Accounting, Valuation and Taxation
19 questions. Each answer is explained.
Question 1 of 10Practice · Series V-A — Mutual Fund Distributors
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Exam format
| Questions | 100 · 1 mark each |
|---|---|
| Duration | 120 min · 2 hours |
| Pass mark | 50% · 50 of 100 marks |
| Negative marking | None · a wrong answer costs nothing beyond the mark |
| Certificate validity | 3 years · from the date of the examination |
| Marks for this unit | Not published by NISM |
NISM Series V-A Mutual Fund Distributors
Exam rules read on NISM's site on 3 October 2026. Check the current rules on NISM's site (opens in a new tab)
What these answers assume, and when it was last checked
Each question uses the rules listed below. We last checked them on 5 September 2026. A Budget or SEBI circular can change a rate, lot size or expiry day. If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.
- NSE uses Tuesday expiry and BSE uses Thursday expiry. This applies from 1 September 2025.
- The January 2026 index lot sizes are NIFTY 65, BANKNIFTY 30, FINNIFTY 60, MIDCPNIFTY 120 and NIFTYNXT50 25.
- The October 2024 SEBI framework sets a minimum index contract value of Rs 15–20 lakh. Each exchange may list one weekly benchmark index.
- Option buyers pay the premium upfront from 1 February 2025. A short index option has an extra 2% Extreme Loss Margin on expiry day from 20 November 2024.
- Equity short-term capital gains are taxed at 20%. Long-term gains are taxed at 12.5% above Rs 1.25 lakh. Both rates apply from 23 July 2024.
- F&O income is non-speculative business income in ITR-3. NSE equity derivatives trade from 9:15 a.m. to 3:40 p.m.
- The final ten-minute session began on 3 August 2026. It aligns with the cash market Closing Auction Session.
- Most Securities Transaction Tax questions test the base and who pays. On an option sale, it is the premium and the seller pays. On a futures sale, it is the traded value and the seller pays.
- On exercise, Securities Transaction Tax uses intrinsic value: settlement price minus strike price. The buyer pays it.
- Two questions test the current rate. From 1 April 2026, option sales carry 0.15% on the premium and futures sales carry 0.05% on traded price. The earlier rates were 0.10% and 0.02% from 1 October 2024.
- This section uses the T+1 rolling settlement cycle. Obligations are fixed on T+1. A short delivery goes to buy-in auction on T+1 and settles on T+2.
- The trade-for-trade surveillance segment uses direct close-out. Funds pay in by 10:30 a.m. and pay out on or after 1:30 p.m. on settlement day.
- Securities pay in to the settlement pool by 10:30 a.m. They pay out directly to the client’s demat account by 3:30 p.m.
- The 3:30 p.m. deadline replaced 1:30 p.m. under SEBI’s 10 October 2024 circular. Direct client credit was required by SEBI’s 5 June 2024 circular.
- The optional T+0 cycle trades until 1:30 p.m. Obligations are fixed by 2:30 p.m. on the trade day. An early pay-in shortage is closed out directly.
- Cash-market Value at Risk margin is six times exponentially weighted moving-average volatility. It has a 9% floor for Group I, a 21.5% floor for Group II, and a fixed 50% or 75% level for Group III.
- Extreme Loss Margin is 3.5% for a share and 2% for a broad-market-index exchange traded fund. Mark-to-market margin is collected before the next day’s trading. The trade-for-trade segment has 100% upfront margin.
- Close-out uses the higher of the highest price from trade day to auction day and 20% above the auction day’s official close.
- A funds shortage costs 0.07% a day. The trading facility is withdrawn at a shortage of Rs 5 lakh or more.
- SCORES allows 21 calendar days, then two 15-day review levels. Online Dispute Resolution moves from conciliation to arbitration after the market participant and SCORES steps.
- At NSE, the Investor Protection Fund limit is Rs 35 lakh per investor for each defaulting or expelled member. This applies to claims arising after 13 August 2024.
- A Basic Services Demat Account has no annual maintenance charge up to Rs 4 lakh of holdings. It costs up to Rs 100 above that, until the Rs 10 lakh eligibility ceiling. These slabs apply from 1 September 2024.
- The rupee pairs are USD-INR, EUR-INR, GBP-INR and JPY-INR. The cross-currency pairs are EUR-USD, GBP-USD and USD-JPY.
- Each contract covers 1,000 units of the foreign currency, except JPY-INR. JPY-INR covers 100,000 yen and is quoted in rupees per 100 yen.
- The tick is 0.25 paise, or Rs 0.0025. It equals Rs 2.50 a contract.
- Rupee pairs trade from 9:00 a.m. to 5:00 p.m. A monthly contract stops trading at 12:30 p.m. two working days before the expiry month’s last business day.
- Final settlement is in cash at the FBIL reference rate on expiry day. FBIL, Financial Benchmarks India, has published this rate in place of the Reserve Bank since 2018. Premium-style European options are quoted in rupees. The buyer pays the premium in cash on T+1.
- Daily settlement is on T+1 and final settlement is on T+2.
- NSE Clearing circular 026/2020 sets SPAN margin plus Extreme Loss Margin. The futures margin is 0.50% for USD-INR, 0.15% for EUR-INR, 0.25% for GBP-INR and 0.35% for JPY-INR. A short option has 0.75%. These figures apply from 1 June 2020.
- A USD-INR client may hold 6% of total open interest or USD 20 million, whichever is higher. A trading member may hold 15% or USD 100 million.
- A resident user has one USD 100 million equivalent limit across all rupee pairs and exchanges. No document is needed below that limit, but a valid underlying contracted exposure must still exist. This clarification applies from 3 May 2024.
- The currency segment has no Securities Transaction Tax.
The exam figures (questions, time, pass mark, negative marking and certificate validity) come from NISM's own pages, read on 3 October 2026. Timed practice uses the same figures. Study with the official workbook as well.
The written-out answers on this page are hidden while your timed set runs.
All 19 questions on Accounting, Valuation and Taxation, with answers
Q1A scheme has assets valued at ₹520 crore, total liabilities of ₹20 crore and 25 crore units outstanding. What is its NAV per unit?
Option A. ₹20.80
Why it is wrong: ₹520 crore ÷ 25 crore units ignores the liabilities.
Option B. ₹20.00 — Correct answer
Option C. ₹21.60
Why it is wrong: (₹520 crore + ₹20 crore) ÷ 25 crore units adds liabilities instead of subtracting them.
Option D. ₹19.20
Why it is wrong: (₹520 crore − ₹20 crore − ₹20 crore) ÷ 25 crore units subtracts the same liabilities twice.
Answer: B. ₹500 crore of net assets divided by 25 crore units gives ₹20 per unit. Net assets = total assets − total liabilities = ₹520 crore − ₹20 crore = ₹500 crore. NAV per unit = ₹500 crore ÷ 25 crore units = ₹20 per unit. The crore factor cancels between the numerator and denominator. Liabilities are subtracted once. Remember: Use net assets, not gross assets, when calculating NAV.
Hint, shown before you answer in practice mode: Common mistake: Ignoring liabilities or confusing rupees per unit with a total corpus amount.
VA-003easynumerical
Q2An investor bought 1,000 units at ₹25 per unit. All units are redeemed at an applicable NAV of ₹31 with a 1% exit load on their redemption value. Ignoring taxes and other charges, what amount is received?
Option A. ₹5,690
Why it is wrong: It is the gain after load, ₹30,690 − ₹25,000, rather than the total amount received.
Option B. ₹31,000
Why it is wrong: It is the gross amount before deducting the exit load.
Option C. ₹30,750
Why it is wrong: It deducts ₹250, incorrectly calculating the load on the ₹25,000 purchase cost.
Option D. ₹30,690 — Correct answer
Answer: D. This answer deducts the ₹310 load from the ₹31,000 redemption value. Gross redemption value = 1,000 × ₹31 = ₹31,000. Exit load = 1% × ₹31,000 = ₹310. Net amount received = ₹31,000 − ₹310 = ₹30,690. The ₹25 purchase NAV is relevant to the original cost, not the base for the stated exit load. Remember: Distinguish redemption proceeds from investment profit.
Hint, shown before you answer in practice mode: Common mistake: Charging an exit load on the purchase cost or reporting only the gain.
VA-004mediumnumerical
Q3An investor calculates a 10% one-year return from a growth plan’s published NAVs. Its TER was 1.5% during that year. What further adjustment is required for the same recurring scheme expenses?
Option A. Make no further deduction for expenses already reflected in NAV. — Correct answer
Option B. Deduct 1.5 percentage points from the calculated return.
Why it is wrong: It counts the same scheme expenses for a second time.
Option C. Deduct 1.5% of the closing investment value again.
Why it is wrong: It also double-counts the expenses, while using an additional closing-value calculation.
Option D. Add 1.5 percentage points to the calculated return.
Why it is wrong: Adding the TER would attempt to move toward a gross figure, not the investor’s NAV-based return.
Answer: A. No second deduction is needed for costs already included in the NAV calculation. Recurring expenses reduce the net assets from which NAV is calculated. A return calculated from published NAVs therefore already reflects those expenses. Deducting the same costs again double-counts them. This does not establish the investor’s after-tax or after-exit-load return. Those are separate issues and are excluded here. Remember: Before subtracting an expense, check whether the stated return is gross or already net of that expense.
Hint, shown before you answer in practice mode: Common mistake: Applying “gross return minus expenses” to a return that is already calculated from net NAVs.
VA-005mediumapplication
Q4For the same scheme and option, which comparison of its direct and regular plans is correct?
Option A. They share a portfolio, but the direct plan has lower expenses and a separate NAV. — Correct answer
Option B. They have separate portfolios, identical expenses and a single NAV.
Why it is wrong: It incorrectly treats plans of the same scheme as separate portfolios with one NAV.
Option C. They share a portfolio, identical expenses and a single NAV.
Why it is wrong: The plans do not have identical expenses or one common NAV.
Option D. They have separate portfolios, but the direct plan has lower expenses and a single NAV.
Why it is wrong: It identifies a cost difference but incorrectly states separate portfolios and a single NAV.
Answer: A. This answer correctly separates the common portfolio from the differing costs and plan NAVs. The direct plan does not carry the distribution commission expense of the regular plan. The different expenses lead to separately calculated NAVs. Choosing the direct plan does not, by itself, replace the underlying portfolio with a lower-risk one. Remember: Compare the same scheme and option: the portfolio is common, while plan costs and NAVs differ.
Hint, shown before you answer in practice mode: Common mistake: Treating a direct plan as either a different portfolio or a plan with no operating expenses at all.
VA-006mediumconceptual
Q5For tax year 2026–27, qualifying equity-oriented mutual fund long-term gains fall under Section 198 of the Income-tax Act, 2025. What base rate applies to the portion above the annual ₹1,25,000 threshold? Assume no unused basic exemption and ignore surcharge and cess.
Option A. 12.5% — Correct answer
Option B. 15.0%
Why it is wrong: This is not the long-term rate specified in Section 198 for this question. It confuses different tax categories or periods.
Option C. 20.0%
Why it is wrong: This is not the special long-term rate under Section 198. The kind of asset and the nature of the gain must be identified before selecting a rate.
Option D. 10.0%
Why it is wrong: This is not the rate in the inspected Year 2026 version of Section 198. A remembered earlier equity-gains rate cannot replace the rule for the stated tax year.
Answer: A. Section 198(2)(a), in the official Year 2026 version inspected, applies 12.5% to qualifying long-term gains exceeding ₹1,25,000. The question already establishes that the fund units and transfer qualify for Section 198. For fund units, the inspected section includes an STT-on-transfer condition. Apply the annual ₹1,25,000 threshold to the qualifying aggregate gains, not a separate allowance to every scheme. The remaining qualifying gains attract the 12.5% base rate in the Year 2026 section. The question removes any unused basic exemption and does not ask for surcharge or cess. This is a rate question, not a calculation of the investor’s entire annual tax bill. Remember: Use the rate, threshold and eligibility conditions for the tax year stated in the question.
Hint, shown before you answer in practice mode: Common mistake: Remembering a rate without checking the transfer period, qualifying asset and annual threshold.
VA-010easyregulatory
Q6An equity-oriented mutual fund redemption in September 2025 produces a gain that qualifies as short-term capital gains under Section 111A. With the basic exemption fully used, what base tax rate applies to this gain, before surcharge and cess?
Option A. 12.5%
Why it is wrong: This confuses the qualifying equity long-term-gains rate with the short-term-gains category explicitly given in the question.
Option B. 10%
Why it is wrong: This is not the applicable Section 111A rate for the stated September 2025 transfer.
Option C. 20% — Correct answer
Option D. 15%
Why it is wrong: The official explanation assigns 15% to qualifying transfers before 23 July 2024, not to this September 2025 transfer.
Answer: C. The official Income Tax Department explanation specifies 20% for qualifying Section 111A transfers on or after 23 July 2024. September 2025 falls in that period. The question classifies the gain under Section 111A and gives a September 2025 redemption. It therefore removes uncertainty about the asset’s eligibility and the gain’s holding-period classification. The inspected official tax explanation gives a 20% base rate for qualifying transfers on or after 23 July 2024. The earlier 15% rate does not apply to the date specified. The 12.5% long-term rate is also irrelevant because the gain is expressly short-term. The basic exemption is already used and surcharge and cess are excluded, so no additional personal-tax calculation is needed. Remember: A dated short-term-gains question requires the rate for that transfer date, not the long-term rate.
Hint, shown before you answer in practice mode: Common mistake: Using a familiar historical 15% rate or the 12.5% long-term rate without checking the question’s date and classification.
VA-011easyregulatory
Q7In tax year 2026–27, a resident individual has qualifying Section 198 equity-fund long-term gains of ₹1,00,000 from one scheme and ₹80,000 from another. There are no other such gains or capital losses, and the basic exemption is fully used. What is the tax on these gains before surcharge and cess?
Option A. ₹0
Why it is wrong: This incorrectly applies a separate ₹1,25,000 threshold to each scheme. The threshold applies to the investor’s qualifying aggregate gains.
Option B. ₹10,000
Why it is wrong: This subtracts an outdated ₹1,00,000 threshold but uses the 12.5% rate, mixing rule sets. It does not apply the threshold in the inspected Section 198.
Option C. ₹6,875 — Correct answer
Option D. ₹22,500
Why it is wrong: This is 12.5% of the entire ₹1,80,000 and fails to deduct the annual ₹1,25,000 threshold.
Answer: C. Aggregate gains are ₹1,80,000. After the single ₹1,25,000 threshold, ₹55,000 is taxed at 12.5%, giving ₹6,875. Aggregate the two gains: ₹1,00,000 + ₹80,000 = ₹1,80,000. There are no capital losses or unused basic exemption to adjust. Apply the single Section 198 threshold: ₹1,80,000 − ₹1,25,000 = ₹55,000. Calculate the base tax: ₹55,000 × 12.5/100 = ₹6,875. The result is tax on the specified gains, before surcharge and cess. It is not tax on total income and is not a tax on the redemption proceeds. Remember: Aggregate qualifying gains first, then use the annual threshold once and apply the correct rate.
Hint, shown before you answer in practice mode: Common mistake: Treating the annual threshold as a separate exemption for every mutual fund scheme.
VA-012hardnumerical
Q8An investor receives ₹20,000 gross IDCW, from which ₹2,000 tax has been withheld and credited. For this illustration, assume the entire gross distribution is taxable at 20%, with no deductions, rebates, surcharge or cess. What further tax remains attributable to this distribution after the TDS credit?
Option A. ₹0
Why it is wrong: Withholding is a tax payment on the investor’s behalf, not necessarily the final liability. Here it covers only ₹2,000 of the assumed ₹4,000 tax.
Option B. ₹2,000 — Correct answer
Option C. ₹1,600
Why it is wrong: This applies 20% to the net cash of ₹18,000 and then deducts TDS. The stated taxable income is gross IDCW of ₹20,000, not the amount left after withholding.
Option D. ₹4,000
Why it is wrong: This is the full assumed tax on the distribution before recognising the ₹2,000 TDS credit already available.
Answer: B. Tax on gross IDCW is ₹20,000 × 20% = ₹4,000. Subtract the credited TDS of ₹2,000 to get a further ₹2,000. The investor’s gross distribution is ₹20,000. The cash paid after withholding is ₹20,000 − ₹2,000 = ₹18,000. Use the expressly hypothetical final tax assumption: ₹20,000 × 20% = ₹4,000. The ₹2,000 withheld has been credited, so remaining tax attributable to this income is ₹4,000 − ₹2,000 = ₹2,000. The assumed 20% rate is not a claim that all IDCW investors have the same tax rate. Actual liability depends on the applicable law and investor circumstances. Remember: Compute tax on the specified gross taxable income, then deduct credited TDS once.
Hint, shown before you answer in practice mode: Common mistake: Treating TDS as final tax or computing taxable income from the net bank credit.
VA-027mediumnumerical
Q9An investor buys 100 units at NAV ₹40. Later the NAV is ₹44 immediately before a ₹2-per-unit IDCW payout. With no market movement or other change, assume the NAV falls by the payout amount. Ignoring taxes and charges, what total return has the investor earned after receiving the cash?
Option A. 10% — Correct answer
Option B. 5%
Why it is wrong: This counts the post-payout units worth ₹4,200 but omits the ₹200 cash already received.
Option C. 15%
Why it is wrong: This keeps the pre-payout NAV of ₹44 and also adds the ₹200 distribution, counting the same ₹200 twice.
Option D. 0%
Why it is wrong: A payout changes the form of part of the investment’s value. It does not erase the gain from the purchase value of ₹4,000 to total wealth of ₹4,400.
Answer: A. After the payout the units are worth 100 × ₹42 = ₹4,200 and the cash is ₹200. Total value is ₹4,400 against ₹4,000 invested, a 10% gain. Initial investment = 100 × ₹40 = ₹4,000. Under the supplied assumption, post-payout NAV = ₹44 − ₹2 = ₹42, so the remaining units are worth ₹4,200. Cash received = 100 × ₹2 = ₹200. Total post-payout wealth = ₹4,200 + ₹200 = ₹4,400. Total return = (₹4,400 − ₹4,000) / ₹4,000 = 10%. Do not add the distribution to the pre-payout value. That value already contains the amount which is being paid out. Remember: Measure total return using both the value left in the units and distributions received, without double-counting.
Hint, shown before you answer in practice mode: Common mistake: Ignoring the cash distribution or adding it to a NAV that has not yet been reduced for the payout.
VA-073mediumnumerical
Q10A scheme has net assets of ₹12 crore and 40 lakh units before two adjustments. A bond carried at ₹80 lakh must be valued at ₹68 lakh, and an unrecorded ₹4 lakh expense has accrued. No other values or unit counts change. What is the adjusted NAV?
Option A. ₹29.60 — Correct answer
Option B. ₹29.70
Why it is wrong: This deducts the bond write-down but overlooks the accrued expense.
Option C. ₹29.90
Why it is wrong: This deducts the expense but leaves the bond at its old carrying value.
Option D. ₹30.00
Why it is wrong: This is the unadjusted NAV and ignores both changes.
Answer: A. Both the ₹12 lakh valuation loss and the ₹4 lakh accrued expense are deducted before dividing by the unchanged units. Express the starting net assets in lakh: ₹12 crore = ₹1,200 lakh. The bond write-down is ₹80 lakh − ₹68 lakh = ₹12 lakh. Deduct only this change because the original bond value is already included. The additional accrued expense reduces net assets by another ₹4 lakh. Adjusted net assets = ₹1,200 lakh − ₹12 lakh − ₹4 lakh = ₹1,184 lakh. NAV = ₹1,184 lakh ÷ 40 lakh units = ₹29.60 per unit. Remember: Update both security values and accrued obligations before calculating NAV.
Hint, shown before you answer in practice mode: Common mistake: Ignoring an unrealised loss or deducting the bond’s full revised value instead of the write-down.
VA-079hardnumerical
Q11A scheme has net assets of ₹5 crore and 20 lakh units. A fresh ₹50 lakh subscription is fully invested at the existing NAV. With no market change, tax, charge or other transaction, what is the NAV immediately after allotment?
Option A. ₹27.50
Why it is wrong: ₹27.50 adds the new cash to assets but incorrectly keeps the old 20 lakh unit count.
Option B. ₹22.73
Why it is wrong: About ₹22.73 increases the units to 22 lakh but fails to add the subscription cash to assets.
Option C. ₹25.00 — Correct answer
Option D. ₹26.19
Why it is wrong: About ₹26.19 uses 21 lakh units, as though only 1 lakh new units were issued. The correct allotment is 2 lakh.
Answer: C. Both sides increase proportionately, leaving the per-unit value unchanged at ₹25. Before the subscription, NAV = ₹500 lakh ÷ 20 lakh units = ₹25. New units = ₹50 lakh ÷ ₹25 = 2 lakh units. After allotment, net assets are ₹550 lakh and units are 22 lakh. NAV = ₹550 lakh ÷ 22 lakh = ₹25. Existing investors have not gained merely because another investor supplied capital. Remember: For a subscription at NAV, add the cash and the newly issued units together.
Hint, shown before you answer in practice mode: Common mistake: Mistaking growth in assets under management for a gain in NAV.
VA-080mediumnumerical
Q12After an approved portfolio segregation, an investor holds 2,000 main-portfolio units and 2,000 segregated-portfolio units. She redeems all main units at NAV ₹18 but keeps the segregated units. The segregated portfolio has 5,00,000 units and later distributes a net recovery of ₹3,00,000 pro rata. Ignoring loads and taxes, what total cash does she receive from these two events?
Option A. ₹37,200 — Correct answer
Option B. ₹36,000
Why it is wrong: This omits the recovery by incorrectly treating main-portfolio redemption as cancellation of the segregated entitlement.
Option C. ₹36,600
Why it is wrong: This halves the recovery to ₹600, as though a second equal pool of main units belonged in the segregated denominator.
Option D. ₹1,200
Why it is wrong: This is only the recovery amount. The question also asks for the earlier main-portfolio redemption proceeds.
Answer: A. This adds the main redemption to the pro-rata recovery attributable to the segregated units still held. Main-portfolio redemption cash = 2,000 × ₹18 = ₹36,000. The retained share of the segregated portfolio is 2,000 ÷ 5,00,000 = 0.004, or 0.4%. Recovery entitlement = 0.004 × ₹3,00,000 = ₹1,200. Equivalently, the recovery is ₹0.60 per segregated unit. Total cash from the two events = ₹36,000 + ₹1,200 = ₹37,200. The main units must not be added to the segregated-unit denominator. Remember: Track the units and cash entitlement of a segregated portfolio separately from the main portfolio.
Hint, shown before you answer in practice mode: Common mistake: Cancelling or diluting the segregated entitlement merely because the main units were redeemed.
VA-099hardnumerical
Q13For this question only, assume stamp duty is 0.005% of the ₹2,00,000 subscription and is deducted before units are allotted. The applicable NAV is ₹40. With no other deduction, how many units are allotted?
Option A. 5,000 units
Why it is wrong: This divides the gross subscription by NAV and ignores the ₹10 deduction.
Option B. 4,975 units
Why it is wrong: This deducts ₹1,000, which results from using 0.5% rather than the stated 0.005%.
Option C. 4,999 units
Why it is wrong: This implies a ₹40 deduction, equal to one unit at the given NAV. The actual assumed deduction is ₹10.
Option D. 4,999.75 units — Correct answer
Answer: D. The ₹10 deduction leaves ₹1,99,990, which purchases exactly 4,999.75 units at NAV ₹40. Convert 0.005% to decimal form: 0.005 ÷ 100 = 0.00005. Stamp duty under the stated assumption = ₹2,00,000 × 0.00005 = ₹10. Net subscription available for units = ₹2,00,000 − ₹10 = ₹1,99,990. Units allotted = ₹1,99,990 ÷ ₹40 = 4,999.75 units. The deduction reduces the amount invested, not the stated NAV. Remember: First calculate the rupee deduction using the correct percentage scale, then divide the net amount by NAV.
Hint, shown before you answer in practice mode: Common mistake: Confusing 0.005% with 0.005 as a decimal and overstating the deduction by a factor of 100.
VA-107mediumnumerical
Q14For FY 2025–26 under the Income-tax Act, 1961 framework, an investor has short-term capital gains of ₹70,000, long-term capital gains of ₹30,000 and a long-term capital loss of ₹50,000. There are no other gains or losses. After permitted set-off, what remains? Ignore tax rates and exemptions.
Option A. Short-term gain ₹50,000, long-term gain nil, unabsorbed loss nil
Why it is wrong: This uses the remaining ₹20,000 long-term loss against short-term gains, which the stated framework does not permit.
Option B. Short-term gain nil, long-term gain ₹30,000, unabsorbed loss ₹20,000
Why it is wrong: This removes the short-term gain while leaving the eligible long-term gain untouched. It also removes more short-term gain than the entire loss.
Option C. Short-term gain ₹70,000, long-term gain nil, unabsorbed long-term loss ₹20,000 — Correct answer
Option D. Short-term gain ₹70,000, long-term gain ₹30,000, unabsorbed long-term loss ₹50,000
Why it is wrong: This incorrectly disallows the available set-off of long-term loss against long-term gain.
Answer: C. Only the long-term gain is absorbed. The short-term gain survives and ₹20,000 of long-term loss remains unabsorbed. Under the stated 1961 Act framework, a long-term capital loss can be set off against long-term capital gains, not short-term capital gains. Use ₹30,000 of the ₹50,000 long-term loss against the ₹30,000 long-term gain. The remaining long-term gain is nil. The unabsorbed long-term loss is ₹50,000 − ₹30,000 = ₹20,000. The short-term gain remains ₹70,000. These are amounts remaining after set-off, not a tax calculation. Eligibility to carry the remaining loss forward is a separate question and is not assumed here. Remember: Classify the loss before netting capital gains. Long-term and short-term amounts are not one unrestricted pool.
Hint, shown before you answer in practice mode: Common mistake: Adding all gains and subtracting all losses without applying the loss-type restriction.
VA-108hardnumerical
Q15A scheme has net assets of ₹10 crore, including ₹4 lakh of accrued interest receivable, and 40 lakh units. The full ₹4 lakh interest is received in cash. There is no further accrual, price movement, expense or unit change. What is the NAV immediately after receipt?
Option A. ₹24.90
Why it is wrong: This subtracts ₹4 lakh from assets while forgetting that cash has replaced the receivable.
Option B. ₹25.00 — Correct answer
Option C. ₹25.10
Why it is wrong: This adds the cash but leaves the already recognised receivable in assets, double-counting the same ₹4 lakh.
Option D. ₹26.00
Why it is wrong: This adds ₹1 per unit, which implies an unexplained ₹40 lakh increase rather than collecting a ₹4 lakh receivable.
Answer: B. The receipt exchanges a ₹4 lakh receivable for ₹4 lakh cash. Net assets and NAV remain unchanged. Before receipt, NAV = ₹10 crore ÷ 40 lakh units = ₹25 per unit. On collection, cash increases by ₹4 lakh and accrued interest receivable decreases by ₹4 lakh. The equal increase and decrease leave total assets and net assets unchanged. Units also remain at 40 lakh. The NAV therefore remains ₹25. This would differ if the interest had not already been recognised or another portfolio value changed. Remember: Check whether income is already accrued before treating its cash receipt as fresh NAV income.
Hint, shown before you answer in practice mode: Common mistake: Counting the same interest once when it accrues and again when it is collected.
VA-109mediumnumerical
Q16A scheme splits each existing unit into two units without changing net assets. An investor holds 400 units at NAV ₹75 immediately before the split. With no other change, what are the investor’s units, NAV and holding value immediately afterwards?
Option A. 800 units, NAV ₹75 and value ₹60,000
Why it is wrong: This doubles units without adjusting NAV, incorrectly creating ₹30,000 of extra wealth.
Option B. 800 units, NAV ₹37.50 and value ₹30,000 — Correct answer
Option C. 400 units, NAV ₹37.50 and value ₹15,000
Why it is wrong: This halves NAV but fails to double the unit count, incorrectly halving wealth.
Option D. 200 units, NAV ₹150 and value ₹30,000
Why it is wrong: This describes a consolidation in the opposite direction, not the stated two-for-one split.
Answer: B. Both the unit count and NAV adjust, leaving the ₹30,000 value unchanged. Before the split, the holding is worth 400 × ₹75 = ₹30,000. A two-for-one split doubles the holding to 800 units. Since the scheme’s net assets do not change, NAV halves to ₹75 ÷ 2 = ₹37.50. After the split, 800 × ₹37.50 = ₹30,000. The same economic interest is expressed in more units. Remember: For an unchanged asset pool, a unit-denomination change alone leaves holding value unchanged.
Hint, shown before you answer in practice mode: Common mistake: Reading a higher unit balance as an investment gain without checking the new NAV.
VA-134mediumnumerical
Q17An investor holds 600 units allotted 18 months ago and 600 allotted 6 months ago. A hypothetical exit load is 1% for units held 12 months or less and zero thereafter. A redemption of 900 units uses the oldest units first, at NAV ₹50. Ignoring taxes and other charges, what amount is received?
Option A. ₹44,550
Why it is wrong: ₹44,550 charges 1% on all 900 redeemed units, including the exempt older lot.
Option B. ₹45,000
Why it is wrong: ₹45,000 ignores the load on the 300 newer units included in the redemption.
Option C. ₹44,700
Why it is wrong: ₹44,700 charges 1% on 600 units, rather than on the 300 newer units actually redeemed.
Option D. ₹44,850 — Correct answer
Answer: D. ₹44,850 correctly deducts only the ₹150 load attributable to the newer redeemed units. Redeem all 600 older units and then 300 of the newer units to make 900 units. The 600 older units carry no load. The 300 newer units have gross value 300 × ₹50 = ₹15,000. Load on the newer redeemed units is ₹15,000 × 1% = ₹150. Gross total is 900 × ₹50 = ₹45,000. Net receipt = ₹45,000 − ₹150 = ₹44,850. Another 300 newer units remain invested. Remember: Apply the stated redemption sequence first, then calculate the load for each redeemed lot.
Hint, shown before you answer in practice mode: Common mistake: Using one age or one load rate for the entire folio.
VA-135hardnumerical
Q18A scheme bought 1,000 shares at ₹100 each. Their carrying value is now ₹110 each. It sells 400 shares at ₹112 each and values the remaining 600 at ₹110. Ignoring costs and income, what are the realised gain on the sale and the remaining unrealised gain, each measured from original cost?
Option A. ₹4,800 realised and ₹6,000 unrealised — Correct answer
Option B. ₹800 realised and ₹6,000 unrealised
Why it is wrong: ₹800 measures only the extra ₹2 per sold share above the previous carrying value.
Option C. ₹4,800 realised and ₹10,000 unrealised
Why it is wrong: ₹10,000 is the earlier unrealised gain on all 1,000 shares. It wrongly retains the sold shares in the remaining balance.
Option D. ₹44,800 realised and ₹6,000 unrealised
Why it is wrong: ₹44,800 is the sale proceeds, not the gain after subtracting the ₹40,000 cost of the shares sold.
Answer: A. The two amounts use original cost and keep the sold and remaining shares separate. Realised gain on 400 shares = 400 × (₹112 − ₹100) = ₹4,800. Unrealised gain on the remaining 600 shares = 600 × (₹110 − ₹100) = ₹6,000. The combined gain from original cost is ₹10,800. As a check, cash of ₹44,800 plus remaining shares of ₹66,000 less original cost of ₹1,00,000 also gives ₹10,800. Only ₹800 is additional gain relative to the previous ₹110 valuation of the sold shares. It is not the total gain from their ₹100 original cost. Remember: Label the cost basis and distinguish proceeds, total gain and incremental revaluation.
Hint, shown before you answer in practice mode: Common mistake: Adding the full sale gain to an unrealised-gain balance that still includes the sold securities.
VA-136mediumnumerical
Q19For this illustration, assume a distributor’s commission invoice totals ₹23,600 including GST at 18% of the commission before GST. There is no withholding or other adjustment. What are the commission before GST and the GST component?
Option A. ₹19,352 and ₹4,248
Why it is wrong: ₹4,248 is 18% of the inclusive total. Subtracting it gives ₹19,352, but that is not the correct pre-tax base.
Option B. ₹23,600 and ₹4,248
Why it is wrong: This treats the inclusive invoice amount as the commission before GST, then adds tax again.
Option C. ₹20,000 and ₹3,600 — Correct answer
Option D. ₹20,000 and ₹4,248
Why it is wrong: The commission is correctly extracted, but the tax is still incorrectly calculated on the inclusive total.
Answer: C. The pre-tax base and tax add exactly to the invoice total and satisfy the assumed 18% rate. Let the commission before GST be C. The invoice total is C × 1.18 = ₹23,600. C = ₹23,600 ÷ 1.18 = ₹20,000. GST = ₹20,000 × 0.18 = ₹3,600. Check that ₹20,000 + ₹3,600 = ₹23,600. Applying 18% directly to the inclusive total would use the wrong base. Remember: For a tax-inclusive amount, divide by 1 + rate before calculating the tax component.
Hint, shown before you answer in practice mode: Common mistake: Deducting the stated tax percentage directly from an amount that already includes the tax.
VA-137mediumnumerical
Accounting, Valuation and Taxation: common questions
How many practice questions are there on Accounting, Valuation and Taxation?
19 questions, all written out on this page with the correct answer and why each other option is wrong. This unit is one of the 8 practice topics for NISM Series V-A, which has 150 questions in total.
Are these real NISM Series V-A questions on Accounting, Valuation and Taxation?
No. LearnNifty wrote every question from NISM's public syllabus. NISM does not publish its question bank, so nobody can offer you the real paper. Use these questions to check that an idea has gone in. Use the official NISM workbook to see what is examined.
Does negative marking apply to NISM Series V-A?
No. NISM applies no negative marking to Series V-A. A wrong answer costs nothing beyond the mark you did not earn, so a blank is never better than an attempt. Timed practice here uses the same rule.
Are these practice questions kept up to date?
Each question is written against the rules printed on this page, last checked on 5 September 2026. A Budget or a SEBI circular can change a rate, a lot size or an expiry day. If one of those rules changes before your exam, treat the questions that use it as out of date. Then check NISM's current workbook.
Mutual Fund Products
22 questions on Mutual Fund Products. Its quiz opens on that unit.
Open Mutual Fund Products