INCOME TAX

Special Tests- Key (1- 3 Exams)

1) Assessment year is the period of 12 months commencing from …………….

Every year.

-c) 1st April

2) When the income earned in an year is taxed in the same year, it is called
…………………..

- Accelerated assessment

3) Gratuity is defined as per section ………..

- 10(10)

4) Surcharge is levied when the total income exceeds …………………..

- 1 crore

5) There are heads of income

-5

6) Educational cess is charges at the rate of ……..

- 2%.

7) Bonus paid by the employer to the employee is …………

- Fully taxable

8) The highest Administrative Authority for Income Tax in India is............

- CBDT

9) Income Tax Act was passed in the year……….

1
- 1961

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

- Assessment year

11) Payment made by an employer to employee monthly, other than salary is

called ………….

- Allowances

12) Salary is defined as per section ……….

- 17(1)

13) Incomes exempted from tax are stated in the section……. Of Income Tax Act.

- 10

14) Gratuity received by a government employee is.......................

- Fully exempted

15) Is exempted from income tax.

- Dividend from Indian company

16) The income received and accrued outside India from a business controlled or
profession set up in India, the tax incidence in case of resident is ………………..

- Taxable

17) A government employee received salary Rs.120,000 and entertainment

allowance Rs.10,000 during the previous year. He spent Rs.6000 on entertainment.
He is entitled to deduction u/s 16(ii)

- 5000

18) If the assesse is living in own house HRA is …………..

- Fully taxable

19) The periodic payment of money for the past service is known as........................

2
- Pension

20) Who among the following may be “not ordinarily resident”?

- Hindu undivided family

21) Rule explain the taxation of HRA

- 2A

22)Pension is taxable under ..........................head.

- Salary

23) A person is Non-resident if he fails to fulfil.....................

c) Both basic conditions

24) The following is not taxable as income under the head “Salaries”:

- Remuneration received by a partner

25) The Income Tax Act, 1961 broadly covers ………………………...

- all of the above

26) State which of the following income are exempted?

- Foreign allowance

27) Agricultural income in Pakistan is assessable for........................

- Resident

28) Employer’s contribution to RPF is exempted up to...................

- 12% of salary

29) The interest on loan paid by the Government of India to a non-resident outside
India is ……………….. In India.

- Not taxable

30) Which of the following is not taxable under the head Salary?

3
-Remuneration paid to lecturer of a college for setting a question paper

-Salary received by a member of parliament

31) Deduction from gross Total income is allowed under Sec. 80C up to lower of
the Qualifying amount or a maximum of.

- 1, 00,000

32) Under Section 15 of Income Tax Act, the salary due in previous years and even
if it is not received is ………………………...

- taxable

33) Perquisites to employees are covered in the I.T. Act 1961 under...................

- Sec 17b

34) Value of rent free accommodation a house owned by employer in case of non-
Govt. employees with above 25 lakhs population is...........................

- 15% of employee’s salary

35) The entertainment tax allowed as a deduction under Section 16 of Income Tax
Act is the least of ………………………….

-20% of basic salary of the individual

36) Income accrued outside India and received outside India is taxable in case of
………

- Resident and ordinary resident (ROR) only

37) Value of rent free accommodation in case of Govt. employee shall be taxable
up to.......................

- License fee fixed by Govt.

38) If the employee receives retirement gratuity from more than one employer, he
can claim exemption in respect of ……………………

- Both employers

4
39) The assesses can claim relief under for arrears or advance salary.

- Section 89(1)

40) The income of previous year is chargeable to tax in the……

- Immediately succeeding assessment year

41) An employee is deemed as specified employee if he is a director in the

company or has substantial in the company or his chargeable salary per annum
exceeds.

- 50,000

42) Interest for pre-acquisition period is deductible in Installments

-5

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

- Annual value

44) Reductions from annual value are as per section….

- 24

45) The following is not taxable as income under the head “Salaries”:

- Remuneration received by a partner

46) Annual value is defined as per section …………..

- 23(1)

47) If an employer transfers second hand motor car to the employee, the perquisite
is valued at …………………………………….

- Actual costless depreciation @20% for every completed year under SLM method

48) The Income from House Property is taxable in the hands of the individual even
if property is not registered in his name …………………………….

- When the property has been transferred to spouse for inadequate consideration

5
- When the property is transferred to a minor child for inadequate consideration

- Where the individual holds on importable estate

49) The tax paid by the tenant is ……

- No adjustment

50) The following conditions must be satisfied to charge the rental income under
the head Income of House Property:

- The property should consist of any buildings or lands

- The assesse should be one of the properties

- The property should not be used by the owner for the purpose of business or
professional purpose

51) Any benefits attached to an office or position in addition to salary or wages is

called ………

- Perquisites

52) A sum equal to 30% is allowed as deduction from the annual value as ………

- Standard deduction

53) Mr. Ram owns a house property. He lent it to Laxman at ` 10,000 p.m. Laxman
sublet it to Mr. Maruti on monthly rent of ` 20,000 p.m. Rental income of Ram is
taxable under the head ………

- Income from house property

54) Employer provides a car (below 1.6 ltr capacity) along with a driver to X partly
for official and partly for personal purpose. The expenses incurred by the company
are: running andmaintenance expenses – ` 32,000 and driver’s salary – ` 36,000.
Taxable value of perquisite is …………

- 32,400

6
55) Which of the following is deductible from the annual value of HP?

- Municipal taxes paid by the owner for previous year

56) In case of disputed ownership, income from HP is chargeable in the hands of

…………

- Recipient of income

57) Deduction allowed from annual value is …………………...

- Interest on loan for construction

- interest on loan for repair

- Statutory deduction

58) Interest on capital, borrowed on 10.10.2000, for self-occupied property is

deductible up to a maximum amount of ………………...

- 1, 50,000

59) Any payments made outside India and TDS is not paid, then it is …………

- Disallowed

60) Mr. Shushant is the owner of a house, the details of which are given below the
gross annual value would be ……………... Municipal value ` 36,000 Actual rent `
32,000 Fair Rent` 36,000 Standard Rent` 40,000

- 36,000

61) Subletting is assessable under the head …………………

- Income from other sources

62) If the assesses let out the building or staff quarters to the employee of business,
the rent collected from such employees is assessable as income from
……………...

- Taxable as income from other sources

7
63) An individual is considered as an owner of the house property for the purpose
of charging tax to …………………..

- A member of cooperative society, company of ADP to whom a building or a part

these is allotted or leased under a house building scheme of a society

- An individual who transfers house property without an adequate consideration to

this owner spouse or to minor child

- The holder of importable estate

64) An individual who transfers house property without an adequate consideration

to his owner spouse or to minor child is called as ………………….

- Deemed owner

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

- Market price of the machinery

66) Identify the correct head

- Profit and Gains from business and profession

67) If fair rent is not gives, then assume ………… as fair rent.

- Actual rent

68) Interest on loan for self-occupied house taken before 1st April, 1999 will be
allowed up to …...

- 30,000

69) Which of the following is not a case of deemed ownership of house property?

- Co-owner of a property

70) Income Tax Act was passed in the year……….

- 1961

71) Income Tax Act came into force on…………

- 1st April 1962

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72) Surcharge is levied when the total income exceeds …………………..
- 1 Crore

73) Income tax is a………………….

- Direct tax

74) CBDT stands for …………………………..

- Central Board of Direct Taxes

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

- Assessment Year

76) A Company has types of residential status.

-2

77) There are heads of income

-5

78) As per Income tax Act, Person includes ……………

- Individual
- HUF
- Local Authority

79) Income from Salary is explained in the section ……………………

- 15 to 17

80) A person with the age of ………… or more is considered as a super senior
citizen as per Income tax Act

- 80

81) Educational cess is charges at the rate of ……..

-2%

82) Rebate of Income tax is defined as per section ……………..

- 87A

9
83) To be an Ordinarily resident in India, an individual must satisfy
……………………….

- One Basic Condition and Both Additional Conditions

84) Residential Status of an assesses can be …………………………..

- Different for different assessment year

85) If the assesse is living in own house HRA is …………..

- Fully Taxable

86) A government employee received salary Rs.120,000 and entertainment

allowance Rs.10,000 during the previous year. He spent Rs.6000 on entertainment.
He is entitled to deduction u/s 16(ii) :

- 5000

87)The Income TaxAct,1961 broadly covers ………………………...

-all of the above

88) The periodic payment of money for the past service is known as
........................

- Pension

89) Agricultural income in Pakistan is assessable for........................

- Resident

90) Any allowance granted for encouraging research, academic and other
professional pursuit is called ………………………

- Academic Allowance

91) Previous year means the financial year immediately preceding

the…………………...

- Assessment Year

10
92) Children hostel allowance is exempt up to per month per child for two
children.

- Rs.300

93) Salary received by a Member of Parliament is taxable under the

head.........................

- Income from other sources

94) Who among the following may be “not ordinarily resident”?

- Hindu Undivided Family.

95) Income received in India is taxable in the hands of...........................

- All assessees.

96) Pension is taxable under ..........................head.

- Salary

97) A citizen of India who goes abroad for the purpose of employment, he must
stay in India in the previous year for at least .............................days to become a
resident

- 182 days

98) Value of rent free accommodation in case of Govt. employee shall be taxable
up to.......................

-license fee fixed by government

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

-Any annuity or pension

- Any gratuity

- Any fees, commission, perquisite or profits in lieu of or in addition to any salary

orwages

11
100) Perquisites to employees are covered in the I.T. Act 1961 under...................
- Sec. 17b.

101) The salary, remuneration or compensation received by the partners is taxable

under the head ………………………….

– income from business

102) A Perk is.........................

- facility provided by employer to employee

103) The death-cum-retirement gratuity received by the Government Employee or

employee of local authority is ………………………….

- Fully exempted

104) Medical reimbursement is exempt upto .................. if treatment is done in a

private hospital.

- rs: 15,000

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

- Taxable

106) Gross Total Income is arrived after ………………………..

-adding Income under five heads of Income, after applying clubbing provisions
and making adjustment of set off and carry forward of losses and after allowing
deduction under section 80Cto80U

107) Which of the following is not taxable under the head Salary?

- commission received by a full time director

108) Income accrued outside India and received outside India is taxable in case of
………………………….

-Resident and ordinary resident (ROR)only

109) Interest on RPF balance is exempted up to.......................

12
-9.5%

110)Employers contribution to RPF is exempted up to...................

- 12 % of salary

111) Value of rent free accommodation a house owned by employer in case of

non- Govt. employees with above 25 lakhs population is...........................

-15% of employees salary

112) The Income from House Property is taxable in the hands of the individual
even if property is not registered in his name …………………………….

- When the property has been transferred to spouse for inadequate consideration

- Where the individual holds on importable estate

- Where the property is transferred to a minor child for inadequate consideration

113) From the amount of arrears of rent received, …………. Is allowed as

deduction.

- 30%

114) Mr. Ram owns a house property. He lent it to Laxman at ` 10,000 p.m.
Laxman sublet it to Mr. Maruti on monthly rent of ` 20,000 p.m. Rental income of
Ram is taxable under the head ………………………………...

- income from house property

115) Which of the following is not deductible from annual value?

- Interest on unpaid interest

116) The tax paid by the tenant is ……………………

- No adjustment

117) Salary received by the manager of an agricultural farm is .................................

- a salary income.

13
118) Annual value of self-occupied house is ……………………..

- Zero

119) A sum equal to …………… is allowed as deduction from the annual value.

- 30%

120) Rule 4 includes ………………………….

- All of the Below

- The defaulting tenant has vacated or steps have been taken to vacate the house

- Tenancy must be bonafide

121) Deductions from annual value is as per section …………

- 24

122) Foreign house property’s income is taxable only in the case of

……………………..

- Ordinarily Resident

123) The following is exempt income from Income Tax:.

- perquisites in india

124) Which of the following is deductible from the annual value of HP?

- Municipal taxes paid by the owner during the previous year

125) The balance of unabsorbed loss from HP can be carry forward to a maximum
of …….

-7

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

- capital expenditure

127) Expenditure on scientific research is in the section ……..

14
- sec 35

128) If an assesses earns rent from a sub-tenant in respect to tenanted property let
out as a residence, the said rent is …………………..

- Taxable as income from other sources

129) Mr. R owns a house. The Municipal value of the house is ` 50,000. He paid `
8,000 as local taxes during the year. He uses this house for his residential purposes
but lets out half of the house @ ` 3,000 p.m. The annual value of the house is
………...

-16,000

130) The Gross annual value of the property is depends upon the ……………….

- Municipal Valuation

- Standard rent

- Fair rent

131) Rent from vacant plot of land is assessible under the head …………………

- Income from Other Source

132) When the portion of the house is self-occupied for the full year and portion is
self-occupied for the whole year, the annual value of the house shall be determined
by …………..

- The full annual value of the house the proportionate annual value of self-occupied
portion for the whole year shall be deducted

133) If fair rent is not gives, then assume ………… as fair rent.

- actual rent

134) An individual is considered as an owner of the house property for the purpose
of charging tax to …………………..

– all of the above

15
135) Interest on capital, borrowed on 10.10.2000, for self-occupied property is
deductible up to a maximum amount of ………………...

- 1,50,000

136) An assesses, after sale of house property, receiving arrears of rent (is/is not)
chargeable to tax; the same computed in the stipulated manner, is chargeable to tax
as ……………...

-Either (a) or (b)

137) Subletting is assessible under the head …………………

- Income from Other Source

138) If the assesses let out the building or staff quarters to the employee of
business, the rent collected from such employees is assessable as income from
……………...

- Other Sources

139) Assessment year is the period of 12 months commencing from …………….

Every year.

- 1st April

140) When the income earned in an year is taxed in the same year, it is called
…………………..

- Accelerated Assessment

141) Gratuity is defined as per section ………..

- 10(10)

142) Bonus paid by the employer to the employee is …………

- Fully Taxable

143) The highest Administrative Authority for Income Tax in India is............

- CBDT

16
144) Payment made by an employer to employee monthly, other than salary is
called ………….

- Allowances

145) Salary is defied as per section ……….

- 17(1)

146) Income exempted from tax are stated in the section……. Of Income Tax Act.

- 10

147) Gratuity received by a government employee is .......................

- Fully exempted

148) Is exempted from income tax.

- Dividend from Indian company

149) The income received and accrued outside India from a business controlled or
profession set up in India, the tax incidence in case of resident is ………………..

- Taxable

150) A government employee received salary Rs.120,000 and entertainment

allowance Rs.10,000 during the previous year. He spent Rs.6000 on entertainment.
He is entitled to deduction u/s 16(ii) :

- 5000

151) Rule explain the taxation of HRA

- 2A

152) A person is Non-resident if he fails to fulfil.....................

- at lest one of the basic conditions

153) The following is not taxable as income under the head “Salaries”:
- Commission received by a full-time director

17
154) State which of the following income are exempted?
- Foreign Allowance

155) The interest on loan paid by the Government of India to a non-resident

outside India is ……………….. in India.
- Not taxable
156) Deduction from gross Total income is allowed under Sec. 80C up to lower of
the Qualifying amount or a maximum of.

- Rs. 1,00,000

157) Under Section 15 of Income Tax Act, the salary due in previous years and
even if it is not received is ………………………...

- Taxable

158) The entertainment tax allowed as a deduction under Section 16 of Income Tax
Act is the least of ………………………….

- 20% of basic salary of the individual

159) Income accrued outside India and received outside India is taxable in case of
………………………….

- Resident and ordinary resident (ROR)only

160) If the employee receives retirement gratuity from more than one employer, he
can claim exemption in respect of ……………………

- Both employer

161) The assesses can claim relief under for arrears or advance salary.

Section 89(1)

162) The income of previous year is chargeable to tax in the ……………………...

- Immediately succeeding assessment year

163) An employee is deemed as specified employee if he is a director in the

company or has substantial in the company or his chargeable salary per annum
exceeds.

18
- rs. 50,000

164) Interest for pre-acquisition period is deductible in Installments

- 5

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

- annual value

166) Annual value is defined as per section …………..

- Section 23(1)

167) If an employer transfers second hand motor car to the employee, the
perquisite is valued at …………………………………….

- Actual costless depreciation @20% for every completed year under SLM method

168) The following conditions must be satisfied to charge the rental income under
the head Income of House Property:

- The property should consist of any buildings or lands

- The asssessee should be one of the property

- The property should not be used by the owner for the purpose of
businessorprofessional purpose

169) Any benefits attached to an office or position in addition to salary or wages is

called ……………..

- Perquisites

170) A sum equal to 30% is allowed as deduction from the annual value as
………………

- Standard Deduction

171) Employer provides a car (below 1.6 ltr capacity) along with a driver to X
partly for official and partly for personal purpose. The expenses incurred by the

19
company are: running and maintenance expenses – ` 32,000 and driver’s salary – `
36,000 . Taxable value of perquisite is ……………………….

- 32,400

172) In case of disputed ownership, income from HP is chargeable in the hands of

…………

- Recipient of income

173) What is expected rent?

- municipal value and standard rent

174) Deduction allowed from annual value is …………………...

- all of the above

175) Any payments made outside India and TDS is not paid, then it is …………

- Disallowed

176) Mr. Shushant is the owner of a house, the details of which are given below
the gross annual value would be ……………... Municipal value ` 36,000 Actual
rent ` 32,000 Fair Rent` 36,000 Standard Rent` 40,000

- 36,000

177) If an assesses earns rent from a sub-tenant in respect to tenanted property let
out as a residence, the said rent is …………………..

- Taxable as income from other sources

178) An individual who transfers house property without an adequate

consideration to his owner spouse or to minor child is called as ………………….

- Deemed Owner

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

………………..

- Written down value of the machinery

20
-Market price of the machinery

180) Identify the correct head

- Profit and Gains from business and profession

181) Interest on loan for self-occupied house taken before 1st April, 1999 will be
allowed up to ……………………...

- 30,000

182) Which of the following is not a case of deemed ownership of house property?

- Co-owner of a property

183) Income tax rates are fixed in……………..

- Finance Act

184) The minimum exceptional limit of income is……………….

- 2,50,000

185) CBDT is control by …………………………………..

- Central Government

186) Foreign allowance is a …………….

- Fully Exempted Allowance

187) HRA is ………………..

- Partly Taxable

188) Education allowance is exempted for ……..

- Two persons

189) Income received in India whether occurred in India or outside India, the tax
incidence in case of resident is …………………………...

- Taxable as per slabs

21
190) The Payment of Gratuity Act came into force in ……………………..

- 1972

191) In case of Tax free salary, .................

- Tax is to be paid by employer

192) Compensation received on voluntary retirement is given by

……………………. of Income Tax Act,1961.

- Section10(10C)

193) Encashment of earned leave is given by ……………………… of Income

TaxAct, 1961.

- Section 10(10AA)

194) Interest on loan taken for which all purposes are deductible from annual
value?

- All of the above

195) What is expected rent?

- Municipal value of Fair value whichever is higher subject to standard rent

196) Business can be defined as per section ……….

- 2 (13)

197) Interest on delayed payment of VAT is …………..

- Allowed

198) Income from property held under trust for charitable or religious purposes is
………….

- Exempted from tax

199) Income from illegal business is …………

- Taxable

22
200) Expenditure incurred on exempted income is …………. as deduction.

- Not Allowed

201) When an URPF is recognized, the balance so transferred is called ………….

- Transferred Balance

202) Who is assessee in case of a HUF?

- Karta

203) Which of the following is not included in salary income.

- Commuted pension

204) Transport allowance given by the employer to the employee is exempt up to

………..

- Rs.1600p.m

205) The family pension received by the family members of armed forces after
death of employee is ……………………………….

- Exempted after fulfilling of certain conditions

206) The value of Interest free concessional loans to employees is determined on

the basis of lending rates of ..................... for the same purpose.

- S.B.I

207) Dearness allowance is taxable in the hands of.................

- All employees

208) For claiming the deduction for unrealised rent, the assessee must satisfy
……………..

- Rule 4

209) If the house remains vacant for the whole year, annual value will be
…………..

23
- Nil

210) Children education allowance is exempt up to per month per child for two
children

- Rs.100

211) Any rent or revenue derived from land which is situated in India and is used
for agricultural purpose is ……………………...

C) Exempted from tax

24