An online survey conducted by Economictimes.com shows that Indians are not very clued in when it comes to taxation. Take this quiz to gauge how much you know about tax regulations.
1) The interest earned on a bank fixed deposit is...
a. Fully taxable as income. b. Exempt up to Rs 10,000 a year. c. Not taxable if TDS is deducted. d. Tax-free if it's a tax-saving FD.
44% of the respondents said FD interest is exempt up to Rs 10,000 a year.
2) Which of these cannot be claimed as deduction?
a. School fees of two children. b. Interest paid on education loan. c. Charges for medical check-up. d. Premium of travel insurance policy
23% didn't know about deductions under Section 80C, 80D and 80E.
3) An individual won't get tax deduction for...
a. Voluntary contribution to PF. b. Life insurance of child over 18. c. Employer's contribution to PF. d. Health cover of earning spouse
31% said premium paid for health cover of working spouse is not eligible for tax deduction.
4) Which of the following will be taxable?
a. Gift of Rs 2 lakh to earning spouse. b. Gift worth Rs 75,000 to a friend. c. Rs 50 lakh property gifted to son. d. Rs 1 lakh wedding gift to colleague.
35% said a gift worth Rs 1 lakh to a colleague on wedding is taxable.
5) HRA is not tax-exempt if you pay rent to...
a. Your non-working mother. b. Your minor child. c. Your retired father. d. Your real brother or sister.
15% believe you can't claim HRA exemption if you pay rent to your parents.
6) There are additional tax benefits for people with...
a. Only one girl child. b. A disabled dependant. c. A large family to take care of. d. No pension benefit from employer. 87% say you get addiitonal tax benefits if you have a disabled dependant.
7) If you have a second house lying vacant, you have to...
a. Pay tax on rent not received. b. Include in wealth tax. c. Pay property tax on it. d. All of the above.
63% say you have to pay tax on the rent even if the house is lying vacant.
8) If one earns rent on property, how much of it is taxable?
a. Full amount taxable as income. b. Only 70% is taxable. c. No tax if out of municipal limit. d. No tax if house is on a loan.
40% said full amount is taxable as income from house property.
9) One doesn't have to file tax return if...
a. TDS has been deducted. b. After Sec 80C savings, tax is nil. c. Income is below Rs 2 lakh a year. d. One is a senior citizen with pension.
14% believe senior citizens with pension income dont have to file returns.
10) Which of the following statements is not true?
a. Annual PPF limit is Rs 1 lakh. b. Health premium deduction limit is Rs 20,000 for seniors. c. Stock investors can cut tax further with RGESS funds. d. Insurance plans must give a cover of 10 times the annual premium for tax benefits.
The online survey was conducted on 6-7 March among 2,361 respondents.
ANSWERS TO THE QUIZ:
1) a. Interest on FDs is fully taxable as income at the rate applicable to the taxpayer.
2) d. Travel insurance policies are not tax deductible for salaried individuals.
3) c. Individuals do not get any deduction for employer's contribution to PF.
4) b. Gifts worth over Rs 50,000 in a year are taxed as income of recipient.
5) b. Any income of the minor child will be clubbed with that of the parent.
6) b. A disabled dependant gets you a deduction under Section 80DD.
7) d. All the three conditions apply on a second house lying vacant.
8) b. Rental income is eligible for 30% standard deduction.
9) c. Only those with income below the basic exemption are exempt from filing tax.
10) c. The RGESS deduction is available only to first-time investors in equities.