Income Tax Interview Questions & Answers

Question 1. What Is The Difference Between Gross Total Income And Total Income?

Answer :

Section 80C to 80U provides certain deductions which can be claimed from Gross Total Income (GTI). After claiming these deductions from GTI, the income remaining is called as Total Income. In other words, GTI less Deductions (under section 80C to 80U) = Total Income (TI). Total income can also be understood as taxable income. Following table gives a better understanding of the difference between GTI and TI

Question 2. ​what Is Gross Total Income?

Answer :

Total income of a taxpayer from all the heads of income is referred to as Gross Total Income.

Question 3. ​can A Partnership Firm Or Huf Claim Rebate Under Section 87a?​

Answer :

​​​Rebate under section 87A is available only to an individual, hence, any person other than an individual cannot claim rebate under section 87A.

Question 4. ​can I Claim Deduction For My Personal And Household Expenditure While Calculating My Taxable Income Or Profit?​

Answer :

No, you cannot claim deduction of personal expenses while computing the taxable income.
While computing income under various heads, deduction can be claimed only for those expenses which are provided under the Income-tax Act.

Question 5. ​what Is Rebate Under Section 87a And Who Can Claim It?

Answer :

An individual who is resident in India and whose total income does not exceed Rs. 5,00,000 is entitled to claim rebate under section 87A. Rebate under section 87A is available in the form of deduction from the tax liability. Rebate under section 87A will be lower of 100% of income-tax liability or Rs. 5,000. In other words, if the tax liability exceeds Rs. 5,000, rebate will be available to the extent of Rs. 5,000 only and no rebate will be available if the total income

Question 6. ​how To Round Off The Tax Liability?

Answer :

​​​​As per section 288B​, tax payable by the taxpayer or tax refundable to the taxpayer shall be rounded off to the nearest multiple of ten, following points should be kept in mind while rounding off the tax.

Question 7. What Is Marginal Relief And How It Is Computed?

Answer :

The concept of marginal relief is designed to provide relaxation from levy of surcharge to a taxpayer where the total income exceeds marginally above Rs. 1 crore or Rs. 10 crore, as the case may be. Thus, while computing surcharge, in case of taxpayers (i.e. Individuals/HUF/AOP/BOI/artificial juridical person) having total income of more than Rs. 1 crore, marginal relief shall be available in such a manner that the net amount payable as income-tax and surcharge shall not exceed the total amount Source

Question 8. How To Compute The Total Tax Liability?

Answer :

After ascertaining the total income, i.e., income liable to tax, the next step is to compute the tax liability for the year. Tax liability is to be computed by applying the rates prescribed in this regard. For rates of tax, refer "Tax Rate" section. Following table will help in understanding the manner of computation of the total tax liability of the taxpayer. 

Computation of total income and tax liability for the year:-

Particulars Amount

Income from salary XXXXX

Question 9. ​how To Round Off Total Income Before Computing Tax Liability?

Answer :

​​​As per section 288A​​, total income computed in accordance with the provisions of the Income-tax Law, shall be rounded off to the nearest multiple of ten. Following points should be kept in mind while rounding off the total income First any part of rupee consisting of any paisa should be ignored.

Question 10. ​can A Non-resident Claim Rebate Under Section 87a?

Answer :

Rebate under section 87A is available only to an individual who is resident in India, hence, non-residents cannot claim rebate under section 87A​.​

Question 11. Under How Many Heads The Income Of A Taxpayer Is Classified?​

Answer :

S​ection 14​ of the Income-tax Act has classified the income of a taxpayer under five different heads of income, viz.:-

• Salaries
• Income from house property
• Profits and gains of business or profession
• Capital gains
• Income from other sources​.

Question 12. Is There Any Limit Of Income Below Which I Need Not Pay Tax?​

Answer :

​At this moment (i.e., for the financial year 2016-17​) Individual, HUF, AOP, and BOI having income below Rs. 2,50,000 need not pay any Income-tax. In respect of resident individuals of the age of 60 years and above but below 80 years, the basic exemption limit is Rs. 3,00,000 and in respect of resident individuals of 80 years ​and above, the limit is Rs. 5,00,000. For other categories of persons such as co-operative societies, firms, companies and local authorities, no basic e Source.

Question 13. ​what Is Surcharge And How It Is Computed?

Answer :

Surcharge is an additional tax levied on the amount of income-tax. In case of individuals/HUF/AOP/BOI/artificial juridical person surcharge is levied @ 15% on the amount of income-tax where the total income of the taxpayer exceeds Rs. 1 crore.

In case of Firm, co-operative society and local authority surcharge is levied at 12% if total income exceeds Rs 1 crore.​

In case of a domestic company surcharge is levied @ 7% on the amount of income-tax.