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Taxation Law MCQs and mock tests

88 distinct Taxation Law questions are in live Law Maker papers, used across 4 exams. Each was checked against the official text and comes with the answer and an explanation once you submit.

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Read the Acts: The Central Goods and Services Tax Act, 2017, The Integrated Goods and Services Tax Act, 2017 (official text, section by section).

Taxation Law practice sets

2 sets, 1 free.

Exams with Taxation Law questions

Sample Taxation Law questions

From free papers. Try each one before you open the answer.

  1. Question 1 · Taxation Law Practice Set 1

    For a tax year, R is 'not ordinarily resident' in India. During that year he earns (i) income accruing outside India from a business controlled in India, and (ii) income accruing outside India from a business controlled outside India. Both incomes are received outside India. Under Section 5 of the Income-tax Act, 2025, his total income includes:

    1. A. only the income from the business controlled in India
    2. B. only the income from the business controlled outside India
    3. C. neither income, since a person not ordinarily resident is taxed like a non-resident
    4. D. both incomes, since a person not ordinarily resident is still a resident
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    A. only the income from the business controlled in India

    Under Section 5(1)(c), income accruing outside India to a resident is included, but for a person not ordinarily resident under Section 6(13) it is included only when derived from a business controlled in or a profession set up in India. Since neither income was received in India, only income (i) is included.

  2. Question 2 · Taxation Law Practice Set 1

    Under Section 3(1) of the Income-tax Act, 2025, 'tax year' means:

    1. A. the previous year, whose income is assessed in the following assessment year
    2. B. any period of twelve months adopted by the assessee as its accounting year
    3. C. the calendar year ending on 31 December preceding the year of assessment
    4. D. the twelve months period of the financial year commencing on 1 April
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    D. the twelve months period of the financial year commencing on 1 April

    Section 3(1) defines 'tax year' as the twelve months period of the financial year commencing on 1 April. The 2025 Act uses the tax year in place of the separate 'previous year' and 'assessment year' of the repealed 1961 Act.

  3. Question 3 · Taxation Law Practice Set 1

    Under Article 279(1) of the Constitution, the 'net proceeds' of a tax or duty attributable to any area are ascertained and certified by:

    1. A. the Union Ministry of Finance, subject to review by the GST Council
    2. B. the Comptroller and Auditor-General of India, whose certificate is final
    3. C. the Finance Commission, subject to the approval of the President
    4. D. an arbitrator appointed by the Chief Justice of India on a reference made by the President
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    B. the Comptroller and Auditor-General of India, whose certificate is final

    Article 279(1) defines 'net proceeds' as the proceeds of a tax or duty reduced by the cost of collection, and provides that the net proceeds in or attributable to any area shall be ascertained and certified by the Comptroller and Auditor-General of India, whose certificate shall be final.

  4. Question 4 · Taxation Law Practice Set 1

    Assertion (A): The Union may make a grant for a public purpose even though the purpose relates to a matter on which only the State Legislature can make laws. Reason (R): Article 282 provides that the Union or a State may make any grants for any public purpose, notwithstanding that the purpose is not one with respect to which Parliament or the State Legislature, as the case may be, may make laws.

    1. A. A is false, but R is true
    2. B. Both A and R are true, but R is not the correct explanation of A
    3. C. A is true, but R is false
    4. D. Both A and R are true, and R is the correct explanation of A
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    D. Both A and R are true, and R is the correct explanation of A

    Both are true and R explains A. Article 282 delinks the power to make grants for public purposes from legislative competence, so the Union can make such grants even on State List matters.

  5. Question 5 · Taxation Law Practice Set 1

    Under Article 269A(1) of the Constitution, goods and services tax on supplies in the course of inter-State trade or commerce is:

    1. A. levied and collected by the Government of India and credited in full to the Consolidated Fund of India, with no part of it apportioned to any State in any year
    2. B. levied by the Government of India but collected and appropriated by the State in which the supply ends, as Parliament may by law provide
    3. C. levied and collected by the Government of India and apportioned between the Union and the States as Parliament provides by law on GST Council recommendations
    4. D. levied and collected by the State of origin and shared with the Union in the proportion that the President fixes by order after consulting the GST Council
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    C. levied and collected by the Government of India and apportioned between the Union and the States as Parliament provides by law on GST Council recommendations

    Article 269A(1) provides that GST on inter-State supplies is levied and collected by the Government of India and apportioned between the Union and the States in the manner provided by Parliament by law on the recommendations of the GST Council. Under Article 269A(3), the amount apportioned to a State does not form part of the Consolidated Fund of India.