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INCOME TAX LAWS CASE SCENARIO BASED MCQs

PAPER 3A - CASE SCENARIO BASED MCQs

Question 1.
Mr. Rajesh Sharma, aged 54 years, an Indian citizen, is working as Assistant Manager in ABC India
Ltd. He is getting basic salary of Rs. 58,000 per month. He used to travel frequently out of India for
his office work. He left India from Delhi Airport on 5 October, 2023 and returned to India on 2 April,
2024.
For previous year 2023-24, following information are relevant;
(a) Dearness Allowance - 10% of Basic Pay (considered for retirement purposes)
(b) Bonus - Rs. 98,000
(c) Medical allowance paid during P.Y. 2023-24 amounting to Rs. 60,000
(d) He was also reimbursed medical bill of his mother amounting to Rs. 15,000
(e) He was also transferred a laptop by company for Rs. 15,000 on 31 December, 2023. The laptop
was acquired by company on 1 October, 2020 for Rs. 1,00,000. Company was charging
depreciation at 31.666% assuming useful life of laptop as 3 years
(f) He was also reimbursed salary of house servant of Rs. 4,000 per month
(g) Professional Tax paid by employer amounting to Rs. 2,400
(h) 400 equity shares allotted by ABC India Ltd. at the rate of Rs. 250 per share against fair market
value of share of Rs. 350 on the date of exercise of option
(i) Short-term capital gain on sale of shares of listed company on which STT is paid amounting to
Rs. 94,000
(j) Mr. Rajesh has exercised the option of shifting out of the default tax regime under section
115BAC
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:

1) What is Mr. Rajesh Sharma’s residential status for the A.Y. 2024-25?
a) Resident but can’t determine resident and ordinarily resident or resident but not ordinarily resident
from the given information.
b) Non-Resident
c) Resident but not ordinarily resident
d) Resident and ordinarily resident

2) What are his taxable perquisites for A.Y. 2024-25?

a) Rs. 55,000
b) Rs. 90,400
c) Rs. 1,05,400
d) Rs. 1,03,000

3) What is the income chargeable under the head “Salaries” in the hands of Mr. Rajesh Sharma for
A.Y. 2024-25?
a) Rs. 9,76,600
b) Rs. 9,79,000
c) Rs. 9,74,200
d) Rs. 10,26,600

4) The total tax liability of Mr. Rajesh Sharma for A.Y. 2024-25 is:
a) Rs. 1,26,800
b) Rs. 1,54,630

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c) Rs. 1,12,130
d) Rs. 1,39,960

5) What would be the total tax liability of Mr. Rajesh Sharma for A.Y. 2024-25 if he does not exercise
the option of shifting out of the default tax regime under section 115BAC and pays tax under
default tax regime under section 115BAC.
a) Rs. 81,590
b) Rs. 73,790
c) Rs. 89,390
d) Rs. 98,700

Answer Keys:
1 2 3 4 5
(a) (c) (a) (a) (b)

Question 2.
Mr. Hardik (age 45 years) is appointed as senior executive officer in Sky India Limited, Mumbai on
01.02.2023 in the scale of Rs. 35,000-3500-65,000. He is paid dearness allowance @ 40% of basic pay
forming part of retirement benefits.
He is given rent free unfurnished accommodation from 01.10.2023. The company pays lease rent of
Rs. 5,000 p.m.
He has been provided a car of above 1.6 liters capacity which is used by him for private purposes only.
The actual cost of the car is Rs. 8,00,000. The monthly expenditure of car is Rs. 5,000, which is fully
met by the employer. Car is owned by his employer.
He pays lumpsum premium of Rs. 1,20,000 towards health insurance for self and his wife (age 43
years) for 48 months on 01.10.2023 by account payee cheque. He also contributes Rs. 1,50,000 towards
PPF. Mr. Hardik wants to pay tax under default tax regime under section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) What would be the value of rent-free accommodation chargeable to tax in the hands of Mr.
Hardik?
a) Rs. 30,380
b) Rs. 44,100
c) Rs. 45,570
d) Rs. 30,000

2) What amount of health insurance premium paid during the previous year 2023-24 by Mr. Hardik
can be claimed as deduction while computing total income, if he exercises the option to shift out of
the default tax regime under section 115BAC?
a) Rs. 30,000
b) Rs. 15,000
c) Rs. 24,000
d) Rs. 25,000

3) What would be perquisite value of car chargeable to tax in the hands of Mr. Hardik?
a) Rs. 28,800
b) Rs. 21,600
c) Rs. 60,000
d) Rs. 1,40,000

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4) Would you advise Mr. Hardik to exercise the option of shifting out of the default tax regime under
section 115BAC?
a) Yes, Mr. Hardik should exercise the option of shifting out of the default tax regime and pays tax
under normal provisions of the Act, since in such case his tax liability would be Rs. 53,310, being
lower than the tax liability under default tax regime under section 115BAC
b) Yes, Mr. Hardik should exercise the option of shifting out of the default tax regime and pays tax
under normal provisions of the Act, since in such case his tax liability would be Rs. 53,100, being
lower than the tax liability default tax regime under section 115BAC
c) No, Mr. Hardik should not exercise the option of shifting out of the default tax regime, since as per
default tax regime, his tax liability would be Rs. 18,510, being lower than the tax liability under
normal provisions of the Act
d) No, Mr. Hardik should not exercise the option of shifting out of the default tax regime, since as per
default tax regime, his tax liability would be Rs. 27,850, being lower than the tax liability under
normal provisions of the Act

Answer Keys:
1 2 3 4
(d) (c) (d) (c)

Question 3.
Mr. Rajan, aged 62 years, an Indian citizen, resides in Delhi. His wife Sheetal and daughter Riya also
reside with him. Riya, aged 16 years, is studying in 12th Standard in DAV school at New Delhi. Mr.
Rajan left for employment to Dubai on 15 September, 2023 but his family did not accompany him. He
returned to India on 25 March 2024. Mr. Rajan had gone outside India for the first time in his life.
During April, 2023 to September, 2023, he was working with a multinational company in Delhi. He
earned salary of Rs. 14,00,000 from his job in India. He paid Tuition Fee of Rs. 1,80,000 for Riya’s
education in DAV school.
Apart from that, Mr. Rajan also earned professional income of Rs. 60,00,000 (Gross Receipts – Rs. 90
lakhs) from India. During the year, he also earned interest from his Indian savings bank account to
the tune of Rs. 12,000 and interest from fixed deposits with nationalized banks of Rs. 45,000. Mr.
Rajan also earned a salary income equivalent to Rs. 6,00,000 for his job in Dubai, on which no tax is
paid or payable in Dubai, which was deposited in his bank account in Dubai and later on remitted to
India. Mr. Rajan has exercised the option to shift out of the default tax regime under section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions: -
1) What is the residential status of Mr. Rajan for the previous year 2023-24?
a) Resident and ordinarily in India
b) Resident but not ordinarily resident in India
c) Non-resident in India
d) Deemed resident but not ordinarily resident in India

2) What would be the income chargeable to tax under the head “Salaries” in the hands of Mr. Rajan
in India for P.Y. 2023- 24?
a) Rs. 20,00,000
b) Rs. 19,50,000
c) Rs. 13,50,000
d) Rs. 19,60,000

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3) How much deduction is available under Chapter VI-A from the Gross Total Income of Mr. Rajan?
a) Rs. 2,30,000
b) Rs. 1,95,000
c) Rs. 1,60,000
d) Rs. 2,00,000

4) What shall be the tax liability of Mr. Rajan for the A.Y. 2024- 25?
a) Rs. 22,69,810
b) Rs. 22,58,940
c) Rs. 22,56,080
d) Rs. 22,72,670

5) What would be the due date for filing income-tax return of Mr. Rajan for the P.Y. 2023-24?
a) 31st July, 2024
b) 31st October, 2024
c) 30th November, 2024
d) 31st March, 2025

Answer Keys:
1 2 3 4 5
(d) (c) (d) (c) (b)

Question 4.
Mr. X wanted to file his return of income for the previous year 2023-24. He required assistance for
which he has approached you. He has shared the following details relevant to the P.Y. 2023-24.
Mr. X owned a house property in Mumbai and the same was rented out for Rs. 70,000 p.m. He claims
that this was the only income which he earned during the P.Y. 2023-24. However, when you had sought
for his bank statement, you observed the following information additionally.
There is a credit for Rs. 23,975 towards income-tax refund which includes Rs. 5,775 towards interest
on income tax refund. On 15 August, 2023, the bank statement showed a credit of Rs. 55,000 which
he claimed to have received as a gift from his grandchildren on his 60th birthday. On further
assessment you were able to understand that Mr. X and his wife had travelled to Australia during the
P.Y. 2023-24 to spend some time with their daughter, who is staying in Australia, since her marriage.
On scrutiny of their passport and relevant documents you conclude that they had left India on 27
September, 2023 and retuned on 30 March, 2024. During the 4 years preceding previous year 2023-
24, both had stayed in India for 320 days. Prior to that, they had been staying only in India.
1) What is the residential status of Mr. X for the P.Y. 2023-24?
a) Resident and ordinarily resident
b) Resident but not ordinarily resident
c) Non-resident
d) Deemed resident but not ordinarily resident

2) Mr. X requests you to compute his tax liability for the A.Y. 2024-25 in a manner such that his tax
liability is minimum. Accordingly, his tax liability would be
a) Rs. 22,750
b) Rs. 29,910
c) Rs. 32,510
d) Nil

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3) Mr. X had given the house property at Mumbai on rent to Mr. Y, a salaried employee. Is there
any requirement to deduct tax at source on such rent by Mr. Y, if yes, what would be the amount
of TDS to be deducted?
a) No, there is no requirement to deduct tax at source, since Mr. Y is a salaried employee
b) Yes, Mr. Y is required to deduct tax at source of Rs. 42,000
c) Yes, Mr. Y is required to deduct tax at source of Rs. 31,500
d) No, there is no requirement to deduct tax at source, since Mr. X is a non-resident

4) Which of the following statements is correct with respect to advance tax liability of Mr. X for P.Y.
2023-24?
a) Advance tax liability shall not arise to Mr. X since he is a non-resident
b) Advance tax liability shall not arise, since Mr. X is a resident senior citizen and he has no income
chargeable under the head “Profits and gains of business or profession
c) Advance tax liability shall arise, since he is a non-resident
d) Advance tax liability shall arise, since his tax liability is not less than Rs. 10,000

Answer Keys:
1 2 3 4
(a) (d) (b) (b)

Question 5.
Mr. Zukaro, aged 42 years, a Singapore citizen, visits India for business purpose on a regular basis.
He was in India for the first time in the year 2019-20 for 270 days, in the year 2020-21 for 190 days,
in the year 2021-22 for 145 days and in the year 2022-23 for 155 days. In the current financial year
2023-24, he along with his family had come to India on 10 August, 2023 for a pleasure trip. His family
returned to Singapore on 31 August, 2023, however he stayed back to complete some business
commitments and then returned to Singapore on 17 November, 2023.
Mr. Zukaro owns a manufacturing unit in Singapore. He basically comes to India for procurement of
raw material. He has appointed Mr. Manish, as a dependent agent in Mumbai, who procures raw
material from India and then exports it to Singapore to his manufacturing unit and then sells the
finished product there. An income of Rs. 8,75,000 was received in Singapore out of this activity in the
P.Y. 2023-24. He had purchased a residential property for Rs. 17,50,000 in Indore in April 2020. On
getting an attractive deal in November, 2023, he sold the property for Rs. 26,25,000. He also paid
brokerage @2% on sales consideration.
Mr. Zukaro had also purchased an agricultural land in India and leased it out to a tenant. The tenant
shares a portion of his agricultural income with Mr. Zukaro as a consideration for rent of land every
year. The share in the income from the land for the previous year 2023-24 was Rs. 6,50,000.
Cost inflation index (CII) for the Financial Year (F.Y.) 2020-21: 301; F.Y. 2023-24: 348
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:-
1) What is the Residential Status of Mr. Zukaro for the assessment year 2024-25?
a) Resident and ordinarily resident
b) Resident but not ordinarily resident
c) Non-resident
d) Deemed resident but not ordinarily resident

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2) Assume for the purpose of answering this question only, that Mr. Zukaro is a non-resident in India
for the P.Y. 2023-24, would income of Rs. 8,75,000 earned though activity of procuring raw
material for manufacturing unit in Singapore be taxable in India?
a) Yes, since it is deemed to accrue or arise in India through a business connection in India
b) No, as it is confined to purchase of goods in India for further export and hence not an income deemed
to accrue or arise in India
c) Yes, as business is controlled from India
d) No, as income is received outside India

3) Would income arising from transfer of residential property in Indore is chargeable to tax in India
in the hands of Mr. Zukaro? If yes, compute the amount of capital gains chargeable to tax.
a) Yes, long term capital gain of Rs. 5,49,244 is chargeable to tax, since income is deemed to accrue
or arise in India and hence taxable in his hands though he is non-resident in India
b) Yes, long term capital gain of Rs. 6,01,755 is chargeable to tax, since he is resident in India
c) Yes, long term capital gain of Rs. 5,49,244 is chargeable to tax, since he is resident in India
d) Yes, long term capital gain of Rs. 6,01,744 is chargeable to tax, since income is deemed to accrue
or arise in India and hence taxable in his hands though he is non-resident in India

4) Would income earned from agricultural land given on lease is taxable in the hands of Mr. Zukaro?
a) No, such income is exempt, since it is agricultural income
b) Yes, such income is taxable as income from house property, since land is given on lease
c) Yes, such income is taxable as income from other sources, since land is given on lease
d) Yes, such income is taxable since he is non-resident even though it is an agricultural income

5) What is the tax liability of Mr. Zukaro for A.Y. 2024-25 assuming that he has exercised the option
to shift out of the default tax regime and pays tax under normal provisions of the Act?
a) Rs. 2,05,240
b) Rs. 3,95,040
c) Rs. 2,87,350
d) Rs. 2,98,840

Answer Keys:
1 2 3 4 5
(a) (b) (c) (a) (d)

Question 6.
Mr. Animesh, an Indian citizen, aged 61 years, has set-up his business in Canada and is residing in
Canada since 2011. He owns a house property in Canada, half of which is used by him for his residence
and half is given on rent (converted into INR is Rs. 12,00,000 p.a.).
He purchased a flat in Delhi on 13.10.2021 for Rs. 42,00,000. The stamp duty value of the flat was Rs.
35,00,000. He has taken a loan from Canara Bank in India of Rs. 34,00,000 for purchase of this flat.
The interest on such loan for the F.Y. 2023-24 was Rs. 3,14,000 and principal repayment was Rs.
80,000. Mr. Animesh has given this flat on monthly rent of Rs. 32,500 since April, 2023. The annual
property tax of Delhi flat is Rs. 40,000 which is paid by Mr. Animesh, whenever he comes to India to
meet his parents. Mr. Animesh visited India for 124 days during the previous year 2023-24. Before
that he visited India in total for 366 days during the period 1.4.2019 to 31.3.2023.
He had a house in Ranchi which was sold in May 2020. In respect of this house, he received arrears
of rent of Rs. 2,96,000 in February 2024 (not taxed earlier).
He also derived some other incomes during the F.Y. 2023-24 which are as follows:

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i) Profit from business in Canada Rs. 2,75,000

ii) Interest on bonds of a Canadian Co. Rs. 6,20,000 out of which 50% was received in India
iii) Income from Apple Orchid in Nepal given on contract and the yearly contract fee of Rs. 5,00,000
for F.Y. 2023-24, was received by Animesh in Nepal
Mr. Animesh has sold 10,000 listed shares @ Rs. 480 per share of A Ltd., an Indian company, on
15.9.2023, which he acquired on 05-04-2017 @ Rs. 100 per share. STT was paid both at the time of
acquisition as well as at the time of transfer of such shares. On 31-01-2018, the shares of A Ltd. were
traded on a recognized stock exchange as under:
Highest price - Rs. 300 per share
Average price - Rs. 290 per share
Lowest price - Rs. 280 per share
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:-
1) What would be the residential status of Mr. Animesh for the A.Y. 2024-25?
a) Resident and ordinarily resident in India
b) Resident but not ordinarily resident in India
c) Non-resident
d) Deemed resident

2) What would be amount of income taxable under the head “Income from house property” in the
hands of Mr. Animesh for the A.Y. 2024-25?
a) Rs. 2,52,200
b) Rs. 1,38,200
c) Rs. 9,78,200
d) Rs. 10,92,200

3) What amount of capital gain would arise in the hands of Mr. Animesh on transfer of shares of A
Ltd?
a) Rs. 18,00,000
b) Rs. 19,00,000
c) Rs. 20,00,000
d) Rs. 38,00,000

4) What would be total income of Mr. Animesh for the A.Y. 2024-25, if he has exercised the option
to shift out of the default tax regime and pays tax under normal provisions of the Act?
a) Rs. 22,82,200
b) Rs. 22,68,200
c) Rs. 22,48,200
d) Rs. 21,68,200

5) What would be the tax liability (computed in the manner so as to minimise his tax liability) of Mr.
Animesh for the A.Y. 2024- 25?
a) Rs. 1,82,950
b) Rs. 1,87,110
c) Rs. 1,80,350
d) Rs. 1,84,510

Answer Keys:
1 2 3 4 5
(b) (b) (a) (d) (c)

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Question 7.
Mr. Akash (aged 47 years) is a CEO of BAC Enterprises (P) Ltd. During the P.Y.2023-24, he has
earned the following income -
- Salary of Rs. 45 lakhs
- Long-term capital gain on sale of listed equity shares (STT paid) amounting to Rs. 6,54,000
- Dividend of Rs. 12,00,000 from shares of Indian companies
- Interest on saving bank account with SBI of Rs. 16,000
- Interest on fixed deposits with BOB of Rs. 45,000
Mr. Akash has made the following payments towards medical insurance premium for health policies
taken for his family members:
- Medical premium for his spouse aged 43 years: Rs. 13,500 (by cheque)
- Medical premium for his mother aged 65 years: Rs. 26,670 (by cheque)
- Preventive health check-up of Rs. 5,500 each for his wife and mother in cash.
Mr. Akash also incurred medical expenses, by credit card, of Rs. 17,000 for the treatment of his
mother and of Rs. 27,000 for his father who is 67 years old.
He has multiple life insurance policies. The details of such policies are given hereunder:
Particulars X Y Z A B
(Term insurance
policy)
Date of issue 1.4.2017 1.4.2024 1.4.2025 1.4.2024 1.3.2023
Annual premium
Rs. 40,000 Rs. 3,00,000 Rs. 2,00,000 Rs. 2,50,000 Rs. 80,000
(excluding GST)
GST@18% Rs. 7,200 Rs. 54,000 Rs. 36,000 Rs. 45,000 14,400
Total premium Rs. 47,200 Rs. 3,54,000 Rs. 2,36,000 Rs. 2,95,000 Rs. 94,400
Date of maturity 31.3.2026 31.3.2033 31.3.2034 31.3.2033 28.3.2056
Consideration
received on
Rs. 7,00,000 Rs. 36,00,000 Rs. 28,00,000 Rs. 30,00,000 -
maturity (including
bonus)
Sum assured Rs. 5,00,000 Rs. 33,00,000 Rs. 25,00,000 Rs. 27,00,000 Rs. 2,00,00,000

1) Which are the life insurance policies in respect of which Mr. Akash would be eligible for exemption
under section 10(10D) in respect of maturity proceeds? Choose the option most beneficial to Mr.
Akash.
a) X, Y and Z
b) X and Y
c) X, Z and A
d) Y and Z
2) What would be your answer to MCQ 1, if Mr. Akash surrendered LIC A in A.Y. 2026-27 and
claimed exemption under section 10(10D) in respect of such LIC? This information is only for the
purpose of this MCQ.
a) X, Y and Z
b) X and Y
c) X, Z and A
d) Y and Z

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3) What would be the amount of deduction available to Mr. Akash under Chapter VI-A for the A.Y.
2024-25 if he has exercised the option to shift out of the default tax regime?
a) Rs. 82,170
b) Rs. 78,500
c) Rs. 2,28,500
d) Rs. 2,32,170

4) What is Mr. Akash’s tax liability for A.Y.2024-25 under the default tax regime under section
115BAC?
a) Rs. 16,97,350
b) Rs. 16,80,190
c) Rs. 18,41,270
d) Rs. 18,84,170

5) What is Mr. Akash’s tax liability for A.Y.2024-25 if he has exercised the option to shift out of the
default tax regime?
a) Rs. 17,30,470
b) Rs. 18,93,720
c) Rs. 17,29,210
d) Rs. 17,27,500
Answer Keys:
1 2 3 4 5
(a) (c) (c) (b) (a)

Question 8.
Mr. Kamal, aged 45 years, commenced operations of the business of a new three-star hotel in Delhi
on 1.4.2023. He incurred capital expenditure of Rs. 50 lakhs on land in March, 2023 exclusively for
the above business, and capitalized the same in his books of account as on 1st April, 2023. Further,
during the P.Y. 2023-24, he incurred capital expenditure of Rs. 2 crores (out of which Rs. 50 lakhs
was for acquisition of land and Rs. 1.50 crore was for acquisition of building) exclusively for the above
business. The payments in respect of the above expenditure were made by account payee cheque. The
profits from the business of running this hotel (before claiming deduction under section 35AD) for the
A.Y.2024-25 is Rs. 85 lakhs.
He has employed 220 new employees during the P.Y.2023-24, the details of whom are as follows –
Total monthly emoluments
No. of employees Date of employment Regular/ Casual
per employee (Rs.)
(i) 40 1.6.2023 Regular 24,000
(ii) 80 1.7.2023 Regular 24,500
(iii) 50 1.7.2023 Casual 25,500
(iv) 30 1.9.2023 Regular 25,000
(v) 20 1.12.2023 Casual 24,000
All regular employees participate in recognized provident fund and their emoluments are paid by
account payee cheque. His gross revenue from the hotel is Rs. 11 crores. Mr. Kamal has opted out of
the default tax regime under section 115BAC.
Mr. Kamal also has another existing business of running a four-star hotel in Ahmedabad, which
commenced operations 20 years back, the profits from which are Rs. 140 lakhs for the A.Y.2024-25

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1) Assuming that Mr. Kamal has fulfilled all the conditions specified for claim of deduction under
section 35AD and has not claimed any deduction under Chapter VI-A under the heading “C. –
Deductions in respect of certain incomes”, what would be the quantum of deduction under section
35AD, which he is eligible to claim as deduction for A.Y.2024-25?
a) Rs. 250 Lakhs
b) Rs. 200 Lakhs
c) Rs. 100 Lakhs
d) Rs. 150 Lakhs
2) What would be the income chargeable/loss under the head “Profits and gains of business or
profession” for the A.Y.2024-25 in the hands of Mr. Kamal?
a) Rs. 75 Lakhs
b) Rs. 140 Lakhs
c) Rs. 25 Lakhs
d) (Rs. 10 Lakhs)

3) Would Mr. Kamal be eligible for deduction under section 80JJAA in the A.Y.2024-25? If so, what
is the quantum of deduction?
a) No, he would not be eligible for deduction u/s 80JJAA
b) Yes; Rs. 75,00,000
c) Yes; Rs. 81,72,000
d) Yes; Rs. 99,72,000
Answer Keys:
1 2 3
(d) (a) (b)

Question 9:
Mr. Shashikant, aged 45 years, is an Indian citizen and a member of the crew of a Singapore bound
Indian ship engaged in carriage of passengers in international traffic departing from Chennai port
on 29th May, 2023.

Particulars Date
Date entered into the Continuous Discharge Certificate in respect of joining 29th May, 2023
the ship by Mr. Shashikant
Date entered into the Continuous Discharge Certificate in respect of signing 19th December,
off the ship by Mr. Shashikant 2023

He stayed in India in the last 4 previous years preceding the P.Y. 2023-24 for 400 days and for a period
of 750 days in the last 7 previous years preceding to P.Y. 2023-24. He received salary of Rs. 7,20,000
in his NRE account maintained with State Bank of India, Chennai Branch.
He also furnished details of other income earned by him during the previous year 2023-24:

S.no Particulars Amt (Rs. )

1. Dividend declared in the month of April, 2023 by X limited, a Singapore
1,00,000
company. The same was received by him in Singapore.
2. Agriculture income from land in Pakistan received in India 2,50,000
3. Rent received from house property in Chennai 3,60,000

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Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) What is Mr. Shashikant’s residential status for the P.Y 2023-24?
a) Resident and ordinarily resident
b) Resident but not ordinarily resident
c) Non-resident
d) Deemed resident

2) What would be the total income of Mr. Shashikant for A.Y.2024-25 assume that he does not opt
to pay tax under section 115BAC?
a) Rs. 7,10,000
b) Rs. 12,72,000
c) Rs. 5,02,000
d) Rs. 6,02,000

3) Assume for the purpose of answering this question that Mr. Shashikant has transferred his house
property in Chennai to his minor married daughter on 1st April, 2023 and his wife is a housewife
and does not have any income. The minor married daughter receives the rent from house property.
In such case, his total income as per normal provisions of the Act would be -
a) Rs. 5,00,500
b) Rs. 6,00,500
c) Rs. 5,02,000
d) Rs. 6,02,000

4) Mr. Shashikant would like to minimize his tax liability and consulted you to compute the amount
of same for the P.Y. 2023-24. Accordingly, his tax liability (rounded off) would be –
a) Rs. 13,420
b) Rs. 13,210
c) Rs. 23,610
d) Rs. 34,220

Answer Keys:
1 2 3 4
(c) (c) (a) (b)

Question 10:
Mr. Suraj (aged 48 years) furnishes the following particulars for the previous year 2023-24 in respect
of an industrial undertaking established in "Special Economic Zone" in March 2017. It began
manufacturing in April 2017.
Particulars (₹)
Total sales 85,00,000
Export sales [proceeds received in India] 45,00,000
Domestic sales 40,00,000
Profit from the above undertaking 20,00,000
Export Sales of F.Y. of 2023-24 include freight and insurance of Rs. 5 lakhs for delivery of goods
outside India.

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He received rent of Rs. 25,000 per month for a commercial property let out to Mr. Sudhir, a salaried
individual. He earned interest on savings bank A/c of Rs. 12,500 and interest on Post Office savings
A/c of 5,500 during the P.Y. 2023-24.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) Compute the amount of export turnover and total turnover for purpose of computing deduction
under section 10AA for A.Y. 2024-25.
a) Rs. 45,00,000 and Rs. 85,00,000, respectively
b) Rs. 40,00,000 and Rs. 80,00,000, respectively
c) Rs. 45,00,000 and Rs. 80,00,000, respectively
d) Rs. 40,00,000 and Rs. 85,00,000, respectively

2) Compute the amount of deduction available under section 10AA to Mr. Suraj under section 10AA
for A.Y. 2024-25.
a) Rs. 10,00,000
b) Rs. 4,70,588
c) Rs. 5,62,500
d) Rs. 5,00,000

3) Assume for the purpose of this question only that Mr. Suraj established SEZ Unit and began
manufacturing in April, 2019. Compute the amount of deduction available under section 10AA
for A.Y. 2024-25.
a) Rs. 10,00,000
b) Rs. 9,41,176
c) Rs. 11,25,000
d) Rs. 5,00,000

4) Compute the total income of Mr. Suraj for the previous year 2023-24, assuming that he does not
opt to pay tax under section 115BAC.
a) Rs. 12,14,500
b) Rs. 17,18,000
c) Rs. 17,14,500
d) Rs. 17,28,000

Answer Keys:
1 2 3 4
(b) (d) (a) (c)

Question 11:
Mr. Kishan is engaged in the following activities on agricultural land situated in India, total area of
land is 5 acres.
Activity A: He grows saplings or seedlings in a nursery spreading over on one acre land, the sale
proceeds of which is Rs. 5,00,000. Cost of plantation is Rs. 1,40,000. Basic operations are not
performed for growing saplings or seedlings.
Activity B: He grows cotton on 3 acres land. 40% of cotton produce is sold for Rs. 4,00,000, the cost
of cultivation of which is Rs. 2,25,000. The cost of cultivation of balance 60% cotton is Rs. 3,37,500
and the market value of the same is Rs. 6,00,000, which is used for the purpose of manufacturing yarn.
After incurring manufacturing expenses of Rs. 1,00,000, yarn is sold for Rs. 8,50,000

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Activity C: Land measuring 1 acres is let out to Mr. Ramesh on monthly rental of Rs. 15,000 which is
used by Mr. Ramesh as follows:
- 50% of land is used for agricultural purpose
- 50% of land is used for non-agricultural purpose.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) What amount of income arising from activity A would constitute agricultural income in the hands
of Mr. Kishan?
a) Rs. 5,00,000
b) Nil
c) Rs. 3,60,000
d) Rs. 1,40,000

2) What amount of income from activity B with respect to sale of cotton would constitute agricultural
income or/and business income in the hands of Mr. Kishan?
a) Rs. 1,75,000 as agricultural income
b) Rs. 1,75,000 as business income
c) Rs. 1,75,000 as agricultural income and Rs. 2,62,500 as business income
d) Rs. 4,00,000 as agricultural income

3) What amount of the income from activity B with respect to sale of yarn constitute agricultural
income or/and business income in the hands of Mr. Kishan?
a) Rs. 1,50,000 as agricultural income
b) Rs. 2,62,500 as agricultural income and Rs. 1,50,000 as business income
c) Rs. 3,37,500 as agricultural income and Rs. 1,50,000 as business income
d) Rs. 4,12,500 as business income

4) What amount of income arising from activity C constitute agricultural income or otherwise in the
hands of Mr. Kishan?
a) Whole amount of Rs. 1,80,000 would be agricultural income
b) Whole amount of Rs. 1,80,000 would be business income.
c) Rs. 90,000 would be agricultural income and Rs. 63,000 is chargeable to tax as income from house
property
d) Rs. 90,000 would be agricultural income and Rs. 90,000 is chargeable to tax under the head “Income
from Other Sources”

5) Compute the gross total income of Mr. Kishan for the P.Y. 2023-24, assuming he has no other
source of income.
a) Rs. 2,40,000
b) Rs. 3,30,000
c) Rs. 5,02,500
d) Rs. 2,13,000

Answer Keys:
1 2 3 4 5
(c) (a) (b) (d) (a)

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Question 12:
Ananya Gupta, a citizen of India, lives with her family in New York since the year 2001. She visited
India from 21st March, 2023 to 28th September, 2023 to take care of her ailing mother. In the last four
years, she has been visiting India for 100 days every year to be with her mother. She owns an
apartment at New York, which is used as her residence. The expected rent of the house is $ 32,000
p.a. The value of one USD ($) may be taken as Rs. 75. Municipal taxes paid in New York in January,
2024 are $ 2,000.
She took ownership and possession of her house in New Delhi on 25th March, 2023, for self- occupation,
while she is in India. The municipal valuation is Rs. 4,20,000 p.a. and the fair rent is Rs. 4,50,000 p.a.
She paid property tax of Rs. 22,000 to Delhi Municipal Corporation on 21 st March, 2024. She had
taken a loan of Rs. 16 lakhs @ 10% p.a. from IDBI Bank on 1st April, 2019 for constructing this house
and the construction got completed on 20th March, 2023. No amount has been paid towards principal
repayment so far. The house is vacant for the rest of the year i.e., from October 2023 to March 2024.
She had a house property in Mumbai, which was sold on 28th March, 2023. In respect of this house,
she received arrears of rent of Rs. 3,00,000 on 4th February, 2024. This amount has not been charged
to tax earlier.
She does not have any income under any other source in India during previous year in 2023-24.
Ananya Gupta does not want to opt for the new tax regime under section 115BAC for A.Y. 2024-25.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) What would be the residential status of Ananya Gupta for A.Y. 2024-25?
a) Resident and ordinarily resident
b) Resident but not ordinarily resident
c) Deemed resident but not ordinarily resident in India
d) Non-resident
2) Ms. Ananya Gupta can claim benefit of “Nil” Annual Value under section 23(2) in respect of -
a) Her Delhi houses
b) Her New York house, since it is more beneficial; her Delhi house will be deemed to be let out and
expected rent would be the annual value.
c) Her Delhi house alone; her New York house will be deemed to be let out and expected rent would
be the annual value.
d) Both her Delhi house and New York house, since benefit of Nil Annual value u/s 23(2) is available
in respect of two-house properties.
3) What is the income chargeable under the head “Income from house property” of Ananya Gupta
for A.Y. 2024-25?
a) Rs. 15,65,000
b) Rs. 3,09,600
c) Rs. 1,00,000
d) Rs. 10,000
4) Assuming that, for the purpose of this question alone, Ananya Gupta has let out her flat in New
York during the six months (April to September) when she is in India, for a sum of $ 6,000 p.m.
Such rent was received in a bank account in New York and then remitted to India through
approved banking channels. What would be the income from house property chargeable to tax in
her hands in India for A.Y. 2024-25?
a) Rs. 10,000
b) Rs. 17,85,000
c) Rs. 17,95,000
d) Rs. 18,85,000

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Answer Keys:
1 2 3 4
(d) (a) (d) (a)

Question 13:
Ram Builders & Developers is the sole-proprietorship concern of Mr. Ram. The main business of the
concern is construction, development and sale of residential and commercial units. Ram Builders &
Developers developed a project named Luxuria Heaven, which has both residential and commercial
units with its own funds. It obtained certificate of completion for the said project with effect from
31/03/2023. Ram sold majority of its residential units and commercial units in the F.Y.2023-24.
However, around 30 residential units and 15 commercial units were held by him as stock in trade as
on 31.3.2024. During this period, there was a slump in the real estate sector. In order to earn some
income from these units, Ram incidentally let out some of the units held as stock-in-trade. The details
of units constructed, sold and held as stock-in-trade are given hereunder:

Units vacant Actual rent per

Units held as Units let
during the unit per month
stock-in- out during
Total Units Units whole of P.Y. [in respect of
Particulars trade as on P.Y. 2023-
Constructed Sold 2023-24 let out units
31.3.2024 24 out of
mentioned in
[(2) – (3)] (4) [(4) – (5)]
(5)]
(1) (2) (3) (4) (5) (6) (7)
Residential
100 70 30 10 20 10,000 pm.
Units
Commercial
40 25 15 5 10 18,000 pm.
Units
140 95 45 15 30

Out of the residential units sold, 5 residential units were sold to his friend, Mr. Gaurav, who is also a
real estate developer, on 15.2.2024, for Rs. 20 lakhs each. The stamp duty value on the date of sale
was for Rs. 23 lakhs each. However, the agreement of sale was entered into on 1.11.2023, on which the
date the stamp duty value was Rs. 22 lakhs. Mr. Ram received Rs. 1 lakh by way of account payee
bank draft on 1.11.2023 from Mr. Gaurav.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) While computing the total income of Mr. Ram, the income from residential and commercial units
let out during the P.Y. 2023-24 will be taxed under head:
a) Income from house property
b) Profits and gains of business or profession
c) Income from let out residential units will be taxed under the head “Income from house property” and
income from let out commercial units will be taxed under the head “Profits and gains of business or
profession”
d) Income from other source

2) What would be the tax treatment of vacant residential and commercial units held as stock in trade
as on 31.3.2024?

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a) The vacant residential units would be deemed to be let out and expected rent would be deemed as
the annual value chargeable to tax under the head “Income from house property” for A.Y. 2024-25.
b) The vacant units, both residential and commercial, would be deemed to be let out and expected rent
would be deemed as the annual value chargeable to tax under the head “Income from house property”
for A.Y. 2024-25.
c) The annual value of both vacant residential and commercial units would be Nil for A.Y.2024-25.
Hence, no income is chargeable for such units under the head “Income from house property” for
A.Y. 2024-25.
d) Vacant units held as stock-in-trade can never be deemed as let out at any point of time

3) What would be the full value of consideration in respect of sale of units to Mr. Gaurav for the
purpose of computing profits and gains from transfer of units?
a) Rs. 1,00,00,000
b) Rs. 1,15,00,000
c) Rs. 1,10,00,000
d) Rs. 99,00,000

4) Assume that Rs. 1 lakh was paid in cash by Mr. Gaurav to Mr. Ram on 1.11.2023 instead of by
way of account payee bank draft, what would be the income chargeable under section 56(2)(x) in
the hands of Mr. Gaurav?
a) Rs. 15 lakh
b) Rs. 10 lakh
c) Nil, since the stamp duty value is within the permissible deviation limit
d) Nil, since section 56(2)(x) is not applicable in this case

Answer Keys:
1 2 3 4
(a) (c) (a) (d)

Question 14:
For the assessment year 2024-25, Mr. Sonu submits the following information:
Particulars Building at Building at
Chennai (Rs.) Kochi (Rs.)
Municipal valuation 35,000 80,000
Standard Rent 36,000 70,000
Fair Rent 31,000 82,000
Rent received 38,000 68,000
Municipal taxes paid by tenant Mr. Ramu for building at Chennai 3,000 4,000
and paid by Mr. Sonu for Building at Kochi
Repairs paid by tenant Mr. Ramu for Chennai building and Mr. Sonu 500 18,000
paid for Kochi building
Land revenue paid 2,000 16,000
Insurance premium paid 500 2,000
Interest on loan borrowed for payment of municipal tax of house 200 400
property

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Nature of occupation Let out for Let out for

residence business
Date of completion of construction 1.4.1996 1.7.2008
Mr. Sonu is constructing one more building in Mumbai during the previous year 2023-24. Mr. Raju,
a film director, took on rent the building under construction in Mumbai at Rs. 5,000 per month for
his film shooting. The construction of the said building would be completed by April 2024. Mr. Sonu
is a real estate developer and letting out properties is not the business of Mr. Sonu.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) Which of the building’s income is chargeable to tax under the head “Income from house property”
in the hands of Mr. Sonu?
a) Building at Chennai only
b) Building at Kochi only
c) Both buildings at Chennai and Kochi
d) All the three buildings at Chennai, Kochi and Mumbai

2) Which of the following payments/expenditure is allowable as deduction while computing income

under the head “Income from house property” incurred in respect of the building at Chennai and
Kochi?
a) Municipal taxes paid by Mr. Sonu and Mr. Ramu
b) Municipal tax, land revenue, insurance premium, interest on loan borrowed for payment of
Municipal tax paid by Mr. Sonu
c) Only municipal tax paid by Mr. Sonu
d) Both Municipal tax and repairs paid by Mr. Sonu

3) Under which head of income, the amount received from Mr. Raju would be chargeable to tax?
a) Income from house property
b) Profits and gains from business or profession
c) Income from other sources
d) Income from house property or Income from other sources, at the option of Mr. Sonu

4) What is the amount chargeable to tax under the head “Income from house property” in the hands
of Mr. Sonu for the P.Y. 2023-24?
a) Rs. 72,800
b) Rs. 81,200
c) Rs. 1,14,800
d) Rs. 70,700

Answer Keys:
1 2 3 4
(c) (c) (c) (a)

Question 15:
Mr. Ganesha (a salaried person) has three houses. One in Thane (Maharashtra), second in Jaipur
(Rajasthan) and third in Ratlam (Madhya Pradesh). Details of the flats/houses are as follows:
- Thane flat: 3 BHK flat purchased in April, 2003 for Rs. 90 lakhs. Afterwards, interior work done
in 2006 of Rs. 15 lakhs. Mr. Ganesha took loan of Rs. 65 lakhs for purchase of this flat in 2001 and
settled full loan in 2019.

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- Jaipur house: Purchased in July, 2020 of Rs. 62 lakhs and interior work done in September, 2021
of Rs. 15 lakhs. Loan taken for purchase of this house of Rs. 15 lakhs in June, 2019. As per interest
certificate, he paid Rs. 12,00,500 and Rs. 43,500 towards principal and interest, respectively,
during the P.Y. 2023-24.
- Ratlam House: Purchased in December 2020 for Rs. 70 lakhs (stamp duty value of Rs. 65 lakhs).
For acquiring this house, he took loan of Rs. 40 lakhs from Canara Bank. Loan was sanctioned on
1.8.2020. He pays EMI of Rs. 38,100 per month. As per interest certificate, for the previous year
2023-24, he paid Rs. 60,900 and Rs. 3,96,300 towards principal and interest, respectively.

Thane Jaipur House (Apr-23

Particulars Ratlam House
House to Dec-23)
Municipal Taxes paid by Mr. Ganesha 18,574 8,090 6,909
Municipal value (per month) 30,500 6,800 7,200
Fair Rent (per month) 33,000 7,000 7,500
Standard Rent (per month) 32,000 8,000 7,300
Other details are as follows:
- He has sold Jaipur house on 1st January, 2024 for Rs. 90 lakhs and invested Rs. 15 lakh in RECL
bonds issued by the Central Government on 10th August 2024.
- Mr. Ganesha is working in WinDoor Exports Pvt Ltd, Mumbai and self-occupied Thane flat. He
earned salary of Rs. 22,50,350 for the previous year 2023-24.
- He has no other income from any source for the P.Y. 2023-24.
- He has given Ratlam house on rent for F.Y. 2023-24 to Mr. Pratap on a monthly rent of Rs. 8,500.
- He has given Jaipur house on rent for the period of April, 2023 to June, 2023 to Mrs. Madhura
Mahto on monthly rent of Rs. 7,100 and vacant for remaining period from July, 2023 to
December, 2023.
Mr. Ganesha would not like to opt concessional tax rates available under section 115BAC. Cost
inflation index (CII) for the Financial Year (F.Y.) 2020-21 is 301; 2021-22: 317; F.Y. 2023-24: 348.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) What would be Net Annual Value of each house for the previous year 2023-24?
a) Thane – Nil; Jaipur – Rs. 13,210; Ratlam – Rs. 95,091
b) Thane – Nil; Jaipur – Rs. 54,910; Ratlam – Rs. 95,091
c) Thane – Nil; Jaipur – Rs. 21,300; Ratlam – Rs. 1,02,000
d) Thane – Nil; Jaipur – Rs. 13,210; Ratlam – Rs. 80,691

2) What would be income/loss under the head “Income from house property” in the hands of Mr.
Ganesha?
a) Loss of Rs. 1,67,689
b) Loss of Rs. 2,86,236
c) Loss of Rs. 3,20,489
d) Loss of Rs. 3,63,989

3) How much amount will be carried forward as loss from house property for the subsequent
assessment year 2024-25?
a) Rs. 3,63,989
b) Rs. 1,63,989
c) Rs. 2,00,000
d) Rs. 1,50,000

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4) What would the amount of capital gains chargeable to tax in the hands of Mr. Ganesha during the
previous year 2023-24?
a) Short-term capital gains of Rs. 13,00,000
b) Long-term capital gains of Rs. 18,98,962
c) Long-term capital gain of Rs. 1,85,206
d) Long-term capital gain of Nil, since he is eligible for deduction u/s 54EC in respect of amount
invested in RECL bonds issued by Central Government

5) What would be the gross total income of Mr. Ganesha for the A.Y. 2024-25?
a) Rs. 22,99,810
b) Rs. 20,99,810
c) Rs. 21,85,556
d) Rs. 38,99,312

Answer Keys:
1 2 3 4 5
(a) (d) (b) (c) (c)

Question 16:
“LUX Enterprise” a proprietorship firm of Mr. Lucifer Mornigstar, a resident individual, in
Maharashtra engaged in business of printing and publishing. The following details pertain to the
assets of the business:
Particulars Date of purchase Date of put to use Amount
Office building: Superstructure 30.09.2023 30.12.2023 1,85,00,000
constructed on leased land
BMW M4 convertible car 23.08.2021 25.08.2021 94,80,000
Machineries used in printing 25.09.2022 15.10.2023 9,12,500
and publishing process
Notes:
(1) Car is also used for personal purposes; disallowance for personal use may be taken at 20%.
(2) Written down value of Plant & Machinery (Depreciable @15%) as on 1.4.2023 is Rs. 1,45,00,000.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions, assuming all the aforementioned assets are purchased through account payee
cheque:
1) What would be the amount of depreciation allowable on plant and machinery (@15%) for the
previous year 2023-24?
a) Rs. 24,25,938
b) Rs. 23,34,688
c) Rs. 24,94,375
d) Rs. 24,03,125

2) What would be the WDV of plant and machinery (Depreciable@15%) as on 1.4.2024?

a) Rs. 1,29,86,562
b) Rs. 1,29,18,125
c) Rs. 1,30,77,812
d) Rs. 1,30,09,375

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3) What would the WDV of Office building superstructure constructed on leased land as on 1.4.2024?
a) Rs. 1,85,00,000
b) Rs. 1,66,50,000
c) Rs. 1,75,75,000
d) Rs. 1,57,25,000

4) What would be the amount of depreciation allowable on BMW M4 convertible car for the previous
year 2023-24?
a) Rs. 13,93,560
b) Rs. 10,27,395
c) Rs. 8,80,957
d) Rs. 13,14,156

Answer Keys:
1 2 3 4
(b) (c) (c) (c)

Question 17:
Mr. X has set up a manufacturing unit in Chittor, Andhra Pradesh on 1 st April 2022.
During the previous year 2022-23 and 2023-24, Mr. X has purchased following assets:
Date of put to use Asset Amount (Rs.)
7 Jun 2022 Plant & machinery “X” 14,75,340
25 Jul 2022 Office Furniture 7,65,400
14 Jan 2023 Plant & machinery “Y” 5,00,000
15 May 2023 Plant & machinery “Z” 8,00,000
He has paid professional fees of Rs. 35,000 each to Mr. A, Mr. B and Mr. C on 10 th September 2023
credited in the books on the same day, to discuss some legal matter related to business.
The net profit computed in accordance with “Chapter IV-D - Computation of business income” of the
Income-tax Act, 1961 for the previous year 2022-23 is Rs. 1.2 crore.
Mr. X has 2,000 equity shares of MNO Pvt. Ltd. On 21 October 2023, MNO Pvt. Ltd has bought back
50% shares from its shareholders amounting to Rs. 13,50,000 which were issued for Rs. 5,70,000
which include Rs. 1,15,000 towards premium.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) What would be the amount of depreciation in respect of Plant & Machinery “Y” allowable as
deduction while computing income under the head “Profit & Gains from business or profession”
for the previous year 2023-24?
a) Rs. 61,875
b) Rs. 1,11,875
c) Rs. 69,375
d) Rs. 63,750

2) What shall be the total amount of depreciation for the previous year 2023-24 allowable as
deduction while computing profits and gains from business or profession?

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a) Rs. 3,77,481
b) Rs. 3,71,856
c) Rs. 5,54,607
d) Rs. 6,04,607

3) Mr. X wanted to know from you, whether tax is required to be deducted on professional fees paid
to Mr. A, Mr. B and Mr. C. If tax has to be deducted, then what would be the rate and amount of
tax to be deducted at source?
a) Yes, TDS amounting to Rs. 7,875 @7.5% on Rs. 1,05,000 is to be deducted
b) Yes, TDS amounting to Rs. 1,575 @1.5% on Rs. 1,05,000 is to be deducted
c) No, tax is to be deducted, since amount does not exceed the threshold limit
d) Yes, TDS amounting to Rs. 10,500 @10% on Rs. 1,05,000 is to be deducted

4) What shall be the amount of tax payable by MNO Private Limited on buy-back of its shares?
a) Rs. 2,08,500
b) Rs. 1,81,710
c) Rs. 3,14,496
d) Rs. 1,62,240

Answer Keys:
1 2 3 4
(b) (d) (d) (b)

Question 18:
ABC & Co. is a partnership firm engaged in the business of sale of footwear. The partnership firm
consist of three partners – A, B & C. A & B are working partners and C is a sleeping partner. The
firm is liable to tax audit under section 44AB of the Act. It has a book profit of Rs. 11,50,000.
Following payments were made to partners as authorized by the partnership deed:
 Remuneration to A & B - Rs. 32,000 p.m. to each partner
 Remuneration to C - Rs. 10,000 p.m.
 Interest on capital @ 19.5% to A & B - Rs. 18,500 p.a. to each partner
 Interest on capital @ 17% to C - Rs. 10,540 p.a.
The firm has following brought forward losses of past years:
A.Y. Business loss Unabsorbed depreciation Long-term capital loss
2021-22 26,000 17,600 5,300
2022-23 78,000 29,860 -
2023-24 1,05,670 54,180 13,470

Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) What amount of interest is allowable as deduction in the hands of firm while computing profits
and gains from business or profession?
a) Rs. 29,040
b) Rs. 22,770
c) Rs. 47,540
d) Rs. 30,210

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2) What amount of remuneration not allowable as deduction in the hands of firm while computing
profits and gains from business or profession?
a) Rs. 1,20,000
b) Nil
c) Rs. 1,08,000
d) Rs. 78,000

3) What is the due date of filing of return of income for Mr. A and Mr. C for the A.Y. 2024-25?
a) 31st July 2023 for Mr. C and 30th September 2023 for Mr. A
b) 31st July 2023 for Mr. C and 31st October 2023 for Mr. A
c) 31st October 2023 for both Mr. A and Mr. C
d) 31st October 2023 for Mr. C and 31st July 2023 for Mr. A

4) What would be the income under the head “Profits and gains from business or profession” in the
hands of ABC & Co. for the A.Y. 2024-25?
a) Rs. 70,690
b) Rs. 1,72,330
c) Rs. 51,920
d) Rs. 1,53,560

Answer Keys:
1 2 3 4
(d) (a) (c) (b)

Question 19:
Mr. Sarthak (aged 37 years) a share broker, sold a building to his friend Anay, who is a dealer in
automobile spare parts, for Rs. 120 lakh on 10.11.2023, when the stamp duty value was Rs. 150 lakh.
The agreement was, however, entered into on 1.9.2023 when the stamp duty value was Rs. 140 lakh.
Mr. Sarthak had received a down payment of Rs. 15 lakh by a crossed cheque from Anay on the date
of agreement. Mr. Sarthak purchased the building for Rs. 95 lakh on 10.5.2019. Further, Mr. Sarthak
also sold an agricultural land (situated in a village which has a population of 5,800) for Rs. 60 lakhs
to Mr. Vivek on 01.03.2024, which he acquired on 15.06.2016 for Rs. 45 lakhs. Stamp duty value of
agricultural land as on 1.3.2024 is Rs. 65 lakhs.
CII for F.Y. 2016-17; 264; F.Y. 2019-20: 289; F.Y. 2023-24: 348.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) What is the amount of tax to be deducted by Mr. Anay and Mr. Vivek, if any, on consideration
paid or payable for transfer of building and agricultural land?
a) Rs. 1,20,000 by Mr. Anay and Nil by Mr. Vivek
b) Rs. 1,50,000 by Mr. Anay and Nil by Mr. Vivek
c) Rs. 1,50,000 by Mr. Anay and Rs. 65,000 by Mr. Vivek
d) Rs. 1,20,000 by Mr. Anay and Rs. 60,000 by Mr. Vivek

2) What amount of capital gains is chargeable to tax in the hands of Mr. Sarthak in respect of transfer
of building?
a) Long-term capital gains of Rs. 35,60,554
b) Long-term capital gains of Rs. 25,60,554
c) Long-term capital gains of Rs. 7,60,554
d) Short-term capital gains of Rs. 55,00,000

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3) Assuming that Mr. Sarthak has other income exceeding basic exemption limit, the tax liability
(excluding surcharge and health and education cess) on transfer of building and agricultural land,
would be -
a) Rs. 5,12,111
b) Rs. 1,12,111
c) Rs. 7,12,111
d) Rs. 16,50,000

4) What amount of income is chargeable to tax in the hands of Mr. Anay in respect of transfer of
building?
a) Rs. 20 lakh
b) Rs. 30 lakhs
c) Rs. 15 lakhs
d) Nil

Answer Keys:
1 2 3 4
(b) (a) (c) (b)

Question 20:
Mr. Narendra Sharma, aged 54 years, an Indian citizen, carrying on retail business in Dubai. He
frequently visits India for business purpose. Details of his visits in India are as follows:
1) Came to India on 03.12.2018 and left India on 26.04.2019
2) Again came to India on 09.09.2021 and left India on 10.01.2022
3) Again came to India on 27.12.2022 and left India on 20.02.2023
Afterwards he decided to shift permanently in India and closed his business in Dubai. So, he came to
India on 27.11.2023 and joined Indian Company “Cosmos Heritage India Limited” at registered office
in Mumbai from 01.12.2023. From December 2023, he has taken a flat on rent for Rs. 60,000 per
month from Mr. Sarthak, an Indian resident, and Mr. Sarthak has provided his PAN No. to Mr.
Narendra Sharma.
Following details of his salary income earned in India:
- Basic Salary – Rs. 2,75,675 per month
- COLA (Cost of Living Allowance) (forms part of retirement benefits) – Rs. 1,20,200 per month
- HRA – Rs. 1,37,838 per month
- Other Allowances – Rs. 1,56,000 per month
For the period from April 2023 to November 2023, his business income arising in Dubai is Rs.
26,00,000 and his turnover for the P.Y. 2022-23 was Rs. 95,00,000. He is not liable to pay any tax in
Dubai. Such business was controlled from Dubai.
He is active in equity share trading after coming to India. Following are the details of his portfolio:
Sale/ Purchase Company Date of Qty Price per Share Brokerage
Purchase/ Sale (Rs.)
1. Purchase First Smile Ltd 10.12.2023 250 203 1.5%
2 Purchase Rainbow Ltd 10.12.2023 50 503 1.5%
3. Purchase Mega Service Ltd 12.12.2023 150 82 1.5%
4. Sale First Smile Ltd 18.12.2023 100 325 1.8%

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5. Purchase Mega Service Ltd 15.12.2023 110 110 1.5%

6. Sale Mega Service Ltd 26.12.2023 150 100 1.8%
7. Purchase Rainbow Ltd 28.12.2023 200 385 1.5%
8. Purchase Rainbow Ltd 03.01.2024 100 465 1.5%
9. Sale First Smile Ltd 23.03.2024 150 250 1.8%
10. Sale Mega Service Ltd 26.03.2024 110 110 1.8%
Rainbow Limited declared an interim dividend of 200% on 28.02.2024 (face value of each share is Rs.
10). The record date was 31.1.2024. He does not opt to pay tax as per section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) What is the residential status of Mr. Narendra for the previous year 2023-24?
a) Resident
b) Resident and ordinary resident
c) Non-resident
d) Deemed resident

2) Which of the following statements is correct, in respect of dividend paid by Rainbow Ltd. to Mr.
Naredra?
a) Dividend from Rainbow Ltd is exempt in the hands of Mr. Narendra. Hence, no tax is required to be
deducted at source.
b) Dividend from Rainbow Ltd is taxable in the hands of Mr. Narendra but, since the dividend is less
than Rs. 10,000, no tax is required to be deducted at source.
c) Dividend from Rainbow Ltd is taxable in the hands of Mr. Narendra. Tax of Rs. 525 is required to
be deducted at source.
d) Dividend from Rainbow Ltd is taxable in the hands of Mr. Narendra. Tax of Rs. 700 is required to
be deducted at source.

3) What shall be the TDS liability of Mr. Narendra for rent paid to Mr. Sarthak?
a) There is no TDS liability of Mr. Narendra, since he is a salaried individual.
b) Mr. Narendra is liable to deduct TDS u/s 194-I of Rs. 6,000 for each month.
c) Mr. Narendra is liable to deduct TDS u/s 194-IB of Rs. 3,000 for each month.
d) Mr. Narendra is liable to deduct TDS u/s 194-IB of Rs. 12,000 in the month of March 2024.

4) What would be income chargeable to tax under the head “Income from Salaries” in the hands of
Mr. Narendra for the A.Y. 2024-25:
a) Rs. 26,27,202
b) Rs. 26,77,202
c) Rs. 27,08,852
d) Rs. 26,58,852

5) What is the amount of short-term capital gain chargeable to tax in the hands of Mr. Narendra on
sale of shares for the P.Y. 2023-24:
a) Rs. 20,202.20
b) Rs. 21,950
c) Rs. 19,474,25
d) Rs. 19,074.95

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Answer Keys:
1 2 3 4 5
(d) (d) (d) (a) (d)

Question 21:
Mr. Akshaya Biyani celebrated his 26th birthday on 15th May 2023 and arranged a grand party at
Radisson Blu hotel. On this occasion, he invited his friends, blood relatives and distant relatives to
attend the party. The ceremony was very grand, the feast was also very spectacular. All the
arrangements and decorations were absolutely wonderful. At the end of party, Mr. Akshaya was
awarded by gifts and flower’s bouquet as infra:
Gifts received from Type of Gift Remarks
She purchased on the same day for Rs.
Mother One 22K Gold Chain
37,822
One 22K Gold
Father He purchased on the same day for Rs. 56,075
Bracelet
She purchased these rings on 15.5.2022 for
Wife 4 Gold Rings Rs. 35,500 each. Fair market value on 15th
May 2023 is Rs. 37,429 each.
This painting is made by her. Fair market
Sister Painting
value is Rs. 45,000.
Cousin brother He purchased it on the same day for Rs.
One Gold chain
(Father’s brother’s son) 18,200.
Closest Cousins (mother’s
I-20 Car Value of Rs. 4,10,000
sister’s sons/daughters)
Friends and other distant
Cash Rs. 1,51,000
relatives
Mr. Akshaya desires to set up a new manufacturing unit with his friend in partnership on 1.12.2023.
For making investment in the firm, he sold following jewellery which he has received on his 26 th
birthday celebration as gifts:
- Mother’s gifted Gold Chain for Rs. 42,150
- Father’s gifted Gold Bracelet for Rs. 60,180
- Cousin brother’s gifted Gold Chain for Rs. 20,600
His wife gave him Rs. 1 lakh as a gift so that he could invest sufficient money in the unit.
On 1st December 2023, he invested Rs. 6,00,000 (including the amount received on sale of above gifts
and amount received from his wife) and his friend invested Rs. 4,00,000 in the firm.
On 1st February 2024, his wife again gave him Rs. 1 lakh as a gift to invest such money in the firm and
apart from that he invested Rs. 50,000 more from his individual savings. On this day, his friend also
invested Rs. 1,00,000 in the firm.
Since the firm is a manufacturing unit and at initial stage, the firm requires sufficient fund so Mr.
Akshaya sold his wife’s gifted Gold Rings for Rs. 40,250 each as on 31 st March 2024 and he deployed
the funds as partner’s capital in the firm on 01st April, 2024.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:

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1) What is the amount of capital gain taxable in the hand of Mr. Akshaya for P.Y. 2023-24?
a) Short term capital gains Rs. 10,833
b) Short term capital gains Rs. 29,833
c) Short term capital gains Rs. 22,117
d) No, capital gains is taxable in his hands, since he received the capital assets as gift.

2) What is the gift amount not considered as income under section 56(2)(x) for P.Y. 2023-24?
a) Rs. 8,98,613
b) Rs. 3,06,813
c) Rs. 9,16,813
d) Rs. 7,16,813
3) What is the gift amount taxable in the hands of Mr. Akshaya for P.Y. 2023-24?
a) Rs. 1,51,000
b) Rs. 1,69,200
c) Rs. 5,79,200
d) Rs. 5,61,000

4) Is any amount taxable in the hands of Akshaya’s wife in respect of sale of jewellery by Mr.
Akshaya, if yes, what shall be the taxable amount in her hands for P.Y. 2023-24?
a) No
b) Yes; Rs. 15,284
c) Yes; Rs. 19,000
d) Yes; Rs. 11,284
Answer Keys:
1 2 3 4
(a) (c) (a) (c)

Question 22:
Mr. Rajesh gifted Rs. 15 lakhs to his wife, Raavi, on her birthday on 23rd February, 2023. Raavi lent
Rs. 6,00,000 out of the gifted amount to Karuna on 1st April, 2023 for 6 months on which she received
interest of Rs. 30,000. The said sum of Rs. 30,000 was invested in shares of a listed company on 18th
October, 2023, which were sold for Rs. 66,000 on 25th March, 2024.
Securities transactions tax was paid on purchase and sale of such shares. The balance amount of gift
was invested on 1st April 2023, as capital by Raavi in her new business. She suffered loss of Rs. 22,000
in the business in Financial Year 2023-24. Raavi is working with a Private company as sales executive
at a salary of Rs. 62,000 p.m. She paid Rs. 3,500 p.m towards tuition fees for her daughter Riya
studying in St. Thomas School, Mumbai.
Rajesh is working with an MNC on a monthly salary of Rs. 64,000. He has gifted Rs. 1,25,000 to Riya
on her 13th Birthday. This amount is deposited as 2 years term deposits with SBI bank in her name.
On which interest of Rs. 11,500 is earned during the previous year 2023-24. Both Mr. Rajesh and Mrs.
Raavi opt to pay tax under section 115BAC.
1) In whose hands, the interest income received from Karuna and interest on fixed deposits in the
name of Riya would be included?
a) both interest income to be included in the hands of Mr. Rajesh
b) both interest income to be included in the hands of Mrs. Raavi
c) interest income from Karuna to be included in the hands of Mrs. Raavi and interest on two years
term deposits to be included in the hands of Mr. Rajesh.
d) interest income from Karuna to be included in the hands of Mr. Rajesh and interest on two years
term deposits to be included in the hands of Mrs. Raavi.

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2) In whose hand’s loss from business and capital gains would be included in A.Y. 2024-25? Assume
that capital invested in the business was entirely out of the funds gifted by her husband.
a) Both loss from business and capital gains would be included in the hands of Mr. Rajesh
b) Both loss from business and capital gains would be included in the hands of Mrs. Raavi
c) Loss from business included in the hands of Mr. Rajesh and capital gains included in the hands of
Mrs. Raavi
d) Loss from business included in the hands of Mrs. Raavi and capital gains included in the hands of
Mr. Rajesh

3) What would be the total income of Mrs. Raavi for the previous year 2023-24?
a) Rs. 6,88,000
b) Rs. 7,80,000
c) Rs. 7,91,500
d) Rs. 7,90,000

4) What would be total income of Mr. Rajesh for the previous year 2023-24?
a) Rs. 7,76,000
b) Rs. 8,09,500
c) Rs. 8,08,000
d) Rs. 7,98,000

Answer Keys:
1 2 3 4
(d) (c) (c) (a)

Question 23:
Miss Hetal transferred to his husband, Mr. Hemant, a residential property worth Rs. 45 lakhs located
in Nagpur without any consideration. The expected rent of such property is Rs. 5 lakhs. Municipal
tax of Rs. 5,000 paid by Miss Hetal for this property during the previous year 2023-24. Miss Hetal has
3 residential properties in Mumbai. The expected rent from the 3 properties situated in Mumbai is
Rs. 10 lakhs, Rs. 11 lakhs and Rs. 12 lakhs respectively. She purchased the properties out of her own
funds. Municipal taxes due are Rs. 15,000, Rs. 20,000 and Rs. 25,000. The same have, however, not
been paid this year in respect of the three properties. The expected rent is lesser than the standard
rent in case of all the aforementioned properties. Miss Hetal does not have any income from any other
source.
Miss Hetal’s father, aged 58 years had capital gains of Rs. 5 crores from sale of house property. He
reinvested the proceeds from sale in another residential house of Rs. 4.98 crores and the remaining
sale proceeds were deposited in his savings bank account. He has paid Rs. 1,50,000 towards LIC
premium. He has no other source of income.
Miss Hetal’s grandfather is aged 81 years and has interest income on fixed deposits of Rs. 6 lakhs. He
has no other income for the P.Y. 2023-24. He has to fly to USA for his treatment of cancer on 31 st July,
2024 and his return of income is not filed before his flying to USA.
1) What is the amount of income liable to be taxed in the hands of Miss Hetal under the head “Income
from House Property” for A.Y.2024-25?
a) Rs. 7,00,000
b) Rs. 10,46,500
c) Rs. 10,50,000
d) Rs. 13,76,500

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2) What would be tax liability of Miss Hetal for the assessment year 2024-25? Compute in a manner
so that her tax liability is minimum.
a) Rs. 66,300
b) Rs. 88,400
c) Rs. 87,670
d) Rs. 1,31,510

3) Is Hetal’s father required to furnish his return of income in India for the A.Y.2024-25?
a) No, he is not required, since his income does not exceed basic exemption limit
b) Yes, he is required to furnish return of income on or before 31st July, 2024
c) Yes, he is required to furnish return of income on or before 30th September, 2024
d) Yes, he is required to furnish return of income on or before 31st October, 2024

4) Is Miss Hetal’s grandfather required to pay advance tax during the previous year 2024-25?
a) No, he is not required to pay advance tax, since he is a senior citizen
b) Yes, he is required to pay advance tax, since his tax liability exceeds Rs. 10,000
c) No, he is not required to pay advance tax, since he is a senior citizen and he is not having any income
under the head “Profits and gains from business or profession”
d) Yes, he is required to pay advance tax, since his total income exceeds basic exemption limit of Rs.
5,00,000

Answer Keys:
1 2 3 4
(b) (c) (b) (c)

Question 24:
Ms. Chanchal, aged 45, provides the following data of her gross receipts for the financial year 2022-
23 and 2023-24. She is engaged in agency business along with providing services as tarot card reader.
She is generally engaged in cash payments and cash receipts.
F.Y. Receipts from business (Rs.) Receipts from profession (Rs.) Total Gross Receipts (Rs.)
2022-23 1,05,00,000 47,00,000 1,52,00,000
2023-24 98,00,000 49,00,000 1,47,00,000
She paid an amount of Rs. 12,00,000 to a contractor for polishing her old furniture in her self-occupied
residential house property on 12.04.2023. Further on 05.06.2023, she has taken services from
renowned interior designer for the same residential house property for which she paid Rs. 2,50,000.
On 28.05.2023, she sold one commercial property for Rs. 50,00,000. The stamp duty value on the date
of registration is Rs. 58,00,000. The value adopted for stamp duty was Rs. 54,00,000 on the date of
agreement (part payment by account payee cheque was received on the date of agreement). It was
purchased for Rs. 40,00,000 on 28.06.2021. (Cost Inflation Index for F.Y. 2023-234: 348, F.Y. 2021-
22: 317).
The brought forward long-term capital loss from unlisted shares of F.Y. 2022-23 is Rs. 5,50,000.
During the year, Ms. Chanchal incurred a loss of Rs. 70,00,000 while trading in the agricultural
commodity derivatives (no CTT paid). Ms. Chanchal does not want to opt for the tax regime available
under section 115BAC for A.Y. 2024-25.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions: -

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1) Is Ms. Chanchal liable to tax audit under the Income-tax Act, 1961 for the P.Y. 2023-24?
a) Yes, as the total gross receipts exceeds Rs. 1,00,00,000
b) No, as the gross receipts from business or profession are below the specified threshold limits.
c) Yes, as the gross receipts from business exceeds Rs. 50,00,000
d) Yes, as the gross receipts from profession exceeds Rs. 25,00,000

2) With respect to payment made to contractor and to the interior designer during the P.Y. 2023-24,
Ms. Chanchal consulted various persons and they have the following views -
i) She is required to deduct tax at source under section 194C and 194J, since her turnover from
business for the previous year 2022-23 exceeds Rs. 1,00,00,000
ii) She is required to deduct tax at source under section 194M on both the payments
iii) She is not required to deduct tax at source neither under section 194C nor under section 194J,
since such amounts are paid for personal purposes
iv) She is not required to deduct tax at source under section 194M, since payment to each
individual does not exceed Rs. 50,00,000
Which views are correct?
a) (iii) and (iv) views are correct
b) (i) view is correct
c) (ii) view is correct
d) (i) and (iv) views are correct

3) What is the amount and nature of Capital gain chargeable to tax in the hands of Ms. Chanchal?
a) Rs. 14,00,000 and Short-term capital gain
b) Rs. 10,00,000 and Short-term capital gain
c) Rs. 14,01,329 and Long-term capital gain
d) Rs. 6,01,329 and Long-term capital gain

4) What is the amount of losses which can be carried forward to A.Y. 2025-26, assuming that business
income is Rs. 45,00,000 and income from profession is Rs. 25,00,000 for the P.Y. 2023-24?
a) Rs. 5,50,000 under section 74
b) Rs. 70,00,000 under section 73
c) No loss is required to be carried forward, since brought forward loss and current year loss are set-
off against current year’s income
d) Rs. 5,50,000 under section 74 and Rs. 70,00,000 under section 73

Answer Keys:
1 2 3 4
(b) (a) (b) (a)

Question 25:
Mr. Abhishek Seth, aged 42 years, is working as a CEO of Soil Limited. He provides you the following
information for preparation and filing of his income-tax return for the year ended 31 st March 2024:
 Salary, allowances and perquisites from Soil Limited - Rs. 1,35,00,000
 Dividend from ABC Ltd. which was declared in February, 2023 and received in April, 2023 - Rs.
4,55,000
 Dividend from PRQ Ltd. declared and received in July, 2023 - Rs. 5,90,000 (Gross)
 Interest income on saving bank account in SBI – Rs. 24,530
 Long term capital gains on transfer of residential house in Mumbai on 15 th December, 2023 - Rs.
1,73,540

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 Short term capital gain on transfer of listed equity shares (STT paid both at the time of transfer
and acquisition) of Ind Ltd. - Rs. 73,00,000
He also furnished the following details of investment/ payments made by him during the P.Y. 2023-
24:
a. Three-year post office time deposit - Rs. 25,000
b. Contribution to PPF - Rs. 35,000
c. Tuition fees of three children in Bharti Sr. Sec. School in Delhi - Rs. 20,000 per annum per children
d. Subscription to NHAI redeemable bonds after 5 years on 16th March, 2023 - Rs. 2,00,000.
Further, his son Mr. Dhaval, aged 15 years, has also earned the following income:
a. Income from a quiz competition - Rs. 25,000
b. Interest on bank fixed deposit - Rs. 9,500
Assuming that the tax has been deducted on time, wherever applicable. Mr. Abhishek does not want
to opt for the provision of section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:-
1) What is the quantum of income of Mr. Dhaval which is to be clubbed with the income of Mr.
Abhishek, if any, assuming that income of Mr. Abhishek is greater than the income of his spouse?
a) Rs. 34,500
b) Rs. 8,000
c) Rs. 33,000
d) Rs. 9,500

2) What is the gross total income of Mr. Abhishek for A.Y. 2024-25?
a) Rs. 2,13,72,530
b) Rs. 2,14,22,530
c) Rs. 2,13,64,530
d) Rs. 2,15,46,070

3) What is the amount of deduction allowable under section 80C to Mr. Abhishek?
a) Rs. 1,00,000
b) Rs. 1,20,000
c) Rs. 95,000
d) Rs. 75,000
4) What shall be the tax liability of Mr. Abhishek for A.Y. 2024-25?
a) Rs. 62,67,350
b) Rs. 61,04,100
c) Rs. 59,60,050
d) Rs. 61,45,610

Answer Keys:
1 2 3 4
(b) (a) (d) (b)

Question 26:
M/s Abhinav & sons, a sole proprietorship is engaged in business of manufacturing pharmaceutical
products and it had started its business on 20th June 2019. Tax head of M/s Abhinav & sons furnishes
you the following particulars for the year ended 31 March 2024:

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 Income under the head PGBP - Rs. 5,75,22,750

 Interest on fixed deposits (Gross) - Rs. 12,50,000 [The same was received on 30 th April, 2023 after
deduction of tax at source]
 Donation to PM Cares Fund - Rs. 2,50,000
 Turnover during the previous year 2023-24 - Rs. 15,50,00,000
M/s Abhinav & sons does not want to opt for the provisions of section 115BAC. It has employed total
150 employees during the P.Y. 2022-23 with an annual increment of 10% in their monthly
emoluments. Details of the same are as under:
Date of joining No. of employees Employee Monthly emoluments per Participate in recognised
category employee (Rs.) provident fund
1.5.2022 50 Regular 26,500 Yes
1.6.2022 65 Casual 23,000 No
1.7.2022 35 Regular 22,500 Yes
Casual employees do not participate in the recognised provident fund. It has employed further 50
employees during the P.Y. 2023-24. Details of the same are as under:
Date of joining No. of employees Employee Monthly emoluments Participate in recognised
category per employee provident fund
1.4.2023 20 Regular 21,000 Yes
1.8.2023 30 Regular 26,000 Yes
Emoluments to all the employees are being paid by way of account payee cheque only. No employees
have left the job during P.Y. 2022- 23 as well as during P.Y. 2023-24.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:
1) What is the due date of filing of return of income of M/s Abhinav & sons for A.Y. 2024-25?
a) 31st July, 2024
b) 30th November, 2024
c) 30th September, 2024
d) 31st October, 2024

2) What shall be the amount of deduction available to M/s Abhinav & sons under section 80JJAA
for A.Y. 2024-25?
a) Rs. 36,38,250
b) Rs. 15,12,000
c) Rs. 46,30,500
d) Rs. 33,84,000

3) What would be the total income of M/s Abhinav & sons for the A.Y. 2024-25?
a) Rs. 5,70,10,750
b) Rs. 5,48,84,500
c) Rs. 5,57,60,750
d) Rs. 5,52,64,250

4) What would be the tax payable of M/s Abhinav & sons for the A.Y. 2024-25?
a) Rs. 2,47,47,810
b) Rs. 1,94,68,310
c) Rs. 2,31,92,680
d) Rs. 2,30,67,680

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Answer Keys:
1 2 3 4
(d) (a) (b) (d)

Question 27:
Mr. A (aged 52 years), is a CEO of XYZ Enterprise Limited. During the previous year 2023-24, he
earned salary of Rs. 1,65,00,000 and long- term capital gain on sale of listed equity shares (STT paid)
amounting to Rs. 1,06,500. He earned interest of Rs. 4,82,778 on saving bank account.
Further, he has provided the following other information for filing his return of income:
He does not receive house rent allowance from his employer. Mr. A took a loan from State Bank of
India on 27th October 2021 for repairing his house (self-occupied) at Delhi and paid interest on such
borrowings of Rs. 80,000 and Rs. 1,50,000 towards principal amount during the previous year 2023-
24.
Mr. A has made the following payments towards medical insurance premium for health policies taken
for his family members:
Medical premium for his brother: Rs. 13,500 (by cheque) Medical premium for his parents: Rs. 17,670
(by cheque) Medical premium for self and his wife: Rs. 21,000 (by cheque).
He also incurred Rs. 6,400 towards preventive health check-up of his wife in cash. He deposited Rs.
1,00,000 towards PPF. He also deposited Rs. 50,000 and Rs. 2,50,000 towards Tier I and Tier II NPS
A/c, respectively.
He has paid Rs. 5,30,000 as advance tax. His employer has deducted tax at source of Rs. 51,89,000. He
is of the opinion that the balance amount of tax, if any, he will pay on 27th July 2024 (i.e. before the
due date for filing of return of income). Mr. A does not want to opt for section 115BAC.
Based on the facts of the case scenario given above, choose the most appropriate answer to the
following questions:-
1) What would be the amount of deduction available to Mr. A under Chapter VI-A for the assessment
year 2024-25?
a) Rs. 2,04,070
b) Rs. 2,42,670
c) Rs. 2,52,670
d) Rs. 2,02,670

2) Assume that, for the purpose of answering this question alone, that Mr. A pays rent of Rs. 65,000
per month for his rented house at Mumbai to Mr. C, a resident individual, is Mr. A liable to deduct
TDS on such rent. If so, what would be the rate and amount of TDS?
a) Yes, Mr. A is liable to deduct TDS @ 3.75% amounting to Rs. 2,438 every month i.e., at the time of
payment of such rent
b) Yes, Mr. A is liable to deduct TDS @5% amounting to Rs. 3,250 every month i.e., at the time of
payment of such rent
c) Yes, Mr. A is liable to deduct TDS @5% amounting to Rs. 39,000 in the month of March 2024
d) No, Mr. A is not liable to deduct TDS, since he is a salaried person

3) What would be the amount of net tax payable for the A.Y. 2024-25 in the hands of Mr. A?
a) Rs. 78,230
b) Rs. 60,290
c) Rs. 49,530
d) Rs. 67,470

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4) What would be the amount of interest chargeable under section 234B on account of short payment
of advance tax?
a) Rs. 1,980
b) Nil
c) Rs. 3,130
d) Rs. 2,410

Answer Keys:
1 2 3 4
(d) (c) (c) (b)

Question 28:
Mr. Sarthak, aged 38 years, working in Nobita Pvt. Limited as Senior Manager- Finance. His yearly
pay slip for the financial year 2023-24 is as follows:
Earnings Rs. Deduction Rs.
Basic Pay 6,34,068 Employee’s contribution to 1,14,132
Provident Fund
Dearness allowance 1,26,814 Profession tax 2,400
HRA 3,17,040 Income-tax 2,32,830
Transport Allowance 19,200 Net Pay 13,03,848
Personal Allowance 5,09,088
Children Education Allowance for 12,000
two children
Medical Allowance 15,000
Bonus 20,000
Total Earnings 16,53,210 16,53,210
i. His employer also contributes equivalent amount of contribution towards provident fund.
ii. Dearness allowance forms part of retirement benefits.
iii. He has intimated to his company that he would opt for 115BAC for the A.Y. 2024-25.
Consequently, he has not submitted any investment proof to company.
iv. He has paid Rs. 55,212 towards mediclaim premium for his parents (aged above 65 years) by
account payee cheque.
v. He has purchased a house of Rs. 38,00,000 during the year 2016 and taken a loan of Rs. 28,00,000
from HDFC to purchase this house. He is paying EMI of Rs. 22,835. Possession of house received
on 01/04/2023. He himself is occupying this house. Total principal and interest paid for full year
is Rs. 55,037 and Rs. 2,18,983, respectively, as per interest certificate received from bank for F.Y.
2023-24.
vi. He has 3 children, studying in Sandalwood International School. The following are the
components of school fees paid for the Academic Session 2023-24:
School Fees Component Child 1 Child 2 Child 3 Total
Tuition fees 30,000 37,000 40,000 1,07,000
Admission fees 20,000 - - 20,000
Books, stationery and uniform 8,000 12,000 15,000 35,000
Infrastructure Fund 25,000 30,000 35,000 90,000

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Commute cost 8,000 8,000 8,000 24,000

Activity Fees 6,000 7,000 8,000 21,000
Total Fees 97,000 94,000 1,06,000 2,97,000
(vii) He has invested Rs. 5000 in HDFC ULIP and taken a LIC policy for his wife for Rs. 10,000.
(viii) He has invested Rs. 12,500 and Rs. 25,000 towards NPS Tier I A/c and Tier II A/c, respectively.
(ix) He has also donated Rs. 50,000 in PM CARES fund.
(x) He has invested Rs. 40,000 in listed equity shares of Shaktimaan Power Solution Limited on
01/03/2023 at Rs. 200 per share and sells 100 shares at Rs. 350 per share on 01/11/2023. STT is paid
both at the time of sale and purchase of these shares.
1) What would be the amount of income chargeable to tax under the head "Salaries" in the hands of
Mr. Sarthak for the A.Y. 2024-25?
a) Rs. 16,53,210
b) Rs. 16,21,236
c) Rs. 16,76,036
d) Rs. 16,71,236

2) Whether the tax deducted at source by Nobita Pvt Ltd. on the salary paid to Mr. Sarthak based
on the intimation submitted by him, is correct?
a) Yes, the amount of Rs. 2,32,830 deducted as tax at source is correct.
b) No, the correct amount of tax to be deducted at source is Rs. 2,49,920.
c) No, the correct amount of tax to be deducted at source is Rs. 2,42,800.
d) No, the correct amount of tax to be deducted at source is Rs. 2,41,300.

3) What would be the total income (without rounding off) of Mr. Sarthak for the A.Y. 2024-25,
assume that he does not opt for section 115BAC?
a) Rs. 11,73,736
b) Rs. 11,76,699
c) Rs. 11,61,699
d) Rs. 11,58,736

4) What would be tax liability of Mr. Sarthak for the A.Y. 2024-25, if he does not opt for section
115BAC?
a) Rs. 1,66,530
b) Rs. 1,68,870
c) Rs. 1,71,210
d) Rs. 1,67,450

5) Assuming for the purpose of answering this question only that no contribution is made by Mr.
Sarthak and his employer towards provident fund, what amount of deduction is available to Mr.
Sarthak under Chapter VI-A for the previous year 2024-25, if he does not opt for section 115BAC?
a) Rs. 2,62,500
b) Rs. 2,59,537
c) Rs. 2,50,000
d) Rs. 2,04,500

Answer Keys:
1 2 3 4 5
(c) (b) (a) (b) (b)

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Question 29:
Mr. Kashyap, a manufacturer, has disclosed a net profit of Rs. 40 lakhs for the year ended 31st March,
2024. He claimed depreciation of Rs. 12,20,000 in his books of account. Expenditure in profit and loss
account includes interest payable to Mr. Raj, a resident, without deduction of tax at source Rs.
1,50,000. Such tax was, however, deducted on 15.4.2024 and remitted on 17.5.2024.
Mr. Kashyap is engaged in in-house scientific research and development. He incurred expenditure of
Rs. 1,50,000 on purchase of research equipment’s and Rs. 1,00,000 as remuneration paid to scientists.
The said sums are also debited in the profit and loss account.
Mr. Kashyap purchased a new plant and machinery for Rs. 45,00,000 on 2nd August, 2023 and put
the same to use on 1st November, 2023. For this purpose, he borrowed Rs. 25,00,000 on 1st August,
2023 and paid interest@10% p.a. which is debited in profit and loss account. Mr. Kashyap also
purchased a motor car for Rs. 8,00,000 on 2nd October, 2021, which was put to use on the same date.
Written down value of block of plant and machinery (15%) as on 1st April, 2023 is Rs. 95,00,000.
Turnover for the P.Y. 2022-23 and P.Y. 2023-24 is Rs. 2.5 crores and Rs. 3 crores, respectively.
1) What would be the depreciation allowable u/s 32 in respect of block of plant and machinery (15%)
and motor car for A.Y.2024-25? Assume that motor car is the only asset in the block.
a) Rs. 22,23,438 and Rs. 1,17,600, respectively
b) Rs. 17,67,188 and Rs. 86,700, respectively
c) Rs. 22,12,500 and Rs. 86,700, respectively
d) Rs. 22,23,438 and Rs. 2,40,000, respectively

2) What is the amount of disallowance, if any, attracted for non- deduction of tax at source on interest
payable to Mr. Raj during the P.Y.2023-24?
a) Nil, since the tax was deducted and deposited on or before the due date of filing of return of income
b) Rs. 30,000
c) Rs. 45,000
d) Rs. 1,50,000

3) What would be the income under the head "Profits and gains of business and profession" of Mr.
Kashyap for A.Y.2024-25 under the normal provisions of the Act?
a) Rs. 29,86,462
b) Rs. 29,23,962
c) Rs. 28,01,562
d) Rs. 34,11,112

4) What would be the income chargeable under the head "Profits and gains of business and
profession" of Mr. Kashyap for A.Y.2024-25, if he opts for section 115BAC?
a) Rs. 29,65,800
b) Rs. 32,15,800
c) Rs. 34,42,712
d) Rs. 36,92,712

5) What would be the tax liability of Mr. Kashyap for A.Y. 2024-25 in a manner most beneficial to
him?
a) Rs. 7,30,330
b) Rs. 7,36,780
c) Rs. 7,17,280
d) Rs. 6,79,090

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Answer Keys:
1 2 3 4 5
(a) (c) (a) (c) (b)

Question 30:
Mr. Akash had bought a residential house worth Rs. 2.5 crores at South Extension, Delhi in 2021 and
let out the house on rent to Mr. Riyaz. The property was funded through loan from PNB. The interest
due for F.Y.2023-24 to PNB is Rs. 25 lakhs, out of which he paid only Rs. 20 lakhs during the year.
Mr. Akash then took a loan of Rs. 1.5 crores from SBI on 1.7.2023 for construction of first floor in
that house for self-occupation. The construction is in progress as on 31.3.2024. Mr. Akash started
repaying EMIs due to SBI. During the P.Y. 2023-24, he repaid principal amount of Rs. 25 lakhs and
Rs. 5 lakhs to PNB and SBI, respectively. He also paid interest of Rs. 8 lakhs to SBI out of Rs. 10
lakhs, being interest due for the period from 1.7.2023 to 31.3.2024.
Mr. Akash owns another house in Haryana. He transferred that house to his minor daughter Miss Sia
on her birthday as her birthday gift. Miss Sia gave the said house to the local Panchayat from
September, 2023 at a rent of Rs. 5,000 per month. Mrs. Akash's total income for A.Y.2024-25 is higher
than that of Mr. Akash. This is the first year when Miss Sia has any source of income.
Mr. Akash bought electric vehicle worth Rs. 50 lakhs on loan from BSM Bank which it sanctioned on
1.4.2021. BSM Bank charged interest of Rs. 7 lakhs on electric vehicle for the P.Y.2023-24. Mr. Akash
has also taken loan from ABC Bank for his daughter's higher education. He paid Rs. 50,000 as interest
to ABC Bank. He also paid mediclaim of Rs. 20,000 to New India Assurance Scheme for insuring his
health via cheque.
Mrs. Akash owns a shop of 200 square feet area in Gurgaon. She rented it to Mr. Vishal from October,
2021 at Rs. 60,000 per month, who gave her an interest-free deposit of Rs. 1,50,000.
From the information given above, choose the most appropriate answer to the following questions -

1) What is the amount of interest allowable as deduction u/s 24(b) to Mr. Akash for A.Y.2024-25?
a) Rs. 2 lakhs
b) Rs. 25 lakhs
c) Rs. 28 lakhs
d) Rs. 35 lakhs

2) What is the amount of deduction permissible to Mr. Akash under Chapter VI-A of Income-tax
Act, 1961 for A.Y. 2024-25?
a) Rs. 1,70,000
b) Rs. 2,20,000
c) Rs. 3,70,000
d) Rs. 9,20,000

3) Is notional interest on interest free deposit received in respect of shop let out on rent chargeable
to income-tax? If so, under which head of income would the same be taxable?
a) No, it is not chargeable to tax
b) Yes, it is chargeable to tax as profits and gains from business, since a commercial property has been
let out.
c) Yes, it is chargeable to tax as "Income from Other Sources", being the residuary head of income.
d) Yes, it is chargeable to tax as "Income from house property", since section 22 does not distinguish
between a residential house property and commercial house property.

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4) In whose hands would Sia's rental income from house property at Haryana be taxable and how
much income would be taxable?
a) In Sia's hands; Rs. 24,500
b) In Mr. Akash's hands; Rs. 24,500
c) In Mrs. Akash's hands; Rs. 23,000
d) It would change every year depending on the parent whose income is higher in that year.

Answer Keys:
1 2 3 4
(b) (c) (a) (b)

Question 31:
Mr. Alishaan is engaged in the business of clothes trading since 2017 and Mrs. Alishaan is a house
wife. Their minor daughter's marriage is fixed in October, 2023. Mr. Alishaan planned destination
wedding in Udaipur for his minor daughter. For the wedding, he withdrew Rs. 40,00,000 cash in the
month of August, 2023 and Rs. 65,00,000 cash in the month of September, 2023 from Aapka Paisa
Bank.
He booked 30 rooms for 5 days for the accommodation of his relatives in Raho Hotel and paid Rs.
40,000 in cash as advance and balance by account payee cheque. He took the catering services of
Daana Caterers, a sole proprietor, for the wedding for which he paid Rs. 10,20,000 on 15.9.2023. On
her wedding, he gifted his daughter a house property, purchased from RK Builders on 10.9.2023 by
account payee cheque for Rs. 15,00,000. The stamp duty value of the property on 10.9.2023 is Rs.
16,00,000 and on the date of transfer to minor daughter is Rs. 20,00,000.
Mr. Alishaan paid Rs. 45,000 in cash and balance in cheque to travel agent for the return ticket of
some of his relatives to US. He regularly files his return of income on time but he failed to file his
return of income of P.Y. 2021-22. His daughter let out the house property received from him at a
monthly rent of Rs. 40,000 from 01.11.2023.
Based on the above information, choose the most appropriate option of the following Multiple Choice
Questions (MCQs):-
1) The amount of tax to be deducted by Aapka Paisa Bank on cash withdrawals by Mr. Alishaan is -
a) Rs. 10,000
b) Rs. 25,000
c) Rs. 1,85,000
d) Rs. 4,25,000

2) The amount of tax to be deducted by Mr. Alishaan on payment made to Daana Caterers is -
a) Rs. 1,200
b) Rs. 900
c) Rs. 150
d) Nil

3) For which of the following transactions, Mr. Alishaan is required to quote his PAN?
a) Purchase of immovable property from RK Builders
b) Payment to Raho Hotel
c) Payment to Travel agent
d) All of the above

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4) What shall be the amount taxable and in whose hands with respect to purchase of immovable
property by Mr. Alishaan from RK Builders and gift of the same to his daughter?
a) Rs. 1,00,000 in the hands of Mr. Alishaan, Rs. 1,00,000 in the hands of RK builders and Rs.
20,00,000 in the hands of minor daughter
b) Nothing is taxable in the hands of Mr. Alishaan, RK Builders and minor daughter
c) Rs. 1,00,000 in the hands of Mr. Alishaan, Rs. 1,00,000 in the hands of RK builders and nothing is
taxable in the hands of minor daughter
d) Nothing is taxable in the hands of Mr. Alishaan and RK Builders but Rs. 20,00,000 is taxable in the
hands of minor daughter

5) What shall be the amount taxable under “Income from House property” with respect to let out of
house property by daughter of Mr. Alishaan and in whose hands it will taxable?
a) Rs. 1,40,000 taxable in the hands of daughter of Mr. Alishaan
b) Rs. 1,40,000 taxable in the hands of husband of daughter of Mr. Alishaan
c) Rs. 1,38,500 taxable in the hands of Mr. Alishaan
d) Rs. 1,40,000 taxable in the hands of Mr. Alishaan

Answer Keys:
1 2 3 4 5
(a) (d) (a) (b) (c)

Question 32.
Mr. Subhash is a retailer of car spare parts. He started his business in May, 2022. His turnover for
the P.Y. 2022-23 was Rs. 10.50 crores. He generally purchases goods from Car accessories & Co. only.
Car accessories & Co. manufactures and sells spare parts directly to the customers as well as through
an e-commerce platform – CarParts.com. Car accessories & Co.’s turnover from the business for the
P.Y. 2022-23 was Rs. 15 crores.
The relevant information of purchases made by Mr. Subhash in P.Y. 2023-24 is given hereunder:
Date of credit to Date of Payment Value of spare parts GST @18% Total value of
account of Car to Car accessories without GST (Rs.) spare parts/
accessories & Co. & Co. payment
15.05.2023 02.06.2023 40,00,000 7,20,000 47,20,000
18.06.2023 30.06.2023 15,00,000 2,70,000 17,70,000
28.08.2023 17.08.2023 21,50,000 3,87,000 25,37,000
14.02.2024 28.02.2024 10,50,000 1,89,000 12,39,000
In addition to the above, Mr. Subhash also purchased spare parts of Car accessories & Co. for Rs.
12,00,000 inclusive of GST@18% through CarParts.com on 31.12.2023. The payment was made
directly to Car accessories & Co. on 15.1.2024. PAN is duly furnished by Mr. Subhash, Car accessories
& Co. and CarParts.com. The GST portion is indicated separately in the invoice of Car accessories &
Co. but it is not shown separately when the goods are purchased through CarParts.com.
1. Is Mr. Subhash required to deduct tax at source in respect of the purchase transactions made
directly with Car accessories & Co. If yes, when and what is the amount of tax to be deducted?
a) Yes; Rs. 2,150 on 17.08.2023 and Rs. 1,050 on 14.02.2024
b) Yes; Rs. 2,537 on 17.08.2023 and Rs. 1,050 on 14.02.2024
c) Yes; Rs. 500 on 18.06.2023, Rs. 2,150 on 17.08.2023 and Rs. 1,050 on 14.02.2024
d) No, Mr. Subhash is not liable to deduct tax at source.

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2. Is Car accessories & Co. required to collect tax at source in respect of the sale transactions with
Mr. Subhash. If yes, when and what is the amount of tax to be collected?
a) Yes; Rs. 500 on 30.06.2023, Rs. 2,150 on 17.08.2024 and Rs. 1,050 on 28.02.2024
b) Yes; Rs. 1,490 on 30.06.2023, Rs. 2,537 on 17.08.2023 and Rs. 1,239 on 28.02.2024
c) Yes; Rs. 1,490 on 30.06.2023
d) No, Car accessories & Co. is not liable to collect tax at source.

3. Assume that Mr. Subhash has started the retail business of car spare parts in May, 2023. In such
case, would the answer of MCQ 1 and 2 be different? If yes, what would be the answer of MCQ 1
and 2?
a) No, the answer of MCQ 1 and 2 would be the same
b) Yes, the answer of MCQ 1 would change to (d) but the answer of MCQ 2 would be the same
c) Yes, the answer of MCQ 1 would change to (d) and the answer of MCQ 2 would change to (b)
d) Yes, the answer of MCQ 1 would change to (d) and the answer of MCQ 2 would change to (a)

4. Are the provisions of tax deduction/ collection at source attracted in respect of the transactions
with CarParts.com? If yes, who has to deduct/ collect at source and at what rate?
a) Mr. Subhash is required to deduct tax at source on Rs. 12 lakhs @0.1%.
b) Car accessories & Co. is required to collect tax at source on Rs. 12 lakhs @0.1%.
c) CarParts.com is required to deduct tax at source on Rs. 12 lakhs @0.1%.
d) CarParts.com is required to deduct tax at source on Rs. 12 lakhs @1%.

5. If Mr. Subhash has not furnished his PAN to Car accessories & Co. but has furnished his Aadhar
number, what would be the rate of TCS for the purpose of MCQ 2.
a) 5%
b) 1%
c) 0.1%
d) Car accessories & Co. is not liable to collect tax at source.

Answer Keys:
1 2 3 4 5
(b) (c) (c) (d) (c)

Question 33.
Kishore & Sons is a dealer of coal. Its turnover for the F.Y. 2022-23 was Rs. 12 crores. The State
Government of Hyderabad granted a lease of coal mine to Kishore & Sons on 1.5.2023 and charged
Rs. 11 crores for the lease. Kishore & Sons sold coal of Rs. 95 lakhs to M/s BAC Co. during the P.Y.
2023-24. M/s XYZ Ltd. purchased coal of Rs. 55 lakhs from Kishore & Sons for trading purpose in
July 2023. Turnover of M/s XYZ Ltd. during the P.Y. 2022-23 was Rs. 12 crores. PAN is duly
furnished by the buyer and seller to each other. Details of sale to and payments from M/s BAC Co. by
Kishore & Sons are as follows:

S. No. Date of sale Date of receipt/ Payment Amount (Rs.)

1 29.05.2023 10.05.2023 35,00,000
2 30.06.2023 10.07.2023 25,00,000
3 25.11.2023 25.10.2023 8,00,000
4 20.01.2024 22.01.2024 15,00,000
5 01.03.2024 15.02.2024 12,00,000

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Turnover of M/s BAC Co. during the P.Y. 2022-23 was Rs. 11 crores. The above amounts were
credited to Kishore & Sons account in the books of M/s BAC Co. on the date of sale. M/s BAC Co.
furnishes a declaration to Kishore & Sons that coal is to be utilised for generation of power.
1. Who is required to deduct/ collect tax at source in respect of lease of coal mine by the State
Government of Hyderabad to Kishore & Sons and at what rate?
a) State Government of Hyderabad is liable to collect tax at source @ 2% on Rs. 11 crores
b) State Government of Hyderabad is liable to collect tax at source @0.1% on Rs. 10.50 crores, being
the amount exceeding Rs. 50 lakhs
c) Kishore & Sons is liable to deduct tax at source @0.1% on Rs. 10.50 crores, being the amount
exceeding Rs. 50 lakhs
d) Neither State Government of Hyderabad is liable to collect tax at source nor Kishore & Sons is
liable to deduct tax at source

2. Is Kishore & Sons required to collect tax at source in respect of the sale transactions with M/s
BAC Co. If yes, when and what is the amount of tax to be collected?
a) Yes; Rs. 1,000 on 30.6.2023, Rs. 800 on 25.10.2023, Rs. 1,500 on 20.1.2024 and Rs. 1,200 on
15.2.2024
b) Yes; Rs. 35,000 on 10.5.2023, Rs. 25,000 on 30.6.2023, Rs. 8,000 on 25.10.2023, Rs. 15,000 on
20.1.2024 and Rs. 12,000 on 15.2.2024
c) Yes; Rs. 1,000 on 10.7.2023, Rs. 800 on 25.10.2023, Rs. 1,500 on 22.1.2024 and Rs. 1,200 on
15.2.2024
d) No, Kishore & Sons is not liable to collect tax at source

3. Is Kishore & Sons required to collect tax at source in respect of the sale transaction with M/s
XYZ Ltd. If yes, what is the amount of tax to be collected?
a) Yes; Rs. 55,000
b) Yes; Rs. 5,500
c) Yes; Rs. 500
d) No, Kishore & Sons is not liable to collect tax at source

4. Is M/s BAC Co. required to deduct tax at source in respect of the purchase transactions with
Kishore & Sons. If yes, when and what is the amount of tax to be deducted?
a) Yes; Rs. 1,000 on 30.6.2023, Rs. 800 on 25.10.2023, Rs. 1,500 on 20.1.2024 and Rs. 1,200 on
15.2.2024
b) Yes; Rs. 3,500 on 10.5.2023, Rs. 2,500 on 30.6.2023, Rs. 800 on 25.10.2023, Rs. 1,500 on
20.1.2024 and Rs. 1,200 on 15.2.2024
c) Yes; Rs. 1,000 on 10.7.2023, Rs. 800 on 25.10.2023, Rs. 1,500 on 22.1.2024 and Rs. 1,200 on
15.2.2024
d) No, M/s BAC Co. is not liable to deduct tax at source

5. Assume for the purpose of this MCQ, M/s BAC Co.’s turnover for the F.Y. 2022-23 was Rs. 9
crore, who will be required to deduct/ collect tax at source in respect of transactions between
Kishore & Sons and M/s BAC Co. and at what rate?
a) Kishore & Sons is liable to collect tax at source @1% of Rs. 95 lakhs
b) Kishore & Sons is liable to collect tax at source @0.1% of Rs. 45 lakhs, being the sum exceeding
Rs. 50 lakhs
c) M/s BAC Co. is liable to deduct tax at source @0.1% of Rs. 45 lakhs, being the sum exceeding Rs.
50 lakhs
d) Neither Kishore & Sons is liable to collect tax at source nor M/s BAC Co. is liable to deduct tax at
source

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Answer Keys:
1 2 3 4 5
(a) (d) (a) (a) (d)

Question 34.
High Tech Ltd., a real estate development company, entered into an agreement with Mr. Sakshar, a
resident individual on 25.6.2021 as per which Mr. Sakshar agrees to transfer a plot of land measuring
12 acres in New Delhi to High Tech Ltd. Mr. Sakshar purchased such land on 14.7.2019 for Rs.
80,50,000.
High Tech Ltd. has planned to develop a high-rise society of 250 flats on such land. In consideration,
High Tech Ltd. paid a part consideration of Rs. 1 crore to Mr. Sakshar on the date of agreement and
would provide 3 flats in the society to him as final settlement.
The certificate of completion of society was issued by the authority as on 10.8.2023. On such date,
stamp duty value of each flat in the society was Rs. 2,51,00,000. Subsequently on 31.8.2023, Mr.
Sakshar sold 2 flats in the society to Mr. Kevin for a consideration of Rs. 2,70,00,000 each while the
stamp duty value of each flat on such date was Rs. 2,98,00,000. During the P.Y. 2023-24, Mr. Kevin
has earned salary income of Rs. 30,50,000.
Out of the proceeds received on sale of land, Mr. Sakshar has purchased a house on 08.09.2023 for a
consideration of Rs. 47,00,000 and occupied for own residence. Mr. Sakshar has taken a loan of Rs.
35,00,000 (80% of stamp duty value) from SBI for purchase of such house which was sanctioned and
disbursed at the interest rate of 12% p.a. on 01.07.2023. He does not own any other residential house
on the date of sanction of loan. Mr. Kevin and Mr. Sakshar do not opt for section 115BAC.
Cost Inflation Index: 2023-24: 348; 2021-22: 317; 2019-20: 289
1. What would be the tax, if any, required to be deducted by High Tech Ltd. in respect of agreement
entered into with Mr. Sakshar?
a) Rs. 10,00,000
b) Rs. 85,30,000
c) Rs. 8,53,000
d) Rs. 1,00,000

2. What would be the capital gain in the hands of Mr. Sakshar in respect of the agreement entered
into with High Tech Ltd. and in which year it would be taxable?
a) Rs. 7,59,18,199 in P.Y. 2023-24
b) Rs. 7,20,46,875 in P.Y. 2023-24
c) Rs. 7,72,50,000 in P.Y. 2023-24
d) Rs. 7,67,46,875 in P.Y. 2021-22

3. Determine the capital gain/loss in the hands of Mr. Sakshar in respect of sale of 2 flats to Mr. Kevin
during P.Y. 2023-24. For the purpose of answering this MCQ, assume that no cash consideration
was paid by High Tech Ltd. to Mr. Sakshar.
a) Rs. 38,00,000
b) Rs. 47,00,000
c) Rs. 56,00,000
d) Rs. 94,00,000

4. What would be the total income of Mr. Kevin for the P.Y. 2023-24?
a) Rs. 30,50,000
b) Rs. 86,50,000
c) Rs. 86,00,000
d) Rs. 30,00,000

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5. What would be the total deduction available under the relevant provisions of the Income- tax Act,
1961 to Mr. Sakshar for the P.Y. 2023-24 in respect of interest on loan taken from SBI?
a) Rs. 2,00,000
b) Rs. 3,15,000
c) Rs. 3,50,000
d) Rs. 4,20,000

Answer Keys:
1 2 3 4 5
(a) (c) (d) (c) (b)

Question 35.
Mr. Shaan, a resident aged 42 years, is employed in an MNC in Gurugram since 2014. He submitted
his resignation on 31st July, 2023 for starting his own business and gave a notice period of one month
to the employer. He received the following emoluments from his employer for the period from 1st
April, 2023 to 31st August, 2023:
Basic pay - Rs. 45,000 p.m.
Dearness Allowance (Forming part of retirement benefits) - 10% of Basic pay
Medical allowance - Rs. 5,000 p.m.
Entertainment allowance - Rs. 2,500 p.m.
Commission - Rs. 10,000 p.m.
Employee’s contribution to RPF - Rs. 7,500 p.m.
Employer’s contributed the same amount to the RPF
Interest accrued in the RPF@13% - Rs. 14,300
In October, 2023, he started the business of manufacturing of footwear under the brand name
“COMFORT”. He withdrew the entire amount from his RPF account in September, 2023 to invest in
his business. He has employed 75 regular employees on 1.11.2023 at a salary of Rs. 23,000 p.m. and
they participate in recognized provident fund. For the P.Y. 2023-24, the profits and gains derived
from such business is Rs. 51 lakhs (computed) and the turnover is Rs. 7 crores. Mr. Shaan received
12% of the sales in cash.
On 1st December, 2023, he has purchased a house property for Rs. 90 lakhs for self-occupation by
taking a loan of Rs. 45 lakhs@10% p.a. on the same day. He has paid stamp duty of Rs. 6,25,000 on
purchase of such house property. Mr. Shaan does not want to opt for the provisions of section
115BAC.
1. What is the amount of salary chargeable under “Salaries” to Mr. Shaan for A.Y. 2024-25?
a) Rs. 2,85,000
b) Rs. 2,99,300
c) Rs. 2,96,650
d) Rs. 2,84,150

2. What is the amount of deduction available to Mr. Shaan under Chapter VI-A for A.Y. 2024-25?
a) Rs. 1,50,000
b) Rs. 25,87,500
c) Rs. 26,25,000
d) Rs. 27,37,500

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3. What is the total income of Mr. Shaan for A.Y. 2024-25?

a) Rs. 25,09,150
b) Rs. 24,59,150
c) Rs. 24,61,800
d) Rs. 25,59,150

4. Compute the tax liability of Mr. Shaan for A.Y. 2024-25.

a) Rs. 5,87,860
b) Rs. 10,78,660
c) Rs. 10,62,520
d) Rs. 5,72,250

5. Compute the tax liability of Mr. Shaan for A.Y. 2024-25 if he opts for the provisions of section
115BAC. Assume that the figure of profits and gains from business or profession remains the same
under section 115BAC also.
a) Rs. 15,68,990
b) Rs. 5,56,650
c) Rs. 5,72,250
d) Rs. 6,19,060
Answer Keys:
1 2 3 4 5
(c) (d) (a) (c) (d)

Question 36.
Mr. Suresh born on 1.4.1964 furnished his return of income for Assessment Year 2024-25 on
25.07.2024. He has opted for the provisions of section 115BAC. He had shown the following income in
his original return of income -
- Salary of Rs. 10.50 lakhs from ABC (P) Ltd
- Interest from savings bank account of Rs. 15,700
- Interest from fixed deposits with SBI of Rs. 50,000.
During the P.Y. 2023-24, he paid interest on loan Rs. 2,50,000 for purchase of self-occupied property.
He contributed Rs.1,50,000 towards the PPF. He paid health insurance premium of Rs. 40,000 by
account payee cheque for self and wife. He paid Rs. 2,200 in cash for his health check-up and Rs. 4,000
by cheque for preventive health check-up of his parents. He also paid medical insurance premium of
Rs. 29,000 during the year to insure the health of his mother, aged 80 years. He further incurred
medical expenditure of Rs. 18,000 on his father, aged 81 years, who is staying with him. His father is
not covered under any mediclaim policy.
He met one of his friends, CA. Nakul on 31.1.2025. While discussing with his friend, his friend told
him that the concessional tax rate under section 115BAC is not beneficial to him. He advised him to
revise his return of income and not to opt for section 115BAC. However, Mr. Suresh’s son, who is
employed in the accounts department of XYZ (P) Ltd., is of the view that once option to pay tax as
per section 115BAC is selected in original return, it cannot be changed in revised return.
From the information given above, choose the most appropriate answer to the following questions –
1. What is the tax payable by Mr. Suresh for A.Y. 2024-25 as per original return of income filed by
Mr. Suresh?
a) Rs. 97,070
b) Rs. 1,02,070
c) Rs. 96,030
d) Rs. 1,01,030

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2. What is the total deduction under Chapter VI-A allowable to Mr. Suresh if he does not opt for
the provisions of section 115BAC?
a) Rs. 2,34,800
b) Rs. 2,35,000
c) Rs. 2,92,000
d) Rs. 2,92,200
3. What is total income of Mr. Suresh under the normal provisions of the Act for A.Y. 2024-25?
a) Rs. 5,23,700
b) Rs. 5,73,700
c) Rs. 6,75,700
d) Rs. 6,80,700
4. Compute the tax liability of Mr. Suresh for A.Y. 2024-25 if he does not opt for the provisions of
section 115BAC.
a) Rs. 25,730
b) Rs. 50,590
c) Rs. 17,930
d) Rs. 49,550
5. Can Mr. Suresh file his revise return of income for A.Y. 2024-25 and declare income under the
regular provisions of the Act?
a) Yes, Mr. Suresh can revise his return of income and declare income under the regular provisions
of the Act
b) No, though he can file a revised return of income, option under section 115BAC once opted in
original return of income cannot be changed in revised return of income
c) No, Mr. Suresh cannot revise his return of income for A.Y. 2024-25
d) No, he cannot do so since he is a salaried employee. He would have made a declaration to opt for
section 115BAC to his employer, which cannot be changed subsequently at the time of fling of
return of income
Answer Keys:
1 2 3 4 5
(b) (c) (b) (a) (c)

Question 37.
Mr. Ram, an Indian resident, purchased a residential house property at Gwalior on 28.05.1999 for
Rs. 28.5 lakhs. The fair market value and the stamp duty value of such house property as on 1.4.2001
was Rs. 33.5 lakhs and Rs. 32.4 lakhs, respectively. On 05.02.2015, Mr. Ram entered into an agreement
with Mr. Byomkesh for sale of such property for Rs. 74 lakhs and received an amount of Rs. 3.9 lakhs
as advance. However, as Mr. Byomkesh did not pay the balance amount, Mr. Ram forfeited the
advance.
On 15.04.2023, Mr. Ram sold the house property for Rs. 2.10 crores, when the stamp duty value of
the property was Rs. 2.33 crores. Further, he purchased two residential house properties at Delhi and
Mumbai for Rs. 54 lakhs each on 28.08.2023.
On 28.02.2024, Mr. Ram decided to sell the house property at Mumbai to his nephew, Mr. Vaibhav,
for Rs. 58 lakhs, from whom Rs. 19,000 was received in cash on 15.01.2024 as advance for signing the
agreement to sale. Sale deed was registered on 30.03.2024 on receipt of the balance amount through
account payee cheque from Mr. Vaibhav. The stamp duty value of house property at Mumbai on
28.02.2024 and 30.03.2024 was Rs. 61 lakhs and Rs. 64 lakhs, respectively.
Cost inflation index – P.Y. 2023-24: 348; P.Y. 2014-15: 240; P.Y. 2004-05: 113

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1. What shall be the indexed cost of acquisition of residential house property at Gwalior for
computation of capital gains in the hands of Mr. Ram?
a) Rs. 1,00,83,500
b) Rs. 97,52,400
c) Rs. 99,18,000
d) Rs. 89,09,600

2. The amount of capital gains taxable for A.Y. 2024-25 in the hands of Mr. Ram for sale of
residential house property at Gwalior is -
a) Rs. 25,82,000
b) Rs. 93,21,500
c) Rs. 35,90,400
d) Rs. 24,16,500

3. The amount of capital gains taxable for A.Y. 2024-25 in the hands of Mr. Ram for sale of
residential house property at Mumbai is -
a) Rs. 3 lakhs
b) Rs. 6 lakhs
c) Rs. 61 lakhs
d) Rs. 64 lakhs

4. The amount taxable under section 56(2)(x) in the hands of Mr. Vaibhav, if any, is -
a) Rs. 3 lakhs
b) Nil
c) Rs. 6 lakhs
d) Rs. 5.50 lakhs

5. What shall be the total tax credit available with Mr. Ram with respect to sale of 2 house properties
during P.Y. 2023-24 assuming the tax was fully deducted by both the buyers at the time of
payment?
a) Rs. 2,01,000
b) Rs. 2,53,500
c) Rs. 2,68,000
d) Rs. 2,81,000
Answer Keys:
1 2 3 4 5
(c) (a) (d) (c) (c)

Question 38.
Anjali is a research scholar pursuing her PhD. She is unmarried and her parents are living in
Ahmedabad, Gujarat. Her parental grandparents and other family relatives are staying in South
Africa. She was in India with her parents till May 2019. After then, she went to London for further
education. In October 2022, she returned to India. On 28th March 2023, she travelled out of India to
Johannesburg, in South Africa, for her research project and Khadi business exhibitions. She returned
on 1st October 2023 to participate in the 154th Birth Anniversary Celebrations of Mahatma Gandhi.
In this connection, she attended numerous events held all over India, while also holding exhibitions
for her textile business in ‘Khadi - the fabric that breathes, the livery of freedom’ - as showcased by
Mahatma Gandhi. She won accolades and awards, gifts and donations in the course of showcasing
her work. You have been provided with the following data in respect of her receipts and income for
the F.Y. 2023-24

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S. No. Details Amount (Rs.)

1. Scholarship for pursuing her research work 4,80,000
2. Gross receipts from exhibitions held in South Africa in collaboration with 10,00,000
the leading Fashion House
3. Gross receipts from exhibitions held in India 12,00,000
4. Gross receipts from sale of Honey in the exhibitions in India 1,05,000
5. Gross receipts from sale of Handmade Khadi designer fashion accessories 2,25,000
and other Khadi stationery products
6. Gift from father’s sister whom she visited in Johannesburg, South Africa 51,000
7. Cash gifts received from friends in ‘Gandhi Gujarat Seva Samaj’ with 27,000
whom she stayed while in Johannesburg, South Africa.
8. Received share of income from the HUF 22,000
9. Cost of material for exhibitions held in South Africa and India - Rs. 12,00,000; Cost of
Handmade Khadi designer fashion accessories and other Khadi stationery products - Rs.
1,00,000; Other eligible Business expenses - Rs. 4,00,000; Cost of Honey purchased for sale
in the exhibitions in India – Rs. 55,000.
10. Mr. Patel of South Africa gave her a cheque of Rs. 5,00,000 favouring ‘Gandhi Smarak
Trust’ as donation to the Trust. She was requested to hand over the cheque to the Trust’s
office at Ahmedabad.
Notes:
1. Anjali does not manufacture any of the Khadi products. She sourced all the Khadi materials,
accessories, products and honey from suppliers of such items.
2. All financial transactions are carried out in cheques & applicable TDS has been deducted.
3. Her paternal grandfather is the Karta of the family HUF. Her paternal grandfather comes on
visit in India for 6 months every year since 2016. The HUF is managed outside India and all
decisions regarding the HUF are made outside India.
4. Anjali does not want to opt for the provisions of section 115BAC.
1. What is the residential status of Anjali for the A.Y. 2024-25?
a) Non-resident
b) Resident but not ordinarily resident
c) Deemed resident
d) Resident and ordinarily resident
2. What is the residential status of HUF for the A.Y. 2024-25?
a) Resident and ordinarily resident
b) Resident but not ordinarily resident
c) Non-resident
d) Deemed resident
3. Determine the taxability of gift received by Anjali from her father’s sister and from her friends in
‘Gandhi Gujarat Seva Samaj’ for the A.Y. 2024-25?
a) Rs. 51,000 will be exempt as it is a gift received from a relative. Rs. 27,000 received as cash gifts
from her friends would not be taxable as all her friends are non-residents.
b) Rs. 51,000 will be taxed as “Income from other sources” as father’s sister is not a relative. Rs. 27,000
received as cash gifts from friends will also be taxable as the total gifts from non- relatives during the
A.Y. 2024-25 exceeds Rs. 50,000.
c) Rs. 51,000 will be exempt as it is a gift received from a relative. Rs. 27,000 received as cash gifts
from friends will be taxed as amount is paid in cash and is received from non-residents.
d) Rs. 51,000 will be exempt as it is a gift received from a relative. Rs. 27,000 will not be taxable as the
total gifts received from non-relatives does not exceed Rs. 50,000.

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4. What would be the total income of Ms. Anjali for A.Y. 2024-25 if she wishes to maximize tax
savings?
a) Rs. 12,55,000
b) Rs. 8,02,000
c) Rs. 1,51,800
d) Rs. 7,75,000
Answer Keys:
1 2 3 4
(d) (c) (d) (c)

Questions 39.
Mrs. Shalini is a retired Government employee. She was born on 01.04.1944 in India. She is residing
in Delhi. She stayed with her elder son Mr. Nakul from 1st May, 2023 to 15th October, 2023, who is
residing in Australia. She stayed in India for 361 days during the 4 previous years preceding the
previous year 2023-24. During the previous year 2023-24, pension of Rs. 7,15,461 is credited in her
account with State Bank of India, Uttam Nagar Branch, Delhi after deducting tax at source of Rs.
14,565. She received interest of Rs. 4,352 on her saving A/c with SBI during the previous year 2023-
24. She also received interest of Rs. 67,500 on Fixed Deposits with Canara Bank in the month of April,
2023.
She has purchased two life insurance policies for her son Mr. Yuvaan and married daughter Mrs.
Kajal, the details of which are as follows:
Person insured Policy Date of payment Sum Premium paid
purchased on of premium Assured
Mr. Yuvaan (50 years old) 15.10.2022 23.10.2023 Rs. 9,84,655 Rs. 1,00,388
Mrs. Kajal (45 years old) 20.09.2022 25.09.2023 Rs. 2,00,000 Rs. 17,000
She has taken a medical insurance for herself for which she paid an amount of Rs. 35,000 towards
health insurance premium by A/c payee cheque. She incurred Rs. 7,500 towards preventive health
check-up of herself and her husband in cash. She also incurred medical expenditure of Rs. 25,000 in
cash in the month of January 2024 for her husband. In the month of March 2024, she incurred medical
expenditure of Rs. 10,500 for herself, which is paid by account payee cheque. She has given a
wristwatch of Rs. 10,000 on her husband’s 85th birthday. Her husband is resident in India for the
P.Y. 2023-24. Mrs. Shalini does not opt to pay tax under section 115BAC.
1. What would be the amount of deduction under Chapter VI-A available to Mrs. Shalini for the
A.Y. 2024-25?
a) Rs. 2,05,466
b) Rs. 2,08,466
c) Rs. 2,07,388
d) Rs. 2,18,466

2. What would be the Gross total income of Mrs. Shalini for the assessment year 2024-25?
a) Rs. 7,87,313
b) Rs. 8,04,878
c) Rs. 7,59,378
d) Rs. 8,09,378

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3. What is the amount of net tax payable/(refundable) of Mrs. Shalini for the A.Y. 2024-25?
a) (Rs. 10,850)
b) (Rs. 1,790)
c) (Rs. 1,080)
d) (Rs. 450)

4. What would be the total income of Mrs. Shalini for the assessment year 2024-25, if she opts to
pay tax under section 115BAC?
a) Rs. 7,51,880
b) Rs. 8,01,880
c) Rs. 7,87,310
d) Rs. 8,09,380

5. What is the amount of net tax payable/(refundable) of Mrs. Shalini for the A.Y. 2024-25, if she
opts to pay tax under section 115BAC?
a) Rs. 22,760
b) Rs. 13,200
c) Rs. 26,200
d) Rs. 25,030

Answer Keys:
1 2 3 4 5
(a) (c) (a) (d) (c)

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