ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a type of investment risk
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a lower tax rate
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a no tax rate
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not a tax advantage
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Detailed explanation-1: -Therefore, it is creating a deferred tax asset of Rs. (25% x 10, 000) or Rs. 2, 500. There is no separate deferred tax rate followed in taxation practices in India; therefore, the general corporate tax rate is applicable in the calculation of deferred tax.
Detailed explanation-2: -What is a tax-deferred investment? With a tax-deferred investment, you pay federal income taxes when you withdraw money from your investment, instead of paying taxes up front. Any earnings your contributions produce while invested are also tax deferred.
Detailed explanation-3: -Saving for retirement by investing in a tax-deferred vehicle can give you a big boost over time-forgoing the tax bite while you grow your money and potentially lowering the tax impact when take income. Tax-deferral is a feature of many investment vehicles (variable annuities, IRAs, 401(k) plans).
Detailed explanation-4: -Taxable accounts accrue taxes on earnings and withdrawals in the year paid. Tax-deferred accounts allow earnings to grow tax free until you withdraw the money.