Classification and Tax Incidence on Companies

Industrial company means an Indian Company where business mainly consists in the :

(A)Construction of ships

(B)Manufacture or processing of goods

(C)Mining or in the generation of electricity or any other Form of Power

(D)All of the above

Which of the following is a company under the Income Tax Act, 1961 ?

(A)An Indian Company

(B)Domestic & Foreign Company

(C)Widely Held & Closely Held Company

(D)All of the above

Which of the following is a company under the Income Tax Act, 1961 for income tax purposes ?

(A)Foreign Company

(B)Indian Company

(C)Closely held Company

(D)All the above

As per Section 115BG of the Income Tax Act, where the total Income of the assessee includes any Income from the transfer of carbon credit then such income shall be taxable at a concessional rate of ............ plus cess on such income tax.

(A)5% on the gross amount of such income

(B)5% on the net amount of such income

(C)10% on the gross amount of such income

(D)10% on the net amount of such income

What is concessional rate of income tax for income from the transfer of carbon credit ?

(A)3% (+SE+EC+SHEC)

(B)5% (+SE+EC+SHEC)

(C)10% (+SE+EC+SHEC)

(D)20% (+SE+EC+SHEC)

What percentage of surcharge is applicable to foreign companies whose total income exceeds ₹ 10 crore for the Assessment Year 2021-22 ?

(A)@ 2%

(B)@ 5%

(C)@ 7%

(D)@ 12%

The surcharge applicable to a foreign company for Assessment Year 2021-22 :

(A)5%, if the total income exceeds ₹ 1 crore

(B)10%, if the total income exceeds ₹ 1 crore

(C)2%, if the total income exceeds ₹ 10 crore

(D)2%, if the total income exceeds ₹ 1 crore but does not exceed ₹ 10 crore

Ram Process (P) Ltd received ₹ 2,10,000 on transfer of Carbon Credit. The total income of the company is below ₹ 100 lakhs. How much is payable as income tax (including surcharge and higher education cess) on the said amount received on transfer of carbon credit ?

(A)NIL

(B)₹ 21,840

(C)₹ 43,680

(D)₹ 65,520

Where the total income of an assessee includes any income by way of transfer of Carbon Credits, the tax payable thereon in Asst. Year 2020-21 shall be at the rate of ------------ with applicable surcharge and cess.

(A)2%

(B)5%

(C)7%

(D)10%

BBG Pvt. Ltd is a domestic company engaged in the business of running and maintaining of hotels in India had total turnover in Asst. Year 2019-20 of ₹ 180 crores declared the total taxable income for the year ended 31.03.2020 of ₹ 12.5 crores. Tax payable on the income of ₹ 12.5 crores in the Asst. Year 2020-21 by the company shall be _____

(A)₹ 3.64 Cr.

(B)₹ 3.4775 Cr.

(C)₹ 4.368 Cr.

(D)₹ 4.173 Cr.

PQ Ltd. is a domestic company whose turnover for the assessment year 2017- 18 was ₹ 45 crore and for the assessment year 2018-19 ₹ 80 crore. Its turnover for the previous year 2018-19 is ₹ 110 crore. The rate of tax (excluding cess) applicable for the assessment year 2019-20 would be :

(A)40%

(B)30%

(C)29%

(D)25%

ABC Ltd., a domestic company having a turnover of ₹ 350 crore has computed its total income for the year 2018-19 of ₹ 102 lakh. The tax payable by the company on such income in A.Y. 2019-20 shall be :

(A)₹ 34,05,168

(B)₹ 29,70,240

(C)₹ 33,28,000

(D)₹ 33,30,968

RAJA Ltd. has earned income of ₹ 150 lakh inclusive of income of ₹ 50 lakh from the transfer of Carbon Credit during the year 2018-19. The company had incurred an amount of ₹ 5 lakh as transfer expenses on transfer of Carbon Credit. The income received from transfer of Carbon Credit in the A.Y. 2019-20 shall be taxed as per section 115BBG of the Act and the amount of tax on such income payable shall be :

(A)₹ 5,82,400

(B)₹ 5,56,400

(C)₹ 13,00,000

(D)₹ 5,00,000

As per Income Tax Act, 1961 surcharge @ 12% is payable by a domestic company if the total income exceeds :

(A)₹ 10 lakh

(B)₹ 1 crore

(C)₹ 10 crore

(D)₹ 100 crore

The base for determination of notional income arising from the operation of a ship, in case of Indian Shipping Company under section 115V to 115V2C of the Income Tax Act, 1961 is taken :

(A)Aggregate turnover/receipt/sales of the ship

(B)Tonnage of the ship

(C)@ 8% of turnover/receipts/sales of the ship

(D)Gross profit rate of preceding year

Income tax on the income from the transfer of Carbon Credit under section 115BG of Income Tax, 1961 derived/earned during the previous year 2017-18 shall be taxable :

(A)At normal rate of tax

(B)At concessional rate of 10% only

(C)At concessional rate of 10% (+SC+EC+SHEC)

(D)At 20% of concessional rate

Royalty of ₹ 105 lakh received by a foreign company from an Indian concern in pursuance of an agreement approved by the Central Government in the previous year 2017-18. The amount of tax payable on such royalty Income for Asst. Year 2018-19 is :

(A)₹ 10 lakh

(B)₹ 11.03 lakh

(C)₹ 20 lakh

(D)₹ 22.06 lakh

Normal tax liability for a company assessee is 5,00,000 and tax liability under MAT is 8,00,000. In this case the tax payable and MAT Credit c/f will be :

(A)3,00,000, 0

(B)8,00,000, 3,00,000

(C)5,00,000, 3,00,000

(D)5,00,000, 0

The net profit as per P & L A/c of ZARA Ltd., domestic company for the year ended 31st March, 2022 is ₹ 210 lakh, it includes ₹ 15 lakh as dividend from subsidiary company and Profit on sale of land ₹ 18 lakh. The book profit u/s 115JB of ZARA Ltd. for assessment year 2022-23 would be :

(A)₹ 243 lakh

(B)₹ 177 lakh

(C)₹ 195 lakh

(D)₹ 210 lakh

As per section 115JB inserted vide Finance Act, 2016, where the assessee is a unit located in an International Financial Services Centre and derives its income solely in convertible foreign exchange, the rate of MAT shall be .................... instead of ............ .

(A)9%, 18.5% of Taxable Profits

(B)9%, 18.5% of Book Profits

(C)18.5%, 9% of Taxable Profits

(D)18.5%, 9% of Book Profits

Which of the following is correct statement regarding MAT?

(A)MAT credit can be carried forward up to 7th Assessment Year immediately succeeding the assessment year in which such credit becomes allowable

(B)MAT credit can be carried forward up to 15th Assessment Year immediately succeeding the assessment year in which such credit becomes allowable

(C)MAT credit can be carried forward up to 15th Assessment Year immediately preceding the assessment year in which such credit becomes allowable

(D)MAT credit can be carried forward up to 7th Assessment Year immediately preceding the assessment year in which such credit becomes allowable

For computing the book profit under section 115JB which of the following is not added back to the profits ?

(A)Provision for diminution in value of investment

(B)Securities Transaction Tax

(C)Proposed dividend

(D)Provision for deferred tax

Sam (P) Ltd has MAT credit of ₹ 10.50 lakhs belonging to the assessment year 2015-16. What is the maximum time limit up to which the MAT credit can be carried forward by Sam (P) Ltd ?

(A)Assessment Year 2025-26

(B)Assessment Year 2020-21

(C)Assessment Year 2030-31

(D)Assessment Year 2027-28

When a domestic company has paid tax on book profit which is higher than the normal tax payable on the total income, such excess tax so paid is eligible for carry forward up to :

(A)5 succeeding assessment years

(B)8 succeeding assessment years

(C)10 succeeding assessment years

(D)15 succeeding assessment years

Provisions of Minimum Alternate Tax (MAT) are applicable to the companies which are;

(i)Indian companies

(ii)Foreign companies

(iii)LLP

(A)(i) & (iii)

(B)(i) & (ii)

(C)All the three

(D)None of the above

M Ltd. has Minimum Alternative Tax (MAT) credit of ₹ 5,20,000 of the assessment year 2018-19. It can carry forward this MAT credit upto ____________ assessment years immediately succeeding the assessment year 2018-19.

(A)5

(B)10

(C)15

(D)20

While calculating Book Profits under section 115 JB of Income Tax Act, 1961, which of the following is not to be added ?

(A)The amount of dividend upto ₹ 10 lakh

(B)Interest on Income tax including surcharge and cess

(C)The amounts carried to any reserves

(D)The amount by way of provision for losses of subsidiary companies

While calculating book profits under section 115 JB of Income Tax Act, 1961 which of the following is not to be deducted ?

(A)The amount withdrawn from any reserve or provision if any such amount is credited to the Profit & Loss Account

(B)The amount of income by way of royalty in respect of patent chargeable to tax under section 115BBF

(C)Long term capital gain referred under section 10(38) of the Act

(D)Brought forward loss/unabsorbed depreciation whichever is less

ABC Ltd, a domestic company purchased on 14th October, 2019 its own unlisted shares. The consideration for the buyback of shares amounted to ₹ 50,00,000 which was paid by the company on the very same day. Amount received for the issue of such shares by the company 2 years ago was of ₹ 27,00,000. The company is required to make the payment of tax for the buy-back of shares in assessment year 2020-21 of ₹ ------------

(A)5,35,810

(B)6,87,700

(C)6,69,760

(D)5,50,160

XYZ Pvt. Ltd. had distributed income of ₹ 6 lakh to Rajesh for the reason of buyback of its shares (Not being listed on a recognized stock exchange) from him on 1st February, 2019. The amount of ₹ 6 lakh received by Rajesh in the A.Y. 2019-20 shall be ........................... .

(A)Taxable in full

(B)Exempt u/s 10(34A)

(C)Taxable @ 20%

(D)Taxable at normal rate of tax

(c)A domestic company purchased its own unlisted shares on 20th August 2018 for a total consideration of INR-30,00,000 which was paid on the same day. The company has issued the same share 2 years ago for ₹ 15,00,000. Compute the tax liability of the company if the tax on buy-back was deposited by the company to the credit of Central Government on 15th February 2019.

XYZ Pvt. Ltd. had distributed income of ₹ 9,00,000 to Rajesh for the reason of buyback of its shares from him on 1st March, 2018. These shares were purchased by him for ₹ 5,00,000 on 1st March, 2012. The income out of the amount received by Rajesh against the buyback of shares from the company XYZ Pvt. Ltd. shall be subject to tax in A.Y. 2018-19 shall be of ...........

(A)₹ 4 lakh

(B)₹ 9 lakh

(C)Nil being exempt u/s 10 (34A) of Act

(D)None of the above

Rainbow (P) Ltd. is engaged in manufacturing of pesticides was incorporated on 01.03.2020. It has opted for section 115BAB of the Income Tax Act, 1961. Its total income for the previous year 2022-23 was ₹ 12 crore. What is the rate of surcharge applicable for the assessment year 2023-24?

(A)7%

(B)12%

(C)5%

(D)10%

Where an assessee has not exercised option u/s 115BAA, 115BAC or 115BAD, deduction u/s 80IBA, shall be allowed if the carpet area of the shops and other commercial establishments include in the housing project does not exceed :

(A)1% of the aggregate carpet area

(B)2% of the aggregate carpet area

(C)3% of the aggregate carpet area

(D)5% of the aggregate carpet area

XYZ Pvt. Ltd. a manufacturing company incorporated in India on 1st June, 2021. During the financial year 2021-22, it earned income from business of ₹ 20 lakh. The company wants to opt the benefit u/s 115BAB. The tax rate of XYZ Ltd. for the assessment year 2022-23 shall be :

(A)Taxable @ 15%

(B)Taxable @ 22%

(C)Taxable @ 25%

(D)Taxable @ 30%

What is the tax rate applicable for the manufacturing companies incorporated in India on or after 1st October, 2019, where it opted for section 115BAB ?

(A)22%

(B)15%

(C)25%

(D)30%

A company shall be deemed to be one as per section 2(18) of the Income Tax Act, 1961 in which public are substantially interested and is owned by the Government or Reserve Bank of India (RBI) or in which not less than ________ of the shares whether singly or taken together are being held by the Government or Reserve Bank of India or a Corporation owned by the RBI.

(A)50%

(B)40%

(C)51%

(D)45%

As per section 2(1B) of the Income Tax Act, 1961, which out of the following is not a requirement for amalgamation of two companies:

(A)All the assets are transferred from amalgamating company to amalgamated company

(B)More than 50% of the directors of the amalgamating company become directors of the amalgamated company

(C)All liabilities including contingent liabilities are transferred from amalgamating company to amalgamated company

(D)Shareholders having 3/4th in value of shares of the amalgamating company become shareholders of the amalgamated company