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Consultation on Tax Laws  

A.     General

Source: http://www.incometaxindia.gov.in/questionbank.htm#A

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  1. What is Income Tax?

 

  1. What do you mean by income earned in India?

 

3. Who administers the Income-Tax Act?

 

  1. What is the period for which a persons income is taken into account for purpose of Income tax?

 

  1. What is an Assessment Year?

 

  1. Who is supposed to pay Income Tax?

 

7.      Is Income tax Act applicable only to residents?

 

8.      Who is a resident?

 

9. How can I know whether a company is resident or non-resident?

 

10.  How is resident/ non-resident status relevant for levy of income tax?

 

  1. I am an Indian scientist, who had gone abroad on a government project. Should my return of income include income earned/received abroad?

 

B. Taxable Income

 

  1. What does the Income Tax Department consider as income?

 

  1. Are all receipts considered as income?

 

  1. What are revenue and capital receipts?

 

  1. Is income tax levied on gifts received by a person?

 

16.  I own shares of various Indian companies and receive dividends. Is it taxable?

 

17.  I am a religious preacher and earn money from preaching. Do I have to pay tax and file return?

 

  1. Can I claim deduction for my personal and household expenditure in calculating my income or profit?

 

19.  Most of my income is given away in charity and I am left with just enough to meet my personal requirement. What will be considered as my income?

 

20.  My daughter stays in USA. She owns a house in India and has let it out. She has asked tenants to pay rent to me so that I can a lead decent life. She has not received any rent. Is she still liable to tax? What if she transfers the house to me?

 

21.  I Children living abroad send me Rs.20000/- per month for my maintenance. Would this be considered as my income?

 

  1. Is there any limit of income below which I need not pay taxes?

 

  1. I am an agriculturist? Is my income taxable?

 

24.  What is agriculture income?

 

  1. Is income from animal husbandry considered as agriculture income?

 

  1. Do I have to maintain any records or proof of earnings?

 

  1. As an agriculturist, am I required to maintain any proof of earning and expenditure incurred?

 

  1. I win a lottery or prize money in a competition. Am I required to pay taxes on it?

 

C. Tax on Income

 

  1. How does the Government collect Income Tax?

 

  1. How will I know how much Income tax I have to pay?

 

  1. Does every person have to keenly follow the annual Finance bill?

 

  1. When do I have to pay the taxes on my income?

 

  1. What is the procedure for depositing tax?

 

  1. In the challan there are terms like Income tax on companies & Income tax other than companies, What do they mean?

 

  1. How is advance tax calculated and paid?

 

  1. What is regular tax and how is it paid?

 

  1. What are the precautions that I should take while filling up the tax payment challan?

 

  1. Do I need to insist on some proof of payment from the Banker to whom I have submitted the challan?

 

  1. How can I know that the Government has received the amount deposited by me as taxes in the bank?

 

  1. What is the procedure to be followed to view my Tax passbook/Tax statement?

 

  1. What should I do if my tax payment particulars are not found against my name in your website?

 

  1. Is my responsibility under the Income tax Act over once taxes are paid?

 

  1. What can I do to reduce my tax?

 

D. Return of income

 

44.  What is a return of income?

 

45.  From where can I get a return form?

 

46.  How can I know which form is applicable for my income?

 

  1. Where and how am I supposed to file my return?

 

  1. Who is an Assessing Officer?

 

  1. How is a return filed electronically?

 

  1. I am going out of India. Who will file my income tax return for this period?

 

  1. Will I be put to any disadvantage by filing my return?

 

  1. What are the benefits of filing my return of income?

 

  1. Is it necessary to file return of income when I do not have any positive income?

 

  1. What are the due dates for filing returns of income/loss?

 

55.  If I fail to furnish my return within the due date of filing, will I be fined or penalized?

 

  1. Can a return be filed after the due date?

 

  1. So far I have never paid any tax. If I file a return this year will the IT department ask me about my earlier years income?

 

  1. If I have paid excess tax how and when will it be refunded?

 

  1. If I have committed any mistake in my original return, am I permitted to file a corrected return?

 

  1. How many times can I revise the return?

 

  1. Am I required to keep a copy of the return filed as proof and for how long?

 

62.  There are various deductions that have not been reflected in the Form 16 issued by my employer. Can I claim them in my return?

 

63.  Why is return filing mandatory even though all my taxes and interests have been paid and there is no refund due to me?

 

64.  Am I liable for any criminal prosecution [arrest/imprisonment etc] if I dont file my income tax return even though my income is taxable?

 

E. PAN

 

  1. What are the benefits of obtaining a Permanent Accounts Number [PAN] and PAN Card?

 

  1. I have lost my PAN card but remember my number. Do I necessarily need to get a fresh card?

 

  1. I have been allotted two PANs. Which number should I use?

 

  1. If I do not surrender the additional PAN number, is there any problem?

 

  1. By mistake I have been using different PANs for different purpose like one for my demat account and another for filing my Income Tax return and payment of taxes. How do I set this right?

 

70.  Is it mandatory to file return of income after getting PAN?

 

F. Salary Income

 

71.  What is considered as Salary income?

 

72.  What is meant by an employer-employee relationship?

 

73.  What are allowances? Are all allowances taxable?

 

  1. I am always on tour and my employer gives me substantial daily allowance, most of which is saved. Will this saving be treated as income?

 

  1. My employer reimburses all my expenses on grocery and children education. Would this be considered as income?

 

  1. During the year, I had worked with three different employers and none of them deducted any tax from salary paid to me. If all these amounts are clubbed, my income will exceed the minimum exemption limit. Do I have to pay taxes on my own?

 

  1. Even if no taxes have been deducted from salary, is there any need for my employer to issue Form-16 to me?

 

78.  Is pension income considered as salary?

 

79.  Is Family pension considered as salary?

 

80.  If I am receiving my pension through a bank who will issue Form-16 or pension statement to me-the bank or my former employer?

 

81.  Are retirement benefits such as PF and Gratuity taxable?

 

82.  Are arrears of salary taxable?

 

83.  Can my employer consider relief u/s 89(1) for the purposes of calculating my tax liability?

 

84.  My income from let out house property is negative. Can I ask my employer to consider this loss against my salary income while computing my tax liability?

 

85.  Is leave encashment taxable as salary?

 

86.  Life insurance amount received on maturity along with bonus - is it taxable?

 

G. Income from House property

 

87.  What do you mean by Income from House Property?

 

88.  If a property is not a residential house, can its income still be considered as income from house property?

 

89.  What are the conditions for taxing income from a property under this head?

 

  1. Can interest paid on hand loans taken from friends and relatives be claimed as deduction while calculating house property income?

 

  1. I have two houses. One is a farmhouse that I visit on weekends and the other is in the city that I use on weekdays. Is it correct to treat both these residences as self occupied?

 

92.  I own two houses both of which are occupied by my family and me. Is there any tax implication?

 

  1. My spouse and I are joint owners of a house constructed by availing housing loan separately. Are we both individually/separately entitled for deduction of the maximum interest payable of Rs.1.5 lakh?

 

  1. My spouse and I jointly own a house for construction of which both of us have invested equally out of independent sources. Can the rental income received be split between us and taxed in the individual hands?

 

  1. I have 5 separate let out properties. Should I calculate the house property income separately for each individual property or by clubbing all the rental receipts in one calculation?

 

H. Income from business and Profession

 

  1. What does Profession mean?

 

97.  I have a large piece of land, which I sold by dividing into smaller plots. However I am not in the real estate business. Would this one time activity still be considered as business activity?

 

  1. What books of accounts have been prescribed to be maintained by a person carrying on business under the Income tax Act?

 

  1. Are professionals required to maintain any books of account under the Income tax Act?

 

100. I am a small time trader. Do I need to maintain any account?

 

101. Where should the books of account of my business be kept and for how long?

 

102. Do I have to keep an accountant to maintain my accounts?

 

103. What is meant by audit of the books of account?

 

104. In my business it is impossible to issue bills for every transaction. How can I be expected to maintain proper accounts?

 

105. I am a medical practitioner. Do I need to maintain any accounts?

 

106. Can an electric contractor also avail the benefit of deemed income provision?

 

107. I own 7 cars that are let out on hire to various organizations. Am I also eligible to declare presumptive income without maintaining any books?

 

108. What are the expenses that I can deduct from my business receipt while calculating the business profit?

 

109. What do you mean by revenue expenditure?

 

110. In what form can I claim deductions for capital expenses incurred in my business?

 

111. I am engaged in wholesale business and also have a commission agency. My turnover from wholesale business this year Rs.38 lakh while my commission income this year is Rs.5 lakh. Do I have to get accounts audited since the total is exceeding Rs.40 lakh?

 

112. I am an Insurance agent. I incur substantial expense on travel and also meet the first few insurance premium of my customers. However I have no documents to prove these expenses. How can I claim them?

 

I. Capital Gains

 

113. I have sold a house for Rs. five lakh, which had been purchased by me 5 years ago for Rs two lakh. Am I required to pay any tax on the profit of Rs.three lakh earned by me?

 

114. Sale of what kind of assets attracts capital gains?

 

115. What does transfer mean?

 

116. Does the capital gain tax differ according to my period of holding an asset?

 

117. Can I get any benefit for erosion in the value of money over the years while calculating my gain on sale of asset?

 

118. I have sold a property and made profit. If the sale amount is reinvested in purchase of a site, is my profit exempt from tax?

 

119. If I sell my land will I be taxed?

 

J. Tax Deduction at Source

 

120. What is TDS?

 

121. Is TDS relevant for me as a businessman?

 

122. I have made some deposits with a bank on which annual interest is around Rs.15000. My income is below taxable limit. The banker wants to deduct tax. What do I do?

 

123. I have let out a property for Rs.20000 per month. The tenant is deducting tax which is more than my tax liability. What can I do under this circumstance?

 

124. I have deducted tax from payments disbursed but used the same for some urgent financial needs. What are the consequences?

 

125. What can I do if I am unable to get the TDS certificate [form-16 or 16A]?

 

126. I have not received TDS certificate from my employer. Can I claim TDS deducted from my salary?

 

127. If the employer does not deduct tax and employee also does not pay his due tax, who will be held responsible for tax payment?

 

128. I am buying a property from a person residing in USA. Should I deduct tax while making payment?

 

129. Can I use PAN to pay the TDS deducted into government account?

 

130. In case the deductee comes back stating that the original TDS certificate is lost, whether a duplicate certificate can be issued?

K. Assessment

 

131. What is the mechanism by which the department checks the correctness of my return of income? Would I be given an opportunity to present my views during the course of such verification?

132. What recourse is available to me if I am unhappy with the order passed by my Assessing officer?

 

133. Some demand has been raised by my Assessing officer after assessment. Can I pay this demand in installments or seek time till my appeal is settled?

Yes. You may approach your Assessing officer within 30 days of receipt of demand notice for installments or stay or seek time for payment. However you are liable to pay interest for delay in payment of demanded tax.



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