Here are several MCQs related to Income Tax which is really help you to clear your NET exam.
You can also see MCQs of Statistics and Marketing Management
So, here we go:
Q1. The year in which income is earned is the and such income is taxable in the immediately following year which is the__.
(A) Assessment year, Previous year
(B) Previous year, Assessment year
(C) Financial year, Previous year
(D) None is correct
Q2. Statement I: Previous year always starts from 1st April and it is always a period of 12 months.
Statement II: Assessment year means the financial year immediately preceding the assessment year.
Codes:
(A) Statement I is correct Only
(B) Statement II is correct Only
(C) Both are correct
(D) None is correct
Q3. Assertion: In Income tax Act person is defined under section 2(7).
Reason: 7 types of persons are defined under this act.
Codes:
(A) Both A and R is correct and R is correct explanation of A
(B) Both A and R is correct but R is not the correct explanation of A
(C) A is true but R is false
(D) R is true but A is false
Q4. Assesses means a person by whom any tax or any other sum of money is payable under this Act and includes:
i. Every person in respect of whom any proceedings under this act has been taken.
ii. Deemed assesse or representative assesse
iii. Assesse in default
iv. Any person
Codes:
(A) i and ii Only
(B) i, ii and iii Only
(C) i and iii Only
(D) All of the above
Q5. Match List I with List II:
| List 1. | List 2. |
| A. Section 2(31) | 1. Previous year |
| B. Section 2(8) | 2. Assessment Year |
| C. Section 2(9) | 3. Assessment |
| D. Section 3 | 4. Person |
- A-1 B-3 C-4 D-1
- A-4 B-3 C-2 D-1
- A-4 B-2 C-3 D-1
- A-1 B-2 C-4 D-3
Q6. Identify the liability of Cooperative society Where the total income does not exceed Rs. 10,000?
(A) 20% of total income
(B) 30% of total income
(C) 10% of total income
(D) 15% of total income
Q7. Given below are the statements related to which of the following option:
i. Levied on tax
ii. Same rate for everyone
iii. The amount used for specific purpose
iv. States do not get any part
Codes:
(A) Cess
(B) Surcharge
(C) Exemption
(D) Deduction
Q8. Identify the incorrect match from the options given below:
i. Health & education cess- 4%
ii. Rebate- Section 89
iii. Marginal Relief- 87A
Codes:
(A) ii Only
(B) ii and iii Only
(C) i Only
(D) All are correct Only
Q9. Match List I with List II:
| List 1. (Rate of Advance Tax) | List 2. (Due date of tax) |
|---|---|
| A. On or before 15th June | 100% of advance tax |
| B. On or before 15th September | 75% of advance tax |
| C. On or before 15th December | 45% of advance tax |
| D. On or before 15th March | 15% of advance tax |
- A-4 B-1 C-3 D-2
- A-3 B-2 C-4 D-1
- A-4 B-3 C-2 D-1
- A-1 B-2 C-3 D-4
Q10. Identify the correct statement in context of Late fees for delay in filing of return of income:
i. Total Income is upto ₹ 5,00,000 : Late Fees ₹ 1,000.
ii. Total Income exceeds ₹ 5,00,000 : Late Fees ₹ 5,000
iii. if return is furnished after due date but on or before 31-12 otherwise ₹ 10,000.
Codes:
(A) i Only
(B) ii Only
(C) ii and iii Only
(D) All of the above
Q11. Assertion: Return of income is filed in order to inform the government regarding the taxes paid and information regarding income.
Reason: There are three types of returns which are filed for the purpose of income tax- Original Return, Revised Return and Belated Return.
Codes:
(A) Both A and R is correct and R is correct explanation of A
(B) Both A and R is correct but R is not the correct explanation of A
(C) A is true but R is false
(D) R is true but A is false
Q12. Every person being a seller, who receives any amount as consideration for a sale of motor vehicle exceeding____________shall at the time of receipt of___________such amount collect tax from buyer
of sale consideration.
(A) 50,000 and @2%
(B) 1 lakhs and @1
(C) 10 lakhs and @1%
(D) 25 lakh and @5%
Q13. The annual value of house property being held as stock in trade would be treated as NIL for a period of __ from the end of the financial year in which the certificate of completion of construction of the property is obtained from the competent authority.
(A) 1 year
(B) 3 years
(C) 2 years
(D) 5 years
Q14. Identify the correct statements in context of co-owner of house property?
Statement I: In case of self occupied property: each taxpayer can claim a deduction of a maximum amount of Rs. 2 Lakhs for interest of home loan.
Statement II: In case of let out property: taxpayer have no limit in claiming deduction of interest amount.
Codes:
(A) Statement I is correct
(B) Statement I is correct
(C) Both Statements are correct
(D) None is correct
Q15. In case of a ___________income from house property situated outside India is taxable, whether such income is brought into India or not.
i. Resident and ordinarily resident
ii. Individual
iii. Non-resident
iv. HUF
Codes:
(A) ii, iii and iv Only
(B) i and iv Only
(C) i, iii and iv Only
(D) iii Only
Q16. Find out expected rent of house property from the following given information.
Municipal value: 1 Lakh
Fair Rent: 88,000
Standard Rent: 1,25,000
Codes:
(A) 88,000
(B) 1 Lakh
(C) 1,25,000
(D) 2,00,000
Q17. Assertion: Forgoing is not claiming salary that shall otherwise become due.
Reason: Surrender means returning the salary after it has been paid in normal course of business.
Codes:
(A) Both A and R is correct and R is correct explanation of A
(B) Both A and R is correct but R is not the correct explanation of A
(C) A is true but R is false
(D) R is true but A is false
Q18. Section 15 deals with the basis of charge which means salary is chargeable to tax either on:
i. Due basis
ii. Receipt basis
iii. Deemed basis
iv. When it is received whichever is earlier
Codes:
(A) iii and iv Only
(B) i and ii Only
(C) i, ii and iv Only
(D) All of the above
Q19. Exemption of House Rent Allowance is not available to?
i. An assessee who lives in his own house.
ii. House for which he has not incurred the expenditure of rent.
iii. If assessee choose the new tax regime from F.Y 2020-21.
Codes:
(A) i and ii Only
(B) ii Only
(C) i and iii Only
(D) All of the above
Q20. Identify the correct match from the options given below:
i. Statutory provident fund- Act 1952
ii. Recognized provident fund- Act 1968
iii. Public Provident fund- Act 1925
Codes:
(A) i and ii Only
(B) ii and iii Only
(C) All of the above
(D) None of the above
Q21. Assertion: Section 10 of Income tax Act exempt certain incomes.
Reason: Section 80 of Income Tax Act deals with deductions from total income.
Codes:
(A) Both A and R is correct and R is correct explanation of A
(B) Both A and R is correct but R is not the correct explanation of A
(C) A is true but R is false
(D) R is true but A is false
Q22. Deduction under Section 80E deals with:
i. Available only for individual not for HUF, company, partnership firm etc.
ii. Deals with tax deduction on education loan
iii. For higher education full time course after class 12th
iv. Maximum tenure for deduction is 10 years
v. Principal amount of loan also qualify for tax deduction under this section
Codes:
(A) i, ii and iii Only
(B) iii, iv and v Only
(C) ii, iii, iv and v Only
(D) All are correct
Q23. Identify the category of deduction mentioned below of section 80G?
i. Government or local authority
ii. institution for promotion of family
planning etc.
Codes:
(A) 100% deduction without any qualifying limit.
(B) 50% deduction without any qualifying limit.
(C) 100% deduction with qualifying limit.
(D) 50% deduction with qualifying limit.
Q24. Scope of Agricultural income includes:
i. Rent or revenue derived from land situated in India.
ii. That land used for agricultural purpose.
iii. Rent or revenue derived from land situated outside India as well.
Codes:
(A) i Only
(B) ii Only
(C) i and ii Only
(D) All of the above
Q25. Identify the incorrect statement from the options given below:
Statement I: Agricultural income is exempt if it is situated in anywhere in India.
Statement II: Agricultural income is exempt if it is situated in any rural area in India.
Codes:
(A) Statement I Only
(B) Statement II Only
(C) Both are correct
(D) Both are incorrect
Q26. The scheme of partial integration is applicable only if the following conditions will be satisfied?
i. The taxpayer is an Individual, HUF, AOP, BOI and AJP.
ii. Not eligible taxpayer includes- Company, firm and Local authority.
iii. Non-agricultural income exceeding the amount of basic exemption limit.
iv. Agriculture income of taxpayer should exceeds 5,000.
Codes:
(A) i, iii and iv Only
(B) ii, iii and iv Only
(C) i and iv Only
(D) All of the above
Q27. Assertion: deduction under section 80M is available for domestic company.
Reason: This section deals with deduction in respect of intercorporate dividend.
Codes:
(A) Both A and R is correct and R is correct explanation of A
(B) Both A and R is correct but R is not the correct explanation of A
(C) A is true but R is false
(D) R is true but A is false
Q28. Eligible payments under section 80C includes which among the following?
i. Life insurance premium
ii. Contribution to PPF/ SPF/ RPF and approved superannuation fund.
iii. Repayment of housing loan taken from Govt., bank, LIC, specified employer etc.
iv. Term deposit for a fixed period of not less than 5 years with schedule bank.
Codes:
(A) i and ii Only
(B) iii and iv Only
(C) i, ii and iii Only
(D) All of the above
Q29. Identify the incorrect match from the options given below regarding statutory limit of each?
i. Gratuity- 20 lakhs
ii. Leave encashment- 3 lakhs
iii. Voluntary retirement- 5 lakhs
iv. Retrenchment- 5 lakhs
Codes:
(A) iv Only
(B) i and iv Only
(C) iii Only
(D) All are correct only
Q30. Assertion: Pension received from UNO is not taxable.
Reason: But pension received by a widow of UN ex-officials from US joint staff pension partly exempt upto a qualified limit.
Codes:
(A) Both A and R is correct and R is correct explanation of A
(B) Both A and R is correct but R is not the correct explanation of A
(C) A is true but R is false
(D) R is true but A is false
