FinanceInsights has created mock tests for the NISM Investment Adviser X-B Level 2 exam. Questions are based on NISM Investment Adviser X-B Level 2 Workbook Version - Jul 21.
FinanceInsights has created a bank of about 600 questions.
Every time you take the mock test, 100 random questions from the question bank will be presented. Each question will carry 1 mark each. There will be negative marking of 25%. This bank of questions covers the entire syllabus and can be used to learn the course content.
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Mr. A (resident in India) acquired 10,000 units of Gold ETF at Rs. 30 per unit on 01-03-2018. He sold such units on 25-03-2021 at Rs. 50 per unit. Compute the amount of capital gain chargeable to tax in hands of Mr. A. CII of the year of sale - 301; CII of the year of in which asset is first held by assessee or CII of 2001-02, whichever is later - 272. (from NISM)
The total income of a resident individual (excluding long-term capital gains) is Rs. 1,85,000 and long-term capital gain from the sale of unlisted shares is Rs. 2,50,000. What is the amount chargeable to tax?
Senior Citizens’ Savings Scheme (SCSS) offers tax benefit under section 80C.
In 'tenants-in-common' form of property ownership, when one tenant dies, the interest of the deceased tenant will pass on to the survivor tenant, and not to the legal heirs.
An equity share is acquired on 01-01-2017 at Rs. 100, its fair market value is Rs. 200 on 31-01-2018 and it is sold on 01-01-2020 at Rs. 250. Calculate long term capital gain. (from NISM)
Suresh purchased a term plan under the Married Women's Property Act, 1874 where his wife Reema was the nominee/beneficiary. The couple separated and Suresh applied to the insurance company to change the beneficiary to his mother. Can he do so?
Section 80RRB offers tax deduction of ________ to individuals from royalty income from patents.
Chetan was working in London for some years. He returned to India in FY 2020-21. The details of his stay are given above. Determine his residential status for FY 2020-21.
Short term capital gains in case of equity-oriented funds are taxed at --
Short-term capital gain arising from transfer of masala bonds is taxable at _____ for FPIs.
In case of Systematic Withdrawal Plan (SWP) from equity funds, if the holding period is more than 12 months, then the capital gains portion of the withdrawn amount will be taxed at ______.
Maximum deduction available to a self-employed person for the investment made in NPS is ________. (from NISM)
Mr. A, working in an eligible start-up company, has been allotted 100,000 shares at the rate of Rs. 10 per share under ESOP scheme in the Financial Year 2020-21. The fair market value of shares at the time of exercising of option by Mr. A is Rs. 100. The perquisite value of ESOPs taxable in the hands of Mr. A shall be Rs. 90 Lakhs [100,000 shares* (Rs. 100 – Rs. 10)]. The annual salary of Mr. A (excluding perquisite value of ESOPs) in that year is Rs. 40 Lakhs. He continues with the company even after expiry of 48 months from the end of the assessment year in which shares are allotted and he does not sell the shares even after expiry of said period. What will be his tax liability for Assessment Year 2021-22? What will be his tax liability for the Assessment Year 2025-26? (from NISM)
As per the Prospect Theory, people are risk-____ about gains but risk-_______ about losses.
For Unit Linked Insurance Plans (ULIPs), insurers must provide Benefit Illustrations giving two scenarios of interest – at _% and at _%.
Rishi received 1000 bonus shares of Razor Ltd on 23 Dec 1996. What should be considered as cost of acquisition?
When a bank becomes the corporate agent of an insurance company it is referred to as a _________. (from NISM)
Section 80QQB offers tax deduction of ________ to authors from royalty income.
Mr. X acquired 20% shareholding in ABC Ltd. for Rs. 20,00,000 (20,000 shares at Rs. 100 each) 01-01-2010. The company went into liquidation 30-06-2018. The accumulated profit of the company on the date of liquidation was Rs. 15,00,000. Mr. X received a machinery worth Rs. 60 lakhs from the liquidator on 01-05-2020. Discuss the taxability in hands of the ABC Ltd. and Mr. X. (from NISM)
Mr. A (resident in India) invested Rs. 50 lakhs in debt oriented mutual funds. He received dividend of Rs. 500,000 in respect of such units in financial year 2020-21. He paid interest of Rs. 150,000 on the amount borrowed for making investment in mutual funds. Determine the taxability of dividend in the hands of Mr. A. Also comment whether the taxability will remain same if Mr. A is a non-resident in India? (from NISM)
Anuj is a resident and ordinarily resident but not ordinarily resident in India during the Financial Year 2020-21. He has a bank account in USA. There is an interest income on the balance lying in the offshore bank account. Will this account be taxable in India?
A senior citizen above the age of ____ is eligible for reverse mortgage.
When an individual borrows against his insuance policy, he has to ______ the lender.
Rohit acquired a house in Mumbai out of inheritance from his father. His father had purchased the house for Rs. 50 lakh in the F.Y. 2002-03. The current market value of the house is Rs. 3.5 crore. The CII for the current year (FY 20-21) is 301; the CII for FY 2002-03 is 105. Calculate the cost of acquisition in case Rohit decides to sell the house in the current year.
The maximum loan tenure for reverse mortgage is _____.
Sovereign gold bonds bear interest at the rate of ____ per cent (fixed rate) per annum on the nominal value of the bond.
Suresh, a doctor, wants to purchase insurance in the event of any case filed for negligence against him by any patient. Which insurance should he purchase?
Category-I AIF, registered as a trust, has derived following income during the year: Income under the head profit and gains from business and profession - Rs 20 lakh; Income under the head capital gains - Rs 15 lakh; Income from other sources - Rs 5 lakh; Mr. X holds 30% units of the AIF. During the year, the AIF has credited the entire income to the accounts of its investors except for income in the nature of other sources. Determine the taxability both in the hands of AIF and Mr. X. (from NISM)
Investments in unlisted shares in a company are treated as short term assets if held for less than ____. In case of both resident and non-resident investors, short term capital gains are taxed at ____.
Investments in Land and Building are treated as long term assets if held for more than ____. In case of both resident and non-resident investors, long term capital gains are taxed at ____ plus applicable surcharge plus cess.
Health insurance policies are portable.
Any sum received under a Keyman insurance policy is tax-free.
Any interest income that distributed by a Real Estate Investment Trust (REIT) to a non-resident unitholder is charged to tax at ______.
Profit from sale of index ETF is considered as long-term if it is held for more than ___ and such long-term capital gains above Rs 1 lakh is taxed at the rate of ____.
Nehal held 1000 units of New Flexicap Fund – dividend payout. He decided that he preferred to let the dividend remain in the scheme and therefore switched to the growth option. Does this constitute ‘transfer’ and, as a result, taxable capital gains?
The minimum deposit amount required per financial year in Public Provident Fund (PPF) is:
Short-term capital gain from the transfer of GDRs shall arise when they are transferred within a period of ____ from the date of acquisition.
Under the Hindu Succession Act, adopted children (son or daughters) are not counted as heirs.
If a Power of Attorney has been executed out of India, it will continue to be valid even when the person returns to India.
A person is eligible to receive gratuity only if he has completed minimum __ years of continuous service with an organisation.
Sudha chose the 'Auto Choice' for investment in the National Pension System (NPS) where she selected the Conservative Life Cycle Fund. What is the maximum equity allocation in this option?
Mr. X purchased 400 listed convertible bonds of ABC Ltd. on 01-01-2010 for Rs. 500 each. The bonds are converted into equity share on 01-01-2021 at convertible ratio of 1:1. As a result, Mr. X is allotted 400 shares of ABC Ltd. The fair market value of the share on the date of conversion is Rs. 850 per share. Mr. X sold the shares on 25-03- 2021 for Rs. 1,000 per share. Securities Transaction Tax (STT) was paid at the time of transfer of shares. What shall be the tax implications in the hands of Mr. X in this case? (from NISM)
Who is not included in the definition of an ""Assessee"" as defined under the Income Tax Act? (from NISM)
Section 80TTA offers tax deduction of ________ from interest on deposits in savings account.
Minimum Alternate Tax (MAT) is payable even if the total income of the company is nil or it has tax losses.
Capital gains will not be taxed to the extent by which all other taxable income falls short of minimum chargeable to tax – Rs. 2.50 lakhs/ Rs. 3 lakhs/Rs. 5 lakhs as applicable.
Death-cum-retirement gratuity received by a Central Government / State government / local authority employee is _______.
Snehal needed funds for her daughter Sita's higher education. She approached her employer to see how much she could withdraw from the EPF (Employees' Provident Fund) account. She had been in employment for more than 7 years (the stipulated period for being eligible to withdraw from EPF). Her employer stated she could withdraw --
Section 80E offers tax deduction for interest on education loan up to _____.
Investments in units listed on the Indian stock exchange such as Fixed Maturity Plans, Gold ETF, Nasdaq 100 ETF etc. are treated as long term assets if held for more than ____. In case of both residents and non-resident investors, long term capital gains are taxed at ____ plus applicable surcharge plus cess.
Contribution made to National Pension System (NPS) account by the employer is eligible for tax deduction upto __ of Basic + DA for central government employees and __ for any other employee.
Non-residents can open ______ in National Pension System (NPS).
As per Employees' Provident Fund (EPF) rules, employers must contribute ___ the employee's contribution.
Mahesh wanted to purchase land to construct a house. He approached his employer (he had been employed for more than the stipulated 5 years) to check how much he could withdraw from his EPF (Employees' Provident Fund) account. His employer informed him that he could withdraw --
The maximum deposit amount required per financial year in Public Provident Fund (PPF) is:
In case of income from house property, standard deduction is available upto ___ of the net annual value.
In case of the above example, calculate capital gains and tax thereon.
Under the Muslim law, per capita distribution method is majorly used in the ____ law.
Satish retired from his job and decided to withdraw his funds from National Pension System (NPS). His accumulated corpus is greater than Rs 5 lakhs. How much can he take as lumpsum?
In case of unlisted Real Estate Investment Trust (REITs), where REITs units are held by the investor for less than 36 months, short-term capital gains will arise, which will be taxable at _____.
Family arrangements are treated as transfer and hence capital gains tax will arise.
Under section 80CCD(2), employer's contribution towards NPS gets tax deduction up to ___ of salary for central government employees and ___ for others.
Any profit or loss arising on account of withdrawal of amount from Tier II Account of National Pension System (NPS) is tax-free.
Unit Linked Insurance Plans (ULIPs) have a lock-in period of __ years.
The existence of a Will results in ______ succession. The absence of a Will results in ______ succession.
The age limit to open a Senior Citizens’ Savings Scheme (SCSS) account is reduced to __ years in case of an individual retiring on superannuation or otherwise, or under VRS or special VRS, provided the account is opened within one month of date of receipt of retirement benefits.
Which is the most basic legal instrument of all estate plans?
A borrower in the Securities Lending and Borrowing (SLB) scheme needs to --
Under the Hindu Succession Act, two persons are said to be related by uterine blood when they have different _____.
Zoya sold listed capital index bonds through the stock exchange. She had held these bonds for more than a year. What tax rate will apply for capital gains earned on the sale?
Rahul's term life insurance policy has his wife Rekha as the nominee. Rahul died during the policy term without making a will. Is she the beneficiary of the policy claim amount or does she hold the claim amount for Rahul's legal heirs, i.e. their children?
Atul, 40 years of age, is earning a monthly income of Rs. 60,000 of which 50% is household expenses. He is planning to retire at the age of 60 years. He expects additional expenses of Rs. 15000 at his retirement. Assume inflation at 6%. What will be his expenses at time of retirement?
A trust earned business income, which was exclusively for the benefit of the spouse of the author. The business income will be taxed at ____.
Investments in unlisted shares in a company are treated as long term assets if held for more than ____. In case of non-resident investors, long term capital gains are taxed at ____ plus applicable surcharge plus cess.
An equity share is acquired on 01-01-2017 at Rs. 100, its fair market value is Rs. 200 on 31-01-2018 and it is sold on 01-01-2020 at Rs. 50. Calculate long term capital gain. (from NISM)
An insane person can make a will during an interval in which he is of sound mind.
Section 80C of the Income tax Act is available to _______.
A life Insurance policy is a/an ________ insurance.
In case of an indeterminate trust, subject to certain exceptions, tax is paid by the _______representative assessees i.e. the trustees at ____Maximum Marginal Rate.
Any interest income that distributed by a Real Estate Investment Trust (REIT) to a resident unitholder is charged to tax at ______.
Meera had purchased a critical illness plan. She was detected to have cancer and as a result, received the claim amount. Since she had already paid for the initial treatment and no funds were needed immediately, she decided to invest the claim proceeds. Can she do so?
Under the Law of Succession among Muslims, the wife takes ___of share in a case where the couple is without lineal descendants.
Tax benefit on contribution by employer to an employee's National Pension System (NPS) account is restricted to (a) Actual NPS contribution by employer (b) ___ of Basic and DA for central government employees and ___ of Basic + DA for other employees (c) Gross total income.
What is a Probate? (from NISM)
The Income tax Act has ___ categories of mutual fund schemes.
Devesh and Amrut, both NRIs, entered into transactions to purchase/sell GDRs and rupee denominated bonds of Indian companies. Their transactions took place in the US. Do these transactions constitute transfer and result in capital gains?
Only securities traded in F&O segment and liquid index ETFs are eligible for Securities Lending & Borrowing (SLB) scheme.
Any amount withdrawn from NPS before the closure of account or opting out of the scheme shall be exempt only in case of employees to the extent of ___of employee’s contribution to NPS.
Long-term capital gains arising from the sale of unlisted equity shares shall be taxable at the rate of ____ plus surcharge and health & education cess for residents.
Pradhan Mantri Vaya Vandana Yojana (PMVVY) offers maximum pension of Rs _____ per month for which investment amount required is Rs ____ lakh.
The tenure of Senior Citizens’ Savings Scheme (SCSS) is ___ years.
Mr. X purchased 10,000 shares of A Ltd on 01-04-2019 for Rs. 58 each on a recognized stock exchange and STT was charged at the time of purchase. With effect from on 01-07-2019, A Ltd. amalgamated with B Ltd. to form a new company AB Ltd. Mr. X was allotted 8,000 shares in the new amalgamated company. He sold the shares of the amalgamated company for Rs. 100 per share on 01-06-2020. The shares of AB Ltd. are listed on recognized stock exchange and STT was charged at the time of transfer. Compute his income and tax thereon. (from NISM)
The Disposition Effect proposed by Shefrin and Statman states that _____.
The sum assured of a ULIP is Rs. 1 crore. Annual premium payable is Rs. 3,13,200. Will the maturity value be taxable?
Smriti and Sanjay decided to divorce. Will this imply that Sanjay's Will with Smriti being one of the beneficiaries is revoked?
Contribution to National Pension System (NPS) account of an employee by his employer is eligible for tax deduction of lower of the amount contributed by the employer, or ___ of salary in case of Central Government employee or ___ of salary in case of any other employee.
Meeta runs a business where her employees need to handle a large amount of valuables in terms of gold, cash, etc. She wants to purchase insurance to cover the risk of theft by her employees. Which policy should she purchase?
Section 80D offers tax deduction for medical insurance, health checkup, etc. up to ______ [where individual (incl. his family) is less than 60 years of age and his parents are senior citizens) and ______ [where both individual (incl. any member of family) and his parents are senior citizens.
Shishir bought stock of ABC Ltd at Rs 100 per share. A year later, ABC Ltd's share price has risen to Rs 150 per share and it had a 'buy' recommendation from most brokerages, including Shishir's investment advisor. Shishir abstained from buying more shares stating that the stock price had already risen from Rs 100 per share (his purchase cost) to Rs 150 per share. This mindset is called _______ in behavioural finance.
Short-term capital gain arising from the transfer of unlisted shares shall be taxable at ______.
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