SAMPLE QUESTIONS FOR UNIT -4

1. The number allotted by income tax authorities to assesses for identification and which should be
quoted in all documents and correspondence is.......................
A. I.D. No.
B. Register No.
C. Permanent Account Number (PAN).
D. License No. 19. Deduction of tax at source mad
Answer- C
2. Long-term Capital Loss can only be set off against _______________ .
A) Long-term capital loss
B) Short-term capital loss
C) Long-term capital gain
D) All of the above.
Answer-C
3. Loss from speculation business cannot be set off against profit from any non speculation
business, however_______________.
A) Loss from non-speculative business can be set off against speculation income
B) Loss from non-speculative business cannot be set off against speculation income
C) Profit from non-speculative business can be set off against speculation income
D) None of the above
Answer- A
4. In Income Tax Act, 1961, deduction under sections 80C to 80U cannot exceed ________.
A. Gross total income
B. Total income
C. Income from business or profession
D. Income from house property
Answer- A
5. Payment of LIC premium can be claimed as deduction u/s _______.
A) 80 C
B) 80 CCC
C) 80 D
D) 80 DD
Answer- A
6. Section 70-79 deals with _____.
A) Salary
B) Capital gain
C) Clubbing of income
D) Set off and carry forward
Answer- D
7. Income from horse race falls under the head _____.
A) Salary
 B) Other sources
C) Profession
D) Business
Answer- B
8. Deduction on interest on loan taken for studies fall under _____.
A) 80 CC
B) 80 C
C) 80 E
D) 80 D
Answer- C
9. A method adopted by a person to evade tax by transferring securities before the date of
payment of interest and then again reacquired the same is called:
A) Clubbing
B) Bond washing
C) Grossing
D) Carry forward
Answer- B
10. The amount of deduction under section 80DD regarding disability is.....................
A) Rs: 30,000
B) Rs: 50,000
C) Rs: 75,000
D) Actual expense.
Answer- C
11. Income from subletting is charged under the head:
A. Income from other sources
B. Income from house property
C. Capital gain
D. Income from business
Answer- A
12. Return filed after the due date is called:
a) Revised Return
b) Best return
c) Belated return
d) Defective return
Answer- C
13. Which among the following deduction is available only to disabled persons :
A. 80 C
B. 80 G
C. 80 Q
D. 80 U
Answer- D
14. Income from other sources is a.................
 A. Residuary head of income.
B. Major Head of income.
C. Income from a single source.
D. Constant and regular income
Answer- A
15. Deduction in respect of contribution to pension scheme of central government comes under
_______________ of Income Tax Act, 1961.
(a) Section 80CCD
(b) Section 80U
(c) Section 80EE
(d) Section 80G
Answer- A
16. Person with severe disability is allowed a fixed deduction of _______________.
(a) Rs.50, 000
(b) Rs.75, 000
(c) Rs.1, 25,000
(d) Rs.1, 00,000
Answer- C
17. On the occasion of marriage of Mr. Rahul, he received a gift of ` 75,000 from a relative. Such an
amount shall be _______________.
(a) Taxable
(b) Non-taxable
(c) Taxable subject to standard deduction of 50%
(d) None of the above
Answer- B
18. The carry forward of losses is permissible if the return of income for the year in which loss
incurred is _______________.
(a) Filled on time
(b) Not filled on time
(c) Filed in advance
(d) None of the above
Answer- A
19. Which is the charging section for income chargeable under the head Income from other
sources?
A. Section 15
B. Section 28
C. Section 22
D. Section 56
Answer- D
20. Maximum deduction under section 80C is Rs:
A. 1, 00,000
B. 70,000
 C. 1, 50,000
D. 50,000
Answer- C
21. A person may not have assessable income but may still be assessee.
a) True
b) False
Answer- A
22. The process of adjustment of loss from a source under a particular head of income against
income from other source under the same head of income is called_____.
(a) Inter-head adjustment
(b) Intra-head adjustment
(c) Carry forward of loss
(d) Clubbing of income
Answer- B
23. While making intra-head adjustment of loss, short-term capital loss cannot be set off against
long-term capital gain.
(a) True
(b) False
Answer- B
24. As per section 74A, loss arising from owning and maintaining race horses can be carried forward
to a maximum of ________ immediately succeeding the assessment year for which such loss
was first calculated
A. 4 years
B.6 years
C.8 years
D.indefintly
Answer- A
25. While making inter-head adjustment of loss, loss from business and profession cannot be set off
against income chargeable to tax under the head “Salaries”.
(a) True
(b) False
Answer- A
26. Loss under the head “Profits and gains of business or profession” can be carried forward even if
the return of income/loss of the year in which loss is incurred is not furnished on or before the
due date of furnishing the return, as prescribed under section 139(1).
(a) True
(b) False
Answer- B
27. Loss from house property, if not set off in the same assessment year, can be carried forward
upto
A.2 years
B.4 years
 C.6 years
D.8 years
Answer- D
28. Who incurs a loss of Rs.4,00,000 from his house property in the in the previous year 2019-20 will
be allowed to set off such loss from the gain or income on house property of Rs,3,50,000, to the
extent of
A.Rs.2, 00,000
B.3, 50,000
C.Rs.4, 00,000
D.Not allowed to be set off
Answer- B
29. Ram owner of a house property, incurs loss of Rs.5, 00,000 from such house property. He has
filed his return of loss u/s 139(1) after the due date. Will he be eligible to carry forward his loss
of Rs.5, 00,000?
A.Yes, he can carry forward loss of Rs.5, 00,000
B.No, he can't carry forward the loss of Rs. 5, 00,000
C.He can carry forward on Rs.2, 00,000
D.None of the above
Answer- A
30. Sunil has two businesses, Business trading of goods has a profit of Rs.5, 00,000 and the other
one, for purchase and sale of shares which is settled otherwise than by actual delivery, has a loss
of Rs, 2, 00,000. His taxable income would be
A Rs.2, 00,000
B Rs.5, 00,000
C Rs.3, 00,000
D Rs.7, 00,000
Answer- B
31. Loss under the head House Property is allowed to be set off from any other head
A. Maximum Upto Rs.1, 00,000
B. Maximum Upto Rs.2, 00,000
C.50% of the loss
D.Without any ceiling limit
Answer- B
32. Loss from speculation business ___ be adjusted against the income from non-speculation
business
A.can
B.cannot
C.Partly can
D.None of the above
Answer- B
33. The loss from a speculation business is allowed to be set off from the profits or gains of _____in
the same year and if losses cannot be set off fully, then such losses can be carried forward for a
maximum period of
A.Another speculation business, 4 years
B.Another speculation business, 8 years
C.Any other business, 4 years
D.Any other business, 8 years
Answer- A
34. Shane has a long term capital loss of Rs.5, 00,000 from Capital Asset A and he also has a short-
term capital gain of Rs.10, 00,000 from sale of Capital Asset B. His taxable income would be
A.Rs.10, 00,000
B.Rs.5, 00,000
C.Rs.13, 00,000
D.Rs.7, 00,000
Answer- A
35. In which of the following cases, would loss from one source, not be allowed to be set off against
other income falling under the same head of income?
A. Loss from a speculation business
B. Loss from the activity of owning and maintaining horse race
C.Loss from winnings from lotteries
D.All of the above
Answer- D
36. Saleem has a short-term capital loss of Rs.5, 00,000 from Capital Asset. A and he also has a
short-term capital gain of Rs.10, 00,000 from sale of Capital Asset B. His taxable income would
be
A.Rs.10, 00,000
B.Rs.5, 00,000
C.Rs.13, 00,000
D.Rs.7, 00,000
Answer- B
37. The loss arising from capital gain can be carried forward to a maximum of
A.4 years
B.6 years
C.8 years
D.indefinitely
Answer- C
38. Set of loss under the same head of income comes under section
A) Sec 60
B) Sec 70
C) Sec 80
D) None of the above
Answer- B
39. What are the provisions for minimum and maximum penalty in case of concealment of the
particulars of income or furnishing inaccurate particulars of income or concealment of fringe
benefits
A) 25000 & 45000
B)50000 & 80000
C)100000 & 150000
D)100% of tax sought to be evaded & 300% of tax sought to be evaded
Answer- D
40. Penalty in case of failure to keep or maintain books of accounts ,documents etc. as required
under section 44AA
A) 50000
B) 60000
C) 25000
D) 30000
Answer- C
41. What are the maximum imprisonment time in case of dealing with seized in contravention of
the order made by the officer conducting search
A) 2 years and fine
B) 3 years and fine
C) 5 years and fine
D) 1 year and fine
Answer- A
42. Where it is not possible or practicable to take physical possession of any valuable article or thing
and remove it to safe place due to its volume ,weight or other physical characteristics or due to
its being of an dangerous nature ,the authorized officer may serve an order on the owner (or the
person who is in immediate possession thereof)that he shall not remove part with or otherwise
deal with it ,except with the previous permission of the authorized officer and such action of the
authorized officer shall be deemed to be seizure of such valuable article or thing, What is this
concept called ?
A) Seizure
B) Survey
C) Deemed Seizure
Answer- C
43. Power of survey is given under which section?
A) 132
B) 133 A
C) 147
D) 154
Answer- B
44. Scheme of assessment in case of search for requisition is given under which section?
A)153 A
B) 153 B
 C) 131
D)132
Answer- A
45. Mention the section of best judgment assessment?
A) 144
B) 132
C) 148
D) 147
Answer- A
46. Mention the section of self assessment?
A) 144
B) 132
C) 148
D) 140A
Answer-D
47. Section 139(9) deals with?
A) Defective Return
B) Belated Return
C) Revised Return
D) Voluntary Return
Answer- A
48. For how many consecutive years deduction is available under section 80JJA?
A) 5
B) 3
C) 4
D) 8
Answer- A
49. Site Restoration fund deductible expense id mentioned under which section?
A ) 45
B) 33ABA
C) 32
D) 56
Answer- B
50. What is the rate of depreciation of Block of building -Residential buildings other than hotels and
Boarding houses :
A) 7%
B) 5%
C) 10 %
D) 20 %
Answer-B