Income Tax Interview Cheat Sheet (Easy to Hard)
Complete Guide for CA, MBA, Commerce & Tax Job Aspirants
Interviews in taxation are rarely about complex case laws alone. In reality, interviewers first test whether your fundamentals are rock solid. Most rejections happen not because candidates don’t know tax, but because they hesitate on basics like AY vs PY, slab rates, capital gains holding period, or key sections.
This blog is a complete Income Tax Interview Cheat Sheet, structured exactly the way interviews progress:
- Easy (foundational concepts)
- Medium (application-based questions)
- Hard (advanced, professional-level taxation)
If you master everything covered here, you are already ahead of the majority of candidates.
PART 1 – EASY LEVEL (FOUNDATION QUESTIONS)
1. Assessment Year (AY) vs Previous Year (PY)
- Previous Year (PY): Year in which income is earned.
- Assessment Year (AY): Year immediately following PY in which income is assessed and taxed.
This is usually the first question in any tax interview.
2. Five Heads of Income
Income under the Income-tax Act is classified into five heads:
- Salary
- Income from House Property
- Profits and Gains from Business or Profession (PGBP)
- Capital Gains
- Income from Other Sources
3. Basic Exemption Limits (Old Regime)
- General Individual: ₹2,50,000
- Senior Citizen: ₹3,00,000
- Super Senior Citizen: ₹5,00,000
4. New Tax Regime – Slab Structure
- Up to ₹3L – Nil
- ₹3L–₹6L – 5%
- ₹6L–₹9L – 10%
- ₹9L–₹12L – 15%
- ₹12L–₹15L – 20%
- Above ₹15L – 30%
Surcharge applies beyond ₹50 lakh as per applicable rates.
5. Important TDS Sections
- Section 192: TDS on Salary
- Section 194A: TDS on interest (other than securities)
6. Residential Status – Individual
An individual is resident in India if:
- Stayed 182 days or more in the previous year, OR
- Stayed 60 days in PY + 365 days in preceding 4 PYs
7. Fully Exempt Incomes (Section 10)
- Agricultural income
- Certain allowances
- PF receipts
- Scholarships
8. House Property – Municipal Taxes
Municipal taxes actually paid by the owner are deductible from Gross Annual Value (GAV).
9. Standard Deduction
- Old Tax Regime: ₹50,000
- New Tax Regime: ₹75,000
PART 2 – MEDIUM LEVEL (APPLICATION QUESTIONS)
1. Capital Gains – Holding Period
- Immovable Property (LTCG): More than 24 months
2. STCG under Section 111A
- Taxed at 20% (plus applicable surcharge & cess)
3. Difference Between Section 80TTA and 80TTB
- 80TTA: Savings bank interest up to ₹10,000 (non-senior citizens)
- 80TTB: Interest up to ₹50,000 (senior citizens)
4. Section 80C Limit
- Maximum deduction: ₹1,50,000
5. House Property Loss Set-off
- Can be set off against salary income up to ₹2,00,000
6. Carry Forward of Business Loss
- Allowed for 8 assessment years
7. ITR Due Dates
- Audit cases: 31st October of the Assessment Year
8. Belated Return
- Can be filed up to 31st December of AY
9. Interest Sections 234A / 234B / 234C
- 234A – Delay in filing return
- 234B – Non-payment of advance tax
- 234C – Deferment of advance tax
PART 3 – HARD LEVEL (PROFESSIONAL QUESTIONS)
1. Advance Tax Liability
Every person whose tax liability exceeds ₹10,000 is required to pay advance tax, except senior citizens without PGBP income.
2. Section 43B
Certain expenses are allowed as deduction only on actual payment basis.
3. Section 40A(3)
Cash expenditure exceeding ₹10,000 is disallowed, subject to specified exceptions.
4. Tax Audit – Section 44AB
- Business turnover limit: ₹1 crore
- Enhanced limit: ₹10 crore where cash transactions ≤ 5%
5. Presumptive Taxation
- Section 44AD: Business turnover ≤ ₹2 crore, profit @ 8% / 6%
- Section 44ADA: Professionals with receipts ≤ ₹50 lakh, profit @ 50%
6. MAT – Section 115JB
Minimum Alternate Tax on companies at 15% of book profits.
7. AMT
Alternative Minimum Tax applicable to non-corporate taxpayers claiming specified deductions.
8. Capital Gains Exemptions
- Section 54: Reinvestment of LTCG from residential house
- Section 54F: Reinvestment of sale proceeds of any asset (except house)
- Section 54EC: Investment in REC/NHAI bonds within 6 months (limit ₹50 lakh)
9. Clubbing Provisions
Income from asset transferred to spouse without adequate consideration is clubbed if spouse has no technical contribution.
10. DTAA Relief
Relief from double taxation through:
- Exemption method, or
- Tax credit method
11. Foreign Income
Global income of a resident is taxable in India.
12. Equalisation Levy
Levy on digital advertising and e-commerce supply by non-resident companies (6% / 2%).
13. Significant Economic Presence (SEP)
Non-residents become taxable if they have significant digital or economic presence in India.
14. GAAR
General Anti-Avoidance Rules to curb impermissible tax avoidance arrangements.
15. Transfer Pricing – Arm’s Length Price
Price charged in an uncontrolled transaction between unrelated parties.
16. Vodafone International Case (Key Point)
Indirect transfer of Indian assets was held non-taxable initially; retrospective amendment introduced later.
17. Practical Interview Question
Can HRA and home loan interest both be claimed?
Yes, if conditions are satisfied (different cities or justified same-city cases).
18. Appeals
- CIT(A): First appellate authority
- ITAT: Second appeal on facts and law before High Court / Supreme Court
Final Tip for Interview Success
This cheat sheet is not meant for last-minute cramming. Revise it repeatedly until answers become automatic. Interviews reward confidence and clarity, not memorisation.
