BASIC CONCEPTS OF INCOME TAX

NEERAJ GUPTA CA IPCC TAX CLASSES BASIC CONCEPTS OF INCOME TAX
www.ngpacollege.com Assessment Year 2013-14 For sms only 9810139214 Page 1

INTRODUCTION TO INCOME TAX
The matter discussed in this assignment is relevant only for a beginner to income tax.
Means for the one who is studying income tax for the first time. All provisions discussed
are in brief only just for the sake of giving the student a feel of what is income tax and
what are the various concepts we are going to study specially at IPCC level.
How we will study:
1. While we will be preparing for the CA IPCC Taxation papers, we will be covering
Income tax (50 marks), VAT (25 marks ) & Service tax (25 marks).
2. Complete theory provisions and practicals are given in the assignments. For
solving practical problems, please use Blank portion of assignments. Please
bring some extra white pages for this purpose.
3. One word, fill in the blanks and true false questions series shall be going
alongwith.
4. Will also be covering Questions from Scanner, Module and Practice Manual.
5. After completion of syllabus mock tests shall be taken till exams.
6. SMS of revision series shall be given on regular basis.
7. In break time, PPT of chapters already covered shall be shown. I hope this will
help in thorough revision of the concept.
8. Bringing I cards is necessary for issue of study assignments.

Q 1 : What is tax ?
Ans: It is an amount which is payable by a person to the government so that govt can
meet out its certain expenses for which directly there are no charges.
For example, armed forces, police, govt schools and hospitals, parks, roads etc.

Tax is an amount payable to government


Q 2: What is broader classification of taxation system of India ?
Ans: Indian Govt. collects tax both directly and indirectly.
Income tax & wealth tax are main examples of direct tax.
Service tax, VAT, Excise duty, Customs Duty are the main examples of indirect tax.
Two classifications of taxation are
direct and indirect taxation

TAX

DIRECT
TAX

INDIRECT
TAX

Q 3 : What is Income tax ?
Ans: As the name suggests, this is a tax on the income of a person. Usually the amount
received is not fully taxable and the expenses incurred to receive (earn) that amount
is deductible.
The net profit is taxable as income.
Income Tax is tax on the income of a person
INCOME
TAX
WEALTH
TAX
SERVICE
TAX

VAT
EXCISE
DUTY
CUSTOMS
DUTY
ENTERTAINMENT
TAX


Q 4 : Whether taxation is on monthly or annual basis ?
Ans: Income tax is an annual tax liability. Income earned in one financial year is
taxable in the next financial year. The financial year of income is known as PREVIOUS
YEAR and financial year of taxation is known as ASSESSMENT YEAR.

Taxation is on annual basis.

Q 5: How taxable income is computed ?
Ans: Income, for the purpose of taxation is divided in five heads of income
1. Salary income Sections 15 to 17

It includes income earned from employer employee relationship.

FINANCIAL
YEAR
INCOME TAXATION
PREVIOUS YEAR ASSESSMENT YEAR


2. House Property Income Sections 22 to 27

3.
It includes rental income from residential & commercial properties.

4. Business & Profession Income Sections 28 to 44D

Income from trading, manufacturing, providing services etc is covered.

5. Capital Gains Sections 45 to 55
Income from sale of property, gold, silver etc is covered.

6. Income from other sources Sections 56 to 59

Income from interest, lotteries, gifts above Rs 50,000 p.a. etc [Sec 56(2)] is
covered.

The total of above five heads of income is known as GROSS TOTAL INCOME (GTI).
From GTI, deductions given as per Sections 8OC to 80U is deductible.
The net amount is Taxable income also known as NET INCOME or total income.



SALARY

HOUSE
PROPERTY
BUSINESS &
PROFESSION
CAPITAL
GAINS
INCOME
FROM
OTHER
SOURCES

Sections

Sections

Sections

Sections

Sections
15 to 17

22 to 27

28 to
44D
45 to 55

56 to 59

Less:- Deductions U/s 80 C to 80 U
NET INCOME OR TAXABLE INCOME OR TOTAL INCOME
GROSS TOTAL
INCOME (GTI)
HUNDREDS OF
SOURCES OF INCOME


The format of computation:
INCOME FROM SALARIES
+ INCOME FROM HOUSE PROPERTY
+ INCOME FROM BUSINESS AND PROFESSION
+ INCOME FROM CAPITAL GAINS
+ INCOME FROM OTHER SOURCES
-------------------------------------------------------------------
GROSS TOTAL INCOME (GTI)
(-) DEDUCTION U/S 80 C TO 80 U
-------------------------------------------------------------------
NET INCOME OR TAXABLE INCOME OR TOTAL INCOME {ROUNDED OFF}
ROUNDING OFF OF NET INCOME - SECTION 288A

As per this section, the total income is rounded off in the multiples of Rs 10/-.
Upto Rs 4.99 is ignored.
If last figure of net income is Rs 5 or more, than net income is increased to the nearest
multiple of ten.
For example if net income is Rs 2,45,234.99, then tax shall be calculated on Rs
2,45,230.
Similarly if net income is Rs 3,46,865 or Rs 3,46,868
then in both situations, the tax shall be calculated on Rs 3,46,870.
ROUNDING OFF OF NET TAX PAYABLE - SECTION 288B
J ust like net income, tax payable is also rounded off in multiples of Rs 10.
The total income is rounded off
in the multiples of Rs 10 under Section 288A
The net tax payable is rounded off
in the multiples of Rs 10 under Section 288B



Q 6 Discuss in brief the deductions given by Section 80C, 80D & 80G.
Ans:- SECTION 80C - [DEDUCTION FOR SAVINGS]
Deduction is allowed
in respect of
amount paid
during the previous year
as
life insurance premium, or
contribution to Public Provident Fund or
Tuition fee for children etc.
The maximum deduction allowed is Rs 1,00,000.

SECTION 80D- [DEDUCTION FOR MEDICLAIM POLICY]

in respect of
amount paid
as
medical insurance premium
the maximum deduction allowed is Rs 15,000

ROUNDED
OFF
INCOME NET TAX
288A 288B


SECTION 80G [DEDUCTION FOR DONATIONS]

in respect of
amount paid
AS DONATION
to
National Defence fund set up by the Central Govt. @ 100%
Prime Ministers National Relief Fund @ 100%
National Childrens Fund @ 50%
Etc.

Maximum deduction u/s 80C is Rs 1,00,000
Maximum deduction u/s 80D is Rs 15,000
Deduction u/s 80G is allowed as per prescribed rates

Q 7 : Give few names of exempted incomes.
Ans: 1. Agricultural Income - Section 10(1)
2. Amount received by a member from HUF Section 10(2)
3. Share of profit of a partner from a firm Section 10(2A)
4. Dividend income from Domestic company is exempt in the hands of
shareholders Section 10(34)
MAXIMUM
DEDUCTION
80C 80D
1,00,000
15000


5. Income from Units of UTI/ Mutual funds is exempt in the hands of unit holders
Section 10(35)
6. Long term capital gain arising from sale of shares through recognized stock
exchange is exempt as
transactions are subject to Securities transaction tax Section 10(38)
Agricultural income, dividend income and income from units of UTI is exempt.

Q 8 : Compute the net income of Mr. N for the assessment year 2013-14 with the
help of following particulars:
Salary income: Rs 25,000 pm
Net income from House Property: Rs 78,000 p.a.
Short term Capital Gain on sale of silver : Rs 35,000
Long term Capital Gain on sale of shares subject to Securities Transaction Tax: Rs
48,000
Gift received during the year : Rs 30,000
Mediclaim insurance premium paid during the year: Rs 8,236

Q 9: Compute the net income of Mr. N for the assessment year 2013-14 with the
Salary income: Rs 20,000 pm
Net income from House Property: Rs 70,000 p.a.
Short term Capital Gain on sale of Land : Rs 3,35,000
Dividend received from Reliance India Ltd: Rs 45,000
Mediclaim insurance premium paid during the year: Rs 18,000
Life insurance premium paid during the year: Rs 36,252

GIFT UPTO Rs 50,000 FULLY EXEMPT. ABOVE Rs 50,000 FULLY TAXABLE



Net Business income (Proprietorship) for the year financial year Rs 6,80,000
Interest income : Rs 69,245
Share of profit from a partnership firm : Rs 90,000
Agricultural income : Rs 45,000
Tuition fees paid to Bal Bharti Public School : Rs 8,000 per quarter
Donation to PM National Relief fund: Rs 21,000

Net income from house property : Rs 4,00,000
Share of profit from HUF : Rs 50,000
Part time business income : Rs 1,90,000
Income from units of HDFC mutual fund : Rs 37,000
Amount deposited in PPF : Rs 40,000
Life insurance premium Paid during the year : Rs 67,000
Amount donated to National Relief fund : Rs 12,000

Q 12 : What are the tax rates for individuals for the assessment year 2013-14?
Ans: Tax rates for individual (both male and female taxpayers)

1. Net income upto Rs 2,00,000
Nil

2. Net Income between Rs 2,00,010 5,00,000
Tax =[net income less 2,00,000] x 10%
3. Net income between Rs 5,00,010 10,00,000
Tax =Rs 30,000 + {[net income less 5,00,000] x 20%}
4. Net income above Rs 10,00,010
Tax =Rs 1,30,000 +{[net income less 10,00,000] x 30% }


Surcharge: It is the additional tax payable by higher income group. In some years it
is applicable and sometimes not. Surcharge is not applicable for A/Y 13-14 for
individuals. So students can ignore this.
Education cess: It is 2% in every case of income tax.
Secondary and higher education cess: It is 1% in every case of income tax.
For practice, students can calculate it at 3% but for examination purpose, it should be
shown separately.
UPTO 2,00,000 0%; BETWEEN 2-5 LACS 10%;
BETWEEN 5 10 LACS 20%; ABOVE 10 LACS 30%

Q 13 Compute the tax payable [as per A/Y 2013-14] in the following cases
assuming the figures given are Net Income:
a) Rs 167,000
b) Rs 2,56,000
c) Rs 4,80,000
d) Rs 5,70,000
e) Rs 8,90,000
f) Rs 10,30,000
g) Rs 20,00,000

Q 14 Compute the taxable income and tax payable based on following data as
per provisions applicable for assessment year 2013-14:
Salary income : Rs 23,000 p.m.
Net House Property income : Rs 2,50,000
Dividend from NGPA Private Limited : Rs 30,000
Long term capital gain on sale of listed shares : Rs 35,000
Mediclaim insurance premium paid : Rs 17,600
Life insurance Premium Paid : Rs 45,675


Q 15 : Compute the taxable income and tax payable of Mr. N based on following
data as per provisions applicable for assessment year 2013-14:
Proprietary Business income : Rs 8,90,000
Short term capital gain on sale of gold : Rs 4,00,000
Share of profit from a partnership firm: Rs 2,40,000
Income from units of Reliance Mutual fund: Rs 66,000
Life insurance premium paid : Rs 65,000
PPF deposit : Rs 56,000
Donation to National Defence fund : Rs 11,255
Q 16 : What are special provisions for computation of tax in case of Senior
Citizens ?
Ans: Senior citizens are divided in two categories
1. Senior citizens Age during previous year is 60 Years or more but less than
80 years

2. Super Senior citizens Age during previous year is 80 years or more
Tax Provisions:
For senior citizen having age of 60 years or more,
first slab of exemption is Rs 2,50,000 instead of Rs 2,00,000.
Tax rates for individual senior citizens (both male and female taxpayers)
Nil

2. Net Income between Rs 2,50,010 5,00,000
Tax =[net income less 2,50,000] x 10%
3. Net income between 5,00,010 10,00,000
Tax =25,000 + {[net income less 5,00,000] x 20%}
4. Net income above 10,00,010
Tax =1,25,000 +{[net income less 10,00,000] x 30% }
SENIOR CITIZEN = 60 YEARS OR MORE
ONLY CHANGE EXEMPTION UPTO 2,50,000


For super senior citizens having age of 80 years or more,
first slab of 10% is fully exempt.
So, for them income upto Rs 5,00,000 is fully exempt and after that 20% slab is
applicable.
Tax rates for individual super senior citizens (both male and female taxpayers)

Nil

2. Net income between 5,00,010 10,00,000
Tax ={[net income less 5,00,000] x 20%}
3. Net income above 10,00,010
Tax =1,00,000 +{[net income less 10,00,000] x 30% }

SUPER SENIOR CITIZEN =80 OR MORE
UPTO 5 LACS 0%; 5-10 LACS 20%; ABOVE 10 LACS 30%

Q 17 - Compute the net income & Tax payable of Mrs. N (age 64 years) for the
assessment year 2013-14 with the help of following particulars:
Net Business income (Proprietorship) for the year financial year Rs 4,80,000
Interest income : Rs 67,000
Share of profit from HUF : Rs 99,000
Life insurance premium paid during the year : Rs 30,000
Donation to PM National Relief fund: Rs 31,000



Q 18 : Compute the net income and tax payable by Mr N (age 83 years) for the
assessment year 2013-14 with the help of following particulars:
Net house property income : Rs 4,70,000
Short term capital gain on sale of plot of land : Rs 3,70,000
Interest income : Rs 2,50,000
Dividend received from Indian Company : Rs 35,000
Life Insurance Premium paid during the year : Rs 22,000
Donation paid to National children fund : Rs 8000

Q 19 What are special tax rates for Long term capital gains and winning from
Lotteries etc ?
Ans: While LTCG is taxable at a flat rate of 20%,
winnings from lotteries, crossword puzzles, races etc is taxable at a flat rate of 30%.

In both cases, education cess and SHEC shall apply at 2% and 1% as usual.

LTCG TAXABLE @ 20% FLAT. LOTTERY ETC @ 30% FLAT

Q 20 Compute the tax liability of Mr N (age 44 years) with the help of following
data for the assessment year 2013-14:
Net Salary income for the year : 3,60,000
Net income from house property : 2,60,000
Long term capital gain on sale of silver : 45,000
Winning from Lotteries : 20,000
Mediclaim insurance premium paid : 10,000



Q 21 Compute the tax liability of Mr N (age 67 years) with the help of following
data for the assessment year 2013-14:
Net house property income for the year : 4,50,000
Amount received as profit share from HUF : 56,000
Short term capital gain on sale of plot of land : 5,70,000
Long term capital gain on sale of listed shares : 38,500
Winning from crossword puzzles : 5,000
Life insurance premium paid : 59,000
Donation to PM National relief fund : 10,000

Q 22 Who is an assessee ?
Ans: In simple terms it means the taxpayer.
Assessee [Section 2(7)] :
Assessee means a person
by whom
any tax
or
any other sum of money
(e.g interest or penalty)
is payable
as per this Act

Assessee is a person by whom any tax or any other sum of money is payable

Q 23: Explain in brief the concept of Clubbing of income.
Ans: In India, we follow progressive rates of taxation.



As we have already studied, tax rates increase from 10% to 20% and then to 30%,
people may try to avoid tax by transferring their income to relatives specially wife and
children.
In order to avoid such practices of tax avoidance, provisions of clubbing of income is
prescribed in Section 60-65 of Income tax act.
The main theme behind the provisions is that if assessee transfers his income in favour
of wife or children etc. by gifting the properties etc then income from such properties
shall be taxed in the hands of assessee and not in the hands of wife / children etc.
Transferred income is taxable in the hands of transferor and not transferee (like wife or
children)

Q 24 : Explain in brief the concept of Set off and Carry forward of losses.
Ans: Income of assessee is taxable in five heads of income i.e. salary, house property,
PGBP, capital gains and income from other sources.
It is not necessary that every year, in every head of income there shall be a profit only.
In some sources of income, like business head or capital gain etc, losses may also be
there. Losses may also be possible in House property income or income from other
sources.
Section 70-80 of income tax act deals with such provisions.
Normally the concept is that as a first step, a loss from a particular head of income is
adjusted against income under the same head and, then difference loss, if any, is
adjusted against the income in other head of income.
If still, any unadjusted loss is left, then it is adjusted in the next year or years against the
same head of income.
Usually a limit of 4 or 8 years is applicable for carry forward of losses.
Loss is adjusted in same year from same head other head Loss is adjusted in
next years from same head



Q 25 : When is the return of income is filed ?

Ans: Return of income is a systematic intimation to Income tax department about
the income earned by assessee during the previous year. Return is furnished in
prescribed format by due date of filing of return of income. Due date basically
means the last date of filing of return of income. An i ndividual assessee should file his
return of income on or before 31
st
J uly of Assessment year. The due date for corporate
assessee is 30
th
September of Assessment Year.
INDIVIDUAL RETURN BY J ULY 31. CORPORATE BY SEP 30

Q 26 : What is PAN number ?
Ans: It is a ten digit unique identification number. It is alpha numeric number. The
Govt. has made it compulsory to quote pan number in lot of day to day financial
transactions like sale/purchase of property valued at Rs 5 lacs or more or Fixed Deposit
with a bank exceeding Rs 50,000 etc.

PAN number is an alpha numeric ten digit unique identification number.
Q 27 : What is the difference between Self Assessment, Scrutiny Assessment and
Best Judgement Assessment ?
Ans: Assessment done by assessee himself is known as Self assessment [Section
140A].
In some selected cases, income tax officer may issue notice to assessee and ask for
documents to ensure there is no understatement of income. Such assessment
procedure is known as Scrutiny Assessment Procedure. [Section 143(3)]
If return is not filed or inspite of notice, information is not submitted then income tax
officer assess the income based on informations available or collected by him. This
assessment is known as Best J udgement Assessment. [Section 144]
RETURN AFTER NOTICE TO ASSESSEE & THOROUGH CHECKING IS KNOWN AS
SCRUTINY ASSESSMENT.


Q 28 : Explain the concept of Advance Tax ?
Ans: As per Sections 207 to 211, if tax payable by assessee exceeds Rs 10,000, then
advance tax is payable by assessee during the PREVIOUS YEAR itself.
The slabs for advance tax are as follows:
Due dates of installments Amount payable
On or before the 15
th
September
On or before the 15
th
December
On or before the 15
th
March
30% of annual tax payable

Obviously, when assessee will pay self assessment tax at the time of filing of return of
income, he will deduct the advance tax already paid.

TAX PAYABLE IS MORE THEN 10,000 PAY ADVANCE TAX

Q 29: What is the concept of Tax deduction at source ?
Ans: In this concept while making payment, in some specified cases, mainly based on
provisions given in section 190 to 199, tax is deducted at source by the payer and the
amount is deposited by the payer to Govt and a certificate in this regard is issued to
the payee.
Based on this certificate, the assessee claims deduction from his tax liability at the time
of self assessment.
Q 30 : What if the return is not filed or delayed or not correctly filed ?

Ans: For later filing of return or late payment of taxes, interest is payable by Assessee
and for effort of tax evasion, penalties may be imposed.

IF LATE INTEREST ; TAX KI CHORI =PENALTIES



Q 31 : Is there any appeal against decision of Income tax officer ?
Ans : Yes, if assessee is not satisfied by assessment order of ITO he can file an appeal
with
Commissioner of Income Tax (Appeals), and then to
ITAT (Income tax Appellate Tribunal) and then to
High Court and finally to
Supreme Court.
APPEAL AGAINST ITO CIT (A) ITAT - HC - SC

Q 32 : Compute tax liability as per assessment year 2013-14 in following cases:
Facts Mr N (Age 38
years)
Mr X (age 65
years)
Mr Y (age 82
years)
Salary income 3,60,000 Nil Nil
House property
income
2,60,000 4,70,000 8,90,000
Business income Nil 13,68,000 Nil
STCG 1,50,000 2,00,000 50,000
LTCG 40,000 35,000 20,000
Gift 35,000 50,000 60,000
Dividend income Nil 49,000 Nil
LIC premium paid 40,000 1,03,000 80,000
Mediclaim premium 29,000 9,145 11,000



QUICK REVISION (SUMMARY)
CHAPTER-1 [BASIC CONCEPTS OF INCOME TAX]

1) Tax is an amount which is payable by a person to the government so that govt
can meet out its certain expenses for which directly there are no charges.
2) Indian Govt. collects tax both directly and indirectly.
3) Income tax is a tax on the income of a person & its an annual tax liability.
4) Income earned in one financial year is taxable in the next financial year.
5) The financial year of income is known as PREVIOUS YEAR.
6) The financial year of taxation is known as ASSESSMENT YEAR.
7) Income of assessee is taxable in five heads of income i.e. salary, house property,
PGBP, capital gains and income from other sources.
8) The total of above five heads of income is known as GROSS TOTAL INCOME
(GTI).
9) From GTI, deductions given as per Sections 8OC to 80U is deductible.
10) The net amount is Taxable income also known as NET INCOME OR TAXABLE
INCOME OR TOTAL INCOME.
11) The total income is rounded off in the multiples of Rs 10 in Section 288A
12) The net tax payable is rounded off in the multiples of Rs 10 in Section 288B
13) Maximum deduction u/s 80C for savings is Rs 1,00,000
14) Maximum deduction u/s 80D for mediclaim policy is Rs 15,000
15) Deduction u/s 80G for donations in various funds is allowed as per prescribed
rates
16) Some exempted incomes are- agricultural Income, amount received by a
member from HUF, share of profit of a partner from a firm, dividend income from
Domestic company, income from Units of UTI / Mutual funds, long term capital
gain arising from sale of shares through recognized stock exchange.
17) Tax rates for individual (both male and female taxpayers)
Net income Tax
upto Rs 2,00,000 Nil


Rs 2,00,010
5,00,000
[net income less 2,00,000] x 10%
Rs 5,00,010
10,00,000
Rs 30,000 + {[net income less 5,00,000]
x 20%}
above Rs
10,00,010
Rs 1,30,000 + { [net income less
10,00,000] x 30% }
18) Surcharge is not applicable for A/Y 13-14 for individuals.
19) Education cess is 2% of income tax. Secondary and higher education cess is 1%
of income tax.
20) Senior citizens are divided in two categories Senior citizens and Super senior
citizens
21) Senior citizens are having age of 60 Years or more but less than 80 years
22) Super Senior citizens are having age of 80 years or more
23) Tax rates for individual senior citizens (both male and female taxpayers)
Net income Tax
Rs 2,50,010
5,00,000
[net income less 2,50,000] x 10%
Rs 5,00,010
10,00,000
Rs 25,000 + {[net income less 5,00,000]
x 20%}
above Rs
10,00,010
10,00,000] x 30% }
24) Tax rates for individual super senior citizens (both male and female taxpayers)
Net income Tax
Rs 5,00,010
10,00,000
[net income less 5,00,000] x 20%}
above Rs
10,00,010
10,00,000] x 30% }
25) LTCG is taxable at a flat rate of 20% plus education cess and SHEC @2% and
1%
26) Winnings from lotteries, crossword puzzles, races etc is taxable at a flat rate of
30% plus education cess and SHEC @2% and 1%
27) Assessee means the taxpayer. By whom tax or any other money is payable.
28) If assessee transfers his income in favour of wife or children etc. then it shall be
taxed in the hands of assessee and not in the hands of wife / children etc.


29) A loss from a particular head of income is adjusted against income under the
same head and, then against the income in other head of income, and, then in
the next year or years against the same head of income.
30) Usually a limit of 4 or 8 years is applicable for carry forward of losses.
31) An individual assessee should file his return of income on or before 31st J uly of
Assessment year. The due date for corporate assessee is 30th September of
Assessment Year.
32) PAN number is an alpha numeric ten digit unique identification number.
33) Assessment done by assessee himself is known as Self assessment [Section
140A]. Assessment after notice and thorough checking is scrutiny assessment.
34) If tax payable exceeds Rs 10,000, then advance tax is payable by assessee.
35) For late filing of return or late payment of taxes, interest is payable by Assessee.
36) For effort of tax evasion, penalties may be imposed.
37) All orders of ITO appealable to CIT (A), then ITAT, then HC, then SC.



TEST SERIES CHAPTER 1 (BASIC CONCEPTS OF INCOME TAX)
Q.NO. TYPE
QUESTIONS
ANSWER
1) T/F
Tax is an amount payable by persons to Govt. so that they
can meet expenses on public services like education,
security, health, infrastructure etc.

2) T/F
Income tax is an example of Indirect taxes ?

3) OW
Service tax and VAT are examples of which type of taxation
Direct or Indirect ?

4) T/F
Income tax is a monthly tax liability.

5) FB
The financial year of income is known as
..

6) FB
The financial year of taxation is known as

7) FB
Pension income is taxable as
.

8) T/F
Rental income from a commercial office is taxable as
Business income.

9) T/F
Gift is tax free with no limit.

10) FB
Total of five heads of income is known as
..

11) FB
Deductions which are deductible from GTI are prescribed in
sections

12) OW
Rounding off of net income is given in section
..

13) OW
Rounding off of tax payable is given in section ..

14) FB
Tax shall be computed on if net
income as per provisions is Rs 4,67,755.

15) OW
How much is the limit for various investments like LIC, PPF
etc in Section 80C?

16) OW
How much is the limit for deduction u/s 80D for paying
mediclaim insurance premium?

17) OW
How much is the deduction u/s 80G for donation to National
Defence fund and PM National relief fund?

18) OW
How much is the deduction u/s 80G for donation to National
children Fund ?

19) FB Agricultural income is exempt as per section ..........................



20) T/F Share of profit received from HUF is taxable as business income
for Karta.

21) T/F Share of profit received by a partner from the partnership firm is
not taxable.

22) T/F Dividend income from Foreign company is exempt from tax.
23) OW As per which section income from units of UTI/Mutual funds is
exempt from tax.

24) T/F Short term capital gain is exempt from tax on sale of listed shares.
25) T/F For assessment year 2013-14 tax rates are same for male and
female assessee.

26) OW What is basic exemption limit for taxation for A/Y 2013-14 ?
27) OW What is basic exemption limit for senior citizens for A/Y 2013-14 ?
28) OW What is basic exemption limit for Super Senior citizens for A/Y
2013-14?

29) OW What is maximum marginal rate of tax for A/Y 13-14 ?
30) OW How much is the surcharge applicable if net income is above Rs 10
lacs ?

31) OW How much is education cess & SHEC ?
32) OW How much is the tax rate for Short term Capital Gains ?
33) OW How much is the tax rate for Long term capital gains ?
34) OW How much is tax rate for winning from Lotteries, KBC, crossword
puzzles etc ?

35) FB Assessee means a person from whom any tax or any other some
of money e.g.. is payable as per this act ?

36) T/F Any income earned by wife is clubbed with the income of husband
as per income tax provisions

37) T/F If any loss arises, then it can be adjusted against any income of
assessee.



38) FB Due date for filing of return for individual assessee is
of A/Y.

39) FB Due date for filing of return for Corporate assessee is
..of A/Y

40) FB PAN number is .digit unique identification
number.

41) FB Assessment done by assessee himself at the time of filing of return
is known as .as per section
140A

42) FB Assessment done by AO after notice to assessee for additional
informations is known as as per section 143(3).

43) FB Assessment done by AO when no return is filed is known as
..as per section 144.

44) T/F Advance tax is payable if tax liability for the year exceeds Rs
8,000.

45) T/F TDS provisions are optional.
46) T/F Interest is payable for late filing of return of income ?
47) T/F Assessment order passed by Income tax officer is final and no
appeal is possible







IMPORTANT SECTIONS DISCUSSED IN THE CHAPTER
Section Details
15 - 17 Income from salaries
22 - 27 Income from house property
28 44D PGBP
45 55 Capital gains
56 59 Income from other sources
80C 80U All deduction from GTI
288A Rounding off of Net Income
288B Net tax payable rounded off
80C Deduction for savings
80D Deduction for Mediclaim Policy
80G Deduction for donations
10(1) Agricultural income
10(2) Income from HUF (share of profit)
10(2A) Income from firm (share of profit)
10(34) Dividend income from Domestic Companies
10(35) Income from units of UTI / Mutual funds
10(38) LTCG on transfer of listed securities
2(7) Definition of Assessee
60 65 Clubbing of income
70 80 Set off and carry forward of losses
140A Self assessment
143(3) Scrutiny assessment
144 Best judgement assessment
207 211 Advance tax
190 199 TDS

BASIC CONCEPTS OF INCOME TAX

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NEERAJ GUPTA CA IPCC TAX CLASSES BASIC CONCEPTS OF INCOME TAX

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