Deck 4: Taxation and Income: Understanding Indian Income Tax Regulations

Question 1

An individual is resident and ordinarily resident of India if .

A)Person had been resident in India at least 2 out of 10 previous years immediately preceding the relevant previous year
B)Person been in India for a period of 730 days or more during 7 years immediately preceding the relevant previous year
C)All of the above
D)None of the above

Answer 1

All of the above

Question 2

The Resident HUF is ordinarily resident in India, if

A)He has been resident in India at least 2 years out of 10 previous years immediately
B)He has been resident in India at least 3 years out of 10 previous years immediately
C)He has been resident in India at least 2 years out of 5 previous years immediately
D)None of the above

Answer 2

He has been resident in India at least 2 years out of 10 previous years immediately

Question 3

Which of the following is not included in the term Income under the Income Tax Act, 1961?

A)Reimbursement of travelling expenses
B)Profits and gains of business or profession
C)Dividend
D)Profit in lieu of salary

Answer 3

Profit in lieu of salary

Question 4

14 Income from shares of a public company set up in any special Industrial zone is exempt up to-------- years from the date of commencement of commercial production.

A)Three
B)Four
C)Five
D)None of the above

Question 5

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 sources
C)PGBP
D)none

Question 6

Perquisite received by the assessee during the course of carrying on his business or profession is taxable under the head.

A)Salary
B)Other sources
C)PGBP
D)none

Question 7

Under the head Business or Profession, the method of accounting which an assessee can follow shall be:

A)Mercantile system only
B)Cash system only
C)Mercantile or cash system only
D)Hybrid system

Question 8

Gain arising from the disposal of _________ is taxable under the head capital gains.

A)Depreciable asset
B)Eligible depreciable asset
C)Securities
D)All of the above

Question 9

____________are capital assets.

A)Stock in trade
B)Sculpture
C)Immovable property
D)Both b and c

Question 10

A person who derives his income by dealing in shares of private, unlisted and public limited companies are covered under the head.

A)Income from business
B)Income from other sources
C)Capital gains or
D)All of the above

Question 11

Bonus shares are issued by a company to its ______ without receiving any amount from them.

A)Employees
B)Customer
C)Shareholders
D)All of the above

Question 12

Bonus shares are the shares issued by a company_____________.

A)Free of cost
B)Issued at concessional rate
C)On credit
D)None of the above

Question 13

A company in which at least 50% of the shares are held by a foreign government is ___________.

A)Private company
B)Public company
C)Foreign company
D)All of the above

Question 14

Any incidental expenditure on disposal of capital assets shall form part of _____________.

A)Cost of assets
B)Disposal consideration
C)Selling cost
D)None of a to c

Question 15

Capital loss u/s 37 is allowed as deduction for those assets the gain of which is___________.

A)Chargeable to tax
B)Exempt from tax
C)Both of these
D)None of (a) to (c)

Question 16

At the time of devolution ___________ would be the cost of the asset.

A)FMV
B)Historical cost
C)higher of a and b
D)none

Question 17

Capital gain tax shall not be chargeable on disposal of securities which are held for a period of __________.

A)one year
B)two years
C)three years
D)six months

Question 18

'Derivatives' is a general term for financial assets that are "derived" from other_______________.

A)fixed assets
B)current assets
C)financial assets
D)income

Question 19

Gain on disposal of immovable property is chargeable to at _____%, where holding period is up to one year.

A)10
B)2
C)6
D)12

Question 20

A loss on the sale of jewellery is _______ under the head capital gain.

A)recognized
B)not recognized
C)taxable
D)none of above

Question 21

Maximum limit for the deduction of Life insurance premia from the gross total income is .

A)Rs. 2,00,000
B)Rs 1,50,000
C)R s 1,00,000
D)Rs 1,25,000