Tax Planning and Management MCQs Quiz Multiple Choice Questions & Answers

1. ..............is a casual income

1. Interest received
2. Dividend income
3. Person received
4. Winning from lotteries

2. ..............is the implementation of the plan of tax

1. Tax evasion
2. Tax avoidance
3. Tax management
4. None of these

3. .............is exempted from income tax.

1. Interest from Indian company
2. Dividend from foreign company
3. Cooperative dividend
4. Dividend from Indian company

4. ..........refers to hedging of tax?

1. Tax planning
2. Tax evasion
3. Tax management
4. Tax avoidance

5. .........deals with PAN

1. Section 140
2. Section 140 (A)
3. Section 140 (B)
4. Section 140 (C)

6. 80 ID deals with tax holiday for

1. Hospitals
2. Hotels
3. Natural gas
4. Eligible business

7. A company carry forward the eligible tax credit under MAT for a maximum of

1. Five assessment years
2. Eight assessment years
3. Ten assessment years
4. Twelve assessment years

8. A company in which the public are not substantially interested is closed

1. Open company
2. Closely held company
3. Limited company
4. None of these

9. A company in which the public is not substantially interested is known as

1. Domestic company
2. Foreign company
3. Widely held company
4. Closely held company

10. A company which is neither an Indian company not has made the prescribed arrangements for the declaration and payment of dividends within India is called

1. Domestic Company
2. Foreign Company
3. Public sector company
4. Provincial company

11. A person carrying not less than............of the voting power in a company is said to have substantial interest in the company.

1. 10%
2. 20%
3. 30%
4. 40%

12. A short term capital asset means a capital asset held by the assesse for not more than

1. 12 Months immediately preceding the month of its transfer
2. 24 Months immediately preceding the month of its transfer
3. 36 Months immediately preceding the month of its transfer
4. None of these

13. Alternate Minimum Tax shall not be applicable to a non-corporate assessee who has claimed any deduction under:

1. Sections 80-IA to 80RRB
2. section 80P
3. Section 10AA
4. Section 35AD

14. Amendments by the finance act are made applicable from

1. First day of next financial year
2. First day of same financial year
3. Last day of same Accounting year
4. None of the above

15. An assessee incurred expense of tax on non monetary perquisites of employees. Such expenditure shall be considered as

1. Revenue expenditure
2. Deferred revenue
3. Capital expenditure
4. Expressly disallowed

16. An assessee paid insurance premium against risk of damage or destruction of stocks or stores used for the purposes of his business or profession. Such expenditure shall be considered as

1. Revenue expenditure
2. Capital expenditure
3. Deferred revenue expenditure
4. Illegal expenditure

17. An assessee was engaged in the business of cattle rearing. He incurred a loss in respect of animals which were used for the purposes of his business (otherwise Such expenditure shall be considered as than as stock-in trade) and which have die

1. Revenue expenditure
2. Capital expenditure
3. Deferred revenue expenditure
4. Illegal expenditure

18. An assessee was engaged in the business of dealing in commodities. He had paid Commodities transaction tax of Rs.15,000 in respect of the taxable commodities transactions. Income arising of Rs 3,00,000 from such taxable commodities transactions was included in the income computed under the head Profits and gains of business or profession. Such expenditure of payment of Commodities transaction tax shall be considered as

1. Revenue expenditure
2. Capital expenditure
3. Speculative transaction expenditure
4. Illegal expenditure

19. Any company which has made the prescribed arrangements for the declaration and payment of dividends within India is called

1. Domestic Company
2. Non domestic company
3. Public sector company
4. Provincial company

20. Any corporation by or under any Central, State or Provincial Act or a Government Company as defined in the Companies Act is called

1. Public Sector Company
2. Joint company
3. Private Sector company
4. Provincial Company

21. As per section 2(31), the following is not included in the definition of person

1. An individual
2. A Hindu undivided family
3. A company
4. A minor

22. As per section 30, which expenditure incurred for a building used for the business or profession shall not be allowed as deduction?

1. Rent, rates and taxes
2. Insurance of building
3. Repairs of building
4. Capital expenditure

23. Assessee is having stock existing in the business. Valuation of stock will be at

1. Cost price
2. Market price
3. Cost or market price, whichever is less
4. Cost or market price, whichever is more

24. Availing tax holiday by a new industrial undertakings in backward areas is a case of

1. Tax evasion
2. Tax planning
3. Tax avoidance
4. Tax management

25. CBDT stands for

1. Central Bureau of Direct Taxes
2. Central Board of Direct Taxes
3. Citizens Board of Direct Taxes
4. Citizens Bureau of Direct Taxes

26. Clubbing of income means

1. Adding income of two persons
2. Inclusion of income of other person in assessees income
3. Total income of various heads
4. Collection of income

27. Company is defined under

1. Section 2 (17)of the Income Tax Act
2. Section 2 (32)of the Income Tax Act
3. Section 2 (14)of the Income Tax Act
4. Section 2 (12)of the Income Tax Act

28. Compliance of the legal requirements in connection with the tax is the essence of

1. Tax evasion
2. Tax planning
3. Tax avoidance
4. Tax management

29. Compliance with legal formalities and availing tax incentives are cases of

1. Tax evasion
2. Tax planning
3. Tax avoidance
4. Tax management

30. Concealment of income or false claims to reduce tax liability are cases of

1. Tax evasion
2. Tax planning
3. Tax avoidance
4. Tax management

31. Deemed dividend is defined in

1. Section 2 (22)(a)
2. Section 2 (21)(a)
3. Section 2 (23)(a)
4. Section 2 (22)(c)

32. Dividend from an Indian Company is

1. Fully Taxable
2. Partly Taxable
3. Fully Exempted
4. None of these

33. Donation is deductible under section

1. 80 C
2. 80D
3. 80 E
4. 80 G

34. Educational cess is levied in case of

1. Individual
2. HUF
3. Company
4. All assesses

35. Expenditure incurred by an hotelier on replacement of linen and carpets in his hotel. Such expenditure shall be considered as

1. Revenue expenditure
2. Deferred revenue expenditure
3. Capital expenditure
4. Illegal expenditure

36. Flat rate of corporate tax for a domestic company with annual turnover more than Rs250 crore is

1. 15%
2. 25%
3. 30%
4. 35%

37. Flat rate of corporate tax for a domestic company with annual turnover up to Rs250 crore is

1. 15%
2. 25%
3. 30%
4. 35%

38. Flat rate of corporate tax for a foreign company is

1. 15%
2. 25%
3. 30%
4. 40%%

39. Group of assets falling within a class of assets comprising of tangible & intangible assets is known as :

1. Group of assets
2. Block of assets
3. Set of assets
4. Cluster of assets

40. If the tax liability of a company is less than 18.5% of its book profits, the company is liable to pay MAT at the rate of

1. 15% of books profits plus Surcharge) if any) plus 4% HEC
2. 16% of books profits plus Surcharge)if any) plus 4% HEC
3. 16.5% of books profits plus Surcharge)if any) plus 4% HEC
4. 18.5% of books profits plus Surcharge(if any) plus 4% HEC

41. In accordance with the provisions of Section 17(1) of Income Tax Act, 1961, the term salary includes

1. Any annuity or pension
2. Any gratuity
3. Any fees, commission, perquisite or profits in lieu of or in addition to any salary orwages
4. All of the above

42. Income distributed by a fund other than a money market mutual fund or a liquid fund to an individual or HUF is subject to CDT at the rate of

1. 12.5% + Surcharge 10% + 4 % HEC
2. 15% + Surcharge 10% + 4 % HEC
3. 20% + Surcharge 10% + 4 % HEC
4. 25% + Surcharge 10% + 4 % HEC

43. Income distributed by a money market mutual fund or liquid fund is taxable @.........

1. 15% + Surcharge 10% + 4%HEC
2. 20% + Surcharge 10% + 4%HEC
3. 25% + Surcharge 10% + 4%HEC
4. 30% + Surcharge 10% + 4%HEC

44. Income from horse race falls under the head

1. Salary
2. Other sources
3. Profession
4. Business

45. Income tax rates are fixed in

1. Income tax Act
2. Finance Act
3. Income tax rules
4. Finance rules

46. Indexation is applicable to

1. Sale of short term capital assets.
2. Sale of long term debentures.
3. Sale of depreciable capital assets.
4. Sale of long term capital assets which are not depreciable assets

47. It is the device which satisfies the requirements of the law but not in accordance with the intentions of the law

1. Tax evasion
2. Tax planning
3. Tax avoidance
4. Tax management

48. Long term capital loss can be set off against

1. Long term capital loss
2. Short term capital loss
3. Long term capital gain
4. All of these

49. MAT Provisions are applicable to

1. Non domestic companies
2. Indian companies
3. Private companies
4. Every Company

50. Minors income is clubbed to

1. Fathers income
2. Mothers income
3. Fathers income or mothers income whichever is grater
4. Both mothers and fathers income