INCOME TAX - 2
101.Under the head Income from House Property the basis of charge is
………………………
A) Rent Received B) Gross Annual Value
C) Annual Value D) Municipal Value
102.Foreign house property’s income is taxable only in the case of ……………………..
A) Non Resident B) Not Ordinarily Resident
C) Ordinarily Resident D) None of the above
103.Annual value is defined as per section …………..
A) 21(1) B) 22(1) C) 23(1)
D) 24(1)
104.Which of the following is deductible from the annual value of HP?
A) Municipal Taxes paid
B) Municipal taxes paid by the owner
C) Municipal taxes paid by the owner for the previous year
D) Municipal taxes paid by the owner during the previous year
105.The Income from House Property is taxable in the hands of the individual even if
property is not registered in his name …………………………….
A) When the property has been transferred to spouse for inadequate consideration
B) Where the property is transferred to a minor child for inadequate consideration
C) Where the individual holds on importable estate
D) All of the above
106.The following conditions must be satisfied to charge the rental income under the head
Income of House Property:
A) The property should consist of any buildings or lands
B) The asssessee should be one of the property
C) The property should not be used by the owner for the purpose of business or
professional purpose
D) All of the above
107.Mr. Ram owns a house property. He lent it to Laxman at ` 10,000 p.m. Laxman sublet
it to Mr. Maruti on monthly rent of ` 20,000 p.m. Rental income of Ram is taxable
under the head ………………………………...
A) Income from Salary B) Income from Other Sources
C) Income from House Property D) Income from Business
108.Mr. Ram owns a house property. He lent it to Laxman at ` 10,000 p.m. Laxman sublet
it to Mr. Maruti on monthly rent of ` 20,000 p.m. Rental income of Laxman is taxable
under the head …………………………………….
A) Income from Salary B) Income from Other Sources
C) Income from House Property D) Income from Business
109.For claiming the deduction for unrealised rent, the assessee must satisfy ……………..
A) Rule 4 B) Section 4
C) Rule 4A D) Section 4 A
110.Rule 4 includes ………………………….
A) Tenancy must be bonafide
B) The defaulting tenant has vacated or steps have been taken to vacate the house
C) The defaulting tenant is not occupying any other property of the owner
D) All of the above
111. The tax paid by the tenant is ……………………
A) Added to rent received
B) No adjustment
C) Deducted from rent received
D) Added to Annual value
112.If the house remains vacant for the whole year, annual value will be …………..
A) Equal to Municipal Value
B) Equal to Fair rent
C) Nil
D) None of the above
113.A sum equal to …………… is allowed as deduction from the annual value.
A) 15% B) 20% C) 25% D) 30%
114.A sum equal to 30% is allowed as deduction from the annual value as ………………
A) Deduction B) Standard Deduction
C) Basic Deduction D) None of the above
115.Interest on loan taken for which all purposes are deductible from annual value?
A) Purchase B) Repair
C) Construction D) All of the above
116.Deductions from annual value is as per section …………
A) 22 B)24 C)26 D)24A
117.Which of the following is not deductible from annual value?
A) Interest on unpaid interest
B) Interest on loan taken for repairs
C) Interest on loan taken for reconstruction
D) None of the above
118.Interest for pre-acquisition period is deductible in ………………. instalments
3 B)4 C)5 D)7
119.Annual value of self-occupied house is ……………………..
A) Equal to Municipal Value
B) Equal to Fair rent
C) Nil
D) None of the above
120.From the amount of arrears of rent received, …………. Is allowed as deduction.
A) 15% B) 20% C) 25% D) 30%
121.The balance of unabsorbed loss from HP can be carry forward to a maximum of ……..
years.
A) 6 B)7 C)5 D) None of these
122.Rent from vacant plot of land is assessible under the head …………………
A) Income from HP B) Income from Other Source
C) Income from Capital Gain D) None of the above
123.Subletting is assessible under the head …………………
A) Income from HP B) Income from Other Source
C) Income from Capital Gain D) None of the above
124.In case of disputed ownership, income from HP is chargeable in the hands of …………
A) Recipient of income B) Not assessible
C) All owners D) None of the above
125.What is expected rent?
A) Municipal value of Fair value whichever is lower
B) Municipal value of Fair value whichever is higher
C) Municipal value of Fair value whichever is higher subject to standard rent
D) None of these
126.An individual who transfers house property without an adequate consideration to his
owner spouse or to minor child is called as ………………….
A) Co-owner B) Deemed Owner
C) Owner Himself D) None of the above
127.An individual is considered as an owner of the house property for the purpose of
charging tax to …………………..
A) A member of cooperative society, company or AOP to whom a building or a part
there of is allotted or leased under a house building scheme of the society.
B) An individual who transfers house property without an adequate consideration to his
owner spouse or to minor child
C) The holder of importable estate
D) All of the above
128.If the assesses let out the building or staff quarters to the employee of business, the rent
collected from such employees is assessable as income from ……………...
A) Business B) House Property
C) Other Sources D) None of the above
129.The Gross annual value of the property is depends upon the ……………….
A) Standard rent B) Municipal Valuation
C) Fair rent D) All of the above
130.Which of the following is not a case of deemed ownership of house property?
A) Transfer to a spouse for inadequate consideration
B) Transfer to a minor child for inadequate consideration
C) Holder of an importable estate
D) Co-owner of a property
131.If an assesses earns rent from a sub-tenant in respect to tenanted property let out as a
residence, the said rent is …………………..
A) Exempted under Section 10
B) Taxable under the head income from house property
C) Taxable as business income, as the letting out is a commercial activity
D) Taxable as income from other sources
132.An assesses, after sale of house property, receiving arrears of rent (is/is not) chargeable
to tax; the same computed in the stipulated manner, is chargeable to tax as
……………...
A) Income from House Property B) Income from Other Sources
C) Either (a)or(b) D) Neither (a)nor (b)
133.Mr. Shushant is the owner of a house, the details of which are given below the gross
annual value would be ……………... Municipal value ` 36,000 Actual rent ` 32,000
Fair Rent` 36,000 Standard Rent` 40,000
A) 36,000 B) 35,000 C) 30,000 D) 40,000
134.Interest on capital, borrowed on 10.10.2000, for self-occupied property is deductible up
to a maximum amount of ………………...
A) 50,000 B) 1,50,000 C) 5,000 D) None of the above
135.Interest on loan for self-occupied house taken before 1st April, 1999 will be allowed up
to ……………………...
A) 30,000 B) 1,50,000 C) 10,000 D) 50,000
136. Deduction allowed from annual value is …………………...
A) Interest on loan for constitution B) Interest on loan for repair
C) Statutory deduction D) All of the above
137.When the portion of the house is self-occupied for the full year and portion is selfoccupied for the whole year, the annual value of the house shall be determined by
…………..
A) The full annual value of the house the proportionate annual value of self-occupied
portion for the whole year shall be deducted
B) Its present standard value
C) All of the above
D) None of the above
138.Mr. R owns a house. The Municipal value of the house is ` 50,000. He paid ` 8,000 as
local taxes during the year. He uses this house for his residential purposes but lets out
half of the house @ ` 3,000 p.m. The annual value of the house is ………...
A) 15,000 B) 16,000 C) 17,000 D) 18,000
139.If fair rent is not gives, then assume ………… as fair rent.
A) Actual rent B) Standard rent
C) Average rent D) None of the above
140.Rent received by original tenant from sub-tenant is taxable under the head ………...
A) Income from House Property B) Income from Other Sources
C) Income from Capital Gain D) None of the above
141.Income from property held under trust for charitable or religious purposes is ………….
A) Exempted from tax B) Taxable @10%
C) Taxable @20% D) None of the above
142.Identify the correct head
A) Income from business and profession
B) Profits from business and profession
C) Profit and Gains from business and profession
D) None of these
143.Business can be defined as per section ……….
A) 2(11) B) 2(12) C) 2(13) D) 2(14)
144.Income from illegal business is …………
A) Partly taxable B) Taxable
C) Exempted D) None of these
145.Expenditure on scientific research is in the section ……..
A) 31 B) 32 C)35 D)36
146.Any payments made outside India and TDS is not paid, then it is …………
A) Allowed B) Disallowed
C) Partly allowed D) None of these
147.Payment made in cash exceeding ………….. is disallowed.
A) 15000 B) 20000 C) 25000 D) 30000
148.Interest on delayed payment of VAT is …………..
A) Allowed B) Disallowed
C) Partly allowed D) None of these
149.Under the Income Tax Act,1961, depreciation on machinery is charged on
………………..
A) Purchase price of the machinery B) Written down value of the machinery
C) Market price of the machinery D) All of the above
150.As per section 30, which expenditure incurred for a building used for the business or
profession shall not be allowed as deduction?
A) Rent, rates and taxes B) Insurance of building
C) Repairs of building D) Capital expenditure
151.Group of assets falling within a class of assets comprising of tangible & intangible
assets is known as :
A) Group of assets B) Block of assets
C) Set of assets D) None of these
152. If a block of assets ceases to exist on the last day of the previous year, depreciation
admissible for block of assets will be ………………….
A) Nil
B) 50% of the value of the block of assets on the first day of 'he previous year
C) The total value of the block of assets on the first day of the previous year
D) 50% of the value of the block of assets on the last day of the previous year.
153.Payments to residents on which tax has not been deducted/ paid shall be disallowed to
the extent of …………………………
A) 0% B) 30% C) 100% D) 50%
154.Which of the following taxes are allowed as deduction while computing the business
income ………………………………
A) Wealth-tax B) Income-tax
C) Sales tax D) None of the above
155.DS made a cash payment of Rs. ` 2,95,000 on 28th March, 2019 as the banks were on
strike that day and the payment was to be made urgently. Calculate the amount of
expenditure to be disallowed u/s 40A.
A) Rs. 2,95,000 B) Rs.2,75,000 C) Nil D) Rs.
10,000
156.Where an assessee doing a business incurs any expenditure in respect of which
payments made to a person in a day exceeds Rs. ` 10,000 should be paid through
account payee cheque or demand draft to claim deduction for such expenditure. This
restriction does not apply to ………………
A) Payments made to RBI
B) Payments made to cultivators
C) Payment of terminal benefits to employees not exceeding ` 50,000
D) All of the above
157.Deemed profits chargeable to tax under section 41 includes:
A) Taxability of Balancing Charge in case of Power Generating Undertakings.
B) Sale of an asset used for scientific research without having been used for the
purposes of business or profession.
C) Recovery of bad debts.
D) All of the above.
158.DS discontinued wholesale trade in medicines from 1st June, 2015. He recovered Rs. `
1,40,000 in September, 2018 being a bad debt which was written-off and allowed in
assessment year 2015-14. He has eligible brought forward business loss of wholesale
trade in medicines of Rs. ` 1,60,000. The consequence of bad debt recovery is that –
A) It is chargeable to tax
B) It is eligible for set-off against brought forward business loss
C) The brought forward business loss is taxable now
D) 50% of the amount recovered now is taxable
159.As per section 43B, certain payments are to be allowed as deduction only on actual
payment. Such sums include:
A) Any sum payable by the assessee to the Indian Railways for the use of railway assets.
B) Employer's contribution to provident fund or superannuation fund or gratuity fund
or any other fund for the welfare of employees.
C) Bonus or commission to employees for services rendered as referred uls 36(1)(ii).
D) All of the above.
160.The profits and gains of any business of insurance, including any such business carried
on by a mutual insurance company or by co-operative society, shall be computed in
accordance with rules contained in First Schedule to the Act. The profits and gains
derived from life insurance business is taxable at what rate?
A) 11.5% B) 12.5% C) 10% D) Nil
161.Which is the charging section of income under the head profits and gains of business
or profession?
A) Section 15 B) Section 24
C) Section 28 D) Section 17
162.Raman & Co., a partnership firm, received Rs. ` 5, 00,000 from an insurance company
under key man insurance policy consequent to demise of partner Pramod. The amount
of premium Rs.` 2, 30,000 paid earlier was claimed as deduction under section 37 by
the firm. The amount received from the insurance company is –
A) Tax-free under section 10(10D) B) Fully taxable as income
C) Rs.` 2,70,000 is taxable D) Rs.` 2,30,000 is taxable
163.Assessee is having stock existing in the business. Valuation of stock will be at:
A) Cost price B) Market price
C) Cost or market price, whichever is less D) Cost or market price, whichever is
more
164.Export Incentives taxable under this head includes:
A) Cash Compensatory Support B) Duty Drawback
C) Profit on transfer of DEPB D)All of the above
165.……………………. includes any arrangement or understanding or action in concert
whether or not it is formal or in writing or whether or not it is intended to be enforceable
by legal proceedings:
A) Contract B) Agreement
C) Service D) Profession
166.Which of the following conditions are to be fulfilled for charging an income under the
head profits and gains of business or profession
A) There should be profits and gains.
B) Business or profession must be carried on by the assessee.
C) Business or profession should be carried on at any time during previous year.
D) All of the above.
167.Which of the following are included in business according to section 2(13) :
A) Trade B) Commerce
C) Manufacture D) All of the above
168.X, Manager of XYZ Ltd. since 2004 was terminated by the company on 1st August,
2018 by paying a compensation of Rs. 200 lakh. Such compensation is
…………………………
A) Chargeable under the Wealth-tax Act, 1957
B) Not chargeable under the Income-tax
C) Chargeable under section 17(3)(i)
D) Chargeable under section 28(ii) (a).
169.DSK, an LLP had taken key man insurance policy on the life of its managing partner.
The policy got matured on 13th September, 2018 and an amount of Rs.`75lakh was paid
by the insurers to the managing partner. The amount so received on maturity of the
policy by the managing partner is ………………..
A) Fully exempt u/s 10(10D) B)50% of Rs. 75lakh exempt
C) Rs.` 75lakh taxable D)Rs.` 25 lakh exempt and Rs.` 50 lakh
taxable
170.Circulars and Notifications are binding on the
A) Central Board of Direct Taxes (CBDT) B) Assessee
C) Income Tax Appellate Tribunal (ITAT) D) Income Tax Authorities
171.Who amongst the following confers on the power to issue circulars and clarifications?
A) ITAT B) Central Government
C) CBDT D) State Government
172.Amendments by the finance act are made applicable from
A) First day of next financial year B) First day of same financial year
C) Last day of same Accounting year D) None of the above
173.As per section 2(31), the following is not included in the definition of 'person'
A) An individual B) A Hindu undivided family
C) A company D) A minor
174.Which amongst the following is an exception to the previous year rule?
A) Business or Profession newly set up. B) Where a source of income
newly set up.
C) Non-resident engaged in shipping business D) None of the above
175.Which amongst the following is not a head of Income?
A) Salaries B) Income from house Property
C) Capital gains D) Income from exports
176.Which of the following is not included in taxable income –
A) Reimbursement of expenses B) Cash gifts received from non relatives
C) Income from illegal activity D) Profit on sale of equity shares of
unlisted company
177.In case of non-residents engaged in shipping business in India income earned during
the financial year is
A) Taxable in India the same financial year
B) Taxable in India the relevant assessment year
C) Not taxable in India in the same financial year
D) Not taxable in India
178.Additional surcharge (education cess) of 3% per cent is payable on
A) Income tax B) Income tax plus surcharge
C) Surcharge D) None of these
179.The salary, remuneration or compensation received by the partners is taxable under the
head ………………………...
A) Income from Other Sources B) Income from Business
C) Salary D) None of the above
180.The death-cum-retirement gratuity received by the Government Employee or employee
of local authority is ………………………...
A) Partially exempted B) Fully exempted
C) Half taxable D) None of the above
181.Rent Free Accommodation given to an employee by the employer is a ………………..
A) Allowance B) Perquisite
C) Profit in lieu of salary D) None of the above
182.Payment of Gratuity Act came into force in ………………...
A) 1973 B) 1980 C) 1991 D) 1972
183.The entertainment allowance is applicable to…………………….
A) Private sector employees B) Public sector employees
C) Government employees D) All of the above
184.……………………. is the rent fixed under Rent control Act.
A) Municipal rental value B) Fair rental value
C) Standard rent D) Real rent
185.For computation of Gross Annual Value, if actual rent is more than expected rent, then
we select the …………………………..
A) Actual rent B) Expected rent
C) Any of the above D) None of the above
186.Under the Income Tax Act, 1961, depreciation on machinery is charged on
………………….
A) Purchase price of the machinery B) Written down value of the machinery
C) Market price of the machinery D) All of the above
187.………………………are not treated as agricultural income.
A) Income from poultry farming B) Income from bee heaving
C) Purchase of standing crop D) All of the above
188.Suman, has rendered services in India and retired in 2011. He then shifted and settled
in Singapore. The pension received by him for such services would be
……………………. ?
A) Deemed to accrue or arise outside India
B) Deemed to accrue or arise in India
C) Deemed to accrue or arise in India only when it is received in India
D) Deemed to accrue or arise in India only when it is received outside India
189.Educational cess is leviable in case of ………..
A) Individual B) HUF
C) Company D) All assesses
190.A car is imported after 1- 4- 2005 by R Ltd. from London to be used by its employee.
R Ltd. shall be allowed depreciation on such car at:
A) 15% B) 40% C) 60% D)
Nil
191.Certain revenue and capital expenditure on scientific research are allowed as deduction
in the previous year of commencement of business even if these are incurred:
A) Five years immediately before the commencement of business
B) 3 years immediately before the commencement of the business
C) Any time prior to the commencement of the business.
D) None of these
192.Preliminary expenses incurred are allowed deduction in:
A) 10 equal annual instalments B) 5 equal annual instalments
C) full D) None of these
193.In case the assessee follows mercantile system of accounting, bonus or commission to
the employee are allowed as deduction on:
A) Due basis B) Payment basis
C) Due basis but subject to section 43B D) Any of the above
194.For person carrying on profession, tax audit is compulsory, if the gross receipts of the
previous year exceeds
A) Rs.50 lakhs B) Rs.40 lakhs
C) Rs.10 lakhs D) Rs.5 lakhs
195.Tax audit is compulsory in case a person is carrying on business whose gross
turnover/sales/receipts, as the case may be, exceeds:
A) Rs. 10 lakhs B) Rs. 40 lakhs
C) 1 crore D) 10 crore
196.In case an assessee is engaged in the business of civil construction, presumptive income
scheme is applicable if the gross receipts paid or payable to him in the previous year
does not exceed:
A) Rs.10 lakhs B) Rs. 40 lakhs
C) Rs. 50 lakhs D) 1 crore
197.In case an assessee is engaged in the business of retail trade, presumptive income
scheme is applicable if the total turnover of such retail trade of goods does not exceed:
A) Rs.10 lakhs B) Rs.30 lakhs
C) Rs.40 lakhs D) Rs.50 lakhs
198.A is entitled to children education allowance @ Rs. 80 p.m. per child for 3 children
amounting Rs. 240 p.m. It will be exempt to the extent of :
A) Rs.200 p.m. B) Rs.160 p.m.
C) Rs. 240 p.m. C) Rs. 120 p.m.
199.R gifted his house property to his wife in 2000. R has let out the house property @
Rs.5,000 p.m. The income from such house property will be taxable in the hands of :
A) Mrs. R
B) R. However , income will be computed first as Mrs. R’s income and thereafter
clubbed in the income of R
C) R as he will be treated as deemed owner & liable to tax
D) None of the above
200.Income tax is a …………………..
A) Direct tax B) Indirect tax
C) Any of the above D) None of the above
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