MCQ’S ON PRINCIPLES OF INCOME TAX IN INDIA

 

Q. 1	The term' income' includes the following types of incomes -
a)	Legal
b)	Illegal
c)	both
d)	None of the above
Q. 2	Income includes -
a)	Profit and gains
b)	Capital gain
c)	Lottery winning
d)	All of the above
Q. 3	A tax is------------------------ payment to the government by the subject.
a)	Compulsory
b)	Optional
c)	both A and B
d)	None of the above
Q. 4	Tax can be imposed by--------------
a)	Individual
b)	Industries
c)	Authority
d)	Agency
Q. 5	A tax is paid by a Subject to government…….
a)	Without expectation of definite return
b)	with expectation of definite return
c)	both A and B
d)	None of the above
Q. 6	In the payment of tax element of------------------ is involved.
a)	Sacrament
b)	Crime
c)	Autonomy
d)	Sacrifice
Q. 7	Payment of tax is a personal obligation of………
a)	Individual
b)	Pri Minister
c)	President

d) Supreme Court Q. 8 The purpose of Tax is raising a) Public Demand b) Public Awareness c) Public Revenue d) None of the above Q. 9 Taxes are Paid in………….. a) Goods b) Services c) Kinds d) Cash     Q. 10   The famous book------------------- written by Kautilya gives clear references about the tax was prevailing in the ancient India. a) Manu Smriti b) Sahasraveena c) Árthshashtra d) Garudpurana Q. 11 The aim of Taxation is…………… a) Welfare of community b) Coercion to community c) Both A and B d) None of the above Q. 12 Fees is the another source of the------------- of the state. a) Revenue b) Registration c) Stamp duty d) Service Q. 13 "Tax and fees are different from each other" this statement is a) FALSE b) TRUE c) Cant say d) None of the above

 

 

 

 

 

 

Q. 14	"A charge imposed by some Governmental agency for which it has been collected" is called as
a)	Fee
b)	Tax
c)	Both A and B
d)	None of the above
Q. 15	The Tax collection are routed to----------------- fund.
a)	Consolidated
b)	Complementary
c)	Category
d)	Compensatory
Q. 16	According to Art. 265 "No tax shall be levied or collected except by------------------
a)	Individual
b)	President
c)	Authority of Law
d)	None of the above
Q. 17	A Tax should not violate----------------- guaranteed under Art 14 and 19(1)(g) The Constitution of India.
a)	Fundamental Duties
b)	Directive Principles of State Policy
c)	Union and its Territories
d)	Fundamental Rights
Q. 18	Which of the following statement is true……….
a)	Double Taxation is Not prohibited under Art. 265 of the Constitution
b)	Double Taxation is prohibited under Art. 265 of the Constitution
c)	Anyone can impose tax in India
d)	None of the Above
Q. 19	Which of the following are not characteristics of indirect taxes?
a)	Incidence of such tax is borne by the consumer
b)	It's burden can be shifted by the taxpayers to some other person
c)	It is levied on Goods and Services

d)	It is imposed on persons
Q. 20	Money shall be considered as…………
a)	Goods
b)	Services
c)	Partly good and partly services
d)	None of the above
Q. 21	What is the nature of the Constitution of India with its Delegation of legislative powers between union and State?
a)	Rigid
b)	Flexible
c)	federal
d)	Quasi-Federal
Q. 22	The Union Parliament and State Legislature are empowered under the Constitution to make laws for………….
a)	Levy and collection of taxes
b)	Not to Levy and collection of taxes
c)	Both A and B
d)	None of the Above
Q. 23	The seventh schedule of the Indian Constitution gives how many lists?
a)	7
b)	5
c)	3
d)	1
Q. 24	Following list is not included in the seventh schedule of Constitution of India?
a)	Concurrent List
b)	State List
c)	Union List
d)	Legislative List
Q. 25	Which of the following statement is False?
a)	Union can impose tax on Agriculture
b)	List I of seventh schedule is known as Union List
c)	List II is known as State List
d)	List III is known as Concurrent List.

Q. 26	Who can impose Tax on Income?
a)	Union
b)	State
c)	Both
d)	None of the above
Q. 27	The Constitution Of India in Art. 268 to 281 envisages a scheme for distribution of tax revenue between……………………………
a)	Union and the States
b)	The States and Local Governments
c)	Both A and B
d)	None of the Above
Q. 28	The Finance Commission deals with………..
a)	Financial relations between centre and state
b)	Allocating finance to the schemes
c)	Financial relations between government and RBI
d)	None of the above
Q. 29	Finance commission is constituted after every
a)	Three years
b)	Four years
c)	Five years
d)	Six Years
Q. 30	In India who has authority to impose Tax in their three tire government structure?
a)	Central Government
b)	State Government
c)	Local Authorities
d)	All of the above
Q. 31	What is the meaning of quid pro quo?
a)	Person must pay tax
b)	quality is assured
c)	Something in return
d)	None of above
Q. 32	The tax that is levied by the government directly on the individuals or Corporations are called…………….
a)	Indirect Tax

b)	Direct Tax
c)	Both A and B
d)	None of above
Q. 33	Indirect Tax is…………
a)	Levied by the government on Goods
b)	Directly Paid by the individual
c)	Paid by Central Government
d)	Paid by state Government
Q. 34	Income Tax, Corporation Tax and Wealth Tax these are examples of……….
a)	Indirect Tax
b)	Direct Tax
c)	Both A and B
d)	None of above
Q. 35	VAT, Service tax, GST, Excise duty, entertainment tax and Customs Duty are classified as……..
a)	Direct Tax
b)	Indirect Tax
c)	Both A and B
d)	None of the above
Q. 36	Direct Taxes are------- in nature.
a)	Progressive
b)	Regressive
c)	Aggressive
d)	Inflationary
Q. 37	How Many Boards present in India to exercises control in respect of matters relating to all the Direct and Indirect Union Taxes?
a)	Four
b)	Three
c)	Two
d)	Many
Q. 38	CBDT stands for………
a)	Central Board of Direct Taxes
b)	Central Board of Indirect Taxes
c)	Central Bureau of Direct Taxes

d) Central Bureau of Indirect Taxes Q. 39 CBIC means……….. a) Central Board of Direct Taxes b) Central Board of Indirect Taxes c) Both A and B d) None Of the Above Q. 40               contains 97 items which comprise of the subjects having national significance. a) Union List b) State List c) Concurrent List d) None of the above Q. 41 Is tax evasion a crime in India? a) Tax evasion has always been a criminal offence in India. b) Tax evasion not always been a criminal offence in India c) Tax evasion has always been a civil offence in India. d) Tax evasion not always been a civil offence in India. Q. 42 Not paying Taxes when they are actually due which is absolutely Illegal? a) Tax Evasion b) Tax Avoidance c) Tax Implementation d) Tax alteration Q. 43 Which of the following is not the way of Tax Evasion? a) Failing to pay the due b) Smuggling c) accurate Financial statement d) Inaccurate Financial statement Q. 44                             is basically finding the loophole that exempts you from paying taxes and i a) Tax Avoidance b) Tax Evasion c) Both A and B d) None Of the Above Q. 45 Which of the following is not the way of Tax Avoidance? a) Show the monetary transaction as loan. b) Inaccurate Financial statement

 

c) Deduction available in case of minor child d) There is no tax on long term gains Q. 46 Which of the following is manipulation of account for Tax Evasion? a) Keeping Proper Record b) Maintain expenses c) Manipulation of sales/ receipts d) Proper reporting of production Q. 47 Measures to combat Tax Evasion a) Reduction of Tax rates by the Government b) High rates of Taxes by Government c) Complicated tax laws d) Difficult Tax filing procedures. Q. 48 Which of the following is not the fundamental principle relating to tax law? a) Neutrality b) Conflict in nature c) Effectiveness and fairness d) Flexibility Q. 49 What is the difference between a direct & an indirect tax? a) Charge of levy b) Nature of transfer c) Different collection pattern of tax d) All of the above Q. 50 What kind of tax can be transferred from one person to another? a) Direct tax b) Indirect tax c) Both of the above d) None of the above   Q. 51 "It was only for the good of his subjects that he collected taxes from them, just as the Sun d this a) Kalidas b) Kautilya c) Mahaveer d) Maithilisaran Gupta Q. 52 Supreme Courts precedent in binding on

 

a)	Courts
b)	Appellate Tribunals
c)	Income Tax Authorities
d)	All of the above
Q. 53	High Court's precedents are not binding on
a)	Tribunal
b)	Income Tax Authorities
c)	Assessee
d)	None of the above
Q. 54	Who amongst the following confers on the power to issue circulars and clarifications?
a)	ITAT
b)	Central Government
c)	CBDT
d)	State Government
Q. 55	Amongst the following _                                 is empowered to levy tax on agricultural income.
a)	Central Government
b)	State Government
c)	Commissioner
d)	President
Q. 56	Circulars and Notifications are binding on the
a)	Central Board of Direct Taxes (CBDT)
b)	Assessee
c)	Income Tax Appellate Tribunal (ITAT)
d)	Income Tax Authorities
Q. 57	Amendments by the finance act are made applicable from
a)	First day of next financial year
b)	First day of same financial year
c)	Last day of same Accounting year
d)	None of the above.
Q. 58	Which one of the following taxes is not levied by the State Government?
a)	Entertainment tax
b)	VAT
c)	Professional tax

 

d)	None of the above.
Q. 59	The apex body of Income Tax Department is
a)	Finance Ministry of Central Govt.
b)	Central Govt. of India.
c)	CBDT
d)	Dept. of Revenue
Q. 60	Which of the following is indirect tax?
a)	Income tax
b)	Wealth tax
c)	Corporation tax
d)	Sales tax

 

 

Q. 61	The term GST in the act stands for
a)	General Services Act.
b)	Goods Sales Act.
c)	Goods & Service Tax.
d)	None of the above.
Q. 62	The system of Tax in GST is
a)	Origin Based
b)	Destination based.
c)	Not Taxable.
d)	None of the above.
Q. 63	What kind of Taxes are levied in GST
a)	CGST
b)	SGST
c)	IGST.
d)	All of the above
Q.6 4	What is SGST.
a)	State Goods and Services Tax
b)	Special Government Service Tax
c)	Some Gross sale Tax
d)	None of the above
Q. 65	Which of the followings Constitutional amendment Act has added GST to Tax system.

a)	101st
b)	98th
c)	100th
d)	None of the above.
Q. 66	GST is a kind of
a)	Direct Tax.
b)	Indirect Tax
c)	Toll Tax
d)	None of the above..
Q. 67	GST represents the following tax structure.
a)	First Point Tax.
b)	Last Point Tax
c)	Multi Point Tax
d)	None of the above.
Q. 68	GST is to be levied on
a)	Manufacturers
b)	Retailers
c)	Consumers.
d)	All of the above.
Q. 69	What of the following tax is abolished by GST in India.
a)	Sales Tax
b)	Corporation tax.
c)	Income Tax
d)	All of the above.
Q. 70	Penalty for under-reporting or mis-reporting of income shall be……
a)	Rupees 1 lakh
b)	sum equal to fifty per cent of the amount of tax payable on under-reported income
c)	Both (a)& (b)
d)	None of the above.
Q. 71	Section 270A provides Penalty for……. of income.
a)	Show
b)	under-reporting and misreporting
c)	Expenditure
d)	All of the above.

Q. 72 Which of the following officers can exercise Powers to requisition books of account ? a) Principal Director General b) Director General c) Director d) All of the above. Q. 73 Assessing officers may exercise  powers of civil court for the….............. purposes. a) discovery and inspection. b) enforcing the attendance of any person, including any officer of a banking company and examining hi c) compelling the production of books of account and other documents d) All of the above Q. 74 As per Section 120 of The Income Tax Act , the Authorities may exercise jurisdiction on the basis of a) Territorial area. b) Persons or classes of persons. c) Incomes or classes of income. d) All of the above Q. 75 As per Section 120, which of the following authority which of the following authorities may direct ju a) Chief Commissioner of Income tax b) CBDT c) Principal Chief Commissioners of Income-tax d) All of the above. Q. 76 Which authority is the highest income authority under Income Tax Act, 1961. a) Chief Commissioner of Income tax b) CBDT c) Principal Chief Commissioners of Income-tax d) All of the above. Q. 77 Section ……..of Income Tax Act deals with classes of Income Tax Authorities. a) 100 b) 109 c) 116 d) 123 Q. 78 Choose an officer who is not income tax authority. a) Commissioner of Income Tax. b) Assistant Commissioner of Tax c) Deputy Commissioner of Tax

 

d)	District Collector.
Q. 79	Income of minors is included in income of…….
a)	Income of mother
b)	Income of father
c)	Income of father or mother whichever is higher.
d)	None of the above.
Q. 80	What is clubbing of Income?
a)	Addition income of two partners
b)	Inclusion of income of other person in income of assessee
c)	income Total of income of various heads
d)	Collection of income
Q.81	Section 80G provides deductions for donation to charitable institutions.
a)	TRUE
b)	FALSE
c)	All of the above
d)	None of the above
Q. 82	The maximum amount of deductions available under Section 80 C is limited up to….......... rupees.
a)	75000
b)	100000
c)	150000
d)	200000
Q.83	Which of the followings income is taxable as income from other sources.
a)	Income from perquisites.
b)	Income from sale of capital assets.
c)	Winnings from lottery
d)	All of the above.
Q. 84	A gift of sum equal to 50000 is totally exempted from tax.
a)	TRUE
b)	FALSE
c)	Both A & B
d)	None of the above
Q. 85	Which is exempted income from house property.
a)	Income from warehouse
b)	Income from farm house.

c) Income from let out property d) None of the above Q. 86 Income from other sources is not a residuary source of income. a) TRUE b) FALSE c) Both A & B d) None of the above Q. 87 ……... is the rent fixed under Rent control Act a) Municipal rental value b) Standard rent c) Real rent d) Fair rental value Q. 88 The term capital Assets means any property held by assessee except….. a) A Stock in trade held for business. b) An Agricultural Land not within urban area. c) Items of personal use except jewellery. d) All of the above. Q. 89 Income from capital gain is chargeable under section….......... of Income Tax Act 1961. a) 15 b) 40 c) 45 d) 60 Q. 90 What is the period of holding the asset that decides any asset as a short term capital asset. a) Holding the asset for less than 24 months. b) Holding the asset for less than 36 months. c) Holding the asset for less than 12 months. d) Holding the asset for more than 36 months Q. 91 What is taxable as income from capital gain. a) Income from gift. b) Income from pension c) Both A & B d) Profit from transfer of capital assets by assessee. Q. 92 Which of the following expenditures is not allowed as deduction from income under head business an a) Expenses relating to plant

 

b)	Depreciation as provided by Act.
c)	Any interest, royalty or commission paid outside India without TDS.
d)	None of the above.
Q. 93	The Term business(S. 2(32)) include the activities like….
a)	Trade
b)	Commerce.
c)	Both A &B
d)	None of the above
Q. 94	Income from business and profession shall be computed as.............................. system of accounting.
a)	Mercantile.
b)	Cash.
c)	Both (a)& (b)
d)	None of the above.
Q. 95	What is taxable income under income from business and profession?
a)	Income from winnings of lottery.
b)	Profit and gains of business and profession
c)	Both A & B
d)	None of the above.
Q. 96	What is essential for taxability of income from house property?
a)	Income must be received from house property or land appurtenant to it.
b)	The assessee must be owner of property.
c)	The should not have used such property for own business or profession.
d)	All of the above.
Q. 97	Income from house property means…...
a)	Income received from sale of house property.
b)	Income received from rent of House property by owner..
c)	All of the above
d)	None of the above.
Q. 98	What are the deductions available against income from house property.
a)	Deduction for payment of municipal taxes.
b)	30% Statutory deduction of Net annual Value.
c)	Deduction for payment of interest on loan(home loan etc.)
d)	All of the above.
Q. 99	Income Taxable from house property is…….of House property.

a)	Total value of property.
b)	Annual value of house property
c)	All of the above
d)	None of the above.
Q. 100	Income from salary is taxable if-
a)	It is received as salary
b)	There is employer and employee relation
c)	All of the above
d)	None of the above
Q. 101	Gross total income means ….
a)	Income from salary.
b)	Sum (total) of income from all heads.
c)	Income from house property.
d)	Income from gifts.
Q. 102	Which of following amount is available as deduction from income from salary?
a)	Allowances
b)	Perquisites
c)	Professional Tax
d)	Profit in lieu of salary.
Q. 103	Income from salary is chargeable under section….......... of Income Tax Act 1961.
a)	15
b)	40
c)	51
d)	60
Q. 104	Which of the following sections deals with exempted Income?
a)	Section 5
b)	Section 10
c)	Section 80 C
d)	Section 44
Q. 105	Daily and Constituency allowance paid to Members of Parliament are totally exempted from income Tax.
a)	TRUE
b)	False.
c)	Both (a)& (b).
d)	None of the above.

 

Q. 106	Write the different kinds of residents of India under The Income Tax Act 1961.
a)	Resident of India.
b)	Resident and ordinary resident of India.
c)	All of the above
d)	None of the above
Q. 107	Income of political parties from following heads........... is totally exempted from income tax.
a)	Income from house property.
b)	Income from capital gain.
c)	Income from other sources.
d)	All the above
Q. 108	Any sum received by an individual from HUF as a member is exempted from tax.
a)	TRUE
b)	FALSE
c)	All of the above.
d)	None of the above.
Q. 109	Income received in the form of........ award is exempted from tax.
a)	Bharat Ratna
b)	Padma Vibhushan
c)	Padma Bhushan
d)	All of the above.
Q. 110	Children Education allowance is exempted for _           child/ children.
a)	One
b)	Two
c)	Three
d)	Four
Q. 111	Income Which do not form part of Total income means…………
a)	Income which is exempted from income tax.
b)	Income which is considered for calculation of income tax.
c)	Both of the above.
d)	None of the above
Q. 112	Income received by non-residents from outside India is …...
a)	Total exempted from tax
b)	Partly exempted from tax.
c)	All of the above .

d) None of the above Q. 113 The HUF is said to be resident in India if                               . a) The control and management of its affairs is wholly or partly situated in India. b) The control and management of its affairs is partially situated out of India. c) The control and management of its affairs is wholly or partly situated out of India. d) None of the above Q. 114 An individual is said to be resident in India if …………….. a) It was in India in the previous year for a period of 182 days or more. b) It was in India for period of 60 days or more during the previous and 365 days or more during the fou c) All of the above d) None of the above

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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