Certifications Mock Tests Study Material Menu Certifications Mock Tests Study Material NISM Series XX: Taxation in Securities Markets Certification 'Last Day Revision' Test /100 NISM Series XX: Taxation in Securities Markets Certification ‘Last Day Revision’ Test 1 / 100 1. If the MF distributor has opted for the composition scheme of service provider, he may be liable to pay GST of ________. a. 3% b. 4% c. 5% d. 6% Explanation:If the MF distributor has opted for the composition scheme of service provider, he may be liable to pay GST of 6%. 2 / 100 2. The transfer of assets defined under section 2(47) of the IT act includes _________. a. Redemption of zero-coupon bonds b. Conversion of asset into stock-in-trade c. Lending of securities d. Only 1 and 2 Explanation:The transfer of asset defined under section 2(47) of IT act includes redemption of zero-coupon bonds and conversion of asset into stock-in-trade. 3 / 100 3. The clearing corporations of _______ are the authorized intermediary permitted to lend and borrow securities. a. NSE b. BSE c. MCX d. Both 1 and 2 Explanation:The clearing corporations of both NSE and BSE are the authorized intermediaries permitted to lend and borrow securities. 4 / 100 4. The dual option warrants are designed to provide the buyer with _______. a. Potential of capital appreciation b. Limited downside risk c. Investment secured by assets d. Both 1 and 2 Explanation:Dual option warrants are designed to provide the buyer with both the potential of capital appreciation and limited downside risk. 5 / 100 5. _______ are issued with detachable warrants and are redeemable after a notified period. a. Perpetual debentures b. Participating preference share c. Sweat equity shares d. Secured premium notes Explanation:Secured premium notes are issued with detachable warrants and are redeemable after a notified period. 6 / 100 6. The option provided under the ESOP scheme confers a right and an obligation on the employee. a. True b. False Explanation:The statement “The option provided under ESOP scheme confers a right and an obligation on the employee” is FALSE. 7 / 100 7. The collective holding of the sponsors should be _______ in REIT for at least 3 years from the date of listing. a. 10% b. 15% c. 20% d. 25% Explanation:The collective holding of the sponsors should be 25% in REIT for at least 3 years from the date of listing. 8 / 100 8. As per Section 2(ac) of the Securities Contracts (Regulation) Act, 1956 (SCRA), the derivative includes _______. a. Mutual funds b. Currency derivatives c. Commodity derivatives d. Both 2 and 3 Explanation:As per Section 2(ac) of the Securities contracts (Regulation) Act, 1956 (SCRA), derivatives include both currency derivatives and commodity derivatives. 9 / 100 9. If the assessee follows a mercantile system of accounting, interest on securities is taxable on ___________. a. Cash basis b. Receipt basis c. Accrual basis d. Both 1 and 2 Explanation:If the assessee follows the mercantile system of accounting, interest on securities is taxable on an accrual basis. 10 / 100 10. The advantage of not computing income on a presumptive scheme is that a person can claim _______. a. Deduction of all the expenses incurred in connection with the sale b. Fair value of the security that has been acquired c. Speculative loss carried forward d. Only 1 and 2 Explanation:The advantage of not computing income on a presumptive scheme is that a person can claim a deduction of all the expenses incurred in connection with the sale. 11 / 100 11. The shareholder shall be liable to pay ________ on the market value of the asset received on liquidation. a. Property income tax b. Business income tax c. Capital gain tax d. Both 1 and 3 Explanation:The shareholder shall be liable to pay capital gain tax on the market value of the asset received on liquidation. 12 / 100 12. Section 208 of the IT act provides that if the estimated tax liability of an assesses during a financial year is _______ or more, he is liable to make payment of advance tax. a. Rs. 10,000 b. Rs. 50,000 c. Rs. 25,000 d. Rs. 75,000 Explanation:Section 208 of the IT act provides that if the estimated tax liability of an assesses during a financial year is Rs. 10,000 or more, he is liable to make payment of advance tax. 13 / 100 13. The GAAR do not apply to an arrangement where the tax benefit in the relevant assessment year arising, in aggregate, to all the parties to the arrangement does not exceed _______. a. Rs. 6 crores b. Rs. 7 crores c. Rs. 3 crores d. Rs. 5 crores Explanation:The GAAR do not apply to an arrangement where the tax benefit in the relevant assessment year arising, in aggregate, to all the parties to the arrangement does not exceed Rs. 3 crores. 14 / 100 14. There are no separate provisions for taxation of income of intermediaries except in the case of ________. a. Underwriters b. Collective investment scheme c. Investment advisers d. Foreign portfolio investors Explanation:There are no separate provisions for taxation of income of intermediaries except in the case of collective investment schemes. 15 / 100 15. The presumptive taxation scheme of Section 44AD can be opted by a partnership firm if the turnover from the business during the relevant previous year does not exceed ________. a. Rs. 1 crore b. Rs. 2 crores c. Rs. 3 crores d. Rs. 4 crores Explanation:The presumptive taxation scheme of Section 44AD can be opted by a partnership firm if the turnover from the business during the relevant previous year does not exceed Rs. 2 crores. 16 / 100 16. If a return is not furnished, the TDS applicable on brokerage shall be _______ for a resident person as per section 194H of the IT Act. a. 5% b. 10% c. 15% d. 20% Explanation:If a return is not furnished, the TDS applicable on brokerage shall be 10% for a resident person as per section 194H of IT act. 17 / 100 17. In the case of derivatives, the transactions are ultimately settled only with the actual delivery of underlying security. a. True b. False Explanation:In the case of derivatives, the transactions are ultimately settled only with the actual delivery of underlying security. This statement is FALSE. 18 / 100 18. If the bonus shares are not listed on a recognized stock exchange, they shall be treated as a short-term capital asset if it is held for not more than ________. a. 12 months b. 6 months c. 24 months d. 18 months Explanation:If the bonus shares are not listed on a recognized stock exchange, they shall be treated as a short-term capital asset if it is held for not more than 24 months. 19 / 100 19. The securities market serves as a platform for marketing government securities. a. True b. False Explanation:The statement “The securities market serves as a platform for marketing government securities” is TRUE. 20 / 100 20. The unregulated funds in the form of limited partnership and trusts belong to the category II FPIs. a. True b. False Explanation:The unregulated funds in the form of limited partnership and trusts belong to the category II FPIs. This statement is TRUE. 21 / 100 21. The residential status of an ______ depends upon its place of control and management and the residential status of its Karta. a. Hindu undivided family b. Partnership firm c. Association of person d. Artificial juridical person Explanation:The residential status of a Hindu undivided family depends upon its place of control and management and the residential status of its Karta. 22 / 100 22. The condition of payment of STT at the time of transfer shall not be applicable if the transfer is undertaken on a recognized stock exchange located in an international financial services center. a. True b. False Explanation:The condition of payment of STT at the time of transfer shall not be applicable if the transfer is undertaken on a recognized stock exchange located in an international financial services center. This statement is TRUE. 23 / 100 23. _______ is any arrangement in which, through a series of transactions, funds are transferred among the parties to the arrangement. a. Money laundering b. Round trip financing c. Non-commercial funding d. Remittance fund Explanation:Round trip financing is any arrangement in which, through a series of transactions, funds are transferred among the parties to the arrangement. 24 / 100 24. The contribution made by central government employees to Tier II NPS account shall be made for a fixed period of at least _______ for tax benefit under section 80C. a. 3 years b. 4 years c. 5 years d. 6 years Explanation:The contribution made by central government employees to Tier II NPS account shall be made for a fixed period of at least 3 years for tax benefit under section 80C. 25 / 100 25. If the turnover of the MF distributor is up to _______ in the preceding financial year, he may opt for the composition scheme. a. Rs.30 lakhs b. Rs.40 lakhs c. Rs.50 lakhs d. Rs.60 lakhs Explanation:If the turnover of the MF distributor is up to Rs. 50 lakhs in the preceding financial year, he may opt for the composition scheme. 26 / 100 26. The expenditures such as _______ shall be allowed to be deducted while computing the income on a presumptive basis. a. Depreciation on computer b. Security transaction tax c. Staff Salary d. None of the above Explanation:None of the above shall be allowed to be deducted while computing the income on a presumptive basis. 27 / 100 27. In the case of a domestic company, the surcharge applicable on any income above Rs.1 crore but below Rs.10 crore shall be _______. a. 6% b. 7% c. 8% d. 10% Explanation:In case of domestic company, the surcharge applicable on any income above Rs.1 crore but below Rs.10 crore shall be a) 7%. 28 / 100 28. The debt-oriented and hybrid ULIP shall have different tax treatments. a. True b. False Explanation:Debt-oriented and hybrid ULIPs do not have different tax treatment. Regardless of the type, ULIPs are treated uniformly for tax purposes. Therefore, the statement that they have different tax treatments is false. 29 / 100 29. The resultant gains under the sale of ESOP by employees shall be taxable under the head _______. a. Income from other sources b. Capital gains c. Property Income d. Profits and gains of business Explanation:Gains from the sale of Employee Stock Ownership Plan (ESOP) shares by employees are taxable under the head of capital gains. This includes gains made from the sale of shares acquired through ESOP schemes, which are subject to capital gains tax as per the applicable tax rules. 30 / 100 30. The business loss can be set off against the income from salary. a. True b. False Explanation:Business losses cannot be set off against income from salary. The Indian Income Tax Act allows for the set-off of business losses against income from other heads such as profits and gains of business or profession, but it does not permit offsetting against salary income. Therefore, the statement is false. 31 / 100 31. In case of cooperative society, the surcharge applicable on any income up to Rs. 1 crore shall be _______. a. 2% b. 3% c. 4% d. None of the above Explanation:In case of cooperative society, the surcharge applicable on any income up to Rs. 1 crore shall be None of the above. 32 / 100 32. The taxability of capital gains under ESOP shall depend on the _______ of such share. a. Type of share b. Period of holding c. Book value d. Both 1 and 2 Explanation:The taxability of capital gains under ESOP shall depend on the Period of holding. 33 / 100 33. As per section 9A of the IT act, the fund not deemed to have a business connection in India shall have a minimum of _______ members who are, directly or indirectly, not connected persons. a. 25 b. 30 c. 35 d. 40 Explanation:As per section 9A of the IT act, the fund not deemed to have a business connection in India shall have a minimum of 25 members who are, directly or indirectly, not connected persons. 34 / 100 34. Under MLI, a shareholder shall maintain its shareholding in the company paying the dividend for a minimum period of _______ to get dividend tax benefit. a. 180 days b. 380 days c. 365 days d. 765 days Explanation:Under MLI, a shareholder shall maintain its shareholding in the company paying the dividend for a minimum period of 365 days. 35 / 100 35. Which one of these is/are true regarding Securities Lending and Borrowing (SLB)? a. SLB executed on automated, screen-based, order-matching platform b. Securities traded in F&O segment and liquid Index Exchange Traded Funds (ETFs) are eligible c. Both (a) and (b) d. None of the above Explanation:True regarding Securities Lending and Borrowing (SLB) is Both (a) and (b). 36 / 100 36. The commercial paper can be issued for maturities between a minimum of 7 days and a maximum of up to ________. a. 10 months b. 11 months c. 12 months d. 13 months Explanation:The commercial paper can be issued for maturities between a minimum of 7 days and a maximum of up to 12 months. 37 / 100 37. Under presumptive taxation scheme, _______ of total turnover from business is deemed as presumptive income. a. 5% b. 6% c. 7% d. 8% Explanation:Under presumptive taxation scheme, 8% of total turnover from business is deemed as presumptive income. 38 / 100 38. The sovereign gold bonds cannot be held by a trust or HUF. a. True b. False Explanation:Sovereign Gold Bonds can be held by trusts or HUFs. The correct option is b) FALSE. 39 / 100 39. The short-term capital loss can be set-off against any capital gain, whether short-term or long-term. a. True b. False Explanation:The short-term capital loss can be set-off against any capital gain, whether short-term or long-term. (TRUE) 40 / 100 40. ________ entails swapping both principal and interest between the parties, with the cash flow in two different currencies. a. Interest rate swap b. Equity swap c. Currency swap d. Market swap Explanation:Currency swap entails swapping both principal and interest between the parties, with the cash flow in two different currencies. 41 / 100 41. The business losses can be set off against income taxable under the head Income from _______. a. Capital gains b. House property c. Income from other sources d. Salary Explanation:The business losses can be set off against income taxable under the head Income from House property. 42 / 100 42. No tax is required to be deducted under _______ from the payment of interest to a resident person in respect of securities of central government. a. Section 110 b. Section 193 c. Section 161 d. Section 145 Explanation:No tax is required to be deducted under Section 193 from the payment of interest to a resident person in respect of securities of central government. 43 / 100 43. Which of the are true with respect to futures? a. Customized contract b. Traded on OTC market c. Standardized contract d. Both 2 and 3 Explanation:True with respect to futures is Standardized contract. 44 / 100 44. Who can set up a stock exchange in an IFSC? a. Foreign stock exchange b. Clearing corporation c. Indian company d. Both 1 and 2 Explanation:Both a foreign stock exchange and a clearing corporation are eligible entities to establish a stock exchange in an International Financial Services Centre (IFSC). 45 / 100 45. Any right available to a shareholder to subscribe to shares or any other security of a company is treated as a _______ under IT act. a. Current asset b. Capital asset c. Business asset d. Non current asset Explanation:Any right available to a shareholder to subscribe to shares or any other security of a company is treated as a Capital asset. 46 / 100 46. ________ allows the investor to transfer the amount from one scheme to another scheme of the same mutual fund house. a. Systematic investment plan b. Systematic transfer plan c. Systematic withdrawal plan d. Either 1 or 3 Explanation:Systematic transfer plan allows the investor to transfer the amount from one scheme to another scheme of the same mutual fund house. 47 / 100 47. The methods of accounting are allowed under the Income-tax act are ___________. a. Mercantile system b. Cash system c. Going concern system d. Both 1 and 2 Explanation:The methods of accounting allowed under the Income-tax act are Both 1 & 2 (Mercantile system and Cash system). 48 / 100 48. The TDS on dividend income received by the investment division of offshore banking unit shall be deducted at the reduced rate of _______. a. 10% b. 15% c. 20% d. 25% Explanation:The TDS on dividend income received by the investment division of offshore banking unit shall be deducted at the reduced rate of 10%. 49 / 100 49. The gain arising on account of valuation of stock shall be taxable as business income under _______ of IT act. a. Section 10 b. Section 14 c. Section 28 d. Section 32 Explanation:The gain arising on account of valuation of stock shall be taxable as business income under Section 28 of IT act. 50 / 100 50. Any person responsible for paying any income to an FPI is liable to deduct tax as per _______. a. Section 194LD b. Section 196A c. Section 196B d. All the above Explanation:Any person responsible for paying any income to a Foreign Portfolio Investor (FPI) is liable to deduct tax as per Section 196A. This ensures withholding of taxes on income earned by FPIs in India. 51 / 100 51. The tier I NPS account is a voluntary saving account associated with PRAN of the subscriber. a. True b. False Explanation:The statement “The tier I NPS account is a voluntary saving account associated with PRAN of the subscriber” is b) FALSE. Tier I NPS account is mandatory for subscribers and forms the core retirement savings account. 52 / 100 52. As per Section 139A a non-resident, not being a company, shall not be required to obtain and quote PAN, provided it furnishes a quarterly statement electronically in ________. a. Form No. 49BA b. Form No. 56CB c. Form No. 21DH d. Form No. 32CD Explanation:As per Section 139A, a non-resident, not being a company, shall not be required to obtain and quote PAN, provided it furnishes a quarterly statement electronically in Form No. 49BA. This exemption simplifies compliance requirements for non-residents engaging in financial transactions in India. 53 / 100 53. In case of a domestic company, being a unit located in the IFSC, the dividend distributed to its shareholders is not taxable if ________. a. Income is derived solely in convertible foreign exchange b. Dividend is distributed out of its current income c. Income is derived from domestic operations d. Both 1 and 2 Explanation:In the case of a domestic company located in an International Financial Services Centre (IFSC), the dividend distributed to its shareholders is not taxable if income is derived solely in convertible foreign exchange and the dividend is distributed out of its current income. This provision incentivizes investment and business activities in IFSCs. 54 / 100 54. The period of holding for securities held in demat form is determined as per _______. a. Date of allotment b. LIFO c. Date of transfer d. FIFO method Explanation:The period of holding for securities held in demat form is determined as per the FIFO (First In, First Out) method. FIFO is a common method used to calculate the cost basis of securities for taxation purposes. 55 / 100 55. Any interest income that REITs earned from SPV is exempt in the hands of REITs under _______. a. Section 12 (21AC) b. Section 10 (23FC) c. Section 10(16DC) d. Section 8 (11FD) Explanation:Any interest income that Real Estate Investment Trusts (REITs) earned from Special Purpose Vehicles (SPVs) is exempt in the hands of REITs under Section 10(23FC). This exemption encourages investment in REITs and supports the development of the real estate sector. 56 / 100 56. An Indian citizen, who is not a resident under Section 6(1), shall be deemed to be resident in India during the previous year if his Indian income during that year exceeds _______ and he is not liable to pay tax in any other country. a. Rs. 10 lakhs b. Rs. 15 lakhs c. Rs. 20 lakhs d. Rs. 25 lakhs Explanation:An Indian citizen, who is not a resident under Section 6(1), shall be deemed to be a resident in India during the previous year if his Indian income during that year exceeds Rs. 15 lakhs and he is not liable to pay tax in any other country. This provision aims to ensure taxation of high-income individuals who have significant economic ties to India. 57 / 100 57. ________ are eligible for lending and borrowing under the SLB scheme. a. Securities traded in the F&O segment b. Liquid index exchange traded funds c. Collective investment schemes d. Both 1 and 2 Explanation:Securities traded in the F&O segment and liquid index exchange-traded funds (ETFs) are eligible for lending and borrowing under the Securities Lending and Borrowing (SLB) scheme. This scheme facilitates short-term trading and liquidity management in the securities market. 58 / 100 58. _______ are issued by a company to its employees at a discount or for consideration, other than cash. a. Bearer debentures b. Perpetual debentures c. Participating preference share d. Sweat equity shares Explanation:Sweat equity shares are issued by a company to its employees at a discount or for consideration, other than cash. These shares are allotted to employees as part of their compensation for their contribution to the company’s growth and success. 59 / 100 59. An individual is treated as a resident in India if he stays in India for _______ or more in 4 years preceding the previous year. a. 182 days b. 365 days c. 312 days d. 275 days Explanation:An individual is treated as a resident in India if he stays in India for 365 days or more in 4 years preceding the previous year. 60 / 100 60. The period of holding for GDRs to qualify for long-term capital asset is ________. a. 12 months b. 24 months c. 36 months d. 48 months Explanation:The period of holding for GDRs to qualify for long-term capital asset is 36 months. 61 / 100 61. The surcharge on the dividend income taxable shall be taxed at the rate ________ if it is above Rs.1 crore in case of a trust. a. 10% b. 15% c. 20% d. 25% Explanation:The surcharge on the dividend income taxable shall be taxed at the rate 15% if it is above Rs.1 crore in case of a trust. 62 / 100 62. Who can opt for the presumptive taxation scheme of Section 44ADA ? a. Legal b. Architectural c. Stock broker d. Only 1 and 2 Explanation:Only professionals in the fields of architecture and legal services can choose the presumptive taxation scheme under Section 44ADA. 63 / 100 63. The securities held by foreign portfolio investors are always treated as capital asset. a. True b. False Explanation:The securities held by foreign portfolio investors are always treated as capital asset. (FALSE) 64 / 100 64. The IT act, 1961 provides for levy of MAT at the rate of ______ on the company, if the tax payable by it is less than 15% of book profits. a. 10% b. 12% c. 15% d. 18% Explanation:The IT act, 1961 provides for levy of MAT at the rate of 15% on the company, if the tax payable by it is less than 15% of book profits. 65 / 100 65. There is no tax benefit for the investment made in tier II NPS account. a. TRUE b. False Explanation:The statement “There is no tax benefit for the investment made in tier II NPS account” is a) TRUE. Unlike Tier I NPS account, investments in Tier II NPS account do not qualify for tax deductions under Section 80C. 66 / 100 66. The non-resident Indians (NRIs) cannot activate Tier II NPS account. a. True b. False Explanation:The statement “Non-resident Indians (NRIs) cannot activate Tier II NPS account” is a) TRUE. Tier II NPS account is only available to resident individuals and not to NRIs. 67 / 100 67. The short-term capital gains arising from the sale of units of equity-oriented mutual funds are taxable at the rate of ______ plus surcharge & cess. a. 10% b. 15% c. 20% d. 25% Explanation:The short-term capital gains arising from the sale of units of equity-oriented mutual funds are taxable at the rate of 15% plus surcharge & cess. This encourages long-term investment in equity mutual funds by offering a concessional tax rate. 68 / 100 68. _______ of the Income-tax act provides exemption for certain interest income. a. Section 10 b. Section 15 c. Section 20 d. Section 25 Explanation:Section 10 of the Income-tax Act provides exemption for certain interest income. This includes interest income earned from specified sources such as savings accounts, PPF, EPF, etc. 69 / 100 69. A unit of an IFSC is restricted from claiming deduction under section 80LA of the Income-tax act. a. True b. False Explanation:A unit of an IFSC is restricted from claiming deduction under section 80LA of the Income-tax act. This ensures uniformity in tax treatment across different jurisdictions and prevents misuse of tax incentives. 70 / 100 70. The specified fund are not subject to the provisions of alternate minimum tax. a. True b. False Explanation:Specified funds are not subject to the provisions of alternate minimum tax; the statement is correct. 71 / 100 71. If the assessee follows the mercantile system of accounting, the interest on securities shall be recognized in accordance with _______. a. ICDS-IV b. ICDS-VI c. ICDS-VII d. ICDS-V Explanation:If following the mercantile system, interest on securities is recognized in accordance with ICDS-IV. 72 / 100 72. GST is chargeable on the rental income earned by the REITs or InvITs at the rate of ________. a. 12% b. 10% c. 20% d. 18% Explanation:GST on rental income for REITs or InvITs is charged at 18%; the statement is correct. 73 / 100 73. A stock split increases the number of shares in a company and hence the market cap. a. True b. False Explanation:A stock split does not increase the market cap; the statement is correct. 74 / 100 74. The conversion of bonds into shares or debentures of the company is not treated as transfer under _______ of IT act. a. Section 18 b. Section 32 c. Section 47 d. Section 65 Explanation:Conversion of bonds into shares or debentures is not treated as transfer under Section 47 of the IT Act. 75 / 100 75. ________ is a company registered under section 25 of the Companies act, 1956. a. Limited liability partnership b. Partnership firm c. Charitable institution d. Hindu undivided family Explanation:A company registered under section 25 of the Companies Act, 1956, is a charitable institution. 76 / 100 76. The interest rate at which the present value of future cash flows is determined is known as _______. a. Discount rate b. Coupon rate c. Yield to maturity d. Yield to call Explanation:The interest rate used for determining the present value of future cash flows is known as Yield to Maturity. 77 / 100 77. If contribution to NPS is made by the employer for a Central government employee, the maximum deduction of _______ of salary shall be allowed under section 80CCD of IT act. a. 10% b. 12% c. 14% d. 16% Explanation:If the employer contributes to NPS for a Central govt employee, a maximum deduction of 14% of salary is allowed under section 80CCD. 78 / 100 78. Any surplus arising from the sale of stock-in-trade or raw material is chargeable to tax as _______. a. Capital gain b. Business income c. Property proceeds d. Either 1 or 3 Explanation:Surplus from the sale of stock-in-trade is chargeable to tax as business income. 79 / 100 79. The merchant banker is any person who is engaged in the business of ______. a. Fund raising b. Issue management c. Marketing products d. Both 2 and 3 Explanation:A merchant banker is engaged in the business of issue management; the statement is correct. 80 / 100 80. The cost of acquisition of the bonus shares are taken to be nil. a. True b. False The cost of acquisition for bonus shares is considered nil; the statement is correct. 81 / 100 81. As per ________ the shares held as stock-in trade shall be recorded in the books at their cost of acquisition. a. ICDS-VIII b. ICDS-XI c. ICDS-II d. ICDS-V Explanation:Shares held as stock-in-trade are recorded at their cost of acquisition under ICDS-XI. 82 / 100 82. In case of the listed securities, which have been held as stock-in-trade, shall be valued at a _________. a. Actual cost initially recognised b. Net realisable value at the end of previous year c. Either 1 or 2 d. Market value at the end of next year Explanation:Listed securities held as stock-in-trade can be valued at either actual cost or net realizable value. 83 / 100 83. An individual will be treated as not ordinarily resident in India if he has been in India for ______ or less during the period of 7 years immediately preceding the previous year. a. 529 days b. 629 days c. 729 days d. 829 days Explanation:An individual is not ordinarily resident in India if present for 729 days or less in the preceding 7 years. 84 / 100 84. The security receipts issued by ARCs are not included in the definition of ‘securities’ as defined under section 2(h) of the Securities Contracts act, 1956. a. True b. False Explanation:Security receipts issued by ARCs are not included in the definition of ‘securities’; the statement is correct. 85 / 100 85. Companies can issue securities by way of __________. a. Initial Public Offering (IPO) b. Rights Issue c. Bonus Issue d. All of the above Explanation:Companies can issue securities through an Initial Public Offering (IPO), Rights Issue, or Bonus Issue. 86 / 100 86. _______ is a type of bond which is issued at a deep discount to its face value. a. Plain vanilla bonds b. Perpetual bonds c. Zero coupon bond d. Inverse float bonds Explanation:A bond issued at a deep discount to its face value is a Zero Coupon Bond. 87 / 100 87. Any hedging contract in respect of stocks and shares is treated as speculative transaction. a. True b. False Explanation:Hedging contracts for stocks and shares are not treated as speculative transactions; the statement is correct. 88 / 100 88. The IT act provides for levy of AMT at the rate of ______ in case of non-company assessee, if the tax payable by it on income is less than 18.5% of adjusted total income. a. 10.50% b. 12.50% c. 15.50% d. 18.50% Explanation:The AMT rate for non-company assessees is 18.50% if tax payable on income is less than 18.5% of adjusted total income. 89 / 100 89. The dividend from foreign companies, if operating in India, is taxable only if it is paid in India. a. True b. False Explanation:Dividends from foreign companies operating in India are taxable only if paid in India; the statement is correct. 90 / 100 90. The business loss can be set off against the income from salary. a. True b. False Explanation:Business loss cannot be set off against income from salary; the statement is correct. 91 / 100 91. The resultant gains under the sale of ESOP by employees shall be taxable under the head _______. a. Income from other sources b. Property income c. Capital gains d. Profits and gains of business Explanation:Gains from the sale of ESOPs by employees are taxable under the head of Capital Gains. 92 / 100 92. The debt-oriented and hybrid ULIP shall have different tax treatments. a. True b. False Explanation:Debt-oriented and hybrid ULIPs have different tax treatments; the statement is correct. 93 / 100 93. In the case of a domestic company, the surcharge applicable on any income above Rs.1 crore but below Rs.10 crore shall be _______. a. 7% b. 8% c. 9% d. 10% Explanation:For domestic companies, the surcharge on income between Rs.1 crore and Rs.10 crore is 7%. 94 / 100 94. The expenditures such as _______ shall be allowed to be deducted while computing the income on a presumptive basis. a. Depreciation on computer b. Security transaction tax c. Staff Salary d. None of the above Explanation:Expenditures such as Security Transaction Tax shall be allowed for deduction on a presumptive basis to compute income. 95 / 100 95. The fixed maturity plans are _______ having a fixed maturity date. a. Interval funds b. Hybrid funds c. Open-ended funds d. Closed-ended funds Explanation:The fixed maturity plans are d) Closed-ended funds having a fixed maturity date. These funds invest in debt instruments with a predefined maturity date, providing investors with a clear investment horizon. 96 / 100 96. If the contribution to NPS is made by the employee, the maximum deduction of _______ of salary shall be allowed under section 80CCD of IT Act. a. 10% b. 12% c. 15% d. 18% Explanation:If a contribution to NPS is made by the employee, the maximum deduction of a) 10% of salary shall be allowed under section 80CCD of the IT act. This deduction is available in addition to the deduction available under Section 80C. 97 / 100 97. ________ is the discount rate used in free cash flow to the firm. a. Cost of equity b. WACC c. Discount rate d. Cost of Debt Explanation:WACC is the discount rate used in free cash flow to the firm. Weighted Average Cost of Capital (WACC) is used to discount future cash flows to determine the present value of a company. 98 / 100 98. Which one of these is included in ‘Capital Asset’? a. Movable Property b. Immovable Property c. Leasehold Right d. All of these Explanation:All of these are included in ‘Capital Asset’. Capital Asset includes movable property, immovable property, leasehold rights, and certain intangible assets. 99 / 100 99. Any short-term capital gains arising from the sale of equity shares allotted under ESOP on which STT has been paid shall be taxable at the rate of ________. a. 10% b. 15% c. 20% d. 25% Explanation:Any short-term capital gains arising from the sale of equity shares allotted under ESOP on which STT has been paid shall be taxable at the rate of b) 15%. This rate is applicable for gains arising from transactions executed on recognized stock exchanges. 100 / 100 100. An individual is treated as a resident in India if he stays in India for _______ or more during the relevant previous year. a. 121 days b. 151 days c. 182 days d. 163 days Explanation:An individual is treated as a resident in India if he stays in India for c) 182 days or more during the relevant previous year. This establishes the residential status of an individual for taxation purposes. Your score is 0% Restart quiz Exit
