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WorksheetsIncome Tax Act Quiz
Total questions: 143
Worksheet time: 1hrs 12mins
Section 1 of the Income Tax Act deals with what?
Short title, extent, and commencement
Taxability of individuals
Residential status
Rates of income tax
Clubbing provisions are laid down under which sections of the Income Tax Act?
Sections 60 to 64
Sections 52 to 56
Sections 65 to 69
Sections 56 to 59
In case of revocable transfer, income is taxable in the hands of:
Transferee
Transferor
Trustee
None
Income of a minor child is not clubbed with parents if:
Child earns through own skill/talent
Income is less than ₹1,500
Child is married
Income is from mutual funds
Clubbing of income provisions are applicable when:
There is an intention to transfer income without transferring the asset
Transfer of income is revocable
Transfer is made to spouse/minor child
All of the above
Clubbing provisions are applicable in case of income of minor child under:
Section 64(1A)
Section 64(1B)
Section 64(1C)
Section 64(1D)
Under which section is the clubbing of income of a spouse covered?
Section 64(1)(iv)
Section 62(1)(iv)
Section 63(1)(iv)
Section 60(1)(iv)
Which landmark case defined tax as a compulsory exaction of money by a public authority for public purpose enforceable by law, and not a payment for services rendered?
Keshavananda Bharati v. State of Kerala (1973)
Commissioner HR & CE v. Lakshmendra (1954)
Minerva Mills Ltd. v. Union of India (1980)
Golaknath v. State of Punjab (1967)
Which article of the Constitution of India defines taxation as including the imposition of any tax or impost, whether general, local, or special, and states that tax shall be construed accordingly?
Article 265
Article 14
Article 366(28)
Article 370
Which year marked the introduction of the First Income Tax Act in India?
1961
1857
1950
1860
The Income Tax Act of 1961 was enacted to consolidate and amend the law related to which of the following?
Tax on Property
Tax on Expenditure
Tax on Income
Tax on Wealth
Who introduced the Income Tax Act in India for the first time?
Lord Curzon
Lord Dalhousie
Sir James Wilson
Lord Mountbatten
Income from Agriculture is exempt under which section of the Income Tax Act, 1961?
Section 2(1A)
Section 1(1)
Section 3
Section 10(1)
Which taxation method involves a constant tax rate regardless of income level, where the tax rate remains the same as income increases?
Progressive taxation
Regressive taxation
Proportional taxation
Disregressive taxation
In which taxation method does the tax rate decrease as income increases, making it more burdensome for lower-income earners?
Progressive taxation
Regressive taxation
Proportional taxation
Disregressive taxation
Who is the ultimate authority for implementing and amending the policies related to Direct Taxes in India?
Central Board of Direct Taxes (CBDT)
State Government
Union Parliament
Ministry of Finance
Which Indian constitutional article empowers the Union Government to levy taxes?
Article 226
Article 246
Article 245
Article 300A
The power to tax agricultural income lies with which level of government?
Central Government
State Government
Union Territories
Both Central and State Government
An 'Assessee' under the Income Tax Act refers to:
Any individual earning salary
Any person who is liable to pay tax
Only companies and firms
None of the above
The term 'Person' under Section 2(31) of the Income Tax Act includes:
Only individuals
Individuals, companies, and firms
Individuals, companies, firms, and HUFs (Hindu Undivided Families), BOI, AOP and Others
Only government bodies
The Financial Year in India starts on which date?
January 1
March 31
April 1
June 1
Previous Year under the Income Tax Act refers to:
The calendar year before the financial year
The financial year in which income is earned
The year of filing tax returns
None of the above
Which of the following best describes the Canon of Economy?
Taxes should maximize revenue for the government
Taxes should minimize the cost of collection
Taxes should be progressive
Taxes should be levied on luxury items
Mr. Kumar is a salaried employee. In September 2017, he purchased a house and sold the same in May 2023. Is this transaction considered short-term or long-term?
Short-term
Long-term
Short and Long term
None
Advocate Income is taxable under the head of ______?
Income from Salary
Capital Gains
Income from Other Sources
Income from Profession
The idea that taxes should not burden taxpayers beyond their ability to pay is part of which canon?
Canon of Convenience
Canon of Equity
Canon of Economy
Canon of Simplicity
R&OR stands for __________?
Resident and Other Resident
Registered and Ordinary Resident
Resident and Ordinarily Resident
Revenue and Ordinary Return
CBDT stands for ______?
Central Bureau of Direct Tax
Central Board of Direct Tax
Central Board of Direct Taxes
Central Bureau of Direct Taxes
TDS stands for ______?
Tax Deducted at Source
Total Direct Savings
Tax Deferred at Source
Tax Departmental Services
What does the Canon of Productivity emphasize?
Imposing many taxes with small revenues
Imposing fewer taxes that generate large revenues
Imposing taxes that are difficult to calculate
Imposing taxes that fluctuate frequently
Mr. Rupesh owns a house property. The Municipal value is ₹1,50,000, Fair Rent is ₹1,25,000, and Standard Rent is ₹1,45,000. It is let out throughout the previous year for ₹1,80,000. What is the Gross Annual Value (GAV) for the Assessment Year 2019-20?
₹1,50,000
₹1,45,000
₹1,80,000
₹1,25,000
The Canon of Elasticity is best represented by which of the following?
Taxes that remain fixed regardless of economic conditions
Taxes that can be easily adjusted based on revenue needs
A single flat tax rate for all citizens
Taxes that cannot be changed once imposed
Abbreviation of CIT is what?
Chief Income Tax
Commissioner of Income Tax
Central Income Tax
Country Income Tax
The net annual value of a house let out is ₹1,00,000. The amount of standard deduction allowed under Section 24(a) shall be _______________.
₹30,000
₹15,000
₹50,000
₹1,00,000
What is business?
Professional activity
Economic activity for profit
Hobby for leisure
Non-economic activity
The income that is received or accrued outside India and then remitted to India is taxable for:
Resident but not ordinarily resident
Resident and ordinarily resident
Non-resident
All residents
Income received in India, whether earned in India or abroad, is:
Always exempt from tax
Taxable in the hands of non-residents only
Always taxable in India
Taxable only if remitted
What is the significance of determining a person's residential status for income tax purposes?
To determine citizenship
To decide taxability
To determine employment status
To decide domicile
If an individual resides in India for a period of 59 days during the financial year, his status is:
Resident
Non-resident
Resident but not ordinarily resident
None of the above
Who is considered a Resident and Ordinarily Resident (ROR)?
A person who stayed in India for less than 182 days
A person who satisfies any one of the basic condition and meets additional criteria
A foreign national visiting India
A person living abroad
The residential status of a Hindu Undivided Family (HUF) depends on the residential status of which individual?
Head of the family
The eldest member
Karta (Manager) of the HUF
All members
An individual is considered 'Resident and Ordinarily Resident' if they have been a resident in India for how many out of the preceding 10 years?
2 years
5 years
7 years
9 years
Income of a non-resident from a business connection in India is:
Taxable only if received in India
Exempt from tax
Always taxable in India
Taxable only if accrued in India
Which of the following is not taxable in the hands of a non-resident?
Income earned from business in India
Salary earned from employment in India
Income from foreign countries
Royalty received from an Indian company
Which section deals with the 'Income from House Property'?
Section 22
Section 56
Section 10
Section 84
What is the specific charging section for 'Income from Salaries'?
Section 5
Section 56
Section 9
Section 17
Which section defines the term "Salary"?
Section 15
Section 16
Section 17
Section 18
What is meant by the "Place of Effective Management" in the context of a company's residential status?
Location where the company is registered
Place where management and commercial decisions are made
Country where the majority of shareholders live
Location of the company's branch office
Entertainment allowance in the Income Tax Act is covered under which section?
Section 16
Section 10
Section 24
Section 80C
HRA stands for what?
Hall Rent Allowance
House Rent Allowance
Housing Reimbursement Allowance
Housing Rent Account
Who is the Finance Minister of India?
Amit Shah
Piyush Goyal
Nirmala Sitharaman
Arun Jaitley
What determines the residential status of a firm or LLP for taxation purposes?
Where its partners reside
Where it is legally registered
Where its management and control are located
Its total revenue
Income from which of the following is not considered under the head 'Income from Salary'?
Gratuity
Pension
Agent remuneration
Fees
According to Section 15, which of the following is chargeable to income tax under the head 'Salaries'?
Salary paid after resignation
Arrears of salary paid in the current year
Salary paid by a former employer
All of the above
Standard Deductions under 'Income from House Property' are available for:
Repairs to the house
Home loan interest
Insurance premiums
Flat 30%
Income from 'House Property' includes:
Income from renting out a property
Income from business activities
Income from agricultural land
Income from selling shares
Income from which of the following is considered 'Income from Other Sources'?
Rent from property
Income from business
Interest on fixed deposits
Salary
In the case of 'Justice Deoki Nandan Agarwala vs Union of India,' which category was confirmed as taxable under 'Income from Salary'?
MLA's salary
Judge's salary
Agent's commission
Both a and b
House Rent Allowance (HRA) is exempt from tax under which section of the Income Tax Act?
Section 10(13A)
Section 80C
Section 24(b)
Section 16
For income to be classified under 'Profits and Gains of Business or Profession,' it must arise from:
Trade
Profession
Commerce
All of the above
Is Dearness Allowance (DA) fully taxable under the Income Tax Act?
Yes, DA is fully taxable
No, DA is fully exempt
DA is partially taxable based on certain conditions
DA is taxable only if not forming part of salary for retirement benefits
What is the standard deduction available for Income from House Property under Section 24 of the Income Tax Act?
10% of annual value
20% of annual value
30% of annual value
40% of annual value
What does NAV (Net Annual Value) represent in the context of Income from House Property under the Income Tax Act?
Gross rent received before deductions
The value of property after deducting municipal taxes
The market value of the property
The amount spent on maintenance of the property
Which of the following is considered a salary under Section 17(1)?
Advance of salary
Income from house property
Capital gains
Professional fees
If a house property is used for own business or business purposes, how its taxable?
Fully Taxable
Partly Taxable
Not Taxable
All of the above
Which of the following is not classified as 'business income'?
Income from trade
Income from personal property
Income from manufacturing
Income from commerce
Lottery is taxable under the head of what?
Salary
Other Sources
House Property
Capital Gains
To qualify as a profession under Law, an individual must acquire:
Specific knowledge
Professional experience
A degree from Law
Business skills
Which asset is considered a capital asset?
Personal clothes
Agricultural Produces
Stationaries
Gold bonds issued by the government
Which of the following is taxable under 'Income from Other Sources'?
Income from profession
Title winner of Big Boss
Rental income
Business profits
Standard Rent comes under which Act?
Companies Act
IT Act
Rent Control Act
GST Act
Gifts received, the value of which exceeds Rs. 50,000, are taxable under which head?
Income from Salary
Income from House Property
Income from Capital Gains
Income from Other Sources
What is fee?
A charge for a specific service
A penalty for late payment
A fine imposed by the government
A charge for non-compliance
What is the difference between 'Business and Profession'?
Profession is taxable, business is not
Business is for individuals, profession is for firms
Both are the same
Business is profit-oriented, profession is service-oriented
Winnings from horse races are categorized under which head?
Income from Salary
Income from House Property
Profits and Gains from Business and Profession
Income from Other Sources
The entertainment allowance is allowed as exemption, it's applicable to _______________ sector employees.
Private
Government
Public and Private
All sectors
The children education allowance, the amount exempted from taxable income is limited to ______________.
₹100 per child per month up to 2 children
₹200 per child per month up to 2 children
₹300 per child per month up to 2 children
₹400 per child per month up to 2 children
Income from which of the following is not covered under 'Income from Other Sources'?
Betting and gambling
Dividend income
Rental income
Gifts received
What is the duration for a capital asset to qualify as a short-term capital gain for equity shares under the Income Tax Act?
Less than 10 months
Less than 18 months
Less than 16 months
Less than 36 months
What constitutes 'perquisites' under Section 17(1)?
Salary
Allowances
Income from other sources
Benefits provided by the employer
What is the minimum holding period for a capital asset, such as immovable property, to qualify as a long-term capital gain under the Income Tax Act?
More than 10 months
More than 14 months
More than 36 months
More than 48 months
What does ICOI stand for in the context of capital gains?
Indexed Cost of Income
Initial Cost of Investment
Indexed Cost of Improvement
Investment Capital of India
What does ICOA stand for in the context of capital gains?
Indexed Cost of Acquisition
Income from Cost of Asset
Initial Capital of Asset
Indexed Capital of Acquisition
Under which head is black money taxable in India?
Income from Salaries
Income from House Property
Income from Other Sources
Income from Business or Profession
What is the primary objective of clubbing of income under the Income Tax Act?
To prevent tax evasion through manipulation of income
To increase tax rates
To simplify tax computation
To allow higher exemptions
In the case of a minor child, whose income is taxable?
The minor child
The parent whose income is higher
The parent whose income is lower
Both parents equally
If a gift is made to a son's wife, the income generated from that gift is:
Always taxable in the hands of the son's wife
Always taxable in the hands of the father-in-law
Taxable in the hands of the son
Taxable in the hands of the son's wife only if the income is from business activities
Which section of the Income Tax Act is related to residential status?
Section 2
Section 6
Section 10
Section 17
NRI stands for what?
Non-Refundable Income
Non-Resident Individual
Non-Resident of India
Non-Resident Investor
The company may have the residential status as what?
Resident or Non-resident
Resident only
Non-resident only
Domestic only
The total number of heads under the Income Tax Act is what?
3
4
5
6
Capital gain means what?
Profit from selling a capital asset
Income from salary
Income from business
Profit from services
What does 'Set-Off' refer to in the context of income tax?
Deducting income from tax
Adjusting losses against income within the same head
Carrying forward losses to the next year
Exempting certain types of income
Inter-head adjustments involve:
Adjusting losses from one head against income from another head
Carrying forward losses to the next year
Clubbing income from different heads
Exempting certain heads from tax
What is the maximum number of years for which losses under the head 'Business or Profession' can be carried forward?
5 years
8 years
10 years
12 years
Which type of loss cannot be set off against income under the head 'Salaries'?
Loss from house property
Short-term capital loss
Long-term capital loss
Loss from business
Which section provides for the set-off of losses against income under the same head?
Section 70
Section 171
Section 172
Section 173
What does intra-head adjustment refer to?
Adjusting losses from one head of income against income from another head
Adjusting losses within the same head of income
Adjusting current year's income against previous year's losses
Carrying forward losses to future years
Which of the following is an example of intra-head adjustment?
Adjusting a loss from business against salary income
Setting off a short-term capital loss against a short-term capital gain
Carrying forward a loss from house property to the next year
Setting off a loss from speculative business against business income
Which section of the Income Tax Act provides for deductions for donations made to charitable institutions?
Section 80C
Section 80D
Section 80G
Section 80E
No tax shall be levied or collected except by authority of law is mentioned in which Article?
Article 256
Article 265
Article 275
Article 300
Taxability of Dearness Allowance is ________?
Fully taxable
Fully exempt
Exempt up to a limit
Partially exempt
What does STCG stand for in the context of taxation?
Short-Term Capital Gains
Short-Term Credit Gains
Standard Tax Credit Gain
Special Term Capital Gain
The taxpayer's liability is determined with reference to his or her _______________ status.
Residence
Citizenship
Occupation
Age
Taxability of Agricultural Income under the Income Tax Act is _______.
Fully taxable
Partially taxable
Exempt
Zero-rated
The income of the previous year is chargeable to tax in the _______________.
Assessment Year
Current Year
Financial Year
Calendar Year
The salary of a Member of Parliament is taxable under the head ________.
Income from Salary
Income from Business
Income from House Property
Income from Other Sources
Which section of the Income Tax Act provides for deductions on premiums paid for Life Insurance Policies (LIC)?
Section 80C
Section 80D
Section 10(10D)
Section 80E
What does TCS stand for?
Tax Collected at Source
Tax Calculated at Source
Tax Credited at Source
Tax Computed at Source
What is the primary purpose TDS?
To simplify tax payments
To ensure that taxes are collected at the source of income
To provide tax exemptions
To refund excess tax paid
What is the term for the process where the tax department examines the tax returns filed by the taxpayer?
Adjudication
Assessment
Reconciliation
Verification
Which section of the Income Tax Act deals with penalties for failure to furnish returns, non-compliance with notices, and concealment of income?
Section 270
Section 271
Section 272
Section 273
What does ITAT stand for?
Income Tax Appeal Tribunal
Income Tax Appellate Tribunal
Income Tax Assessment Tribunal
Income Tax Advisory Tribunal
Which of the following principles is enshrined in Article 265 of the Indian Constitution?
The State shall provide free and compulsory education to children.
The State shall not discriminate against any citizen on the grounds of religion.
Every citizen shall have the right to equality before the law.
No tax shall be levied or collected except by authority of law.
What does Article 276 of the Indian Constitution address?
Prohibition of discrimination on grounds of religion
Expenditure of funds from the Consolidated Fund of India
Taxes on professions, trades, callings, and employments
The right to freedom of speech and expression
What is the primary objective of conducting a search under Section 132 of the Income Tax Act?
To assess the taxpayer's financial status
To recover the outstanding tax dues
To gather evidence of undisclosed income or assets
To provide tax advice.
What can be seized during a search operation under Section 132 of the Income Tax Act?
Only cash
Only documents
Cash, documents, and valuables
Only bank accounts
In case of seizure, what document is issued to the person from whose possession the items were seized?
A receipt for the items seized
A notice of demand
A summons for appearance
A notice of assessment
Which forum is the first level of appeal against an assessment order issued by an Assessing Officer?
Commissioner of Income Tax (Appeals)
Income Tax Appellate Tribunal (ITAT)
High Court
Supreme Court
In which court can a taxpayer appeal if they are dissatisfied with the order of the Income Tax Appellate Tribunal (ITAT)?
High Court
Supreme Court
District Court
Income Tax Appellate Tribunal (ITAT) itself
The house rent allowance (HRA) under the salary head of Income Tax Act is given by which section?
Section 10(13A)
Section 16
Section 24
Section 80C
Progressive tax is based on the principle higher the ______, higher the ______.
Income, tax
Consumption, tax
Profit, benefit
Value, cost
GAV stands for ______.
Gross Assessable Value
Gross Annual Value
General Annual Value
Government Annual Value
What is the rate of percentage for standard deduction in Income from House Property?
20%
25%
30%
50%
Rent received by the original tenant from the sub-tenant is taxable under the head ________.
Income from House Property
Income from Business
Income from Other Sources
Income from Capital Gains
Self-assessment means ________.
Evaluation done by a third party
Taxpayer calculates their own tax liability
Assessment conducted by a tax authority
Evaluation by an accountant
Section 132 of the Income-tax Act, 1961 empowers income tax authorities to:
Conduct a search and seizure of books of accounts, documents, cash, jewellery, and other assets
Assess income and impose penalties
Collect taxes and issue refunds
Conduct audits and reviews
What is the primary purpose of levying a cess in India?
To reduce the income tax rates for individuals
To fund specific government initiatives or programs
To provide a subsidy for certain products
To replace other forms of taxation
Which of the following cesses was introduced to fund Clean India initiatives in India?
Swachh Bharat Cess
SAH Cess
Education Cess
Infrastructure Cess
For FY 2025-26, what is the tax rate applicable to income between Rs 4,00,001 and Rs 8,00,000 in the new tax regime?
0%
5%
10%
15%
For FY 2025-26, what is the tax rate applicable to income between Rs 0 and Rs 4,00,000 in the new tax regime?
0%
5%
10%
15%
For FY 2025-26, what is the tax rate applicable to income above Rs 24,00,000 in the new tax regime?
0%
5%
20%
30%
What is the basic exemption limit under the new tax regime for all individual taxpayers in FY 2025-26?
Rs 2,50,000
Rs 12,00,000
Rs 5,00,000
Rs 7,00,000
For FY 2025-26, the highest surcharge rate under the new tax regime is applicable to individuals earning above Rs:
50 lakh
1 crore
2 crore
5 crore
Section 156 of the Income-tax Act, 1961 deals with:
Notice of demand.
Search and seizure.
Assessment procedures.
Penalties for default
ITAT stands for ______.
Income Tax Assessment Tribunal
Income Tax Advisory Tribunal
Income Tax Administrative Tribunal
Income Tax Appellate Tribunal
International taxation refers to the taxation of:
Domestic income
Cross-border transactions
Local businesses only
Tax on import duties
Calculate the Gross Annual Value from the following details: Municipal Value ` 45,000 Fair rental value ` 50,000 Standard Rent ` 48,000 Actual Rent ` 42,000.
45000
50000
48000
42000
Mr. Ram owns a house property. He lent it to Laxman at 10,000 per month. Laxman sublet it to Mr. Maruti on a monthly rent of 20,000. The rental income of Ram is taxable under the head:
Income from Salaries
Income from Other Sources
Income from House Property
Income from Business and Profession
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
40000
32000
36000
None of the above
Which of the following defines the 'Assessment Year'?
The year before the current financial year
The year in which income tax is assessed and paid
The year in which income is earned
The year after the previous year
If an individual resides in India for a period of 12 financial years, his status is:
Resident and ordinarily resident
Non-resident
Resident but not ordinarily resident
None of
Income from an asset transferred to son's wife is taxable in:
Son’s hands
Daughter-in-law’s hands
Transferor's hands
None
