MCQ for CA Final Audit - Chapter 12 AUDIT UNDER FISCAL LAWS

Sample Multiple Choice Questions (MCQ's) for CA Final - Paper 3 - Advanced Auditing and Professional Ethics - Chapter 12: AUDIT UNDER FISCAL LAWS - For Practice relevant for May/Nov 23 Examinations

 

Q:1 As per Sec. 44AB of Income-tax Act, 1961, tax audit is required in which of the following cases:

 

  1. assessee carrying on business where total sales or turnover or gross receipts exceeds ₹ 50 lakhs in any previous year.
  2. Assessee carrying on business where total sales or turnover or gross receipts exceeds ₹ 100 lakhs in any previous year.
  3. assessee carrying on business where total sales or turnover or gross receipts was ₹ 200 lakhs or more in any previous year.
  4. assessee carrying on business where total sales or turnover or gross receipts was ₹ 100 lakhs or more in any previous year and his income exceeds the maximum exempted income.

Answer: 2

 

Q:2 As per Sec. 44AB of Income-tax Act, 1961, tax audit is required in which of the following cases:               

 

  1. assessee carrying on profession where gross receipts exceed ₹ 50 Lakhs in any previous year and his income exceeds the maximum exempted income.
  2. assessee carrying on profession where gross receipts exceed ₹ 100 Lakhs in any previous year and his income exceeds the maximum exempted income.
  3. assessee carrying on profession where gross receipts exceed ₹ 50 Lakhs in any previous year.
  4. assessee carrying on profession where gross receipts exceed ₹ 100 Lakhs in any previous year.

Answer: 3

 

Q:3 As per Sec. 44AB of Income-tax Act, 1961, tax audit is required in which of the following cases:

 

  1. Assessee carrying on profession covered u/s 44ADA and declaring lower income than deemed u/s 44 ADA, irrespective of income earned.
  2. Assessee carrying on profession covered under section 44ADA and declaring lower income than deemed u/s 44ADA and his income exceeds the maximum exempted amount.
  3. Assessee carrying on profession under section 44ADA where gross receipts exceed ₹ 25 Lakhs.
  4. Both (b) and (c).

Answer: 2

 

Q:4 Section 44AB is not applicable to assessees covered under section:       

 

  1. 44B relating to shipping business.
  2. 44BB relating to exploration of mineral oil.
  3. 44BBB relating to foreign companies engaged in Civil Construction.
  4. All of the above.

Answer: 1

 

Q:5 Mr. A is having turnover of ₹1.5 Cr. from his business in F.Y. 2020-21. He has presumptive taxation u/s 44AD.  

 

  1. As per Sec. 44AB of Income Tax Act, 1961, tax audit is required as turnover exceeds ₹ 1 Cr.
  2. As per Sec. 44AB of Income Tax Act, 1961, tax audit is not required as turnover does not exceeds ₹ 2 Cr.
  3. As per Sec. 44AD of Income Tax Act, 1961, tax audit is required as turnover exceeds ₹ 1 Cr.
  4. As per Sec. 44AD of Income Tax Act, 1961, tax audit is not required as turnover does not exceeds ₹ 2 Cr.

Answer: 4

 

Q:6 Mr. Y aged 50 years is having turnover from business in F.Y. 2020-21 of 90 Lakhs from which he is having loss of ₹ 2,00,000. He is also having salary income of ₹ 10,50,000. During F.Y. 19-20, he opted for presumptive taxation.        

 

  1. Y is not required to get his accounts audited since turnover is less than ₹ 1 Cr.
  2. Y is not required to get his accounts audited since turnover is less than ₹ 2 Cr.
  3. Y is required to get his accounts audited.
  4. None of the above.

Answer: 3

 

Q:7 Mr. X deals in a commodity and purchase and sales of that commodity is ultimately settled otherwise than by the actual delivery. During the financial year 2020-21 he purchased the commodity worth ₹ 95 Lacs and sold the same commodity for ₹ 104 Lacs and the contract was settled otherwise than by the actual delivery.

 

  1. X is liable for audit u/s 44AB of Income-tax Act, 1961, as his turnover (i.e. ₹ 104 Lacs) exceeds ₹ Cr.
  2. X is not liable for audit u/s 44AB of Income-tax Act, 1961 as turnover (i.e. ₹ 95 Lacs) does not exceed ₹ 1 Cr.
  3. X is not liable for audit u/s 44B of Income -tax Act, 1961, as turnover (i.e. ₹ 9 Lacs) does not exceed ₹ 1 Cr.
  4. X is liable for tax audit u/s 44AB of Income-tax Act 1961, as he is engaged in speculative business.

Answer: 3

 

CA Final - Paper 3 - Advanced Auditing and Professional Ethics - Chapter 13   

 

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