Income tax - basic concepts, residential status and tax incidence, scope of income, incomes exempt from tax, income from salaries, income from house property, profits and gains from business or profession, capital gains, income from other sources - One Line Questions

1. What is the tax rate on Short-Term Capital Gains from the sale of listed equity shares (where STT is paid)? — 15%
2. If a house property is let out for the entire year, what is the deduction allowed for repairs? — 20% of the Net Annual Value.
3. What is the tax rate applicable to Long-Term Capital Gains from the sale of listed equity shares (subject to conditions)? — 10% (above Rs. 1 lakh exemption).
4. What is 'Indexation' in the context of Capital Gains? — A method to calculate the cost of acquisition by adjusting for inflation.
5. What is the deduction allowed for rent paid for a self-occupied house property? — No deduction is allowed.
6. What is a 'Capital Asset' according to the Income Tax Act? — Any property held by an assessee, including movable and immovable property.
7. What is the depreciation allowed on plant and machinery? — A fixed percentage as prescribed by the Income Tax Act.
8. What is 'perquisites' in the context of salary income? — Benefits provided to an employee by the employer, in addition to salary.
9. Which of the following is a revenue expenditure and allowed as a deduction for business income? — Expenditure on advertisement.
10. What is the deduction allowed for municipal taxes paid by the owner of a house property? — Deductible from Gross Annual Value.
11. Which of the following is taxable under 'Income from Other Sources'? — Rent from subletting a house property.
12. Which of the following is a taxable perquisite? — Rent-free accommodation provided by the employer (subject to conditions).
13. What is the tax treatment of compensation received for termination of employment? — Fully taxable as salary.
14. What is the tax treatment of gratuity received by a government employee at the time of retirement? — Fully exempt.
15. An individual is considered a 'Resident' in India if they satisfy at least one of the two basic conditions. What is the first basic condition? — In India for a period of 182 days or more during the previous year.
16. What is the second basic condition for an individual to be considered a 'Resident' in India? — In India for a period of 60 days or more during the previous year and 365 days in 4 preceding previous years.
17. Which of the following is NOT a direct tax? — Goods and Services Tax (GST)
18. An individual who is a resident but not ordinarily resident (RNOR) is taxed on: — Indian income and foreign income derived from a business controlled in or a profession set up in India.
19. Which of the following is an example of 'Income from Other Sources'? — Interest on fixed deposit in a bank.
20. Which of the following is NOT considered 'Income from Other Sources'? — Profits from a business.
21. Which of the following is NOT an income exempt from tax under Section 10? — Interest on certain debentures.
22. For how long must a property be held to be considered a 'Long-Term Capital Asset'? — More than 24 months
23. Which of the following deductions is available under the head 'Profits and Gains from Business or Profession'? — Interest on capital borrowed for business.
24. What is the basis of charge for 'Income from Salaries'? — Salary, wages, pension, gratuity, fees, commission, perquisites, profits in lieu of salary, etc.
25. Which of the following is a capital expenditure and not allowed as a deduction for business income? — Cost of acquiring a plant and machinery.
26. What is the maximum amount of leave encashment that is exempt from tax for a government employee? — Fully exempt.
27. What is the exemption limit for interest earned on savings bank accounts in a financial year? — Rs. 10,000
28. What is the standard deduction available against salary income? — Rs. 50,000 or the amount of salary, whichever is less.
29. Under which head of income would the interest received on compensation awarded by a court be taxed? — Income from Other Sources
30. Which of the following incomes is generally exempt from Income Tax in India? — Agricultural income (subject to certain conditions).
31. Which of the following expenses are NOT deductible while computing income under the head 'Profits and Gains from Business or Profession'? — Any expenditure incurred for personal purposes of the partner.
32. Which section of the Income Tax Act deals with the 'Income from Salaries'? — Section 15
33. Which section of the Income Tax Act deals with 'Income from House Property'? — Section 22
34. Which section of the Income Tax Act deals with 'Profits and Gains from Business or Profession'? — Section 28
35. Which section of the Income Tax Act deals with 'Capital Gains'? — Section 45
36. Which section of the Income Tax Act deals with 'Income from Other Sources'? — Section 56
37. What is the taxability of winnings from lotteries, crossword puzzles, etc.? — Taxed at a flat rate of 20% (plus surcharge and cess).
38. What is 'Annual Value' of a house property? — The Gross Annual Value (GAV) of the property.
39. What is the meaning of 'Previous Year' in Income Tax law? — The financial year immediately preceding the assessment year.
40. What are the conditions for 'Income from Other Sources' to be taxable? — The income must not be taxable under any other head.
41. What is the maximum period for which 'Unrealised Rent' can be treated as a deduction? — The tenant has vacated the property and the rent is unrealised.
42. What is the difference between 'Short-Term Capital Gain' (STCG) and 'Long-Term Capital Gain' (LTCG)? — The period of holding of the capital asset.
43. Tax incidence refers to: — The person who finally bears the burden of the tax.
44. What is the annual letting value (ALV) of a self-occupied house property? — Nil.
45. What is the 'Assessment Year'? — The financial year immediately following the previous year.
46. Bad debts written off during the year are generally allowed as a deduction if: — They were part of the business's trading receipts.
47. What is the primary purpose of Income Tax? — To fund government expenditure and provide public services.
48. What is the period of holding for determining short-term or long-term capital gain for immovable property (land/building)? — Up to 24 months
49. What is the deduction allowed for interest on a loan taken for a self-occupied house property? — Up to Rs. 2,00,000.
All One Line Questions
E-Book Income tax - basic concepts, residential status and tax incidence, scope of income, incomes exempt from tax, income from salaries, income from house property, profits and gains from business or profession, capital gains, income from other sources Online Test Income tax - basic concepts, residential status and tax incidence, scope of income, incomes exempt from tax, income from salaries, income from house property, profits and gains from business or profession, capital gains, income from other sources Question Bank Income tax - basic concepts, residential status and tax incidence, scope of income, incomes exempt from tax, income from salaries, income from house property, profits and gains from business or profession, capital gains, income from other sources