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Multiple Choice Questions and Answers on Income Tax Rate & Basic Concept of Income Tax

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Free download in PDF Tax Rate & Basic Concept of Income Tax Multiple Choice Questions and Answers for competitive exams. These short objective type questions with answers are very important for Board exams as well as competitive exams like UPSC, NDA, SSC etc. These short solved questions or quizzes are provided by Gkseries./p>

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(1) The period of 12 months commencing on the rt day of April every year is known as ____________ _
[A] Financial Year
[B] Assessment Year
[C] Previous Year
[D] Accounting Year
Answer: Assessment Year
(2) The charging section of the Income-tax Act, 1961, states that the income earned in a year is taxable in the next year. This is known as ______
[A] Principle of mutuality
[B] Previous year rule
[C] Financial year rule
[D] None of these.
Answer: Previous year rule

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(3) Income-tax in India is charged at the rates prescribed by -
[A] The Finance Act of the assessment year
[B] The Income-tax Act, 1961
[C] The Central Board of Direct Taxes
[D] The Finance Act of the previous year.
Answer: The Finance Act of the assessment year
(4) A new business was set-up on 1st July, 2018 and trading activity was commenced from 1st September, 2018, the previous year would be the period commencing from
[A] 1st April, 2018 to 31st March, 2019
[B] 1st July, 2018 to 31st March, 2019
[C] 1st September, 2018 to 31st March, 2019
[D] 1st October, 2018 to 31st March, 2019.
Answer: 1st April, 2018 to 31st March, 2019
(5) According to section 2(24) definition of 'income' is -------
[A] Inclusive
[B] Exhaustive
[C] Exclusive
[D] Descriptive.
Answer: Inclusive
(6) 'Income' under section 2(24) includes -

(i) The profits and gains of a banking business carried on by a co-operative society with its members.

(ii) Any advance money forfeited in the course of negotiations for transfer of capital asset.

Choose the correct option with reference to the above statements _

[A] Both (i) and (ii)
[B] Only (i)
[C] Only (ii)
[D] Neither (i) nor (ii).
Answer: Both (i) and (ii)
(7) Income includes -
[A] Profits and gains
[B] Profit in lieu of Salary
[C] Income from other sources
[D] All of the above
Answer: All of the above
(8) Income is divided in ___________ heads of Income.
[A] 4
[B] 5
[C] 6
[D] 3
Answer: 5
(9) Income includes -
[A] Profits or Gains
[B] Capital gains
[C] Lottery winnings
[D] All of the above
Answer: All of the above
(10) The term' income' includes the following types of incomes -
[A] Legal
[B] Illegal
[C] Legal and illegal both
[D] None of the above
Answer: Legal and illegal both

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