Important One-liners for Income tax for competitive exams

TORAN LAL VERMA
  1. Capital Gains is taxable under section 45 (1)
  2. Section 54 relates with the capital gain exemption on sales of a house.
  3. Movable assets like car,refrigerator television etc are exempted from capital gains tax
  4. Rural agricultural land is not regarded as capital asset.
  5. Rural land if
    1.  10,000 – 1,00,000        =          2 KM
    1. 1,00,000 – 10,00,000    =          6 KM
    1. 10,00,000- Above         =          8 KM
  6. Gold deposit bonds are exempted from capital gains tax.
  7. Self generated goodwill, tenancy rights, right to manufacture and produce and right to carry on a business is treated as capital asset and is taxable.
  8. Gold silvr ornaments shall be treated as short term if they are held by assessee for not more than 36 months.
  9. As per section 2 (42 A) listed securities held for more than 12 months are considered LTCG.
  10. As per section 2 (42 A) unlisted securities held for more than 24 months are considered LTCG.
  11. In case of transfer of unlisted equity shares, the asset will be treated as short term capital asset if they are held for not more than 24 months immediately preceding the date of transfer.
  12. transfer of share or shares as referred to in section 47(xvii) shall be? Cost of acquisition to him of the shares.
  13. Transfer of capital assets is defined in section 2 (47).
  14. Transer of capital assets includes the sale, exchange, relinquishment of assets. Extinguishment of any rights therein, compulsory acquisition thereof under any law. Conversion of capital asset into stock in trade. asset. Maturity or redemption of a zero-coupon bond.
  15. In the case of a capital asset, being the right to subscribe to any financial asset, which is renounced in favour of any other person, The period shall be reckoned from the date of the offer of such right by the company or institution, as the case may be, making such offer.
  16. LTCG loss can set off against LTCG only.
  17. Loss from non-speculative business can be set off against speculation income
  18. In Income Tax Act, 1961, deduction under sections 80C to 80U cannot exceed _ Gross total income
  19. Payment of LIC premium is deducted under 80 C
  20. Clubbing of income means Inclusion of income of other people in assesse income.
  21. Minors income is clubbed to Father’s income or mother’s income whichever is greater.
  22. As per Section 207, A resident senior citizen not having any income from business or profession is not liable to pay advance tax.
  23. Others having Tax Liability less than Rs 10,000/- after considering TDS and Tax Relief on Income. is not liable to pay advance tax.
  24. LTCG is charged 20 + surcharge and cess.
  25. Contribution to political party is taxable under section 80GGC.
  26. Rate of Health & Education cess on total income is 4 Per cent.
  27. Section 70-79 deals with carry forwarding of losses.
  28. Income from horse race falls under the head Other sources.
  29. Deduction on interest on loan taken for studies fall under 80 E
  30. The highest Administrative Authority for Income Tax in India is   CBDT
  31. Dividend from an Indian company is Fully Exempted
  32. Income of Benami transactions shall be included in the income of Real owner
  33. Advance tax must be paid according to the provisions of “Pay as You Earn” Scheme.
  34. The Assesse who is carrying business and opting for presumptive taxation scheme have to pay its Advance Tax in one installment by 15/03/2018.
  35. Under which section interest shall be charged to deferment of advance tax.
  36. Under section 234A, interest is levied for delay in filing the return of income. Interest is levied at 1% per month or part of a month.
  37. Section 234B provides for levy of interest for default in payment of advance tax.  the taxpayer is liable to pay simple interest at 1% per month or part of a month for default in payment of advance tax.
  38. As per Section 208 of the Act, advance tax shall be payable by the taxpayer during the financial year if estimated tax liability of assesse during that year is ten thousand rupees or more.
  39. A method adopted by a person to evade tax by transferring securities before the date of payment of interest and then again reacquired the same is called: Bond washing.
  40. Contribution to RPF is deducted u/s Section 80C of the Income-Tax Act, 1961. The maximum limit for such deduction is Rs 1,00,000 along with other specified investments.
  41. The amount of deduction under section 80DD regarding disability is Rs: 75,000.
  42. A partnership firm sold a residential house. The firm will get exemption under section Sec. 54EC.
  43. Indexation is applicable to Sale of long term capital assets which are not depreciable assets
  44. Gift of Rs. 75,000 from a friend of the assesse is a taxable gift.
  45. taxable under the head ‘ income from other sources’ are Family pension, Sum received under ‘key man insurance policy, Salary to a member of parliament, Income from other sources.
  46. The maximum amount of exemption of gift from a non-relative is: 50,000
  47. Interest on Govt. securities is taxable whereas interest on POSA is exempted.
  48. Advance tax is payable when tax payable by an assessed is Rs: 5,000 or more.
  49. Section 80CCF offers tax-saving benefits for taxpayers who invest in government-approved infrastructure bonds. The maximum deduction amount that can be claimed under this section is Rs. 20,000 for an assessment year.
  50. The last date of filling of return of income of individual:  31st July of the assessment year
  51.  Return filed after the due date is called: Belated return.
  52. Section 80 C is allowed to Both individual and HUF.
  53. Income of a minor child is exempted up to Rs: 1,500.
  54. When a loan is taken for the education of a child, the father is entitled to deduction u/s 80 E.
  55. The maximum amount deductible u/s 80GG in respect of rent paid is Rs: 60,000.
  56. 80 U is only available to disabled person.
  57. The maximum tax exemption to a senior citizen for the assessment year is Rs: 3,00,000.
  58. House Property, CG and BP Loss can be carried forward for 8 years.
  59. Income from other sources is a Residuary head of income.
  60. Short term and long term capital gains on sale of unlisted shares are Taxable.
  61. Some example of capital receipt ‘Salami’ for settlement of Tenancy, Insurance claim received on machinery lost by fire, Lump sum received on sale of shares.
  62. Compensation for cancellation of a license by the government resulting in cessation of business is a capital receipt.
  63. When expenses incurred on replacement of an asset is capitalized it will increase the tax liability.
  64. Compensation received for loss of trading asset is a Capital receipt.
  65. Loss due to fire of hired machinery is Capital loss.
  66. Embezzlement of cash by a cashier is a Revenue loss.
  67. Total income and net tax liability is rounded off to nearest multiple of 10.
  68. Rural agricultural land is not capital asset.
  69. Family pension Allowed for a  33.33 per cent or 15000 deduction.
  70. Section 10 of the IT Act deals with exempted income.
  71. a receipt is determined as Capital Receipt or Revenue receipt At the time it is received.
  72. Minors income will not be included in his father’s income if he receives the income from manual work and by applying his skills, talent and specialized information, if minor is disabled,
  73. Exemption for minor income is provided for interest on bank deposits.
  74. Where the spouse earns an income by applying technical and professional knowledge, the income will not be clubbed.
  75. Contribution made to an approved research association is eligible for deduction up to  100%.
  76. Repairs incurred before installation of an assets is Capital expenditure.
  77. What is the time limit for holding of a Financial Asset, to be called Short Term Capital Asset? Not more than 12 months.
  78. To be a long term capital asset, a non financial asset should be held more than 36 months.
  79. Cost of long term debentures are Not eligible for indexing.
  80. What is the date on which Fair Market Value of capital assets acquired is determined? 1.4.2001
  81. Maximum limit for the deduction of Life insurance premia from the gross total income is 1,50,000.
  82. The maximum aggregate amount of deduction under sections 80C, 80CCC (certain pension funds) and 80CCD cannot exceed Rs.1,50,000.
  83. Deduction in respect of contribution to political party will Not be allowed if payment made in cash.
  84. Deduction in respect of contribution to pension scheme of central government comes under Section 80CCD of Income Tax Act, 1961.
  85. In case of assesses other than companies, the following is advance tax rate to be payable on or before of 15th September: 30%
  86. Deduction under Section 80C can be claimed for fixed deposit made in any scheduled bank, if the minimum period of deposit is 5 Years
  87. The deduction available under section 80QQB in respect of royalty income of authors shall not exceed Rs.3,00,000. Same for 80RRB.
  88. Sections 60-69 is a section related to clubbing of income.
  89. Deduction in respect of medical insurance premium is allowed under Section 80D.
  90. Maximum deduction allowed for senior citizen under Section 80D is 50,000.
  91. Person with sever disability is allowed a fixed deduction of Rs.1,25,000 under section 80 U.
  92. The deduction for donation to National Foundation for Communal Harmony is 100%.
  93. Under which section HUF is not entitled to deduction from GTI Section 80E.
  94. The provision regarding TDS is given under Sections 192-206.
  95. Section 140(A) is related to self-assessment.
  96. Section 139A deals with PAN.
  97. Surcharge on tax on firm’s total income is Applicable if total income crosses Rs.1 crore.
  98. Interest is paid to partners under section 40B.
  99.  The provision of Section 56(2)(vii) is applicable to an individual and HUF.
  100. On the occasion of marriage of Mr. Rahul, he received a gift of ` 75,000 from a relative. Such an amount shall be Non-taxable. As they are exempted upto 50,000.
  101. In case of winning from horse races, payment exceeding Rs. 10,000 are subject to tax deduction at source.
  102. Exemption for casual receipt under section 10(37) is available to  An individual or an HUF.
  103. The exemption under section 54 shall be available to the extent of capital gain invested in the house property.  Within a period of one year before or two years after the date of transfer of old house, the taxpayer should acquire another residential house or should construct a residential house within a period of three years from the date of transfer of the old house. With effect from Assessment Year 2020-21, the Finance Act, 2019 has amended Section 54 to extend the benefit of exemption in respect of investment made in two residential house properties if the value is less than 2 crores.
  104. If the payee does not furnish PAN and TDS under section 194, dividends shall be made @ 20%.
  105. Deduction of tax at source for insurance commission is @ 5 per cent.
  106. The carry forward of losses is permissible if the return of income for the year in which loss incurred is Filled on time.
  107. What are the incomes are considered as an agricultural income? Any rent received from land which is used for agricultural purpose, any income derived from such land by agricultural operations, Income attributable to farm house.
  108. If the coffee is grown and cured, then the tax liability on the agricultural income is 75% agricultural and 25% non-agricultural income.
  109. The coffee is grown, cured and further processed, then the tax liability for the agricultural income is 60% agricultural and 40% non-agricultural.
  110. If the agricultural land is used for tea plantation, then the tax liability is 60% agricultural and 40% non-agricultural.
  111. An income by way of rent of agricultural land is Income from Other Sources.
  112. Which member of the family can demand partition in the property?  All coparceners.
  113. Personal earning including income from Self Acquired Property of a member of the HUF is included in Income of: Individual’s income.
  114. Partial partition in HUF affected after which year is not recognized for tax purpose 31 march, 1978.
  115. What is the place of Karta in HUF?  Major member.
  116. Income of every kind, which is not to be excluded from the total income under this Act and not charged to income-tax under any of the other four heads, shall be chargeable to income tax under the head Income from Other Sources.
  117. Which is the charging section for income chargeable under the head Income from other sources? Section 56.
  118. A person engaged in fertilizer trade received rent by sub-letting a building. This will be taxable under the head – Income from profits & gains of business & profession.
  119. Under the Income-tax Act, 1961, dividend derived from the shares held as stock-in-trade aretaxable under head Income from other sources.
  120. First installment of advance tax payable falls due on: 15th March. Second on 15th sep and third on 15th December.
  121. Where the entire block of the depreciable asset is transferred after 36 months , there will be: Long-term capital gain.
  122. CII stands for Cost Inflation Index.
  123. The amount deposited in Capital Gain Account Scheme shall be deemed to be the amount utilized for the purchase of new house under section 54.
  124. Tax rate of LTCG is 20%.
  125. Dividend paid by an Indian company is: Taxable in the hands of the company and exempt in the hands of the recipient.
  126. When an individual transfers an income without transferring the asset , it is taxable in the hands of Individual himself.
  127. Income of a physically handicapped minor child will be taxable in the hands of Minor child himself/herself.
  128. Unexplained income is a Deemed.
  129. income of a minor child earned by manual labour is included in the income of: Minor
  130. The loss from speculation business can be set off against   Speculation business only.
  131. The long term capital loss can be set off against: Long term capital gain.
  132. Loss from house property can be set off against Any head of income.
  133. Loss of lottery can be set off against: Cannot be set off.
  134.  Loss from house property can be carried forward: 8 years.
  135. 80 D deduction is allowed for: Medical insurance premium.
  136. Which of the following donations is eligible for 100 % deduction? Rajive Gandhi Foundation.
  137. Section 80 C is allowed to Both individual and HUF.
  138. The last date of filing of return of income of individual: 31st July of the assessment year.
  139. Penalty is chargeable for non-filing of income tax on the due date and before 31st December: Rs.5000.
  140. The rate of TDS from winning from lottery: 30%.
  141. Unabsorbed depreciation can be carried forward for set-off even though the return of loss has not been filed before the due date.
  142. A non-resident individual receivedRs.4,00,000 as royalty on the artistic book. He will get deduction U/S 80QQB: Nil.
  143.  Compensation of cancellation of a license by the government resulting in cessation of business is Revenue Receipt.
  144. The compensation received for loss of trading asset is a Casual receipt.
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