MCQ ON INCOME TAX LAW & ACCOUNTS
UNIVERSITY OF LUCKNOW
B.COM SEM VI
CHAPTER WISE I TO VI MCQ
CH:1 (Mcq Income Tax Introduction And Important Definitions)
Q1. When Income Tax was levied in India first time?
(A)in 1860
(B)In 1866
(C)in 1918
(D)In 1961
2. Income-tax is:
(A)a direct tax
(B)an indirect Tax
(C)business tax
(D)none of these
3. Rate of income-tax is fixed under:
(A)The Income Tax Act
(B)The Finance Act
(C)An Ordinance
(D)none of these
Q4. How Many heads of income tax are there to compute Gross total income of an assesse?
- Three
- Four
- Five
- six
5. The present Income Tax Act is known as:
(A) Income Tax Act, 1922
(B) Income Tax Act, 1886
(C) Income Tax Rule, 1962
(D) Income Tax Act, 1961
Q6. The period of 12 months commencing on the 1st day of April every year is known as:
(A)The Previous Year
(B)The Assessment Year
(C)The Accounting Year
(D)The Financial Year
Q7. The definition of income is:
(A)inclusive
(B)exhaustive
(C)complex
(D)simple
8. Income Tax Act was passed in:
(A)1961
(B)1971
(C)1981
(D)1951
9.The term previous year means:
(A)The Financial year
(B)Calendar year
(C)Accounting year
(D)The Financial year before the assessment year
10.Income Tax is computed on:
(A)Capital
(B)Fixed Assets
(C)Income
(D)Business Gains
11.The period of assessment year is:
(A)1st January to 31st December
(B)1st April to 31st March
(C)1st April to 31st December
(D)1st July to 30th June
12. Income Tax is levied on those individuals:
(A)Whose income is less than the exempted limit in any the previousyear.
(B)Whose income is more than the exempted limit in any the previous year.
(C)Whose income is up to 2,45,000 in any the previous year.
(D)Whose income is up to 2,50,000 in any the previous year.
13. Income tax was levied in India first by the following:
(A)Sir James Wilson
(B)Sir James
(C)Sir Newton
(D)Sir Lucas Paciolo
14. Exemption limit for the Assessment Year 2020-21 for a non-resident individual is:
(A)1,50,000
(B)1,60,000
(C)2,50,000
(D)2,20,000
15. Exemption limit for the Assessment Year 2020-21 for a super senior citizen resident of India is:
(A)2,50,000
(B)3,00,000
(C)4,00,000
(D)5,00,000
16. Exemption limit for the Assessment Year 2020-21 for a woman (resident in India and who is of the age of 60 years or more but less than 80 years) is:
(A)1,90,000
(B)2,40,000
(C)3,00,000
(D)3,50,000
17. Income tax department works under:
(A)Central Government
(B)State Government
(C)Central Board of Direct Taxes
(D)Chief Commissioner of Income Tax
18.Under The Income Tax Act Person’ means:
(A)Hindu undivided family
(B)Company
(C)Local authority
(D)All of these
19.Sum of various heads of income is called:
(A)Gross total income
(B)Total income
(C)Taxable income
(D)Aggregate income
20.A very senior citizen shall be that individual for purpose of Income Tax whose age is more than the following:
(A)60 years
(B)65 years
(C)80 years
(D)None of these
21.The previous year always ends on:
(A)31st March
(B)30th April
(C)30th June
(D)31st December
22. What would be the Assessment Year of the Financial Year 2019-20:
(A)2018-19
(B)2019-20
(C)2020-21
(D)None of these
23. An individual is liable to pay a surcharge for the Assessment Year 2020-21:
(A)12% of tax payable
(B)12% of tax payable if total income exceeds 10 lakh
(C)12% of tax payable if total income exceeds 50 lakh
(D)10% of tax payable if total income exceeds 50 lakh but does not exceed 1 crore or 15% of tax payable if total income exceeds 1 crore but does not exceed 2 crore
CH2 (MCQ ON AGRICULTURAL INCOME)
1.Which of the following is an agricultural income?
(A)Income from interest on a simple mortgage of land used.
(B)Income from agricultural land situated in Pakistan for agricultural purpose.
(C)Amount of compensation received from Insurance Company on account of the loss of crop due to flood.
(D)Prize from the Government on account of higher yield
2.Income from the rent of agricultural land is:
(A)agricultural income
(B)casual income
(C)business income
(D)professional income
3.Salary received by an Agricultural Farm’s Manager:
(A)Professional income
(B)Salary income
(C)Agricultural income
(D)Capital income
4.Which of the following is an agricultural income?
(A)Rent received from agricultural land
(B)Income from a dairy farm
(C)Income from poultry farming
(D)Dividend from a company engaged in agriculture
5.In case of a woman assessee her agricultural income of 20,000 shall be included in her total income, when it is more than the following limit:
(A)1,35,000
(B)1,10,000
(C)2,50,000
(D)2,25,000
6.Percentage of income from growing and manufacturing tea in India is considered as agricul tural income:
(A)50%
(B)60%
(C)65%
(D)70%
7.For the computation of tax agricultural income is included in total income if:
(A)Agricultural income exceeds 5,000
(B)Agricultural income exceeds 10,000
(C)Agricultural income exceeds 50,000
(D)Agricultural income exceeds 5,000 and total income exceeds the exemption limit
8.For the computation of tax agricultural income is included in the total income of:
(A)Individual
(B)Firm
(C)Company
(D)Local Authority
9.Percentage of income from the sale of coffee grown and cured in India is considered as agricultural income:
(A)50%
(B)60%
(C)70%
(D)75%
10.Percentage of income from the sale of coffee grown, cured, roasted and grounded is considered as business income:
(A)20%
(B)30%
(C)40%
(D)50%
11.Income from land but not agricultural income;
(A)Income from self-grown grass
(B)Income from fisheries
(C)Income from mining royalties
(D)All of these
12.Percentage of income from the sale of rubber is grown and manufactured latex in India is considered as agricultural income:
(A)45%
(B)50%
(C)55%
(D)65%
CH3: (MCQ ON RESIDENCE AND TAX LIABILITY)
BASIS OF CHARGE
1.Who may be not an ordinary resident from the following?
(A)Partnership firm
(B)Company
(C)Association of person
(D)Hindu undivided family
2.Salary payable by the Government of India to an Indian citizen for services outside India:
(A)is taxable in India
(B)is not taxable in India
(C)is includible in the total income for rate purposes only
(D)none of these
3.What are the classes of an assessee on the basis of their residence:
(A)Indian and foreigners
(B)Resident Indians and Non-resident Indians
(C)Resident, Not ordinarily resident and Non-resident
(D)Persons, Firms, and Companies
4.Income accruing in India is assessable for:
(A)All assessees
(B)Resident in India
(C)Not ordinarily resident in India
(D)Non-resident in India
5.On the basis of residence, the assessees
(A)Two
(B)Three
(C) Four
(D) Five
6.Agricultural income in Pakistan is assessable for:
(A)Resident
(B)Not ordinarily resident
(C)Non-resident
(D)Not taxable
7.A citizen of India who goes abroad for the purpose of employment, he must stay in India tobecome a resident for at least:
(A)182 days
(B)90 days
(C)60 days
(D)180 days
8.Every year the residential status of an assessee:
(A)may change
(B)will certainly Change
(C)will not change
(D)none of these
9.A company does not become the following in the previous year:
(A)Ordinarily resident
(B) Non-resident
(C) Not an ordinarily resident
(D)Resident
10. Income from a business in foreign country not controlled from India is taxable in case of:
(A)Ordinarily resident
(B)Not ordinarily resident
(C)Non-resident
(D)All of these
11.Income not taxable in case of resident in India:
(A)Income received in India
(B)Income accrued in India
(C)Foreign income
(D)Past untaxed foreign income brought into India during the previous year
12.Income accruing in Paris and received there is taxable in India in the case of:
(A)for resident and ordinarily resident only
(B)for both resident and ordinarily resident and resident but not ordinarily resident
(C)for both resident and non-resident
(D)for all resident, not ordinarily resident and non-resident
CH4 (MCQ ON Exemption FROM INCOME TAX)
(NON-Taxable Income)
1.State, which of the following income is exempted from tax
(A)Agricultural income in Kolkata
(B)Interest on Government securities
(C)Income from Salary
(D)Capital Gains
2.Agricultural income is:
(A)Taxable
(B)Exempted
(C)Partly exempted
(D)None of these
3.A new undertaking is established in Special Economic Zone during the Previous Year 2014-15. Deduction u/s 10AA shall be allowed for:
(A)5 Assessment years
(B)8 Assessment years
(C)10 Assessment years
(D)15 Assessment years.
4.In which section of the Income-tax Act exempted incomes have been mentioned?
(A)Sec. 10
(B)Sec. 80C
(C)Sec. 13
(D)Sec. 20
5.The daily allowance received by a Member of Parliament is:
(A)Exempt
(B)Taxable
(C)To be included in total income for tax purpose
(D) None of these
6.Tax-free income from the following is:
(A)Agriculture income
(B)Foreign allowance
(C)Dividend from Indian company
(D)All of these
7.Exempted income is:
(A) Interest from a domestic company
(B) Dividend from a domestic company
(C) Dividend from a foreign company
(D) Dividend from a cooperative society
8.Income of minor child is exempted:
(A)1,000
(B)1,500
(C)Income of minor child or 1,500, whichever is less
(D)Whole income
9.Maximum limit of interest exemption on individual account in post office savings account is:
(A)2,500
(B)3,500
(C)4,500
(D)Whole amount
10. Exempted income of a partner from the firm is:
(A)Salary from partnership firm
(B)Interest from partnership firm
(C)Share of profit in the firm’s income
(D)All of these
CH: 5 (MCQ on Income From Salary)
1.State, which of the following allowance is exempted?
(A) Dearness Allowance
(B)Foreign Allowance
(C)City Compensatory Allowance
(D) Medical Allowance
2.Education allowance is exempted for:
(A)One person
(B)Four persons
(C)Two persons
(D)None of these
3. A Government employee received salary 1,20,000 and entertainment allowance 10,000 during the previous year. He spent 6,000 on entertainment. He is entitled to deduction u/s 16 (ii):
(A)10,000
(B)6,000
(C)5,000
(D)Nil
4.Which of the following allowance is totally exempt from the Income Tax?
(A)Dearness Allowance
(B)House Rent Allowance
(C)Foreign Allowance
(D)None of these
5.The maximum amount for deduction as entertainment allowance to a government employee is:
(A)5000
(B)7500
(C)1/5th of salary
(D)Not at all
6.Deduction allowed from gross salary
(A)Professional Tax
(B)Entertainment Tax
(C)Income Tax
(D)Insurance Premium
7. Salary includes:
(A)Wages
(B)Pension
(C)Commission on sale
(D)All of these
8.Salary includes:
(A)Cash receipts
(B)Perquisites
(C)Profit in lieu of salary
(D)All of these
9.Deduction for entertainment allowance is availed by:
(A)Govt. Servant
(B)Non-Govt. Servant
(C)Both (a) and (b)
(D) None of these
10.Interest credited in recognised provident fund account is exempt up to:
(A)8%
(B)9%
(C)9.5%
(D)10%
11.Value of facility of a house, owned by the employer provided to an employee in the city where the population is 12 lakh, shall be:
(A) 15% of salary
(B) 10% of salary
(C) 7.5% of salary
(D) Fair Reant
12.Value of the facility of gardener is taxable for:
(A)Every employee
(B) Specified employee
(C) Officer
(D) Director
13.Cost of education for the employer is 1,200 p.m. per child. For employee taxable value of free education to his child shall be:
(A)1,000 p.m.
(C)200 p.m.
(B)1,200 p.m.
(D)Nil
14.Reimbursement of medical bills of a private hospital is exempt up to:
(A) 8,000
(B) Nil
(C) 20,000
(D) 25,000
15.House rent allowance is:
(A) Fully exempted
(B) Exempted to a certain limit
(C) Exempted in big cities
(D) Exempted for Govt. Employees
16.The HRA paid to an employee residing in Agra is exempt up to the lower of actual HRA, excess of rent paid over 10% of salary or:
(A)40% of salary
(B)50% of salary
(C)60% of salary whichever is less.
(D)75% of salary
CH 6 (MCQ ON INCOME From Salaries)
Retirement
1.The Commuted pension, in case the employee, does not get gratuity, shall be taxable:
(A)1/3 of total pension
(B) 2/3 of total pension
(C) 1/4 of total pension
(D) 1/2 of total pension
2.In the case of non-government employees covered by the Payment of Gratuity Act, 1972, what is the maximum amount of gratuity exempt from tax?
(A)10,00,000
(B)2,50,000
(C)20,00,000
(D)5,00,000
3.Gratuity received by a Government employee is:
(A)Fully exempted
(B)Partly taxable
(C) Fully taxable
(D) Exempted up to 10,00,000
4.The periodic payment of money for the past service is known as:
(A)Pension
(B)Commuted Pension
(C) Gratuity
(D) None of these
5.Maximum exempted amount of encashment of earned leave received by an employee is:
(A) 2,00,000
(B) 1,35,360
(C)2,40,000
(D)3,00,000
6.Maximum amount of exemption in case of compensation on retrenchment is:
(A)3,00,000
(B)4,00,000
(C)5,00,000
(D)6,00,000
7.Maximum amount of exemption in case of compensation on voluntary retirement is:
(A)4,00,000
(B)5,00,000
(C)8,00,000
(D)10,00,000
8.Amount received from a recognised provident fund at the time of retirement is exempt:
(A)3,00,000
(B)5,00,000
(C) 10,00,000
(D) Whole amount
9.On retirement of government employee exemption is available on:
(A)Commuted value of pension
(B)Amount of gratuity
(C) Encashment of earned leave
(D) All of these