140+ Business Taxation Solved MCQs

Chapters

43
12.8k
Take a Test Download as PDF
Chapter: INCOME TAX ACT 1961
1.

Income tax is collected on all types of income except .

A. agricultural income
B. industrial income
C. capital gain
D. household property
Answer» A. agricultural income
discuss
2.

The Income Tax Act came into force from .

A. 1st march 1971
B. 1st april 1971
C. 1st march 1961
D. 1st april 1961
Answer» D. 1st april 1961
discuss
3.

The Income Tax Act came into force all over India except .

A. andaman & nicobar
B. maldives
C. jammu & kashmir
D. none of the above
Answer» D. none of the above
discuss
4.

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
Answer» C. previous year
discuss
5.

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
Answer» B. residential status
discuss
6.

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
Answer» D. all of the above
discuss
7.

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
Answer» B. assessment year
discuss
8.

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
Answer» B. assessment year
discuss
9.

Agricultural income is completely exempted for assessment year

A. 1974-75
B. 1985-86
C. 1975-76
D. 1978-79
Answer» A. 1974-75
discuss
10.

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
Answer» C. 100% exempted
discuss
11.

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
Answer» C. payment is in cash or in kind
discuss
12.

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
Answer» A. taxable as per slabs
discuss
13.

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
Answer» A. taxable as per slabs
discuss
14.

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
Answer» A. taxable as per slabs
discuss
15.

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
Answer» A. taxable as per slabs
discuss
16.

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
Answer» A. taxable
discuss
17.

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
Answer» B. non-taxable
discuss
18.

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
Answer» A. taxable
discuss
19.

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
Answer» A. taxable
discuss
20.

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
Answer» A. taxable
discuss
21.

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
Answer» A. non-taxable
discuss
22.

…………. is exempted from income tax.

A. interest from indian company
B. dividend from foreign company
C. cooperative dividend
D. dividend from indian company
Answer» D. dividend from indian company
discuss
23.

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

A. section 80c
B. section 80dd
C. section 10
D. section 2
Answer» C. section 10
discuss
24.

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

A. section 2
B. section 6
C. section 5
D. section 4
Answer» B. section 6
discuss
25.

Resident of India includes .

A. ordinarily resident
B. not ordinarily resident
C. nri
D. both (a) and (b)
Answer» D. both (a) and (b)
discuss
26.

The Company may have the residential status as .

A. resident or non-resident
B. not ordinarily resident
C. non-resident
D. resident
Answer» A. resident or non-resident
discuss
27.

The number of income source for a person are .

A. one head
B. two heads
C. various heads
D. any of the above
Answer» D. any of the above
discuss
28.

The sum of various heads is called as .

A. taxable income
B. total income
C. gross total income
D. adjusted income
Answer» C. gross total income
discuss
29.

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
Answer» D. all of the above
discuss
30.

…………..comes under agricultural income.

A. tea garden
B. commodity farming
C. all of the above
D. none of the above
Answer» C. all of the above
discuss
31.

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
Answer» A. more than ` 5,000 and total income is exceeding exemption limit
discuss
32.

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
Answer» D. all of the above
discuss
33.

The capital gain is chargeable under of Income Tax Act.

A. section 45
B. section 55
C. section 56
D. section 40
Answer» A. section 45
discuss
34.

The definition of the person includes .

A. an individual
B. a company
C. a hindu undivided family
D. all of the above
Answer» A. an individual
discuss
35.

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
Answer» C. exempted from tax
discuss
36.

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
Answer» B. different for different assessment year
discuss
37.

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
Answer» A. immediately succeeding assessment year
discuss
38.

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
Answer» A. not taxable
discuss
39.

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
Answer» A. at least 182 days in india
discuss
40.

The term income includes the following types of incomes.

A. illegal
B. legal income from india only
C. legal
D. legal and illegal both
Answer» D. legal and illegal both
discuss
41.

……………is the casual income.

A. interest received
B. dividend income
C. pension received
D. winning from lotteries
Answer» D. winning from lotteries
discuss
42.

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
Answer» C. tax planning
discuss
43.

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

A. firm
B. an individual
C. body of individual
D. huf
Answer» A. firm
discuss
Chapter: INCOME FROM SALARY
44.

The income is chargeable under the head of salary under ……………of Income Tax Act, 1961.

A. section 15
B. section 20
C. section 14
D. section 16
Answer» A. section 15
discuss
45.

Pension is ……………under the salary head.

A. fully taxable
B. partially taxable
C. not taxable
D. none of the above
Answer» A. fully taxable
discuss
46.

The salary of Member of Parliament is taxable under the head .

A. salary
B. income from other sources
C. income from business
D. all of the above
Answer» B. income from other sources
discuss
47.

The death-c um-retirement gratuity received by the Government Employee or employee of the local authority is.

A. partially exempted
B. fully exempted
C. half taxable
D. none of the above
Answer» B. fully exempted
discuss
48.

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
Answer» A. taxable
discuss
49.

The assesses can claim relief under…………….for arrears or advance salary.

A. section 89(1)
B. section 89(2)
C. section 89(3)
D. section 89(4)
Answer» A. section 89(1)
discuss
50.

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

A. 1973
B. 1980
C. 1991
D. 1972
Answer» D. 1972
discuss
51.

Which of the following is not taxable under the head Salary?

A. remuneration paid to the lecturer of a college for setting a question paper
B. salary received by a member of parliament
C. commission received by an employee director of a company
D. both (a) and (b)
Answer» D. both (a) and (b)
discuss
52.

The children education allowance, the amount exempted from taxable income is limited to

A. 100 per month per child upto 3 children
B. 1,000 per year per child upto 2 children
C. 100 per month per child upto 2 children
D. none of the above
Answer» C. 100 per month per child upto 2 children
discuss (1)
53.

If the employee receives retirement gratuity from more than one employer, he can claim exemption in respect of .

A. current employer
B. previous employer
C. both employer
D. not from single employer
Answer» C. both employer
discuss
54.

The family pension received by the family members of armed forces after death of employee is .

A. exempt fully
B. exempted after fulfilling of certain conditions
C. not exempted
D. none of the above
Answer» B. exempted after fulfilling of certain conditions
discuss
55.

The entertainment allowance is applicable to .

A. private sector employees
B. public sector employees
C. government employees
D. all of the above
Answer» C. government employees
discuss
56.

The assessment period for income tax on salary is .

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
Answer» C. only 12 months
discuss
57.

Total income is to be rounded off to nearest multiple of …………….and tax is to be rounded off to nearest multiple of .

A. ten rupee
B. hundred, ten
C. ten, ten
D. rupee, rupee
Answer» C. ten, ten
discuss
58.

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
Answer» A. resident and ordinary resident (ror) only
discuss
59.

Deduction under section 80C to 80U cannot exceed .

A. gross total income
B. total income
C. income from business or profession
D. income from house property
Answer» A. gross total income
discuss
60.

The maximum limit for the claim of deduction under salary head Contributions to certain pension funds of LIC or any other insurer is .

A. up to ` 2,00,000
B. up to ` 1,50,000
C. up to ` 1,75,000
D. none of the above
Answer» B. up to ` 1,50,000
discuss
61.

Encashment of earned leave is given by………………. of Income Tax Act, 1961.

A. section 10(10aa)
B. section 12(10a)
C. section 15(10b)
D. none of the above
Answer» A. section 10(10aa)
discuss
62.

Compensation received on voluntary retirement is given by of Income Tax Act, 1961.

A. section 10(10d)
B. section 10(10c)
C. section 10(10e)
D. section 11(10d)
Answer» B. section 10(10c)
discuss
63.

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

A. section 10
B. sec 10(13a)
C. section 11(13b)
D. section 11
Answer» B. sec 10(13a)
discuss
64.

……………….of Income Tax Act defines the perquisites and their valuation.

A. section 18
B. section17
C. section 18(c)
D. section 17(c)
Answer» D. section 17(c)
discuss
65.

The Income tax rate for the financial year 2016-17 for individual is…………..

A. ` 5,00,000 to ` 10,00,000 is 20%
B. ` 5,50,000 to ` 1,50,000 is 20%
C. ` 5,00,000 to ` 10,00,000 is 30%
D. ` 5,00,000 to ` 10,00,000 is 10%
Answer» A. ` 5,00,000 to ` 10,00,000 is 20%
discuss
66.

Income tax rate for the senior citizens for year 2016-17 is .

A. upto ` 5 lakh is nil
B. upto ` 10 lakh is 10%
C. upto ` 5 lakh is 10%
D. none of the above
Answer» A. upto ` 5 lakh is nil
discuss
67.

For computation for Income tax liability for individual, the Education Cess is

A. 3%
B. 4%
C. 2.5%
D. 2%
Answer» A. 3%
discuss
68.

The rate of tax for the financial year 2016-17 for the foreign companies is

A. 45%
B. 30%
C. 40% flat
D. none of the above
Answer» C. 40% flat
discuss
69.

Which of the following are true regarding taxing the rich?

A. additional 10% tax on dividends in excess of ` 10 lakh per annum
B. surcharge on persons decreased to 12% from 15%
C. tds at 1% on purchase of luxury cars exceeding value of ` 10 lakh
D. all of the above
Answer» D. all of the above
discuss
70.

Surcharge is levied at the rate …………….if the income exceeds ` 1 crore of the financial year 2016-17.

A. 10%
B. 12%
C. 15%
D. 20%
Answer» C. 15%
discuss
71.

Tax Liability for the individual for 2016-17 who is not the resident of the India whose income ` 2,50,000 to ` 5,00,000 is……………….

A. 10% of total income minus ` 2,00,000
B. 10% of total income minus ` 1,00,000
C. 15% of total income minus ` 1,00,000
D. none of the above
Answer» A. 10% of total income minus ` 2,00,000
discuss
72.

The following is not taxable as income under the head “Salaries”:

A. commission received by a full-time director
B. remuneration received by a partner
C. allowances received by an employee
D. free accommodation given to an employee
Answer» B. remuneration received by a partner
discuss
73.

The following is exempt income from Income Tax:.

A. travel concession to employee
B. remuneration received for valuation of answer scripts
C. encashment of leave salary whilst in service
D. perquisites in india
Answer» D. perquisites in india
discuss
74.

Advance salary is taxable and advance against salary is .

A. fully taxable
B. partially taxable
C. not taxable
D. none of the above
Answer» C. not taxable
discuss
75.

If loan granted by employer to employee does not exceed …………., it is not treated as perquisite to employee for purpose of income tax.

A. ` 20,000
B. 40,000
C. ` 30,000
D. ` 25,000
Answer» B. 40,000
discuss
76.

Gift to employee up to p.a. will not be treated as perquisite taxable in the hands of employee.

A. ` 4,000
B. ` 5,000
C. ` 10,000
D. 2,500
Answer» B. ` 5,000
discuss
77.

Expenditure on free meals to employee in excess of………………per meal will be treated as perquisite of employee.

A. ` 25
B. 50
C. ` 100
D. ` 55
Answer» B. 50
discuss
78.

Any commission due or received by a partner of a firm from the firm shall not be regarded as salary income under .

A. section 15
B. section 20
C. section 17
D. section 19
Answer» A. section 15
discuss
Chapter: INCOME FROM HOUSE PROPERTY
79.

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
Answer» A. annual value
discuss
80.

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
Answer» B. income from other sources
discuss
81.

An individual who transfers house property without an adequate consideration to his owner spouse or to minor child is called as .

A. co-owner
B. deemed owner
C. owner himself
D. none of the above
Answer» B. deemed owner
discuss
82.

Mr. R owns a house. The Municipal value of the house is ` 50,000. He paid `
8,000 as local taxes during the year. He uses this house for his residential
purposes but lets out half of the house @ ` 3,000 p.m. The annual value of
the house is.

A. 15,000
B. ` 16,000
C. ` 17,000
D. ` 18,000
Answer» B. ` 16,000
discuss (2)
83.

If the individual using the property for the business or professional purpose the income taxable under the……………..head.

A. income from house property
B. income from huf
C. income from other
D. income from business or proprietorship
Answer» D. income from business or proprietorship
discuss
84.

If the assesses let out the building or staff quarters to the employee of
business, the rent collected from such employees is assessable as income
from .

A. business
B. house property
C. other sources
D. none of the above
Answer» C. other sources
discuss
85.

Calculate the Gross Annual Value from the following details: Municipal
Value ` 45,000
Fair rental value ` 50,000 Standard Rent ` 48,000 Actual Rent ` 42,000

A. ` 50,000
B. 48,000
C. ` 45,000
D. 42,000
Answer» B. 48,000
discuss
86.

Which of the following is not a case of deemed ownership of house property?

A. transfer to a spouse for inadequate consideration
B. transfer to a minor child for inadequate consideration
C. holder of an importable estate
D. co-owner of a property
Answer» D. co-owner of a property
discuss
87.

,67,000. While computing income from house property, the deduction is allowable to the extent of .

A. ` 30,000
B. 1,00,000
C. ` 1,67,000
D. ` 1,50,000
Answer» D. ` 1,50,000
discuss
88.

Deduction for other expenses except interest in the computation of income from house property is allowable to the extent of .

A. 25% of annual value
B. 10% of annual value
C. 30% of annual value
D. 20% of annual value
Answer» C. 30% of annual value
discuss
89.

Arrear rent is taxable after deducting…………..as per Section 25B of the Income Tax Act, 1961.

A. 30%
B. 35%
C. 10%
D. 20%
Answer» A. 30%
discuss
90.

The value of interest-free concessional loans to employees is determined on the basis of lending rates of for the same purpose.

A. sbi
B. ` rbi
C. central government
D. state government
Answer» D. state government
discuss
91.

Value of rent-free accommodation in case of Government employee shall be taxable up to

A. 15% of employee’s salary
B. 8% of employee’s salary
C. license fee fixed by government
D. 10% of employee’s salary
Answer» C. license fee fixed by government
discuss
92.

Value of rent-free accommodation or a house owned by employer in case of non-government employees with above 25 lakh population is .

A. 15% of employee salary
B. 7.5% of employee salary
C. 20% of employee salary
D. 10% of employee salary
Answer» A. 15% of employee salary
discuss
93.

Rate of depreciation on residential building is……………..

A. 10%
B. 20%
C. 25%
D. 5%
Answer» D. 5%
discuss
94.

House property held for less than 36 months is .

A. short-term capital asset
B. projected capital asset
C. exempted capital asset
D. long-term capital asset
Answer» C. exempted capital asset
discuss
95.

Mr. Shushant is the owner of a house, the details of which are given below
the gross annual value would be Municipal value ` 36,000 Actual rent `
32,000 Fair Rent ` 36,000 Standard Rent ` 40,000

A. ` 36,000
B. 35,000
C. ` 30,000
D. ` 40,000
Answer» A. ` 36,000
discuss
96.

Expected rent shall be higher of .

A. municipal value and standard rent
B. fair rent and actual rent received
C. standard rent and fair rent
D. municipal value and fair rent
Answer» D. municipal value and fair rent
discuss
97.

Interest on capital, borrowed on 10.10.2000, for self-occupied property is deductible up to a maximum amount of .

A. ` 50,000
B. ` 1,50,000
C. ` 5,000
D. none of the above
Answer» B. ` 1,50,000
discuss
98.

Deduction from annual value is allowed under .

A. section 24
B. section 25
C. section 27
D. section 28
Answer» A. section 24
discuss
99.

………………..standard deduction from annual value is allowed.

A. 10%
B. 20%
C. 30%
D. 15%
Answer» C. 30%
discuss
100.

Interest on loan for self-occupied house taken before 1st April, 1999 will be allowed up to

A. ` 30,000
B. ` 1,50,000
C. ` 10,000
D. ` 50,000
Answer» A. ` 30,000
discuss

Done Reading?

Take a Test Download as PDF
Tags
Question and answers in Business Taxation, Business Taxation multiple choice questions and answers, Business Taxation Important MCQs, Solved MCQs for Business Taxation, Business Taxation MCQs with answers PDF download