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This set of Income Tax Law and Practices Multiple Choice Questions & Answers (MCQs) focuses on Income Tax Law And Practices Set 5

Q1 | An individual is resident and ordinarily resident of India if .
  • Person had been resident in India at least 2 out of 10 previous years immediately preceding the relevant previous year
  • Person been in India for a period of 730 days or more during 7 years immediately preceding the relevant previous year
  • All of the above
  • None of the above
Q2 | The Resident HUF is ordinarily resident in India, if
  • He has been resident in India at least 2 years out of 10 previous years immediately
  • He has been resident in India at least 3 years out of 10 previous years immediately
  • He has been resident in India at least 2 years out of 5 previous years immediately
  • None of the above
Q3 | Basic condition will be for a person who leaves India for employment
  • At least 182 days in India
  • At least 60 days in previous year and 365 days in preceding 4 years
  • At least 730 days in preceding 7 years
  • All of the above
Q4 | Which of the following is not included in the term Income under the Income Tax Act, 1961?
  • Reimbursement of travelling expenses
  • Profits and gains of business or profession
  • Dividend
  • Profit in lieu of salary
Q5 | 14 Income from shares of a public company set up in any special Industrial zone is exempt up to-------- years from the date of commencement of commercial production.
  • Three
  • Four
  • Five
  • None of the above
Q6 | An assessee has borrowed money for purchase of a house & Interest is payable outside India.
  • Such interest shall:
  • Be allowed as deduction
  • Not to be allowed on deduction
  • Be allowed as deduction if the tax is deducted at source
Q7 | Salary, bonus, commission or remuneration due to or received by a working partner from the firm is taxable under the head.
  • Income from salaries
  • Other sources
  • PGBP
  • none
Q8 | Perquisite received by the assessee during the course of carrying on his business or profession is taxable under the head.
  • Salary
  • Other sources
  • PGBP
  • none
Q9 | Interest on capital or loan received by a partner from a firm is:
  • Exempt U/S 10(2A)
  • Taxable U/H business and profession
  • Taxable U/H income from other sources
  • none
Q10 | Under the head Business or Profession, the method of accounting which an assessee can follow shall be:
  • Mercantile system only
  • Cash system only
  • Mercantile or cash system only
  • Hybrid system
Q11 | Gain arising from the disposal of _________ is taxable under the head capital gains.
  • Depreciable asset
  • Eligible depreciable asset
  • Securities
  • All of the above
Q12 | ____________are capital assets.
  • Stock in trade
  • Sculpture
  • Immovable property
  • Both b and c
Q13 | A person who derives his income by dealing in shares of private, unlisted and public limited companies are covered under the head.
  • Income from business
  • Income from other sources
  • Capital gains or
  • All of the above
Q14 | Bonus shares are issued by a company to its ______ without receiving any amount from them.
  • Employees
  • Customer
  • Shareholders
  • All of the above
Q15 | Gain from sale of shares of Private Limited companies is taxable under section_________.
  • 37
  • 37A
  • Not taxable
  • None of (a) to (c)
Q16 | Bonus shares are the shares issued by a company_____________.
  • Free of cost
  • Issued at concessional rate
  • On credit
  • None of the above
Q17 | A company in which at least 50% of the shares are held by a foreign government is ___________.
  • Private company
  • Public company
  • Foreign company
  • All of the above
Q18 | Any incidental expenditure on disposal of capital assets shall form part of _____________.
  • Cost of assets
  • Disposal consideration
  • Selling cost
  • None of a to c
Q19 | Capital loss u/s 37 is allowed as deduction for those assets the gain of which is___________.
  • Chargeable to tax
  • Exempt from tax
  • Both of these
  • None of (a) to (c)
Q20 | At the time of devolution ___________ would be the cost of the asset.
  • FMV
  • Historical cost
  • higher of a and b
  • none
Q21 | Capital gain tax shall not be chargeable on disposal of securities which are held for a periodof __________.
  • one year
  • two years
  • three years
  • six months
Q22 | ‘Derivatives’ is a general term for financial assets that are “derived” from other_______________.
  • fixed assets
  • current assets
  • financial assets
  • income
Q23 | Gain on disposal of immovable property is chargeable to at _____%, where holding periodis up to one year.
  • 10
  • 2
  • 6
  • 12
Q24 | A loss on the sale of jewellery is _______ under the head capital gain.
  • recognized
  • not recognized
  • taxable
  • none of above
Q25 | Maximum limit for the deduction of Life insurance premia from the gross total income is .
  • Rs. 2,00,000
  • Rs 1,50,000
  • R s 1,00,000
  • Rs 1,25,000