RAHI’s PRACTICE SET 2

Number of questions: 100 Time Allowed: 120 minutes

Important Notice All questions carry equal mark. However, for every wrong answer marked .25 mark will be
deducted.
Minimum mark required to be qualified is 50
1. Persons entering into international transaction or specified domestic transaction has to submit a report
from Chartered Accountant on or before the due date for furnishing return of income under section 139(1)
a. 30th November every year in such case.
b. Penalty for failure to furnish report from Chartered Accountant is ₹ 5 Lakh u/s 271BA
c. Both A&B
d. None of the given
2. Advance Pricing Agreement shall be valid for such period not exceeding
a. 10 consecutive PYs as specified in the agreement
b. 5 consecutive PYs as specified in the agreement
c. 15 consecutive PYs as specified in the agreement
d. 7 consecutive PYs as specified in the agreement
3. Transfer Pricing Officer means
a. A Chartered Accountant firm authorised by the CBDT to act as transfer pricing officer.
b. A valuation firm authorised by the CBDT to act as transfer pricing officer.
c. A Joint Commissioner/Dy. Commissioner/Asst. Commissioner authorised by the CBDT to act as transfer
pricing officer.
d. All of the above
4. The arm's length price in relation to international transaction or specified domestic transaction shall be
determined by the methods
i. Comparable uncontrolled price method [CUPM]
ii. Resale price method [RPM]
iii. Cost plus method [CPM]
iv. Profit split method [PSM]
v. Transactional net margin method [TNMM]

a. i, ii, iii and iv b. ii, iii, iv and v

c. i, iii, iv and v d. All of the above
5. In determination of a Specified Domestic Transaction the amount involved should
a. exceed Rs. 100 crore b. not exceed Rs. 100 crore
c. exceed Rs. 20 crore b. not exceed Rs. 20 crore
6. Chargeability of income from manufacturing of rubber
a. 65% b. 35%
c. 40% d. 60%
7. University and Temple fall in the category of person
a. Artificial Juridical Person b. Association of Person
c. Body of Individual d. Local Authority
8. Income tax is charged on
a. Gross Total Income b. Net Total Income
c. Total Income d. Total Income plus deduction allowed.
9. Income accrues or arises or deemed to accrue or arises outside India , but first receipt outside India shall be
taxable in the hand of
a. Resident Ordinarily Resident only
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 b. Resident Ordinarily Resident and Resident Not Ordinarily Resident only
c. Non-resident only
d. All of the above
10. Pick the incorrect one
a. Chapter VII- Incomes forming part of total income on which no income-tax is payable
b. Chapter VIII- Rebates and Reliefs
c. Chapter IX-Double Taxation Relief
d. Chapter X- Additional income-tax on undistributed profits
11. Rates for computation of net agricultural income are provided in the Finance Act under
a. Part II of First Schedule b. Part IV of First Schedule
c. Part II of Second Schedule d. Part IV of Second Schedule
12. A firm, LLPs, AOP, BOI, artificial juridical person referred to in section 2(31)(vii), cooperative society and local
authority are required to file the income tax return in
a. ITR 4 b. ITR 7
c. ITR 5 d. ITR 6
13. The residential status of HUF depends upon the
a. Control and management of affairs b. Residential Status of Karta
c. Both A&B d. Neither A nor B
14. Every order granting registration or refusing registration of a Trust/Institution shall be passed
a. before expiry of 6 months from the date on which application was received
b. before expiry of 6 months from the end of month in which application was received
c. before expiry of 6 months from the end of month of the FY in which application was received
d. before expiry of 6 months from the date on which application was received or date of submission of
income tax return falls due whichever is earlier
15. Exemption of Income of Political Party
i. Income from house property ii. Income from other sources including casual income
iii. Capital gains iv. Voluntary contributions received from any person

a. i, ii and iii b. ii, iii and iv

c. i, iii and iv d. All of the above
16. Chargeability of Income under the head profit & gains of business or profession u/s
a. 29 b. 27
c. 26 d. 28
17. Option for claiming depreciation either on WDV or SLM has to be exercised
a. before furnishing Return of Income for the Assessment Year in which undertaking starts to generate.
b. before close of the Previous Year in which undertaking starts to generate.
c. before close of the Assessment Year in which income of undertaking is assessed for the first time
d. before expiry of six month from the end of the month in which undertaking starts to generate.
18. Pick the incorrect one regarding Specific additional depreciation
a. available to all assessees engaged in the business of manufacture or production of any article or thing or
in business of Generation, Transmission or Distribution of power for acquiring and installing new machinery
and plant including ship and aircraft in PY.
b. Rate of additional depreciation is 20%. If acquired and put to use for less than 180 days, then half of the
prescribed rate i.e. 10% & balance 10% next year will be allowed.
c. Specific additional depreciation @ 35% is available to the Andhra Pradesh, Bihar, Telangana and West
Bengal
d. None of the above
19. Investment Allowance for New Plant or Machinery under Section 32AC
i. Company engaged in the business of manufacture or production of any article or thing
ii. The scheme is Applicable for AY 15-16 to 17-18
iii. New Plant & Machinery exceeding ₹ 25 crore acquired and installed between 01.04.2014 and 31.03.2017
iv. Deduction @ 15% allowed in the year of installation.

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

 a. ii, iii and iv b. i, ii and iv
c. i, iii and iv d. All of the above
20. Pick the correct one regarding treatment of in-house Scientific Research for Pre commencement period
a. The pre-commencement period admissible is 5 years prior to date of commencement of Business
b. Salary (excluding perquisites) of Research Staff & Purchase of Material for scientific Research only shall be
admissible for deduction
c. All Capital expenditure shall be admissible for deduction under the scheme.
d. All of the above
21. Quantum of deduction allowed for any expenditure on agricultural extension project notified by CBDT is
a. 100% of such expenditure b. 200% of such expenditure
c. 125% of such expenditure b. 150% of such expenditure
23. Allowance for Provision for bad and doubtful debts made by Foreign Banks/Public financial institution/Sate
financial corporation/State industrial investment corporation/NBFC is
a. Up-to 5% of Gross Total Income computed before making this deduction
b. Up-to 5% of Gross Total Income computed after making this deduction
c. Up-to 7.5% of Gross Total Income computed before making this deduction
d. Up-to 7.5% of Gross Total Income computed after making this deduction
24. Maintenance of books of accounts for non-Specified Profession under Section 44 (AA) is mandatory, if
a. Gross Receipts exceeds 10 lakh or P/G/B/P exceeds ₹ 1.5 lakh in all of 3 years preceding PY
b. For individual/HUF the amount of gross receipt 25 lakh and PGBP 2.5 lakh has been introduced by Finance
Act, 2017
c. Both A&B
d. None of the given
25. Where assessee declares profit for any PY u/s 44AD & he declares profit for any of 5 PY succeeding such P/Y
not in accordance with sec 44AD, he shall not be eligible to claim the benefit of this section for
a. 3 subsequent PY from PY in which the profit has not been declared.
b. 5 subsequent PY from PY in which the profit has not been declared.
c. 7 subsequent PY from PY in which the profit has not been declared.
d. 10 subsequent PY from PY in which the profit has not been declared.
26. Income from which of the following falls under other sources
i. Rental Income from vacant land
ii. Agricultural Income outside India
iii. income from undisclosed sources
iv. Refund by seller for failing to honour the deal on property
v. Director fees/Commission

a. i, iii, iv and v b. i, ii, iii and v

c. i, ii, iii and iv d. All of the above
27. A patent developed & registered in India means
a. A minimum 50% of expenditure incurred in India by eligible assessee for any invention in respect of which
patent is granted under Patents Act, 1970
b. A minimum 60% of expenditure incurred in India by eligible assessee for any invention in respect of which
patent is granted under Patents Act, 1970
c. A minimum 75% of expenditure incurred in India by eligible assessee for any invention in respect of which
patent is granted under Patents Act, 1970
d. A minimum 90% of expenditure incurred in India by eligible assessee for any invention in respect of which
patent is granted under Patents Act, 1970
28. A company is said to be a company in which the public are substantially interested
a. if the Government holds its share to the extent of at-least 40%
b. if the Government holds its share to the extent of at-least 51%
c. if the Government or RBI holds its share to the extent of at-least 51%
d. if the Government or RBI holds its share to the extent of at-least 40%
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
29. Where Stamp Duty Value (SDV) of gifted Immovable property without consideration exceeds ₹ 50000/-, the
amount chargeable to income tax shall be
a. amount exceeding ₹ 50000
b. the entire SDV
c. either A or B as determined by the Assessing Officer
d. the SDV minus ₹ 50000
30. Income arising from revocable transfer of assets shall be charged in the income of
a. Transferor income
b. Transferee income
c. both Transferor and Transferee income proportionately
d. Transferor or Transferee income whose income is higher
31. Power of the Central Government to notify ICDS
a. u/s 147 (2) b. u/s 145 (5)
c. u/s 145 (2) d. u/s 147 (5)
32. ICDS shall be applicable
a. only for computation of ‘Profits and Gains from Business & Profession’ (‘PGBP’) in case of taxpayers
following mercantile system of accounting
b. only for computation of ‘Income from other sources’ in case of taxpayers following mercantile system of
accounting
c. only for computation of ‘Profits and Gains from Business & Profession’ (‘PGBP’) and ‘Income from other
sources’ in case of taxpayers following mercantile system of accounting
d. only for computation of ‘Profits and Gains from Business & Profession’ (‘PGBP’), “Capital Gain” and
‘Income from other sources’ in case of taxpayers following mercantile system of accounting
33. Where the duration of the contracts is more than 90 days, the ICDS permits
a. only Proportionate Completion Method (PCM)
b. only Cost Per thousand Method (CPM)
c. Both A&B
d. Either A or B as selected by the assessee
34. In term of ICDS II, valuation of inventory shall be done at
a. cost price b. net realizable value
c. cost price or net realizable value whichever is higher
d. cost price or net realizable value whichever is lower
35. Para 20 of ICDS III says during the early stages of a contract, where the outcome of the contract cannot be
estimated reliably contract revenue is recognized only to the extent of costs incurred. The early stage of a contract
shall not extend beyond
a. 15% the stage of completion. b. 25% the stage of completion.
c. 33% the stage of completion d. 51% the stage of completion
36. Capital Asset does not include
i. Any stock-in-trade other than securities
ii. Items of Personal Effects including wearing apparel & furniture
iii. Agricultural Land in India
iv. Gold Deposit Bonds/Certificates issued under Gold deposit scheme,1999 or Gold Monetisation
scheme,2015

a. i, ii and iv b. ii, iii and iv

c. i, iii and iv d. All of the above
37. Jewellery & Debt-oriented Fund
a. shall be treated as short-term asset if held for less than 12 months and long-term capital if held for more
than 12 months
b. shall be treated as short-term asset if held for less than 24 months and long-term capital if held for more
than 24 months

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

 c. shall be treated as short-term asset if held for less than 36 months and long-term capital if held for more
than 36 months
d. shall always be treated long-term capital irrespective of period of holding.
38. When a Capital Asset, converted into Stock in Trade, is sold later and the selling price is higher than the
FMV, the difference shall be
a. Taxable under head Capital Gain
b. Taxable under head PGBP
c. Taxable under head Income from Other Sources
d. Any of the above
39. Full value of consideration in case a person transfers a Capital Asset to a firm, AOP or BOI in which he is/or
becomes partner or member by way of Capital Contribution or Otherwise shall be
a. Fair market price of asset
b. present market cost of asset
c. present cost of asset minus admissible depreciation had it been used in the business in normal course
d. Amount recorded in books of account of Firm/AOP/BOI.
40. Under Section 115 A any assessee transfers STCA being Equity shares or Units in Equity oriented Mutual
Fund and such transaction is chargeable to security transaction Tax, then such STCG shall be chargeable @
a. 10% b. 15%
c. 20% d. Applicable slab rate
41. Pick the correct one
a. to claim the benefit of exemption under Section 54, deposit into Capital Gain Scheme Account shall be
made on or before due date of filing the return of inome
b. New assets should have been acquired either 1 year prior to sale of old assets or shall be acquired within
2 year or construction within 3 years from date of sale of old assets
c. On sale of new assets acquired within 3 years shall be treated as Short term capital gain
d. All of the above
42. Extent to exemption to capital gain arising out of Long-term Capital Assets under Section 54EC shall be
a. Lower of ₹ 50 lakh or Amount invested or actual capital gain
b. higher of ₹ 50 lakh or Amount invested or actual capital gain
c. Lower of ₹ 1crore or Amount invested or actual capital gain
d. Higher of ₹ 1 crore or Amount invested or actual capital gain
43. Under Section 54GB purchased shares of eligible company i.e.
a. new Indian company Pvt limited company established in year of claiming and in such company
Individual/HUF should hold 67% share/voting right
b. Such shares shall not be sold before 8 years of acquisition
c. Both A&B
d. None of the given
44. Pick the correct one
a. Long term capital gains (LTCG) arising from transfer of long term capital assets, being equity shares of a
company or an unit of equity oriented fund or an unit of business trusts is exempt by virtue of section 10(38)
if sale and acquisition transactions carried out on a recognized stock exchange and are liable to securities
transaction tax (STT).
b. A new section 112A proposed to be inserted with effect from A.Y. 2019-20 for taxing LTCG in excess of ₹ 1
lakh @10%
c. Both A&B
d. None of the given
45. No adjustments shall be made in a case where the variation between stamp duty value and the sale
consideration is not more than
a. 10% of the sale consideration b. 5% of the sale consideration
c. 2% of the sale consideration d. 12% of the sale consideration
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
46. Inter-head set-off is provisioned
a. u/s 70 b. u/s 70A
c. u/s 71 d. u/s 71A
47. a. For carry forward of losses u/s. 72, 73, 74, 74A, assessee shall have to file Return of Income by time
allowed u/s.139 (1)
b. Even when an assessee fails to submit his/her Return of Income (ROI) u/s 139(1) Carry forward of loss
pertaining to the Head is permitted Loss from House Property.
c. Both A&B
d. None of the given
48. Loss under head Business/Profession can be set off against any Income of other head except
a. salary b. salary and casual income
c. salary and income from other sources d. House property and casual income
49. Which can be carried forward for any number of assessment years
a. Unabsorbed depreciation
b. Unabsorbed capital expenditure on scientific research
c. unabsorbed capital expenditure on family planning
d. All of the above
50. Inter head set off of Short or Long-term Capital Loss shall be done against the income of
a. All heads except casual Income b. All heads except casual income and salary
c. All heads except PGBP and casual income d. None of the above
51. As per Explanation 4 to section 115JB as amended by Finance Act, 2016 it is clarified that the MAT provisions
shall not be applicable and shall be deemed never to have been applicable to an assessee, being a foreign company
fulfilling certain condition
a. with retrospective effect from 1st April 2001 b. with retrospective effect from 1st April 2010
c. with retrospective effect from 1st April 2015 d. with effect from 1st April 2021
52. Tax on income from transfer of carbon credit where the total income of an assessee includes any income by
way of transfer of carbon credits, the income-tax payable shall be the aggregate of
a. the amount of income-tax calculated on the income by way of transfer of carbon credits, at the rate of
ten per cent (10%) and
b. The amount of income-tax with which the assessee would have been chargeable had his total income
been reduced by the amount of income referred to in clause (a)
c. Both A&B
d. None of the given
53. Carbon Credit in respect of one unit shall mean reduction of
a. one Quintal of carbon dioxide emissions or emissions of its equivalent gases which is validated by the
United Nations Framework on Climate Change and which can be traded in market at its prevailing market
price
b. one Ton of carbon dioxide emissions or emissions of its equivalent gases which is validated by the United
Nations Framework on Climate Change and which can be traded in market at its prevailing market price
c. one Metric Ton of carbon dioxide emissions or emissions of its equivalent gases which is validated by the
United Nations Framework on Climate Change and which can be traded in market at its prevailing market
price
d. one kg of carbon dioxide emissions or emissions of its equivalent gases which is validated by the United
Nations Framework on Climate Change and which can be traded in market at its prevailing market price
54. The such transitional amount i.e. amount of adjustments arising on account of transition to Indian AS from
existing Indian GAAP that will not be reclassified should
a. included in computation of book profit equally over a period of 5 years starting from the year of first-time
adoption of Indian AS, subject to certain exclusions.
b. included in computation of book profit equally over a period of 6 years starting from the year of first-time
adoption of Indian AS, subject to certain exclusions.
c. excluded in computation of book profit equally over a period of 5 years starting from the year of first-time
adoption of Indian AS, subject to certain exclusions.

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

 d. excluded in computation of book profit equally over a period of 6 years starting from the year of first-time
adoption of Indian AS, subject to certain exclusions.
55. Book profit for the purpose of Section 115JB means
a. means Gross profit as shown in the statement of profit and loss prepared in accordance with Schedule III
to the Companies Act, 2013
b. means Net profit as shown in the statement of profit and loss prepared in accordance with Schedule III to
the Companies Act, 2013 as increased and decreased by certain items prescribed in this regard
c. means Operating profit as shown in the statement of profit and loss prepared in accordance with
Schedule III to the Companies Act, 2013 as increased and decreased by certain items prescribed in this
regard
d. means Working Capital as shown in the statement of profit and loss prepared in accordance with
Schedule III to the Companies Act, 2013 as increased and decreased by certain items prescribed in this
regard
55. Advance Tax payable by 15th March is
a. corporate 60% and Non-Corporate 75% b. corporate 75% and Non-Corporate 60%
c. corporate 100% and Non-Corporate 75% d. corporate 100% and Non-Corporate 100%
56. ITR form prescribed for presumptive income from business or profession
a. ITR 3 b. ITR 5
c. ITR 4 d. ITR 6
57. Revised return of income under Section 139 (5) shall be submitted within
a. one year from the end of AY
b. Any time before close of relevant AY or before completion of assessment whichever is earlier
c. Any time before close of relevant AY or six month after completion of assessment whichever is later
d. eighteen months year from the end of AY
58. With regards to permanent account number, Finance Act, 2018 brought amendments
a. An entity which enters into a financial transaction of an amount aggregating to five lakh rupees
(₹ 500000) or more in a financial year shall have to apply for PAN
b. The entity includes all persons whether residents or non-residents
c. The managing director, director, partner, trustee, author, founder, karta, chief executive officer, principal
officer or office bearer or any person competent to act on behalf of such entities would also apply to the
Assessing Officer for allotment of PAN.
d. All of the above.
59. A person shall not be proceeded against under the section 276CC for failure to furnish return if the tax
payable by him on the total income determined on regular assessment as reduced by the advance tax, if
any, paid and any tax deducted at source, does not exceed
a. ₹ 25000 b. ₹ 15000
c. ₹ 10000 d. ₹ 3000.
60. Pick the correct one
a. Finance Act 2018 re-introduced Standard deduction of ₹ 40000 has been provided under Section 16 (2)
b. Standard deduction was earlier omitted by Finance Act 2006
c. Both A&B
d. None of the given
61. Capital receipt are shown on
a. Credit side of Income Statement b. Debit side of Income Statement
c. Assets side of Balance Sheet d. Liability side of Balance Sheet
62. Political parties are required to maintain the details of payee donating amount in excess of
a. Rs. 2000 b. Rs. 10000
c. Rs. 20000 d. Rs. 50000
63. Electoral Trust are exempted from Income Tax provided
a. distribution of at-least 95% of donations received during the PY to any political party registered under
Representation of People Act, 1951
b. distribution of at-least 95% of donations received during the PY plus surplus brought forward to any
political party registered under Representation of People Act, 1951

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)

 c. distribution of at-least 90% of donations received during the PY to any political party registered under
Representation of People Act, 1951
b. distribution of at-least 90% of donations received during the PY plus surplus brought forward to any
political party registered under Representation of People Act, 1951
64. To claim exemption of its income u/s 11 or 12 shall make an application for registration of the trust in the
prescribed form & manner to CIT
a. An application for registration in Form 10A
b. Application shall be made before the expiry of 1 year from the end of the month of creation of trust or
establishment of institution whichever is later
c. Both A&B
d. None of the given
65. Specified Persons with regard to Trust/Institution defined
a. Person contributed greater than 1,00,000/- during P/Y
b. Person contributed greater than 50,000/- during P/Y
c. Person contributed greater than 25,000/- during P/Y
d. Person contributed greater than 75,000/- during P/Y
66. Any gain or loss arising on account of effects of changes in foreign exchange rates in respect of specified
foreign currency transactions shall be treated as income or loss under Section
a. Section 43A b. Section 43AA
b. Section 43AB d. Section 43CB
67. Under Section 80JJA additional deduction in addition to normal deduction of 100% in respect of
emoluments paid to eligible new employees allowed under the scheme would be
a. 25% b. 50%
c. 30% d. 40%
68. For the purpose of Section 44AE, heavy goods vehicle means any goods carriage, the gross vehicle weight of
which exceeds
a. 10000 kilograms b. 15000 kilograms
c. 20000 kilograms d. 12000 kilograms
69. Any compensation received or receivable in connection with the termination or modification of the terms of
any contract relating to its business shall
a. be treated as business income when such receipt is of revenue nature
b. be treated as business income when such receipt is of capital nature
c. be treated as business income whether such receipt is of revenue or capital nature
d. not be treated as business income whether such receipt is of revenue or capital nature rather be treated
as income from other sources.
70. Section 80P provides deduction in respect of profit of cooperative society which provide assistance to its
members engaged in primary agricultural activities to the extent of
a. 50% b. 75%
c. 100% d. 80%
71. Residential Building means a building in which
a. At-least 3/4th of built-up area is used for residential purpose
b. At-least 2/3rd of built-up area is used for residential purpose
c. At-least 4/5th of built-up area is used for residential purpose
d. At-least 1/2nd of built-up area is used for residential purpose
72. Gain or loss arising out of sale of depreciable assets will be treated as
a. Short-term gain or loss as the case may be irrespective of the period for which the assets is held by the
assessee.
b. Long-term gain or loss as the case may be irrespective of the period for which the assets is held by the
assessee.
c. Long-term or short-term gain or loss depending upon the period for which the assets is held by the
assessee.
d. Business gain or loss and not capital gain or loss.
73. Pick the correct one

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 a. Interest paid or payable for acquiring an asset will not be added to actual cost after asset first put to use.
b. Actual cost of an asset acquired on which Excise, Custom Duty is repayable will be reduced by Excise,
Custom Duty repayable
c. Actual cost of capital asset on which deduction has been allowed u/s 35AD shall be NIL
d. All of the above
74. If brought forward losses are also there in a PY along with B/F unabsorbed depreciation, then priority of set
off shall be
a. 1st setoff current year depreciation>2nd setoff brought forward losses>Last setoff unabsorbed
depreciation
b. 1st setoff brought forward losses >2nd setoff unabsorbed depreciation >Last setoff current year
depreciation
c. 1st setoff unabsorbed depreciation >2nd setoff current year depreciation >Last setoff brought forward
losses
d. 1st setoff current year depreciation>2nd setoff unabsorbed depreciation >Last setoff brought forward
losses
75. Allowance for Special reserve created and maintained by a specified entity i.e. Financial Corporation,
Banking Company, Co-operative bank and Housing finance company
a. Highest of 20% of profits under head "PGBP" before making this deduction or Profit transferred to special
reserve account or 2 x {[Paid up share capital + General reserves as on last day of P/Y] – [Balance of special
reserve A/c on 1st day of PY] }
b. Highest of 40% of profits under head "PGBP" before making this deduction or Profit transferred to special
reserve account or 2 x {[Paid up share capital + General reserves as on last day of P/Y] – [Balance of special
reserve A/c on 1st day of PY] }
c. Least of 20% of profits under head "PGBP" before making this deduction or Profit transferred to special
reserve account or 2 x {[Paid up share capital + General reserves as on last day of P/Y] – [Balance of special
reserve A/c on 1st day of PY] }
d. Least of 40% of profits under head "PGBP" before making this deduction or Profit transferred to special
reserve account or 2 x {[Paid up share capital + General reserves as on last day of P/Y] – [Balance of special
reserve A/c on 1st day of PY] }
76. Pick the incorrect regarding maintenance and keeping of information and document by person entering into
an international transactions or specified domestic transactions
a. AO/Commissioner (Appeal) may direct person concerned to furnish document in 30 days of the notice. An
extension of 30 days may also be granted.
b. Penalty of ₹ 5 lakh u/s 271AA for non-furnishing of information /documents (2% of transaction value u/s
271G TPO)
c. Penalty for failure to non-maintenance of information or document under Section 92D (Sec. 271AA) is 2%
of the value of the transaction for each such failure
d. None of the given
77. The determination of transfer price in accordance with the arm’s length principle resulting in an increase in
the total income or reduction in the loss, as the case may be, of the assessee is called
a. Secondary Adjustment b. Primary Adjustment
c. Safe Harbour Adjustment d. Swap Adjustment
78. Under Advance Pricing Agreement, submission of modified return should be made within a period of
a. 3 months from the end of the month in which the said APA was entered into
b. 3 months from the end of the PY in which the said APA was entered into
c. 6 months from the end of the month in which the said APA was entered into
b. 6 months from the end of the PY in which the said APA was entered into
79. Arms’ length Price means a price which is applied or proposed to be applied in a transaction between
a. person other than associated enterprises in controlled condition
b. person other than associated enterprises in uncontrolled condition

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 c. person having associated enterprises in controlled condition
d. person having associated enterprises in uncontrolled condition
80. Empowered to enter into an APA with any person for determination of ALP is
a. Board with the approval of the Central Government
b. Pr. CCIT/CCIT/CIT with the approval of the Central Government
c. Jt. CIT/Dy. CIT/Asst. CIT with the approval of the Pr. CCIT/CCIT/CIT
d. Transfer Pricing Officer appointed by the Board.
81. The cost of acquisitions for bonus shares acquired before 31.01.2018 will be
a. Market value of share
b. FMV as on 31.01.2018
c. higher of Market value of share or FMV as on 31.01.2018
d. lower of Market value of share or FMV as on 31.01.2018
82. Long-term capital gains (LTCG), arising from the transfer of listed equity shares or units of an equity oriented
fund from FY 2018-19 onwards shall be
i. taxed at the rate of 10 percent where the amount of such capital gains exceeds Rs 1,00,000.
ii. the indexation benefit will not be available
iii. the benefit under Chapter VI-A (like section 80C, 80D etc.) cannot be availed on line with capital gains
from other assets.
iv. A rebate under section 87A cannot be availed whereas this rebate is allowed in respect of capital gains
from other assets

a. i, ii and iii b. ii, iii and iv

c. i, ii and iv d. All of the above
83. Interest received on delayed payment of compensation shall be chargeable as
a. 50% deduction allowed and accounted for under other sources.
b. 100% deduction allowed and accounted for under other sources.
c. 50% under other sources and 50% under Capital Gain
d. 100% under other sources.
84. Pick the correct one
a. Forfeiture of Advance Money on property in the hand of seller from AY 2015-16, shall be treated as
income from other sources rather than reduction in the cost of acquisition.
b. Forfeiture of Advance Money on property in the hand of buyer shall be treated as capital loss
c. Both A&B
d. None of the above
85. Where value claimed by assessee is not according to estimate by a registered Valuer, the AO may refer the
valuation of Capital Asset to valuation officer if FMV exceeds value claimed by assessee by
a. By more than 10% or ₹ 25,000/- whichever is less
b. By more than 15% or ₹ 25000/- whichever is less
c. By more than 15% or ₹ 50000/- whichever is less
d. By more than 10% or ₹ 25000/- whichever is less
86. Deduction for Business of Tea/Coffee/Rubber under Section 33AB is available
i. is lower of such deposit or 40% of Profit or Gain without considering the 33AB deduction
ii. Deposit to be made with NABARD as per scheme of Tea/Coffee/Rubber Board or Deposit account as
approved by Central Govt. within 6 months from the end of FY or return filling date
iii. Amount of deposited cannot be used for 100% depreciable assets and P&M so purchased not to be used
in office/home/guest hose.
iv. If asset purchased is sold before 8 years then taxable
v. Compulsory Audit required by CA in Form 3AD

a. ii, iii, iv and v b. i, iii, iv and v

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 c. i, ii, iii and v d. All of the above
87. Which of the following does not fall under specified business category under section 35AD
a. Hotel of 2 star or above category anywhere in India
b. Hospital with at least 500 beds for patients
c. Production of fertilizer in India
d. Affordable Housing
88. Pick the correct one
a. Amortisation of expenditure incurred under voluntary retirement scheme u/s 35DDA is applicable for all
assessee
b. 1/4th of the amounts so admissible will be allowed for the deduction in the PY in which sum on this
account was paid and balance shall be deducted in equal instalments for each of the three immediately
succeeding PY
c. Both A&B
d. None of the given
89. Payment to an employee or his legal heir of gratuity, retrenchment compensation or similar terminal benefit
provided in cash may be allowed for deduction provided
a. aggregate of such amount does not exceed ₹ 40,000
b. aggregate of such amount does not exceed ₹ 75,000
c. aggregate of such amount does not exceed ₹ 1,00,000
d. aggregate of such amount does not exceed ₹ 50,000
90. Payment of interest on Capital brought into business shall be allowed for deduction provided
a. paid to non-working partner and to the extent of 12% p.a. simple interest.
b. paid to working partner and to the extent of 12% p.a. simple interest.
c. paid to all partners whether working or non-working partner and to the extent of 12% p.a. simple interest.
d. paid to all partners whether working or non-working partner and to the extent of 9.5% p.a. simple
interest.
91. Surcharge of income tax in respect of every company other than a domestic company is
a. 7% where total income exceeds one crore rupees but not exceeding ten crore rupees and 12% where
total income exceeds ten crore rupees, at the rate of five per cent.
b. 2% where total income exceeds one crore rupees but not exceeding ten crore rupees and 5% where total
income exceeds ten crore rupees, at the rate of five per cent.
c. 10% where total income exceeds one crore rupees but not exceeding ten crore rupees and 15% where
total income exceeds ten crore rupees, at the rate of five per cent.
d. 5% where total income exceeds one crore rupees but not exceeding ten crore rupees and 7% where total
income exceeds ten crore rupees, at the rate of five per cent.
92. Notice of demand is served under
a. Section 156 b. Section 153
c. Section 148 d. Section 147
93. Pick the incorrect one treatment of income of minor child
a. If marriage persists- the parent whose total income is lower otherwise who maintains the child
b. Exemption to the extent of Rs. 1500/-per child u/s 10(32) is allowed
c. Income out of property transferred for no consideration to a minor married daughter, shall not
be clubbed in the parents’ hands
d. None of the given
94. Income due outside India and received outside India from Business/profession set up in India shall be
taxable in hand of
a. ROR only b. RNOR only
c. ROR and RNOR d. All categories i.e. ROR, RNOR and NR
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
95. Employer's contribution to a recognised Provident Fund and interest thereupon is taxable in case of
a. Both Contribution in excess of 12% of salary and interest credited in excess of 12% of such deposit.
b. Both Contribution in excess of 9.5% of salary and interest credited in excess of 9.5% of such deposit.
c. Contribution in excess of 9.5% of salary and interest credited in excess of 12%
d. Contribution in excess of 12% of salary and interest credited in excess of 9.5%
96. Incomes that shall be deemed to accrue or arise in India are
i. Dividend paid by an Indian company outside India.
ii. Interest/Royalty/fee for technical service payable by a Government
iii. Interest/Royalty/fee for technical service payable by a person who is resident in India, except where
interest is payable in respect of money borrowed and used for the purpose of business or profession carried
on outside India or earning any income from any source outside India
iv. Interest/Royalty/fee for technical service payable by a person who is a non-resident in India provided
interest is payable in respect of money borrowed and used for a business or profession carried on in India
v. Income from the transfer of any capital asset situated in India or abroad

a. i, ii, iii and iv b. ii, iii, iv and v

c. i, iii, iv and v d. All of the above
97. Amount realised from Issue of Shares and debt instruments such as debentures shall be classified as
a. Revenue Receipt
b. Capital Receipt
c. Issue of share as capital receipt and issue of debt instruments such as debentures as revenue receipt
d. As determined by the Assessing Officer
98. In respect of registered trust/institution additional exemption shall be available for such amount which is
accumulated or set apart for application in future year not exceeding
a. 7 years b. 3 years
c. 5 years d. no limitation of period
99. Salary paid by an Indian company to its employees working in one of its branches outside India is.
a. Salary accruing in India b. Salary deemed to accrue in India.
c. Salary accruing outside India d. None of these.
100. Mr. X died in 2018 and his legal heirs Mr. A and B carry on his business without entering into a partnership,
the category in which Mr. A and B will fall for the purpose of Income Tax
a. AOP b. Body of Individual
c. Firm d. Limited Liability Firm

Pattern
Sl. No. Topics No. of Ques. Sl. No.
Ques
1 BASIC 30 6-15, 56-65 & 91-100
2 Profit and Gain from Business & Profession 25 16-25, 66-75 & 86-90
3 Capital Gains 15 36-45 & 81-85
4 Incomes from Other Sources 5 26-30
5 Set-off and Carry Forward of Losses 5 46-50
6 International Taxation 10 1-5 & 76-80
7 ICDS 5 31-35
8 Special Provisions to Certain Companies 5 51-55
TOTAL 100

Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)