Income Tax And Corporate Tax - Study Mode
[#291] Which two of the following are correct about the due date of issue of the TDS certificate? (1) Form No 16 - Annual (2) Form No 16A - Quarterly (3) Form No 16B - Half Yearly (4) Form No 16C - Monthly Choose the correct option from those below:
Correct Answer
(C) 1 and 2
[#292] Objective of tax planning is
Correct Answer
(B) minimise of tax liability
[#293] Which of the following sections provide for penalty for failure to obtain Tax Deduction Account Number or Tax Collection Account Number (as the case may be)?
Correct Answer
(B) 272BB(1)
[#294] A tax is meant for welfare of community. Which kind of payment is it to the government by the subject?
Correct Answer
(A) Compulsory
[#295] If the coffee is grown and cured, then the tax liability on the agricultural income is:
Correct Answer
(B) 65% agricultural and 35% non-agricultural Income
Explanation
Solution: Income from coffee grown and cured by the seller in India is treated as partly agricultural and partly non-agricultural income under the Income Tax Act, 1961. As per Rule 7B of the Income Tax Rules: When coffee is grown and cured (but not roasted or grounded), then 65% of the income is treated as agricultural income and exempt from tax 35% of the income is treated as non-agricultural income and taxable under the Income Tax Act This classification is based on the extent of agricultural vs. processing work involved in the production. Therefore, the tax liability is calculated on the 35% portion of the total income earned from coffee grown and cured.