Taxation and Corporate Taxation MCQ Questions and Answers for Practice

1. What is the primary objective of taxation?

1. To increase income inequality
2. To increase the consumption of goods
3. To generate revenue for the government
4. To reduce inflation

2. What is the corporate tax rate for a foreign company in India?

1. 25%
2. 22%
3. 40%
4. 30%

3. The minimum alternate tax (MAT) is levied on:

1. Only foreign companies
2. Only government companies
3. All companies
4. Companies with zero tax liability

4. What is the due date for filing the corporate tax return in India for a company with a financial year ending on March 31st?

1. November 30th
2. December 31st
3. June 30th
4. September 30th

5. Which of the following is not a component of direct tax?

1. Wealth Tax
2. Sales Tax
3. Corporate Tax
4. Income Tax

6. What is the penalty for non-payment of taxes in India?

1. Only interest
2. Refund of taxes paid
3. No penalty
4. Interest and fines

7. Which of the following is not a type of corporate tax under the Income Tax Act, 1961?

1. Capital gains tax
2. Tax on income from house property
3. Income tax
4. Dividend distribution tax

8. What is the purpose of tax audits for companies in India?

1. To check the income of employees
2. To prepare the tax return
3. To reduce corporate taxes
4. To assess the accuracy of financial statements

9. Under which section can the Income Tax Department reassess the income of a company?

1. Section 143(3)
2. Section 10
3. Section 147
4. Section 115JB

10. Which tax is levied on the distribution of profits by a company to its shareholders?

1. Sales Tax
2. Service Tax
3. Corporate tax
4. Dividend Distribution Tax

11. Which of the following is a characteristic of a progressive tax system?

1. The tax rate increases as income increases
2. There is no tax based on income
3. The tax rate decreases as income increases
4. The tax rate is constant across all income levels

12. Which of the following is a direct tax?

1. Custom Duty
2. Sales Tax
3. GST
4. Income Tax

13. What is the current rate of GST for most goods and services in India?

1. 5%
2. 28%
3. 12%
4. 18%

14. Which of the following is a non-refundable tax credit under the Income Tax Act, 1961?

1. Foreign Tax Credit
2. Tax Deducted at Source (TDS)
3. Standard Deduction
4. Dividend Tax Credit

15. Which tax is levied on a company’s net income in India?

1. Excise Duty
2. Service Tax
3. VAT
4. Corporate Tax