MCQ ON INCOME TAX

FY: 2021-22 & AY: 2022-23

Q1. Amount of commuted pension received by a Govt. employee is
………..
(a) Fully taxable as income from salary.
(b) Taxable up to 50% of such amount.
(c ) Fully exempt from tax
(d) None of the Above

ANS: (c ) Fully exempt from tax

Q2. In which Section of Income Tax,amount of commuted pension
is fully exempted?
(a) u/s 10(10) (b) u/s 10(10A)
(c ) u/s 10(10AA) (d) u/s 10(10C)

ANS: (b) u/s 10(10A)

Q3. Death-cum-retirement gratuity received by a Govt. employee
is exempt Under Section ------ of the Income Tax Act.
(a) u/s 10(10) (b) u/s 10(10A)
(c ) u/s 10(10AA) (d) u/s 10(10C)

ANS: (a) u/s 10(10)

Q4. Death-cum-retirement gratuity received by a Govt. employee
is exempt Under Section 10(10) of the Income Tax Act up to
a maximum of --------.
(a) 50% of the gratuity (b) 100% of the gratuity
(c ) Rs 10 lakhs (d) Rs 20 lakhs

ANS: (b) 100% of the gratuity

Q5. In old tax regime,Under which section of Income Tax,Amount
sanction by the Office/actual money spent on journey through
shortest route in case of Leave Travel Concession(LTC) is fully exem-
pted ?
(a) u/s 10(7) (b) u/s 10(10A)
(c ) u/s 10(5) (d) u/s 10(10C)

ANS: (c ) u/s 10(5)

Q6. In which section of Income Tax Act,Leave encashment at the
time of retirement/ resignation of Govt. employee is fully exempt ?
(a) u/s 10(7) (b) u/s 10(10AA)
(c ) u/s 10(5) (d) u/s 10(10C)

ANS: (b) u/s 10(10AA)

Q7. Leave encashment during service at the time of Leave Travel
Concession(LTC) is -------- .
(a) Fully taxable (b) Fully exempted
(c ) Partly taxable (d) Partly exempted

ANS: (a) Fully taxable

Q8. Leave encashment received by Nominee/Legal heir due to death
of the Govt. employee is ------ .
(a) Fully taxable (b) Fully exempted
(c ) Partly taxable (d) Partly exempted

ANS: (b) Fully exempted

Q9. In how many heads income is classified under Income Tax Act,
1961 ?
(a) 3 (b) 4
(c ) 5 (d) 6

ANS: (c ) 5
EXPLANATION:
INCOME: Income is Classified under the following heads:
1. Salaries
2. Income from house property
3. Profits and Gains of business or Profession
4. Capital gains
5. Income from other sources
Q10. Pension is taxable as income of pensioner under the head----.
(a) Income from Salary (b) Income from other sources
(c ) Income from Business or Profession
(d) None of the Above

ANS: (a) Income from salary

Q11. Family pension is taxable under the head ----- .
(a) Income from Salary (b) Income from other sources
(c ) Income from Business or Profession
(d) None of the Above

ANS: (b) Income from other sources

Q12. In respect of income from Family Pension,a standard deduction
is allowed under the Income Tax Act for an amount equal to
------ . (Old Tax Regime)
(a) 33 1/3 % of such income
(b) Rs 15,000
(c ) (a) or (b) whichever is more
(d) (a) or (b) whichever is less

ANS: (d) (a) or (b) whichever is less

Q13. Value of perquisites U/S 17(2) of Incme Tax Act includes:
(a) License Fee for Rent free accommodation provided by the
employer.
(b) Reimbursement of Medical Expenditure
(c ) Free electricity, gas and water supply.
(d) All of the Above

ANS: (d) All of the Above

Q14. Income from salary is coming under which section of Income
Tax Act,1961 ?
(a) u/s 17(1) (b) u/s 17(2)
(c ) u/s 17(3) (d) u/s 10

ANS: (a) u/s 17(1)

Q15. What is the Standard Deduction U/S 16 in Old Tax Regime?
(a) Rs 30,000 (b) Rs 40,000
(c ) Rs 50,000 (d) Rs 60,000

ANS: (c ) Rs 50,000
Q16. U/S 17(3) of Income Tax Act,1961 contain:
(a) Income from salary (b) Value of Perquisites
(c ) Profits in lieu of Salary
(d) None of the Above

ANS: (c ) Profits in lieu of Salary

Q17. Entertainment Allowance U/S 16(ii) of Income Tax is exempt
under Old Tax Regime:
(a) Actual allowance (b) At the rate of 1/5th of salary
(c ) limited to Rs. 5,000
(d) (a) or (b) or (c ) whichever is less

ANS: (d) (a) or (b) or (c ) whichever is less

Q18. Employment tax is exempted under which section of Income Tax
in Old Tax Regime ?
(a) u/s 16(ia) (b) u/s 16(ii)
(c ) u/s 16(iii) (d) u/s 10(5)

ANS: (c ) u/s 16(iii)

Q19. In Old Tax Regime,in which section of Income Tax,Standard
Deduction is there ?
(a) u/s 16(ia) (b) u/s 16(ii)
(c ) u/s 16(iii) (d) u/s 10(5)

ANS: (a) u/s 16(ia)

Q20. What is the percentage of Health and Education cess imposed
on tax on total income ?
(a) 2% (b) 3%
(c ) 4% (d) 5%

ANS: (c ) 4%
Q21. When the Govt. employees receive arrears then under which
section of Income Tax,they get relief ?
(a) u/s 87A (b) u/s 89
(c ) u/s 80U (d) u/s 234A

ANS: (b) u/s 89

Q 22. When the Govt. employees getting arrears then which form
they fill up to get relief u/s 89 of Income Tax ?
(a) Form 10A (b) Form 10 B
(C ) Form 10 E (d) Form 10 IA

ANS: (C ) Form 10 E
Q23. When the taxable income is -------- then the tax payer getting
rebate and pay zero tax.
(a) 5 lakhs or less (b) 4 lakhs or less
(c ) 3 lakhs or less (d) 2 lakhs or less

ANS: (a) 5 lakhs or less

Q24. Under which section of Income Tax,rebate is there when taxable
income is 5 lakhs or less ?
(a) u/s 87A (b) u/s 89
(c ) u/s 80U (d) u/s 234A

ANS: (a) u/s 87A

Q25. What is the rebate amount u/s 87A of Income Tax,when
taxable income is 5 lakhs or less ?
(a) Rs 15,500 (b) Rs 14,500
(c ) Rs 13,500 (d) Rs 12,500

ANS: (d) Rs 12,500

Q26. U/S 10(14) of Income Tax,How much Child Educational Assistance
is exempted per child per annum ? (Old Tax Regime)
(a) Rs 2,000 (b) Rs 1500
(c ) Rs 1200 (d) Rs 1000

ANS: (c ) Rs 1200
 Q27. U/S 10(14) of Income Tax, Up to …… per month per child up to a
maximum of 2 children is exempt in case Hostel Expenditure Allowance
(Old Tax Regime).
(a) Rs 200 (b) Rs 300
(c ) Rs 400 (d) Rs 500

ANS: (b) Rs 300

Q28. Under Section -------of Income tax(Old Tax Regime), Part of
HRA is exempted .
(a) u/s 10(10) (b) u/s 10(10A)
(c ) u/s 10(13A) (d) u/s 10(10AA)

ANS: (c ) u/s 10(13A)

Q29. Basic Pay of an employee is Rs 60,400. Dearness Allowance is
28%.Employee working in Non-Metro City. He is receiving 18%
HRA. He is paying Rs 13,000 house rent.How much tax exemption
he will get on HRA U/S 10(13A) ? (Old Tax Regime)
(a) Rs 63,228 (b) Rs 64,228
(c ) Rs 65,228 (d) Rs 66,228

ANS: (a) Rs 63,228

His Salary = Basic + DA = Rs 60,400 + 28% of Rs 60,400 = Rs 77,312
(i) 40% of Salary = Rs 30,925.
(ii) Actual HRA received = Rs 13,916
(iii) 10% of Salary = Rs 7,731
Excess of rent paid over 10% salary = 13,000 – 7731 = Rs 5,269
Least among (i),(ii) & (iii) is Rs 5,269.
Exemption of HRA = 5269 x 12 = Rs 63,228
Q30. Under Which section of Income Tax,Interest on borrowed
capital is deducted for self-used property?
(a) u/s 24(a) (b) u/s 24(b)
(c ) u/s 87A (d) u/s 89

ANS: (b) u/s 24(b)

Q31. What is the maximum amount deducted on interest on borrowed
capital for self-used property in case of Old Tax Regime ?
(a) Rs 1 Lakh (b) Rs 1.5 Lakhs
(b) Rs 2 Lakhs (d) Rs 2.5 Lakhs

ANS: (b) Rs 2 Lakhs

Q32. What is the maximum amount deducted on interest on borrowed
capital for self-used property in case of New Tax Regime ?
(a) Rs 1 Lakh (b) Rs 1.5 Lakhs
(b) Rs 2 Lakhs (d) Nil

ANS: (d) Nil

Q33. What is the maximum amount deduction under 80 CCE
(80 C + 80 CCC + 80 CCD(1) ) of Income tax under Old Tax Regime?
(a) Rs 1 Lakh (b) Rs 1.5 Lakhs
(b) Rs 2 Lakhs (d) Nil

Ans: (b) Rs 1.5 Lakhs

Q34. U/S 80D of Income Tax, What is the maximum amount deducted
due to Mediclaim Policy For self and Family members(Less than
60 years) (Old Tax Regime).
(a) Rs 10,000 (b) Rs 15,000
(c ) Rs 20,000 (d) Rs 25,000

ANS: (d) Rs 25,000

Q35. U/S 80D of Income Tax, What is the maximum amount deducted
due to Mediclaim Policy For self and Family members(Less than
60 years) & Parents (Below 60 years) ? (Old Tax Regime)
(a) Rs 30,000 (b) Rs 45,000
(c ) Rs 50,000 (d) Rs 75,000

ANS: (c ) Rs 50,000
Q36. U/S 80D of Income Tax, What is the maximum amount deducted
due to Mediclaim Policy For self and Family members(Less than
60 years) & Parents (Senior Citizen) ? (Old Tax Regime)
(a) Rs 30,000 (b) Rs 45,000
(c ) Rs 50,000 (d) Rs 75,000

Ans: (d) Rs 75,000

Q37. U/S 80D of Income Tax, What is the maximum amount deducted
related to health check-up For self and Family members.
(Old Tax Regime)
(a) Rs 10,000 (b) Rs 5,000
(c ) Rs 20,000 (d) Rs 25,000

ANS: (b) Rs 5,000

Q38. An employee invest Rs 23,000 on Medical Insurance Policy
per annum for self & family and Spend Rs 6,000 on health check-up.
How much amount deduction he will get U/S 80D of Income Tax ?
(Old Tax Regime)
(a) Rs 10,000 (b) Rs 5,000
(c ) Rs 20,000 (d) Rs 25,000

ANS: (d) Rs 25,000

Under Section 80D:
Maximum amount deduction for Medical Insurance Policy for
self and Family members(Below 60 years) including Health check-up
is Rs 25,000.
In Question:
Medical Insurance = Rs 23,000
Health check-up = Rs 6,000
but Maximum amount deduction = Rs 25,000
Q39. Under Section 80D, ----- maximum amount is deducted when
medical expenditure incurred on Senior Citizen for their treatment
but the condition is no medical insurance on their name.
(Old Tax Regime)
(a) Rs 25,000 (b) Rs 40,000
(c ) Rs 50,000 (d) Rs 1 Lakh

ANS: (c ) Rs 50,000
Q40. Under which Section of Income Tax entire NPS Govt. share is
deducted ?
(a) 80 CCD(1) (b) 80 CCD(2)
(c ) 80 CCD(1b) (d) 80 D

ANS: (b) 80 CCD(2)

Q41. Under Section 80CCD(1b) of Income Tax, Additional deduction of
……… is allowed for amount deposited to NPS account over and above
1.5 lakh under 80 CCE. (Old Tax Regime).
(a) Rs 25,000 (b) Rs 50,000
(c ) Rs 75,000 (d) Rs 1,00,000

ANS: (b) Rs 50,000

Q42. U/S 80DD of Income Tax,Maximum ------ and ------- amount
deducted for minor and Major disability, when the taxpayer has
incurred expenses for medical treatment (including nursing), training &
rehabilitation of the differently-abled dependant(spouse, children,
parents, brothers & sisters ). (Old Tax Regime)
(a) Rs 25,000,Rs 50,000 (b) Rs 50,000,Rs 75,000
(c ) Rs 75,000,Rs 1,00,000 (d) Rs 75,000,Rs 1,25,000
ANS: (d) Rs 75,000,Rs 1,25,000(It is fix one irrespective of actual
expenses but submit certificate in Form 10-IA.Certificate Certified by
the Medical Authority)
Q43. U/S 80DDB of Income Tax, Maximum deduction on Expenses
actually paid for medical treatment of specified diseases and
ailments(Cancer,AIDS,Renal Failure etc.) for Taxpayer himself or wholly
dependent spouse, children, parents, brothers and sisters is ------ and
------- for Parents(Senior Citizen). (Old Tax Regime)
(a) Rs 25,000,Rs 50,000 (b) Rs 50,000,Rs 75,000
(c ) Rs 40,000,Rs 1,00,000 (d) Rs 75,000,Rs 1,25,000

ANS: (c ) Rs 40,000,Rs 1,00,000

Q44. Under Section ------- of Income Tax, deduction on interest of
educational loan taken for pursuing higher education. (In case of
Old Tax Regime).
(a) u/s 80E (b) u/s 80EE
(c ) u/s 80EEA (d) u/s 80EEB

ANS: (a) u/s 80E (Entire interest amount)

Q45. U/S 80EEB of Income Tax,Maximum deduction is --------- on
loan taken by an individual from any financial institution for the
purpose of purchase of an electric vehicle subject to certain condition.
(Old Tax Regime).
(a) Rs 1 Lakh (b) Rs 1.5 Lakh
(c ) Rs 2 Lakh (d) Rs 2.5 Lakh

ANS: (b) Rs 1.5 Lakh

Q46. Under Section 80G of Income Tax, Donations Eligible for 100%
Deduction Without Qualifying Limit: (Old Tax Regime)
(a) Prime Minister’s National Relief Fund
(b) National Foundation for Communal Harmony
(c ) PM CARES FUND
(d) All of the Above

ANS: (d) All of the Above

Q47. U/S 80G of Income Tax, Donations Eligible for 50% Deduction
Without Qualifying Limit:(Old Tax Regime)
(a) Jawaharlal Nehru Memorial Fund
(b) Prime Minister’s Drought Relief Fund
(c ) Indira Gandhi Memorial Trust
(d) All of the Above

ANS: (d) All of the Above

Q48. Deduction under section ------ is allowed to an individual taxpayer
for any amount contributed to a political party or an electoral trust.
(Old Tax Regime)
(a) 80 G (b) 80GGC
(c ) 80 TTA (d) 80 TTB

ANS: (b) 80GGC(Pay other than Cash)

Q49. What is the mode of payment of donations for 80G of Income
Tax?
(a) Cheque (b) Digital Payment
(c ) Demand Draft (d) All of the Above

ANS: (d) All of the Above( Up to Rs 2,000 can make donation

in cash)
Q50. U/S TTA of Income Tax, What is the maximum amount deducted
on interest of Saving account ? (Old Tax Regime)
(a) Rs 10,000 (b) Rs 15,000
(c ) Rs 20,000 (d) Rs 25,000

ANS: (a) Rs 10,000

Q51. U/S TTB of Income Tax, What is the maximum amount deducted
on interest of Saving account in case of Senior Citizen. (Old Tax
Regime)
(a) Rs 10,000 (b) Rs 15,000
(c ) Rs 20,000 (d) Rs 50,000

ANS: (d) Rs 50,000

Q52. U/S 80U of Income Tax, ------- and ------- amount deducted for
Minor and Major disability if taxpayer himself is suffering.
(Old Tax Regime)
(a) Rs 25,000,Rs 50,000 (b) Rs 50,000,Rs 75,000
(c ) Rs 75,000,Rs 1,00,000 (d) Rs 75,000,Rs 1,25,000

ANS: (d) Rs 75,000,Rs 1,25,000(It is fix one irrespective of actual

expenses but submit certificate in Form 10-IA.Certificate Certified by
the Medical Authority)
Q53. ……… is the newly inserted section in the Income Tax Act, 1961
that deals with the new income tax regime.
(a) Section 115BAC (b) Section 139(1)
(c ) Section 139(5) (d) Section 139(4)

ANS: (a) Section 115BAC

Q54. New Tax Regime was introduced in the Union Budget …….. .
(a) 2018 (b) 2019
(c ) 2020 (d) 2020

ANS: (d) 2020

Q55. In case of New Tax Regime of Income Tax, except Section-------
there is no tax deduction in any other section of Chapter VI-A
deduction.
(a) 80 CCE(80C,80CCC,80CCD(1) ) (b) 80CCD(1b)
(c ) 80 CCD(2) (d) 80E

ANS: (c ) 80 CCD(2)
Q56. In case of New Tax Regime, there is no deduction of tax:
(a) Interest on borrowed capital on the self-occupied property.
(b) Interest on Educational loan
(c ) Investment under 80C,80CCC and NPS share of the employee
80CCD(1)
(d) Deductions in case of disability u/s 80DD & u/s 80U.
(e) All of the Above

ANS: (e) All of the Above

Q57. In case of New Tax Regime, There is no exemption in case of:
(a) Leave Travel Allowance(LTA)
(b) House Rent Allowance (HRA)
(c ) Children education allowance
(d) All of the Above

ANS: (d) All of the Above

Q58. In case of new tax regime,claim for tax exemption in case of:
(a) Transport allowances in case of a specially-abled person.
(b) Conveyance allowance received to meet the conveyance
expenditure incurred as part of the employment.
(c ) Any compensation received to meet the cost of travel on tour or
transfer.
(d) All of the Above

ANS: (d) All of the Above

Q59. The Service Tax was introduced in India on ------ .
(a) July 1,1994 (b) August 1,1994
(c ) September 1,1994 (d) October 1,1994

ANS: (a) July 1,1994

Q60. The Service tax was introduced in India on the recommendations
of --------.
(a) Dr. Raja Chelliah Committee
(b) Abid Hussain Committee
(c ) Aditya Puri Committee
(d) A K Khandelwal Committee

ANS: (a) Dr. Raja Chelliah Committee

Q61. What percentage of Net Annual Value of a let out property can
be claimed as deduction Under Section 24 of I-Tax Act ?(Old Tax
Regime)
(a) 25% (b) 33%
(c ) 30% (d) 40%

ANS: (c ) 30%
Q62. What is the Surcharge on Income Tax when Taxable income is
Rs 50 Lakhs to Rs 1 Crore ?
(a) 5% (b) 10%
(c ) 15% (d) 20%

ANS: (b) 10%

 Surcharge:
Range of Income(Taxable
Income)
Rs. 50 Lakhs to Rs. 1 Crore: 10%
Rs. 1 Crore to Rs. 2 Crores: 15%
Rs. 2 Crores to Rs. 5 Crores : 25%
Rs. 5 crores to Rs. 10 Crores: 37%
Exceeding Rs. 10 Crores: 37%
Q63. What is the maximum tax exemption on Transport Allowance
granted to an employee, who is blind or deaf and dumb or
orthopedically handicapped with disability of lower extremities
U/S 10(14)(ii) ?
(a) Rs 38,400 (b) Rs 40,000
(c ) Rs 45,000 (d) Rs 50,000

ANS: (a) Rs 38,400 ( Exemption is Rs 3,200 per Month)

Q64. In New Tax Regime,there is no deductions:
(a) Standard Deductions u/s 16(ia),Entertainment Allowance
u/s 16(ii) & Employment Tax u/s 16(iii).
(b) Standard Deduction in case of Family Pension u/s 57(iia)
(c ) Deductions in case of Net Annual Value(NAV) u/s 24(a)
(d) All of the Above

ANS: (d) All of the Above

Q65. In case of ITR-1:
(a) For individuals being a resident having total income upto Rs 50
lakhs
(b) income from salaries,one house property,other
sources(Interests)
(c ) Agricultural income upto Rs 5000.
(d) All of the Above

ANS: (d) All of the Above

Q66. U/S ----- Income Tax Return(ITR) file before due date.
(a) 139(1) (b) 139(5)
(c ) 139(4) (d) 234A

ANS: (a) 139(1)

Q67. Under Section ------- revised Income Tax Return(ITR).
(a) 139(1) (b) 139(5)
(c ) 139(4) (d) 234A

ANS: (b) 139(5)

Q68. Under Section ------- File return after due date but before the
end of the relevant Assessment year.
(a) 139(1) (b) 139(5)
(c ) 139(4) (d) 234A

ANS: (c ) 139(4)
Q69. Under Section ------ interest is levied for delay in filing the return
of income.
(a) 139(1) (b) 139(5)
(c ) 139(4) (d) 234A

ANS: (d) 234A

Q70. Under Section ------- interest is levied when the advance tax paid
by the taxpayer is less than 90% of the assessed tax.
(a) 139(1) (b) 139(5)
(c ) 139(4) (d) 234B

ANS: (d) 234B

Total Tax to be paid = Rs 1 Lakh
TDS collected by Office = Rs 80,000
Assessed Tax = Total Tax to be paid – TDS collected by Office
= 1 Lakh – 80,000 = Rs 20,000(More than Rs 10,000)
Advance Tax paid within March 31 = Rs 12,000(Less than 90% of
Assessed Tax)
Interest levied on (Rs 20,000 – Rs 12,000) = Rs 8,000 from month
of April (1% Simple Interest) till Return File.
* In case of part of month also interest imposed on full month basis.