Taxes-2

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41. Ad Valorem tax is levied–
(A) According to value added by the government.
(B) According to value addition to a commodity
(C) According to value given by producers
(D) According to value added by the Finance ministry
Ans. (C)

42. State which amongst the following is not true about VAT
(A) All States have uniform vat for the same product
(B) State have discretion to fix the rate of tax within the four rates prescribed
(C) It will promote production efficiency of investments
(D) It will make our exports more competitive
Ans. (A)

43. Which amidst the following taxes collected by the Union is NOT mandated to be assigned to the States?
(A) Terminal taxes on goods or passengers carried by railway, sea or air.
(B) Taxes on railway fares and freights.
(C) Taxes on consignment of goods.
(D) Service Tax
Ans. (D)

44. Among the tax revenues of the Union Government, what is the largest source?
(A) Income tax
B) Corporation tax
(C) Central Excise
(D) Customs Duty
Ans. (B)

45. The largest source of revenue to the Union Government is-
(A) Income tax
(B) Central Excise Duty
(C) Customs Duty
(D) Wealth Tax
Ans. (A)

46. The Government of India derives its single largest source of revenue from-
(A) Direct Taxes
(B) Customs Duties
(C) Deficit Financing
(D) Union Excise Duties
Ans. (A)

47. For which tax, was constitutional status given much later after its introduction in a small way
in 1994-95?
(A) Customs Duty
(B) Coporation Tax
(C) Taxes on Services
(D) Income tax
Ans. (C)

48. Indirect tax means:
(A) There is not direct relationship between the tax payer and the government.
(B) Direct relationship between tax payer and the government.
(C) Tax base is income
(D) The incidence and impact are on the same person on whom tax is imposed.
Ans. (A)

49. The incidence of sales tax falls on-
(A) Consumers
(B) Wholesale dealers
(C) Retail dealers
(D) Producers
Ans. (D)

50. The ‘Canons to Taxation’ were propounded by-
(A) Edwin Canon
B) Adam Smith
(C) J.M. Keynes
(D) Dalton
Ans. (B)

51. The tax levied on gross sales revenue from busines transactions is called-
(A) Turnover Tax
(B) Sales Tax
(C) Capital Gains Tax
(D) Corporation Tax
Ans. (A)

52. Interest paid by the government on the loans raised is called-
(A) Debt Servicing
(B) Deficit Financing
(C) Discounted Budgeting
(D) Bridge-loan
Ans. (A)

53. Custom duty is an instrument of-
(A) Monetary Policy
(B) Foreign Trade Policy
(C) Industrial Policy
(D) Fiscal Policy
Ans. (B)
54. Value-added means value of-
(A) Output at factor cost
(B) Output at market prices
(C) Goods and services less depreciation
(D) Goods and services less cost of intermediate goods and services
Ans. (D)

55. Which of the following is an indirect tax?
(A) Capital Gains Tax
(B) Excise Duty
(C) Wealth Tax
(D) Estate Duty
Ans. (B)

56. Taxes on professions can be levied by:
(A) State government only
(B) Both by state and union government
(C) By panchayats only
(D) Union Government only
Ans. (A)

57. A part of National Debt known as External Debt is the amount-
(A) Borrowed by its citizens from abroad
(B) Lent by its citizens to foreign governments
(C) Borrowed by its government from abroad
(D) Lent by its government to foreign government
Ans. (C)

58. The non-expenditure costs which arise when the producing firm itself owns and supplies certain factors of production are-
(A) Explicit costs
(B) Original costs
(C) Implicit costs
(D) Replacement costs
Ans. (C)

59. Taxes are as certain as the death, because-
(A) They constitute the major source of government revenue.
(B) Government have no other source of revenue.
(C) Most PSUs are run inefficiently.
(D) Government has its own budget constraints.
Ans. (A)

60. Which among the following is not a non-customs duty obstacle the world trade?
(A) Quantity restriction
(B) Establishment of Standard
(C) Determination of import duty uniformly
(D) Restrictions on goods quality
Ans. (C)

61. Which one of the following taxes is collected and utilized by the State Governments?
(A) Personal income tax
(B) Corporation tax
(C) Land revenue
(D) Custom duties
Ans. (C)

62. Which of the following taxes are levied and collected by the centre but their net proceeds are whollytransferred to states?
(A) Expenditure Tax and Gift Tax
(B) Additional Duties of Excise in lieu of Sales Tax
(C) Stamps and Registration
(D) Taxes on Advertisement
Ans. (D)

63. In India which of the following taxes is levied by the State governments?
(A) Excise duty on liquor
(B) Capital gains tax
(C) Customs tax
(D) Corporation tax
Ans. (A)
.
64. Excise duty is levied on-
(A) Sale of goods
(B) Production of goods
(C) Import of goods
(D) Export of goods
Ans. (B)

65. The GST (Goods and Services Tax), recently passed by Government will be levied on which of the following products?
(A) Petroleum Crude
(B) Tobacco
(C) Natural Gas
(D) Aviation Turbine Fuel
Ans. (B)

66. Tax on inheritance is called______.
(A) Excise duty
(B) Estate duty
(C) Gift tax
(D) Sales tax
Ans. (B)

67. Which of the following tax systems will help to reduce economic inequalities in India?
(A) Regressive Tax
(B) Progressive Tax
(C) Flat rate tax
(D) None of these
Ans. (B)

68. Which State Government has recently abolished “agriculture income tax”
(A) Karnataka
(B) Rajasthan
(C) Bihar
(D) Assam
Ans. (A)

69. CENVAT is related to which of the following ?
(A) Sales Tax
(B) Excise Duty
(C) Custom Duty
(D) Service Tax
Ans. (B)

70. What is an octroi?
(A) Tax
(B) Tax collection center
(C) Tax processing center
(D) Tax information center
Ans. (A)

71. The main effect of Direct Taxes is on-
(A) Food prices
(B) Consumer goods
(C) Capital goods
D) Income
Ans. (D)

72. The term ‘Dumping’ refers to-
(A) The sale of a sub-standard commodity
(B) Sale in a foreign market of a commodity at a price below marginal cost
(C) Sale in a foreign market of a commodity just
at marginal cost with too much of profit
(D) Smuggling of goods without paying any customs duty
Ans. (B)

73. If a person’s income increases from Rs. 10 lakhs per year to Rs. 11 lakhs per year and tax increases from Rs. 80,000 to Rs. 92,500 the marginal tax rate is-
(A) 12.50%
(B) 8%
(C) 10%
(D) 15%
Ans. (A)

74. This tax is entirely borne by the entity it is levied upon and cannot be passed-
(A) Direct tax
(B) Indirect tax
(C) Straight tax
(D) Advance tax
Ans. (A)

75. First country to impose carbon tax is ________.
(A) Australia
(B) Iceland
(C) USA
(D) New Zealand
Ans. (D)

76. If a person’s income increases from Rs 20 lakhsper year to Rs 24 lakhs per year and tax increases from Rs 3,50,000 to Rs 4,00,000 the marginal tax rate is-
(A) 8 percent
(B) 12.5 percent
(C) 10 percent
(D) 15 percent
Ans. (B)

77. Which of the following is a Direct tax?
(A) Excise Duty
(B) Customs Duty
(C) Service Tax
(D) Wealth tax
Ans. (D)

78. Which among the following is not a direct tax?
(A) Income tax
(B) Wealth tax
(C) Corporate tax
(D) None of these
Ans. (D)

79. Which tax causes a burden on the poorer section of the society?
(A) Direct Tax
(B) Indirect Tax
(C) Both Direct and Indirect Tax
(D) None of these
Ans. (B)

80. Which among the following is an example of progressive tax?
(A) Excise duty
(B) Octroi
(C) Income tax
(D) House tax
Ans. (C)

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