount of
deduction shall be allowed to him?
a) ` 37,000
b) ` 40,000
64. Section 64(1)(iv) is applicable on all assets except
c) ` 60,000
a) House property
b) Share
c) Gold
d) None of the above
d) ` 27,000
65. Securities worth ` 20,00,000 was transferred by Abhi, member of HUF to HUF. Interest
income of ` 2,00,000 is earned on securities so transferred. Partition of HUF took place. ¼ of
securities were transferred to Abhi, ¼ of securities were transferred to Abhi’s wife. How much
amount shall be taxable in the hands of Abhi
a) ` 2,00,000
b) ` 50,000
c) ` 1,00,000
66. Notice u/s 142(1)(i) can be issued even after ………………………
a) end of relevant previous year
b) end of relevant assessment year
c) either of a) or b)
d) None of the above
d) None
67. Notice u/s 142(1)(ii) can be issued
a) when return of income is not filed
b) When return of income is filed
c) in both the case whether return is filed or not
d) one of the above
68. Where no such installment is due i.e. income is earned after 15th March, the entire tax
should be paid by …………...
a) 15th March
b) 31st March
c) 31st July
d) 15th September
69. What shall be payable by assessee for deferment of advance tax beyond due dates.
a) Interest under section 234A
b) Interest under section 234B
c) Interest under section 234C
d) None of the above
70. During the PY ending 31st March, 2015, a charitable trust earned an income of ` 4,00,000.
Amount applied by trust is ` 2,00,000. How much amount shall be taxable?
a) ` 3,40,000
b) ` 4,00,000
c) ` 1,40,000
d) Nil
PART-B
71. The method under which tax is imposed at each stage of sales on the entire sale value
and the tax paid at the earlier stage is allowed as set-off is called
a) Invoice method
b) Subtraction method
c) Deductive method
d) Value addition and deletion method
72. Product X is taxable @ 4% and Product Y is taxable @12.5%. Product X is sold for Rs.
100,000 &Product Y for Rs. 50.000. Total input tax credit is available for Rs. 5,000. What
would be the net VAT payable?
a) Rs.5,250
b) Rs. 5,000
c) Rs. 2,500
d) Rs. 10,250
73. Where Input is lost, credit on same …………………
a) may be allowed
b) cannot be allowed
c) shall be allowed
d) None of the above
74. Credit of which of the following purchases cannot be claimed by the dealer?
a) purchase from unregistered dealer
b) purchase from registered dealer who opt for composition scheme
c) any of the above
d) none of the above
75. Tax invoice is admissible as supporting documents for taking credit. Is the statement true?
a) Valid
c) Partly valid
b) Invalid
d) None of the above
76. In which of situation is registration compulsory?
a) when the taxable annual turnover of a dealer does exceeds the threshold of Rs. 5 Lakh
b) when dealer is an importer
c) any of the above
d) none of the above
77. A manufacturer purchased raw material for Rs. 1,12,500 (inclusive of 12.5% VAT) and capital
equipment/ goods for Rs. 6,24,000 (inclusive of 4% VAT). Capital goods are depreciated over 3
years straight line. How much credit is available to manufacturer if Gross product Variant method
followed.
a) 12,500
b) 20,500
c) 36,500
d) Nil
78. How is value addition computed as per Addition Method?
a) Profit + Trade and Manufacturing Expenses
b) Sale price – purchase price
c) Sale price + purchase price
d) Not computed
79. Which method is widely used and accepted?
a) Addition Method
b) Subtraction Method
c) Input Tax Credit Method
d) Any of the above
80. Which invoice can be used to avail tax credit?
a) Retail invoice
b) Tax invoice
c) any of the above
d) None of the above
81. Penalty for failure to pay service tax electronically when assessee is required to pay tax
electronically
a) 5,000
b) 10,000
c) 1,000
82. A person is to file its return by 25
th
d) 7,000
April, due date of filing return but it is public holiday,
then return shall be filed on …………
a. immediately succeeding working day
b. within two days from public holiday
c.
next day whether it is working day or not
d. None of the above
83. Service tax liability arises only when the taxable turnover of the previous year exceeds
a) ` 10,00,000
b) ` 9,00,000 c) ` 8,00,000,
d) ` 7,00.000
84. The aggregate value of taxable turnover of an ABC Ltd. during the financial year 2013-14
is `49 lakh. company during the current financial year shall pay service tax on
a. on receipt basis on all the taxable services provided
b. on receipt basis on taxable services upto` 50 lakh
c.
on accrual basis on all the taxable services provided
d. none of the above
85. Which approach to service tax is used in India?
a) Comprehensive
b) Selective
c) Partly a) and b)
d) None of the above
86. In case of Nil service tax during a specified period, penalty for delayed filing if service tax
return
a) Cannot be waived
b) Can be waived by CEO
c) waiver is not applicable
d) None of the above
87. Determine the interest payable under section 75 of Finance Act, 1994 on delayed payment
of service tax from the following particulars:
Service tax payable
` 60,500
Due date of payment
06.11.2014
Date of payment
06.01.2016
Note: Turnover of services in the preceding financial year was` 80 lakh.
a) 15,730
b) 12,740
c) 13,664
d) Nil
88. When is small service provider required to obtain registration?
a) when value of total services exceeds ` 10 lakh
b) when value of taxable services exceeds ` 10 lakh
c) when value of total services exceeds ` 9 lakh
d) when value of taxable services exceeds ` 9 lakh
89. A real estate agent who has his office in Chandigarh provided a service in relation to a
property located in Mumbai. Which place is place of provision of service for purpose of levy of
service tax?
a) Mumbai
b) Chandigarh
c) Both a) and b) partly
d) None of the above
90. What shall be the place of provision of service in case of GTA?
a) location of person liable to pay service tax
b) location of service provider
c) location of destination of goods
d) location of the event
91. If a corporate assessee has paid 15000 as excess service tax during the previous half
year ending period, this excess amount can be adjusted against its subsequent liability
a) Equally per quarter
b) Equally every month
c) In lump sum
d) Equally on half yearly basis
92. Service tax is rounded off to nearest multiple of
a) 10
b) 100
c) 1
d) None of the above
93. Service tax in India made a humble beginning from ....... with only 3 services
a) June 1, 1994
b) July 1, 1994
c) July 1, 1995
d) July 1, 2014
94. The rate of service tax is …… (inclusive of education cess, SHEC, Swachh Bharat cess, if
applicable)
a) 12%
b) 14%
c) 14.5%
d) 14.92%
95. Where service is rendered from outside India, such service shall be taxable in the hand of
a) Provider of service
b) Recipient of service
c) Partly in hands of both a) and b)
d) None of the above
96. What is the due date for filing return for the period April – September
a) 25 September
b) 25 October
c) 31 December
d) None of the above
97. Service Tax is to be paid to the credit of Central Government by the 5th of the month
immediately following the calendar month in which the payment received. Is the statement
valid
a) Valid
b) not valid
c) partly valid
d) maybe valid
98. If Raj has collected any amount of service tax from Brijesh which is not required to be
collected, Raj shall pay the amount so collected to
a) Brijesh
b) The central government
c) Keep with himself
d) None of the above
99. What is the last date for payment Service Tax for the month of March?
a) 31 March
b) 30 April
c) 7 April
d) 5 April
100. The amount of service tax shall be increased by
a. education cess
b) secondary and higher education cess
c) both of the above
d) not increased by EC & SHEC