Sky Education

Direct TAX
Multiple choice question
Chap.1.Basic Concept
1. Income tax act extend to
a. Whole of India
b. Whole of India extend Jammu and Kashmir
c. Whole of Maharashtra only
d. Whole of Gujrat
2. Out of the following which is revenue receipt
a. Premium received on issue of new shares
b. Annuity received from former employer
c. Interest from investment
d. Interest from annuity
3. Mumbai university is treated under income tax laws as
a. A company
b. An association of persons
c. A body of individual
d. An artificial juridical person
4. Recovery of bad debt is
a. Allowed as reduction from gross income
b. Exempt from tax
c. Chargeable to tax as income from business
d. Chargeable to tax as capital gain
5. Gift from a patient to doctor is
a. Allowed as deduction from gross income of the patient
b. Exempt from tax for the doctor
c. Chargeable to tax as income from business for the doctor
d. Chargeable to tax as income from other sources for the doctor
6. A capital receipt
a. Is exempt
b. Is always taxable
c. Is always taxable unless specifically exempted under the income tax act
 d. Is exempt unless specifically made taxable under the income tax act
7. A revenue receipt
a. Is never exempt
b. Is never taxable
c. Is always taxable unless specifically exempted under the income tax
act
d. Is exempt unless specifically made taxable under the income tax act
8. A person by whom any tax , interest , penalty . etc is due is known as
a. A defaulter
b. A resident
c. A citizen
d. An Assesse
Chap-2 Residence and scope of total income
9. Residential status is to be determined for__________
a. Previous year
b. Assessment year
c. Accounting year
d. Calendar year
10.Income which accrue or arise outside in India but are received directly into
India are taxable in case of________
a. Resident only
b. Both ordinary resident but NOR
c. Non resident
d. All the assesses
11.Income which accrue outside India and also received outside India is
taxable in case of_________
a. Residential status in India
b. Citizenship in India
c. Foreign citizen
d. Resident But NRI

Chap-3 Income From Salary

12.Un-commuted pension received by a government employee
is______________
 a. Exempt
b. Taxable
c. 1/3rd is exempt
d. Tax-free
13.Children education allowance is________
a. Exempt upto lower of the amount actually spent or the prescribed limits
b. Exempt fully to the extent actually spent
c. Exempt to the extent of lower of allowance received or the lump-sum
amount prescribed
d. Fully taxable
14.Entertainment allowance in case of government employee is____________
a. Fully taxable
b. Fully exempt
c. Exempt upto certain limits mentioned in sec16(ii)
d. First included in full in gross salary and thereafter deduction allowed
from gross salary under section 16(ii)
15.Pension received by an employee of the central or state government who has
been awarded “param vir chakra”
a. Is taxable as income from salary
b. Is exempt from tax
c. Is taxed after deducting RS 15,000 or 1/3 whichever is lower
d. Is taxable as income from other sources
16.Lump-sum payment from unrecognized provident fund to an employee on
his retirement over and above his own contributes
a. Is not taxable
b. Is taxable as income from other sources
c. Is taxable in case of only “specified “ employees
d. Is taxable as profit in lieu off salary
17.Value of rent free accommodation provident by the employer
a. Is exempt from tax
b. Is perquisite taxable in case all employees
c. Is perquisite taxable in case of only specified employees
d. Is a perquisite taxable in case of only government employees
18.Salary received by partner from firm
a. Salary
 b. Income from other source
c. Income from business
d. Exempt income
19.Salary received by a member of parliament
a. Salary
b. Income from other source
c. Income from business
d. Exempt income
20.Payment received by a college lecture form university for setting question
paper
a. Salary
b. Income from other source
c. Income from business
d. Exempt income
21.Sum paid as employer’s contribution to a recognized provident fund within
the allowed limits
a. Is taxable
b. Is perquisite taxable in case of only specified employees
c. Is taxable as profit in lieu of salary
d. Is a perquisite taxable in case of all employees
22.Compensation for termination of employment
a. Is not taxable
b. Is taxable in case of only specified employees
c. Is taxable as profit in lieu of salary
d. Is taxable as capital gain
Chap-4 Income from house property
23.An assesse has borrowed money for purchase of a house and interest is
payable outside India such interest shall
a. Be borrowed as deduction
b. Not to be allowed as deduction
c. Be allowed as deduction if the tax is deducted at source
d. Full paid the interest
24.A has two house properties both are self –occupied the annual value of
a. Both house shall be NIL
 b. One house shall be NIL
c. No house shall be NIL
d. Full exempt
25.Municple tax is deducted from
a. Net annual value
b. Gross annual value
c. Muncipal valuation
d. Income tax
26.Unrealised rent is deduction from
a. Gross annual value
b. Net annual value
c. Muncipal value
d. Income tax
27.Following will be taxable as income from house property
a. Sub-letting of a house
b. Letting of an office building
c. Sale of house profit
d. Rent from open land used for wedding functions
28.Municipal taxes to be deducted from GAV should be
a. Paid by the tenant during the previous year
b. Paid by the owner during the previous year
c. Accrued during the previous year
d. Accrued or paid by owner whichever is less
29.Standard deduction under section 24(a) from
a. 1/3rd of NAV
b. Realise actually incurred by the owner
c. 30% of NAV
d. RS 30,000

Chap-5 Income from business profession

30.Salary , bonus , commission or remuneration due to or received by a
working partner from the firm is taxable under the head
a. Income from salaries
b. Other source
 c. Business income
d. capital gain
31.Perquisite received by the assesse during the course of carrying on his
business or profession is taxable under the head
a. Salary
b. Other source
c. Business profession
d. Capital gain
32.Depreciation is allowed in case of
a. Tangible fixed asset only
b. Intangible asset only
c. Tangible and Intangible
d. Wasting asset only
33.Which of the following tax is allowed as a deduction while computing the
business income?
a. Wealth tax
b. Income tax
c. GST
d. Service tax
34.Profit on sale of import license is
a. Exempt from tax
b. Taxed as income from other source
c. Taxed as profits and gain of business
d. Taxed as capital gain
35.Profit on transfer of duty entitlement pass book is
a. Exempt from tax
b. Taxed as income from other source
c. Taxed as profits and gains o business
d. Taxed as capital gain
36.Any sum received under a keyman insurance policy including bonus is
a. Wholly exempt from tax
b. Exempt from tax to the extent of the bonus
c. Taxed as income from other source
d. Taxed as profits and gain of business
 Chap-6 Capital gains
37.Capital gain arises from the transfer
a. Any assets
b. Any fixed assets
c. Any capital assets
d. Land and building only
38.Which assets is not treated as capital assets for capital gain purpose
a. Motor car for business use
b. Jewellery
c. Tenancy rights
d. Plant and machinery held as stock in trade
39.Short term capital gain arise on transfer of item shares and units held by the
assesse for not more than
a. 36 months from the date of acquisition
b. 12 months from the date of acquisition
c. 54 months from the date of acquisition
d. 15 months from the date of acquisition
40.Income form sale of household furniture is
a. Taxable capital gain
b. Not taxable as capital gain
c. Short term capital gain
d. Long term capital gain
41.Income from sale of rural agriculture land is
a. Taxable capital gain
b. Not taxable as capital gain
c. Short term capital gain
d. Fully exempt
42.To be a long term capital asset a residential house property should be held
for more than a
a. 12 month
b. 24 month
c. 36month
d. 60 month
43.which of the following is a capital asset for he purpose of capital gain for
 a. Assets held for personal use
b. Shares of domestic companies
c. Gold deposit bonds 1999
d. Special bearer
44.House property held for less than 36 months is
a. Long term capital asset
b. Short term capital gain
c. Exempted capital gain
d. Excluded from definition of capital asset
45.Listed shares held for 15 months are
a. Long term capital assets
b. Short term capital assets
c. Exempted capital assets
d. Excluded from definition of capital assets
46.What is the date on which for market value of capital assets acquired is
determined
a. 1-4-2001
b. 1-4-1971
c. 1-4-1981
d. 1-4-1961
47.The cost inflation index number of the previous year 2019-20 is
a. 289
b. 200
c. 100
d. 300
48.Exemption under section 54 is available to
a. All assesses
b. Individual only
c. Individual as well as HUF
d. HUF only
49.The exemption under section 54 shall be available
a. To the extent of capital gain invested in house property
b. Proportionate to the net consideration price invested
c. To the extent of amount actually invested
d. Inflation rate proportionate
50.FMV on 1-4-2001 is applicable to assets
a. Acquired prior to 1-4-2001
b. Transferred to prior to 1-4-2001
c. Acquired after 1-4-2001
d. Sale period
51.Long term capital gain on sale of unlisted shares are
a. Taxable
b. Exempted
c. Partially exempted
d. Partially taxable
52.For claiming exemption under section 54EC the amount to the extent of
capital gain subject to maximum 50 lakhs should be invested within six
month from the date of transfer in
a. State bank of India
b. Notified securities
c. State bank of India or notified securities
d. Bonds of the NHAI or RECL
Chap-7 Income From other sources
53.Income under the head income from other sources is taxable on
a. Due basis
b. Receipt basis
c. On the basis of method of accounting regularly employed by the
assesse
d. Payment regularly
54.Dividend declared by unit trust of India is
a. Fully exempt in the hands of unit holder
b. Fully taxable in the hands of
c. Taxable but deduction is allowed under 80C
d. Taxable but deduction is allowed under 80E
55.For computing lottery income the assesee shall
a. Be entitled to any deduction for purchase of lottery ticket
b. Not entitled to any deduction for purchase of lottery ticket
c. Be entitled to deduction upto 10% of total purchase of tickets
d. Fully chargeable tax
56.Gift received by an individual RS 7000 from his relative M shall be
a. Fully exempt
b. Fully taxable
c. Exempt upto RS 50000
d. Exempt upto RS 10000
57.Agricultural income from a place outside india is
a. Exempt from tax
b. Taxable only in case of a non-resident
c. Taxable as income from business
d. Taxable as income from other source
58.Ganesh received RS 60000 from his friend on the occasion of his birthday
a. The entire amount of RS 60000 is taxable
b. RS 50000 is taxable
c. The entire amount is exempt
d. RS 10000 is taxable
59.For computing lottery income the assesse shall
a. Be entitled to any deduction for purchase of lottery tickets
b. Not entitled to any deduction for purchase of lottery tickets
c. Be entitled to deduction upto 10% of total purchase of tickets
d. The entire amount is exempt
60.The deduction allowable in respect of family pension taxable under income
from other source is
a. 331/3% of the pension
b. 30% of the pension or RS 15000 whichever is less
c. 331/3% of the pension of RS 15000
d. NIL
61.Mr. Y has received a sum of RS 51000 on 24-10-2019 from relatives on the
occasion of his marriage
a. Entire RS 51000 is chargeable tax
b. Only RS 1000 is chargeable to tax
c. Entire RS 51000 is exempt form tax
d. Only 50% i.e. RS 25500 is chargeable to tax
Chap-9 Deductions from Gross Total income
62.Deduction u/s 80c in respect of LIP contributed to provide fund, etc is
allowed
a. Any assesse
b. An individual
c. An individual HUF
d. An individual or HUF who is resident in India
63.Deduction u/s 80C is allowed to the maximum of
a. RS 50000
b. RS 15000
c. RS 10000
d. RS 25000
64.For claiming deduction u/s80C in respect of wife insurance premium shall
be allowed for
a. Karta HUF
b. Any member HUF
c. Karta and coparceners of the HUF
d. Only coparceners
65.For claiming deduction U/S 80 c the payment or deposit should be made
a. Out of any income
b. Out of any income chargeable to income tax
c. During the current year out of any sources
d. Out of All income charge
66.Deduction u/s 80c in respect of tution fees is allowed to
a. An individual only
b. Individual HUF
c. Any Assessee
d. Non-resident
67.Deduction under section 80CCC is allowed to the extent
a. RS 200000
b. RS 100000
c. RS 250000
d. RS 150000
68.Deduction U/S 80D is allowed to an individual for premium paid to insure
the health of
a. Individual himself
 b. Individual and his family
c. Individual , his spouse parents and dependent children
d. Only children
69.The payment for insurance premium under section 80 D should be
a. In cash
b. By any mode other than cheque
c. Cash/ by cheque
d. Only cheque
70.The quantam of deduction allowed under section 80D for self and spouse
shall be limited to
a. RS 25000
b. RS10000
c. RS15000
d. RS20000
71.Deduction U/S 80DD in case of dependent with serve disability shall be
allowed
a. To the extent of actual expenditure
b. RS 75000
c. RS 125000 irrespective of actual expenditure
d. RS 50000
72.Deduction under section 80DD shall be allowed
a. To the extent of actual expenditure deposit or RS 50000 whichever is less
b. For a sum of RS 75000 irrespective of actual expenditure or deposit
c. For a sum of RS 50000 irrespective of any expenditure or actual
deposited
d. For a sum of RS 25000 irrespective of any expenditure or actual
deposited
73.Deduction under U/S 80E shall be allowed in respect of amount paid by way
of interest is loan taken from
a. Any person
b. Any relative
c. Financial institution or approved charitable institution
d. Any Company
74.Deduction U/S 80U in case of person with disability is allowed to
a. An individual who is citizen of India
 b. An Individual who is resident of India
c. Any individual is assesse
d. Any HUF
75.RS 1.50 lakh is the maximum qualifying limit for deduction under
a. Sec 80C
b. Sec 80 & 80CCC
c. Sec 80CCC
d. Sec 80C &80DD