FPSB QUESTIONS RET & TAX

Which of the following correctly describes one of the fundamental assumptions that must be determined for
each individual when developing a retirement distribution strategy?

What are the most common types of annuities in India?

Indian families' biggest threat when it comes to structure is?

Mr. X covered under payment act 1974 has worked for 15 years at a Private company. How much gratuity
is he entitled to? His basic is 25000, D.A. is 20000.

It is important for advisors to "plan for the worst and work for the best," especially when it comes to
retirement planning. Which of the following strategies would help accomplish this goal?

Which of the following can be an example of a Fixed and terminable retirement expense?

Which of the following is not a type of annuity?

What is the real rate of return, assuming a 7% investment return rate and a 2% inflation rate?

A client is able to save $6,000 at the beginning of each year. They have no current savings or other anticipated
income sources in retirement. As their advisor, you estimate that they can earn 8% from their investments. If
their projected retirement funding need is $750,000 in today's dollars, how many years will it take them to save
this amount?

Are Indians retirement ready?

Why is MGNREGS important in India?

Which type of employer-sponsored plan provides the most predictable pension benefit?

Which of the following would be the most important information for an advisor to collect before estimating a
client’s retirement expenses?

What is the average retirement age in India?

Which of the following is not a potential source of cash flow in retirement?

Which of the following is a pension paid to persons whose income, assets, pension income, or a combination of
these falls below designated levels?

What are the top 3 reasons that push people in India to save for retirement?

Which of the following advisor activities should take place before all of the others when assisting a client
with retirement planning?

If Mr. X has 15 lakhs on retirement, in his Superannuation fund, how much can he withdraw tax free?

Do families in India plan their retirement independently of other goals/ family members?

The new pension system is based on Individual Retirement Account in what ways?

Which of the following best describes what types of investments to include in "bucket #2" of the "three bucket"
distribution strategy?

Which of the following is least likely to be a common tactic to reduce taxation of retirement cash flow?

Which of the following statements are TRUE in case of Pradhan Mantri Vaya Vandana Yojana (PMVVY) A. PMVVY is exclusively available to those who are 60 years of age and above.
B. The maximum investment that can be made in PMVVY is restricted to Rs 25 lakh per senior citizen.
C. The maximum monthly pension in PMVVY is Rs 9,250 per senior citizen

Which of the following is false regarding why a client’s retirement goals may be difficult for an advisor to assess?

Clients’ retirement goals can be classified to help the advisor and client develop a retirement budget. Which of the following is not one of the classifications?

Which of the following is least likely to be a type of “capital consumption” pool?

Which of the following would be the most important information for an advisor to collect before estimating a client’s retirement expenses?

If the interest from SCSS is more than Rs.…………… then TDS is deducted at source of interest.

How does an employer’s contribution to the employee superannuation fund benefit them?

Which of the following best describes the glide path strategy?

Which of the following is not a potential source of cash flow in retirement?

In the joint family system in India, what are the major benefits?

What are the most common types of annuities in India?

When an individual chooses an investment account in the NPS, if he does not know what option to choose, what can he do?

Are Indians retirement ready?

Our client has agreed that 4% of their investment portfolio will be distributed into a current bank account at the first of each year. Their investment portfolio started last year worth $1,000,000, but suffered a decline of 5%. How much is the current distribution likely to be?

Which of the following correctly describes one of the fundamental assumptions that must be determined for each individual when developing a retirement distribution strategy?

Which of the following is not part of identifying a client’s retirement objectives?

A client is able to save $6,000 at the beginning of each year. They have no current savings or other anticipated income sources in retirement. As their advisor, you estimate that they can earn 8% from their investments. If their projected retirement funding need is $750,000 in today’s dollars, how many years will it take them to save this amount?

Which of the following statements are TRUE in case of Pradhan Mantri Vaya Vandana Yojana (PMVVY): A. PMVVY is exclusively available to those who are 60 years of age and above. B. The maximum investment that can be made in PMVVY is restricted to Rs 25 lakh per senior citizen. C. The maximum monthly pension in PMVVY is Rs 9,250 per senior citizen

What is contributing to higher required retirement corpus?

What factors contributed to the fall in the Joint family system?

Why should Indians have a micro credit facility in their pension accounts?

Do families in India plan their retirement independently of other goals/ family members?

Which of the following statements are TRUE in case of pension commutation: A. For a government employee, commuted pension is fully exempt. B. For a non-government employee, it is partially exempt. C. Pension received by a family member is taxed under income from other sources in the family member’s income tax return.

If Mr.X has 15 lakhs on retirement, in his Superannuation fund, how much can he withdraw tax free?

A capital asset is property used to generate a financial return, rather than property used generally for consumption or put to other personal use. When capital assets produce a gain or a loss it normally is categorized as a capital gain or capital loss. Which of the following statements least likely supports the concept that the capital gains system is a tax-advantaged system?

Financial planners can explore opportunities arising from various classifications of income where one of the tax jurisdictions may assess a lower rate on the income. Suppose a U.S. company provided training services in the U.S. for Indian computer programmers. The Indian programmers used their new skills back home in India. Which of the following statements regarding income source rules is least likely correct?

High value transactions need to be updated to the Income Tax department by the entity with which you carry out such a transaction. This is in order to ensure taxes are levied as required on each of these transactions in a timely manner. Failure to do so is an invitation for a tax notice. What qualifies as a high value transaction? A. Cash deposits in a bank worth Rs 10 lakh or more in a year B. Credit card purchases of Rs 2 lakh or more C. Mutual fund investments for Rs 2 lakh or more D. Purchase of bonds and debentures worth Rs 5 lakh or more in a year E. Sale or purchase of property worth Rs 30 lakh or more

Mr X is 62 years old and his salary income is Rs. 4 lakhs. Along with it he gets a rental income of Rs. 2 lakhs and earns an interest on deposit of Rs. 50,000 for the F.Y. 2019-20. He saves Rs. 1.50 lakhs under section 80C. Calculate the amount of tax payable by him?

Mr. A bought an equity share on 23-Oct-2016 for Rs. 14,500. FMV of the shares was Rs. 18,000 as on 31-Jan-18. He sold the shares on 18-May-2018 for Rs. 7,000. What will be the long-term capital gain/ loss? (Grandfathering applicable)

Mr L wants to invest in Pradhan Mantri Jan Dhan Yojana. He wishes to know the rate of interest, maximum contribution and taxation of the product. You explained that:

The tax deduction on the interest portion of a home loan can be claimed under section ____ while the principal portion can be claimed under section ____

Which of the following statements are TRUE in case of STT? A. STT is applicable on all equity shares which are sold or bought on a stock exchange. B. Any sale/purchase which happens on a stock exchange is not subject to STT. C. STT is applicable on all transactions on NSE. D. STT is applicable on all transactions on BSE.

According to IFRS 10, when must a parent company present consolidated financial statements for itself and its subsidiaries?

“Alexander owns an apartment that he rents out full-time. At the end of last year his basis in the property was $100,000. This year he spent $5,000 to repair the sidewalk, $10,000 to install new cabinets in the kitchen, and $2,000 on property taxes. He received $18,000 in rent. What is Alexander’s current basis in the property?”

Mr X has availed a loan from his employer for pursuing higher education. Can he claim the interest paid on such a loan as a deduction under Section 80E?

Which of the following options are correct? The income tax laws in India (for the purpose of income tax) classifies taxable persons as: A. Resident B. Resident not Ordinarily Resident (RNOR) C. Secondary Resident D. Non-Resident (NR)

Which of the following two statements are not true? 1. Under section 80 TTB, a senior citizen can claim a deduction of maximum Rs. 50,000 in respect to interest income from fixed deposits. 2. Under section 80TTA one can claim a deduction of maximum Rs 10,000 against interest income from savings accounts with a bank, co-operative society, or post office.

Avoidance of double taxation is one of the primary functions of any tax treaty. When money is earned in a foreign territory and income tax is paid in the domestic territory there may be a currency gain or loss. A taxpayer in South Africa pays taxes in the local currency—Rand (ZAR). When the taxpayer must pay taxes on income earned in another territory (e.g., India; INR), there will be an exchange rate applied of (currently) 1 ZAR = 4.53 INR. Which of the following statements regarding how exchange rate spreads are addressed is most likely true?

Mr B (age 32) wants to invest Rs. 1.50 lakhs for his 80C but is confused with the taxation of ELSS vs a 5-year FD. You explained to him that:

Which of the following is true in the case of the old tax regime for the AY 2020-21? 1. In case of individuals – no tax for income up to Rs. 2.5 lakhs 2. In case of senior citizen individuals – no tax for income up to Rs. 3 lakhs 3. In case of super senior citizen individuals – no tax for income up to Rs. 5 lakhs 4. In case of senior citizen individuals – no tax for income up to Rs. 3.5 lakhs 5. In case of super senior citizen individuals – no tax for income up to Rs. 6 lakhs

Mr B is a senior citizen residing in Mumbai. His sources of income are Pension and interest income. Should he pay advance tax?

For the F.Y. 2019-20, Mr. X (age 45) contributed Rs. 2.50 lakhs towards his Employee Provident, Rs. 1 lakh towards his personal NPS account (Tier 1), Rs. 30,000 towards his individual medical insurance premium. What is the total deduction he can claim under section 80C, 80CCD(1B) and 80D?

Mr Q runs a small business with a turnover of about 30 lakhs on an average every year. Does he need to maintain accounting records?

What is the first factor a financial planner should consider when determining the suitability of an offshore investing strategy for a client?

Ms Z is an NRI. Will she be subject to capital gains tax if she sells a flat that she owns in India? What will be the rate of tax?

Avoidance of double taxation is one of the primary functions of any tax treaty. Which of the following is least a common tax treaty objective?

If a person is required to furnish a return of income under section 139 and fails to do so within time prescribed in sub-section (1) , you will have to pay interest on tax due. W.e.f. assessment year 2018-19, fee as per section 234F is required to be paid if return is furnished after the due date. Fee for default in furnishing return of income will be as follows:

Mr A received Rs. 1,00,000 interest from Sukanya Samriddhi Yojna account. He falls under the 30% tax slab. What is the tax liability on SSY interest for him?

“A new client has recently retired and has assets in employer-sponsored retirement plans in multiple territories. With regards to cross-border retirement plan taxation, what is the first piece of information needed to understand how the client’s assets will be taxed?”

Which of the following are exempt in case of Gift taxation in case of an individual? 1. Gifts up to Rs 5,00,000 in a financial year from friends. 2. Gifts from specified relatives regardless of amount. 3. Gifts given in contemplation of marriage of the recipient. 4. Gifts given under a will or inheritance. 5. Property received from a trust or institution registered under section 12AA.

With regards to cross-border taxation, resident aliens, expatriates, and foreign nationals all share what characteristic?

It is not unusual for individuals from one territory to move to, and earn income in, another territory. Most territories tax based on where you are living. Which of the following statements describing cross-border taxation is most likely true?

Which of the following points are applicable in case of Non-Resident and RNOR: 1. They will be charged to tax in India on his global income i.e. income earned in India as well as income earned outside India. 2. Their tax liability in India is restricted to the income they earn in India. They need not pay any tax in India on their foreign income.

Mrs. L, a 55-year-old lady has been investing Rs. 1.50 lakhs in her Public Provident Fund account for the past 10 years in the beginning of every financial year i.e. on 1st April. She wishes to retire after 5 years at her age 60. As her advisor, she wishes to get clarity on the following questions from you. Is the annual contribution in PPF eligible for any tax benefit?

Which of the following is not included U/S 80C? A. Employee’s share of PF contribution B. NSCs C. Medical Insurance Premium payment D. Children’s Tuition Fee E. Interest Repayment of home loan F. Investment in Sukanya Samriddhi Account G. Contribution towards ULIPS H. Mutual Fund ELSS I. Sum paid to purchase deferred annuity J. Three-year term deposit scheme K. Subscription to notified securities/notified deposits scheme L. Contribution to notified Pension Fund set up by Mutual Fund or UTI.

Mrs K won a prize of Rs. 30 lakhs on a TV game show. Will there be TDS deduction on the sum received if she doesn’t have any other income?

Which of the following statements regarding tax treaties and their implications is most likely correct?

For the F.Y. 2019-20 the total short-term capital loss for Mr X was Rs. 20,000. Can he set off the short-term capital loss against any other head of income?

Which form shows the total amount of tax received by the government against a PAN number?

For an investor with a marginal tax rate of 25%, what is the tax-equivalent yield of a tax-exempt bond with a 4% coupon rate?

In case of joint ownership of a house property which of the following two points is/are necessary for both the owners to claim tax benefit under a home loan. 1. They must be co-owners in the property 2. They must be co-borrowers for the loan

Which of the following items are TRUE in case of Form 16? A. Part A of Form 16 contains the information of the employer & employee, like name & address, PAN and TAN details, a period of employment, details of TDS deducted & deposited with the government. B. Part B of Form 16 contains the details of salary paid, other incomes, deductions allowed, tax payable etc.

Sophia owns a company that produces sewing needles. She sells an order of needles to a local sewing machine manufacturer. What type of tax will Sophia most likely owe as a result of the sale?

Which of the following points is applicable in case of Resident: 1. They will be charged to tax in India on his global income i.e. income earned in India as well as income earned outside India. 2. Their tax liability in India is restricted to the income they earn in India. They need not pay any tax in India on their foreign income.

Mr. P is confused whether to give his neighbour friend a car on his birthday or pay the amount in cash. He wants to know if gifts in cash and kind, both taxable?

D received the following gifts in the previous F.Y. What will be the total taxable amount of gift? 1. Rs. 40,000 from a friend on his birthday. 2. Rs. 8,000 from another friend on his birthday. 3. Rs. 60,000 from his father for buying a phone. 4. Rs. 15,000 from his brother on his birthday. 5. Rs. 50,000 from a friend on his marriage.

Mr Z bought a house in Mumbai for Rs. 1 Cr on 1st May 2015. On 1st June 2019 he is planning to sell the house. Which of the following points are true for taking exemption under section 54 of the IT Act: 1. The new property can be purchased either 1 year before the sale or 2 years after the sale of the property. 2. The gains can also be invested in the construction of a property, but construction must be completed within three years from the date of sale. 3. Please note that this exemption can be taken back if this new property is sold within 3 years of its purchase/completion of construction

Jacques is a 44-year old real estate investor who purchases properties, makes improvements, then rents or sells the properties. One of Jacques’s rental properties is assessed at a higher value than it was the previous year. How will this change affect his taxes?

You have a meeting with Gustavo, a prospective client who owns property and income sources from multiple territories. He wishes to pay as little in taxes as possible, and implies that he is willing to “take liberties” with tax law to do so. How should you respond?

Sajid had purchased a house property for Rs. 85,000 in the year 1978. In 2004-05, he built another floor on the same house, for which he incurred an expense of Rs. 3,00,000. The fair market value of this property as on April 1, 2001 is Rs. 1,20,000. The house was sold by Sajid on July 15, 2019 for Rs. 15,50,000 and he had to incur an expense of Rs. 10,000 on brokerage and other costs. What shall be the long-term capital gain for Sajid for AY 2020-21? CII for FY 2001-02: 100, FY 2004-05: 113, FY 2019-20: 289

What factor is most likely correlated with increased occurrences of tax arbitrage?

In a progressive income tax regime, which of the following is more beneficial to an individual as her income increases (all else being equal)?

Which of the following types of income is most likely to be taxed according to cross-border retirement plan rules?

A tax advisor recommends to her client that he should contribute to an eligible charity in order to claim a deduction this year. What type of tax minimization technique is this?

Atul is an Indian resident aged 42 years. He made some investments in debentures and shares during the previous year 2019-20, which are detailed below. What will be Atul’s income under the head ‘Income from other sources’ for the previous year 2019-20 considering these investments? 1. Purchase of 11% IDBI debenture of Rs. 1 lakh on October 1, 2019 directly from IDBI. The due date of interest is March 31 every year. 2. Purchase of 100, 12% debentures of X Ltd. from a broker at Rs. 100 each on Nov 30, 2019. The debentures are listed on a recognised stock exchange. The due date of interest is June 30 and December 31 every year. 3. Purchase of 100, 12% debentures of Y Ltd. by subscribing to the company directly, face value Rs. 100 each. The date of issue was October 31, 2019. The interest becomes due on June 30 and December 31 every year. 4. Purchase of 500 shares of Z Ltd., face value Rs. 10, @Rs. 50 per share from the market on October 15, 2019. Z Ltd. is an Indian domestic company which has declared a dividend @20% on December 30, 2019.

Soumil has provided the following information about movable assets purchased by him for inadequate considerations during the previous year 2019-20: a) a work of art from a friend Nupur. It’s fair market value is Rs. 1,00,000 but he paid Rs. 90,000 to her; b) a gold ring from a friend Suhas. It’s fair market value is Rs. 85,000 but he paid Rs. 45,000 only to Suhas. What will be the net income chargeable to tax in these two transactions for Soumil under the head ‘Income from other sources’?

For what type of entity is tax arbitrage most likely to be a viable strategy?

A territory taxes investment income in two different ways: interest and dividends are taxed at the investor’s ordinary income tax rate, while capital gains are taxed at a 15% rate. Assuming a 1-year holding period, which of the following investments has the highest after-tax total return for an investor with a 30% marginal ordinary income tax rate? 1. A corporate bond with a 6% coupon rate that is bought and sold at par 2. A tax-exempt bond with a 3% coupon rate that rises in price from €96 to €98 3. A share of stock that rises in price from €50 to €53 4. A share of stock that rises in price from €75 to €78 and pays a dividend of €1,50

Which territory has the primary ability to tax an individual under most tax treaties?

As per the residency rules under the Income Tax Act, 1961, income which accrues or arises outside India, and is also received outside India, from any other source shall be taxable in India for which one of the following entities?

Brigitte is a client who has heard about an investment strategy with the potential for significant tax savings. She calls her financial planner to talk about it. With regards to Brigitte’s financial situation, what factor should the financial planner consider first in order to determine the suitability of the strategy?

Amit is working with Indian Railways. His annual emoluments are – Basic Rs. 180,000, Dearness allowance Rs. 36,000 and entertainment allowance Rs. 18,000. How much of this entertainment allowance shall be taxable for Amit?

Leave Travel Assistance (LTA), also called Leave Travel Concession (LTC), extended by an employer to employees for going anywhere in India along with his family. What is the frequency that can be availed by the employee under LTC?

Section 10(1) deals with the taxability of agricultural income. Which one of the following statements correctly describes the taxability of agricultural income in India?

M is an engineer who works in a software company in Bengaluru. In the previous year he earned the following incomes: Income from Salary: Rs. 9.50 lakhs Interest on Savings account was Rs. 10,000. Gift from father Rs. 2,00,000. Fixed Deposit interest of Rs. 12,000. He invested Rs. 50,000 in Public Provident Fund and Rs. 20,000 in Mutual Fund ELSS. He also paid his Life insurance premium of Rs. 80,000 and Health insurance premium of Rs. 10,000. Calculate his taxable income and tax liability.

Atul works with a private firm ABC Ltd. The firm provides a car (1500 cc) to Atul, along with a driver. It is used by him partly for official purposes and partly for personal purposes. The company spends Rs. 60,000 on running and maintenance expenses of this car and another Rs. 180,000 on driver’s salary. What shall be the taxable value of this perquisite for Atul?

Russell let-out his house property in Pune to his friend Manish on a rental of Rs. 12,000 per month. The details of this house property for the FY 2019-20 are as follows: Net annual value – Rs. 1,00,000 Municipal Taxes Paid – Rs. 10,000 Amount spent by Russell on repairs and insurance premium – Rs. 20,000 What shall be the amount of deduction allowed to Russell under Section 24(a) of the Income Tax Act,1961 for the FY 2019-20?

Akshay owns a house-property whose municipal valuation is Rs. 2,50,000, fair rent is Rs. 2,00,000 and standard rent fixed by the Rent Control Act is Rs. 2,10,000. This property was let-out in the month of April 2019 for a rent of Rs. 20,000 per month. However, the tenant vacated the property on January 31,2020. At the time of vacation, there was an unrealised rent of Rs. 20,000 while all conditions prescribed by Rule 4 are satisfied. During the same year Akshay paid municipal taxes @8% of municipal valuation. He took a loan in the year of 2005 for construction of this house-property for which the interest paid on borrowed capital for the whole year was Rs. 65,000. What shall be the income from house-property for Akshay for the A.Y. 2020-21 given the said particulars?

Vikas joined ABC Ltd., a private company, on 01/10/2003. He retired from the same company on 31/03/2020. He was entitled to 35 days of paid leave per year from his employer out of which he availed 180 days during his service. What shall be the paid leave, in number of months, standing to the credit of Vikas for computing his taxability of leave salary?

What characteristics are shared between sole ownership and partnership arrangements?

For the F.Y. 2019-20, Mr. X (age 59) paid Rs. 35,000 towards his and his spouse’s medical insurance premium. Along with it he paid Rs. 45,000 for his father’s (age 90) medical insurance premium. What amount of deduction can he claim U/S 80D??

Mrs. XYZ, a 55-year-old lady has been investing Rs. 1.50 lakhs in her Public Provident Fund account for the past 10 years in the beginning of every financial year i.e. on 1st April. She wishes to retire after 5 years at her age 60. As her advisor, she wishes to get clarity on the following questions from you. Can she contribute to her PPF account after she is 60?

Mrs. XYZ, a 55-year-old lady has been investing Rs. 1.50 lakhs in her Public Provident Fund account for the past 10 years in the beginning of every financial year i.e. on 1st April. She wishes to retire after 5 years at her age 60. Is the entire interest earned on PPF account exempt from Income tax?

Can one claim their EPF without having to log on to the EPFO Portal?

Mr X joined a private sector company on 1st April 2016 which is covered under the Payment of Gratuity Act, 1972. The total employee strength of the company is 60. He died on 1st Dec 2020. His last drawn last drawn salary (Basic + DA) was Rs. 44,000 per month. What will be the gratuity
amount?

A client would like to fund a retirement lifestyle costing $100,000 a year starting tomorrow. Which of the following facts regarding the client’s situation would be most helpful in determining whether or not these are realistic objectives?

Mrs. XYZ, a 55-year-old lady has been investing Rs. 1.50 lakhs in her Public Provident Fund account for the past 10 years in the beginning of every financial year i.e. on 1st April. She wishes to retire after 5 years at her age 60. As her advisor, she wishes to get clarity on the following questions from you. Is the annual contribution in PPF eligible for any tax benefit?

Which of the following is a true statement regarding mitigating the impact of taxes on one’s retirement cash flow?

Which of the following questions would not be helpful to ask a client in order to determine their estimated annual retirement expenses?

Which is an example of a fixed and terminable goal?

Mr A (age 35) has been working in a private sector firm for the past 10 years. He has been contributing towards his Employee Provident Fund for the past 10 years and now he wants to explore NPS for additional tax saving and retirement purposes. Mr. A invests Rs. 50,000 per annum in NPS for the next 25 years at the beginning of each year. What will be the corpus accumulated at retirement? How much percentage out of that corpus can Mr. A withdraw tax free? Assume a return of 10% p.a.

What is the “hard work” of helping clients plan for retirement?

Which of the following is a strategy for addressing sequence risk for a client?

Mr Z started working for the first time in a private company on 1st April 2012. The company was covered under EPF Act 1952. He left his company on 1st April 2016 to take a year’s break for further studies. His EPF balance on 1st April 2016 was Rs. 30,000. Will he get the entire amount of EPF tax free?

Which of the following statements are false? A. EDLI applies to all employees with a basic salary under Rs. 15,000/- per month. If the basic salary goes above Rs. 15,000 per month, the maximum benefit is capped at Rs. 6,00,000/- B. There is no need for the employees to contribute to EDLI. Their contribution is required only for EPF. C. There is a bonus of Rs. 1,50,000/- available under the EDLI.
D. Any organisation that has more than 20 employees needs to register for EPF. Therefore, any employee who has an EPF account automatically becomes eligible for the EDLI scheme.

Mr X and Mr Y joined their first company after college in the year 1 APRIL 2014. In the July month 2019 Mr X wanted to withdraw his PF balance for his marriage whereas Mr Y wanted to withdraw his PF balance for his home loan repayment. Can both of them withdraw their PF balance?

A client is able to start saving $500 at the beginning of each month for their retirement goal. You estimate that they can earn 7% from their investments currently. What is the least information would you need at this stage from your client so that you determine whether the proposed monthly savings would be enough to meet their retirement funding goals?

Mr Z started working for the first time in a private company on 1st Jan 2015. The company was covered under EPF Act 1952. He moved to another company on 1st Jan 2019 and continued his EPF account through portability. He left his new company on 1st March 2020 and is unemployed for the past 4 months. His EPF balance on 1st April 2020 was 4 lakhs. Will he get the entire amount of EPF?

A client who is 30 years away from their desired retirement age is afraid to invest in the financial markets due to a recent economic downturn. Clients benefit from advisor guidance and education. Which of the following is not recommended?

Which of the following is not a benefit of using annuities as part of a client’s investment portfolio?

Mr Y wants to contribute to his PPF account. He wants to earn maximum possible interest on his investment during a financial year. Which option will be the best for him if he wants to invest a lump sum for the financial year:

How is the contribution by the Employee and Employer to the EPS, EPF and EDLI made?

In which one of the following cases, the individual is not an ‘assessee’ for the AY 2020-21?

Which one of the following statements best describe the functions of the Central Board of Indirect Taxes and Customs (CBIC), one of the Boards established under the statute Central Boards of Revenue Act, 1963?

What characteristic is shared between sole ownership and partnership arrangements?

ABC Corporation acquires XYZ Corporation for a purchase price of €50 million. XYZ Corporation’s balance sheet contains €150 million of assets and €80 million of liabilities. According to IFRS 3, how must ABC Corporation reflect the acquisition in its financial statements?

Vikas joined ABC Ltd., a private company, on 01/10/2003. He retired from the same company on 31/03/2020. He was entitled to 35 days of paid leave per year from his employer out of which he availed 180 days during his service. What shall be the paid leave, in the number of months, standing to the credit of Vikas for computing his taxability of leave salary?

Provident Fund is a valuable retirement tool which is built over the years by periodic contributions from the employer and the employee. Which one of the following statements correctly describe the taxability of the employer’s contribution to the Recognized Provident Fund of an employee?

Tax treaties and credits against foreign tax paid are both methods used by governments to achieve what goal?

“An investor bought 100 shares of Stock XYZ in each of the last four years. She purchased the stock at $100 per share in year one, $110 per share in year two, $90 per share in year three, and $120 per share in year four. Today, the stock is trading at $130 per share. If the investor wants to sell 200 shares, which share identification method would result in the least amount of capital gains?”

A territory taxes investment income in two different ways: interest and dividends are taxed at the investor’s ordinary income tax rate, while capital gains are taxed at a 15% rate. Assuming a 1-year holding period, which of the following investments has the highest after-tax total return for an investor with a 30% marginal ordinary income tax rate? 1. A corporate bond with a 6% coupon rate that is bought and sold at par 2. A tax-exempt bond with a 3% coupon rate that rises in price from €96 to €98 3. A share of stock that rises in price from €50 to €53 4. A share of stock that rises in price from €75 to €78 and pays a dividend of €1.50

Satish is working with ABC Ltd. His salary is Rs. 40,000 per month which becomes due on the last day of the month but is paid on 7th of the next month. However, Satish has received his salary for the months of April 2020 and May 2020 in advance in the month of March 2020 itself. What will be the gross income of Satish for the AY 2020-21?

Capital assets are categorized into short-term and long-term and the tax incidence depends on whether the capital gain is short-term or long-term. In which one of the following instances, the transaction shall be considered as a long-term capital gain?

Esther and Frederic are a married couple who have hired you for tax planning. Esther’s salary is $70,000 per year and Frederic earns $50,000, and they have a combined $10,000 in investment income. The couple’s territory taxes income up to €125,000 at 25% and the remainder at 35%. What will reduce their total tax by the greatest amount?

Madhur, an Indian citizen, left India for the first time on September 21, 2019 for a work assignment in Canada, given to him by his present employer in India. He finished his assignment and returned to India on April 5, 2020. What is the residential status of Madhur for the AY 2020-21?

Subhash, a non-resident, remits US$ 30,000 to India on June 10, 2002. The amount is partly utilised by Subhash for purchasing 40,000 preference shares of an Indian company @ Rs. 8 per share on June 17, 2002. He sells them @ Rs. 30 per share on April 30, 2019. What will be the amount of capital gains taxable for Subhash for the AY 2020-21? Assume the telegraphic transfer buying and selling rate is Rs. 18.50 per dollar on June 17, 2002 and Rs. 68.20 per dollar on April 30, 2019. The CII for the year 2002-03 is 105 and for the year 2019-20 is 289.

“A 70-year old client has accumulated a large investment portfolio consisting of both stocks and bonds. He uses the quarterly interest payments from the bonds to supplement his monthly government pension income, holding each bond until maturity then using the proceeds to buy more bonds. He intends to let the stocks appreciate in value so he can pass them on to his grandchildren when he dies. Which types of taxes are the most important for the client to minimize in order to achieve his goals?”