laboursonline – MCQs, Mock Tests | Business Studies Direct Tax MCQ Set 2

What is the exempted limit while calculating salary under section 16 ia?

1. Rs. 40,000
2. Rs. 25,000
3. Rs. 30,000
4. Rs. 1,00,000

✅ Correct Answer: 1

For tax deducted at source, employer issues to employee.

1. Form 20.
2. Saral
3. Form 16
4. Form 31A.

✅ Correct Answer: 3

Advance tax should be paid during a financial year if such advance tax payable by the assessee exceeds.

1. Rs.50,000.
2. Rs. 1,000.
3. Rs.20,000.
4. Rs. 1,00,000.

✅ Correct Answer: 2

Due date of filing of return by company assessee is____.

1. 30th June.
2. 31st August
3. 31st July.
4. 30th Sep.

✅ Correct Answer: 4

Under the income- tax act, the incidence of taxation depends on

1. The citizenship of the tax-payer.
2. The age of the taxpayer
3. The residential status of the tax-payer.
4. The gender of the taxpayer

✅ Correct Answer: 3

Unabsorbed depreciation can be carried forward for set off.

1. for a period of four years only.
2. for a period of eight years only
3. for an unlimited number of years.
4. for a period of eighteen years only.

✅ Correct Answer: 3

Contribution of provident fund by employer is exempted upto ____ of Salary.

1. . 9.5%
2. 10%
3. 12%
4. 50%

✅ Correct Answer: 3

Contribution of provident fund by employer is exempted upto ____ of Salary.

1. . 9.5%
2. 10%
3. 12%
4. 50%

✅ Correct Answer: 3

Interest accumulated to PF a/c is exempted upto _________.

1. 9.5%
2. 10%
3. 12%
4. 15%

✅ Correct Answer: 1

Which of the following is taxable in the hands of specified employee only?

1. Rent free house
2. club facility
3. credit card facility
4. car or other conveyance facility

✅ Correct Answer: 4

Deduction in respect of expenditure on advertisements through articles intended for presentation will be allowed on the value of each article up to a limit of.

1. fully allowed.
2. Rs. 1,000 per item
3. Rs. 800 per item
4. Rs. 1,800 per item.

✅ Correct Answer: 1

Capital expenditure on scientific research which cannot be absorbed on account of insufficiency of profit in any accounting year can be carried forward for.

1. 16 years.
2. 8 succeeding previous years.
3. Indefinite period.
4. 12 years.

✅ Correct Answer: 3

Embezzlement of cash in a money lending business shall be treated as.

1. . Business expenditure.
2. Revenue loss incidental to business.
3. Capital expenditure
4. Capital loss.

✅ Correct Answer: 1

Entertainment allowance is fully taxable allowance to _________.

1. private employees
2. Govt. employees
3. foreign employee
4. None of the above.

✅ Correct Answer: 1

Receipt of amount on maturity of LIC Policy is.

1. A revenue receipt.
2. A capital receipt.
3. A casual receipt
4. None of the these

✅ Correct Answer: 2

Water bill issued in the name of employee but paid by employer is

1. taxable for all employees
2. exempted for all employees
3. partially taxable for all employees
4. taxable for specified employees only

✅ Correct Answer: 1

What is the notified limit for calculation of exemption of gratuity?

1. . Rs. 20,00,000
2. Rs. 10,00,000
3. Rs. 5,00,000
4. Rs. 30,00,000

✅ Correct Answer: 1

Deductions out of gross salary under section 16 is/are _______.

1. Standard deduction
2. professional tax
3. both of the above
4. None of the above

✅ Correct Answer: 3

Maximum limit of amount which can be claimed as deductions under section 80C is ______.

1. Rs. 50,000
2. Rs.1,00,000
3. Rs. 2,00,000
4. . Rs. 1,50,000

✅ Correct Answer: 4

Rent from a building let out for business purpose is __________ income

1. house property
2. business
3. capital gain
4. other source

✅ Correct Answer: 1

Annual value is dealt in section ______.

1. 23
2. 25
3. 24
4. 26

✅ Correct Answer: 1

The rent fixed under the rent control act is ________

1. MRV
2. FRV
3. standard rent
4. RRV

✅ Correct Answer: 3

Integration of agricultural income with non agricultural income is not done for

1. Individuals
2. HUF
3. AOP
4. firm

✅ Correct Answer: 4

Exempted incomes are defined under section

1. 15 of income tax Act.
2. 18 of income tax Act
3. 10 of income tax Act
4. 20 of income tax Act.

✅ Correct Answer: 3

Exempted incomes do not form part of total income of

1. Individual assessees only
2. HUF only
3. Firm and company assessees only
4. all assessee

✅ Correct Answer: 4

Incomes absolutely exempt from Tax are listed under

1. Sec 2.
2. Sec 10
3. Sec 38.
4. Sec. 80c.

✅ Correct Answer: 2

Remuneration received by embassy or high commission employees of a foreign state is fully exempt from tax under.

1. Section 9a.
2. Sec 14(e)
3. Sec 10 b. (ii) to (vi)
4. Sec 20 (s).

✅ Correct Answer: 3

Scholarship granted is.

1. Fully exempted.
2. Fully taxable
3. Partly exempted.
4. None of these.

✅ Correct Answer: 1

Scholarship granted is.

1. Fully exempted.
2. Fully taxable
3. Partly exempted.
4. None of these.

✅ Correct Answer: 1

Scholarship granted is.

1. Fully exempted.
2. Fully taxable
3. Partly exempted.
4. None of these.

✅ Correct Answer: 1

Income of Non profit seeking educational institutions, financed by government, is exempt from Income tax if its annual receipts do not exceed.

1. Rs. 50 lakhs .
2. Rs. 1 crore.
3. Rs. 5 crores.
4. Rs. 50 crores.

✅ Correct Answer: 2

When parents income is clubbed with minor childs income parent is eligible for exemption of the.

1. Actual income of minor or Rs. 20,000 which ever is less
2. Actual income of minor or Rs. 10,000 whichever is less.
3. Actual income of minor or Rs. 5,000 which ever is less
4. Actual income of minor or Rs. 1,500 whichever is less.

✅ Correct Answer: 4

Tax Holiday is.

1. Income tax on holiday income.
2. Tax exemption for a specified period
3. Cancellation of tax for the entire country.
4. None of the above

✅ Correct Answer: 3

Rebate u/s 87A is allowed to individuals upto _________.

1. Rs. 2,500
2. Rs. 3,500
3. Rs. 4,000
4. Rs. 5,000

✅ Correct Answer: 1

Share of income from firm is.

1. Taxable in the hands of partner
2. Exempted in the hands of partner.
3. Exempted in the hands of firm.
4. None of the these

✅ Correct Answer: 2

In case of Tax free salary.

1. Tax is to be paid by employer
2. No tax is payable on such salary
3. Tax is to be paid by the employee.
4. Govt, itself pays the tax at a future date.

✅ Correct Answer: 1

Salary received by a member of parliament is.

1. Taxable as salary income
2. Exempt from tax sources
3. Taxable as income from other sources
4. capital gain

✅ Correct Answer: 3

Taxable as income from other sources

1. Payment by the employer in kind.
2. Salary from the former employer.
3. Salary received by UNO employees
4. Leave salary.

✅ Correct Answer: 3

Taxable as income from other sources

1. Payment by the employer in kind.
2. Salary from the former employer.
3. Salary received by UNO employees
4. Leave salary.

✅ Correct Answer: 3

What is the maximum rate of tax for an individual assessee?

1. . 5%
2. 10%
3. 20%
4. . 30%

✅ Correct Answer: 4

Dearness allowance is taxable in the hands of.

1. Govt employees
2. Non-Govt employees
3. All employees.
4. None of the these

✅ Correct Answer: 3

Dearness allowance is taxable in the hands of.

1. Govt employees
2. Non-Govt employees
3. All employees.
4. None of the these

✅ Correct Answer: 3

HRA paid to an employee who is residing in his own house is

1. Fully exempted.
2. Partly taxable.
3. Fully taxable.
4. None of the above

✅ Correct Answer: 3

Exemption for house rent allowance is determined by.

1. Rule 24C.
2. Sec. 80C
3. Rule 2A.
4. Sec. 91.

✅ Correct Answer: 3

Exempted limit of HRA in non-metropolitan cities is.

1. A. 40% of salary.
2. 50% of salary
3. 10% of salary.
4. 7.5% of salary.

✅ Correct Answer: 1

Value of the car, when car is provided to an employee for official purpose and expenditure is incurred by employer is

1. . Nil
2. Rs 1,800 p.m
3. Rs. 1,200 p.m
4. Rs. 2,000 p.m

✅ Correct Answer: 1

Lump-sum gratuity received by govt. employee is

1. fully exempted
2. fully taxable
3. partially taxable
4. none

✅ Correct Answer: 1

Monthly pension received by govt. employee is

1. fully taxable
2. fully exempted
3. partially taxable
4. None

✅ Correct Answer: 1

Deduction under 80G is allowed to _______.

1. Individuals only
2. HUF only
3. Company only
4. All assessee

✅ Correct Answer: 4

Amount of contribution made to PM national relief fund is exempted upto _________.

1. 100%
2. 75%
3. 50%
4. 25%

✅ Correct Answer: 1

Perquisites to employees are covered in the I.T. Act 1961 under.

1. Sec 2a.
2. Sec. 17b
3. Sec 28a.
4. Sec. 36 c.

✅ Correct Answer: 2

The value of Interest-free concessional loans to employees is determined on the basis of lending rates for the same purpose

1. S.B.I.
2. R.B.I.
3. Central govt.
4. State govt.

✅ Correct Answer: 1

An employee is deemed as a specified employee if he is a director in the company or has substantial in the company or his chargeable salary per annum exceeds.

1. Rs. 5,00,000.
2. Rs. 2,00,000
3. Rs. 1,00,000.
4. Rs. 50,000.

✅ Correct Answer: 4

University teacher is

1. Govt. employee
2. Semi Govt. employee
3. Private employee
4. undecided employee

✅ Correct Answer: 2

Employers contribution to RPF is exempted upto.

1. 10% of salary.
2. 13% of salary
3. 12% of salary
4. 11% of salary.

✅ Correct Answer: 3

Medical allowance received by an employee is

1. Fully taxable.
2. Partially taxable
3. Fully exempted
4. exempted upto the actual amount of expenditure

✅ Correct Answer: 1

Rate of tax for long term capital gain

1. 10%
2. 20%
3. 30%
4. 35%

✅ Correct Answer: 2

In case the dependent is suffering from a notified disease the rate of deduction u/s 80DDB is

1. . Rs. 15,000 p.a
2. Rs. 40,0000 p.a
3. Rs. 50,000 p.a
4. Rs. 1,00,000

✅ Correct Answer: 2

Leave encashment received during service by a govt or non-govt employee is.

1. Fully exempted.
2. Partially exempted
3. Fully taxable
4. employer has to pay tax on it.

✅ Correct Answer: 3

The statutory limit of exemption of leave encashment is.

1. Rs. 3,50.000.
2. Rs. 3,00,000
3. Rs. 5,00,000
4. 2,50,000.

✅ Correct Answer: 2

Which one of the following is not eligible for deduction u/s 80C?

1. Employee contributions to SPF
2. Employee contributions to URPF
3. Employee contributions to PPF
4. Employee contributions to RPF

✅ Correct Answer: 2

For all non-corporate assessees whose accounts are subject to audit and working partners of a firm whose accounts are subject to audit must file the return by

1. 30th Sep. of AY
2. 30th July of AY
3. 31st Oct. of AY
4. 30th Nov. of AY

✅ Correct Answer: 1

Professional tax paid by salaried assessees is allowed as a deduction

1. u/s 16 ia
2. u/s 16ii
3. u/s 16 iii
4. u/s 17 b

✅ Correct Answer: 3

Rate of depreciation on furniture is.

1. . 5%.
2. 15%.
3. 10%
4. 20%.

✅ Correct Answer: 3

Additional depreciation is allowed at half the rate if the asset is used in the initial year for.

1. 195 days.
2. 199 days
3. 360 days.
4. less than 180 days.

✅ Correct Answer: 4

Expansion of PAN

1. Permanent Account Number
2. Person Account Number
3. Permanent Audit number
4. Permanent Assessee Number

✅ Correct Answer: 1

Tax benefit for senior citizen is available to an assess who has attained the age of

1. . 65 yrs
2. 60 yrs
3. 80 yrs
4. 75 yrs

✅ Correct Answer: 3

Furniture held for more than 36 months, on which depreciation is allowed is

1. Long term capital asset.
2. Short term capital asset.
3. Exempted capital asset
4. not a capital asset.

✅ Correct Answer: 2

Long term capital gain on sale of listed shares are.

1. Exempted.
2. Taxable
3. Partially Exempted.
4. Partially Taxable.

✅ Correct Answer: 1

Dividends from co-operative society are.

1. Exempted.
2. Taxable
3. Partially Exempted.
4. Partially Taxable.

✅ Correct Answer: 2

Income received by charted account by way of fees from his client is

1. salary income
2. business income
3. professional income
4. income from other sources

✅ Correct Answer: 3

Which of the following gifts are taxable?

1. Gift in kind from relatives.
2. Gift from wife
3. Gift from son
4. Gift from employer

✅ Correct Answer: 4