XX Taxation in Securities Markets - 13
XX Taxation in Securities Markets - 13
Q 1. What is the maximum period for which securities can be held before and after the record date to avoid triggering the provisions of Section 94(7)?
1 month ago and 1 month after
3 months ago and 3 months after
3 months ago and 6 months after
None of the above
Q 2. Under which section are Specified Funds allowed to pay taxes at concessional rates?
Section 10(4D)
Section 115AB
Section 115AD
Section 196D
Q 3. Is the sale of rural agricultural land considered a transfer under Section 47 of the Income-tax Act?
Yes
No
Only if it is sold to a non-agriculturist
Only if it is sold for commercial purposes
Q 4. What is the formula for computing the exemption under Section 10(23(FF) for specified funds?
(* (b)
(a) * (/ (c)
(a) + (b) - (c)
(a) - (b) / (c)
Q 5. What are the conditions for an investment division of an offshore banking unit to be treated as a specified fund under Section 10(4D) of the Income-tax Act, 1961?
- (This should be established before 31-03-2024 and maintain separate accounts
- (It should hold all its units with non-residents and maintain proper documentation of all transactions
- (You should be granted a certificate of registration as a Category-I Foreign Portfolio Investor and maintain separate accounts, among other conditions
- (It should be established or incorporated in India and hold all its units with non-residents
Q 6. Which of the following is NOT a commonly used derivative?
Futures
Options
Swaps
Forwards
Q 7. Which section of the Income-tax Act provides for taxation of long-term capital gains from the transfer of a long-term capital asset, being an equity share or a unit of an equity-oriented fund or a unit of a business trust chargeable to STT at a rate of 10% on the amount of capital gain over Rs. 1,00,000?
Section 10(23FC
Section 111A
Section 112
Section 115UA
Q 8. In which scenario would a valuation report be necessary for unquoted securities?
During the IPO
During a corporate takeover
For tax assessment purposes
During a bankruptcy proceeding
Q 9. What are the primary financial benefits of investing in Sovereign Gold Bonds (SGBs)?
Dividend payments
Capital appreciation
Interest payments
Inflation protection
Q 10. Can income from lottery winnings be taxed under any other head of income?
Yes
No
Only if it exceeds a certain threshold
Only if it is received as a gift
Q 11. How does MAT impact companies with tax losses?
It increases their tax losses
It decreases their tax losses
It has no impact on their tax losses
This allows them to claim tax credits
Q 12. Why should securities not listed on a recognized stock exchange be valued when held as inventories, according to Section 145A of the Income-tax Act?
Net realizable value
Fair market value
Actual cost initially recognized by ICDS-VIII
None of the above
Q 13. What does the holder of equity shares with detachable warrants have the option to do?
Convert the warrants into debt instruments
Redeem warrants for cash after a specified period
Apply for a specified number of shares at a predetermined price on the appointed date
None of the above
Q 14. Under what conditions is an investment made in Category-I or Category-II AIF eligible for exemption from tax under section 10(23FE)?
Investments made between 01-04-2020 and 31-03-2024
Investments are held for at least 1 year
Investment is made in Category-I or Category-II AIF having more than 25% investment in InVITs
Investment is made in Category-I or Category-II AIF having more than 75% investment in specified entities
Q 15. How are the rules made by CBDT amended?
Through legislative amendments
Through circulars issued by the Ministry of Finance
Through notifications issued by CBDT
Through orders issued by the Securities and Exchange Board of India (SEBI)
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