Income Tax Law And Practice Set -2

income tax law and practice mcq
Quiz 1 2 3 4 5 6 7 8

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

View Answer
(B) Agricultural 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.

View Answer
(C) A capital receipt. 

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.

View Answer
(A) Goods sold for cash.

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.

View Answer
(B) A revenue receipt.

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.

View Answer
(A) Capital receipt. 

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.

View Answer
(C) A salary 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

View Answer
(A) 182 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.

View Answer
(A) Capital loss.

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.

View Answer
(A) a revenue loss.

Question 10. Who among the following may be “not ordinarily resident” ___________.

(A) Hindu Undivided Family.

(B) Association of persons.

(C) Company.

(D) Partnership firm.

View Answer
(A) Hindu Undivided Family.

Question 11. Agricultural income in Pakistan is assessable for ______________.

(A) Not taxable

(B) Non-resident

(C) Not Ordinarily Resident

(D) Resident

View Answer
(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

View Answer
(C) Remuneration received by a partner

Question 13. Section ___________ of the Income Tax Act deals with exempted incomes.

(A) 80

(B) 10

(C) 7

(D) 2

View Answer
(B) 10 

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

View Answer
(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

View Answer
(B) indefinite 

Question 16. The periodic payment of money for the past service is known as ____________.

(A) Leave salary

(B) Commuted pension

(C) Pension

(D) Gratuity

View Answer
(C) Pension

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.

View Answer
(A) At the time it is received

Question 18. Pension is taxable under ___________ head.

(A) other sources

(B) Capital gains

(C) House property

(D) Salary

View Answer
(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

View Answer
(B) Profits and gains of business or profession

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

View Answer
(A) Income from other sources

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.

View Answer
(A) a revenue receipt in the hands of employee

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.

View Answer
(B) Commission to employees to achieve sales Targets.

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

View Answer
(A) Income from other sources

Question 24. Interest on capital paid by the firm to its partners is allowed up to ____________.

(A) 16%

(B) 15%

(C) 12%

(D) 6%

View Answer
(C) 12% 

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

View Answer
(B) W D V D.
Quiz 1 2 3 4 5 6 7 8