Income Tax MCQs
UKPSC Assistant Accountant Exam
Total Marks in this Section: 4 Marks
In this Post You will get Income Tax MCQS for UKPSC Assistant Accountant Exam. This UKPSC Assistant Accountant exam is conducted every year by Uttarakhand Government.
This Exam is conducted into two medium – Hindi Medium and English Medium.
Hindi Medium exam is known as UKPSC Sahayak Accountant Exam and English Medium Exam is know as UKPSC Assistant Accountant Exam.
Question Paper Consists of Two Parts – Section A (Commerce and Management) and Section B – Hindi. Section A Consists of 80 Questions and Section B Consists of 20 Questions.
Income Tax MCQs is the First Part of Section which covers 04 Marks. We preparing UKPSC Assistant Accountant Exam Notes. We keep our posts updated, so visit our webiste frequently.
1. Income tax Act extends to:
a) Whole of India
b) Whole of India except Jammu & Kashmir
c) Whole of India except Sikkim
d) Whole of India except NE region
Ans: a) Whole of India
2. Taxable income is determined on the basis of:
a) Residential Status
b) Total Income
c) Citizenship
Ans: a) Residential Status (Total income of a person is determined on the basis of his residential status)
3. Residential status is to be determined for
a) Previous year.
b) Assessment year.
c) Accounting year.
Ans: a) Previous year
4. Income tax act was passed in the year:
a) 1860
b) 1947
c) 1961
Ans: c) 1961 (Income Tax Act was passed on 1-4-1961)
5. Income tax is treated as:
a) Direct expenses
b) Indirect expenses
c) Business expenses
d) Personal expenses
Ans: d) Personal expenses
6. Finance bill becomes the Finance Act when it is passed by:
a) The Lok Sabha
b) The Rajya Sabha
c) Both by Lok Sabha and Rajya Sabha
d) Both by Lok Sabha and Rajya Sabha and given the assent of the President
Ans: d) Both by Lok Sabha and Rajya Sabha and given the assent of the President
7. AOP (Association of Person) should consists of:
a) Individuals only
b) Person other than individuals
c) Both the above
d) Artificial Judicial person
Ans: c) Both the above
8. BOI (Body of Individuals) should consists of:
a) Individuals only
b) Person other than individuals
c) Both the above
d) Artificial Judicial person
Ans: a) Individuals only
9. When was income tax levied in India for the first time?
a) 1961
b) 1860
c) 1947
Ans: b) 1860 (The income tax was introduced in India for the first time in 1860 by British rulers.)
10. If books of accounts are maintained on cash basis, interest on securities is taxable on:
a) Receipt basis
b) Due basis
c) Hybrid basis
d) Not taxable
Ans: b) Receipt basis
11. If books of accounts are maintained on mercantile basis, interest on securities is taxable on:
a) Receipt basis
b) Due basis
c) Hybrid basis
d) Not taxable
Ans: b) Due basis
12. Under the Income-tax Act, the incidence of taxation depends on:
a) The citizenship of the tax-payer.
b) The age of the tax-payer.
c) The residential status of the tax-payer.
Ans: c) The residential status of the tax-payer.
13. Embezzlement of cash by a cashier is
a) A revenue loss.
b) A casual loss.
c) A capital loss.
Ans: a) A revenue loss.
14. Rent received from agricultural land is:
a) Fully exempted.
b) Partially exempted.
c) Not exempted.
Ans: a) Fully exempted. Because it is an agricultural income
15. Deduction under Section 80D in respect of medical insurance premium is allowed to:
a) An individual
b) Any assessee
c) An individual and HUF
d) AOP and BOI
Ans: c) An individual and HUF
16. Deduction under Section 80E in respect of Interest on Education loan is allowed to:
a) An individual
b) Any assessee
c) An individual and HUF
d) AOP and BOI
Ans: a) An individual
17. Capital assets include all assets except:
a) Stock in trade
b) Special bearer bonds
c) All personal effects except jewellery
d) All of the above
Ans: d) All of the above
18. Under the head income from house property the basis of charge is:
a) Rent received from house property
b) Annual value of house property
c) Net profit from house property
d) None of the above
Ans: b) Annual value of house property
19. A short term capital asset means a capital asset held by the assessee for not more than:
a) For listed securities 12 months
b) For immovable property and unlisted securities 24 months
c) For other capital assets 36 months
d) All of the above
Ans: d) All of the above
20. residential status is determined for:
a) Previous year.
b) Assessment year.
c) Accounting year.
d) Financial year.
Ans: a) Previous year.
21. An individual who wants to be resident of India must stay in India for at least:
a) 730 days in 10 previous years.
b) 182 days in the previous year.
c) 365 days in the previous year.
d) 60 days in the previous year.
Ans: b) 182 days in the previous year.
22. Under the income- tax act, the incidence of taxation depends on:
a) The citizenship of the tax-payer.
b) The age of the taxpayer
c) The residential status of the tax-payer.
d) The gender of the taxpayer
Ans: c) The residential status of the tax-payer.
23. Second basic condition of 60 days is not applicable to:
a) The person of Indian Origin
b) Indian Citizen who leaves India as a crew member of ship
c) Indian Citizen who leaves India for Job
d) All of the above
Ans: d) All of the above
24. Residential Status of the following Assessee:
|
Assessee |
Resident |
Non-Resident |
|
1. HUF |
Wholly or partially controlled in India |
Entire control lies outside India |
|
2. Firms |
Wholly or partially controlled in India |
Controlled wholly from outside India |
|
3. AOP/BOI |
Wholly or partially controlled in India |
Controlled wholly from outside India |
|
4. Company |
Indian Company registered in India Or A non-Indian Company Wholly controlled from India |
A non-Indian Company controlled wholly or partially outside India. |
25. Residential status of an Individual can be:
a) Resident and Ordinarily resident (ROR)
b) Resident but Not-Ordinarily resident (RNOR)
c) Non-Resident in India (NRI)
d) All of the above
Ans: d) All of the above
26. Income from salary includes:
a) Basic payments
b) Allowances
c) Perquisites
d) All of the above
Ans: d) All of the above
27. Children education allowance is exempted up to:
a) Rs. 200 p.m. per child.
b) Rs. 300 p.m. per child.
c) Rs. 100 p.m. per child.
d) Rs. 400 p.m. per child.
Ans: c) Rs. 100 p.m. per child.
28. Hostel expenditure allowance is exempted up to:
a) Rs. 300 per month per child.
b) Rs. 200 per month per child.
c) Rs. 150 per month per child.
d) Rs. 250 per month per child.
Ans: a) Rs. 300 per month per child.
29. A Perquisite or perk is:
a) Cash paid by employer to employee.
b) Facility provided by employer to employee.
c) Amount credited to employees.
d) None of these accounts.
Ans: b) Facility provided by employer to employee.
30. 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.
Ans: b) Sec. 17b.
31. Meaning of salary for different purposes:
|
For HRA, PF, Gratuity and Leave Encashment |
Basic Pay + DP + Dearness Allowance (Which enters) + Commission on turnover |
|
For Gratuity |
Basic Pay + Full DA |
|
For Deduction under Sec. 16 (ii) i.e., Entertainment allowance |
Only Basic Salary |
|
For rent free house |
Basic Pay + DP + DA (Which enters) + any fee, commission, bonus excluding gratuitous bonus + All taxable allowance + Leave encashment pertaining to current year |
32. Commuted value of pension is fully exempted in case of:
a) an employee of private sector.
b) an employee of a public sector undertaking.
c) a Govt. employee.
d) none of these.
Ans: c) a Govt. employee.
33. Statutory limit for exemption of compensation received at the time of voluntary retirement (VRS) is:
a) Rs. 5,00,000.
b) Rs. 8,00,000.
c) Rs. 10,00,000.
d) Rs. 15,00,000.
Ans: a) Rs. 5,00,000.
34. The charging section of the Income under the head income from house property is:
a) Section 15
b) Section 17
c) Section 22
d) Section 45
Ans:
c) Section 22
35. What are the conditions to be fulfilled for charging of income under the head income from house property is:
a) There must be property consisting of any building or land appurtenant thereto
b) The assessee must be owner or deemed owner
c) Property is not used by the assessee for the purpose of any business or profession
d) All of the above
Ans: d) All of the above
36. The ceiling limit of deduction u/s 24 (b) in respect of Interest of Loan taken on 01.06.2014 for construction of a self-occupied house is:
a) Rs. 2,00,000/-
b) Rs. 30,000/-
c) Rs. 45,000/-
d) No limit.
Ans: a) Rs. 2,00,000/-
37. Deduction under sec. 24 includes:
a) Standard deduction @ 30%
b) Interest on loan taken for purchase or construction of house
c) Interest on loan taken for repairs or renovation of house
d) All of the above
Ans: d) All of the above
38. Salary received by a partner from the firm in which he is a partner is taxable under the head:
a) Income from salary.
b) Capital gains.
c) Profits and gains of business or profession.
d) Income from other sources.
Ans: c) Profits and gains of business or profession.
39. Methods of accounting is irrelevant for which head of income?
a) Income from salary.
b) Income from house property
b) Capital gains.
d) All of the above
Ans: d) All of the above
40. Under the head business and profession, the method of accounting which an assessee can follow shall be:
a) Mercantile System
b) Cash System
c) Mercantile or cash system only
d) Hybrid system
Ans: c) Mercantile or cash system only
41. Depreciation is allowed in case of:
a) Tangible assets
b) Intangible assets
c) Tangible and intangible assets
d) Deferred revenue expenditure
Ans: c) Tangible and intangible assets
42. Unabsorbed capital expenditure on scientific research can be carried forward for:
a) 15 years.
b) 14 years.
c) 8 years.
d) 10.
Ans: c) 8 years.
43. Under valuation of opening stock is:
a) Deducted from net profit.
b) Added to net profit.
c) Credited to P & L A/c.
d) None of these.
Ans: a) Deducted from net profit.
44. Over valuation of Closing stock is:
a) Deducted from net profit.
b) Added to net profit.
c) Credited to P & L A/c.
d) None of these.
Ans: a) Deducted from net profit.
 45. Gifts from clients are:
a) Professional income.
b) Income from other sources.
c) Non-taxable item.
d) None of these.
Ans: a) Professional income.
46. What are the conditions to be fulfilled for charging of income under the head capital gains:
a) There must be a capital asset.
b) There must be a transfer of such capital asset.
c) The transfer of such capital asset has been affected during the previous year.
d) All of the above.
Ans: d) All of the above.
47. Tick the assets which are included and excluded from capital assets:
|
Assets included in Capital Assets |
Assets Excluded from Capital Assets |
|
Land and Building (Both Commercial and Residential) Plant and Machinery Jewellery Drawings, Paintings, Collections Investments in securities Patent rights Intangible assets |
Stock in trade Personal Effects including wearing apparel Jewellery or any property held as stock-in-trade Agricultural rural land Special bearer bond Gold deposit bonds Deposit under gold monetization scheme |
48. Which of the following is regarded as transfer of capital asset?
a) Any transfer in a scheme of amalgamation if the amalgamated company is an Indian company.
b) Any transfer in a scheme of amalgamation of shares held in an Indian company by the amalgamating foreign company to the amalgamated foreign company.
c) Any transfer, in a demerger, of a capital asset by the demerged company to the resulting company.
d) Distribution of assets on the dissolution of a firm, body of individuals or association of persons
Ans: d) Distribution of assets on the dissolution of a firm, body of individuals or association of persons
49. In case of bonus shares, cost of acquisition will be:
a) FMV
b) Cost of the previous owner
c)Â Nil
d) none of the above
Ans: c)Â Nil
50. If unlisted securities are sold after 12 months, the capital gain arising from such sale is a:
a) STCG
b) LTCG
c) Income from other sources
d) All of the above
Ans: a) STCG
51. Short term capital gain on sale of unlisted shares are:
a) Taxable.
b) Exempted.
c) Partially Exempted.
d) Partially Taxable.
Ans: a) Taxable.
52. Long term capital gain on sale of unlisted shares are:
a) Taxable.
b) Exempted.
c) Partially Exempted.
d) Partially Taxable.
Ans: a) Taxable.
53. Which one of the following statement is true?
a) Agricultural land in rural area is a capital asset.
b) Capital gain arises from transfer of any asset.
c) Capital assets include both tangible and intangible assets as per sec 2(14).
d) Gold bonds under gold deposit scheme are capital asset.
Ans: c) Capital assets include both tangible and intangible assets as per sec 2(14).
54. Long term capital loss can be carried forward for next:
a) 6 Years
b) 8 Years
c) Indefinite Years
d) Cannot be carried forward
Ans: b) 8 Years
55. Loss from house property can be carried forward and set-off in subsequent eight assessment years:
a) If return of loss is filed within due date
b) Even if return of loss is filed after due date
c) Even if return of loss is not filed
d) None of above
Ans: b) Even if return of loss is filed after due date
56. Unabsorbed depreciation can be carried forward for:
a) Any number of years
b) 8 years
c) 4 years
d) 7 years
Ans: a) Any number of years
57. Speculation Loss can be carried forward for:
a) 8 years.
b) 10 years.
c) 5 years.
d) 4 years.
Ans: d) 4 years.
58. Loss from derivative trading in shares can be carried forward for:
a) 8 years.
b) 10 years.
c) 5 years.
d) Indefinitely
Ans: a) 8 years.
59. Deduction under section 80C is allowed to:
a) Individual
b) Individual or HUF
c) Individual or HUF resident in India
d) All Assessee
Ans: b) Individual or HUF
60. Maximum deduction under section 80C is:
a) 1,00,000
b) 1,50,000
c) 2,00,000
d) 70,000
Ans: b) 1,50,000
61. The maximum amount of deduction under section 80D in the case of a senior citizen is:
a) Rs: 10,000.
b) Rs: 15,000.
c) Rs: 50,000.
d) Rs: 25,000.
Ans: c) Rs: 50,000.
62. CBDT is control by _______.
a) Central Government.
b) State Government.
c) both (A) and (b).
d) none of this above.
Ans: a) Central Government.
63. The highest Administrative Authority for Income Tax in India is _______.
a) Finance Minister.
b) CBDT.
c) President of India.
d) Director of Income Tax.
Ans: b) CBDT.
64. Rates of Income tax are fixed under _______.
a) An Ordinance.
b) The Income Tax Act.
c) The Finance Act.
d) Notification of CBDT.
Ans: c) The Finance Act.