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Principles of Income Tax Laws
Principles of Income Tax Laws
Principles of Income Tax Laws
MCQ
1. The Central Government has been empowered by entry ________________ of the Union list of
schedule VII of the constitution of India to levy tax on income other than agricultural income.
A. 84
B. 82
C. 81
D. 85
2. The Income tax act, 1961 came into force w.e.f........ __________ _
D. None of above
A. Central Government
B. State Government
C. Commissioner
D. President
B. Assessee
A. Courts
B. Appellate Tribunals
A. Tribunal
C. Assessee
8. Who amongst the following confers on the power to issue circulars and clarifications?
A. ITAT
B. Central Government
C. CBDT
D. State Government
9. Amendments by the finance act are made applicable from
A. Financial Year
B. Assessment Year
C. Previous Year
D. Accounting Year
A. Only Individual
D. Individuals, HUF, Company, Firm, AOP or BOI,Local Authority, Every Artificial Juridical Person
12. As per section 2(31), the following is not included in the definition of 'person'
A. An individual
C. A company
D. A minor
C. only 12 months
15. Year in which income is taxable is known as ___________ and year in which income is earned is
known as ----
A. Previous year
B. Financial year
A. Individual
B. Partnership firm
C. Company
D. Association of person
B. Local authority
C. Individual
D. Association of Person
A. Individual only
D. None of these
D. None of these
A. Contract
B. Agreement
C. Popularity
D. Status
A. Partnership
B. Co-Partnership
C. Co -Parcenership
D. Co-Ownership
24. Section __ of the Income-tax Act, 1961 defines the term 'person' –
A. 4
B. 2(31)
C. 5
D. 2(32)
25. --------------must be one in which two or more persons join in for a common purpose or common
action with the object of earning income or profits or gains.
A. Partnership
B. Co-ownership
C. Body of Individuals
D. Association of Persons
A. Corporation
B. Local Fund
C. District Board
D. None of these
A. Section 2(34)
B. Section 2(9)
C. Section 3
D. Section 4
D. None of these
29. First previous year in case of a business/profession newly set up on 31-3-2019 would:
A. Start from 1st April, 2018 and end on 31st March 2019
B. Start from 31" March, 2019 and will end on 31st March, 2019
C. Start from 1st January, 2019 and end on 31st December, 2019
D. Start from 1st January, 2019 and will end on 31st March,2019
30. Dr. Ashok commenced medical practice on 1st September, 2018. The previous year for the
profession for the assessment year 2019-20 would be _
31. Income of business commenced on 1st March, 2019 will be assessed in assessment year
A. 2018-19
B. 2019-20
C. 2020-21
D. 2021-22
32. A person follows calendar year for accounting. For taxation, he has to follow:
D. He will to follow extended year from 1st January to next 31st March (a period of 15 months)
33. In which of the following cases, income of previous year is assessable in the previous year itself:
34. In which of the following cases, Assessing Officer has the discretion to assess the income of
B. Assessment of Association of Persons or Body of Individuals formed for a particular event or purpose
C. Assessment of persons likely to transfer property to avoid tax
D. Discontinued business
A. Total Income
B. Total Income-Debt
36. The period of 12 months commencing on the 1st day of April every year is known as ____________ _
A. Financial Year
B. Assessment Year
C. Previous Year
D. Accounting Year
37. The charging section of the Income-tax Act, 1961, states that the income earned in a year is taxable
in the next year. This is known as ______
A. Principle of mutuality
D. None of these.
39. A new business was set-up on 1st July, 2018 and trading activity was commenced from 1st
September, 2018, the previous year would be the period commencing from
A. Inclusive
B. Exhaustive
C. Exclusive
D. Descriptive.
A. 4
B. 5
C. 6
D. 3
A. Profits or Gains
B. Capital gains
C. Lottery winnings
A. ' Legal
B. Illegal
45. Which of the following income is not included in the term 'income' under the Income-tax Act, 1961 -
A. Profit and gains
B. Dividend
a. Salaries
c. Capital gains
47. AB & Co. received Rs.`2, 00,000 as compensation from CD & Co. for premature termination of
B. Casual income
A. Revenue receipt
B. Capital receipt
C. Revenue expenditure
D. Capital expenditure
50. Out of the following, which of the capital receipt is not taxable:
51. In case the Key man insurance policy is taken in name of any other person any sum received on
A. Salaries
C. Capital Gains
A. Salaries
B. Income from House Property
C. Capital Gains
A. Reimbursement of expenses
A. Rs.`1
B. Rs.`10
C. Rs.`100
D. Rs.`1,000
A) 1934
B) 1956
C) 1961
D) 1972
57. Income Tax Act came into force on…………
B) 1 st April 1961
C) 1 st April 1962
D) 1 st April 1956
A) Professional tax
B) Direct tax
C) Indirect tax
D) Service tax
A) Person
B) Assessee
C) Previous Year
D) Assessment Year
60. Assessment year is the period of 12 months commencing from ……………. Every year
. A) 1st March
B) 31st March
C) 1st April
D) 30 th April
61. When the income earned in an year is taxed in the same year, it is called …………………..
A) Advanced Assessment
B) Super Assessment
C) Accelerated Assessment
A) Individual
B) HUF
C) Local Authority
A) Central Government
B) State Government
66. A citizen of India who goes abroad for the purpose of employment, he must stay in India in the
previous year for at least ............................. days to become a resident
A) 90 days
B) 162 days
C) 180 days
D) 182 days
A) Karta
B) Coparceners
C) Deemed Karta
D) None of these
A) Fully Taxable
B) Partly Taxable
C) Fully Exempted
D) None of these
A) Fully Allowed
B) Partly Allowed
C) Not Allowed
D) None of these
70. Income exempted from tax are stated in the section……. Of Income Tax Act.
A) 5
B) 10
C) 12
D) 8
A) 12 to 14
B) 15 to 17
C) 18 to 22
D) 24 to 26
A) 15(2)
B) 16(1)
C)17(2)
D)17(1)
73. The highest Administrative Authority for Income Tax in India is............
A) Finance Minister.
B) CBDT
. C) President of India.
74. Payment made by an employer to employee monthly, other than salary is called ………….
A) Bonus
B) Allowances
C) Benefits
D) None of these
A) Fully Taxable
B) Partly Taxable
C) Fully Exempted
D) None of these
B) Partly Taxable
C) Fully Exempted
D) None of these
A) 16
B) 16(i)
C) 16(ii)
D) 16(iii)
77. Any allowance granted for encouraging research, academic and other professional pursuit is called
………………………
A) Research Allowance
B) Academic Allowance
D) Educational Allowance
78. A citizen of India who goes abroad for the purpose of employment, he must stay in India at least for
............................. days to become a resident
A) 90 days
B) 162 days
C) 180 days
D) 182 days
B) Company.
C) Association of persons.
D) None of these
80. The following is not taxable as income under the head "Salaries"
81. Previous year means the financial year immediately preceding the…………………...
A) Accounting Year
B) Assessment Year
82. The income received and accrued outside India from a business controlled or profession set up in
India, the tax incidence in case of resident is ………………..
A) Taxable
B) Non-taxable
C) Partly taxable
A) Salary
B) House property
C) Capital gains
D) other sources
B) Capital gains
D) None of these
A) Resident only.
C) Non-resident only.
D) All assessees.
87. Any rent or revenue derived from land which is situated in India and is used for agricultural purpose
is ……………………...
A) Partially taxable
B) Fully taxable
91. The interest on loan paid by the Government of India to a non-resident outside India is ……………….. in
India.
A) Not taxable
B) Partially taxable
C) Taxable
D) Can’t say
92. The salary, remuneration or compensation received by the partners is taxable under the head
………………………….
C) Salary
93. Under Section 15 of Income Tax Act, the salary due in previous years and even if it is not received is
………………………...
A) Taxable
B) Not taxable
C) Partially taxable
A) Taxable.
B) Tax free.
95. Which of the following is not taxable under the head Salary?
96. In accordance with the provisions of Section 17(1) of Income Tax Act, 1961, the term salary includes
……………………..
B) Any gratuity
C) Any fees, commission, perquisite or profits in lieu of or in addition to any salary or wages
97. The entertainment tax allowed as a deduction under Section 16 of Income Tax Act is the least of
………………………….
C) 50,00
98. The following is not taxable as income under the head “Salaries”:
D) Perquisites in India
A) An agricultural income.
B) A salary income.
C) A business income.
D) A capital income.
101. Any benefits attached to an office or position in addition to salary or wages is called …………….
. A) Allowances
B) Perquisites
C) Benefits
D) None of these
102.Under the head Income from House Property the basis of charge is ………………………
A) Rent Received
C) Annual Value
D) Municipal Value
A) When the property has been transferred to spouse for inadequate consideration
105.The following conditions must be satisfied to charge the rental income under the head Income of
House Property:
C) The property should not be used by the owner for the purpose of business or professional purpose
106.Mr. Ram owns a house property. He lent it to Laxman at ` 10,000 p.m. Laxman sublet it to Mr.
Maruti on monthly rent of ` 20,000 p.m. Rental income of Laxman is taxable under the head
……………………………………
107.If the house remains vacant for the whole year, annual value will be …………..
C) Nil
C) Nil
110.Rent from vacant plot of land is assessible under the head …………………
A) Income from HP
A) Income from HP
112.In case of disputed ownership, income from HP is chargeable in the hands of …………
A) Recipient of income
B) Not assessible
C) All owners
D) None of these
114.An individual who transfers house property without an adequate consideration to his owner spouse
or to minor child is called as ………………….
A) Co-owner
B) Deemed Owner
C) Owner Himself
115.The Gross annual value of the property is depends upon the ……………….
A) Standard rent
B) Municipal Valuation
C) Fair rent
D) Co-owner of a property
117.If an assesses earns rent from a sub-tenant in respect to tenanted property let out as a residence,
the said rent is ………………….
A) Allowed
B) Disallowed
C) Partly allowed
D) None of these
120.Which of the following taxes are allowed as deduction while computing the business income
………………………………
A) Wealth-tax
B) Income-tax
C) Sales tax
121.Which is the charging section of income under the head profits and gains of business or profession?
A) Section 15
B) Section 24
C) Section 28
D) Section 17
122.Which of the following conditions are to be fulfilled for charging an income under the head profits
and gains of business or profession
A) ITAT
B) Central Government
C) CBDT
D) State Government
A) Rs. 10 lakhs
B) Rs. 40 lakhs
C) 1 crore
D) 10 crore
126. What are the conditions to be fulfilled for charging of income under the head capital gains:
C. The transfer of such capital asset has been affected during the previous year.
127. Which of the following is not a requisite for charging income-tax on capital gains –
A. The transfer must have been effected in the relevant assessment year
A. Jewellery
C. Archaeological Collections
129. A short term capital asset means a capital asset held by the assessee for not more than:
130. A Long term capital asset means a capital asset held by the assessee for more than:
D. Collection of income
A. Father’s income
B. Mother ’s income
133. . Which one of the following is not an income from other sources?
135. Which is the charging section for income chargeable under the head Income from other sources?
A. Section 15
B. Section 28
C. Section 22
D. Section 56
136. When an individual transfers an income without transferring the asset , it is taxable in the hands of
A) Transferee
B) Individual himself