NISM Series XIX-C AIF Managers Certification Exam - 21

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Q 1. Why is it essential for AIF investors to set a risk profile for their investment at the time of commitment?

a) To comply with regulatory requirements

b) To facilitate fund management

c) To mitigate investment risks

d) None of the above
 
Q 2. What is a potential solution to complex problems in the context of fund monitoring?

a) Find consensus with the investment committee

b) Building alliances with co-investors

c) Withdrawing investments immediately

d) Ignoring the situation and hoping for the best
 
Q 3. How is 'control' defined for sponsors other than listed or unlisted companies according to the AIF Regulations?

 A) Any change in the regulatory environment

 B) Any change in the fund's investment objectives

 C) Any change in the legal formation or ownership of the sponsor

 D) Any changes to the fund's fee structure
 
Q 4. What is the 'Liquidation Period' in the context of winding up an AIF?

- A) A period during which investors can withdraw their investments without penalty.

- B) A period during which the AIF manager seeks potential buyers for the AIF's assets.

- C) A period during which the AIF's performance is evaluated before the winding-up process begins.

- d) A period during which investors can increase their investments in the AIF.
 
Q 5. What is the primary responsibility of the Compliance Officer in an AIF?

a) Managing fund performance

b) Handling investor relations

c) Monitoring compliance with regulatory provisions

d) None of the above
 
Q 6. Under which section of the ITA can loss from one source be adjusted against income from another source falling under the same head of income?

a) Section 70

b) Section 71

c) Section 72

d) Section 75
 
Q 7. What are the effective tax rates for resident investors on deemed income from shares and securities received below FMV?

a) 20.8% to 34.944%

b) 23.296% to 42.744%

c) 30% to 43.68%

d) 42.744% to 50%
 
Q 8. Which streams of income in a Category III AIF are eligible for tax pass-through to beneficiaries?

a) Interest and dividend income only

b) Gains on transfer of listed securities only

c) Gains on transfer of unlisted securities only

d) Only income from 'Income from Other Sources'
 
Q 9. According to Indian tax laws, what happens to the cost of acquisition of convertible preference shares upon conversion into equity shares?

A) Decreases

B) Increases

C) Remains the same

d) Transfers to the issuing company
 
Q 10. When did the GAAR provisions under the ITA become effective?

a) 1 April 2015

b) 1 April 2016

c) 1 April 2017

d) 1 April 2019
 
Q 11. How are short-term capital gains from the sale of equity shares listed on a recognized stock exchange in India, on which STT is paid and taxed?

a) Exempt from taxation

b) Taxable at a flat rate of 10%

c) Taxable at a flat rate of 15%

d) Taxable at progressive rates
 
Q 12. Under what circumstances will expenditure incurred by investors not be allowed as a deduction for calculating taxable income?

a) When the income is taxable at a flat rate

b) When the income is exempt under the ITA

c) When income is tax-exempt abroad

d) When income is subject to withholding tax
 
Q 13. Effective from when will the dividend stripping provisions cover all securities and units?

a) April 1, 2021

b) April 1, 2022

c) April 1, 2023

d) None of the above
 
Q 14. What is the tax treatment of winnings from lottery or gambling for non-resident investors?

a) Taxable under the head 'Income from Other Sources'

b) Exempt from taxation

c) Taxable under the head 'Income from Business or Profession'

d) Taxable under the head 'Income from Salaries'
 
Q 15. How is dividend income taxed in the hands of shareholders according to Indian tax laws?

A) No taxation

B) Taxed at corporate tax rates

C) Taxed at source with no further taxation

d) Exempted for non-resident investors

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