Unit 1 (Chapter 1)
Introduction and Basic Concepts
A. Answer whether following statements are true or false
(i) Income tax is a direct tax.
Answer: Ture
(ii) Income tax is charged by the Central Government.
Answer: Ture
(iii) Tax on income is governed by Income Tax act, 1962.
Answer: False
(iv) Income-Tax is applicable India excluding the State of Jammu and Kashmir.
Answer: False
(v) All assessee are persons but all persons may not be assessee.
Answer: Ture
(vi) The year in which Income is earned is called 'Pervious year'.
Answer: Ture
(vii) Income-tax in a voluntary payment by various persons to the Government.
Answer: False
(viii)Income-tax is levied as per entry 82 of the Union List Under Seventh schedule of the constitution.
Answer: Ture
(ix) Income-tax in a indirect tax.
Answer: False
(x) In India, Custom duty is levied by State Government.
Answer: False
(xi) Income tax Rules 1962 are formed by the Income tax department.
Answer: False
(xii) In India, budget is presented every year by the prime minister.
Answer: False
(xiii) In India 'Central Goods and Service Tax' (CGST) is charged by the Central Government.
Answer: Ture
(xiv) Integrated Goods and Services Tax (CGST) is tax on sale of goods within a State.
Answer: False
(xv) The Central Government has the power to charged tax on agriculture income.
Answer: False
B. Fill up the blanks with appropriate words.
(i) _______ is the apex authority for overall administration of direct taxes.
Answer: Central Board of Direct Taxes,
(ii) _______ is the apex authority for overall administration of indirect taxes.
Answer: Central Board of Indirect Taxes and Customs
(iii) _______ Government has the authority to charge Income-Tax in India.
Answer: Central
(iv) Customs duty is levied by virtue of entity _______ of Union List of seventh schedule of Indian constitution.
Answer: 83
(v) The total of income under all the heads is called _______.
Answer: Gross total income
(vi) The total income is comupted under _______ heads.
Answer: 5
(vii) The year in which income is earned is called _______
Answer: Previous year
(viii) The Finance Bill when passed by both the houses of Parliament and signed by the President is called _______.
Answer: Finance Act
(xi) Income tax Rules 1962 are framed by the _______.
Answer: Central Board of Direct Taxes
(x) Income tax is charged on _______.
Answer: Tota Income
C. Multiple Choice Questions
1. Central Goods and Services Tax is charged by
(a) Central Government
(b) State Government
(c) Local authority
(d) by all the above
Answer: (a) Central Government
2. Tax on agricultural income is the domain of
(a) Central Government
(b) Municipal corporation
(c) State Government
Answer: (c) State Government
3. Income of previous year (1-6-2019 to 31-3-2020) is taxable in the assessment year
(a) 2018-19
(b) 2019-20
(c) 2020-21
Answer: (c) 2020-21
4. Income Tax Act currently in force is
(a) IT Act 1922
(b) IT Act 1944
(c) IT Act 1961
(d) IT Act 1956
Answer: (c) IT Act 1961
5. A person who pays tax on income earned under Income Tax Act is
(a) An assessee
(b) A client
(c) A debitor
(d) A creditor
Answer: (a) An assessee
6. Income Tax Act is applicable to
(a) Whole of India
(b) Whole of India except State of J&K
(c) Whole of India except the State of Sikkim
Answer: (a) Whole of India
7. The year in which income is earned is called
(a) Previous year
(b) Current year
(c) Assessment year
(d) None of these
Answer: (a) Previous year
8. Income tax is charged by
(a) Central Government
(b) Local authority
(c) State and Central Government
(d) None of these
Answer: (a) Central Government
9. The term previous year means
(a) The accounting period of the assessee
(b) Financial year before the assessment year
(c) Calander year before the assessment year
Answer: (b) Financial year before the assessment year
10. The year in which tax on income is computed and determined is called
(a) Previous year
(b) Current year
(c) Assessment year
(d) Tax year
Answer: (c) Assessment year
11. The number of heads of income under Income Tax Act 1961 are
(a) 2
(b) 6
(c) 5
(d) 4
Answer: (c) 5
D. Long Answer Questions
1. Define : (i) Income
Answer:
(ii) Person
Answer:
(iii) Assessee
Answer:
2. What is previous year? Under what circumstances income of a person can be assessed in same year in which it is earned?
Answer:
3. Define the terms Previous year' and 'Assessment year'. What are the exceptions to the rule that income of a previous year is assessed to tax in the assessment year?
Answer:
4. Explain the terms (a) Income (b) Person.
Answer:
5. Explain the concept of income and give its features.
Answer:
6. Define the terms (a) Assessment year (b) Assessee.
Answer:
7. "The general rule is that the income of previous year alone should be taxed in the immediately following assessment year". Explain the exceptions to this rule?
Answer:
8. "All assessees are persons but all persons are not assessees." Explain with appropriate examples.
Answer:
9. Explain the various features of Income tax in India.
Answer:
10. Explain the following terms in brief:
(a) Assessee-in-default
Answer:
(b) Representative assessee
Answer:
(c) Average Rate
Answer:
(d) Fair Market value
Answer:
(e) Charitable purpose
Answer:
(f) Tainted Income
Answer:
(g) Application of income
Answer:
(h) Assessment year
Answer:
(i)Previous year for newly set up business.
Answer:
(j) Gross Total Income
Answer:
(k) Total Income
Answer:
(l) Maximum Marginal Rate of Tax
Answer:
Answer:
Question Type- Ishan Dev Bora
