Tag: meaning of tax

Quizzes (0) Questions (66)

Questions Related to meaning of tax

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

Manohar sold his house property for Rs. 50 lakhs. This income is chargeable under the head of __________.

  1. Income from other sources

  2. Income from House Property

  3. Profits and Loss from Business or Profession

  4. Income from Capital Gains
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
 Any profits or gains arising from the transfer of a capital asset effected in the previous year shall be chargeable to income-tax under the head capital gains. Examples of assets are a flat or apartments, land, shares, mutual funds, gold among many others. There are two types of capital gains:
  • Short-term capital gain: capital gain arising on transfer of short term capital asset.
  • Long-term capital gain: capital gain arising on transfer of long term capital asset.
Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

Gratuity received by a government employee is ______.

  1. Fully exempted

  2. Partly exempted

  3. Fully taxable

  4. Exempted up to Rs:1,00,000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Gratuity is a sum of money paid by an employer to an employee for services rendered in the company. However, gratuity is paid only to employees who complete 5 or more years with the company. It can be understood as a form of tip paid by employer to the employee for services offered in the company. Any employee under the state government, central government or local authority receives gratuity amount than the amount is fully exempt from Income Tax.

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

According to the Section 2(24) of the Income Tax Act, income include ________.

  1. profit and gains

  2. dividend

  3. voluntary contribution received by a Trust

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Section 2(24) of the Income Tax Act include,

(i)         Profits and gains
(ii)        Dividend
(iii)       Voluntary Contributions received by a trust. Voluntary contributions received by a trust are included in the definition of income. As such contributions received by following types of trusts, funds, associations, bodies etc. are included in the income of such bodies.
Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

The Previous Year in case of newly started business shall be the period between commencement of business and 31st March of the following year.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The starting of an assessment year is counted from 1st April. Hence the previous year of a newly started business would be date of commencement of the business and 31st March of the following year.

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

Interest on bank deposits and securities are charged under the head ______.

  1. Income from Capital Gains

  2. Income from other sources

  3. Profits and Loss from Business or Profession

  4. Income from House Property
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Income from other sources include:
  • Any contribution to a fund for welfare of employees received by the employer.
  • Income received by way of interest on securities.
  • Income from letting out or hiring of plant, machinery or furniture.
  • Income from letting out of plant, machinery or furniture along with building; both the lettings are inseparable.
  • Money received under a Keyman Insurance Policy including bonus.
Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

______ means the period of 12 months commencing on the 1st day of April every year.

  1. Previous year

  2. Assessment year

  3. Either A or B

  4. Neither A or B
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Assessment year is a 12 months period which commences on the 1st day of April every year. It is usually the beginning of a new financial year. 

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

Under Section 2(31), the word Person is defined to include _________.

  1. Individual

  2. Company

  3. Firm

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
Under Section 2(31), the word Person is defined to include:
(i)         an Individual;
(ii)        a Hindu Undivided Family (HUF) ;
(iii)       a Company;
(iv)       a Firm
(v)        an association of persons or a body of individuals, whether incorporated or not;
(vi)       a local authority; and
(vii)      every artificial juridical person not falling within any of the preceding sub-clauses.
(viii)     Association of Persons or Body of Individuals or a Local authority or Artificial Juridical Persons shall be deemed to be a person whether or not, such persons are formed or established or       incorporated with the object of deriving profits or gains or income. 
Multiple choice income tax direct taxes commerce black money and tax evasion meaning of tax

______ means the financial year immediately preceding the assessment year.

  1. Calendar year

  2. Assessment year

  3. Previous year

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Previous year means the financial year preceding the current assessment year. For example, 2017 is the previous year for the current financial year. 

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

Tax is calculated and compared with the amount paid and assessment order is issued. The year in which whole of this process is under taken is called _______.

  1. Calendar Year

  2. Previous Year

  3. Assessment Year

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Assessment Year is the year in which one file income tax returns of the year prior to it (i.e. Financial Year). It is the year in which the income that one has earned in the financial year that is just ended is evaluated. Tax is calculated and compared with the amount paid and assessment order is issued.