RAHI’s PRACTICE SET 1

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. Section 30 deals with
a. other allowable deductions for Rent, Repairs, Taxes & Insurance for Buildings used for Business &
Profession
b. Asset not exclusively used for Business or Profession
c. Other allowable deduction for revenue repair and insurance premium for Machinery, Plant & Furniture
used for B&P
d. Sale of asset used for Scientific Research
2. Investment allowance for new plant & machinery in backward area under Section 32D is applicable for
EXCEPT
a. Bihar b. West Bengal
c. Andhra Pradesh d. Jharkhand
3. Deduction available under Section 33ABA is
a. lower of amount deposited to special account with SBI/Site Restoration Account or 20% of Profit or Gain
without considering the 33ABA deduction
b. higher of amount deposited to special account with SBI/Site Restoration Account or 20% of Profit or Gain
without considering the 33ABA deduction
c. lower of amount deposited to special account with SBI/Site Restoration Account or 20% of Profit or Gain
after considering the 33ABA deduction
d. higher of amount deposited to special account with SBI/Site Restoration Account or 20% of Profit or Gain
after considering the 33ABA deduction
4. In case of scientific research carried out by assessee i.e. In-house Scientific Research, deduction admissible
for pre-commencement up-to the period of
a. 2 years b. 3 years
c. 4 years d. 5 years
5. Loss from specified business can be set-off against the
a. income of specified business only
b. income of any other head except salary and casual income
c. Profit & gain from business and profession whether specified or unspecified
d. income of any other head except salary, capital gain and casual income
6. Bonus or commission shall be allowed as deduction
a. in the year in which declared b. in the year in which actually paid
c. either A or B. d. Bonus or commission shall not be allowed as deduction
7. Allowance for Provision for bad and doubtful debts made by scheduled Bank or a co-operative bank is
a. Up-to 8.5% of Gross Total Income (computed before making this deduction) + up-to 15% of aggregate
average advances made by rural branches of such bank
b. Up-to 8.5% of Gross Total Income (computed before making this deduction) + up-to 10% of aggregate
average advances made by rural branches of such bank
c. Up-to 7.5% of Gross Total Income (computed before making this deduction) + up-to 15% of aggregate
average advances made by rural branches of such bank
d. Up-to 7.5% of Gross Total Income (computed before making this deduction) + up-to 10% of aggregate
average advances made by rural branches of such bank

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

8. Threshold limit for allowing deduction for payment of Salary, Bonus, commission or other remuneration and
interest on capital to working partner is
a. First 3 lakh of book profit or loss-Salary allowed 1.5 lakh or 90% of book value whichever is higher and on
balance 60%
b. First 3 lakh of book profit or loss-Salary allowed 1.5 lakh or 60% of book value whichever is higher and on
balance 90%
c. First 5 lakh of book profit or loss-Salary allowed 2.5 lakh or 90% of book value whichever is higher and on
balance 60%
d. First 5 lakh of book profit or loss-Salary allowed 2.5 lakh or 60% of book value whichever is higher and on
balance 90%
9. Maintenance of books of accounts for Specified Profession under Section 44 (AA) is mandatory
a. if income exceeds ₹ 1.5 lakh or total sale, turnover or gross receipts exceeds ₹ 10 lakh in any of 3 years
immediately preceding relevant PY
b. if income exceeds ₹ 1.2 lakh or total sale, turnover or gross receipts exceeds ₹ 10 lakh in any of 3 years
immediately preceding relevant PY
c. if income exceeds ₹ 2.5 lakh or total sale, turnover or gross receipts exceeds ₹ 25 lakh in any of 3 years
immediately preceding relevant PY
d. a. without any condition
10. Where stock-in-trade is converted into capital assets in a business, such business income would be taxable
a. in the year of conversion and there is no provision for postponement of taxability of income to the year in
which the transfer took place.
b. in the year in which the transfer took place.
c. either in the year of conversion or the year in which the transfer took place
d. in the year of conversion with a provision for postponement of taxability of income to the year in which
the transfer took place
11. Salary to MP/MLA are chargeable under the head
a. Salary b. PGBP
c. Other Sources d. Capital Gain
12. Where the total income of eligible assessee includes royalty income in respect of a patent developed &
registered in India, income-tax payable on such income shall be @
a. 20% b. 5%
c. 15% d. 10%
13. Pick the correct tax on dividend
a. Dividend from Domestic Company is non-taxable in the hand of all assessee receiving the dividend up-to ₹
10 lakh
b. Where the amount of dividend from domestic company exceeds ₹ 10 lakh all assessee receiving the same
are subject to income tax @ 10% plus applicable surcharge and cess
c. Both A&B
d. None of the given
14. Sum of money received by Individual or HUF without consideration shall be exempt from income tax up-to
the amount of
a. ₹ 5000 b. ₹ 10000/
c. ₹ 20000/- d. ₹ 50000/-
15. Deduction against family pension is allowed up-to the extent of
a. 1/2nd or ₹ 15000 whichever is less b. 1/5th or ₹ 15000 whichever is less
c. 1/3rd or ₹ 15000 whichever is less d. fully exempt.
16. Total of Incomes from all the 5 heads makes
a. Gross Total income b. Gross Income
c. Total Income d. Net Total Income

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

17. Previous year i.e. the financial year immediately preceding the assessment year has been defined under
section
a. 2 (33) b. 3
c. 2 (35) d. 4
18. Under Section 5 of Income Tax Act, 1961, income accrue or arises or deemed to accrue or arises outside
India , but first receipt outside India shall be taxable
a. for all categories of assessee irrespective of residential status
b. only for Resident Ordinarily Residents and non-taxable for others
c. only for Resident Ordinarily Residents and Resident Not Ordinarily Residents and non-taxable for Non-
resident
d. only for Resident Not Ordinarily Residents and Non-resident and non-taxable for Resident Ordinarily
Residents
19. Residential status of an assessee is to be determined for
a. Financial Year b. Assessment Year
c. Previous Year d. Calendar Year
20. As per Finance Act 2018, Dividend Distribution Tax (DDT) on deemed dividend is taxable @
a. 30% plus surcharge and cess as applicable b. 15% plus surcharge and cess as applicable
c. 10% plus surcharge and cess as applicable d. 40% plus surcharge and cess as applicable
21. Which of the following is/are revenue expenditure
i. Expenditure in connection with raising capital including fee etc.
ii. Purchase of raw material and forfeiture of amount for purchase of raw-materials
iii. Insurance premium
iv. interest/dividend/royalty paid
v. fee paid for issue of bonus share.

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

c. i, iii, iv and v d. All of the above
22. Pick the correct one
a. Exemption to income from the property held under trust or Voluntary contribution (Donations) not
forming part of corpus is allowed to the extent of 100% where 85% of the receipt of the PY has been applied
to.
b. In cases, where less than 85% of the receipt has been applied, the exemption allowed is 50% of amount
applied plus 15% of the exemption allowed.
c. Both A&B
d. None of the given
23. Every order granting registration or refusing registration of a Charitable/Religious Trust shall be passed
before expiry of
a. 12 months from the date on which application was received
b. 6 months from the date on which application was received
c. 12 months from the end of month in which application was received
d. 6 months from the end of month in which application was received
24. Exemption to the income of a political party is given under
a. Section 13 b. Section 13A
c. Section 13B d. Section 10 (13)
25. An individual will be considered resident in a PY if he/she has been in India for at-least 182 days in the
previous year. The second condition of 60/365 days will not be applicable in cases except
a. for the purpose of higher education outside India
b. for the purpose of employment outside India
c. crew member of an Indian ship who leaves India in any previous year

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

 d. a Citizen of India or is a Person of Indian origin, who being outside India and comes on a visit to India in
any previous year
26. The Central Government has power to notify ICDS under Section
a. 145 (2) b. 145 (5)
c. 147 (3) d. 149 (4)
27. Disclosure requirements provided in ICDS shall be given in theTax Audit Report (TAR) i.e. Form
a. 3AD b. 3BD
c. 3CD d. 3DA
28. Persons not subject to tax audit u/s. 44AB exempted from ICDS
a. Resident Individuals and HUFs
b. Non-resident Individuals and HUFs
c. Individuals and HUFs whether resident or non-resident
d. Resident Individuals, HUFs and partnership firm.
29. Non-compliance with ICDS will give power to tax officer for
a. Self-Assessment b. Best Judgement assessment
c. Protective assessment d. Excessive Judgement
30. Contract Revenue equals to
a. initial amount agreed in contract+ Retention Money - Variations, claims and incentives
b. initial amount agreed in contract+ Retention Money + Variations, claims and incentives
c. initial amount agreed in contract+ Variations, claims and incentives
d. initial amount agreed in contract+ Retention Money
31. Capital Asset does not include
i. Any stock-in-trade other than securities
ii. Items of Personal Effects
iii. Agricultural Land in India whether situated in rural or urban area
iv. Gold Deposit Bonds/Certificates issued under Gold deposit scheme,1999 or Gold Monetisation
scheme,2015

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

c. ii, iii and iv d. All of the above
32. Advance Money received on property shall be accounted for as
a. income from other sources b. PGBP
c. reduction of the cost of acquisition d. Any of the given
33. Long-term capital gain on account of listed securities other than Units of MF OR Zero Coupon Bonds shall be
chargeable @
a. 10%
b. 20%
c. higher of 20% with Indexation OR 10% without indexation
d. lower of 20% with Indexation OR 10% without indexation
34. Under Section 54, the gain from sale of the capital assets should be from
a. Residential House being long-term capital asset
b. Residential House being short-term capital asset
c. Residential House whether short-term or long-term capital asset
d. Residential House and land whether short-term or long-term capital asset
35. Exemption from Capital gain arising out of residential house or land being Long term Capital Assets shall be
under Section 54GB for
a. re-invested in units of specified fund, as may be notified by Govt. to finance start-ups
b. investment in specified bonds of NHAI or RECL
c. purchase of shares of eligible company i.e. new Indian company Pvt limited company established in year
of claiming and in such company Individual/HUF should hold 50% share/voting right
d. agricultural land be it urban or rural
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
36. The amount withdrawn from the Capital Gain Scheme Accounts has to be utilised for the eligible purpose
within
a. 180 days b. 30 days
c. 90 days d. 60 days
37. The selling price may be considered as sale consideration even it is less than the stamp value provided
Stamp value is within
a. 115% of selling price b. 110% of selling price
c. 105% of selling price d. 102% of selling price
38. Period of Holding & cost of acquisition with regard to transfer of securities is computed on
a. FIFO basis b. LIFO basis
c. Weighted Average basis d. Any of the given
39. Base Index Year has been changed from 1981 to 2001 by the
a. Finance Act 2015 b. Finance Act 2016
c. Finance Act 2017 d. Finance Act 2018
40. Unlisted shares shall be treated as a short-term capital assets, if the holding period is
a. less than 36 months b. less than 24 months
c. less than 48 months d. less than 12 months
41. Loss under head house property can be set off against any income of other head except
a. Salary b. Casual Income
c. Salary & Casual Income d. Salary, Casual Income& PGBP
42. The maximum amount of loss under the head House Property that can be set off against permissible other
heads of income is
a. ₹ 2 lakh b. ₹ 1.5 lakh
c. ₹ 50000 d. ₹ 1 lakh
43. Loss from which of the following can only set-off against the income from same head/source
i. Income from speculative Business ii. Income from Specified Business
iii. Casual Income iv. Long-term Capital Gain

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

c. i, ii, and iv d. All of the above
44. Pick the correct one
a. Where Loss under the Head PGBP could not be set off under Sec.70 & Sec.71 that loss can be carried
forward u/s 72 for maximum period of 8 subsequent AYs
b. Where the loss under the Head PGBP is carried forward for subsequent AYs, the loss can be set off against
the income from any head except casual income.
c. Both A&B
d. None of the given
45. Where Loss from Owning & Maintaining Race Horses could not be set off, that loss can be carried forward
for
a. Indefinite period b. 4 AYs
c. 8 AYs d. 6 AYS
46. Any area within the Jurisdiction of a municipality /Municipal corporation/cantonment board and which has a
population of at-least 10,000 OR Any area within the distance, measured aerially except
a. Up-to 2 kms from local limits of above jurisdiction having population > 10,000 but up-to 1,00,000
b. Up-to 4 kms from local limits of above jurisdiction having population > 10,000 but up-to 1,00,000
b. Up-to 6 kms from local limits of above jurisdiction having population > 1,00,000 but up-to 10,00,000
c. Up-to 8 kms, from the local limits of above jurisdiction having population of > 10,00,000.
47. Tea grown and manufactured-Business is taxable as
a. Taxable 40% and Exempted 60% under Income Tax Rule 7
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 b. Taxable 40% and Exempted 60% under Income Tax Rule 7A
c. Exempted 40% and Taxable 60% under Income Tax Rule 7
d. Exempted 40% and Taxable 60% under Income Tax Rule 7A
48. Block of Assets means
a. A group of tangible assets for which SAME PERCENTAGE OF DEPRECIATION is prescribed.
b. A group of intangible assets for which SAME PERCENTAGE OF DEPRECIATION is prescribed
c. A group of tangible assets or intangible assets for which SAME PERCENTAGE OF DEPRECIATION is
prescribed
d. A group of assets be it tangible or intangible assets which HAVE SIMILAR LIFE PERIOD.
49. Body of Individual
a. includes only combination of Individuals having common design or will
b. includes only combination of Individuals not having common design or will
c. includes only combination of Individuals whether having common design or will or not
d. None of the given
50. An individual is said to be a Resident and Ordinarily Resident if
a. a resident in at least any 2 out of 10 PY immediately preceding the PY AND has been in India for 730 days
or more during the 7 years preceding the PY
b. a resident in at least any 2 out of 10 PY immediately preceding the PY AND has been in India for 365 days
or more during the 4 years preceding the PY
c. a resident in at least any 2 out of 10 PY immediately preceding the PY OR has been in India for 730 days or
more during the 7 years preceding the PY
b. a resident in at least any 2 out of 10 PY immediately preceding the PY OR has been in India for 365 days or
more during the 4 years preceding the PY
51. Chargeability of Income Tax is under
a. Section 6 b. Section 5
c. Section 4 d. Section 9
52. Modification in object of a Trust or Institution registered under Section 12AA shall be communicated to Pr.
CIT /CIT within a period of
a. thirty (30) days from the date of said adoption or modification
b. sixty (60) days from the date of said adoption or modification
c. thirty (30) days from the end of the Previous Year of said adoption or modification
b. sixty (60) days from the end of the Previous Year of said adoption or modification
53. MAT credit has been
a. Increased from 15 to 20 Year b. Increased from 10 to 15 years
c. Reduced from 20 to 15 Year b. Reduced from 15 to 10 years
55. Part III of First Schedule of Finance Act 2018 depicts the income tax rate for
a. AY 2018-19 b. AY 2019-20
c. AY 2017-18 d. FY 2019-20
56. With respect to the countries with which no agreement on double taxation relief exists, grant of Relief from
double taxation may be provided under section
a. Section 90A b. Section 93
c. Section 92 d. Section 91
57. International Transaction means
a. a transaction which is a transaction between two or more associated enterprises, both of whom are non-
residents
b. a transaction which is a transaction between two or more associated enterprises, both of whom are
residents
c. transaction which is a transaction between two or more associated enterprises, either or both of whom
are non-residents
d. transaction which is a transaction between two or more associated enterprises, either or both of whom
are non-residents or resident but monetary transaction is conducted in currency other than Indian currency
58. Any income arising from an international transaction shall be computed having regard to
a. Controlled price b. Advance price
c. Uncontrolled price d. the arm’s length price
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
59. Where more than one price is determined by the most appropriate method, the arm’s length price shall be
a. the arithmetic mean of all such prices b. the average of all such price
c. the highest of the all such prices d. the lowest of all such prices
60. The CBDT has notified that the actual transaction price shall be taken as ALP for AY 2015-16, 2016-17, 2017-
18 and 2018-19 where variation between ALP determined u/s 92C does not exceed
a. 5% of the wholesale price or 10% otherwise of international or specified domestic transactions
b. 1% of the wholesale price or 3% otherwise of international or specified domestic transactions
c. 2% of the wholesale price or 5% otherwise of international or specified domestic transactions
d. 3% of the wholesale price or 8% otherwise of international or specified domestic transactions
61. Computing profits and gains of business of operation of aircraft in case of non-residents as
a. 5 % of the amount received or receivable as obligation i.e. carriage of passenger, livestock, mail or goods
from any place in india.
b. 7.5 % of the amount received or receivable as obligation i.e. carriage of passenger, livestock, mail or
goods from any place in india.
c. 10 % of the amount received or receivable as obligation i.e. carriage of passenger, livestock, mail or goods
from any place in india.
d. 12.5 % of the amount received or receivable as obligation i.e. carriage of passenger, livestock, mail or
goods from any place in india.
62. A person carrying on Medical Profession in addition to Specified books of accounts shall maintain a daily
case register in Form
a. 3A b. 3B
c. 3D d. 3C
62. Expenditure of Capital nature incurred by Company for promoting Family Planning among Employees shall
be allowed for
a. Deduction in 5 equal installments from PY in which incurred
b. Deduction in 6 equal installments from PY in which incurred
c. Deduction in 8 equal installments from PY in which incurred
d. Deduction in lump-sum in PY in which incurred
63. Pick the incorrect regarding treatment of Capital Expenditure of Specified Business u/s 35AD
a. 100% Capital expenditure for above business incurred after commencement including Pre
commencement Capital Expenditure is allowed for deduction
b. 150% deduction for Cold Chain facility, Warehousing facilities, Hospital, Affordable Housing and fertilizer.
c. If P&M is sold before putting the same into use for 5 years, the sale consideration i.e. Deduction allowed
minus applicable depreciation will be treated as deemed income
d. None of the above
64. Computation of PGBP on Presumptive Basis for business of Plying, Hiring or Leasing goods carriage /s 44AE is
applicable for
a. Resident Individual and HUF b. All Resident and Non Resident Individual and HUF
c. Any resident assessee d. Any assessee whether resident or non-resident
65. Section of Income Tax Act that deals with compulsory audit of the accounts of a Business/Profession
a. Section 44AB b. Section 44BA
c. Section 44AAB d. Section 44BBA
66. Rate of depreciation for intangible assets is
a. 25% of Written Down Value (WDV) b. 25% on Straight Line Method (SLM)
c. Either A or B provided selection is made before submission of first income tax return
d. All of the above.
67. Deduction for Business of Prospecting or Extraction or production of Petroleum or Natural Gas or both in
India
a. is admissible under Section 33AB

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

 b. for claiming deduction amount should be deposit in SBI in a special Account or In a site restoration
account before submission of the ITR
c. Deduction available is lower of such deposit or 20% of Profit or Gain without considering the deduction
available
d. All of the above
67. Long-term finance" means
a. any loan where the terms under which moneys are loaned for repayment along with interest during a
period of not less than one year
b. any loan where the terms under which moneys are loaned for repayment along with interest during a
period of not less than five years
c. any loan where the terms under which moneys are loaned for repayment along with interest during a
period of not less than three years
d. any loan where the terms under which moneys are loaned for repayment along with interest during a
period of not less than seven years
68. No Deduction of expenditure shall be allowed if
a. Expenditure of a sum in excess of ₹ 10,000 AND Payment or aggregate of payments made to a person in a
day, in excess of ₹ 10,000 otherwise than by a/c payee cheque/DD
b. Expenditure of a sum in excess of ₹ 20,000 AND Payment or aggregate of payments made to a person in a
day, in excess of ₹ 20,000 otherwise than by a/c payee cheque/DD
c. Expenditure of a sum in excess of ₹ 50,000 AND Payment or aggregate of payments made to a person in a
day, in excess of ₹ 50,000 otherwise than by a/c payee cheque/DD
d. Expenditure of a sum in excess of ₹ 2,00,000 AND Payment or aggregate of payments made to a person in
a day, in excess of ₹ 2,00,000 otherwise than by a/c payee cheque/DD
69. The Finance Act, 2018 extended the benefit of concessional rate of corporate tax @25% to domestic
companies whose total turnover or gross receipt in the
a. previous year 2016-17 does not exceed ₹ 250 crores
b. previous year 2015-16 does not exceed ₹ 250 crores
c. previous year 2016-17 does not exceed ₹ 50 crores
d. previous year 2015-16 does not exceed ₹ 50 crore
70. Pick the correct one
a. Deduction with respect of employment of new employee is available under Section 80JJAA
b. the new employee shall have been employed for a minimum period of 240 days in case of apparel
industry and 300 days for other industries
c. Both A&B
d. None of the given
71. Under MAT for a company income tax in addition to applicable surcharge & cess payable shall be
a. Tax on total income computed as per the normal provisions of the Act by charging special rates and
normal rates applicable.
b. 18.5% of book profit
c. Higher of the A&B
c. Lower of A&B
72. Which of the following types of company have to prepare the profit and loss account for the relevant
previous year in accordance with the provisions of governing act rather than Companies Act, 1956 except
a. Electricity Company b. Real Estate Company
c. insurance Company d. banking Company
73. In case of a company, being a unit of an International Financial Services Centre and deriving its income solely
in convertible foreign exchange effective rate of the MAT is
a. 9% plus surcharge & cess as applicable b. 18.5% plus surcharge & cess as applicable
c. 15% plus surcharge & cess as applicable d. 12% plus surcharge & cess as applicable

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

74. The difference between the arm’s length price determined in primary adjustment and the price at which the
international transaction has actually been undertaken
a. Total income b. Secondary Money
c. Provisional money d. Excess Money
75. Under MAT provision report from Accountant shall be obtained in
a. Form 3AC b. Form 2B
c. Form 29B d. Form 3AD
76. Pick the correct one
a. Cost of acquisition where Shares purchased from Broker/Market shall be the amount actually paid to
broker excluding brokerage
b. Cost of acquisition where Shares purchased from other than Broker/Market shall be the amount actually
paid to broker excluding brokerage
c. Cost of acquisition of Offer of right shares not subscribed but renounced shall be NIL
d. All of the above
77. Full value of consideration for Conversion of Capital Asset into Stock in Trade shall be
a. Actual amount of sale consideration b. Fair Market Value
c. Present cost minus depreciation d. Actual amount of sale consideration minus indexed cost
78. Where amount of compensation is increased by any Court or tribunal, such increased amount shall be
deemed as
a. Capital Gain in the PY of receipt
b. Capital Gain of the PY to which it belongs
c. either a or b
d. If the amount is more than 10% of original value then Capital Gain of the PY to which it belongs else
Capital Gain in the PY of receipt
79. Transfer of one or more undertaking as a result of sale for lump-sum consideration without values being
assigned to individual assets and liabilities is known as
a. lump-sum sale under Section 50B b. sunk sale under Section 50C
c. Slump Sale under Section 50C d. Slump Sale under Section 50B
80. Transfer of Any Capital Asset on conversion of a firm to a company shall not be regarded as a transfer
provided
a. aggregate shareholding of partners in the company should be at-least two-third of total voting power
b. same should be maintained for eight years from date of conversion.
c. Both A&B
d. None of the given
81. Section that deals the residential status of an assessee is
a. Section 5 b. Section 9
c. Section 6 d. Section 10
82. Income deemed to accrue or arise in India is taxable for
a. Resident Ordinarily Resident only
b. Non-Resident only
c. Resident Ordinarily Resident and Resident Not Ordinarily Resident only
d. All of the above.
83. Specified Shareholder Means
a. beneficial owner holding at-least 10% voting in the company
b. beneficial owner holding at-least 25% voting in the company
c. beneficial owner holding at-least 51% voting in the company
d. beneficial owner holding at-least 67% voting in the company
84. Pick the correct one

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

 a. Exemption from income tax on account of Dividend received from a domestic company under Section
115-O has been provided under 10 (22) provided the amount does not exceed ₹ 10 lakh.
b. The exemption is available to all categories of persons.
c. Both A&B
d. None of the given
85. Case where income of PY is assessed in the same year
a. Non-resident shipping business
b. Assessment of persons leaving India
c. Associations/ bodies formed for short duration or discontinued business
d. Assessment of person trying to alienate his assets with a view to avoid tax
e. All of the above
86. Pick the correct one
a. A company is said to be resident in India in any PY, if it is an Indian company OR its place of effective
management, in that PY, is in India
b. Place of effective management” means a place where key management and commercial decisions that
are necessary for the conduct of the business of an entity as a whole, are in substance made.
c. Both A&B
d. None
87. Expenses before commencement of business is treated as
a. Capital Expenditure b. Revenue Expenditure
c. Deferred capital expenditure d. Deferred revenue expenditure
88. Where a Trust or Institution does not apply the prescribed percentage of amount received in the PY, the
same can apply for exemption from income tax on such accumulation in the manner
a. Notice is given to A.O in Form 10 on or before due date of return u/s 139(1) specifying period and purpose
for which such income is accumulated.
b. period cannot exceed 5 years from PY in which such income is derived and Money so accumulated or set
apart is invested or deposited specified manner
c. Both A&B
d. None of the given
89. Rate of Surcharge for over 1 crore in respect of co-operative society is
a. 7% b. 12%
c. 15% d. 10%
90. Quoting of Aadhaar number has been made mandatory
a. with effect from 01.04.2016 under Section 139A
b. with effect from 01.07.2017 under Section 139AA
c. with effect from 01.04.2017 under Section 139AA
d. with effect from 01.04.2018 under Section 139AA
91. Method of Accounting for computing income under PGBP and income from other sources
a. Mercantile basis b. Cash Basis
c. Mercantile basis or cash basis d. Mercantile basis, cash basis or notional basis
92. Plant includes except
a. Ship b. Book
c. Building d. None of the given
93. Which section deals with depreciation?
a. Section 30 b. Section 32
c. Section 37 d. Section 33
94. a. Expenditure in case of Amalgamation or Demerger is allowed as deduction provided u/s 35DD to Indian
Company incurring expenditure wholly & exclusively for amalgamation or demerger.
b. Quantum and period of deduction under Section 35DD will be 1/6th of expenditure for successive 6 year
c. Both A&B
Prepared by Deepak Kumar Rahi, AAO (LAD/Patna)
 d. None of the given
95. Pick the incorrect one regarding computation of PGBP on Presumptive Basis under Section 44AD
a. is available to all assessee Excluding Limited Liability Partnership Firm for any Business except business of
Plying, Hiring or Leasing goods carriage u/s 44AE
b. Gross receipts/ turnover of eligible assessee does not exceeds 2 Cr
c. Deemed PGBP will be 8% of such turnover where receipt in cash & 6% in case of digital/account payee
cheque/DD payment
d. None of the given
96. Associated enterprise means an enterprise which participates directly or indirectly or through one or more
intermediaries in the management or control or capital of the other enterprises.
a. Carrying share not less than 51% of voting right
b. supply of raw material 80% or more
c. Both A&B
d. None of the given
97. Wholesale Trading means an international transaction or specified domestic transaction of trading in goods,
which fulfils the following conditions
a. purchase cost of finished goods is 80% or more of the total cost pertaining to such trading activities
b. average monthly closing inventory of such goods is ten percent or less of sales pertaining to such trading
activities
c. Both A&B
d. None of the given
98. Under Section 153B where a reference is made to Transfer Pricing Officer (TPO) u/s 92CA, the period
available for assessment or re-assessment shall be extended by
a. 6 months b. 12 months
c. 9 months d. 18 months
99. Circumstances in which the income-tax authorities shall accept the transfer price declared by the assessee is
known as
a. Safe Harbour Rule b. Rule of Advance Ruling
c. Best Judgement Rule d. Free On Board Rule
100. Secondary adjustment in certain cases wherever applicable shall be made provided the amount of primary
adjustment made in previous year
a. shall not exceed 1 crore rupees (₹ 1 crore)
b. The secondary adjustment is made in respect of an AY commencing on or after 01.04.2017.
c. Both A&B
d. None of the given

Pattern
Sl. No. Topics No. of Ques. Sl. No.
Ques
1 BASIC 30 16-25, 46-55 & 81-90
2 Profit and Gain from Business & Profession 25 1-10, 61-70 & 91-95
3 Capital Gains 15 31-40 & 76-80
4 Incomes from Other Sources 5 11-15
5 Set-off and Carry Forward of Losses 5 41-45
6 International Taxation 10 56-60 & 96-100
7 ICDS 5 26-30
8 Special Provisions to Certain Companies 5 71-75
100

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

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