Articleship assessment test ICAI – Level 1 | Direct Tax MCQ – Profits and Gains of Business or Profession

Articleship assessment test ICAI – MCQ

Question 1:- 

Income under the Head Profits and Gains of Business and Profession would tax :-

(a) Income from only one business of assessee

(b) Income from all the business of assessee

(c) Only income from profitable business of the assessee

(d) None of the above

Question 2:- 

X is a lawyer providing services to ABC Co. He went to Chandigarh to argue the case for the company and lived in an accommodation and car to travel, for which he was reimbursed by ABC Co.  What would be the tax treatment for this income in nature of reimbursement for Mr. X :  –

(a) Its taxed as income from other Sources;

(b) Its taxed as a perquisite arising during carrying on of any business or profession

(c) Not taxable under any Head

(d) Should be taxed as income from Profession under other Sources.

Question 3:- 

Which of the following are taxable under the Head PGBP :-

(a) Interest received by a partner from a firm

(b) Salary & Bonus received by a partner from a firm

(c) Commission received by a partner from a firm

(d) All of the above.

Question 4:- 

X Club rendered certain services to its members . Which of the head would such income be taxable :-

(a) Income derived by trade, professional or similar organization, from specific services performed for its members, is taxable under the head PGBP

(b) Income from other Sources

(c) Capital Gains

(d) None of the above.

Question 5:- 

Export incentives taxable under PGBP excludes : –

(a) Profit on sale of import licenses granted under Imports (Control) Order on account of exports;

(b) Cash assistance received or receivable against exports;

(c) Subsidy on purchase of new plant and machinery for setting up new plant

(d) Profit on transfer of Duty Entitlement Pass book

Answers

1. (b) Income from all the business of assessee

2. (b) Its taxed as a perquisite arising during carrying on of any business or profession

3. (d) All of the above.

4. (a) Income derived by trade, professional or similar organization, from specific services performed for its members, is taxable under the head PGBP

5. (c) Subsidy on purchase of new plant and machinery for setting up new plant