MCQ Module 1

1.
The Central Government has been empowered by entry ________________ of the Union list of
schedule VII of the constitution of India to levy tax on income other than agricultural income.
A.84 B. 82 C. 81 D. 85
2. Amongst the following _________________ is empowered to levy tax on agricultural income.
A. Central Government B.State Government C.Commissioner D.President
3. Who amongst the following confers on the power to issue circulars and clarifications?
A. ITAT B. Central Government C. CBDT D. State Government
4. Amendments by the finance act are made applicable from
A.First day of next financial year B. First day of same financial year
C.Last day of same Accounting year D. None of a b and c
5. Income Tax is charged in -

A. Financial Year B.Assessment Year C.Previous Year D.Accounting Year
6. A person includes:
A. Only Individual B. Only Individual and HUF
C.Individuals, HUF, Firm, Company only
D.Individuals, HUF, Company, Firm, AOP or BOI,Local Authority, Every Artificial Judicial
Person
7. Every assessee is a person, and -
A. every person is also an assessee B.every person need not be an assessee
C.individual is always an assessee D.A HUF is always an assessee
8. Assessment year can be a period of :

A. only more than 12 months B.12 months and less than 12 months
C.only 12 months D.12 months and more than 12 months
9. Year in which income is taxable is known as ___________ and year in which income is earned is
known as ----
A. Previous year, Assessment year B. Assessment year, Previous year
C.Assessment year, Assessment year D. Previous year, Previous year
10. All assesses are required to follow:

A. Uniform previous year which must be calendar year only
B. Uniform previous year which must be financial year only
C. Any period of 12 months
D. Period starting from 1st July to 30th June only
11. Financial year means a year commencing on –
A. 31st March of the period B.1" day of the April
C.Mid of the year D.None of these
12. First previous year in case of a business/profession newly set up on 31-3-2019 would:
A. Start from 1st April, 2018 and end on 31 st March 2019
B. Start from 31" March, 2019 and will end on 31st March, 2019
C. Start from 1st January, 2019 and end on 31 st December, 2019
D. Start from 1st January, 2019 and will end on 31st March,2019
13. Income of business commenced on 1st March, 2019 will be assessed in assessment year-
A. 2018-19 B. 2019-20 C.2020-21 D.2021-22
14. In which of the following cases, income of previous year is assessable in the previous year itself:
A. Assessment of persons leaving India
B. A person in employment in India
C. A person who is into illegal business
D. A person who is running a charitable institution
15. In case of non-residents engaged in shipping business in India income earned during the financial
year is
A. Taxable in India in the same financial year
B. Taxable in India in the relevant assessment year
C. Not taxable in India in the same financial year
D. Not taxable in India.
16. Income Tax is levied on the ___________ of a person.
A. Total Income B.Total Income-Debt C.Gross Total Income D. Net Income-Debt
Perquisites
17. Income is divided in ___________ heads of Income.
A. 4 B.5 C.6 D.3
18. Which amongst the following is not a head of Income?
a. Salaries b.Income from house Property c.Capital gains d.Income from exports
19. 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.
20. 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.
Residential status and agriculture income:
1.The tax payer liability is determined with reference to his or her _______________. (a) Financial Status
(b) Residential Status (c) All of the above (d) None of the above
2. The agricultural income is _______________, then the agricultural income is considered for calculating
tax. (a) More than ` 5,000 and total income is exceeding exemption limit (b) More than ` 5,000 (c) More
than ` 10,000 (d) Any amount
3.Basic condition will be for a person who leaves India for employment _______________. (a) At least
182 days in India (b) At least 60 days in previous year and 365 days in preceding 4 years (c) At least 730
days in preceding 7 years (d) All of the above
4.Residential status is determined for ....................
A. Previous year B. Assessment year C. Accounting year D. Financial year.
5.Mr. Rajiv, born and brought up in India left for employment in Belgium on 15-10-2018. He has never
gone out of India, previously. What is his residential status for the assessment year 2019-20? (a) Non-
resident (b)Resident but Not ordinarily resident (c) Resident and ordinarily resident in India (d) Indian
citizen
6. income earned during the previous year is subject to tax under the Act on the basis of residential
status of an assessee. However, the residential status of an assessee ........................ every year. (a) will
not change (b) will certainly change (c) may change (d) None of the above
7.State whether the following statement is true or false
Determination of residential status is dependent on citizenship (F)
A person may be resident in more than one country at the same time.(T)
8.An individual is said to be resident and ordinary resident in India if he has been resident in India for at
least 2 out of 10 previous years and _________________.
(a) He has been in India for a period of 700 days or more during the 7 previous years immediately
preceding the relevant previous year
(b) He has been in India for a period of 730 days or more during the 7 previous years immediately
(c) He has been in India for a period of 700 days or more during the 10 previous years immediately
(d) He has been in India for a period of 730 days or more during the 10 previous years immediately
9.An Indian citizen leaving India during the previous year for employment purpose is said to be resident
if
a. He has a house in India b. He is in India in the previous year for a period of 182 days or more
c. He is in India for a period of 60 days or more during the previous year and for 365 or more days during
4 previous years immediately preceding the relevant previous year
d. His parents are Indian citizen.

10. Which of the following is an agriculture income?
a. Dividend paid by a company out of its agriculture income.
b. Share of Profit of a Partner from a firm engaged in an agriculture operation
c. Income from supply of water by a assessee from a tank in its agriculture land.
d. Interest received by a money lender in the form of agricultural produce.
Incidence of taxation and Capital & Revenue
State whether the following statements are true or false
1. Indian income is always taxable in India irrespective of the residential status of the taxpayer (T)
2 Foreign income is taxable in the hands of non-resident in India.(F)
3.Revenue expenses are non recurring in nature (F)
4.Which of the following is not a capital receipt?
a.Sale of machinery b.Insurance claim received on machinery lost by fire c.Proceeds from issue of
shares
d.Goods sold for cash
5. Incomes which accrue or arise outside India but received directly in India are taxable in case of
(a) resident and ordinarily resident only (b) resident but not ordinarily resident
(c) non-resident (d) All the above
6.Following are the particulars of income of Mr.Vivek pertaining to the year ended 31/3/2019
Dividend received from shares of Indian company Rs.55,000, Business income of Singapore, controlled
from India, received there and subsequently remitted to India Rs.37,000
If Mr.Vivek is a resident of India, what is his total income?
55,000 37,000 92,000 Nil

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1.

5. Income Tax is charged in -

C.Individuals, HUF, Firm, Company only

C.individual is always an assessee D.A HUF is always an assessee

8. Assessment year can be a period of :

C.only 12 months D.12 months and more than 12 months

C.Assessment year, Assessment year D. Previous year, Previous year

10. All assesses are required to follow:

4.Residential status is determined for ....................

A. Previous year B. Assessment year C. Accounting year D. Financial year.

7.State whether the following statement is true or false

Determination of residential status is dependent on citizenship (F)

d. His parents are Indian citizen.

a. Dividend paid by a company out of its agriculture income.

b. Share of Profit of a Partner from a firm engaged in an agriculture operation

d. Interest received by a money lender in the form of agricultural produce.

Incidence of taxation and Capital & Revenue

State whether the following statements are true or false

2 Foreign income is taxable in the hands of non-resident in India.(F)

3.Revenue expenses are non recurring in nature (F)

4.Which of the following is not a capital receipt?

d.Goods sold for cash

(c) non-resident (d) All the above

If Mr.Vivek is a resident of India, what is his total income?

55,000 37,000 92,000 Nil

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