UPSC Prelims Practice Questions — CBDT seeks stakeholders' inputs on proposed Income-tax Rules and Forms related to Income Tax Act, 2025

Q1. Under the Income-tax Act, 2025, the term "Tax Year" is best defined as which one of the following?

  • A. The twelve-month financial year for which income is computed and charged to tax, a single concept that replaces both the earlier "Previous Year" and "Assessment Year".
  • B. The year immediately following the financial year, in which the income earned during the preceding year is assessed to tax.
  • C. A twelve-month accounting period freely chosen by the taxpayer, which may differ from the Government's financial year.
  • D. The block period over which business losses are permitted to be carried forward and set off under the Act.

Q2. How many sections does the Income-tax Act, 2025 contain?

  • A. 536
  • B. 819
  • C. 298
  • D. 411

Q3. The original Income-tax Bill, 2025 was referred for detailed scrutiny to a Select Committee of which one of the following?

  • A. Lok Sabha
  • B. Rajya Sabha
  • C. A Joint Parliamentary Committee of both Houses
  • D. The Departmentally-related Standing Committee on Finance

Q4. Which one of the following best describes the Central Board of Direct Taxes (CBDT)?

  • A. A statutory body constituted under the Central Boards of Revenue Act, 1963, functioning under the Department of Revenue in the Ministry of Finance.
  • B. A constitutional body established under Article 280 to oversee the administration of direct taxes.
  • C. An attached office of the Ministry of Corporate Affairs created by executive resolution.
  • D. An autonomous regulator that is the sole authority for both direct and indirect taxes in India.

Q5. Apart from the Chairman, how many Members constitute the Central Board of Direct Taxes (CBDT)?

  • A. Six
  • B. Five
  • C. Seven
  • D. Four

Q6. Under how many categories did the CBDT invite inputs from stakeholders on the proposed Income-tax Rules and Forms in the 2026 consultation?

  • A. Four
  • B. Three
  • C. Five
  • D. Six

Q7. The Central Boards of Revenue Act, 1963 provides for the constitution of how many Boards?

  • A. Two
  • B. One
  • C. Three
  • D. Four

Q8. With reference to the transition to the Income-tax Act, 2025 and its Rules, which of the statements given below is/are correctly identified?

  1. The Income-tax Act, 2025 came into force on 1 April 2026.
  2. The Income-tax Rules, 2026 reduced the number of rules and forms compared with the earlier Income-tax Rules, 1962.
  3. Income up to the financial year 2025-26 continues to be governed by the Income-tax Act, 1961.
  4. The 2025 Act raised income-tax rates for individuals as part of the simplification exercise.
  • A. 1 and 4 only
  • B. 2 and 3 only
  • C. 1, 2 and 3 only
  • D. 1, 2, 3 and 4