This quiz works best with JavaScript enabled. Home > General Knowledge > Economy > Banking > Taxes In India – Quiz 2 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Taxes In India Quiz 2 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Definition of 'person' under Income Tax Act, 1961 is A) Inclusive. B) Exhaustive. C) Both of these. D) None of these. Show Answer Correct Answer: A) Inclusive. 2. Tax audit is compulsory in case a person is carrying on business whose gross turnover/sales/receipts, as the case may be, exceeds A) Rs. 30 lakhs. B) Rs. 40 lakhs. C) Rs. 20 lakhs. D) Rs. 10 lakhs. Show Answer Correct Answer: B) Rs. 40 lakhs. 3. Deduction U/s 80G on account of donation is allowed to A) Any assessee. B) A business assessee only. C) Individual or HUF only. D) None of these. Show Answer Correct Answer: A) Any assessee. 4. In the case of compulsory acquisition, the indexation of cost of acquisition or improvement shall be done till the A) In which the full compensation received. B) In which part or full consideration is received. C) Previous year of compulsory acquisition. D) None of these. Show Answer Correct Answer: C) Previous year of compulsory acquisition. 5. Remuneration paid to working partner shall be allowed as deduction to a firm A) Subject to limits specified in section 40(b). B) In full. C) All of these. D) None of these. Show Answer Correct Answer: A) Subject to limits specified in section 40(b). 6. Which commission distributes the taxes between centre and states? A) National Development Counsel. B) NITI Ayog. C) Finance Commission. D) Board of Direct Taxes. Show Answer Correct Answer: C) Finance Commission. 7. In case an assessee is engaged in the business of retail trade, presumptive income scheme is applicable if the total turnover of such retail trade of goods does not exceed A) Rs. 40lakhs. B) Rs. 10lakhs. C) Rs. 20lakhs. D) Rs. 30lakhs. Show Answer Correct Answer: A) Rs. 40lakhs. 8. The quantum of deduction allowed u/s 80U is A) Rs. 70,000. B) Rs. 20,000. C) Rs. 50,000. D) Rs. 40,000. Show Answer Correct Answer: C) Rs. 50,000. 9. The maximum amount of the total Revenue earned by the government of India comes from A) Customs Duty. B) Value Added Tax. C) Income Tax. D) Excise Duty. Show Answer Correct Answer: D) Excise Duty. 10. Expenditure incurred on family planning amongst the employees is allowed to A) An assessee which is a company or cooperative society. B) Any assessee. C) A company assessee. D) None of these. Show Answer Correct Answer: C) A company assessee. 11. The tax levied on the interstate trade of goods is A) Sales tax. B) Excise tax. C) Service tax. D) Central sales tax. Show Answer Correct Answer: D) Central sales tax. 12. Additional surcharge (education cess) of 3 % per cent is payable on A) Income tax. B) Income tax plus surcharge. C) Surcharge. D) None of these. Show Answer Correct Answer: B) Income tax plus surcharge. 13. Due date of payment of service tax for the month/quarter ending 31st March is A) 1 st March. B) 31 st March. C) 5th day of the month immediately following March. D) None of the above. Show Answer Correct Answer: B) 31 st March. 14. For a person suffering from severe physical disability, deduction available under section 80U is Rs..... A) Rs.1,00,000. B) Rs.75,000. C) Rs. 25,000. D) Rs.50,000. Show Answer Correct Answer: B) Rs.75,000. 15. Indirect taxes includes A) Sales Tax. B) VAT. C) GST. D) All of these. Show Answer Correct Answer: D) All of these. 16. Service tax was initially levied in India by the Constitution vide entry No. A) 97 of the Union list. B) 92C of the Union list. C) 92C of the concurrent list. D) 54 of the State list. Show Answer Correct Answer: B) 92C of the Union list. 17. Assessment year means A) Year in which income is earned. B) Period of 12 months commencing on the 1st day of April every year. C) Period of 12 months commencing on the 1st day of January every year. D) Year in which tax is paid by assessee. Show Answer Correct Answer: B) Period of 12 months commencing on the 1st day of April every year. 18. Of the gross tax revenue of the Union Government the indirect taxes account for nearly A) 55 percent. B) 65 percent. C) 75 percent. D) 85 percent. Show Answer Correct Answer: B) 65 percent. 19. Any person who has made default in complying with the provisions of Income Tax Act, 1961 is known as A) Custom Assessee. B) Assessee in default. C) Deemed Assessee. D) None of the above. Show Answer Correct Answer: B) Assessee in default. 20. Taxes in India are including A) Direct taxes. B) Indirect taxes. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: C) Both (a) and (b). 21. By special order, CBDT declared a foreign association to be a company for the purpose of income tax. Under Income Tax Act, 1961, such association shall be considered as A) Indian Company. B) Foreign Company. C) All of these. D) None of these. Show Answer Correct Answer: A) Indian Company. 22. Perquisite received by the assessee during the course of carrying on his business or profession is taxable under the head. A) PGBP. B) Salary. C) Other source. D) None of these. Show Answer Correct Answer: A) PGBP. 23. Direct taxes includes A) Income Tax. B) Property Tax. C) Gift Tax. D) All of these. Show Answer Correct Answer: D) All of these. 24. Preliminary expenses incurred are allowed deduction in A) Full. B) 5 equal annual installments. C) 10 equal annual installments. D) None of these. Show Answer Correct Answer: B) 5 equal annual installments. 25. The deduction u/s 80E is allowed for repayment of interest to the extent of A) Rs. 15,000. B) Any amount repaid. C) Rs.35,000. D) Rs.55,000. Show Answer Correct Answer: B) Any amount repaid. 26. The tax on net income of companies is A) Wealth tax. B) Interest tax. C) Corporation tax. D) Personal income tax. Show Answer Correct Answer: C) Corporation tax. 27. Which of the following taxes is/are withdrawn or abolished? A) Gift tax. B) Interest tax. C) Estate duty. D) All of the above. Show Answer Correct Answer: D) All of the above. 28. If any amount is donate for research, such research should be in nature of A) Scientific research only. B) Social or statistical research only. C) Scientific or social or statistical research. D) None of these. Show Answer Correct Answer: C) Scientific or social or statistical research. 29. A firm business income is nil /negative. It shall still be allowed as deduction on account of remuneration to working partner to the maximum extent of A) Nil. B) Rs.50,000. C) Actual remuneration paid as specified in partnership deed. D) None of these. Show Answer Correct Answer: B) Rs.50,000. 30. Deduction u/s 80D is allowed if the premium is paid to A) Life insurance Corporation. B) Life insurance or General insurance corporation. C) General insurance Corporation or any other insurer approved by IRDA. D) None of these. Show Answer Correct Answer: C) General insurance Corporation or any other insurer approved by IRDA. 31. In case an assessee is engaged in the business of civil construction, presumptive income scheme is applicable if the gross receipts paid or payable to him in the previous year does not exceed A) Rs. 70lakhs. B) Rs. 40lakhs. C) Rs. 10lakhs. D) 1 crore. Show Answer Correct Answer: B) Rs. 40lakhs. 32. Charge of service tax is in relation to service provided or to be provided A) Not sured. B) May be. C) True. D) False. Show Answer Correct Answer: C) True. 33. Loss from a speculation business of a particular A. Yr. can be set off in the same A. Yr. from A) Profit and gains from any business. B) Income of speculation business. C) Profit and gains from any business other than speculation business. D) None of these. Show Answer Correct Answer: B) Income of speculation business. 34. Where service is received from outside India, such service shall be A) Exempt from service tax. B) Taxable in the hands of service provider. C) Taxable in the hands of Service recipient. D) None of these. Show Answer Correct Answer: C) Taxable in the hands of Service recipient. 35. Income deemed to accrue or arise in India is taxable in case of A) Resident only. B) Non-resident. C) Both ordinarily resident and NOR. D) All the assesses. Show Answer Correct Answer: D) All the assesses. 36. Government imposes taxes to? A) Check the accumulation of wealth among the rich. B) Run the machinery of state. C) Uplift weaker sections. D) None of these. Show Answer Correct Answer: B) Run the machinery of state. 37. An assessee has borrowed money for purchase of a house & Interest is payable outside India. Such interest shall A) Not to be allowed on deduction. B) Be allowed as deduction. C) Be allowed as deduction if the tax is deducted at source. D) None of these. Show Answer Correct Answer: C) Be allowed as deduction if the tax is deducted at source. 38. Agricultural income is exempt provided the A) Land is situated in India. B) Land is situated in any rural area India. C) Land is situated whether in India or outside India. D) None of these. Show Answer Correct Answer: A) Land is situated in India. 39. The income tax in India is A) Direct and proportional. B) Direct and progressive. C) Indirect and proportional. D) Indirect and progressive. Show Answer Correct Answer: B) Direct and progressive. 40. The term assessee is defined under Section A) Section 2(10) of Income Tax Act, 1961. B) Section 2(7) of Income Tax Act, 1961. C) Section 2(24) of Income Tax Act, 1961. D) Section 2(35) of Income Tax Act, 1961. Show Answer Correct Answer: B) Section 2(7) of Income Tax Act, 1961. 41. Income which accrue or arise outside India and also received outside India taxable in case of A) Resident only. B) Not ordinarily resident. C) Both ordinarily resident and NOR. D) None of the above. Show Answer Correct Answer: A) Resident only. 42. The term principal officer is defined under Section A) Section 2(10) of Income Tax Act, 1961. B) Section 2(7) of Income Tax Act, 1961. C) Section 2(24) of Income Tax Act, 1961. D) Section 2(35) of Income Tax Act, 1961. Show Answer Correct Answer: D) Section 2(35) of Income Tax Act, 1961. 43. The cost inflation index number of the P.Yr.2008-09 is A) 580. B) 582. C) 577. D) 586. Show Answer Correct Answer: B) 582. 44. The loss is allowed to be carried forward only when as assessee has furnished A) Return of loss before the due date mentioned u/s 139(1). B) Return of loss. C) Or not furnished the return of loss. D) None of these. Show Answer Correct Answer: A) Return of loss before the due date mentioned u/s 139(1). 45. The exemption u/s 54B, is allowed to A) HUF only. B) Individual only. C) Any assessee. D) All of the above. Show Answer Correct Answer: B) Individual only. 46. Service tax is payable on the value of taxable service @ A) 12 %. B) 12.36 %. C) 12.24 %. D) 10.3 %. Show Answer Correct Answer: B) 12.36 %. 47. Service tax is not payable if the aggregate value of taxable service does not exceed A) Rs. 6,00,000. B) Rs. 4,00,000. C) Rs.10,00,000. D) Rs.8,00,000. Show Answer Correct Answer: C) Rs.10,00,000. 48. The term person is defined under A) Section 2(21). B) Section 2(11). C) Section 2(41). D) Section 2(31). Show Answer Correct Answer: D) Section 2(31). 49. Conversion of capital asset into stock in trade will result into capital gain of the previous year A) In which such conversion took place. B) In which such converted asset is sold or otherwise transferred. C) All of these. D) None of these. Show Answer Correct Answer: B) In which such converted asset is sold or otherwise transferred. 50. Education cess was levied by A) The Finance No. (2) Act, 2004. B) The Finance Act, 1994. C) The Finance Act, 2006. D) The Finance No. (2) Act, 2002. Show Answer Correct Answer: A) The Finance No. (2) Act, 2004. 51. Interest on capital or loan received by a partner from a firm is A) Taxable U/H business and profession. B) Taxable U/H income from other sources. C) Exempt U/S 10(2A). D) None of these. Show Answer Correct Answer: A) Taxable U/H business and profession. 52. Service tax is levied in India by following the A) Selective approach. B) Comprehensive approach. C) All of the above. D) None of these. Show Answer Correct Answer: A) Selective approach. 53. Loss under the head income from house property can be carried forward A) Even if the return is furnished after the due date. B) Even if the return is not furnished. C) Only if the return is furnished before the due date mentioned u/s 139(1). D) None of these. Show Answer Correct Answer: A) Even if the return is furnished after the due date. 54. For person carrying on profession, tax audit is compulsory, if the gross receipts of the previous year exceeds A) Rs. 10lakhs. B) Rs. 40lakhs. C) Rs. 30lakhs. D) Rs. 20lakhs. Show Answer Correct Answer: A) Rs. 10lakhs. 55. R Ltd., is registered in U.K. The control and management of its affairs is situated in India .R Ltd shall be A) Resident in India. B) Not ordinarily resident in India. C) Non-resident. D) None of these. Show Answer Correct Answer: C) Non-resident. 56. Service tax is applicable to A) Whole of India. B) Whole of India except Jammu and Kashmir. C) Whole of India, except Jammu and Kashmir and Union Territories of Dadra, Nagar Haveli, Daman & Diu. D) None of these. Show Answer Correct Answer: B) Whole of India except Jammu and Kashmir. 57. Ambitious anti-offshore tax evasion and black money detection agreement between USA and India is known as A) SLBC. B) AML. C) FATCA. D) KYC. Show Answer Correct Answer: C) FATCA. 58. Incomes which accrue or arise outside India but are received directly into India are taxable in case of A) Resident only. B) Non-resident. C) Both ordinarily resident and NOR. D) All the assesses. Show Answer Correct Answer: D) All the assesses. 59. Loss under the head capital gain in a particular assessment year can A) Be carried forward. B) Be set off from other head of income in the same assessment year. C) Neither be set off nor carried forward. D) None of these. Show Answer Correct Answer: A) Be carried forward. 60. Interest on capital of or loan from partner of a firm is allowed as deduction to the firm to the extent of A) 12 % p.a. even if it is not mentioned in partnership deed. B) 18 % p.a. C) 12 % p.a. or at the rate mentioned in partnership deed whichever is less. D) None of these. Show Answer Correct Answer: C) 12 % p.a. or at the rate mentioned in partnership deed whichever is less. ← PreviousNext →Related QuizzesEconomy QuizzesGeneral Knowledge QuizzesTaxes In India Quiz 1Taxes In India Quiz 3Banking Awareness And Sebi QuizInsurance Awareness Quiz 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books