NISM Mock Test For Mutual Fund – Part 4 | NISM V A

This is Part 4 of our Premium NISM Mock test for NISM V A.

#1. In the Growth option of Debt Mutual Fund scheme an Investor doesn't have

to pay tax on their income

to pay tax on their income till the time capital gain is booked

There is great advantage in the Growth option of Debt Mutual Fund scheme is that an Investor doesn’t have to pay tax on their income till the time capital gain is booked.

#2. Short term or long term, Capital loss, can be set off against

Any other source of income

same source of income

Capital loss, can be set off against same source of income only.

Set off benefit means to adjust losses with the help of gains in funds and only pay tax for the left over profit. But there is rule that you can compensate your losses only with gains of same income source and for this question income source is capital gains. So you can take set off benefits only through capital gains to recover capital losses.

#3. Long term capital losses can only be set off against

Long term capital gain

Short term capital gain

Both Long term and Short term capital gain

Neither Long term nor Short term capital gain

Similarly, short term capital losses can only be set off against short term capital gains.

#4. In Growth Options, Fund Managers objective is to

look for stocks which expected to have growth in earnings and profitability lower than the economy.

look for stocks which expected to have growth in earnings and profitability higher than the economy.

#5. In National Pension Scheme (NPS), Auto choice subscriber's allocation of investments between the different asset class is

based on pre-determined ratio linked to the subscriber's age

not based on pre-determined ratio linked to the subscriber's age

based on pre-determined ratio linked to the subscriber's net worth

based on pre-determined ratio linked to the subscriber's education qualifications

Auto choice subscriber’s allocation of investments between the different asset class (Equity and Debt) is determined through subscriber’s age.

Obviously, if NPS subscriber is elder person then their equity exposure will reduce as time passes but in case of young subscriber equity exposure should be more. As older person have less risk taking capacity than younger ones.

#6. Which among the following fund can private sector NPS subscriber can choose, under the active choice model?

Conservative Life Cycle Fund (LC-25)

Aggressive Life Cycle Fund (LC-75)

Moderate Life Cycle Fund (LC-50)

All the options

Under the active choice model, private sector NPS subscriber have right to manage their investment (with a rule that their investment shouldn’t have Equity exposure more than 75%).

So, under active choice model, NPS subscriber can invest in any kind of fund with above exception.

#7. For Individual and Hindu Undivided Family (HUF) investors, DDT in Equity is

20%

10%

30%

For Individual and HUF Investors,

Direct Distribution Tax in Equity is 10% (11.648% with 12% surcharge and 4% cess).

#8. Which among the following option is correct?

NPS Subscribers in the government model do not have right to decide where their asset will be invested.

NPS Subscribers in the private sector model do not have right to decide where their asset will be invested.

In Both government and private sector model , NPS Subscribers have right to decide where their asset will be invested.

In Both government and private sector model , NPS Subscribers do not have right to decide where their asset will be invested

In Private sector model NPS Subscribers have two choice:

1) Active choice = NPS Subscribers can manage their investment.

2) Auto choice = NPS Subscribers can’t manage their investment.

But in case of Active choice, there is a rule that Equity exposure shouldn’t exceed more than 75%.

And in the Government model of NPS, only government decide to manage the investment.

#9. For Domestic Company, Dividend Distribution Tax (DDT) in Equity is 10% (11.648% with 12% surcharge and 4% cess).

True

False

Direct Distribution Tax in Equity is

10% (11.648% with 12% surcharge and 4% cess)

for Individuals, HUF, Domestic company as well as NRI. Remember it.

#10. In money market fund, for individuals and HUF investors DDT applicable is

10% (11.648% +with 12% surcharge and 4% cess).

29.12% (25%+with 12% surcharge and 4% cess).

24.12% (25% +with 12% surcharge and 4% cess).

25.68 % (25% +with 12% surcharge and 4% cess).

In money market fund (not equity fund),

for individuals and HUF investors

DDT applicable is

29.12% (25% with 12% surcharge and 4% cess).

#11. Indexation Benefit is used to evade tax

True

False

Indexation Benefit is used to decreases the tax liability for the impact of Inflation.

For Instance, i put money on SBI Bank FD.

If Inflation rate is 4% and Interest rate is 7% then my actual Rate of return is (7-4=3%). So my actual gain is 3%.

If i pay tax for normal case then i have to pay tax for 7% gains.

But through help of indexation i need to pay tax for only 3% gains.

Finish

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Other Certifications:

Please keep this in mind the below paragraph is not related to NISM VA. This is only written to aware you about other certification other then NISM. If you are not interested, ignore reading this and click NEXT to continue solving Part 5 of Nism VA mock test.

Certified Financial Planner (CFP)

As we learn about CFP in the previous part. Now we will it’s importance and it’s modules CFP is very good course for Graduates and Post graduates to improve their employability. The modules of CFP are:

Retirement Planning
Tax & Estate Planning
Investment Planning
Risk Management Module

If you have any doubt please comment below.