MCQs on THE INCOME TAX ACT 1961 Part - 2

Q.1:- Income accrued and received outside India is taxable in the hands of:

• Resident and not ordinarily
• Non-resident
• Resident and ordinarily resident
• None of these residents

Q.2:- Right to enforce partition of H.U.F is available to:

• Only female members
• Both male as well as female
• Only male members
• None of these members

Q.3:- Which of the following is not a revenue receipt?

• Profit on sale of technical know
• Subsidy from Got, in the normal how course of business
• Compensation for surrender of future profits
• Insurance received for loss of stock

Q.4:- Income accrued and received outside India is taxable in the hands of:

• Resident and ordinarily resident
• Resident and not ordinarily
• Non-resident
• None of these residents

Q.5:- Standard deduction for salaried tax payer for the assessment year 2020-2021:

• Rs. 20,000
• Rs. 50,000
• Rs. 10,000
• Rs. 40,000

Q.6:- A domestic company is taxable at 30%. However, tax rate is 25% if turnover or gross receipt of the company does not exceed:

• Rs. 10 crore
• Rs. 400 crore
• Rs. 200 crore
• Rs. 25 crore

Q.7:- Provision for Income under head house property has been given under:

• Section 28 to 44D
• Section 45 to 55A
• Section 15 to 17
• Section 22 to 27

Q.8:- Which is the charging section of income under the head profits and gains of business or profession?

• Section 28
• Section 15
• Section 17
• Section 24

Q.9:- The benefit of exemption under Section 54 is available to:

• HUF
• Individual
• Any person
• Both Individual and HUF

Q.10:- Under section 54, in case if the new asset is transferred within of its purchase or construction, then its cost of acquisition shall be reduced by the amount of the capital gains exempted earlier for the purpose of computing capital gains on transfer of such new asset:

• 2 years
• 4 years
• 3 years
• 1 year

Q.11:- Embezzlement of cash in a money lending business shall be treated as:

• Capital expenditure
• Capital loss
• Revenue loss incidental to business
• Business expenditure

Q.12:- Which of the following incomes from house property is not exempted from tax?

• Income from house property of salaried employee
• Annual value of any one palace of ex-Indian ruler
• Income of charitable trust
• Income of local authority

Q.13:- Ms. Neha is a working partner in Ramaiya & Associates. As per the terms of the partnership deed, she is paid a fixed monthly salary of Rs.39,800. In this case, salary of Rs.39,800 shall be charged to tax in the hands of Neha in which head of income and to whatextent?

• Income from other sources
• Profits and gains of business or profession, to the extent of amount not allowed to the Firm u/s40(b).
• Salaries
• Profits and gains of business or profession, to the extent of amount allowed to the Firm u/s40(b).

Q.14:- Which of the following losses available after inter source set-off, cannot be set-off from income, in other heads in the same assessment year

• Loss from specified business
• Loss under the head capital gains
• Speculation losses
• All of the above

Q.15:- Any payment made to discharge a revenue liability, if refunded later on, shall be:

• A casual receipt
• A revenue receipt
• A capital receipt
• None of the above

Q.16:- Following income of a resident and ordinarily resident is taxable in India, that is:

• Bank interest from Bank of America, New York Branch
• Rental income from house property located in London
• Bank interest from State Bank of India, Delhi
• All of the above

Q.17:- An Indian company's residential status is that it is always:

• Ordinarily resident
• Resident
• Nonresident
• None of the above

Q.18:- How much surcharge is levied if total income of domestic company exceed Rs. 10 crore?

• 10%
• 5%
• 12%
• 7%

Q.19:- Out of the following, which of the capital receipt is not taxable?

• Amount of Rs. 3,00,000 on by way of lottery, games, puzzles
• Amount of 2,00,000 received by way of gift from relatives
• Capital gains of Rs. 20,00,000.
• Amount, of Rs. 1,00,000 received by way of gift from a friend on marriage anniversary

Q.20:- For availing exemption under section 54, which amount is eligible for availing exemption (subject to Capital Gain amount is exceed Rs. 2 Crore)?

• Purchase/Construction of one residential house property upto due date of return of income and deposit in capital gain account scheme upto due date of return of income
• Purchase / construction after three years from the transfer date
• Purchase/Construction of one residential house upto due date of return of income
• Deposit in capital gain account scheme upto due date of return of income only

Q.21:- Capital expenditure on scientific research which cannot be absorbed on account of insufficient of profit in any accounting year can be carried forward for:

• Indefinite period
• 16 years
• 12 years
• 8 succeeding previous years

Q.22:- Indexation is applicable to:

• Sale of depreciable capital assets
• Sale of long term capital assets which are not depreciable assets
• Sale of short term capital assets
• Sale of long term debentures

Q.23:- Section 92A(2) provides that two enterprises shall be deemed to be associated enterprises for the purposes of sub-section (1) if, at any time during the previous year a loan advanced by one enterprise to the other enterprise constitutes not lessthan ...................... % of the book value of the total assets of the other enterprise

• 30
• 51
• 20
• 26

Q.24:- ____ is an agreement between a taxpayer and a taxing authority (Board) on an appropriate transfer pricing, methodology for fixing the arm's length price for a set of transactions over fixed period of time in future:

• Advance Pricing Agreement
• Pricing Agreement
• DTAA
• Transfer pricing Agreement