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35+ Popular Questions on The Income Tax Act, 1961 For All Competitive Exams

In this article, I will take you through 35+ Popular Questions on Income Tax Act 1961. As you might have witnessed, every year there is an increase in number of questions from Income Tax Act, 1961 so it is very important to go through atleast all the frequently asked questions. Below set of questions are not only helpful for the written exams but also for all those who are going for Finance related Interviews as well.

The Income Tax Act 1961

The Income Tax Act, 1961

Also Read: 20 Frequently Asked Questions on Motor Vehicles Act, 1988(For UPSC/PSC Aspirants)

1. How many Chapters are there in Income Tax Act 1961 ?

Ans. 23 Chapters

2. How many Sections are there in Income Tax Act, 1961 ?

Ans. 293 Sections

3. Under which section revised income tax return can be filed ?

Ans. Section 139(5)

4. Under which section Mandatory Income Tax return can be filed ?

Ans. Section 139(1)

5. What is ‘Specified date’ under Section 44AB ?

Ans. 30th September

6. When did Income Tax came into force ?

Ans. 1st April, 1962

7. How many heads of Income are there to compute Gross Total Income ?

Ans. Five

8. Who is highest Administrative Authority for Income Tax in India ?

Ans. CBDT(Central Board of Direct Taxes)

9. What is the rate of TDS for unlisted securities including cesses ?

Ans. 10% as per Section 193

10. Which Section of Income Tax Act 1961 talks about exempted incomes ?

Ans. Section 10

11. What is the existing Maximum Marginal Rate of tax of an individual Assessee ?

Ans. 25.17%(As of Year 2020)

12. Which Section provides House Rent Allowance exempts up to a Certain Limit ?

Ans. Section 10 (13A)(1)

13. Which Section provides rebate from Tax on Total Income ?

Ans. Section 87A

14. Which Section deals about unexplained Cash Credits in the books of an assessee ?

Ans. Section 68

15. How much TDS get deducted from the sale consideration under Section 194-IA of Income Tax Act 1961 ?

Ans. 1%

16. Which Section deals with the exemption of the amount received by way of Inheritance or will ?

Ans. Section 56

17. Which Section provides Safe Harbor for offshore funds managed by an onshore fund manager ?

Ans. Section 9A. More on Official Income Tax website.

18. What is the rate of Tax on Anonymous Donation ?

Ans. 30%

19. Which Section deals with the Institution liable to pay tax on Anonymous Donation ?

Ans. Section 115BBC(1)

20. Which Section deals with the Institution not liable to pay tax on Anonymous Donation ?

Ans. Section 115BBC(2)

21. Under Section 2(42A), after holding for how many days Listed Securities will be treated as Long Term Capital Asset ?

Ans. 12 Months

22.  Under Section 2(42A), after holding for how many days Un-Listed Securities will be treated as Long Term Capital Asset ?

Ans. 24 Months

23. Which Section deals with the Exemption of Capital Gain from Tax if the long term Capital Gain are invested in Investment instrument within a pre-defined time period ?

Ans. Section 54EC

24. What is the current(as of 2021) rate of depreciation on residential building ?

Ans. 5%

25. What is the rate of depreciation in Non-Residential Building ?

Ans. 10%

26. What is the date on which Fair Market Value of capital assets acquired is determined ?

Ans. 1st April, 2001

27. What is the Current Tax on Long Term Capital Gain ?

Ans. 20%

28. What is the Current Tax on Short Term Capital Gain ?

Ans. 15%

29. Which Section has the provision to claim tax relief on Encashment of Earned Leave ?

Ans. Section 89

30. Which Section allows the tax exemption on Compensation amount received on Voluntary Retirement from Public Sector Company ?

Ans. Section 10(10C)

31. Under which section of Income Tax Act 1961, HRA(House Rental Allowance) can be claimed ?

Ans. Section 10

32. What is the current Health and Education Cess applicable on the Income Tax ?

Ans. 4%

33. What is the amount of deduction for Severe Disability under Section 80U ?

Ans. Rs 1.25 Lakhs

34. Under which section a parent can claim deduction if his/her child had taken loan for Higher Education ?

Ans. Section 80E

35. What is the difference between Section 80C and Section 80E ?

Ans. Section 80C of the Income Tax Act provides deduction in respect of the tuition fees paid for the education. However, section 80E of the Income Tax Act provides deduction in respect of interest paid on educational loan taken for higher education. More on FAQs.

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