XX Taxation in Securities Markets -27

Find More Mock Tests Here

Q 1. What is the purpose of Instruction No. 1827 and Circular No. 4 of 2007 issued by CBDT?

Regulating the sale of shares and securities

To simplify the tax treatment of shares and securities

Guide distinguishing capital gains from business income

To discourage investment in shares and securities
 
Q 2. What is the tax treatment for gains or losses from the sale of bonus shares held as stock-in-trade?

Taxed as regular income

Taxes as capital gains

Exempt from tax

Taxed at a flat rate
 
Q 3. How are ADRs different from GDRs?

ADRs are denominated in US dollars, while GDRs are denominated in Indian rupees.

ADRs are issued by Indian companies, while GDRs are issued by non-US companies.

ADRs are listed on US exchanges, while GDRs are listed on European exchanges.

ADRs carry the corporate and economic rights of foreign shares, while GDRs do not.
 
Q 4. What is one of the conditions specified for an applicant to be considered an eligible investment fund?

The fund must have a minimum corpus of US $10 million

The fund must be regulated by the International Financial Services Centres Authority

The fund manager must be a resident of a country whose central bank is a member of the Bank for International Settlements

None of the above
 
Q 5. What determines the tax rate applicable to short-term capital gains?

Type of investment account

The amount of capital gain

The sector of the company

The residential status of the taxpayer
 
Q 6. How is the exemption calculated for income attributable to non-resident unitholders in a category-III AIF specified fund under Section 10(4D)?

By multiplying the daily AUM held by non-resident unit-holders

By dividing the daily total AUM of the specified fund

By adding the daily AUM to the period of holding the capital asset

By calculating the average AUM of the specified fund
 
Q 7. Can Sovereign Gold Bonds (SGBs) be used as collateral for loans?

No, they cannot be used as collateral

Yes, but only from banks

Yes, but only from financial institutions

Yes, they are eligible to be used as collateral for loans from banks, financial institutions, and NBFCs
 
Q 8. How are resultant capital gains computed in foreign currency converted into Indian Rupees?

At the average exchange rate over one year before the date of transfer

At the buying rate prevalent on the date of transfer of the capital asset

At the selling rate prevalent on the date of transfer of the capital asset

None of the above
 
Q 9. What is the primary characteristic of the Cash System of accounting?

It calculates profit or loss based on income and expenditure regardless of cash receipt or payment

It calculates profit or loss based on cash receipt and payment only

It calculates profit or loss based on income and expenditure only when cash is received or paid

It calculates profit or loss based only on cash transactions
 
Q 10. When is the exemption allowed for the investment division of an offshore banking unit under Section 10(4D)?

If you earn income from any source

If you earn income from securities not specified in para 1.2

When the audit report is filed in Form No. 10-IL by the due date

When the investment division files its annual financial statements
 
Q 11. Which income is NOT part of the 'total income' and is considered exempt?

Income from salaries

Income from house property

Capital gains

Dividend income
 
Q 12. How are derivative transactions settled?

With the actual delivery of the underlying asset

Without the actual delivery of the underlying asset

Through the physical exchange of assets

None of the above
 
Q 13. What is a specified mutual fund (SMF) based on its investment in equity shares?

Invests more than 50% of its total proceeds in equity shares

Invest exactly 35% of its total proceeds in equity shares

Invests less than 35% of its total proceeds in equity shares

None of the above
 
Q 14. Which of the following incomes is always taxable under the head of "Income from other sources"?

Salary income

Rental income from house property

Dividend income

Capital gains
 
Q 15. Which companies are exempt from MAT if they do not have a Permanent Establishment (PE) in India?

Domestic companies

Foreign companies

Insurance companies

Companies governed by specific laws

Find More Mock Tests Here