Income under the Salary

1. Remuneration received by a teacher of a college from the University for checking answer scripts is taxable as:
   (a) Salaries
   (b) Income from other sources
   (c) Profits or Gains of Business of Profession
   (d) Income from speculative business
2. Mr. Raju is getting salary of Rs.10,000 per month. His salary is due on last day of every month. Salary of March 2019 was paid on 7 April, 2019. Compute his taxable salary income for the Previous  Year 2018-19.
   (a) Rs.1,20,000
   (b) Rs.1,00,000
   (c) Rs. 1,10,000
   (d) Rs.90,0000
3. Mr. Raju is getting salary of Rs 10,000 per month from 1st October 2018 after allowing 500 increment this date . His salary is due on last day of every month. Salary of March 2019 was paid on 7 April, 2019. Compute his taxable salary income for the PY 2018-19.
   (a) Rs. 1,20,000
   (b) Rs. 1,17,000
   (c) Rs. 1,23,000
   (d) Rs. 90,000
4. Mr. Raju is getting salary of Rs 10,000 per month from 1st October 2018 after allowing 500 increment this date . His salary is due on first day of next following  month. Salary of March 2019 was paid on 7 April, 2019. Compute his taxable salary income for the PY 2018-19.
   (a) Rs. 1,20,000
   (b) Rs. 1,17,000
   (c) Rs. 1,23,000
   (d) Rs. 1,16,500
5. Salary of S (Rs. 60,000 per month) becomes due on the last day of the month but is paid on 7^th of next month. Also, salary of April, 2019 and May, 2019 is received in advance in March, 2019. What will be his gross income for Assessment Year 2019-20?
   (a) Rs. 7,20,000
   (b) Rs. 7,80,000
   (c) Rs. 8,40,000
   (d) Rs. 6,40,000

   Allowance

6. While computing income under the head ‘Salaries’, exemption under House Rent Allowance is available to an employee when:
   (a) The employee pays rent which does not exceed 10% of salary
   (b) The employee pays rent which exceeds 10% of salary
   (c) The employee lives in a house for which he does not pay rent
   (d) The employee lives in his own house
7. While computing income under the head ‘Salaries’, exemption under House Rent Allowance is not available to an employee when:
   (a) The employee pays rent which does not exceed 10% of salary
   (b) The employee pays rent which exceeds 10% of salary
   (c) The employee lives in a house for which he pay rent Rs.5,000 p.a.
   (d) None of the above
8. Calculate the exempt HRA from the following details:
   X is entitled to a basic salary of Rs. 50,000 p.m. and dearness allowance of Rs. 10,000 p.m., 40% of which forms part of retirement benefits. He is also entitled to HRA of Rs. 20,000 pm. He actually lives with his parents in Mumbai and does not pay any rent. Market rent of that house is Rs. 20,000 pm in Mumbai.
   (a) Nil
   (b) Rs. 1,75,200
   (c) Rs. 64,800
   (d) Rs. 2,40,000
9. Y received children education allowance of Rs. 500 pm for his children. Calculate taxable amount of children education allowance for the assessment year 2019-20 if entire Rs. 500 is spent by Y.
   (a) Nil
   (b) Rs. 4,800
   (c) Rs. 6,000
   (d) Rs. 3,600
10. For an employee in receipt of hostel expenditure allowance for his four children, the maximum annual allowance exempt under section 10(14) is
    (a) Rs.300 per month
    (b) Rs.100 per month
    (C) Rs.3,600
    (b) Rs.7,200
11. Sums received as transport allowance for handicap employee is exempt up to:
    (a) Rs.1,000 p.m.
    (b) Rs.3,200 p.m.
    (c) Rs.1,600 p.m.
    (d) Nil

    Perquisite

12. Interest-free loan received from the employer is tax-free perquisite if the amount of loan does not exceed :
    (a) Rs. 10,000
    (b) Rs.15,000
    (c) Rs. 20,000
    (d) Rs. 25,000
13. A was provided accommodation in a hotel by the employer for 10 days consequent to his transfer from Kolkata Hyderabad. The cost of accommodation was Rs. 30,000 to the employer. The value of perquisite is
    (a) Nil
    (b) Rs. 30,000
    (c) Rs. 15,000
    (d) Rs. 20,000
14. Employer provides a car (below 1.6 Ltr. capacity) along with a driver to X partly for official and partly for personal purpose. The expenses incurred by the company are:
    Running and maintenance expenses – Rs. 32,000
    Driver’s salary – Rs. 36,000
    Taxable value of perquisite is:
    (a) Rs. 21,600
    (b) Rs. 10,800
    (c) Rs. 32,400
    (d) Rs. 39,600
15. Motor car with more than 1.6 litters cubic capacity is given to the employee both for official and personal use with expenditure on running and maintenance met by the employer. The car was self driven by the employee. The perquisite value shall be
    (a) Rs. 1,200 p.m.
    (b) Rs. 1,800 p.m.
    (c) Rs. 2,400 p.m.
    (d) Nil

    Deduction From Gross Salary

16. In the case of Government employees, the Entertainment Allowance is allowed as deduction to the extent
    (a) Rs 5,000
    (b) Rs 5,000 or 1/5th of salary whichever is less
    (c) Rs 5,000 or 1/4th of salary whichever is less
    (d) No deduction
17. Interest credit in Recognised Provident Fund is exempted up to
    (a) 8%
    (b) 9%
    (c) 9.5%
    (d) 10%

    Retirement Benefits :- Gratuity

18. For non-Government employee governed by Payment to Gratuity Act, 1972, the monetary limit for exemption is:
    (a) Rs.5,00,000
    (b) Rs.3,50,000
    (c) Rs.10,00,000
    (d) Limitless
19. R, who claimed the exemption of gratuity in the past to the extent of Rs. 3,00,000, was entitled to the gratuity from the present / second employer amounting to Rs. 8,00,000 in the previous year 2018-19 as he retired on 25.10.2018. R shall be entitled to exemption to the maximum extent of:
    (a) Rs. 7,00,000
    (b) Nil
    (c) Rs. 6,00,000
    (d) Rs. 10,00,000

    Pension

20. An employee who was not entitled to gratuity got 30% of his total pension commuted in the past. He wishes to commute another 25% of his total pension in the previous year. How many percentages to the extent of his total pension are commuted?
    (a) Nil
    (b) 10%
    (c) 25%
    (b) 40%
21. X retired on 15.4.2013 from a company. He was entitled to a pension of Rs. 4,000 p.m.. At the time of retirement, he got 75% of the pension commuted and received Rs. 1,20,000 as commuted pension. Compute the taxable portion of the commuted pension if he is entitled to gratuity.
    (a) Rs. 66,667
    (b) Rs. 53,333
    (c) Rs. 1,20,000
    (d) Rs. 78,667
22. Commuted pension received by a State Government employee is exempt up to ` ……
    (a) 3 lakhs
    (b) 5 lakhs
    (C) 10 lakhs
    (d) Fully exempt

    Leave Encashment

23. Encashment of earned leave is fully taxable, if encashed
    (a) after retirement
    (b) after death
    (c) during the period of employment or after reitrement
    (d) during the period of service
24. Encashment of earned leave is fully taxable, if encashed
    (a) after retirement
    (b) after death
    (c) during the period of employment or after reitrement
    (d) during the period of service
25. Payment received by employee in respect of encashment of earned leave during service is :
    (a) Taxable as salary
    (b) Taxable as income from other sources
    (c) 50% is exempt and balance taxable as salary
    (d) Fully exempt under section 10
26. The maximum amount of leave salary not chargeable to tax as specified by the Government in case of a non-government employee is :
    (a) Rs.75,600
    (b) Rs.80,000
    (c) Rs.2,40,000
    (d) Rs.3,00,000

    VRS

27. The maximum amount of compensation received at the time of voluntary retirement exempt from tax is:
    (a) Rs. 200000
    (b) Rs. 500000
    (c) Rs. 100000
    (d) The actual amount received as compensation
28. X received Rs. 100,000 from the prospective employer before joining duty in order to resign from the present employer. Subsequently, he joined the new employer. The amount received is:
    (a) Taxable as income from business
    (b) Taxable as salary income
    (c) Exempt from tax u/s 10
    (d) Exempt being capital receipt