Chapter Exam

Chapter 32: Direct Taxes — Online MCQ Test

Q: Which of the following is an example of a direct tax?

Answer: B. Income Tax — Income tax is a direct tax because the burden of payment falls directly on the person or entity who earns the income.

Q: The period of 12 months commencing on 1st April every year is known as:

Answer: C. Assessment Year — Under the Income Tax Act, the period of 12 months beginning from 1st April in which income is assessed is termed the Assessment Year.

Q: Which of the following is a characteristic feature of direct tax?

Answer: C. It is based on the ability to pay principle — Direct taxes are based on the principle of equity, where those with higher income pay more, reflecting their greater ability to pay.

COMMERCE · CLASS 11th · Tamil Nadu State Board

Practice Chapter 32: Direct Taxes with a free chapter-wise online MCQ test for Tamil Nadu State Board CLASS 11th COMMERCE. This chapter covers: This chapter introduces direct taxation principles in India. Students examine income tax definitions assessment years previous years tax liability calculations and direct tax admin.... AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 32: Direct Taxes — Important Questions & Answers (FAQ)

Frequently asked questions from Tamil Nadu State Board CLASS 11th COMMERCE — Chapter 32: Direct Taxes, with answers and explanations. These are sample questions; the exam has its own separate question set.

Which of the following is an example of a direct tax?

A. Goods and Services Tax
B. Income Tax ✓
C. Customs Duty
D. Excise Duty

Answer: B. Income Tax
Income tax is a direct tax because the burden of payment falls directly on the person or entity who earns the income.

The period of 12 months commencing on 1st April every year is known as:

A. Previous Year
B. Financial Year
C. Assessment Year ✓
D. Accounting Year

Answer: C. Assessment Year
Under the Income Tax Act, the period of 12 months beginning from 1st April in which income is assessed is termed the Assessment Year.

Which of the following statements regarding direct tax is correct?

A. The burden can be shifted to another person
B. It is levied on goods and services
C. The impact and incidence fall on the same person ✓
D. It is regressive in nature

Answer: C. The impact and incidence fall on the same person
In direct taxes, the individual who is legally liable to pay the tax also bears the financial burden, meaning impact and incidence are on the same person.

Which of the following is a characteristic feature of direct tax?

A. It is easy to evade
B. The tax is collected through intermediaries
C. It is based on the ability to pay principle ✓
D. It is levied on consumption

Answer: C. It is based on the ability to pay principle
Direct taxes are based on the principle of equity, where those with higher income pay more, reflecting their greater ability to pay.

Consider a scenario where a taxpayer is a minor. Under Indian law, how is their income handled for tax purposes?

A. They are exempt from all taxes
B. Their income is clubbed with the parent's income ✓
C. They must file a separate return as a company
D. They can only pay tax at the age of 21

Answer: B. Their income is clubbed with the parent's income
According to the clubbing provisions of the Income Tax Act, income of a minor is generally included in the income of the parent whose total income is higher.