MCQOPTIONS
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MCQOPTIONS
This section includes 435 Mcqs, each offering curated multiple-choice questions to sharpen your Bachelor of Accounting and Finance (BAF) knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
.A is entitled to children education allowance @ Rs. 80 p.m. per child for 3 children amounting Rs. 240 p.m. It will be exempt to the extent of : |
| A. | 200 |
| B. | 260 |
| C. | 160 |
| D. | 240 |
| Answer» D. 240 | |
| 2. |
profit or income of that particular year. |
| A. | set off |
| B. | carry forward |
| C. | none of above |
| D. | both of above |
| Answer» B. carry forward | |
| 3. |
Capital LosseCan be carry forward up to next assessment years from the assessment year in which the loss was incurred |
| A. | 8 |
| B. | 4 |
| C. | 2 |
| D. | 5 |
| Answer» B. 4 | |
| 4. |
of Income Tax Act is related to residential status |
| A. | Section 6 |
| B. | section-5 |
| C. | section 8 |
| D. | section 9 |
| Answer» B. section-5 | |
| 5. |
is a retirement benefit given by the employer to the employee in consideration of past services. |
| A. | Gratuity |
| B. | Dearness allowance |
| C. | Lunch allowance |
| D. | House Rent allowance |
| Answer» B. Dearness allowance | |
| 6. |
means fixed quantum of money given regularly in addition to salary to meet particular requirement |
| A. | Allowance |
| B. | Perquisites |
| C. | pension |
| D. | none of the above |
| Answer» B. Perquisites | |
| 7. |
Medical insurance premium incurred for senior citizen is eligible for deduction up to________ under section 80D. |
| A. | Rs. 30,000 |
| B. | Rs. 50,000 |
| C. | Rs. 1,00,000 |
| D. | Rs. 60,000 |
| Answer» C. Rs. 1,00,000 | |
| 8. |
Income tax is a: |
| A. | Indirect Tax |
| B. | Entertainment Tax |
| C. | Direct Tax |
| D. | None of the Above |
| Answer» D. None of the Above | |
| 9. |
An Indian citizen leaving India during the previous year for employment purpose is saidto 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. |
| Answer» 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 | |
| 10. |
As per section 271H, where a person fails to file the statement of tax deducted/collected at source i.e. TDS/TCS return on or before the due dates prescribed in this regard, then he shall be liable to pay penalty under section 271H. Maximum penalty that can be levied is ______. |
| A. | 1,00,000, but not exceeding the amount of TDS/TCS. |
| B. | 2,00,000 |
| C. | 3,00,000 |
| D. | 4,00,000 |
| Answer» B. 2,00,000 | |
| 11. |
Island duty allowance is exempt upto ___ |
| A. | 1,300 |
| B. | 1,800 |
| C. | 2,500 |
| D. | 3,250 |
| Answer» E. | |
| 12. |
The number of identities included in the definition of persons is |
| A. | five |
| B. | six |
| C. | seven |
| D. | eight |
| Answer» D. eight | |
| 13. |
Interest on delayed compensation or enhanced compensation is taxable: |
| A. | On accrual basis |
| B. | On receipt basis |
| C. | Exempt from tax |
| D. | As per method of accounting of the assessee. |
| Answer» C. Exempt from tax | |
| 14. |
In case of loss, a partnership firm may claim deduction in respect of remuneration topartner to the extent of: |
| A. | Rs. 1,50,000/- |
| B. | Rs. ,50,000/- or remuneration paid, whichever is lower |
| C. | Rs. 1,50,000/- or 90% of book profit, whichever is lower |
| D. | Nil |
| Answer» C. Rs. 1,50,000/- or 90% of book profit, whichever is lower | |
| 15. |
On donation to whom of the following a 50% deduction is allowable u/s.80G of the Income Tax Act? |
| A. | National Defence Fund |
| B. | Prime Ministers National Relief Fund |
| C. | Rajiv Gandhi Foundation |
| D. | National foundation for Communal Harmony |
| Answer» D. National foundation for Communal Harmony | |
| 16. |
Short-term capital gain on sale of listed shares (STT paid) in a recognized stockexchange is chargeable to income-tax @ ______ %. |
| A. | 10 |
| B. | 15 |
| C. | 20 |
| D. | 30 |
| Answer» C. 20 | |
| 17. |
Interest relating to pre-construction period is allowable: |
| A. | In 5 equal installments from the year in which it was incurred. |
| B. | In the year in which it was incurred |
| C. | In the year in which house property was constructed |
| D. | None of the Above |
| Answer» E. | |
| 18. |
The rate of depreciation for a block of assets consisting of buildings used as factory is |
| A. | 2.5% |
| B. | 5% |
| C. | 10% |
| D. | None of the above |
| Answer» D. None of the above | |
| 19. |
Mr. Harivallabh incurred medical expenditure of Rs. 1,20,000 in respect of the disease specified in rule 11DD for his father (aged 66) who is wholly dependent on him. The amount eligible for deduction from his gross total income would be ________. |
| A. | Rs. 40,000 |
| B. | Rs. 60,000 |
| C. | Rs. 80,000 |
| D. | Rs. 1,00,000 |
| Answer» E. | |
| 20. |
Cost of acquisition of capital asset being immovable property acquired through gift covered u/s 49(4) is: |
| A. | Actual cost of acquisition to the previous owner |
| B. | Nil |
| C. | Stamp duty value of the property as considered while computing income u/s 56(2) |
| D. | Actual cost of acquisition to the assessee. |
| Answer» D. Actual cost of acquisition to the assessee. | |
| 21. |
Shares in unlisted companies, in order to be treated as long-term capital asset, should be held for a minimum period of ____________ immediately prior to the date of transfer. |
| A. | 365 days |
| B. | 12 months |
| C. | 24 months |
| D. | None of the above |
| Answer» D. None of the above | |
| 22. |
Contribution to approved research (not scientific) institution in case of a business man is: |
| A. | 100% of such amount |
| B. | 125% of such amount |
| C. | 175% of such amount |
| D. | None of above |
| Answer» B. 125% of such amount | |
| 23. |
When tax is not deducted at source on annual rent of Rs.2 lakhs paid to landlord by a company, the amount liable for disallowance under section 40(a) (ia) is |
| A. | Nil |
| B. | Rs.2,00,000 |
| C. | Rs.20,000 |
| D. | Rs.60,000 |
| Answer» E. | |
| 24. |
On salary, tax is required to be deducted at the time of: |
| A. | Payment or crediting the employee, whichever is earlier |
| B. | Crediting the employee |
| C. | Payment |
| D. | Retirement of employee |
| Answer» D. Retirement of employee | |
| 25. |
Remuneration to partner of a firm engaged in the business of growing andmanufacturing rubber in India is: |
| A. | Partly agricultural income and partly non-agricultural income |
| B. | Agricultural income |
| C. | Non-Agricultural income |
| D. | None of the above |
| Answer» B. Agricultural income | |
| 26. |
W.e.f. 01-04-2016, quoting ‘Permanent Account Number’ (PAN) is compulsory in thefollowing transaction – |
| A. | Payment to LIP exceeding Rs. 50,000 in a financial year |
| B. | Sale or purchase of any immovable property valued at Rs. 4,00,000 |
| C. | Time deposit upto Rs. 35,000 with a bank |
| D. | None of the above |
| Answer» B. Sale or purchase of any immovable property valued at Rs. 4,00,000 | |
| 27. |
TDS on commission other than insurance commission |
| A. | 5% |
| B. | 10% |
| C. | 20% |
| D. | 30% |
| Answer» B. 10% | |
| 28. |
Interest rate on refund as per section 244A (1A) |
| A. | 3% |
| B. | 6% |
| C. | 9% |
| D. | None of the above |
| Answer» D. None of the above | |
| 29. |
Notice under section 156 is given for |
| A. | failure to submit return |
| B. | tax demand |
| C. | deferment of tax |
| D. | None of the above |
| Answer» D. None of the above | |
| 30. |
TDS on interest on securities is covered under section |
| A. | Section 192 |
| B. | Section 192A |
| C. | Section 193 |
| D. | None of the above |
| Answer» D. None of the above | |
| 31. |
When cash is deposited into savings bank account, quoting of PAN is mandatory whenthe amount of deposit is ____ or more. |
| A. | Rs. 20,000 |
| B. | Rs. 50,000 |
| C. | Rs. 1,00,000 |
| D. | Rs. 2,00,000 |
| Answer» C. Rs. 1,00,000 | |
| 32. |
Unabsorbed business losses cannot be carried for more than |
| A. | 7 assessment years |
| B. | 8 assessment years |
| C. | 10 assessment years |
| D. | 12 assessment years |
| Answer» C. 10 assessment years | |
| 33. |
Maximum amount of exemption available in respect of amount received under voluntaryretirement scheme is: |
| A. | Rs. 2,00,000 |
| B. | Rs. 3,00,000 |
| C. | Rs. 4,00,000 |
| D. | Rs. 5,00,000 |
| Answer» E. | |
| 34. |
Tax is required to be deducted at …….. from interest payable to a resident. (AssumingPAN details are available) |
| A. | 10% |
| B. | 20% if payee is domestic company else 10% |
| C. | 10% + Surcharge (if any) + Cess + SHEC |
| D. | 20% |
| Answer» B. 20% if payee is domestic company else 10% | |
| 35. |
Deduction u/s 24(a) is not available when: |
| A. | Net annual value is zero |
| B. | Net annual value is positive |
| C. | Net annual value is zero or negative |
| D. | None of the above |
| Answer» D. None of the above | |
| 36. |
The following is taxable under the head “Salaries”: |
| A. | Gifts received by employee from employer |
| B. | Salary received by partner from a firm |
| C. | Fees received by director from a company |
| D. | Commission received by agent from a principal |
| Answer» B. Salary received by partner from a firm | |
| 37. |
Cash donation given to a charitable trust (approved under section 80G) is eligible fordeduction under that section, when the amount of donation does not exceed |
| A. | Rs. 2,000 |
| B. | Rs. 5,000 |
| C. | Rs. 7,000 |
| D. | Rs. 10,000 |
| Answer» B. Rs. 5,000 | |
| 38. |
Which of the following is not allowed as a deduction for computation of business Income? |
| A. | Loss incurred due to theft in factory after working hours |
| B. | Anticipated future losses |
| C. | Loss caused by white ants |
| D. | Loss due to accidental fire in stock-in-trade |
| Answer» C. Loss caused by white ants | |
| 39. |
Following activity shall be considered as agricultural activity: |
| A. | Subsequent operation on the agricultural land |
| B. | Basic operation on the agricultural land |
| C. | Basic and subsequent operation on the agricultural land |
| D. | Both (b) and (c) |
| Answer» E. | |
| 40. |
Monetary limit for exemption in the case of encashment of earned leave onsuperannuation received by private sector employee is |
| A. | 1 Lakh |
| B. | 2 Lakh |
| C. | 3 Lakh |
| D. | None of the above |
| Answer» D. None of the above | |
| 41. |
Tax is required to be deducted at ………… from rent payable on plant and machinery to a resident (Assuming PAN details are available) |
| A. | Nil |
| B. | 15% |
| C. | 1% |
| D. | 2% |
| Answer» E. | |
| 42. |
Income Computation and Disclosure Standards are to be applied in computation of income under the head: |
| A. | Capital Gain only |
| B. | Profits and Gains of Business or Profession only |
| C. | Income from other sources only |
| D. | Both “Profits and Gains from Business or Profession” and “Income from Other Sources” |
| Answer» E. | |
| 43. |
As per section 115BBDA dividend from Indian companies is taxable in the hands of certain recipients at _______ when the aggregate dividend exceeds _______. |
| A. | 10%, 1 lakh |
| B. | 15%, 10 lakhs |
| C. | 10%, 10 lakhs |
| D. | 5%, 5 lakhs |
| Answer» D. 5%, 5 lakhs | |
| 44. |
ICDS-II stands for _______. |
| A. | Accounting policies |
| B. | Construction Contract |
| C. | Revenue recognition |
| D. | Valuation of inventories |
| Answer» E. | |
| 45. |
When a charitable trust registered u/s 12AA pays Rs. 50,000 towards rent to a resident for the premises occupied by it without deduction of tax at source for the entire previous year 2018-19, the amount of rental expenditure liable for disallowance would be ________. |
| A. | Nil |
| B. | Rs. 6,00,000 |
| C. | Rs. 4,20,000 |
| D. | Rs. 1,80,000 |
| Answer» E. | |
| 46. |
When a resident senior citizen having gross total income of Rs. 5,56,000, has derived interest from savings account in a nationalized bank of Rs. 8,200 and fixed deposit interest of Rs. 47,000 from such bank, he is eligible for deduction of Rs. ________ from the gross total income. |
| A. | 55,200 |
| B. | 8,200 |
| C. | 47,000 |
| D. | 50,000 |
| Answer» E. | |
| 47. |
Income escaping assessment is covered under section _________ . |
| A. | 144 |
| B. | 156 |
| C. | 143(3) |
| D. | 147 |
| Answer» E. | |
| 48. |
In case of an individual or HUF, agricultural income is |
| A. | Exempted |
| B. | Exempted but included in the total income for the rate purpose |
| C. | Fully taxable provided it is earned from India |
| D. | Taxable at flat rate of 10% |
| Answer» C. Fully taxable provided it is earned from India | |
| 49. |
Income of public charitable trust registered u/s 12A is: |
| A. | Exempt |
| B. | Taxable at MMR |
| C. | Taxable at slab rates |
| D. | None of above |
| Answer» B. Taxable at MMR | |
| 50. |
Interest on Post Office SB joint account is exempt upto _____ |
| A. | Rs. 3,500 |
| B. | Rs. 7,000 |
| C. | Rs. 10,000 |
| D. | Rs. 20,000 |
| Answer» C. Rs. 10,000 | |