Sample Questions: Section I: Subjective Questions 1. Define the terms, Assessment Year and Previous Year. 2. Explain the concept of short term and long term capital assets. 3. Which books of account should be maintained under "Maintenance Of Accounts - Section 44AA"? 4. Define the term relative under IT Act. 5. Define the terms municipal value, fair rent and standard rent. 6. As per the provisions of Section 17(1) of the Act, salary is defined to include which items? 7. Name any five tax authorities in India. 8. Define the term person under IT Act. Section II: Objective Questions Multiple Choice Single Response 1. A partnership firm is considered as "nonresident". 1] Control MGMT is within India 2] Control mgmt. is outside India 3] Control mgmt. is in the state 4] Control mgmt. is in metropolitan city 2. Interest on notified capital investment bonds and relief bonds is exempt in the hands of 1] Individual 2] Company 3] Firm
4] AOP 3. For claiming exemption, an assessee should enclose a certificate of a 1] Financial Accountant 2] Chartered Accountant 3] Cost Accountant 4] Company Secretary 4. Perquisite provided is taxable in all cases for 1] Rent free accommodation 2] Provision of medical facility 3] Amount spent on training of workers 4] Refreshments provided 5. Salary does not include 1] Wages 2] Any annuity 3] Any gratuity 4] Profits of business 6. In case of disputed ownership, who will be the owner? 1] Owner himself 2] Tenant 3] Owner or Tenant 4] A person who receives the income 7. Insurance Companies are regulated by the provisions of which Act? 1] Company Act 2] Insurance Regulatory & Development Authority 3] Income Tax Act 4] Insurance Act
8. In case of loan taken for higher education, deduction is allowed only in case of which assessee? 1] Individual Only 2] Hindu Undivided Family Only 3] Company Only 4] Firm Only 9. In case of insolvency of partnership, loss is borne by the partners in which ratio? 1] In the profit sharing ratio 2] In the ratio of capital 3] Equally 4] Depends on the partnership deed 10. Firms are required to pay tax at 1] Floating rate 2] Flat rate 3] Floating or Flat rate 4] Both Multiple Choice Multiple Response 11. The Depreciation indicates reduction in the value of asset due to which of the following factors? 1] Time factor 2] Use factor 3] Obsolescence factor 4] Break down factor 12. Intangible Assets include 1] Patents, Copy-rights 2] Trade Marks 3] Licenses Franchise 4] Plant, Furniture 13. The term Owner under the House Property Act includes
1] Individual, H.U.F. 2] Firm, A.O.P. 3] Company Co-Op society 4] Only Individual 14. Agricultural Income in India means income from 1] land situated in India 2] land used for agricultural purposes 3] land on which agricultural operations are performed 4] land situated outside India 15. Deemed owner of property includes 1] Holder of impartible estate 2] Member of Co-Op society 3] Transfer by spouse to children 4] Owner himself 16. For the purpose of income tax, FTZ includes 1] Kandla FTZ 2] Madras EPZ 3] Cochin ETZ 4] Bombay EPZ 17. Municipal tax includes 1] Water Tax 2] State Education Cess 3] Scavering Tax 4] Gift Tax 18. Intangible Assets include 1] Patents, Copy-rights
2] Trade Marks 3] Licences Franchise 4] Plant, Furniture Fill in the Blanks 19. In case of loan taken for higher education, deduction shall be allowed for assessment years. 1] 4 2] 5 3] 6 4] 8 20. The company that is merged is called. 1] Amalgamating Company 2] Amalgamated Company 3] Merged Company 4] Amalgamatory Company 21. Expenditure incurred for shifting the registered office is. 1] Revenue Expenditure 2] Capital Expenditure 3] Deferred Revenue Expenditure 4] Casual Expenditure 22. In Medical insurance premium deduction permitted is actual paid or, whichever is less. 1] Rs. 5000 2] Rs. 7000 3] Rs. 10000 4] Rs. 12000
23. In case of medical treatment, deduction allowed is amount paid, whichever is less. 1] Rs. 20000 2] Rs. 30000 3] Rs. 40000 4] Rs. 50000 24. The assessee carrying on profession is required to get accounts audited if gross receipts exceeds 1] Rs. 25,00,000 2] Rs. 20,00,000 3] Rs. 30,00,000 4] Rs. 40,00,000 25. Loss from Non Speculative business may arise due to. 1] Loss under head House Property 2] Loss under head Business 3] Loss from Other Sources 4] Unabsorbed Depreciation 26. Enquiry before assessment cannot be done without prior approval of. 1] Additional Commissioner 2] Deputy Commissioner 3] Joint Commissioner 4] Assistant Commissioner 27. Index Number is notified by the. 1] State Government 2] Central Government 3] Central Board of Direct Taxes 4] Finance Act
28. Cost of Inflation Index is the Inflation Index Number for as base year. 1] 1971-72 2] 1981-82 3] 1991-92 4] 2001-02 State True or False 29. If payment is made from salary for a charitable purpose, no TDS is allowed. 30. Domestic Company means an Indian Company. 31. The loss incurred can be set off to reduce the Gross Total Income. 32. Unexplained expenditure, which is treated as deemed income, shall not be deducted under any head. 33. Expenses incurred before the setting up of the business are not allowed as business expenditure. 34. No tax is payable on anticipated profits. 35. The loss incurred can be set off to reduce the Gross Total Income. 36. Capital assets include only fixed, immovable and tangible assets. 37. On the date of acquisition, asset may or may not be of capital nature. 38. Deduction in case of donation for scientific research or rural development is allowed to all. Match the Following 39. 1] Annual Return 1] Form no 24 2] Tax Deduction Account No. 2] Section 203A 3] Maintain Books of Accounts 3] Section 44 AB 4] Inter Source Adjustments 4] Section 70 5] Section 205 A 6] Form no 26 40. 1] Annuity 1] Yearly Grant 2] Commuted Pension 2] Lump-sum Payment 3] Rebate 3] Section 88 4] Specified Employee 4] Director of a company
5] Section 80 6] Half Yearly Grant 41. 1] Defective Return 1] Annexure in the return of income not duly filled 2] Powers of Assessing Officer 2] Powers are given to Assessing Officer to search or scrutinize the filed return 3] Returns by political parties 3] Filed by CEO of the political party 4] Appeal 4] To be filed with High Court 42. 1] Short Term Capital Gain 1] More Tax 2] Capital Assets 2] Jewellery 3] The cost of Inflation Index Year 3] 1981-82 4] Base Year 4] Index no. 100 5] Filed by Director of the political party 6] To be filed with Sessions Court 5] Stock in Trade 6] 2001-02