Tag: black money and tax evasion

Questions Related to black money and tax evasion

The maximum amount of deduction under section 80D in the case of a senior citizen is _____.

income tax direct taxes commerce black money and tax evasion meaning of tax

  1. 20,000

  2. 25,000

  3. 50,000

  4. 75,000

Show answer
Correct Option: C
Explanation:

Deduction under section 80D is available to an individual or a HUF. A deduction of Rs. 25,000 can be claimed for insurance of self, spouse and dependent children. An additional deduction for insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age or Rs 50,000 (has been increased in Budget 2018 from Rs 30,000) if parents are more than 60 years old. In case, a taxpayers age and parents age is 60 years or above, the maximum deduction available under this section is to the extent of Rs. 100,000. Example: Rohan’s age is 65 and his father’s age is 90. In this case, the maximum deduction Rohan can claim under section 80D is Rs. 100,000. From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for the preventive health check up to individuals. 

Education allowance is exempted for a maximum of ______.

income tax direct taxes commerce black money and tax evasion meaning of tax

  1. One child

  2. Two children

  3. Three children

  4. Four children

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Correct Option: B
Explanation:
In respect of education, a parent can claim a deduction on the amount paid as tuition fees to any university, college, school or any other educational institution. Only tuition fees that forms part of the total fees paid is allowed for deduction.
The maximum deduction on payments made towards tuition fee can be claimed up to Rs 1.50 lakh together with the deduction in respect of insurance, provident fund, pension etc. in a financial year.
It can only be claimed in respect of two dependent children and for fees paid to an educational institution, college or school.

Choose the correct answer:
(a) Under the straight line method, depreciation charges are allocated equally over the asset's useful life
(b) The accelerated depreciation methods provide for larger amount of depreciation in the early years of the asset's life while the amount progressively declines in latter years
Of these:

income tax direct taxes commerce black money and tax evasion meaning of tax

  1. Both (a) and (b) are true

  2. (a) is true but (b) is false

  3. (a) is false but (b) is true

  4. Both (a) and (b) are false

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Correct Option: A

Maximum deduction available as deduction of interest payable on loan taken by an individual from any financial institution for the purpose of acquisition of a residential house property is _____.

income tax direct taxes commerce black money and tax evasion meaning of tax

  1. 25,000

  2. 40,000

  3. 50,000

  4. 100,000

Show answer
Correct Option: C
Explanation:

Section 80EE allows tax benefits for first time home buyers. Income tax deduction can be claimed on home loan interest towards your first house property. The deduction allowed under this section is for interest paid on home loan up to maximum Rs 50,000 per financial year. 

The sum of direct material direct wages & direct expenses is ______.

income tax direct taxes commerce black money and tax evasion meaning of tax

  1. Total cost

  2. Average cost

  3. Production cost

  4. Prime cost

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Correct Option: D
Explanation:
Though the production of goods and services involves many different kinds of expenses, the prime cost formula only takes into account those variable expenses directly connected to the production of each item.

Prime cost is calculated by adding the cost of raw materials to the cost of labor directly associated with the production process. The formula is as follows:

Prime Cost = Direct Expenses + Direct Wages

The methods of appraising capital expenditure proposals can be divided into ____.

income tax direct taxes commerce black money and tax evasion meaning of tax

  1. unsophisticated and sophisticated

  2. average rate of return and discounted cash flow techniques

  3. average rate of return and pay back method

  4. net present value method and net terminal value method

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Correct Option: A

Wealth Tax is a:

income tax direct taxes commerce black money and tax evasion meaning of tax

  1. Direct tax

  2. Indirect tax

  3. Cooperation tax

  4. Value added tax

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Correct Option: A
Explanation:

A direct tax is paid by a person upon whom it is legally imposed; its effect is borne by the tax payer, for example, income tax. A direct tax is demanded from the very person who it is intended or devised for.  An example of a direct tax is wealth tax.

In CENVAT, one basic excise duty of what is percent is applicable to all goods?

income tax direct taxes commerce black money and tax evasion meaning of tax

  1. 20%

  2. 14%

  3. 16%

  4. None of the above

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Correct Option: C
Explanation:

In CENVAT, one basic excise duty of 16% is applicable to all goods. CENVAT stands for Central Value Added Tax.

Operating leverage indicates the impact of changes in

income tax direct taxes commerce black money and tax evasion meaning of tax

  1. Sales on operating income

  2. Output on operating income

  3. Profit on operating income

  4. All the above

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Correct Option: A

Which of the following is referred to as 'Deferred Payment System?"

income tax direct taxes commerce black money and tax evasion meaning of tax

  1. Hire-purchase

  2. Instalment selling

  3. Co-operative retailing

  4. Mail order retailing

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Correct Option: B