The 'Presumptive Taxation' scheme under Section 44AD is for: MCQ with Answer and Explanation

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The 'Presumptive Taxation' scheme under Section 44AD is for:

A. Small businesses with turnover up to ₹2 crore

B. Professionals only

C. Large corporates

D. Importers

Answer: Option A

Solution (By JKSSB Mock Tests)

Section 44AD allows eligible businesses to declare 8% (or 6% digital) of turnover as presumptive income.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

A business buying machinery pays 18% GST. Can it claim Input Tax Credit (ITC) on this GST?

A. No, ITC is only for raw materials

B. Yes, provided the machinery is used in the course of business

C. Yes, but only 50%

D. No, capital goods are exempted from ITC

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Correct Answer: Option B

Explanation:
ITC can be claimed on capital goods (like machinery) used for business purposes, subject to certain conditions in the GST Act.

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Question #2

A 'Drawings' account is a:

A. Nominal account

B. Personal account

C. Real account

D. Valuation account

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Correct Answer: Option B

Explanation:
Drawings account represents the proprietor, hence it is a personal account.

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Question #3

A and B share profits 3:2. They admit C for 1/5th share. C brings ₹50,000 as capital and ₹20,000 as goodwill. Goodwill is withdrawn by old partners. The amount credited to A's capital for goodwill will be:

A. ₹12,000

B. ₹20,000

C. ₹10,000

D. ₹8,000

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Correct Answer: Option A

Explanation:
Goodwill brought by C is distributed in sacrificing ratio, which is old ratio 3:2. A's share = 20,000 * 3/5 = ₹12,000.

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