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Created on February 17, 2026 By

CA Sonal Saboo

CMA Inter

Inter Direct and Indirect Taxation PN-7 Quiz 2

This quiz is based on the CMA Direct and Indirect Taxation paper.
Each question is multiple-choice with 4 options, and only 1 option is correct.
Attempt the quiz to test your understanding of CMA DIT concepts.

1 / 25

Category: Direct and Indirect Taxation PN - 7

1. Income under the head “Income from Other Sources” is taxable on –

a. Due Basis

b. Receipt Basis

c. On the basis of method of accounting regularly employed by the Assessee

d. None of the above.

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Category: Direct and Indirect Taxation PN - 7

2. Exemption under Section 54F shall not be allowed if the assessee, on the date of transfer, owns-

a. any Residential House

b. a Residential House which is let out

c. a Hose which is self occupied

d. more than one Residential House

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Category: Direct and Indirect Taxation PN - 7

3. Where the entire block of the depreciable assets is transferred after 36 months, there will be-

a. Short-Term Capital Gain

b. Long-Term Capital Gain

c. Short- Term Capital Gain or Loss

d. Long- Term Capital Gain or Loss

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Category: Direct and Indirect Taxation PN - 7

4. Capital Gain, arising from compulsory acquisition of urban agricultural land, is:

a. Taxable

b. Exempt

c. Exempt if acquired by RBI or Central Government

d. None of the above

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Category: Direct and Indirect Taxation PN - 7

5. The cost of acquisition of shares under Employees Stock Option Scheme shall be-

a. Fair Market Value of Shares on the date of offer

b. Fair Market Value of the shares on the date of exercise of option

c. Fair Market Value of share on the date of vesting of option.

d. Price at which it was offered to the employee.

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Category: Direct and Indirect Taxation PN - 7

6. Sums received by an employer from Keyman Insurance Policy taken on the life of the employee shall be-

a. Exempt

b. Taxable under the head Business and Profession

c. Taxable under the head Other Sources

d. Taxable in the hand of the employee

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Category: Direct and Indirect Taxation PN - 7

7. “A” borrowed ` 5,00,000 at 12% p.a on 01-04-2015 for construction of house property which was completed on 15-03- 2024 and let out. The amount is still unpaid. The deduction on account of interest for the previous year 2023-24 shall be-

a. ` 60,000

b. ` 96,000

c. ` 1,80,000

d. ` 2,40,000

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Category: Direct and Indirect Taxation PN - 7

8. The basis of chargeability of income under the head income from house property is:

a. Rental value

b. Annual value

c. Value fixed by the government

d. None of the above

9 / 25

Category: Direct and Indirect Taxation PN - 7

9. Interest credited to Recognized Provident Fund is –

a. Fully Taxable

b. Fully Exempt

c. Exempt upto 12% of Salary

d. Exempt upto 9.5% p.a.

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Category: Direct and Indirect Taxation PN - 7

10. 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

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Category: Direct and Indirect Taxation PN - 7

11. Salary received by the Partner of a Firm is charged under the head

a. Salaries

b. Business Income

c. Other Sources

d. Its exempt from tax

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Category: Direct and Indirect Taxation PN - 7

12. Uncommuted Pension received by a Government Employee is-

a. Exempt

b. Taxable

c. Partially Taxable

d. None of the above

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Category: Direct and Indirect Taxation PN - 7

13. An individual purchased a painting on 01-11-2023 for ₹ 5,00,000 though fair market value of the asset is ₹ 5,25,000. Income taxable u/s 56(2)(x) is:

a. ₹ 25,000 i.e., difference between market value and actual consideration

b. Nil as this is not gift

c. Nil as difference between market value and actual consideration does not exceed ₹ 50,000

d. The provision of sec. 56(2)(x) is not applicable for any transaction entered during P.Y. 2023-24

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Category: Direct and Indirect Taxation PN - 7

14. Gift received by an individual in certain circumstances is not taxable, one of them is:

a. Any gift received from family friend

b. Any gift received on the occasion of any marriage in the family

c. Any gift received on the occasion of the marriage of the individual-assessee

d. All of the above

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Category: Direct and Indirect Taxation PN - 7

15. While computing income from other sources, deduction is not allowed to the assessee for:

a. Personal expenditure

b. Direct tax

c. Interest payable outside India without TDS

d. All of the above

16 / 25

Category: Direct and Indirect Taxation PN - 7

16. The provision of sec.56(2)(x) is applicable on:

a. All assessee

b. Only on corporate assessee

c. On an individual only

d. On an individual and HUF only

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Category: Direct and Indirect Taxation PN - 7

17. While computing taxable interest on delayed compensation, a standard deduction is allowed @:

a. 50%

b. 30%

c. 15%

d. Nil

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Category: Direct and Indirect Taxation PN - 7

18. Cost of acquisition of self-generated asset is nil, the exception is:

a. Goodwill

b. Route permit

c. Bonus shares acquired before 01-04 2001

d. Loom hours

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Category: Direct and Indirect Taxation PN - 7

19. Profit on sale of rural agricultural land is:

a. Not taxable as it is agricultural income

b. Not taxable under the head ‘Capital gains’ but under the head ‘Income from Other Sources’

c. Not taxable as rural agricultural land is not considered as a capital asset

d. Taxable if it is compulsorily acquired.

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Category: Direct and Indirect Taxation PN - 7

20. Personal effect do not cover the followings:

a. Immovable property

b. Drawings

c. Jewellery

d. All of the above

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Category: Direct and Indirect Taxation PN - 7

21. U/s 54, capital gain will be allowed as exemption if the house property under transfer is held for:

a. Less than 12 months preceding the date of transfer

b. More than 12 months preceding the date of transfer

c. Less than 36 months preceding the date of transfer

d. More than 24 months preceding the date of transfer

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Category: Direct and Indirect Taxation PN - 7

22. In case of loss, a partnership firm may claim deduction in respect of remuneration to partner to the extent of:

a. ₹ 1,50,000/-

b. ₹ 1,50,000/- or actual remuneration, whichever is lower

c. ₹ 1,50,000/- or 90% of book profit, whichever is lower

d. Nil

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Category: Direct and Indirect Taxation PN - 7

23. Expenditure on promotion of family planning is an allowance as deduction u/s. 36(1)(ix) of the Income Tax Act, 1961 in case of:

a. Individual

b. Firm

c. HUF

d. Company

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Category: Direct and Indirect Taxation PN - 7

24. The preliminary expenses that can be amortized under the Income Tax Act, 1961 has to be restricted to of the cost of project.

a. 3%

b. 5%

c. 8%

d. 20%

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Category: Direct and Indirect Taxation PN - 7

25. Which of the following is not allowed as a deduction for computation of business Income?

a. Loss incurred due to theft in factory after working hours

b. Anticipated future losses

c. Loss caused by white ants

d. Loss due to accidental fire in stock-in-trade

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Inter PN-7 Direct and Indirect Taxation Quiz 2

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