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Income Tax and Corporate Tax MCQ Questions and Solutions with Explanations | Commerce

Income Tax and Corporate Tax MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Income Tax and Corporate Tax MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-3 section-5

Each section contains 100 MCQs on Income Tax and Corporate Tax .
21
Due to some dispute, the salary of a person is retained by an order of the court. Then, such salary will be
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Answer & Solution
Answer: Option B
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22
Due date of furnishing return of income in case of a non-working partner shall be . . . . . . . . of the assessment year, whether the account of the firm are required to be audited or not.
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Answer: Option A
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23
Match the following.
List-I List-II
a. When the assessee is in default or is deemed to be in default in making payment of tax, including the tax deducted at source 1. Section 271(1)C
b. Failure to pay the advance tax as directed by the assessing office 2. Section 273(1)
c. Concealment of particulars of income or furnishing of inaccurate particulars of income 3. Section 201(1)
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Answer: Option B
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24
Nature of tax planning includes
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Answer: Option D
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25
Under the Income Tax Act, 1961, depreciation on machinery is charged on:
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Answer & Solution
Answer: Option B
Solution:
Explanation:
The correct answer is B: Written down value of the machinery.

Let's break down why:
* Depreciation is the reduction in the value of an asset (like machinery) over time due to wear and tear or obsolescence.
* The Income Tax Act, 1961 provides rules for claiming depreciation to reduce your taxable income.
* Purchase Price: This is the original cost of the machinery, but depreciation isn't calculated on this every year. It's used initially.
* Market Price: This is what you could sell the machinery for *now*. This isn't used for calculating annual depreciation.
* Written Down Value (WDV): This is the original cost of the machinery *minus* the total depreciation that has already been claimed in previous years. Depreciation for the current year is calculated on this reduced value. So, WDV keeps changing every year.

Therefore, under the Income Tax Act, depreciation is charged on the Written Down Value of the machinery.
26
Which one of the following statement is true?
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Answer: Option A
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27
The benefits of debt financing over equity financing are likely to be highest in which of the following situations?
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Answer: Option A
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28
Capital gain on shifting of industrial undertaking from urban area to any special economic zone is
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Answer: Option B
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29
Short-term capital gain other than covered under section 111A is charged to tax at:
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Answer: Option D
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30
If an asset is used for scientific research related to the business of assessee, is used in business for sometime and then sold, the selling price is deducted from the WDV of the block of asset. This will reduce
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Answer: Option C
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