MCQ ON Income Tax Law and Accounts(UNIT 3)



Unit 4

Q1. A person includes .

(a) Individual & HUF

(b) Firm & Company

(c) AOP/BOI, LA, Every AJP

(d) All of the above.

Q2. Notifications issued by CBDT are binding on .

(a) Assessee

(b) Income Tax Authority

(c) Both of above

(d) None of the above

Q3. 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

Q4. Every assessee is a person, & every person is .

(a) Also an assessee

 (b) Need not be an assessee

Q5. In which following situation, income f minor child shall be clubbed in the income of parents

(a) Income of child suffering from disease u/s 800

(b) Income earned by child from manual work

(c) Income of child from interest on FDR

(d) Income earned from an activity involving skill

Q6. For the provisions of clubbing of incomes to calculate substantial interest we consider the holding of.

(a) the individual only

(b) the individual & his spouse taken together

(c) the individual along with his relatives

(d) the individual & his spouse taken separately

Q7. If any income has to be clubbed u/s 64, it will be clubbed under the.

(a) head of income from other sources

(b) relevant head to which it belongs

(c) none of these two

Q8. Section 70-79 deals with

a. Salary

b. capital gain

C Clubbing of income

d. Set off and carry forward

Q9. If there is a transfer of income by a person to another person without the transfer of the asset from which the income arises, such income shall be included in the income of

(a) Transferor

(b) Transferee

(c) Transferor irrespective of whether the transfer revocable or irrevocable

(d) Transferee if transfer is irrevocable

Q10. Mr. P transfers income of Rs. 51,000 from rent to his major son without transfer of house property. Rent of Rs. 51,000 is

(a) Taxable in the hands of the transferor-father

(b) Taxable in the hands of his son

(c) Taxable the hands of the that parent whose total income is higher

(d) Exempt from tax

Q11. Income derived on the accretion of transferred property:

(a) Shall be clubbed in the hands of transferor

(b) Shall be clubbed in the hands of transferee

(c) Cannot be clubbed

(d) Not taxable

Q12. Clubbing provisions u/s 64(1)(vi) are applicable where the asset is transferred by an individual without an adequate consideration to.

(a) Daughter’s husband

(b) Daughter in law

(c) Minor child

(d) Spouse

Q13. Income arising to a minor married daughter is

(a) to be assessed in hands of the minor married daughter

(b) to be clubbed with the income of that parent whose total income, is higher

(c) completely exempt from tax

(d) to be clubbed with the income of her husband

Q14. Interest from a fixed deposit received by a minor married daughter is

(a) to be assessed in the hands of the minor child

(b) to be clubbed with the income of that parent whose total income, before including minor’s income, is higher

(c) completely exempt from tax

(d) to be clubbed with the income of her husband

Q15. When income of minor child is clubbed in the income of the parent such parent will be allowed exemption of Rs. 1,500 pa per child u/s of.

(a) 10(1)

(b) 10(2)

(c) 10(2A)

 (d) 10(32)

Q16. In certain cases, income of other person is included in the income of assesses. It is called

(a) Clubbing of income

(b) Increase in income

(c) Addition to income

(d) Set-off of income

Q17. For the purpose of clubbing of income of the specified person in the income of the individual u/s 64, the word income includes?

(a) Loss

(b) Expenses

(c) Interest

(d) All of the above

Q18. Intra head set off is done u/s.

(a) Sec 70

(b) Sec 71

(c) Sec 72

(d) Sec 73

Q19. Loss from a speculation business can be set off from.

(a) Any head of income.

(b) Profits & gains from any business.

(c) Profits & gains from any business other than speculation business.

 (d) Income of speculation business.

Q20. Loss on account of owing & maintaining the race horses can be set off from.

(a) Any business income

b) Any income under the head other sources

(c) Income from horse races

(d) Income of owing & maintaining of race horses

Q21. Short-term capital loss can be set off from.

(a) STCG

 (b) LTCG

(c) STCG or LTCG

(d) IFOS

Q22. Choose the most appropriate answer from the given options. Short-term capital loss can be set-off from

(a) STCG

(b) LTCG

(c) STCG or LTCG

Q23. Which of the following is correct?

(a) LTCG can be set off from LTCG only.

(b) LTCG can be set off from STCG only.

(c) Loss of business can be set off from salary income

 (d) Loss of speculation business can be set off from income from normal business

Q24. The term “Person” includes .

(a) Registered Firm

 (b) Unregistered Firm

(c) Both of (a) & (b)

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

Q25. Association of persons consists of .

(a) Individuals (only)

 (b) Company

(c) Any Person other than (a)

 (d) Any kind of person

Q26. Explanation gives to the main provision in

(a) Clarification

 (b) Exceptions

(c) Proper Administration

 (d) None of these

Q27. Part 1 of schedule I ofthe FinanceAct, 2018 gives rate of income tax for AY .

(a) 2018-19

(b) 2019-20

(c) 2017-18

 (d) 2016-17

Q28. 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.

Q29. Loss under the head capital gains can.

(a) be set off from any other head of income in same year

(b) be carried forward only

(c) neither be set off nor carried forward

(d) IFOS

Q30. Gross interest Net x 100/100-rate of



b. Deduction

C. Exempted

Q31. Payment of LIC premium can be claimed as deduction u/s

a. 80 C

 b. 80 CCC

c. 80 D

d. 80 DD

Q32. Clubbing of income means

a. Addition income of two partners

b. Inclusion of income of other person in assessee income

c. Total income of various heads

d. Collection of income

Q33. Business loss of the current year cannot be set off against

 (a) Any income other than business income

(b) LTCG

(c) Either LTCG/STCG

 (d) Salary income

Q34. Loss under the head business & profession can be set off from income under

(a) any other head

(b) income from

(c) any other head except salary & lottery income

(d) any other head except H/P

Q35. Loss under the head of house property

a) can be carry forwarded for 8 years

b) can’t be carried forward

(c) can be carry for warded for 4 years

(d) may be carry forwarded.

Q36. Speculation loss can be carried forward for the maximum of.

(a) 8 AY

(b) 4 AY

(c) 10 AY

(d) Infinite

Q37. For Carry Forward of loss under various heads the assessee shall file a return of loss u/s 139(3) of Income Tax Act, 1961 within the prescribed time limit except loss under the head:

(a) Capital gain

(b) PGBP

(c) HP

(d) All the above

Q38. he loss is allowed to be carried forward only when an assessee has furnished

(a) return of loss at any time as per his wish

(b) return of loss on or before the due date u/s 139

(c) Not furnished the return of loss

Q39. the definition of ‘person’.

(a) Individual

(b) HUF

(c) Company

(d) Minor

Q40. 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

Q41. 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

Q42. As per sec. 2(24) definition of ‘income’ is:

(a) Inclusive

 (b) Exhaustive

 (c) Exclusive

 (d) Descriptive

Q43. Income-tax authority

a. Executive authorities

b. Judicial Authorities

c. Both a and b

d. None of these

 Q44. The designation of the assessing officer is created from the following dates :

A. 1-4-1988


C. 1-10-1988

B. 1-4-1986.

D. None of these

Q45. Last chain of income tax authorities is :

A. Inspector of income tax

B. Tax recovery officer

C. income tax officer

 D. Commissioner of Income Tax

Q46. CBDT can inform through the following media that such authority will work under control of the authority:

A. Through phone

B. Personal contact

C. information notification

D. none of these

Q47. Various income tax authority defined under section:

A. 116

B 115

 C. 114


48. The provision regarding income tax authority appointmented by central government under section:

A. 116

B. 115

C. 117

D. 119

49. Circulars and Notifications are binding on the

  1. Central Board of Direct Taxes (CBOT)
  2. Assessee
  3. Income Tax Appellate Tribunal (ITAT)
  4. Income Tax Authorities

49. Supreme Courts precedent in binding on Courts

  1. Appellate Tribunals
  2. Income Tax Authorities
  3. All of the above.

50. High Court’s precedents are not binding on

  1. Tribunal
  2. Income Tax Authorities.
  3. Assessee
  4. None of the above.

51. Wherever in the Act the phrase as prescribed appears it means that

  1. Regulations are to be framed is in this respect
    1. Rules have been framed in this respect.
    1. Regulations were earlier framed in this respect
    1. Regulations are framed in this respect. in

52. Who amongst the following confers on the power to issue circulars and clarifications?

  1. Central Government
    1. CBOT
    1. State Government

53. Amendments by the finance act are made applicable from

  1. First day of next financial year
    1. First day of same financial year
    1. Last day of same Accounting year
    1. None of the above.

54. Assessing officer is :

A. Assistant Commissioner

B. Deputy commissioner

C. income tax officer

D.All Of these

55. Who controls Income Tax Department:

A. Income Tax commissioner

B. C.B.D.T


D. None

56. Top authorities are in Income Tax Department authorities:

A. Finance minister

B finance secretary

C. Board of direct tax

D. chief Commissioner

57. Due date of filing return of income tax in the case of individual:

a. 30th June

 b. 31st July

 c. 31st August

d. 30th September

58. Due date of filing income tax return in the case of firm,whose account are required to be edited is :

A. 31st July

B. 31st August

C. 30th September

D. 31st October

59. For individual having income from salary or family pension and interest the prescribed form is :

a. ITR-1

b. ITR-2

 c. ITR-3

d. ITR-4

60. Getting Permanent Account number is compulsory for :

 A. income tax assesse

B. importers

C. assessee under service tax

D. all of these

61. Rectification of mistake is done :

a. U/s 145

b. U/s 147

 c. U/s 154

62. Section of self assessment is :

A. 140

B. 140A

C. 147

d. U/s 156

D. 148

63. Section of best judgement assessment

A. 143

B. 144

 C. 147

D. 148

64. Assessment under section 143 for the assessment year 2018-19 shall be completed from the end of the relevant assessment year:

A. within 18 months

B. within 21 month

C. within 24 month

D. within 30 month

65. Pan must be quoted when the fixed deposit with the bank exceeds

A. Rs. 25,000

B. Rs. 50, 000

C. Rs. 10, 000

D. Rs. 20, 000

66. Types of assessment includes :

a. Self assessment

b. regular assessment

c. best judgement

d. All of these

Q67. Regular assessment means the assessment made on the basis of evidence under section.

A. 143 (2)

B. 143(3)

C. 143(1)

D. None

Q68. Circulars issued by CBDT are binding on .

(a) Assessee

(b) Income Tax Authority

(c) Both of above

(d) None of the above

Q69. 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

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