Computation of Taxable Income

Multiple Choice Questions (MCQs) Based on Computation of Taxable Income

  • Our topic experts have formed these Commerce MCQs dependent on the UGC NET schedule and Syllabus.
  • The given Commerce MCQs incorporate all ideas for understudies to assist them with Basic Concepts of Income Tax.
  • Each question contains four choices. Out of the four choices, one is the right response.

 

Table of Contents

Question: Belated return u/s 139(4) can be filled at any time:

Option 1: Before the expire of relevant assessment year

Option 2: Before the expire of one year from relevant assessment year

Option 3: Before the expire of relevant assessment year or before the assessment is complete, whichever is earlier

Option 4: Before the expire of one year from the end of the relevant assessment year or before the assessment year, whichever is earlier

Answer: C

Question: Which of the following is fully taxable allowances?

Option 1: Overseas allowance

Option 2: Tribal area allowance

Option 3: House rent allowance

Option 4: Dearness allowance

Answer: D

Question: Any profit of facility received by an employee is called?

Option 1: Perquisites

Option 2: Gratuity

Option 3: Wages

Option 4: Pension

Answer: A

Question: Amount received from unrecognised provident fund is?

Option 1: taxable

Option 2: exempted

Option 3: 50% taxable and 50% exempted

Option 4: None of the above

Answer: D

Question: Salary received by a partner from partnership fund will be included in income from:

Option 1: salary

Option 2: business and profession

Option 3: house property

Option 4: None of the above

Answer: B

Question: Which of the following is not taxable under the head salaries?

Option 1: Commission received by an employee director of a company

Option 2: salary received by member of the parliament

Option 3: Remuneration paid to the lecturer of a college for setting a question paper by university

Option 4: Both (a) and (b)

Answer: D

Question: Due to some dispute, the salary of a person is retained by an order of the court. Then such salary will be

Option 1: included in income under the head slaraies

Option 2: not included in income under the head salaries

Option 3: exempted

Option 4: None of the above

Answer: B

Question: Income from house property owned by trade union is exempt under

Option 1: Section 10 (24)

Option 2: Section 10 (10)

Option 3: Section 10 (20A)

Option 4: Section 10 (AA)

Answer: A

Question: On which value assessee has to pay income tax on building or land appurtenant?

Option 1: Actual value

Option 2: Actual income

Option 3: Annual value

Option 4: None of these

Answer: C

Question: House use for self residence come under:

Option 1: Section 24

Option 2: Section 24 (1)

Option 3: Section 23

Option 4: Section 23 (1)

Answer: C

Question: Paying guest accomodation is chargeable under

Option 1: Income from house property

Option 2: profit and gains from business and profession

Option 3: income from other sources

Option 4: None of the above

Answer: B

Question: Time limit to set off the losses from house property is:

Option 1: 2 years

Option 2: 6 years

Option 3: 8 years

Option 4: 9 years

Answer: C

Question: Income from house property which is owned by political party is exempt under?

Option 1: Section 12 C

Option 2: Section 13 A

Option 3: Section 10 (10)

Option 4: Section 10 (24)

Answer: B

Question: Compulsory audit of account book is covered

Option 1: Section 10

Option 2: Section 44 AB

Option 3: Section 21

Option 4: Section 21 AA

Answer: B

Question: Which of the following capital expenditure is not allowed deduction?

Option 1: Purchase of machinery

Option 2: Purchase of furniture

Option 3: Purchase of land

Option 4: Repairing

Answer: C

Question: If payment of royalty is paid outside India and no tax at source has been deducted, then such expenses will be

Option 1: allowed as deduction

Option 2: disallowed

Option 3: exempt

Option 4: None of these

Answer: B

Question: For persons carrying on profession, tax audit is compulsory, if the gross receipts of the PY exceed

Option 1: ₹ 1 crore

Option 2: ₹ 50 crore

Option 3: ₹ 25 lakh

Option 4: ₹ 10 lakh

Answer: B

Question: A company sold a residential house. under which section, the company can get exemption on Long-term capital gains?

Option 1: Section 54

Option 2: Section 54D

Option 3: Section 54EC

Option 4: Section 54F

Answer: C

Question: For capital gain being long term capital gain, an assessee should retain the asset for a period of:

Option 1: 24 months

Option 2: 36 months

Option 3: more than 36 months

Option 4: 12 months

Answer: C

Question: Which of the following attract capital gains tax?

Option 1: Special bearer bond, 1991

Option 2: 6 1/2% Gold Bond, 1977

Option 3: Stock-in-trade

Option 4: None of the above

Answer: D

Question: Capital gains on shifting of industrial undertaking from urban area to any special economic zone is:

Option 1: taxable

Option 2: exempt

Option 3: partly taxable

Option 4: partly excempt

Answer: B

Question: The conversion of preferance share into equity share

Option 1: does not give rise to capital gain

Option 2: give rise to capital gain

Option 3: give rise to capital gain only, if it is LTCG

Option 4: None of the above

Answer: B

Question: Bond washing transaction is done:

Option 1: to reduce the tax liability

Option 2: to make poor happy

Option 3: to give money to wife

Option 4: None of these

Answer: A

Question: Dividend paid by Indian company outside India as per section 9 (1) (iv) is deemed as

Option 1: paid in India

Option 2: accrued in India

Option 3: received in India

Option 4: None of these

Answer: B

Question: Family pension is taxable under the head

Option 1: Salary

Option 2: income from other sources

Option 3: capital gain

Option 4: none of the above

Answer: B

Question: Dividend from Indian company is not taxable. It is exempt under section

Option 1: 10 (10)

Option 2: 10 (34)

Option 3: 10 (2A)

Option 4: 2 (AA)

Answer: B

Question: Mr. X is entitled to transport allowance of Rs 1,800 p.m for commuting from his residence to office and back and he spends Rs 1,400 p.m. The exemption shall be allowed of:

Option 1: Rs 1,800 p.m

Option 2: Rs 1,400 p.m

Option 3: Rs 1,600 p.m

Option 4: Nil

Answer: C

Question: Deduction in respect of contribution to pension scheme under section

Option 1: 80 (C)

Option 2: 80 CCC

Option 3: 80 CCD

Option 4: 80 D

Answer: C

Question: Deduction in respect of medical insurance premium is covered under section

Option 1: 80 C

Option 2: 80 D

Option 3: 80 E

Option 4: 80 F

Answer: B

Question: Which of the following are allowed as 100% deduction?

Option 1: Prime Minister National Relief Fund

Option 2: Africa (Public Contribution India) Fund

Option 3: National Defence Fund and National Children Fund

Option 4: Indira Gandhi Memorial Trust

Answer: D

Question: Deduction, which are permissible from gross total income are from

Option 1: Section 80C to 80IA

Option 2: Section 80C to 80IC

Option 3: Section 80C to 80U

Option 4: Section 80C to 80P

Answer: C

Question: The income arrived after deductions under section 80C to 80U from gross total income is known as:

Option 1: Total income

Option 2: Taxable income

Option 3: Both (a) and (b)

Option 4: None of these

Answer: B

Question: The maximum amount of deduction allowed under Section 80C

Option 1: ₹ 80,000

Option 2: ₹ 90,000

Option 3: ₹ 1,50,000

Option 4: ₹ 1,10,000

Answer: C

Question: Preliminary expenses incurred are allowed deduction in

Option 1: 10 equal installments

Option 2: 8 equal installments

Option 3: 5 equal installments

Option 4: Fund

Answer: C

Question: Deduction in respect of contribution to certain pension fund under Section 80CCC is available

Option 1: only to individual, even to non-resident individual

Option 2: only to members of HUF

Option 3: only to members of AOP/BOI

Option 4: All of the above

Answer: A

Question: Which assesses are allowed deduction under section 80C?

Option 1: An individual or a HUF

Option 2: An individual and a company

Option 3: An individual: HUF;AOP/BOI

Option 4: An individual: HUF;AOP/BOI or company

Answer: A

Question: Deduction allowed under Section 80C, towards any sum paid an individual to effect or to keep an insurance on the life of

Option 1: An individual

Option 2: an individual spouse

Option 3: any child of such individual, children may be married/unmarried, dependent/not dependent

Option 4: All of the above

Answer: D

Question: Deduction under Section 40 (b) shall be allowed on account of salary/remuneration paid to

Option 1: any partner

Option 2: major partner only

Option 3: working partner only

Option 4: sleeping partner only

Answer: C

Question: Deduction under Section 36(1) shall be allowed of those expenditure which are of

Option 1: capital nature

Option 2: revenue nature

Option 3: Both (a) and (b)

Option 4: deferred revenue nature

Answer: C

Question: Salary, bonus, commission or remuneration due or received by a working partner from the firm is taxable under the head

Option 1: Income from salaries

Option 2: income from other sources

Option 3: income from business and profession

Option 4: None of the above

Answer: C

Question: Rent from Vacant plot of land is assessable under the head

Option 1: income from business and profession

Option 2: income from other sources

Option 3: income from house property

Option 4: income from capital gain

Answer: B

Question: If any income of house property is received in previous year, then it is chargeable to tax under lead

Option 1: income from capital gain

Option 2: income from business and profession

Option 3: income from house property

Option 4: will not chargeable

Answer: C

Question: In which of the following cases, the house property income is exempt from tax?

Option 1: house property of university

Option 2: house property of registered trade union

Option 3: house property of local authority

Option 4: All of the above

Answer: C

Question: Which of the following expense/loss is not admissible as deduction while computing income from business and profession?

Option 1: Stock-in-trade lost in fire ₹ 20,000

Option 2: Entertainment expenses ₹ 10,000

Option 3: Commission of ₹ 2,000 paid in order to receive business

Option 4: Gift on the marriage of an employee

Answer: D

Question: Which of the following statement is correct?

Option 1: 30% depreciation is allowed on Neon sign board

Option 2: Animals are used for business purposes. Hence depreciation shall be allowed on them.

Option 3: For the purpose of taxation, there should not be and indeed distinction made between legal and illegal business.

Option 4: All of the above

Answer: C

Question: In which of the cases the amount withdraw from Site Restoration Account shall not be taxable?

Option 1: Amount withdrawn for the purpose specified in the scheme

Option 2: Closure of business

Option 3: Death of an assessee

Option 4: Partition of HUF

Answer: A

Question: Which of the following statement are correct?

Option 1: Provision made for sales tax is admissible deduction

Option 2: Wealth tax paid by a company is a deductible expense

Option 3: Contribution to a political party is a deductible expense

Option 4: Noone of the above

Answer: A

Question: As per section 80G maximum deduction allowed for any cash donation is upto

Option 1: Rs 1,000

Option 2: Rs 2,000

Option 3: Rs 5,000

Option 4: Rs 10,000

Answer: B

Question: Which of the following statement are correct?

Option 1: Charity received from customers is not business income

Option 2: In connection with the statutory income tax preceding, expenses upto ₹ 20,000 are admissible

Option 3: Expenses Incurred for issuing share are deductible

Option 4: All of the above

Answer: A

Question: Consider the following statement?

Option 1: The aggregate amount of deduction under sections 80C to 80U can exceed gross total income

Option 2: If a deduction is allowed under the above section to the AOP or BOI, then deductions for the same payment/income will not be allowed to the members of AOP/BOI.

Option 3: Deduction is allowed when it is claimed in his return under the heading “C deductions in respect of certain incomes

Option 4: Both (b) and (c)

Answer: D

Question: Gross total income includes

Option 1: 3 heads of income

Option 2: 4 heads of income

Option 3: 5 heads of income

Option 4: 6 heads of income

Answer: C

Question: Education cess and secondary higher education cess is liable on

Option 1: Individual

Option 2: Company

Option 3: All assessee

Option 4: HUF

Answer: C

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