COMPLIED BY CA. RAJESH R. DALAL J.M.PATEL COLLEGE OF COMMERCE- INCOME TAX SEMESTER V- INTRODUCTION & DEFINITION. Objective Questions

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Multiple Choice Questions Objective Questions 1. The constitution of India empowers to levy tax on income (a) State Government (b) Central Government (c) Parliament (d) Finance Minister 2. Income tax is a tax on. (a) Income (b) Profit (c) Turnover (d) Expenditure 3. The Income Tax Act, 1961 has 298. (a) Sections (b) Sub-sections (c) Clauses (d) Sub-clauses 4. The makes the amendment in the form of omissions, insertions and substitutions in the Income Tax Act. (a) Finance Bill (b) Finance Minister (c) Finance Act (d) Parliament 5. The Income Tax Act extends to of India. (a) States (b) Union Territories (c) Citizens (d) Whole 6. Gross tax liability is calculated on. (a) Gross total income (b) Net taxable income (c) Income (d) Salary 7. The term HUF stands for. (a) Hindu divided family (b) Human undivided family (c) Hindu undivided family (d) Human divided family 8. Residential has nothing to do with. (a) Constitution (b) Citizenship (c) Censorship pg. 1 FOR INTERNAL PRACTICE USE ONLY : NOT PAID OR CHARGE ANY SEPARATE REMUNRATION

(d) Change 9. AOP is the abbreviation used for. (a) Association of Persons (b) Association of Professors (c) Association of Panchayats (d) Associations of Persons 10. AOP should consist of. (a) Individual only (b) Person other than individual also (c) None of the above (d) Both of the above 11. Body of individual should consist of. (a) Individual only (b) Person other than individual only (c) None of the above (d) Both of the above 12. Residential status of an individual depends on the stay of the assesses in India during the. (a) Calendar year (b) Accounting year (c) Assessment year (d) Previous year 13. A person by whom any tax is payable under Income Tax Act 1961 is called. (a) Individual (b) Tax receiver (c) Assesse (d) None of the above 14. The financial year in which the income is earned is called as the. (a) Assessment year (b) Present year (c) Previous year (d) Current year 15. An Company is always resident in India. (a) Industrial (b) Individual (c) Indian (d) Investment 16. Income Tax Act extends to. (a) Whole of India (b) Whole of India except Jammu & Kashmir (c) India & Sir Lanka (d) None of these 17. A new business was set up on 15-11-2014 and it commended its business from 1-12-2014. The first previous year in this case shall be. pg. 2 FOR INTERNAL PRACTICE USE ONLY : NOT PAID OR CHARGE ANY SEPARATE REMUNRATION

(a) 15-11-2014 to 31-03-2015 (b) 1-12-2014 to 31-03-2015 (c) 2014 2015 (d) None of these 18. Shivaji University is assessable under the Income Tax Act as. (a) A undividual (b) An artificial juridical person (c) A local authority (d) None of these 19. Income Tax Act has schedules. (a) 23 (b) 14 (c) 298 (d) 40 20. 58(1)(A)(ii) is read as. (a) Section 58 schedules (1) clause (A) sub-clause (ii) (b) Section 58 clause (1) sub-section (A) schedule (ii) (c) Section 58 sub-section (1) clause (A) sub-clause (ii) (d) Section 58 sub-section (1) clause (A) sub-clause (ii) 21. In 59(3)(b)(iv), (b) is. (a) Section (b) Clause (c) Sub-section (d) Sub-clause 22. are definite, specific, complete and full. (a) Exhaustive definition (b) Inclusive definition (c) Sections (d) Clauses 23. A firm is regarded as a unit of assessment as per. (a) Income Tax (b) Partnership Act (c) Companies Act (d) Finance Act 24. is chargeable u/s 45. (a) Capital gains (b) Voluntary contribution (c) Capital gains (d) All of the above 25. Any sum of money received in excess of without consideration is chargeable to tax. (a) 5,000/- (b) 5,00,000/- (c) 50,000/- (d) 55,000/- pg. 3 FOR INTERNAL PRACTICE USE ONLY : NOT PAID OR CHARGE ANY SEPARATE REMUNRATION

26. Previous year can be of 12 months. (a) More than (b) Less than (c) Only (d) Any 27. Any sum received or receivable in cash or kind under an agreement for not carrying out an activity in relation to a business is called as. (a) Pin money (b) Mutual activity (c) No competition deal (d) Non-compete agreement 28. is expected to be periodical monetary return. (a) Salary (b) Profit (c) Income (d) Interest 29. are not taxable. (a) Losses (b) Personal gifts (c) Illegal income (d) Awards 30. received by wife is not taxable. (a) Pin money (b) Compensation (c) Gift (d) Salary 31. The term person includes (a) HUF (b) AOP (c) BOI (d) All of them 32. Partners are liable to pay tax on received from firm. (a) Salary (b) Profit (c) Income (d) Both (a) and (b) Fill in the Blanks 1. Income tax extends to of India. 2. Income tax is a tax on. 3. In all, there are numbers of sections under the Income Tax Act, 1961. 4. The rate of tax on income is decided every year by the. 5. Income Tax Act came into force from. 6. Constitution is the in India. pg. 4 FOR INTERNAL PRACTICE USE ONLY : NOT PAID OR CHARGE ANY SEPARATE REMUNRATION

7. The constitution of India empowers to levy tax on income. 8. Gross tax liability - = Net tax liability. 9. The finance bill is introduced by. 10. The Act provides for of the assesse. 11. Finance bill, once approved, becomes. 12. The on the total income is decided every year by passing the Finance Act. 13. The two types of definition are and. 14. A person by whom tax is payable under the Act is called. 15. Income Tax Act defines assessment to include. 16. Person includes a natural human being and also includes or a person of. 17. Previous year of a newly setup business can be of 12 months. 18. A period of 12 months commencing on 1 st day of April every year called an. 19. of the Income Tax Act, 1961 gives the definition of various terms. 20. provides scope for interpretation. 21. Income should be real and not. 22. Income can be on and basis. 23. Non-compete agreements are also called. 24. received by a professional sportsman is an income. 25. Loss is to be taken as. 26. gifts are not chargeable to tax. 27. Income is expected to be a. 28. is chargeable u/s 45. 29. A person by whom a tax is payable under the act is called. Match the Following Column 1 Column 2 1. Constitution of India (a) Income tax act 2. Central government (b) 1 st April 1961 3. Income Tax Act (c) Approves finance bill 4. Net tax liability (d) Introduce finance bill 5. Rate of tax (e) Parent law 6. Finance minister (f) Finance act 7. Parliament (g) Levies tax on income 8. Determination of total income (h) Gross tax liability - TDS Column 1 Column 2 1. Assessment year (a) F.Y. 2012-13 2. Assesse (b) Gift above 50,000 3. Previous year (c) 2013-14 4. Assessment (d) Person liable to pay tax 5. Income (e) Reassessment pg. 5 FOR INTERNAL PRACTICE USE ONLY : NOT PAID OR CHARGE ANY SEPARATE REMUNRATION

Column 1 Column 2 1. Company (a) Section 2 (8) 2. Capital Gain (b) Section 2 (24) 3. Assessment (c) Section 2 (34) 4. Assesse (d) Section 2 (45) 5. Income (e) Section 2 (17) 6. Assessment Year (f) Section 2 (31) 7. Previous Year (g) Section 2 (9) 8. Person (h) Section 2 (7) Complete Following 1. Income tax is extended to whole India. 2. Income tax is tax on tax. 3. Income tax in India is governed by the Income Tax Act 1961. 4. The constitution of India empowers Central Government to levy tax on income. 5. The Income Tax came into force from financial year 1962-63. 6. Gross tax liability is calculated on gross total income. 7. The Income Tax Act has 289 sections. 8. Finance bill becomes finance act after the assent of parliament. 9. The finance bill makes the amendment in the form of omissions, insertions and substitutions in the Income Tax Act. 10. The Income Tax Act is applicable to whole India. 11. The Finance minister introduces the finance bill in the parliament. 12. The rate of tax on the total income is decided every year by passing the finance act. 13. The Finance Act is substitute to Income Tax Act. True or False 1. Dharampur gram panchayat is a AOP. 2. AOP stands for association of panchayat 3. HUF stands for human undivided family 4. Thane Municipal Corporation is a local authority. 5. Previous year is always of 12 months. 6. Assessment year is always of 12 months. 7. Only individuals can be member of body of individuals 8. Gift received on occasion of marriage is always taxable income. 9. Every receipt is an income. 10. All person do not have to pay tax. 11. In assessment year, income of previous year is assessed. 12. Income can be in cash or kind 13. Pin money is taxable. 14. Income can be real or fictional. pg. 6 FOR INTERNAL PRACTICE USE ONLY : NOT PAID OR CHARGE ANY SEPARATE REMUNRATION

15. According to section 2(8), assessment include reassessment. 16. The definition of income is inclusive definition. 17. Reliance Industry Ltd. Is a person as per Income Tax Act 1961. 18. Income is calculated on the basis of receipt only. 19. Any income is receivable through unlawful means is not chargeable to tax. 20. Distribution of surplus arising from mutual activity is not chargeable to tax. pg. 7 FOR INTERNAL PRACTICE USE ONLY : NOT PAID OR CHARGE ANY SEPARATE REMUNRATION