MCQ Questions on Income Tax in India | Tax Rate & Basic Concept of Income Tax MCQs

Questions

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.

View Answer

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

View Answer

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.

View Answer

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

View Answer

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

View Answer

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.

View Answer

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

View Answer

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

View Answer

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

View Answer

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

View Answer

Answer:All of the above

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