📘 Advanced MCQs on Assessee, Assessment Year, Capital & Revenue, Receipts, Depreciation

 

📘 Advanced MCQs (1–50)

Topics: Assessee, Assessment Year, Capital & Revenue, Receipts, Depreciation

---

1.

Which of the following is not included in the definition of “assessee” under the Income Tax Act?
A. A person liable to pay tax
B. A person against whom proceedings are initiated
C. A person who voluntarily files return despite no liability
D. A person earning exempt income only
Answer: D

---

2.

A person deemed to be an assessee includes:
A. Only legal heirs
B. Only agents of non-residents
C. Both legal heirs and agents of non-residents
D. Only representatives of minors
Answer: C

---

3.

Assessment year is the year:
A. In which income is earned
B. Immediately preceding previous year
C. In which income is assessed to tax
D. Same as financial year
Answer: C

---

4.

Previous year for a newly set-up business begins from:
A. 1st April
B. Date of incorporation
C. Date of commencement of business
D. Date of first sale
Answer: C

---

5.

If a business is discontinued, previous year ends on:
A. 31st March
B. Date of discontinuance
C. End of financial year
D. Date of audit
Answer: B

---

6.

Which receipt is capital in nature?
A. Sale of stock
B. Rent received
C. Loan received
D. Commission income
Answer: C

---

7.

Compensation for loss of profit is:
A. Capital receipt
B. Revenue receipt
C. Deferred receipt
D. Contingent receipt
Answer: B

---

8.

Compensation for loss of source of income is:
A. Revenue receipt
B. Capital receipt
C. Taxable income
D. Exempt income
Answer: B

---

9.

Expenditure incurred to acquire a new asset is:
A. Revenue expenditure
B. Deferred revenue expenditure
C. Capital expenditure
D. Contingent expenditure
Answer: C

---

10.

Which is revenue expenditure?
A. Purchase of machinery
B. Installation charges of plant
C. Routine repair of machinery
D. Extension of building
Answer: C

---

11.

Replacement of a major part of machinery leading to increased capacity is:
A. Revenue expenditure
B. Capital expenditure
C. Deferred revenue expenditure
D. Contingent liability
Answer: B

---

12.

Legal expenses for acquiring property are:
A. Revenue
B. Capital
C. Deferred
D. Contingent
Answer: B

---

13.

Which of the following is revenue receipt?
A. Sale of fixed asset
B. Issue of shares
C. Interest income
D. Loan taken
Answer: C

---

14.

Depreciation is allowed on:
A. Land
B. Building
C. Goodwill (in all cases)
D. Stock
Answer: B

---

15.

Depreciation is calculated on:
A. Market value
B. Historical cost
C. Written down value
D. Replacement cost
Answer: C

---

16.

Which asset is not eligible for depreciation?
A. Plant
B. Furniture
C. Land
D. Computer
Answer: C

---

17.

Depreciation is allowed under which section?
A. 32
B. 28
C. 80C
D. 10
Answer: A

---

18.

Block of assets concept applies to:
A. Individual assets
B. Group of assets with same rate
C. Only buildings
D. Only machinery
Answer: B

---

19.

Which is not a condition for claiming depreciation?
A. Ownership
B. Use for business
C. Registration
D. Asset existence
Answer: C

---

20.

Half depreciation is allowed if asset is used for:
A. Less than 180 days
B. More than 180 days
C. Exactly 365 days
D. None
Answer: A

---

21.

Advance received from customer is:
A. Capital receipt
B. Revenue receipt
C. Liability
D. Income
Answer: C

---

22.

Subsidy for setting up industry is:
A. Revenue receipt
B. Capital receipt
C. Taxable income
D. Business income
Answer: B

---

23.

Bad debts written off are:
A. Capital expenditure
B. Revenue expenditure
C. Deferred expenditure
D. Contingent expenditure
Answer: B

---

24.

Insurance claim for stock loss is:
A. Capital receipt
B. Revenue receipt
C. Exempt income
D. Not income
Answer: B

---

25.

Insurance claim for machinery destruction is:
A. Revenue receipt
B. Capital receipt
C. Income
D. Liability
Answer: B

---

26.

Which is capital expenditure?
A. Salaries
B. Rent
C. Purchase of land
D. Electricity charges
Answer: C

---

27.

Which is revenue expenditure?
A. Purchase of building
B. Wages
C. Acquisition of patent
D. Extension of factory
Answer: B

---

28.

Depreciation reduces:
A. Cash
B. Profit
C. Revenue
D. Capital
Answer: B

---

29.

Capital receipt is generally:
A. Taxable
B. Non-taxable
C. Always exempt
D. Always taxable
Answer: B

---

30.

Which is taxable capital receipt?
A. Loan
B. Gift
C. Capital gain
D. Share capital
Answer: C

---

31.

Assessment year 2025-26 relates to previous year:
A. 2025-26
B. 2024-25
C. 2023-24
D. 2026-27
Answer: B

---

32.

Revenue receipts are:
A. Recurring
B. Non-recurring
C. Capitalized
D. Deferred
Answer: A

---

33.

Capital receipts are:
A. Recurring
B. Non-recurring
C. Always income
D. Always expense
Answer: B

---

34.

Depreciation is a:
A. Cash expense
B. Non-cash expense
C. Liability
D. Income
Answer: B

---

35.

Which method is used in Income Tax?
A. Straight line
B. WDV
C. Both
D. None
Answer: B

---

36.

Which is not revenue receipt?
A. Commission
B. Interest
C. Dividend
D. Sale of building
Answer: D

---

37.

Expenditure to increase earning capacity is:
A. Revenue
B. Capital
C. Deferred
D. Contingent
Answer: B

---

38.

Routine maintenance is:
A. Capital
B. Revenue
C. Deferred
D. Liability
Answer: B

---

39.

Which is capital receipt?
A. Salary
B. Rent
C. Sale of machinery
D. Commission
Answer: C

---

40.

Assessee includes:
A. Individual only
B. Company only
C. Every person liable
D. Only firms
Answer: C

---

41.

Deemed assessee includes:
A. Minor
B. Legal representative
C. Partner
D. Director
Answer: B

---

42.

Previous year is normally:
A. Calendar year
B. Financial year
C. Assessment year
D. Accounting year only
Answer: B

---

43.

Which is not depreciation method under IT Act?
A. SLM
B. WDV
C. Units of production
D. Both A & C
Answer: D

---

44.

Depreciation is mandatory:
A. Yes
B. No
C. Optional
D. Conditional
Answer: A

---

45.

Which asset qualifies for depreciation?
A. Personal car
B. Business car
C. Land
D. Stock
Answer: B

---

46.

Capital expenditure is shown in:
A. P&L
B. Balance Sheet
C. Trading account
D. Cash book
Answer: B

---

47.

Revenue expenditure is shown in:
A. Balance Sheet
B. P&L Account
C. Capital account
D. Cash account
Answer: B

---

48.

Which is deferred revenue expenditure?
A. Advertisement campaign (large scale)
B. Rent
C. Salary
D. Electricity
Answer: A

---

49.

Depreciation helps in:
A. Increasing tax
B. Reducing profit
C. Increasing revenue
D. Reducing liability
Answer: B

---

50.

Which is not a capital receipt?
A. Loan
B. Share capital
C. Interest
D. Sale of asset
Answer: C