laboursonline – MCQs, Mock Tests | CBES Board Class 11 CS Executive Tax Laws MCQs Set-6

A foreign institutional investor (FIT) has total income which includes the short-term capital gains on the sale of listed shares of ₹ 30 lakh. The rate of tax for charging such income to tax is

1. 10%
2. 30%
3. 15%
4. 40%

✅ Correct Answer: 3

Manoj acquired 1,000 equity shares of ₹ 10 each in a listed company for ₹ 35,000 on 1 st July 2013. The company issued 1,000 rights shares in April 2015 at ₹ 15 per share. The company issued 2,000 bonus shares in June 2020. The market price was ₹ 50 per share before the bonus issue and ₹ 25 after such an issue. The cost of the acquisition of bonus shares would be

1. Nil
2. ₹ 20,000
3. ₹ 50,000
4. ₹ 1,00,000

✅ Correct Answer: 1

Cost of acquisition of securities held with depositories is to be computed by –

1. Average cost method
2. First in first out
3. Last in first out
4. Weighted average cost method

✅ Correct Answer: 2

Long-term capital gains on the sale of a long-term capital asset in October 2020 is 1105 lakh. The assessee invested 150 lakh in REC bonds in March 2021 and ₹ 55 lakh in MIAI bonds in May 2021. The amount of exemption eligible under Section 54EC is

1. Nil
2. ₹ 50 lakh
3. ₹ 55 lakh
4. ₹ 105 lakh

✅ Correct Answer: 2

Rajat purchased a car for his personal use for ₹ 5,00,000 in April 2020 and sold the same for ₹ 5,50,000 in July 2020. The taxable capital gains would be

1. Nil
2. ₹ 5,50,000
3. ₹ 50,000
4. ₹ 4,00,000

✅ Correct Answer: 1

Mrs. Lakshmi purchased shares of ABB Ltd. for ₹ 5 lakhs on 3rd April 2018. The shares were sold on 5th June 2020 for ₹ 7 lakhs. She paid STT of ₹ 700 and brokerage of ₹ 500. Capital gain chargeable to tax:

1. Nil, as it is exempt u/s 10(38)
2. @ 10% u/s 112A without the benefit of indexation
3. @20% u/s 112 without the benefit of indexation
4. @ 10% u/s 112A with benefit of indexation

✅ Correct Answer: 2

Ms. Netra acquired 1,000 equity shares of MMC Ltd. (unlisted company) for ₹ 4 lakh in April 2009. She received bonus shares on a 1:1 basis in April 2020 from the company. She sold bonus shares in January 2021 for ₹ 8 lakhs. The capital gain chargeable to tax in the hands of Ms. Netra for the assessment year 2021-22 is:

1. ₹ 8 lakhs
2. Nil, since the entire gain is exempt from tax
3. ₹ 2 lakhs
4. ₹ 80,000

✅ Correct Answer: 1

Mr. Madan sold vacant land for ₹ 120 lakh on 10.10.2020. The indexed cost of acquisition amounts to ₹ 18 lakhs. He deposited ₹ 50 lakhs in REC bonds in January 2021 and another ₹ 50 lakh in March 2021. The amount of capital gain liable to tax after deduction under section 54EC is:

1. ₹ 2 lakhs
2. ₹ 52 lakhs
3. ₹ 102 lakhs
4. ₹ 18 lakhs

✅ Correct Answer: 2

Which of the following is not a capital asset for Mr. Rao who is employed in a public sector bank?

1. Urban land
2. Agricultural land within 2 km from local limits of the municipality
3. Deposit certificate issued under Gold Monetization Scheme, 2015
4. Jewellery

✅ Correct Answer: 3

On 1.6.2020 Kamlesh transferred his vacant land to Raj esh for ₹ 12 lakhs. The land was acquired on 1.9.2017 for ₹ 3 lakh. The indexed cost of acquisition of the said land is ₹ 3,28,409. The taxable capital gain would be:

1. long term capital gain ₹ 8,29,091
2. short-term capital gain ₹ 9 lakhs
3. long-term capital gain ₹ 9 lakhs
4. short term capital gain ₹ 8.70 lakhs

✅ Correct Answer: 2

Dr. Sam sold vacant land to Mr. Roy for ₹ 36 lakhs. For stamp-duty purposes, the value of land was ₹ 41 lakhs. The indexed cost of acquisition of land was computed at ₹ 20 lakhs. The taxable long-term capital gain would be:

1. ₹ 21 lakhs
2. ₹ 16 lakhs
3. ₹ 5 lakhs
4. ₹ 20 lakhs

✅ Correct Answer: 1

Out of the following, which income is chargeable as capital gain: (i) from the transfer of self-generated goodwill of profession. (ii) from the transfer of personal jewelry (iii) from the transfer of paintings and art-work (iv) from the transfer of furniture utilized for personal use Select the correct answer from the options given below:

1. (i)and(ii)
2. (ii) and (iii)
3. (i), (ii) and (iii)
4. All the four

✅ Correct Answer: 3

Land or building, or both, if transferred on or after 1st April 2019 shall be treated as a long term capital asset, if it is being held immediately prior to the date of its transfer for more than:

1. 36 months
2. 12 months
3. 24 months
4. None of the above

✅ Correct Answer: 3

The base year for the purpose of calculation of the indexed cost of acquisition or the cost of improvement in respect of long term capital asset acquired prior to 1st April 2001 shall be taken as:

1. 1981-1982
2. 2001-2002
3. 1991-1992
4. 2011-2012

✅ Correct Answer: 2

X entered into an agreement for the sale of his house located at Jaipur to Y on 1st April 2020 for a total sale consideration of ₹ 90 lakh. Y paid an amount of ₹ 20 lakh by account payee cheque to X on the date of the agreement and the balance was to be paid at the time of registration of the deed. However, the conveyance deed could not be executed till 1st September 2020. The Stamp Valuation Authority determined the value of the property on the date of registration of conveyance deed at ₹ 120 lakh and the value determined by the Stamp Valuation Authority on the date of the agreement was ₹ 100 lakh. The value for the purpose of capital gain u/ s 50C shall be taken:

1. ₹ 90 lakh
2. ₹ 120 lakh
3. ₹ 20 lakh
4. ₹ 100 lakh

✅ Correct Answer: 4

The cost of improvement in relation to the capital asset being goodwill of the business shall be taken to be as:

1. Cost incurred by the previous owner
2. Actual cost incurred by the assessee
3. Incurred cost after indexation
4. None of the above

✅ Correct Answer: 4

In a scheme of buyback of shares, XYZ Ltd., a listed company, paid ₹ 6 lakh to a shareholder X on 12.3.2021. The buy-back was through the recognized stock exchange. The sum of ₹ 6 lakh received by X who had bought these shares 2 years back will be:

1. Taxable in full
2. Fully exempt u/s 10(34A)
3. Taxable @ 20%
4. Taxable at a normal rate of tax

✅ Correct Answer: 2

Radhey has sold his house on 11th August 2020 for ₹ 80 lakh. The value applied by Stamp Valuation Authority is 1100 lakh. He disputed this valuation and the departmental valuation cell made the valuation at ₹ 110 lakh. The value to be taken for calculation of capital gain as per Section 50C is:

1. ₹ 80 lakh
2. ₹ 110 lakh
3. ₹ 100 lakh
4. None of the above

✅ Correct Answer: 3

Radhey has sold his residential house on 11th Sept. 2020 for ₹ 75 lakh. The value applied by the Stamp Valuation Authority on the date of registration of the Conveyance Deed on 15th Sept. 2020 was ₹ 115 lakh. Radhey disputed the valuation made by the Stamp Valuation Authority and asked the departmental valuation officer to determine the value of the house on the date of registration of the deed. The departmental valuation officer determined the value of the house on the date of registration of the deed at ₹ 120 lakh. The sale value of the house to be taken for calculation of capital gain in AY 2021-22 as per section…………..shall be……..

1. 50C, ₹ 115 lakh
2. 50C, ₹ 120 lakh
3. 48, ₹ 75 lakh
4. 45, Indexed cost of ₹ 75 lakh

✅ Correct Answer: 1

Exemption under section 54G on fulfilling of specified conditions is available on:

1. Shifting of industrial undertaking from an urban area to a Special Economic Zone (SEZ)
2. Shifting of industrial undertaking from urban Area by Government
3. Compulsory acquisition of land and building
4. Transfer of certain capital assets as specified

✅ Correct Answer: 2

Nair, a retired person of 68 years of age obtained ₹ 10,000 per month from 1st April 2020 on a reverse mortgage of his self-occupied residential property from a bank. The fair rent of the property is ₹ 15,000 per month. The income chargeable to tax in respect of amount received on reverse mortgage for his self-occupied house property for the FY 2020-21 would be:

1. ₹ 1,20,000
2. ₹ 1,26,000
3. NIL
4. (15,000 – 10,000) X 12 = 60,000

✅ Correct Answer: 3

B joined Avtar & Co. as a partner on 1st June 2020. He contributed his vacant land in the firm as his capital which was recorded in the books of the firm at ₹ 5 lakh. The land was inherited by B from his father in April 2010 and the Fair Market Value (FMV) on that date was ₹ 2 lakh. The land was originally acquired by his father in August 2005 for ₹ 1 lakh. The Fair Market Value (FMV) on 1st June 2018 was ₹ 10 lakh. The full value of the consideration received as a result of the transfer of land by B as capital would be taken as:

1. ₹ 1 lakh
2. ₹ 2 lakh
3. ₹ 5 lakh
4. ₹ 10 lakh

✅ Correct Answer: 3

Durafon (P) Ltd., engaged in the steel industry, acquired a vacant piece of land on 15th May 2018. The company sold the said land in December 2020. The profit earned on the sale of vacant land of ₹ 10 lakh shall be taxable as:

1. Business income
2. Income from other sources
3. Short term capital gain
4. Long term capital gain

✅ Correct Answer: 4

D transferred Zero-Coupon Bonds on 20th August 2020. These bonds were acquired during the financial year 2011-2012. The capital gain computed on the redemption with indexation benefit is ₹ 2 lakh and without indexation benefit is ₹ 3 lakh. The long term capital gain would be chargeable to tax on such Zero-Coupon Bonds in AY 2020-2021:

1. @20% of LTCG (Net consideration – Indexed cost of acquisition)
2. @ 10% of (Net consideration – Cost of acquisition without indexation)
3. @30% of (Net consideration-Cost of acquisition without indexation)
4. (A) or (B) whichever is less.

✅ Correct Answer: 2

Indexed cost of acquisition of the house property purchased for ₹ 80 lakh in June 1998 and was sold in December 2020 will be ₹ (worked out by taking the CD of 1998-99 as 351; of the year 2001-02 as 100; of the year 2020-21: 301) and FMV of the house property as on 1st April 2001 of ₹ 90 lakh.

1. ₹ 63,81,766
2. ₹ 90 lakh
3. ₹ 2,70,90,000
4. ₹ 71,79,487

✅ Correct Answer: 3

Chirag entered into an agreement for the sale of his house property located at Jaipur to Yash on 1st August 2020 for a total sale consideration of ₹ 95 lakh. Yash paid an amount of ₹ 20 lakh by account payee cheque to Chirag on 1st August 2020, and the balance was agreed to be paid at the time of registration of the Conveyance Deed which could only be executed by Chirag on 1st September 2020. The Stamp Valuation Authority determined the value of the house property on the date of registration of deed at ₹ 140 lakh. However, the value determined by the Stamp The valuation Authority of the house on the date of the agreement (1st August 2017) was ₹ 110 lakh. The sale value for the purpose of computing the capital gain of the property in A.Y. 2020-21 to be taken by Chirag shall be :

1. ₹ 95 lakh
2. ₹ 110 lakh
3. ₹ 140 lakh
4. ₹ 120 lakh

✅ Correct Answer: 2

Which of the following is not included in taxable income:

1. Income from smuggling activity
2. Casual income
3. Gifts of personal nature subject to a maximum of ₹ 50,000 received in cash
4. Income received in-kind

✅ Correct Answer: 3

The amount deductible from a family pension is up to:

1. ₹ 15,000 or 1/3rd of family pension whichever is less
2. ₹ 15,000 or 1 /2 of family pension whichever is less
3. ₹ 10,000 or 1/3rd of family pension whichever is less
4. No deduction

✅ Correct Answer: 1