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    Chapter 3 MCQs On Classification of Income

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    Rajni Kumari
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    Chapter 3 MCQs On Classification of Income

    Uploaded by

    Rajni Kumari
    8 views4 pages
    MCQs

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    Chapter 3 MCQs on Classification of Income

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    MCQs

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    8 views4 pages

    Chapter 3 MCQs On Classification of Income

    Uploaded by

    Rajni Kumari
    MCQs

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    CA Final Direct Tax Laws –MCQ on Classification of Income

    MCQ on Classification of Income

    1. Under the Income-tax Act, 1961, 'notional profit' from speculative business is -
    A. Taxable under the head 'income from profits and gains of business and profession
    B. Taxable under the head 'income from other ' sources'
    C. Taxable either as income from other sources or as income from profits and gains of
    business and profession
    D. Not taxable.

    2. Transaction in which a contract for the purchase or sale of any commodity including stocks and
    shares is periodically or ultimately settled otherwise than by the actual delivery or transfer of
    the commodity or scrips is known as :
    A. Wagering transaction
    B. Speculative transaction
    C. Deemed Speculation business
    D. None of these

    3. Under the head 'profits and gains of business or profession', the method of accounting that
    should be followed by an assessee is ____________
    A. Cash system only
    B. Mercantile system only
    C. Hybrid system only
    D. Cash system or mercantile system only

    4. Income is divided in ___________ heads of Income.


    CA Final Direct Tax Laws –MCQ on Classification of Income
    2

    A. 4
    B. 5
    C. 6
    D. 3

    5. Income includes -
    A. Profits or Gains
    B. Capital gains
    C. Lottery winnings
    D. All of the above

    6. The term' income' includes the following types of incomes -


    A. ' Legal
    B. Illegal
    C. Legal and illegal both
    D. None of the above,

    7. In case the Key man insurance policy is taken in name of any other person any sum received on
    its maturity by such person shall be taxable under the head -
    A. Salaries
    B. Profits & Gains of Business or Profession
    C. Capital Gains
    D. Income from Other Sources

    8. Method of Accounting is not relevant for –


    A. Salaries
    B. Income from House Property
    C. Capital Gains
    D. All of the above
    CA Final Direct Tax Laws –MCQ on Classification of Income
    3

    9. The Central Government has notified Income computation and disclosure standards for
    computing income under the head Profits and Gains of Business and Profession - .
    A. 2
    B. 5
    C. 8
    D. 10

    10. Director sitting fees will be Chargeable Under which head?


    A. Income from house property
    B. Income from other sources
    C. Income from PGBP
    D. Income from Capital gain

    11. Rental income of house property shall be taxable under which head, if house property is used by
    assessee for own business and profession
    A. Income from house property
    B. Income from other sources
    C. Income from PGBP
    D. Income from Capital gain

    12. Rental income from the business of leasing out properties would be taxable under the
    head_______
    A. Income from house property
    B. Income from other sources
    C. Income from PGBP
    D. Income from Capital gain

    13. franchise fee received by an assessee in tourism business, against special rights given to
    franchisees to undertake hotel business in assessee’s property is taxable under the head _____
    A. Income from house property
    B. Income from PGBP
    C. Income from Capital gain
    CA Final Direct Tax Laws –MCQ on Classification of Income
    4

    D. Income from other sources

    14. Interest income earned on share application money deposited with a bank for a specified period
    in accordance with statutory requirement becomes taxable in A.Y. in which allotment is
    completed or in the year of accrual?
    A. In A.Y in which allotment is completed
    B. In the year of accrual
    C. Both in A.Y in which allotment is completed and in the year of accrual
    D. Either in A.Y in which allotment is completed or in the year of accrual

    Answer Key

    Question
    Number Answer
    1 Not taxable.
    2 Speculative transaction
    3 Cash system or mercantile system only
    4 5
    5 All of the above
    6 Legal and illegal both
    7 Income from Other Sources
    8 All of the above
    9 10
    10 Income from Other sources.
    11 Income from PGBP
    12 Income from PGBP
    13 Income from PGBP
    14 In A.Y in which allotment is completed

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