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WorksheetsTax Quiz 4
Total questions: 115
Worksheet time: 58mins
Which tax was introduced by the British government in 1935 as a source of revenue?
Income Tax
Sales Tax
Corporate Tax
Excise Duty
Who is regarded as the father of modern taxation and contributed significantly to tax theories?
Karl Marx
Adam Smith
David Ricardo
John Keynes
Which Mauryan ruler is credited with implementing an efficient tax collection system?
Ashoka
Chandragupta Maurya
Bindusara
Brihadratha
Which British-era tax was abolished post-independence in India?
Salt Tax
Land Revenue Tax
Excise Duty
Customs Duty
Which of the following tax-related policies of the British contributed to agrarian distress and became a factor in the Revolt of 1857?
Introduction of Income Tax Act, 1860
Increase in land revenue under the British system
Reduction of tariffs on Indian goods
Exemption of British officials from taxation
Which of the following is NOT a feature of direct tax?
It is progressive in nature
It is levied on individuals or organizations
It is passed on to consumers
It is governed by the Income Tax Act, 1961
Which of the following is a characteristic of indirect taxes?
Burden of tax falls on the person who earns income
It is collected directly from individuals
It is transferable from one person to another
It is levied on property ownership
What is the main purpose of levying direct taxes in an economy?
To encourage inflation
To redistribute wealth and reduce income inequality
To increase indirect tax collection
To increase exports
Under which section of the Income Tax Act is 'Income from Other Sources' taxed?
Section 50
Section 56
Section 80
Section 90
Which of the following incomes is taxable under 'Income from Other Sources'?
Salary income
Capital gains
Dividend income
Business income
Which of the following incomes is NOT classified under 'Income from Other Sources'?
Interest earned on bank fixed deposits
Rental income from property
Winning from lotteries
Gift received from a non-relative above ₹50,000
Interest received on which of the following is taxable under 'Income from Other Sources'?
Savings account
Fixed deposits
Post office savings
All of the above
Which of the following is NOT taxable under 'Income from Other Sources'?
Agricultural income
Lottery winnings
Dividend from foreign companies
Interest from unsecured loans
Which of the following statements is true about 'Income from Other Sources'?
It includes all sources of income not covered under other heads
Only business income is taxed under this head
Agricultural income is taxed under this head
It does not include dividend income
Which of the following expenses can an advocate claim as a deduction?
Rent of office space
Salaries paid to employees
Legal research expenses
All of the above
Which of the following incomes earned by an advocate is NOT taxable under 'Profits and Gains from Business or Profession'?
Consultation fees
Legal opinion fees
Rental income from house property
Appearance fees in courts
Which of the following incomes of an advocate is taxable under 'Income from Other Sources'?
Interest on Fixed Deposits (FDs)
Fees for legal opinions
Court appearance charges
Consultation fees from clients
Which of the following expenses can be claimed as a deduction by an advocate under Section 37?
Fees for legal journals and professional books
Traveling expenses for court visits
Telephone and internet expenses for professional use
All of the above
What is the primary difference between tax evasion and tax avoidance?
Tax evasion is legal; tax avoidance is illegal
Tax evasion involves hiding income; tax avoidance involves planning to reduce tax
Tax avoidance involves cash transactions; tax evasion is only online
There is no difference
Which of the following is an example of tax evasion?
Investing in tax-saving instruments under Section 80C
Not reporting rental income in tax returns
Claiming deduction for home loan interest
Setting up a trust to reduce tax liability
Tax avoidance is:
A criminal offence under Indian law
Ethically questionable but legal
Always illegal
A form of tax theft
Under which section of the Income Tax Act, 1961 are penalties for tax evasion imposed?
Section 80C
Section 23A
Section 270A
Section 10
Which of the following best defines tax evasion?
Paying taxes before the due date
Avoiding taxes through lawful means
Illegally not paying or underreporting taxes
Investing in foreign securities
Which case is considered a recent landmark tax case in India?
Vodafone International Holdings v. Union of India
McDowell & Co. Ltd. v. CTO
Union of India v. Azadi Bachao Andolan
CIT v. B.C. Srinivasa Setty
Which governmental body in India investigates serious cases of tax evasion?
NITI Aayog
Central Bureau of Investigation (CBI)
Central Board of Direct Taxes (CBDT)
Enforcement Directorate (ED)
Which of the following is an acceptable form of tax planning?
Hiding income to reduce tax
Creating fictitious expenses
Using deductions provided under law
Not filing a tax return
The penalty for under-reporting of income under Section 270A can be up to:
50% of the tax payable
20% of the tax payable
200% of the tax payable
10% of the tax payable
Which of the following best defines a sale in legal terms?
Temporary transfer of goods for free
Permanent transfer of ownership in exchange for money
Lease of goods for fixed time
Exchange of goods without money
Under Section 71B, loss from house property can be carried forward for:
20 years
8 years
Infinite
22 years
Long-term capital loss can be carried forward for how many years?
12 years
6 years
8 years
10 years
Which of the following losses has infinite carry forward period?
Normal business loss
Capital loss
Specified business Loss u/s 35AD
Speculative loss
What does the abbreviation 'OECD' stand for?
Organization for Economic Coordination and Development
Organization for Economic Co-operation and Development
Office of Economic Co-operation and Development
Organization of European Countries for Development
Which of the following is the primary legislation enacted in India to deal with undisclosed foreign income and assets?
Prevention of Money Laundering Act, 2002
Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015
Income Tax Act, 1961
Benami Transactions (Prohibition) Act, 1988
Black money refers to income:
Reported to the government and taxed
Earned through legal means and fully disclosed
Earned through legal or illegal means but not disclosed to tax authorities
Earned only from illegal sources
Under the CGST Act, 2017, what is the maximum imprisonment for committing certain specified offences involving tax evasion exceeding ₹5 crore?
3 years
5 years
7 years
10 years
Under the Income Tax Act, 1961, what is the maximum punishment for willful attempt to evade tax under Section 276C(1)?
3 years
5 years
7 years
10 years
Under the Black Money (Undisclosed Foreign Income and Assets) Act, 2015, what is the maximum punishment for wilful failure to disclose foreign assets?
3 years
5 years
7 years
10 years
Punishment for wilful failure to disclose foreign assets?
3 years
5 years
7 years
10 years
Under the Prevention of Money Laundering Act (PMLA), 2002, what is the maximum imprisonment prescribed for the offence of money laundering?
5 years
7 years
10 years
14 years
What does the abbreviation 'SCN' stand for in tax and legal proceedings?
Special Case Notification
Show Cause Notice
Statutory Compliance Notice
Standard Compliance Notice
Arrests under the Prevention of Money Laundering Act (PMLA) are made by:
GST Officers
Income Tax Department
Enforcement Directorate
Reserve Bank of India
Under the CGST Act, who is empowered to authorize the arrest of a person for offences under GST?
Income Tax Officer
Central Bureau of Investigation
Commissioner of GST
Enforcement Directorate
In Income Tax, an arrest for willful attempt to evade tax may result in prosecution under which court?
Civil Court
High Court
Magistrate's Court
Special Economic Offences Court
Which of the following agencies does not have power to arrest in tax-related cases?
GST Intelligence Wing
Enforcement Directorate
Income Tax Department (in certain cases)
National Company Law Tribunal
Under GST law, arrest without a warrant is permissible when the offence is classified as:
Compoundable offence
Civil wrong
Cognizable offence
Non-cognizable offence
In case of arrest under the Income Tax Act, who can grant bail to the arrested person?
Income Tax Officer
Civil Court only
Magistrate having jurisdiction
GST Commissioner
Under the Black Money Act, the offence of willfully attempting to evade tax is:
Cognizable and bailable
Non-cognizable and bailable
Cognizable and non-bailable
Non-cognizable and non-bailable
What was one of the major objectives of the 2016 demonetization policy?
Introduce new taxes
Promote cash-based economy
Eliminate black money, counterfeit currency, and curb terrorism financing
Increase interest rates
During a tax raid by authorities under the GST Act, a businessman is arrested for allegedly issuing fake invoices. He is not informed of the grounds of arrest, his family is not informed, and he is denied access to legal counsel. Which Supreme Court case ensures protection of his fundamental rights in such a situation?
D.K. Basu vs State of West Bengal
Vodafone vs Union of India
Puttaswamy vs Union of India
Lalita Kumari vs Govt. of U.P.
A GST officer receives credible information that a trader is issuing fake invoices without actual supply of goods. A surprise inspection is conducted, and incriminating documents are found. What legal action can the officer take?
Only impose penalty
Arrest the trader under Section 69 of CGST Act
Ignore the issue
Send notice only
A businessman conceals ₹5 crore in sales in his GST return. After investigation, it's found he intentionally evaded tax. What is the maximum imprisonment under CGST Act?
3 years
5 years
7 years
1 year
An Income Tax officer finds ₹2 crore unaccounted cash during a search. The assessee fails to explain the source. What is the likely next step?
Confiscation and penalty
Seizure of cash and arrest
Immediate bail
No action required
A person obstructs tax officers during a GST raid and refuses to allow access to business records. What can the officers do legally?
File a civil suit
Arrest under Section 132 of CGST Act
Dismiss the search
Hand over case to SEBI
During an Income Tax raid, officers seize gold jewellery. The taxpayer fails to produce supporting documents. What does this amount to?
Routine audit
Tax evasion and undisclosed asset
Legal transfer
No consequence
A company books fake purchases to claim Input Tax Credit under GST. After inquiry, it is proven false. What is the possible consequence?
Refund of GST
Arrest and penalty under Section 132
Suspension of GSTIN only
Audit notice
A businessman is issued an arrest warrant under the Income Tax Act for willful evasion. Who can issue such a warrant?
Police Inspector
Income Tax Commissioner
GST Superintendent
Finance Minister
A person is found using a fake GST registration number and collecting tax fraudulently. What can be the consequence?
Compulsory registration
Fine only
Arrest and prosecution under Section 132
No action
During a GST investigation, a taxpayer absconds and avoids summons. What can the department do?
Ignore the case
Seek arrest warrant from Magistrate
Summon again only
Cancel PAN
A tax officer arrests someone under GST, but no arrest memo is prepared. Which constitutional principle is violated?
Article 370
Article 14
Article 21
Article 324
Which of the following is an essential condition before conducting a search under Section 67 of CGST Act?
Approval from High Court
Reason to believe that goods or documents are hidden
Newspaper notice
FIR from police
What is the maximum time an arrested person can be detained without being produced before a magistrate?
48 hours
24 hours
72 hours
96 hours
A taxpayer is arrested under GST and demands bail. Which court will hear his bail application if the offence is non-bailable?
Civil Court
Magistrate's Court
CIT
Income Tax Tribunal
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
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
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 exemption limit under the new tax regime for all individual taxpayer is not liable to pay tax in FY 2025-26, AY 2026-2027?
Rs 2,50,000
Rs 12,00,000
Rs 5,00,000
Rs 7,00,000
What is the exemption limit under the new tax regime for all individual taxpayer is not liable to pay tax in FY 2024-25, AY 2025-2026?
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
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. 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
Who was the chairman of the Direct Tax Administration Committee?
Shri K.C. Neogi
Shri N.N. Mehta
Shri Mahavir Tyagi
Shri A.K. Roy
Hostel expenditure allowance exemption limit is up to?
Rs. 500 per month per child for a maximum of 3 children
Rs. 300 per month per child for a maximum of 2 children
Rs. 1,000 per month per child for a maximum of 2 children
Rs. 500 per month per child for a maximum of 2 children
Income from agriculture in Bangladesh amounting to Rs.5,00,000, and received in India, is:
Exempt from tax in India.
Taxable in Bangladesh.
Taxable in India.
Exempt
What is the fine for failing to deduct TDS as per Section 271C?
₹10,000
100% of the tax not deducted
₹50,000
₹25,000
The Settlement Commission has the power to grant:
Tax refunds
Immunity from penalties and prosecution
Lower tax rates
Advance rulings
Hazlewood, an Australian cricketer, earned ₹10,000,000 from playing in the Indian Premier League (IPL) during FY 2023-24. How is this income treated for tax purposes in India?
Taxable in India
Taxable in Australia
Exempt from Tax under Income Tax Act
None of the above
Hazlewood, an Australian cricketer, earned ₹20,000,000 from playing for Australian Cricket board during FY 2023-24. How is this income treated for tax purposes?
Taxable in India because he is an IPL Player
Taxable in Australia
Exempt from Tax under Income Tax Act
None of the above
Which type of receipt is taxable under the Income Tax Act, 1961?
Capital Receipt
Revenue Receipt
Both Capital and Revenue Receipts
Neither Capital nor Revenue Receipts
Which article of the Indian Constitution states that no tax shall be levied or collected except by the authority of law?
Article 256
Article 265
Article 270
Article 280
Which schedule of the Indian Constitution distributes the power of taxation between the Union and the States?
Fifth Schedule
Sixth Schedule
Seventh Schedule
Eighth Schedule
Under which list of the Seventh Schedule does the power to levy income tax (except on agricultural income) fall?
Union List
State List
Concurrent List
Residuary Powers
Which article allows the Parliament to levy surcharge on certain duties and taxes for purposes of the Union?
Article 268
Article 269
Article 270
Article 271
Which type of tax is characterized by its impact and incidence falling on the same person?
Indirect Tax
Direct Tax
Service Tax
Excise Duty
Which of the following is an example of an indirect tax?
Income Tax
Wealth Tax
Goods and Services Tax (GST)
Corporate Tax
Which article provides for the constitution of a Finance Commission?
Article 270
Article 275
Article 280
Article 282
Which tax was subsumed into GST upon its introduction?
Income Tax
Wealth Tax
Service Tax
Corporate Tax
Which of the following is not a characteristic of a good tax system?
Equity
Certainty
Complexity
Convenience
Which article allows the imposition of taxes on professions, trades, callings, and employments?
Article 265
Article 276
Article 286
Article 289
Which body is responsible for recommending the distribution of taxes between the Centre and the States?
Planning Commission
Finance Commission
NITI Aayog
GST Council
Which tax is levied on the manufacture of goods within the country?
Customs Duty
Excise Duty
Service Tax
Sales Tax
Which article defines the term 'taxation' in the Indian Constitution?
Article 215
Article 366(28)
Article 280
Article 275
Which list in the Seventh Schedule contains subjects on which only the State Governments can levy taxes?
Union List
State List
Concurrent List
Residuary List
Which of the following is a direct tax?
Excise Duty
Customs Duty
Income Tax
Service Tax
Which tax is levied on the final consumption of goods and services?
Income Tax
Wealth Tax
Goods and Services Tax (GST)
Corporate Tax
Which article empowers the Parliament to levy taxes for the purpose of the Union?
Article 265
Article 270
Article 275
Article 282
Which article mandates that a Money Bill, including taxation laws, can only be introduced in the Lok Sabha?
Article 109
Article 110
Article 111
Article 112
What is the tax rate applicable under the Composition Scheme for manufacturers?
20 %
1%
22%
55%
As per the amendment to Section 22 of the CGST Act, what is the threshold turnover for a supplier in special category States to be liable for registration?
20 lakh rupees
10 lakh rupees
40 lakh rupees
50 lakh rupees
What does HSN stand for in the context of GST?
Harmonized System Number
Harmonized Sales Number
Harmonized System of Nomenclature
High Security Number
Under which section is the clubbing of income of a spouse covered?
Section 60
Section 64(1)(iv)
Section 61
Section 65
If a father transfers an asset to his minor child, income from it is clubbed in:
Minor child's income
Grandfather's income
Father's income
None
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
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
Which of the following is not a case of clubbing of income?
Transfer to minor married daughter
Transfer to major son
Transfer to spouse without consideration
Transfer to HUF by karta
Clubbing provisions are laid down under which sections of the Income Tax Act?
Sections 60 to 64
Sections 50 to 59
Sections 65 to 69
Sections 10 to 20
What does the abbreviation CII stand for in the context of Indian taxation?
Central Investment Index
Cost Inflation Index
Consumer Income Indicator
Capital Income Identifier
What does 'Income Escaping Assessment' refer to?
Income that is exempt from tax
Income declared by the taxpayer
Income that has not been assessed earlier by mistake or omission
Refund not claimed
What is meant by 'Best Judgment Assessment'?
Assessment based on court orders
Assessment when a taxpayer hides income
Assessment made by the officer using their judgment when the taxpayer does not cooperate
Final assessment after audit
What does a summary assessment check for?
Fraud
Mathematical errors and mismatches
Investment plans
Physical
