Tax Laws MCQ on Income from Business or Profession: Check the below Tax Laws MCQ on Income from Business or Profession with Answers Pdf free download. Tax Laws MCQ on Income from Business or Profession Questions for Tax Laws with Answers were prepared based on the latest exam pattern. We have provided Tax Laws MCQ on Income from Business or Profession with Answers to help students understand the concept very well. Students should practice  – CS Executive Tax Laws MCQ on Income from Business or Profession with Answers based on the latest syllabus.

Tax Laws MCQ on Income from Business or Profession

1. ‘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. A person carrying a specified profession will have to maintain books of account prescribed by Rule 6F of the Income-tax Rules, 1962 if gross receipts are more than ₹ 1,50,000 for
(A) All preceding 5 years
(B) Any of the preceding 5 years
(C) All preceding 3 years
(D) Any of the preceding 3 years

3. The rate of depreciation chargeable on temporary wooden structure for the AY 2021-22 is
(A) 25%
(B) 10%
(C) 40%
(D) 50%

4. Where the assessee does not himself carry on scientific research but makes contributions to an approved university, college, or institution, to be used for scientific research related or unrelated to the business of the assessee, then the amount of deduction from income of business shall be allowed on such contribution to the extent of
(A) 125%
(B) 150%
(C) 100%
(D) 200%

5. X, Manager of XYZ Ltd. since 2006 was terminated by the company on 1 st August 2020 by paying a compensation of ₹ 200 lakh. Such compensation is
(A) Chargeable under the Wealth-tax Act, 1957
(B) Not chargeable under the Income-tax Act, 1961
(C) Chargeable u/s 17(3)(z)(e)
(D) Chargeable u/s 28(n)(a)

6. Anuj owns 6 goods carriage vehicles {other than heavy goods vehicle) out of which 2 goods vehicles are acquired by him on 15th January 2021. His taxable income u/s 44AE will be
(A) ₹ 4,05,000
(B) ₹ 3,24,000
(C) ₹ 2,46,000
(D) ₹ 3,60,000 

7. In the case of companies, capital expenditure incurred for the purpose of promoting family planning amongst the employees would be deductible to the extent
(A) Equal to 1 /5th in each year for 5 years
(B) Equal to 1 / 6th in each year for 6 years
(C) Equal to 1 /4th in each year for 4 years
(D) Equal to 1 / 10th in each year for 10 years

8. U/s 40A(3) which of the following payment for an expenditure incurred would not be admissible as a deduction from business income
(A) ₹ 15,000 paid in cash to a transporter
(B) ₹ 5,000 paid in cash to a dealer in the morning and ₹ 5,000 paid in cash to the same dealer in the evening
(C) ₹ 40,000 sent through NEFT to the bank account of the dealer for goods purchased
(D) ₹ 19,000 paid through bearer cheque to the dealer for goods purchased

9. Under the Income-tax Act, 1961, which of the following outlays incurred by Sun Ltd. during the previous year ended 31st March 2021 will not be admissible as deduction while computing its business income
(A) Contribution to a political party in cash
(B) Interest on loan taken for payment of income-tax
(C) Capital expenditure on advertisement
(D) All of the above

10. A person carrying on profession will have to get his accounts audited before the specified date if gross receipts from the profession for a previous year or years relevant to the assessment year exceed
(A) ₹ 50 Lakh
(B) ₹ 10 Lakh
(C) ₹ 1 Crore
(D) ₹ 25 Lakh

11. Provisions of Section 44AD for computation of presumptive income are not applicable to
(A) Limited liability partnership
(B) Partnership firm
(C) Resident Hindu Undivided Family
(D) Resident individual

12. Which of the following business commenced during August 2016 will not be eligible for deduction u/s 35 AD?
(A) Setting-up and operating a cold chain facility
(B) A production unit of fertilizer in India
(C) Operating of a 1-star hotel in a village
(D) Building a hospital of 200 beds

13. If a block of assets ceases to exist on the last day of the previous year, depreciation admissible for the block of assets will be
(A) Nil
(B) 50% of the value of the block of assets on the first day of the previous year
(C) The total value of the block of assets on the first day of the previous year
(D) 50% of the value of the block of assets on the last day of the previous year

14. Where an asset used for scientific research for more than three years is sold without having been used for other purposes, then the sale proceeds to the extent of the cost of the asset already allowed as deduction under section 35 in the past shall be treated as
(A) Business income
(B) Long-term capital gain
(C) Short-term capital gain
(D) Exempted income

15. The maximum penalty leviable for failure to get accounts audited or to furnish report u/s 44AB is
(A) ₹ 75,000
(B) ₹ 1,00,000
(C) ₹ 1,50,000
(D) ₹ 3,00,000

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By Team Learning Mantras