Deck 1: Taxation and Corporate Law: Understanding Tax Liability, Compliance, and Deductions

Question 1

Concealment of income or false claims to reduce tax liability are cases of ------

A)Tax evasion
B)Tax planning
C)Tax avoidance
D)Tax management

Answer 1

Tax evasion

Question 2

Using the loopholes of law to reduce tax is known as

A)Tax evasion
B)Tax planning
C)Tax avoidance
D)Tax management

Answer 2

Tax avoidance

Question 3

------ is the device which satisfies the requirements of the law but not in accordance with the intentions of the law

A)Tax evasion
B)Tax planning
C)Tax avoidance
D)Tax management

Answer 3

Tax avoidance

Question 4

Reducing tax liability, utilizing the deductions, exemptions or reliefs allowed in the Act and Rules is called----

A)Tax evasion
B)Tax planning
C)Tax avoidance
D)Tax management

Question 5

Compliance of the legal requirements in connection with the tax is the essence of -----

A)Tax evasion
B)Tax planning
C)Tax avoidance
D)Tax management

Question 6

Tax avoidance is ----

A)Illegal
B)Immoral
C)Lawful
D)All of these

Question 7

Availing tax holiday by a new industrial undertakings in backward areas is a case of

A)Tax evasion
B)Tax planning
C)Tax avoidance
D)Tax management

Question 8

Compliance with legal formalities and availing tax incentives are cases of

A)Tax evasion
B)Tax planning
C)Tax avoidance
D)Tax management

Question 9

Return of income must be furnished on or beforethe due date as per a part of-----

A)Tax evasion
B)Tax planning
C)Tax avoidance
D)Tax management

Question 10

The total income of a domestic company is taxable at the rate of -------

A)20%
B)30%
C)40%
D)35%

Question 11

The total income of a non domestic company is taxable at the rate of----

A)20%
B)30%
C)40%
D)35%

Question 12

Under the Income-tax Act, 1961, which of the following outlays incurred by Sun Ltd. during the previous year ended 31st March, 2019 will not be admissible as deduction while computing its business income

A)Contribution to a political party in cash
B)Interest on loan taken for payment of income-tax
C)Capital exnditure on advertisement
D)All of the above

Question 13

Any corporation by or under any Central, State or Provincial Act or a Government Company as defined in the Companies Act is called -----

A)Public Sector Company
B)Joint company
C)Private Sector company
D)Provincial Company

Question 14

Any company which has made the prescribed arrangements for the declaration and payment of dividends within India is called ------

A)Domestic Company
B)Non domestic company
C)Public sector company
D)Provincial company

Question 15

A company which is neither an Indian company not has made the prescribed arrangements for the declaration and payment of dividends within India is called -----

A)Domestic Company
B)Foreign Company
C)Public sector company
D)Provincial company

Question 16

A company in which the public are not substantially interested is closed------

A)Open company
B)Closely held company
C)Limited company
D)None of these

Question 17

A person carrying not less than----- of the voting power in a company is said to have substantial interest in the company.

A)10%
B)20%
C)30%
D)40%

Question 18

Section 115JB relates to ----

A)Securities Transaction Tax
B)Maximum Alternative Tax
C)Minimum Alternative Tax
D)Surcharge

Question 19

Under the Income Tax Act, 1961, depreciation on machinery is charged on ………

A)Purchase price of the machinery
B)Written down value of the machinery
C)Market price of the machinery
D)All of the above

Question 20

If the tax liability of a company is less than 18.5% of its book profits, the company is liable to pay MAT at the rate of ------

A)15% of books profits plus Surcharge) if any) plus 4% HEC
B)16% of books profits plus Surcharge)if any) plus 4% HEC
C)16.5% of books profits plus Surcharge)if any) plus 4% HEC
D)18.5% of books profits plus Surcharge(if any) plus 4% HEC

Question 21

A company carry forward the eligible tax credit under MAT for a maximum of -----

A)Five assessment years
B)Eight assessment years
C)Ten assessment years
D)Twelve assessment years

Question 22

The rate of corporate dividend tax during the year 2018-19 is ------

A)17.674% + 12% surcharge + 4% HEC
B)18. % + 12% surcharge + 4% HEC
C)19.67% + 12% surcharge + 4% HEC
D)20% + 12% surcharge + 4% HEC

Question 23

Income distributed by a money market mutual fund or liquid fund is taxable @------

A)15% + Surcharge 10% + 4%HEC
B)20% + Surcharge 10% + 4%HEC
C)25% + Surcharge 10% + 4%HEC
D)30% + Surcharge 10% + 4%HEC

Question 24

Income distributed by a fund other than a money market mutual fund or a liquid fund to an individual or HUF is subject to CDT at the rate of

A)12.5% + Surcharge 10% + 4 % HEC
B)15% + Surcharge 10% + 4 % HEC
C)20% + Surcharge 10% + 4 % HEC
D)25% + Surcharge 10% + 4 % HEC

Question 25

Under the head Income from House Property the basis of charge is ……

A)Rent Received
B)Gross Annual Value
C)Annual Value
D)Municipal Value

Question 26

Tonnage tax system is exclusively intended to ------

A)Joint stock Companies
B)partnership firms
C)Sipping companies
D)IT Companies

Question 27

Which among the following is not available to companies?

A)80 IB
B)80 C
C)80 G
D)None of these

Question 28

MAT Provisions are applicable to----

A)Non domestic companies
B)Indian companies
C)Private companies
D)Every Company

Question 29

Which among the following is not a widely held company

A)Mutual Benefit Finance Company
B)Private Limited Company
C)Limited Company
D)None of these

Question 30

Substantial interest in the company means not less than---- of voting power

A)50%
B)20%
C)30%
D)40%

Question 31

Section 115JB relates to

A)Tonnage Tax
B)Corporate Dividend Tax
C)MAT
D)GST

Question 32

An assessee paid insurance premium against risk of damage or destruction of stocks or stores used for the purposes of his business or profession. Such expenditure shall be considered as

A)Revenue expenditure
B)Capital expenditure
C)Deferred revenue expenditure
D)Illegal expenditure

Question 33

The salary, remuneration or compensation received by the partners is taxable under the head -----

A)Income from Other Sources
B)Income from Business
C)Salary
D)None of the above

Question 34

In accordance with the provisions of Section 17(1) of Income Tax Act, 1961, the term salary includes _______________

A)Any annuity or pension
B)Any gratuity
C)Any fees, commission, perquisite or profits in lieu of or in addition to any salary orwages
D)All of the above

Question 35

Under the Income-tax Act, 1961, 'notional profit' from speculative business is -

A)Taxable under the head 'income from profits and gains of business and profession
B)Taxable under the head 'income from other ' sources'
C)Taxable either as income from other sources or as income from profits and gains of business and profession
D)Not taxable.

Question 36

The books of accounts are to be kept and maintained for a period of how many years from the end of the relevant assessment year.

A)6 years
B)5 years
C)8 years
D)Unlimited period

Question 37

Alternate Minimum Tax shall not be applicable to a non-corporate assessee who has claimed any deduction under:

A)Sections 80-IA to 80RRB
B)section 80P
C)Section 10AA
D)Section 35AD

Question 38

Under the Income-tax Act, 1961, interest on capital received by a partner from a partnership firm is chargeable under the head

A)Profits and gains of business or profession
B)Income from other sources
C)Capital gains
D)None of the above

Question 39

The employer made a contribution of Rs 25,000 to recognized provident fund for the previous year 2018-19. Such payment was made on 12th March, 2019. Such expenditure shall be considered as

A)Revenue expenditure
B)Capital expenditure
C)Deferred revenue expenditure
D)None of the above

Question 40

Income tax rates are fixed in……………..

A)Income tax Act
B)Finance Act
C)Income tax rules
D)Finance rules

Question 41

Section 2(9) of Income tax deals with…………..

A)Person
B)Assessee
C)Previous Year
D)Assessment Year

Question 42

CBDT stands for …………………………..

A)Central Bureau of Direct Taxes
B)Central Board of Direct Taxes
C)Citizen's Board of Direct Taxes
D)Citizen's Bureau of Direct Taxes

Question 43

Dividend from an Indian Company is …………………

A)Fully Taxable
B)Partly Taxable
C)Fully Exempted
D)None of these

Question 44

Profits earned from an illegal business are...............

A)Taxable.
B)Tax free.
C)Ignored by Tax Authorities.
D)treated as other income.