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Bangalore University Income Tax-2 Two Marks Important Question with Answers
1.What is Profession?
Ans. It refers to rendering personal service to others using educational qualification, talent, experience, skill etc, in consideration for fees is called profession.
2. Mention any four admissible expenses while calculating income from business?
Ans. Purchase of goods, printing and stationery, advertisement expenses, discount allowed, sales tax paid, general expenses.
3. What is long term capital gain?
Ans. Capital gain arising from the transfer of a long-term capital assets is termed as long-term capital gain it is taxed at a higher rate.
4. What is Tax free Government Securities?
Ans. Tax free Government securities are those securities which are fully exempted from tax under Section 10 (15).
5. Define Business?
Ans. Business is an economic activity, production goods and services for the purpose of earning profit is called business.
6. Mention any four disallowed expense, in calculation of profit from Business?
Ans. Land and building, All provisions and reserve, Income tax, wealth tax.
7. What is short term capital assets?
Ans. Short term capital assets refers to a capital asset held by an assessee for not more then 12 months immediately preceding the Date of transfer.
8. What do you mean by Less Tax securities?
Ans. Less tax securities can be issued either by government or non-government institutions. They are taxable securities but however no tax is deducted at source on there and interest on these will not be grossed.
9. What is vocation?
Ans. It refers to all those activities which are undertaken by a person other than profession for the purpose of earning income from livelihood.
10. What is casual Income?
Ans. Casual Income are those incomes which are non-recurring in nature and are received by a nature of windfall.
1. Winning from lottery.
2. Winning from horse race.
11. Explain the treatment of family pension received by an assesee?
Ans. Family pension received by an assesse in chargeable is subject to standard deduction 1\3rd of total amount received and 15,000 whichever is less.
12. What is Gross total Income?
Ans. Gross total income is the sum total various heads of Income from salary, Income from house property, Income from business and profession, Income from Capital gain and Income from other sources.
13. Expand TDS and DTC
Ans. TDS: Tax Deducted at Source
DTC: Direct tax code.
14. State any four items chargeable to tax under the head income from other source?
Ans. Interest received, Casual Income, Director Fees, Income from subletting.
15. What is dividend under the IT Act?
Ans. It is a share of over all profits of the company received by the shareholder based on number of share he holds. The term dividends include both interim as well as final dividend.
16. State any four long term capital assets for which benefit indexation is not available?
Ans. Bonds, Debentures, repurchase of units acquired, Depreciable Assets, Global Depositary Receipts.
17. What is long term capital Assets?
Ans. Long term capital assets are those assets which are held for more than 12 months however in certain exceptional cases if shares listed securities units of mutual fund.
18. What is Indexed Cost of Acquisition?
Ans. Indexed cost of acquisition mean an amount which bears to the cost of acquisition in the same proportion as cost inflation index.
19. What is a Block of Asset?
Ans. Block of assets means group of assets falling with in a class of assets, comprising of tangible assets being building, machinery, plant and furniture and intangible assets being know how.
20. Define Speculative Transaction?
Ans. According to section 43 (5) of the income tax act speculative transaction is a transaction in which contract for the purchase or sale of any commodity including stocks and shares is periodically.
21. What do you mean by expressly admissible expenses?
Ans. Admissible expenses are those expenses which are allowed during the regular course of business these expenses are specified Under Section 30 to 37 of the Income tax act at 1961.
22. What is Bond Washing Transaction?
Ans. It is a tool adopted by high income earning group assesses for the purpose of avoiding and reducing the tax
23. Mention the provision for deduction under section 80D?
Ans. It pertains to expenditure incurred on the medical treatment including missing, training and rehabilitation of handicapped or mentally retarded dependent relative in the case of an individual or any member of the family in case of HUF.
24. Explain the provisions of Section 80E?
Ans. Deduction is allowed to an individual in respect of the repayment of loan including interest there on taken by him for higher studies.
25. What is Total Income?
Ans. Total Income is the difference between gross total income and deduction under section 80 C to 80 U.
26. What is Set off of losses?
Ans. Carry forward such unobserved losses for set off against his incomes in the succeeding assessment years.