Basic Concepts of Income Tax Law

What is the difference between direct tax and indirect tax ?

• Direct taxes are levied on goods and services, while indirect taxes are levied on individuals or entities

• Direct taxes are paid by individuals or entities on their taxable income, while indirect taxes are paid by consumers on goods and services

• Direct taxes are paid only by businesses, while indirect taxes are paid by individuals or entities

• There is no difference between direct and indirect tax

Which of the following statements is true regarding income tax ?

• It is a direct tax paid by individuals and entities on their taxable income

• It is an indirect tax paid by consumers on goods and services

• It is a tax that is paid only by businesses

• None of the above

Previous year means

• Financial Year

• Year in which income is earned

• Year in which income is taxed

• None of the above

Person is explained u/s

• 2(31)

• 2(30)

• 2(3)

• 2(33)

Which of the following is not a head of income under the Income Tax Act ?

• Salaries

• Buisness or Profession

• Interest on savings account

• None of the above

What is the role of the Income Tax Department in India ?

• To collect taxes and enforce compliance with tax laws

• To provide tax planning and accounting services to individuals and entities

• To set tax rates and policies for the government

• None of the above

What is the tax rate for income between Rs. 5 lakhs and Rs. 10 lakhs for individuals below 60 years of age?

• 10%

• 20%

• 30%

• No tax

Who is required to file income tax returns in India ?

• Everyone who earns an income

• Only salaried individuals

• Only self-employed individuals

• None of the above

Which of the following is not an exempt income ?

• Income from agriculture

• Income from charity

• Income from mutual funds

• None of the above

Which form is used for filing income tax returns for salaried individuals ?

• ITR-1

• ITR-2

• ITR-3

• ITR-4