Basic Concept – 

QUIZ
Income Tax MCQ with Answers Pdf – 1
Goods and Services Tax MCQ
Income Tax MCQ – 1 
 
1. Income tax is a
A) Direct tax
B) Indirect tax
C) Total tax
D) Danger tax                                                        
2. Sambalpur university is a
A) Local authority
B) Association of person
C) Individual
D) Artificial juridical person 
3. Education cess is levid in case of
A) Individual
B) Hindu undivided family
C) All assesse
D) Company assesse 
4. Income tax act 1961 imposed on
A) Legal income
B) Illegal income
C) Both legal and illegal income
D) None of this 
5. Income tax act 1961 applicable to
A) Jammu and Kashmir only
B) All state in India
C) All metro city
D) All India except Jammu and Kashmir 
6. Assesse includes
A) Individual
B) Company
C) HUF, AOP/BOI
D) All of the above 
7. AOP consist of                                                                          
A) Individual only
B) Other than individual
C) Both
D) None of Above 
8. BOI consist of
 A) Individual only
B) Other than individual
C) Both
D) None of Above 
9. Health & Education cess is
A) 6%
B) 2%
C) 4%
D) 3% 
10. The term income is defined u/s
A) 2(24)
B) 3(24)
C) 24(2)
D) None of the above 
11. Income tax act 1961 came in to force on
A) 1st April 1960
B) 31st march 1972
C) 1st April 1962
D) None of the above 
12. Who has the statutory power to issued notification under income tax act1961
A) Central board of direct taxes
B) Central board of film certification
C) Finance department of state
D) None of the above 
13. Income tax is imposed on
A) Half yearly
B) Annually
C) Monthly
D) Daily 
14. Assessment year start on
A) 1st April
B) 31st march 
C) 1st July
D) None of the Above 
15. Previous year ends With
A) 1st April
B) 31st march
C) 1st July
D) None of the Above 
16. How many head of income are there
A) 6
B) 3
 C) 4
D) 5 
17. Residential status is determined on
A) Assessment year
B) Calendar year
C) Previous year
D) Accounting year 
18. Taxable income is determined on the basic of
A) Residential status in India 
B) Citizenship of India
C) BPL card holder
D) Govt. job holder 
19. Section of residential status is
A) 7
B) 6
C) 5
D) 4 
20. Salary to MP/MLA is
A) Exempted
B) Free
C) Taxable
D) illegal 
Income Tax MCQ – 2 
Income Tax MCQ with Answers Pdf-2

1. Computation of income from salary section is

A) Sec 11-12
B) Sec 15-17
C) Sec 6-10
D) Sec 16-20 
2. Deduction allowed against gross salary
A) Income tax
B) Entertainment tax
C) Professional tax
D) education tax 
3. RPF full form in income tax
A) Reserve police force
B) Railway police force
C) Recognized provident fund
D) None of the above 
4. Exemption limit of interest credit to RPF is
 A) 6.5%
B) 9.5%
C) 7.5%
D) None of this 
5. Employer contribution to RPF is Exempted up
A) 12%
B) 9.5%
C) 19%
D) 10% 
6. Taxable amount of perquisite in respect of small car for offial and personal purpose
A) 1500 p.m.
B) 1800 p.m.
C) 2400 p.m.
D) None of the Above 
7. Taxable amount of perquisite in respect of Big car for offial and personal purpose
A) 1800 p.m.
B) 2000 p.m.
C) 1500 p.m.
D) 2400 p.m. 
8. Deduction from salary is allowed u/s
A) Sec 15
B) Sec 16
C) Sec 25
D) None of Above 
9. Education allowancw is exempted
A) Rs. 200 per month up to 4 child
B) Rs. 200 per month up to 3 child
C) Rs. 100per month up to 2 child
D) Rs. 100 per month up to 10 child 
10. Medical bil reimbursed in respect of treatment in private hospital
A) Up to 15,000 
B) Up to 12,000
C) Up to 25,000
D) None of the above 
11. HRA exempted u/s
A) 15(13B)
B) 12(13C)
C) 10(13A)
D) None of the above 
12. Perquisite Comes U/S
A) 19(3)
B) 17(2)
 C) 2(17)
D) None of the above 
13. Allowance from U.N.O is
A) partly taxable
B) fully taxable
C) fully exempted
D) None of the above 
14. Entertainment allowance is
A) Partly exempted
B) Exempted
C) fully taxable
D) None of the Above 
15. HRA exempted u/s 10(13A) includes
A) 40% of salary if accommodation is situated at Delhi, Mumbai, Chennai,
Kolkata
B) 60% of salary if accommodation is situated at Delhi, Mumbai, Chennai,
Kolkata
C) 50% of salary if accommodation is situated at Delhi, Mumbai,
Chennai, Kolkata 
D) None of the Above 
16. Free food during working hours at office/ business premises exemopted up to
A) Rs. 50 per meal
B) Rs. 60 per meal
C) Rs. 90 per meal
D) None of the above 
17. Agricultural income is
A) Taxable
B) Fully taxable
C) Exempted
D) Partly taxable 
18. Exempted Income comes under section
A) Sec 12
B) Sec 10
C) Sec 24
D) Sec 13 
19. Sec 10AA deduction implies
A) Buffer zone
B) Special economic zone
C) POK zone
D) None of the above 
20. Allowance of MP/MLA is
A) Exempted
B) Free
 C) Taxable
D) illegal 
Income Tax MCQ – 3 
Income Tax MCQ with Answers Pdf-3

1. The basis of charge Under the head Income from House Property is
A) Rent Received
B) Gross Annual Value
C) Annual Value
D) None of the above
2. Annual value is defined u/s
A) 23(1)
B) 22(1)
C) 21(1)
D) None of the above
3. The Income from House Property is taxable on individual even if property is
not registered in his name
A) When the property has been transferred to spouse for inadequate
consideration
B) Where the individual holds on importable estate
C) Where the property is transferred to a minor child for inadequate
consideration
D) All of the above
4. Mr. A owns a house property. He lent it to Mr.B at 20,000 p.m. Mr.B sublet it to
Mr. C on monthly rent of ` 30,000 p.m. Rental income of A is taxable under the
head ….
A) Income from Other Sources
B) Income from House Property
C) Income from Salary
D) None of this
  5. For claiming the deduction for unrealised rent, the assessee must satisfy
Which of the following rules
A) Rule 4A
B) Rule 4
C) Section 4 A
D) None of this
6. The tax paid by the tenant is ?
 A) Added to rent received
B) No adjustment
C) Added to Annual value
D) All of the above
7. What % is allowed as deduction from the annual value.
A) 20%
B) 25%
C) 30%
D) None of Above
8. which purposes are deductible from annual value for Interest on loan taken?
A) Construction
B) Purchase
C) Repair
D) All of the Above
9. Which of the following is not deductible from annual value?
A) Interest on loan taken for repairs
B) Interest on loan taken for reconstruction
C) Interest on unpaid interest
D) 3%
10. Annual value of self-occupied house is….
A) Nil
B) Equal to Municipal Value
C) Equal to Fair rent
D) None of the above
11. Foreign house property’s income is taxable in the case of
A) Non Resident
B) Not Ordinarily Resident
C) Ordinarily Resident
D) None of the above
12. Which of the following is deductible from the annual value of House
Property ?
A) Municipal taxes paid by the owner during the previous year
B) Municipal taxes paid by the owner for the previous year
C) Municipal taxes paid by the owner
D) None of the above
13. Which of the following conditions must be satisfied to charge the rental
income under the head Income of House Property:
 A) The asssessee should be one of the property
B) The property should consist of any buildings or lands
C) The property should not be used by the owner for the purpose of
business or professional purpose
D) All of the above
14. Mr. A owns a house property. He lent it to Mr. B at ` 10,000 p.m. Mr. B sublet
it to Mr. C on monthly rent of ` 20,000 p.m. Rental income of Mr. B is taxable
under the head
A) Income from Other Sources
B) Income from House Property
C) Income from Salary
D) None of the Above
15. Rule 4 includes
A) All of the Below
B) The defaulting tenant has vacated or steps have been taken to vacate
the house
C) Tenancy must be bonafide
D) Tenancy must be bonafide
16. If the house remains vacant for the whole year, Then annual value will be
A) Equal to Fair rent
B) Equal to Municipal Value
C) Nil
D) None of the above
17. In incomre House Property, A sum equal to 30% is allowed as deduction from
the annual value as
A) Basic Deduction
B) Standard Deduction
C) Deduction
D) All of the above
18. Deductions from annual value is comes under section….
A) 24
B) 24A
C) 24AA
D) All of the above
19. Interest for pre-acquisition period is deductible in ………………. instalments
A) 7
B) 6
 C) 5
D) 4
20. From the amount of arrears of rent received, ….. % Is allowed as deduction
A) 30%
B) 20%
C) 40%
D) 10%
Income Tax MCQ – 4

Income Tax MCQ with Answers Pdf-4

 1.      Sec 45 related to

a.      Capital assets

b.     capitals gains                                                        

c.      Assets                         

d.      d. none of the above

 2.      Where total block of depreciable assets is transferred after 36 months, there will

a.      Short term capital gains or loss

b.      short term capital gains

c.      long term capital gains

d.      long term capital gains  or losses

 3.      capital assets includes

a.                deposit bonds

b.                stock in trade

c.                shares

d.                none of the above

 4.      indexation will be allowed in case of

a.      LTCG

b.      STCG

c.      Both

d.      None of the above

 5.      How many types of capital gains are there

a.      3

b.     2

c.      4

d.      None of the above

 6.      Indexation will be done

a.      Shares

b.      Debenture

c.      Other security

d.      All of the above

 7.      Cost inflation index before 31stmarch, 2001 …

a.      150

b.      200

c.      100

d.      None of the above

 8.      Exemption is not allowed u/s

a.      54B

b.     54E

c.      54

d.      None of the above

 9.      Short term capital gains is taxed at……. Price

a.      Normal tax rates

b.      Fixed tax rates

c.      Market rates

d.      None of the above

 10.   Exemption under section 54 is available to which persons

a.      Company

b.     Individual and HUF

c.      AOP/BOI

d.      None of the above

  11.   For deduction u/s 54EC , the individual should invest the whole or part of the capital gains
in the specified asserts …….

a.      Within 6 months from the date of long term capital assets transfer

b.      Within 3 months from the date of long term capital assets transfer

c.      Within 12 months from the date of long term capital assets transfer

d.      None of the above

 12.   Long term capital gain is taxed ……..

a.      30%

b.      25%

c.      20%

d.      None of the above

 13.   If the goodwill of profession which is self-generated is transferred , then there will  be

a.      Long term capital gains

b.      Short term capital gins

c.      No capital gains

d.      None of the above

 14.   Deduction from capital gains under section 54B is for capital gains arising from transfer of….

a.      Agricultural land

b.      Salary

c.      House property

d.      None of the above

 15.   The rate of tax that is imposed on STCG arising from transfer of equity shares of a
company , concern, units of an equity oriented fund is…..

a.      25%

b.     15%

c.      30%

d.      None of the above

 16.      Short term capital assets has been defined

a.      Sec 4(24A)
b.      Sec 4(22A)

c.      Sec 2(42A)

d.      None of the above

 17.      Long term capital assets

a.      Sec 2(29A)

b.      Sec 2 (92A)

c.      Sec 9(22A)

d.      None of the above

 18.      Transfer of capitals assets has been defined u/s

a.      Sec 7(42)

b.     Sec 2(47)

c.      Sec 2(74)

d.      None of the above

 19.      The computation of capital gains is u/s

a.      48

b.      49

c.      47

d.      None of the above

 20.      Full form of STCG

a.      Short term capital gains

b.      Short term capital gold

c.      Short time capital gain

d.      None of the above

 21.      Computation of capital gains in case of slump sale has been defined u/s

a.      50C

b.      50D

c.      50B

d.      None of the above

 22.      Transfer of security by depository u/s

a.      45(2B)

b.     45(2A)

c.      45(A2)

d.      None of the above

 23.      Transfer of depreciable assets u/s

a.      50

b.      51

c.      52

d.      None of the above

 24.      Transfer of capital assets being the units of UTI or other mutual funds comes u/s

a.      Sec 45(8)

b.      Sec 45(7)

c.      Sec 45(6)

d.      None of the above

 25.   Full form of LTCG

a.      Long term capital gains

b.      Long term capital gold

c.      Long time capital gain

d.      None of the above

Income Tax MCQ – 5

Income Tax MCQ with Answers Pdf-5

 1.      What is the maximum amount of deduction from family pension is…

a.      20,000

b.     15,000

c.      25,000

d.      None of the above

 2.      The aggregate value of monetary gift received during the previous year is exempted , if it

a.      Doesn’t exceed 50,000

b.      Exceed 50,000
c.      Exceed 45,000

d.      None of the above

 3.      T.D.S. is not deducted on lottery income up to…. Amount

a.      10,000

b.      15,000

c.      5,000

d.      None of the above

 4.      Income from others sources may be includes

a.      Indian company dividend

b.      Dividend from units

c.      Foreign company dividend

d.     All of the above

 5.      If I win from crossword puzzles, horse races, card games and lotteries . then rate
of  TDS……?

a.      25%

b.      15%

c.      30%

d.      None of the above

 6.      The amount of dividend received from cooperative society is….

a.      Partly taxable

b.      Exempted

c.      Taxable

d.      None of the above

 7.      Gift received from my wife is

a.      Exempted

b.      Partly taxable

c.      Taxable

d.      None of the above

 8.      Income from others sources is known as

a.      films head of income

b.     Residuary head of income

c.      marriage heads of income

d.      none of the above

 9.      income from others sources is u/s ……

a.      56

b.      57

c.      55

d.      None of the above

 10.   Interest on saving bank account is exempted up to……

a.      15,000

b.      12,000

c.      10,000

d.      None of the above

Income Tax MCQ – 6

Income Tax MCQ with Answers Pdf-6

 1.      Business has been defined

a.      u/s 2(13)

b.      u/s 13(2)

c.      u/s 10(2)

d.      None of the above

 2.      Chartered accountant is a …..

a.      Profession

b.      Vocation

c.      Business

d.      None of the above

 3.      Singer is a ….

a.      Profession

b.     Vocation
c.      Business

d.      None of the above

 4.      Example of Profession

a.      Dancer

b.      Singer

c.      Lawyer

d.      None of the above

 5.      Expenses allowed as a deduction u/s …. Under the head of profit and gain of business and
profession

a.      Sec 20 to 25

b.      Sec 15 to 27

c.      Sec 30 to 37

d.      None of the above

 6.      Depreciation comes u/s…. under the head of business profession

a.      Sec 32

b.      Sec 42

c.      Sec 22

d.      None of the above

 7.      Repairs & maintenance of machinery , plant & furniture

a.      Sec 34

b.      Sec 33

c.      Sec 31

d.      None of the above

 8.      Rent rates and taxes, repair & insurance for building come under section

a.      Sec 40

b.     Sec 30

c.      Sec 20

d.      None of the above

 9.      Speculative business are

a.      Partly taxable

b.     Fully taxable

c.      Exempted

d.      None of the above

 10.   Recovered against bad debts comes under section

a.      Sec 41(4)

b.      Sec 31(4)

c.      Sec 21(4)

d.      None of the above

Income Tax MCQ – 7

Income Tax MCQ with Answers Pdf-7

 1.      Agricultural income defined u/s

a.      sec 2(1A)

b.      Sec 2(2A)

c.      Sec 1(2A)

d.      None of the above

 2.      Agricultural income related to

a.      Capital

b.     Land

c.      Machinery

d.      None of the above

 3.      Agricultural income includes

a.      Cultivation

b.      Farm house building

c.      Agricultural activities

d.     All  of the above

 4.      Rule 7applicable to all except

a.      Tea, coffee, and rubber

b.      Samosa, aluchop, biribada

c.      Pan ,pudia, bhang

d.      None of the above

 5.      Non-agricultural income formulas = sale proceeds of industrial product – M.V. of

agricultural produce used as raw material – industrial expenses (except cost of cultivation)

a.      False

b.     True

c.      Doubt

d.      None of the above

 6.      Agricultural income formulas = M.V. agricultural produce used as raw material – cost of
cultivation

a.      True

b.      False

c.      Doubt

d.      None of the above

 7.      Rule 8related to

a.      Gas manufacturing

b.     Tea manufacturing

c.      Pan card business

d.      None of the above

 8.      Income from coffee manufacturing has been divided as

a.      75% as agricultural income & 25% as business income

b.      25% as agricultural income & 75% as business income

c.      40% as agricultural income & 60% as business income

d.      None of the above

 9.      Profit from tea manufacturing has been divided as

a.      40% as agricultural income & 60% as business income

b.     60% as agricultural income & 40% as business income

c.      75% as agricultural income & 25% as business income

d.      None of the above

  10.   Income from rubber manufacturing has been divided as

a.      35% as agricultural income & 65% as business income

b.      75% as agricultural income & 25% as business income

c.      65% as agricultural income & 35% as business income

d.      None of the above

 11. Nonagricultural income is

            a. fishery

            b. mining

            c. dairy income

            d. All of the above

12. Partly agricultural income is from

            a. nursery

            b. Tea garden

            c. Self-growing tree

            d. None of the above

13. Agricultural income is considered while calculating tax if it is

            a. more than 10,000

            b. more than 5,000

            c. more than 5,000 and the non-agricultural exceed the basic income exemption limit

            d. none of the above

14. Which income related to land is not agricultural income

            a. income from mine

            b. income from royalty from mine

            c. income of a purchaser of standing crop

            d. all of the above

15. income from building used for agriculture is computed as

            a. income from capital gain

            b. income from business and profession

            c. income from house property

D. None of the above

16. losses from agricultural operation can be carried forward and set off with agricultural income for the
next how many year…..?

            a. 8 Assessment year

            b.4 Assessment year

            c.6 Assessment year

            d. None of the above

 Income Tax MCQ – 8

Income Tax MCQ with Answers Pdf-8

1. Set of loss under the same head of income comes under section

A) Sec 60
B) Sec 70
C) Sec 80
D) None of the above 

2. Set of loss against income under other heads of income under section……

A) Sec 51
B) Sec 61
C) Sec 71 
D) None of the above 

3. Loss from the house property can be set off against ……

A) Business profession
B) Capital gains
C) Salaries
D) All of the above 

4. Long term capital gain can be carried forward for

A) 8 subsequent assessment years

B) Indefinitely
C) 6 years
D) None of the above

  5. Short term capital loss can be set off in the same assessment year from

A) Long term capital gains

B) Short term capital gold
C) Both 
D) None of the above 
6. Loss from specified business can be set off

A) Income other than salary

B) Any head of income
C) Profits of any other specified business only
D) None of the above 

7. Compulsory filing of loss return has been defined u/s

A) 80
B) 70
C) 60
D) None of the above 

8. Carry forward and set off of capital losses comes under section

A) 74(1) & (2) 

B) 73(1) & (2)
C) 71(1) & (2)
D) None of the Above 

9. The share of loss from a from cannot be set off by a partner against his…..income

A) Gross
B) Total
C) Individual
D) None of the above 

10. Loss from house property can be set off only up to ….. From any head on income

A) 2,50,000
B) 2,00,000
C) 3,00,000
D) None of the Above 

11. Loss from business can’t be set off against…

A. salaries

B. business and profession

C. capital gain

D. None of the above

12. Loss of partnership firm can be set-off only against…

A. salaries

B. capita gain

C. firm
D. None of the above

13. Capital loss can be carried forward for a maximum period of …

A. 4 subsequent year assessment year

B. 8 subsequent year assessment year

C. 10 subsequent year assessment year

D. None of the above

14. The loss in speculation business can be carried forward only for a maximum period of…

A. 4 subsequent year assessment year

B. 8 subsequent year assessment year

C. 2 subsequent year assessment year

D. None of the above

15. long term capital loss can be adjusted only against

A. short term capital gain

B. long term capital gain

C. both the above

D. None of the above

16. Unabsorbed depreciation can be carried forward for a period of …

A. 8 year

B. 4 year

C. indefinite

D. None of the above

17. Loss from the business of owning and maintaining race horses can be carried forward for a period
of…

A. 4 subsequent year assessment year

B. 8 subsequent year assessment year

C. indefinite subsequent year assessment year

D. None of the above

18. Losses of discontinued business of an industrial undertaking after re-establishment or revival can be
carried forward up to…
A. 4 subsequent year assessment year

B. 8 subsequent year assessment year

C. indefinite subsequent year assessment year

D. None of the above

19. Treatment of losses after succession comes under

A. sec 78(2)

B. sec 77(2)

C. sec 76(2)

d. None of the above

20 . Loss from other sources can be carried forward for …. Subsequent year

A. 4 year

B. 8 year

C. No carried forward

D. None of the above 

MCQ on Clubbing and Aggregation of Income QUIZ

 Income Tax MCQ – 9

Income Tax MCQ with Answers Pdf-9

1. Revocable transfer of assets has been defined under sec……

A) Sec 51
B) Sec 61
C) Sec 71
D) None of the above 

2. In order to curb tax avoidance practices, some necessary clubbing provision have been incorporated
u/s …..

A) 60 to 64
B) 50 to 54
C) 70 to 74
D) None of the above 

3. Inclusion of others incomes in the income of the assessee is known as….

A) Inclusion of income
B) Other income
C) Clubbing of income
D) None of the above 

4. Clubbing of income of minor child has been defined under section….

A) Sec 64(1A)
B) Sec 74(1A)
C) Sec 64(1B)
D) None of the above

  5. Exemption to parent comes u/s….

A) Sec 10(31)
B) Sec 10(32) 
C) Sec 10(33)
D) None of the above 

6. Amounting to Rs. …. Is exemption in respect to each minor child under clubbing and aggregation of
income

A) 2500
B) 1500 
C) 3500
D) None of the above 

7. The person on whose name the property has been purchased is known as …… and the property is
known as……

A) Benamidar, Benami property

B) Ostensible owner, own property
C) Benami, footpath
D) None of the above 

8. Clubbing provision are applicable for

A) HUF
B) Individual
C) Firms
D) None of the Above 

9. Clubbing provision are applicable in case of

A) Positive income
B) Negative income
C) Both
D) None of the above 

10. In case parent are separated, then the income of minor will be included in the income of Mother

A) Mother
B) Father
C) That parent who maintain the minor
D) None of the Above 

MCQ on Deductions from Gross Total Income QUIZ

  Income Tax MCQ – 10

Income Tax MCQ with Answers Pdf-10

1. Gross total income has been defined u/s …….

A) Sec 80A(1)
B) Sec 80(1)
C) Sec 80u
D) None of the above 

2. Maximum deduction allowed in respect of LIP, contribution to PF etc. u/s 80C

A) 125000
B) 175000
C) 150000 
D) None of the above 

3. Full form of NSC in deduction from gross total income

A) National saving certificate

B) National saving circle
C) National service commission
D) None of the above 

4. Who is eligible for deduction in respect of contribution to certain penson funds u/s 80CCC

A) HUF
B) Individual
C) Firms
D) None of the above

  5. Deduction in respect of investment made under rajiv Gandhi equity saving scheme comes u/s

A) 80CCC
B) 80CGC
C) 80CCG
D) None of the above 

6. Deduction in respect to medical treatment of disabled dependent has been defined u/s

A) Sec 80CC
B) Sec 80DD
C) Sec 80BB
D) None of the above
7. Deduction in respect to medical treatment come u/s….

A) 80DDB
B) 80CCB
C) 80AAB
D) None of the above 

8. Deduction in respect of interest in loan taken for higher education come u/s…..

A) 80E
B) 80C
C) 80D
D) None of the Above 

9. Deduction in respect to donation to charitable institution come u/s….

A) 80E
B) 80G
C) 80GG
D) None of the above 

10. Deduction in respect of rent paid comes under section….

A) 80U
B) 80E
C) 80GG
D) None of the Above 

11. Deduction to political parties has been defined u/s…….

A) 80GGC
B) 80CCG
C) 80GCG
D) None of the above 

12. Deduction in respect of profits and gains of an eligible startup comes u/s…..?

A) 80CAI
B) 80ACI
C) 80IAC
D) None of the above 

13. Deduction in respect to special economic zone(SEZ) Unit come u/s ….

A) 80ABI
B) 80IAB
C) 80AIB
D) None of the above 

14. Deduction in respect of cooperative society…..

A) 80P
B) 80C
C) 80CO
D) None of the Above 

15. Deduction in respect of royalty of author….

A) Sec 80QQB
B) Sec 80RA
C) Sec 80ROA
D) None of the above 

@@@@@@@@@@@@@@@@@@@@

BUSINESS TAXATION (4TH SEMESTER MBA)

Question 1 : A person includes :

a) Only individual

b) Only individual and HUF

c) Individuals, HUF, Firm, Company only

d) Individuals, HUF, Company, Firm, AOP or BOI, Local Authority, Every Artificial Juridical

person

Question 2 : Every assesses is a person and

a) Every person is also an assesse

b) Every person need not be an assesse

c) An individual is always an assesse

d) A HUF is always an assesse

Question 3 : Assessment year can be a period of :

a) Only more than 12 months

b) 12 months and less than 12 months

c) Only 12 months

d) 12 months and more than 12 months

Question 4 : Year in which income is taxable is known as _______ and year in which income is

earned is known as _________________

a) Previous year, Assessment year

b) Assessment year, Previous year

c) Assessment year, Assessment year

d) Previous year, Previous year

Question 5 : All assesses are required to follow :

a) Uniform previous year which must be calendar year only

b) Uniform previous year which must be financial year only

c) Any period of 12 months

d) Period starting from 1st July to 30th June only.

Question 6 : Previous year started from

a) April

b) March

c) January

d) September

Question 7 : Who is Tax payer ?

a) Assessee

b) Businessman

c) Trust

d) Farmer

Question 8 : Health and Education cess on tax payable is at :

a) 4%

b) 1%

c) 3%

d) 5%

Question 9 : Right to enforce partition of H.U.F. is available to

a) Only male members

b) Only female members

c) Both male as well as female

d) None of these members

Question 10 : Above 80 aged persons are called as

a) Senior Citizen

b) Old Man

c) Super Senior Citizen

d) Retired Person

Question 11 : One of the basic conditions under residential Status is how many days.

a) 186

b) 182

c) 181

d) 180

Question 12 : Who is an ordinarily Resident ?

a) Both basic and additional

b) Only basic

c) Only additional

d) Not basic and additional conditions

Question 13 : Income accrued outside India and received outside India is taxable in case of :

a) Resident and ordinary resident (ROR) only

b) Resident but not ordinary resident (RNOR) only

c) Non resident only

d) ROR, RNOR and Non-Resident.

Question 14 : Residential status to be determined for :

a) Previous year

b) Assessment year

c) Accounting year

d) None of these

Question 15 : Taxable Income of a person is determined on the basis of his :

a) Residential status in India

b) Citizenship in India

c) None of these
d) Both of the above

Question 16 : An Indian company is always :

a) Resident in India

b) Non-resident in India

c) Not ordinarily resident in India

d) None of these

Question 17 : Dividend paid by an Indian company is :

a) Taxable in India in the hands of the recipient

b) Exempt in the hands of recipient

c) Taxable in the hands of the company and exempt in the hands of the recipient

d) None of these

Question 18 : Under section 17(1) defines –

a) Income from business

b) Capital gains

c) Income from other sources

d) Income from salaries

Question 19 : For Gratuity under payment of Gratuity Act –

a) Salary = Basic pay

b) Salary = Basic + Allowances

c) Salary = Basic + Allowances + Bonus

d) Salary = Salary = Basic + Full DA

Question 20 : Professional tax paid u/s

a) 16 (5)

b) 16 (2)

c) 16 (4)

d) 16 (3)

Question 21: Salary under section 17 (1) does not includes

a) Wages

b) Pension
c) Interest

d) Gratuity

Question 22: taxable allowance from salary

a) Conveyance Allowance

b) Dearness Allowances

c) Children Education Allowances

d) Entertainment Allowances

Question 23: Sec-22 Income Tax Act 1961 does not includes income under the head house

property from;

a) House

b) Building

c) Bungalows

d) Party plot

Question 24: Capital gain tax liability arises when following condition get satisfied:

a) There should be a capital asset

b) There should be a transfer

c) Transfer should be in previous year

d) All of the above

Question 25: ___________income is not chargeable under profit/ gain from Business/ Profession;

a) Any interest, salary, bonus, commission received by partner of a firm

b) Dividend on share

c) Income derived by trade/profession

d) Income from speculative transaction

Question 26:Long term capital Assets (shares) is held for;

a) More than 36 months

b) More than 12 months

c) More than 24 months

d) Not more than 36 months

Question 27: Income from others sources includes;

a) Dividend

b) Duty drawback

c) Income from speculative transaction

d) All of the above

Question 28:Share____________from partnership firm is exempted us 10 (2A);

a) Interest

b) Profit

c) Remuneration

d) All of the above

Question 29: Interest on public provident fund investment is_________;

a) Taxable under the Head: Income from other sources

b) Taxable under the Head: Income from Business and profession

c) Allowed as Deduction

d) Exempted from Income

Question 30 : What is MAT?

a) Maximum Alternative Tax

b) Maximum Advance Tax

c) Minimum Advance Tax

d) Minimum Alternative Tax

Question 31: A reflationary (expansionist) fiscal policy could include:

a) Lower interest rates

b) Increased lending by the banks

c) An increase in corporation tax

d) An increase in discretionary government spending

Question 32: If the economy grows, the government's budget position should automatically:

a) Worsen

b) Improve

c) Stay the same

d) Decrease with inflation

Question 33: Fiscal drag occurs when:

a) Tax bands do not increase with inflation

b) Tax rates move inversely with inflation

c) Government spending falls to reduce aggregate demand

d) Tax bands increase with inflation

Question 34: If the marginal rate of tax is 40% and consumers' income increases from Rs. 10,000 to

Rs. 12,000:

a) The amount of tax paid will increase by Rs. 4,800

b) The amount of tax paid will increase by Rs. 4,000

c) The amount of tax paid will increase by Rs. 800

d) The total tax paid will be Rs. 4,800

Question 35: Imagine there is no tax on income up to Rs. 10,000; after that, there is a tax of 50%.

What is the average tax rate on an income of Rs. 20,000?

a) Rs. 5,000

b) 20%
c) 25%

d) Rs. 10,000

Question 36: The marginal rate of tax paid is:

a) The total tax paid / total income

b) Total income / total tax paid

c) Change in the tax paid / change in income

d) Change in income / change in tax paid

Question 37: In a regressive tax system:

a) The amount of tax paid increases with income

b) The average rate of tax decreases with less income

c) The average rate of tax falls as income increases

d) The average rate of tax is constant as income increases

Question 38: The Public Sector Net Cash Borrowing is:

a) A measure of the government's trade position

b) A measure of the government's budget position

c) A measure of the government's total debt

d) A measure of the government's monetary stance

Question 39: A government might use tax to:

a) Discourage consumption of goods with positive externalities

b) Discourage consumption of public goods

c) Discourage consumption of merit goods

d) Discourage consumption of goods with negative externalities

Question 40: A budget deficit is likely to:

a) Boost aggregate demand

b) Lead to less import spending

c) Lead to falling prices

d) Leads to more unemployment

41. Income Tax Act was passed in the year _.

a) 1947

b) 1950

c) 1961

d) 1991

42. Life Insurance Corporation of India is a .

a) AOP

b) Firm

c) Company

d) Individual

43. ___is an artificial person registered under Indian Companies Act 1956.

a) The total tax paid / total income

b) Total income / total tax paid

c) Change in the tax paid / change in income

d) Change in income / change in tax paid

44. Which one of the following taxes is not levied by the State Government?

a) Entertainment tax

b) VAT

c) Professional tax

d) None of the above

45. The first income tax act was introduced in the year

a) 1918

b) 1861

c) 1860

d) 1886

46. The apex body of Income Tax Department. Is

a) Finance Ministry of Central Govt.

b) Central Govt. of India.

c) CBDT

d) Dept. of Revenue

47. Income received or deemed to be received in India (whether accrued in or outside India) is

taxable in case of

a) Resident

b) Not Ordinarily Resident

c) Non Resident

d) All of the above

48. The Income Tax Act, which is still in force in India, was enforced in

a) 1922

b) 1961

c) 1860

d) None of the above

44. Which one of the following taxes is not levied by the State Government?

a) Entertainment tax

b) VAT

c) Professional tax

d) None of the above

45. The first income tax act was introduced in the year

a) 1918

b) 1861

c) 1860

d) 1886

46. The apex body of Income Tax Department. Is

a) Finance Ministry of Central Govt.

b) Central Govt. of India.

c) CBDT

d) Dept. of Revenue
47. Income received or deemed to be received in India (whether accrued in or outside India) is

taxable in case of

a) Resident

b) Not Ordinarily Resident

c) Non Resident

d) All of the above

48. The Income Tax Act, which is still in force in India, was enforced in

a) 1922

b) 1961

c) 1860

d) None of the above

49. Mr. X has started has business from 1st Sept '16 and does not have any other source of

income. His first previous year will start from

a) 1st April '16

b) 1st Sept '16

c) Any of the above

d) None of the above.

50. According to Section 2(7) of Income Tax Act "Assessee" means a person

a) By whom any tax or other sum of money is payable

b) By whom any proceeding under the Act has been taken

c) Who is deemed to be an assessee in default under any provision of this Act

d) All of the above

51. The house rent allowance (HRA) under the salary head of Income Tax Act is given by .

a) Section 10

b) Section 10(13A)

c) Section11(13B)

d) Section11

52. Children Education allowance is exempted for _ child/ children.

a) One

b) Two

c) Three

d) Four

53. Pension is under the salary head.

a) Fully taxable

b) Partially taxable

c) Not taxable

d) None of the above

54. The salary, remuneration or compensation received by the partners is taxable under the

head

a) Income from Other Sources

b) Income from Business

c) Salary

d) None of the above

55. The death-cum-retirement gratuity received by the Government Employee or employee of

local authority is .

a) Partially exempted

b) Fully exempted

c) Half taxable

d) None of the above

56. 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

d) None of the above

57. Provident Fund Act was passed in the year .

a) 1932
b) 1956

c) 1925

d) 1922

58. Rent Free Accommodation given to an employee by the employer is a .

a) Allowance

b) Perquisite

c) Profit in lieu of salary

d) None of the above

59. The Payment of Gratuity Act came into force in .

a) 1973

b) 1980

c) 1991

d) 1972

60. The entertainment allowance is applicable to .

a) Private sector employees

b) Public sector employees

c) Government employees

d) All of the above

61. is the rent fixed under Rent control Act.

a) Municipal rental value

b) Fair rental value

c) Standard rent

d) Real rent

62. Expected Rent can be determined in the following way

a) Higher of Municipal Value & Fair Rent

b) Lower of Municipal Value & Fair Rent

c) Higher of Municipal Value & Fair Rent subject to maximum of Standard Rent

d) Any of the above

63. Under the Head Income from House Property, the basis of charge is the of
property.

a) Annual value

b) Quarterly

value

c) Half-quarterly

value

d) None of the

above

64. 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 Ram is taxable under the head .

a) Income from Salary

b) Income from Other Sources

c) Income from House Property

d) Income from Business

65. 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 .

a) Income from Salary

b) Income from Other Sources

c) Income from House Property

d) Income from Business

66. The value of concessional loans to employees is determined on the basis of lending rates of

for the same purpose.

a) SBI

b) RBI

c) Central
Governme

nt

d) State

Governme

67. Deduction from annual value is allowed under .

a) Section 24

b) Section 25

c) Section 27

d) Section 28

68. ______% standard deduction is allowed on annual value.

a) 20

b) 30

c) 40

d) 50

69. For computation of Gross Annual Value, if actual rent is more than expected rent, then we

select the .

a) Actual rent

b) Expected rent

c) Any of the above

d) None of the above

70. Under the Income Tax Act, 1961, depreciation on machinery is charged on .

a) Purchase price of the

machinery

b) Written down value of the

machinery

c) Market price of the machinery

d) All of the above

71. Income chargeable under the head ‘Profits and Gains from Business or Profession’ is

covered under .

a) Section 23

b) Section 24

c) Section 28

d) Section 27

72. The transfer of old movable assets will be tax-free if it is used for .

a. 1 year

b. 5 years

c. 10 years

d. 15 year

73. _______are not treated as agricultural income.

a) Income from poultry farming

b) Income from bee heaving

c) Purchase of standing crop

d) All of the above

74. Section 45 of Income Tax Act, 1961 is related to ___

a) Capital assets

b) Assets

c) Capital expenses

d) Capital gain

75. Long-term Capital Loss can only be set off against .

a) Long-term capital loss

b) Short-term capital loss

c) Long-term capital gain

d) All of the above

76. Loss from speculation business cannot be set off against profit from any non-speculation

business, however .

a) Loss from non-speculative business can be set off against speculation income

b) Loss from non-speculative business cannot be set off against speculation income

c) Profit from non-speculative business can be set off againstspeculation income

d) None of the above

77. In Income Tax Act, 1961, deduction under sections 80C to 80U cannot exceed .

a) Gross total income

b) Total income

c) Income from business or profession

d) Income from house property

78. Gross interest = Net x 100/100 – rate of .

a) Tax

b) TDS

c) Deduction

d) Exempted

79. Payment of LIC premium can be claimed as deduction u/s .

a) 80 C

b) 80 CCC

c) 80 D

d) 80 DD

80. Clubbing of income means .

a) Addition income of two partners

b) Inclusion of income of other person in assessee income

c) Total of income of various heads

d) Collection of income

81. Minors income is clubbed to .

a) Father ’ s income

b) Mother ’s income

c) Father’s income or mother’s income whichever is greater

d) Both mother’s and father’s income

82. As per Section 207, not having any income from business or profession is not liable to

pay advance tax.

a) A resident individual who is of the age of below 60 years

b) A resident HUF

c) A nonresident individual

d) A resident senior citizen

83. Generally, long-term capital gain is charged to tax @ (plus surcharge and cess as

applicable).

a) 10%

b) 15%

c) 20%

d) 30%

1
c) Deduction

d) Exempted

79. Payment of LIC premium can be claimed as deduction u/s .

a) 80 C

b) 80 CCC

c) 80 D

d) 80 DD

80. Clubbing of income means .

a) Addition income of two partners

b) Inclusion of income of other person in assessee income

c) Total of income of various heads

d) Collection of income

81. Minors income is clubbed to .

a) Father ’ s income

b) Mother ’s income

c) Father’s income or mother’s income whichever is greater

d) Both mother’s and father’s income

82. As per Section 207, not having any income from business or profession is not liable to

pay advance tax.

a) A resident individual who is of the age of below 60 years

b) A resident HUF

c) A nonresident individual

d) A resident senior citizen

83. Generally, long-term capital gain is charged to tax @ (plus surcharge and cess as

applicable).

a) 10%

b) 15%

c) 20%

d) 30%

84. Mr. Sharma contributed to a political party, he can avail deduction under .

a) Section 80G

b) Section 80GGB

c) Section 80GGC

d) Section 80GGD

85. Rate of education cess on total income is .

a) 2%

b) 3%

c) 4%

d) 0.3%

86. Section 70-79 deals with .

a) Salary

b) Capital gain

c) Clubbing of income

d) Set off and carry forward

87. Income from horse race falls under the head _.

a) Salary

b) Other sources
c) Profession

d) Business

88. Deduction can be claimed for amount deposited under Suganya Samridhi Account under

a) 80 CC

b) 80 C

c) 80 DD

d) 80 D

89. Deduction on interest on loan taken for studies fall under .

a) 80 CC

b) 80 C

c) 80 E

d) 80 D

90. The amount of total income is rounded off to the nearest multiple of .

a) Rs.100

b) Rs.10

c) Rs.5

d) Rs.50

91 Income tax is collected on all types of income except .

(a) Agricultural Income (b) Industrial Income

(c) Capital Gain (d) Household Property

92 The Income Tax Act came into force from .

(a) 1st March 1971 (b) 1st April 1971

(c) 1st March 1961 (d) 1st April 1961

93 The Income Tax Act came into force all over India except .
(a) Andaman & Nicobar (b) Maldives

(c) Jammu & Kashmir (d) None of the above

94. As per Income Tax Act, 1961, income tax is charged on the income of at a

rates which are prescribed by the Finance Act of relevant assessment year.

(a) Current year (b) One year before previous year

(c) Previous year (d) None of the above

95. The tax payer liability is determined with reference to his or her .

(a) Financial Status (b) Residential Status

(c) All of the above (d) None of the above

96. As per the definition of Income, the income includes the following .

(a) Profits and gains

(b) Dividend declared

(c) Voluntary contribution received by a trust created

(d) All of the above

97. The period of 12 months commencing on the first day of April every year and ending on

31st March is called as .

(a) Previous Year (b) Assessment year

(c) Accounting Year (d) Financial Year

98. Previous year means the financial year immediately preceding the .

(a) Accounting Year (b) Assessment Year

(c) All of the above (d) None of the above

99. Under Income Tax Act, the

income liable for tax is classified on the basis of

(a) Income from Salaries (b) Income from House Property

(c) Agricultural Income (d) Both (a) and (b)

100. Agricultural income is completely exempted for assessment year .

(a) 1974-75 (b) 1985-86

(c) 1975-76 (d) 1978-79

101. The income from foreign companies by providing the services in project connected with

security of India is from tax liability.

(a) 50% exempted (b) 20% exempted

(c) 100% exempted (d) 55% exempted

102. An individual is said to be resident in India if .

(a) It is in India in the previous year for a period of 182 days or more

(b) It is in India for period of 60 days or more during the previous and 365 days or more

during the four years immediately proceeding previous year

(c) All of the above

(d) None of the above

103. The HUF is said to be resident in India if .

(a) The control and management of its affairs is wholly or partly situated in India

(b) The control and management of its affairs is partially situated out of India

(c) The control and management of its affairs is wholly or partly in out of India

(d) None of the above

104. The awards and rewards are exempted from Income Tax if .

(a) Payment is in cash (b) Payment is in kind

(c) Payment is in cash or in kind (d) None of the above

105. Income received in India whether occurred in India or outside India, the tax incidence in

case of resident is .

(a) Taxable as per slabs (b) Exempted from tax

(c) Partly exempted (d) None of the above

106. Income received in India whether occurred in India or outside India, the tax incidence in

case of resident but not ordinarily resident is .

(a) Taxable as per slabs (b) Exempted from tax

(c) Partly exempted (d) None of the above

107. Income received in India whether occurred in India or outside India, the tax incidence in

case of non-resident is .
(a) Taxable as per slabs (b) Exempted from slab

(c) Partly exempted (d) None of the above

108. Income deemed to be received in India whether occurred in India or outside India, the tax

incidence in case of resident is .

(a) Taxable as per slabs (b) Exempted from slab

(c) Partly exempted (d) None of the above

109. 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 (d) None of the above

110. The income received and accrued outside India from a business controlled or profession

set up in India, the tax incidence in case of non-resident is .

(a) Taxable (b) Non-taxable

(c) Partly taxable (d) None of the above

111. The tax incidence for company or firm in which income received in India and company is

resident is .

101. The income from foreign companies by providing the services in project connected with

security of India is from tax liability.

(a) 50% exempted (b) 20% exempted

(c) 100% exempted (d) 55% exempted

102. An individual is said to be resident in India if .

(a) It is in India in the previous year for a period of 182 days or more

(b) It is in India for period of 60 days or more during the previous and 365 days or more

during the four years immediately proceeding previous year

(c) All of the above

(d) None of the above

103. The HUF is said to be resident in India if .

(a) The control and management of its affairs is wholly or partly situated in India
(b) The control and management of its affairs is partially situated out of India

(c) The control and management of its affairs is wholly or partly in out of India

(d) None of the above

104. The awards and rewards are exempted from Income Tax if .

(a) Payment is in cash (b) Payment is in kind

(c) Payment is in cash or in kind (d) None of the above

105. Income received in India whether occurred in India or outside India, the tax incidence in

case of resident is .

(a) Taxable as per slabs (b) Exempted from tax

(c) Partly exempted (d) None of the above

106. Income received in India whether occurred in India or outside India, the tax incidence in

case of resident but not ordinarily resident is .

(a) Taxable as per slabs (b) Exempted from tax

(c) Partly exempted (d) None of the above

107. Income received in India whether occurred in India or outside India, the tax incidence in

case of non-resident is .

(a) Taxable as per slabs (b) Exempted from slab

(c) Partly exempted (d) None of the above

108. Income deemed to be received in India whether occurred in India or outside India, the tax

incidence in case of resident is .

(a) Taxable as per slabs (b) Exempted from slab

(c) Partly exempted (d) None of the above

109. 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 (d) None of the above

110. The income received and accrued outside India from a business controlled or profession

set up in India, the tax incidence in case of non-resident is .

(a) Taxable (b) Non-taxable

(c) Partly taxable (d) None of the above

111. The tax incidence for company or firm in which income received in India and company is

resident is .

(a) Taxable (b) Non-taxable

(c) Partly taxable (d) None of the above

112. The tax incidence for company or firm in which income received in India and company for

non-resident is .

(a) Taxable (b) Non-taxable

(c) Partly taxable (d) None of the above

113. The tax incidence for company or firm in which income received outside India from a source

controlled from India for resident is .

(a) Taxable (b) Non-taxable

(c) Partly taxable (d) None of the above

114. The tax incidence for company or firm in which income received outside India from a source

controlled from India for non-resident is .

(a) Non-taxable (b) Taxable

(c) Partly taxable (d) None of the above

115. is exempted from income tax.

(a) Interest from Indian company (b) Dividend from foreign company

(a) Cooperative dividend (d) Dividend from Indian company

116. Which section of the Income Tax Act exempted incomes have been mentioned?

(a) Section 80C (b) Section 80DD

(c) Section 10 (d) Section 2

117. of Income Tax Act is related to residential status.

(a) Section 2 (b) Section 6

(c) Section 5 (d) Section 4

118. Resident of India includes .

(a) Ordinarily resident (b) Not ordinarily resident

(c) NRI (d) Both (a) and (b)

119. The Company may have the residential status as .

(a) Resident or Non-resident (b) Not ordinarily resident

(c) Non-resident (d) Resident

120. The meaning of exempted income is .

(a) Not included in total income (b) Agricultural income

(c) Not taxable under income tax (d) All of the above

121. The number of income source for a person are .

(a) One head (b) Two heads

(c) Various heads (d) Any of the above

122. The sum of various heads is called as .

(a) Taxable income (b) Total income

(c) Gross total income (d) Adjusted income

123. The agricultural income includes .

(a) Income from sale of crop (b) Income from preparation of crop

(c) Income from nursery (d) All of the above

124. comes under agricultural income.

(a) Tea garden (b) Commodity farming

(c) All of the above (d) None of the above

125. If the agricultural income is , then the agricultural income is considered

for calculating tax.

(a) More than ` 5,000 and total income is exceeding exemption limit

(b) More than ` 5,000

(c) More than ` 10,000

(d) Any amount

126. The Income Tax Act, 1961 broadly covers .

(a) Basic charging income

(b) Rebates and reliefs

(c) Incomes exempted from income tax

(d) All of the above

127. The capital gain is chargeable under of Income Tax Act.

(a) Section 45 (b) Section 55

(c) Section 56 (d) Section 40

128. The definition of the person includes .

(a) An individual (b) A company

(c) A Hindu undivided family (d) All of the above

129. 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

(c) Exempted from tax (d) None of the above

130. Residential Status of an assesses can be .

(a) Different for different previous year in the same assessment year

(b) Different for different assessment year

(c) None of the above

(d) All of the above

131. The income of previous year is chargeable to tax in the .

(a) Immediately succeeding assessment year

(b) Same previous year

(c) Immediately preceding academic year

(d) None of the above

132. 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

133. An individual is resident and ordinarily resident of India if .

(a) Person had been resident in India at least 2 out of 10 previous years immediately

preceding the relevant previous year

(b) Person been in India for a period of 730 days or more during 7 years immediately

preceding the relevant previous year

(c) All of the above

(d) None of the above

134. The Resident HUF is ordinarily resident in India, if .

(c) All of the above (d) None of the above

125. If the agricultural income is , then the agricultural income is considered

for calculating tax.

(a) More than ` 5,000 and total income is exceeding exemption limit

(b) More than ` 5,000

(c) More than ` 10,000

(d) Any amount

126. The Income Tax Act, 1961 broadly covers .

(a) Basic charging income

(b) Rebates and reliefs

(c) Incomes exempted from income tax

(d) All of the above

127. The capital gain is chargeable under of Income Tax Act.

(a) Section 45 (b) Section 55

(c) Section 56 (d) Section 40

128. The definition of the person includes .

(a) An individual (b) A company

(c) A Hindu undivided family (d) All of the above

129. 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

(c) Exempted from tax (d) None of the above

130. Residential Status of an assesses can be .

(a) Different for different previous year in the same assessment year

(b) Different for different assessment year

(c) None of the above

(d) All of the above

131. The income of previous year is chargeable to tax in the .

(a) Immediately succeeding assessment year

(b) Same previous year

(c) Immediately preceding academic year

(d) None of the above

132. 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

133. An individual is resident and ordinarily resident of India if .

(a) Person had been resident in India at least 2 out of 10 previous years immediately

preceding the relevant previous year

(b) Person been in India for a period of 730 days or more during 7 years immediately

preceding the relevant previous year

(c) All of the above

(d) None of the above

134. The Resident HUF is ordinarily resident in India, if .

(a) He has been resident in India at least 2 years out of 10 previous years immediately

(b) He has been resident in India at least 3 years out of 10 previous years immediately

(c) He has been resident in India at least 2 years out of 5 previous years immediately

(d) None of the above

135. Basic condition will be for a person who leaves India for employment .
(a) At least 182 days in India

(b) At least 60 days in previous year and 365 days in preceding 4 years

(c) At least 730 days in preceding 7 years

(d) All of the above

136. Which of the following is not included in the term Income under the Income Tax Act, 1961?

(a) Reimbursement of travelling expenses

(b) Profits and gains of business or profession

(c) Dividend

(d) Profit in lieu of salary

137. The term income includes the following types of incomes.

(a) Illegal (b) Legal income from India only

(c) Legal (d) Legal and illegal both

138. is the casual income.

(a) Interest received (b) Dividend income

(c) Pension received (d) Winning from lotteries

139. The way of tax liability by taking full advantage provided by the Act is .

(a) Tax management (b) Tax avoidance

(c) Tax planning (d) Tax evasion

140. Mr. A, partner of M/s ABC, is assessable as .

(a) Firm (b) An individual

(c) Body of individual (d) HUF

141 GST was introduced in India with effect from

a) 1.1.2017 b) 1.4.2017 c) 1.1.2018 d) 1.7.2017

142 GST was introduced in Jammu and Kashmir with effect from
a) 1.8.2017 b) 1.7.2017 c) 1.1.2018 d) 8.7.2017

143. Constitution Amendment Act, 2016 for GST was

a) 80th b) 101st c) 122nd d) None of these

144. As a result of constitution amendment for GST a Separate List --- has been inserted in the

constitution.

b) Article 246A b) Article 146B c) Article 122 C d) Article 101B

145. The incidence of tax on tax is called

c) Tax Cascading b) Tax Pyramidding c) Tax evasion d) Indiret tax

146. Under GST, ‘value addition’ refers to

d) Expenses ‘plus’ profit b) Cost plus tax c) Cost plus tax plus‘profit d) Tax plus profit

147. UTGST is applicable when

e) Sold from Union territory b) Goods are purchased by Central Government

c) Sold from one union territory to another union territory d) There is interstate supply

148. Integrated Goods and Services Tax is applicable when -

f) Sold in Union territory b) Sold from one GST dealer to another GST dealer

c) Sold within a state d) There is interstate supply

149. SGST is applicable when

g) Goods are sold within a state b) Goods are sold from one GST dealer to a customer

c) Goods are sold by a GST dealer to another GST dealer d) Interstate supply

150. The tax which was not merged into GST

h) Counterveiling Duty b) Excise duty c) Basic Customs Duty d) Purchase tax

ANSWER KEY

11

21

31

12

22

32

13

23

33

14
A

24

34

15

25

35

16

26

36

17

27

37

C
8

18

28

38

19

29

39

10

20

30

40

41

51

B
61

71

81

42

52

62

72

82

43

53

63

73

83

44

54
B

64

74

84

45

55

65

75

85

46

56

66

76

86

47

D
57

67

77

87

48

58

68

78

88

49

59

69

79

89

50
D

60

70

80

90

91

(a)

101

(c)

111

(a)

121

(d)

131

(a)

92

(d)

102

(c)

112

(a)

122

(c)
132

(a)

93

(d)

103

(a)

113

(a)

123

(d)

133

(c)

94

(c)

104

(c)

114

(a)

124

(c)

134

(a)

95

(b)

105

(a)

115

(d)

125
(a)

135

(a)

96

(d)

106

(a)

116

(c)

126

(d)

136

(d)

97

(b)

107

(a)

117

(b)

127

(a)

137

(d)

147. UTGST is applicable when

e) Sold from Union territory b) Goods are purchased by Central Government

c) Sold from one union territory to another union territory d) There is interstate supply

148. Integrated Goods and Services Tax is applicable when -

f) Sold in Union territory b) Sold from one GST dealer to another GST dealer

c) Sold within a state d) There is interstate supply

149. SGST is applicable when

g) Goods are sold within a state b) Goods are sold from one GST dealer to a customer

c) Goods are sold by a GST dealer to another GST dealer d) Interstate supply

150. The tax which was not merged into GST

h) Counterveiling Duty b) Excise duty c) Basic Customs Duty d) Purchase tax

ANSWER KEY

11

21

31

12

22

B
32

13

23

33

14

24

34

15

25

35

16
A

26

36

17

27

37

18

28

38

19

29

39

D
10

20

30

40

41

51

61

71

81

42

52

62

72

82

D
43

53

63

73

83

44

54

64

74

84

45

55

65

75

85
B

46

56

66

76

86

47

57

67

77

87

48

58

68

78

B
88

49

59

69

79

89

50

60

70

80

90

91

(a)

101

(c)

111
(a)

121

(d)

131

(a)

92

(d)

102

(c)

112

(a)

122

(c)

132

(a)

93

(d)

103

(a)

113

(a)

123

(d)

133

(c)

94

(c)

104

(c)
114

(a)

124

(c)

134

(a)

95

(b)

105

(a)

115

(d)

125

(a)

135

(a)

96

(d)

106

(a)

116

(c)

126

(d)

136

(d)

97

(b)

107
(a)

117

(b)

127

(a)

137

(d)

98

(b)

108

(a)

118

(d)

128

(a)

138

(d)

99

(d)

109

(a)

119

(a)

129

(c)

139
(c)

100

(a)

110

(b)

120

(d)

130

(b)

140

(a)

141

143

145

147

149

142

144

146

A
148

150

1) Income Tax Act came into force on ..............

A    01.04.1961

B    01.04.1962

C    01.04.1956

D    01.04.1965

 Answer : B  Discuss
2) Residential status is determined for ...........

A    Previous year

B    Assessment year

C    Accounting year

D    Financial year.

 Answer : A  Discuss
3) How many heads of income are there to compute Gross total income.

A    Six

B    Five

C    Four
D    Three

 Answer : B  Discuss
4) Deduction of tax at source made for incomes which can be calculated in
advance is called .....

A    T.D.S.

B    P.A.S.

C    F.A.S.

D    M.A.S.

 Answer : A  Discuss
5) The number allotted by income tax authorities to assessees for identification
and which should be quoted in all documents and correspondence is.....

A    I.D. No.

B    Register No

C    Permanent Account Number (PAN)

D    Licence No.

 Answer : C  Discuss
6) Due date of filing of return by a non business assessee is..............

A    30th June

B    31st August

C    30th November

D    31st July

  Discuss

7) Under the income- tax act, the incidence of taxation depends on ...........

A    The citizenship of the tax-payer.

B    The age of the taxpayer

C    The residential status of the tax-payer

D    The gender of the taxpayer

 Answer : C  Discuss
8) Income by way of rent of agricultural land is ....

A    Business income

B    Income from other sources

C    Agricultural income

D    asual income

 Answer : C  Discuss
9) The highest Administrative Authority for Income Tax in India is...

A    Finance Minister

B    CBDT

C    President of India

D    Director of Income Tax.

 Answer : B  Discuss
10) Receipt of amount on maturity of LIC Policy is......

A    A revenue receipt

B    A capital receipt

C    A casual receipt

D    None of these.

 Answer : B  Discuss
11) Compensation for cancellation of a licence by the government resulting in
cessation of business is ......

A    a casual receipt

B    a capital receipt

C    a revenue receipt

D    None of the above

 Answer : C  Discuss
12) Compensation received for loss of trading asset is a .....

A    Capital receipt

B    Revenue receipt

C    a casual receipt

D    None of these.

 Answer : A  Discuss
13) 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

 Answer : D  Discuss
14) Salary received by the manager of an agricultural farm is ......

A    An agricultural income

B    A salary income.

C    A business income.

D    A capital income

 Answer : B  Discuss
15) Loss due to fire of hired machinery is ..........

A    Capital loss.

B    Revenue loss

C    Capital expenditure

D    None of the above

 Answer : A  Discuss
16) Embezzlement of cash by a cashier is....
A    a revenue loss

B    a capital loss

C    a casual loss

D    None of these

 Answer : A  Discuss
17) Who among the following may be “not ordinarily resident”

A    Partnership firm

B    Company

C    Association of persons.

D    Hindu Undivided Family

 Answer : D  Discuss
18) Agricultural income in Pakistan is assessable for ............

A    Resident

B    Not Ordinarily Resident

C    Non-resident

D    Not taxable

 Answer : A  Discuss
19) Section.................. of the Income Tax Act deals with exempted incomes

A    Section 2
B    Section 7

C    Section 10

D    Section 80

 Answer : C  Discuss
20) Gratuity received by a government employee is .......

A    Fully exempted

B    Partly exempted

C    Fully taxable

D    Exempted up to Rs:1,00,000

 Answer : A  Discuss
21) Capital expenditure on scientific research which cannot be absorbed on
account of insufficiency of profit in any accounting year can be carried forward
for........

A    16

B    8

C    indefinite

D    12

 Answer : C  Discuss
22) The periodic payment of money for the past service is known as ........

A    Gratuity
B    Pension

C    Commuted pension

D    Leave salary

 Answer : B  Discuss
23) When a receipt is determined as Capital Receipt or Revenue receipt.

A    At the time it is received

B    While preparing final accounts

C    When the received amount is used

D    None of the above

 Answer : A  Discuss
24) Pension is taxable under ..........................head

A    Salary

B    House property

C    Capital gains

D    other sources

 Answer : A  Discuss
25) Who is assessee in case of a HUF?

A    Father

B    spouse
C    Karta

D    Deemed Karta

 Answer : C  Discuss
26) Education cess on tax payable is at

A    2%

B    1%

C    3%

D    5%

 Answer : A  Discuss
27) Agriculture Income is ____

A    Taxable

B    not taxable

C    partly taxable

D    none of this above

 Answer : B  Discuss
28) Section 10 0f Income Tax Act deals with ___

A    Deductions

B    Exempted incomes

C    Income from salary

D    Casual incomes

 Answer : B  Discuss
29) Income Tax Authorities are grouped into two main wings Administrative
and.....

A    Judicial

B    Managerial

C    Executives

D    Clerical

 Answer : A  Discuss
30) What are the exemption limit in Hostel Expenditure Allowance?

A    Rs.200pm

B    Rs.300pm

C    Rs.400pm

D    Rs.500pm

 Answer : B  Discuss
31) Rates of Income tax are fixed under ....

A    An Ordinance

B    The Income Tax Act

C    The Finance Act

D    Notification of CBDT

 Answer : C  Discuss
32) _________ is / are empowered to levy and collect income tax.

A    State governments

B    Central Government

C    RBI

D    local self government department

 Answer : B  Discuss
33) In which year Income Tax was levied in India for the first time?

A    1960

B    1961

C    1860

D    1857

 Answer : C  Discuss
34) Income Tax Act was passed in the year___________

A    1955

B    1961

C    1956

D    1962

 Answer : B  Discuss
35) CBDT is control by ____

A    Central Government

B    State Government

C    both (A) and (b)

D    none of this above

 Answer : A  Discuss
36) previous year started from ___

A    April

B    March

C    January

D    September

 Answer : A  Discuss
37) Who is Tax payer?

A    Assessee

B    Businessman

C    Trust

D    Govt. employee

  Discuss

38) Income tax is a .........

A    business tax

B    profession tax

C    Direct tax

D    Indirect tax

 Answer : C  Discuss
39) A person is said to be an ordinarily Resident when the person is
satisfying .......

A    both basic and additional conditions

B    only basic conditions

C    only additional conditions

D    not basic and additional conditions

 Answer : A  Discuss
40) Salary received by a Member of Parliament is taxable under the head.......

A    Income from salary

B    Capital gains

C    Profits and gains of business or profession

D    Income from other sources

 Answer : D  Discuss
41) Interest on capital paid by the firm to its partners is allowed up to .........

A    6%

B    12%
C    15%

D    16%

 Answer : B  Discuss
42) Under Income Tax Act depreciation is allowed on ....

A    Purchase price

B    Market price

C    W D V

D    Face value

 Answer : C  Discuss
43) The rate of depreciation on intangible asset is ......

A    5%

B    15%

C    20%

D    25%

 Answer : D  Discuss
44) Residential status of an assessee is ascertained as per the provisions of........

A    Section 6

B    Section 7

C    Section 9
D    Section 11

 Answer : A  Discuss
45) The income tax rate on long term capital gains for an individual is ..........

A    10%

B    15%

C    20%

D    25%

 Answer : C  Discuss
46) Residential status of taxable entities is........

A    Fixed in nature

B    Can change from year to year

C    Fixed once in 5 years

D    None of these

 Answer : B  Discuss
47) A person who is of Indian origin visiting India during the previous year to be
called resident must stay in India for at least.....

A    60 days in PY

B    6 days in PY and 365 days or more during 4 years preceding the PY

C    182 days in PY

D    730 days during 7 years preceding the PY

 Answer : C  Discuss
48) As per Second additional condition, a resident will be an ordinarily resident if
stay in India for at least ......................... days during the seven previous years
preceding the relevant

A    182 days

B    365 days

C    60 days

D    730 days

 Answer : D  Discuss
49) A person is Non resident if he fails to fulfil.........

A    The additional conditions

B    At least on of the basic conditions

C    Both basic conditions

D    None of the above

 Answer : B  Discuss
50) An Indian company’s residential status is that it is always......

A    Resident

B    Non resident

C    Ordinarily resident

D    None of these

 Answer : A  Discuss
51) Income from a farm house is.............

A    Income from house property

B    Income from business

C    Agricultural income

D    income from other sources

 Answer : C  Discuss
52) Incomes on which Income tax is not charged are called....

A    Exceptional incomes

B    Privileged incomes

C    Exempted incomes

D    None of the above

 Answer : C  Discuss
53) Income accrued and received outside India is taxable in the hands of......

A    Non-resident

B    Resident and ordinarily resident

C    Resident and not ordinarily

D    None of these residents

 Answer : B  Discuss
54) Past untaxed income brought to India is taxable in the hands of.....

A    Resident and not ordinarily resident

B    Resident and ordinarily resident

C    Non-resident

D    None of these

 Answer : D  Discuss
55) Exempted incomes are defined under section....

A    15 of income tax Act

B    18 of income tax Act

C    10 of income tax Act

D    20 of income tax Act

 Answer : C  Discuss
56) Incomes absolutely exempt from Tax are listed under........

A    Section 2

B    Section 10

C    Section 38

D    Section 80c

 Answer : B  Discuss
57) Scholarship granted is........

A    Fully exempted.

B    Fully taxable

C    Partly exempted

D    None of these

 Answer : A  Discuss
58) Any payments made under and awards instituted by central or state
Governments are.......

A    Fully exempted

B    Fully taxable

C    Partly exempted

D    None of these

 Answer : A  Discuss
59) Allowances of MP/M.L.A / or M.L.C are

A    Fully exempted

B    Fully taxable

C    Partly exempted

D    None of these

 Answer : A  Discuss
60) Income of political parties is not to be included in total income if certain
conditions are satisfied. The relevant section of IT Act 1961 is.

A    Section 13A

B    Section 10d

C    Section 233B

D    Section 88G

 Answer : A  Discuss
61) Tax Holiday is

A    Income tax on holiday income

B    Cancellation of tax for the entire country

C    Tax exemption for a specified period

D    None of the above

 Answer : C  Discuss
62) The existing Maximum Marginal Rate of tax of an individual assessee is....

A    10%

B    20%

C    30%

D    35%

 Answer : C  Discuss
63) Which of the following is not included in salary income?

A    Commuted pension

B    Un commuted pension

C    Family pension

D    Leave salary

 Answer : C  Discuss
64) Salary paid by an Indian company to its employees working in one of its
branches outside India is...........

A    Salary accruing in India

B    Salary deemed to accrue in India

C    Salary accruing outside India

D    None of these

 Answer : A  Discuss
65) Income received in India is taxable in the hands of.....

A    Resident only

B    Resident and ordinarily resident only

C    Non-resident only

D    All assessees

 Answer : D  Discuss
66) Income accrued in India is taxable in the hands of.........

A    Non-resident only

B    Resident and not ordinarily resident only.

C    All assesses

D    Resident and ordinarily resident only.

 Answer : C  Discuss
67) Share of income from firm is.....

A    Taxable in the hands of partner

B    Exempted in the hands of partner

C    Exempted in the hands of firm

D    None of these

 Answer : B  Discuss
68) Casual income is ........

A    Fully taxable

B    Partly taxable

C    Fully exempted

D    None of these

 Answer : A  Discuss
69) In case of Tax free salary, ..............

A    Tax is to be paid by employer

B    No tax is payable on such salary

C    Tax is to be paid by the employee

D    Govt, itself pays the tax at a future date

 Answer : A  Discuss
70) Salary received by a member of parliament is

A    Taxable as salary income

B    Exempt from tax sources

C    Taxable as income from other sources

D    None of these

 Answer : C  Discuss

SAMPLE MCQ -

1. Surcharge of 10 per cent is payable by an individual where the total income exceeds:
a) Rs.7,50,000 b) Rs.8,50,000 c) Rs.10,00,000 d) None of the three
Ans c

1. Additional surcharge (education cess) of 3% per cent is payable on

a) Income tax b) Income tax plus surcharge c) Surcharge
Ans b

2. Family pension received by a widow of a member of the armed forces where the death of the
member has occurred in the course of the operational duties, is
a) Exempt up to Rs.3,00,000 b) Exempt up to Rs. 3,50,000
c) Totally exempt under section 10(19) d) Totally chargeable to tax
Ans c

3. In respect of shares held as investment, while computing the capital gains, securities transaction
tax paid in respect of sale of listed shares sold in a recognized stock exchange,
a) Is deductible up to Rs.1,00,000 b) Is deductible up to Rs.2,00,000
c) Is deductible if C.G.’s is < 5,00,000 d) Is not deductible at all
Ans d

4. Gift of Rs 5,00,000 received on 10 July, 2008 through account payee cheque from a non-relative
regularly assessed to income-tax, is
a) A capital receipt not chargeable to tax b) Chargeable as other sources
c) Chargeable to tax as business income
 d) Exempt up to Rs.50,000 and balance chargeable to tax as income from other source
Ans b

5. The rate of tax that is leivable on STCG arising from transfer of Equity shares of a Company or
units of an Equity oriented fund is
a) 10% b) 15% c) 20%
Ans b

6. For an employee in receipt of hostel expenditure allowance for his three children, the maximum
annual allowance exempt under section 10(14) is
a) Rs.10, 800 b) Rs.7,200 c) Rs.9,600 d) Rs.3,600
Ans b

7. For an industrial undertaking fulfilling the conditions, additional depreciation in respect of a

machinery costing Rs.10 lakh acquired and installed on October 3, 2005 is
a) Rs.75,000 b) Rs.1,50,000 c) Rs.1,00,000 d) None of the above
Ans c

8. Assessee is always a person but a person may or may not be an assessee.

a) True b) False
Ans a

9. A person may not have assessable income but may still be assessee.
a) True b) False
Ans a

10. In some cases assessment year and previous year can be same financial year.
a) True b) False
Ans a

11. A.O.P should consist of :

a) Individual only b) Persons other than individual only c) Both the above
Ans c

12. Body of individual should consist of :

a) Individual only b) Persons other than individual only c) Both the above
Ans a

13. A new business was set up on15-11-2008 and it commenced its business from 1-12-2008.The
first previous year in this case shall be:
a) 15-11-2008 to 31-3-2009 b) 1-12-2008 to 31-3-2009 c) 2008-2009
Ans a

14. A person leaves India permanently on 15-11-2008.The assessment year for income earned till
15-11-2008 in this case shall be:
a) 2007-08 b) 2008-09 c) 2009-10
Ans b
CONTAIN ALL TOPICS OF INCOME TAX AS PER THE SYLLABUS OF COMMERCE UGC -NET