Taxation of Perquisites Quiz
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Questions and Answers

Which of the following perquisites is NOT taxable according to court decisions and regulations?

  • Sum payable to a retirement fund
  • Transport facility provided by a private employer
  • Payment of annual premium on personal accident policy (correct)
  • Refreshments provided during working hours (correct)

    • Which perquisite received outside India is exempt from taxation?

  • Privilege ticket orders by Indian railways
  • Perquisites allowed by the government for services rendered abroad (correct)
  • Transport facilities provided by government in India
  • Medical facilities provided by the employer

    • What type of accommodation is considered a non-taxable perquisite?

  • Housing allowance given to employees
  • Rent free accommodation provided by a private company
  • Furnished residence provided by a corporate employer
  • Rent free official residence provided to a high court judge (correct)

    • Which of the following falls under recreational facilities and is exempt from taxation?

    <p>Facilities extended to all employees generally</p> Signup and view all the answers

    Which of the following expenditures by an employer is tax-exempt?

    <p>Amount spent on refresher courses for employees</p> Signup and view all the answers

    How is the salary due on the 1st of the next month classified for tax purposes?

    <p>Taxed in the previous financial year</p> Signup and view all the answers

    What is the initial monthly salary of an employee in the grade of Rs. 12,200-300-17,400-500-19,400?

    <p>Rs. 12,200</p> Signup and view all the answers

    What annual increment does an employee receive after reaching a salary of Rs. 17,400 in the grade system?

    <p>Rs. 500</p> Signup and view all the answers

    If an employee's salary is fixed at Rs. 14,400 in the grade of Rs. 12,000-300-15,000-500-18,000, when will they reach a salary of Rs. 15,000?

    <p>After two years</p> Signup and view all the answers

    In what scenario can an employee receive a salary that is set above the initial grade level?

    <p>Upon joining at a higher level</p> Signup and view all the answers

    What amount did Mr. Surendra receive as arrears of salary in respect of 2018-19?

    <p>Rs. 10,000</p> Signup and view all the answers

    If Mr. Surendra has a monthly salary of Rs. 5,000 due at month-end, how much salary is subject to tax if he receives a month’s salary in advance?

    <p>Rs. 60,000</p> Signup and view all the answers

    What is the effective date for the basic salary of Mr. Surendra?

    <p>May 1, 2022</p> Signup and view all the answers

    What is the maximum amount of exemption according to the guidelines?

    <p>Rs. 5,00,000</p> Signup and view all the answers

    How is the average pay calculated for a monthly paid workman prior to retrenchment?

    <p>For the last three calendar months</p> Signup and view all the answers

    What is a characteristic of Statutory Provident Fund?

    <p>Administered by the government.</p> Signup and view all the answers

    How is the employer's contribution to a Recognized Provident Fund taxed?

    <p>Taxed only if it exceeds 12% of basic salary.</p> Signup and view all the answers

    In the given example, what was Mr. Omkar's retrenchment compensation actually received?

    <p>Rs. 2,60,000</p> Signup and view all the answers

    What happens to the interest credited during a year in a Recognized Provident Fund if the rate is above 9.5%?

    <p>Only the excess amount is taxable.</p> Signup and view all the answers

    What is included in the definition of wages?

    <p>All allowances including dearness allowance</p> Signup and view all the answers

    According to the guidelines, what does 'retirement compensation' refer to?

    <p>Any amount received as compensation by an employee</p> Signup and view all the answers

    Which of the following statements about Unrecognized Provident Fund is correct?

    <p>Interest on employee contributions is taxable upon retirement.</p> Signup and view all the answers

    What is the least amount used for determining the exemption u/s 10 (10b)?

    <p>Retrenchment compensation received</p> Signup and view all the answers

    What is true for an employee's contribution to any Provident Fund during employment?

    <p>It is added to gross taxable salary.</p> Signup and view all the answers

    Which type of Provident Fund is not recognized by the income tax department due to non-compliance?

    <p>Unrecognized Provident Fund</p> Signup and view all the answers

    For how many years of service does Mr. Omkar qualify in the example provided?

    <p>30 years and 5 months</p> Signup and view all the answers

    What amount is calculated from Mr. Omkar's service to determine the exemption?

    <p>Rs. 2,25,000</p> Signup and view all the answers

    What kind of payment related to a Statutory Provident Fund is exempt from taxation?

    <p>Lump sum amount at retirement.</p> Signup and view all the answers

    What defines allowances in the context of employment?

    <p>Fixed amounts paid for personal expenses.</p> Signup and view all the answers

    What portion of an employer's contribution to a recognized provident fund is taxable as salary when it exceeds a certain limit?

    <p>15% of basic salary</p> Signup and view all the answers

    How much of the commuted pension received by a non-government employee is exempt from tax?

    <p>90%</p> Signup and view all the answers

    Leave encashment received while in service is classified as what for tax purposes?

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

    What is V's gross salary for the assessment year 2022-23 if M pays a salary of Rs. 2,50,000 and undertakes to pay Rs. 49,980 in income tax on his behalf?

    <p>Rs. 2,99,980</p> Signup and view all the answers

    What is the gross salary for M, who was employed in the grade of Rs. 15,000-400-17,000-500-22,000, for the assessment year 2022-23?

    <p>Rs. 22,000</p> Signup and view all the answers

    How is M's gross salary calculated if he received an advance of Rs. 20,000 against his salary of Rs. 10,000 p.m. on 1-3-2021 for assessment year 2022-23?

    <p>Rs. 1,40,000</p> Signup and view all the answers

    What deduction can a government employee take for entertainment allowance if they receive Rs. 50,000 as salary and Rs. 12,000 as entertainment allowance, with actual expenditure of Rs. 3,000?

    <p>Rs. 3,000</p> Signup and view all the answers

    What is the exempt amount for Mr.X's taxable salary?

    <p>Rs. 25,000</p> Signup and view all the answers

    What is the deduction for entertainment allowance if Mayank receives Rs. 5000 as salary and Rs. 300 as dearness allowance along with Rs. 500 entertainment allowance?

    <p>Rs. 300</p> Signup and view all the answers

    What is the taxable amount after exemptions for Mr.X?

    <p>Rs. 12,500</p> Signup and view all the answers

    When is the salary for March 2021 taxable according to the due basis?

    <p>In the previous year 2022-23</p> Signup and view all the answers

    What is the total monthly salary Mr.X receives from XYZ Ltd, excluding perquisites?

    <p>Rs. 70,000</p> Signup and view all the answers

    What is the taxable value of the rent-free furnished accommodation provided by Mr.X's employer?

    <p>Rs. 2,56,000</p> Signup and view all the answers

    What was the total amount Mr.X received as gratuity?

    <p>Rs. 1,20,000</p> Signup and view all the answers

    How much pension does Mr.X receive from the Government starting June 2022?

    <p>Rs. 3,000</p> Signup and view all the answers

    Which of the following emoluments is NOT mentioned for Mr.X during his time at the Government?

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

    Study Notes

    Shivaji University, Kolhapur

    • Centre for Distance and Online Education
    • Advanced Accountancy Paper-III (Taxation)
    • M.Com. Part-I, Semester-I
    • Implemented from Academic Year 2023-24
    • In accordance with National Education Policy 2020

    Subject Matter for Paper-III

    • Income from Salary (Section 15-17)

      • Taxability of Income from salary
        • Who is taxable?
        • When is Salary Taxable? (Basis of Charge) [S.15]
        • Legal Provisions
        • Comments
      • What is included in Salary? [S.17(1)]
        • Definition
        • Perquisites
        • Profit in Lieu of Salary
        • Provident Fund
        • Allowances
      • Exemptions [S.10]
        • Leave Travel Concession [S.10(5)]
        • Gratuity [S.10(10)]
        • Commutation of Pension [S.10(10AA)]
        • Encashment of Leave Salary [S.10(10A)]
        • Retrenchment Compensation [S.10(10B)]
        • Retirement Compensation [S.10(10C)]
        • Tax on Perks Paid by Employer [S.10(10CC)]
        • Payment from Statutory/Public P.F. [S.10(11)]
        • Payment from Recognized P.F. [S.10(12)]
      • Deductions from Salary
        • Standard Deduction [S.16(ia)]
        • Entertainment Allowance [S.16(ii)]
        • Professional Tax [S.16(iii)]

    • Income from Business or Profession, Income from House Property, Capital Gains, and Income from other sources (Of individuals only)

    • Deductions Under Chapter VI A (Computation of Total Income and Liability of individual Only)

    • Clubbing of Income, Set-off and Carry Forward of Loss, E-Filing of Return, E-Payment of Tax

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    Related Documents

    M. Com. Part-I Advanced Accountancy Paper-III (Taxation) PDF

    Description

    Test your knowledge on the taxation of perquisites and salary increments in India. This quiz covers rules around taxable and non-taxable perquisites, salary classifications, and employer expenditures. Perfect for students or professionals looking to deepen their understanding of tax regulations.

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