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PGBP MCQs by CA Pranav Chandak
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- Instelling
Exam of 46 pages for the course AC1 at dubai university (MCQs)
[Meer zien]Voorbeeld 4 van de 46 pagina's
Voorbeeld 4 van de 46 pagina's
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Voorbeeld van de inhoud
BASIC OF PGBPQ1 Which of the following activities are taxable u/h PGBP? D
(a) Business (b) Profession (c) Vocation (d) All
Q2 Income u/h “PGBP” would tax ................ B
(a) Income from only one business of assessee
(b) Income from all the business of assessee
(c) Only income from one of the profitable business of the assessee
(d) None of the above
Q3 “Business" under Income-tax Act, does not include ____. D
(a) Any trade (b) Commerce (c) Manufacture
(d) Adventure or concern in the nature of leisure or sport
Q4 Under Income tax act, business, profession & vacation are ________ C
(a) Taxed under different head
(b) Treated alike but taxed under different head
(c) Treated alike & taxed under the same head (d) Not taxed at all
Q5 The term ‘Profession’ includes Vocation is given in A
(a) 2(36) (b) 2(13) (c) 2(14) (d) 2(47)
Q6 Business includes any ___ D
(a) Trade & Commerce (b) Manufacture
(c) Any Adventure in the nature of Trade, Commerce, Manufacture. (d) All
Q7 Income of a trade or professional association, from specific services performed for its B
members shall be _____.
(a) Exempt (b) Taxable u/h PGBP
(c) Taxable u/h IFOS (d) Partly taxable & partly exempt
Q8 ____ requires some degree of learning. B
(a) Business (b) Profession (c) Vocation (d) All of the above
Q9 In computing income u/h “PGBP”, income from which of the following business is taxable? C
(a) Legal business (b) Illegal business
(c) Both legal & illegal business (d) None of the above
Q10 Illegal incomes are ___ under Income Tax Act. A
(a) Taxable (b) Exempt
(c) Taxable in certain cases only (d) Exempt in certain cases only
Q11 Income from adventure or concern in the nature of trade, commerce or manufacture is A
taxable under which of the following heads of Income?
(a) PGBP (b) Capital gains
(c) Salaries (d) Income from other sources
Q12 Profession involves an occupation requiring _______. B
(a) Purely intellectual skill (b) Manual skill based on special learning
(c) Both (a) & (b) (d) None of the above
Q13 Vocation refers to an activity on which a person spends major part of his time to earn__ D
(a) Respect (b) Esteem (c) Professional satisfaction (d) Livelihood
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,Q14 Happy club is a trade organization which rendered certain services to its members. Under A
which head would such income be taxable?
(a) PGBP (b) IFOS (c) Cap. Gains (d) Exempt
MEANING OF “PROFIT”
Q15 In making a computation of taxable income, if the profit & loss account of assessee shows B
profit, any expenses which has not been debited to the profit & loss account but is
allowable as a deduction for income tax purpose would be ................
(a) Added to the profit & loss credit balance
(b) Reduced from the profit & loss balance
(c) No impact since its not debited to the profit & loss account
(d) Allowed 50%
Q16 In making a computation of taxable income, if the profit & Loss account of assessee shows C
a loss, any expenses which has not been debited to the profit & loss account but is
allowable as a deduction for income tax purpose would ................
(a) Increase the loss (b) Reduce the profit (c) Allowed 50%
(d) No impact since its not debited to the profit & loss account
Q17 Incomes or receipts which are taxable under PGBP, but have not been credited to P&L D
Account, are to be ................
(a) Added to the profit & loss balance, when P&L shows a credit balance
(b) Reduced from the profit & loss balance, when P&L shows a debit balance
(c) No impact (d) Both (a) & (b)
Q18 While computing income u/h “PGBP”, expenses, which are excessive/losses not allowable B
under PGBP, debited to P&L Account are to be ................
(a) Reduced from Profit & Loss Account balance, when P&L shows a credit balance
(b) Reduced from the profit & Loss Account balance when P&L shows a debit balance
(c) Added to the Profit & Loss Account balance when P&L shows a debit balance
(d) No impact
Q19 While computing income u/h “PGBP”, expenses, which are not allowable, but are debited D
to P&L Account are ................
(a) Added to the profit & loss Account balance when P&L shows a credit balance
(b) Reduced from the profit & loss account balance, when P&L shows a Credit Balance
(c) No impact (d) Both (a) & (b)
Q20 Application of Profit from business or profession is ____ for Income Tax Act. B
(a) Material (b) Immaterial
(c) Depends on the discretion of AO (d) Depends on the discretion of Assessee.
BASIS OF CHARGE (SECTION 28)
Q21 Profits & Gains of any business or profession carried on ____ by the assessee is taxable B
u/h PGBP.
(a) for the whole year (b) at any time during the year
(c) in the last year (d) Consistently
Q22 Capital Losses are ____ under Income Tax Act. C
(a) Taxable (b) Exempt (c) Not Deductible (d) Deductible
Q23 Capital Receipt are ____ under Income Tax Act. C
(a) Taxable (b) Exempt
, (c) Taxable in certain cases only (d) Exempt in certain cases only
Q24 Mr. Pranav who was carrying on agency business, received a sum of Rs. 5,00,000 from his C
principal for termination of agency. Compensation amount so received shall be ________.
(a) Exempt as it is capital receipt (b) Exempt as it is ex-gratia payment
(c) Fully taxable u/h PGBP (d) Taxable u/h IFOS
Q25 Export incentives received by an assessee are _____. B
(a) Exempt (b) Taxable u/h PGBP (c) Taxable u/h IFOS
(d) Exempt up to certain limits & balance is taxable u/h PGBP.
Q26 Export incentives received by an assessee includes ______. D
(a) Profit on sale of import entitlements or Cash assistance against exports from GOI.
(b) Customs duty or Excise repaid repayable as drawback.
(c) Profit on transfer of Duty Entitlement Passbook Scheme.Duty-Free Replenishment
Certificate. (d) All of the above
Q27 In case of conversion of SIT into capital asset, ____ would be taxed u/h _____. C
(a) SDV on the date of conversion, Capital gains
(b) FMV on the date of conversion, Capital gains
(c) FMV on the date of conversion, PGBP (d) SDV on the date of conversion, PGBP
Q28 Perquisite received by the assessee during the course of his business/profession is A
taxable u/h
(a) PGBP (b) Salary (c) IFOS (d) None
Q29 Any sum received under an agreement, for not carrying out any activity in relation to any C
business or profession or for not sharing any know-how, patent, copyright, trade mark
likely to assist in the manufacture or processing of goods or provision for services etc is
taxable u/h
(a) IFOS (b) Salary (c) PGBP
(d) Such agreement is void since it is in restrain of trade.
Q30 Remuneration to Partners is taxable in the hands of the Partner to the extent ____. C
(a) Always (b) Not taxable at all
(c) deductible to the firm (d) not deductible to the firm
Q31 Any payment received by the employer on the maturity of the Keyman Insurance Policy for A
which premium was paid by such employer shall be considered to be income of the
employer u/h
(a) PGBP (b) Salary (c) IFOS (d) None
Q32 Which of the following income is not chargeable u/h PGBP? C
(a) Profits & gains of business carried by an assessee at any time during the previous year
(b) Income derived by a trade, professional association from specific services performed
for its members
(c) Winnings from lottery
(d) Salary received by a partner of a firm from the firm in which he is a partner
Q33 Which of the following income is taxable u/h PGBP? C
(a) Cash Compensatory Support & Duty Drawback
(b) Sum received under a keyman insurance policy
(c) Both of the above (d) None of the above
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, Q34 Under the Income-tax Act, dividend derived from the shares held as SIT is taxable u/h ___ A
(a) IFOS (b) PGBP (c) Capital gains
(d) Either capital gains or PGBP as the case may be
Q35 Mr. Mankaran started his business on 7th July 2021. For PY 2021-22, he earned Rs. 8,00,000. A
He is of the opinion that this income would be taxable u/h “Income from other sources”,
since the business has been in existence only for the part of the year. You, being a student
of chartered accountancy course are required to suggest Mr. Suraj as to which of the
following is correct?
(a) ‘PGBP’, since income from business, even if it is carried on during part of the year is
also taxable under this Head.
(b) Income from other sources, since it is carried on for only part of the year.
(c) It depends on the choice of the assessee.
(d) It depends on the choice of the assessing officer.
Q36 Which of the following compensation is not taxable u/h ‘PGBP’? D
(a) Modification of managing agreement for whole of affairs of Indian company.
(b) Termination of terms of agency agreement in India, for any part of the activities
relating to business of any other person.
(c) Vesting with Government, management of any property under any law for time being in
force.
(d) Modification of terms of employment of a key employee in the company.
Q37 Aakash was employed as managing director of Indian company. In PY 2021-22, his services C
are terminated & he received Rs. 5 lacs as compensation. Such amount is ___ taxable u/h.
(a) Salaries (b) IFOS (c) PGBP (d) None
Q38 Mr. Pranav is the sole distributor of Cadbury Ltd. for the entire Maharashtra Region. D
During PY 2021-22, company has modified the contract of Mr. Pranav’s agency & in future
Mr. Pranav will be the distributor only for Pune Region. The company has paid Rs. 10 Lacs
as compensation to Mr. Pranav. Such compensation is ___ taxable u/h.
(a) Salaries (b) IFOS (c) Cap. Gains (d) PGBP
Q39 Export incentives taxable under PGBP excludes ______. C
(a) Profit on sale of import licenses granted under Imports order on account of exports
(b) Cash assistance receivable against exports
(c) Subsidy on purchase of new plant & machinery for setting up new plant
(d) Profit on transfer of Duty Entitlement Pass book
Q40 Which of the following are taxable u/h PGBP? D
(a) Interest received by a partner from a firm
(b) Salary & Bonus received by a partner from a firm
(c) Commission received by a partner from a firm (d) All of the above
Q41 A Inc. purchased the India rice business from company C & in the process, agreed with B
the promoters of C that they would not carry out rice business. Such payment for not
carrying rice business would be taxable under which head?
(a) Income from Capital Gains (b) Profits & Gains of Business & Profession
(c) Salaries (d) Income from Other Sources
Q42 PCA Ltd. had taken a keyman insurance policy on its MD, Mr. Tanish who left the company B
on April 1, 2021. S Ltd. received a sum of R. 40,00,000 from the insurance company on such
policy & Rs. 10,00,000 as bonus thereon. Such receipt would be taxable as ................
(a) Rs. 40,00,000 under PGBP (b) Rs. 50,00,000 under PGBP
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