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CTEP Questions and Answers

Question # 6

The employer had purchased a car for Rs. 3,00,000 which was being used for official purposes. After 2 year 6 months of its use, the car is sold to R, the employee, for Rs. 1,20,000. The value of this perquisite shall be __________.

A.

Rs. 72,000

B.

Rs. 60,000

C.

Nil

D.

Rs. 1,23,000

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Question # 7

Lokesh purchased a flat on 1-4-1996 for Rs. 10,00,000/-. He sells the same flat on 1-10-2006 for Rs. 25,00,000/-. As a CTEP calculate the Indexed Cost of Acquisition on which capital gain would be calculated. (The CII of year 1995-96 is 281, for year 1996-97 is 305, for year 2005-06 is 497 and for year 2006-07 is 519).

A.

Rs.17,01,639

B.

Rs.18,46,975

C.

Rs.17,68,683

D.

Rs.16,29,508

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Question # 8

The legal heir of the deceased who receives family pension is allowed a standard deduction from such family pension received to the extent of:

A.

1/3rd of such pension subject to maximum of Rs. 20,000

B.

1/3rd of such pension or Rs. 15,000 whichever is less

C.

1/3rd of such pension or Rs. 12,000 whichever is less

D.

1/3rd of such pension or Rs. 12,500 whichever is less

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Question # 9

Choose the amount of final tax liability of Mr. Raj for the assessment year 2007-08:

Tax slab for male / HUF(for AY 2007-08)

Rs. 0 to 100000 — No Income Tax

Rs. 1,00,001 to 1,50,000 — 10%

Rs. 150001 to 2,50,000 — 20%

Rs. 2,50,001 and above — 30%

Note: A surcharge of 10% on income tax amount is payable if total income is exceeding Rs. 10,00,000 and a 2% education cess is payable on the income tax amount and surcharge.

A.

Rs.17,100

B.

Rs.17,442

C.

Rs.15,700

D.

Rs.16,014

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Question # 10

Vikrant Juneja gifted his house property to his wife in year 2007. Mrs. Juneja then lets out this house @ Rs. 5000 per month. The income from such house property will be taxable in the hands of:

A.

Mrs. Juneja

B.

Vikrant. However income will be computed first as Mrs. Juneja’s income and thereafter clubbed in the income of Manish.

C.

Vikrant, as he will treated as deemed owner & liable to pay tax

D.

Anyone amongst both of them, whose income is greater.

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Question # 11

Deduction under section 80QQB is allowed in respect of royalty income to:

A.

an individual who is an author of a book

B.

an individual who is resident in India and who is an author of a book

C.

an individual who is resident in India and who is either an author of a book or a joint author of the book

D.

None of these

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Question # 12

Incase of Divorce by mutual consent, on the motion of both the parties made not earlier than __________ after the date of the presentation of the petition and not later than____________ after the said date, if the petition is not withdrawn in the meantime, court shall, on being satisfied on all grounds pass a decree of divorce declaring the marriage to be dissolved with effect from the date of the decree.

A.

6 months, 12 months

B.

6 months,18 months

C.

12 months, 18 months

D.

12 months, 24 months

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Question # 13

With respect to Workmen’s Compensation Act, if distinction is made on the ground of duration of incapacity it may extend to

A.

Only (i) and (ii)

B.

All of the above

C.

(i),(ii) and (v)

D.

Only (iii) and (v)

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Question # 14

Mr. Kadam is entitled to a salary of Rs. 25,000 per month. He is given an option by his employer either to take house rent allowance or a rent free accommodation which is owned by the company. The HRA amount payable was Rs. 5,000 per month. The rent for the hired accommodation was Rs. 6,000 per month at New Delhi. Advice Mr. Kadam whether it would be beneficial for him to avail HRA or Rent Free Accommodation. Give your advice on the basis of “Net Take Home Cash benefits”.

A.

Avail HRA

B.

Rent Free Accomodation

C.

Both are Beneficial

D.

None of the Above

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Question # 15

The income of any university or other educational institution existing solely for educational purposes and not for the purposes of profit is exempt under clause (iiiad) of Section 10(23C) if the aggregate annual receipts’ of such university or educational institution do not exceed

A.

Rs.100 crores

B.

Rs.1 crore

C.

Rs. 10 crores

D.

Rs. 10 lakhs

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Question # 16

Compute Gross Total income and amount of loss allowed to be carried forward to next year:

A.

Rs. 34,000; Rs. 10,000

B.

Rs. 40,000; Rs. 10,000

C.

Rs. 40,000; Nil

D.

Rs. 40,000; Rs.10,000

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Question # 17

A person is deemed to have attained majority on completion of __________________ in case where a guardian of a minor’s property is appointed under the Guardian and Wards Act,1890.

A.

15 years

B.

16 years

C.

18 years

D.

21 years

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Question # 18

Saptarshi acquired shares of G Ltd. on 15.12.98 for Rs. 5 lacs which were sold on 14.6.11 for Rs. 19 lacs.

Expenses on transfer of shares Rs. 40,000. He invests 8 lacs in the bonds of Rural Electrification. Corporation Ltd. on 16.10.2011. Compute capital gain for the assessment year 2012-13.

A.

Rs 7,41,766

B.

Nil

C.

Rs 11,18,234

D.

Rs 12,45,745

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Question # 19

There are __________ types of Insurance policies which are used in Estate Planning.

A.

Two

B.

Three

C.

Four

D.

No limit on the types of Insurance Policies

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Question # 20

Estate planning has_____ phases.

A.

Nil

B.

Two

C.

Three

D.

Depends on the value of estate

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Question # 21

Mr. Raj, the intestate, leaves no brother or sister but leaves his mother and one child of a deceased sister, Mary and two children of a deceased brother, George. How will the Estate be distributed?

A.

Raj’s Mother will be receive all the Property.

B.

Raj’s Mother will take 50% of the share while remaining 50% will be divided equally between the three children.

C.

Raj’s mother will take one-third, Mary’s child will take one-third and the children of George will divide the remaining one-third equally between them.

D.

Raj’s mother will take 50% of the share and remaining will be divided between George’s children

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Question # 22

____________ is the most basic legal instrument of all Estate Plans.

A.

Power of Attorney

B.

Will

C.

Trust Deed

D.

Any one of above

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Question # 23

Which of the following is essential for contract?

A.

Free Consent

B.

Witness

C.

Signatory

D.

Consideration

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Question # 24

You are an estate planner. A couple has jointly owned company. They have three children out of which one is disabled. As an estate planner, which Estate planning would you suggest to the couple, so as to enable them to transfer wealth efficiently to their children.

A.

Life Insurance Policy

B.

Buy Sell Agreement

C.

Family Limited Partnership

D.

Grantor Retained Annuity Trust

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Question # 25

Charity tends to be ________ and _________ response.

A.

Short term, Strategic

B.

Long Term, Emotional

C.

Short Term, Emotional

D.

Long Term, Strategic

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Question # 26

Which of the following events does not require a Estate Planner to revise his plan?

A.

Divorce

B.

Donation of Asset

C.

Birth of grandchildren

D.

None of the above

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Question # 27

Which of the following statement(s) about Ancillary Probate is/are false?

A.

Only (i)

B.

Only (ii)

C.

Both (i) and (ii)

D.

Neither (i) nor (ii)

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Question # 28

Which of the following is a way to Revoke a Will?

A.

None of the above

B.

Both (i) and (ii)

C.

Only (iii)

D.

(i), (ii) and (iii)

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Question # 29

There are generally________ types of Private Foundations. Out of these, in ____________ arrangement, the donor has no direct participation in any charitable work.

A.

Two, Company-Sponsored Foundation

B.

Three, Non-Operating Foundation

C.

Two, Non-Operating Foundation

D.

Three, Company-Sponsored Foundation

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Question # 30

__________ is an influential person who knows you favorably and agrees to introduce or recommend you to others.

A.

Centre of Influence

B.

Attorney

C.

Commercial Bank Officer

D.

Property Agent

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Question # 31

Estate Planning Process is eight-step procedure that a manager has to follow. The Eight Steps are as given below (not in any order)

The correct order is

A.

(i)-(ii)-(iii)-(iv)-(v)-(vi)-(vii)-(viii)

B.

(ii)-(i)-(iii)-(iv)-(vi)-(vii)-(viii)-(v)

C.

(ii)-(i)-(iii)-(iv)-(vi)-(vii)-(v)-(viii)

D.

(ii)-(i)-(iii)-(iv)-(vi)-(v)-(vii)-(viii)

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Question # 32

Which of the following about “Succession Plan” is/are true?

A.

Neither(i) nor (ii)

B.

Only (i)

C.

Only (ii)

D.

Both (i) and (ii)

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Question # 33

There are_________ steps to implement Philanthropy Planning and the first step is__________.

A.

Three, Gift Design

B.

Three, Discovery

C.

Four, Gift Design

D.

Four, Discovery

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Question # 34

Which of the following is/are objective(s) of Probate process?

A.

(i) and (ii)

B.

(iI) and (iii)

C.

(i),(ii) and (iii)

D.

(i) and (iii)

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Question # 35

As per Employee Provident Fund, a member can withdraw________ of the amount of provident fund at credit after attaining the age of 54 years or within one year before actual retirement or superannuation whichever is later.

A.

100%

B.

90%

C.

75%

D.

50%

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Question # 36

Which of the following statement(s) about beneficiary is/are correct?

A.

None of the above

B.

Only (iv)

C.

All of the above

D.

All except (iii)

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Question # 37

Which of the following statement(s) about Socities Registration Act is/are correct?

A.

Both (i) and (ii)

B.

Only (i)

C.

Only (ii)

D.

Neither (i) nor (ii)

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Question # 38

A Diety is entitled to initial exemption of __________________ in respect of its income.

A.

Rs 1,00,000

B.

Rs 1,50,000

C.

Rs. 2,50,000

D.

None of the above

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Question # 39

Which of the following statement(s) about Inheritance Tax is/are correct?

A.

Only (i)

B.

Only (ii)

C.

Neither (i) or (ii)

D.

Both (i) and (ii)

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Question # 40

Which of the following is/are advantage(s) of Trust?

A.

Neither (i) or (ii)

B.

Both (i) and (ii)

C.

Only (i)

D.

Only (ii)

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Question # 41

Private Sector hospitals, which are formed under a trust as a society, would be exempt from the tax if the annual receipts of such hospital or institution do not exceed _______________ as per Section 10(23(C).

A.

1 crore

B.

50 Lakhs

C.

10 crores

D.

10 Lakhs

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Question # 42

______________ of the Transfer Property Act permits the transfer of property only to one or more living persons.

A.

Section 1

B.

Section 5

C.

Section 8

D.

Section 10

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Question # 43

Under _______________ of the Transfer of Property Act, a transfer of property can legally be made for the benefit of an unborn person.

A.

Section 5

B.

Section 8

C.

Section 13

D.

None of the above

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Question # 44

Which of the following statement(s) about Estate duty is/are correct?

A.

Neither (i) or (ii)

B.

Only (i)

C.

Only (ii)

D.

Both (i) and (ii)

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Question # 45

Which of the following statements about Discretionary Trust is/are correct?

A.

Both (i) and (ii)

B.

Only (i)

C.

Only (ii)

D.

Neither (i) nor (ii)

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Question # 46

For Registration of Charitable Trust an application should be submitted with Covering Letter, Court Stamp of ___________ and Certified True Copy of Trust Deed. The application should be made within _________ of creation of Trust. The application should be in Form as specified in _____________ under ____________ and duly notarized.

A.

Rs.1, 1 month, Schedule I, Rule 1

B.

Rs.10, 1 month, Schedule II, Rule 1

C.

Rs.2, 3 months, Schedule II, Rule 6

D.

Rs.100, 3 months, Schedule I, Rule 2

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Question # 47

The application for Registration of Trust has to be made in the prescribed Form No. _______________ to the Chief Commissioner of Income Tax or the Commissioner of Income Tax of the area concerned.

A.

Form 1A

B.

Form 1B

C.

Form 10A

D.

Form 10B

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Question # 48

A member is defined under ___________ of the Societies Registration Act and a Governing body is defined under_______________ of the Societies Registration Act.

A.

Section 15, Section 16

B.

Section 17,Section 18

C.

Section 19,Section 20

D.

Section 29,Section 30

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Question # 49

Which of the following statement(s) about “Special Needs Trust” is/are correct?

A.

Both (i) and (ii)

B.

Only (i)

C.

Only (ii)

D.

Neither (i) nor (ii)

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Question # 50

Which of the following is/are disadvantage(s) of Trust?

A.

Only (i)

B.

Only (ii)

C.

Neither (i) or (ii)

D.

Both (i) and (ii)

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Question # 51

Which of the following cannot be transferred with the help of Trust?

A.

Real Estate

B.

Stock Shares

C.

Annuities

D.

None of the above

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Question # 52

You are a Trust and Estate Planner. Mr. Sumit, your client comes out you with the following data and wants to know for which the years he is resident or not.

He left UK on 10th March 2008 to work full-time abroad and visited UK for:

74 days in the tax year 2008–09; 98 days in the tax year 2009–10; 92 days in the tax year 2010–11; 79 days in the tax year 2011–12

Assume the following only for this question:-

320 days in the remainder of the tax year 2008-2009;365 days in the tax year 2009-10; 366 days in the tax year 2010–11; 366 days in the tax year 2011-2012.

Your reply to Mr. Sumit is –“For the year 2009-2010 you are ______________, for year 2010- 2011 you are _______ and for the year 2011-2012 you are ______________”

A.

Non-Resident; Non-Resident; Non-Resident

B.

Non-Resident; Resident; Non-Resident

C.

Resident; Non Resident; Non-Resident

D.

Resident; Resident; Resident

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Question # 53

When a deceased dies issueless leaving a widow there is no question of a deemed partition under ___________ of the Hindu Succession Act.

A.

Section 10

B.

Section 8

C.

Section 12

D.

Section 6

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Question # 54

If a Muslim gentleman dies, leaving behind his widow, a sister and a son, then how would the property be distributed?

A.

(i) only

B.

(ii) only

C.

Either (i) or (ii)

D.

None of the above

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Question # 55

Which of the following statement(s) is/are correct?

A.

Both (i) and (ii)

B.

Neither (i) nor (ii)

C.

Only (i)

D.

Only (ii)

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Question # 56

The Hindu Succession (Amendment Act), 2005 came into force from _______________.

A.

29th September,2005

B.

9th September,2003

C.

9th September,2005

D.

29th September,2003

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Question # 57

Which of the following statement(s) is/are correct?

A.

Neither (i) or (ii)

B.

Both (i) and (ii)

C.

Only (i)

D.

Only (ii)

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Question # 58

Mr. Shikar wants to invest his savings in an account that pays an interest rate of 9.25% p.a. compounded annually at different ages of his son whose current age is 4 years. Please calculate for him the Future Value of these investments when his son turns 18.

A.

Rs. 21,77,626

B.

Rs. 23,79,057

C.

Rs. 27,97,057

D.

Rs. 33,79,057

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Question # 59

Under the provisions of _________of the Hindu Succession Act, 1956 where a Hindu male dies intestate on or after __________, having at the time of his death an interest in a Mitakshara coparcenary property leaving behind a female heir of the Class I category, then his interest in the coparcenary property shall devolve by succession under that Act and not by survivorship.

A.

Section 6, 17th June 1956

B.

Section 8, 27th June 1956

C.

Section 10, 17th June 1956

D.

Section 12, 27th June 1956

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Question # 60

What is the full form of PET?

A.

Potential Exempt Transfer

B.

Potentially Exempt Transfers

C.

Potential Exemption Transfer

D.

Potentially Exempt Transfers

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Question # 61

Shri Ganjarwala Charitable Trust (Regd.) submits the particulars of its income/outgoing for the previous year 2009-2010 as below:

The trust spends Rs. 2,77,500 during the previous year 2009-2010 for charitable purposes. In respect of Rs. 5,20,000, it has exercised its option to spend it within the permissible time-limit in the year of receipt or in the year, immediately following the year of receipt.

The trust spends Rs. 2,00,000 during the previous year 2009-2010 and Rs. 1,00,000 during the previous year 2010-2011.

Compute the tax payable on the income of the trust.

A.

Rs.2,080

B.

Rs.2,160

C.

Rs.2,060

D.

Rs.2,200

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Question # 62

Which of the following transaction /transactions is/are an example of the Layering Stage of Money Laundering?

A.

Only II

B.

II, III and IV

C.

I, II and III

D.

II and IV

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Question # 63

In US the exemption amount for Alternative Minimum Tax in the case of estate or trust is _________. The same in the case of married individuals filing a joint return and surviving spouses is ______________.

A.

$80,800; $51,900

B.

$22,500; $80,800

C.

$51,900; $22,500

D.

$40,400; $51,900

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Question # 64

Which of the following statement(s) about partition of HUF is/are correct?

A.

All of the above

B.

Only (i)

C.

Only (ii)

D.

Only (iii)

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Question # 65

Which one of the following statement(s) is/are correct?

A.

(i) only

B.

(ii) only

C.

Both are correct

D.

Both are incorrect

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Question # 66

Mukul purchased a flat on 1-4-1996 for Rs. 10,00,000/-. He sells the same flat on 1-10-2006 for Rs. 25,00,000/-. Please calculate the Indexed Cost of Acquisition on which capital gain would be calculated. (The CII of year 1995-96 is 281, for year 1996-97 is 305, for year 2005-06 is 497 and for year 2006-07 is 519).

A.

Rs.17,85,129

B.

Rs.17,26,175

C.

Rs. 17,01,639

D.

Rs.17,45,508

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Question # 67

Where a transfer of value is from a UK-domiciled spouse to a non-UK domiciled spouse, then the exempt transfer is limited to ____________

A.

£25,000

B.

£35,000

C.

£45,000

D.

£55,000

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Question # 68

Under English law, an individual acquires at birth the domicile of the person on whom he or she is legally dependent, which the individual retains until reaching the age of _____________.

A.

18

B.

21

C.

15

D.

16

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Question # 69

Given below are certain acts. Fill in the blanks with their respective year of enactment.

Power of Attorney Act ______________

Indian Evidence Act ______________

Muslim Women (Protection of Rights on Divorce) Act ______________

Indian Divorce Act ______________

A.

1869;1872;1882;1986

B.

1872;1869;1882;1986

C.

1882;1872;1986;1869

D.

1869;1882;1969;1986

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Question # 70

For 2012-2013 the annual exclusion amount sheltered from estate tax in US is ____________.

A.

$5,000,000

B.

$5,250,000

C.

$5,500,000

D.

$5,750,000

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