Which of the following is included in taxable income?
a) Salary income
b) Business profits
c) Rental income
d) All of the above
Which of the following expenses is NOT deductible from taxable income?
a) Depreciation expense
b) Personal living expenses
c) Business-related expenses
d) Charitable donations (as per tax laws)
Taxable income is calculated as:
a) Total income minus allowable deductions
b) Total revenue plus expenses
c) Gross salary without deductions
d) Net profit plus capital expenditures
Which of the following is NOT considered part of gross income?
a) Salary
b) Inheritance
c) Rental income
d) Dividend income
Which of the following is an allowable tax deduction?
a) Interest on personal loans
b) Charitable donations (as per tax rules)
c) Luxury car purchases
d) Vacation expenses
Which of the following incomes is taxable?
a) Gifts received from family
b) Lottery winnings
c) Scholarships
d) Life insurance proceeds
In progressive tax systems, as income increases, the tax rate:
a) Decreases
b) Stays the same
c) Increases
d) Is eliminated
Which of the following is considered capital gain?
a) Salary income
b) Profit from selling shares
c) Business revenue
d) Rental income
Tax exemptions refer to:
a) A reduction in taxable income
b) An increase in tax liability
c) A penalty for late filing
d) A mandatory additional charge
Depreciation on business assets is considered a:
a) Tax credit
b) Deductible expense
c) Non-taxable income
d) Personal expense
Taxable income from salary is calculated after deducting:
a) Gross salary
b) Allowable deductions like provident fund contributions
c) Bonus amount
d) Full salary without deductions
Which of the following is tax-free?
a) Interest earned on savings account
b) Business income
c) Dividend from a tax-exempt company
d) Rental income
If a company has a net loss, its taxable income is:
a) Positive
b) Zero
c) Negative but carried forward
d) Subject to immediate taxation
Which of the following is NOT part of business taxable income?
a) Revenue from sales
b) Office rent expense
c) Interest earned on business deposits
d) Capital gains from asset sales
Which tax filing status generally has the highest standard deduction?
a) Single
b) Married filing jointly
c) Head of household
d) Qualifying widower
The tax on long-term capital gains is usually:
a) Higher than ordinary income tax rates
b) Equal to ordinary income tax rates
c) Lower than ordinary income tax rates
d) Non-taxable
A person earning below the taxable threshold:
a) Must pay a minimum tax
b) Is exempt from income tax
c) Must pay the highest tax rate
d) Cannot claim deductions
Which of the following expenses is NOT tax-deductible for a business?
a) Employee salaries
b) Advertising costs
c) Personal groceries of the owner
d) Rent of business premises
What is the effect of tax credits on taxable income?
a) They increase taxable income
b) They decrease taxable income
c) They directly reduce tax payable
d) They do not affect taxable income
Which income is subject to self-employment tax?
a) Salary from an employer
b) Business income of a sole proprietor
c) Interest income from savings
d) Rental income
Which of the following is NOT included in taxable income?
a) Salary income
b) Pension received after retirement
c) Life insurance maturity proceeds
d) Rental income
A non-resident taxpayer is usually taxed on:
a) Global income
b) Income earned within the country
c) Inheritance income
d) Gifts received from abroad
Which of the following tax benefits is available for home loan interest payments?
a) Deduction from taxable income
b) Full tax refund
c) Tax exemption on the full loan amount
d) No tax benefits
If tax is deducted at source (TDS), the taxpayer should:
a) Ignore it
b) Claim a tax credit while filing returns
c) Pay the tax again
d) Pay penalties
What is the purpose of deductions in taxable income calculations?
a) To increase taxable income
b) To reduce tax liability
c) To increase tax rates
d) To determine net profit
Which of the following is an example of a tax-exempt income?
a) Salary
b) Dividend from a government bond
c) Business income
d) Rental income
Which of the following can reduce tax liability the most?
a) Tax deduction
b) Tax credit
c) Gross income
d) Capital gains
Which form is used for reporting income tax in most countries?
a) Tax Invoice
b) Income Tax Return
c) Balance Sheet
d) Payroll Statement
