Operational Taxation Interview Questions & Answers:

1. If i had no taxable income to claim but i have had my granddaughter though the whole year in 2016 can i get the extra child tax credit check of $1000.00?

2. Tell me what is an excise duty?

The Excise and Taxation Department controls the manufacturing and sale of following excisable articles:
☛ Intoxicating liquor.
☛ Rectified Spirit.
☛ Denatured Spirit.
☛ Methanol.

3. Tell me how is income tax calculated?

Income of the person is categorized and calculated under the following five heads:
☛ Salaries
☛ Income from house property.
☛ Profits and gains of business or profession.
☛ Capital gains.
☛ Income from other sources.

4. What is an entertainment duty?

Entertainment duty is levied on entertainment places like Cinemas, Amusements, Parks, Variety Programmes Sports etc on following rates.
☛Presently no duty is being collected from Cinemas.
☛Dramas, plays, variety Programmes 10% of the payment for admission.
☛Games and Sports 5% of the payment for admission.
☛Items of amusement other than above 25% of the payment for admission.

5. Tell me which items fall under the category of securities?

Securities are defined under Section 2(h) of the Securities Contracts (Regulation) Act, 1956 (SCRA) to include:
☛ Shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate.
☛ Derivatives.
☛ Units or any other instrument issued by any collective investment scheme to the investors in such schemes.
☛ Security receipt as defined in Section 2(zg) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
☛ Such other instruments as declared by the central government.
☛ Rights or interest in securities.
Equity-oriented mutual funds (not debt-oriented mutual funds).

6. Tell me what do you know about dissolution of firm?

Dissolution of firm means assets of firm are realized and liabilities are paid off and the surplus, if any is distributed among the partners according to their right. It is to be noted that dissolution of Firm involves dissolution of partnership but dissolution of partnership may not lead to dissolution of firm.

7. Tell me what are dis-allowable expenditure?

Dis allowable expenditure:
☛private expenditure
☛clothes bought for ordinary everyday wear
☛acquisition and depreciation of business assets
☛your own wages or salary
☛your business partner's wages or salary
☛payments to charities
☛travel expenses between your home and place of business
☛a general (non-specific) provision against doubtful debts
☛legal costs of acquiring land and buildings
☛fines for breaking the law
☛your own life, accident or sickness assurance
☛costs of alterations, additions or improvements to business premises

8. Tell me about allowable expenditure?

Allowable expenditure:
☛the cost of goods bought for the business
☛the prime costs of running a business asse
☛wages and salaries of employees
☛heat, light and cleaning of business premises
☛repairs to and maintenance of business premises
☛postage and stationery
☛business telephone and rental
☛bank charges and interest on business loans and overdrafts
☛travel and entertaining if the sole purpose is to retain or acquire business
☛legal costs of defending business rights and renewing leases of less than 50 years duration
☛bad debts and specific doubtful debts
☛protective clothes necessary for the business

9. Tell me how would you calculate House Rent Allowance (HRA)?

Minimum of following three amounts is available as HRA exemption:
☛ Actual House Rent Allowance provided by employer to employee.
☛ House Rent paid in excess of 10% of Salary.
☛ 50% of Salary in case House is located in major cities.
For all three conditions mentioned above relevant period is very important. Means if there is any change in Salary, HRA paid to employee, location of rented house and actual rent paid by employee HRA need to calculate from that relevant change Hence one should avoid calculating HRA on annual basis if there is any change in above factors.
Meaning of Salary for calculating HRA (Basic Salary + Dearness allowance if terms of employment so provide + fixed percentage of turnover achieved by employee).

10. What do you know about Public Provident Fund (PPF)?

Public Provident Fund (PPF) involves minimum contribution of Rs.500 per annum and the maximum contribution is Rs. 100,000 per annum. The contribution made along with interest earned is repayable after 15 years, unless extended.