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Income Tax MCQ PDF
Income Tax MCQ PDF
In this page you get income tax objective types questions with answers which are asked in various exams of Mumbai
University, Dibrugarh University, Gauhati University, Kolkata University and Assam University.
Also, these questions are useful for B. Com exams of various universities covered under CBCS pattern.
Also, these income tax objective type questions and answers are also useful for NTA Net Commerce Exam, CMA, CA, CS
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and other competitive exams.
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Income tax Multiple Choice Questions (MCQs) with answers
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Assessment Year 2022 – 23 (Previous year 2021 – 22)
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1. Income tax Act extends to:
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a) Whole of India
a) Residential Status
b) Total Income
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c) Citizenship
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Ans: a) Residential Status (Total income of a person is determined on the basis of his residential status)
a) Previous year.
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b) Assessment year.
c) Accounting year.
a) 1860
b) 1947
c) 1961
a) Direct expenses
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b) Indirect expenses
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c) Business expenses
d) Personal expenses
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Ans: d) Personal expenses
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Also Read: Income Tax Chapterwise MCQs (2022 - 2023)
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1. 700+ Income Tax MCQs 2022-23 [Free PDF], Income Tax Laws and Practice MCQs
2. 50+ MCQ on Residential Status, Income Tax MCQs 2022 - 23 [Free PDF]
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3. 100+ MCQs on Income From Salary, Income Tax MCQs 2022 - 23 [Free PDF]
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4. 50 Income from House Property MCQ, Income Tax MCQs 2022 - 23 [Free PDF]
5. 50+ Profits and Gains from Business and Profession (PGBP) MCQs, Income Tax MCQs 2022 - 23 [Free PDF]
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7. 30+ MCQ on Set off and Carry forward of Losses, Income Tax MCQs 2022 - 23, Master Chart [Free PDF]
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8. 25+ Income Tax Deductions MCQs (80C to 80 U), Income Tax MCQs 2022 – 23 [Free PDF]
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d) Both by Lok Sabha and Rajya Sabha and given the assent of the President
Ans: d) Both by Lok Sabha and Rajya Sabha and given the assent of the President
7. The circulars issued by CBDT are binding on:
a) Assessee
b) Finance Ministry
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Ans: c) Income tax authorities
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8. AOP (Association of Person) should consists of:
a) Individuals only
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b) Person other than individuals
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d) Artificial Judicial person
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Ans: c) Both the above ls a
9. BOI (Body of Individuals) should consists of:
a) Individuals only
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b) Person other than individuals
b) Finance Act
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11. In which case income of the previous year is assessed in the same year?
12. Q sets up a new business on 15.7.2021 and he commenced his business from 1.2.2022. First previous year shall be:
a) 1-4-2021 to 31-3-2022
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b) 1-4-2022 to 31-3-2023
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c) 1-2-2022 to 31-3-2023
d) 15-7-2021 to 31-3-2022
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Ans: d) 15-7-2021 to 31-3-2022
13. An AOP formed on 1-6-2021 for a particular event which is completed on 12-12-2021. What is the assessment year
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for AOP?
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a) 1-4-2021 to 31-3-2022
b) 1-4-2022 to 31-3-2023
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c) 1-2-2022 to 31-3-2023
d) 15-7-2021 to 31-3-2022
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Ans: a) 1-4-2021 to 31-3-2022
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14. If the total income of an assessee has been computed as rupees 12,50,794.90, the total income after rounding off
will be taken as:
a) 12,50,790
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b) 12,50,800
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c) 12,50,795
Ans: a) 12,50,790
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(Hint: The total income and income tax shall be rounded off to the nearest multiple of 10 rupees)
b) A person may not have assessable income but may still be assessee.
c) In some cases assessment year and previous year can be same financial year.
d) All of the above
16. When was income tax levied in India for the first time?
a) 1961
b) 1860
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c) 1947
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Ans: b) 1860 (The income tax was introduced in India for the first time in 1860 by British rulers.)
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a) State Bank of India, Dibrugarh.
b) Delhi University.
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c) Guwahati Municipal Corporation.
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d) Amul ls a
Ans: b) Delhi University.
b) Mark fed.
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d) Delhi university
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a) Agricultural income
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a) Taxable.
b) Exempt.
Ans: b) Exempt.
21. C is entitled to hostel expenditure allowance @ Rs. 600 p.m. per child for 3 children. It will be exempt to the
extent of:
a) Rs. 1,800/-
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b) Rs. 900/-
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Ans: c) Rs. 600/- p.m. (Hostel expenditure allowance is exempted upto R.s 300 per month per child for a maximum of
two children)
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22. The ceiling limit of deduction u/s 24 (b) in respect of Interest of Loan taken on 01.06.2014 for construction of a
self-occupied house is:
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a) Rs. 1,50,000/- ls a
b) Rs. 30,000/-
c) No limit.
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Ans: a) Rs. 1,50,000/-
23. For the assessment year 2022 - 23 rebate under Section 87A is available in the case of the residential individual, if
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24. If title of ownership of a house property is under dispute in a court of law, the decision as to who is the owner
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rests with?
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a) Government of India.
b) State Government.
25. An appeal against the order of the assessing officer lies with:
a) Commissioner (Appeals) [Sec 246A].
26. As per National Pension System, it is mandatory for persons entering the government service on or after January
1, 2004 to contribute:
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a) 20% of salary every month towards NPS.
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c) 10% of salary every month towards NPS. (Salary = Basic +DA)
Ans: c) 10% of salary every month towards NPS. (Salary = Basic +DA)
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27. Perquisites or benefits or any other remuneration received from other than the employer, would be taxable under
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the head:
28. Tribal areas/Scheduled areas allowances as specified in rule 2BB, exemption to State, Assam and other similar
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29. Which of the following is not taxable under the head income from other sources?
a) Rs. 4,000.
b) Rs. 2,400.
c) Rs. 1,200.
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31. The contribution made by the Central Government in the previous year, to the account of an employee under a
pension scheme referred to in:
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a) Section 80C.
b) Section 80CCC.
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c) Section 80CCD
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Ans: c) Section 80CCD
32. Where an assessee uses his property for carrying on any business or profession, no income is chargeable to tax
under the head:
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a) Income from Salaries.
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b) Income from House Property.
33. The Appellate Tribunal, constituted by the Central Government, functions under the Ministry of Law, consists of
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a) Receipt basis
b) Due basis
c) Hybrid basis
d) Not taxable
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Ans: b) Due basis
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36. If books of accounts are maintained on cash basis, interest on securities is taxable on:
a) Receipt basis
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b) Due basis
c) Hybrid basis
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d) Not taxable
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Ans: b) Receipt basis ls a
37. If books of accounts are maintained on mercantile basis, interest on securities is taxable on:
a) Receipt basis
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b) Due basis
c) Hybrid basis
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d) Not taxable
Ans: a) Minimum Rs. 500 and maximum Rs. 1,50,000 per annum.
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39. Pankaj is entitled to hostel allowance @ Rs. 500 p.m. per child for 3 children. It will be exempted to the extent of:
a) Rs. 7,200.
b) Rs. 12,000.
c) Rs. 16,400.
Ans: a) Rs. 7,200.
40. Income accrued and received outside India is taxable in the hands of:
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Ans: c) Non-Resident in India (NRI)
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41. Underground allowance granted to an employee who is working in uncongenial, unnatural climate in underground
mines is exempted to the limit of:
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a) Rs. 1,000 per month.
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c) Rs. 600 per month.
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Ans: b) Rs. 800 per month.
b) Whole of India.
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c) Whole of India except the State of Sikkim.
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43. Under the Income-tax Act, the incidence of taxation depends on:
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a) A revenue loss.
b) A casual loss.
c) A capital loss.
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a) Fully exempted.
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b) Partially exempted.
c) Not exempted.
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Ans: a) Fully exempted. Because it is an agricultural income
47. An assessee has borrowed money for purchase of a house, and interest is payable outside India. Such interest
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shall:
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a) Be allowed as deduction.
b) Citizenship in India.
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49. Where the income of an individual includes the income of minor children, such individual shall be entitled to an
exemption of:
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a) Rs. 2,000/-
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c) Rs. 1,500/- per minor child or to the extent of income of the minor child included in the total income of the assessee,
whichever is less.
Ans: c) Rs. 1,500/- per minor child or to the extent of income of the minor child included in the total income of the
assessee, whichever is less.
50. D owns a house in which he lives. His employer reimburses to him the electricity bill amounting to Rs. 6,000/-. It
shall be a perquisite for:
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MCQ on Residential Status
Income Tax MCQs for 2022 - 23
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Choose the Correct Alternative:
1. residential status is determined for:
a) Previous year.
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b) Assessment year.
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c) Accounting year.
d) Financial year.
Ans: a) Previous year.
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2. An individual who wants to be resident of India must stay in India for at least:
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a) 730 days in 10 previous years.
b) 182 days in the previous year.
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3. Under the income- tax act, the incidence of taxation depends on:
a) The citizenship of the tax-payer.
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6. As per the second basic condition to determine residential status, a person should have been in India during the
previous year concerned for:
a) 730 days in 10 previous years.
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b) 182 days in the previous year.
c) 365 days in the previous year.
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d) 60 days in the previous year plus 365 days in 4 preceding p/y
Ans: d) 60 days in the previous year plus 365 days in 4 preceding p/y
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7. An individual who wants to be resident of India must satisfy at least:
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a) One of the Two basic conditions.
b) Both the basic conditions.
c) Both the additional conditions.
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d) Both the basic conditions and the additional conditions
Ans: a) One of the Two basic conditions.
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Income Tax MCQs Multiple Choice Questions with Answers (2022 – 23)
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Choose the Correct Options
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1. Income from salary includes:
a) Basic payments
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b) Allowances
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c) Perquisites
b) Bonus
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c) Dearness Allowance
d) None of these.
Ans: c) All employees.
4. Deduction on account of entertainment allowance is allowed to:
a) Non-government employees
b) Government employees
c) Both the above
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b) Rs. 2,000.
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c) Rs. 20,000.
d) Rs. 5,000.
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Ans: d) Rs. 5,000.
6. The daily allowance received by a Member of the Parliament is
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a) Taxable.
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b) Exempt.
Ans: b) Exempt.
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7. Education allowance is exempted for a maximum of:
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a) One child.
b) Two children.
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c) Three children.
d) Four children.
Ans: b) Two children.
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Ans: Ans: d) All of the above
Income from House Property MCQ
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MCQ on Income from House Property
Income Tax MCQs Multiple Choice Questions with Answers (2022 – 23)
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Choose the Correct Options
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1. The charging section of the Income under the head income from house property is:
a) Section 15
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b) Section 17
c) Section 22
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d) Section 45
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Ans: c) Section 22
2. What are the conditions to be fulfilled for charging of income under the head income from house property is:
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c) Property is not used by the assessee for the purpose of any business or profession
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3. Properties exempted from tax under the head income from house property (Sec. 10)
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10) Annual value of two self occupied properties.
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Ans: All of the above
4. The ceiling limit of deduction u/s 24 (b) in respect of Interest of Loan taken on 01.06.2014 for construction of a self-
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occupied house is:
a) Rs. 2,00,000/-
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b) Rs. 30,000/-
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c) Rs. 45,000/-
d) No limit.
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Ans: a) Rs. 2,00,000/-
5. In case of rental house property only such municipal tax is deducted which is:
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a) Paid during previous year by landlord
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6. Where an assessee uses his property for carrying on any business or profession, no income is chargeable to tax
under the head:
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d) Capital Gains
7. Under the head income from house property the basis of charge is:
a) Rent received from house property
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8. Which of the following incomes from house property is not exempted from tax:
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a) Agricultural house property
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c) House held as stock in trade
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Ans: d) House let out for commercial purpose
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9. Income from sub-letting of house property is taxable under the head:
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a) Income from Salaries.
d) Capital Gains
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10. If annual value of the house property let out is negative then the deduction under section 24 is allowed only for:
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a) All deductions
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c) Profits and gains of business or profession.
d) Income from other sources.
Ans: c) Profits and gains of business or profession.
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3. Any some received under key man insurance policy taken on the life of the employee shall be:
a) Income from salary.
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b) Capital gains.
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c) Profits and gains of business or profession.
d) Income from other sources. ls a
Ans: c) Profits and gains of business or profession.
4. Methods of accounting is irrelevant for which head of income?
a) Income from salary.
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b) Income from house property
b) Capital gains.
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5. Under the head business and profession, the method of accounting which an assessee can follow shall be:
a) Mercantile System
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b) Cash System
c) Mercantile or cash system only
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d) Hybrid system
Ans: c) Mercantile or cash system only
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8. For which company depreciation is allowed on SLM basis under Income Tax Act?
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a) Banking Companies
b) Insurance Companies
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c) Electricity undertakings
d) None of the above
Ans: c) Electricity undertakings
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9. Rate of depreciation on residential building is:
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a) 5%.
b) 10%.
c) 15%.
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d) 20%.
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Ans: a) 5%.
10. Rate of depreciation on non-residential building is:
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a) 10%.
b) 15%.
c) 20%.
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d) 25%.
Ans: a) 10%.
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Income Tax MCQs Multiple Choice Questions with Answers (2022 – 23)
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1. The charging section of the income under the head capital gains is:
a) Section 15
b) Section 17
c) Section 10
d) Section 45 (1)
Ans: d) Section 45 (1)
2. 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.
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d) All of the above.
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Ans: d) All of the above.
3. Tick the assets which are included and excluded from capital assets:
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Assets included in Capital Assets Assets Excluded from Capital Assets
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Land and Building (Both Commercial and Residential) Stock in trade
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Jewellery ls a Jewellery or any property held as stock-in-trade
c) Capital asset
b) Any transfer in a scheme of amalgamation of shares held in an Indian company by the amalgamating foreign company
to the amalgamated foreign company.
c) Any transfer, in a demerger, of a capital asset by the demerged company to the resulting company.
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d) Distribution of assets on the dissolution of a firm, body of individuals or association of persons
Ans: d) Distribution of assets on the dissolution of a firm, body of individuals or association of persons
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7. Which of the following assets shall be treated as short term capital assets if these assets are held for not more than
12 months?
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a) A security and shares of companies listed in a recognised stock exchange
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b) A unit of an equity oriented fund
1. Loss from house property can be carried forward and set-off in subsequent eight assessment years:
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d) None of above
Ans: b) Even if return of loss is filed after due date
2. When the assessee has loss from house property, the maximum amount of such loss eligible for set off against
other permissible incomes would be:
a) Rs. 30,000
b) Rs.1,50,000
c) Rs.2,00,000
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d) No Limit
Ans: c) Rs.2,00,000
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3. STCL can be set off in the same assessment year from:
a) STCG.
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b) LTCG.
c) both.
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d) Not possible.
Ans: c) both.
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4. Long term capital loss can be set off from which of the following?
a) STCG
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b) LTCG
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c) Casual Income
Ans: b) LTCG
5. Loss of card game can be set off from:
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a) STCG
b) LTCG
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c) Casual Income
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Ans: d) None of the above (Casual loss Cannot be set off at all)
6. Unabsorbed depreciation can be carried forward for:
b) 8 years
c) 4 years
d) 7 years
a) 5 A.Y
b) 6 A.Y
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c) 8 A.Y
d) 10 A.Y
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Ans: c) 8 A.Y
Income Tax Deductions MCQs (80C to 80 U)
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Income Tax MCQs 2022 – 23
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1. Deduction under section 80C is allowed to:
a) Individual ls a
b) Individual or HUF
c) Individual or HUF resident in India
d) All Assessee
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Ans: b) Individual or HUF
2. Maximum deduction under section 80C is:
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a) 1,00,000
b) 1,50,000
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c) 2,00,000
d) 70,000
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Ans: b) 1,50,000
3. Section 80C provides for deduction in respect of tuition fee to _______ children.
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a) One.
b) Two.
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c) Three.
d) None.
Ans: b) Two.
4. Deduction u/s 80CCC allowed to an individual for amount paid by him in an annuity plan of LIC is restricted to
a) Rs. 5,000
b) Rs. 7,500
c) Rs. 1,50,000
d) Rs. 12,500
Ans: c) Rs. 1,50,000
5. Deduction under section 80D is allowed to:
a) Individual
b) Individual or HUF
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c) Individual or HUF resident in India
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d) All Assessee
Ans: b) Individual or HUF
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6. Medical insurance premium incurred for senior citizen is eligible for deduction up to ________ under section 80D.
a) Rs. 30,000
b) Rs. 50,000
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c) Rs. 1,00,000
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d) Rs. 60,000
Ans: b) Rs. 50,000
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7. The maximum amount of deduction under section 80D in the case of a senior citizen is:
a) Rs: 10,000.
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b) Rs: 15,000.
c) Rs: 50,000.
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d) Rs: 25,000.
Ans: c) Rs: 50,000.
8. The maximum amount of deduction under section 80D if both taxpayer and parents are senior citizen is:
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a) Rs: 10,000.
b) Rs: 15,000.
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c) Rs: 50,000.
d) Rs: 1,00,000.
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a) Individual
b) Individual or HUF
c) Individual or HUF resident in India
d) All Assessee
Ans: b) Individual or HUF
10. The amount of deduction under section 80DD regarding disability which is less than 80%
a) Rs: 30,000.
b) Rs: 50,000.
c) Rs: 75,000.
d) Actual expense.
Ans: c) Rs: 75,000.
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