Income Tax in Income Tax And Corporate Tax Planning : Practice MCQ Questions & Answers with Explanations

The correct answer is 2 Years. The proposed law allows taxpayers to update their ITR up to 2 years from the end of the relevant assessment year if they missed including any income. An additional tax of 25%–50% on the tax and interest due on the additional income is payable. This is proposed via a new sub-section (8A) in Section 139 of the Income-tax Act, 1961.

The correct answer is Component basis. Under this method, the cost of a large asset (e.g., machinery) is allocated to its different components and each component is depreciated separately, since components may have different useful lives. Charging depreciation at a single rate on the whole asset would distort its value. This method is prescribed by both Accounting Standards and the Companies Act, 2013.