Tax-Saving Investments, Tax-Free Bonds and Tax Planning vs. Tax Evasion

The video tutorial covers various aspects of taxation, including tax saving investments, tax free bonds, tax planning, and the risks of tax evasion. It explains the difference between deductions and exemptions, and highlights the importance of legal tax planning to minimize tax liabilities. The session also discusses the concept of double taxation and how international agreements help mitigate its impact.

What is the primary purpose of deductions in the context of income tax?

• To increase the gross total income

• To reduce the taxable income

• To provide tax-free income

• To increase tax liability

Which of the following is NOT a tax saving investment option?

• Public Provident Fund (PPF)

• Agricultural income

• Five-year tax saving fixed deposits

• Life insurance premiums

What is a key feature of tax-free bonds?

• The interest income is exempt from taxes

• They are issued by private companies

• They have a high-risk profile

• They offer variable interest rates

What is the main goal of tax planning?

• To minimize tax dues within the law

• To maximize tax liability

• To increase taxable income

• To evade taxes legally

Which of the following is an example of tax evasion?

• Claiming legitimate deductions

• Underreporting income

• Investing in tax-free bonds

• Using tax advantage accounts

What is double taxation?

• Taxing the same income twice by the same country

• Taxing income and expenses simultaneously

• Taxing different incomes by two countries

• Taxing the same income by two or more jurisdictions

How do Double Taxation Avoidance Agreements help taxpayers?

• By increasing the tax rates

• By providing guidelines to avoid being taxed twice

• By eliminating all taxes

• By allowing tax evasion