## Tax Laws MCQ on Income from Salary | Tax Laws MCQs for CS Executive and Other Competitive Exams | Commerce Classes

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

## Tax Laws MCQ on Income from Salary

1. Which of the following is not correct about the approved superannuation fund?
(A) Employees’contribution qualifies for deduction under section 80C
(B) Any amount contributed by the employer is exempt from tax
(C) Interest on accumulated balance is exempt from income-tax
(D) Under some circumstances, payments from the fund are chargeable to income-tax

(B) Any amount contributed by the employer is exempt from tax

2. Ashraf is an employee of Moon Public School. His daughter, Zara, is studying in the said school at concessional fees of ₹ 600 p.m. (Actual fee: ₹ 4,000 p.m.), Amount taxable in the hands of Ashraf will be
(A) ₹ 48,000
(B) ₹ 7,200
(C) Nil
(D) ₹ 40,800

Hint:
(4,000 – 600) × 12 = 40,800.
(D) ₹ 40,800

3. Kapil gets a salary of 712,000 p.m. and is provided with rent-free unfurnished accommodation at Pune (population 31 lakh). House is owned by the employer, the fair rental value of which is ₹ 1,400 p.m. House was provided with effect from 1st July 2020. Value of the prerequisite of rent-free accommodation will be:
(A) ₹ 21,600
(B) ₹ 10,800
(C) ₹ 16,200
(D) ₹ 12,600

Hint:
12,000 × 9 × 15% = 16,200
(C) ₹ 16,200

4. Ashok took an interest-free loan of ₹ 15,000 from B Ltd. (the employer). Assuming that the market rate of interest on the similar loan is 10%, the taxable value of the prerequisite in the hands of Ashok will be:
(A) ₹ 150
(B) ₹ 1,500
(C) Nil
(D) None of the above

Hint:
A loan of up to ₹ 20,000 is exempt. No interest on it is taxable.
(C) Nil

5. Akash is entitled to get a pension of ₹ 6,000 per month from a private company. He gets 60% of the pension commuted and receives ₹ 3,60,000. He also receives ₹ 2,00,000 as gratuity from the same employer. Taxable portion of commuted value of pension will be:
(A) ₹ 1,60,000
(B) Nil
(C) ₹ 3,60,000
(D) ₹ 60,000

(A) ₹ 1,60,000

6. During the previous year 2020-21, Barun received a watch worth ₹ 20,000 from his employer. The taxable value of the watch will be
(A) ₹ 20,000
(B) ₹ 15,000
(C) Nil
(D) None of the above

Hint:
A gift in excess of ₹ 5,000 is fully taxable.
(B) ₹ 15,000

7. Chandan, a handicapped employee receives ₹ 3,000 p.m. as a transport allowance from his employer. His actual expenditure on transport is ₹ 2,000 p.m. The amount of transport allowance taxable under the head income from salaries will be—
(A) ₹ 18,000
(B) Nil
(C) ₹ 6,000
(D) ₹ 8,000

(B) Nil

8. The company has provided a laptop worth ₹ 50,000 to his employee for official as well as personal purposes. The taxable amount of perquisites will be:
(A) ₹ 5,000
(B) ₹ 25,000
(C) ₹ 10,000
(D) Nil

(D) Nil

9. Ms. Janhvi is provided with an interest loan by her employer for the purchase of a house. The value of the perquisite shall be:
(A) Simple interest computed at the rate charged by the Central Government to its employees on 1st April of the previous year
(B) Simple interest computed at the rate charged by State Bank of India on 1st April of the previous year
(C) Simple interest computed at the rate charged by National Housing Bank on 1st April of the previous year
(D) Simple interest computed at the rate determined by the employer on 1 st April of the previous year

(B) Simple interest computed at the rate charged by State Bank of India on 1st April of the previous year

10. Mr. Ashwin retired on 31.10.2020 after rendering 35 years of service in PLN & Co. Ltd. He received a gratuity of ₹ 18 lakhs. He is governed by the Payment of Gratuity Act, 1972. The monetary limit eligible for the exemption is:
(A) ₹ 20 lakhs
(B) ₹ 10 lakhs
(C) ₹ 3,50,000
(D) Nil

(A) ₹ 20 lakhs

11. Allowances and perquisites allowed to an employee for services rendered outside India are tax-free in case of –
(A) All types of employees
(B) Government employees only
(C) Non-government employees only
(D) None of the above

(B) Government employees only

12. Interest credited to the statutory provident fund shall be:
(A) Fully exempt
(B) Exempt up to 8.596 p.a.
(C) Fully-taxable
(D) Exempt up to 9.596

(A) Fully exempt

13. When interest on employee’s own contribution from the unrecognized provident fund is received, it is:
(A) taxable as income from other sources
(B) taxable as income from salary
(C) exempt from tax
(D) taxable if the interest exceeds ₹ 10,000

(A) taxable as income from other sources

14. Employer’s contribution to Recognized Provident Fund (RPF) in excess of 12% of salary income of an employee shall be treated as:
(A) Taxable income from salaries
(B) Deemed income from salaries
(C) Exempted income
(D) Income of other sources

(A) Taxable income from salaries

15. An assessee is not eligible to claim any relief under section 89 of Income-tax Act, 1961, when he is in receipt of income as arrears or in advance during the previous year from his employer:
(A) in respect of gratuity
(B) in respect of commutation of pension
(C) in respect of arrears of family pension
(D) in respect of amount received on voluntary retirement or termination of services

(D) in respect of amount received on voluntary retirement or termination of services

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