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140+ Income Tax Law and Practices Solved MCQs

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) , Bachelor of Commerce in Banking and Insurance (B.Com Banking and Insurance) .

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

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