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Unit 1: Income Tax: Basic Framework

1.9 Review Questions Notes

1. Discuss the historical background of Income tax. What is its importance?

2. What is net tax?
3. What are the components of Income Tax Law?
4. Write brief notes on the following:
(a) Assessment Year

(b) Income
(c) Gross Total Income
(d) Previous Year
(e) Assessee

5. “Every financial year is an assessment year.” Comment.
6. “Income of a previous year is chargeable tax in the immediately following assessment
year.“ Discuss.
7. X starts his business on April 26, 2010. Determine the previous year to the assessment year
2011-12.
8. Mr. Sharma has a total income of ` 20,10,000. Compute his gross tax liability.
9. Discuss the Income Tax System in India.
10. What is agricultural income? Which incomes CANNOT be treated as Agricultural
Income?

Answers: Self Assessment

1. True 2. False
3. True 4. True
5. False 6. False

7. Central Board of Direct Taxes (CBDT) 8. Offi cers/Assessees
9. Income tax Act, 1961 10. False
11. True 12. True
13. Income 14. ` 2,50,000

15. Foreign
1.10 Further Readings

Books Ahuja, G. K. & Gupta, Ravi, Systematic Approach to Income Tax, Bharat Law
House.
Aggarwal, K., Direct Tax Planning and Management, Atlantic Publications.
Lakhotia, R.N., Income Tax Planning Handbook, Vision Books.

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