Direct Tax MCQ Questions and Answers Part – 2

Direct Tax MCQ Questions and Answers Part – 1

Direct Tax MCQ Questions and Answers Part – 2

Direct Tax MCQ Questions and Answers Part – 3

51. Embezzlement of cash by a cashier is.
A. a revenue loss.
B. a capital loss.
C. a casual loss.
D. None of these.
ANSWER: A
52. Remuneration paid to members of AOP is.
A. Inadmissible expense of AOP.
B. Allowable business expenses of AOP.
C. Expense for members.
D. None of these.
ANSWER: A
53. Share of income received from AOP is entitled to rebate at.
A. 10%
B. nil
C. Average
D. 20%
ANSWER: C
54. If individual shares of partners of AOP/BOI are unknown, tax is charged on the total income of AOP/BOI at the Maximum Marginal rate of.
A. 20%
B. 25%
C. 28%0
D. 30.9%
ANSWER: D
55. Which one of the following rental value is not considered for calculation of ERV?
A. Municipal rental value
B. Fair rental value
C. Standard rent
D. rent received
ANSWER: D
56. Mr. Abraham and Mrs. Abraham are qualified Chartered Accountants and are carrying on profession as partners in the same professional firm.
A. the share of income of both partners will be clubbed under the provisions of Section 64.
B. the clubbing provisions of section 64 will not apply to them.
C. the share income from the firm will be exempt form tax.
D. the clubbing provisions of section 46 will not apply to them.
ANSWER: C
57. Dividends declared by Indian company are
A. fully taxable.
B. Partially taxable
C. fully exempted
D. not considered as income
ANSWER: C
58. Net annual value of self occupied house is
A. Nil
B. taxable
C. Rs. 24,000
D. Rs.50,000
ANSWER: A
59. In case of expenditure on common facilities paid by the owner is reduced out of actual rent, the balance is known as
A. real rental value
B. expected rental value
C. municipal rental value
D. fair rental value
ANSWER: A
60. __________ deduction is allowable while calculating income from self occupied house.
A. municipal tax
B. repair expenses
C. insurance premium
D. interest on loan taken for construction
ANSWER: D
61. Deductions out of net annual value is dealt in sec.c _______.
A. 23
B. 24
C. 26
D. 25
ANSWER: B
62. 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.
A. fully allowed.
B. Rs. 1,000 per item.
C. Rs. 1,000 per item..
D. Rs.800 per item
ANSWER: A
63. A senior citizen female assessee can claim deduction u/s 80u upto.
A. Rs. 50,000.
B. Rs. 60,000.
C. Rs. 75,000.
D. Rs. 85,000.
ANSWER: A
64. _________ of pre-construction period interest is allowed as deduction u/s 24.
A. 1/4
B. 30%
C. 1/5
D. 50%
ANSWER: C
65. In case of let out property, the amount of deduction in respect of interest is _______.
A. Rs. 30,000
B. Rs. 2,00,000
C. Rs. 50,000
D. no limits
ANSWER: D
66. What is the amount of standard deduction under section 24?
A. 30% of net annual value
B. 33% of net annual value
C. Rs. 400,000
D. Rs. 50,000
ANSWER: A
67. Which of the following is a capital receipt?
A. Commission received.
B. Salary received
C. Salary received
D. Sale proceeds of Building.
ANSWER: D
68. Which of the following income is not charged under the head Profits and Gains of business or profession?
A. remuneration received by partner
B. export incentives
C. income of trade association
D. profit on sale of capital asset
ANSWER: D
69. Expressly allowed deduction are dealt in
A. sec. 30-36
B. sec. 28-33
C. sec. 33-36
D. sec. 28-35
ANSWER: A
70. A weighted deduction of ______ % is allowed under sec. 35(2AA) in respect of contribution to National
Laboratory.
A. 110
B. 150
C. 175
D. 200
ANSWER: B
71. Expenditure incurred on the acquisition of patents or copy rights is allowed upto _____every year.
A. 25%
B. 35%
C. 50%
D. 10%
ANSWER: A
72. Any payment made to discharge a revenue liability, if refunded later on, shall be.
A. a revenue receipt.
B. a capital receipt.
C. a casual receipt.
D. None of these.
ANSWER: A
73. While computing business income general deductions are given in sec.
A. 37
B. 39
C. 40
D. 35
ANSWER: A
74. What is not included in capital asset?
A. stock in trade
B. agricultural land
C. Special bearer bonds, 1991
D. all the above
ANSWER: D
75. Share of listed company, which is held by an assessee for more than _________ months known as short term capital assets.
A. 12.
B. 18
C. 24
D. 36
ANSWER: A
76. Share of unlisted company, which is held by an assessee for more than _________ months known as short
term capital assets.
A. 12
B. 24
C. 36.
D. 48
ANSWER: B
77. CII for the financial year 2018-2019 is __________.
A. 254
B. 264
C. 272
D. 280
ANSWER: D
78. Indexation should not be done for the following case/s.
A. Debentures
B. GDR purchased in foreign currency
C. Depreciable assets
D. All the above
ANSWER: D
79. Total income is determined on the basis of Residential Status of the assessee in the previous year
according to.
A. Sec. 3.
B. Sec. 5.
C. Sec. 8.
D. Sec. 12.
ANSWER: B
80. Residential status of an assessee is ascertained as per the provisions of.
A. Sec. 6.
B. Sec. 7.
C. Sec. 9.
D. Sec. 11.
ANSWER: A
81. Profit on sale of long term capital asset is
A. business income
B. professional income
C. capital gain
D. income from other source
ANSWER: C
82. Sec. 54 of the IT act deal with
A. calculation of cost of acquisition
B. exempted capital gains
C. indexing of caost
D. determination of capital assets
ANSWER: B
83. In order to claim deductions under section 54 the assessee should not transfer the newly acquired asset with in ________ years from the date of its purchase.
A. 2
B. 3
C. 4
D. 1
ANSWER: B
84. Incomes which specifically fall under any of the first four heads of income are included in _______.
A. exempted income
B. income from other sources
C. general income
D. all the above
ANSWER: B
85. Which of the following/s is/are general income/s under section 56(1)?
A. Royalty from coal mine
B. income received from sub-letting of house
C. tips received by taxi driverd
D. all the above
ANSWER: D
86. Which one of the following is not general income u/s 56(1)?
A. Receipts from other than employer
B. income from sub-letting
C. family pension received by legal heirs
D. dividends
ANSWER: D
87. Rates of TDS for dividends on shares referred to u/s 115O is
A. Nil
B. 5%
C. 10%
D. 20%
ANSWER: A
88. A person who has not stayed in India for a period of less than 60 days during the relevant previous year is
__________.
A. resident
B. non resident
C. resident but not ordinarily resident
D. none of the above
ANSWER: B
89. In case of residential status of HUF, firm, AOP and EOP if control and management are wholly outside
India, they are deemed as.
A. Resident.
B. Ordinarily Resident.
C. Nonresident .
D. None of these.
ANSWER: C
90. Rate of TDS for casual incomes is ________.
A. 30%
B. 20%
C. 15%
D. 33%
ANSWER: A
91. Rate of TDS for listed securities is
A. 10%
B. 20%
C. 30%
D. None of these.
ANSWER: A
92. Speculation loss can be set off against
A. salary income
B. house property income
C. another speculation business
D. capital gain
ANSWER: C
93. Speculation loss cannot be set off against
A. salary income
B. house property income
C. casual income
D. all the above
ANSWER: D
94. Long term capital loss can be set off against
A. another long term capital gain
B. short term capital gain
C. casual income
D. speculation profit
ANSWER: A
95. Loss under the head house property can be carry forward to
A. 4 years
B. 5 years
C. 8 years
D. unlimited years
ANSWER: C
96. Non speculation business loss can be carry forward to
A. 5 years
B. 8 years
C. 10 years
D. 12 years
ANSWER: B
97. Deductions under section 80C is allowable for
A. Individuals
B. HUF
C. Individuals and HUF
D. Company
ANSWER: C
98. What is maximum limit of deduction u/s 80D for senior citizen?
A. Rs. 25,000
B. Rs. 50,000
C. Rs. 30,000
D. Rs. 20,000
ANSWER: B
99. Under section 80E deduction out of total income is
A. Rs. 20,000
B. Rs. 25,000
C. Rs. 30,000
D. Actual amount paid
ANSWER: D
100. Integration of agricultural income with non agricultural income is done if net agricultural income exceeds
A. Rs. 5,000
B. Rs. 10,000
C. Rs. 50,000
D. Rs. 25,000
ANSWER: A

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Author and Assistant Professor in Finance, Ardent fan of Arsenal FC. Always believe "The only good is knowledge and the only evil is ignorance - Socrates"
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