Direct Tax MCQ Questions and Answers Part – 3

Direct Tax MCQ Questions and Answers Part – 1

Direct Tax MCQ Questions and Answers Part – 2

Direct Tax MCQ Questions and Answers Part – 3

101. Integration of agricultural income with non agricultural income is not done for
A. Individuals
B. HUF
C. AOP
D. firm
ANSWER: D
102. Exempted incomes are defined under section
A. 15 of income tax Act.
B. 18 of income tax Act
C. 10 of income tax Act.
D. 20 of income tax Act.
ANSWER: C
103. Exempted incomes do not form part of total income of
A. Individual assessees only
B. HUF only.
C. Firm and company assessees only
D. all assessee
ANSWER: D
104. Incomes absolutely exempt from Tax are listed under
A. Sec 2.
B. Sec 10.
C. Sec 38.
D. Sec. 80c.
ANSWER: B
105. Remuneration received by embassy or high commission employees of a foreign state is fully exempt from tax under.
A. Section 9a.
B. Sec 14(e).
C. Sec 10 b. (ii) to (vi)
D. Sec 20 (s).
ANSWER: C
106. Scholarship granted is.
A. Fully exempted.
B. Fully taxable.
C. Partly exempted.
D. None of these.
ANSWER: A
107. Allowances of MP/M.L.A / or M.L.C are.
A. Fully exempted.
B. Fully taxable.
C. Partly exempted.
D. None of these.
ANSWER: A
108. Income of Non profit seeking educational institutions, financed by government, is exempt from Income tax if its annual receipts do not exceed.
A. Rs. 50 lakhs .
B. Rs. 1 crore.
C. Rs. 5 crores.
D. Rs. 50 crores.
ANSWER: B
109. When parents income is clubbed with minor childs income parent is eligible for exemption of the.
A. Actual income of minor or Rs. 20,000 which ever is less
B. Actual income of minor or Rs. 10,000 whichever is less.
C. Actual income of minor or Rs. 5,000 which ever is less
D. Actual income of minor or Rs. 1,500 whichever is less.
ANSWER: D
110. Tax Holiday is.
A. Income tax on holiday income.
B. Cancellation of tax for the entire country.
C. Tax exemption for a specified period.
D. None of the above.
ANSWER: C
111. Rebate u/s 87A is allowed to individuals upto _________.
A. Rs. 2,500
B. Rs. 3,500
C. Rs. 4,000
D. Rs. 5,000
ANSWER: A
112. Sum received by a co-parcener from Hindu undividual family is.
A. Exempted in the hands of co-parcener
B. Exempted in the hands of HUF.
C. Taxable in the hands of co-parcener
D. None of these.
ANSWER: A
113. Share of income from firm is.
A. Taxable in the hands of partner
B. Exempted in the hands of partner.
C. Exempted in the hands of firm.
D. None of these.
ANSWER: B
114. In case of Tax free salary.
A. Tax is to be paid by employer
B. No tax is payable on such salary
C. Tax is to be paid by the employee.
D. Govt, itself pays the tax at a future date.
ANSWER: A
115. Salary received by a member of parliament is.
A. Taxable as salary income
B. Exempt from tax sources.
C. Taxable as income from other sources
D. capital gain
ANSWER: C
116. Which of the following is an exempted salary?
A. Payment by the employer in kind.
B. Salary from the former employer.
C. Salary received by UNO employees.
D. Leave salary.
ANSWER: C
117. Contributions into Public Provident Fund (PPF) are repayable after
A. 5 years
B. 10 years.
C. 20 years.
D. 15 years.
ANSWER: D
118. What is the maximum rate of tax for an individual assessee?
A. 5%
B. 10%
C. 20%
D. 30%
ANSWER: D
119. Dearness allowance is taxable in the hands of.
A. Govt employees
B. Non-Govt employees
C. All employees.
D. None of these.
ANSWER: C
120. HRA paid to an employee who is residing in his own house is
A. Fully exempted.
B. Partly taxable.
C. Fully taxable.
D. none
ANSWER: C
121. Exemption for house rent allowance is determined by.
A. Rule 24C.
B. Sec. 80C.
C. Rule 2A.
D. Sec. 91.
ANSWER: C
122. Exempted limit of HRA in non-metropolitan cities is.
A. 40% of salary.
B. 50% of salary.
C. 10% of salary.
D. 7.5% of salary.
ANSWER: A
123. Value of the car, when car is provided to an employee for official purpose and expenditure is incurred by
employer is
A. Nil
B. Rs 1,800 p.m
C. Rs. 1,200 p.m.
D. Rs. 2,000 p.m
ANSWER: A
124. Lump-sum gratuity received by govt. employee is
A. fully exempted
B. fully taxable
C. partially taxable
D. none
ANSWER: A
125. Monthly pension received by govt. employee is
A. fully taxable
B. fully exempted
C. partially taxable
D. none
ANSWER: A
126. Deduction under 80G is allowed to _______.
A. Individuals only
B. HUF only
C. Company only
D. All assessee
ANSWER: D
127. Amount of contribution made to PM national relief fund is exempted upto _________.
A. 100%
B. 75%
C. 50%
D. 25%
ANSWER: A
128. Perquisites to employees are covered in the I.T. Act 1961 under.
A. Sec 2a.
B. Sec. 17b.
C. Sec 28a.
D. Sec. 36 c.
ANSWER: B
129. The value of Interest-free concessional loans to employees is determined on the basis of lending rates for
the same purpose
A. S.B.I.
B. R.B.I.
C. Central govt.
D. State govt.
ANSWER: A
130. 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.
A. Rs. 5,00,000.
B. Rs. 2,00,000.
C. Rs. 1,00,000.
D. Rs. 50,000.
ANSWER: D
131. University teacher is
A. Govt. employee
B. Semi Govt. employee
C. Private employee
D. undecided employee
ANSWER: B
132. Employers contribution to RPF is exempted upto.
A. 10% of salary.
B. 13% of salary.
C. 12% of salary.
D. 11% of salary.
ANSWER: C
133. Medical allowance received by an employee is
A. Fully taxable.
B. Partially taxable.
C. Fully exempted.
D. exempted upto the actual amount of expenditure
ANSWER: A
134. Rate of tax for long term capital gain
A. 10%
B. 20%
C. 30%
D. 35%
ANSWER: B
135. In case the dependent is suffering from a notified disease the rate of deduction u/s 80DDB is
A. Rs. 15,000 p.a
B. Rs. 40,0000 p.a
C. Rs. 50,000 p.a
D. Rs. 1,00,000
ANSWER: B
136. Leave encashment received during service by a govt or non-govt employee is.
A. Fully exempted.
B. Partially exempted.
C. Fully taxable.
D. employer has to pay tax on it.
ANSWER: C
137. The statutory limit of exemption of leave encashment is.
A. Rs. 3,50.000.
B. Rs. 3,00,000.
C. Rs. 5,00,000
D. 2,50,000.
ANSWER: B
138. Which one of the following is not eligible for deduction u/s 80C?
A. Employee contributions to SPF
B. Employee contributions to URPF
C. Employee contributions to PPF
D. Employee contributions to RPF
ANSWER: B
139. 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
A. 30th Sep. of AY
B. 30th July of AY
C. 31st Oct. of AY
D. 30th Nov. of AY
ANSWER: A
140. Professional tax paid by salaried assessees is allowed as a deduction
A. u/s 16 ia
B. u/s 16ii
C. u/s 16 iii
D. u/s 17 b
ANSWER: C
141. Rate of depreciation on furniture is.
A. 5%.
B. 15%.
C. 10%.
D. 20%.
ANSWER: C
142. Additional depreciation is allowed at half the rate if the asset is used in the initial year for.
A. 195 days.
B. 199 days.
C. 360 days.
D. less than 180 days.
ANSWER: D
143. Expansion of PAN
A. Permanent Account Number
B. Person Account Number
C. Permanent Audit number
D. Permanent Assessee Number
ANSWER: A
144. Current Assessment Year
A. 2017-2018
B. 2018-2019
C. 2019-2020
D. 2020-2021
ANSWER: C
145. Tax benefit for senior citizen is available to an assess who has attained the age of
A. 65 yrs
B. 60 yrs
C. 80 yrs
D. 75 yrs
ANSWER: B
146. Furniture held for more than 36 months, on which depreciation is allowed is
A. Long term capital asset.
B. Short term capital asset.
C. Exempted capital asset.
D. not a capital asset.
ANSWER: B
147. Long term capital gain on sale of listed shares are.
A. Exempted.
B. Taxable.
C. Partially Exempted.
D. Partially Taxable.
ANSWER: A
148. Dividends from co-operative society are.
A. Exempted.
B. Taxable.
C. Partially Exempted.
D. Partially Taxable.
ANSWER: B
149. Income received by charted account by way of fees from his client is
A. salary income
B. business income
C. professional income
D. income from other sources
ANSWER: C
150. Which of the following gifts are taxable?
A. Gift in kind from relatives.
B. Gift from wife.
C. Gift from son.
D. Gift from employer
ANSWER: D

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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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