NISM VA Chapter 8 Taxation Mock Questions for Mutual Fund Distributor Exam 2024 - NISM Series V-A Mutual Fund Distributor MCQs

Topic Covered: Taxes in respect of mutual funds, Capital Gains, Dividend income, Stamp Duty on Mutual Fund Units, Securities Transaction Tax etc MFD exam free mcqs

1.In the context of mutual funds, when an investor receives income from their investments after the payment of taxes, what does this imply?

A. Tax-free income
B. Tax-deferred income
C. Tax-deductible income
D. Tax-exclusive income

2.Who is primarily responsible for understanding the taxation associated with mutual fund investments?

A. Individual investors
B. Distributors of mutual funds
C. Mutual fund managers
D. Tax authorities

3. What determines whether there is an incidence of capital gain or loss when a unit holder sells units of the scheme?

A. The type of funds invested in
B. The selling price relative to the purchase price
C. The holding period
D. The total number of units sold

4.How is the holding period defined for long-term capital gains in non-equity-oriented funds?

A. More than 1 year
B. More than 2 years
C. More than 3 years
D. More than 5 years

5.On which of the following transactions is Securities Transaction Tax (STT) applicable?
a) Purchase of units of an equity scheme
b) Sale of units of an equity-oriented mutual fund on the stock exchange
c) Redemption of debt securities
d) Purchase of units of a debt mutual fund scheme

6. In the context of Securities Transaction Tax (STT), which type of mutual funds does the tax apply to?
a) Only debt mutual funds
b) Only equity-oriented mutual funds
c) Both debt and equity-oriented mutual funds
d) Only index funds

7. What type of plan typically attracts a 3-year lock-in for each reinvestment in ELSS?
a. Dividend payout plan
b. Growth plan
c. Hybrid plan
d. Fixed income plan

8. Who is eligible for the tax benefit under Section 80C in the case of a joint holding of ELSS?
a. Only the second holder
b. Only the primary holder
c. Both the first and second holders
d. Neither the first nor the second holder

9. What happens if an investor chooses the (dividend) Income distribution cum capital withdrawal reinvestment plan in ELSS?
a. No lock-in for reinvested dividends
b. 3-year lock-in for reinvested dividends
c. Only the first holder is eligible for tax benefits
d. No tax benefits for any holder

10. True/False: ELSS investments are eligible for deduction under Section 80C of the Income Tax Act.

Answers