Model Question Paper

Course: Direct Tax Laws

1. Income of Previous years is taxed in which year?

A. Same Previous year
B. Same financial year
C. Assessment year
D. Calendar year

2. Assessment year is commencing from 1st day of which month?

A. January every year
B. April every year
C. August every year
D. December every year

3. The final tax liability shall be rounded off to nearest how many Rupees?
A. 1
B. 5
C. 10
D. No rounding off allowed

4. Arun, a non-resident of India celebrated his 80th birthday on 10th October 2020.
If his total income for the previous year is 6,00,000 his income-tax liability for the
previous year 2020-21 is:
A. Rs 33800
B. Rs 41200
C. Rs 33475
D. NIL
5. Alpha Ltd. is an Indian company. It carries its business in Delhi and London. Total
control and management of the company is situated in London. More than 85%
of its business income is from the business in England. If so, its residential status
will be:
A. Resident
B. Non-resident
C. Not ordinarily resident
D. Foreign company

6. Satish brought into India, in the previous year, past untaxed income which was
earned in the UK The income will be taxable if Satish is:
A. An ordinarily resident
B. A not ordinarily resident
C. A non-resident
D. None of the above

7. At what rate short term capital gains arising on transfer of listed equity shares
through recognized stock exchange are chargeable to Tax?
A. 10%
B. 15%
C. 20%
D. 30%

8. At what rate of tax is Income by way of royalty in respect of a patent developed

and registered in India in respect of person who is resident in India?
A. 10%
B. 15%
C. 20%
D. 30%
9. At what rate is unexplained cash credits are chargeable to tax
A. 10%
B. 15%
C. 20%
D. 30%

10. Value of rent-free accommodation in case of Government employee shall be

taxable up to
A. 15% of employee’s salary
B. 8% of employee’s salary
C. license fee fixed by government
D. 10% of employee’s salary

11. Value of rent-free accommodation or a house owned by employer in case of

non-government employees with above 25 lakh population is .
A. 15% of employee salary
B. 7.5% of employee salary
C. 20% of employee salary
D. 10% of employee salary

12. How much is the amount of Standard deduction under income from salary?
A. Rs 30,000
B. Rs 20,000
C. Rs 80,000
D. Rs 50,000

13. An individual who transferred house property without an adequateconsideration

to his owner spouse or to minor child is called as
A. Co-owner
B. Deemed owner
C. owner himself
D. No owner
14. If the assesses let out the building or staff quarters to the employee of business,
the rent collected from such employees is assessable as income from -
A. Business
B. House Property
C. Other sources
D. Salary

15. Which of the following is not a case of deemed ownership of house property
A. transfer to a spouse for inadequate consideration
B. transfer to a minor child for inadequate consideration
C. holder of an importable estate
D. co-owner of a property

16. Sameer sold goods worth ₹ 50,000 at credit on 1st April 2020. However, he has
written off ₹10,000 of it as bad debts and claimed a deduction for the same
during the year 2020-21. On 4th April 2021, the defaulting debtor made a
payment of ₹ 45,000. What is the taxable amount of bad debts recovered for the
year 2021-22?
A. ₹ 5,000
B. ₹ 50,000
C. ₹ 45,000
D. ₹ 10,000

17. A Ltd acquired two air-conditioners for ₹ 1,40,000 on 10th June 2021. It claimed
the acquisition as the application of income. What is the amount it can claim by
way of depreciation for the said air-conditioners for the AY 2022-23?
A. ₹ 21,000
B. ₹ 1,40,000
C. ₹ 35,000
D. 0
18. Saraswathi Ltd. made a provision of ₹ 12 lakh for a bonus payable for the year
ended 31st March 2021. It paid ₹ 7 lakh on 31st July 2021; ₹ 3 lakh on 30th
September 2021; and ₹ 2 lakh on 15th December 2021. What is the amount
eligible for deduction u/s 43B would be?
A. ₹ 10 Lakh
B. ₹ 12 Lakh
C. ₹ 7 Lakh
D. ₹ 3 Lakh

19. Which of the following is not deductible while calculating taxable income from
business?
A. GST
B. Income-tax
C. Customs Duty
D. Local Taxes

20. As per Section 35D, What is the total expenditure in Preliminary expenses is
deductible?
A. 5 equal installments
B. 10 equal installments
C. 15 equal installments
D. The same year

21. How many business are there in ‘specified business’ eligible for deduction under
section 35AD?
A. 10
B. 15
C. 14
D. 12
22. Rakesh acquired a motor car for ₹ 3,00,000 from his friend (non-relative) when
the fair market value of the motor car was ₹ 5,00,000. What is the amount liable
to tax in the hands of Rakesh?
A. ₹ 3,00,000
B. ₹ 2,00,000
C. ₹ 1,50,000
D. 0

23. Ms. Anshu received a dividend of ₹ 80,000 for her equity shareholding in MNO
Ltd. (a listed company). She paid an interest of ₹ 12,500 for the amounts
borrowed for investment in those shares. What is the taxable dividend income?
A. ₹ 80,000
B. 0
C. ₹ 67,500
D. ₹ 92,500

24. Babu Lai won a prize of ₹ 1,00,000 in Rajasthan State Lottery and the Lottery
Department paid him an amount of ₹ 70,000 after deduction of tax at source of
130,000. He had purchased lottery tickets for ₹ 8,000. What is the amount
chargeable to tax in the hands of Babu Lai under other sources?
A. ₹ 70,000
B. ₹ 1,00,000
C. ₹ 92,000
D. None of the above

25. Deduction in respect of interest on loan taken for Electric Vehicle during the
period beginning from 1.4.2020 and ending on 31.3.2022 from any Financial
Institution is allowed u/s 80 EEB?
A. ₹ 50,000
B. ₹ 1,00,000
C. ₹ 1,50,000
D. ₹ 2,00,000
26. Under which section is the deduction in respect of donations to National Defence
Fund is allowed?
A. 80G
B. 80CCG
C. 80C
D. None of the above

27. Mr. Ganesh gave donation by way of cheque of ₹ 40,000 and by cash ₹ 5,000 to
an approved charitable trust having recognition under section 80G. His gross
total income for the assessment year 2022-23 is ₹ 5 lakhs. What is the quantum
of deduction under section 80G would be?
A. ₹ 45,000
B. ₹ 5,000
C. ₹ 40,000
D. ₹ 20,000

28. Loss from lottery winnings can be set off with which income?
A. Any casual income
B. Cannot be set off
C. Income from Salary
D. Income from House

29. Brought Forward business loss can be set off with which income in the current
year?
A. Any casual income
B. Cannot be set off
C. Business Income
D. Income from House
30. Which are the companies where provisions of Minimum Alternate Tax (MAT) are
applicable?
A. Indian Companies
B. LLP
C. HUF
D. Government Institutions