Tag: black money and tax evasion

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Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

The maximum amount of deduction under section 80D in the case of a senior citizen is _____.

  1. 20,000

  2. 25,000

  3. 50,000

  4. 75,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Deduction under section 80D is available to an individual or a HUF. A deduction of Rs. 25,000 can be claimed for insurance of self, spouse and dependent children. An additional deduction for insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age or Rs 50,000 (has been increased in Budget 2018 from Rs 30,000) if parents are more than 60 years old. In case, a taxpayers age and parents age is 60 years or above, the maximum deduction available under this section is to the extent of Rs. 100,000. Example: Rohan’s age is 65 and his father’s age is 90. In this case, the maximum deduction Rohan can claim under section 80D is Rs. 100,000. From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for the preventive health check up to individuals. 

Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

Education allowance is exempted for a maximum of ______.

  1. One child

  2. Two children

  3. Three children

  4. Four children
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
In respect of education, a parent can claim a deduction on the amount paid as tuition fees to any university, college, school or any other educational institution. Only tuition fees that forms part of the total fees paid is allowed for deduction.
The maximum deduction on payments made towards tuition fee can be claimed up to Rs 1.50 lakh together with the deduction in respect of insurance, provident fund, pension etc. in a financial year.
It can only be claimed in respect of two dependent children and for fees paid to an educational institution, college or school.
Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

Choose the correct answer:
(a) Under the straight line method, depreciation charges are allocated equally over the asset's useful life
(b) The accelerated depreciation methods provide for larger amount of depreciation in the early years of the asset's life while the amount progressively declines in latter years
Of these:

  1. Both (a) and (b) are true

  2. (a) is true but (b) is false

  3. (a) is false but (b) is true

  4. Both (a) and (b) are false
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The straight line method allocates depreciation equally over the asset's life. Accelerated methods (like double declining balance) charge more depreciation in the early years, which then decreases over time.

Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

Maximum deduction available as deduction of interest payable on loan taken by an individual from any financial institution for the purpose of acquisition of a residential house property is _____.

  1. 25,000

  2. 40,000

  3. 50,000

  4. 100,000
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Section 80EE allows tax benefits for first time home buyers. Income tax deduction can be claimed on home loan interest towards your first house property. The deduction allowed under this section is for interest paid on home loan up to maximum Rs 50,000 per financial year. 

Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

The sum of direct material direct wages & direct expenses is ______.

  1. Total cost

  2. Average cost

  3. Production cost

  4. Prime cost
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Though the production of goods and services involves many different kinds of expenses, the prime cost formula only takes into account those variable expenses directly connected to the production of each item.

Prime cost is calculated by adding the cost of raw materials to the cost of labor directly associated with the production process. The formula is as follows:

Prime Cost = Direct Expenses + Direct Wages
Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

The methods of appraising capital expenditure proposals can be divided into ____.

  1. unsophisticated and sophisticated

  2. average rate of return and discounted cash flow techniques

  3. average rate of return and pay back method

  4. net present value method and net terminal value method
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Capital expenditure appraisal methods are broadly categorized into unsophisticated (non-discounting) methods like Payback Period or Accounting Rate of Return, and sophisticated (discounting) methods like Net Present Value or Internal Rate of Return.

Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

Wealth Tax is a:

  1. Direct tax

  2. Indirect tax

  3. Cooperation tax

  4. Value added tax
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A direct tax is paid by a person upon whom it is legally imposed; its effect is borne by the tax payer, for example, income tax. A direct tax is demanded from the very person who it is intended or devised for.  An example of a direct tax is wealth tax.

Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

Operating leverage indicates the impact of changes in

  1. Sales on operating income

  2. Output on operating income

  3. Profit on operating income

  4. All the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Operating leverage measures how sensitive a company's operating income (EBIT) is to changes in sales volume. It arises from the presence of fixed operating costs.

Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

Which of the following is referred to as 'Deferred Payment System?"

  1. Hire-purchase

  2. Instalment selling

  3. Co-operative retailing

  4. Mail order retailing
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Instalment selling is often referred to as a deferred payment system because the buyer takes possession of the goods immediately but pays for them in installments over a period of time.