CHAPTER 6

Income under the Head Profits and Gains of Business or Profession

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2.

3.

4.

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6.

7.

Salary, bonus, commission or remuneration due to or received by a working partner

from the firm is taxable under the head:
(A) Income from salaries
(B) Income from other sources
(C) Business & Profession
(C)
Perquisite received by the assessee during the course of carrying on his business or
profession is taxable under the head.
(A) Salary
(B) Other sources
(C) Business or Profession
(C)
Export incentives received by an assessee are:
(A) exempt
(B) taxable under section 28
(C) exempt up to certain limits
(B)
Income of a trade or professional association, from specific services performed for
its members shall be:
(A) exempt
(B) taxable u/H business and profession
(C) taxable u/H income from other sources
(B)
Interest on capital or loan received by a partner from a firm is:
(A) exempt u/s 10(2A)
(B) taxable u/H business and profession
(C) taxable u/H income from other sources
(D) taxable u/H business and profession on account of interest on capital and
income from other sources on account of loan to the firm
(B)
Under the head Business & Profession, the method of accounting which an assessee
can follow shall be:
(A) Merchantile system only
(B) Cash system only
(C) Merchantile or Cash system only
(D) Hybrid system
(E) Any of these systems
(C)
For computation of business income, the assessee has to follow:
(A) Auditing standards prescribed by I.C.A.I.
(B) Accounting standards notified by the Central Government
(C) No accounting standards
(B)

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Any sum received by an employer from Keyman insurance policy taken on the life
of the employee shall be:
(A) exempt
(B) taxable under the head business and profession
(C) taxable under the head other sources
(D) taxable in the hands of employee
(B)
R, who was carrying on agency business received a sum of Rs.5,00,000/- from his
principal for termination of agency. Compensation amount so received shall be:
(A) exempt as it is a capital receipt
(B) fully taxable under the head business and profession
(C) taxable under the head other sources
(B)
(i) If the house property used for business or profession is taken on rent, tick the
expenses which shall be allowed as deduction u/s 30.
(A) Rent
(B) Current repairs, other than expenditure in the nature of capital expenditure
(D) Insurance premium
(E) Rates and taxes though due
(F) Rates and taxes actually paid only
(G) Rates and taxes paid or due subject to section 43 B
(C), (D) & (G)
(ii) Which expenses shall be allowed if the premises in occupied by the assessee
otherwise as tenant.
(B), (D) & (G)
Where the machinery, plant and furniture is used by the assessee for the purpose of
carrying on business and profession, he shall be entitled to deduction u/s 31 on
account of:
(A) current repairs other than expenditure in the nature of capital expenditure
(B) revenue and capital expenditure on repairs
(C) any repairs
(A)
Depreciation is allowed in case of:
(A) tangible assets only
(B) intangible assets only
(C) tangible and intangible assets
(C)
Tick the tangible assets which are subject to depreciation.
Land
Building
Machinery
Books
Tea bushes
Vehicles
Gold
Furniture
Stock-in-hand
(B), (C), (D), (G) & (I)

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The depreciation is allowed to:

(A) the owner of asset
(B) owner including fractional owner of the asset
(C) lessee
(B)
Electricity companies are allowed depreciation on the basis of:
(A) block of asset
(B) each asset separately
(C) each asset separately unless the assessee opts for block of asset system in
the first previous year of its commencement
(D) either on block of asset or each asset separately provided the option is
exercised in the first previous year.
(C)
(i) If the asset of a particular block is acquired and put to use during the PY for less
than 180 days, the assessee shall be entitled to depreciation:
(A) at normal rate
(B) at 50 % of normal rate
(C) proportionate period for which it is first put to use.
(B)
(ii) What will be your answer in the above case if the asset is acquired by the
electricity company which is claiming depreciation on straight line method:
(A) at normal rate
(B) at 50 % of normal rate
(C) proportionate period for which it is put to use
(B)
(i) W.D.V. of block of 15 % as on 1.4.2011 is Rs.5,00,000. An asset amounting to
Rs.1,00,000 was acquired on 1.11.2011 and put to use on 1.12.2011. During
the previous year 2011-12 a part of the block (other than the new asset) is sold
for Rs.5,40,000. The depreciation to be allowed for this block is:
(A) Rs.9,000
(B) Rs.4,500
(C) Rs.5,000
(B)
(ii) If in the above case, this part of the block is sold for Rs.4,80,000 instead of
Rs.5,40,000, the depreciation allowed shall be:
(A) Rs.10,500
(B) Rs.18,000
(C) Rs.9,000
(A)
(iii) What will be your answer in case of (i) above if the part of the block sold
includes the new asset acquired during the year:
(A) Rs.9,000
(B) Rs.4,500
(C) Rs.5,000
(A)

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22.

Where a part of block of assets is sold for a price more than the opening W.D.V.
plus cost of asset acquired during the year, if any, the assessee shall be subject to:
(A) balancing charge
(B) short-term capital gain
(C) short-term or long-term capital gain depending upon the period after which
the block is transferred
(B)
Where a part of a block of asset is sold for a price less than the opening W.D.V.
plus cost of assets, if any, acquired during the year, the balance amount shall be
treated as:
(A) short-term capital loss
(B) terminal/balancing depreciation
(C) written down value for purpose of charging current year depreciation
(C)
Where the entire block of the asset is sold for a price more than the opening
W.D.V. and asset, if any, acquired during the year, the excess amount shall be
subject to:
(A) Balancing charge
(B) Short-term capital gain
(C) LT or STCG depending upon the period for which block is held
(B)
Where an electricity company claiming depreciation on straight line method on
each asset separately sells such asset for a price more than its W.D.V. then the
excess amount shall be taxable:
(A) as short-term capital gain
(B) balancing charge under business head
(C) balancing charge to the extent of depreciation allowed in the past and the
balance, if any, short-term capital gain
(D) balancing charge to the extent of depreciation allowed in the past and the
balance, if any, long-term or short-term capital gain depending upon the
period for which such asset was held
(D)
Where the entire block is sold for a price less than the opening W.D.V. and the cost
of asset, if any, acquired during the PY, the balance amount shall be treated as:
(A) terminal/balancing depreciation
(B) short-term capital loss
(C) written down value
(D) short-term or long-term capital loss depending on the period for which the
block was held
(B)

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Where an electricity company charging depreciation on straight line method on

each asset separately, sells any asset for a price less than the opening W.D.V. the
balance amount shall be treated as:
(A) short-term capital loss
(B) terminal depreciation
(C) written down value
(B)
R acquired an asset for Rs.5,22,000 which includes Rs.72,000 as excise duty for
which the assessee has claimed CENVAT Credit. The actual cost of acquisition to
be included in the block of asset shall be:
(A) Rs.5,22,000
(B) Rs.4,50,000
(C) None of these two
(B)
An asset which was acquired for Rs.5,00,000 was earlier used for scientific
research. After the research was completed the machinery was brought into the
business of the assessee. The actual cost of the asset for the purpose of inclusion in
the block of asset shall be:
(A) Rs.5,00,000
(B) Rs. NIL
(C) Market value of the asset on the date it was brought into business
(B)
R had been using an asset for his business and its W.D.V. as on 1.4.2011 was
Rs.3,50,000. He sold this asset to G for Rs.5,00,000 and G leased back this asset to
R. The market value of this asset on the date of sale was Rs.4,00,000; in this case,
the actual cost of this asset to G for charging depreciation shall be:
(A) Rs.5,00,000
(B) Rs.3,50,000
(C) Rs.4,00,000
(B)
A car is imported after 1.4.2011 by R Ltd., from London to be used by its
employee. R Ltd. shall be allowed depreciation on such car at:
(A) 15 %
(B) 20 %
(C) 40 %
(D) NIL
(A)
Unabsorbed depreciation which could not be set off in the same AY can be carried
forward for:
(A) 8 years
(B) indefinitely
(C) 4 years
(B)
Unabsorbed depreciation brought forward from an earlier year of a particular
business can be set off from:
(A) the same business
(B) any head of income
(C) any business income
(D) any head of income but first from business income
(D)

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For claiming deduction for Tea Development, Coffee development or Rubber

development u/s 33AB the assessee should deposit the money with NABARD or in
the Deposit Account:
(A) before the expiry of the PY
(B) within six months from the end of the relevant PY
(C) within six months from the end of the relevant PY or before the due date of
furnishing the return of income whichever is earlier
(D) before the due date of furnishing the return of income
(C)
Deduction of Tea/Coffee/Rubber Development Account shall be allowed to:
(A) any assessee
(B) a company assessee only who is engaged in the business of growing and
manufacturing tea/coffee/rubber in India
(C) any assessee who is engaged in the business of growing and manufacturing
tea/coffee/rubber in India
(D) any assessee who is engaged in the business of manufacturing tea/
coffee/rubber in India
(C)
The maximum deduction to be allowed under Tea Development Account, Coffee
Development Account or Rubber Development Account shall be:
(A) actual amount deposited in the scheme
(B) 20 % of the profits of such business
(C) 20 % of the amount deposited in the scheme
(D) 40 % of the profits of such business
(D)
Tick the cases where the amount withdrawn from the scheme of Tea/Coffee/Rubber
Development Account shall not be taxable.
Amount withdrawn and used for the purpose specified in the scheme in the
same PY
Amount withdrawn in a PY & used for the purpose specified in the scheme in
the next PY
Closure of business
Death of an assessee
Partition of HUF
Dissolution of a firm
Liquidation of a company
(A), (D), (E) & (G)
For claiming deduction for Site Restoration Fund u/s 33ABA, the assessee should
deposit the money with State Bank of India or Site Restoration Account:
(A) before the end of the PY
(B) before the expiry of six months from the end of the PY
(C) before the expiry of six months from the end of the relevant PY year or
before the due date of return whichever is earlier
(A)
Deduction on account of Site Restoration Fund shall be allowed to:
(A) any assessee
(B) company assessee engaged in the business of prospecting for or
extraction or production of petroleum or natural gas or both
(C) any assessee engaged in the business mentioned in clause (b) above
(C)

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The maximum deduction for Site Restoration Fund under section 33ABA shall be:
(A) the amount deposited in the scheme
(B) 20 % of the profits from such business
(C) 20 % of the amount deposited in the scheme
(B)
Tick the case where the amount withdrawn from Site Restoration Account shall not
be taxable:
(A) amount withdrawn for the purpose specified in the scheme
(B) closure of business
(C) death of an assessee
(D) partition of HUF
(E) dissolution of a firm
(F) liquidation of a company
(A)
Expenditure on scientific research incurred by the assessee shall be allowed if such
research:
(A) is related to the business of the assessee
(B) may or may not relate to the business of the assessee
(C) is related to the research specified by the Government
(A)
If an assessee carries on any scientific research related to his business, he shall be
allowed deduction u/s 35 on account of:
(A) revenue expenditure
(B) capital expenditure
(C) both revenue and capital expenditure
(D) both revenue and capital expenditure excepting expenditure incurred on
acquisition of land
(D)
Certain revenue and capital expenditure on scientific research are allowed as
deduction in the PY of commencement of business even if these are incurred:
(A) 5 years immediately before the commencement of the business
(B) 3 years immediately before the commencement of the business
(C) any time prior to the commencement of the business
(B)
Tick which expenses on scientific research related to the business are allowed a
deduction in the PY of commencement of the business although incurred within 3
years immediately before the commencement of the business.
any revenue expense on scientific research
payment of salary to employees engaged in scientific research
purchase of material used in scientific research
repairs and maintenance expenses on the asset acquired for scientific research
land acquired for scientific research
building constructed for scientific research
plant and machinery acquired for scientific research
(B), (C), (F) & (G)

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Where a scientific research asset is sold without having been used for other purpose
then the sale price to the extent of the cost of the asset already allowed as deduction
in the past shall be treated as:
(A) business income
(B) short-term capital gain
(C) long-term capital gain
(D) long-term or short-term capital gain depending upon the period for which
such asset was held
(A)
Where the sale price in the above exceeds the cost of acquisition of such asset, such
excess shall be treated as:
(A) business income
(B) short-term capital gain
(C) long-term capital gain
(D) long-term or short-term capital gain depending upon the period for which
such asset was held
(D)
If the income of a business before claiming revenue expenditure on scientific
research is Rs.50,000 and the revenue expenditure incurred on scientific research
related to the business of the assessee is Rs.80,000, then Rs.30,000 shall be:
(A) business loss
(B) unabsorbed capital expenditure on scientific research
(C) none of these two
(A)
If the income of a business before claiming capital expenditure on scientific
research is Rs.50,000 and the capital expenditure incurred on scientific research
related to the business of the assessee is Rs.80,000, then Rs.30,000 shall be:
(A) business loss
(B) unabsorbed capital expenditure on scientific research
(C) none of these two
(B)
Brought forward unabsorbed capital expenditure on scientific research can be
carried forward:
(A) for any number of years
(B) for 8 years
(C) for 10 years
(A)
If any amount is donated for research, such research should be in the nature of:
(A) scientific research only
(B) social or statistical research only
(C) scientific or social or statistical research
(C)
If donation is made for scientific or social or statistical research, such research:
(A) must relate to the business of the assessee
(B) may or may not relate to the business of the assessee
(C) none of these
(B)

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Donation for scientific or social or statistical research shall be allowed as deduction

to the extent of:
(A) 50 % of the donation so made
(B) 100 % of the donation so made
(C) 125 % of the donation so made
(D) 150 % of the donation so made
(C)
If donation is made to a National Laboratory or a University or IIT with the specific
direction that scientific research should be for an approved programme, the amount
of deduction shall be:
(A) 50 % of the donation so made
(B) 100 % of the donation so made
(C) 125 % of the donation so made
(D) 150 % of the donation so made
(C)
(i) Weighted deduction of 150 % for in-house research in some cases is allowed to:
(A) any assessee
(B) company assessee
(C) a scientific research association
(B)
(ii) Weighted deduction of 150 % for in-house research in some cases shall be
allowed for the purchase of:
(A) any assets
(B) any assets other than land
(C) any assets other than land and buildings
(C)
Expenditure incurred on acquisition of patents and copyrights after 31.3.1998 are
subject to:
(A) deduction in 14 equal instalments
(B) deduction in 10 equal instalments
(C) depreciation u/s 32
(C)
Lumpsum payment for acquisition of technical know-how after 31.3.1998 shall be
subject to:
(A) deduction in 6 equal instalments
(B) deduction in 3 equal instalments
(C) depreciation u/s 32
(C)
Expenditure incurred for obtaining licence to operate telecommunication services
shall be allowed in:
(A) 10 equal instalments
(B) 14 equal instalments
(C) in equal instalments over the period for which the licence remains in force
(C)

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R Ltd., paid Rs.1,10,00,000 during the previous year 2010-11 for acquiring the
telecommunication rights which were effective for 11 years. It commenced the
business of operating the telecommunication service with effect from PY 2011-12.
R Ltd., shall be entitled to a deduction of:
(A) Rs.10 lakhs w.e.f. PY 2010-11
(B) Rs.11 lakhs w.e.f. PY 2011-12
(C) none of these two
(B)
R had acquired a licence to operate telecommunication service in the PY 2009-10
for Rs.2 crores and its life was 10 years. During the PY 2010-11 it had sold the
licence for Rs.1,50,00,000. It shall be allowed a deduction under section 35ABB
during the PY 2011-12 to the extent of:
(A) Rs.20 lakh
(B)
Rs.10 lakh
(C)
None of the above two
(B)
(i) R had acquired a license to operate telecommunication service in the PY
2007-08 for Rs.2 crores and its life was 10 years. During the PY 2011-12 it has
sold the licence for Rs.1.90 crores, the sale price in excess of its W.D.V. shall be
treated as:
(A) Business income taxable under section 35ABB
(B) Long-term capital gain
(C) Not taxable
(A)
(ii) In the above case, the business income taxable shall be:
(A) Rs.40 Lakhs
(B) Rs.30 Lakhs
(C) Rs.37,19,875
(B)
(iii) If the above license is sold for Rs.2.20 crores instead of Rs.1.90 crores, then:
(A) Rs.60 lakhs will be taxable as business income
(B) Rs.40 lakhs shall be taxable as business income and balance 20 lakhs as
long-term capital gain
(C) Rs.40 lakhs shall be taxable as business income and balance 20 lakhs as
short-term capital gain
(D) Rs. 40 lakhs shall be taxable as business income and excess/deficit of
Rs.2.20 crore over the indexed cost of Rs.2 crores shall be treated as longterm capital gain/loss
(D)
R, had acquired a license to operate telecommunication service in the PY 2007-08
for Rs.2 crores and it has a life of 20 years. Part of the license is sold in the PY
2011-12 for Rs.1 crore. R shall be allowed deduction to the extent of:
(A) Rs.3.75 lakhs per year for the remaining 16 years
(B) Entire Rs.60 lakh in the PY 2011-12
(C) None of the above
(A)

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For claiming deduction under section 35AC, the payment for eligible project and
scheme should be made to:
(A) a public sector company
(B) a local authority
(C) to an institution or an association approved by the National Committee
(D) to any of the three mentioned in (A), (B) and (C)
(D)
A company assessee shall be allowed deduction under section 35AC on account of
eligible project and scheme if:
(A) the payment is made to the specified institution
(B) if it incurs expenditure itself
(C) both for payment made to specified institution and for direct expenditure
incurred by itself
(C)
Preliminary expenses incurred are allowed deduction in:
(A) 10 equal instalments
(B) 5 equal instalments
(C) full
(B)
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
(B)
In case of company assessee, the total preliminary expenses incurred are allowed as
deduction to extent of 5 % of:
the cost of the project
the aggregate capital employed
the cost of project or the capital employed
(C)
Expenditure incurred on prospecting, etc., of minerals shall be allowed as
deduction in:
(A) 5 equal instalments
(B) 10 equal instalments
(C) full
(B)
In case the assessee follows merchantile system of accounting, bonus or
commission to the employee are allowed as deduction on:
(A) due basis
(B) payment basis
(C) due basis but subject to section 43B
(C)
Interest accrued before the commencement of the production is to be:
(A) capitalised
(B) treated as revenue expenditure
(C) either capitalized or treated as revenue expenditure
(A)

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Interest on money borrowed for acquiring an asset by an existing concern for

expansion of the existing business, pertaining to a period prior to the date on which
the asset is put to use is to be:
(A) capitalised
(B) treated as revenue expenditure
(C) either capitalised or treated as revenue expenditure at the option of the
assessee till the asset is put to use
(A)
Interest on money borrowed for the purpose of acquiring a capital asset pertaining
to the period after the asset is put to use is to be:
(A) capitalised
(B) treated as revenue expenditure
(C) either capitalized or treated as revenue expenditure
(B)
Expenditure incurred on purchase of animals to be used by the assessee for the
purpose of carrying on his business and profession is subject to:
(A) depreciation
(B) deduction in the previous year in which animal dies or becomes ermanently
useless
(C) nil deduction
(B)
Expenditure incurred on family planning amongst the employees is allowed to:
(A) any assessee
(B) a company assessee
(C) an assessee which is a company or co-operative society
(B)
Capital expenditure incurred on family planning amongst employees of the
company assessee is allowed as deduction:
(A) in full
(B) in 5 equal instalments
(C) in 10 equal instalments
(B)
(i) The business income of a company assessee before claiming Rs.60,000 being
1/5th of capital expenditure on family planning is Rs.40,000. The balance
Rs.20,000 shall be treated as:
(A) business loss
(B) unabsorbed expenditure on family planning
(C) none of these two
(B)
(ii) The business income of a company before claiming Rs.60,000 being revenue
expenditure on family planning is Rs.40,000. The balance of Rs.20,000 shall
be treated as:
(A) business loss
(B) unabsorbed expenditure on family planning
(C) none of these two
(B)

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(iii) 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
(A)
Deduction u/s 37(1) shall be allowed of those expenditure which are of:
(A) revenue nature
(B) capital nature
(C) both revenue and capital nature
(A)
Interest on capital of or loan from partner of a firm is allowed as deduction to the
firm to the extent of:
(A) 18 % p.a.
(B) 12 % p.a. even if it is not mentioned in partnership deed
(C) 12 % p.a. or at the rate mentioned in partnership deed whichever is less
(C)
Deduction u/s 40(b) shall be allowed on account of salary/remuneration paid to:
(A) any partner
(B) major partner only
(C) working partner only
(C)
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
(B)
A firms business income is nil/negative. It shall still be allowed as deduction on
account of remuneration to working partner to the maximum extent of:
(A) actual remuneration paid as specified in partnership deed
(B) Rs.50,000
(C) NIL
(B)
From the following, tick the expenses which are subject to provisions of section
43B:
Sales Tax
Income-tax
Excise duty
Municipal Tax
Custom duty
Wealth Tax
Bonus or Commission to employees
Salary to employees
Interest on term loan from financial institutions
Interest on term loan from any scheduled bank
Interest on advance or loan from any scheduled bank
Contribution by the employer to the provident fund or superannuation fund

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Contribution by the employer to gratuity fund and any other welfare fund of
the employee
Interest on term loans from finance companies
(A), (C), (D), (G), (I), (K), (L) & (M)
(i) A person carrying on specified profession is:
(A) required to maintain books of account
(B) required to maintain prescribed books of account
(C) not required to maintain books of account
(A)
(ii) A person carrying on specified profession is required to maintain the prescribed
books of account of the current PY if the gross receipts of such profession in
all the three preceding PYs exceed:
(A) Rs.40,00,000
(B) Rs.10,00,000
(C) Rs.1,50,000
(D) Rs.60,000
(C)
(iii) A person carrying on specified profession is required to maintain:
(A) prescribed books of account in all cases
(B) prescribed books of account if the gross receipts of all the three preceding
PYs exceeds Rs.1,50,000 otherwise no books of account are to be
maintained
(C) prescribed books of account if the gross receipts of all the preceding PYs
exceeds Rs.1,50,000 otherwise such books of account as will enable the
Assessing Officer to compute his business income
(C)
If a person sets up a specified profession during the current PY, he is:
(A) required to maintain prescribed books of account
(B) not required to maintain prescribed books of account
(C) required to maintain prescribed books of account if the gross receipts of
such profession is likely to exceed Rs.1,50,000 otherwise such books of
account which will enable the Assessing Officer to compute his total
income
(C)
A person who has been carrying on non-specified profession is:
(A) not required to maintain any books of account
(B) required to maintain books of account of the current PY if the gross
receipts of such profession exceeds Rs.1,50,000
(C) required to maintain books of account of the current PY if the gross receipts
of such profession of any of the preceding PY exceeded Rs.10 lakh
(D) required to maintain books of account of the current PY if in any of the
preceding 3 PYs his total income exceeded Rs.1,20,000 or gross receipts
exceeded Rs.10 lakh
(D)
(i) A person, who has been carrying on business is required to maintain books of
account of the current PY if:
(A) his total income of any 3 preceding PYs exceeded 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
(C)

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(ii) 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
(C)
For persons carrying on business or non-specified profession, the books of account
to be maintained have been:
(A) prescribed
(B) not prescribed
(C) none of these
(B)
For persons carrying on profession, tax audit is compulsory, if the gross receipts of
the PY exceeds:
(A) Rs.50 lakh
(B) Rs.40 lakh
(C) Rs.10 lakh
(C)
Tax audit is compulsory in a case a person is carrying on business whose gross
turnover/sales/receipts, as the case may be exceeds:
(A) Rs.10 lakh
(B) Rs.40 lakh
(C) Rs.1 crore
(B)
In case an assessee is engaged in the business of civil construction, presumptive
income scheme is applicable if the gross receipts paid or payable to him in the PY
does not exceed:
(A) Rs.10 lakh
(B) Rs.40 lakh
(C) Rs.50 lakh
(B)
In the aforesaid case, the income shall be presumed to be:
(A) 5 % of gross receipts
(B) 8 % of gross receipts
(C) 10 % of gross receipts
(B)
If an assessee is engaged in the business of civil construction and he had opted for
presumptive income scheme under section 44AD, the assessee shall:
(A) be entitled to deduction u/s 30 to 37
(B) not be entitled to any deduction u/s 30 to 37
(C) not be entitled to deduction u/s 30 to 37 except on account of interest on
capital and loan from a partner and remuneration to working partner as per
section 40(b)
(C)

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In case an assessee is engaged in the business of plying hiring or lease goods

carriage, presumptive income scheme under section 44AE is applicable if the
assessee is the owner of maximum of:
(A) 8 goods carriages
(B) 10 goods carriages
(C) 12 goods carriages
(B)
As per presumptive income scheme under section 44AE, the presumed income
shall be:
(A) Rs.3,000 p.m. per goods carriage
(B) Rs.3,500 p.m. per heavy goods vehicle and Rs.3,150 p.m. 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
(B)
In case an assessee is engaged in the business of retail trade, presumptive income
scheme is applicable if the total turnover of such retail trade of goods does not
exceed:
(A) Rs.10 lakh
(B) Rs.30 lakh
(C) Rs.40 lakh
(D) Rs.50 lakh
(C)
In the above case, the income to be presumed under section 44AF shall be:
(A) 8 % of total turnover
(B) 5 % of total turnover
(C) 10 % of total turnover
(B)
If the assessee opts for presumptive income scheme under section 44AD or 44AF
or 44AE, then the assessee shall:
(A) not be entitled to any deduction u/ss 30 to 37
(B) be entitled to deduction under sections 30 to 37
(C) not be entitled to deduction u/ss 30 to 37 except for interest or capital or
loan from partner and remuneration to a working partner subject to
conditions laid down under section 40(b)
(C)
In case of non-resident, who is carrying on shipping business, his Indian income
shall be presumed to be:
(A) 5 % of certain amount received
(B) 7 % of certain amount received
(C) 10 % of certain amount received
(B)

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99.

The income of a non-resident from shipping business under section 44B shall be
presumed to be 7 % of:
(A) the amount paid or payable whether in India or out of India to the assessee
on account of carriage of passengers, livestock, mail or goods shipped at
any port in India
(B) the amount received or deemed to be received in India on account of
carriage of passengers, livestock, mail or goods shipped at any port outside
India
(C) both the amount mentioned in (A) & (B) above
(C)
In case of non-resident, who is engaged in the business of operation of aircraft, his
income shall be presumed to be:
(A) 7 % of certain amount
(B) 5 % of certain amount
(C) 10 % of certain amount
(B)
The expenditure incurred on payment under voluntary retirement scheme shall be
allowed as deduction in:
(A) the previous year it is paid
(B) equal instalments in 5 assessment years starting from the AY in which it is
paid
(C) not allowed at all
(B)
Which of the following taxes are allowed as deduction while computing the
business income
(A) Wealth Tax
(B) Income Tax
(C) Sales Tax
(D) Securities Transaction Tax
(C&D)
Which of following expenditure for which payment is made to a resident are not
allowed as deduction unless the tax is deducted at source and deposited before the
due date of furnishing the return under Section 139(1)
(A) Salary to employees
(B) Interest
(C) Commission or brokerage
(D) Payment of contractors
(E) Payment to sub-contractors
(F) Rent
(G) Fee for professional services
(H) Fee for technical services
(I) Royalty
(B, C, D, E, F,G,H, I)

100. 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
(B)
101. Where the above payment is not made by account payee cheque or account payee
draft:
(A) 20% of such payment shall be disallowed
(B) 100% of such payment shall be disallowed
(C) 100% of such payment shall be disallowed unless such payment falls under
the exceptions prescribed.
(C)
102. Where business re-organisation of a co-operative bank has taken place during the
financial year then:
(A) the deduction under Section 32, Section 35D and section 35DD shall be
allowed both to the predecessor as well as successor co-operative bank
(B) the deduction under Section 32, Section 35D and Section 35DD shall be
allowed proportionately to the predecessor co-operative bank and successor
co-operative bank
(C) the deduction under section 32, section 35D and section 35DD shall be
allowed proportionately to the predecessor bank from 1st day of the relevant
financial year and till the date prior to the date of reorganization and to the
successor co-operative bank from the date of business re-organization to the
last day of the financial year
(C)
103. 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
(C)
104. Write True or False :
(A) Sum paid by the employer by way of contribution towards a pension scheme
referred to in section 80CCD shall be allowed as deduction to the extent it does not
exceed 10% of salary of the employee in previous year.
(T)
(B) Depreciation is allowed in case of tangible assets only (F)
(C) R acquired an asset for Rs 6,61,800 which includes Rs 61,800 as excise duty
for which the assessee has claimed CENVAT credit. The actual cost of acquisition
to be included in the block of asset shall be Rs 6,61,800 (F)
(D) Deduction of Tea Development Account shall be allowed to a company
assessee only which is engaged in the business of growing and manufacturing tea in
India.
(E) Preliminary expenditure are allowed deduction in 10 equal instalments (F)