Q1.
Capital assets are classified as long-term or short-term depending on the period of holding of the asset by the assessee.
Q2.
(I) Indexation is calculated on the basis of the cost inflation index announced by the government every financial year.
(II) Indexation is not permitted on debentures and bonds other than capital indexed bonds issued by the government.
Q3.
Shares in ABC Ltd. were purchased by a resident investor on 1 May, 1999 for Rs. 5,000
and sold on 29 March, 2010 for Rs. 3,000. Calculate the capital gain or loss, without considering indexation.
Q4.
Short-term capital asset for shares in a company is held for up to _______ months.
Q5.
(I) If the capital gain is short term capital gain, it is taxable at the rate of 10% plus education cess.
(II) Non-residents are chargeable to tax on long-term capital gains from a ‘foreign exchange asset’ at 10% without the benefit of indexation.
Q6.
Lets say partly convertible debentures of Rs. 100 were issued. Rs. 60 was converted into two equity shares, while Rs. 40 was redeemed. The cost of acquisition of the two equity shares would be:
Q7.
Investments through margin lending are also known as geared/leveraged securities.
Q8.
If the interest rate on a mortgage is 9.5%, and the person’s marginal tax rate including surcharge is 31.5% , the return required from a fixed interest investment to equal the mortgage cost is:
Q9.
If the investment involves capital growth, the cost of the loan is 9.5% per annum, tax is 31.5% and inflation of 3% is assumed, the calculation becomes:
Q10.
If the interest on a borrowing is tax deductible, the interest rate is 31.5% and inflation is 3%. Pre-tax return required:
Q12.
Which of the following do not constitute transfer?
Q13.
Long-term capital asset for units of mutual funds is held for more than ______ months.
Q14.
Capital gains is chargeable as income of the previous year in which transfer takes place.
Q15.
(I) Tax avoidance involves arrangements within the law that take the taxpayer outside the scope of particular legislation.
(II) Tax evasion involves arrangements outside the law where liability to pay tax , having been incurred, is willfully concealed or ignored.
Q16.
The example/s of issues involving tax planning:
Q17.
Strategies to minimize taxation:
Q18.
Shares in ABC Ltd. were purchased by a resident investor on 1 May, 1999 for Rs. 5,000 and sold on 29 March, 2010 for Rs. 6,000? The cost inflation factor for 1999-2000 is 389 and that for 2009 -10 is 632. Calculate the Capital gain or loss?
Q19.
The assets that are subject to CGT:
Q20.
The assets which are excluded from CGT:
Q21.
The disadvantage with margin lending is the margin call.
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