This quiz set is designed to help you learn and test your knowledge of Income Tax Law and Practice. The questions are based on the topics covered in the course.
Question 1. Income by way of rent of agricultural land is ______________.
(A) Casual income
(B) Agricultural income
(C) Income from other sources.
(D) Business income
Question 2. Receipt of amount on maturity of LIC Policy is _____________.
(A) A revenue receipt.
(B) A casual receipt.
(C) A capital receipt.
(D) None of these.
Question 3. Which of the following is not a capital receipt?
(A) Goods sold for cash.
(B) Lump sum received on sale of shares.
(C) Insurance claim received on machinery lost by fire.
(D) ‘Salami’ for settlement of Tenancy.
Question 4. Compensation for cancellation of a license by the government resulting in cessation of business is _______________.
(A) A casual receipt.
(B) A revenue receipt.
(C) A capital receipt.
(D) None of the above.
Question 5. The compensation received for loss of trading asset is a _____________.
(A) Capital receipt.
(B) A casual receipt.
(C) Revenue receipt.
(D) None of these.
Question 6. Salary received by the manager of an agricultural farm is ____________.
(A) A capital income.
(B) A business income.
(C) A salary income.
(D) An agricultural income.
Question 7. A citizen of India who goes abroad for the purpose of employment, he must stay in India at least for _____________ days to become a resident
(A) 182 days
(B) 180 days
(C) 162 days
(D) 90 days
Question 8. Loss due to fire of hired machinery is _____________.
(A) Capital loss.
(B) Capital expenditure
(C) Revenue loss.
(D) None of the above.
Question 9. Embezzlement of cash by a cashier is _____________.
(A) a revenue loss.
(B) a casual loss.
(C) a capital loss.
(D) None of these.
Question 10. Who among the following may be “not ordinarily resident” ___________.
(A) Hindu Undivided Family.
(B) Association of persons.
(C) Company.
(D) Partnership firm.
Question 11. Agricultural income in Pakistan is assessable for ______________.
(A) Not taxable
(B) Non-resident
(C) Not Ordinarily Resident
(D) Resident
Question 12. The following is not taxable as income under the head “Salaries”.
(A) Free accommodation is given to an employee
(B) Allowances received by an employee
(C) Remuneration received by a partner
(D) Commission received by a full-time director
Question 13. Section ___________ of the Income Tax Act deals with exempted incomes.
(A) 80
(B) 10
(C) 7
(D) 2
Question 14. Gratuity received by a government employee is ____________.
(A) Exempted up to Rs:1,00,000
(B) Fully-taxable
(C) Partly exempted
(D) Fully exempted
Question 15. Capital expenditure on scientific research which cannot be absorbed on account of insufficiency of profit in any accounting year can be carried forward for _____________.
(A) 12
(B) indefinite
(C) 8
(D) 16
Question 16. The periodic payment of money for the past service is known as ____________.
(A) Leave salary
(B) Commuted pension
(C) Pension
(D) Gratuity
Question 17. When a receipt is determined as Capital Receipt or Revenue receipt.
(A) At the time it is received
(B) When the received amount is used.
(C) While preparing final accounts.
(D) None of the above.
Question 18. Pension is taxable under ___________ head.
(A) other sources
(B) Capital gains
(C) House property
(D) Salary
Question 19. Salary received by a partner from the firm in which he is a partner is taxable under the head _________.
(A) Income from other sources
(B) Profits and gains of business or profession
(C) Capital gains
(D) Income from salary
Question 20. Family pension received by the widow of a deceased employee is taxable under the head ___________.
(A) Income from other sources
(B) Profits and gains of business or profession
(C) Capital gains
(D) Income from salary
Question 21. Salary paid by an employer out of capital will be ____________.
(A) a revenue receipt in the hands of the employee
(B) a casual receipt
(C) a capital receipt in the hands of the employee
(D) None of the above.
Question 22. Which of the following is not a capital expense?
(A) Expenses of promoting a company.
(B) Commission to employees to achieve sales Targets.
(C) Legal expenses for reduction of capital.
(D) Installation expenditure of plant of a company.
Question 23. Salary received by a Member of Parliament is taxable under the head ____________.
(A) Income from other sources
(B) Profits and gains of business or profession
(C) Capital gains
(D) Income from salary
Question 24. Interest on capital paid by the firm to its partners is allowed up to ____________.
(A) 16%
(B) 15%
(C) 12%
(D) 6%
Question 25. Under the Income Tax Act depreciation is allowed on ______________.
(A) Face value
(B) W D V D.
(C) Market price
(D) Purchase price