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MCQ ON Income Tax Law and Accounts(UNIT 1)

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B.COM SEM 6

UNIVERSITY OF LUCKNOW

 Q1. Parliament has the power to levy tax on incomes other than .

  1. Exempt Incomes
  2. Income of poor people
  3. Agricultural Income
  4. All incomes aretaxable

Q2. A person includes .

  1. Individual & HUF
  2. Firm & Company
  3. AOP/BOI, LA, Every AJP
  4. All of the above.

Q3. Association of persons consists of .

  1. Individuals (only)
  2. Company
  3. Any Person other than (a)
  4. Any kind of person

Q4. Explanation gives to the main provision.

  1. Clarification
  2. Exceptions
  3. Proper Administration
  4. None of these

Q5. ………….of Income Tax Act is related to residential status.

  1. Section 2
  2. Section 6
  3. Section 5
  4. Section 4

Q6. . Resident of India includes

  • Ordinarily resident
  • Not ordinarily
  • NRI resident
  • Both (a) and (b)

Q7. The Company may have the residential status as

  1. Resident or Non-resident
  2. Not ordinarily resident
  3. Non-resident
  4. Resident

Q10. The agricultural income includes

  1. Income from sale of crop
  2. Income from preparation of crop
  3. Income from nursery
  4. All of the above

Q11. If the agricultural income———————- is considered for calculating tax then the agricultural

  1. More than 5,000 and total income is exceeding exemption
  2. More than 5,000
  3. More than 10,000
  4. Any amount

Q12. Which section of the Income Tax Act exempted incomes have been mentioned?

  1. Section 80C
  2. Section 80DD
  3. Section 10
  4. Section 2

Q13. . The meaning of exempted income is

  1. Not included in total income
  2. Agricultural income

C.  Not taxable limit under income tax

D . All of the above

Q14. ‘Income’ includes the following types .

Legal

Illegal

Both (A) & (B)

None

Q15.A domestic company means .

  1. Indian company only
  2. Both Indian company & foreign company
  3. Both Indian company & a foreign company having business connection in India
  4. 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.

14…………….is the casual income.

  1. (a)interest received
  2. (b) Dividend income
  3. (c) Pension received
  4. (d) Winning from lotteries

15. The way of tax liability by taking full advantage provided by the Act is

  1. Tax management
  2. Tax avoidance
  3. Tax planning
  4. Tax evasion

16. Total income of a person is determined on basis of his

  1. Residential status
  2. Citizenship in India
  3. Both (a) & (b)
  4. None of the above

17. Residential status of company is determined

  1. u/s 6(4)
  2. u/s 6(1)
  3. u/s 6(6)
  4. u/s 6(3)

18. Indian Income means,

  1. Income accrued. Deemed to be accrued in India
  2. Income received. Deemed to be received in India
  3. Both (a) & (b)
  4. None of the above.

19. Income received in India during the previous year is taxable in the case of

  1. ROR
  2. RNOR
  3. NR
  4. All

20. Is tax planning legal or illegal Legal:

  1. legal and ethical/ moral
  2. legal but not ethical
  3. illegal but ethical
  4. none of these

21. Tax planning bring reduction In tax liability of following:

  1. A company
  2. An Assessee
  3. A H.U.F
  4. Individual

22. An art of dodging tax without actually breaking the law

  1. tax planning –
  2. Tax Avoidance
  3. Tax evasion
  4. Tax management

23. When a person reduce his total income by making false claim it is a procedure of:

  1. tax planning
  2. Tax Avoidance
  3. Tax evasion
  4. Tax management

24. An individual may get income

A. In India

B) Outside of  India

C. In India as well as outside India

D. No any where

25. Agriculture income is :

a. Taxable

b. Exempted

c. partly Exempt

d. None

26. Tax free income from

 A. agricultural income

B. Foreign allowances

C. dividend from Indian company

D. all of these

27. Any sum received by an Individual as a member of HUF from the income of HUF shall be the following :

(a) Fully taxable

(b) Fully exempt u/s 10(2)

(c)X, Fully taxable u/h “Salary”

 (d) Taxable @ 15%.

28. Share of the profits from the firm by the partner is:

(a) Fully taxable

(b) Fully Exempt u/s 10(2A)

 (c) Fully taxable u/h “Salary”

(d) Exempt upto Rs. 2.5 lacs

29. Tax paid by the employer on non-monetary perquisites provided to the employee is exempt u/s

(a) 17(2)

(b) 10(14)

(c) 10(10CC)

(d) None

30. Daily Allowance & Constituency Allowance received by a Member of Parliament & MLAs is purpose

(a) Exempt

(b) Taxable

 c) Included in total income for rate

(d) Spent amount is Exempt

31. Scholarship received by a student is:

(a) Casual income

 (b) Fully exempt u/s 10(16)

(c) Fully taxable

(d) Exempt if AO deems fit

32. Family pension received by legal heir of army personnel who died during operational duties is

(a) Exempt u/s 10(18)

(b) Exempt u/s 10(19)

(c) Exempt u/s 10(20)

(d) None of the above

33. Which of the following income is agricultural income?

(a) Rent received from agricultural land

(b) Income from dairy farm

 c) Income from poultry farm

(d) Dividend from a company engaged in agriculture

Q34. 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

Q35. 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.

Q36. When Income Tax was levied in India first time?

(A)in 1860

(B)In 1866

(C)in 1918

(D)In 1961

37. Income-tax is:

(A)a direct tax

(B)an indirect Tax

(C)business tax

(D)none of these

38. Rate of income-tax is fixed under:

(A)The Income Tax Act

(B)The Finance Act

(C)An Ordinance

(D)none of these

Q39. How Many heads of income tax are there to compute Gross total income of an assesse?

  1. Three
  2. Four
  3. Five
  4. six

 Q39. The present Income Tax Act is known as:

  1. Income Tax Act, 1922
  2. Income Tax Act, 1886
  3. Income Tax Rule, 1962
  4. Income Tax Act, 1961

Q40. The period of 12 months commencing on the 1st day of April every year is known as:

  1. (A)The Previous Year
  2. (B)The Assessment Year
  3. (C)The Accounting Year
  4. (D)The Financial Year

Q41. The definition of income is:

  1. (A)inclusive
  2. (B)exhaustive
  3. (C)complex
  4. (D)simple

Q42. Income Tax Act was passed in:

  1. (A)1961
  2. (B)1971
  3. (C)1981
  4. (D)1951

Q43.The term previous year means:

(A)The Financial year

(B)Calendar year

(C)Accounting year

(D)The Financial year before the assessment year

Q44.Income Tax is computed on:

(A)Capital

(B)Fixed Assets

(C)Income

(D)Business Gains

44. Income tax is collected on all types of income except

(a) Agricultural Income

(b) Industrial Income

(c) Capital Gain

(d) Household Property

45. The Income Tax Act came into force from

(a) 1st March 1971

(b) 1st April 1971

(c) 1st March 1961

(d) 1st April 1961

46. The first income tax act was introduced in the year

  1. 1861
  2. 1918
  3. 1860
  4. 1886

47. Income tax is…

A. A direct tax

B. An indirect Tax

C. Business Tax

D. none of these

48. Income Tax Act was passed in the year

a. 1947

b. 1950

C . 1961

d. 1991

49.Which Entry of Union List gives the power to Parliament to levy tax on incomes?

(a) Entry 81 of List I to Seventh schedule

(b) Entry 81 of List Il to Seventh schedule

(c) Entry 82 of List I to Seventh schedule

(d) Entry 82 of List Il to Seventh schedule

50.As per the definition of Income, the income includes the following

 (a) Profits and gains

 (b) Dividend declared

 (c) Voluntary contribution received by a trust created

 (d) All of the above

51.The period of 12 months commencing on the first day of April every year and ending on 31 March is called as

 (a) Previous Year

 (b) Assessment year

 (c) Accounting Year

 (d) Financial Year

52. Previous year means the financial year immediately preceding the

 (a) Accounting Year

 (b) Assessment Year

 (c) All of the above

 (d) None of the above

53. As per Section 2(7), “Assesses” means a person……

(a) By whom any tax or other sum of money is payable

(b) Against whom proceeding has been taken under the act

(c) A person deemed to be assessee in default

(d) All of the above

54. A person includes

(a) Individual & HUF

(b) Firm & Company

(c) AOP/BOI, LA,

(d) All of the above.

55. The term “Person” includes.

(a) Registered Firm

(b) Unregistered

(C)Both of (a) & (b)

(d) None of (a) or (b)

56. Association of persons consists of

(a) Individuals (only)

(b) Company

(c) Any Person other than

(d) Any kind of person

57. Body of Individuals consists of.

(a) Individuals only

(B)Company

(c) Any Person other than (a)

d) Any kind of person

58. As per Section 2(31), the following is not included in the definition  person’.

(a) Individual

(b) HUF

(c) Company

(d) Minor

59.House rent allowance is:

(A) Fully exempted

(B) Exempted to a certain limit

(C) Exempted in big cities

(D) Exempted for Govt. Employees

60.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

61.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

62.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

63.Gratuity received by a Government employee is:

(A)Fully exempted

(B)Partly taxable

(C) Fully taxable

(D) Exempted up to 10,00,000

64.The periodic payment of money for the past service is known as:

(A)Pension

(B)Commuted Pension

(C) Gratuity

(D) None of these

65.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

66.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

67.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

68.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

69. Health & Education Cess is liveable on

(a) Income tax

(b) Income tax + SC (if any)

(c) Only Surcharge

(d) Not applicable at all

70. The rate of HEC for AY 2019-2020 is

(a) 2%

(b) 3%

(c) 3%

(d) 4%

71. Surcharge on income tax is payable by

(a) Company

(b) Individual

(c) Firm

(d) All assesses

72. The apex body of Income Tax Department, is

a. Finance Ministry of Central Govt.

b. Central Govt. of India.

C) CBDT.

D)Department of Revenue

73. The term of previous year means

a) The financial year

B. calendar year

C. The financial year before the assessment year

D. accounting year

74.. How many heads of income are there in compute gross total income of an assessee:

A. Three Four

B.Four Year

C. Five

6. Six

75. Sum of various heads of income is called:

A. Gross total income

B. Total income

c. taxable income

d. aggregate income

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