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CMA Inter Salaries — practice questions

Explore 22 free Salaries questions in CMA Inter Direct Taxation. Open each question or exercise to read its content, reference answers and available explanation.

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Salaries questions and exercises with answers

Showing questions 1–22 of 22.

Which section deals with the basis of charge under the head Salaries?Read the answer and worked solution →Salary is chargeable to tax onRead the answer and worked solution →Salary paid in advance and already assessed in the year of payment isRead the answer and worked solution →Advance salary is taxableRead the answer and worked solution →Salary due for March 2026 but received in April 2026 is assessed in which previous year?Read the answer and worked solution →Salary for April 2026 drawn in advance in March 2026 is chargeableRead the answer and worked solution →Standard deduction from salary is allowed under which provision?Read the answer and worked solution →Entertainment allowance is deductible under which provision?Read the answer and worked solution →Professional tax paid by an employee is deductible underRead the answer and worked solution →The deduction for entertainment allowance is available toRead the answer and worked solution →Under the default tax regime of section 115BAC(1A), standard deduction from salary is up toRead the answer and worked solution →If the assessee shifts out of the default tax regime, standard deduction from salary is up toRead the answer and worked solution →Salary, perquisite and profits in lieu of salary are defined by which section?Read the answer and worked solution →Compute income under the head SalariesRead the answer and worked solution →For a payment to be taxed under the head Salaries, there must beRead the answer and worked solution →Under the default tax regime, house rent allowance isRead the answer and worked solution →Deduction for entertainment allowance and professional tax is allowableRead the answer and worked solution →The leave travel concession exemption is available toRead the answer and worked solution →In the salary computation, transport allowance appears asRead the answer and worked solution →Gratuity received by an employee is dealt with under which head of income?Read the answer and worked solution →Leave encashment received by an employee is charged underRead the answer and worked solution →Provident fund is discussed in the salaries chapter because it isRead the answer and worked solution →

Worked practice questions

Which section deals with the basis of charge under the head Salaries?

  1. Section 15
  2. Section 16
  3. Section 17
  4. Section 14
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Correct answer: A. Section 15

1. Each head of income has its own charging provision. 2. For salaries, the basis of charge is dealt with by section 15. 3. Section 16 covers the deductions allowed from salary instead. 4. Section 17 defines salary, perquisite and profits in lieu of salary. _Source: ICAI Income Tax Law, Ch3 'Heads of Income', Unit 1 'Salaries', section 1.2_

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Salary is chargeable to tax on

  1. due basis only, in every case
  2. due or receipt basis, whichever is earlier
  3. receipt basis only, in every case
  4. due or receipt basis, whichever is later
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Correct answer: B. due or receipt basis, whichever is earlier

1. Salary can fall due in one year and be received in another. 2. The rule fixes which of the two events triggers the charge. 3. Salary is chargeable to tax either on due basis or on receipt basis, whichever is earlier. 4. Choosing the later of the two would let tax be deferred simply by delaying payment. _Source: ICAI Income Tax Law, Ch3 'Heads of Income', Unit 1 'Salaries', section 1.2_

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Salary paid in advance and already assessed in the year of payment is

  1. taxed again in the year it falls due
  2. taxed at half rate when it falls due
  3. not taxed again when it falls due
  4. refunded to the employee on assessment
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Correct answer: C. not taxed again when it falls due

1. The earlier of due or receipt decides the year of charge. 2. Where salary paid in advance is assessed in the year of payment, that year has already taxed it. 3. It cannot subsequently be brought to tax in the year in which it becomes due. 4. The mirror rule applies to arrears: salary already assessed on due basis is not taxed again when paid. 5. Together these two rules prevent the same salary being taxed twice. _Source: ICAI Income Tax Law, Ch3 'Heads of Income', Unit 1 'Salaries', section 1.2_

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