CA Inter Taxation mock test Jan 2027: 14 traps ICAI flagged
A CA Inter Taxation mock test for January 2027 must be set on the Income-tax Act, 1961 for Assessment Year 2026-27 (Finance Act, 2025), and it must copy Paper 3's split: two 50-mark sections, income tax and GST, each with 15 marks of MCQs and 35 marks of descriptive questions. Write it in 3 hours with 90 minutes per section, then check it against the 14 mistakes ICAI's examiners reported in the May 2026 Taxation paper.
Taxation is Paper 3 of Group I, which ICAI's January 2027 schedule (PDF) (opens in a new tab) puts on 2, 4 and 6 January 2027, 2 to 5 PM. ICAI's schedule doesn't give paper-wise dates; if ICAI keeps September 2026's paper-number order, expect Taxation on Wednesday 6 January.
Which law your CA Inter tax mock test must use for Jan 2027
Check this first: a mock on the wrong year teaches wrong rates and limits.
| Question | ICAI's answer for January 2027 | Source |
|---|---|---|
| Which Income-tax Act? | The Income-tax Act, 1961. ICAI moves Inter Paper 3A to the 2025 Act from the May 2027 exams | ICAI announcement (PDF) (opens in a new tab) |
| Which assessment year? | AY 2026-27, as amended by the Finance Act, 2025 | Study material, Module 1 (PDF) (opens in a new tab) |
| Income-tax cut-off | Notifications, circulars and amendments up to 30 June 2026, now out as the Statutory Update for January 2027 (what it changes) | Same study material, "Know the relevant Finance Act" |
| Which edition? | July 2025 edition of both sections, plus the RTP and the Statutory Update for January 2027 | Study material notice (PDF) (opens in a new tab) |
| GST cut-off | Notifications and circulars from 1 March to 30 June 2026 go into the January 2027 Statutory Update. ICAI's January 2027 RTP, Paper 3 (PDF) (opens in a new tab) applies GST changes effective up to 30 June 2026; its Amendments page (opens in a new tab) still lists the September 2026 GST update as the latest (checked 29 October 2026) | GST study material, Module 1 (PDF) (opens in a new tab) |
A trap only tax students face: ICAI's Paper 3 study material page (opens in a new tab) now carries the new study material "as per the Income-tax Act, 2025", marked relevant for May 2027, September 2027 and January 2028. That book is not yours. Keep the July 2025 edition for January 2027.
Old papers are not all on your year. ICAI prints the law in each paper's instructions:
| ICAI paper | Law it is set on | Use it as a full mock? |
|---|---|---|
| September 2025 (PDF) (opens in a new tab) | AY 2025-26 | Format and GST; recheck tax rates and limits |
| January 2026 (PDF) (opens in a new tab) | AY 2025-26 | Format and GST; recheck tax rates and limits |
| May 2026 (PDF) (opens in a new tab) | AY 2026-27; GST up to 31 October 2025 | Yes |
| September 2026 (PDF) (opens in a new tab) | AY 2026-27; notifications up to 28 February 2026 | Yes, the closest to yours |
The May 2026 answers, with every Taxation attempt's GST date side by side, are in CA Inter suggested answers May 2026. Cut-offs paper by paper: what's applicable for your CA attempt.
CA Inter tax mock test paper: two 50-mark papers in one
Paper 3 is 100 marks in 3 hours: Section A income tax (50) and Section B GST (50), each with its own MCQs, its own compulsory question and its own choice. This is the shape of ICAI's May and September 2026 papers:
| Section A: Income tax | Section B: GST | |
|---|---|---|
| MCQs (Part I) | MCQs 1 to 8: seven of 2 marks, one of 1 mark = 15 | MCQs 9 to 16: the same = 15 |
| Compulsory descriptive | Q1, 15 marks | Q5, 15 marks |
| Choice | Any 2 of Q2, Q3, Q4 (10 marks each) | Any 2 of Q6, Q7, Q8 (10 marks each) |
| The OR inside a question | Q4(b) | Usually Q8(b) |
So Paper 3 is not fully descriptive, and the split is 50:50, not 60:40. All six Inter patterns: CA Inter exam pattern Jan 2027.
Treat it as two 90-minute papers:
| Part | Marks | Minutes |
|---|---|---|
| 8 MCQs | 15 | 22 |
| The compulsory 15-marker | 15 | 30 |
| Two 10-mark questions | 20 | 34 |
| Final check | – | 4 |
Every minute income tax overruns comes out of GST, so stop Section A at 90.
CA Inter Taxation important questions: the slots that never moved
In ICAI's last four papers (September 2025 to September 2026), these slots held the same kind of question every time:
| Slot | What came in all four papers |
|---|---|
| Q1 (15) | Total income and tax computation, mostly business income |
| Q2(b) (4) | TDS or TCS on independent situations |
| Q3 | A salaries computation |
| Q4(a) (6) | Set-off and carry forward of losses |
| Q5(a) (10) | Net GST payable in cash for a month |
| ITC | 5 to 7 marks somewhere in Section B |
Residential status also came as Q2(a) in all four papers. The full slot map, the six topics that came back within a year and a worked set-off sum are in CA Inter taxation important questions for Jan 2027. Chapter-by-chapter marks for both sections, with an A, B, C priority, are in CA Inter chapter wise weightage for Jan 2027.
What ICAI's examiners marked down in May 2026 Taxation
ICAI's Group I suggested answers for May 2026 (PDF) (opens in a new tab), which include Taxation, end with "Examiners' comments on the performance of the examinees" (pages 132 to 140). The 14 traps they reported in Paper 3:
| # | Question | What examinees got wrong | Write instead |
|---|---|---|---|
| 1 | Q1 | Wrong depreciation rate on pollution control equipment "even though the same is stated in the question itself" | Use every rate given; no additional depreciation under the default regime |
| 2 | Q2(a) | Could not compute total income "other than the income from foreign sources" to test deemed residence | Leave foreign-source income out of the 15 lakh test (example below) |
| 3 | Q2(b) | Applied the 10 lakh TCS threshold under section 206C(1F) to two luxury goods together | Test the threshold separately for each notified good |
| 4 | Q3(a) | Missed the family pension deduction | Deduct the lower of 15,000 or one-third of the pension |
| 5 | Q3(b) | Taxed insurance received for a stolen gold chain | It is a capital receipt, not taxable, and not under section 45(1A) |
| 6 | Q4(a) | Created a loss from a self-occupied house under the default regime | No interest deduction, so no loss; no set-off of a brought-forward 35AD loss either |
| 7 | Q4(b) | Counted the updated-return time limit from the previous year | 48 months from the end of the assessment year |
| 8 | Q4(b) | Wrong revised-return limit | 3 months before the end of the AY or assessment, whichever is earlier |
| 9 | Q5(a) | Did not split exempt and taxable goods on one invoice; treated vouchers as a supply | Split values first; give "appropriate legal reasoning" for each conclusion |
| 10 | Q5(b) | Read the rule 86B limit of 50 lakh as annual | Test it month by month, then apply each exception to the figures |
| 11 | Q6(a) | Treated three purchase orders as one contract and took ITC on all | ITC only on orders fully received; time limit by the date the annual return was actually filed |
| 12 | Q6(b) | Took a round-trip air ticket as one journey | Two journeys, each with its own place of supply |
| 13 | Q7(a) | Deducted GST TDS on a supply from one PSU to another; misstated the 2.5 lakh limit | No TDS between PSUs; no TDS where the contract value is up to 2.5 lakh |
| 14 | Q8 | Online money gaming as a separate category; revised tax invoice in general terms | It is a specified actionable claim; name the exact case for a revised invoice |
The pattern: most are not syllabus gaps but facts in the question ignored (1, 3, 9, 11), "assessment year" and "previous year" swapped (7, 8), or a conclusion with no reason (9, 10). ICAI's January 2026 comments and how the other five papers fared are in ICAI examiner comments for CA Inter May 2026.
A worked mini-example: deemed resident or not?
Residence came in May and September 2026, and trap 2 caught examinees in May. Our figures:
Facts: Ms. Ritu, an Indian citizen, worked in Dubai from 2018 with no visit to India and no UAE tax on her income. She returned on 1 December 2025 and stayed: 121 days in PY 2025-26. Her income for AY 2026-27, default regime (in rupees):
| Item | Amount |
|---|---|
| Salary from the Dubai employer, April to November, received in Dubai | 28,00,000 |
| Salary from an Indian employer, December to March | 9,00,000 |
| Annual value of her let-out flat in Pune | 3,60,000 |
| Interest on a fixed deposit with an Indian bank | 1,30,000 |
Step 1, section 6(1): 121 days is under 182, and with no days in India in the four preceding years the 365-day condition fails. Not resident under section 6(1).
Step 2, section 6(1A), income other than from foreign sources:
| Head | Working | Amount |
|---|---|---|
| Salaries | 9,00,000 less standard deduction 75,000 | 8,25,000 |
| House property | 3,60,000 less 30% | 2,52,000 |
| Other sources | FD interest | 1,30,000 |
| Total, excluding the Dubai salary | 12,07,000 |
Step 3, conclusion: 12,07,000 does not exceed 15 lakh, so she is not a deemed resident. She is a non-resident, and her total income is 12,07,000.
The trap: adding the Dubai salary gives 40,07,000 and the wrong answer "deemed resident". Foreign-source income stays out of the test.
One change flips it: if she also had a long-term capital gain of 4,00,000 on a flat in India, the total would be 16,07,000. She is then a deemed resident and, under section 6(6), resident but not ordinarily resident. The Dubai salary is still not taxable: it accrued and was received outside India, and isn't from a business controlled or profession set up in India.
What earns the marks: the section at each step, the 15 lakh test as a working note, and the status before total income; see step marking in CA exams.
CA Inter income tax mock test or GST mock test: should you split them?
Yes early on, no at the end. The two sections share nothing but the three hours:
- Till mid-November: 90-minute sectional tests, income tax one day and GST another, each with its 8 MCQs.
- From late November: only full 3-hour papers, as printed. This tests the switch from computing to reasoning at 90 minutes.
- Late December: one full paper at 2 PM, in your Group I order.
Dates for each round: our CA Inter Jan 2027 mock test plan. Tax chapters by date: the CA Inter revision planner for January 2027.
Where to get CA Inter Taxation mock test papers and MTPs
ICAI's Paper 3 Taxation MTPs for January 2027 are on 23 November (Series I) and 7 December 2026 (Series II), 10 AM to 1 PM (ICAI notice, PDF (opens in a new tab)); all dates are in CA Inter MTP Jan 2027 schedule. Past CA Inter MTPs, RTPs and past papers are free; check the AY on each before you trust its income tax answers.
Our CA Inter Taxation mock tests for January 2027
Our CA Inter Taxation test series has 3 full-syllabus Paper 3 mocks, each set at the real ICAI exam standard on the latest pattern and testing every amendment that applies to January 2027. Each paper allows one checked submission: answer by hand, as in the hall, then photograph each page and submit them as one PDF. Your checked copy shows why each mark was cut and the line that would have earned it. Mock 1 has preview pages you can read first.
Frequently asked questions
Is the CA Inter Taxation paper objective or subjective?
Both: 30 marks of MCQs (15 per section) and 70 descriptive (35 per section), with no negative marking.
Which assessment year applies to CA Inter Taxation in January 2027?
AY 2026-27, under the Income-tax Act, 1961 as amended by the Finance Act, 2025. The Income-tax Act, 2025 comes in only from May 2027.
How many marks do I need to pass CA Inter Taxation?
40 out of 100 in the paper, and 150 out of 300 across Group I, at one sitting. The full rule and how an exemption of 60 carries forward are in CA Inter passing marks Jan 2027.
Are ICAI's MTPs enough practice for CA Inter Taxation?
Write them first; they are free and on the current pattern. Then add at least one full paper on AY 2026-27 with a checked copy, because traps like the 14 above only show up when your steps are marked.
Write one Taxation section this week
Take ICAI's September 2026 Paper 3, write Section A in 90 minutes and check it against the 14 traps. Move to full CA mock tests in late November: our CA Inter Taxation mock tests, the rest of Group I on the CA Inter test series page, and every level on our CA test series home page.