Here are a few sample theory questions in Taxation. 1.

2.

Define and explain the scope of Income-tax. What are the different rates of Income-tax for AY 2010-11? Explain the residential status and ordinary residence for Individuals, HUF and companies. Explains the difference between Exemptions, Deductions and Rebates. Give five examples of exemptions and deductions. What do you know about black money and money laundering? How is it generated and how is it detected. Explain House property Income, particularly with reference to SOP / LOP. Explain indexation of costs for working out capital gains, with examples What do you know about VAT.? Explain 5 items included in Deduction u/s.80C. Do you think Voluntary Retirement compensation and gratuity received is fully free from taxation. Explain the rules. Explain deduction u/s.54. What are other alternative plans for minimizing capital Gains. Explain the Speculation profit and Capital Gains. What are the rules regarding maintenance of books of accounts and what you mean by books of accounts? Are they compulsorily auditable? What are the schedules of Central Excise?

3.
4.

5.

6.

7.
8.

9.
10.

11.

12.
13.

14.

15. 16. 17.

Explain the scope of Income-tax. Explain perquisites. Some small time businessmen can pay Income-tax on ad hoc basis without maintaining proper books of accounts. Is it true? If so what are the conditions? Sales-tax is decided on the basis of the items traded in as mentioned in the Schedules. Explain. To whom service tax is applicable? Custom duty is payable on all imports. Whether the statement is correct. What are the different methods of payments of Income-tax? Losses under one head can be set off against income of another head. Comment. Explain Central Sales Tax. Is it different from Cenvat? It is not true that Every gift is taxable as Income from other sources. Comment. What do you know about the Direct Taxes Code introduced by Finance Minister in Parliament.

18.

19. 20. 21. 22. 23. 24. 25.

The income tax return filing season is finally upon us and you must be wondering what possibly could be the easiest way to filing your income tax returns (ITR form). At the same time, you might be having many questions like do you need to file your returns in the first place; whether you need to file it physically or e-file it; what is the last date for filing the income tax returns, among others. Here is a small guideline which will help you clear the cobwebs.

Who should file income tax returns?

All individuals, whose total income exceeds the exemption limit before allowing for deduction, have to file their income tax returns. The below table shows the income tax slabs which is applicable for the current year. Depending on which tax slab you fall in, you will need to file your returns.

You do not need to file an income tax return if your total taxable income does not exceed the basic exemption limit before taking into account deductions. Remember that having a PAN does not mean you need to file returns -this is an often asked query among investors. Tax Slabs (in Rs) 0 to 1,60,000 Indian 1,60,001 to 5,00,000 Male/NRI/HUF 5,00,001 to 8,00,000 Above 8,00,000 0 to 1,90,000 1,90,001 to 5,00,000 Women 5,00,001 to 8,00,000 Above 8,00,000 0 to 2,40,000 Senior Citizen 2,40,001 to 5,00,000 (>65 yrs) 5,00,001 to 8,00,000 Above 8,00,000 Income tax NIL 10% 20% 30% NIL 10% 20% 30% NIL 10% 20% 30%

What are the various income heads ?

All the income that you receive in the financial year needs to be assessed for filing income tax returns. There are 5 heads of income in which all your earnings will fall into. They are :

Income from salary : This will include all your monthly wages, your bonus, perks, incentives, commissions. Income from house property : Income from house property is the rental proceeds which you receive in a year after a standard 30% deduction. Profits and gains of business or profession : This is the profit you earn from running a business. Capital Gains : Profit from the sale of real estate, stocks, mutual funds, gold etc etc are covered under this. Income from other sources : All the gifts, dividends and money you get from winning lotteries are to be accounted for in this income head.

When is the last date for filing income tax returns ?

It is July 31st 2011. Remember that the last date for paying all your taxes was March 31st. If you still have some tax that you need to pay to the government, then you will need to pay an interest fee of 1% for each month of delay. If all your taxes have been paid, you can file your income tax returns by March 31st 2012 without paying any penalty. However, you might not be able to claim any refunds or carry forward losses if you do this. After March 31st 2012, you can be levied a fine of Rs 5000.

Which ITR form should be used ?

ITR 1 (Saral 2) : If you have income from salary, pension and/or interest, then you can use the ITR 1 form. ITR 2 : You need to use this form if you have income from capital gains or rent from a house. ITR 3 : This is to be used when you are a partner in a firm. ITR 4 : If you have income from business or some profession, then use this form.

How to file income tax returns ?

Filing of income tax returns can essentially be done in three ways. The most popular of them is the physical way of filing returns wherein the form is filled up by a chartered accountant or a tax consultant who charges you anywhere form Rs 200/- to Rs 1000/. Most of the income tax returns are filed in this way. The most advanced way of filing income tax returns is e-filing. You fill up an online form, convert it into an XML file and along with a digital signature, you simply submit it online. You can use online tax portals for this. This can cost you upto Rs 1000/-.

There is a middle way to filing income tax returns where you fill in the form online and take a printout of the same. You can then submit it at your local income tax office. This can cost upto Rs 500/-, not to mention the serpentine queues you might encounter at the tax office