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 66 rapid-fire Q&A cards.
What is the basic objective of tax planning?
Tax planning aims to minimise tax liability within the legal framework by arranging financial affairs in a manner that takes full advantage of all available deductions, exemptions, and reliefs under the Income Tax Act.
What is the maximum aggregate deduction allowed under Section 80C, 80CCC, and 80CCD(1) combined?
Maximum combined deduction is Rs 1.5 lakh per year.
What is the difference between tax planning and tax evasion?
Tax planning is a legal method of reducing tax liability using permissible provisions of the law, whereas tax evasion involves concealing income or furnishing false information to avoid paying taxes, which is illegal and punishable.
What is the lock-in period for investment in ELSS mutual funds for tax benefits?
ELSS funds have a mandatory lock-in of three years.
Under which section of the Income Tax Act can an individual claim deduction for life insurance premium?
Under Section 80C of the Income Tax Act, individuals can claim a deduction for life insurance premium paid, subject to a maximum limit of Rs. 1.50 lakh per financial year.
What is the tax treatment of long-term capital gains from listed equity shares above Rs 1 lakh?
LTCG above Rs 1 lakh on listed equity is taxed at 10%.
What is the maximum deduction allowed under Section 80C of the Income Tax Act?
The maximum deduction allowed under Section 80C is Rs. 1.50 lakh in a financial year, covering investments such as PPF, ELSS, NSC, life insurance premium, and repayment of home loan principal.
What is the tax deduction available for interest paid on education loan under Section 80E?
Full interest paid on education loan is deductible for eight years.
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