MCQs on Basic Concept of Income Tax, Residential Status & Exempt Income
Q1. Income Tax is imposed
by .
(a) State Government (b) Central Government
(c) Both of the above (d) Constitution of India
Q2. Parliament has the power to levy tax on incomes other than.
(a) Exempt Incomes (b) Income
of poor people
(c) Agricultural Income (d) All incomes are taxable
Q3. Which Entry of Union List gives the power to
Parliament to levy tax on incomes?
- (a) Entry 81 of List I to the Seventh schedule
- (b) Entry 81 of List II to the Seventh schedule
- (c) Entry 82 of List I to the Seventh schedule
- (d) Entry 82 of List II to the Seventh schedule
Q4. Highest Administrative Authority for Income
Tax in India is.
(a) Finance Minister (b) CBDT
(c) President of India (d) Director
of Income Tax
Q5. Income-tax Act, 1961 applies
to .
(a) Whole of India (b) Whole of India excluding J&K
(c) Maharashtra (d) All of the above
Q6. The basic source
of income-tax law
is .
(a) Income-tax Act, 1961 (b) Income-tax
Rules, 1962
(c) Circulars/Notifications (d)
Judgments of Courts
Q7. The income Tax Act came into force on .
(a) 1.4.1961 (b) 1.4.1962 (c) 1.4.1956 (d) 1.4.1965
Q8. The income Tax Act contains sections
(a) XIV (b) 297 (c) XV (d) 298
Q9. The income Tax Act contains schedules.
(a) XIV (b) 297 (c) XV (d) 298
Q10. Proviso gives to the main provision.
(a) Clarification (b) Exceptions
(c) Proper Administration (d) None of these
Q15. Part 3 of schedule I of The Finance Act, 2018 gives rate of advance tax payable for the
AY .
(a) 2018-19 (b) 2019-20 (c) 2017-18 (d) 2016-17
Q16. Notifications issued
by CBDT are binding on .
(a) Assessee (b) Income tax authority
(c) Both of the above (d) None of the above
Q17. Circulars issued by CBDT are binding
on .
(a) Assessee (b) Income tax authority
(c) Both of the above (d) None of the above
Q18. Circulars are issued by the CBDT to the scope & meaning
of the provisions of Law.
(a) Clarify the doubts (b) Exceptions
(c) Proper Administration (d) None of these
Q19. As per Section 2(7),
“Assesses” means a person
- (a)
By whom any tax or other sum of money
is payable
- (b) Against whom a proceeding has been taken under the act
- (c) A person deemed to be an assessee
in default
- (d)
All of the above
Q20. A person includes .
(a) Individual & HUF (b) Firm & Company
(c) AOP/BOI, LA, Every AJP (d) All of the above.
Q21. Every assessee is a person,
& every person
is .
(a) Also an assessee (b) Need not be an assessee
Q22. The term “Person” includes .
(a)
Registered Firm (b) Unregistered Firm
(c) Both of (a) & (b) (d) None of (a) or (b)
Q23. Association of persons consists
of .
(a) Individuals (only) (b) Company
(c) Any Person other than (a) (d) Any kind of person
(a) Individuals (only) (b) Company
(c) Any Person other than (a) (d) Any kind of person
Q11. Explanation gives to the main provision.
(a) Clarification (b) Exceptions
(c) Proper Administration (d) None of these
Q12. Part 1 of schedule
I of the Finance Act, 2018 gives
rate of income tax for AY .
(a) 2018-19 (b) 2019-20 (c) 2017-18 (d) 2016-17
Q13. Finance Bill becomes the Finance Act when it is
passed by .
(a) Lok Sabha (b) Both Lok Sabha & Rajya Sabha
(c) Both House
of Parliament & signed by President.
(d)
Both House of Parliament & signed by Prime Minister.
Q14. Part 2 of schedule
of I of the Finance
Act, 2018 gives rate of tax deductible of source
for the PY .
(a) 2018-19 (b) 2019-20 (c) 2017-18 (d) 2016-17
the definition of ‘person’.
(a) Individual (b) HUF (c) Company (d)
Minor
Q26. A municipal corporation legally entitled to manage & control a municipal fund is taxable
in the status of :
(a) Individual (b) AOP (c)
LA (d) AJP
Q27. A & B are legal heirs of
C. After death of C, A & B carry on his business without entering
into a partnership. What is their Status?
(a) Company (b) LLP (c) AOP (d) Firm
Q28. As per sec. 2(24) definition of ‘income’ is:
(a) Inclusive (b) Exhaustive (c) Exclusive (d) Descriptive
|
1: d |
2: c |
3: c |
4: b |
5: a |
6: a |
7: b |
8: d |
9: a |
10: b |
11: a |
12: b |
13: c |
14: a |
|
15: b |
16: c |
17: b |
18: a |
19: d |
20: d |
21: b |
22: c |
23: d |
24: a |
25: d |
26: c |
27: c |
28: a |
Q29. A domestic
company means .
(a) Indian company
only
(b) Both Indian company & foreign company
(c) Both Indian
company & a foreign company having business connection in India
(d) Both Indian
company & a foreign company which has made the prescribed arrangement for
declaration & payment of dividends in India out of the income chargeable to tax in India.
Q30. ‘Income’ includes the following types .
(a) Legal (b) Illegal (c) Both (d) None
Q31. ‘Income’ u/s 2(24) includes .
(i)
Profits of any business carried
on by a person.
(ii)
Any advance money forfeited in the course of
negotiations for transfer of capital asset.
Choose the correct
option:
(a) Both (i) & (ii) (b) Only (i)
(c) Only (ii) (d) Neither
(i) nor (ii).
Q32. Which of the following income
is not included in the term ‘income’ ?
(a) Profit & gains (b) Dividend (c) Profit in lieu of salary
(d) Reimbursement of travelling expenses
Q33. Cash gift received from a non-relative is regarded as income. But Exempt amount is p.a.
(a) Rs. 25,000
(b) Rs. 75,000 (c) Rs. 50,000 (d) Rs. 25,000
*Q34. What is not included
in taxable Income
?
(a)
Income from smuggling
activity
(b)
Casual income
(c)
Capital Receipt, except gains on transfer of capital asset
(d)
Income received in kind.
*Q35.
A & Co. received Rs. 2 lacs as compensation from B & Co. for
premature termination of contract of agency. Amount so received is .
(a)
Capital receipt & taxable
(b)
Capital receipt & not taxable
(c)
Revenue receipt & taxable
(d)
Revenue receipt &
not taxable
*Q36. Mr. P has taken a loan of Rs. 5,00,000 from HDFC bank for purchasing
a car. His rental income is Rs. 50,000 pm out of which Rs. 5,000 pm directly
goes to the bank as an instalment of loan. Discuss the tax treatment.
(a) Rs. 5,000 p.m is treated as diversion of Income.
(b) Rs. 5,000 p.m is an application of income.
(c)
Rs. 5,000 p.m is not treated as his income.
(d) None of the above.
Q37. Year in which
income is taxable
is known as & year in
which income is earned is known as .
(a) PY, AY (b)
AY, PY (c) AY, AY (d) PY, PY
Q38. Pick-the correct
one.
(a)
AY & PY are same concepts.
(b) AY is the year next to the PY.
(c)
PY is the year next to the AY.
(d) None of the above
Q39. Assessment Year is the period of 12 month
commencing on 1st day of .
(a) April every year (b)
December every year
(c) July every year (d) January
every year
*Q40. Previous Year can be a period of .
(a) > 12 months
or < 12 months (b) only 12 months
(c) 12 months or < 12 months (d)
≥ 12 months.
Q41. Assessment year can be a period of .
(a) > 12 months
or < 12 months (b) only 12 months
(c) 12 months or < 12 months (d)
≥ 12 months.
Q42. Mr. P sets up a new business on 15.7.2018 & he commenced his business from 1.2.2019. First PY shall be:
(a) 15.7.2018 to 31.3.2019 (b)
PY 2018-19
(c) 1.2.2018 to 31.3.2019 (d) PY 2019-20
*Q43. First previous year in case of a business or profession newly set up
on 31.3.2019 would be .
(a) Start from 1.4.2018 & end on 31.03.2019
(b) Start from 31.3.2019 & will end on 31.3.2019
(c) Start from 1.1.2019 & end on 31.12.2019
(d) Start from 1.1.2019
& end on 31.3.2019
Q44. All Assessees
are required to follow:
(a)
Uniform PY which must be calendar year only
(b) Uniform PY which must be FY only
(c)
Any period of 12 months as previous
year
(d)
Period starting from 1st July to 30th June as PY
Q45. A person
follows Calendar year for accounting purpose. For taxation, he has
to follow
(a)
Calendar year only – 1 Jan to 31 December
(b) FY only - 1 April to 31 March
(c)
Any Calendar or FY as per his choice
(d) He will follow extended
year from 1st January to next
31st March (a period of 15
months)
Q46. Mr. P. maintains his accounts of the basis of calendar year. For PY 2018-19, his AY
shall be.
(a) 2018-19 (b)
2018 (c) 2019-20 (d) 2019
Q47. In which of the following cases, income of PY is assessable in the previous year
itself.
(a) A persons
leaving India (b) Salaried
Employee
(c) Illegal business (d) Charitable institution
*Q48. If the master of the ship belonging to a
NR could not file return of income before the departure of ship from
India then it can be filed after the ship has left India but within days.
(a) 30 (b) 45 (c) 60 (d) 90
*Q49. In case of shipping business
of NR, Income =
(a)
10% of the fare & freight collected by the ship.
(b)
20% of the fare & freight collected by the ship.
(c) 25% of the fare & freight
collected by the ship.
(d) 7.5% of the fare & freight
collected by the ship.
Q50. Income of NR from shipping business
in India is taxed
(a) 30% + SC + HEC (b) 40% + SC + HEC
(c) 50% + SC + HEC (d) 60% + SC + HE
Answer keys
29-D, 30-c, 31-a, 32-d, 33-c,34-c,35-a,
36-b,37-b,38-b39-a,40-c,41-b, 42-a,
43-b, 44-b, 45-b,
46-c, 47-a, 48-a, 49-d, 50-b
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