Tax Laws MCQ on Basic Concepts: Check the below Tax Laws MCQ on Basic Concepts with Answers Pdf free download. Tax Laws MCQ on Basic Concepts Questions for Tax Laws with Answers were prepared based on the latest exam pattern. We have provided Tax Laws MCQ on Basic Concepts with Answers to help students understand the concept very well. Students should practice Basic Concepts – CS Executive Tax Lawss MCQ Questions with Answers based on the latest syllabus.

Tax Laws MCQ on Basic Concepts

1. According to Section 2(24) definition of ‘income’ is:
(A) Inclusive
(B) Exhaustive
(C) Exclusive
(D) Descriptive 

2. The total income of Atul, a resident individual, is ₹ 4,90,000. The rebate allowable u/s 87A would be:
(A) ₹ 2,500
(B) Nil
(C) ₹ 12,000
(D) ₹ 12,500

3. An assessee, being an individual resident in India, is entitled to a deduction, from the amount of income tax on his total income which is chargeable for an assessment year, of an amount equal to 100% of such income tax or a lesser amount. The maximum amount of total income qualifying for such deduction and the maximum amount of deduction so available is:
(A) ₹ 5 lakh and ₹ 12,500 respectively
(B) ₹ 3.5 lakh and ₹ 2,500 respectively
(C) ₹ 5 lakh and ₹ 7,500 respectively
(D) ₹ 3.5 lakh and ₹ 5,000 respectively

4. As per Section 2(31) of the Income-tax Act, 1961, the following is not included in the definition of ‘person’: [Dec. 2014]
(A) An individual
(B) A Hindu undivided family
(C) A company
(D) A minor

5. An assessee, being an individual resident in India, is entitled to a deduction, from the amount of income tax on his total income which is chargeable for an assessment year, of an amount equal to 100% of such income tax or a lesser amount. The maximum amount of total income qualifying for such deduction and the maximum amount of deduction so available is:
(A) ₹ 5 lakh and ₹ 12,500 respectively
(B) ₹ 3.5 lakh and ₹ 2,500 respectively
(C) ₹ 5 lakh and ₹ 7,500 respectively
(D) ₹ 3.5 lakh and ₹ 5,000 respectively

6. Tax exemption limit for a resident senior citizen having age below 80 years is (between 60 to 80 yrs.): [Dec. 2014]
(A) Up to 2,00,000
(B) Up to 5,00,000
(C) Up to 1,80,000
(D) Up to 3,00,000 

7. For the AY2021 -2022, taxable income of A Ltd., a Domestic Manufacturing Company claiming benefit of Section 115BAB is ₹ 10,86,920. Its tax liability would be:
(A) ₹ 2,79,880
(B) ₹ 2,82,600
(C) ₹ 3,35,860
(D) ₹ 1,69,560 

8. AB & Co. received 7 2,00,000 as compensation from CD & Co. for premature termination of the contract of the agency. The amount so received is 
(A) Capital receipt and taxable
(B) Capital receipt and not taxable
(C) Revenue receipt and taxable
(D) Revenue receipt and not taxable 

9. The year in which the income is earned is known as:
(A) Previous year
(B) Financial year
(C) Both (A) and (B)
(D) None of the above

10. For a domestic company whose turnover never been above ₹ 400 Crore, the minimum amount of total income liable for a surcharge and the rate of surcharge applicable therein are:
(A) ₹ 10 Crore and 10% respectively
(B) ₹ 1 Crore and 7% respectively
(C) ₹ 1 Crore and 12% respectively
(D) ₹ 10 Crore and 5% respectively

11. HSK, an LLP had taken keyman insurance policy on the life of its managing partner. The policy got matured on 13th September 2020 and an amount of ₹ 75 lakh was paid by the insurers to the managing partner. The amount so received on maturity of the policy by the managing partner is:
(A) Fully exempt u/s 10 (10D)
(B) 50% of ₹ 75 lakh exempt
(C) ₹ 75 lakh taxable
(D) ₹ 25 lakh exempt and ₹ 50 lakh taxable

12. A new business was set up on 1st July 2020 and trading activity was commenced from 1st September 2020, the previous year would be the period commencing from:
(A) 1st April 2020 to 31st March 2021
(B) 1st July 2020 to 31st March 2021
(C) 1st September 2020 to 31st March 2021
(D) 1st October 2020 to 31st March 2021

13. Raghu traced a missing girl by spending ₹ 20,000. For this, he was awarded a sum of ₹ 1,20,000; In this case, the award is taxable to the extent of:
(A) ₹ 1,00,000
(B) ₹ 1,20,000
(C) ₹ 1,15,000
(D) Nil

14. X Marine Lines Inc., a Singapore company engaged in shipping business collected ₹ 150 lakhs towards carrying goods from Chennai Port. Its presumptive income chargeable to tax in India would be:
(A) ₹ 15 lakh
(B) ₹ 11.25 lakh
(C) ₹ 12 lakh
(D) Nil

15. Raman & Co., a partnership firm, received ₹ 5,00,000 from an insurance company under the keyman insurance policy consequent to the demise of partner Pramod. The amount of premium ₹ 2,30,000 paid earlier was claimed as a deduction under Section 37 by the firm. The amount received from the insurance company is:
(A) Tax-free under section 10(10D)
(B) Fully-taxable as income
(C) ₹ 2,70,000 is taxable
(D) ₹ 2,30,000 is taxable

16. Metro Ltd., a domestic company, is assessed with a total income of ₹ 11.25 Crore. The surcharge payable by the company shall be at the rate of:
(A) 2%
(B) 596
(C) 1096
(D) 1296

17. A municipal committee legally entitled to manage and control a municipal fund is chargeable to income-tax in the status of:
(A) Individual
(B) Association of persons
(C) Local authority
(D) Artificial juridical person

18. Under the Income-tax Act, 1961 the term ‘assessee’ means a person:
(A) Who is an assessee in default
(B) From whom tax is due
(C) Against whom any proceeding under the Act has been taken
(D) All of the above

19. Arul Industries got a waiver of Goods & Services Tax (GST) of ₹ 2,20,000 for the current financial year. The amount of waiver is
(A) Exempt income
(B) Capital receipt
(C) Revenue receipt
(D) None of the above

20. Normal rates of income tax are prescribed in the:
(A) Income-tax Act, 1961
(B) Income-tax Rules, 1962
(C) Finance Act of the current year
(D) CBDT circulars 

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