Direct Taxes MCQ — 71 Practice Questions with Answers

Q1. Consider the following statements about the Central Board of Direct Taxes: 1. CBDT is a statutory authority. 2. CBDT functions under the Central Board of Revenue Act, 1963. 3. CBDT became a separate Board with effect from 1 January 1954. Which of the statements given above are correct?

Q2. Consider the following statements about the Central Board of Direct Taxes (CBDT): 1. CBDT is a statutory authority constituted under the Central Board of Revenue Act, 1963. 2. Officers of CBDT also function as a Division of the Ministry dealing with levy and collection of direct taxes. 3. CBDT consists of a Chairperson and four Members. 4. CBIC, not CBDT, handles direct taxes like income tax. Which of the statements given above are correct?

Q3. 1. Salaries are one of the heads of income under section 14 of the Income-tax Act. 2. Income from house property is one of the heads of income under section 14 of the Income-tax Act. 3. Capital gains are one of the heads of income under section 14 of the Income-tax Act. Which of the statements given above are correct?

Q4. Consider the following statements about constitutional provisions related to direct taxes: 1. Article 265 requires authority of law for levy or collection of any tax. 2. Union List Entry 82 covers taxes on income including agricultural income. 3. Union List Entry 85 covers corporation tax. 4. State List Entry 46 covers taxes on agricultural income. Which of the statements given above are correct?

Q5. Consider the following statements about the Central Board of Direct Taxes (CBDT): 1. CBDT is a statutory authority constituted under the Central Board of Revenue Act, 1963. 2. CBDT officers in their ex-officio capacity also function as a Division of the Ministry dealing with levy and collection of direct taxes. 3. CBDT consists of a Chairman and four Members. 4. The split between CBDT and the Central Board of Excise and Customs took effect from 1 January 1964. Which of the statements given above are correct?