140+ Income Tax Law and Practices Solved MCQs

1.

The Income Tax Act, was enacted in:

A. 1921
B. 1951
C. 1961
D. 1981
Answer» C. 1961
2.

Mr. X has started his business from 2nd Sept,2019 and does not have any other source of Income, his first previous year will start from

A. 1st April, 201 9
B. 2nd September,2019
C. Any of the above
D. None of the above
Answer» B. 2nd September,2019
3.

In Assessment year, the tax will be calculated at

A. current year rate
B. previous year rate
C. previous to previous year rate
D. none of the above
Answer» A. current year rate
4.

Assesee means a person from whome

A. Tax is to be collected
B. Tds is to be deducted
C. Advance tax is collected
D. all of the above
Answer» D. all of the above
5.

Agriculture income is exempt in India:

A. True
B. False
C. Somewhat agree
D. Neither of them
Answer» A. True
6.

Agricultural income from foreign is taxable

A. True
B. False
C. Somewhat agree
D. Neither of them
Answer» A. True
7.

Sale of land is a

A. Capital Receipt
B. Revenue Receipt
C. Both of the above
D. Neither of the above
Answer» A. Capital Receipt
8.

Sales of goods is a

A. Revenue Receipt
B. Capital Receipt
C. Both of the above
D. Neither of the above
Answer» A. Revenue Receipt
9.

As the income goes up, the slab of income tax rate goes

A. up
B. down
C. moderate
D. fluctuate
Answer» A. up
10.

The financial year starts from

A. 1st Jan to 31st Dec
B. 1st April to 31st March
C. 1st Oct to 30th September
D. 1st July to 31st August
Answer» B. 1st April to 31st March
11.

Person includes

A. AOP
B. BOI
C. Company
D. All of the above
Answer» D. All of the above
12.

Income tax is paid by every individual depending on his

A. citizenship
B. residential status
C. both of the above
D. neither of the above
Answer» B. residential status
13.

Income tax is a

A. Direct tax
B. Indirect tax
C. Neither of the above
D. Both of the above
Answer» A. Direct tax
14.

Income tax is collected by

A. state government
B. central government
C. Semi-Government
D. All of the above
Answer» B. central government
15.

Assessee includes any person in respect of whom:

A. who is liable to pay tax
B. any person in respect of whom proceedings under the Act have been started
C. any person who is deemed to be an asssessee
D. all of the above
Answer» D. all of the above
16.

The residential status of an Individual can be:

A. Resident and Ordinary Resident
B. Resident but not ordinary resident
C. Non resident
D. All of the above
Answer» D. All of the above
17.

Citizenship is the criteria of assessment

A. true
B. false
C. somewhat agree
D. partially correct
Answer» A. true
18.

An individual is said to be resident in India if he stays for_ days during the previous year

A. 180
B. 182
C. 183
D. 184
Answer» B. 182
19.

Income received or deemed to be received in India is taxable for

A. ROR
B. RNOR
C. NR
D. All of the above
Answer» D. All of the above
20.

Gifts received from relatives on the occasion of marriage would be

A. taxable
B. exempted
C. both of the above
D. Neither of the above
Answer» B. exempted
21.

Gifts received from others on the occasion other than marriage would be taxable if the aggregate amount exceeds

A. Rs 50,000
B. Rs 51,000
C. Rs 52,000
D. Neither of the above
Answer» A. Rs 50,000
22.

As the income goes down, the slab of income tax rate goes

A. up
B. down
C. moderate
D. fluctuate
Answer» B. down
23.

The calendar year starts from

A. 1st Jan to 31st Dec
B. 1st April to 31st March
C. 1st Oct to 30th September
D. 1st July to 31st August
Answer» A. 1st Jan to 31st Dec
24.

Receipt of Income and remittance of income are different things

A. True
B. False
C. Somewhat agree
D. All of the above
Answer» A. True
25.

Ordinary resident must stay in India for_ days during the previous year

A. 60 days
B. 65 days
C. 70 days
D. neither of the above
Answer» A. 60 days
26.

A resident must stay in India for 730 days during the previous

A. 6 years
B. 8 years
C. 7 years
D. 9 years
Answer» C. 7 years
27.

A person is said to be of Indian origin if he or his parent were born in

A. undivided india
B. divided india
C. partitioned india
D. Neither of the above
Answer» A. undivided india
28.

Receipt by a member from HUF is fully exempt

A. true
B. false
C. somewhat agree
D. all of the above
Answer» A. true
29.

Income of minor child clubbed with the income of parents gets an exemption of

A. Rs 1500
B. Rs 3000
C. Rs 4000
D. Rs 2000
Answer» A. Rs 1500
30.

To determine the residential status of HUF, the residential status of

A. member is considered
B. karta is considered
C. co-parceners is considered
D. neither of the above
Answer» B. karta is considered
31.

GST is a………………….

A. Professional tax
B. Direct tax
C. Indirect tax
D. Service tax
Answer» C. Indirect tax
32.

A person with the age of or more is considered as a super senior citizen as per Income tax Act.

A. 56
B. 60
C. 80
D. 85
Answer» C. 80
33.

Assessment year is the period of 12 months commencing from_every year.

A. 1st March
B. 31s tMarch
C. 1st April
D. 30thApril
Answer» C. 1st April
34.

Expenditure incurred on exempted income is.............. as deduction.

A. Fully Allowed
B. Partly Allowed
C. Not Allowed
D. None of these
Answer» A. Fully Allowed
35.

HRA is………………..

A. Fully Taxable
B. Partly Taxable
C. Fully Exempted
D. None of these
Answer» B. Partly Taxable
36.

If the assessee is living in own house HRA is…………..

A. Fully Taxable
B. Partly Taxable
C. Fully Exempted
D. None of these
Answer» A. Fully Taxable
37.

Children education allowance is exempt up to per month per child for two children.

A. Rs.100
B. Rs.150
C. Rs.200
D. Rs.250
Answer» A. Rs.100
38.

Children hostel allowance is exempt up to per month per child for

A. 2 child
B. 3 child
C. 4 child
D. 7 child
Answer» A. 2 child
39.

Transport allowance given by the employer to the employee is exempt up to………..

A. Rs.1000p.m
B. Rs.1600p.m
C. Rs.1000p.a
D. Rs.1600p.a
Answer» B. Rs.1600p.m
40.

Education allowance is exempted for……..

A. One person
B. Four persons
C. Two persons
D. None of these
Answer» C. Two persons
41.

Gratuity received by a government employee is.......................

A. Fully exempted
B. Partly exempted
C. Fully taxable
D. Exempted up toRs:1,00,000
Answer» A. Fully exempted
42.

The periodic payment of money for the past service is known as........................

A. Gratuity
B. Pension
C. Commuted pension
D. Leave salary
Answer» B. Pension
43.

Pension is taxable under_head.

A. Salary
B. House property
C. Capital gains
D. other sources
Answer» A. Salary
44.

Which of the following is not included in salaryincome.

A. Commuted pension
B. Un commuted pension
C. Family pension
D. Leave salary
Answer» C. Family pension
45.

Dearness allowance is taxable in the handsof.................

A. Govtemployees
B. Non Govtemployees
C. Allemployees.
D. None ofthese.
Answer» D. None ofthese.
46.

Deduction under section 80 C is available for investments in

A. Unit link insurance plan
B. LIC
C. Statutory provident fund
D. All of these
Answer» D. All of these
47.

Deduction under section 80 CCD is available to investment made in the fund of

A. State government
B. Deemed government
C. Centralgovt.
D. None of these
Answer» C. Centralgovt.
48.

Maximum deduction under section 80CCE is subject to a maximum of

A. Rs. 5,00,000.
B. Rs.2,00,000.
C. Rs.1,00,000.
D. Rs.1,50,000.
Answer» D. Rs.1,50,000.
49.

.Deduction under section 80D is available on

A. Health Insurance Premium
B. Life Insurance Premium
C. Education Insurance Premium
D. None of these
Answer» A. Health Insurance Premium
50.

Deduction under section 80 D is subject to

A. 25,000
B. 50,000
C. 70,000
D. None of these
Answer» A. 25,000
51.

Deduction under section 80DD is available to

A. dependent
B. disabled dependent
C. Less dependent
D. None of these
Answer» B. disabled dependent
52.

Deduction under sec 80DD is available to the extent of

A. Rs 75,000
B. Rs 50,000
C. Rs 25,000
D. None of these
Answer» A. Rs 75,000
53.

Deduction under section 80DDB is available to the extent of

A. 40,000
B. 20,000
C. 30,000
D. None of these
Answer» A. 40,000
54.

Deduction under section 80E is available on

A. education
B. health
C. life
D. none of these
Answer» A. education
55.

Deduction under 80 QQB is available in respect of

A. royalty income
B. health
C. education
D. none of these
Answer» A. royalty income
56.

Every assesse has to file return of income if their taxable income exceeds

A. gross total income
B. total income
C. net income
D. basic exemption limit
Answer» D. basic exemption limit
57.

.The due date of filing return of income in case of company is

A. 30th September
B. 31st march
C. 1stapril
D. none of these
Answer» A. 30th September
58.

if total income is up to 50,000 then the late fees of filing ROI IS

A. 1,000
B. 2,000
C. 3,000
D. NONE OF THESE
Answer» A. 1,000
59.

If total income is up to 5,00,000 then the late fees of filing ROI is

A. 1,000
B. 5,000
C. 3,000
D. NONE OF THESE
Answer» B. 5,000
60.

Sales tax collected from the buyer of the goods is

A. Capital receipt
B. Revenue receipt
C. Deferred revenue receipt
D. Profits in lieu of salary
Answer» D. Profits in lieu of salary
61.

Income tax is collected on all types ofincome except .

A. Agricultural Income
B. Industrial Income
C. Capital Gain
D. Household Property
Answer» A. Agricultural Income
62.

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
63.

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
64.

As per Income Tax Act, 1961, income tax is charged on the income of at a rate 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
65.

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
66.

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
67.

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
68.

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
69.

Agricultural income is completely exempted for assessment year .

A. 1974-75
B. 1985-86
C. 1975-76
D. 1978-79
Answer» A. 1974-75
70.

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
71.

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
Answer» C. All of the above
72.

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
Answer» A. The control and management of its affairs is wholly or partly situated in India
73.

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
74.

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
75.

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
Answer» A. Taxable as per slabs
76.

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
77.

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
78.

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
79.

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
80.

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
81.

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
82.

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
83.

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
84.

__________ is exempted from income tax.

A. Interest from Indian company
B. Dividend from foreign company
C. (a) Cooperative dividend
D. (d) Dividend from Indian company
Answer» D. (d) Dividend from Indian company
85.

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» A. Section 80C
86.

_________ of Income Tax Act is related to residential status.

A. Section 2
B. Section
C. Section 5
D. Section 4
Answer» A. Section 2
87.

Resident of India includes .

A. Ordinarily resident
B. Not ordinarily resident
C. NRI
D. Both (a) and (b)
Answer» D. Both (a) and (b)
88.

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
89.

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
Answer» A. Not included in total income
90.

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
91.

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
92.

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
93.

____________ comes under agricultural income.

A. Tea garden
B. Commodity farming
C. All of the above
D. None of the above
Answer» A. Tea garden
94.

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
95.

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
96.

The definition of the person includes .

A. An individual
B. A company
C. A Hindu undivided family
D. All of the above
Answer» D. All of the above
97.

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. (c) Exempted from tax
D. (d)None of the above
Answer» C. (c) Exempted from tax
98.

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
99.

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
100.

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. (c) Taxable
D. (d)Can’t say
Answer» A. Not taxable
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