COMPLIED BY CA. RAJESH R. DALAL J.M.

PATEL COLLEGE OF COMMERCE- INCOME TAX SEMESTER V-

INTRODUCTION & DEFINITION

Objective Questions
Multiple Choice Questions
1. The constitution of India empowers_______________ to levy tax on income
(a) State Government
(b) Central Government
(c) Parliament
(d) Finance Minister
2. Income tax is a tax on ______________.
(a) Income
(b) Profit
(c) Turnover
(d) Expenditure
3. The Income Tax Act, 1961 has 298 _______________.
(a) Sections
(b) Sub-sections
(c) Clauses
(d) Sub-clauses
4. The ______________ makes the amendment in the form of omissions, insertions and
substitutions in the Income Tax Act.
(a) Finance Bill
(b) Finance Minister
(c) Finance Act
(d) Parliament
5. The Income Tax Act extends to ______________ of India.
(a) States
(b) Union Territories
(c) Citizens
(d) Whole
6. Gross tax liability is calculated on _____________.
(a) Gross total income
(b) Net taxable income
(c) Income
(d) Salary
7. The term HUF stands for __________.
(a) Hindu divided family
(b) Human undivided family
(c) Hindu undivided family
(d) Human divided family
8. Residential has nothing to do with __________.
(a) Constitution
(b) Citizenship
(c) Censorship

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INTRODUCTION & DEFINITION

(d) Change
9. AOP is the abbreviation used for __________.
(a) Association of Persons
(b) Association of Professors
(c) Association of Panchayats
(d) Associations of Persons
10. AOP should consist of __________.
(a) Individual only
(b) Person other than individual also
(c) None of the above
(d) Both of the above
11. Body of individual should consist of __________.
(a) Individual only
(b) Person other than individual only
(c) None of the above
(d) Both of the above
12. Residential status of an individual depends on the stay of the assesses in India during the
__________.
(a) Calendar year
(b) Accounting year
(c) Assessment year
(d) Previous year
13. A person by whom any tax is payable under Income Tax Act 1961 is called __________.
(a) Individual
(b) Tax receiver
(c) Assesse
(d) None of the above
14. The financial year in which the income is earned is called as the __________.
(a) Assessment year
(b) Present year
(c) Previous year
(d) Current year
15. An Company is always resident in India __________.
(a) Industrial
(b) Individual
(c) Indian
(d) Investment
16. Income Tax Act extends to _________.
(a) Whole of India
(b) Whole of India except Jammu & Kashmir
(c) India & Sir Lanka
(d) None of these
17. A new business was set up on 15-11-2014 and it commended its business from 1-12-2014. The
first previous year in this case shall be _________.

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INTRODUCTION & DEFINITION

(a) 15-11-2014 to 31-03-2015

(b) 1-12-2014 to 31-03-2015
(c) 2014 2015
(d) None of these
18. Shivaji University is assessable under the Income Tax Act as _________.
(a) A undividual
(b) An artificial juridical person
(c) A local authority
(d) None of these
19. Income Tax Act has _________ schedules.
(a) 23
(b) 14
(c) 298
(d) 40
20. 58(1)(A)(ii) is read as ________.
(a) Section 58 schedules (1) clause (A) sub-clause (ii)
(b) Section 58 clause (1) sub-section (A) schedule (ii)
(c) Section 58 sub-section (1) clause (A) sub-clause (ii)
(d) Section 58 sub-section (1) clause (A) sub-clause (ii)
21. In 59(3)(b)(iv), (b) is _________.
(a) Section
(b) Clause
(c) Sub-section
(d) Sub-clause
22. _________ are definite, specific, complete and full.
(a) Exhaustive definition
(b) Inclusive definition
(c) Sections
(d) Clauses
23. A firm is regarded as a unit of assessment as per __________.
(a) Income Tax
(b) Partnership Act
(c) Companies Act
(d) Finance Act
24. __________ is chargeable u/s 45.
(a) Capital gains
(b) Voluntary contribution
(c) Capital gains
(d) All of the above
25. Any sum of money received in excess of _________ without consideration is chargeable to tax.
(a) 5,000/-
(b) 5,00,000/-
(c) 50,000/-
(d) 55,000/-

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INTRODUCTION & DEFINITION

26. Previous year can be of _________ 12 months.

(a) More than
(b) Less than
(c) Only
(d) Any
27. Any sum received or receivable in cash or kind under an agreement for not carrying out an
activity in relation to a business is called as _________.
(a) Pin money
(b) Mutual activity
(c) No competition deal
(d) Non-compete agreement
28. __________ is expected to be periodical monetary return.
(a) Salary
(b) Profit
(c) Income
(d) Interest
29. __________ are not taxable.
(a) Losses
(b) Personal gifts
(c) Illegal income
(d) Awards
30. __________ received by wife is not taxable.
(a) Pin money
(b) Compensation
(c) Gift
(d) Salary
31. The term person includes
(a) HUF
(b) AOP
(c) BOI
(d) All of them
32. Partners are liable to pay tax on __________ received from firm.
(a) Salary
(b) Profit
(c) Income
(d) Both (a) and (b)

Fill in the Blanks

1. Income tax extends to _________ of India.
2. Income tax is a tax on _________.
3. In all, there are _________ numbers of sections under the Income Tax Act, 1961.
4. The rate of tax on income is decided every year by the _________.
5. Income Tax Act came into force from __________.
6. Constitution is the _________ in India.

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INTRODUCTION & DEFINITION

7. The constitution of India empowers ________ to levy tax on income.

8. Gross tax liability - __________ = Net tax liability.
9. The finance bill is introduced by __________.
10. The Act provides for ________ of the assesse.
11. Finance bill, once approved, becomes _________.
12. The ____________ on the total income is decided every year by passing the Finance Act.
13. The two types of definition are __________ and __________.
14. A person by whom tax is payable under the Act is called _________.
15. Income Tax Act defines assessment to include __________.
16. Person includes a natural human being and also includes __________ or a person of
__________.
17. Previous year of a newly setup business can be of __________ 12 months.
18. A period of 12 months commencing on 1st day of April every year called an __________.
19. __________ of the Income Tax Act, 1961 gives the definition of various terms.
20. __________ provides scope for interpretation.
21. Income should be real and not _________.
22. Income can be on _________ and __________ basis.
23. Non-compete agreements are also called __________.
24. __________ received by a professional sportsman is an income.
25. Loss is to be taken as __________.
26. __________ gifts are not chargeable to tax.
27. Income is expected to be a __________.
28. __________ is chargeable u/s 45.
29. A person by whom a tax is payable under the act is called __________.

Match the Following

Column 1 Column 2
1. Constitution of India (a) Income tax act
2. Central government (b) 1st April 1961
3. Income Tax Act (c) Approves finance bill
4. Net tax liability (d) Introduce finance bill
5. Rate of tax (e) Parent law
6. Finance minister (f) Finance act
7. Parliament (g) Levies tax on income
8. Determination of total income (h) Gross tax liability - TDS

Column 1 Column 2
1. Assessment year (a) F.Y. 2012-13
2. Assesse (b) Gift above 50,000
3. Previous year (c) 2013-14
4. Assessment (d) Person liable to pay tax
5. Income (e) Reassessment

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INTRODUCTION & DEFINITION

Column 1 Column 2
1. Company (a) Section 2 (8)
2. Capital Gain (b) Section 2 (24)
3. Assessment (c) Section 2 (34)
4. Assesse (d) Section 2 (45)
5. Income (e) Section 2 (17)
6. Assessment Year (f) Section 2 (31)
7. Previous Year (g) Section 2 (9)
8. Person (h) Section 2 (7)

Complete Following
1. Income tax is extended to whole India ___________.
2. Income tax is tax on tax __________.
3. Income tax in India is governed by the Income Tax Act 1961 __________.
4. The constitution of India empowers Central Government to levy tax on income __________.
5. The Income Tax came into force from financial year 1962-63 __________.
6. Gross tax liability is calculated on gross total income __________.
7. The Income Tax Act has 289 sections __________.
8. Finance bill becomes finance act after the assent of parliament.
9. The finance bill makes the amendment in the form of omissions, insertions and substitutions in
the Income Tax Act __________.
10. The Income Tax Act is applicable to whole India __________.
11. The Finance minister introduces the finance bill in the parliament __________.
12. The rate of tax on the total income is decided every year by passing the finance act __________.
13. The Finance Act is substitute to Income Tax Act __________.

True or False
1. Dharampur gram panchayat is a AOP.
2. AOP stands for association of panchayat
3. HUF stands for human undivided family
4. Thane Municipal Corporation is a local authority.
5. Previous year is always of 12 months.
6. Assessment year is always of 12 months.
7. Only individuals can be member of body of individuals
8. Gift received on occasion of marriage is always taxable income.
9. Every receipt is an income.
10. All person do not have to pay tax.
11. In assessment year, income of previous year is assessed.
12. Income can be in cash or kind
13. Pin money is taxable.
14. Income can be real or fictional.

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INTRODUCTION & DEFINITION

15. According to section 2(8), assessment include reassessment.

16. The definition of income is inclusive definition.
17. Reliance Industry Ltd. Is a person as per Income Tax Act 1961.
18. Income is calculated on the basis of receipt only.
19. Any income is receivable through unlawful means is not chargeable to tax.
20. Distribution of surplus arising from mutual activity is not chargeable to tax.

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