Income Tax Act(Direct And Indirect Taxation ) Questions and Answers

Question 1.

Salary paid by an Indian company to its employees working in one of its branches outside India is:
  1.    Salary deemed to accrue in India
  2.    Salary accruing outside India
  3.    Salary accruing in India
  4.    None of the above
Explanation:-
Answer: Option C. -> Salary accruing in India


Question 2. Income from subletting of house property is taxable under the head :
  1.    Capital Gain
  2.    Income from Other Sources
  3.    Income from House Property
  4.    Profits & Gains of Business or Profession
Explanation:-
Answer: Option B. -> Income from Other Sources


Question 3. Mohan Received a gift of Rs.35,000/- each from his 3 friends on 30th March 2019:.
  1.    105,000 is taxable
  2.    50000 is taxable
  3.    Not taxable
  4.    Rs. 55000 is taxable
Explanation:-
Answer: Option A. -> 105,000 is taxable


Question 4. The benefit of exemption under Section 54F is available when following capital asset transferred
  1.    Short term capital asset other than residential house property
  2.    Short term residential house property
  3.    Long term residential house property:
  4.    Any long term capital asset other than residential house property
Explanation:-
Answer: Option D. -> Any long term capital asset other than residential house property


Question 5. Income of minor is clubbed however the clubbing provision is not applicable if:
  1.    Parents are separated
  2.    Minor is a married daughter
  3.    Minor is handicapped as specified u/s 80U
  4.    None of the above
Explanation:-
Answer: Option C. -> Minor is handicapped as specified u/s 80U


Question 6. In case of revocable transfer of asset, all income arising from such asset to transferee shall be included
  1.    income of transferee
  2.    income of transferor
  3.    Both transferor and transferee
  4.    Either transferor or transferee
Explanation:-
Answer: Option B. -> income of transferor


Question 7. When parent's income is clubbed with minor child income, parent is eligible for exemption
  1.    Actual income of minor or Rs. 10,000 whichever
  2.    Actual income of minor or Rs. 1,500 whichever is less
  3.    Actual income of minor or Rs. 20,000 whichever is less
  4.    Actual income of minor or Rs. 5,000 is less whichever is less
Explanation:-
Answer: Option B. -> Actual income of minor or Rs. 1,500 whichever is less


Question 8. Unabsorbed depreciation can be carried forward for set off:
  1.    For an unlimited number of years
  2.    For a period of four years only
  3.    For a period of eighteen years only
  4.    For a period of eight years only
Explanation:-
Answer: Option A. -> For an unlimited number of years


Question 9. Which of the following loss can't be carry forward if assessed has not filed his return of income within time under section 139(1) of the Income-tax Act?
  1.    Losses under Head Capital gain
  2.    Losses of owning & maintaining race horses
  3.    Losses under Head Business/Profession
  4.    All of the above
Explanation:-
Answer: Option A. -> Losses under Head Capital gain


Question 10. If Mr. A & Mrs. A both have substantial interest in a concern and both are in receipt of remuneration from that concern, then what will be the tax consequences?
  1.    Remuneration shall be clubbed in the total income of Mrs. A
  2.    Remuneration shall be clubbed in the total of that individual whose total income (before this clubbing) is higher
  3.    Clubbing shall not apply
  4.    Remuneration shall be clubbed in the total income of Mr. A
Explanation:-
Answer: Option B. -> Remuneration shall be clubbed in the total of that individual whose total income (before this clubbing) is higher


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