Multiple Choice Questions (MCQs) Based on Basic Concepts of Income Tax

Our topic experts have formed these Commerce MCQs dependent on the UGC NET schedule and Syllabus.

Table of Contents

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: Income tax was levied in India first by the following

Option 1: Sir Lucas Paciolo

Option 2: Sir Newton

Option 3: Sir James

Option 4: Sir James Wilson

Answer: D

Question: Out of the following which expense is not an admissible expense?

Option 1: Bad debts

Option 2: Sales tax

Option 3: Income tax

Option 4: Excise duty

Answer: C

Question: If any agriculture land is sold. it is covered under the head:

Option 1: Capital gain

Option 2: Income from house property

Option 3: agriculture income

Option 4: not under any head

Answer: C

Question: Any profit earned from purchasing and selling standing crop is:

Option 1: house property income

Option 2: agriculture income

Option 3: non-agriculture income

Option 4: all of these

Answer: C

Question: The daily allowance received by a member of parliament is:

Option 1: Exempted

Option 2: to be inculded in total income for tax purpose

Option 3: taxable

Option 4: none of the above

Answer: A

Question: The income of an educational institution on non-profit is exempt under which section?

Option 1: 10 23(C)

Option 2: 10 (80G)

Option 3: 10 10(B)

Option 4: 10 (23D)

Answer: A

Question: Scholarship received by a student to meet the cost of education is:

Option 1: Fully taxable

Option 2: Fully exempt

Option 3: Casual Income

Option 4: None of these

Answer: B

Question: State which of the following income is exempted from tax?

Option 1: Share in income of HUF

Option 2: Interest of Govterenment securities

Option 3: Income from salaries

Option 4: Capital gains

Answer: A

Question: Rate of income tax on different slabs of income in case of an individual assessee are

Option 1: Decreasing

Option 2: Increasing

Option 3: Constant

Option 4: None of these

Answer: B

Question: Tax is computed on agriculture income when,

Option 1: Agriculture income is more than Rs 5,000

Option 2: Total non-agriculture income is more than exemption limit

Option 3: on hapenning of both (a) and (b)

Option 4: None of the above

Answer: C

Question: Which of the following is considered as agriculture income

Option 1: Income from live sttock living

Option 2: Income from cattle breeding

Option 3: Income from juice centre

Option 4: Rent received from agriculture land

Answer: D

Question: Which of the following is considered as non-agriculture income

Option 1: Income from agriculture in Nepal

Option 2: Reward received from higher yield

Option 3: Income from letting out agricultural machinery

Option 4: All of the above

Answer: D

Question: Any individual who is residence is any previous year, in the next previous year he shall be:

Option 1: non-ordinarly resident

Option 2: non-resident

Option 3: resident

Option 4: Any one of the three

Answer: D

Question: The basis of determination of total income of person is

Option 1: His citizenship in India

Option 2: his residential status in India

Option 3: Both (a) and (b)

Option 4: None of the above

Answer: B

Question: Income which accrue or arise outside India from a business controlled from India is taxable in case of

Option 1: resident only

Option 2: both ordinarily resident and non ordinarily resident

Option 3: non-resident

Option 4: All of the above

Answer: B

Question: A citizen of India, who goes abroad for the purpose of employment, must stay in India to become resident at least

Option 1: 182 days

Option 2: 90 days

Option 3: 60 days

Option 4: 180 days

Answer: A

Question: Income tax is levied on those individuals

Option 1: whose income is less than exempted limit in any previous year

Option 2: whose income is more than exempted limit in any previous year

Option 3: whose income is upto ₹ 1,00,000 in any previous year

Option 4: None of the above

Answer: B

Question: Which of the following is non-agriculture income?

Option 1: Income from leasing out tea estates

Option 2: Income from sale by assessee of plants grown in pots

Option 3: Amount received in reward by a farmer for growing more crops in his field

Option 4: Income from sale of tobacco after drying it

Answer: B

Question: According to section 5 of Income Tax Act, 1961, Incomes which accrue arise outside India, but are received directly into India are taxable in case of:

Option 1: resident only

Option 2: both ordinarily resident and non ordinarily resident

Option 3: non-resident

Option 4: All of the above

Answer: D

Question: X ltd is an Indian company. It carries own business in Mumbai and London. The entire control and management of X Ltd is situated outside India. Three-fourth of total income of company is from the business in London, what is the residential status of X Ltd?

Option 1: resident only

Option 2: ordinarily resident

Option 3: non-resident

Option 4: non ordinarily resident

Answer: A

Question: Mr P was born on 18th April, 1986 in India and later on he took the citizenship of USA. Neither his parents nor his grand parents were born in unindividual India. In this Mr P shall be:

Option 1: a person of Indian origin

Option 2: a citizen of India

Option 3: a foreign national

Option 4: None of these

Answer: A

Question: According to Section 5 of Income Tax Act, 1961, Incomes deemed to accure arise in India is taxable in case of:

Option 1: resident only

Option 2: both ordinarily resident and non ordinarily resident

Option 3: non-resident

Option 4: All of the above

Answer: D

Question: Which of the following statement is true?

Option 1: Different residential status in respect of different previous years of the same assesment year not possible

Option 2: A resident in India cannot become resident in any other country for the same A.Y.

Option 3: Any sum received by an individual, as a member of a HUF, shall be taxable in hands of the member

Option 4: All of the above

Answer: D

Question: Dividend paid by an Indian Company outside India is:

Option 1: taxable in India in the hands of recipient

Option 2: taxable in the hands of the company and exempt in the hands of the recipient

Option 3: taxable outside India

Option 4: exempt in the hands of the recipient

Answer: B

Question: Which of the following income are exempt from tax?

Option 1: Dividend received from foreign company

Option 2: Capital gain income

Option 3: Rental Income from house property

Option 4: Dividend received from Indian company

Answer: B

Question: Which of the following is an indirect tax

Option 1: corporation tax

Option 2: excise tax

Option 3: wealth tax

Option 4: capital gains tax

Answer: B

Question: As per the budget 2019-20, which among the following is the single largest source of income of the government of India, contributing 21 paise to each rupee earned?

Option 1: custom duties

Option 2: service tax

Option 3: non-tax revenue

Option 4: corporation tax

Answer: D

Question: In which year did the government of India introduce value-added-tax (VAT) as an indirect tax in the Indian taxation system to replace the existing general sales tax?

Option 1: 2007

Option 2: 2005

Option 3: 2013

Option 4: 2011

Answer: B

Question: Which among of the following is a progressive tax?

Option 1: customs duty

Option 2: development surcharge

Option 3: sales tax

Option 4: income tax

Answer: D

Question: Which of the following terminology are NOT related to Income tax?

Option 1: Tax deduction and collection account number (TAN)

Option 2: Leave Travel Allowance (LTA)

Option 3: Dearness Allowance (DA)

Option 4: Taxpayer Identification Number (TIN)

Answer: D

Question: What is the rate of tax for income tax slab between the income of Rs. 5 lakh to Rs. 7.5 Lakh for assesment year 2020-21?

Option 1: 5%

Option 2: 20%

Option 3: 15%

Option 4: 10%

Answer: D

Question: Which of the following does not come under the purview of ‘paper taxes’?

Option 1: Gift tax

Option 2: Estate duty

Option 3: Excise tax

Option 4: Wealth tax

Answer: C

Question: Which of the following is a tax which can be collected only by the state?

Option 1: Land Revenue

Option 2: Custom duty

Option 3: Surcharge on income tax

Option 4: Tax on capital value of assets of individuals and companies

Answer: A

Question: Which one of the following is not a tax saving investment?

Option 1: Home Loan principal repayment

Option 2: Public Provident Fund

Option 3: Life Insurance Premium

Option 4: Fixed Deposits

Answer: D

 

 

 

 

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