ECONOMICS (CBSE/UGC NET)

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ECONOMICS

INCENTIVES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
A VCC is exempted from the payment of tax for a period of ten (10) years of assessment or the life of the fund established for the purpose of investing in a VC whichever is the lesser in respect of the following statutory income EXCEPT
A
Interest income from loan given to VC
B
Interest income arising from savings or fixed deposits and profits from syariah-based deposits
C
Dividend income from portfolio share investment listed in Bursa Malaysia
D
Dividend income from investment in property trust funds
Explanation: 

Detailed explanation-1: -Eligible investments for Tax Exemptions Payment made towards pension plans, as well as mutual funds. Payment made towards certain Government-backed schemes such as National Pension System, Atal Pension Yojana, etc. Investments of up to Rs.50, 000 in NPS is considered for exemption under this section.

Detailed explanation-2: -Exempt-Exempt-Exempt tax regime usually applies for long-term investments that are intended to build a corpus to meet long-term goals. For instance, investment instruments such as Public Provident Fund (PPF) and Employee Provident Fund (EPF) are covered under the Exempt-Exempt-Exempt tax regime.

Detailed explanation-3: -Under the present regime, income of a VCF is taxable at fund level, (except for the exemption provided under section 10(23 FA) of the Income tax act for the income by the way of dividend and capital gains) and also taxable in the hands of investors when distributed by VCF.

Detailed explanation-4: -Interest Income Generated from Savings Account Deposits. Section-80TTA. Limit – ₹10, 000. Interest Component Paid Towards Education Loan. Section-80E. Limit – No limit. Premium Payment Towards Health Insurance Policies. Section-80D. 30-Jan-2023

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