If you’re preparing for RBI Grade B, you’ve likely noticed that Income Tax is the topic that reappears in exams. RBI doesn’t always ask directly. So, you must know how they usually frame the questions. In this blog, we’ll break down the most frequently asked questions on Income Tax, group them according to their theme, and discuss how to prepare effectively.
Also, know why RBI Grade B Phase 1 Exam: The Silent Eliminator of 99% Aspirants & What is the Finance and Management Syllabus for RBI Grade B Exam?
1. Basics of Income Tax Structure
These questions test your knowledge of standard definitions and structure:
- What is Income Tax and who pays it?
- What is the Difference between Direct and Indirect Tax?
- Responsibilities and rate slab of Salaried Individuals vs Super-rich under the Income Tax Act?
Why it’s asked: RBI wants to ensure you know the fundamental framework of the tax system It is essential for understanding more complicated issues.
2. Heads of Income
RBI often quizzes candidates on the classification and tax treatment of various incomes. Typical questions include:
- Define “Salary”, “House Property”, “Capital Gains”, “Business or Profession”, “Other Sources”.
- Classify rental income from a property you rent out.
- Tax implications of selling a house vs selling stocks (Capital Gains).
How to prepare: Memorize the five heads with their important points and examples. This know-how will help you answer questions based on cases.
3. Deductions and Exemptions
This is a favorite topic in RBI exams. Some of the questions that will show you how those questions evolve around the topics that are related to tax deductions and exceptions:
- What are standard deductions (like Section 80C, 80D, 80TTA, etc.)?
- What is the total limit allowed under 80C?
- Tax treatment of HRA, LTA, or Leave Encashment?
- How is the Standard Deduction allowed for salaried employees calculated?
Smart tip: Create one-page cheatsheets for all major sections, rules, and limits. It makes last-minute revision easier.
4. Tax Computation & Slabs
These questions involve calculating or knowing the tax payable under different incomes and slabs:
- Identify the tax slab applicable for a ₹12 lakh per annum income.
- Calculate tax on the income of ₹7 lakh after standard deduction.
- Check if surcharge and cess are included properly in the computation.
Preparation strategy: Practice 5 to 8 tax computation questions thoroughly, each week. You should try your best to increase your speed and accuracy.
5. Tax Authorities & Due Dates
RBI likes to check whether you’re familiar with the institutional structure and compliance timelines. So, here are the types of questions that you may face in the exam:
- Who is the CBDT, and what is its function?
- What is the Due Date for filing ITR for individuals?
- Penalties for late filing or tax evasion.
Tip: Always try to link the structure to real-world examples. This will help you with retention and answers in the interview stage too.
6. TDS, TCS, Advance Tax
These are regular mark-givers in RBI Prelims and Mains:
- When is TDS applicable on rent, salary, professional fees, etc.?
- Meaning and rate of TCS on high-value transactions.
- Amounts and timelines for Advance Tax payments.
Do this: Go through the latest budget and notifications to catch all the updates. RBI often shifts baselines slightly.
7. Case Study Questions
RBI Grade B Mains often contains mini-case studies. These studies involve income tax scenarios, such as:
- A taxpayer receives salary, capital gains, and agricultural income (ask for tax computation).
- Multiple incomes from salary, rent, and interest (find total taxable income).
Strategy: Read carefully, underline key values, and structure your computation with clarity. Show proper steps in your answer.
How to Prepare Income Tax Effectively
- Start with NCERTs or a simple guide on the Income Tax structure.
- Maintain a cheat sheet with slabs, deductions, dates, and authorities.
- Solve Past RBI Questions—many repeat the same themes.
- Practice mock tests with tax computation & case studies.
- Stay updated through the current budget or CBDT notifications each year.
Conclusion
Income Tax is an RBI Grade B favorite not just because it’s technical, but because it applies widely across monetary policy and governance. With focused study—covering definitions, computations, institutions, and practice—you can score confidently in this section. So plan your prep, stick to a cheat sheet, solve smartly, and stay current with updates. You’ve got this! Want a ready-to-use Income Tax cheat sheet? Drop a comment below or sign up for our newsletter!
Click here to test your knowledge with this amazing Quiz: 7 questions, 15 sec each!
FAQs
A: Mostly in Mains (Finance & Management) section.
A: Basics, deductions, slabs, and computation-based questions are frequently asked.
A: Focus on concepts, past year questions, and practice case studies regularly.
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