Going through the Deductions From Gross Total Income, Rebate and Relief – CS Executive Tax Laws MCQ Questions with Answers you can quickly revise the concepts.
Deductions From Gross Total Income, Rebate and Relief – Tax Laws CS Executive MCQs
Question 1.
Deduction are given under chapter ……………. of the income tax.
(a) VIA
(b) V
(c) VA
(d) VII
Answer:
(a) VIA
Question 2.
Choose the correct option from the following
(a) Deductions are claimed from total income of the assessee.
(b) The aggregate of deduction can exceed the gross total income, and the loss thus arising, is allowed to be set off.
(c) The assessee has to claim deductions, they are not automatically allowed under the Income-tax Act, 1961
(d) Deductions are allowed on all types of incomes.
Answer:
(c) The assessee has to claim deductions, they are not automatically allowed under the Income-tax Act, 1961
Question 3.
The deductions are available from the
following incomes except:
(a) Long term capital gains
(b) Short term capital gains u/s 111A
(c) Winnings from lotteries, races, etc.
(d) All of the above
Answer:
(d) All of the above
Question 4.
Mr. Ram has GTI of ₹ 1,20,000 for F.Y. 2020-21 and has deduction under chapter VI-A of ₹ 1,50,000. Loss to be carried forward by Mr. Ram for FY 2020-21 is –
(a) Nil
(b) 30,000
(c) 1,50,000
(d) 20,000
Answer:
(a) Nil
Deductions cannot exceed Gross total Income.
Question 5.
Deduction under section 80C is allowed to
(i) Individual
(ii) HUF
(iii) Firm
(iv) Company
(a) (i) only
(b) (i) & (ii) only
(c) (i) & (ii) & (iii)
(d) (ii), (iii) & (iv)
Answer:
(b) (i) & (ii) only
Question 6.
For the year ended 31st March, 2021 Paresh receives annual salary of ₹ 2,80,000. Paresh’s contribution to employees recognised provident fund account is ₹ 59,000 and matching contribution has been made by employer. Taxable income of Paresh will be
(a) ₹ 1,96,400
(b) ₹ 2,06,400
(c) ₹3,39,000
(d) ₹ 2,80,000
Answer:
(a) ₹ 1,96,400
| Computation of Total Income of Mr. Paresh | ||
| ₹ | ₹ | |
| Salary | 2,80,000 | |
| Employer’s contribution to R.P.F in excess of 12% [? 5,9000- (12% of 2,80,000)] | 25,400 | |
| Gross Salary | 3,05,400 | |
| Less: Standard deduction u/s 16(ia) | 50,000 | |
| Gross Total Income | 255,400 | |
| Less Deduction u/s 80C | 59,000 | |
| Total Income | 1,96,400 | |
Hint: Deduction in respect of certain income is available only if the return is filed on or before the due date of return. The assessee will lose the right to claim deduction if return is filed after the due date. These are contained in Chapter VI-A under the heading “C. – Deduction in respect of certain Incomes’’
Question 7.
An individual has made investments in the schemes approved u/ss 80C and 80CCD of ₹ 2,50,000 and ₹ 1,00,000 respectively during the year ended 31st March, 2021. Amount that can be claimed by him as deduction out of income in AY 2021-22 is:
(a) ₹ 50% of ₹ 3,50,000
(b) ₹ 1,50,000 u/s 80C and ₹ 50,000 u/s 80CCD(1B)
(c) ₹ 1,50,000
(d) None of the above
Answer:
(b) ₹ 1,50,000 u/s 80C and ₹ 50,000 u/s 80CCD(1B)
Question 8.
Deduction under section 80C can be claimed for fixed deposit made in any scheduled bank, if the minimum period of deposit is
(a) 5 Years
(b) 8 Years
(c) 10 Years
(d) 12 Years
Answer:
(a) 5 Years
Question 8A.
Which of the following deductions can still be claimed even if the return of income is filed after the due date
(a) 80C
(b) 80JJA
(c) 80P
(d) 80QQB
Answer:
(a) 80C
Question 8B.
Manasavi has to pay ₹ 80,000 to the cooperative society annually against the house allotted to her by the society. She initially paid a sum of ₹ 1,00,000 to become a member of the housing cooperative society during the previous year 2019-20. The term of the payment was for 10 years. The amount allowed to be deducted under section 80C for the previous year 2020-21 will be X:
(a) 1,50,000
(b) 80,000
(c) 90,000 \(\left(80,000+\frac{1,00,000}{10}\right)\)
(d) 1,80,000.
Answer:
(b) 80,000
Hint:
Initial deposit which a person has to pay for becoming member in a cooperative society is inadmissible payment.
Question 8C.
Deduction under section 80C is allowed to an employee of the Central Government for contribution to additional account under NPS for a fixed period of not less than 3 years. This Account is
(a) Tier I Account
(b) Tier II Account
(c) Tier III Account
(d) Any of the above
Answer:
(b) Tier II Account
Question 9.
Mr. Mithun acquired a house property for, ₹ 8 lakhs and paid stamp duty and registration fee of ₹ 80,000. He borrowed housing loan and repaid principal of ₹ 60,000 and interest of₹ 20,000. The amount eligible for deduction under Section 80C would be:
(a) ₹ 80,000
(b) ₹ 60,000
(c) ₹ 1,00,000
(d) ₹ 1,40,000
Answer:
(b) ₹ 60,000
Stamp duty, registration fee and repayment of principal is eligible for deduction u/s 80C
80,000+60,000 = 1,40,000.
Question 10.
Mr. Anand engaged in business wants to deposit in pension fund of Life Insurance Corporation of India. The maximum amount of contribution eligible for deduction from Gross total income is:
(a) ₹ 10,000
(b) ₹ 50,000
(c) ₹ 1,00,000
(d) ₹ 1,50,000
Answer:
(d) ₹ 1,50,000
Question 11.
Mr. X has invested ₹ 1,00,000 in NSC during the year 2019-20. He has invested in NSC earlier also which will mature in two years’ time. The interest accrued on the previous investments during the year was ₹ 12,000. Assuming, no other investment, his deduction u/s 80C will be:
(a) ₹ 1,00,000
(b) ₹ 1,12,000
(c) ₹ 88,000
(d) Nil
Answer:
(b) ₹ 1,12,000
The interest accrued on NSC is automatically reinvested, if it does not mature and the accrued interest will also qualify for deduction u/s 80C
Question 12.
The PPF A/c can be opened in
(a) Bank
(b) Post office
(c) Both (a) and (b)
(d) None of the above
Answer:
(c) Both (a) and (b)
Question 13.
In order to claim deduction u/s 80C the Public Provident Fund A/c can be opened in the name of the following, except:
(a) Self
(b) Brother
(c) Spouse
(d) In case of HUF, in the name of any member of HUF
Answer:
(b) Brother
Question 14.
Sukhdev has taken a life policy in the name of following members of his family. The premium does not exceed 10% of capital sum assured. Mr. Sukhdev can claim deduction in respect of all except:
(a) Dependent daughter
(b) One independent son
(c) Another married daughter
(d) None of the above
Answer:
(d) None of the above
Question 15.
Deduction u/s 80C in respect of tuition fees is allowed subject to:
(a) It is allowed for whole time education only.
(b) It is allowed for education in a college, school or other educational institution in India
(c) It is allowed for education of the children of the assessee upto a maximum of two children
(d) All of the above
Answer:
(d) All of the above
Question 16.
Vasudhara has taken a life insurance policy of 7 4,00,000 on the life of married son on 9.1.2016. The annual premium of 7 45,000 was due on 28.3.2020. She paid the premium on 4th April 2020, through an account payee cheque. The amount of deduction u/s 80C for the P.Y. 2019-20 shall be:
(a) 45,000
(b) 40,000
(c) Nil
(d) 13,500
Answer:
(c) Nil
Question 17.
The deduction u/s 80CCC is available to
(a) An individual
(b) An individual & HUF
(c) All assessees
(d) Only to company
Answer:
(a) An individual
Question 18.
Employer pays 7 8,00,000 as salary to the employee and also contributes 7 1,10,000 to National Pension Scheme (NPS) for the benefit of employee. The employee himself makes a contribution of 7 80,000 towards NPS. The employee’s contribution to PPF and NSC are 7 90,000 & 7 40,000. The amount deduction available to the employee will be:
(a) 7 80,000 u/s 80CCD(2)
(b) 7 50,000 u/s 80CCD(1B)
(c) 7 1,50,000 u/ss 80C, 80CCD
(d) All of the above
Answer:
(d) All of the above
The deduction on Employer’s contribution towards NPS is allowed u/s 80CCD(2) to the extent of 10% of salary, therefore this will be limited to ₹ 80,000. The employee can claim additional deduction u/s 80CCD(1B) to the extent of ₹ 50,000 and the balance contribution will be added under other investments subject to a maximum limit of ₹ 1,50,000 and not more than 10% of salary.
Question 19.
Mr. X is an employee of central government. The employer pays 7 8,00,000 as salary and also contributes 7 1,10,000 to National Pension scheme (NPS) for the benefit of employee. The employee however contributes 7 72,000. The amount deductible under section 80CCD(2) of the Act, for the Previous Year 2019-20 will be:
(a) 1,12,000
(b) 80,000
(c) 1,10,000
(d) 1,52,000
Answer:
(c) 1,10,000
After the amendment in Finance Act, 2019, the employer’s contribution u/s 80CCD(2) can be up to 14% of the employee’s salary if the employer is Central Government. Therefore, the entire ₹ 1,10,000 contributed by the central government will be allowed under section 80CCD(2).
Question 20.
A self-employed person shall not be allowed deduction of more than on his contribution to NPS u/s 80CCD(1).
(a) 10% of gross total income
(b) 20% of gross total income
(c) 10% of total income
(d) 20% of total income
Answer:
(b) 20% of gross total income
Question 21.
If aperson who has contributed to NPS, closes his account or opts out of NPS, the exempt amount will be:
(a) 30% of the amount standing to his balance in credit
(b) 40% of the balance in credit
(c) 50% of the balance in credit
(d) 60% of the balance in credit.
Answer:
(d) 60% of the balance in credit.
After the Amendment, 60% of the total amount payable to him at the time of opting out of Scheme is exempt.
Question 22.
Withdrawal or pension from NPS is always exempt, except:
(a) Withdrawal is partial, not exceeding 25% of employee’s contribution.
(b) Amount received by a nominee on the death of an assessee
(c) The withdrawn amount is utilized for purchasing another annuity plan in the same previous year.
(d) Pension received out of NPS
Answer:
(d) Pension received out of NPS
Question 23.
The maximum possible amount of deduction u/s 80DDB for senior citizen is X –
(a) 75,000
(b) 1,25,000
(c) 1,00,000
(d) 60,000
Answer:
(c) 1,00,000
Question 24.
Raghu’s father is dependent on him and suffering with 90% disability. Raghu has incurred an amount of ₹ 72,500 in maintaining and medical treatment of his father. The deduction he can claim in his income-tax return for AY 2020-2021 is
(a) ₹ 72,500
(b) ₹ 50,000
(c) ₹ 1,25,000
(d) None of the above
Answer:
(c) ₹ 1,25,000
Deduction is allowed u/s 80DD. A deduction of ₹ 1,25,000 is allowed in case of severe disability.
25.
Question 25.
Ravi paid ₹ 25,000 to LIC of India for the maintenance of his disabled son and incurred ₹ 15,000 for the treatment of his handicapped wife who is working in State Bank of India. The deduction allowable to him under Section 80DD is-
(a) ₹ 15,000
(b) ₹ 25,000
(c) ₹ 50,000
(d) ₹ 75,000
Answer:
(d) ₹ 75,000
Deduction of ₹ 75,000 is allowed u/s 80DD.
Question 26.
Mr. X aged 78 years, Resident in India paid medical insurance premium of ₹ 52,000 by cheque and ₹ 4,000 by cash during May, 2018 under a medical Insurance Scheme of the General Insurance Corporation. The above sum was paid for insurance of his own health. He would be entitled to a deduction under section 80D of a sum of
(a) ₹ 30,000
(b) ₹ 50,000
(c) ₹52,000
(d) ₹ 56,000
Answer:
(b) ₹ 50,000
Deduction u/s 80D is allowed upto ₹ 50,000 in case of resident senior citizen.
Question 27.
The payment for Insurance premium under section 80D should be paid:
(a) In cash
(b) By any mode other than cash
(c) By cheque
(d) Through account payee cheque/ account payee bank draft
Answer:
(b) By any mode other than cash
The payment of preventive checkup can be made in cash. All other payments should be made by any mode other than cash.
Question 28.
Which of the following is not eligible for section 80C deduction
(a) Subscription to NSC (national saving certificate)
(b) Subscription to KVP (Kishan Vikas Patra)
(c) Sun deposited in Sukanya Samriddhi Account
(d) Contribution to approved superannuation fund
Answer:
(b) Subscription to KVP (Kishan Vikas Patra)
Question 29.
Sahil works in a technology company. On 1st January, 2019, he took a loan of ₹ 2,40,000 from his company for the higher education of his daughter. During the year 2019-2020, he paid an interest of ₹ 46,000 towards the said loan and repaid principal component of ₹ 10,000. The deduction that he can claim u/s 80E would be-
(a) Nil
(b) ₹ 24,000
(c) ₹ 46,000
(d) ₹ 10,000
Answer:
(c) ₹ 46,000
Question 30.
Raghunath repaid during previous year 2019-2020 education loan of ₹ 60,000 and interest on education loan of ₹ 18,000 taken from Punjab National Bank for his son to pursue MS in Germany. The loan was taken in the financial year 2010-2011 and the payment commenced from financial year 2012-2013. The amount eligible for deduction under section 80E for the assessment year 2020-2021 is:
(a) ₹ 60,000
(b) ₹ 78,000
(c) ₹ 18,000
(d) Nil
Answer:
(c) ₹ 18,000
Deduction u/s 80E is allowed in the year in which first interest is paid and 7 subsequent years. Deduction is allowed only for interest and not for principal. Thus, total deduction allowed is ₹ 18,000.
Question 31.
Mr. Rath borrowed loan of ₹ 10 lakhs for higher education in India in the year 2007-2008. He completed the course study in 2010-2011. He started repayment of the loan from April 2012. He paid interest of ₹ 41,000 and principal of ₹ 1,20,000 during the financial year 2019-2020. The amount eligible for deduction under section 80E would be:
(a) ₹ 1,20,000
(b) ₹ 1,61,000
(c) ₹ 41,000
(d) ₹ 1,00,000 (monetary limit)
Answer:
(c) ₹ 41,000
Question 32.
Deduction in respect of interest on loan taken for residential house property during the period beginning from 1.4.2019 and ending on 31.3.2021 from any Financial Institution is allowed u/s 80EEA up to X.
(a) 50,000
(b) 1,00,000
(c) 1,50,000
(d) 2,00,
Answer:
(c) 1,50,000
Question 32A.
Mr. Srinivasan has taken a loan from a Financial institution for the purchase of house during the Previous year 2020-21. The loan was sanctioned in the month of April 2020 but was disbursed on 1.7.2020. The stamp duty valuation of the house was ₹42 lakhs. The amount of loan was ₹ 40 lakhs. What will be the amount of deduction relating to the interest on loan in the P.Y. 2020-21 if the rate of interest is 12% p.a.₹ The total interest will be ₹ 3,60,000 (₹ 40,00,000 × 12% for 9 months) for the P.Y. 2020-21
(a) ₹ 1 50,000 u/s 80EEA
(b) ₹ 50,000 u/s 80EE
(c) ₹ 2,00,000 u/s 24(6) and ₹ 1,50,000 u/s 80EEA
(d) ₹ 2,00,000 u/s 24(b) and ₹ 50,000 u/s 80EE
Answer:
(c) ₹ 2,00,000 u/s 24(6) and ₹ 1,50,000 u/s 80EEA
Question 33.
Raman purchased a residential house property in Ahmedabad on loan for which he paid an interest of ₹ 50,000 during the previous year. He is working in Delhi and getting an HRA of ₹ 4,000 per month. He can claim exemption/deduction for-
(a) Only HRA
(b) Only interest paid
(c) Either interest paid or HRA but not both
(d) Both HRA and interest paid.
Answer:
(d) Both HRA and interest paid.
Question 34.
Which of the following cannot claim deduction for the loan taken to purchase a house property
(a) Karta, in respect of property purchased by HUF
(b) An individual, in respect of property purchased by him
(c) Partner, in respect of property purchased by the firm
(d) Spouse of an individual, in respect of property purchased jointly by the individual and his/her spouse.
Answer:
(c) Partner, in respect of property purchased by the firm
Question 35.
Deduction u/s 80EEB is allowed to an individual upto ₹ 1,50,000 in respect of interest on Loan taken from any Financial institution for purchase of :
(a) Rural Agricultural land
(b) Industry in North eastern Region
(c) Residential House Property
(d) Electronic Vehicle.
Answer:
(d) Electronic Vehicle.
Question 35A.
Anupam took a loan from a deposit taking NBFC for purchase of electric vehicle for personal use, sanctioned and disbursed on 1.9.2020. The loan was for ₹ 30 lakhs @ 15% p.a. The amount of
deduction that can be claimed by Anupam is:
(a) ₹ 2,62,500 u/s 80EEB
(b) ₹ 1,50,000 u/s 80EEB
(c) ₹ 1,50,000 u/s 80EEA
(d) Nil
Answer:
(b) ₹ 1,50,000 u/s 80EEB
Question 36.
Deduction in respect of donations to National Defence Fund is allowed u/s –
(a) 80G
(b) 80CCG
(c) 80C
(d) None of the above
Answer:
(a) 80G
Question 37.
Deduction under Section 80G on ac-count of donation is allowed to:
(a) A business assessee only
(b) Any assessee
(c) Individual or HUF only
(d) Any resident assessee
Answer:
(b) Any assessee
Question 38.
Mr. Ganesh gave donation by way of cheque of ₹ 40,000 and by cash ₹ 5,000 to an approved charitable trust having recognition under section 80G. His gross total income for the assessment year 2020-2021 is ₹ 5 lakhs. The quantum of deduction under section 80G would be:
(a) ₹ 45,000
(b) ₹ 5,000
(c) ₹ 40,000
(d) ₹ 20,000
Answer:
(d) ₹ 20,000
No deduction shall be allowed under section 80G in respect of donation of any sum exceeding
₹ 2000 unless such sum is paid by any mode other than cash. Thus, eligible amount of donation is
₹ 40,000. (50% deduction with qualifying limit) Gross total income (Assumed adjusted total income) = 5,00,000.
Qualifying limit = 5,00,000 × 10% = 50,000.
Qualifying limit is covering full amount of eligible donation.
Thus, deduction will be 40,000 × 50% = 20,000.
Question 39.
Bharat, engaged in business, claimed that he paid ₹ 10,000 per month by cheque as rent for his residence. He does not own any residential building. His total income computed before deduction under section 80GG is ₹ 3,40,000, The amount he can claim as deduction under section 80GG is –
(a) ₹ 60,000
(b) ₹ 86,000
(c) ₹ 1,20,000
(d) ₹ 85,000
Answer:
(a) ₹ 60,000
Minimum of following three is exempt u/s 80GG:
| ₹ | |
| Rent paid less 10% of adjusted total income (1,20,000 – 34,000) | 86,000 |
| 25% of adjusted total income (3,40,000 × 25%) | 85,000 |
| Rs. 5,000 p.m. | 60,000 |
Question 40.
Which of the conditions is required to be fulfilled u/s 80GG for getting deduction of rent paid-
(a) Accommodation should be occupied by the assessee for the purpose of his residence
(b) Assessee should not be receiving any HRA
(c) Assessee or his spouse or his minor child does not own any accommodation at place where he ordinarily resides
(d) All of the above
Answer:
(d) All of the above
Question 41.
Mr. A proprietor, gave an asset of ₹ 2,50,000 to an institution established for charitable purpose deduction u/s 80G admissible will be –
(a) 2,50,000
(b) 1,25,000
(c) Nil
(d) 1,00,000
Answer:
(c) Nil
Question 42.
Shravan engaged in business paid monthly rent of ₹ 10,000 by cheque for his residence during the previous year 2019-2020. His adjusted total income is ₹ 3,40,000. The amount eligible for deduction under section 80GG is:
(a) ₹ 86,000
(b) ₹ 60,000
(c) ₹ 24,000
(d) ₹ 85,000
Answer:
(b) ₹ 60,000
Question 43.
Donation to university for research in Social Science is eligible for deduction at:
(a) 100%
(b) 25%
(c) 150%
(d) 175%
Answer:
(a) 100%
Question 44.
Under the Income-tax Act, 1961, which of the following can claim deduction for any sum contributed during the previous year to a political party or electoral trust –
(a) Local authority
(b) Individual
(c) Artificial juridical person
(d) None of the above
Answer:
(b) Individual
Question 45.
For computing adjusted total income for the purpose of section 80G, what should be reduced from GTI
(a) STCGu/slllA
(b) LTCGu/ss 112 and 112A
(c) Deduction under chapter VI-A except sec 80G
(d) All of the above
Answer:
(d) All of the above
Question 46.
Maximum permissible deduction for donation u/s 80G which is subject to qualifying limit is restricted to –
(a) 5% of GTI
(b) 10% of adjusted GTI
(c) 10% of adjusted total income
(d) 5% of adjusted total income
Answer:
(b) 10% of adjusted GTI
Question 47.
Contribution given by LLP for renovation of temple u/s 80G eligible for deduction will be:
(a) 50% of donation, subject to qualifying limit
(b) 100% of donation, subject to qualifying limit
(c) 100% of donation, without qualifying limit
(d) 50% of donation, without qualifying
Answer:
(a) 50% of donation, subject to qualifying limit
Question 48.
ABC Limited fulfilling all the conditions of operating different infrastructure facilities for claiming deduction u/s 80-IA. Find which are being not covered under infrastructure facility out of the following:
(a) Developing of Toll-Road
(b) Operating and maintaining of Highway Project
(c) Operating and maintaining of an Air-port
(d) Developing of industrial park
Answer:
(d) Developing of industrial park
Question 48A.
The deduction under the said section 80-IAC shall be available to an eligible start-up for a period of three consecutive assessment years out of beginning from the year in which it is incorporated.
(a) 7 years
(b) 8 years
(c) 10 years
(d) 12 years
Answer:
(c) 10 years
Question 48B.
The deduction under the section 80-IAC shall be available to an eligible start-up, if the total turnover of its business does not exceed ₹ crores, in any of the previous years beginning from the year in which it is incorporated.
(a) 20
(b) 25
(c) 50
(d) 100
Answer:
(d) 100
Question 48C.
The deduction of an amount equal to one hundred percent of the profits and gains derived from the business of developing and building affordable housing projects is allowed u/s 80-IBA. The conditions contained in the section, inter alia, prescribe that the project is approved by the competent authority during the period from 1st June, 2016 to
(a) 31st March, 2020
(b) 31st March, 2021
(c) 31st December, 2020
(d) 31st December, 2021
Answer:
(b) 31st March, 2021
Question 49.
Sudhan Ltd. incorporated in April 2018 commenced commercial production from 1.6.2019. It deployed 100 employees who were employed for 260 days during the year and recruited 50 casual workmen who were employed for 100 days during the financial year 2018-2019. The salary paid to 100 employees was ₹ 25 lakhs and salary paid to casual workmen was ₹ 6 lakhs. The quantum of deduction under section 80JJAA is:
(a) ₹ 7.50 lakhs
(b) t 9.30 lakhs
(c) ₹ 25 lakhs
(d) ₹ 6 lakhs
Answer:
(a) ₹ 7.50 lakhs
25,00,000 × 30% = 7,50,000
Question 49A.
For claiming the deduction u/s 80JJAA, the assessee must obtain the Form 10DA from a practicing chartered accountant on or before the:
(a) end of the previous year
(b) due date of filing of Tax audit report u/s 44 AB
(c) due date of filing of return
(d) 31 st of December of the relevant A.Y.
Answer:
(b) due date of filing of Tax audit report u/s 44 AB
Question 49B.
Where the gross total income of a domestic company in any previous year includes any income by way of dividends from any other domestic company or a foreign company or a business trust, there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of such domestic company, a deduction of an amount equal to so much of the amount of income by way of dividends received from such other domestic company or foreign company or business trust as does not exceed the amount of dividend distributed by it on or before the due date u/s:
(a) 80L
(b) 80M
(c) 80P
(d) 80K
Answer:
(b) 80M
Question 50.
In case of which of the following co-operative society the deduction under Section 80P is restricted to ₹ 1,00,000 –
(a) Consumers co-operative society
(b) Society engaged in collection and disposal of labour
(c) Society engaged in fishing
(d) Society engaged in processing of agricultural produce without the aid of power
Answer:
(a) Consumers co-operative society
Question 51.
The profits of a Co-operative Society engaged in (i) Carrying out the business of banking, (if) A cottage industry and (in) Collective disposal of labour of its members are exempt from tax as per section 80P up to:
(a) 75% of the profits
(b) 100% of the profits
(c) 50% of the profits
(d) 40% of the profits
Answer:
(b) 100% of the profits
Question 52.
An Indian resident patentee is entitled to a deduction u/s 80RRB to the extent of-
(a) 100% of such income
(b) 50% of such income
(c) 100% of such income or ₹ 3,00,000 whichever is less
(d) 50% of such income or ₹ 3,00,000 whichever is more
Answer:
(c) 100% of such income or ₹ 3,00,000 whichever is less
Question 53.
Monetary limit for deduction in respect of royalty on patents received by a resident individual is –
(a) ₹ 1,00,000
(b) ₹ 3,00,000
(c) ₹ 5,00,000
(d) Nil
Answer:
(b) ₹ 3,00,000
Question 54.
Under Section 80QQB, the maximum deduction in respect of royalty is allowed up to –
(a) ₹ 1,00,000
(b) ₹ 1,50,000
(c) ₹ 2,50,000
(d) ₹ 3,00,000
Answer:
(d) ₹ 3,00,000
Question 55.
Mr. Uday is a resident individual having patent registered on 1.7.2014 under the Patents Act, 1970. He received ₹ 5 lakhs by way of royalty from ABC Ltd. during the financial year 2018-2019. The quantum of royalty eligible for deduction would be:
(a) ₹ 5 lakhs
(b) ₹ 3 lakhs
(c) ₹ 1 lakh
(d) ₹ 2 lakhs
Answer:
(b) ₹ 3 lakhs
As per section 80RRB, 100% of royalty income or ₹ 3,00,000 whichever is less exempt
Question 56.
When a person suffers from severe disability, quantum of deduction allowable under section 80U is
(a) ₹ 50,000
(b) ₹ 75,000
(c) ₹ 1,25,000
(d) ₹ 1,00,000
Answer:
(c) ₹ 1,25,000
Question 57.
The maximum amount of deduction u/s 80U allowed to a person with 80% or more of one or more disabilities is –
(a) ₹ 40,000
(b) ₹60,000
(c) ₹ 50,000
(d) ₹ 1,25,000
Answer:
(d) ₹ 1,25,000
Question 58.
Mr. Veer earns monthly rental income of ₹ 60,000 from a house property. He suffers from severe disability and has obtained certificate from the prescribed medical authority. He has not incurred any expenditure towards treatment of severe disability. His total income chargeable to tax after deduction under section 80U would be:
(a) ₹ 3,79,000
(b) ₹ 4,29,000
(c) ₹ 5,04,000
(d) ₹ 7,20,000
Answer:
(a) ₹ 3,79,000
| Net annual value (60,000 × 12) | 7,20,000 |
| (-) standard deduction @30% | (2,16,000) |
| Income from house property/Total income | 5,04,000 |
| (-) Deduction u/s 80U | (1,25,000) |
| Total income | 3,79,000 |
Question 59.
Mr. Bhaskar a person with disability referred to in Section 80U is employed in a bank. He paid ₹ 50,000 as premium on life insurance policy taken on himself and whose sum assured is ₹ 4 lakhs. The amount of premium eligible for deduction under section 80C would be:
(a) ₹ 40,000 (10% of sum assured)
(b) ₹ 50,000
(c) Nil (since it exceeded 10%)
(d) None of the above
Answer:
(b) ₹ 50,000
Premium on insurance policy upto of 15% of the actual sum assured shall qualify for deduction in respect policies issued on or after 1.4.2013, if the policy is for insurance on life of any person, who is i. A person with disability or a person with severe disability as referred to in section 80U, or
ii Suffering from disease or aliment as specified in the rules made u/s 80DDB.
As Mr. Bhaskar is suffering from disability u/s 80U, he can claim deduction of ₹ 50,000, as his policy is of ₹ 4,00,000.
Question 60.
An amount up to a maximum of ₹ 10,000 is deductible under section 80TTA from the gross total income of –
(a) Individual only
(b) HUF and Individual only
(c) Company only
(d) All assessee
Answer:
(b) HUF and Individual only
Question 61.
The following is not allowed as deduction u/s 80TTA –
(a) Interest on deposits in a savings account with bank up to ₹ 10,000
(b) Interest on time deposits with bank up to ₹10,000
(c) Interest on deposits in a savings account with post office up to ₹ 10,000
(d) Interest on deposits with coopierative society engaged in carrying on the business of banking up to ₹ 10,000.
Answer:
(b) Interest on time deposits with bank up to ₹10,000
Question 62.
Deduction in respect of interest on savings accounts under section 80TTA shall be allowed with respect to savings account with
(a) Bank
(b) Cooperative society
(c) Post office
(d) All of the above
Answer:
(d) All of the above
Question 63.
Contribution made or given other than by way of cash by an Indian company in the previous year to any political party or to an electoral trust shall be allowed as deduction while computing its total income under section 80GGB of Income-tax Act, 1961 of an amount maximum or upto :
(a) ₹ 50,000
(b) ₹ 1,50,000
(c) No monetary ceiling limit
(d) None of the above
Answer:
(c) No monetary ceiling limit
Question 64.
SJG Ltd., a manufacturer of leather goods in a factory located at Noida having an annual turnover of ₹ 50 crore. The company, during the year, employed 200 new regular workers in the factory, which was 5% of the existing work-force employed on the last day of the preceding year. It paid ₹ 30 lakh to the new workers during the year as additional wages. All workmen were employed from 1st May, 2020. The eligible amount of deduction which the company can claim under section 80JJAA of Income-tax Act, 1961 is :
(a) ₹ 30 lakh
(b)₹ 15 lakh
(c) ₹ 9 lakh
(d) ₹ 18 lakh
Answer:
(c) ₹ 9 lakh
Question 65.
The quantum of deduction available to offshore Banking Units under section 80LA of Income-tax Act, 1961 located in Special Economic Zone (SEZ) and satisfying all conditions from the Gross Total Income is:
(a) 100% of such income for five consecutive assessment years, relating to the previous year in which the permission was obtained
(b) 50% of such income for next five consecutive years
(c) 25% of such income for next ten years
(d) both (a) and (h)
Answer:
(d) both (a) and (h)
Question 66.
………. of the under mentioned incomes of a Co-operative Society is not eligible for deduction under section 80P of the Income-tax Act, 1961 when the gross total income of the society exceeds ₹ 20,000
(a) Agency business
(b) Income from letting of godown
(c) Income from house property
(d) Dividend from other Co-operative Societies
Answer:
(c) Income from house property
Question 67.
Royalty of ₹ 105 lakh received by a foreign company from an Indian concern in pursuance of an agreement approved by the Central Government in the previous year 2017-18. The amount of tax payable on such royalty Income for Asst. Year 2021-22 is:
(a) ₹ 10 lakh
(b) ₹ 11.13 lakh
(c) ₹ 20 lakh
(d) ₹ 22.06 lakh
Answer:
(b) ₹ 11.13 lakh
Royalty will be taxed @10% + Surcharge @ 2% on tax + 4% HEC on tax & surcharge.
Question 68.
Nargis during the previous year had do¬nated the amount of ₹ 50,000 each in Africa Fund, National Children Fund, National Illness Assistance Fund and further amount of ₹ 30,000 in Rajiv Gandhi Foundation. The amount of deduction eligible to be claimed by her as per section shall be of ……………
(a) 80GG, ₹ 1,80,000
(b) 80G, ₹ 1,65,000
(c) 80GGB, ₹ 1,50,000
(d) 80G, ₹ 90,000
Answer:
(b) 80G, ₹ 1,65,000
Question 69.
Deduction with respect to interest on deposits in savings accounts u/s 80TTA is applicable to
(a) individual/HUF
(b) AllAssessee
(c) All assessees except company
(d) Individual only
Answer:
(a) individual/HUF
Question 70.
Quantum of deduction with respect to section 80TTA i.e. deduction with respect to interest on deposits in saving accounts is:
(a) 5,000
(b) 10,000
(c) 15,000
(d) 20,000
Answer:
(b) 10,000
Question 71.
Additional employee u/s 80JJAA excludes which of the following from its definition –
(a) Employee whose total emoluments are more than ₹ 25,000 p.m.
(b) Employee employed for less than 240 (150 days in case of manufacturing of apparel or footwear or leather products) days during previous year
(c) Employee who does not participate in the Recognized provident Fund
(d) All of the above
Answer:
(d) All of the above
Question 72.
Timir aged 5 years subscribed to health insurance for himself, wife and son and paid premium of ₹ 28,000. He also incurred medical expenditure for his parents during the year amounting to ₹ 32,000. He can claim deduction for these expenses as per section 80D of the Income-tax Act, 1961, of:
(a) ₹ 57,000
(b) ₹ 30,000
(c) ₹ 28,000
(d) ₹ 55,000
Answer:
(a) ₹ 57,000
Question 73.
100% deduction in respect of donations as per section 80G without any qualifying amount of limit is available in the case of:
(a) Prime Minister Drought Relief Fund
(b) Jawaharlal Nehru Memorial Fund
(c) Payment to local authority for promotion of family planning
(d) Africa Fund
Answer:
(d) Africa Fund
Question 74.
The profits of a co-operative society engaged in carrying out the business of banking, cottage industry and collective disposal of labours of its member are eligible for deduction u/s 80P up-to
(a) 75% of the profits
(b) 100% of the profits
(c) 50% of the profits
(d) None of the above
Answer:
(b) 100% of the profits
Question 75.
The maximum monetary Limit of deduction in respect of rent paid u/s 80GG of the Act is :
(a) ₹ 5,000 p.m.
(b) 25% of the adjusted total income
(c) ₹ 3,000 p.m.
(d) None of the above
Answer:
(a) ₹ 5,000 p.m.
Question 76.
Mr. S made the following investments
| Subscription to NSC | 40,000 |
| Contribution to national housing Bank | 20,000 |
| Subscription to notified infrastructure bonds | 30,000 |
| Deposit in senior citizen saving scheme | 40,000 |
| Investment in 5 years PO time deposit | 20,000 |
What will be the maximum allowable deduction u/s 80C
(a) 1,50,000
(b) 1,30,000
(c) 1,10,000
(d) 90,000
Answer:
(a) 1,50,000
Amount invested ₹ 1,50,000. Maximum deduction u/s 80C is ₹ 1,50,000. Hence deduction allowed is ₹ 1,50,000.
Question 77.
Mr. A, aged 54 years has earned a lottery income of ₹ 1,20,000 (gross) during the previous year 2020-21. He also received interest on FD of ₹ 30,000. He invested an amount of ₹ 10,000 in PPF and ₹ 24,000 in NSC. What is the amount of deduction available u/s 80C to Mr. A
(a) 34,000
(b) 10,000
(c) 24,000
(d) 30,000
Answer:
(d) 30,000
Question 78.
Mr. Z has taken education loan for himself on 01/10/2020
| Amount of loan | 10,00,000 |
| Annual repayment of loan | 3,00,000 |
| Annual repayment of interest | 20,000 |
| Amount deductible u/s 80E for FY 2020-21 will be |
(a) Nil
(b) 20,000
(c) 5,00,000
(d) 1,00,000
Answer:
(b) 20,000
Question 79.
Ms. Varsha aged 65 years earned following interest
| Interest on saving bank account | 12,000 |
| Interest on FD | 15,000 |
| Interest on time deposits | 10,000 |
Deduction available u/s 80TTB will be:
(a) 37,000
(b) 10,000
(c) 50,000
(d) 15,000
Answer:
(a) 37,000
Question 80.
Marginal Relief is allowed to:
(a) ROR
(b) NOR
(c) NR
(d) All the assessees
Answer:
(d) All the assessees
Question 81.
The Income of Mr. X a resident individual is ₹ 51,00,000. The amount of Marginal relief will be:
(a) ₹ 1,64,250
(b) ₹ 64,250
(c) ₹1,00,000
(d) ₹ 13,12,500
Answer:
(b) ₹ 64,250
Question 82.
The Income of Mr. X a resident individual is ₹ 1,02,10,000. The amount of Marginal relief will be:
(a) ₹ 3,075
(b) ₹ 9,625
(c) ₹ 2,10,000
(d) ₹ 2,84,325
Answer:
(a) ₹ 3,075
Question 83.
The Income of X Ltd. a Domestic Co. is ₹ 10,05,00,000. The marginal relief will be:
(a) ₹ 2,10,000
(b) ₹ 5,00,000
(c) ₹ 11,68,000
(d) ₹ 11,84,325
Answer:
(c) ₹ 11,68,000
Question 84.
The relief for Gratuity received, Advance Salary, Arrears of Salary Relief is allowed under Section ……………….. of the Income-tax Act, 1961.
(a) 89
(b) 90
(c) 87A
(d) 88
Answer:
(a) 89
Question 85.
The maximum limit of rebate allowed under section 87A of the Income-tax Act, 1961 in case of a Non- resident individual whose total does not exceeds ₹ 5,00,000 during the previous year 2020-21 is …………
(a) ₹ 2,500
(b) ₹ 5,000
(c) ₹ 10,000
(d) Nil
Answer:
(d) Nil
Question 86.
The rebate of Section 87A is available for the PY 2020-21 if income does not exceed ₹ 5,00,000. The amount of rebate is
(a) ₹ 2500
(b) ₹ 2000
(c) ₹ 12,500 or tax liability whichever is less
(d) ₹ 5000
Answer:
(c) ₹ 12,500 or tax liability whichever is less
Question 87.
X, an employee of a PSU, furnishes the following particulars for the previous year ending 31.03.2021:
| ₹ | |
| (i) Salary for the year | 5,25,000 |
| (ii) Salary for Previous Year 2019-20 received during the year as arrears, not due in the previous year 2019-20. | 40,000 |
| (iii) Salary for the Previous Year 2019-20 | 1,40,000 |
You are requested by the assessee to compute relief under section 89 of the Income-tax Act, 1961, in terms of tax payable for previous year 2020-21.
The rates of income-tax for the Previous Year 2019-20 are same as current year:
(a) ₹ 8,000
(b) ₹ 5000
(c) ₹ 2,000
(d) ₹ 10,500
Answer:
(a) ₹ 8,000
Tax liability for the P.Y. 2020-21, on Income of ₹ 5,65,000 including arrears is ₹ 25,500. Tax liability on ₹ 5,25,000 without arrears is ₹ 17,500. Had the arrears been taxed in 2019-20, the tax liability would be Nil. Therefore, excess tax paid, eligible for relief u/s 89 is ₹ 8,000, i.e. (₹ 25,500 – ₹ 17,500).