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Taxation MCQs for CA Inter
Chapter-wise Taxation MCQs with answers and explanations. Try the sample questions below, then practise a set of 10 with instant right/wrong.
Practise 10 Tax MCQsSample Taxation MCQs with answers
Q1 · CH- House Property
Ms. Riya let out a house property. Its Gross Annual Value is ₹3,00,000. She paid municipal taxes of ₹20,000 during the year and interest on a housing loan of ₹50,000 for this property. What is her Income from House Property?
- (a) ₹1,60,000
- (b) ₹1,46,000
- (c) ₹1,40,000
- (d) ₹2,10,000
Show answer ↓
Answer: (b) ₹1,46,000
(b) is correct: NAV = 3,00,000 − 20,000 = 2,80,000. Less 30% standard deduction (84,000) and interest (50,000) gives ₹1,46,000. (c) wrongly applies the 30% deduction on GAV instead of NAV.
Q2 · CH - Composition Scheme & Registration
Which of the following persons, each with an aggregate turnover below ₹1.5 crore in the preceding FY and registered in a normal category State, is NOT eligible to opt for the composition scheme under section 10(1)?
- (a) A manufacturer of biscuits making only intra-State supplies
- (b) A trader of garments making only intra-State supplies
- (c) A restaurant service provider (not serving alcohol) making only intra-State supplies
- (d) A trader making inter-State outward supplies of goods
Show answer ↓
Answer: (d) A trader making inter-State outward supplies of goods
(d) is correct: a person making inter-State outward supplies of goods is barred from the composition scheme. (c) is wrong because restaurant services are expressly permitted under section 10(1).
Q3 · CH - Set off & Carry Forward CH- Clubbing
Master Aman (age 12) earned interest of ₹10,000 during P.Y. 2024-25 on a fixed deposit gifted to him by his grandfather. His father's total income (excluding this interest) is ₹8,00,000 and his mother's is ₹10,00,000. The parents' marriage subsists. How much will be included, and in whose hands?
- (a) ₹10,000 in the father's hands
- (b) ₹8,500 in the mother's hands
- (c) ₹8,500 in the father's hands
- (d) ₹10,000 in the mother's hands
Show answer ↓
Answer: (b) ₹8,500 in the mother's hands
(b) is correct: under section 64(1A), a minor's income is clubbed with the income of the parent whose total income, before including it, is greater (here the mother), after the section 10(32) exemption of ₹1,500 per child (₹10,000 − ₹1,500 = ₹8,500). Clubbing in the father's hands is wrong because his income is lower.
Q4 · CH- House Property
Mr. Ravi has opted out of the default tax regime under section 115BAC for A.Y. 2025-26. He owns one self-occupied house, built with a housing loan taken in 2019. Interest payable for the year is ₹2,50,000, and the construction was completed within 5 years. What is his income or loss under 'Income from house property'?
- (a) Loss of ₹2,50,000
- (b) Loss of ₹30,000
- (c) Loss of ₹2,00,000
- (d) Nil
Show answer ↓
Answer: (c) Loss of ₹2,00,000
(c) is correct: the annual value of a self-occupied property is nil, and under the old regime section 24(b) allows interest of up to ₹2,00,000 for a loan taken after 1.4.1999 to acquire or construct it. A loss of ₹2,50,000 ignores this ceiling.
Q5 · CH - Capital Gain
Ms. Neha sold listed equity shares (STT paid at acquisition and on sale) on 10 December 2024, giving rise to long-term capital gains of ₹3,25,000. She has no other capital gains, and her other income exceeds the basic exemption limit. What is her tax on these LTCG under section 112A (ignoring cess)?
- (a) ₹40,625
- (b) ₹20,000
- (c) ₹30,000
- (d) ₹25,000
Show answer ↓
Answer: (d) ₹25,000
(d) is correct: for transfers on or after 23.7.2024, LTCG under section 112A exceeding ₹1,25,000 is taxed at 12.5%, so (₹3,25,000 − ₹1,25,000) × 12.5% = ₹25,000. ₹20,000 wrongly applies the old 10% rate.
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