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

(1) Income-tax in India is charged at the rate(s) prescribed by -
[A] The Finance Act
[B] The Income-tax Act
[C] The Central Board of Direct Taxes
[D] The Ministry of Finance.
Answer: The Finance Act
(2) Which of the following is not included in taxable income -
[A] Reimbursement of expenses
[B] Cash gifts received from non relatives
[C] Income from illegal activity
[D] Profit on sale of equity shares of unlisted company.
Answer: Reimbursement of expenses

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(3) The Central Government has notified Income computation and disclosure standards for computing income under the head Profits and Gains of Business and Profession - .
[A] 2
[B] 5
[C] 8
[D] 10
Answer: 10
(4) An individual is said to have substantial interest in a concern if he or she, along with his or her relatives, is, at any time during the previous year, beneficial owner of equity shares carrying or more of the voting power in a company; or entitled to or more of the profits of such concern.
[A] 20% ,10%
[B] 10% ,20%
[C] 10%, 10%
[D] 20% ,20%
Answer: 20% ,20%
(5) Surcharge @ 12 is payable by a domestic company if the total income exceeds.
[A] Rs.` 10 lakhs
[B] Rs.` 1 crore
[C] Rs.` 10 crore
[D] None of the above.
Answer: Rs.` 10 crore
(6) Surcharge @ 7 is payable by a domestic company if the total income exceeds.
[A] Rs.` 10 lakhs
[B] Rs.` 50 lakhs
[C] Rs.` 1 crore
[D] Rs.` 10 crores.
Answer: Rs.` 1 crore
(7) The tax exemption limit for a resident senior citizen is -
[A] Up to Rs.` 2,00,000
[B] Up to Rs.` 5,00,000
[C] Up to Rs.` 1,80,000
[D] Up to Rs.` 3,00,000
Answer: Up to Rs.` 3,00,000
(8) The tax exemption limit for a resident Super senior citizen is -
[A] Up to Rs.` 2,00,000
[B] Up to Rs.` 5,00,000
[C] Up to Rs.` 1,80,000
[D] Up to Rs.` 3,00,000
Answer: Up to Rs.` 5,00,000
(9) Surcharge of 15% is payable by an individual where the total income exceeds:
[A] Rs.` 7,50,000
[B] Rs.` 8,50,000
[C] Rs.` 1,00,00,000
[D] None of the three
Answer: Rs.` 1,00,00,000
(10) The maximum amount on which income-tax is not chargeable in case a co-operative society is:
[A] Rs.` 50,000
[B] Rs.` 30,000
[C] Rs.` 20,000
[D] Nil
Answer: Nil

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