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This set of Income Tax Multiple Choice Questions & Answers (MCQs) focuses on Income Tax Set 1

Q1 | Under the income- tax act, the incidence of taxation depends on......................
  • the citizenship of the tax-payer.
  • the age of the taxpayer
  • the residential status of the tax-payer.
  • the gender of the taxpayer
Q2 | Unabsorbed depreciation can be carried forward for set off.......................
  • for a period of four years only.
  • for a period of eight years only.
  • for an unlimited number of years.
  • for a period of eighteen years only.
Q3 | Residential status is determined for......................
  • previous year
  • assessment year
  • accounting year
  • financial year.
Q4 | How many heads of income are there to compute Gross total income.
  • six.
  • five.
  • four.
  • three.
Q5 | Income Tax Act came into force on............................
  • 01-04-1961
  • 01-04-1962
  • 01-04-1956
  • 01-04-1965
Q6 | Income by way of rent of agricultural land is ..............
  • business income
  • income from other sources.
  • agricultural income
  • casual income
Q7 | Receipt of amount on maturity of LIC Policy is.............................
  • a revenue receipt.
  • a capital receipt.
  • a casual receipt.
  • none of these.
Q8 | Which of the following is not a capital receipt?
  • 'salami' for settlement of tenancy.
  • insurance claim received on machinery lost by fire.
  • lump sum received on sale of shares.
  • goods sold for cash.
Q9 | Compensation for cancellation of a licence by the government resulting in cessation of businessis...................................
  • a casual receipt.
  • a capital receipt.
  • a revenue receipt.
  • none of the above.
Q10 | Compensation received for loss of trading asset is a....................
  • capital receipt.
  • revenue receipt.
  • a casual receipt.
  • none of these.
Q11 | Salary received by the manager of an agricultural farm is .................................
  • an agricultural income.
  • a salary income.
  • a business income.
  • a capital income.
Q12 | 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
  • 90 days
  • 162 days
  • 180 days
  • 182 days
Q13 | Loss due to fire of hired machinery is.............................
  • capital loss.
  • revenue loss.
  • capital expenditure
  • none of the above.
Q14 | Embezzlement of cash by a cashier is.................
  • a revenue loss.
  • a capital loss.
  • a casual loss.
  • none of these.
Q15 | Who among the following may be “not ordinarily resident”
  • partnership firm.
  • company.
  • association of persons.
  • hindu undivided family.
Q16 | Agricultural income in Pakistan is assessable for........................
  • resident
  • not ordinarily resident
  • non-resident
  • not taxable
Q17 | The following is not taxable as income under the head "Salaries".
  • commission received by a full time director
  • remuneration received by a partner
  • allowances received by an employee
  • free accommodation given to an employee
Q18 | Section.................. of the Income Tax Act deals with exempted incomes.
  • 2
  • 7
  • 10
  • 80
Q19 | Gratuity received by a government employee is .......................
  • fully exempted
  • partly exempted
  • fully taxable
  • exempted up to rs:1,00,000
Q20 | Capital expenditure on scientific research which cannot be absorbed on account of insufficiency of profitin any accounting year can be carried forward for.....................
  • 16
  • 8
  • indefinite
  • 12
Q21 | __________ is / are empowered to levy and collect income tax.
  • state governments
  • central government
  • rbi
  • local self government department
Q22 | In which year Income Tax was levied in India for the first time ?
  • 1960
  • 1961
  • 1860
  • 1857
Q23 | Income Tax Act was passed in the year_____________.
  • 1955
  • 1961
  • 1956
  • 1962
Q24 | CBDT is control by ______________.
  • central government
  • state government
  • both (a) and (b)
  • none of this above
Q25 | previous year started from ______________.
  • april
  • march
  • january
  • september