Unit 4: Assessment of Companies - Practice Quiz

1 Which figure is generally taken as the starting point for computing a company's taxable business income?

2 What is meant by the gross total income of a company?

3 A company's gross total income is , and its eligible Chapter VI-A deductions are . What is its total income?

4 Which allowance may be deducted while computing taxable business income under the Income-tax Act?

5 Which item is added to the basic income tax to arrive at the final tax liability, where applicable?

6 Advance tax already paid by a company is generally treated as what while determining the amount payable?

7 What does MAT stand for in corporate taxation?

8 MAT is primarily calculated with reference to which amount?

9 Which section of the Indian Income-tax Act contains the main MAT provisions for companies?

10 When does a company generally become liable to pay MAT?

11 What is the general MAT rate under Section 115JB, before applicable surcharge and cess?

12 What is MAT credit?

13 Under the former Dividend Distribution Tax regime, who was primarily responsible for paying the tax on distributed profits?

14 What did DDT stand for under the former system of taxing corporate dividends?

15 Under the former DDT regime, Dividend Distribution Tax was generally treated as which type of levy?

16 From which date was the Dividend Distribution Tax regime abolished in India?

17 Under the system applicable after the abolition of DDT, dividend income is generally taxable in whose hands?

18 Under the former distribution tax regime, tax on income distributed by a mutual fund was generally payable by whom?

19 A person holding units in a mutual fund is commonly called what?

20 After the abolition of the former distribution tax regime, income distributed by a mutual fund is generally taxable in whose hands?

21 A domestic company reports net business profit of after charging book depreciation of . Depreciation allowable under the Income-tax Act is . Assuming no other adjustments, what is its taxable business income?

22 A company has current-year business income of , short-term capital gain of , and a brought-forward business loss of . Assuming the loss is eligible for set-off, what is the total income?

23 A domestic company has total income of taxable at . Ignoring surcharge but applying health and education cess at , what is its total tax liability?

24 A domestic company has total income of taxable at . Surcharge is and health and education cess is . Ignoring marginal relief, what is the total tax liability?

25 A company has current business income of , long-term capital gain of , brought-forward business loss of , and unabsorbed depreciation of . Assuming all amounts are eligible for set-off, what is the total income after set-off?

26 A company reports net profit of in its statement of profit and loss. This includes exempt income of credited to profit and a provision for income tax of debited to profit. Assuming these are the only MAT adjustments, what is the book profit?

27 A company has normal income-tax liability of . Its book profit is , and MAT applies at . Ignoring surcharge and cess, how much tax must the company pay?

28 A company has available MAT credit of . In the current year, its normal tax liability is and MAT liability is . How much MAT credit may it use, and how much tax will it pay?

29 A company's book profit before the prescribed reduction is . Its books show brought-forward loss of and unabsorbed depreciation of . What is the book profit after the permitted MAT reduction?

30 A company has normal tax liability of and MAT liability of . It has no MAT credit available from earlier years. Which amount is payable before surcharge and cess?

31 Under the former dividend distribution tax regime, a domestic company wants shareholders to receive . If DDT is of the grossed-up dividend and surcharge and cess are ignored, what is the DDT liability?

32 Under the former DDT provisions, a company declares a dividend on 1 July, distributes it on 5 July, and pays it on 10 July. From which date is the 14-day period for depositing DDT measured?

33 A domestic company distributes a dividend during a period governed by the post-abolition dividend regime. Which statement correctly describes the general tax treatment?

34 Under the former DDT regime, how was dividend distribution tax generally treated when computing the domestic company's taxable business income?

35 Under the former DDT regime, a domestic holding company receives an eligible dividend of from its domestic subsidiary and distributes to its own shareholders in the same relevant period. Assuming the statutory conditions for reduction are satisfied, on what amount is DDT computed?

36 Under the current withholding provisions, a resident unit holder receives of taxable income from mutual fund units. The applicable TDS rate is , and the threshold conditions are satisfied. How much tax is deducted?

37 Under a former distribution tax regime, a mutual fund wants unit holders to receive . If the distribution tax is of the grossed-up amount and surcharge and cess are ignored, what is the tax liability?

38 Under the current regime, a resident unit holder receives taxable income from mutual fund units after TDS has been deducted. How is the TDS generally treated when the unit holder files an income-tax return?

39 A resident investor receives from mutual fund units, consisting of of taxable distributed income and of capital gains. If TDS applies at only to the distributed income, how much TDS is required?

40 Under the former tax-on-distributed-income regime for specified funds, who was primarily liable to pay tax on the income distributed to unit holders?

41 For AY 2024-25, a domestic company that has not opted for a concessional tax regime has total income of ₹12 crore, entirely taxable at the ordinary corporate rate. Its turnover in FY 2021-22 was ₹380 crore. What is its tax liability, including surcharge and health and education cess?

42 A domestic company taxable at has total income of ₹1.01 crore for AY 2024-25. All income is taxable at the ordinary rate. After applying marginal relief and cess, what is the final tax liability?

43 A domestic company validly opts for section 115BAA. Its income before Chapter VI-A deductions is ₹10 crore. It claims ₹0.40 crore under section 80JJAA, ₹0.20 crore under section 80G, and ₹0.30 crore under section 80M; all statutory conditions are satisfied. What is its tax liability, including surcharge and cess?

44 A domestic company earns ₹5 crore of business income and receives ₹3 crore as dividend from another domestic company. It distributes ₹2.20 crore as dividend to its shareholders within the period prescribed by section 80M. Assuming no other adjustments, what is its total income?

45 A domestic company is taxable at the ordinary rate of . Its total income consists of ₹5 crore of ordinary business income, ₹1 crore of short-term capital gain taxable under section 111A at , and ₹2 crore of long-term capital gain taxable at . What is the tax liability after surcharge and cess?

46 A company's statement of profit and loss shows net profit of ₹8 crore after debiting current income-tax provision of ₹0.60 crore, deferred tax of ₹0.20 crore, provision for doubtful debts of ₹0.30 crore, and CSR expenditure of ₹0.10 crore. It credits ₹0.40 crore of exempt agricultural income. Book loss brought forward is ₹1.50 crore and unabsorbed depreciation is ₹1 crore. What is its book profit under section 115JB?

47 A domestic company not covered by a concessional regime has book profit of ₹20 crore. Its normal tax liability, including surcharge and cess, is ₹2.90 crore. Using a MAT rate of , surcharge of , and cess of , what amount is payable and what MAT credit arises?

48 A company has brought-forward MAT credit of ₹1.10 crore. In the current year, its normal tax liability is ₹4.20 crore and its MAT liability is ₹3.50 crore, both inclusive of surcharge and cess. How much credit may be used, and how much tax remains payable?

49 For section 115JB purposes, a company's books show accumulated loss of ₹6 crore, including depreciation of ₹4 crore, and unabsorbed depreciation of ₹4 crore. What deduction is available from book profit for these items?

50 A company has unutilized MAT credit and subsequently exercises the irrevocable option under section 115BAA. Which statement correctly describes the consequence?

51 A domestic company declares dividend on 15 May 2024. Under the post-Finance Act 2020 regime, which treatment is generally applicable?

52 Under the historical section 115-O regime, a domestic company distributes ₹8.50 crore as dividend. The statutory DDT rate is after grossing up, surcharge is , and cess is . What is the company's DDT liability?

53 Under the historical DDT regime, a domestic parent receives ₹4 crore of dividend from its domestic subsidiary, on which the subsidiary has paid DDT. The parent distributes ₹10 crore in the same year, and all conditions for inter-corporate dividend reduction are met. What amount is used for grossing up the parent's DDT base?

54 Under the historical section 115-O regime, dividend is declared on 1 July, placed unconditionally at shareholders' disposal on 5 July, and actually paid on 10 July. By which date was DDT required to be paid?

55 Which statement correctly describes the historical tax treatment when a domestic company paid DDT under section 115-O?

56 A mutual fund distributes income to its unit holders on 20 April 2020. What is the general consequence under the Finance Act 2020 changes?

57 Under the historical section 115R regime, a fund distributes ₹9.50 crore. Assume the applicable base rate is , the rate must be grossed up, surcharge is , and cess is . What is the distributed-income tax liability?

58 Under the historical section 115R regime, a non-equity-oriented fund distributes ₹7.50 crore to individual unit holders. Assume an applicable rate of after grossing up, surcharge of , and cess of . What is the fund's tax liability?

59 Under the historical section 115R regime, a mutual fund correctly paid tax on income distributed to resident unit holders. Which treatment generally followed for those unit holders?

60 During a historical period when an equity-oriented fund's distributed income was subject to section 115R at after grossing up, the fund distributed ₹9 crore. If surcharge was and cess was , what tax was payable?