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.
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
