Question 1

Which among the following is a fully exempted allowance?

Accepted Answer

Foreign allowance is fully exempted from tax for government employees working abroad.

Question 2

Income from salary includes:

Accepted Answer

Income from salary includes profit in lieu of salary, perquisites, and allowances, making all of the options correct.

Question 3

Salary received by a partner from his firm is an income under the head:

Accepted Answer

Salary received by a partner from his firm is considered as a part of his share in the profits of the firm and is taxed under the head "Profits and gains from business or profession."

Question 4

Salary received by MLA or MP is treated as income under the head:

Accepted Answer

The salary received by an MLA or MP is treated as income under the head "Other sources" as it is not considered a salary in the traditional employment sense.

Question 5

Family pension received by a widow is treated as an income under the head:

Accepted Answer

Family pension received by a widow is considered as income under the head "Other sources" for tax purposes, as it does not fit into the categories of salary, business or professional income, or capital gains.

Question 6

Salary received from a former employer is treated as an income under the head:

Accepted Answer

Salary received from a former employer is considered income under the head "Salaries" according to tax laws. This includes any form of remuneration received as a result of employment, regardless of whether the employment is current or past.

Question 7

Remuneration received from a person other than employer is treated an income under the head:

Accepted Answer

Remuneration received from a person other than an employer is treated as income under the head "Other sources" because it does not fit the definitions of salary (which is typically from an employer), profits and gains from business or profession, or capital gains.

Question 8

Which among the following is a deduction allowed under section 16 :

Accepted Answer

Under Section 16 of the Income Tax Act, all the options listed - Employment Tax, Standard Deduction, and Entertainment Allowance - are deductions allowed from an individual's salary income.

Question 9

Pension is treated as an income under the head:

Accepted Answer

Pension is considered as a form of salary income and is taxed under the head "Salaries" in income tax.

Question 10

Annuity received from the present employer is treated as income under:

Accepted Answer

Annuity received from the present employer is treated as income under "Salary" as per section 17(1) of the Income Tax Act. This section specifically includes annuities as part of the salary income, making it taxable under the head "Salaries".

Question 11

Annuity received from former employer is treated as income under:

Accepted Answer

Annuity received from a former employer is treated as "Profit in lieu of salary" under the Income Tax Act, as it is a payment received in addition to or in lieu of salary.

Question 12

Annual accretion is taxable under:

Accepted Answer

Annual accretion is taxable under Salary under section 17(1) as it is a benefit or perquisite received by an employee in the course of his employment.

Question 13

Per-diem allowance given for the purpose of lodging facilities is :

Accepted Answer

Per-diem allowance given for the purpose of lodging facilities is fully exempted.

Question 14

Sumptuary allowance to Judges of Supreme Court and High Court is:

Accepted Answer

Sumptuary allowance to Judges of the Supreme Court and High Court is fully exempted from tax.

Question 15

Festival allowance is :

Accepted Answer

Festival allowance is considered as a part of salary and is fully taxable under the Income Tax Act.

Question 16

HRA received by an employee who is living in own house is:

Accepted Answer

HRA (House Rent Allowance) received by an employee who is living in their own house is fully taxable, as the allowance is meant for rent expenses which are not incurred when living in one's own house.

Question 17

Standard deduction allowed from salary for A. Y 2019-20 is:

Accepted Answer

For the Assessment Year 2019-20, the standard deduction allowed from salary was Rs. 40,000 as per the Indian Income Tax Act.

Question 18

Entertainment allowance received by an employee of statutory corporation is:

Accepted Answer

Entertainment allowance received by an employee is fully taxable under the head "Salaries" in the Income Tax Act, unless specific exemptions apply, which generally do not for employees of statutory corporations.

Question 19

Children education allowance is exempt up to .................. per month per child for a maximum of two children.

Accepted Answer

The answer of Children education allowance is exempt up to...

Question 20

Rent free accommodation is an example for:

Accepted Answer

Rent-free accommodation provided by an employer is considered a perquisite, which is a benefit or amenity granted to an employee in addition to their regular salary.

Quiz 2: Income Tax and Allowances in India