Audit Taxation MCQs and Notes

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📊 Audit Taxation
Q. Income by way of royalty in respect of a patent developed and registered in India in respect of person who is resident in India is chargeable to tax at rate of -
  • (A) 10%
  • (B) 15%
  • (C) 20%
  • (D) 30%
💬 Discuss
✅ Correct Answer: (D) 30%
📊 Audit Taxation
Q. Amendments by the finance act are made applicable from
  • (A) First day of next financial year
  • (B) First day of same financial year
  • (C) Last day of same Accounting year
  • (D) None of the above.
💬 Discuss
✅ Correct Answer: (A) First day of next financial year
📊 Audit Taxation
Q. franchise fee received by an assessee in tourism business, against special rights given to franchisees to undertake hotel business in assessee’s property is taxable under the head _____
  • (A) Income from house property
  • (B) Income from PGBP
  • (C) Income from Capital gain
  • (D) Income from other sources
💬 Discuss
✅ Correct Answer: (B) Income from PGBP
📊 Audit Taxation
Q. An assessee incurred a sum of Rs.1,10,000 for alteration of the memorandum and articles of association. Such expenditure shall be considered as:
  • (A) Revenue expenditure
  • (B) Deferred revenue expenditure
  • (C) Capital expenditure
  • (D) Non-deductible expenditure
💬 Discuss
✅ Correct Answer: (A) Revenue expenditure
📊 Audit Taxation
Q. Gross Total Income is arrived after:
  • (A) only adding Income under five heads of Income;
  • (B) adding Income under five heads of Income excluding losses;
  • (C) adding Income under five heads of Income, after applying clubbing provisions and making adjustment of set off and carry forward of losses
  • (D) adding Income under five heads of Income, after applying clubbing provisions and making adjustment of set off and carry forward of losses and after allowing deduction under section 80C to 80U
💬 Discuss
✅ Correct Answer: (C) adding Income under five heads of Income, after applying clubbing provisions and making adjustment of set off and carry forward of losses
📊 Audit Taxation
Q. Salary of S (Rs. 40,000 per month) becomes due on the last day of the month but is paid on 7th of next month. Also, salary of April, 2014 and May, 2014 is received in advance in March, 2014. What will be his gross income for Assessment Year 2014-15?
  • (A) Rs. 5,60,000
  • (B) Rs. 4,80,000
  • (C) Rs. 4,40,000
  • (D) Rs. 5,20,000
💬 Discuss
✅ Correct Answer: (A) Rs. 5,60,000
📊 Audit Taxation
Q. As per Section 2(e a), which of the following is an asset in case of an individual:
  • (A) Cash in hand up to Rs. 50,000
  • (B) Shares
  • (C) Debentures or Bonds
  • (D) Motor car used for official purposes
💬 Discuss
✅ Correct Answer: (D) Motor car used for official purposes
📊 Audit Taxation
Q. Rental income from the business of leasing out properties would be taxable under the head_______
  • (A) Income from house property
  • (B) Income from other sources
  • (C) Income from PGBP
  • (D) Income from Capital gain
💬 Discuss
✅ Correct Answer: (C) Income from PGBP
📊 Audit Taxation
Q. Director sitting fees will be Chargeable Under which head?
  • (A) Income from house property
  • (B) Income from other sources
  • (C) Income from PGBP
  • (D) Income from Capital gain
💬 Discuss
✅ Correct Answer: (B) Income from other sources
📊 Audit Taxation
Q. Expected Rent can be determined in the following way
  • (A) Higher of Municipal Value & Fair Rent
  • (B) Lower of Municipal Value & Fair Rent
  • (C) Higher of Municipal Value & Fair Rent subject to maximum of Standard Rent
  • (D) Any of the above
💬 Discuss
✅ Correct Answer: (C) Higher of Municipal Value & Fair Rent subject to maximum of Standard Rent

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