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INCOME UNDER THE HEAD SALARY 1 / 176 Q1: Mr. J was employed on 1/4/2010 in the grade of Rs. 15,000-Rs. 500-Rs. 17,000-Rs. 750-Rs. 21,500-Rs. 1,000-Rs. 31,500. His gross salary for the AY 2021-2022 i.e. PY 2020-2021 shall be: (a) Rs. 2,70,000 (b) Rs. 2,58,000 (c) Rs. 2,16,000 (d) Rs. 1,80,000 2 / 176 Q2: Mr. J is a CA and is employee of J Ltd. and is working as an internal auditor having contract ofservices with J Ltd. Mr. J requests J Ltd. to show his salary as internal audit fee. Mr. J shall be chargeableto tax for amount under the head of: (a) Income from Salaries (b) Profit and gains from Business and Profession (c) Income from other Sources (d) Any of the above 3 / 176 Q3: Bonus is taxable as salary income (a) When it is received (b) When it gets due or when it is received, whichever is earlier (c) Anytime at the choice of employee (d) Anytime at the choice of employer 4 / 176 Q4: Out of the following, which all payments are taxable as Salary on the receipt basis(1) Arrear of salary(2) Advance salary(3) Bonus (a) Only 1) and 2) (b) Only 2) and 3) (c) Only 1) and 3) (d) All of the above 5 / 176 Q5: Salary of Mr. J becomes due on 1st of next month and it is paid on 7th of that month. For AY2021-2022 i.e. PY 2020-2021, the salary of Mr. J shall be taken from: (a) April 2020 to March 2021 (b) March 2020 to February 2021 (c) Any of the above at the option of the employer (d) Any of the above at the option of the employee 6 / 176 Q6: Income is taxable as Salary Income when there is employer and employee relationship. However inone exceptional case income is taxable as salary even in the absence of employer employeerelationship which is (a) Members of Parliament (b) Professors of college (c) Partner of partnership firm (d) Judges of High Court and Supreme Court 7 / 176 Q7: Read following statements and choose the correct answer(1) Contract between employer and employee is Contract of Service(2) Contract between employer and employee is Contract for Service(3) Contract between professional and client is Contract for Service(4) Contract between professional and client is Contract of Service (a) (1) and (2) are correct (b) (2) and (3) are correct (c) (3) and (4) are correct (d) (1) and (3) are correct 8 / 176 Q8: U/s 15 salary is taxable: (a) On receipt basis (b) On due basis (c) Receipt or due, whichever is earlier (d) None of the above 9 / 176 Q9: Deductions from Gross Salary are allowed in: (a) section 16 (b) section 18 (c) section 17 (d) section 15 10 / 176 Q10: The standard deduction is allowed from gross salary (a) u/s 16(i) (b) u/s 16(ia) (c) u/s 16(ii) (d) u/s 16(iii) 11 / 176 Q11: The standard deduction is allowed from gross salary to the maximum of (a) Rs. 50,000 (b) Rs. 40,000 (c) Rs. 2,500 (d) Rs. 5,000 12 / 176 Q12: The standard deduction is allowed from gross salary to the maximum of `50,000 but (a) Employee has to prove his all expenses to income tax department (b) Employee has to prove his all expenses to the employer (c) Employee has to prove his all expenses to income tax department or employer as per his own discretion (d) Irrespective of any expenses that employee may or may not have incurred 13 / 176 Q13: Standard deduction is not allowed from (a) Pension (b) Family pension (c) Arrear of salary (d) Gross salary 14 / 176 Q14: The maximum deduction for entertainment allowance u/s 16(ii) is (a) Rs. 3,000 (b) Rs. 5,100 (c) Rs. 2,500 (d) Rs. 5,000 15 / 176 Q15: The deduction for entertainment allowance u/s 16(ii) is allowed to— (a) Every kind of employee (b) Every government employee (c) Every non-government employee (d) Every retired employee 16 / 176 Q16: Inclusive definition of salary is given (a) u/s 17 (3) (b) u/s 17 (c) u/s 17(1) (d) None of above 17 / 176 Q17: Deductions for entertainment allowance is allowed to (a) Central Government employee only (b) Central Government employee and State Government employee only (c) Central Government employee, State Government employee and employee of local authority (d) Central Government employee, State Government employee, employee of local authority and employee of statutory corporation. 18 / 176 Q18: Deduction for entertainment allowance is allowed to (a) Government employees (b) Private employees (c) foreign employee (d) All of the above 19 / 176 Q19: Professional Tax is charged under which Article of Constitution of India (a) 274 (b) 275 (c) 276 (d) 277 20 / 176 Q20: Professional Tax is charged by (a) Central Government (b) State government (c) Local authority (d) Statutory corporation 21 / 176 Q21: The deduction for Professional Tax u/s 16(iii) is for (a) Actual amount paid (b) Actual amount due (c) Actual amount charged by State Government (d) Always 2,500 22 / 176 Q22: Statutory limit u/s 16(ii) for deduction of entertainment allowance in case of governmentemployee is (a) 12.5% of salary (b) 20% of salary (c) 15% of salary (d) 7.5% of salary 23 / 176 Q23: Mr. J joins a service on 1/4/2020 with basic salary of Rs. 39,100 pm plus dearness allowance of107% of basic salary. He has no other income. What is his taxable income for the AY 2021-2022 i.e. PY2020-2021 (a) Rs. 9,71,244 (b) Rs. 9,31,244 (c) Rs. 9,71,240 (d) Rs. 9,21,240 24 / 176 Q24: Mr. J joins service on 1/4/2016 in the grade of Rs. 15,000–Rs. 1,000–Rs. 18,000–Rs. 2,000–Rs. 26,000. He shallbe paying tax for the year ended on 31/3/2021 on the total salary of (a) Rs. 2,16,000 (b) Rs. 2,40,000 (c) Rs. 1,90,000 (d) Rs. 1,80,000 25 / 176 Q25: Mr. J is employed in GGC Management Institute, Pune. He is eligible for Rs. 24,000 asdearness allowance to meet increased cost of living. The amount of DA chargeable to tax is: (a) Rs. 10,000 (b) Nil (c) Rs. 24,000 (d) Rs. 9,000 26 / 176 Q26: Gratuity shall be fully exempt in the case of: (a) Central and State Government employee (b) Central and State Government employee and employees of local authorities (c) Central and State Government employee of local authorities and employee of statuary corporation (d) Only central government employee 27 / 176 Q27: Salary for the purposes of exemption of gratuity when employee is covered under Gratuity Act 1972includes: (a) Basic salary + DA (forming part of salary for retirement benefits or not) (b) Basic salary + DA (forming part of salary for retirement benefits) + monthly commission (c) Basic salary + DA (forming part of salary for retirement benefits) + commission on the percentage basis of sales (d) Basic salary and commission 28 / 176 Q28: Mr. J who claimed the exemption of gratuity in the past to the extent of Rs. 2,50,000 was entitled to thegratuity from the present/second employer amounting to Rs. 20,00,000 in the AY 2021-2022 i.e.PY 2020-2021. Both of employers are covered under the Payment of Gratuity Act 1972. Mr. J shall beentitled to exemption to the maximum extent of: (a) Rs. 10,00,000 (b) Rs. 15,00,000 (c) Rs. 20,00,000 (d) Rs. 17,50,000 29 / 176 Q29: An employee is covered under Payment of Gratuity Act, 1972. Salary for purpose of calculating15 days’ salary for each completed year of service shall be: (a) Salary of one month preceding the month of retirement (b) Average Salary of last 10 months (c) Average Salary of last 3 completed years (d) Average Salary of last 12 months 30 / 176 Q30: An employee is covered under Payment of Gratuity Act, 1972. If the employee has completedservice of 16 years 6 months and 5 days’ then to calculate exemption of Gratuity the number ofcompleted years shall be taken as: (a) 16 years (b) 17 years (c) 16 years 6 months and 5 days (d) 16 years and 7 months 31 / 176 Q31: An employee is covered under Payment of Gratuity Act, 1972. For purpose of computing 15days’ salary, the number of days in a month shall be taken as: (a) 30 days (b) 26 days (c) 31 days (d) Any of the above 32 / 176 Q32: An employee is covered under Payment of Gratuity Act, 1972. The maximum exemption ofgratuity shall be: (a) Rs. 10,00,000 (b) Rs. 3,50,000 (c) Rs. 20,00,000 (d) None of the above 33 / 176 Q33: An employee is neither a Government employee nor covered under Payment of Gratuity Act, 1972.Salary for purpose of calculating half month shall be taken as: (a) Last drawn Salary (b) Average salary of 10 months preceding the month of retirement (c) Average salary of each completed year (d) Average salary of last 3 completed years 34 / 176 Q34: An employee is neither a Government employee nor covered under Payment of Gratuity Act, 1972.Salary for purpose of calculating half month shall be taken as: (a) Basic salary + DA (forming part of salary for retirement benefits or not) (b) Basic salary + DA (forming part of salary for retirement benefits) + monthly commission (c) Basic salary + DA (forming part of salary for retirement benefits) + commission on the percentage basis of sales (d) Basic salary and commission 35 / 176 Q35: An employee is Not Covered under Payment of Gratuity Act, 1972. If the employee hascompleted service of 16 years 6 months and 5 days’ then to calculate exemption of Gratuity the numberof completed years shall be taken as: (a) 16 years (b) 17 years (c) 16 years 6 months and 5 days (d) 16 years and 7 months 36 / 176 Q36: An employee is Not Covered under Payment of Gratuity Act, 1972. For purpose of computinghalf months’ salary, the number of days in a month shall be taken as: (a) 30 days (b) 26 days (c) 31 days (d) Any of the above 37 / 176 Q37: An employee is Not Covered under Payment of Gratuity Act, 1972. The maximum exemption ofgratuity shall be: (a) Rs. 10,00,000 (b) Rs. 3,50,000 (c) Rs. 20,00,000 (d) None of the above 38 / 176 Q38: Mr. J worked with a previous employer for 3 years but was not entitled to any gratuity. He workedwith the present employer for 8 years and 3 months. The completed years of service for calculatingexemption of gratuity, if employee is covered under Gratuity Act, 1972 shall be taken as (a) 11 years (b) 8 years (c) 3 years (d) None of the above 39 / 176 Q39: Pension received by gallantry award winner is: (a) fully chargeable to tax (b) fully exempt from tax (c) 50% exempt and rest taxable (d) 80% exempt and rest taxable 40 / 176 Q40: Commuted pension received by employees of Central Government and State Government is: (a) Fully exempt from tax (b) Fully chargeable from tax (c) 50% exempt and rest taxable (d) 80% exempt and rest taxable 41 / 176 Q41: Commuted pension received by non-government employee, who also receives Gratuity,is exempt up to: (a) 1/3 of the full pension (b) 1/6 of the full pension (c) 1/10 of the full pension (d) 1/2 of the full pension 42 / 176 Q42: Commuted pension received by non-government employee, who does not receiveGratuity, is exempt up to: (a) 1/3 of the full pension (b) 1/6 of the full pension (c) 1/10 of the full pension (d) 1/2 of the full pension 43 / 176 Q43: An employee was entitled to gratuity. He got 60% of his pension commuted and received a sum of1,20,000 as commuted pension. The exemption in his case shall be: (a) Rs. 1,20,000 (b) Rs. 66,667 (c) Rs. 80,000 (d) Rs. 1,00,000 44 / 176 Q44: An employee was not entitled to gratuity. He got 60% of his pension commuted and received asum of Rs. 1,20,000 as commuted pension. The exemption in his case shall be: (a) Rs. 1,20,000 (b) Rs. 66,667 (c) Rs. 80,000 (d) Rs. 1,00,000 45 / 176 Q45: Mr. J who was working with another company joined the present employer on 1/5/2020 at a Salaryof Rs. 20,000 p.m. His salary becomes due on first of next month. He was also entitled to a pension ofRs. 8,000 p.m. from his former employer as he retired on 31/3/2020. His pension is taxable on due basis.His gross salary for AY 2021-2022 i.e. PY 2020- 2021 shall be: (a) Rs. 2,20,000 (b) Rs. 3,16,000 (c) Rs. 2,96,000 (d) None of the above 46 / 176 Q46: Un-Commuted Pension received by a Government employee is: (a) Fully Exempt (b) Fully Taxable (c) Partially taxable (d) Partially exempt 47 / 176 Q47: Commuted pension received shall be fully exempt in case of (a) Central Government employee (b) Central Government employee, State Government employee, or an employee of local authority (c) Central Government employee, State Government employee, or an employee of local authority or an employee of statutory corporation (d) All type of employees 48 / 176 Q48: Encashment of leave salary at the time of retirement is fully exempt in the case of: (a) Central Government employee (b) State Government employee (c) Both Central and State Government employees (d) Government employee and Non Government employee 49 / 176 Q49: Salary for exemption of leave encashment shall be taken as: (a) Last drawn Salary (b) Average Salary of 10 months immediately preceding the month of retirement (c) Average Salary of 10 months immediately preceding the date of retirement (d) Any of the above 50 / 176 Q50: The maximum exemption in case of leave encashment shall be: (a) Rs. 2,40,000 (b) Rs. 3,50,000 (c) Rs. 3,00,000 (d) Rs. 10,00,000 51 / 176 Q51: An employee availed the exemption of leave encashment of Rs. 1,00,000 in the past. He receivedfrom the second employer a sum of Rs. 2,50,000 as encashment of leave. He will be entitled toexemption to the extent of (a) Nil (b) Rs. 2,50,000 (c) Rs. 2,00,000 (d) Rs. 1,40,000 52 / 176 Q52: Leave Salary is exempt u/s (a) 10(10AB) (b) 10(10AA) (c) 10(15A) (d) 10(10A) 53 / 176 Q53: Salary for the purpose of exemption of leave encashment shall be taken as: (a) Basic salary + DA (forming part of salary for retirement benefits or not) (b) Basic salary + DA (forming part of salary for retirement benefits) + monthly commission (c) Basic salary + DA (forming part of salary for retirement benefits) + commission on the percentage basis of sales (d) Basic salary and commission 54 / 176 Q54: Interest credited to statutory provident fund shall be: (a) fully exempt (b) exempt upto 12% p.a. (c) fully taxable (d) exempt upto 9.5% p.a. 55 / 176 Q55: Employer's contribution towards statutory provident fund is (a) eligible for deduction u/s 80C (b) taxable (c) partly exempt (d) fully exempt 56 / 176 Q56: Employer's contribution to superannuation fund for employee (a) is not taxable in hands of employee (b) is taxable in hands of employee provided contribution to such fund exceeds Rs. 7,50,000 (c)is exempt to the extent of 12% of salary (d)is fully taxable 57 / 176 Q57:Mr. J was employed since 1st July 2004 in an establishment. His salary was fixed at Rs. 14,800 in thegrade of Rs. 14,000-Rs. 400-Rs. 22,000 w.e.f.1/7/2014. He got the benefit of 15% of salary as DA which istreated as forming part of the salary for the retirement benefits. He retired on 1/2/2021 andreceived 3,40,000 as a Gratuity from his employer. Calculate his income under the head salary for theAY 2021-2022 i.e. PY 2020-2021 if he is a Central Government employee. (a) Rs. 1,46,420 (b) Rs. 1,70,800 (c) Rs. 1,96,420 (d) Fully exempt 58 / 176 Q58: Payment from Recognized Provident Fund after 5 years’ of service of employee shall be: (a) Fully Taxable for employee (b) Fully exempt for employee (c) Taxable to the extent of employer’s contribution and interest thereon (d) Exempt up to Rs. 10,00,000 59 / 176 Q59: An employee received payment from Unrecognized Provident Fund (URPF) on hisretirement. His own contribution to URPF and Interest on his own contribution will be: (a) Taxable, Taxable (b) Exempt, Exempt (c) Taxable, Exempt (d) Exempt, Taxable 60 / 176 Q60: The year in which unrecognized provident fund is converted in recognized provident fund: (a) The employer’s contribution till date and interest thereon shall be taxable (b) The employer’s contribution till date shall be taxable (c) It will be assumed as if the provident fund was recognized right from beginning and excess amount of employer’s contribution and interest thereon shall be chargeable to tax (d) None of the above 61 / 176 Q61: Employer’s contribution to Statutory Provident Fund shall be (a) Fully exempt for employee (b) Exempt up to 12% of salary of employee (c) Exempt up to 10% of salary of employee (d) Fully taxable for employee 62 / 176 Q62: Interest credited to Statutory Provident Fund shall be: (a) Fully exempt for employee (b) Exempt up to 8.5% p.a. of total contribution (c) Fully Taxable for employee (d) Exempt up to 9.5% p.a. of total contribution 63 / 176 Q63: Employer’s contribution to Recognized Provident Fund shall be: (a) Fully exempt for employee (b) Exempt up to 12% of salary of employee (c) Exempt up to 10% of salary of employee (d) Fully taxable for employee 64 / 176 Q64: Interest credited to Recognized Provident Fund shall be: (a) Fully Exempt for employee (b) Exempt up to 8.5% p.a. of total contribution (c) Fully Taxable for employee (d) Exempt up to 9.5% p.a. of total contribution 65 / 176 Q65: Employee’s own contribution to recognized provident fund or public provident fund shall be (a) Allowed as deduction u/s 80C (b) Allowed as deduction u/s 80TTA (c) Allowed as deduction u/s 80CCC (d) Allowed as deduction u/s 16(ia) 66 / 176 Q66: The maximum ceiling limit for exemption u/s 10(10) in respect of gratuity for employees coveredby the Payment of Gratuity Act, 1972 is (a) Rs. 10,00,000 (b) Rs. 5,00,000 (c) Rs. 3,50,000 (d) Rs. 20,00,000 67 / 176 Q67: The maximum ceiling limit for exemption u/s 10(10C) with respect to compensation received onvoluntary retirement is (a) Rs. 2,50,000 (b) Rs. 3,00,000 (c) Rs. 3,50,000 (d) Rs. 5,00,000 68 / 176 Q68: An employee has been provided free meal worth 110 per meal for 295 days in the office,during office hours. Such facility provided to the employees shall be taxable for the employee for theamount of: (a) 60 per day for 295 days (b) 110 per day for 295 days (c) 50 per day for 295 days (d) Not taxable at all 69 / 176 Q69: Bimal is employed in a factory at a salary of 2,400 pm. He also gets dearness allowance @ 600per month and bonus @ 200 per month. He retired on 31/12/2020 and received 75,000 as gratuity underthe Payment of Gratuity Act, 1972 after serving 31 years and 4 months in that factory. The amount ofgratuity exempt under the Income-tax Act, 1961. will be (a) Rs. 75,000 (b) Rs. 53,654 (c) Rs. 21,346 (d) Rs. 20,00,000 70 / 176 Q70: For the year ended 31/3/2021 Mr. J receives a salary of Rs. 2,80,000. Mr. J’s contribution toemployees’ recognized provident fund account 59,000 and matching contribution has been made byemployer. Taxable Income of Mr. J will be (a) Rs. 1,96,400 (b) Rs. 3,05,400 (c) Rs. 3,39,000 (d) Rs. 2,80,000 71 / 176 Q71: Which of the following is not correct about the approved superannuation fund (a) Employees’ contribution qualifies for deduction u/s 80C (b) Any amount contributed by the employer is exempt from tax (c) Interest on accumulated balance is exempt from income-tax (d) Payments from the fund is exempt from income tax. 72 / 176 Q72: Mr. J retired from service with GGC Ltd. on 31/1/2021. He received the following amounts fromunrecognized provident fund: Own contribution Rs. 1,50,000Interest on own contribution Rs. 21,000 Employer’s contribution Rs. 1,10,000Interest on employer’s contribution Rs. 15,000 How much of the receipt is chargeable to tax asincome from salary? (a) Rs. 15,000 (b) Rs. 1,25,000 (c) Rs. 1,71,000 (d) Rs. 15,000 73 / 176 Q73: GGC Ltd contributed 15% of the salary of the employee Mr. J towards recognized provident fund.The amount liable to tax in the hands of Mr. J would be ……………………… of salary. (a) 5% (b) 3% (c) Nil (d) Any sum exceeding 74 / 176 Q74: Mr. J is employed in ABC Ltd. opted for voluntary retirement and received Rs. 22,00,000 byway of Gratuity. The Payment of Gratuity Act, 1972 is applicable in his case. The monetary limit forexemption u/s 10(10) is: (a) Rs. 3,50,000 (b) Rs. 10,00,000 (c) Rs. 20,00,000 (d) Rs. 22,00,000 75 / 176 Q75: The maximum amount eligible for exemption in respect of encashment of earned leave onretirement is: (a) Rs. 3,00,000 (b) Rs.10,00,000 (c) Rs. 50,000 (d) Rs. 5,00,000 76 / 176 Q76: Mr. J employed in GGC Ltd. as accounts manager. The employer paid Rs.1,60,000 ascontribution to approved superannuation fund to benefit Mr. J. The amount of such contribution liableto tax as perquisite in the hands of Mr. J is: (a) Nil (b) Rs.10,000 (c) Rs.1,60,000 (d) Rs. 60,000 77 / 176 Q77: When interest on employee’s own unrecognized provident fund is received atretirement by employee at the time of retirement, it is: (a) Taxable as income from other sources (b) Taxable as income from salary (c) Exempt from tax (d) Taxable if the interest exceeds Rs. 10,000 78 / 176 Q78: Mr. J employed in GGC Ltd. took voluntary retirement in December 2020 and receivedRs. 2,00,000 from National Pension System Trust. The amount so received chargeable to income tax is: (a) Nil as 100% is exempt (b) Rs. 1,20,000 as 40% is exempt (c) Rs. 1,00,000 as 50% is exempt (d) Rs. 80,000 as 60% is exempt 79 / 176 Q79: Compensation received on voluntary retirement is exempt u/s 10(10C) to the maximum extent of: (a) Rs. 2,40,000 (b) Rs. 3,50,000 (c) Rs. 5,00,000 (d) Rs. 3,00,000 80 / 176 Q80: Leave travel concession is allowed: (a) u/s 10(4) Rule 3A (b) u/s 10(5) Rule 2B (c) u/s 12(A) Rule 3A (d) u/s 10(13A) 81 / 176 Q81: Carry forward of leave travel concession is allowed: (a) for all LTC (b) only for one LTC and can be carry forwarded to any calendar year in the next block (c) not allowed at all (d) only for one LTC and can be carry forwarded to first calendar year in the next block 82 / 176 Q82: Leave Travel Concession is (a) always taxable in hands of employee (b) always exempt in hands of employee (c) exempt twice in a prescribed block of 4 year (d) exempt once in a prescribed block of 4 year 83 / 176 Q83: Mr. J received basic salary of Rs. 20,000 p.m. from his employer. He also received childreneducation allowance of Rs. 3,000 for three children and transport allowance of Rs. 1,800 p.m. The amount ofsalary chargeable to tax for AY 2021-2022 i.e. PY 2020-2021 is (a) Rs. 2,62,200 (b) Rs. 2,12,600 (c) Rs. 2,22,200 (d) Rs. 2,07,800 84 / 176 Q84: The entertainment allowance received by a Government employee is exempt up to the lower ofthe actual entertainment allowance received, 20% of basic salary and (a) Rs. 4,000 (b) Rs. 6,000 (c) Rs. 5,000 (d) Rs. 10,000 85 / 176 Q85: Mr. J is a manager of GGC Ltd. since 2002 was terminated by the company on 1/8/2020 by paying acompensation of Rs. 200,00,000. Such compensation is— (a) Chargeable under the Wealth-tax Act, 1957 (b) Not chargeable under the Income-tax Act, 1961 (c) Chargeable u/s 17(3)(i) i.e. PILS (d) Chargeable u/s 28(ii)(a). 86 / 176 Q86: Mr. J retires from private service on 30/4/2020 and his pension has been fixed at 1,500 p.m. He gets½ of his pension commuted on 1/1/2021 and receives 75,000. He also gets 60,000 as gratuity. Thetotal pension taxable including commuted value will be: (a) Rs. 16,500 (b) Rs. 41,500 (c) Rs. 39,250 (d) Rs. 14,250 87 / 176 Q87: An employee of a GGC public limited company received total Rs. 3,00,000 as encashment of leavesalary at the time of retirement. He has 18 months leave to his credit at the time of retirement and hisaverage salary for last 10 months is Rs. 24,000. The taxable amount of leave encashment would be (a) Rs. 2,40,000 (b) Rs. 3,00,000 (c) Rs. 60,000 (d) Nil 88 / 176 Q88: Interest on statutory provident fund shall be: (a) Fully exempt (b) Exempt up to 8.5% p.a. (c) Fully taxable (d) Exempt up to 9.5% 89 / 176 Q89: Mr. J retired on 31/10/2020 after rendering 35 years of service in GGC Ltd. He received gratuity ofRs. 28,00,000. He is governed by Payment of Gratuity Act, 1972. The monetary limit eligible for exemption is: (a) Rs. 10,00,000 (b) Rs. 18,00,000 (c) Rs. 20,00,000 (d) Nil 90 / 176 Q90: Children education allowance is exempt up to: (a) Rs. 100 pa for 2 children (b) Rs. 100 pm for 2 children (c) Rs. 100 pm per child for 2 children each (d) Rs. 100 pa per child for 2 children each 91 / 176 Q91: Hostel expenditure allowance is exempt up to: (a) Rs. 300 pa for 2 children (b) Rs. 300 pm for 2 children (c) Rs. 300 pm per child for 2 children each (d) Rs. 300 pa per child for 2 children each 92 / 176 Q92: Transport allowance is exempt for (a) Government employees (b) Employees of non government sector (c) Employee who deaf, dumb, blind or orthopedically handicapped (d) Employee who is mentally handicapped 93 / 176 Q93: Underground allowance to an employee is exempt upto: (a) Rs. 700 p.m. (b) Rs. 900 p.m. (c) Rs. 1,000 p.m. (d) Rs. 800 pm 94 / 176 Q94: If rent is paid by the employee for a house situated in Delhi then HRA shall be exempt to themaximum extent of: (a) 40% of salary (b) 50% of salary (c) 60% of salary (d) 30% of salary 95 / 176 Q95: If rent is paid by the employee for a house situated in Faridabad the HRA shall be exempt tothe maximum extent of: (a) 40% of salary (b) 50% of salary (c) 60% of salary (d) 30% of salary 96 / 176 Q96: Under the Income Tax Act 1961 Child shall includes: (a) Step child (b) Adopted child (c) Both (a) and (b) (d) None of the above 97 / 176 Q97: Mr. J is entitled to a watchman allowance of Rs. 600 p.m. for the security of his residence. He paysRs. 500 p.m. to the watchman employed by him. The taxable allowance shall be: (a) Rs. 500 p.m. (b) Rs. 100 p.m. (c) Rs. 600 p.m. (d) None of the above 98 / 176 Q98: Mr. J received children education allowance of Rs. 500 pm for each of his 3 children. Taxable amountof children education allowance for the AY 2021- 2022 i.e. PY 2020-2021 if entire amount is spent by Mr. J. (a) Rs. 7,200 (b) Rs. 15,600 (c) Rs. 18,000 (d) Rs. 12,000 99 / 176 Q99: Which of the following amount is exempt (a) overtime allowance (b) medical allowance (c) house rent allowance (d) allowances paid by UNO to its employees 100 / 176 Q100: Mr. J is entitled to Rs. 8,000 pm as Medical Allowance. He spends Rs. 4,000 pm on his medicaltreatment and Rs. 1,000 on the medical treatment of his major son not dependent on him. The exemption inthis case shall be: (a) Rs. 4,000 pm (b) Rs. 5,000 pm (c) NIL (d) Rs. 8,000 pm 101 / 176 Q101: Which of the following is not the condition for claiming exemption for House Rent Allowance: (a) Employee is in receipt of HRA (b) Location of the employer (c) Rent paid by employee is more than 10% of salary (d) Location of the accommodation of employees 102 / 176 Q102: Calculate the exempt HRA from the following details:Mr. J is entitled to a basic salary of Rs. 50,000 p.m. and DA of Rs.10,000 p.m. 40% of which forms part ofretirement benefits. He is also entitled to HRA of Rs. 20,000 pm. He actually lives with his parents inMumbai and does not pay any rent. Market rent of that house is Rs. 20,000 pm in Mumbai. (a) NIL (b) Rs. 1,75,200 (c) Rs. 64,800 (d) Rs. 2,40,000 103 / 176 Q103: Mr. J received Rs. 300 pm as children education allowance for each of his 3 children. Taxable andexempt part of children education allowance shall be? (a) Rs. 8,400 and Rs. 2,400 respectively (b) Rs. 2,400 and Rs. 8,400 respectively (c) Rs. 10,800 and NIL respectively (d) NIL and Rs. 10,800 respectively 104 / 176 Q104: Mr. J is entitled to a transport allowance of 1,000 pm. For commuting from his residence tooffice and back he spends 600 pm. The exemption shall be (a) Rs. 1,000 p.m. (b) Rs. 600 p.m. (c) Rs. 400 p.m. (d) NIL 105 / 176 Q105: Mr. J is Pilot with Jet Airways. He is entitled to outstation allowance of 10,000 p.m. He spends4,000 every month. The exemption shall be (a) Rs. 1,20,000 (b) Rs. 48,000 (c) Rs. 84,000 (d) Rs. 72,000 106 / 176 Q106: Entertainment allowance in case of government employee is: (a) Fully exempt and therefore not included in Gross Salary (b) Fully Taxable and therefore added in Gross Salary (c) Not added in Gross Salary but deduction is allowed as per limits of section 16(ii) (d) First added in full in Gross Salary and thereafter deduction allowed from Gross Salary is allowed u/s 16(ii) 107 / 176 Q107: The HRA paid to an employee residing in Patna is exempt up to the lower of actual HRA,excess of rent paid over 10% of salary and (a) 30% of salary (b) 40% of salary (c) 50% of salary (d) 60% of salary 108 / 176 Q108: Mr. J stays in New Delhi. His basic salary is Rs. 10,000 p.m., D.A. (60% of which forms part ofpay) is Rs. 6,000 p.m., HRA is Rs. 5,000 p.m. and he is entitled to a commission of 1% on the turnoverachieved by him. Mr. J pays a rent of Rs. 5,500 p.m. The turnover achieved by him during the currentyear is Rs. 12,00,000. The amount of HRA exempt u/s 10(13A) is (a) Rs. 48,480 (b) Rs. 45,600 (c) Rs. 49,680 (d) Rs. 46,800 109 / 176 Q109: Mr. J is entitled to a watchman allowance of Rs. 6,600 pm. He pays Rs. 5,000 pm to the watchmanemployed by him. The taxable allowance shall be: (a) Rs. 6,600 pm (b) Rs. 5,000 pm (c) Rs. 1,600 pm (d) Not taxable at all 110 / 176 Q110: Chandan is a handicapped employee receives Rs. 1,500 pm as transport allowance from hisemployer. His actual expenditure on transport is Rs. 1,000 pm. The amount of transport allowancetaxable under the head income from salaries will be (a) Rs. 18,000 (b) Nil (c) Rs. 6,000 (d) Rs. 8,000 111 / 176 Q111: GGC Ltd. transfers a Honda City car to its employee Mr. J after using it for 4 years and 10months, for Rs. 2,10,000. Cost of the car was 10,00,000. Value of taxable perquisite in the hands of Mr. J is (a) Rs. 1,17,680 (b) Rs. 1,99,600 (c) Nil (d) Rs. 7,90,000 112 / 176 Q112: Children education allowance received by an employee from his employer is Rs. 80 per month perchild for 3 children. Taxable education allowance will be – (a) Rs. 960 (b) Nil (c) Rs. 480 (d) Rs. 1,200 113 / 176 Q113: Mr. J purchased a residential house property in Ahmadabad on loan for which he paid an interest ofRs. 50,000 during the previous year. He is working in Delhi and getting an HRA of `4,000 per month. Hecan 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 114 / 176 Q114: Mr. J is employed in GGC Ltd., Delhi. He is paid house rent allowance of 9,000 per month infinancial year 2020-2021. His salary for the purpose of computation of exemption of house rentallowance may be taken as Rs. 20,000 per month. Mr. J pays actual rent of Rs. 10,000 per month. How much ofthe house rent allowance is tax-free. (a) Rs. 1,08,000 (b) Rs. 1,20,000 (c) Rs. 96,000 (d) Rs. 60,000 115 / 176 Q115: Mr. J is receiving `10,000 pm as medical allowance from his employer. Out of this, he spendsRs. 5,000 pm on his own medical treatment, Rs. 2,000 pm on the medical treatment of his dependent wife andanother Rs. 3,000 pm for the medical treatment of his major son who is not a dependent on him. Theamount of medical allowance taxable in his hand is (a) Rs. 10,000 pm (b) Rs. 5,000 pm (c) Rs. 3,000 pm (d) Nil 116 / 176 Q116: Mr. J is employed in GGC Ltd., was eligible for transport allowance of Rs. 2,000 per month to meethis travel expenses from residence to office. He actually incurred 1,200 per month towards travel.The amount of travel allowance chargeable to tax would be (a) Rs. 24,000 (b) Rs. 14,400 (c) Rs. 4,800 (d) Nil 117 / 176 Q117: Mr. J is employed in GGC Ltd. – Transporters as cabin driver. He is paid Rs. 15,000 every monthduring AY 2021-2022 i.e. PY 2020-2021 as allowance for meeting his personal expenditure inthe course of running Goods Vehicle. Mr. J does not receive any other amount by way of daily allowance.The amount of allowance eligible for exemption is: (a) Rs. 1,80,000 (b) Rs. 1,20,000 (c) Rs. 1,26,000 (d) Rs. 1,75,000 118 / 176 Q118: Mr. J employed in GGC Ltd., and received Rs. 10,000 pm as house rent allowance in the AY2021-2022 i.e. PY 2020-2021. His total taxable salary is 4,00,000 consisting of Basic pay + DA. Hedid not pay any rent for whole of the year. How much of HRA is exempt from tax? (a) NIL (b) Rs. 56,000 (c) Rs. 1,20,000 (d) Rs. 1,60,000 119 / 176 Q119: Rent Free Accommodation is covered in: (a) section 17(2)(ii) Rule 3(a) (b) Section 17(2)(i) Rule 3(1) (c) Section 18(i) Rule 3(1) (d) Section 17(2)(vi) 120 / 176 Q120: Obligation of the employee met by the employer is covered u/s (a) 17(2)(iv) (b) 17(3)(iii) (c) 17(2)(vi) (d) 17(2)(v) 121 / 176 Q121: Medical expenditure reimbursed by the employer to the employee shall be: (a) exempt up to Rs. 15,000 pm (b) exempt up to Rs. 15,000 pa (c) fully exempt (d) fully taxable 122 / 176 Q112: During the previous year the employee was reimbursed 23,000 as medical expenses incurred byemployee in Government hospital. The taxable perquisite in this case shall be: (a) exempt up to Rs. 15,000 pm (b) exempt up to Rs. 15,000 pa (c) fully exempt (d) fully taxable 123 / 176 Q123: House Rent Allowance is covered u/s: (a) 10(13A) Rule 2A (b) 10(15B) Rule 3B (c) 20 (4) Rule 8B (d) 10(14A) 124 / 176 Q124: Accommodation at concessional rent is given in section: (a) section 17(2)(ii) Rule 3(1) (b) section 18(i) Rule 5(i) (c) section 16(ii) (d) section 16(iii) 125 / 176 Q125: The employee is provided with furniture costing Rs. 1,50,000 along with rent free accommodation w.e.f.1/8/2020. The value of the furniture to be included in the value of rent free accommodation shall be: (a) Rs. 15,000 (b) Rs. 30,000 (c) Rs. 10,000 (d) Rs. 20,000 126 / 176 Q126: Mr. J is provided with a rent free accommodation owned by his employer in Delhi.The value of this perquisite shall be: (a) 7.5% of salary (b) 15% of salary (c) 10% of salary (d) 20% of salary 127 / 176 Q127: Mr. J owns a house in which he lives. His employer reimburses to him the electricity billamounting to Rs. 15,000. It shall be a perquisite for: (a) specified employee only (b) employee other than specified employee (c) both specified and other employees (d) only for government employees 128 / 176 Q128: Exemption of leave travel concession is allowed u/s: (a) 10(4) Rule 3A (b) 10(5) Rule 2B (c) 12 (A) Rule 3A (d) 10(13A) 129 / 176 Q129: Mr. J has taken interest free loan of Rs. 1,00,000 from his employer for the purpose of medicaltreatment of his son. In this case taxable value of perquisite is (a) Rs. 15,000 (b) percentage of interest as prescribed by State Bank of India as on 1st day of PY (c) percentage of interest as per market norms (d) NIL 130 / 176 Q130: Employer provides a car (below Rs. 1,600 cubic capacity) along with a driver to Mr. J and he uses thecar partly for official and partly for personal purpose. The expenses incurred by the employer are:(1) running and maintenance expenses of Rs. 84,000(2) driver's salary of Rs. 1,20,000 Taxable value of perquisite is: (a) Rs. 21,600 (b) Rs. 10,800 (c) Rs. 32,400 (d) Rs. 2,04,000 131 / 176 Q131: Mr. J is employed in GGC Ltd and his wife is suffering from a critical disease. The company hassent Mr.J and Mrs.Jto USA for the medical treatment of Mrs. J. The company has incurred expenses onmedical treatment of Mrs. J and stay outside India of Mrs. J and of Mr. J. amounting to Rs. 17,00,000 but RBIpermitted only Rs. 15,00,000. The travel expenses amounted to 1,50,000. Salary of Mr. J was Rs. 5,00,000.The taxable perquisite in this case shall be: (a) Rs. 3,50,000 (b) Rs. 8,50,000 (c) Rs. 2,00,000 (d) Rs. 1,50,000 132 / 176 Q132: Mr. J is provided with a rent free unfurnished accommodation, which is owned by his employer,GGC Pvt. Ltd., in New Delhi. The value of perquisite in the hands of Mr. J is (a) 20% of salary (b) 15% of salary (c) 10% of salary (d) 7.5% of salary 133 / 176 Q133: Mr. J is provided with furniture to the value of Rs. 70,000 along with house from February, 2020.Furniture is not owned by employer but has been taken on rent by employer for which employer payshire charges of Rs. 5,000 pa. The value of furniture to be included along with value of unfurnished housefor AY 2021-2022 i.e. PY 2020-2021 is (a) Rs. 5,000 (b) Rs. 7,000 (c) Rs. 10,500 (d) Rs. 14,000 134 / 176 Q134: For the purpose of determining the perquisite value of loan at concessional rate given to theemployee, the lending rate of State Bank of India as on __________ is required; (a) 1st day of the relevant previous year (b) Last day of the relevant previous year (c) the day the loan is given (d) 1st day of the relevant assessment year 135 / 176 Q135: Salary of employee is Rs. 2,00,000. Fair rent of the unfurnished houses situated in Delhi given toemployee is Rs. 1,30,000. The valuation of the perquisite of the house in case of Governmentemployee shall be: (a) Rs. 2,00,000 (b) license fee as determined by the Government (c) Rs. 70,000 (d) Rs. 1,30,000 136 / 176 Q136: Salary of employee is Rs. 2,00,000. Fair rent of the unfurnished houses situated in Delhi given toemployee is Rs. 1,30,000. The valuation of the perquisite of the house in case of non Governmentemployee shall be: (a) Rs. 2,00,000 (b) Rs. 30,000 (c) Rs. 70,000 (d) Rs. 1,30,000 (b) Rs. 30,000 (c) Rs. 70,000 (d) Rs. 1,30,000 (b) Rs. 30,000 (c) Rs. 70,000 (d) Rs. 1,30,000 137 / 176 Q137: Salary of an employee is Rs. 2,00,000. Rent paid by the employer for the unfurnished house providedto employee at Faridabad is 3,000 p.m. The employer charges 2,000 p.m. as rent from theemployee. The valuation of this perquisite shall be: (a) Rs. 24,000 (b) Rs. 36,000 (c) Rs. 30,000 (d) Rs. 6,000 138 / 176 Q138: A car of Rs. 1,500 cc is provided by the employer to the employee whose salary is Rs. 20,000 p.m. Thecar is used by him partly for official and partly for his personal purpose. The expenses of running andmaintenance are met by the employer. The valuation of this perquisite shall be: (a) Rs. 2,400 pm (b) Rs. 1,800 pm (c) Rs. 600 pm (d) Rs. 900 pm 139 / 176 Q139: Mr. J is employee of GGC Ltd. and he is provided a car of engine of 1.9-liter capacity alongwith driver. The expenses of running and maintenance of car are met by Mr. J himself.Besides using the car for official purpose, Mr. J also uses the car for his personal purpose. The valuationof the perquisite of car shall be: (a) Rs. 2,400 pm (b) Rs. 1,800 pm (c) Rs. 600 pm (d) Rs. 900 pm 140 / 176 Q140: Mr. J an employee owns a car which he used for his private purpose. All expenses of running andmaintenance of the car are met by the employer. The perquisite shall be (a) Taxable in case of specified employee only (b) Taxable in case of an employee other than specified employees (c) Taxable in case of all type of employees (d) Not taxable at all for any employee 141 / 176 Q141: Mr. J is an employee of JSJ Ltd. which is an oil manufacturing company. He is provided withfree gas for his personal purpose by the employer. The value of this perquisite shall be (a) value fixed by employee (b) value fixed by the employer (c) manufacturing cost per unit (d) market rate of gas per unit 142 / 176 Q142: Employee own a houses in which he lives happily along with his family. His employerreimburses to him the electricity bill amounting to Rs. 5,000 pm. The perquisite shall be (a) Taxable in case of specified employee only (b) Taxable in case of an employee other than specified employees (c) Taxable in case of all type of employees (d) Not taxable at all for any employee 143 / 176 Q143: The employer provides free facility of watchman, sweeper and gardner to his employees.The perquisite shall be (a) Taxable in case of specified employee only (b) Taxable in case of an employee other than specified employees (c) Taxable in case of all type of employees (d) Not taxable at all for any employee 144 / 176 Q144: The Gardner, Sweeper and Watchman are employed by the employer and provided toemployee along with rent free accommodation which is owned by the employer. The salary ofRs. 5,000 pm per person is paid by the employer. The valuation of this perquisite shall be (a) Rs. 1,80,000 (b) Rs. 1,20,000 (c) Rs. 60,000 (d) Not taxable at all 145 / 176 Q145: Tea and Snacks are provided by GGC Ltd. to employees in the office during office hours. Thevalue of this perquisite shall be (a) Fully taxable (b) Fully exempt (c) Exempt upto Rs. 50 pm (d) Exempt upto Rs. 50 per round of tea and snacks 146 / 176 Q146: The employer GGC Ltd. gives a gift in cash to its employee on the marriage of the son of the suchemployee. Gift so made shall: (a) be taxable if value is Rs. 5,000 or less (b) be taxable if value is more than Rs. 5,000 (c) be always fully taxable (d) be always fully exempt 147 / 176 Q147: The employer has given a laptop for the personal use of the employee. The value of thisperquisite shall be: (a) Actual cost of laptop (b) 10% pa of the historical cost of the asset (c) 10% pa of the W.D.V of the asset (d) always fully exempt 148 / 176 Q148: The employer has given a video-camera for the personal use of the employee. The value of thisperquisite shall be: (a) Actual cost of video camera (b) 10% pa of the historical cost of the asset (c) 10% pa of the W.D.V of the asset (d) always fully exempt 149 / 176 Q149: The employer has given furniture for the personal use of the employee. The value of thisperquisite shall be: (a) Actual cost of furniture (b) 10% pa of the historical cost of the asset (c) 10% pa of the W.D.V of the asset (d) always fully exempt 150 / 176 Q150: The employer had purchased a car for Rs. 8,00,000, 2 years and 7 months ago. This car issold to the employee for Rs. 1,20,000. The value of this perquisite shall be (a) Rs. 4,80,000 (b) Rs. 1,20,000 (c) Rs. 8,00,000 (d) Rs. 3,92,000 151 / 176 Q151: The employer had purchased a computer for Rs. 80,000, 2 years and 7 months ago. This computer issold to the employee for Rs. 15,000. The value of this perquisite shall be (a) Rs. 80,000 (b) Rs. 20,000 (c) Rs. 40,000 (d) Rs. 5,000 152 / 176 Q152: An employee has been provided free meal worth Rs. 110 per meal for 295 days in the office,during office hours. Such facility provided to the employees shall be taxable for the employee for theamount of: (a) Rs. 60 per day for 295 days (b) Rs. 110 per day for 295 days (c) Rs. 50 per day for 295 days (d) Not taxable at all 153 / 176 Q153: GGC Ltd. transfers a Honda City car to its employee Mr. J after using it for 4 years and 10months, for Rs. 2,10,000. Cost of the car was 10,00,000. Value of taxable perquisite in the handsof Mr. J is (a) Rs. 1,17,680 (b) Rs. 1,99,600 (c) Nil (d) Rs. 7,90,000 154 / 176 Q154: Mr. J an employee of GGC Ltd of Delhi, received the following payments during the previousyear ended 31/3/2021: Basic salary: Rs. 2,40,000 and dearness allowance: 40% of basic salary (40%forming part of salary). Rent-free unfurnished accommodation provided by employer for whichrent paid by employer being Rs. 50,000. The value of taxable perquisite in the hands of Mr. J will be (a) Rs. 41,760 (b) Rs. 50,000 (c) Rs. 36,000 (d) Rs. 52,500 155 / 176 Q155: Mr. J is an employee of Gyan Gurucull Public School. His daughter, Ustat, is studying in the saidschool at concessional fees of Rs. 600 per month (Actual fee 4,000 per month). The amount taxable inthe hands of Mr. J will be (a) Rs. 48,000 (b) Rs. 7,200 (c) Rs. 28,800 (d) Rs. 40,800 156 / 176 Q156: Mr. J took an interest-free loan of Rs. 15,000 from GGC Ltd. (the employer). Assuming that themarket rate of interest on similar loan is 10%, the taxable value of the perquisite in the hands of Mr. Jwill be (a) Rs. 150 (b) Rs. 1,500 (c) Nil (d) None of the above. 157 / 176 Q157: During the AY 2021-2022 i.e. PY 2020-2021 Mr. J received a watch worth Rs. 20,000 from hisemployer as a gift. The taxable value of the watch will be (a) Rs. 15,000 (b) Rs. 20,000 (c) Nil (d) None of the above 158 / 176 Q158: Mr. J gets salary of Rs. 12,000 p.m. and is provided with rent free unfurnished accommodationat Pune (which has population of Rs. 20,00,000): House is owned by employer, fair rental value ofwhich is Rs. 1,400 pm. House was provided with effect from 1st July, 2020. Value of the perquisite of rent-free accommodation will be: (a) Rs. 21,600 (b) Rs. 10,800 (c) Rs. 16,200 (d) Rs. 12,600 159 / 176 Q159: Mr. J is employed as chief engineer in GGC Ltd., Chennai w.e.f. 1/4/2020 for a consolidatedsalary of Rs. 60,000 per month. He is provided with rent free unfurnished accommodation owned by theemployer from 1/7/2020 onwards. The value of taxable perquisite is – (a) Rs. 1,08,000 (b) Rs. 81,000 (c) Rs. 72,000 (d) Rs. 54,000 160 / 176 Q160: Ms. J is provided with an interest free loan by her employer for the purchase of a house. The valueof the perquisite shall be – (a) Simple interest computed at the rate charged by the Central Government to its employees on 1st April of the previous year (b) Simple interest computed at the rate charged by State Bank of India on 1st April of the previous year (c) Simple interest computed at the rate charged by National Housing Bank on 1st April of the previous year (d) Simple interest computed at the rate determined by the employer on 1st April of the previous year 161 / 176 Q161: GGC Ltd. acquired a motorcar for 8,00,000 on 30/6/2020. It sold the said motor car to its employee,Mr. J, for Rs. 6,00,000 on 10/7/2020. The company claimed depreciation @ 15% for the year ended31/3/2021. The perquisite value in the hands of Mr. J on sale of motor car would be (a) Rs. 8,00,000 (b) Rs. 6,00,000 (c) Rs. 2,00,000 (d) Rs. 1,40,000 162 / 176 Q162: A company has provided laptop worth Rs. 50,000 to its employee for official as well as personalpurposes. The taxable amount of perquisite will be – (a) Rs. 5,000 (b) Rs. 25,000 (c) Rs. 10,000 (d) Nil 163 / 176 Q163: Mr. J employed in GGC Ltd. at Mumbai was provided rent-free accommodation by the employerwho owned such accommodation. The salary income of Mr. J for the purpose of computing theperquisite value is Rs. 8,00,000. The perquisite value of rent-free accommodation in the hands of Mr. J is: (a) 10% of salary i.e. Rs. 80,000 (b) 7.5% of salary i.e. Rs. 60,000 (c) Nil (d) 15% of salary i.e. Rs. 1,20,000 164 / 176 Q164: Mr. J is given a motor car with chauffeur by the employer which is used for both official andpersonal purpose. The entire running expenses of the car amounting to Rs. 64,800 were met by the employerin the AY 2021-2022 i.e. PY 2020-2021. The cubic capacity of the engine of the motor car exceeds 1.6liters. The perquisite value of motor car taxable in the hands of Mr. J is: (a) Rs. 19,200 (b) Rs. 39,600 (c) Rs. 28,800 (d) Rs. 64,800 165 / 176 Q165: During the AY 2021-2022 i.e. PY 2020-2021, the employee was reimbursed Rs. 24,000 as medicalexpenses incurred by him which includes Rs. 7,000 spent in Government hospital. The taxable perquisitein this case shall be: (a) Rs. 9,000 (b) Rs. 17,000 (c) Rs. 2,000 (d) Rs. 24,000 166 / 176 Q166: Mr. J is employed in GGC Ltd. at Madurai which has population of Rs. 40,00,000. He is providedwith a rent free accommodation owned by the employer. The percentage of salary to be adopted forthe purpose of valuation of perquisite would be: (a) 15% (b) 10% (c) 7.5% (d) 20% 167 / 176 Q167: Mr. J employed in GGC Ltd. was permitted to admit his only son in the school run by theemployer. No fee was charged on such education provided to the son of Mr. J. The cost of sucheducation for other children is 1,800 per month. The perquisite value of free education in the hands ofMr. J would be: (a) Rs. 21,600 (b) Rs. 12,000 (c) Rs. 36,000 (d) Rs. 9,600 168 / 176 Q168: J. Ltd is a company paying salary of Rs. 4,50,000 to its employee Mr. J and also undertakes to pay theIncome Tax amounting to Rs. 10,400 on his behalf during the AY 2021-2022 i.e. PY 2020-2021. Thegross Salary of Mr. J shall be: (a) Rs. 4,60,400 (b) Rs. 4,50,000 (c) Rs. 4,10,400 (d) None of the above 169 / 176 Q169: Mr. J who is entitled to a salary of Rs.10,000 p.m. took an advanced of Rs. 20,000 against the salary inthe month of March 2021. The gross salary of Mr. J for AY 2021-2022 i.e. PY 2020-2021 shall be. (a) Rs.1,00,000 (b) Rs.1,20,000 (c) Rs.1,40,000 (d) None of the above 170 / 176 Q170: Mr. J who is entitled to salary of Rs. 10,000 p.m. took advance salary from his employer for themonths of April 2021 and May 2021 along with salary of March 2021 on 31/3/2021. The gross salaryfor Mr. J for AY 2021-2022 i.e. PY 2020-2021 shall be: (a) Rs. 1,20,000 (b) Rs. 1,40,000 (c) Rs. 1,00,000 (d) None of the above 171 / 176 Q171: Salary of Mr. J is Rs. 10,000 p.m. Mr. J had taken salary in advance for the months of April 2020 toJune 2020 in March 2020 itself. The gross salary of Mr. J for AY 2021-2022 i.e. PY 2020-2021 shall be: (a) Rs. 1,20,000 (b) Rs. 70,000 (c) Rs. 1,00,000 (d) Rs. 90,000 172 / 176 Q172: The Government of India announced increase in the DA on 15/3/2020 with retrospective effect from1/5/2017 and the same were paid on 8/5/2020. The arrears of DA shall be taxable in the: (a) PY 2018-2020 (b) PY 2020-2021 (c) In respective previous years to which these are related to (d) PY which the employee may opt 173 / 176 Q173: Profits in lieu of salary is defined u/s: (a) 17(i) (b) 16(iii) (c) 17(3) (d) 17(2) 174 / 176 Q174: Where there is a decision to increase the D.A. in March, 2021 with retrospective effect from1/4/2019, and the increased D.A. is received in April, 2021 the increase is taxable - (a) in the previous year 2019-2020 (b) in the previous year 2020-2021 (c) in the previous year 2021-2022 (d) in the respective years to which they relate 175 / 176 Q175: GGC is a LLP and had taken keyman insurance policy on the life of it managing partner. The policygot matured on 13/9/2020 and an amount of Rs. 75,00,000 was paid by the insurers to the managingpartner. The amount so received on maturity of the policy by the managing partner is (a) Fully exempt u/s 10(10D) (b) 50% of Rs. 75,00,000 exempt (c) Rs. 75,00,000 taxable as profit in lieu of salary (d) Rs. 25,00,000 exempt and Rs. 50,00,000 taxable 176 / 176 Q176: Mr. J is employed in a company with annual gross salary of Rs. 8,60,000. The company paidincome-tax of Rs. 37,000 on his non-monetary perquisites. He paid Rs. 1,20,000 to recognizedprovident fund during the AY 2021-2022 i.e. PY 2020-2021. His total income would be: (a) Rs. 8,60,000 (b) Rs. 8,20,000 (c) Rs. 8,57,000 (d) Rs. 6,90,000
INCOME UNDER THE HEAD SALARY
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Q1: Mr. J was employed on 1/4/2010 in the grade of Rs. 15,000-Rs. 500-Rs. 17,000-Rs. 750-Rs. 21,500-Rs. 1,000-Rs. 31,500. His gross salary for the AY 2021-2022 i.e. PY 2020-2021 shall be:
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Q2: Mr. J is a CA and is employee of J Ltd. and is working as an internal auditor having contract ofservices with J Ltd. Mr. J requests J Ltd. to show his salary as internal audit fee. Mr. J shall be chargeableto tax for amount under the head of:
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Q3: Bonus is taxable as salary income
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Q4: Out of the following, which all payments are taxable as Salary on the receipt basis(1) Arrear of salary(2) Advance salary(3) Bonus
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Q5: Salary of Mr. J becomes due on 1st of next month and it is paid on 7th of that month. For AY2021-2022 i.e. PY 2020-2021, the salary of Mr. J shall be taken from:
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Q6: Income is taxable as Salary Income when there is employer and employee relationship. However inone exceptional case income is taxable as salary even in the absence of employer employeerelationship which is
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Q7: Read following statements and choose the correct answer(1) Contract between employer and employee is Contract of Service(2) Contract between employer and employee is Contract for Service(3) Contract between professional and client is Contract for Service(4) Contract between professional and client is Contract of Service
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Q8: U/s 15 salary is taxable:
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Q9: Deductions from Gross Salary are allowed in:
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Q10: The standard deduction is allowed from gross salary
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Q11: The standard deduction is allowed from gross salary to the maximum of
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Q12: The standard deduction is allowed from gross salary to the maximum of `50,000 but
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Q13: Standard deduction is not allowed from
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Q14: The maximum deduction for entertainment allowance u/s 16(ii) is
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Q15: The deduction for entertainment allowance u/s 16(ii) is allowed to—
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Q16: Inclusive definition of salary is given
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Q17: Deductions for entertainment allowance is allowed to
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Q18: Deduction for entertainment allowance is allowed to
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Q19: Professional Tax is charged under which Article of Constitution of India
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Q20: Professional Tax is charged by
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Q21: The deduction for Professional Tax u/s 16(iii) is for
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Q22: Statutory limit u/s 16(ii) for deduction of entertainment allowance in case of governmentemployee is
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Q23: Mr. J joins a service on 1/4/2020 with basic salary of Rs. 39,100 pm plus dearness allowance of107% of basic salary. He has no other income. What is his taxable income for the AY 2021-2022 i.e. PY2020-2021
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Q24: Mr. J joins service on 1/4/2016 in the grade of Rs. 15,000–Rs. 1,000–Rs. 18,000–Rs. 2,000–Rs. 26,000. He shallbe paying tax for the year ended on 31/3/2021 on the total salary of
25 / 176
Q25: Mr. J is employed in GGC Management Institute, Pune. He is eligible for Rs. 24,000 asdearness allowance to meet increased cost of living. The amount of DA chargeable to tax is:
26 / 176
Q26: Gratuity shall be fully exempt in the case of:
27 / 176
Q27: Salary for the purposes of exemption of gratuity when employee is covered under Gratuity Act 1972includes:
28 / 176
Q28: Mr. J who claimed the exemption of gratuity in the past to the extent of Rs. 2,50,000 was entitled to thegratuity from the present/second employer amounting to Rs. 20,00,000 in the AY 2021-2022 i.e.PY 2020-2021. Both of employers are covered under the Payment of Gratuity Act 1972. Mr. J shall beentitled to exemption to the maximum extent of:
29 / 176
Q29: An employee is covered under Payment of Gratuity Act, 1972. Salary for purpose of calculating15 days’ salary for each completed year of service shall be:
30 / 176
Q30: An employee is covered under Payment of Gratuity Act, 1972. If the employee has completedservice of 16 years 6 months and 5 days’ then to calculate exemption of Gratuity the number ofcompleted years shall be taken as:
31 / 176
Q31: An employee is covered under Payment of Gratuity Act, 1972. For purpose of computing 15days’ salary, the number of days in a month shall be taken as:
32 / 176
Q32: An employee is covered under Payment of Gratuity Act, 1972. The maximum exemption ofgratuity shall be:
33 / 176
Q33: An employee is neither a Government employee nor covered under Payment of Gratuity Act, 1972.Salary for purpose of calculating half month shall be taken as:
34 / 176
Q34: An employee is neither a Government employee nor covered under Payment of Gratuity Act, 1972.Salary for purpose of calculating half month shall be taken as:
35 / 176
Q35: An employee is Not Covered under Payment of Gratuity Act, 1972. If the employee hascompleted service of 16 years 6 months and 5 days’ then to calculate exemption of Gratuity the numberof completed years shall be taken as:
36 / 176
Q36: An employee is Not Covered under Payment of Gratuity Act, 1972. For purpose of computinghalf months’ salary, the number of days in a month shall be taken as:
37 / 176
Q37: An employee is Not Covered under Payment of Gratuity Act, 1972. The maximum exemption ofgratuity shall be:
38 / 176
Q38: Mr. J worked with a previous employer for 3 years but was not entitled to any gratuity. He workedwith the present employer for 8 years and 3 months. The completed years of service for calculatingexemption of gratuity, if employee is covered under Gratuity Act, 1972 shall be taken as
39 / 176
Q39: Pension received by gallantry award winner is:
40 / 176
Q40: Commuted pension received by employees of Central Government and State Government is:
41 / 176
Q41: Commuted pension received by non-government employee, who also receives Gratuity,is exempt up to:
42 / 176
Q42: Commuted pension received by non-government employee, who does not receiveGratuity, is exempt up to:
43 / 176
Q43: An employee was entitled to gratuity. He got 60% of his pension commuted and received a sum of1,20,000 as commuted pension. The exemption in his case shall be:
44 / 176
Q44: An employee was not entitled to gratuity. He got 60% of his pension commuted and received asum of Rs. 1,20,000 as commuted pension. The exemption in his case shall be:
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Q45: Mr. J who was working with another company joined the present employer on 1/5/2020 at a Salaryof Rs. 20,000 p.m. His salary becomes due on first of next month. He was also entitled to a pension ofRs. 8,000 p.m. from his former employer as he retired on 31/3/2020. His pension is taxable on due basis.His gross salary for AY 2021-2022 i.e. PY 2020- 2021 shall be:
46 / 176
Q46: Un-Commuted Pension received by a Government employee is:
47 / 176
Q47: Commuted pension received shall be fully exempt in case of
48 / 176
Q48: Encashment of leave salary at the time of retirement is fully exempt in the case of:
49 / 176
Q49: Salary for exemption of leave encashment shall be taken as:
50 / 176
Q50: The maximum exemption in case of leave encashment shall be:
51 / 176
Q51: An employee availed the exemption of leave encashment of Rs. 1,00,000 in the past. He receivedfrom the second employer a sum of Rs. 2,50,000 as encashment of leave. He will be entitled toexemption to the extent of
52 / 176
Q52: Leave Salary is exempt u/s
53 / 176
Q53: Salary for the purpose of exemption of leave encashment shall be taken as:
54 / 176
Q54: Interest credited to statutory provident fund shall be:
55 / 176
Q55: Employer's contribution towards statutory provident fund is
56 / 176
Q56: Employer's contribution to superannuation fund for employee
57 / 176
Q57:Mr. J was employed since 1st July 2004 in an establishment. His salary was fixed at Rs. 14,800 in thegrade of Rs. 14,000-Rs. 400-Rs. 22,000 w.e.f.1/7/2014. He got the benefit of 15% of salary as DA which istreated as forming part of the salary for the retirement benefits. He retired on 1/2/2021 andreceived 3,40,000 as a Gratuity from his employer. Calculate his income under the head salary for theAY 2021-2022 i.e. PY 2020-2021 if he is a Central Government employee.
58 / 176
Q58: Payment from Recognized Provident Fund after 5 years’ of service of employee shall be:
59 / 176
Q59: An employee received payment from Unrecognized Provident Fund (URPF) on hisretirement. His own contribution to URPF and Interest on his own contribution will be:
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Q60: The year in which unrecognized provident fund is converted in recognized provident fund:
61 / 176
Q61: Employer’s contribution to Statutory Provident Fund shall be
62 / 176
Q62: Interest credited to Statutory Provident Fund shall be:
63 / 176
Q63: Employer’s contribution to Recognized Provident Fund shall be:
64 / 176
Q64: Interest credited to Recognized Provident Fund shall be:
65 / 176
Q65: Employee’s own contribution to recognized provident fund or public provident fund shall be
66 / 176
Q66: The maximum ceiling limit for exemption u/s 10(10) in respect of gratuity for employees coveredby the Payment of Gratuity Act, 1972 is
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Q67: The maximum ceiling limit for exemption u/s 10(10C) with respect to compensation received onvoluntary retirement is
68 / 176
Q68: An employee has been provided free meal worth 110 per meal for 295 days in the office,during office hours. Such facility provided to the employees shall be taxable for the employee for theamount of:
69 / 176
Q69: Bimal is employed in a factory at a salary of 2,400 pm. He also gets dearness allowance @ 600per month and bonus @ 200 per month. He retired on 31/12/2020 and received 75,000 as gratuity underthe Payment of Gratuity Act, 1972 after serving 31 years and 4 months in that factory. The amount ofgratuity exempt under the Income-tax Act, 1961. will be
70 / 176
Q70: For the year ended 31/3/2021 Mr. J receives a salary of Rs. 2,80,000. Mr. J’s contribution toemployees’ recognized provident fund account 59,000 and matching contribution has been made byemployer. Taxable Income of Mr. J will be
71 / 176
Q71: Which of the following is not correct about the approved superannuation fund
72 / 176
Q72: Mr. J retired from service with GGC Ltd. on 31/1/2021. He received the following amounts fromunrecognized provident fund: Own contribution Rs. 1,50,000Interest on own contribution Rs. 21,000 Employer’s contribution Rs. 1,10,000Interest on employer’s contribution Rs. 15,000 How much of the receipt is chargeable to tax asincome from salary?
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Q73: GGC Ltd contributed 15% of the salary of the employee Mr. J towards recognized provident fund.The amount liable to tax in the hands of Mr. J would be ……………………… of salary.
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Q74: Mr. J is employed in ABC Ltd. opted for voluntary retirement and received Rs. 22,00,000 byway of Gratuity. The Payment of Gratuity Act, 1972 is applicable in his case. The monetary limit forexemption u/s 10(10) is:
75 / 176
Q75: The maximum amount eligible for exemption in respect of encashment of earned leave onretirement is:
76 / 176
Q76: Mr. J employed in GGC Ltd. as accounts manager. The employer paid Rs.1,60,000 ascontribution to approved superannuation fund to benefit Mr. J. The amount of such contribution liableto tax as perquisite in the hands of Mr. J is:
77 / 176
Q77: When interest on employee’s own unrecognized provident fund is received atretirement by employee at the time of retirement, it is:
78 / 176
Q78: Mr. J employed in GGC Ltd. took voluntary retirement in December 2020 and receivedRs. 2,00,000 from National Pension System Trust. The amount so received chargeable to income tax is:
79 / 176
Q79: Compensation received on voluntary retirement is exempt u/s 10(10C) to the maximum extent of:
80 / 176
Q80: Leave travel concession is allowed:
81 / 176
Q81: Carry forward of leave travel concession is allowed:
82 / 176
Q82: Leave Travel Concession is
83 / 176
Q83: Mr. J received basic salary of Rs. 20,000 p.m. from his employer. He also received childreneducation allowance of Rs. 3,000 for three children and transport allowance of Rs. 1,800 p.m. The amount ofsalary chargeable to tax for AY 2021-2022 i.e. PY 2020-2021 is
84 / 176
Q84: The entertainment allowance received by a Government employee is exempt up to the lower ofthe actual entertainment allowance received, 20% of basic salary and
85 / 176
Q85: Mr. J is a manager of GGC Ltd. since 2002 was terminated by the company on 1/8/2020 by paying acompensation of Rs. 200,00,000. Such compensation is—
86 / 176
Q86: Mr. J retires from private service on 30/4/2020 and his pension has been fixed at 1,500 p.m. He gets½ of his pension commuted on 1/1/2021 and receives 75,000. He also gets 60,000 as gratuity. Thetotal pension taxable including commuted value will be:
87 / 176
Q87: An employee of a GGC public limited company received total Rs. 3,00,000 as encashment of leavesalary at the time of retirement. He has 18 months leave to his credit at the time of retirement and hisaverage salary for last 10 months is Rs. 24,000. The taxable amount of leave encashment would be
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Q88: Interest on statutory provident fund shall be:
89 / 176
Q89: Mr. J retired on 31/10/2020 after rendering 35 years of service in GGC Ltd. He received gratuity ofRs. 28,00,000. He is governed by Payment of Gratuity Act, 1972. The monetary limit eligible for exemption is:
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Q90: Children education allowance is exempt up to:
91 / 176
Q91: Hostel expenditure allowance is exempt up to:
92 / 176
Q92: Transport allowance is exempt for
93 / 176
Q93: Underground allowance to an employee is exempt upto:
94 / 176
Q94: If rent is paid by the employee for a house situated in Delhi then HRA shall be exempt to themaximum extent of:
95 / 176
Q95: If rent is paid by the employee for a house situated in Faridabad the HRA shall be exempt tothe maximum extent of:
96 / 176
Q96: Under the Income Tax Act 1961 Child shall includes:
97 / 176
Q97: Mr. J is entitled to a watchman allowance of Rs. 600 p.m. for the security of his residence. He paysRs. 500 p.m. to the watchman employed by him. The taxable allowance shall be:
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Q98: Mr. J received children education allowance of Rs. 500 pm for each of his 3 children. Taxable amountof children education allowance for the AY 2021- 2022 i.e. PY 2020-2021 if entire amount is spent by Mr. J.
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Q99: Which of the following amount is exempt
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Q100: Mr. J is entitled to Rs. 8,000 pm as Medical Allowance. He spends Rs. 4,000 pm on his medicaltreatment and Rs. 1,000 on the medical treatment of his major son not dependent on him. The exemption inthis case shall be:
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Q101: Which of the following is not the condition for claiming exemption for House Rent Allowance:
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Q102: Calculate the exempt HRA from the following details:Mr. J is entitled to a basic salary of Rs. 50,000 p.m. and DA of Rs.10,000 p.m. 40% of which forms part ofretirement benefits. He is also entitled to HRA of Rs. 20,000 pm. He actually lives with his parents inMumbai and does not pay any rent. Market rent of that house is Rs. 20,000 pm in Mumbai.
103 / 176
Q103: Mr. J received Rs. 300 pm as children education allowance for each of his 3 children. Taxable andexempt part of children education allowance shall be?
104 / 176
Q104: Mr. J is entitled to a transport allowance of 1,000 pm. For commuting from his residence tooffice and back he spends 600 pm. The exemption shall be
105 / 176
Q105: Mr. J is Pilot with Jet Airways. He is entitled to outstation allowance of 10,000 p.m. He spends4,000 every month. The exemption shall be
106 / 176
Q106: Entertainment allowance in case of government employee is:
107 / 176
Q107: The HRA paid to an employee residing in Patna is exempt up to the lower of actual HRA,excess of rent paid over 10% of salary and
108 / 176
Q108: Mr. J stays in New Delhi. His basic salary is Rs. 10,000 p.m., D.A. (60% of which forms part ofpay) is Rs. 6,000 p.m., HRA is Rs. 5,000 p.m. and he is entitled to a commission of 1% on the turnoverachieved by him. Mr. J pays a rent of Rs. 5,500 p.m. The turnover achieved by him during the currentyear is Rs. 12,00,000. The amount of HRA exempt u/s 10(13A) is
109 / 176
Q109: Mr. J is entitled to a watchman allowance of Rs. 6,600 pm. He pays Rs. 5,000 pm to the watchmanemployed by him. The taxable allowance shall be:
110 / 176
Q110: Chandan is a handicapped employee receives Rs. 1,500 pm as transport allowance from hisemployer. His actual expenditure on transport is Rs. 1,000 pm. The amount of transport allowancetaxable under the head income from salaries will be
111 / 176
Q111: GGC Ltd. transfers a Honda City car to its employee Mr. J after using it for 4 years and 10months, for Rs. 2,10,000. Cost of the car was 10,00,000. Value of taxable perquisite in the hands of Mr. J is
112 / 176
Q112: Children education allowance received by an employee from his employer is Rs. 80 per month perchild for 3 children. Taxable education allowance will be –
113 / 176
Q113: Mr. J purchased a residential house property in Ahmadabad on loan for which he paid an interest ofRs. 50,000 during the previous year. He is working in Delhi and getting an HRA of `4,000 per month. Hecan claim exemption/deduction for—
114 / 176
Q114: Mr. J is employed in GGC Ltd., Delhi. He is paid house rent allowance of 9,000 per month infinancial year 2020-2021. His salary for the purpose of computation of exemption of house rentallowance may be taken as Rs. 20,000 per month. Mr. J pays actual rent of Rs. 10,000 per month. How much ofthe house rent allowance is tax-free.
115 / 176
Q115: Mr. J is receiving `10,000 pm as medical allowance from his employer. Out of this, he spendsRs. 5,000 pm on his own medical treatment, Rs. 2,000 pm on the medical treatment of his dependent wife andanother Rs. 3,000 pm for the medical treatment of his major son who is not a dependent on him. Theamount of medical allowance taxable in his hand is
116 / 176
Q116: Mr. J is employed in GGC Ltd., was eligible for transport allowance of Rs. 2,000 per month to meethis travel expenses from residence to office. He actually incurred 1,200 per month towards travel.The amount of travel allowance chargeable to tax would be
117 / 176
Q117: Mr. J is employed in GGC Ltd. – Transporters as cabin driver. He is paid Rs. 15,000 every monthduring AY 2021-2022 i.e. PY 2020-2021 as allowance for meeting his personal expenditure inthe course of running Goods Vehicle. Mr. J does not receive any other amount by way of daily allowance.The amount of allowance eligible for exemption is:
118 / 176
Q118: Mr. J employed in GGC Ltd., and received Rs. 10,000 pm as house rent allowance in the AY2021-2022 i.e. PY 2020-2021. His total taxable salary is 4,00,000 consisting of Basic pay + DA. Hedid not pay any rent for whole of the year. How much of HRA is exempt from tax?
119 / 176
Q119: Rent Free Accommodation is covered in:
120 / 176
Q120: Obligation of the employee met by the employer is covered u/s
121 / 176
Q121: Medical expenditure reimbursed by the employer to the employee shall be:
122 / 176
Q112: During the previous year the employee was reimbursed 23,000 as medical expenses incurred byemployee in Government hospital. The taxable perquisite in this case shall be:
123 / 176
Q123: House Rent Allowance is covered u/s:
124 / 176
Q124: Accommodation at concessional rent is given in section:
125 / 176
Q125: The employee is provided with furniture costing Rs. 1,50,000 along with rent free accommodation w.e.f.1/8/2020. The value of the furniture to be included in the value of rent free accommodation shall be:
126 / 176
Q126: Mr. J is provided with a rent free accommodation owned by his employer in Delhi.The value of this perquisite shall be:
127 / 176
Q127: Mr. J owns a house in which he lives. His employer reimburses to him the electricity billamounting to Rs. 15,000. It shall be a perquisite for:
128 / 176
Q128: Exemption of leave travel concession is allowed u/s:
129 / 176
Q129: Mr. J has taken interest free loan of Rs. 1,00,000 from his employer for the purpose of medicaltreatment of his son. In this case taxable value of perquisite is
130 / 176
Q130: Employer provides a car (below Rs. 1,600 cubic capacity) along with a driver to Mr. J and he uses thecar partly for official and partly for personal purpose. The expenses incurred by the employer are:(1) running and maintenance expenses of Rs. 84,000(2) driver's salary of Rs. 1,20,000 Taxable value of perquisite is:
131 / 176
Q131: Mr. J is employed in GGC Ltd and his wife is suffering from a critical disease. The company hassent Mr.J and Mrs.Jto USA for the medical treatment of Mrs. J. The company has incurred expenses onmedical treatment of Mrs. J and stay outside India of Mrs. J and of Mr. J. amounting to Rs. 17,00,000 but RBIpermitted only Rs. 15,00,000. The travel expenses amounted to 1,50,000. Salary of Mr. J was Rs. 5,00,000.The taxable perquisite in this case shall be:
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Q132: Mr. J is provided with a rent free unfurnished accommodation, which is owned by his employer,GGC Pvt. Ltd., in New Delhi. The value of perquisite in the hands of Mr. J is
133 / 176
Q133: Mr. J is provided with furniture to the value of Rs. 70,000 along with house from February, 2020.Furniture is not owned by employer but has been taken on rent by employer for which employer payshire charges of Rs. 5,000 pa. The value of furniture to be included along with value of unfurnished housefor AY 2021-2022 i.e. PY 2020-2021 is
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Q134: For the purpose of determining the perquisite value of loan at concessional rate given to theemployee, the lending rate of State Bank of India as on __________ is required;
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Q135: Salary of employee is Rs. 2,00,000. Fair rent of the unfurnished houses situated in Delhi given toemployee is Rs. 1,30,000. The valuation of the perquisite of the house in case of Governmentemployee shall be:
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Q136: Salary of employee is Rs. 2,00,000. Fair rent of the unfurnished houses situated in Delhi given toemployee is Rs. 1,30,000. The valuation of the perquisite of the house in case of non Governmentemployee shall be:
137 / 176
Q137: Salary of an employee is Rs. 2,00,000. Rent paid by the employer for the unfurnished house providedto employee at Faridabad is 3,000 p.m. The employer charges 2,000 p.m. as rent from theemployee. The valuation of this perquisite shall be:
138 / 176
Q138: A car of Rs. 1,500 cc is provided by the employer to the employee whose salary is Rs. 20,000 p.m. Thecar is used by him partly for official and partly for his personal purpose. The expenses of running andmaintenance are met by the employer. The valuation of this perquisite shall be:
139 / 176
Q139: Mr. J is employee of GGC Ltd. and he is provided a car of engine of 1.9-liter capacity alongwith driver. The expenses of running and maintenance of car are met by Mr. J himself.Besides using the car for official purpose, Mr. J also uses the car for his personal purpose. The valuationof the perquisite of car shall be:
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Q140: Mr. J an employee owns a car which he used for his private purpose. All expenses of running andmaintenance of the car are met by the employer. The perquisite shall be
141 / 176
Q141: Mr. J is an employee of JSJ Ltd. which is an oil manufacturing company. He is provided withfree gas for his personal purpose by the employer. The value of this perquisite shall be
142 / 176
Q142: Employee own a houses in which he lives happily along with his family. His employerreimburses to him the electricity bill amounting to Rs. 5,000 pm. The perquisite shall be
143 / 176
Q143: The employer provides free facility of watchman, sweeper and gardner to his employees.The perquisite shall be
144 / 176
Q144: The Gardner, Sweeper and Watchman are employed by the employer and provided toemployee along with rent free accommodation which is owned by the employer. The salary ofRs. 5,000 pm per person is paid by the employer. The valuation of this perquisite shall be
145 / 176
Q145: Tea and Snacks are provided by GGC Ltd. to employees in the office during office hours. Thevalue of this perquisite shall be
146 / 176
Q146: The employer GGC Ltd. gives a gift in cash to its employee on the marriage of the son of the suchemployee. Gift so made shall:
147 / 176
Q147: The employer has given a laptop for the personal use of the employee. The value of thisperquisite shall be:
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Q148: The employer has given a video-camera for the personal use of the employee. The value of thisperquisite shall be:
149 / 176
Q149: The employer has given furniture for the personal use of the employee. The value of thisperquisite shall be:
150 / 176
Q150: The employer had purchased a car for Rs. 8,00,000, 2 years and 7 months ago. This car issold to the employee for Rs. 1,20,000. The value of this perquisite shall be
151 / 176
Q151: The employer had purchased a computer for Rs. 80,000, 2 years and 7 months ago. This computer issold to the employee for Rs. 15,000. The value of this perquisite shall be
152 / 176
Q152: An employee has been provided free meal worth Rs. 110 per meal for 295 days in the office,during office hours. Such facility provided to the employees shall be taxable for the employee for theamount of:
153 / 176
Q153: GGC Ltd. transfers a Honda City car to its employee Mr. J after using it for 4 years and 10months, for Rs. 2,10,000. Cost of the car was 10,00,000. Value of taxable perquisite in the handsof Mr. J is
154 / 176
Q154: Mr. J an employee of GGC Ltd of Delhi, received the following payments during the previousyear ended 31/3/2021: Basic salary: Rs. 2,40,000 and dearness allowance: 40% of basic salary (40%forming part of salary). Rent-free unfurnished accommodation provided by employer for whichrent paid by employer being Rs. 50,000. The value of taxable perquisite in the hands of Mr. J will be
155 / 176
Q155: Mr. J is an employee of Gyan Gurucull Public School. His daughter, Ustat, is studying in the saidschool at concessional fees of Rs. 600 per month (Actual fee 4,000 per month). The amount taxable inthe hands of Mr. J will be
156 / 176
Q156: Mr. J took an interest-free loan of Rs. 15,000 from GGC Ltd. (the employer). Assuming that themarket rate of interest on similar loan is 10%, the taxable value of the perquisite in the hands of Mr. Jwill be
157 / 176
Q157: During the AY 2021-2022 i.e. PY 2020-2021 Mr. J received a watch worth Rs. 20,000 from hisemployer as a gift. The taxable value of the watch will be
158 / 176
Q158: Mr. J gets salary of Rs. 12,000 p.m. and is provided with rent free unfurnished accommodationat Pune (which has population of Rs. 20,00,000): House is owned by employer, fair rental value ofwhich is Rs. 1,400 pm. House was provided with effect from 1st July, 2020. Value of the perquisite of rent-free accommodation will be:
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Q159: Mr. J is employed as chief engineer in GGC Ltd., Chennai w.e.f. 1/4/2020 for a consolidatedsalary of Rs. 60,000 per month. He is provided with rent free unfurnished accommodation owned by theemployer from 1/7/2020 onwards. The value of taxable perquisite is –
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Q160: Ms. J is provided with an interest free loan by her employer for the purchase of a house. The valueof the perquisite shall be –
161 / 176
Q161: GGC Ltd. acquired a motorcar for 8,00,000 on 30/6/2020. It sold the said motor car to its employee,Mr. J, for Rs. 6,00,000 on 10/7/2020. The company claimed depreciation @ 15% for the year ended31/3/2021. The perquisite value in the hands of Mr. J on sale of motor car would be
162 / 176
Q162: A company has provided laptop worth Rs. 50,000 to its employee for official as well as personalpurposes. The taxable amount of perquisite will be –
163 / 176
Q163: Mr. J employed in GGC Ltd. at Mumbai was provided rent-free accommodation by the employerwho owned such accommodation. The salary income of Mr. J for the purpose of computing theperquisite value is Rs. 8,00,000. The perquisite value of rent-free accommodation in the hands of Mr. J is:
164 / 176
Q164: Mr. J is given a motor car with chauffeur by the employer which is used for both official andpersonal purpose. The entire running expenses of the car amounting to Rs. 64,800 were met by the employerin the AY 2021-2022 i.e. PY 2020-2021. The cubic capacity of the engine of the motor car exceeds 1.6liters. The perquisite value of motor car taxable in the hands of Mr. J is:
165 / 176
Q165: During the AY 2021-2022 i.e. PY 2020-2021, the employee was reimbursed Rs. 24,000 as medicalexpenses incurred by him which includes Rs. 7,000 spent in Government hospital. The taxable perquisitein this case shall be:
166 / 176
Q166: Mr. J is employed in GGC Ltd. at Madurai which has population of Rs. 40,00,000. He is providedwith a rent free accommodation owned by the employer. The percentage of salary to be adopted forthe purpose of valuation of perquisite would be:
167 / 176
Q167: Mr. J employed in GGC Ltd. was permitted to admit his only son in the school run by theemployer. No fee was charged on such education provided to the son of Mr. J. The cost of sucheducation for other children is 1,800 per month. The perquisite value of free education in the hands ofMr. J would be:
168 / 176
Q168: J. Ltd is a company paying salary of Rs. 4,50,000 to its employee Mr. J and also undertakes to pay theIncome Tax amounting to Rs. 10,400 on his behalf during the AY 2021-2022 i.e. PY 2020-2021. Thegross Salary of Mr. J shall be:
169 / 176
Q169: Mr. J who is entitled to a salary of Rs.10,000 p.m. took an advanced of Rs. 20,000 against the salary inthe month of March 2021. The gross salary of Mr. J for AY 2021-2022 i.e. PY 2020-2021 shall be.
170 / 176
Q170: Mr. J who is entitled to salary of Rs. 10,000 p.m. took advance salary from his employer for themonths of April 2021 and May 2021 along with salary of March 2021 on 31/3/2021. The gross salaryfor Mr. J for AY 2021-2022 i.e. PY 2020-2021 shall be:
171 / 176
Q171: Salary of Mr. J is Rs. 10,000 p.m. Mr. J had taken salary in advance for the months of April 2020 toJune 2020 in March 2020 itself. The gross salary of Mr. J for AY 2021-2022 i.e. PY 2020-2021 shall be:
172 / 176
Q172: The Government of India announced increase in the DA on 15/3/2020 with retrospective effect from1/5/2017 and the same were paid on 8/5/2020. The arrears of DA shall be taxable in the:
173 / 176
Q173: Profits in lieu of salary is defined u/s:
174 / 176
Q174: Where there is a decision to increase the D.A. in March, 2021 with retrospective effect from1/4/2019, and the increased D.A. is received in April, 2021 the increase is taxable -
175 / 176
Q175: GGC is a LLP and had taken keyman insurance policy on the life of it managing partner. The policygot matured on 13/9/2020 and an amount of Rs. 75,00,000 was paid by the insurers to the managingpartner. The amount so received on maturity of the policy by the managing partner is
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Q176: Mr. J is employed in a company with annual gross salary of Rs. 8,60,000. The company paidincome-tax of Rs. 37,000 on his non-monetary perquisites. He paid Rs. 1,20,000 to recognizedprovident fund during the AY 2021-2022 i.e. PY 2020-2021. His total income would be:
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