Direct Tax Set 2 MCQs

Q1 | M.Ltd announced increase in D.A. on 21-03-2017 with retrospective effect from 21-3-2012 and the same were paid on 6-04-2017. The arrears of D.A. shall be taxable in the previous year ________

2016-17

2017-18

In respective previous years to which these relate

Previous years

Q2 | Un -commuted pension received by a Government employee is ____________

Exempt

Taxable

1/3 is exempt

Non taxable

Q3 | M.claimed the exemption of gratuity in the past to the extent of Rs.2,50,000.He was entitled to the gratuity from the present employer amounting to Rs.2,00,000 in the previous year 2017-18. M can claim exemption to the maximum extent of ___________

Rs.2,00,000

Nil

Rs.1,00,000

Rs.1,50,000

Q4 | Employee M is neither a government employee nor covered under payment of gratuity Act, 1972. He has completed 16 years and 8 months of service. The number of completed years considered for gratuity exemption shall be _____________

17 years

16 years

16 years and 8 months

19 years

Q5 | Compensation received on voluntary retirement is exempt under sec.10 (10c) to the maximum extentof ___________

Rs.2,40,000

Rs.3,00,000

Rs.5,00,000

Rs.6,00,000

Q6 | M is entitled to children education allowance @80 p.m per child for 3 children amountingRs.240p.m. It will be exempt to the extent of ___________

Rs.200 p.m

Rs.160 p.m

Rs.240 p.m

Rs.250 pm

Q7 | Entertainment allowance in case of government employee is _________________

Fully exempt

Fully taxable

Exempt up to certain limits mentioned in sec.16

First included in full in gross salary and thereafter deduction allowed from gross salary under section 16 (ii)

Q8 | Pension received by an employee of the central or state government who has been awarded “ParamVir Chakra” _____________

Is taxable as income from salary

Is exempt from tax

Is taxed after deducting Rs.15,000 or 1/3 whichever is lower

Is taxable as income from other sources

Q9 | Children education allowance is ____________

Exempt upto lower of the amount actually spent or the prescribed limits.

Exempt fully to the extent actually spent or the prescribed limits

Exempt to the extent of lower of allowance received or the lump sum amount prescribed, irrespective of actual expenditure.

Fully taxable

Q10 | Leave travel concession is _________

Exempt up to lower of the amount actually spent or the prescribed limits.

Exempt fully to the extent actually spent

Exempt to the extent of lower of allowance received or the lump sum amount prescribed, irrespective of actual expenditure.

Fully taxable

Q11 | M.has taken a house on rent and sublets the same to A, income of M from such house property shallbe taxable under the head _____________

Income from house property

Income from other sources

Business income

Income

Q12 | Municipal valuation of the house is Rs.1,00,000 fair rent Rs.1,20,000, fair rent Rs.1,20,000, standard rent Rs.1,10,000 and actual rent received or receivable is Rs.1,40,000. The gross annual value in this case shall be ____________

1,30,000

1,25,000

1,40,000

1,35,000

Q13 | A has two house properties. Both are self-occupied. The annual value of ____

Both houses shall be nil

One house shall be nil

No house shall be nil

Single house

Q14 | Municipal valuation of the house is Rs.1,20,000, fair rent 1,40,000, standard rent Rs.1,30,000 andactual rent received or receivable is Rs.1,25, 000.The gross annual value in this case shall be ______

1,30,000

1,25,000

1,40,000

1,60,000

Q15 | A has two house properties. Both are self-occupied. The annual value of _________

Both houses shall be nil

One house shall be nil

No house shall be nil

None of the above

Q16 | An assessee has borrowed money for purchase of house and interest is payable outside India. Suchas interest shall ____________

Be allowed as deduction

Not to be allowed as deduction

Be allowed as deduction if the tax is deducted at source

None of the above

Q17 | Municipal tax is deducted from__________

Net annual value

Gross annual value

Municipal valuation

Amount value

Q18 | In case the property is owned by co -owners and it is self-occupied by all co -owners. The annualvalue of such house property ____________

Be nil

For each co-owner shall be nil

Only for co -one owner will be nil

None of the above

Q19 | A house property with fair rent Rs.1,20,000 is neither let out nor self-occupied throughout theprevious year. Its annual value shall be ________

Rs.1,20,000

Nil

Rs.60,000

None of the above

Q20 | Unrealized rent is a deduction from ______-

Gross annual value

Net annual value

Municipal value

District

Q21 | Dhanesh is a member of house building cooperative society. The society is the owner of the flats constructed by it. One of the flats is allotted to Dhanesh. The income from that flat will be assesses in the hands of ____________

Co -Operative Society

Dhanesh

Neither of the above

Society and Dhanesh equally

Q22 | Following will be taxable as income from house property_______-

Sub -letting of a house

Letting of an office building

Sale of house at profit

Rent from open land used for wedding functions

Q23 | Municipal taxes to be deducted from GAV should be _______

Paid by the tenant during the previous year

Paid by the owner during the previous year

Accrued during the previous year

Accrued or paid by owner whichever is lower

Q24 | Standard deduction under section 24(a) from income from House property is _______

1/3 rd of NAV

Repairs actually incurred by the owner

30% of NAV

Rs.30,000

Q25 | Interest on borrowed capital accrued up to the end of the previous year to prior to the year ofcompetition of construction is allowed__________

As a deduction in the year of completion of construction

In 5 equal annual installments from the year of competition of construction.

In the respective year in which the interest accrues

Up to Rs.30,000 on Rs.20,000.