📘 Advanced MCQs (51–100) preliminary and pre-operative expenses, deductions and exemptions, rebates
51.
Preliminary expenses are allowed under which section?
A. 35
B. 35D
C. 37
D. 80C
Answer: B
52.
Preliminary expenses can be amortized over:
A. 3 years
B. 5 years
C. 10 years
D. Fully in one year
Answer: B
53.
Preliminary expenses are allowed to:
A. Individuals only
B. Companies only
C. Companies and specified non-corporates
D. All taxpayers
Answer: C
54.
Which of the following is NOT a preliminary expense?
A. Legal charges for drafting MOA
B. Market survey expenses before setup
C. Purchase of machinery
D. Registration fees
Answer: C
55.
Preliminary expenses are allowed:
A. Before incorporation only
B. After incorporation only
C. Before or after commencement
D. Only after first sale
Answer: C
56.
Maximum limit for preliminary expenses is:
A. 2% of cost of project
B. 5% of cost of project
C. 10% of capital employed
D. No limit
Answer: B
57.
Pre-operative expenses are:
A. Always revenue
B. Always capitalized
C. Treated as deferred
D. Not allowed
Answer: B
58.
Interest during construction period is:
A. Revenue expense
B. Capitalized
C. Disallowed
D. Deferred revenue
Answer: B
59.
Pre-operative expenses include:
A. Salary after production
B. Interest before commencement
C. Rent after commencement
D. Audit fees
Answer: B
60.
Expenses incurred after commencement but before production are:
A. Revenue
B. Capital
C. Deferred
D. Contingent
Answer: A
61.
Section 80C maximum deduction is:
A. ₹1,00,000
B. ₹1,50,000
C. ₹2,00,000
D. ₹2,50,000
Answer: B
62.
Which is not eligible under 80C?
A. LIC premium
B. PPF
C. NSC
D. Medical insurance
Answer: D
63.
Section 80D relates to:
A. Education loan
B. Medical insurance
C. Housing loan
D. Donations
Answer: B
64.
Deduction under 80D for senior citizen is up to:
A. ₹25,000
B. ₹50,000
C. ₹75,000
D. ₹1,00,000
Answer: B
65.
Section 80E applies to:
A. Housing loan interest
B. Education loan interest
C. Business loan
D. Car loan
Answer: B
66.
80E deduction is allowed for:
A. 5 years
B. 8 years
C. 10 years
D. Unlimited
Answer: B
67.
Section 80G applies to:
A. Insurance
B. Donations
C. Rent
D. Interest
Answer: B
68.
Donation to PM Relief Fund qualifies for:
A. 50% deduction
B. 100% deduction
C. No deduction
D. 75% deduction
Answer: B
69.
Section 80TTA applies to:
A. FD interest
B. Savings account interest
C. Loan interest
D. Bond interest
Answer: B
70.
Maximum deduction under 80TTA:
A. ₹5,000
B. ₹10,000
C. ₹15,000
D. ₹20,000
Answer: B
71.
Section 80TTB applies to:
A. Companies
B. Senior citizens
C. Firms
D. NRIs
Answer: B
72.
80TTB maximum deduction:
A. ₹10,000
B. ₹25,000
C. ₹50,000
D. ₹1,00,000
Answer: C
73.
Section 10 deals with:
A. Deductions
B. Exemptions
C. Rebates
D. Penalties
Answer: B
74.
Agricultural income is:
A. Taxable
B. Exempt
C. Partially taxable
D. Fully taxable
Answer: B
75.
HRA exemption is covered under:
A. Section 80C
B. Section 10
C. Section 87A
D. Section 24
Answer: B
76.
Which is exempt income?
A. Salary
B. Bonus
C. Gratuity (within limits)
D. Commission
Answer: C
77.
LTA exemption is under:
A. 80C
B. 10
C. 87A
D. 24
Answer: B
78.
Rebate under Section 87A is available to:
A. All taxpayers
B. Individuals only
C. Companies
D. Firms
Answer: B
79.
Maximum rebate under 87A (current regime):
A. ₹5,000
B. ₹10,000
C. ₹12,500
D. ₹25,000
Answer: C
80.
Rebate applies to:
A. Total income
B. Tax payable
C. Gross income
D. Deductions
Answer: B
81.
Rebate under 87A is allowed if income is up to:
A. ₹3 lakh
B. ₹5 lakh
C. ₹7 lakh
D. ₹10 lakh
Answer: C
82.
Which is NOT a deduction?
A. 80C
B. 80D
C. Section 10
D. 80G
Answer: C
83.
Deduction is allowed from:
A. Gross income
B. Net income
C. Total income
D. Tax payable
Answer: A
84.
Exemption reduces:
A. Tax
B. Income
C. Deduction
D. Liability
Answer: B
85.
Rebate reduces:
A. Income
B. Tax liability
C. Gross income
D. Deductions
Answer: B
86.
Standard deduction is available under:
A. Salary
B. Business
C. Capital gains
D. Other sources
Answer: A
87.
Standard deduction amount:
A. ₹40,000
B. ₹50,000
C. ₹75,000
D. ₹1,00,000
Answer: B
88.
Deduction under 80CCD relates to:
A. Insurance
B. Pension scheme
C. Donation
D. Medical
Answer: B
89.
80CCD(1B) additional deduction:
A. ₹25,000
B. ₹50,000
C. ₹75,000
D. ₹1,00,000
Answer: B
90.
Which is NOT exempt?
A. Agricultural income
B. Dividend (fully)
C. Gratuity (within limit)
D. HRA (within limit)
Answer: B
91.
Donation in cash above ₹2000:
A. Fully allowed
B. Partially allowed
C. Not allowed
D. Double deduction
Answer: C
92.
Section 80U applies to:
A. Disabled person
B. Senior citizen
C. Women
D. Students
Answer: A
93.
80U deduction depends on:
A. Income
B. Disability level
C. Age
D. Gender
Answer: B
94.
Which is not pre-operative expense?
A. Trial run expenses
B. Salary before start
C. Advertising after start
D. Interest before start
Answer: C
95.
Pre-operative expenses are shown in:
A. P&L
B. Balance sheet
C. Trading account
D. Cash book
Answer: B
96.
Preliminary expenses are:
A. Fully allowed
B. Not allowed
C. Amortized
D. Capitalized fully
Answer: C
97.
Which section allows deduction for donations?
A. 80C
B. 80G
C. 80D
D. 10
Answer: B
98.
Deduction under Chapter VI-A is allowed from:
A. Gross total income
B. Net profit
C. Tax payable
D. Revenue
Answer: A
99.
Which is rebate?
A. 80C
B. 87A
C. 10
D. 24
Answer: B
100.
Which benefit reduces tax directly?
A. Deduction
B. Exemption
C. Rebate
D. Depreciation
Answer: C
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