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.
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
