INCOME TAX
1. Income Tax Act was passed in the year……….
A) 1934 B) 1956 C) 1961 D) 1972
2. Income Tax Act came into force on…………
A)1
st April 1935 B) 1
st April 1961 C) 1
st April 1962
D) 1
st April 1956
3. Income tax is a………………….
A) Professional tax B) Direct tax C) Indirect tax
D) Service tax
4. Income tax rates are fixed in……………..
A) Income tax Act B) Finance Act C) Income tax rules
D) Finance rules
5. There are …………… heads of income
A) 3 B) 4 C) 5 D) 2
6. A person with the age of ………… or more is considered as a super senior citizen as
per Income tax Act.
A) 56 B) 60 C) 80 D) 85
7. The minimum exceptional limit of income is……………….
A) 250,000 B) 200,000 C) 300,000 D) 500,000
8. Rebate of Income tax is defined as per section ……………..
A) 81A B) 87A C) 81C D) 87C
9. Section 2(9) of Income tax deals with…………..
A) Person B) Assessee C) Previous Year
D) Assessment Year
10. Assessment year is the period of 12 months commencing from ……………. Every
year.
A) 1st March B) 31st March C) 1st April D) 30
th April
11. When the income earned in an year is taxed in the same year, it is called
…………………..
A) Advanced Assessment B) Super Assessment
C) Accelerated Assessment D) None of the above
12. Surcharge is levied when the total income exceeds …………………..
A) 5 Crore B) 10 Crore C) 1 Crore D) 2 Crore
13. Educational cess is charges at the rate of ……..
A) 2% B) 1% C) 3% D) 5%
14. As per Income tax Act, Person includes ……………
A) Individual B) HUF C) Local Authority
D) All of the above
15. CBDT stands for …………………………..
A) Central Bureau of Direct Taxes
B) Central Board of Direct Taxes
C) Citizen’s Board of Direct Taxes
D) Citizen’s Bureau of Direct Taxes
16. 4. CBDT is control by …………………………………..
A) Central Government
B) State Government
C) Both (A) and (B)
D) None of this above
17. To be an Ordinarily resident in India, an individual must satisfy ……………………….
A) Both Basic Conditions and One Additional Condition
B) One Basic Condition and Both Additional Conditions
C) One Basic Condition and One Additional Condition
D) Both Basic Conditions and Both Additional Conditions
18. A Company has …………. types of residential status.
A) 2 B) 3 C) 1 D) 4
19. A citizen of India who goes abroad for the purpose of employment, he must stay in
India in the previous year for at least ............................. days to become a resident
A) 90 days B) 162 days C) 180 days D) 182 days
20. 10. Who is assessee in case of a HUF?
A) Karta B) Coparceners C) Deemed Karta D) None of these
21. Dividend from an Indian Company is …………………
A) Fully Taxable B) Partly Taxable
C) Fully Exempted D) None of these
22. Expenditure incurred on exempted income is …………. as deduction.
A) Fully Allowed B) Partly Allowed
C) Not Allowed D) None of these
23. Income exempted from tax are stated in the section……. Of Income Tax Act.
A) 5 B) 10 C) 12 D) 8
24. Income from Salary is explained in the section ……………………
A) 12 to 14 B) 15 to 17 C) 18 to 22 D) 24 to 26
25. Salary is defied as per section ……….
A) 15(2) B) 16(1) C)17(2) D)17(1)
26. When an URPF is recognized, the balance so transferred is called ………….
A) Recognized PF B) Transferred PF
C) Recognized Balance C) Transferred Balance
27. Bonus paid by the employer to the employee is …………
A) Fully Taxable B) Partly Taxable
C) Fully Exempted D) None of these
28. Gratuity is defined as per section ………..
A) 10(10A) B) 10(10AA) C) 10(10) D)10A
29. The highest Administrative Authority for Income Tax in India is............
A) Finance Minister. B) CBDT. C) President of India.
D) Director of Income Tax.
30. Payment made by an employer to employee monthly, other than salary is called
………….
A) Bonus B) Allowances C) Benefits D) None of these
31. HRA is ………………..
A) Fully Taxable B) Partly Taxable
C) Fully Exempted D) None of these
32. Rule ….. explain the taxation of HRA
A) 2 B) 2A C) 2AA D) 2AB
33. Agricultural income in Pakistan is assessable for........................
A) Resident B) Not Ordinarily Resident
C) Non-resident D) Not taxable
34. If the assessee is living in own house HRA is …………..
A) Fully Taxable B) Partly Taxable
C) Fully Exempted D) None of these
35. Entertainment allowance is allowed as a deduction as per section ……………
A) 16 B) 16(i) C) 16(ii) D) 16(iii)
36. Any allowance granted for encouraging research, academic and other professional
pursuit is called ………………………
A) Research Allowance B) Academic Allowance
C) Higher Educational Allowance D) Educational Allowance
37. Children education allowance is exempt up to per month per child for two children.
A) Rs.100 B) Rs.150 C) Rs.200 D) Rs.250
38. Children hostel allowance is exempt up to per month per child for two children.
A) Rs.100 B) Rs.200 C) Rs.250 D) Rs.300
39. Transport allowance given by the employer to the employee is exempt up to ………..
A) Rs.1000p.m B) Rs.1600p.m
C) Rs.1000p.a D) Rs.1600p.a
40. Foreign allowance is a …………….
A) Fully Exempted Allowance B) Fully Taxable Allowance
C) Partly Exempted Allowance D) None of these
41. State which of the following income are exempted?
A) Dearness Allowance B) City Compensatory Allowance
C) Foreign Allowance D) Medical Allowance
42. Education allowance is exempted for ……..
A) One person B) Four persons
C) Two persons D) None of these
43. A government employee received salary Rs.120,000 and entertainment allowance
Rs.10,000 during the previous year. He spent Rs.6000 on entertainment. He is entitled
to deduction u/s 16(ii) :
A) 10,000 B) 6000 C) 5000 D) Nil
44. A citizen of India who goes abroad for the purpose of employment, he must stay in
India at least for ............................. days to become a resident
A) 90 days B) 162 days C) 180 days D) 182 days
45. Who among the following may be “not ordinarily resident”?
A) Hindu Undivided Family.
B) Company.
C) Association of persons.
D) None of these
46. The following is not taxable as income under the head "Salaries".
A. Commission received by a full time director
B. Remuneration received by a partner
C. Allowances received by an employee
D. Free accommodation given to an employee
47. Previous year means the financial year immediately preceding the…………………...
A) Accounting Year B) Assessment Year
C) All of the above D) None of the above
48. Gratuity received by a government employee is .......................
A) Fully exempted
B) Partly exempted
C) Fully taxable
D) Exempted up to Rs:1,00,000
49. The periodic payment of money for the past service is known as ........................
A) Gratuity
B) Pension
C) Commuted pension
D) Leave salary
50. Income received in India whether occurred in India or outside India, the tax incidence
in case of resident is …………………………...
A) Taxable as per slabs B) Exempted from tax
C) Partly exempted D) None of the above
51. The income received and accrued outside India from a business controlled or profession
set up in India, the tax incidence in case of resident is ………………..
A) Taxable B) Non-taxable
C) Partly taxable D) None of the above
52. Pension is taxable under ..........................head.
A) Salary B) House property
C) Capital gains D) other sources
53. Salary received by a Member of Parliament is taxable under the head.........................
A) Income from salary
B) Capital gains
C) Profits and gains of business or profession
D) Income from other sources
54. A person is Non-resident if he fails to fulfil.....................
A) The additional conditions.
B) At least one of the basic conditions.
C) Both basic conditions.
D) None of these
55. Income received in India is taxable in the hands of...........................
A) Resident only.
B) Resident and ordinarily resident only.
C) Non-resident only.
D) All assessees.
56. ……………………………… is exempted from income tax.
A) Interest from Indian company B) Dividend from foreign company
C) Cooperative dividend D) Dividend from Indian company
57. The Income TaxAct,1961 broadly covers ………………………...
A) Basic charging income B) Rebates and reliefs
C) Incomes exempted from income tax D) All of the above
58. Any rent or revenue derived from land which is situated in India and is used for
agricultural purpose is ……………………...
A) Partially taxable B) Fully taxable
C) Exempted from tax D) None of the above
59. Residential Status of an assesses can be …………………………..
A) Different for different previous year in the same assessment year
B) Different for different assessment year
C) None of the above
D) All of the above
60. Which of the following is not included in salary income.
A) Commuted pension B) Un commuted pension
C) Family pension D) Leave salary
61. In case of Tax free salary, .......................................
A) Tax is to be paid by employer
B) No tax is payable on such salary
C) Tax is to be paid by the employee.
D) Govt, itself pays the tax at a future date.
62. Dearness allowance is taxable in the hands of.................
A) Govt employees B) Non Govt employees
C) All employees. D) None of these.
63. A Perk is.........................
A) Cash paid by employer to employee
B) Facility provided by employer to employee
C) Amount credited to employees.
D) None of these accounts.
64. Perquisites to employees are covered in the I.T. Act 1961 under...................
A) Sec 2a. B) Sec. 17b. C) Sec 28a. D) Sec. 36 c.
65. The value of Interest free concessional loans to employees is determined on the basis
of lending rates of ..................... for the same purpose.
A) S.B.I. B) R.B.I. C) Central govt. D) State
govt.
66. An employee is deemed as specified employee if he is a director in the company or
has substantial in the company or his chargeable salary per annum exceeds.
A) Rs. 5,00,000. B) Rs. 2,00,000.
C) Rs. 1,00,000. D) Rs. 50,000.
67. Value of rent free accommodation in case of Govt. employee shall be taxable up
to.......................
A) 15% of employees salary.
B) 7.5% of employees salary.
C) License fee fixed by Govt.
D) 10% of employees salary.
68. Value of rent free accommodation a house owned by employer in case of non- Govt.
employees with above 25 lakhs population is...........................
A) 10% of employees salary
B) 15% of employees salary
C) 7.5% of employee salary
D) 20% of employees salary
69. Interest on RPF balance is exempted up to.......................
A) 9.75%. B) 9.5%. C) 10%. D) 12%.
70. Employers contribution to RPF is exempted up to...................
A) 10% of salary. B) 13% of salary.
C) 12% of salary. D) 11% of salary.
71. The income of previous year is chargeable to tax in the ……………………...
A) Immediately succeeding assessment year
B) Same previous year
C) Immediately preceding academic year
D) None of the above
72. The interest on loan paid by the Government of India to a non-resident outside India
is ……………….. in India.
A) Not taxable B) Partially taxable
C) Taxable D) Can’t say
73. 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
74. 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
75. Under Section 15 of Income Tax Act, the salary due in previous years and even if it is
not received is ………………………...
A) Taxable B) Not taxable
C) Partially taxable D) None of the above
76. The assesses can claim relief under ………………………… for arrears or advance
salary.
A) Section 89(1) B) Section89(2)
C) Section 89(3) D) Section89(4)
77. The Payment of Gratuity Act came into force in ……………………..
A) 1973 B) 1980 C) 1991 D) 1972
78. Deduction from gross Total income is allowed under Sec. 80C up to lower of the
Qualifying amount or a maximum of.
A) Rs. 50,000. B) Rs. 80,000.
C) Rs. 1,00,000. D) Rs. 2,00,000.
79. Profits earned from an illegal business are..........................
A) Taxable.
B) Tax free.
C) Ignored by Tax Authorities.
D) treated as other income.
80. Medical reimbursement is exempt upto .................. if treatment is done in a private
hospital.
A) Rs: 5,000 B) Rs: 10,000
C) Rs: 15,000 D) Rs: 50,000
81. Which of the following is exempted.
A) C.C.A B) D.A
C) Foreign Allowance D) Medical Allowance
82. Free food provided to employees is exempted upto ...................... per meal.
A) Rs: 40 B) Rs: 50
C) Rs: 60 D) Rs: 15
83. Which of the following is not taxable under the head Salary?
A) Remuneration paid to the lecturer of a college for setting a question paper
B) Salary received by a member of parliament
C) Commission received by an employee director of a company
D) Both (a) and (b)
84. In accordance with the provisions of Section 17(1) of Income Tax Act, 1961, the term
salary includes ……………………..
A) Any annuity or pension
B) Any gratuity
C) Any fees, commission, perquisite or profits in lieu of or in addition to any salary or
wages D) All of the above
85. If the employee receives retirement gratuity from more than one employer, he can
claim exemption in respect of ………………………...
A) Current employer B) Previous employer
C) Both employer D) Not from single employer
86. The family pension received by the family members of armed forces after death of
employee is ……………………………….
A) Exempt fully B) Exempted after fulfilling of certain
conditions
C) Not exempted D) None of the above
87. The entertainment allowance is applicable to ……………………..
A) Private sector employees B) Public sector employees
C) Government employees D) All of the above
88. The entertainment tax allowed as a deduction under Section 16 of Income Tax Act is
the least of ………………………….
A) Actual amount of entertainment allowance received
B) 20% of basic salary of the individual
C) 50,00
D) All of the above
89. Income accrued outside India and received outside India is taxable in case of
………………………….
A) Resident and ordinary resident (ROR)only
B) Resident but not ordinary resident (RNOR)only
C) Non-resident only
D) ROR, RNOR and Non-resident
90. Gross Total Income is arrived after ………………………..
A) only adding Income under five heads of Income
B) adding Income under five heads of Income excluding losses
C) adding Income under five heads of Income, after applying clubbing provisions and
making adjustment of set off and carry forward of losses
D) adding Income under five heads of Income, after applying clubbing provisions and
making adjustment of set off and carry forward of losses and after allowing deduction
undersection 80Cto80U
91. Employer provides a car (below 1.6 ltr capacity) along with a driver to X partly for
official and partly for personal purpose. The expenses incurred by the company are:
running and maintenance expenses – ` 32,000 and driver’s salary – ` 36,000 . Taxable
value of perquisite is ……………………….
A) 21,600 B)10,800 C)32,400 D)39,600
92. Encashment of earned leave is given by ……………………… of Income TaxAct,
1961.
A) Section 10(10AA) B) Section12(10A)
C) Section 15(10B) D) None of the above
93. Compensation received on voluntary retirement is given by ……………………. of
Income Tax Act,1961.
A) Section 10(10D) B) Section10(10C)
C) Section 10(10E) D) Section11(10D)
94. If an employer transfers second hand motor car to the employee, the perquisite is
valued at …………………………………….
A) Actual cost less depreciation @30% for every completed year under straight line
method B) Actual costless depreciation @20% for every completed year under WDV
method
C) Actual costless depreciation @30% for every completed year under WDV method
D) Actual costless depreciation @20% for every completed year under SLM method
95. The following is not taxable as income under the head “Salaries”:
A) Commission received by a full-time director
B) Remuneration received by a partner
C) Allowances received by an employee
D) Free accommodation given to an employee
96. The following is exempt income from Income Tax:.
A) Travel concession to employee
B) Remuneration received for valuation of answer scripts
C) Encashment of leave salary whilst in service
D) Perquisites in India
97. Gift to employee up to ……………………… p.a. will not be treated as perquisite
taxable in the hands of employee.
A) 4,000 B) 5,000 C) 10,000 D) 2,500
98. Salary received by the manager of an agricultural farm is .................................
A) An agricultural income. B) A salary income.
C) A business income. D) A capital income.
99. Any benefits attached to an office or position in addition to salary or wages is called
……………..
A) Allowances B) Perquisites
C) Benefits D) None of these
100.Leave travel concession is explained as per section ……………
A) 10(1) B) 10(5) C) 10(10) D)
10(5A)
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