Direct Tax Concepts Quiz

The word 'Taxo' is based on the Latin word meaning 'to estimate'. Tax is considered a burden and is the 'cost of living in a society'.

Taxes being considered the 'cost of living in a society' denotes that taxes are essential for the functioning and maintenance of a society.

Taxes are levied because they are a basic necessity for the functioning and maintenance of a society.

<p>The purpose of the 'DIRECT TAX INDEX' is to categorize and organize the various chapters and topics related to direct taxes for easier reference and understanding.</p> Signup and view all the answers

<p>The computation of total income involves the calculation and summation of income from various sources as per the provisions of the Income Tax Act 1961.</p> Signup and view all the answers

<p>Residential status under the Income Tax Act, 1961 determines the taxability of an individual's income in India. It is based on the individual's physical presence in India during the financial year as well as preceding years.</p> Signup and view all the answers

<p>Set-off and Carry Forward of Losses provisions allow taxpayers to set off losses from one source of income against income from another source in the same year or carry forward the losses to future years for set-off against future profits.</p> Signup and view all the answers

<p>Income from Capital Gains refers to the profits or gains arising from the transfer of capital assets. The taxation of such gains is governed by specific provisions under the Income Tax Act, 1961 based on the holding period of the asset and the type of asset.</p> Signup and view all the answers

<p>Clubbing of Income provisions aim to prevent tax avoidance by including certain income in the hands of another person (like spouse, minor child, etc.) who may otherwise not be taxed on that income. This prevents the transfer of income to persons in lower tax brackets.</p> Signup and view all the answers

<p>Deductions under Section 80 of the Income Tax Act, 1961 provide various avenues for taxpayers to reduce their taxable income by investing in specified instruments, making contributions to specified funds, or incurring eligible expenses such as medical insurance premiums, charitable donations, etc.</p> Signup and view all the answers