Deck 2: Taxation and Exemptions Related to House Property and Employee Benefits

Question 1

M.Ltd announced increase in D.A. on 21-03-2017 with retrospective effect from 21-3-2012 and the same were paid on 6-04-2017. The arrears of D.A. shall be taxable in the previous year ________

A)2016-17
B)2017-18
C)In respective previous years to which these relate
D)Previous years

Answer 1

2017-18

Question 2

Un -commuted pension received by a Government employee is ____________

A)Exempt
B)Taxable
C)1/3 is exempt
D)Non taxable

Answer 2

Taxable

Question 3

M.claimed the exemption of gratuity in the past to the extent of Rs.2,50,000.He was entitled to the gratuity from the present employer amounting to Rs.2,00,000 in the previous year 2017-18. M can claim exemption to the maximum extent of ___________

A)Rs.2,00,000
B)Nil
C)Rs.1,00,000
D)Rs.1,50,000

Answer 3

Rs.2,00,000

Question 4

Employee M is neither a government employee nor covered under payment of gratuity Act, 1972. He has completed 16 years and 8 months of service. The number of completed years considered for gratuity exemption shall be _____________

A)17 years
B)16 years
C)16 years and 8 months
D)19 years

Question 5

Compensation received on voluntary retirement is exempt under sec.10 (10c) to the maximum extent of ___________

A)Rs.2,40,000
B)Rs.3,00,000
C)Rs.5,00,000
D)Rs.6,00,000

Question 6

M is entitled to children education allowance @80 p.m per child for 3 children amounting Rs.240p.m. It will be exempt to the extent of ___________

A)Rs.200 p.m
B)Rs.160 p.m
C)Rs.240 p.m
D)Rs.250 pm

Question 7

Entertainment allowance in case of government employee is _________________

A)Fully exempt
B)Fully taxable
C)Exempt up to certain limits mentioned in sec.16
D)First included in full in gross salary and thereafter deduction allowed from gross salary under section 16 (ii)

Question 8

Pension received by an employee of the central or state government who has been awarded "Param Vir Chakra" _____________

A)Is taxable as income from salary
B)Is exempt from tax
C)Is taxed after deducting Rs.15,000 or 1/3 whichever is lower
D)Is taxable as income from other sources

Question 9

Children education allowance is ____________

A)Exempt upto lower of the amount actually spent or the prescribed limits.
B)Exempt fully to the extent actually spent or the prescribed limits
C)Exempt to the extent of lower of allowance received or the lump sum amount prescribed, irrespective of actual expenditure.
D)Fully taxable

Question 10

Leave travel concession is _________

A)Exempt up to lower of the amount actually spent or the prescribed limits.
B)Exempt fully to the extent actually spent
C)Exempt to the extent of lower of allowance received or the lump sum amount prescribed, irrespective of actual expenditure.
D)Fully taxable

Question 11

M.has taken a house on rent and sublets the same to A, income of M from such house property shall be taxable under the head _____________

A)Income from house property
B)Income from other sources
C)Business income
D)Income

Question 12

Municipal valuation of the house is Rs.1,00,000 fair rent Rs.1,20,000, fair rent Rs.1,20,000, standard rent Rs.1,10,000 and actual rent received or receivable is Rs.1,40,000. The gross annual value in this case shall be ____________

A)1,30,000
B)1,25,000
C)1,40,000
D)1,35,000

Question 13

A has two house properties. Both are self-occupied. The annual value of ____

A)Both houses shall be nil
B)One house shall be nil
C)No house shall be nil
D)Single house

Question 14

Municipal valuation of the house is Rs.1,20,000, fair rent 1,40,000, standard rent Rs.1,30,000 and actual rent received or receivable is Rs.1,25, 000.The gross annual value in this case shall be ______

A)1,30,000
B)1,25,000
C)1,40,000
D)1,60,000

Question 15

A has two house properties. Both are self-occupied. The annual value of _________

A)Both houses shall be nil
B)One house shall be nil
C)No house shall be nil
D)None of the above

Question 16

An assessee has borrowed money for purchase of house and interest is payable outside India. Such as interest shall ____________

A)Be allowed as deduction
B)Not to be allowed as deduction
C)Be allowed as deduction if the tax is deducted at source
D)None of the above

Question 17

Municipal tax is deducted from__________

A)Net annual value
B)Gross annual value
C)Municipal valuation
D)Amount value

Question 18

In case the property is owned by co -owners and it is self-occupied by all co -owners. The annual value of such house property ____________

A)Be nil
B)For each co-owner shall be nil
C)Only for co -one owner will be nil
D)None of the above

Question 19

A house property with fair rent Rs.1,20,000 is neither let out nor self-occupied throughout the previous year. Its annual value shall be ________

A)Rs.1,20,000
B)Nil
C)Rs.60,000
D)None of the above

Question 20

Unrealized rent is a deduction from ______-

A)Gross annual value
B)Net annual value
C)Municipal value
D)District

Question 21

Dhanesh is a member of house building cooperative society. The society is the owner of the flats constructed by it. One of the flats is allotted to Dhanesh. The income from that flat will be assesses in the hands of ____________

A)Co -Operative Society
B)Dhanesh
C)Neither of the above
D)Society and Dhanesh equally

Question 22

Following will be taxable as income from house property_______-

A)Sub -letting of a house
B)Letting of an office building
C)Sale of house at profit
D)Rent from open land used for wedding functions

Question 23

Municipal taxes to be deducted from GAV should be _______

A)Paid by the tenant during the previous year
B)Paid by the owner during the previous year
C)Accrued during the previous year
D)Accrued or paid by owner whichever is lower

Question 24

Standard deduction under section 24(a) from income from House property is _______

A)1/3 rd of NAV
B)Repairs actually incurred by the owner
C)30% of NAV
D)Rs.30,000

Question 25

Interest on borrowed capital accrued up to the end of the previous year to prior to the year of competition of construction is allowed__________

A)As a deduction in the year of completion of construction
B)In 5 equal annual installments from the year of competition of construction.
C)In the respective year in which the interest accrues
D)Up to Rs.30,000 on Rs.20,000.