Paper 7 Direct Taxation | CMA Intermediate True or False with answer




Paper 7 Direct Taxation True or False

A. State whether the following are True or False                          

1) In applicable situations of TDS, such TDS is to be deducted on amount including GST component. False

2) Contribution made to political party by way of cash to the extent of Rs. 10,000 is allowed as business expenditure. False

3) Unabsorbed depreciation can be carried forward for any number of years. True

4) Interest on normal compensation/enhanced compensation is fully chargeable to tax in the year of receipt. False

5) Long-term capital gain arising from sale of listed shares (STT paid) is not fully exempted from tax. True

B. State whether the following are True or False 

1) All incomes that accrue to a minor child will be included in the total income of that parent whose total income is greater. False

2) Caution money forfeited by the assessee is taxable in the year of forfeiture under the head capital gains. False

3) Paintings are not considered as personal effects in the context of "capital asset" definition. True

4) In the hands of a manufacturer, factory building newly constructed is not eligible for additional depreciation. True

5) Income from assets acquired by spouse out of pin money or household savings is not subject to clubbing. True

C. State whether the following are True or False 

1) Cost of self-generated goodwill of business is deemed to be Nil. True

2)  Reimbursement of ordinary medical expenses by the employer is fully exempted. False

3) Where capital gain arises to an individual from the transfer of a capital asset, being immovable property under a joint development agreement, the capital gain is chargeable to tax in the previous year in which the certificate of completion for whole or part of the project is issued by the competent authority. True

4) In order to avail carry forward of unabsorbed depreciation, the assessee must furnish the return of income within the due date specified in section 139(1). False

5) In order to claim exemption under section 54B, the agricultural land, which is transferred, must have been used by the assessee or his parents for at least 3 years prior to the date of transfer. False

D. State whether the following are True or False 

1) Interest on deposit certificates issued under Gold Monetization Scheme, 2015 is exempt from tax. True

2) The monetary limit of Rs. 5 lakhs in respect of gratuity received by an employee covered by Payment of Gratuity Act, 1972 is exempt from tax. False

3) Medical insurance premium paid by son for parents who are senior citizens is deductible up to a maximum of Rs. 35,000. False

4) In order to avail carry forward loss from house property, the return of income must be filed before the due date specified in section 139(3). False

5) 30% of the additional employee cost incurred by the employer is deductible under section 80JJAA. True

E. State whether the following are True or False 

1)   An Indian company is always resident in India. True

2)  Salary received by a Member of Parliament is exempt. False

3)  Income of a self-occupied property cannot be negative. False

4)  Preliminary expenditure are allowed deduction in 10 equal installments. False

5) Capital gain arises from the transfer of any capital asset. True