Paper 4: Taxation

Section A: Income-tax Law

Multiple Choice Questions for May, 2023 examination

1. For A.Y.2023-34, Mr. Hari, a resident Indian, earns income of ` 10 lakhs from sale of
rubber manufactured from latex obtained from rubber plants grown by him in India
and ` 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?
(a) ` 3,50,000
(b) ` 4,00,000
(c) ` 8,75,000
(d) ` 18,50,000
2. Ms. Sowmya has three farm buildings situated in the immediate vicinity of a rural
agricultural land. In the P.Y.2022-23, she earned ` 3 lakh from letting out her farm
building 1 for storage of food grains, ` 10 lakh from letting out her farm building 2 for
storage of dairy products and ` 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?
(a) Nil
(b) ` 3,00,000
(c) ` 13,00,000
(d) ` 18,00,000
3. 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 coparcenary rights?
(a) Only Mr. Harsh Gupta, Mr. Gautam Gupta and Mr. Deepak Gupta
(b) Only Mr. Harsh Gupta, Mr. Gautam Gupta, Mr. Deepak Gupta and Miss Preeti
Gupta
(c) Only Mr. Harsh Gupta, Mr. Gautam Gupta, Mr. Deepak Gupta, Mrs. Nidhi Gupta
and Mrs. Deepti Gupta
(d) All the members are co-parceners
4. 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. 2022-23 was 135 days. He is not liable to pay

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 any tax in Dubai. Following is his details of stay in India in the preceding previous
years:
Financial Year Days of Stay in India
2021-22 100
2020-21 125
2019-20 106
2018-19 83
2017-18 78
2016-17 37
2015-16 40

What shall be his residential status for the P.Y. 2022-23 if his total income (other than
income from foreign sources) is ` 10 lakhs?
(a) Resident but not ordinary resident
(b) Resident and ordinary resident
(c) Non-resident
(d) Deemed resident but not ordinarily resident
5. Aashish earns the following income during the P.Y. 2022-23:
• Interest on U.K. Development Bonds (1/4th being received in India): ` 4,00,000
• Capital gain on sale of a building located in India but received in Holland:
` 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. 2023-24?
(a) ` 7,00,000
(b) ` 10,00,000
(c) ` 6,00,000
(d) ` 1,00,000
6. 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

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 Delhi-NCR. Income of Mr. Rajesh and Mrs. Sowmya from the Indian sources for the
P.Y. 2022-23 is ` 18 lakhs and ` 16 lakhs, respectively.
What is the residential status of Mr. Rajesh and Mrs. Sowmya for A.Y. 2023-24?
(a) Both are resident and ordinarily resident in India
(b) Both are non-resident in India
(c) Mr. Rajesh is resident but not ordinarily resident in India and Mrs. Sowmya is
non-resident
(d) Mrs. Sowmya is resident but not ordinarily resident in India and Mr. Rajesh is
resident and ordinarily resident in India.
7. Who among the following will qualify as non-resident for the P.Y. 2022-23?
- Mr. Bob, an Italian dancer, came on visit to India to explore Indian dance on
15.09.2022 and left on 25.12.2022. 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 ` 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
01.01.2017 till 01.07.2022.
Choose the correct answer
(a) Mr. Bob and Mr. Joseph
(b) Mr. Samrat
(c) Mr. Bob, Mr. Samrat and Mr. Joseph
(d) None of the three
8. Mr. Sushant is a person of Indian origin, residing in Canada. During P.Y. 2022-23, he
visited India on several occasions and his period of stay, in total, amounted to 129
days during P.Y. 2022-23 and his period of stay in India during P.Y. 2021-22,
P.Y.2020-21, P.Y. 2019-20 and P.Y. 2018-19 was 135 days, 115 days, 95 days and 125
days, respectively. He earned the following incomes during the P.Y. 2022-23:
Source of Income Amount (`)
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 3,75,000
India
Income accruing or arising and received outside India from business 5,50,000
controlled from India

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 Income accruing or arising and received outside India from business 6,50,000
controlled outside India

What is the residential status of Mr. Sushant for A.Y. 2023-24 and his income liable to
tax in India during A.Y. 2023-24?
(a) Non-Resident; ` 6,25,000 is liable to tax in India
(b) Resident and ordinary resident; ` 18,25,000 is liable to tax in India
(c) Resident but not ordinarily resident; ` 11,75,000 is liable to tax in India
(d) Non-Resident; ` 11,75,000 is liable to tax in India
9. Mr. Ramesh, a citizen of India, is employed in the Indian embassy in Australia. He is a
non-resident for A.Y. 2023-24. He received salary and allowances in Australia from the
Government of India for the year ended 31.03.2023 for services rendered by him in
Australia. In addition, he was allowed perquisites by the Government. Which of the
following statements are correct?
(a) Salary, allowances and perquisites received outside India are not taxable in the
hands of Mr. Ramesh, since he is non-resident.
(b) Salary, allowances and perquisites received outside India by Mr. Ramesh are
taxable in India since they are deemed to accrue or arise in India.
(c) Salary received by Mr. Ramesh is taxable in India but allowances and perquisites
are exempt.
(d) Salary received by Mr. Ramesh is exempt in India but allowances and perquisites
are taxable.
10. Anirudh stays in New Delhi. His basic salary is ` 10,000 p.m., D.A. (60% of which forms
part of pay) is ` 6,000 p.m., HRA is ` 5,000 p.m. and he is entitled to a commission of
1% on the turnover achieved by him. Anirudh pays a rent of ` 5,500 p.m. The turnover
achieved by him during the current year is ` 12 lakhs. The amount of HRA exempt
under section 10(13A) is –
(a) ` 48,480
(b) ` 45,600
(c) ` 49,680
(d) ` 46,800
11. 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. 2022-23, following transactions were undertaken by Mr. Jagat:
(i) He attended a seminar on “Perquisite Valuation”. Seminar fees of ` 12,500 was
paid by Bharat Ltd.

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 (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 ` 25,000.
(iii) Ms. Sapna (daughter of Mr. Jagat) studies in DPS Public School (owned and
maintained by Bharat Ltd.). Tuition fees paid for Ms. Sapna was ` 750 per month
by Mr. Jagat. Cost of education in similar institution is ` 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. 2023-24?
(a) ` 25,000
(b) ` 37,500
(c) ` 66,500
(d) ` 79,000
12. Mr. Karan completed his MBA in April 2022 and joined XYZ Ltd from 01.05.2022. His
basic salary is ` 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 31.3.2023 is ` 49,325. What would be the income chargeable
to tax under the head “Salaries” of Mr. Karan for the A.Y. 2023-24, if he does not opt
for section 115BAC?
(a) ` 27,26,442
(b) ` 27,30,884
(c) ` 27,22,000
(d) ` 27,71,325
13. 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 – ` 32,000
and driver’s salary – ` 36,000. The taxable value of car facility for A.Y. 2023-24 will be -
(a) ` 21,600
(b) ` 10,800
(c) ` 32,400
(d) ` 39,600
14. Mr. Raghav has three houses for self-occupation. What would be the tax treatment for
A.Y.2023-24 in respect of income from house property?
(a) 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.

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 (b) Two houses, at the option of Mr. Raghav, would be treated as self-occupied. The
other house would be deemed to be let out.
(c) 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.
(d) Two houses, at the option of Assessing Officer, would be treated as self -
occupied. The other house would be deemed to be let out.
15. Vidya received ` 90,000 in May, 2022 towards recovery of unrealised rent, which was
deducted from actual rent during the P.Y. 2020-21 for determining annual value. Legal
expense incurred in relation to unrealized rent is ` 20,000. The amount taxable under
section 25A for A.Y. 2023-24 would be -
(a) ` 70,000
(b) ` 63,000
(c) ` 90,000
(d) ` 49,000
16. Mr. Vikas took a loan of ` 15,00,000 @10% p.a. on 1-4-2020 for the construction of
residential house for self-occupation. The construction of the house began in June,
2020 and was completed on 30-6-2022. He has not repaid any amount of loan so far.
The amount of interest deduction u/s 24(b) for A.Y. 2023-24 is –
(a) ` 1,50,000
(b) ` 1,80,000
(c) ` 2,00,000
(d) ` 2,10,000
17. Mr. X acquires an asset in the year 2016-17 for the use for scientific research for
` 2,75,000. He claimed deduction under section 35(1)(iv) in the previous year 2016 -17.
The asset was brought into use for the business of Mr. X in the P.Y.2022-23, after the
research was completed. The actual cost of the asset to be included in the block of
assets is -
(a) Nil
(b) Market value of the asset on the date of transfer to business
(c) ` 2,75,000 less notional depreciation under section 32 upto the date of transfer.
(d) Actual cost of the asset i.e., ` 2,75,000
18. 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. 2022-23, the firm has paid remuneration to Mr. B,
Mr. C and Mr. D, being the working partners of the firm, of ` 2,00,000 each. The firm
has paid interest on capital of ` 1,20,000 in toto to all the three partners and the same

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 is within the prescribed limit of 12%. The firm had a loss of ` 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?
(a) ` 2,00,000
(b) ` 1,51,600
(c) ` 1,27,600
(d) ` 1,50,000
19. Mr. Shahid, a wholesale supplier of dyes, provides you with the details of the following
cash payments made throughout the year –
• 12.06.2022: loan repayment of ` 27,000 taken for business purpose from his
friend Kunal. The repayment also includes interest of ` 5,000.
• 19.08.2022: Portable dye machinery purchased for ` 15,000. The payment was
made in cash in three weekly instalments.
• 26.01.2023: Payment of ` 10,000 made to electrician due to unforeseen electric
circuit at shop.
• 28.02.2023: Purchases made from unregistered dealer for ` 13,500.
What will be disallowance under 40A(3), if any, if Mr. Shahid opts to declare his income
as per the provisions of section 44AD?
(a) ` 18,500
(b) ` 28,500
(c) ` 13,500
(d) Nil
20. 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.2022-23 is ` 130 lakh
♦ Out of the above:
` 25 lakh received by A/c payee cheque during the F.Y.2022-23;
` 50 lakh received by cash during the F.Y.2022-23;
` 25 lakh received by A/c payee bank draft before the due date of filing of return;
` 30 lakh not received till due date of filing of return.

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 What shall be the amount of deemed profits of Mr. A under section 44AD(1) for
A.Y. 2023-24?
(a) ` 10.4 lakh
(b) ` 7.0 lakh
(c) ` 5.5 lakh
(d) ` 9.4 lakh
21. A building was acquired on 1.4.1995 for ` 20,00,000 and sold for ` 80,00,000 on
01.06.2022. The fair market value of the building on 1.4.2001 was ` 25,00,000. Its stamp
duty value on the same date was ` 22,00,000. Determine the capital gains on sale of
such building for the A.Y. 2023-24?
CII for F.Y. 2001-02: 100; F.Y. 2022-23: 331
(a) ` 7,18,000
(b) ` 13,80,000
(c) ` 60,00,000
(d) (` 2,75,000)
22. In P.Y. 2022-2023, Mr. A has transferred the following assets:
Asset transferred Full Value of Indexed Cost of Transfer
Consideration Acquisition Date
(`) (`)
Residential house 8 crores 6 crores 25.11.2022
property
Jewellery 3 crores 2 crores 05.01.2023

Mr. A bought a new residential house property on 01.04.2021 for ` 1 crore and on
28.02.2023 deposited ` 3 crores in a capital gains deposit account scheme. On 30.07.2023,
Mr. A has withdrawn ` 3 crores from capital gains deposit account and acquired a
residential house property worth ` 2.5 crore. What would be the capital gains in the hands
of Mr. A for A.Y. 2023-24, if the expenses in connection with transfer of jewellery were
` 2,00,000?
(a) ` 80,50,000
(b) ` 81,55,705
(c) ` 98,00,000
(d) ` 48,00,000
23. Mr. Vishal and Mr. Guha sold their residential house property in Pune for` 3 crore and ` 4
crore, respectively, in January, 2023. The house property was purchased by them 25

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 months back. The indexed cost of acquisition is ` 1 crore and ` 1.75 crore, respectively.
Mr. Vishal purchased two residential flats, one in Delhi and one in Agra for ` 70 lakhs and
` 80 lakhs, respectively, in April, 2023. On the same date, Mr. Guha also purchased two
residential flats, one in Mumbai and the other in Pune, for ` 80 lakhs and ` 75 lakhs,
respectively. Both of them invested ` 30 lakhs in bonds of NHAI in March, 2023 and ` 30
lakhs in bonds of RECL in April, 2023. What is the income taxable under the head “Capital
Gains” for A.Y.2023-24 in the hands of Mr. Vishal and Mr. Guha?
(a) ` 70 lakhs and ` 95 lakhs, respectively
(b) ` 60 lakhs and ` 85 lakhs, respectively
(c) Nil and ` 95 lakhs, respectively
(d) Nil and ` 20 lakhs, respectively
24. Mr. Ram, an Indian resident, purchased a residential house property at Gwalior on
28.05.1999 for ` 28.5 lakhs. The fair market value and the stamp duty value of such
house property as on 1.4.2001 was ` 33.5 lakhs and ` 32.4 lakhs, respectively. On
05.02.2012, Mr. Ram entered into an agreement with Mr. Byomkesh for sale of such
property for ` 74 lakhs and received an amount of ` 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. 2022-23?
Cost Inflation Index for F.Y. 2001-02: 100; F.Y. 2022-23: 331
(a) ` 1,10,88,500
(b) ` 1,07,24,400
(c) ` 97,97,600
(d) ` 94,33,500
25. Mr. X, aged 61 years, earned dividend of ` 12,00,000 from ABC Ltd. in P.Y. 2022-23.
Interest on loan taken for the purpose of investment in ABC Ltd., is ` 3,00,000. Income
includible in the hands of Mr. X for P.Y. 2022-23 would be -
(a) ` 12,00,000
(b) ` 9,60,000
(c) ` 9,00,000
(d) ` 2,00,000
26. Mr. Vikas transferred 600 unlisted shares of XYZ (P) Ltd. to ABC (P) Ltd. on 15.12.2022
for ` 3,50,000 when its fair market value was ` 5,15,000. The indexed cost of acquisition
of shares for Mr. Vikas was computed at ` 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.

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 (a) ` 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.
(b) ` 75,000 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.
(c) ` 90,000 chargeable to tax in the hands of Mr. Vikas as long-term capital gains
and ` 1,65,000 is taxable under the head “Income from other sources” in the
hands of ABC (P) Ltd.
(d) ` 75,000 chargeable to tax in the hands of Mr. Vikas as long-term capital gains
and ` 1,65,000 is taxable under the head “Income from other sources” in the
hands of ABC (P) Ltd.
27. Mr. Vikas received a gold ring worth ` 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 ` 80,000 on the said occasion. Would such gifts be
taxable in the hands of Mr. Vikas and Ms. Kavya?
(a) Yes, the gift of gold ring and gold chain is taxable in the hands of Mr. Vikas and
Ms. Kavya, respectively
(b) Such gifts are not taxable in the hands of Mr. Vikas nor in the hands of Ms. Kavya
(c) 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
(d) 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
28. If the converted property is subsequently partitioned among the members of the
family, the income derived from such converted property as is received by the spouse
of the transferor will be taxable -
(a) as the income of the karta of the HUF
(b) as the income of the spouse of the transferor
(c) as the income of the HUF.
(d) as the income of the transferor-member
29. Ram owns 500, 15% debentures of R Industries Ltd. of ` 500 each. Annual interest of
` 37,500 was payable on these debentures for P.Y. 2022-23. He transfers interest
income to his friend Shyam, without transferring the ownership of these debentures.
While filing return of income for A.Y. 2023-24, Shyam showed ` 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?
(a) Yes, since interest income was transferred to Shyam, therefore, after transfer, it
becomes his income.

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 (b) 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.
(c) 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.
(d) No, since Shyam should have shown the income as interest income received from
Mr. Ram and not as interest income earned on debentures.
30. Mrs. Shivani, wife of Mr. Anurag, is a partner in a firm. Her capital contribution is ` 5
lakhs to the firm as on 1.4.2022 which includes ` 3.5 lakhs contributed out of gift
received from Anurag. The firm paid interest on capital of ` 50,000 and share of profit
of ` 60,000 during the F.Y.2022-23. The entire interest has been allowed as deduction
in the hands of the firm. Which of the following statements is correct?
(a) Share of profit is exempt but interest on capital is taxable in the hands of
Mrs. Shivani.
(b) Share of profit is exempt but interest of ` 39,286 is includible in the income of
Mr. Anurag and interest of ` 10,714 is includible in the income of Mrs. Shivani.
(c) Share of profit is exempt but interest of ` 35,000 is includible in the income of
Mr. Anurag and interest of ` 15,000 is includible in the income of Mrs. Shivani.
(d) Share of profit to the extent of ` 42,000 and interest on capital to the extent of
` 35,000 is includible in the hands of Mr. Anurag.
31. 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?
(a) Income from both properties is to be included in the hands of Mr. Arvind by
virtue of section 64.
(b) Income from property gifted to wife alone is to be included in Mr. Arvind’s hands
by virtue of section 64.
(c) Mr. Arvind is the deemed owner of house property gifted to Mrs. Meena and
Mrs. Seetha.
(d) 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.
32. Pankaj gifted an amount of ` 3,00,000 to his wife, Pinky and ` 2,00,000 to his
daughter, Rinky aged 20 years, on 1st April 2019. 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 on Pinky for A.Y. 2023-24.

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 (a) ` 4,473
(b) ` 12,132
(c) ` 33,000
(d) ` 36,630
33. 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 -
(a) Loss from specified business under section 73A
(b) Loss under the head “Capital Gains” and unabsorbed depreciation carried
forward under section 32(2)
(c) Loss from house property and unabsorbed depreciation carried forward under
section 32(2)
(d) Loss from speculation business under section 73
34. Brought forward loss from house property of ` 3,10,000 of A.Y. 2022-23 is allowed to
be set-off against income from house property of A.Y. 2023-24 of ` 5,00,000 to the
extent of –
(a) ` 2,00,000
(b) ` 3,10,000
(c) ` 2,50,000
(d) ` 1,00,000
35. The details of income/loss of Mr. Kumar for P.Y.2022-23 are as follows:
Particulars Amt. (in ` )
Income from Salary (computed) 5,20,000
Loss from self-occupied house property 95,000
Loss from let-out house property 2,25,000
Loss from specified business u/s 35AD 2,80,000
Loss from medical business 1,20,000
Long term capital gain 1,60,000
Income from other sources 80,000

What shall be the gross total income of Mr. Kumar for A.Y. 2023-24?
(a) ` 4,40,000
(b) ` 3,20,000

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 (c) ` 1,60,000
(d) ` 4,80,000
36. During the A.Y. 2023-24, Mr. Kabir has a loss of ` 6 lakhs under the head “Income from
house property”, loss of ` 5 lakhs from business of profession and income of ` 3 lakhs
from long term capital gains. He filed his return of income for the A.Y. 2023-24 on
31.12.2023. Determine the total income of Mr. Kabir for A.Y. 2023-24 and the amount
of loss which can be carried forward in a manner most beneficial to him?
(a) Total income Nil; loss of ` 4,00,000 from house property and loss of ` 4,00,000
from business or profession.
(b) Total income ` 1,00,000; loss of ` 4,00,000 from house property.
(c) Total income Nil; No loss is allowed to be carried forward.
(d) Total income Nil; loss of ` 6,00,000 from house property.
37. XYZ Ltd. 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
12.3.2014 and unit in DTA from 15.6.2017. Total turnover of XYZ Ltd. and Unit in DTA is
` 8,50,00,000 and ` 3,25,00,000, respectively. Export sales of unit in SEZ and DTA is
` 2,50,00,000 and ` 1,25,00,000, respectively and net profit of Unit in SEZ and DTA is
` 80,00,000 and ` 45,00,000, respectively. XYZ Ltd. would be eligible for deduction
under section 10AA for P.Y. 2022-23 for-
(a) ` 38,09,524
(b) ` 19,04,762
(c) ` 23,52,941
(d) ` 11,76,471
38. Mr. Shiva made a donation of ` 50,000 to PM Cares Fund and ` 20,000 to Rajiv Gandhi
Foundation by cheque. He made a cash donation of ` 10,000 to a public charitable
trust registered under section 80G. The deduction allowable to him under section 80G
for A.Y.2023-24 is –
(a) ` 80,000
(b) ` 70,000
(c) ` 60,000
(d) ` 35,000
39. Mr. Arpit, an employee of MNO Ltd. has contributed ` 1,61,280 towards NPS and
similar amount is contributed by his employer. His basic salary is ` 80,000 p.m. and
dearness allowance is 40% of basic salary which forms part of retirement benefits. He
also paid ` 55,000 towards LIC premium for himself and his wife and medical insurance
premium of ` 35,000 by crossed cheque for his mother, being a senior citizen during

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 the previous year 2022-23. How much deduction is available under Chapter VI-A while
computing total income of Mr. Arpit for the A.Y. 2023-24?
(a) ` 3,46,280
(b) ` 3,69,400
(c) ` 3,19,400
(d) ` 3,96,280
40. Mr. Ram acquired a house property at Chennai from Mr. Satyam, a resident, for a
consideration of ` 85 lakhs, on 23.8.2022. 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 ` 50 lakhs and rural agricultural land from Mr. Danish, a resident,
for a consideration of ` 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?
(a) No tax deduction at source is required in respect of any of the three payments.
(b) TDS@1% is attracted on all the three payments.
(c) TDS@1% on ` 85 lakhs and ` 50 lakhs are attracted. No TDS on payment of ` 75
lakhs for acquisition of rural agricultural land.
(d) TDS@1% on ` 85 lakhs is attracted. No TDS on payments of ` 50 lakhs and ` 75
lakhs.
41. 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 2022-23 are as follows:
Date of Cash withdrawal Saving Account Current Account
05.04.2022 15,00,000 -
10.05.2022 - 22,00,000
25.06.2022 20,00,000 -
17.07.2022 - 5,00,000
28.10.2022 35,00,000 -
10.11.2022 - 38,00,000
12.12.2022 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 2022-23?
If yes, what would the amount of tax deducted at source?
(a) TDS of ` 3,20,000 is required to be deducted

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 (b) No, TDS is not required to be deducted as the cash withdrawal does not exceed ` 1
crore neither in saving account nor in current account
(c) TDS of ` 3,00,000 is required to be deducted.
(d) TDS of ` 1,20,000 is required to be deducted.
42. Mr. Raj (a non-resident and aged 65 years) is a retired person, earning rental income of
` 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?
(a) Yes, he is liable to pay advance tax in India as he is a non-resident and his tax
liability in India exceeds ` 10,000.
(b) No, he is not liable to pay advance tax in India as his tax liability in India is less
than ` 10,000.
(c) 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.
(d) Both (b) and (c)
43. Mr. Jha, an employee of FX Ltd, attained 60 years of age on 15.05.2022. He is resident
in India during F.Y. 2022-23 and earned salary income of ` 5 lakhs (computed). During
the year, he earned ` 7 lakhs from winning of lotteries. What shall be his advance tax
liability for A.Y. 2023-24, if all tax deductible at source has been duly deducted and
remitted to the credit of Central Government on time? Assume that he does not opt to
pay tax under section 115BAC.
(a) ` 2,20,000 + Cess ` 8,800 = ` 2,28,800, being the tax payable on total income of
` 12 lakhs
(b) ` 2,10,000 + Cess ` 8,400 = ` 2,18,400, being the tax payable on lottery income
of ` 7 lakhs
(c) ` 10,000 + Cess ` 8,800 = ` 18,800, being the net tax payable on salary income,
since tax would have been deducted at source from lottery income.
(d) Nil
44. 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 ` 40,000 to mutual fund for purchase of its units
IV Cash deposit with a post office of ` 1,00,000 during a day.

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 V A fixed deposit of ` 30,000 with a NBFC registered with RBI aggregating the total
deposits to ` 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 ` 60,000
Choose the correct answer:
(a) II, IV
(b) II, III, IV
(c) I, II, III, V, VI
(d) II, IV, VI
45. Arun’s gross total income of P.Y. 2022-23 is ` 2,45,000. He deposits ` 45,000 in PPF. He
pays electricity bills aggregating to ` 1.20 lakhs in the P.Y.2022-23. Which of the
statements is correct?
(a) Arun is not required to file his return of income u/s 139(1) for P.Y. 2022-23, since
his total income before giving effect to deduction under section 80C does not
exceed the basic exemption limit.
(b) Arun is not required to file his return of income u/s 139(1) for P.Y. 2022-23, since
his electricity bills do not exceed ` 2,00,000 for the P.Y.2022-23.
(c) Arun is not required to file his return of income u/s 139(1) for P.Y. 2022-23, since
neither his total income before giving effect to deduction under section 80C
exceeds the basic exemption limit nor his electricity bills exceed ` 2 lakh for the
P.Y. 2022-23.
(d) Arun is required to file his return of income u/s 139(1) for P.Y. 2022-23, since his
electricity bills exceed ` 1 lakh for the P.Y.2022-23.
46. Mr. Dinesh, a resident in India, has gross total income of ` 2,30,000 comprising of
interest on saving A/c and rental income during the previous year 2022-23. He
incurred expenditure of ` 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 2023-24? If yes, what is the
due date?
(a) Yes, 31st July of A.Y
(b) Yes, 30th September of A.Y
(c) Yes, 31st October of A.Y
(d) No, he is not required to file return of income
47. Mr. Ajay is a recently qualified doctor. He joined a reputed hospital in Delhi on
01.01.2023. He earned total income of ` 3,40,000 till 31.03.2023. His employer advised
him to claim rebate u/s 87A while filing return of income for A.Y. 2023-24. He
approached his father, a tax professional, to enquire regarding what is rebate u/s 87A
of the Act. What would have his father told him?

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 (i) An individual who is resident in India and whose total income does not exceed
` 5,00,000 is entitled to claim rebate under section 87A.
(ii) An individual who is resident in India and whose total income does not exceed
` 3,50,000 is entitled to claim rebate under section 87A.
(iii) Maximum rebate allowable under section 87A is ` 5,000.
(iv) Rebate under section 87A is available in the form of exemption from total
income.
(v) Maximum rebate allowable under section 87A is ` 12,500.
(vi) Rebate under section 87A is available in the form of deduction from basic tax
liability.
Choose the correct option from the following:
(a) (ii), (iii), (vi)
(b) (i), (v), (vi)
(c) (ii), (iii), (iv)
(d) (i), (iv), (v)
48. Mr. Ritvik has purchased his first house in Gwalior for self-occupation on 1.4.2022 for
` 45 lakhs (stamp duty value being the same) with bank loan sanctioned on 30.3.2022
and disbursed on 1.4.2022. He paid interest of ` 3.8 lakhs during the P.Y.2022-23. What
is the tax treatment of interest paid by him?
(a) Interest of ` 2 lakhs allowable u/s 24
(b) Interest of ` 2 lakhs allowable u/s 24 and ` 1.8 lakhs allowable u/s 80EEA
(c) Interest of ` 2 lakhs allowable u/s 24 and ` 1.5 lakhs allowable u/s 80EEA
(d) Interest of ` 1.5 lakhs allowable u/s 24 and ` 1.5 lakhs allowable u/s 80EEA
49. Mr. Bandu, aged 37 years, provides the following details for P.Y. 2022-23:
Particulars ` in lakhs
Textile business income 22
Speculative business loss (4)
Textile business loss b/f from P.Y. 2019-20 (5)
Business income of spouse included in the income of
Mr. Bandu as per section 64(1)(iv) 2
Deductions available under Chapter VI-A 3
TDS 1

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 TCS 0.5
Advance tax paid 1.3
What shall be the net tax payable/(refundable) as per regular provisions of the
Income-tax Act, 1961 for A.Y. 2023-24 for Mr. Bandu? Ignore interest.
(a) ` 24,200
(b) (` 1,00,600)
(c) ` 2,11,400
(d) ` 12,500
50. Mr. Ashutosh, aged 65 years and a resident in India, has a total income of ` 3,20,00,000,
comprising long term capital gain taxable under section 112 of ` 57,00,000, long term
capital gain taxable under section 112A of ` 65,00,000 and other income of ` 1,98,00,000.
What would be his tax liability for A.Y. 2023-24. Assume that Mr. Ashutosh has not opted for
the provisions of section 115BAC.
(a) ` 90,05,880
(b) ` 97,25,690
(c) ` 97,34,400
(d) ` 97,22,440

ANSWERS

Q. No. Answer
1. (d)
2. (b)
3. (b)
4. (c)
5. (a)
6. (d)
7. (b)
8. (a)
9. (c)
10. (a)
11. (d)
12. (a)

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 13. (c)
14. (b)
15. (b)
16. (c)
17. (a)
18. (c)
19. (d)
20. (d)
21. (a)
22. (b)
23. (c)
24. (d)
25. (b)
26. (c)
27. (c)
28. (d)
29. (b)
30. (c)
31. (d)
32. (b)
33. (c)
34. (b)
35. (a)
36. (d)
37. (b)
38. (c)
39. (b)
40. (c)
41. (d)
42. (b)
43. (d)

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 44. (a)
45. (d)
46. (d)
47. (b)
48. (c)
49. (a)
50. (a)

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