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Multiple Choice Questions and Answers on Income Tax Rate & Basic Concept of Income Tax

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Free download in PDF Tax Rate & Basic Concept of Income Tax Multiple Choice Questions and Answers for competitive exams. These short objective type questions with answers are very important for Board exams as well as competitive exams like UPSC, NDA, SSC etc. These short solved questions or quizzes are provided by Gkseries./p>

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(1) Which of the following income is not included in the term 'income' under the Income-tax Act, 1961 -
[A] Profit and gains
[B] Dividend
[C] Profit in lieu of salary
[D] Reimbursement of travelling expenses.
Answer: Reimbursement of travelling expenses.
(2) Which amongst the following is not a head of Income?
[A] Salaries
[B] Income from house Property
[C] Capital gains
[D] Income from exports
Answer: Income from exports

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(3) Amongst the following which activity will be taxable?
[A] Profits & gains of any insurance business
[B] Income from specific services provided by carried on by a co-operative society. Trade, professional or similar association.
[C] The profits and gains of any banking business carried on by a co-operative society.
[D] All of the above.
Answer: All of the above.
(4) AB & Co. received Rs.`2, 00,000 as compensation from CD & Co. for premature termination of contract of agency. Amount so received is -----
[A] Capital receipt and taxable
[B] Capital receipt and not taxable
[C] Revenue receipt and taxable
[D] Revenue receipt and not taxable
Answer: Revenue receipt and not taxable
(5) Subsidy if given as assistance to carry on business already commenced is a -----
[A] Revenue receipt
[B] Capital receipt
[C] It is not a receipt
[D] None of these
Answer: Revenue receipt
(6) Which of the following is not included in taxable income -
[A] Income from smuggling activity
[B] Casual income
[C] Gifts of personal nature subject to a maximum of `50,000 received in cash
[D] Income received in kind.
Answer: Gifts of personal nature subject to a maximum of `50,000 received in cash
(7) Compensation on account of loss of profit is -
[A] Revenue receipt
[B] Capital receipt
[C] Revenue expenditure
[D] Capital expenditure
Answer: Revenue receipt
(8) Out of the following, which of the capital receipt is not taxable:
[A] Capital gains of Rs.` 10,00,000
[B] Amount of Rs.`5,00,000 won by way of lottery, games, puzzles
[C] Amount of Rs.`2,00,000 received by way of gift from relatives
[D] Amount of Rs.`1,00,000 received by way of gift from a friend on marriage anniversary
Answer: Amount of Rs.`2,00,000 received by way of gift from relatives
(9) In case the Key man insurance policy is taken in name of any other person any sum received on its maturity by such person shall be taxable under the head -
[A] Salaries
[B] Profits & Gains of Business or Profession
[C] Capital Gains
[D] Income from Other Sources
Answer: Income from Other Sources
(10) Method of Accounting is not relevant for –
[A] Salaries
[B] Income from House Property
[C] Capital Gains
[D] All of the above
Answer: All of the above

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