PAPER-III
COMMERCE
Note : This paper contains seventy five (75) objective type questions of two (2) marks each.
All questions are compulsory.
1. The present regime of subsidies can
be improved by focussing on
(i) Reducing the overall scale of
subsidies.
(ii) Making subsidies as
transparent as possible.
(iii) Giving a specific amount to the
Member of Parliament for
subsidies.
(iv) Setting clear limits on duration
of any new subsidy scheme.
(v) Eliminating system of periodic
review of subsidies
(vi) Using subsidies for well-defined
economic objectives.
Codes :
(A) (i), (ii), (iii) and (iv)
(B) (ii), (iii), (iv) and (v)
(C) (i), (iii), (iv) and (vi)
(D) (i), (ii), (iv) and (vi)
Answer:(D)
2. Which of the following is not
regulated by The Competition Act,
2002 ?
(A) Abuse of dominant position
(B) Anti-competitive agreements
(C) Medical negligence
(D) Predatory pricing
Answer:(C)
3. The freedom of private enterprise is
the greatest in the free market
economy. This is characterized by
which of the following assumptions ?
(i) The factors of production
(labour, land, capital) are
privately owned and production
occurs at the initiative of the
private enterprise.
(ii) Income is received in monetary
form by the sale of services of
the factors of production and
from the profits of the private
enterprise.
(iii) Members of the free market
economy have freedom of
choice in so far as consumption,
occupation, savings and
investments are concerned.
(iv) The free market economy is not
planned, controlled or
regulated by the government.
(v) The free market economy is
prone to corrupt practices.
Codes :
(A) (i), (ii) and (iii)
(B) (i), (ii), (iii) and (iv)
(C) (i), (ii), (iii), (iv) and (v)
(D) (ii), (iii), (iv) and (v)
Answer:(B)
4. The important responsibilities of a
business to the customers are
(i) To ensure family welfare of the
customers.
(ii) To understand customer needs
and to take the necessary
measures to satisfy these needs.
(iii) To ensure health condition of
the customers.
(iv) To ensure that the product
supplied has no adverse effect
on the customer.
(v) To provide an opportunity for
being heard and to redress
genuine grievances.
Codes :
(A) (i), (ii), (iii), (iv) and (v)
(B) (i), (ii), (iii) and (iv)
(C) (ii), (iv) and (v)
(D) (ii), (iii), (iv) and (v)
Answer:(C)
5. The rationale of expanding role of
the public sector stems mainly from
which of the following factors ?
(i) The failure of the private sector
in certain crucial areas
(ii) The exploitation of the society
by the private sector
(iii) The revenue need of the
Central Government
(iv) The demand of economic
justice
(v) The need for accelerating the
pace of economic growth
Codes :
(A) (i), (ii), (iii) and (iv)
(B) (ii), (iii), (iv) and (v)
(C) (i), (iii), (iv) and (v)
(D) (i), (ii), (iv) and (v)
Answer:(D)
6. Which of the following factors may
lead to a sick industrial unit ?
(i) Shortage of funds and faulty
financial management
(ii) Investment by the FIIs in
Indian industries
(iii) Unauthorized FDI in Indian
industries
(iv) Lack of experience on the part
of promoters
(v) Technological factors including
obsolete or improper technology
Codes :
(A) (i), (ii), (iii) and (iv)
(B) (ii), (iii), (iv) and (v)
(C) (i), (iv) and (v)
(D) (i), (ii) and (iii)
Answer:(C)
7. Indicate what is not correct in respect
of the Consumer Protection Act,
1986.
(A) No complaint can be
entertained in respect of a
product purchased more than 2
years back.
(B) A complaint against medical
negligence can be filed by legal
heir or representative of the
deceased.
(C) A complaint involving a claim
of INR15 lakhs is to be filed
before the State Commission.
(D) Both (A) and (C)
Answer:(C)
8. If bonus shares are issued out of pre-
acquisition profit, it will have
(A) Direct effect on the
Consolidated Balance Sheet
(B) No effect on the Consolidated
Balance Sheet
(C) No effect on Net Profit
(D) None of the above
Answer:(B)
9. The present value of the future
contributions of employees is one of
the methods of
(A) HR Accounting
(B) Inflation Accounting
(C) Social Accounting
(D) Responsibility Accounting
Answer:(A)
10. A standard which can be attained
under the most favourable working
conditions is called
(A) Attainable Standard
(B) Basic Standard
(C) Current Standard
(D) Ideal Standard
Answer:(D)
11. Which of the following ratios are
taken into consideration by a banker
before sanctioning the loan ?
(A) Proprietory Ratio
(B) Stock-Turnover Ratio
(C) Debt-Equity Ratio
(D) All of the above
Answer:(C)
12. Match the items of the following two
lists :
List – I List – II
(i) Zero-base (a) Internal
Budgeting Reconstruction
(ii) Goodwill or (b) Earnings Per
Capital Reserve Share
(iii) Reduction of (c) Control of
Capital Expenditure
(iv) Basic & (d) Business
Diluted Combination
Codes :
(i) (ii) (iii) (iv)
(A) (c) (d) (b) (a)
(B) (d) (c) (a) (b)
(C) (d) (a) (c) (b)
(D) (c) (d) (a) (b)
Answer:(D)
13. Assertion (A) : Dividend paid out
of pre-acquisition profit by the
subsidiary company to the
holding company is deducted
from the cost of investment.
Reason (R) : Dividend paid out
of pre-acquisition profit by the
subsidiary company should be
treated as a return of capital to
the holding company.
Which one of the following is correct ?
(A) Both (A) and (R) are correct.
(B) (A) is correct, but (R) is wrong.
(C) (A) is wrong, but (R) is correct.
(D) Both (A) and (R) are wrong.
Answer:(A)
14. Given below are two statements, one
labelled as Assertion (A) and the
other labelled as Reason (R) :
Assertion (A) : Increasing the value
of closing inventory increases
profit.
Reason (R) : Increasing the value
of closing inventory reduces
cost of goods sold.
In the context of the above two
statements, which of the following is
correct ?
Codes :
(A) Both (A) and (R) are correct.
(B) Only (A) is correct.
(C) Only (R) is correct.
(D) Both (A) and (R) are wrong.
Answer:(A)
15. Match the items of List – I with the
items of List – II and select the
correct code for the answer :
Answer:(D)
16. A measure of the responsiveness of
quantity demanded to changes in the
price of a related good is known as
(A) Cross Elasticity of Demand
(B) Substitution Elasticity of
Demand
(C) Complementary Elasticity of
Demand
(D) Price Elasticity of Demand
Answer:(A)
17. If the total cost is INR 260 and the total
variable cost is INR 60, what will be
total fixed cost if output is (a) 100
units and (b) 200 units ?
(A) INR 200 and INR 200
(B) INR 100 and INR 200
(C) INR 260 and INR 100
(D) INR 160 and INR 100
Answer:(A)
18. Optimal input combination to
minimize the cost for a given output
will be at the point where :
(A) Isocost is tangent to Isoquant
(B) MRTS between inputs is equal
(C) Any movement from optimum
point will lead to low level of
output
(D) All the above conditions are
fulfilled.
Answer:(D)
19. What kinds of actions can be taken to
put the rivals at a disadvantageous
position under oligopoly market ?
(A) Commitments
(B) Threats
(C) Promises
(D) All the above
Answer:(D)
20. There is no exceptions to the law of
demand in the case of
(A) Giffen goods
(B) Normal goods
(C) Articles of conspicuous
consumption
(D) Ignorance of the buyer
Answer:(B)
21. What is the degree of elasticity of
demand in case the demand is
represented by a straight line parallel
to the x-axis ?
Answer:(C)
22. If a chi-square test is to be performed
on a contingency table with 3 rows
and 4 columns, how many degrees of
freedom should be used ?
(A) 6
(B) 12
(C) 8
(D) 9
Answer:(A)
23. Assertion (A) : If regression co-efficient
of X on Y is greater
than one, regression co-efficient of Y on X
must be less than one.
Reason (R) : The geometric
mean between two regression
coefficients is the co-efficient
of correlation.
On the basis of the above, choose the
appropriate answer :
(A) (A) and (R) are correct.
(B) (A) is correct, but (R) is not
correct.
(C) (A) is not correct, but (R) is
correct.
(D) Both (A) and (R) are not
correct.
Answer:(A)
24. If the sum of squares of deviations
within samples is 140 with 12
degrees of freedom and the sum of
squares of deviations between
samples is 190 with 2 degrees of
freedom, the test statistic will be
(A) 81.4
(B) 12.28
(C) 8.14
(D) 1.22
Answer:(C)
25. The regression equation of profits (X)
on sales (Y) of a firm is given as :
3Y – 5X + 110 = 0. If the sales of the
firm is INR 44,000, the profit will be
(A) INR 23,370 (B) INR 26,422
(C) INR 24,422 (D) INR 21,370
Answer:(B)
26. Cricketer ‘A’ scores on an average
40 runs with a standard deviation of
5. Scores of players ‘B’ and ‘C’, on
an average, are 75 and 90 with
standard deviations 10 and 18
respectively. Arrange the players in
the descending order of consistency :
(A) A, B and C
(B) C, B and A
(C) B, A and C
(D) C, A and B
Answer:(A)
27. Among the following, choose the
most suitable ‘test’ that can be
applied to examine the influence of
one factor on different groups :
(A) ‘t’ test
(B) ‘F’ test
(C) ‘Chi-square’ test
(D) None of the above
Answer:(B)
28. A machine produced 20 defective
articles in a batch of 400. After
overhauling, it produced 10%
defectives in a batch of 300. Which
test of hypothesis can be applied to
the above situation to examine
whether the machine has improved ?
(A) Test of significance of a sample
proportion (two-tail test)
(B) Test of significance of a sample
proportion (one-tail test)
(C) Test of significance of
difference between two sample
proportion (two-tail test)
(D) Test of significance of
difference between two sample
proportion (one-tail test)
Answer:(D)
29. Strategies and policies
(A) are not closely related
(B) give direction
(C) are the framework for
performance appraisal
(D) both (A) and (B)
Answer:(B)
30. According to Vroom’s Expectancy
Theory of Motivation,
(A) Force = valence divided by
expectancy
(B) Force = valence × expectancy
(C) Force = strength of an
individual preference for an
outcome
(D) Valence = probability that a
particular action shall lead to a
desired outcome
Answer:(B)
31. In the managerial grid, the managers
who have little or no concern for
production but are concerned only
for people are known as what type of
managers ?
(A) 1.1 Management
(B) 5.5 Management
(C) 9.1 Management
(D) 1.9 Management
Answer:(D)
32. According to the Boston Consulting
group, a business, which has a strong
market share in a low growth
industry is referred to as a
(A) Dog
(B) Cash Cow
(C) Star
(D) Question mark
Answer:(B)
33. Which of the following are major
principles of leading ?
(i) Principle of motivation
(ii) Principle of continuous
development
(iii) Principle of harmony of
objectives
(iv) Principle of open competition
(v) Principle of communication
clarity
Select the correct answer from the
codes given below :
Codes :
(A) (i), (ii), (iii), (v)
(B) (i), (ii), (iii), (iv), (v)
(C) (i), (iii), (iv), (v)
(D) (i), (iii), (v)
Answer:(D)
34. The following are the steps of
management control process :
(i) Taking corrective action from
standards
(ii) Establishing standards
(iii) Measuring actual performance
(iv) Comparing performance
against standard
Select the correct sequence of these
steps from the codes given below :
Codes :
(A) (i), (ii), (iii), (iv)
(B) (ii), (iii), (iv), (i)
(C) (iii), (iv), (i), (ii)
(D) (ii), (iv), (i), (iii)
Answer:(B)
35. Consider the following :
(i) Planning is today’s action for
tomorrow’s decision.
(ii) Planning is forward looking
while controlling is looking
back.
(iii) Motivation is about getting
voluntary willingness of
subordinates for action.
(iv) Line and staff organisation is
the oldest form of organisation.
Select the correct statements from the
codes given below :
Codes :
(A) (ii) and (iii) are correct.
(B) (i), (ii) and (iv) are correct.
(C) (i), (iii) and (iv) are correct
(D) All are correct.
Answer:(A)
36. Which is not one of the stages in the
consumer buying-decision process ?
(A) Purchase decision
(B) Post-purchase behaviour
(C) Problem recognition
(D) Cultural factors
Answer:(D)
37. At which stage of product-life-cycle
are the pricing decisions most
complex ?
(A) Decline
(B) Growth
(C) Introduction
(D) Maturit
Answer:(D)
38. Which one is not an element of
market logistics ?
(A) Inventory
(B) Order-processing
(C) Warehousing
(D) Supply chain management
Answer:(D)
39. Under which legislation, the
manufacturers and distributors are
required to declare Maximum Retail
Price (MRP) on packaged
commodities ?
(A) The Bureau of Indian
Standards Act, 1986
(B) The Consumer Protection Act,
1986
(C) The Standards of Weights and
Measures Act, 1976
(D) The Essential Commodities
Act, 1955
Answer:(C)
40. In modern marketing, which of the
following functions of a distribution
middleman is gaining maximum
importance ?
(A) Making persuasive
communication
(B) Price negotiation
(C) Keeping adequate inventory
(D) Gathering market information
Answer:(D)
41. Which method of setting the
advertising budget of a company is
considered to be the most scientific ?
(A) All-you-can-afford method
(B) Percentage of sales method
(C) Competitive-parity method
(D) Objectives and tasks method
Answer:(D)
42. Match the items of List – I with those
of List – II and indicate the correct
combination from the codes given
below:
List – I List – II
(i) AIDA (a) Consumer
Model behaviour
(ii) Hierarchy of (b) Marketing
effects communication
model
(iii) Howard (c) Consumer buying-
and Sheth Decision process
model
(iv) Information (d) Advertising
search effectiveness
Codes :
(i) (ii) (iii) (iv)
(A) (a) (b) (c) (d)
(B) (b) (c) (d) (a)
(C) (b) (d) (a) (c)
(D) (d) (a) (c) (b)
Answer:(C)
43. Inability of the firm to meet its
obligations results in financial
distress which may lead to
bankruptcy resulting into the
following :
1. Distress sale of assets at lower
price.
2. Legal and administrative costs
for bankruptcy.
3. Dilution of stakeholders’
commitment to the firm.
4. Stretching of payments to
suppliers and creditors.
The direct costs of such financial
distress may be
(A) 1 and 4 (B) 2 and 3
(C) 1 and 2 (D) 3 and 4
Answer:(C)
44. Mutually exclusive projects can be
more accurately ranked as per
(A) Internal rate of return method
(B) Net Present Value Method
(C) Modified Internal Rate of
Returns Method
(D) Accounting or Average Rate of
Return Method
Answer:(B)
45. Which one of the following does not
constitute a Standalone Risk Analysis ?
(A) Simulation Analysis
(B) Break-even Analysis
(C) Corporate Risk Analysis
(D) Scenario Analysis
Answer:(C)
46. Financial leverage in a firm is
positively affected by
(A) Intensity of tangible assets
(B) Operating leverage
(C) Profitability
(D) Tax Rate
Answer:(A)
47. Which combination of the following
two statements (A) and (R) is correct ?
Assertion (A) : The IRR of a
project is the discount rate
which reduces its NPV to zero.
Reason (R) : A project is worth
accepting if the IRR exceeds
the cost of capital.
Codes :
(A) (A) is right, but (R) is wrong.
(B) Both (A) and (R) are correct.
(C) (A) is wrong, but (R) is correct.
(D) Both (A) and (R) are wrong.
Answer:(B)
48. Assertion (A) : A company should
pay minimum dividend to its
shareholders.
Reason (R) : Dividends are
heavily taxed than capital
gains.
Codes :
(A) Both (A) and (R) are correct.
(B) Both (A) and (R) are incorrect.
(C) (A) is not correct, but (R) is
correct.
(D) (A) is correct, but (R) is wrong.
Answer:(A)
49. Dividend irrelevance hypothesis is
implied in the
(A) Traditional Model
(B) Walter Model
(C) Gordon Model
(D) M.M. Model
Answer:(D)
50. Which one of the following does not
serve the main objective of
performance appraisal ?
(A) Developmental uses
(B) Administrative uses
(C) Ethical and moral values
(D) Organisational objectives
Answer:(C)
51. Statement (I) : Job evaluation is a
technique of assessing the
worth of each job in
comparison with others
throughout an organization.
Statement (II) : Job evaluation and
job rating are one and the same
for employees’ appraisal purposes.
Codes :
(A) Statement (I) is correct, but
Statement (II) is incorrect.
(B) Statement (II) is correct, but
Statement (I) is incorrect.
(C) Both the Statements (I) and (II)
are correct.
(D) Both the Statements (I) and (II)
are incorrect.
Answer:(A)
52. Match the items of List – I with the
items of List – II and select the
correct answer :
List – I List – II
(i) Job (a) Involves conscious
Rotation efforts, to organise tasks, duties and
responsibilities into a unit of work to
achieve certain objectives.
(ii) Job (b) Involves movement
Design of employees from job to job
(iii) Job (c) Seeks to improve both task efficiency
Evalua-tion and human satisfaction and more opportunity
for individual
(iv) Job (d) The formal process by which the relative worth of
Enrich- various jobs in the organisation is determined for pay
ment purpose.
Codes :
(i) (ii) (iii) (iv)
(A) (a) (b) (c) (d)
(B) (d) (c) (b) (a)
(C) (c) (d) (b) (a)
(D) (b) (a) (d) (c)
Answer:(D)
53. Assertion (A) : Merit rating of an
employee is the process of
evaluating the employees
performance on the job in terms
of the requirements of the job.
Reason (R) : Employees’ merit
rating is a technique for fair
and systematic evaluation of an
employee’s capacities and
abilities and performance on
the specific job.
Codes :
(A) Both (A) and (R) are correct,
and (R) is the right explanation
of (A).
(B) Both (A) and (R) are correct,
but (R) is not the right
explanation of (A).
(C) Both (A) and (R) are incorrect.
(D) (R) is correct, but (A) is incorrect.
Answer:(B)
54. The major provisions for employees’
health and safety are contained in
(A) The Industrial Disputes Act, 1947
(B) The Factories Act, 1948
(C) The Industrial Employment
(Standing Orders) Act, 1946
(D) The Employees’ Compensation
Act, 1923
Answer:(B)
55. Indicate your choice through the codes
given below :
1. A club is an industry under the
Industrial Disputes Act, 1947
2. Factory as defined under the
Factories Act, 1948 includes a
mine.
3. For purpose of the payment of
bonus to employees, the gross
profits earned by a bank is to be
calculated in the manner specified
in Schedule – I of the Payment of
the Bonus Act, 1965.
4. Various labour laws do not apply
to public sector undertakings.
Codes :
(A) While 1 and 2 are correct, others
are not.
(B) All the statements are correct.
(C) Only 1 is correct, others are
incorrect.
(D) Only 1 is incorrect, all others are
correct.
Answer:(A)
56. Match the items of List – I with the
items of List – II and select the
correct answer :
List – I List – II
(i) Abraham (a) Achievement
Maslow Motivation Theory
(ii) Herzberg (b) ERG Theory
(iii) Alderfer (c) Two Factor
Theory
(iv) McClelland (d) Need Hierarchy
Theory
Codes :
(i) (ii) (iii) (iv)
(A) (a) (b) (c) (d)
(B) (d) (c) (b) (a)
(C) (c) (b) (a) (d)
(D) (d) (c) (a) (b)
Answer:(B)
57. Assertion (A) : The Central Bank
of the country is responsible to
maintain stability of the
monetary standard which
involves currency circulation
Reason (R) : The Central Bank is
the only authorized entity to do
so.
Codes :
(A) (A) and (R) both are correct.
(B) (A) and (R) both are incorrect.
(C) (A) is correct, but (R) is
incorrect.
(D) (R) is correct, but (A) is
incorrect.
Answer:(C)
58. Identify the quantitative credit control
methods among the following :
(i) Bank Rate
(ii) Credit Rationing
(iii) Open Market Operations
(iv) Variable Reserve Ratio
(v) Selective Credit Control
(vi) Liquidity Ratio
Codes :
(A) (i), (ii), (iii) and (iv)
(B) (ii), (iii), (iv) and (v)
(C) (i), (ii), (v) and (vi)
(D) (i), (iii), (iv) and (vi)
Answer:(D)
59. The following activities are mainly
related to which organization ?
(i) Micro Finance
(ii) Rural Finance
(iii) Self Help Groups
(iv) Cooperative Banks Finance
(A) Industrial Finance Corporation
of India
(B) Ministry of Finance
(C) Reserve Bank of India
(D) National Bank for Agriculture
and Rural Development
Answer:(D)
60. PIN in banking transaction is known
as
(A) Postal Index Number
(B) Permanent Identification
Number
(C) Personal Identification Number
(D) Public Interlocking Numeric
Answer:(C)
61. Reserve Bank of India was
nationalized on
(A) January 26, 1948
(B) January 01, 1949
(C) January 26, 1950
(D) January 01, 1956
Answer:(B)
62. When a banking company is placed
under moratorium under Section 45
of the Banking (Regulation) Act,
1949, the RBI must prepare a scheme
of
(A) VRS for staff
(B) Capital Buy-Back
(C) Reconstruction of the company
or amalgamation with any
other bank
(D) IPO of the bank
Answer:(C)
63. Match the following items of List – I
with List – II :
List – I List – II
(i) SWIFT (a) 1996
(ii) NEFT (b) 1988
(iii) BASEL I (c) 1973
Accord
(iv) BASEL II (d) 2004
Accord
Codes :
(i) (ii) (iii) (iv)
(A) (a) (b) (c) (d)
(B) (b) (c) (a) (d)
(C) (d) (c) (b) (a)
(D) (c) (a) (d) (b)
Answer:(*)
64. The main features of TRIMS are :
(i) All restrictions on foreign
capital are imposed.
(ii) No restriction is imposed on
any area of investment.
(iii) Restrictions on repatriation of
dividend is eliminated.
(iv) Imports of raw material is
allowed freely.
(v) No limit on the extent of
foreign investment.
Indicate the correct combination
(A) (i), (ii), (iii) and (v)
(B) (ii), (iii), (iv) and (v)
(C) (iii), (iv) and (v)
(D) (iv) and (v)
Answer:(B)
65. Assertion (A) : TRIPS requires an
understanding about the scope
of the new patent regime.
Reason (R) : Patent protection
will be extended to micro
organisms, non-biological and
micro-biological processes and
plant varieties.
Codes :
(A) (A) and (R) are not related with
each other.
(B) (R) is related with (A).
(C) (A) is independent of (R).
(D) While (R) is related with TRIMS,
(A) is related with TRIPS.
Answer:(A)
66. Possible impact of WTO on various
aspects of the Indian economy :
(i) Quantitative restriction will be
allowed.
(ii) Second hand cars will be
imported.
(iii) There will be dumping of
Chinese goods.
(iv) Increase in population.
(v) Child labour exploitation
(vi) Unemployment will increase
Which combination is appropriate ?
(A) (i), (ii), (iii)
(B) (iii), (iv), (v)
(C) (ii), (iii) & (vi)
(D) (iv), (v) & (vi)
Answer:(C)
67. Assertion (A) : Economic
integration abolishes cross national economic
discrimination.
Reason (R) : Geographical
proximity is an important
reason for economic integration.
Codes :
(A) (R) does explain (A).
(B) Both (A) and (R) are correct.
(C) Both (A) and (R) are not correct.
(D) (A) is correct, but (R) is not
correct.
Answer:(B)
68. Match the items of List – I and items
of List – II and select the correct
answer :
List – I List – II
(i) Free Trade (a) MERCOSUR
Area
(ii) Customs (b) European Union
Union
(iii) OEEC (c) EFTA
(iv) Common (d) Marshall Plan
Market
Codes :
(i) (ii) (iii) (iv)
(A) (a) (b) (c) (d)
(B) (b) (d) (a) (c)
(C) (c) (a) (d) (b)
(D) (d) (c) (b) (a)
Answer:(C)
69. Assertion (A) : A futures contract
specifies in advance the
exchange rate to be used, but it
is not as flexible as a forward
contract.
Reason (R) : A futures contract
is for specific currency amount
and a specific maturity date.
Codes :
(A) (R) is a correct explanation of
(A).
(B) (R) is not a correct explanation
of (A).
(C) (A) and (R) are not related with
each other.
(D) (R) is irrelevant for (A).
Answer:(A)
70. Out of the following, which are the
important objectives of IMF ?
(i) To promote exchange rate stability
(ii) To create standby reserves
(iii) To print International currency
notes
(iv) To establish a multilateral
system of payments.
(v) To maintain orderly exchange
rate stability
(vi) To create employment
Codes :
(A) (ii), (iv), (v), (vi)
(B) (iii), (v), (vi)
(C) (i), (ii), (iv), (v)
(D) (i), (ii), (v), (vi)
Answer:(C)
71. Given that :
Fair rent of a let out house property
is INR 75,000. Its Municipal value is
INR 60,000, standard rent is INR 72,000
and actual rent received is INR 63,000.
What is the Gross Annual Value of
this house property ?
(A) INR 60,000 (B) INR 63,000
(C) INR 72,000 (D) INR 75,000
Answer:(C)
72. Match the items of List – I with the
items of List – II
List – I List – II
(i) Amount deposited (a) 80-IA
in PPF
(ii) Profits and gains (b) 80 G
from undertakings
engaged in
infrastructure
development
(iii) Contribution to
National Defence (c) 80-IAB
Fund
(iv) Profits and gains by
an undertaking
engaged in the (d) 80-C
development of
Special Economic
Zone
Codes :
(i) (ii) (iii) (iv)
(A) (d) (c) (b) (a)
(B) (d) (a) (b) (c)
(C) (d) (a) (c) (b)
(D) (b) (a) (c) (d)
Answer:(B)
73. Which of the following deductions
will not come under Sec. 80 of the
Income Tax Act ?
(A) Deduction in the case of a
person with disability
(B) Deduction for interest paid on
loan taken for pursuing higher
education
(C) Deduction for interest on loan
taken for the construction /
purchase of house property
(D) Deduction for repayment of
any instalment of principal
amount borrowed for the
purchase / construction of
house property
Answer:(C)
74. X purchased a land in the P.Y. 1997-
98 for INR 50,000. This land was sold
by him during the P.Y. 2009-10 for
INR 8,00,000. The fair market value of
this land on 1-4-81 was INR 1,20,000. If
the Cost Inflation Index for the A.Y.
2010-11 is 632, his capital gain for
the A.Y. 2010-11 will be
(A) INR 4,84,000
(B) INR 7,50,000
(C) INR 6,80,000
(D) INR 41,600
Answer:(D)
75. Any amount of money received in
excess of INR 50,000 without
consideration is fully taxable in the
hands of
(A) Individuals
(B) Individuals and HUF
(C) Individuals, HUF and Company
(D) All assessees
Answer:(B)