Q. If a resident individual earns income from a foreign source, how is it taxed in India?
A.
Only the foreign income is taxed
B.
Only the Indian income is taxed
C.
Both Indian and foreign income are taxed
D.
No tax is applicable
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Solution
Both Indian and foreign income are taxed in India for a resident individual.
Correct Answer:
C
— Both Indian and foreign income are taxed
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Q. If a taxpayer's residential status is 'Resident and Ordinarily Resident', which of the following incomes is taxable?
A.
Income earned in India
B.
Income earned outside India
C.
Both A and B
D.
None of the above
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Solution
Both income earned in India and income earned outside India are taxable for a Resident and Ordinarily Resident.
Correct Answer:
C
— Both A and B
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Q. In the context of income tax, what does 'taxable income' refer to?
A.
Total income before deductions
B.
Total income after deductions
C.
Income from exempt sources
D.
Income from capital gains only
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Solution
Taxable income refers to total income after deductions.
Correct Answer:
B
— Total income after deductions
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Q. What is the maximum deduction available under Section 80C for investments in specified financial instruments?
A.
Rs. 1,50,000
B.
Rs. 2,00,000
C.
Rs. 50,000
D.
Rs. 1,00,000
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Solution
The maximum deduction available under Section 80C for investments in specified financial instruments is Rs. 1,50,000.
Correct Answer:
A
— Rs. 1,50,000
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Q. What is the penalty for late filing of income tax returns in India?
A.
Rs. 1,000
B.
Rs. 5,000
C.
Rs. 10,000
D.
No penalty
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Solution
The penalty for late filing of income tax returns can be up to Rs. 10,000 depending on the delay.
Correct Answer:
C
— Rs. 10,000
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Q. What is the residential status of an individual who has stayed in India for 120 days during the current financial year and 365 days in the preceding four years?
A.
Resident and Ordinarily Resident
B.
Non-Resident
C.
Resident but Not Ordinarily Resident
D.
Not Applicable
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Solution
The individual is classified as Resident and Ordinarily Resident based on the given criteria.
Correct Answer:
A
— Resident and Ordinarily Resident
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Q. Which of the following deductions is available under Section 80D for health insurance premiums?
A.
Rs. 25,000 for self and family
B.
Rs. 50,000 for self and family
C.
Rs. 1,00,000 for parents
D.
All of the above
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Solution
All of the above deductions are available under Section 80D for health insurance premiums.
Correct Answer:
D
— All of the above
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Q. Which of the following is considered as a supply under GST?
A.
Sale of goods
B.
Transfer of property
C.
Sale of services
D.
All of the above
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Solution
All of the above are considered as supplies under GST.
Correct Answer:
D
— All of the above
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Q. Which of the following is included in the taxable income of an individual?
A.
Gifts received from relatives
B.
Income from salary
C.
Agricultural income
D.
Income from a hobby
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Solution
Income from salary is included in the taxable income of an individual.
Correct Answer:
B
— Income from salary
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Q. Which of the following is NOT a condition for being classified as a 'Resident' in India?
A.
Staying in India for 182 days or more in a financial year
B.
Staying in India for 60 days or more in a financial year
C.
Staying in India for 365 days or more in the last 4 years
D.
Being a citizen of India
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Solution
Being a citizen of India is not a condition for being classified as a 'Resident' in India.
Correct Answer:
D
— Being a citizen of India
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Q. Which of the following is NOT a type of income that is exempt from tax under Section 10 of the Income Tax Act?
A.
Agricultural income
B.
Interest on savings bank account
C.
Gratuity received by an employee
D.
Income from lottery
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Solution
Income from lottery is taxable and not exempt under Section 10 of the Income Tax Act.
Correct Answer:
D
— Income from lottery
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