ICAI MCQ's INCOME TAX CA INTER MAY - NOV 2024

ICAI MCQ – CA INTER MAY/NOV 2024 CA Aarish Khan
ICAI MCQ – INCOME TAX – CA INTER MAY/NOV 2024:

This is the compilation of all the ICAI MCQ’s which is there on their portal for CA Inter May/Nov
2024 exams. Aarish Khan Sir has made this so that your time is not wasted in opening the portal
again and again for practicing the MCQ’s. I will also make a video for the same explaining all the
MCQ’s in detail. Till then you all practice. God Bless you all.
Simple
Chapter 1 : Basic Concepts
Question - 1 :
Ms. Sowmya has three farm buildings situated in the immediate vicinity of a rural agricultural
land. In the P.Y.2023-24, she earned Rs. 3 lakh from letting out her farm building 1 for storage of
food grains, Rs. 10 lakh from letting out her farm building 2 for storage of dairy products and Rs.
15 lakh from letting out her farm building 3 for residential purposes of Mr. Sumanth, whose food
grain produce is stored in farm building 1. What is the amount of agricultural income exempt
from income-tax?
Answer - 1 : Nil
Answer - 2 : Rs. 3,00,000
Answer - 3 : Rs. 13,00,000
Answer - 4 : Rs. 18,00,000
Description: Refer sections 2(1A) and 10(1)
Question - 2 :
The Gupta HUF in Maharashtra comprises of Mr. Harsh Gupta, his wife Mrs. Nidhi Gupta, his
son Mr. Deepak Gupta, his daughter-in-law Mrs. Deepti Gupta, his daughter Miss Preeti Gupta
and his unmarried brother Mr. Gautam Gupta. Which of the members of the HUF are eligible
for co-parcenary rights?
Answer - 1 : Only Mr. Harsh Gupta, Mr. Gautam Gupta and Mr. Deepak Gupta
Answer - 2 : Only Mr. Harsh Gupta, Mr. Gautam Gupta, Mr. Deepak Gupta and Miss Preeti Gupta
Answer - 3 : Only Mr. Harsh Gupta, Mr. Gautam Gupta, Mr. Deepak Gupta, Mrs. Nidhi Gupta and Mrs.
Deepti Gupta
Answer - 4 : All the members are co-parceners
Description: Refer Mitashara school of Hindu Law
Question - 3 :
Which of the following is agriculture income?
Answer - 1 : Income from breeding of livestock
Answer - 2 : Income from fisheries
Answer - 3 : Income from juice centre
Answer - 4 : Income derived from saplings or seedlings grown in a nursery
Description: Refer Explanation 3 to section 2(1A).
Question - 4 :
The rates of income-tax are mentioned in -
Answer - 1 : The Income-tax Act, 1961 only
Answer - 2 : The First Schedule to the Annual Finance Act
Answer - 3 : Both Income-tax Act, 1961 and the First Schedule to the Annual Finance Act
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For Lectures Contact 900 900 8977/aarishkhan.com 1
Answer - 4 : Both Income-tax Act, 1961 and Income-tax Rules, 1962
Question - 5 :
For A.Y. 2024-25, Mr. Hari, a resident Indian, earns income of Rs. 10 lakhs from sale of rubber
manufactured from latex obtained from rubber plants grown by him in India and Rs. 15 lakhs
from sale of rubber manufactured from latex obtained from rubber plants grown by him in
Malaysia. What would be his business income chargeable to tax in India, assuming he has no other
business?
Answer - 1 : Rs. 3,50,000
Answer - 2 : Rs. 4,00,000
Answer - 3 : Rs. 8,75,000
Answer - 4 : Rs. 18,50,000
Description: Refer Rule 7A
ANSWERS:
Question No Answer
1 2
2 2
3 4
4 3
5 4
Medium
Question - 1 :
Mr. Raman, aged 64 years, was not able to provide satisfactory explanation to the Assessing
Officer for the investments of Rs. 7 lakhs not recorded in the books of accounts. What shall be the
tax payable by him on the value of such investments considered to be deemed income as per
section 69?
Answer - 1 : Rs. 2,18,400
Answer - 2 : Rs. 55,000
Answer - 3 : Rs. 5,46,000
Answer - 4 : Rs. 54,600
Description: Refer section 115BBE
Question - 2 :
Which of the following statements is/are true in respect of taxability of agricultural income under
the Income-tax Act, 1961?
(i) Any income derived from saplings or seedlings grown in a nursery is agricultural income
exempt from tax u/s 10(1).
(ii) 60% of dividend received from shares held in a tea company is agricultural income exempt
from tax u/s 10(1).
(iii) While computing income tax liability of an assessee aged 50 years, agricultural income is
required to be added to total income only if net agricultural income for the P.Y. exceeds
Rs. 5,000 and the total income (including net agricultural income) exceeds the basic
exemption limit.
(iv) While computing income tax liability of an assessee aged 50 years, agricultural income is
required to be added to total income only if net agricultural income for the P.Y. exceeds
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Rs. 5,000 and the total income (excluding net agricultural income) exceeds the basic
exemption limit.
Answer - 1 : (i) and (iii)
Answer - 2 : (ii) and (iii)
Answer - 3 : (i) and (iv)
Answer - 4 : (i), (ii) and (iv)
Description: Refer section 2(1A) and partial integration of agricultural income with
nonagricultural income
Question - 3 :
For A.Y.2024-25, Mr. Rajesh, a resident Indian, earns income of Rs.12 lakhs from sale of coffee
grown and cured in India. His friend, Mr. Ganesh, a resident Indian, earns income of Rs. 25 lakhs
from sale of coffee grown, cured, roasted and grounded by him in India. What would be the
business income chargeable to tax in India of Mr. Rajesh and Mr. Ganesh?
Answer - 1 : Rs. 3,00,000 and Rs. 6,25,000, respectively
Description: Refer Rule 7B
Question - 4 :
Income derived from farm building situated in the immediate vicinity of an agricultural land (not
assessed to land revenue) would be treated as agricultural income if such land is situated in?
Answer - 1 : an area at a distance of 3 kms from the local limits of a municipality and has a population
of 80,000 as per last census
Answer - 2 : an area within 1.5 kms from the local limits of a municipality and has a population of
12,000 as per last census
Answer - 3 : an area within 2 kms from the local limits of a municipality and has a population of
11,00,000 as per last census
Answer - 4 : an area within 8 kms from the local limits of a municipality and has a population of
10,50,000 as per last census
Description: Refer section 2(1A)
ANSWERS:
Question No Answer
1 3
2 3
3 2
4 1
Difficult
Question - 1 :
Mr. Nekinsaan, aged 43 years, provides the following income details for P.Y. 2023-24 as follows:
Particulars Rs.
Capital Gains under section 112A
Capital Gains under section 111A
Other Income
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What shall be the tax liability of Mr. Nekinsaan under optional tax regime as per normal
provisions of the Income-tax Act, 1961 for A.Y. 2024-25?
Answer - 1 : Rs. 260.06 lakhs
Question - 2 :
Miss Nisha (45 years) is a non resident individual. For the A.Y.2024-25, she has following income:
Long-term capital gain on transfer of listed equity shares (STT has been paid on acquisition and
transfer of the said shares) - Rs.1,80,000
Other income - Rs. 2,75,000
Calculate the tax liability of Miss Nisha for A.Y. 2024-25 under default tax regime.
Answer - 1 : Nil
Answer - 2 : Rs. 9,620
Answer - 3 : Rs. 5,720
Answer - 4 : Rs. 8,320
Description: Refer section 115BAC and 87A.
Question - 3 :
Mr. Ashutosh, aged 65 years and a resident in India, has a total income of Rs. 3,20,00,000,
comprising long term capital gain taxable under section 112 of Rs. 57,00,000, long term capital
gain taxable under section 112A of Rs. 65,00,000 and other income of Rs. 1,98,00,000. What would
be his tax liability for
A.Y. 2024-25 under default tax regime.
Answer - 1 : Rs. 88,74,320
Answer - 2 : Rs. 89,19,170
Answer - 3 : Rs. 96,46,000
Answer - 4 : Rs. 94,60,880
ANSWERS:
Question No Answer
1 4
2 4
3 1
Chapter 2 : Residence and Scope of Total Income

Simple
Question - 1:
Aashish earns the following income during the P.Y. 2023-24:
Interest on U.K. Development Bonds (1/4th being received in India): Rs. 4,00,000 Capital gain on
sale of a building located in India but received in Holland: Rs. 6,00,000
If Aashish is a resident but not ordinarily resident in India, then what will be amount of income
chargeable to tax in India for A.Y. 2024-25?
Answer - 1 : Rs. 7,00,000
Answer - 2 : Rs. 10,00,000
Answer - 3 : Rs. 6,00,000
Answer - 4 : Rs. 1,00,000
Description: Refer sections 5 and 9(1).
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Question - 2:
Raman, a citizen of India, was employed in Hindustan Lever Ltd. He resigned on 27.09.2023. He
received a salary of Rs. 40,000 p.m. from 1.4.2023 to 27.9.2023 from Hindustan Lever Ltd.
Thereafter he left for Dubai for the first time on 1.10.2023 and got salary of rupee equivalent of
Rs. 80,000 p.m. from 1.10.2023 to 31.3.2024 in Dubai. His salary for October to December 2023
was credited in his Dubai bank account and the salary for January to March 2024 was credited
in his Mumbai account directly. He is liable to tax in respect of -
Answer - 1 : income received in India from Hindustan Lever Ltd.
Answer - 2 : income received in India and in Dubai.
Answer - 3 : income received in India from Hindustan Lever Ltd. and income directly credited in India.
Answer - 4 : income received in Dubai.
Description: Refer section 5
Question - 3 :
Determine residential status of Sundaram (HUF) which carries out its transactions in Malaysia.
Its affairs are partly controlled from India. The Karta of HUF, Mr. Sundaram who is from
Chennai visits India on 01.06.2023 and leaves for Malaysia on 10.02.2024.
He has not visited India for the past 11 years.
Answer - 1 : Non-resident
Answer - 2 : Resident but not ordinarily resident
Answer - 3 : Deemed resident
Answer - 4 : Resident and ordinarily resident
Description: Refer sections 6(2) and 6(6).
Question - 4 : Income from a business in Australia, controlled from Australia is taxable in case of
-
Answer - 1 : resident and ordinarily resident only
Answer - 2 : resident and ordinarily resident and
resident but not ordinarily resident
Answer - 3 : non-resident
Answer - 4 : All the above
ANSWERS:
Question No Answer
1 1
2 2
3 2
4 1
Medium
Question - 1 :
If Anirudh, a citizen of India, has stayed in India in the P.Y. 2023-24 for 181 days, and he is non-
resident in 9 out of 10 years immediately preceding the current previous year and he has stayed
in India for 365 days in all in the 4 years immediately preceding the current previous year and
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420 days in all in the 7 years immediately preceding the current previous year, his residential
status for the A.Y. 2024-25 would be –
Answer - 4 : Deemed resident but not ordinarily resident
Description: Refer sections 6(1) and 6(6)
Question - 2 :
Mr. Tejas, an Indian Citizen, left India permanently with his wife and two children, for extending
his retail trade business of toys in Canada in the year 2016. From Canada, he is managing his
retail business of toys in India. For the purpose of his Indian business, he visits India every year
from 1st September to 31st January. His business income is Rs. 23.50 lakhs and Rs. 18 lakhs from
retail trade business in Canada and in India, respectively for the F.Y. 2023-24. He has no other
income during the P.Y. 2023-24. Determine his residential status and income taxable in his hands
for the A.Y. 2024-25.
Answer - 1 : Resident and ordinarily resident in India
and income of Rs. 18 lakhs and Rs. 23.50 lakhs would be taxable.
Answer - 2 : Non-Resident and Rs. 18 lakhs from Indian retail trade business would only be taxable.
Answer - 3 : Resident but not ordinarily Resident and Rs. 18 lakhs from Indian retail trade business
would only be taxable
Answer - 4 : Deemed resident and Rs. 18 lakhs from Indian retail trade business would only be taxable
Description: Refer sections 6(1) and 5
Question - 3 :
Mr. Rajesh, aged 53 years, and his wife, Mrs. Sowmya, aged 50 years, are citizens of Country X.
They are living in Country X since birth. They are not liable to tax in Country X. Both of them
have keen interest in Indian Culture. Mr. Rajesh’s parents and grandparents were born in
Country X. Mrs. Sowmya visits India along with Mr. Rajesh for four months every year to be
with her parents, who were born in Delhi and have always lived in Delhi. During their stay in
India, they organize Cultural Programme in Delhi- NCR. Income of Mr. Rajesh and Mrs.
Sowmya from the Indian sources for the P.Y. 2023-24 is Rs. 18 lakhs and Rs. 16 lakhs,
respectively. What is the residential status of Mr. Rajesh and Mrs. Sowmya for A.Y. 2024-25?
Answer - 1 : Both are resident and ordinarily resident in India
Answer - 2 : Both are non-resident in India
Answer - 3 : Mr. Rajesh is resident but not ordinarily
resident in India and Mrs. Sowmya is non-resident
Answer - 4 : Mrs. Sowmya is resident but not ordinarily resident in India and Mr. Rajesh is
resident and ordinarily resident in India
Description: Refer sections 6(1) and 6(6)
Question - 4 :
Mr. Sumit is an Indian citizen and a member of the crew of an America bound Indian ship
engaged in carriage of freight in international traffic departing from Chennai on 25th April, 2023.
From the following details for the P.Y. 2023-24, what would be the residential status of Mr. Sumit
for A.Y. 2024-25, assuming that his stay in India in the last 4 previous years preceding P.Y. 2023-
24 is 365 days and last seven previous years preceding P.Y. 2023-24 is 730 days?
Date entered in the Continuous Discharge Certificate in respect of joining the ship by Mr. Sumit:
25th April, 2023 Date entered in the Continuous Discharge Certificate in respect of signing off the
ship by
Mr. Sumit: 24th October, 2023
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Mr. Sumit has been filing his income tax return in
India as a resident for the preceding 2 previous years.
Answer - 2 : Resident but not-ordinarily resident
Answer - 4 : Deemed resident but not-ordinarily Resident
Description: Refer illustration 1
ANSWERS:
Question No Answer
1 2
2 3
3 4
4 1
Difficult
Question - 1 :
Mr. Square, an Indian citizen, currently resides in Dubai. He came to India on a visit and his total
stay in India during the F.Y. 2023-24 was 135 days. He is not liable to pay any tax in Dubai.
Following is his details of stay in India in the preceding previous years:
Financial Year Days of Stays in India
2022-23 100
2021-22 125
2020-21 106
2019-20 83
2018-19 78
2017-18 37
2016-17 40
What shall be his residential status for the P.Y. 2023- 24 if his total income (other than income
from foreign sources) is Rs. 10 lakhs?
Answer - 1 : Resident but not ordinary resident
Answer - 2 : Resident and ordinary resident
Answer - 4 : Deemed resident but not ordinarily resident
Description: Refer sections 6(1) and 6(1A).
Question - 2 :
Mr. Sushant is a person of Indian origin, residing in Canada. During P.Y. 2023-24, he visited
India on several occasions and his period of stay, in total, amounted to 129 days during P.Y. 2023-
24 and his period of stay in India during P.Y. 2022-23, P.Y.2021- 22, P.Y. 2020-21 and P.Y. 2019-
20 was 135 days, 115 days, 95 days and 125 days, respectively. He earned the following incomes
during the P.Y. 2023-24:
Source of Income Amount (Rs.)
Income received or deemed to be received in India 2,50.000
Income accruing or arising or which is deemed to accrue or arise in India 3,75,000
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Income accruing or arising and received outside India from business controlled 5,50,000
from India
Income accruing or arising and received outside India from business controlled 6,50,000
outside India
What is the residential status of Mr. Sushant for A.Y. 2024-25 and his income liable to tax in India
during A.Y. 2024-25?
Answer - 1 : Non-Resident; Rs. 6,25,000 is liable to tax in India
Answer - 2 : Resident and ordinary resident; Rs.18,25,000 is liable to tax in India
Answer - 3 : Resident but not ordinarily resident; Rs. 11,75,000 is liable to tax in India
Answer - 4 : Non-Resident; Rs. 11,75,000 is liable to tax in India
Description: Refer sections 6(1A) and 5
Question - 3 :
Who among the following will qualify as non-resident for the P.Y. 2023-24?
Mr. Bob, an Italian dancer, came on visit to India to explore Indian dance on 15.09.2023 and left
on 25.12.2023. For past four years, he visited India for dance competition and stayed in India for
120 days each year.
Mr. Samrat born and settled in USA, visits India each year for 100 days to meet his parents and
grandparents, born in India in 1946, living in Delhi. His Indian income is Rs. 15,20,000
Mr. Joseph, an American scientist, left India to his home country for fixed employment there. He
stayed in India for study and research in medicines from 01.01.2018 till 01.07.2023
Choose the correct answer
Answer - 1 : Mr. Bob and Mr. Joseph Answer - 2 : Mr. Samrat
Answer - 3 : Mr. Bob, Mr. Samrat and Mr. Joseph Answer - 4 : None of the three
Description: Refer section 6(1)
ANSWERS:
Question No Answer
1 3
2 1
3 2
Simple
Chapter 3 : Heads of Income
Question - 1 :
The HRA paid to an employee residing in Patna is exempt up to the lower of actual HRA, excess
of rent paid over 10% of salary and -
Answer - 1 : 30% of salary
Question - 2 : Mr. Kashyap received basic salary of Rs. 20,000 p.m. from his employer. He also
received children education allowance of Rs. 3,000 for three children and transport allowance of
Rs. 1,800 p.m. Assume he exercises the option of shifting out of the default regime provided under
section 115BAC(1A). The amount of salary chargeable to tax for P.Y. 2023-24 is –
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Answer - 1 : Rs. 2,62,600
Answer - 2 : Rs. 2,12,600
Answer - 3 : Rs. 2,11,600
Answer - 4 : Rs. 2,12,200
Description: Refer illustration 2 of Unit 1
Question - 3 : Ganesh and Rajesh are co-owners of a self-occupied property. They own 50% share
each. The interest paid by each co-owner during the previous year 2023-24 on loan (taken for
acquisition of property during the year 2004) is Rs. 2,05,000. The amount of allowable deduction
in respect of each co-owner, if they have exercised the option of shifting out of the default regime
provided under section 115BAC(1A), is -
Answer - 1 : Rs. 2,05,000
Answer - 2 : Rs. 1,02,500
Answer - 3 : Rs. 2,00,000
Answer - 4 : Rs. 1,00,000
Question - 4 : Mr. Hari received voluntary retirement compensation of Rs. 8,00,000 after 30 years
2 months of service. He still has 5 years of service left. At the time of voluntary retirement, he was
drawing basic salary Rs. 15,000 p.m.;
Dearness allowance (which forms part of pay) Rs. 3,000 p.m. Compute his taxable voluntary
retirement compensation, assuming that he does not claim any relief under section 89 -
Answer - 1 : Rs. 8,00,000
Answer - 2 : Rs. 5,00,000
Answer - 3 : Rs. 3,00,000
Answer - 4 : Nil
Description: Refer section 10(10C)
Question - 5 : Mr. Vikas received a gold ring worth Rs. 60,000 on the occasion of his daughter’s
wedding from his best friend Mr. Vishnu. Mr. Vishnu also gifted a gold chain to Kavya, daughter
of Mr. Vikas, worth Rs. 80,000 on the said occasion. Would such gifts be taxable in the hands of
Mr. Vikas and Ms. Kavya?
Answer - 1 : Yes, the gift of gold ring and gold chain is taxable in the hands of Mr. Vikas and Ms.
Kavya, respectively
Answer - 2 : Such gifts are not taxable in the hands of Mr. Vikas nor in the hands of Ms. Kavya
Answer - 3 : Value of gold ring is taxable in the hands of Mr. Vikas but value of gold chain is not taxable
in the hands of Ms. Kavya
Answer - 4 : Value of gold chain is taxable in the hands of Ms. Kavya but value of gold ring is not
taxable in the hands of Mr. Vikas
Description: Refer section 56(2)(x)
Question - 6 : Mr. Kashyap has acquired a building from his friend on 10.10.2023 for Rs.
15,00,000. The stamp duty value of the building on the date of purchase is Rs. 16,20,000. Income
chargeable to tax in the hands of Mr. Kashyap is
Answer - 1 : Rs. 70,000
Answer - 2 : Rs. 50,000
Answer - 3 : Nil
Answer - 4 : Rs. 1, 20,000
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Question - 7 : For an assessee, who is a salaried employee who invests in equity shares, what is the
benefit available in respect of securities transaction tax paid by him on sale and acquisition of 100
listed shares of X Ltd. which has been held by him for 14 months before sale?
Answer - 1 : Rebate under section 88E is allowable in respect of securities transaction tax paid
Answer - 2 : Securities transaction tax paid is treated as expenses of transfer and deducted from sale
consideration.
Answer - 3 : Capital gains without deducting STT paid is taxable at a concessional rate of 10% on such
capital gains exceeding Rs. 1 lakh
Answer - 4 : Capital gains without deducting STT paid is taxable at concessional rate of 15%.
Question - 8 :
Mr. Mayank has received a sum of Rs. 75,000 on 24.10.2023 from his friend on the occasion of his
marriage anniversary. What would be the taxability of the said sum in the hands of Mr. Mayank?
Answer - 1 : Entire Rs. 75,000 is chargeable to tax
Answer - 2 : Entire Rs. 75,000 is exempt from tax
Answer - 3 : Only Rs. 25,000 is chargeable to tax
Answer - 4 : Only 50% i.e., Rs. 37,500 is chargeable to tax
Question - 9 : Mr. Raghav has three houses for self-occupation. What would be the tax treatment
for A.Y.2024-25 in respect of income from house property?
Answer - 1 : One house, at the option of Mr. Raghav, would be treated as self-occupied. The other two
houses would be deemed to be let out.
Answer - 2 : Two houses, at the option of Mr. Raghav, would be treated as self-occupied. The other
house would be deemed to be let out.
Answer - 3 : One house, at the option of Assessing Officer, would be treated as self-occupied. The other
two houses would be deemed to be let out.
Answer - 4 : Two houses, at the option of Assessing Officer, would be treated as self-occupied. The
other house would be deemed to be let out.
Question - 10 : Mr. Ramesh, a citizen of India, is employed in the Indian embassy in Australia.
He is a non-resident for A.Y. 2024-25. He received salary and allowances in Australia from the
Government of India for the year ended 31.03.2024 for services rendered by him in Australia. In
addition, he was allowed perquisites by the Government. Which of the following statements are
correct?
Answer - 1 : Salary, allowances and perquisites received outside India are not taxable in the hands of
Mr. Ramesh, since he is non-resident.
Answer - 2 : Salary, allowances and perquisites received outside India by Mr. Ramesh are taxable in
India since they are deemed to accrue or arise in India.
Answer - 3 : Salary received by Mr. Ramesh is taxable in India but allowances and perquisites are
exempt.
Answer - 4 : Salary received by Mr. Ramesh is exempt in India but allowances and perquisites are
taxable.
Question - 11 : Under section 54EC, capital gains on transfer of land or building or both are
exempted if invested in the bonds issued by NHAI & RECL or other notified bond -
Answer - 1 : within a period of 6 months after the date of such transfer
Answer - 2 : within a period of 6 months from the end of the relevant previous year
Answer - 3 : within a period of 6 months from the end of the previous year or the due date for filing the
return of income under section 139(1), whichever is earlier
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Answer - 4 : At any time before the end of the relevant previous year.
Question - 12 : Mr. X, a retailer, acquired furniture on 10th May 2023 for Rs. 10,000 in cash and
on 15th May 2023, for Rs. 15,000 and Rs. 20,000 by a bearer cheque and account payee cheque,
respectively. Depreciation allowable for A.Y. 2024-25 would be -
Answer - 1 : Rs. 2,000
Answer - 2 : Rs. 3,000
Answer - 3 : Rs. 3,500
Answer - 4 : Rs. 4,500
Description: Refer sections 43(1) and 32(1)(ii)
Question - 13 :
In case of a Member of Parliament -
Answer - 1 : Daily allowance is exempt but constituency allowance received as per applicable Rules is
taxable.
Answer - 2 : Constituency allowance received as per applicable Rules is exempt but daily allowance is
taxable.
Answer - 3 : Both daily allowance and constituency allowance received as per applicable Rules are
taxable.
Answer - 4 : Both daily allowance and constituency allowance received as per applicable Rules are
exempt.
Question - 14 :
For the purpose of determining the perquisite value of loan at concessional rate given to the
employee, the lending rate of State Bank of India as on __________ is required;
Answer - 1 : 1st day of the relevant previous year
Answer - 2 : Last day of the relevant previous year
Answer - 3 : the day the loan is given
Answer - 4 : 1st day of the relevant assessment year
Description: Refer perquisite valuation Rules
Question - 15 : An electricity company charging depreciation on straight line method on each

asset separately, sells one of its machinery in April, 2023 at Rs. 1,20,000. The WDV of the
machinery at the beginning of the year i.e., on 1st April, 2023 is Rs. 1,35,000. No new machinery
was purchased during the year. The shortfall of Rs. 15,000 would be -
Answer - 1 : Terminal depreciation
Answer - 2 : Normal depreciation
Answer - 3 : Always a short-term capital loss
Answer - 4 : Short-term capital loss or long-term capital loss, depending upon the period of holding
Description: Refer section 32(1)(iii)
Question - 16 : Mr. X acquires an asset in the year 2017-18 for the use for scientific research for
Rs.2,75,000. He claimed deduction under section 35(1)(iv) in the previous year 2017-18. The asset
was brought into use for the business of Mr. X in the P.Y.2023-24, after the research was
completed. The actual cost of the asset to be included in the block of assets is -
Answer - 1 : Nil
Answer - 2 : Market value of the asset on the date of transfer to business
Answer - 3 : Rs. 2,75,000 less notional depreciation under section 32 upto the date of transfer
Answer - 4 : Actual cost of the asset i.e., Rs. 2,75,000
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Question - 17 : Unexhausted basic exemption limit of a resident individual can be adjusted against
-
Answer - 1 : only LTCG taxable @20% u/s 112
Answer - 2 : only STCG taxable @15% u/s 111A
Answer - 3 : both (a) and (b)
Answer - 4 : casual income taxable @30% u/s 115BB
Description: Refer section 112, 111A and section 115BB
Question - 18 : Anirudh stays in New Delhi. His basic salary is Rs. 10,000 p.m., D.A. (60% of
which forms part of pay) is Rs. 6,000 p.m., HRA is Rs. 5,000 p.m. and he is entitled to a commission
of 1% on the turnover achieved by him. Anirudh pays a rent of Rs. 5,500 p.m. The turnover
achieved by him during the current year is Rs. 12 lakhs. The amount of HRA exempt under
section 10(13A), if he exercises the option of shifting out of the default regime provided under
section 115BAC(1A), is -
Answer - 1 : Rs. 48,480
Answer - 2 : Rs. 45,600
Answer - 3 : Rs. 49,680
Answer - 4 : Rs. 46,800
Question - 19 :
Anand is provided with furniture to the value of Rs. 70,000 along with house from 1st April, 2023.
The actual hire charges paid by his employer for hire of furniture is Rs. 5,000 p.a.
The value of furniture to be included along with value of unfurnished house for A.Y.2024-25 is-
Answer - 1 : Rs. 5,000
Answer - 2 : Rs. 7,000
Answer - 3 : Rs. 10,000
Answer - 4 : Rs. 14,000
Description: Refer perquisite valuation rules on rent free accommodation
Question - 20 : Vidya received Rs. 90,000 in May, 2023 towards recovery of unrealised rent, which
was deducted from actual rent during the P.Y. 2021-22 for determining annual value. Legal
expense incurred in relation to unrealized rent is Rs. 20,000. The amount taxable under section
25A for A.Y. 2024-25 would be -
Answer - 1 : Rs. 70,000
Answer - 2 : Rs. 63,000
Answer - 3 : Rs. 90,000
Answer - 4 : Rs. 49,000
Description: Refer illustration 10 of Unit 2
ANSWERS:
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Medium
Question - 1 :
Mr. A, an eligible assessee, following mercantile system of accounting, carrying on eligible
business u/s 44AD provides the following details:
- Total turnover for the F.Y.2023-24 is Rs. 130 lakh
- Out of the above:
Rs. 25 lakh received by A/c payee cheque during the F.Y.2023-24;
Rs. 50 lakh received by cash during the F.Y.2023-24;
Rs. 25 lakh received by A/c payee bank draft before the due date of filing of return;
Rs. 30 lakh not received till due date of filing of return.
What shall be the amount of deemed profits of Mr.
A under section 44AD(1) for A.Y. 2024-25?
Answer - 1 : Rs. 10.4 lakh
Description: Refer section 44AD
Question - 2 : Mr. X, aged 61 years, earned dividend of Rs. 12,00,000 from ABC Ltd. in P.Y. 2023-
24. Interest on loan taken for the purpose of investment in ABC Ltd., is Rs. 3,00,000. Income
includible in the hands of Mr. X for P.Y. 2023-24 would be -
Answer - 1 : Rs. 12,00,000
Answer - 2 : Rs. 9,60,000
Answer - 3 : Rs. 9,00,000
Answer - 4 : Rs. 2,00,000
Question - 3 : Mr. Harry and Mr. Sujoy, resident and Indian citizens, have been appointed as
senior officials of County A embassy and County B embassy, respectively, in India in October,
2023. Mr. Harry and Mr. Sujoy are subjects of Country A and County B, respectively, and are
not engaged in any other business or profession in India. The remuneration received by Indian
officials working in Indian embassy in County A is exempt but in County B is taxable. The tax
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treatment of remuneration received by Mr. Harry and Mr. Sujoy from embassies of Country A
and Country B, respectively, in India for the P.Y. 2023-24 is -
Answer - 1 : Exempt from income-tax under section 10
Answer - 2 : Taxable under the Income-tax Act, 1961
Answer - 3 : Remuneration received by Mr. Harry is exempt but remuneration received by Mr. Sujoy is
taxable
Answer - 4 : Remuneration received by Mr. Sujoy is exempt but remuneration received by Mr. Harry is
taxable
Description: Refer section 10(6)(ii)
Question - 4 : The W.D.V. of a block (Plant and Machinery, rate of depreciation 15%) as on
1.4.2023 is Rs. 3,20,000. A second-hand machinery costing Rs. 50,000 was acquired on 1.9.2023
through account payee cheque but put to use on 1.11.2023. During January 2024, part of this
block was sold for Rs. 2,00,000. The depreciation for A.Y.2024-25 would be -
Answer - 1 : Rs. 21,750
Answer - 2 : Rs. 25,500
Answer - 3 : Rs. 21,125
Answer - 4 : Rs. 12,750
Description: Refer section 32(1)(ii)
Question - 5 : Unexhausted basic exemption limit of a non-resident individual can be adjusted

against -
Answer - 1 : only LTCG taxable @20% u/s 112
Answer - 2 : only STCG taxable @15% u/s 111A
Answer - 3 : both (a) and (b)
Answer - 4 : neither (a) nor (b)
Question - 6 : Mr. Virat has a house property in Chennai which he let out to Mr. Sumit. For
acquisition of this house, Mr. Virat has taken a loan of Rs. 30,00,000 @10% p.a. on 1-4-2017. He
has further taken a loan of Rs. 5 lakhs @12% p.a. on 1.7.2023 towards repairs of the house. He
has not repaid any amount of loan so far. The amount of interest deduction u/s 24(b) to Mr. Virat
for A.Y. 2024-25 is -
Answer - 1 : Rs. 2,00,000
Answer - 2 : Rs. 2,30,000
Answer - 3 : Rs. 3,45,000
Answer - 4 : Rs. 3,60,000
Description: Refer section 24(b)
Question - 7 :
Mr. Jagat is an employee in accounts department of Bharat Ltd., a cellular company operating in
the regions of eastern India. It is engaged in manufacturing of cellular devices. During F.Y. 2023-
24, following transactions were undertaken by Mr. Jagat:
(i) He attended a seminar on "Perquisite Valuation". Seminar fees of Rs. 12,500 was paid by
Bharat Ltd.
(ii) Tuition fees of Mr. Himanshu (son of Mr. Jagat) paid to private coaching classes (not having
any tie-up with Bharat Ltd.) was reimbursed by Bharat Ltd. Amount of fees was Rs. 25,000.
(iii) Ms. Sapna (daughter of Mr. Jagat) studies in Bharat Public School (owned and maintained
by Bharat Ltd.). Tuition fees paid for Ms. Sapna was Rs. 750 per month by Mr. Jagat. Cost of
education in similar institution is Rs. 5,250 per month.
What shall be the amount which is chargeable to tax under the head "Salaries" in hands of Mr.
Jagat for A.Y. 2024-25?
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Answer - 1 : Rs. 25,000
Answer - 2 : Rs. 37,500
Answer - 3 : Rs. 66,500
Answer - 4 : Rs. 79,000
Question - 8 : XYZ Pvt. Ltd. provides a car (below 1.6 ltr cc) along with a driver to Mr. Sanjay,
employee of XYZ Pvt. Ltd., partly for official and partly for personal purpose. The expenses
incurred by the company are: Running and maintenance expenses - Rs. 32,000 and driver’s salary
- Rs. 36,000. The taxable value of car facility for A.Y. 2024-25 will be -
Answer - 1 : Rs. 21,600
Answer - 2 : Rs. 10,800
Answer - 3 : Rs. 32,400
Answer - 4 : Rs. 39,600
Description: Refer perquisite valuation rules on car
Question - 9 : Mr. Vikas transferred 600 unlisted shares of XYZ (P) Ltd. to ABC (P) Ltd. on
15.12.2023 for Rs. 3,50,000 when its fair market value was Rs. 5,15,000. The indexed cost of
acquisition of shares for Mr. Vikas was computed at Rs. 4,25,000. Determine the income
chargeable to tax in the hands of Mr. Vikas and ABC (P) Ltd. in respect of the above transaction.
Answer - 1 : Rs. 90,000 chargeable to tax in the hands of Mr. Vikas as long-term capital gains and
nothing is taxable in the hands of ABC (P) Ltd.
nothing is taxable in the hands of ABC (P) Ltd.
Answer - 3 : Rs. 90,000 chargeable to tax in the hands of Mr. Vikas as long-term capital gains and Rs.
1,65,000 is taxable under the head “Income from other sources” in the hands of ABC (P) Ltd.
Rs.1,65,000 is taxable under the head “Income from other sources” in the hands of ABC (P) Ltd.
Description: Refer section 56(2)(viib)
Question - 10 : Mr. Vikas took a loan of Rs. 5,00,000 @10% p.a. on 1-4-2021 for the construction
of residential house for self occupation. The construction of the house began in June, 2021 and
was completed on 30-6-2023. He has not repaid any amount of loan so far. The amount of interest
deduction u/s 24(b) for A.Y. 2024-25, if he has exercised the option of shifting out of the default
regime provided under section 115BAC(1A), is -
Answer - 1 : Rs. 1,50,000
Answer - 2 : Rs. 1,80,000
Answer - 3 : Rs. 2,00,000
Answer - 4 : Rs. 2,10,000
Question - 11 : K is a working partner in a firm on behalf of his HUF and the HUF has contributed
Rs. 3,00,000 as its capital contribution. Apart from this, K has given a loan of Rs. 50,000 to the
firm in his individual capacity. The firm pays interest as per market rate of 15% per annum on
capital as well as loan. Compute the amount of interest that shall be allowed to the firm while
calculating its business income assuming that the interest is authorized by the partnership deed.
Answer - 1 : Rs. 42,000
Answer - 2 : Rs. 51,000
Answer - 3 : Rs. 52,500
Answer - 4 : Rs. 43,500
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Question - 12 : Mr. A purchased equity shares of a listed company on 01.05.2023 through Bombay
Stock Exchange. He will sell the said shares after holding them for 18 months on BSE. Mr. A is
predicting that he will make a profit of Rs. 1,20,000 by selling the equity shares and further, is of
the view that the said profit shall be exempt from income-tax. Determine whether Mr. A’s view is
correct in the light of the tax implications that shall arise in his hands in the year of transfer of
the said equity shares.
Answer - 1 : Mr. A’s view is correct. The resultant gain would be a long-term capital gain arising from
sale of STT paid listed equity shares, which is fully exempt from tax.
Answer - 2 : Mr. A’s view is incorrect. The resultant gain would be a long-term capital gain, chargeable
to tax in his hands at the rate of 20%.
Answer - 3 : Mr. A’s view is incorrect. The resultant gain would be a short term capital gain, chargeable
to tax in his hands at the rate of 15%.
Answer - 4 : Mr. A’s view is partially correct. The resultant gain would be a long term capital gain,
exempt to the extent of Rs. 1,00,000. The long term capital gain in excess of Rs. 1,00,000 would be
taxable @10%.
Question - 13 :
A building was acquired on 1.4.1995 for Rs. 20,00,000 and sold for Rs. 80,00,000 on 01.06.2023.
The fair market value of the building on 1.4.2001 was Rs. 25,00,000. Its stamp duty value on the
same date was Rs. 22,00,000.
Determine the capital gains on sale of such building for the A.Y. 2024-25?
CII for F.Y. 2001-02: 100; F.Y. 2023-24: 348
Answer - 1 : Rs. 3,44,000
Answer - 2 : Rs. 10,40,000
Answer - 3 : Rs. 60,00,000
Answer - 4 : (Rs. 7,00,000)
ANSWERS:
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Difficult
Question - 1 : Mr. Raja, a proprietor, commenced operation of the business of a new three star
hotel in Mumbai on 1.7.2023. He had made a total investment of Rs. 7.58 crores till 30.6.2023. Out
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of total investment of Rs. 7.58 crores, Rs. 1.58 crores was used for purchase of land in P.Y.2022-
23. Rs. 4.70 crores was used for constructing Hotel and balance of Rs. 1.30 used for purchasing
the furniture in P.Y. 2023-24. He wants to avail the benefit of deduction under section 35AD as
he satisfied with all the conditions prescribed u/s 35AD and has exercised the option of shifting
out of the default regime provided under section 115BAC(1A). His profit and gains from the
business for P.Y. 2023-24 is Rs. 50 lakhs before claiming deduction u/s 35AD. He wants to file his
income-tax return on 12.12.2024. How much deduction Mr. Raja can claim for A.Y. 2024-25 and
the losses which he can carry forward to A.Y. 2025-26?
Answer - 1 : He can claim the deduction of Rs. 7.58 crores from his business income but he would not
be able to carry forward the business loss of Rs. 7.08 crores
Answer - 2 : He can claim the deduction of Rs. 6.00 crores from his business income and can carry
forward the business loss of Rs. 5.50
Answer - 3 : He can claim the deduction of Rs. 6.00 crores from his business income but cannot carry
forward the business loss of Rs. 5.50
Answer - 4 : He can claim the deduction of Rs. 7.58 crores from his business income and can carry
forward the business loss of Rs. 7.08 crores
Description: Refer sections 35AD and 73A
Question - 2 : Mr. A (aged 45 years) sold an agricultural land for Rs. 52 lakhs on 04.10.2023
acquired at a cost of Rs. 49.25 lakhs on 13.09.2022 situated at 7 kms from the jurisdiction of
municipality having population of 4,00,000 and also sold another agricultural land for Rs. 53 lakhs
on 12.12.2023 acquired at a cost of Rs. 46 lakhs on 15.02.2022 situated at 1.5 kms from the
jurisdiction of municipality having population of 12,000. What would be the amount of capital
gain chargeable to tax in the hands of Mr. A for the A.Y. 2024-25? CII for F.Y. 2021-22: 317;
2022-23: 331; 2023-24: 348.
Answer - 1 : Short-term capital gain of Rs. 9.75 lakhs
Answer - 2 : Short-term capital gain of Rs. 7 lakhs
Answer - 3 : Long-term capital gain of Rs. 2,72,212
Answer - 4 : Long-term capital gain of Rs. 2,50,158
Description: Refer definition of capital asset
Question - 3 : Mr. Vishal and Mr. Guha sold their residential house property in Pune for Rs. 3
crore and Rs. 4 crore, respectively, in January, 2024.
The house property was purchased by them 25 months back. The indexed cost of acquisition is
Rs. 1 crore and Rs. 1.75 crore, respectively. Mr. Vishal purchased two residential flats, one in
Delhi and one in Agra for Rs. 70 lakhs and Rs. 80 lakhs, respectively, in April, 2024. On the same
date, Mr. Guha also purchased two residential flats, one in Mumbai and the other in Pune, for
Rs. 80 lakhs and Rs. 75 lakhs, respectively. Both of them invested Rs. 30 lakhs in bonds of NHAI
in March, 2024 and Rs. 30 lakhs in bonds of RECL in April, 2024. What is the income taxable
under the head “Capital Gains” for A.Y.2024-25 in the hands of Mr. Vishal and Mr. Guha?
Answer - 1 : Rs. 70 lakhs and Rs. 95 lakhs, respectively
Answer - 2 : Rs. 60 lakhs and Rs. 85 lakhs, respectively
Answer - 3 : Nil and Rs. 95 lakhs, respectively
Answer - 4 : Nil and Rs. 20 lakhs, respectively
Question - 4 :
In P.Y. 2023-204, Mr. A has transferred the following assets:
Asset transferred Full Value of Indexed Cost of Transfer Date
Consideration (Rs.) Acquisition (Rs.)
Residential house 8 crores 6 crores 25.11.2023
property
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Jewellery 3 crores 2 crores 05.01.2024
Mr. A bought a new residential house property on 01.04.2022 for Rs. 1 crore and on 28.02.2024
deposited Rs. 3 crores in a capital gains deposit account scheme.
On 30.07.2024, Mr. A has withdrawn Rs. 3 crores from capital gains deposit account and acquired
a residential house property worth Rs. 2.5 crore. Mr. A filed his return of income on 31.7.2024 for
A.Y. 2024-25. What would be the capital gains in the hands of Mr. A for A.Y. 2024-25, if the
expenses in connection with transfer of jewellery were Rs. 2,00,000?
Answer - 1 : Rs. 80,50,000
Answer - 2 : Rs. 81,55,705
Answer - 3 : Rs. 98,00,000
Answer - 4 : Rs. 48,00,000
Question - 5 :
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 05.02.2012, 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. What would be the indexed cost of acquisition
of Mr. Ram if he sells the property in F.Y. 2023-24?
Cost Inflation Index for F.Y. 2001-02: 100; F.Y. 2023-24: 348
Answer - 1 : Rs. 1,16,58,000
Answer - 2 : Rs. 1,12,75,200
Answer - 3 : Rs. 1,03,00,800
Answer - 4 : Rs. 99,18,000
Question - 6 : Mr. Kumar, engaged in wholesale business of clothes and speculative business,
discontinued its operations on 19.10.2023 and 30.09.2023, respectively. The cloth business loss
upto 19.10.2023 for P.Y. 2023-24 is Rs. 8,000 and speculative business loss upto 30.09.2023 for
P.Y. 2023-24 was Rs. 40,000. Out of total bad debts of Rs. 1,00,000 that were claimed by Mr.
Kumar in respect of a particular debtor, Rs. 60,000 was allowed by the Assessing Officer in P.Y.
2022-23. On 29.01.2024, Mr. Kumar received a sum of Rs. 68,000 from the debtor in full and final
settlement of cloth business. How much amount would be taxable in the hands of Mr. Kumar for
A.Y. 2024-25?
Answer - 1 : Rs. 28,000
Answer - 2 : Rs. 20,000
Answer - 3 : Rs. 60,000
Answer - 4 : Rs. 68,000
Question - 7 : Mr. Karan completed his MBA in April 2023 and joined XYZ Ltd from 01.05.2023.
His basic salary is Rs. 2,25,000 p.m. He is paid 12% of basic salary as D.A forming part of
retirement benefits. He contributed 11% of his pay and D.A. towards recognized provident fund
and the company contributes the same amount. Accumulated interest on provident fund as on
31.3.2024 is Rs. 49,325. What would be the income chargeable to tax under the head “Salaries” of
Mr. Karan for the A.Y. 2024-25, if he exercises the option of shifting out of the default regime
provided under section 115BAC(1A)?
Answer - 1 : Rs. 27,26,442
Answer - 2 : Rs. 27,30,884
Answer - 3 : Rs. 27,22,000
Answer - 4 : Rs. 27,71,325
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Question - 8 : Mr. Shahid, a wholesale supplier of dyes, provides you with the details of the
following cash payments made throughout the year - 12.06.2023: loan repayment of Rs. 27,000
taken for business purpose from his friend Kunal. The repayment also includes interest of Rs.
5,000.
19.08.2023: Portable dye machinery purchased for Rs. 15,000. The payment was made in cash in
three weekly instalments.
26.01.2024: Payment of Rs. 10,000 made to electrician due to unforeseen electric circuit at shop.
28.02.2024: Purchases made from unregistered dealer for Rs. 13,500.
What will be disallowance under 40A(3), if any, if Mr. Shahid declares his income as per the
provisions of section 44AD?
Answer - 1 : Rs. 18,500
Answer - 2 : Rs. 28,500
Answer - 3 : Rs. 13,500
Answer - 4 : Nil
Description: Refer section 44AD
Question - 9 :
Mr. C aged 35 years is a working partner in M/s BCD, a partnership firm, with equal profit
sharing ratio. During the P.Y. 2023-24, the firm has paid remuneration to Mr. B, Mr. C and Mr.
D, being the working partners of the firm, of Rs. 2,00,000 each. The firm has paid interest on
capital of Rs. 1,20,000 in total to all the three partners and the same is within the prescribed limit
of 12%. The firm had a loss of Rs. 1,12,000 after debiting remuneration and interest on capital.
Note - Remuneration and interest on capital is authorized by the partnership deed.
You, being the CA of Mr. C, are in the process of computing his total income. What would be his
taxable remuneration from the firm?
Answer - 1 : Rs. 2,00,000
Answer - 2 : Rs. 1,51,600
Answer - 3 : Rs. 1,27,600
Answer - 4 : Rs. 1,50,000
ANSWERS:
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Simple
Chapter 4 : CLUBBING OF INCOME
Question - 1 : On 20.10.2023, Pihu (minor child) gets a gift of Rs. 20,00,000 from her father’s
friend. On the same day, the amount is deposited as fixed deposit in Pihu’s bank account. On the
said deposit, interest of Rs. 13,000 was earned during the P.Y. 2023-24. In whose hands the income
of Pihu shall be taxable? Also, compute the amount of income that shall be taxable under default
regime under section 115BAC
Answer - 1 : Income of Rs. 20,11,500 shall be taxable in the hands of Pihu’s father
Answer - 2 : Income of Rs. 20,13,000 shall be taxable in the hands of Pihu’s father
Answer - 3 : Income of Rs. 20,11,500 shall be taxable in the hands of Pihu’s father or mother, whose
income before this clubbing is higher
Answer - 4 : Income of Rs. 20,13,000 shall be taxable in the hands of Pihu’s father or mother, whose
income before this clubbing is higher
Question - 2 : Mr. Aarav gifted a house property valued at Rs. 50 lakhs to his wife, Geetha, who
in turn has gifted the same to her daughter-in-law Deepa. The house was let out at Rs. 20,000 per
month throughout the P.Y.2023-24. Compute income from house property for A.Y.2024-25. In
whose hands is the income from house property chargeable to tax?
Answer - 1 : Rs. 2,40,000 in the hands of Mr. Aarav
Answer - 2 : Rs. 1,68,000 in the hands of Mr. Aarav
Answer - 3 : Rs. 1,68,000 in the hands of Geetha
Answer - 4 : Rs. 1,68,000 in the hands of Deepa
Question - 3 : Mr. Arvind gifted a house property to his wife, Mrs. Meena and a flat to his
daughter in law, Mrs. Seetha. Both the properties were let out. Which of the following statements
is correct?
Answer - 1 : Income from both properties is to be
included in the hands of Mr. Arvind by virtue of section 64
Answer - 2 : Income from property gifted to wife alone
is to be included in Mr. Arvind’s hands by virtue of section 64
Answer - 3 : Mr. Arvind is the deemed owner of house property gifted to Mrs. Meena and Mrs. Seetha
Answer - 4 : Mr. Arvind is the deemed owner of property gifted to Mrs. Meena. Income from
property gifted to Mrs. Seetha would be included in his hands by virtue of section 64
Question - 4 : Mr. A, a member of his father, Mr. C's HUF, converts his individual property into
property of the HUF. If the converted property is subsequently partitioned among the members
of the HUF, the income derived from such converted property as is received by Mrs. A will be
taxable -
Answer - 1 : as the income of Mr. C
Answer - 2 : as the income of Mrs. A
Answer - 3 : as the income of the HUF
Answer - 4 : as the income of Mr. A
ANSWERS:
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Medium
Question - 1 : Mr. Vishal started a proprietary business on 01.04.2022 with a capital of Rs.
5,00,000. He incurred a loss of Rs. 1,00,000 during the year 2022-23. To overcome the financial
position, his wife Mrs. Kamini, a Chartered Accountant, gave a gift of Rs. 4,00,000 on 01.04.2023,
which was immediately invested in the business by Mr. Vishal. He earned a profit of Rs. 2,00,000
during the year 2023-24. What is the amount to be clubbed in the hands of Mrs. Kamini for the
Assessment Year 2024-25?
Answer - 1 : Rs. 88,888
Answer - 2 : Rs. 1,00,000
Answer - 3 : Rs. 2,00,000
Answer - 4 : Nil
Question - 2 :
Mrs. Shivani, wife of Mr. Anurag, is a partner in a firm. Her capital contribution is Rs. 5 lakhs to
the firm as on 1.4.2023 which includes Rs. 3.5 lakhs contributed out of gift received from Anurag.
The firm paid interest on capital of Rs. 50,000 and share of profit of Rs. 60,000 during the
F.Y.2023-24. The entire interest has been allowed as deduction in the hands of the firm. Which of
the following statements is correct?
Answer - 1 : Share of profit is exempt but interest on capital is taxable in the hands of Mrs. Shivani.
Answer - 2 : Share of profit is exempt but interest of Rs. 39,286 is includible in the income of Mr.
Anurag and interest of Rs. 10,714 is includible in the income of Mrs. Shivani.
Anurag and interest of Rs. 15,000 is includible in the income of Mrs. Shivani.
Answer - 4 : Share of profit to the extent of Rs. 42,000 and interest on capital to the extent of Rs. 35,000
is includible in the hands of Mr. Anurag.
Question 3:
Mrs. Bhawna, wife of Mr. Sonu, is a partner in a firm. Her capital contribution of Rs. 10 lakhs to
the firm as on 31.3.2023 included Rs. 6 lakhs contributed out of gift received from Sonu. On
1.4.2023, she further invested Rs. 2 lakh out of gift received from Sonu. The firm paid interest on
capital of Rs. 1,20,000 and share of profit of Rs. 1,00,000 during the F.Y.2023- 24. The entire
interest has been allowed as deduction in the hands of the firm. Which of the following statements
is correct?
Answer - 1 : Share of profit is exempt but interest on capital is taxable in the hands of Mrs.
Bhawna
Sonu and interest of Rs. 40,000 is includible in the income of Mrs. Bhawna
Sonu and interest of Rs. 48,000 is includible in the income of Mrs. Bhawna
Answer - 4 : Share of profit to the extent of Rs. 60,000 and interest on capital to the extent of Rs.
72,000 is includible in the hands of Mr. Sonu
Description: Refer sections 64(1)(iv) and 10(2A)
Question 4:
Ram owns 500, 15% debentures of R Industries Ltd. of Rs. 500 each. Annual interest of Rs. 37,500
was payable on these debentures for P.Y. 2023-24. He transfers interest income to his friend
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Shyam, without transferring the ownership of these debentures. While filing return of income for
A.Y. 2024-25, Shyam showed Rs. 37,500 as his income from debentures. As tax advisor of Shyam,
do you agree with the tax treatment done by Shyam in his return of income?
Answer - 1 : Yes, since interest income was transferred to Shyam, therefore, after transfer, it
becomes his income.
Answer - 2 : No, since Ram has not transferred debentures to Shyam, interest income on the
debentures is not taxable income of Shyam. It would be included in the hands of Ram.
Answer - 3 : Yes, if debentures are not transferred,
interest income on debentures can be declared by anyone, Ram or Shyam, as taxable income
depending upon their discretion.
Answer - 4 : No, since Shyam should have shown the income as interest income received from Mr.
Ram and not as interest income earned on debentures.
Description: Refer illustration 1
Question No Answer
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Difficult
Question - 1 : Mr. Raj makes a gift of Rs. 25,000 to his wife, Mrs. Rama, on 27.03.2023. Mrs.
Rama, on 1.4.2023, invests Rs. 75,000 (Rs. 25,000 out of gift and Rs. 50,000 of her own) in a
partnership firm as capital which is her total capital contribution in the firm. During the year
ended 31.03.2024 she earns an interest of Rs.12,000 and salary of Rs. 1,20,000 from the firm, both
of which are approved by the partnership deed. What amount shall form part of total income of
Mr. Raj for the previous year 2023-24?
Answer - 1 : Rs. 3,000 as interest on capital from firm
Answer - 2 : Rs. 4,000 as interest on capital from firm
Answer - 3 : Rs. 3,000 as interest on capital from firm and Rs. 40,000 as salary from firm
Answer - 4 : Rs. 4,000 as interest on capital from firm and Rs. 40,000 as salary from firm
Question - 2 : Pankaj gifted an amount of Rs.3,00,000 to his wife, Pinky and Rs. 2,00,000 to his
daughter, Rinky aged 20 years, on 1st April 2020. Both Pinky and Rinky invested the amounts on
the same date in Government of India 11% Taxable Bonds. The interest accrues yearly and is
reinvested in the same bonds. Determine what will be the amount taxable in hands of Pinky for
A.Y.2024-25.
Answer - 1 : Rs. 4,473
Answer - 2 : Rs. 12,132
Answer - 3 : Rs. 33,000
Answer - 4 : Rs. 36,630
ANSWERS:
Question No Answer
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Simple
Chapter 5 : Aggregation of Income, Set-off and Carry
Forward of Losses
Question - 1 : Brought forward loss from house property of Rs. 3,10,000 of A.Y. 2023-24 is
allowed to be set-off against income from house property of A.Y. 2024-25 of Rs. 5,00,000 to the
extent of -
Answer - 1 : Rs. 2,00,000
Answer - 2 : Rs. 3,10,000
Answer - 3 : Rs. 2,50,000
Answer - 4 : Rs. 1,00,000
Description: Refer section 71B
Question - 2 :
A Ltd. has unabsorbed depreciation of Rs. 4,50,000 for the P.Y.2023-24. This can be carried
forward -
Answer - 1 : for a maximum period of 8 years and set off against business income.
Answer - 2 : indefinitely and set-off against business income.
Answer - 3 : indefinitely and set-off against any head of income
Answer - 4 : indefinitely and set-off against any head of income except salary.
Question - 3 : During the A.Y.2023-24, Mr. A, exercising the option of shifting out of the default
tax regime provided under section 115BAC(1A), has a loss of Rs. 8 lakhs under the head “Income
from house property” which could not be set off against any other head of income as per the
provisions of section 71. The due date for filing return of income u/s 139(1) in case of Mr. A has
already expired and Mr. A forgot to file his return of income within the said due date. However,
Mr. A filed his belated return of income for A.Y.2023-24. Now, while filing return of income for
A.Y.2024-25, Mr. A wishes to set off the said loss against income from house property for the P.Y.
2023-24. His income from house property (computed) for the P.Y. 2023-24 is Rs. 5 lakhs and
interest on bank fixed deposits is Rs. 1 lakh.
Determine whether Mr. A can claim the said set off.
Answer - 1 : No, Mr. A cannot claim set off of loss of Rs. 8 lakhs during A.Y. 2024-25 as he failed to
file his return of income u/s 139(1) for A.Y. 2023-24.
Answer - 2 : Yes, Mr. A can claim set off of loss of Rs. 2 lakhs, out of Rs. 8 lakhs, from his income
from house property during A.Y. 2024-25 and the balance loss of Rs. 6 lakhs has to be carried forward
to A.Y.2025-26.
Answer - 3 : Yes, Mr. A can claim set off of loss of Rs. 2 lakhs, out of Rs. 8 lakhs, from his income
from any head during A.Y. 2024-25 and the balance loss of Rs. 6 lakhs has to be carried forward to
A.Y.2025-26.
Answer - 4 : Yes, Mr. A can claim set off of loss of Rs. 5 lakhs during A.Y. 2024-25 from his income
of Rs. 5 lakhs from house property and the balance loss of Rs. 3 lakhs has to be carried forward to
A.Y.2025-26.
Question - 4 : According to section 80, no loss which has not been determined in pursuance of a
return filed in accordance with the provisions of section 139(3), shall be carried forward. The
exceptions to this are -
__________________________________________________________________________________
Answer - 1 : Loss from specified business under section 73A
Answer - 2 : Loss under the head “Capital Gains” and unabsorbed depreciation carried forward under
section 32(2)
Answer - 3 : Loss from house property and unabsorbed depreciation carried forward under section 32(2)
Answer - 4 : Loss from speculation business under section 73
Question - 5 :
Mr. Ravi incurred loss of Rs. 4 lakh in the P.Y.2023-24 in leather business. Against which of the
following incomes earned during the same year, can he set-off such loss?
(i) Profit of Rs. 1 lakh from apparel business
(ii) Long-term capital gains of Rs. 2 lakhs on sale of jewellery
(iii) Salary income of Rs. 1 lakh
Answer - 1 : First from (ii) and thereafter from (i); the remaining loss has to be carried forward.
Answer - 2 : First from (i) and thereafter from (ii) and (iii)
Answer - 3 : First from (i) and thereafter from (iii); the remaining loss has to be carried forward
Answer - 4 : First from (i) and thereafter from (ii); the remaining loss has to be carried forward
Question - 6 :
Mr. Rohan incurred loss of Rs. 3 lakh in the P.Y. 2023-24 in retail trade business. Against which
of the following income during the same year, can he set-off such loss?
Answer - 1 : profit of Rs. 1 lakh from wholesale cloth business
Answer - 2 : long-term capital gains of Rs. 1.50 lakhs on sale of land
Answer - 3 : speculative business income of Rs. 40,000
Answer - 4 : all of the above

Question - 7 : Mr. A incurred short-term capital loss of Rs. 10,000 on sale of shares through the
National Stock Exchange - Such loss -
Answer - 1 : can be set-off only against short-term capital gains.
Answer - 2 : can be set-off against both short-term capital gains and long-term capital gains.
Answer - 3 : can be set-off against any head of income.
Answer - 4 : not allowed to be set-off.
Question - 8 :
Virat runs a business of manufacturing of shoes since the P.Y. 2021-22. During the P.Y. 2021-22
and P.Y. 2022-23, Virat had incurred business losses. He also has unabsorbed depreciation. For
P.Y. 2023-24, he earned business profit (computed) of Rs. 3 lakhs. Considering he may/may not
have sufficient business income to set off his earlier losses and unabsorbed depreciation, which of
the following order of set off shall be considered:
(He does not have income from any other source)
Answer - 1 : First adjustment for loss of P.Y. 2021-22, then loss for P.Y. 2022-23 and then unabsorbed
depreciation.
Answer - 2 : First adjustment for loss of P.Y. 2022-23, then loss for P.Y. 2021-22 and then unabsorbed
depreciation.
Answer - 3 : First adjustment for unabsorbed depreciation, then loss of P.Y. 2022-23 and then loss for
P.Y. 2021-22.
Answer - 4 : First adjustment for unabsorbed depreciation, then loss of P.Y. 2021-22 and then loss for
P.Y. 2022-23.
__________________________________________________________________________________
Description: Refer order off set of losses
ANSWERS:
Question No Answer
1 2
2 4
3 4
4 3
5 4
6 4
7 2
8 1
Medium
Forward of Losses
Question - 1 : During the A.Y. 2024-25, Mr. Kabir has a loss of Rs. 6 lakhs under the head “Income
from house property”, loss of Rs. 5 lakhs from business of profession and income of Rs. 3 lakhs
from long term capital gains. He filed his return of income for the A.Y. 2024-25 on 31.12.2024.
Determine the total income of Mr. Kabir for A.Y. 2024-25 assuming that he has exercised the
option of shifting out of the default regime provided under section 115BAC(1A) and the amount
of loss which can be carried forward in a manner most beneficial to him?
Answer - 1 : Total income Nil; loss of Rs. 4,00,000 from house property and loss of Rs. 4,00,000 from
business or profession.
Answer - 2 : Total income Rs. 1,00,000; loss of Rs. 4,00,000 from house property.
Answer - 3 : Total income Nil; No loss is allowed to be carried forward.
Answer - 4 : Total income Nil; loss of Rs. 6,00,000 from house property.
Description: Refer sections 70 and 80
Question No Answer
1 4
Difficult
Forward of Losses
Question - 1 :
Mr. Arpan (aged 35 years) submits the following particulars for the purpose of computing his
total income:
Particulars (Rs.)
Income from salary (computed)
Loss from let-out house property
Brought forward loss from let-out house property
Business loss
__________________________________________________________________________________
Bank interest (FD) received
Compute the total income of Mr. Arpan for the A.Y.2024-25 and the amount of loss that can be
carried forward for the subsequent assessment year if he pays tax under section 115BAC?
Answer - 1 : Total income Rs. 2,00,000 and loss from house property of Rs. 2,50,000 and business loss
of Rs. 20,000 to be carried forward to subsequent assessment year.
Answer - 2 : Total income Rs. 1,60,000 and loss from house property of Rs. 2,30,000 to be carried
forward to subsequent assessment year.
Answer - 3 : Total income Rs. 4,00,000 and loss from house property of Rs. 4,50,000 and business loss
of Rs. 20,000 to be carried forward to subsequent assessment year.
Answer - 4 : Total income is Nil and loss from house property of Rs. 70,000 to be carried forward to
subsequent assessment year.
Question - 2 :
The details of income/loss of Mr. Kumar for P.Y.2023-24 are as follows:
Particulars (Rs.)
Income from Salary (computed)
Loss from self-occupied house property
Loss from let-out house property
Loss from specified business u/s 35AD
Loss from medical business
Long term capital gain
Income from other sources
What shall be the gross total income of Mr. Kumar for A.Y. 2024-25 assuming that he has
exercised the option of shifting out of the default regime provided under section 115BAC(1A)?
Answer - 1 : Rs. 4,40,000
Answer - 2 : Rs. 3,20,000
Answer - 3 : Rs. 1,60,000
Answer - 4 : Rs. 4,80,000
ANSWERS:
Question No Answer
1 3
2 1
Simple
Chapter 6 : Deductions from Gross Total Income
Question - 1 : An individual has paid life insurance premium of Rs. 25,000 - during the previous
year for a policy of Rs. 1,00,000 taken on 1.4.2019. If he pays tax under default tax regime under
section 115BAC, he shall -
Answer - 1 : not be allowed deduction u/s 80C
Answer - 2 : be allowed deduction of Rs. 20,000 u/s 80C
Description: Refer section 115BAC
Answer:
Question No Answer
1 1
__________________________________________________________________________________
Medium
Question - 1 : Mr. Shiva made a donation of Rs. 50,000 to PM Cares Fund and Rs. 20,000 to Prime
Minister’s Drought Relief Fund by cheque.
He made a cash donation of Rs. 10,000 to a public charitable trust registered under section 80G.
If Mr. Shiva has exercised the option of shifting out of the default regime provided under section
115BAC(1A), the deduction allowable to him under section 80G for A.Y.2024-25 would be -
Answer - 1 : Rs. 80,000
Answer - 2 : Rs. 70,000
Answer - 3 : Rs. 60,000
Answer - 4 : Rs. 35,000
Description: Refer section 80G
Question - 2 : Mr. Suhaan (aged 35 years), a nonresident, earned dividend income of Rs. 12,50,000
from an Indian company which was declared on 30.09.2023 and credited directly to his bank
account on 05.10.2023 in France and Rs. 15,000 as interest on savings A/c from State Bank of
India for the P.Y. 2023-24. Assuming that he has no other income, what will be amount of income
chargeable to tax in his hands in India for A.Y. 2024-25 if Mr. Suhaan has exercised the option of
shifting out of the default regime provided under section 115BAC?
Answer - 1 : Nil
Answer - 2 : Rs. 12,65,000
Answer - 3 : Rs. 12,50,000
Answer - 4 : Rs. 12,55,000
Description: Refer section 115BAC
Question - 3 : Gross total income of Arpita for P.Y. 2023-24 is Rs. 6,00,000. She had taken a loan
of Rs. 7,20,000 in the financial year 2020-21 from a bank for her husband who is pursuing MBA
course from IIM, Kolkata. On 02.04.2023, she paid the first installment of loan of Rs. 45,000 and
interest of Rs. 65,000. Compute her total income for A.Y. 2024-25, if she has exercised the option
of shifting out of the default regime provided under section 115BAC(1A)
Answer - 1 : Rs. 6,00,000
Answer - 2 : Rs. 5,35,000
Answer - 3 : Rs. 4,90,000
Answer - 4 : Rs. 5,55,000
Description: Refer section 80E
Question - 4 : Mr. X has two units, one unit at Special Economic Zone (SEZ) and other unit at
Domestic Tariff Area (DTA). The unit in SEZ was set up and started manufacturing from
12.3.2016 and unit in DTA from 15.6.2017. Total turnover of Mr. X and Unit in DTA is Rs.
8,50,00,000 and Rs.3,25,00,000, respectively. Export sales of unit in SEZ and DTA is Rs.
3,50,00,000 and Rs.1,25,00,000, respectively and net profit of Unit in SEZ and DTA is Rs.
80,00,000 and Rs.45,00,000, respectively. Proceeds from export sales in SEZ received in
convertible foreign exchange by 30.9.2024 is Rs. 2,50,00,000.
Assuming that Mr. X would file his return on or before 31.10.2024 exercising the option of shifting
out of the default tax regime provided under section 115BAC(1A), he would be eligible for
deduction under section 10AA for P.Y. 2023-24 of an amount equal to
Answer - 1 : Rs. 38,09,524
Answer - 2 : Rs. 19,04,762
__________________________________________________________________________________
Answer - 3 : Rs. 23,52,941
Answer - 4 : Rs. 11,76,471
Description: Refer section 10AA
Question - 5 : Mr. Ramesh pays a rent of Rs. 5,000 per month. His total income is Rs. 2,80,000
(i.e., Gross Total Income as reduced by deductions under Chapter VI-A except section 80GG). He
is also in receipt of HRA. If he exercises the option of shifting out of the default tax regime u/s
115BAC, he would be eligible for a deduction under section 80GG of an amount of-
Answer - 1 : Rs. 60,000
Answer - 2 : Rs. 32,000
Answer - 3 : Rs. 70,000
Answer - 4 : Nil
Description: Refer section 80GG
Question - 6 : Mr. Srivastav, aged 72 years, paid medical insurance premium of Rs. 52,000 by
cheque and Rs. 4,000 by cash during May, 2023 under a Medical Insurance Scheme of the General
Insurance Corporation. The above sum was paid for insurance of his own health. If he has
exercised the option of shifting out of the default tax regime provided under section 115BAC(1A),
he would be entitled to a deduction under section 80D of a sum of -
Answer - 1 : Rs. 30,000
Answer - 2 : Rs. 50,000
Answer - 3 : Rs. 52,000
Answer - 4 : Rs. 56,000
Description: Refer section 80D
Question - 7 : Rajan, a resident Indian, has incurred Rs. 15,000 for medical treatment of his
dependent brother, who is a person with severe disability and has deposited Rs. 20,000 with LIC
for his maintenance. For A.Y.2024-25, if Mr. Rajan exercises the option of shifting out of the
default regime provided under section 115BAC(1A), he would be eligible for deduction under
section 80DD of an amount equal to -
Answer - 1 : Rs. 15,000
Answer - 2 : Rs. 35,000
Answer - 3 : Rs. 75,000
Answer - 4 : Rs. 1,25,000
Description: Refer section 80DD
ANSWERS:
Question No Answer
1 3
2 4
3 2
4 2
5 4
6 2
7 4
__________________________________________________________________________________
Difficult
Question - 1 : Mr. Krishna, a resident Indian aged 61 years, maintains a saving account with a
cooperative land development bank and he earns Rs. 20,000 as interest on saving account for the
Financial Year 2023-24. Mr. Krishna also maintains a fixed deposit and recurring deposit account
with Mani Finance (A Non-Banking Finance Company) and earns Rs. 25,000 and Rs. 10,000
as interest on fixed deposit and recurring deposit, respectively. What would be the deduction
allowable to Mr. Krishna under Chapter VI-A if he has exercised the option of shifting out of the
default regime provided under section 115BAC(1A) for the A.Y. 2024-25?
Answer - 1 : Rs. 55,000
Answer - 2 : Rs. 10,000
Answer - 3 : Rs. 20,000
Answer - 4 : Rs. 50,000
Description: Refer section 80TTB
Question - 2 : Mr. Arpit, an employee of MNO Ltd. has contributed Rs. 1,61,280 towards NPS
and similar amount is contributed by his employer. His basic salary is Rs. 80,000 p.m. and
dearness allowance is 40% of basic salary which forms part of retirement benefits. He also paid
Rs. 55,000 towards LIC premium for himself and his wife and medical insurance premium of Rs.
35,000 by crossed cheque for his mother, being a senior citizen during the previous year 2023-24.
How much deduction is available under Chapter VI-A while computing total income of Mr. Arpit
for the A.Y. 2024-25 if he exercises the option of shifting out of the default regime provided under
section 115BAC(1A)?
Answer - 1 : Rs. 3,46,280
Answer - 2 : Rs. 3,69,400
Answer - 3 : Rs. 3,19,400
Answer - 4 : Rs. 3,96,280
Description: Refer section 80C, 80CCD and 80D
ANSWERS:
Question No Answer
1 3
2 2
Simple
Chapter 7 : Advance Tax, Tax Deduction at Source and
Tax Collection at Source
Question - 1 : The benefit of payment of advance tax in one installment on or before 15th March
is available to assessees computing profits on presumptive basis
Answer - 1 : only under section 44AD
Answer - 2 : under section 44AD and 44ADA
Answer - 3 : under section 44AD and 44AE
Answer - 4 : under section 44AD, 44ADA and 44AE
Description: Refer section 234C
__________________________________________________________________________________
Question - 2 : An interior decorator declares profits from profession under presumptive taxation
scheme under section 44ADA for A.Y. 2024-25. -
Answer - 1 : He is liable to pay advance tax on or before 15.3.2024
Answer - 2 : He is not liable to advance tax
Answer - 3 : He is liable to pay advance tax in three instalments i.e., on or before 15.9.2023, 15.12.2023
and 15.3.2024
Answer - 4 : He is liable to pay advance tax in four instalments i.e., on or before 15.6.2023, 15.9.2023,
15.12.2023 and 15.3.2024
Description: Refer section 234C
Question - 3 : Mr. P is a professional who is responsible for paying a sum of Rs. 2,00,000 as rent
for use of building to Mr. Harshit, a resident, for the month of February, 2024. The gross receipts
of Mr. P are as under: From 01.04.2022 to 31.03.2023: Rs. 55,00,000 From 01.04.2023 to
28.02.2024: Rs. 45,00,000 Whether Mr. P is responsible for deducting any tax at source from the
rent of Rs. 2,00,000 payable to Mr. Harshit?
Answer - 1 : Tax at source is required to be deducted u/s 194-I at the rate of 10%.
Answer - 2 : Tax at source is required to be deducted u/s 194-IB at the rate of 5%.
Answer - 3 : Tax at source is required to be deducted u/s 194-IB at the rate of 10%.
Answer - 4 : No tax is required to be deducted at source.
Description: Refer section 194-I
Question - 4 : Mr. Prakash is employed with XYZ Ltd. from 05.11.2019. He resigned on 31.03.2024
and wants to withdraw the accumulated balance of employer’s contribution in his EPF Account
i.e., Rs. 55,000. The tax deducted on such withdrawal would be
Answer - 1 : Rs. 500 u/s 192
Answer - 2 : Rs. 5,500 u/s 192
Answer - 3 : Rs. 4,125 u/s 192A
Answer - 4 : Rs. 5,500 u/s 192A
Description: Refer section 192A
Question - 5 : Mr. T, an Indian Citizen and resident of India, earned dividend income of Rs. 4,500
from an Indian company, which was declared on 1.10.2023 and paid in cash to Mr. T. What are
the tax implications with respect to the dividend in the hands of Mr. T and Indian Company?
Answer - 1 : Such dividend is taxable in the hands of Mr. T and Indian company is required to deduct
tax at source @5%.
Answer - 2 : Such dividend is taxable in the hands of Mr. T and Indian company is required to deduct
tax at source @10%.
Answer - 3 : Such dividend is taxable in the hands of Mr. T. However, Indian company is not required
to deduct tax at source since it does not exceed Rs. 5,000.
Answer - 4 : Such dividend is exempt in the hands of Mr. T. Hence, Indian company is not required to
deduct tax at source.
Question - 6 : Mr. X paid fees for professional services of Rs. 40,000 to Mr. Y, who is engaged only
in the business of operation of call centre, on 15.7.2023. Tax is to be deducted by Mr. X at the rate
of -
Answer - 1 : 10%
Answer - 2 : 5%
Answer - 3 : 2%
Answer - 4 : 1%
Description: Refer section 194J
__________________________________________________________________________________
Question - 7 : Mr. X, a resident Indian, wins - Rs.10,000 in a lottery. Which of the statement is
true?
Answer - 1 : Tax is deductible u/s 194B@30%
Answer - 2 : Tax is deductible u/s 194B@30.9%
Answer - 3 : No tax is deductible at source
Answer - 4 : Tax is deductible u/s 194BB@30%
ANSWERS:
Question No Answer
1 2
2 1
3 4
4 4
5 2
6 3
7 3
Medium
Question - 1 : Mr. Vyas, aged 80, is a retired government employee. On 1st April 2023, he received
the maturity amount of his LIC policy amounting to Rs. 3,50,000. This policy was taken by Mr.
Vyas on 1st April 2016 on which the sum assured was Rs. 3,00,000 and the annual premium was
Rs. 40,000. His other income comprised of pension amounting to Rs. 85,000.
Mr. Vyas furnishes a declaration in Form 15H for non-deduction of tax at source to the insurance
company stating that his net tax liability for the year is NIL. Choose the correct statement from
below:
Answer - 1 : The declaration made by Mr. Vyas is wrong and the insurance company has to deduct tax
of Rs.3,500 under section 194DA
Answer - 2 : The claim by Vyas is right and insurance company is not required to deduct tax at source
Answer - 3 : The insurance company has to deduct tax under section 194DA since declaration in Form
15H cannot be made for tax deduction under section 194DA
Answer - 4 : The declaration made by Mr. Vyas is wrong and the insurance company has to deduct tax
of Rs. 1,000 under section 194DA
Question - 2 : A firm pays salary and interest on capital to its resident partners. The salary and
interest paid fall within the limits specified in section 40(b). Which of the following statements is
true?
Answer - 1 : Tax has to be deducted u/s 192 on salary and u/s 194A on interest
Answer - 2 : Tax has to be deducted u/s 192 on salary but no tax needs to be deducted on interest
Answer - 3 : No tax has to be deducted on salary but tax has to be deducted u/s 194A on interest
Answer - 4 : No tax has to be deducted at source on either salary or interest
__________________________________________________________________________________
Question - 3 :
Mr. Nihar maintains a savings A/c and a current A/c in Mera Bank Ltd. The details of
withdrawals on various dates during the previous year 2023-24 are as follows:
Date of Cash withdrawal Saving Account
05.04.2023 15,00,000
10.05.2023 --
25.06.2023 20,00,000
17.07.2023 --
28.10.2023 35,00,000
10.11.2023 --
12.12.2023 25,00,000
Mr. Nihar regularly files his return of income. Is Mera Bank Limited required to deduct tax at
source on the withdrawals made by Mr. Nihar during the previous year 2023-24? If yes, what
would the amount of tax deducted at source?
Answer - 1 : TDS of Rs. 3,20,000 is required to be deducted
Answer - 2 : No, TDS is not required to be deducted as the cash withdrawal does not exceed Rs. 1 crore
neither in saving account nor in current account
Description: Refer section 194N
Question - 4 : Mr. A has two bank accounts maintained with ICICI Bank and HDFC Bank. From
01.04.2023 till 31.03.2024, Mr. A withdrew the following amounts as cash from both the said
accounts; HDFC Bank: Rs. 50 lakh on 1.2.2024 ICICI Bank: Rs. 120 lakh on 1.3.2024 What shall
be the amount of tax to be deducted at source u/s 194N by HDFC Bank and ICICI Bank,
respectively, while making payment in cash to Mr.A assuming Mr. A has filed his return of income
for P.Y. 2020-21, P.Y. 2021-22 and P.Y. 2022-23?
Answer - 1 : Rs. 1,00,000 and Rs. 2,40,000
Answer - 2 : Nil and Rs. 40,000
Answer - 3 : Rs. 60,000 and Rs. 1,00,000
Answer - 4 : Rs. 50,000 and Rs. 1,20,000
Description: Refer section 194N
Question - 5 : Mr. X, a resident, is due to receive Rs. 6 lakhs on 31.3.2024, towards maturity
proceeds of LIC policy taken on 1.4.2021, for which the sum assured is Rs. 5 lakhs and the annual
premium is Rs. 1,50,000. Mr. Z, a resident, is due to receive Rs. 99,000 on 1.10.2023 towards
maturity proceeds of LIC policy taken on 1.10.2015 for which the sum assured is Rs. 90,000 and
the annual premium is Rs. 10,000.
Answer - 1 : Tax is required to be deducted on income comprised in maturity proceeds payable to Mr.
X and Mr. Z
X
Z
Answer - 4 : No tax is required to be deducted on income comprised in maturity proceeds payable to
either Mr. X or Mr. Z
Description: Refer section 194DA
Question - 6 : Mr. Raj (a non-resident and aged 65 years) is a retired person, earning rental
income of Rs. 40,000 per month from a property located in Delhi. He is residing in Canada. Apart
__________________________________________________________________________________
from rental income, he does not have any other source of income. Is he liable to pay advance tax
in India? Assume that he pays tax under the default regime u/s 115BAC.
Answer - 1 : Yes, he is liable to pay advance tax in India as he is a non-resident and is not eligible for
rebate under section 87A
Answer - 2 : No, he is not liable to pay advance tax in India as his tax liability in India is less than Rs.
10,000
Answer - 3 : No, he is not liable to pay advance tax in India as he has no income chargeable under the
head “Profits and gains of business or profession” and he is of the age of 65 years
Answer - 4 : Both (b) and (c)
ANSWERS:
Question No Answer
1 2
2 4
3 4
4 2
5 2
6 2
Difficult
Question - 1 : Mr. Jha, an employee of FX Ltd, attained 60 years of age on 15.05.2023. He is
resident in India during F.Y. 2023-24 and earned salary income of Rs. 5 lakhs (computed). During
the year, he earned Rs. 7 lakhs from winning of lotteries. What shall be his advance tax liability
for A.Y. 2024-25, if all tax deductible at source has been duly deducted and remitted to the credit
of Central Government on time? Assume that he pays tax under the default regime u/s 115BAC.
Answer - 1 : Rs. 2,20,000 + Cess Rs. 8,800 = Rs. 2,28,800, being the tax payable on total income of Rs.
12 lakhs
Answer - 2 : Rs. 2,10,000 + Cess Rs. 8,400 = Rs.2,18,400, being the tax payable on lottery income of
Rs. 7 lakhs
Answer - 3 : Rs. 10,000 + Cess Rs. 8,800 = Rs.18,800, being the net tax payable on salary income
Answer - 4 : Nil
Description: Refer section 208 and section 115BAC. Also note that health and education cess not
applicable on TDS in case of resident deductees.
Question - 2 : Mr. Ram acquired a house property at Chennai from Mr. Satyam, a resident, for a
consideration of Rs. 85 lakhs, on 23.8.2023. On the same day, Mr. Ram made two separate
transactions, thereby acquiring an urban plot in Gwalior from Mr. Vipun, a resident, for a sum
of Rs. 50 lakhs and rural agricultural land from Mr. Danish, a resident, for a consideration of Rs.
75 lakhs. Which of the following statements are correct assuming that in the consideration
amounts as aforementioned all the charges incidental to transfer of the immovable property are
included and there is no difference between the stamp duty value and actual consideration?
Answer - 1 : No tax deduction at source is required in respect of any of the three payments.
Answer - 2 : TDS@1% is attracted on all the three payments.
Answer - 3 : TDS@1% on Rs. 85 lakhs and Rs. 50 lakhs are attracted. No TDS on payment of Rs. 75
lakhs for acquisition of rural agricultural land.
__________________________________________________________________________________
Answer - 4 : TDS@1% on Rs. 85 lakhs is attracted. No TDS on payments of Rs. 50 lakhs and Rs. 75
lakhs.
Description: Refer section 194-IA
ANSWERS:
Question No Answer
1 4
2 3
Simple
Chapter 8 : Provisions for filing Return of Income and
Self-assessment
Question - 1 : Mr. Kumar, aged 62 years resident and ordinarily resident, is a retired employee
with a monthly pension of Rs. 22,000. He has no other source of income. He has a house property
in Bhatinda and his only son is living in London and has a house over there. His son met with an
accident and died and thereby leaving the house at London in the name of Mr. Kumar. Mr.
Kumar seeks your advice, as to whether he is required to file his income-tax return u/s 139?
Answer - 1 : Yes, he is mandatorily required to file his income-tax return as he is a resident and
ordinarily resident in India and has asset located outside India
Answer - 2 : No, he is not required to file return of income as his income is below basic exemption limit
Answer - 3 : Yes, he is required to file his return of income as his income exceeds the basic exemption
limit
Answer - 4 : No, he is not required to file his return of income as he is a senior citizen and retired
employee
Question - 2 :
Which of the following returns can be revised under section 139(5)?
(i) A return of income filed u/s 139(1)
(ii) A belated return of income filed u/s 139(4)
(iii) A return of loss filed u/s 139(3)
Choose the correct answer:
Answer - 1 : Only (i)
Answer - 2 : Only (i) and (ii)
Answer - 3 : Only (i) and (iii)
Answer - 4 : (i), (ii) and (iii)
Question - 3 : Mr. Z, a salaried individual, has a total income of Rs. 8 lakhs for A.Y. 2024-25. He
furnishes his return of income for A.Y. 2024-25 on 28th August, 2024. He is liable to pay fee of
Answer - 1 : upto Rs. 1,000 under section 234F
Answer - 2 : Rs. 5,000 under section 234F
Answer - 3 : Rs. 10,000 under section 234F
Answer - 4 : Not liable to pay any fee
Description: Refer section 234F
Question - 4 : Arun’s gross total income of P.Y. 2023-24 is Rs. 2,45,000. He exercises the option of
shifting out of the default regime provided under section 115BAC(1A). He deposits Rs. 45,000 in
__________________________________________________________________________________
PPF. He pays electricity bills aggregating to Rs. 1.20 lakhs in the P.Y.2023-24. Which of the
statements is correct?
Answer - 1 : Arun is not required to file his return of income u/s 139(1) for P.Y. 2023-24, since his total
income before giving effect to deduction under section 80C does not exceed the basic exemption limit.
Answer - 2 : Arun is not required to file his return of income u/s 139(1) for P.Y. 2023-24, since his
electricity bills do not exceed Rs. 2,00,000 for the P.Y.2023-24.
Answer - 3 : Arun is not required to file his return of income u/s 139(1) for P.Y. 2023-24, since neither
his total income before giving effect to deduction under section 80C exceeds the basic exemption limit
nor his electricity bills exceed Rs. 2 lakh for the P.Y. 2023-24.
Answer - 4 : Arun is required to file his return of income u/s 139(1) for P.Y. 2023-24, since his
electricity bills exceed Rs. 1 lakh for the P.Y.2023- 24.
Question - 5 : Mr. Pawan is engaged in the business of roasting and grinding coffee beans. During
F.Y. 2023-24, his total income is Rs. 4.5 lakhs. Mr. Pawan filed his return of income for A.Y. 2024-
25 on 3rd December, 2024. What shall be the fee payable for default in furnishing in return of
income for A.Y. 2024-25?
Answer - 1 : Rs. 5,000
Answer - 2 : Not exceeding Rs. 1,000
Answer - 3 : No fee is payable as tax on total income is Nil
Answer - 4 : No fees payable as total income is below Rs. 5,00,000
Description: Refer section 234F
Question - 6 : Mr. Dinesh, a resident in India, has gross total income of Rs. 2,30,000 comprising
of interest on saving A/c and rental income during the previous year 2023-24. He incurred
expenditure of Rs. 2,00,000 for his son for a study tour to Europe. Whether he is required to file
return of income for the assessment year 2024-25? If yes, what is the due date?
Answer - 1 : Yes, 31st July of A.Y
Answer - 2 : Yes, 30th September of A.Y
Answer - 3 : Yes, 31st October of A.Y
Answer - 4 : No, he is not required to file return of income
Question - 7 : Mr. X is a working partner and Mr. Y is a non-working partner of XYZ partnership
firm. XYZ Partnership firm is subject to tax audit under section 44AB for the P.Y. 2023-24. What
is the due date for filing return of income for Mr. X and Mr. Y for the A.Y. 2024-25?
Answer - 1 : 31st July, 2024 for both Mr. X and Mr. Y
Answer - 2 : 31st October, 2024 for both Mr. X and Mr. Y
Answer - 3 : 31st July, 2024 for Mr. X and 31st October, 2024 for Mr. Y
Answer - 4 : 31st July, 2024 for Mr. Y and 31st October, 2024 for Mr. X
Question - 8 : An individual client has consulted you on the matter of PAN. He is carrying on the
business of sale & purchase of electronic appliances. His turnover is Rs. 3,00,000 and the profit is
Rs. 75,000 for the P.Y. 2023-24. He has asked you to provide him threshold of turnover, if any,
exceeding which he has to apply for PAN.
Answer - 1 : Rs. 2,00,000
Answer - 2 : Rs. 2,50,000
Answer - 3 : Rs. 3,00,000
Answer - 4 : Rs. 5,00,000
__________________________________________________________________________________
ANSWERS:
Question No Answer
1 1
2 4
3 2
4 4
5 2
6 4
7 2
8 4
Medium
Self-assessment
Question - 1 :
In which of the following transactions, quoting of PAN is mandatory by the person entering into
the said transaction?
I Opening a Basic savings bank deposit account with a bank
II Applying to a bank for issue of a credit card.
III Payment of Rs. 40,000 to mutual fund for purchase of its units
IV Cash deposit with a post office of Rs. 1,00,000 during a day.
V A fixed deposit of Rs. 30,000 with a NBFC registered with RBI aggregating the total deposits to
Rs. 3,50,000 for the F.Y upto to the date of this deposit made.
VI Sale of shares of an unlisted company for an amount of Rs. 60,000
Choose the correct answer:
Answer - 1 : II, IV
Answer - 2 : II, III, IV
Answer - 3 : I, II, III, V, VI
Answer - 4 : II, IV, VI
Answer:
Question No Answer
1 1
Difficult
Self-assessment
Question - 1 :
Iskon Inc., a foreign company and non-resident in India for A.Y. 2024-25, engaged in the business
of trading of tube-lights outside India. The principal officer of the company has approached you
to enlighten him regarding the provisions of the Income-tax Act, 1961 pertaining to the person
__________________________________________________________________________________
who is required to verify the return of income in case of Iskon Inc. Advise him as to which of the
following statements are correct, assuming that the company has a managing director-
I The return of income in case of Iskon Inc. can be verified by the managing director.
II The return of income in case of Iskon Inc. can be verified by any director, irrespective of the
availability or otherwise of the managing director.
III The return of income in case of Iskon Inc. may be verified by a person who holds a valid power
of attorney from such company to do so, irrespective of the availability or otherwise of the
managing director. Choose the correct answer:
Answer - 1 : I or II or III
Answer - 2 : Only I
Answer - 3 : I or III
Answer - 4 : Only III
ANSWERS:
Question No Answer
1 3
Simple
Chapter 9 : Income-tax Liability - Computation and
Optimisation
Question - 1 :
Mr. X, who has opted out of the default tax regime under section 115BAC and pays tax under the
optional tax regime, can carry forward the AMT credit for
Answer - 1 : 8 assessment years
Description: Refer section 115JD
Answer:
Question No Answer
1 4
Medium
Optimisation
Question - 1 :
Mr. Raj, aged 32 years, presents you the following data for A.Y. 2024-25:
Particulars Rs.
Gross receipts from business conducted entirely banking channels (opted for
section 44AD)
Capital gains under section 112A
Capital gains under section 111A
Winnings from horse races
What would be the tax liability under optional tax regime as per the regular provisions of the
Income-tax Act, 1961 of Mr. Raj for the A.Y.2024-25?
__________________________________________________________________________________
Answer - 1 : Rs. 1,28,440
Answer - 2 : Rs. 1,05,560
Answer - 3 : Rs. 1,38,840
Answer - 4 : Rs. 1,45,080
Description: Refer section 44AD for presumptive income, CG u/s 112A exceeding Rs. 1,00,000
taxable @10%, STCG u/s 111A taxable @ 15% and winning from horse races taxable u/s 115BB
@30%.
Question - 2 :
Mr. Uttam presents you the following data related to his tax liability for A.Y. 2024-25:
Particulars (Rs.)
Tax Liability as per regular provisions of Income-tax Act
Tax Liability as per section 115JC
AMT credit brought forward from A.Y. 2023-24
What shall be the tax liability of Mr. Uttam for A.Y. 2024-25?
Answer - 1 : Rs. 12 lakhs
Description: Refer section 115JD.
ANSWERS:
Question No Answer
1 1
2 1
Difficult
Optimisation
Question - 1 :
Mr. Bandu, aged 37 years, provides the following details for P.Y. 2023-24:
Particulars (Rs.)
Textile business income
Speculative business loss
Textile business loss b/f from P.Y. 2019-20
Business income of spouse included in the income Mr. Bandu as per
section 64(1)(iv)
Deductions available under Chapter VI-A
TDS
TCS
Advance tax paid
What shall be the net tax payable/(refundable) under optional tax regime as per regular
provisions of the Income-tax Act, 1961 for A.Y. 2024-25 for Mr. Bandu? Ignore interest.
Answer - 1 : Rs. 24,200
Answer - 2 : (Rs. 1,00,600)
Answer - 3 : Rs. 2,11,400
Answer - 4 : Rs. 12,500
__________________________________________________________________________________
Description: Refer section 72 relating to carry forward and set off of business losses, section 73
relating to losses in speculation business discussed in chapter 5 and section 64(1)(iv) discussed in
chapter 4.
ANSWERS:
Question No Answer
1 1
__________________________________________________________________________________
CASE SCENARIO MCQ’s

CASE SCENARIO MCQ 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 5th October, 2023 and returned to India on 2nd 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 31st December, 2023. The laptop
was acquired by company on 1st 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:
MCQ-1
Question - 1 :
What is Mr. Rajesh Sharma’s residential status for the A.Y. 2024-25?
Answer - 1 : Resident but can’t determine resident and ordinarily resident or resident but not ordinarily
resident from the given information
Answer - 2 : Non-Resident
Question - 2 :
What are his taxable perquisites for A.Y. 2024-25?
Answer - 1 : Rs. 55,000
Answer - 2 : Rs. 90,400
Answer - 3 : Rs. 1,05,400
Answer - 4 : Rs. 1,03,000
Description:
Medical bills + House servant salary + professional tax + equity shares
Question - 3 :
What is the income chargeable under the head “Salaries” in the hands of Mr. Rajesh Sharma for
A.Y. 2024-25?
Answer - 1 : Rs. 9,76,600
__________________________________________________________________________________
Answer - 2 : Rs. 9,79,000
Answer - 3 : Rs. 9,74,200
Answer - 4 : Rs. 10,26,600
Description:
Basic salary + D.A. + Bonus + Medical allowances + taxable Perquisite value computed in MCQ
2 - Standard deduction - Professional tax
Question - 4 :
The total tax liability of Mr. Rajesh Sharma for A.Y. 2024-25 is:
Answer - 1 : Rs. 1,26,800
Answer - 2 : Rs. 1,54,630
Answer - 3 : Rs. 1,12,130
Answer - 4 : Rs. 1,39,960
Description:
Tax liability on total income of Rs. 10,70,600 (Salary of Rs. 9,76,600 and STCG u/s 111A of Rs.
94,000)
Question - 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.
Answer - 1 : Rs. 81,590
Answer - 2 : Rs. 73,790
Answer - 3 : Rs. 89,390
Answer - 4 : Rs. 98,700
Description:
Tax liability as per section 115BAC on total income of Rs. 10,73,000 (Salary of Rs. 9,79,000 and
STCG u/s 111A of Rs. 94,000)
ANSWER:
Question No Answer
1 1
2 3
3 1
4 1
5 2
CASE SCENARIO MCQ 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.
questions:
__________________________________________________________________________________
Question - 1 :
What would be the value of rent-free accommodation chargeable to tax in the hands of Mr.
Hardik?
Answer - 1 : Rs. 30,380
Answer - 2 : Rs. 44,100
Answer - 3 : Rs. 45,570
Answer - 4 : Rs. 30,000
Description:
Rent free accommodation perquisite value rules
Question - 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?
Answer - 1 : Rs. 30,000
Answer - 2 : Rs. 15,000
Answer - 3 : Rs. 24,000
Answer - 4 : Rs. 25,000
Description:
Section 80D
Question - 3 :
What would be perquisite value of car chargeable to tax in the hands of Mr. Hardik?
Answer - 1 : Rs. 28,800
Answer - 2 : Rs. 21,600
Answer - 3 : Rs. 60,000
Answer - 4 : Rs. 1,40,000
Description:
Motor car perquisite value rules
Question - 4 :
Would you advise Mr. Hardik to exercise the option of shifting out of the default tax regime under
section 115BAC?
Answer - 1 : 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
Answer - 2 : 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
Answer - 3 : 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
Answer - 4 : 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
ANSWERS:
Question No. Answer
1 4
2 3
__________________________________________________________________________________
3 4
4 3
CASE SCENARIO MCQ 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 15th September, 2023 but his family did not accompany him. He
returned to India on 25th 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.
questions:-
Question - 1 :
What is the residential status of Mr. Rajan for the previous year 2023-24?
Answer - 1 : Resident and ordinarily in India
Answer - 2 : Resident but not ordinarily resident in India
Answer - 3 : Non-resident in India
Answer - 4 : Deemed resident but not ordinarily resident in India
Question - 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?
Answer - 1 : Rs. 20,00,000
Answer - 2 : Rs. 19,50,000
Answer - 3 : Rs. 13,50,000
Answer - 4 : Rs. 19,60,000
Question - 3 :
How much deduction is available under Chapter VI-A from the Gross Total Income of Mr.
Rajan?
Answer - 1 : Rs. 2,30,000
Answer - 2 : Rs. 1,95,000
Answer - 3 : Rs. 1,60,000
Answer - 4 : Rs. 2,00,000
Question - 4 :
What shall be the tax liability of Mr. Rajan for the A.Y. 2024-25?
Answer - 1 : Rs. 22,69,810
Answer - 2 : Rs. 22,58,940
Answer - 3 : Rs. 22,56,080
Answer - 4 : Rs. 22,72,670
__________________________________________________________________________________
Question - 5 :
What would be the due date for filing income-tax return of Mr. Rajan for the P.Y. 2023-24?
Answer - 1 : 31st July, 2024
Answer - 2 : 31st October, 2024
Answer - 3 : 30th November, 2024
Answer - 4 : 31st March, 2025
ANSWERS:
Question No. Answers
1 4
2 3
3 4
4 3
5 2
CASE SCENARIO MCQ 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 15th 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 27th September, 2023
and returned on 30th 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.
questions:
Question - 1 :
What is the residential status of Mr. X for the P.Y. 2023-24?
Answer - 4 : Deemed resident but not ordinarily Resident
Question - 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
Answer - 1 : Rs. 22,750
Answer - 2 : Rs. 29,910
Answer - 3 : Rs. 32,510
Answer - 4 : Nil
Question - 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?
__________________________________________________________________________________
Answer - 1 : No, there is no requirement to deduct tax at source, since Mr. Y is a salaried employee
Answer - 2 : Yes, Mr. Y is required to deduct tax at source of Rs. 42,000
Answer - 3 : Yes, Mr. Y is required to deduct tax at source of Rs. 31,500
Answer - 4 : No, there is no requirement to deduct tax at source, since Mr. X is a non-resident
Question - 4 :
Which of the following statements is correct with respect to advance tax liability of Mr. X for P.Y.
2023-24?
Answer - 1 : Advance tax liability shall not arise to Mr. X since he is a non-resident
Answer - 2 : 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
Answer - 3 : Advance tax liability shall arise, since he is a non-resident
Answer - 4 : Advance tax liability shall arise, since his tax liability is not less than Rs. 10,000
ANSWERS:
Question No Answer
1 1
2 4
3 2
4 2
CASE SCENARIO MCQ 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 10th August, 2023 for a pleasure trip. His family returned
to Singapore on 31st August, 2023, however he stayed back to complete some business commitments
and then returned to Singapore on 17th 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
questions:-
Question - 1 :
What is the Residential Status of Mr. Zukaro for the assessment year 2024-25?
Answer - 4 : Deemed resident but not ordinarily Resident
Description:
Since Mr. Zukaro's stay in India during the P.Y. 2023-24 exceeds 60 days i.e., 100 days and in last 4
years exceeds 365 days i.e., 760 days, he is a resident in India. Since he is a resident in P.Y. 2021-22
__________________________________________________________________________________
and P.Y. 2022-23 owning to the same reason and his stay in India during the last 7 years is 760 days,
he is a Resident and ordinarily resident in India during P.Y. 2023-24
Question - 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?
Answer - 1 : Yes, since it is deemed to accrue or arise in India through a business connection in India
Answer - 2 : 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
Answer - 3 : Yes, as business is controlled from India
Answer - 4 : No, as income is received outside India
Description:
Refer (b) of Explanation 1 to section 9(1)(i)
Question - 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.
Answer - 1 : 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
Answer - 2 : Yes, long term capital gain of Rs. 6,01,755 is chargeable to tax, since he is resident in India
Answer - 3 : Yes, long term capital gain of Rs.5,49,244 is chargeable to tax, since he is resident in India
Answer - 4 : 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
Description:
Full value of consideration = Rs. 26,25,000
Less: Brokerage = 52,500
Net consideration = 25,72,500
Less: Indexed cost of acquisition = 17,50,000 x 348/301 = 20,23,256
Long term capital gains = 5,49,244
Question - 4 :
Would income earned from agricultural land given on lease is taxable in the hands of Mr. Zukaro?
Answer - 1 : No, such income is exempt, since it is agricultural income
Answer - 2 : Yes, such income is taxable as income from house property, since land is given on lease
Answer - 3 : Yes, such income is taxable as income from other sources, since land is given on lease
Answer - 4 : Yes, such income is taxable since he is non-resident even though it is an agricultural income
Description:
Refer agricultural income in chapter 1
Question - 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?
Answer - 1 : Rs. 2,05,240
Answer - 2 : Rs. 3,95,040
Answer - 3 : Rs. 2,87,350
Answer - 4 : Rs. 2,98,840
Description:
Partial integration
Agricultural income = 6,50,000
Total Income = 14,24,240
__________________________________________________________________________________
Total Income with agricultural income = 20,74,240 (A)
Tax on (A) = 3,79,849 (C)
Agricultural income with basic exemption limit = 9,00,000 (B)
Tax on (B) = 92,500 (D)
Tax (C) - (D) = 2,87,349
Add: HEC@4% = 11,494
Tax liability = 2,98,843
Tax liability (Rounded off) = 2,98,840
ANSWERS:
Question No Answers
1 1
2 2
3 3
4 1
5 4
CASE SCENARIO MCQ 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:
(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
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:
(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
questions:-
__________________________________________________________________________________
Question - 1 :
What would be the residential status of Mr. Animesh for the A.Y. 2024-25?
Answer - 1 : Resident and ordinarily resident in India
Answer - 2 : Resident but not ordinarily resident in India
Answer - 4 : Deemed resident
Description:
Indian citizen comes on a visit in India. Since he stays in India for 120 days or more during the P.Y.
2023-24 and more than 365 days in last 4 years and having income from Indian source exceeding Rs.
15 lakhs, resident during P.Y. 2023-24.
Accordingly, he is RNOR.
Question - 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?
Answer - 1 : Rs. 2,52,200
Answer - 2 : Rs. 1,38,200
Answer - 3 : Rs. 9,78,200
Answer - 4 : Rs. 10,92,200
Description:
Rent received/ receivable = 32,500 x 12 = 3,90,000
Municipal tax paid = 40,000
NAV = 3,50,000
Less: 30% of NAV = 1,05,000
Less: Interest on housing loan = 3,14,000
Loss = 69,000
Arrear of rent = 2,96,000
Less: 30% = 88,800
Taxable rent = 2,07,200
Income under the head house property =2,07,200 - 69,000 = 1,38,200
Question - 3 :
What amount of capital gain would arise in the hands of Mr. Animesh on transfer of shares of A
Ltd?
Answer - 1 : Rs. 18,00,000
Answer - 2 : Rs. 19,00,000
Answer - 3 : Rs. 20,00,000
Answer - 4 : Rs. 38,00,000
Description:
Full Value of Consideration 10,000 x 480 = 48,00,000
Less: Cost of acquisition = 30,00,000 Higher of
(i) actual cost of Rs. 10,00,000 and
(ii) lower of (a) FMV of Rs. 30 lakhs and (b) FVC of Rs. 48 lakhs
Long term capital gains = 18,00,000
Question - 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?
Answer - 1 : Rs. 22,82,200
Answer - 2 : Rs. 22,68,200
__________________________________________________________________________________
Answer - 3 : Rs. 22,48,200
Answer - 4 : Rs. 21,68,200
Description:
House Property = 1,38,200
Long term Capital gains taxable u/s 112A = 18,00,000
Other sources (Interest received in India) = 3,10,000
Gross Total Income = 22,48,200
Less: Deduction u/s 80C = 80,000
Question - 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?
Answer - 1 : Rs. 1,82,950
Answer - 2 : Rs. 1,87,110
Answer - 3 : Rs. 1,80,350
Answer - 4 : Rs. 1,84,510
Description:
Under default tax regime u/s 115BAC
Total Income = 22,48,200 (Deduction u/s 80C would not be available)
Tax @10% on Rs. 17 lakhs = 1,70,000
Tax on balance income of Rs. 4,48,200 = 7,410
(Basic exemption limit Rs. 3 lakhs)
Total Tax = 1,77,410
Add: HEC @4% = 7,096
Tax liability (rounded off) = 1,84,510
Under normal provisions of the Act
Tax @10% on Rs. 17 lakhs = 1,70,000
Tax on balance income of Rs. 3,68,200 = 3,410
(Basic exemption limit Rs. 3 lakhs)
Total Tax = 1,73,410
Add: HEC @4% = 6,936
Tax liability (rounded off) = 1,80,350
ANSWERS:
Question No Answers
1 2
2 2
3 1
4 4
5 3
“THANK YOU VERY MUCH ALL OF YOU. GOD BLESS U ALL MY CARTOONS”
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ICAI MCQ's INCOME TAX CA INTER MAY - NOV 2024

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ICAI MCQ – CA INTER MAY/NOV 2024 CA Aarish Khan

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