Taxes-1

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1. Which among of the following is direct tax?
(A) Sales Tax
(B) Excise Tax
(C) Wealth Tax
(D) Entertainment Tax
Ans. (C)

2. Which among of the following is largest source of income for central govt.?
(A) Direct Taxes
(B) Custom Duty
(C) Excise Duty
(D) Entertainment Tax
Ans. (A)

3. Which among of the following is not direct tax?
(A) Income Tax
(B) Property Tax
(C) Gift Tax
(D) Sales Tax
Ans. (D)

4. The Example of Sales tax is-
(A) Coorporate Tax
(B) Direct Tax
(C) Indirect Tax
(D) Welfare Tax
Ans. (C)

5. Which of the following tax is imposed by state govt.?
(A) Entertainment Tax
(B) Property Tax
(C) Income Tax
(D) Corporate Tax
Ans. (A)

6. Taxes are called as Regressive when-
(A) More burden on poor as compared to rich
(B) It causes same burden on rich and poor
(C) Less burden on poor as compared to rich
(D) None of these
Ans. (A)

7. In case of direct tax, impact of tax & incidence of tax is–
(A) On two different person
(B) On same person
(C) Any other person
(D) On that department which called tax.
Ans. (B)

8. Who was the Chairman of Tenth Finance Commission?
(A) Manmohan Singh
(B) Vasant Sathe
(C) Shiv Shankar
(D) K.C. Pant
Ans. (D)

9. Who was the Chairman of 13th Finance Commission?
(A) Dr. Vijay L Kelkar
(B) Dr. C Rangrajan
(C) Dr. A.M. Khusro
(D) Dr. C. Subbarao
Ans. (A)

10. Which among of the following is not a ‘canon of taxation’ according to Adam Smith?
(A) Canon of certainty
(B) Canon of simplicity
(C) Canon of convenience
(D) Canon of economy ineffi- ciency
Ans. (B)

11. VAT was firstly implemented in–
(A) Germany
(B) Spain
(C) France
D) Russia
Ans.(C)

12. ‘Value-added’ is equal to–
(A) Output Minus the Inputs
(B) Reconstruction profit
(C) Gross profit
D) Investment profit
Ans. (A)

13. In Centre–State financial relation in India, Gadgil formula is used in–
(A) Division of tax revenue
(B) Formulation of the policy for fresh borrowings
(C) Writing off state’s indebtedness to the centre
(D) Allocating Central Plan assistance between States
Ans. (A)

14. Which authority decides about the states’ share in central taxes?
(A) Finance Commission
(B) Planning Commission
(C) Election Commission
(D) Finance Ministry
Ans. (A)
15. Indirect taxes by nature are–
(A) Degressive
(B) Regressive
(C) Progressive
(D) Proportional
Ans. (B)

16. Taxation is a tool of–
(A) Monetary Policy
(B) Fiscal Policy
(C) Price Policy
D) Wage Policy
Ans. (B)

17. The Fringe Benefit Tax was introduced in the budget of–
(A) 2003-04
(B) 2004-05
(C) 2005-06
(D) 2006-07
Ans. (C)

18. Which of the following is not the source of the revenue of Central Government?
(A) Income Tax
(B) Corporate Tax
(C) Agricultural Income Tax
(D) Excise Duty
Ans. (C)

19. The Report of Vijay Kelkar Committee relates to–
(A) Trade reforms
(B) Centre-state financial relations
(C) Disinvestment in public sector enterprises
(D) Tax reforms
Ans. (D)

20. Which of the following taxes is not collected by the Central Government?
(A) Income Tax
(B) Customs Duty
(C) Professional Tax
(D) Excise Duty
Ans. (C)

21. Excise duty on a commodity is payable with reference to its–
(A) Production
(B) Production and Sale
(C) Production and Transportation
(D) Production, Transportation and Sale
Ans. (A)

22. If the tax rate increases with the higher level of income, it shall be called–
(A) Proportional Tax
(B) Progressive Tax
(C) Lump sum Tax
(D) Regressive Tax
Ans. (B)

23. Which of the following sets belong to Central tax?
(A) Excise Duty, Sales Tax and Customs Duty
(B) Excise Duty, Customs Duty and Income Tax.
(C) Income Tax, Customs Duty and House Tax
(D) Customs Duty, Entertainment tax and Income Tax
Ans. (B)

24. Which of the following taxes is not shared

between the union and the states?
(A) Income Tax
B) Excise Duty
(C) Corporation Tax
(D) Sales Tax
Ans. (D)

25. Which of the following taxes is levied by the Union and appropriated and planned by the states?
(A) Service Tax
(B) Stamp Duty
(C) Property Tax
(D) Passenger and Freight Duty
Ans. (B)

26. Which of the following taxes is such which does not cause rise in price?
(A) Import Duty
(B) Income Tax
(C) Octoroi
D) Sales Tax
Ans. (B)

27. Who among the following has suggested tax on expenditure?
(A) Dalton
(B) Kaldor
(C) Musgrave
(D) Gautam Mathur
Ans. (B)

28. The proceeds of Income tax go to–
(A) Central Government
(B) State Government
(C) Centre and States
(D) Corporation Authorities
Ans. (C)

29. How does the consumer benefit with VAT?
(A) It removes tax on tax and thus reduces price rise
(B) Reduces the cost of production
(C) With the abolition of the sales tax
(D) Due to the exemption of small businesses from
the tax within certain limits prescribed by the state
Ans. (A)
.
30. The receipts of which of the following taxes/ duties are not shared with the states?
(A) Tax on income except agriculture
(B) Corporation tax
(C) Surcharge on Income tax
(D) Capital gain tax
Ans. (A)

31. Corporation tax is a tax imposed on–
(A) The net incomes of the companies
(B) The corporate properties
(C) The utilities provided by the corporation
(D) Tax imposed by the corporation on individual properties
Ans. (A)

32. The duties levied on alcoholic liquors, narcoti drugs and opium come under–
(A) Central Excise Duty
(B) Land Revenue
(C) State Excise Duty
(D) General Sales Tax
Ans. (A)

33. Parallel economy emerges due to–
(A) Tax Avoidance
(B) Tax Evasion
(C) Tax Compliance
(D) Tax Estimation
Ans.(B)

34. A tax is characterised by horizontal equity if its liability is–
(A) Proportional to the income of tax payers
(B) Similar for tax payers in similar circumstances
(C) Proportional to the expenditure of tax payers
(D) The same for every tax payer
Ans. (A)

35. Which authority recommends the principles governing the grants in aid of the revenues of the states out of the Consolidated Fund of India?
(A) Public Accounts Committee
(B) Union Ministry of Finance
(C) Finance Commission
(D) Inter-State Council
Ans. (C)

36. Buoyancy of a tax is defined as–
(A) Percentage increase in tax revenue/ percentage increase in tax base
(B) Increase in tax revenue/percentage increase in tax coverage
(C) Increase in tax revenue/increase in tax base
(D) Percentage increase in tax revenue/increase in tax coverage
Ans. (C)

37. Which one of the following is not an Example o Indirect tax?
(A) Sales Tax
(B) Excise Duty
(C) Customs Duty
(D) Expenditure Tax
Ans. (D)

(A) Tax levied on imports
(B) Imports of capital goods
(C) Limit on the quantity of imports
(D) Limit on the quantity of exports
Ans. (C)

39. Which is the biggest tax paying sector in India?
(A) Agriculture sector
(B) Industrial sector
(C) Transport sector
D) Banking sector
Ans. (B)

40. The incidence of tax refers to,–
(A) Who pays the tax
(B) Who bears the burden of tax
(C) How taxes can be shifted
(D) Who transfers the tax burden
Ans. (B)

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