BUISENESS MANAGEMENT
TAXES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The less allowances you claim, the more money is withheld from your wages for income taxes
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The more people you need to support (dependents), the more allowances you can claim
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Either A or B
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None of the above
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Detailed explanation-1: -The definition of Income as per section 2 (24) is inclusive but not exhaustive of the below-mentioned items: Any illegal income arising to the assessee. Any income that is received at irregular intervals. Any Taxable income that has been received from a source outside India.
Detailed explanation-2: -Cash Allowance: When the employer provides a cash allowance like marriage allowance, bereavement allowance or holiday allowance, it becomes fully taxable.
Detailed explanation-3: -As per the Income Tax Act, allowances are the monetary benefits given by the employer to the employee over and above the basic salary for meeting various expenses.
Detailed explanation-4: -Children Allowances Such allowance received by the employer towards children’s education is exempt from tax. However, the employee can claim a maximum of Rs.100 per month as an exemption or Rs.1, 200 per annum. The exemption is allowed for a maximum of 2 children.