Basic Terms True False

Basic Terms
True or False
Tripathi Online Educare

True or False
● Dharampur Gram Panchayat is an AOP

Ans: False
● AOP stands for association of panchayats

Ans: False
● HUF stands for human undivided family

Ans: False
● Thane municipal corporation is a local authority

Ans: True
● According to section 2(8), assessment includes Reassessment.

Ans: True

True or False
● Assessment year is always of 12 months

Ans: True
● Only individuals can be member of body of individuals

Ans: True
● Gift received on occasion of marriage is always taxable as income.

Ans: False
● For a newly set up business previous year can be of less than 12 months
Ans: True
● Any person can become a member of association of person

Ans: True

True or False
● Every receipt is an income

Ans: False
● All persons do not have to pay tax

Ans: True
● Any receipt in cash is termed as income

Ans: False
● A company under the Income Tax is defined as per the Companies Act
Ans: False
● On sale of goods illegally imported from a foreign country, Mr. C generates a surplus of Rs.5,500. As
the income is derived from an illegal activity, it is not chargeable to tax.
Ans: False

True or False
● The definition of “Income” is inclusive definition.

Ans: True
● Out of Rs. 29,000 per received by Mrs. X from her husband for household expenses, she saves
approximately Rs. 1,200 pm which is deposited by her in a bank account. Rs 12,400 (1,200 x 12) is an
income of Mrs. X.
Ans: False
● Previous year of every assessee may or may not be same.

Ans: True
● Assessment year can be of less than 12 months.

Ans: False
● Interest and salary payments made to partners are taxable in the hands of partners.
Ans: True

True or False
● Pin money is taxable

Ans: False
● Money received by dependent parents from their son is income as per Income Tax Act.
Ans: False
● Income received from smuggling activity is income as per Income Tax Act.
Ans: True
● Reimbursement of actual travelling expenses to an employe is an income.

Ans: False
● Income can be in cash or kind.

Ans: True

True or False
● Assessee is the person whose income is assessed.

Ans: False
● Man of the match price received by a professional sports man is an income.

Ans: True
● The year in which income is earned is called previous year and the next year in which the income is
taxed is called financial year.
Ans: False
● Distribution of surplus arising from mutual activity is not chargeable to tax.

Ans: True
● A company under the Income Tax Act means a company as defined under the Companies Act.
Ans: False

True or False
● Previous year always indicates a period of 12 months from 1st April to 31st March.
Ans: False
● Assessee means a person liable to pay tax only on his income.

Ans: False
● On rendering some service to a garments manufacturing unit M is given a suit as remuneration. It is

not an “Income”, since he has not received anything in cash.
Ans: False
● The financial year immediately succeeding the assessment year is the previous year.
Ans: False
● A birthday gift received by V from his father Rs.20,000 is not taxable as income of V.
Ans: True

True or False
● Reliance Industries Ltd. is a person as per Income Tax Act, 1961.

Ans: True
● Profit on sale of house property is capital receipt which is, however, chargeable to tax.
Ans: True
● Salary, paid to M by his employer X Ltd. out of capital reserve, is not income in the hands of M.
Ans: False
● Income earned by an assessee during the assessment year is charged to tax during the previous year.
Ans: False
● Every person does not have to pay Income Tax.

Ans: True

True or False
● Gift received by a lawyer from his client is income as per Income Tax Act.
Ans: True
● Gift received by son on his birthday from parents is income as per Income Tax Act.
Ans: False
● Income can be real or fictional.

Ans: False
● Income is calculated on the basis of receipt only.

Ans: False
● Awards received by professional sportsperson in nature of gift is liable to tax.

Ans: True
● Arrears of bonus, received in lump sum by an employee is income as per Income Tax Act.
Ans: True

True or False
● Extra sales money received on account of devaluation of currency is income as per Income Tax Act.
Ans: True
● In assessment year, income of previous year is assessed.

Ans: True
● Compensation for death of father in a car accident received from the car owner by the son on the
deceased is income as per Income Tax Act.
Ans: False
● Free tickets for air travel by Air India received by Mr. Vadera who had rented his premises to Air India,
in lieu of rent, as per the terms of rent agreement is income as per Income Tax Act.
Ans: True
● Any income which is received through unlawful means is not chargeable to tax.
Ans: False

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Basic Terms True False

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Basic Terms

Tripathi Online Educare

● Dharampur Gram Panchayat is an AOP

● AOP stands for association of panchayats

● HUF stands for human undivided family

● Thane municipal corporation is a local authority

● According to section 2(8), assessment includes Reassessment.

Tripathi Online Educare

● Assessment year is always of 12 months

● Only individuals can be member of body of individuals

● Gift received on occasion of marriage is always taxable as income.

● Any person can become a member of association of person

Tripathi Online Educare

● Every receipt is an income

● All persons do not have to pay tax

● Any receipt in cash is termed as income

Tripathi Online Educare

● The definition of “Income” is inclusive definition.

● Previous year of every assessee may or may not be same.

● Assessment year can be of less than 12 months.

Tripathi Online Educare

● Pin money is taxable

● Reimbursement of actual travelling expenses to an employe is an income.

● Income can be in cash or kind.

Tripathi Online Educare

● Assessee is the person whose income is assessed.

● Man of the match price received by a professional sports man is an income.

● Distribution of surplus arising from mutual activity is not chargeable to tax.

Tripathi Online Educare

● Assessee means a person liable to pay tax only on his income.

● On rendering some service to a garments manufacturing unit M is given a suit as remuneration. It is

Tripathi Online Educare

● Reliance Industries Ltd. is a person as per Income Tax Act, 1961.

● Every person does not have to pay Income Tax.

Tripathi Online Educare

● Income can be real or fictional.

● Income is calculated on the basis of receipt only.

● Awards received by professional sportsperson in nature of gift is liable to tax.

Tripathi Online Educare

● In assessment year, income of previous year is assessed.

Tripathi Online Educare

Tripathi Online Educare

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