Question 1

Tax management deals with :

Accepted Answer

Tax management encompasses a wide range of activities including filing returns on time, ensuring accounts are audited as required, and deducting tax at source, among others.

Question 2

income tax act came into force on …………

Accepted Answer

The Income Tax Act, 1961 came into force on 01.04.1962.

Question 3

How many heads of income are there to compute gross total income?

Accepted Answer

There are five heads of income under the Income Tax Act to compute gross total income: Salary, House Property, Profits and Gains of Business or Profession, Capital Gains, and Income from Other Sources.

Question 4

Deduction of tax at source made for incomes which can be calculated in advance is called ……………..?

Accepted Answer

TDS stands for Tax Deducted at Source, which is a means of collecting income tax in India under the Indian Income Tax Act of 1961. It is deducted from certain payments such as salary, commission, rent, interest on securities, etc., which can be calculated in advance.

Question 5

Donation is deductible under section

Accepted Answer

Donations are deductible under section 80G of the Income Tax Act, which covers donations to certain funds, charitable institutions, or for certain relief efforts.

Question 6

Education cess on tax payable is at..

Accepted Answer

Education cess on tax payable is at 2%.

Question 7

The income tax rate on long term capital gains for an individual is …………..

Accepted Answer

The income tax rate on long-term capital gains for an individual is generally 20%. This applies to assets held for more than a certain period (usually more than a year), such as stocks, bonds, or real estate, depending on the jurisdiction's tax laws.

Question 8

When a receipt is determined as capital receipt or revenue receipt .

Accepted Answer

When a receipt is received, it is determined as capital receipt or revenue receipt based on its nature and purpose.

Question 9

STT stands for

Accepted Answer

Securities Transaction Tax (STT) is a tax levied on the purchase and sale of securities listed on the stock exchanges in India.

Question 10

Who is tax payer?

Accepted Answer

An assessee is a person or entity liable to pay taxes to the government. This term encompasses all types of taxpayers, including individuals, businesses, trusts, and government employees, making it the correct choice.

Question 11

Reciept of amount on maturity of LIC policy is ……………. .

Accepted Answer

The receipt of an amount on the maturity of an LIC (Life Insurance Corporation) policy is considered a capital receipt because it is a one-time transaction and not part of the regular income or revenue streams.

Question 12

Income by way of rent of agricultural land is ……………. .

Accepted Answer

Agricultural income is defined as revenue earned from land which is situated in India and is used for agricultural purposes. Rent received from agricultural land directly relates to this category and is classified as agricultural income under the Income Tax laws of India.

Question 13

The highest administrative authority for income tax in India ………….?

Accepted Answer

The Central Board of Direct Taxes (CBDT) is the highest administrative authority for income tax in India, responsible for the administration of direct tax laws through the Income Tax Department.

Question 14

Tonnage tax is based on …………………... .

Accepted Answer

Tonnage tax is based on net tonnage, which is the internal volume of a ship expressed in cubic meters.

Quiz 3: Tax Management and Income Tax Act