INVESTMENT MANAGEMENT PART III & TAX PLANNING
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Retail Banking and Wealth Management — JAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the meaning of 'tax planning' in the context of personal finance?
Tax planning is the legal arrangement of one's financial affairs in such a way as to reduce tax liability to the minimum permissible under the Income Tax Act, using available exemptions, deductions, and rebates.
What is the maximum deduction allowed under Section 80C of the Income Tax Act?
Maximum deduction under Section 80C is Rs 1.5 lakh.
Under which section of the Income Tax Act can an individual claim deduction for investments in PPF, ELSS, NSC, and life insurance premium?
Under Section 80C of the Income Tax Act, individuals can claim a deduction of up to Rs. 1,50,000 per year for investments in specified instruments such as PPF, ELSS, NSC, and life insurance premiums.
What is the tax treatment of interest earned on Public Provident Fund (PPF)?
PPF interest is completely exempt from income tax under EEE status.
What is the maximum deduction allowed under Section 80D for health insurance premium paid for self and family (below 60 years)?
The maximum deduction under Section 80D for health insurance premium for self, spouse, and dependent children (all below 60 years) is Rs. 25,000 per annum.
What is the holding period for equity shares to qualify as long-term capital assets?
Equity shares held for more than 12 months qualify as long-term.
What is the difference between tax avoidance and tax evasion?
Tax avoidance is the legal use of tax laws to reduce tax liability, while tax evasion is the illegal non-disclosure or misrepresentation of income to reduce tax, which is a punishable offence.
What is the rate of Short-Term Capital Gains (STCG) tax on equity shares?
STCG on equity shares is taxed at a flat rate of 15%.
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