Deck 2: Income Tax and Business Expenses

Question 1

Subletting is assessable under the head …………………

A)Income from HP
B)Income from Other Source
C)Income from Capital Gain
D)None of the above

Answer 1

Income from Other Source

Question 2

Preliminary expenses incurred are allowed deduction in:

A)10 equal annual instalments
B)5 equal annual instalments
C)full
D)None of these

Answer 2

5 equal annual instalments

Question 3

Educational cess is levied in case of ………..

A)Individual
B)HUF
C)Company
D)All assesses

Answer 3

All assesses

Question 4

As per section 2(31), the following is not included in the definition of 'person'

A)An individual
B)A Hindu undivided family
C)A company
D)A minor

Question 5

Amendments by the finance act are made applicable from

A)First day of next financial year
B)First day of same financial year
C)Last day of same Accounting year
D)None of the above

Question 6

Assessee is having stock existing in the business. Valuation of stock will be at:

A)Cost price
B)Market price
C)Cost or market price, whichever is less
D)Cost or market price, whichever is more

Question 7

Which is the charging section of income under the head profits and gains of business or profession?

A)Section 15
B)Section 24
C)Section 28
D)Section 17

Question 8

Which of the following taxes are allowed as deduction while computing the business income?

A)Wealth-tax
B)Income-tax
C)Sales tax
D)None of the above

Question 9

As per section 30, which expenditure incurred for a building used for the business or profession shall not be allowed as deduction?

A)Rent, rates and taxes
B)Insurance of building
C)Repairs of building
D)Capital expenditure

Question 10

.Group of assets falling within a class of assets comprising of tangible & intangible assets is known as :

A)Group of assets
B)Block of assets
C)Set of assets
D)Cluster of assets

Question 11

-------- are treated as agricultural income

A)Income from poultry farm
B)Income from bee heaving
C)Purchase of standing crops
D)All of these

Question 12

Long term capital loss can be set off against -----

A)Long term capital loss
B)Short term capital loss
C)Long term capital gain
D)All of these

Question 13

Clubbing of income means

A)Adding income of two persons
B)Inclusion of income of other person in assessee'sincome
C)Total income of various heads
D)Collection of income

Question 14

Income from horse race falls under the head

A)Salary
B)Other sources
C)Profession
D)Business

Question 15

Which of the following is not taxable under the head income from other sources?

A)Family pension
B)Sum received under Keyman Insurance Policy
C)Rent received on letting of business
D)Salary to a member of parliament

Question 16

PAN stands for

A)Private bank Number
B)Permanent Account Number
C)Personal Account Number
D)Passive Account Number

Question 17

Donation is deductible under section

A)80 C
B)80D
C)80 E
D)80 G

Question 18

Return filed after the due date is called

A)Revised return
B)Best return
C)Belated return
D)Defective return

Question 19

Tax deduction available to certain industries for the initial few years is called-----

A)Tax Holiday
B)Tax
C)TDS
D)Advance

Question 20

An assessee was engaged in the business of cattle rearing. He incurred a loss in respect of animals which were used for the purposes of his business (otherwise than as stock-in trade) and which have died. Such expenditure shall be considered as

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

Question 21

The loss from speculation business can be set off against

A)Any income
B)Not any income
C)Non speculative business
D)Speculative business only

Question 22

Minor's income is clubbed to -----

A)Father's income
B)Mother's income
C)Father's income or mother's income whichever is grater
D)Both mother's and father's income

Question 23

------ deals with PAN

A)Section 140
B)Section 140 (A)
C)Section 140 (B)
D)Section 140 (C)

Question 24

An assessee was engaged in the business of dealing in commodities. He had paid Commodities transaction tax of Rs.15,000 in respect of the taxable commodities transactions. Income arising of Rs 3,00,000 from such taxable commodities transactions was included in the income computed under the head "Profits and gains of business or profession". Such expenditure of payment of Commodities transaction tax shall be considered as

A)Revenue expenditure
B)Capital expenditure
C)Speculative transaction expenditure
D)Illegal expenditure

Question 25

--------- is the implementation of the plan of tax

A)Tax evasion
B)Tax avoidance
C)Tax management
D)None of these

Question 26

Which of the following is an objective of tax management?

A)Minimize litigation
B)Productive investment
C)Compliance with legal formalities
D)Healthy growth of economy

Question 27

The method by which a person illegally reduces his tax burden by either deflating their income or inflating their expenses is known as

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

Question 28

------ refers to hedging of tax?

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

Question 29

Company is defined under

A)Section 2 (17)of the Income Tax Act
B)Section 2 (32)of the Income Tax Act
C)Section 2 (14)of the Income Tax Act
D)Section 2 (12)of the Income Tax Act

Question 30

Whichof the following deals with Domestic Company?

A)Sec 2 (234)
B)Sec 2 (224)
C)Sec 2 (22)
D)Sec 2 (26)

Question 31

Section 2 (234) relates to

A)Indian company
B)Domestic company
C)Foreign company
D)Widely held company

Question 32

A company in which the public is not substantially interested is known as

A)Domestic company
B)Foreign company
C)Widely held company
D)Closely held company

Question 33

Section 80 JJAA deals with

A)Deduction in respect of produced companies
B)Production in respect of certain incomes
C)Deduction in respect of employment of new employee
D)Deduction in respect of profits and gains from undertakings an enterprise in special category states

Question 34

Expenditure incurred by an hotelier on replacement of linen and carpets in his hotel. Such expenditure shall be considered as

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

Question 35

The maximum deduction available under section 80 C is

A)Rs50000
B)Rs100000
C)Rs150000
D)Rs200000

Question 36

The Presumptive Taxation Scheme of Section 44 AD can be adopted by

A)Resident Individual tax payers
B)Hindu Undivided Families
C)Partnership firms except Limited Liability Partnership Firms
D)All of these

Question 37

Deemed dividend is defined in

A)Section 2 (22)(a)
B)Section 2 (21)(a)
C)Section 2 (23)(a)
D)Section 2 (22)(c)

Question 38

80 ID deals with tax holiday for

A)Hospitals
B)Hotels
C)Natural gas
D)Eligible business

Question 39

An assessee incurred expense of tax on non monetary perquisites of employees. Such expenditure shall be considered as

A)Revenue expenditure
B)Deferred revenue
C)Capital expenditure
D)Expressly disallowed

Question 40

Flat rate of corporate tax for a domestic company with annual turnover up to Rs250 crore is

A)15%
B)25%
C)30%
D)35%

Question 41

Flat rate of corporate tax for a domestic company with annual turnover more than Rs250 crore is

A)15%
B)25%
C)30%
D)35%

Question 42

Flat rate of corporate tax for a foreign company is

A)15%
B)25%
C)30%
D)40%%

Question 43

Which of the following is not a capital expense?

A)Installation expenditure of plant of a company.
B)Legal expenses for reduction of capital.
C)Commission to employees to achieve sales Targets.
D)Expenses of promoting a company.

Question 44

Which of the following donations is eligible for 100 % deduction?

A)Help to poor
B)National DefenceFund
C)Rajive Gandhi Foundation
D)Any notified temple

Question 45

Indexation is applicable to.......................

A)Sale of short term capital assets.
B)Sale of long term debentures.
C)Sale of depreciable capital assets.
D)Sale of long term capital assets which are not depreciable assets

Question 46

XYZ & Co. incurred a liability by giving discount on issue of debentures. Such expenditure shall be considered as

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

Question 47

The objectives of tax planning is to minimise .........?

A)tax liability
B)finance liability
C)tax return
D)none of these