Income Tax Law and Practice Exam - Dec 2023

False (B)

Section 80 TTB allows deductions for interest income earned by senior citizens.

<p>calculated after depreciation and sales</p> Signup and view all the answers

<p>Section 80 GG = Deduction for rent paid Section 80 TTB = Deduction for interest on deposits for senior citizens Section 80 CCD = Contribution to pension schemes Section 32 = Depreciation of assets</p> Signup and view all the answers

<p>Rs. 4,50,000 (D)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>To offer tax relief for individuals with income below a certain threshold (A)</p> Signup and view all the answers

<p>Additional depreciation is an extra deduction available for newly acquired assets.</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>Section 80G</p> Signup and view all the answers

<p>Let-out house property = Property rented out to tenants Self-occupying house property = Property occupied by the owner Deemed to be let-out house property = Property treated as let out for valuation Vacant property = Property not occupied or rented</p> Signup and view all the answers

<p>Clubbing provisions refer to the tax rule where income of one person is taxed in the hands of another, typically in the case of spouses, to prevent tax avoidance.</p> Signup and view all the answers

<p>Agricultural</p> Signup and view all the answers

<p>Tax Avoidance = Legal methods used to reduce tax liabilities Tax Evasion = Illegal practice of not paying taxes owed Capital Asset = A property owned for investment purposes Short-term Capital Loss = Loss from assets held for less than 36 months</p> Signup and view all the answers

<p>Tax credit for electric vehicle purchase (A)</p> Signup and view all the answers

<p>True (A)</p> Signup and view all the answers

<p>Long-term capital loss occurs on assets held for more than 36 months, while short-term capital loss occurs on assets held for less than 36 months.</p> Signup and view all the answers

<p>new</p> Signup and view all the answers

<p>Only speculation income (C)</p> Signup and view all the answers

NAV stands for Net Asset Value. In the context of let-out house property, NAV is calculated by subtracting the total expenditure incurred on repairs, maintenance, insurance premiums, municipal taxes, etc., from the total rental income received during the year.

NAV for self-occupied house property is determined based on the notional rent, which is the rent that could have been earned if the property was leased out.

The NAV of Deemed-to-be let-out house property is calculated as if the property was actually let out, even if it is not. The notional rent is considered for calculation, and the deduction of expenses is also applied the same way as for actual let-out properties.

The written down value is the original cost of an asset less the accumulated depreciation. It is used to calculate the depreciation expense for the year.

Depreciation under section 32 allows businesses to deduct a certain percentage of the written down value of their assets each year from their taxable income.

Additional depreciation is an extra deduction that can be claimed on certain types of assets, particularly machinery, above and beyond the regular depreciation under section 32.

This deduction is available to taxpayers who pay rent for their residential accommodation. It is a deduction on the rent paid, subject to certain limits.

This deduction is for income tax purposes. It is available to taxpayers who have paid tuition fees for higher education for themselves or their dependents.

This deduction is available for contributions made towards the National Pension System (NPS) or the Atal Pension Yojana (APY).

In case of rent-free accommodation provided by an employer, a notional rent is calculated and added to the employee's salary income. This amount is taxed as salary income.

The period for which income is taxed, usually the financial year (April 1 to March 31). For example, income earned in FY 2023-24 will be taxed in AY 2024-25.

A plan to legally reduce your tax liability by taking advantage of deductions, exemptions, and tax-efficient investments.

Any action taken to avoid paying taxes that is outside of the law. It is often illegal and can lead to penalties by the tax authority.

In India, agricultural income is usually not taxed. However, if you are in a business that integrates with agriculture, this income might be added to your regular taxable income.

A rebate in India for individuals with an income below a certain threshold. It provides a deduction from the total tax payable.

These rules determine when income earned by your spouse is added to your income for calculating your taxes.

Deductions and exemptions are different ways to lower your taxable income. Deductions reduce your income before calculating your taxes, while exemptions are direct reductions in your tax liability.

Any asset held by a person that is used for profit-making, such as land, buildings, shares. Capital assets are classified for tax purposes.

Losses exceeding one year from the sale of a capital asset. These losses are generally allowed to be carried forward for 8 subsequent years to offset future capital gains.

Losses incurred from selling a capital asset that you've held for less than one year. These losses are usually deductible from your total income in the current year.