M.K.

GUPTA CA EDUCATION
PITAM PURA/ROHINI/LAXMI NAGAR
9811429230/9212011367

INCOME TAX
MULTIPLE CHOICE QUESTIONS
COMPUTATION OF TOTAL INCOME AND TAX LIABILITY

1. The basic source of income-tax law is -

(a) Income-tax Act, 1961
(b) Income-tax Rules, 1962
(c) Circulars/Notifications issued by CBDT
(d) Judgments of Courts
2. A domestic company means -
(a) Only an Indian company
(b) Both Indian company and a foreign company having a branch in India
(c) Both Indian company and a foreign company having business connection in India
(d) Both Indian company and a foreign company which has made the prescribed arrangement for declaration
and payment of dividends in India out of the income chargeable to tax in India
3. The rates of income-tax are mentioned in -
(a) The Income-tax Act, 1961 only
(b) Both Income-tax Act, 1961 and Income-tax Rules, 1962
(c) The First Schedule to the Annual Finance Act
(d) Both Income-tax Act, 1961 and the First Schedule to the Annual Finance Act
4. The surcharge applicable in the case of an individual is -
(a) 10% of tax payable if total income exceeds `50 lakhs but does not exceed `1 crore
(b) 10% of tax payable if total income exceeds `1 crore
(c) 15% of tax payable if total income exceeds `1 crore
(d) Both (a) and (c), as the case may be.
5. In respect of a non-resident assessee, who is of the age of 60 years or more but less than 80 years at
any time during the previous year 2018-19, -
(a) Basic exemption of `2,50,000 is available
(b) Basic exemption of `3,00,000 is available
(c) Basic exemption of `5,00,000 is available
(d) No basic exemption limit would be available
6. In case of a domestic company whose gross receipts for the P.Y. 2016-17 is upto `250 crores, the
rate of tax applicable is -
(a) 29%
(b) 25%
(c) 30%
(d) None of the above
7. The surcharge applicable to a domestic company for A.Y. 2019- 20 is -
(a) 5%, if total income exceeds `1 crore.
(b) 10%, if the total income exceeds `1 crore
(c) 7%, if the total income exceeds `1 crore but does not exceed `10 crore, and 15%, if the total income
exceeds `10 crore.
(d) 7%, if the total income exceeds `1 crore but does not exceed `10 crore, and 12%, if the total income
exceeds `10 crore.
8. The surcharge applicable to a foreign company for A.Y. 2019- 20 is -
(a) 5%, if the total income exceeds `1 crore.
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(b) 10%, if the total income exceeds `1 crore.

(c) 2%, if the total income exceeds `1 crore but does not exceed `10 crore and 5% if the total income
exceeds `10 crore.
(d) 2%, if the total income exceeds `10 crore.
9. The rate of tax applicable to a partnership firm for A.Y. 2019- 20 is -
(a) 25%
(b) 30%
(c) 35%
(d) 40%
10. Where the total income of an artificial juridical person is `3,10,000, the income-tax before cess
payable is `............... and surcharge payable is `..............
(a) `3,000; surcharge – nil.
(b) `6,000; surcharge – nil.
(c) `500; surcharge – nil
(d) `93,000; surcharge – `4650
11. What is the basic exemption limit for a woman assessee for A.Y. 2019-20, who turned 60 years on
01.4.2019?
(a) `2,00,000
(b) `3,00,000
(c) `2,50,000
(d) `5,00,000
12. What is the rate of surcharge applicable to individuals having total income exceeding `1 crore?
(a) 15%
(b) 12%
(c) 10%
(d) 2%
13. What is the basic exemption limit for Mrs. X, a resident individual who is of the age of 80 years as
on 31.3.2019?
(a) `5,00,000
(b) `2,40,000
(c) ` 3,00,000
(d) `2,50,000
14. Tax Liability of a resident individual having LTCG 3.5 Lakh shall be
(a) `18,200
(b) `72,800
(c) `70,200
(d) `20,800
15. The maximum amount of rebate allowable under section 87A for A.Y. 2019-20 is -
(a) `2,000, if the total income does not exceed `5 lakh
(b) `5,000, if the total income does not exceed `5 lakh
(c) `2,500, if the total income does not exceed `3.5 lakh
(d) ` 5,000,if the total income does not exceed `3.5 lakh
16. If Mr. Y’s total income for A.Y. 2019-20 is `52 Lakhs, surcharge is payable at the rate of -
(a) 15%
(b) 12%
(c) 10%
(d) 2%
17. Unexhausted basic exemption limit of a non-resident individual can be adjusted against –
(a) only LTCG taxable @20% u/s 112
(b) only STCG taxable @15% u/s 111A
(c) only LTCG taxable @ 10% u/s 112A
(d) casual income taxable @30% u/s 115BB
(e) none of these
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18. Unexhausted basic exemption limit of a resident individual can be adjusted against –
(a) only LTCG taxable @20% u/s 112
(b) only STCG taxable @15% u/s 111A
(c) only LTCG taxable @ 10% u/s 112A
(d) From (a) or (b) or (c)
(e) Casual income taxable @ 30% u/s 115BB
19. The concept of partial integration of agricultural income with non-agricultural income is
applicable to -
(a) only individuals & HUF
(b) only firms and companies
(c) Individuals, HUF, AOPs/BOIs & Artificial juridical persons
(d) All persons
20. What is the basic exemption limit for Mr. X, a resident individual who has completed the age of
60 years as on 1.4.2019?
(a) `5,00,000
(b) `2,40,000
(c) `3,00,000
(d) ` 2,50,000
21. Mr. X aged, 61 years, received dividend of `12,00,000 from a domestic company in P.Y. 2018-19.
Tax chargeable under section 115BBDA is @10% on
(a) The entire amount of `12,00,000
(b) `2,00,000
(c) Nil
(d) `9,00,000
22. In respect of dividend received from domestic companies in excess of ` 10,00,000 by an individual-
(a) no deduction under Chapter VI-A is allowed but loss under other heads can be set-off against such
income
(b) no deduction under Chapter VI-A is allowed and no loss can be set-off against such income
(c) both deduction under Chapter VI-A and set-off of losses against such income are allowed
(d) deduction under Chapter VI-A is allowed but set-off of losses under other heads against such income is
not allowed
23. Mr. X aged, 59 years, received dividend of `14,00,000 from a domestic company in P.Y. 2018-19.
Tax payable shall be
(a) `15,600
(b) `41,600
(c) `2,41,800
(d) Nil
24. Mr. X aged, 61 years, received dividend of `14,00,000 from a domestic company in P.Y. 2018-19.
Tax payable shall be
(a) `10,400
(b) `7,800
(c) `41,600
(d) `1,45,600
25. Rebate u/s 87A shall be allowed to
(a) all persons
(b) only individual
(c) resident individual
(d) resident individual & HUF
26. Rebate u/s 87A shall be allowed if total income is
(a) less than `2,50,000
(b) less than `3,50,000
(c) upto `3,50,000
(d) upto `5,00,000
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27. Marginal relief shall be allowed to

(a) all persons
(b) only individual
(c) individual & HUF
(d) non -resident
28. Mr. X has agricultural Income of `4,900 and non – agricultural income of `2,65,000. Tax Payable
shall be
(a) Nil
(b) `780
(c) `1,030
(d) `14,030
29. Mr. X has agricultural Income of `1,00,000 and non – agricultural income of `2,45,000. Tax
Payable shall be
(a) Nil
(b) `4,940
(c) `2,340
(d) `17,940
30. Tax Liability of a resident individual having only STCG 111A 3.5 Lakh shall be
(a) `15,600
(b) `13,000
(c) `54,600
(d) `52,000
31. Tax Liability of a resident individual having only casual income 3.5 Lakh shall be
(a) `1,06,600
(b) `28,600
(c) `31,200
(d) `1,09,200
32. Tax Liability of a non - resident individual having only STCG 111A 3.5 Lakh shall be
(a) `15,600
(b) `13,000
(c) `54,600
(d) `52,000
33. The rate of tax applicable to a limited liability partnership (LLP) for A.Y. 2019- 20 is -
(a) 25%
(b) 30%
(c) 40%
(d) at slab rate
34. Mr. Devansh has agricultural income of `2,30,000 and business income of `2,45,000. Which of the
following statements are correct?
(a) Agricultural income has to be aggregated with business income for tax rate purposes
(b) No aggregation is required since agricultural income is less than basic exemption limit.
(c) No aggregation is required since business income is less than basic exemption limit.
(d) Agricultural income is exempt under section 10(1) but the same has to be aggregated with business
income, since it exceeds `5,000
35. Additional income tax is payable in case of
(a) Dividend from domestic company
(b) Interest income from domestic company
(c) Income from mutual fund
(d) (a) & (b)
(e) (a) & (c)
(f) none of these
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Answers
1. (a); 2. (d); 3. (d); 4. (d); 5. (a); 6. (b); 7. (d); 8. (c); 9. (b); 10. (a); 11.(c); 12.(a); 13.(a); 14.(a);
15.(c);16.(c); 17.(e); 18.(d); 19(c); 20.(d); 21.(b); 22.(b) 23 (b); 24 (c); 25 (a); 26 (c); 27 (a); 28 (a); 29 (a);
30 (b); 31 (a); 32 (c); 33 (b); 34 (c); 35 (e)
Hint for answer 2. As per rule 27, meaning of making prescribed arrangement for declaration and payment
of dividends in India means that the company has compiled with the following conditions:
1. The share-register of the company for all shareholders shall be regularly maintained at its principal place
of business within India, in respect of any assessment year from a date not later than the 1st day of April of
such year.
2. The general meeting for passing the accounts of the previous year relevant to the assessment year and for
declaring any dividends in respect thereof shall be held only at a place within India.
3. The dividends declared, if any, shall be payable only within India to all shareholders.