Income Tax and Corporate Tax MCQ Questions and Solutions with Explanations

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-6 section-2

Long-term capital loss can be set-off from which of the following?

A) Short-term capital gain only B) Long-term capital gain only C) Income from business and profession D) Capital gain head of income

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Answer & Solution

Answer: Option B

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The maximum amount of exemption of compensation received at the time of voluntary retirement U/S 10(10C) of the Income Tax Act, 1961, is:

A) Rs. 1,00,000 B) Rs. 2,50,000 C) Rs. 5,00,000 D) Rs. 10,00,000

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Answer & Solution

Answer: Option C

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Which of the following statements are true about SAHAJ?

A) SAHAJ is applicable to an ordinarily Resident individual having salary or pension income or income from one house property (not a case of brought forward loss or loss to be carried forward) B) Alternatively, SAHAJ is applicable to income from other sources (not being lottery winnings and income from race horses and in come chargeable to tax at special rates) C) An individual who is a director in a company or has held equity shares of an unlisted company shall not be eligible to use ITR-1 D) All of the above

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Answer & Solution

Answer: Option D

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The monetary amount used to record inter-company transactions is called

A) exchange rate B) transfer price C) conversion rate D) incremental cost

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Answer & Solution

Answer: Option B

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Which of the following TAN represents the initial of the name of the TAN holder who can be a company, firm, individual, etc.?

A) Third alphabet B) Fourth alphabet C) Fifth alphabet D) None of the above

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Answer & Solution

Answer: Option B

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Tax planning is

A) ethical B) legal C) Both A and B D) None of these

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Answer & Solution

Answer: Option C

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Interest on capital paid by a firm to its partners, under the Income Tax Act, 1961, is allowed:

A) 6% B) 12% C) 15% D) 18%

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Answer & Solution

Answer: Option B

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If any expenditure is incurred by an Indian company wholly and exclusively for the purpose of amalgamation or demerger, the said expenditure is:

A) Not allowable as a deduction in computing profits and gains of business or profession B) Fully deductible as revenue expenditure in the year in which it is incurred C) Not deductible but is eligible to be treated as an intangible asset in respect of which depreciation can be claimed D) Allowed as a deduction over five successive previous year in which amalgamation or demerger takes place

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Answer & Solution

Answer: Option D

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Which of the following articles in a Double Taxation Avoidance Agreement is absolutely essential to prevent treaty shopping?

A) Most Favoured Nation Clause B) Non-Discrimination C) Limitation of benefits D) Residential status

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Answer & Solution

Answer: Option C

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Match the following countries with the types of Double Taxation Avoidance Agreement signed by India with them:

Country	Type of Agreement
a. Austria	1. Limited Agreement
b. Bahamas	2. Comprehensive Agreements
c. Lebanon	3. Comprehensive Agreements/Limited Multilateral Agreement
d. Sri Lanka	4. Tax Information Exchange Agreement

Choose the correct option from those given below:

A) a-4, b-2, c-1, d-3 B) a-2, b-4, c-1, d-3 C) a-2, b-4, c-3, d-1 D) a-1, b-2, c-3, d-4

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Answer & Solution

Answer: Option B

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