Basic Terms MCQ

Basic Terms
Multiple Choice Questions
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The term H.U.F stands for Residential has nothing to do with
1. Hindu divided family 1. Constitution

2. Human undivided family 2. Citizenship
3. Hindu undivided family 3. Censorship
4. Human divided family 4. Change

A.O.P is the abbreviation used for A.O.P should consist of
1. Association of persons 1. Individual

2. Association of professors 2. Persons other than individual
3. Association of panchayats 3. Individual & Persons other than
4. Associate of person individual
4. None

Body of individual should consist of Residential status of an individual

depends on the stay of the assessee
1. Individual
in India during the
2. Persons other than individual
3. Individual & Persons other than 1. Calendar year
individual 2. Accounting year
4. None 3. Assessment year
4. Previous year

A person by whom any tax is payable The financial year in which the
under Income Tax Act 1961 is called income is earned is called as the
as
1. Assessment year
1. Individual 2. Present year
2. Tax Payable 3. Previous year
3. Assessee 4. Current year
4. None

An ________ company is always Income Tax Act extends to

resident in India
1. Whole of India
1. Industrial 2. Whole of India except Jammu &
2. Individual Kashmir
3. Indian 3. India & Sri Lanka
4. Investment 4. None of the above

A new business was set up on Shivaji University is assessable under

15/11/2015 and it commenced its the Income Tax Act as
business from 01/12/2015. The first
previous year in this case shall be 1. An Individual
2. An Artificial Juridical Person
1. 15/11/2015 to 31/03/2016 3. A Local Authority
2. 01/12/2015 to 31/03/2016 4. None
3. 01/04/2015 to 31/03/2016
4. None

Income Tax Act has ______ schedules 58 (1)(a)(ii) is read as
1. 23 1. Section 58 schedule (1) clause

2. 14 (a) sub-clause (ii)
3. 298 2. Section 58 clause (1)
4. 40 sub-section (a) schedule (ii)
3. Section 58 sub-section (1)
clause (a) sub-clause (ii)
4. Section 58 sub-section (1)
clause (a) schedule (ii)

In 59 (3) (b) (iv), (b) is __________ __________ are definite, specific,

complete and full
1. Section
2. Sub-section 1. Exhaustive definition
3. Clause 2. Inclusive definition
4. Sub-clause 3. Sections
4. Clauses

A firm is regarded as a unit of ____________ is chargeable u/s 45

assessment as per
1. Capital Gains
1. Income Tax Act 2. Profit & Gains
2. Partnership Act 3. Dividend
3. Companies Act 4. Voluntary Contribution
4. Finance Act

Income includes ____________ Any sum of money received in excess

of Rs. __________ without
1. Dividend
consideration is chargeable to tax
2. Voluntary Contribution
3. Capital Gains 1. 5,000
4. All 2. 50,000
3. 5,00,000
4. 55,000

Previous year can be of ________ 12 Any sum received on receivable in

months. cash or kind under an agreement for
not carrying out an activity in relation
1. More than to a business is called as
2. Less than
3. Only 1. PIn Money
4. Any 2. Mutual Activity
3. No Competition Deal
4. Non-compete Agreement

__________ received by wife is not The term “Person” includes _________

taxable
1. HUF
1. Pin Money 2. AOP
2. Compensation 3. BOI
3. Gift 4. All
4. Salary

Partners are liable to pay tax on Every receipt is an income.

_______ received from firm
1. True
1. Salary 2. False
2. Profit
3. Income
4. Salary & Income

Pin money is taxable. Gift received on occasion of marriage

is always taxable as income
1. True
2. False 1. True
2. False

Previous year is always of 12 month. Any person can become a member of

association of person.
1. True
2. False 1. True
2. False

A revenue receipt is _____________ In assessment year, income of

previous year is assessed.
1. Always exempt
2. Always taxable 1. True
3. Always taxable unless 2. False
specifically exempted under the
income tax act
4. Exempt unless specifically made
taxable under the income tax act

AOP stands for association of Income is calculated on the basis of

receipt only.
Panchayats.
1. True
1. True 2. False
2. False

Reliance Industries Ltd. is a person

For a newly set up business previous as per Income tax Act, 1961.
year can be of less than 12 months.
1. True
1. True 2. False
2. False

The financial year in which the Only individuals can be member of

income is earned is called as the body of individuals.
1. Assessment Year 1. True

2. Present Year 2. False
3. Previous Year
4. Current Year

The financial year immediately A person by whom any tax is payable

succeeding the assessment year is under Income Tax Act 1961 is called
the previous year. as
1. True 1. Individual
2. False 2. Tax Payer
3. Assessee
4. None

An __________ company is always Assessment year can be of less than

resident in India 12 months.
1. Industrial 1. True
2. Individual 2. False
3. Indian
4. Institutional

A person by whom any tax, interest, A firm is regarded as a unit of

penalty etc. is due is know as assessment as per ____________.
1. A defaulter 1. Income Tax Act

2. A resident 2. Partnership Act
3. A citizen 3. Companies Act
4. An assessee 4. Finance Act

The definition of ‘Income’ is inclusive According to section 2 (8),

definition. assessment includes Reassessment.
1. True 1. True
2. False 2. False

Previous year of every assessee may ____________ are definite, specific,

or may not be same. complete and full.
1. True 1. Exhaustive Definition

2. False 2. Inclusive Definition
3. Sections
4. Clauses

____________ are not taxable. HUF stands for human undivided

family.
1. Losses
2. Personal Gifts 1. True
3. Illegal Income 2. False
4. Awards

Dharampur Gram Panchayat is a Any income which is received

AOP. through unlawful means is not
chargeable to tax.
1. True
2. False 1. True
2. False

Assessment year is always of 12 Distribution of surplus arising from

months. mutual activity is not chargeable to
tax.
1. True
2. False 1. True
2. False

Awards received by professional Income can be in cash or kind.

sportsperson in nature of gift is liable
1. True
to tax.
2. False
1. True
2. False

Thane municipal corporation is a In which year is the income tax

local authority. liability computed?
1. True 1. Assessment Year

2. False 2. Previous Year
3. Financial Year
4. Calendar Year

Income earned during what period is Whose income is chargeable to

taxed? income tax?
1. Assessment Year 1. Income of only indian citizens

2. Previous Year 2. Income of only residents
3. Financial Year 3. Income of all persons
4. Calendar Year 4. Income of only assessees

Who is liable to pay the income tax in Assessment year is the period of 12
India? months commencing on the
____________
1. Indian Citizens
2. Resident in India 1. First day of march every year
3. Any Person 2. First day of january every year
4. An Assessee 3. Financial year immediately
preceding the previous year
4. First day of april every year

Previous year means the ____________ Mr. Joshi runs a chemist shop accounting
year of which is the financial year. On
1. Financial year immediately after November 9, 2015 he sets up a chemical
the assessment year factory. What is the previous year of the
2. Period of 12 month commencing assessment year 2016-17 for the above
on the 1st day of april every year two businesses?
3. Financial year immediately 1. 1-4-2015 to 31-3-2016 for both

preceding the assessment year 2. 9-11-2015 to 31-3-2016 for both
4. Calendar year immediately 3. 1-1-2015 to 31-12-2015 for both
preceding the assessment year 4. Shop: 1-4-2015 to 31-3-2016; and
Factory: 9-11-2015 to 31-3-2016

A company with two other companies A charitable trust is treated under

in the joint venture is treated under income tax laws as
income tax laws as
1. A company
1. A company 2. An association of persons
2. An association of persons 3. A body of individuals
3. A body of individuals 4. An artificial judicial persons
4. An artificial judicial persons

A club is treated under income tax A co-operative society is treated

laws as under income tax laws as
1. A company 1. A company
2. An association of persons 2. An association of persons
3. A body of individuals 3. A body of individuals
4. An artificial judicial persons 4. An artificial judicial persons

Life insurance corporation is treated Mumbai University is treated under

under income tax laws as income tax laws as
1. A company 1. A company
2. An association of persons 2. An association of persons
3. A body of individuals 3. A body of individuals
4. An artificial judicial persons 4. An artificial judicial persons

Indicate which of the following Provision of a motor car to the wife

persons will not be taxed as an of the managing director by the
individual: company is
1. X, a partner of a firm 1. Exempt from tax

2. Y, a managing director of A Ltd. 2. Treated as perquisite in the
3. Z, a member of HUF hands of the managing director
4. M, mumbai commissioner of 3. Treated as income of the
mumbai in respect of the income company
of municipal corporation 4. Treated as income of the wife of
the managing director

Recovery of bad debt is Gift from a patient to a doctor is
1. Allowed as deduction from gross 1. Allowed as deduction from gross

income income
2. Exempt from tax 2. Exempt from tax
3. Chargeable to tax as income 3. Chargeable to tax as income
from business from business
4. Chargeable to tax as capital 4. Chargeable to tax as capital
gains gains

A capital receipt is ______________ Salary paid to M by his employer out

of capital reserve is not an income
1. Always exempt
2. Always taxable 1. True
3. Always taxable unless 2. False
specifically exempted under the
income tax act
4. Exempt unless specifically made
taxable under the income tax act

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Basic Terms

Multiple Choice Questions

Tripathi Online Educare

The term H.U.F stands for Residential has nothing to do with

1. Hindu divided family 1. Constitution

Tripathi Online Educare

A.O.P is the abbreviation used for A.O.P should consist of

1. Association of persons 1. Individual

Tripathi Online Educare

Body of individual should consist of Residential status of an individual

Tripathi Online Educare

Tripathi Online Educare

An ________ company is always Income Tax Act extends to

Tripathi Online Educare

A new business was set up on Shivaji University is assessable under

Tripathi Online Educare

Income Tax Act has ______ schedules 58 (1)(a)(ii) is read as

1. 23 1. Section 58 schedule (1) clause

Tripathi Online Educare

In 59 (3) (b) (iv), (b) is __________ __________ are definite, specific,

Tripathi Online Educare

A firm is regarded as a unit of ____________ is chargeable u/s 45

Tripathi Online Educare

Income includes ____________ Any sum of money received in excess

Tripathi Online Educare

Previous year can be of ________ 12 Any sum received on receivable in

Tripathi Online Educare

__________ received by wife is not The term “Person” includes _________

Tripathi Online Educare

Partners are liable to pay tax on Every receipt is an income.

Tripathi Online Educare

Pin money is taxable. Gift received on occasion of marriage

Tripathi Online Educare

Previous year is always of 12 month. Any person can become a member of

Tripathi Online Educare

A revenue receipt is _____________ In assessment year, income of

Tripathi Online Educare

AOP stands for association of Income is calculated on the basis of

Tripathi Online Educare

Reliance Industries Ltd. is a person

Tripathi Online Educare

The financial year in which the Only individuals can be member of

1. Assessment Year 1. True

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The financial year immediately A person by whom any tax is payable

Tripathi Online Educare

An __________ company is always Assessment year can be of less than

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A person by whom any tax, interest, A firm is regarded as a unit of

1. A defaulter 1. Income Tax Act

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The definition of ‘Income’ is inclusive According to section 2 (8),

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Previous year of every assessee may ____________ are definite, specific,

1. True 1. Exhaustive Definition

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____________ are not taxable. HUF stands for human undivided

In 59 (3) (b) (iv), (b) is are definite, specific,

__ received by wife is not The term “Person” includes _