Commerce

It is the main purpose.
The revenue collected through taxes can be used for development of agriculture and industry and to provide infrastructural facilities in poor countries. Thus, entrepreneur can be encouraged to set up industries in backward regions and hence capital formation is increased. In rich countries, the rate of capital formation is already high.

It is progressive tax.
The progressive tax is the tax in which the rate of tax increases with the increase in income. Hence, if the person's income increases, he or she knows that a large part of income will have to be paid as tax to government. Thus, it has an adverse effect on the willingness to earn and there is reluctance to work more.

The corporate tax is narrower in scope in India.
The corporate tax is charged on the annual income of the domestic as well as foreign companies operating in India. Thus, only the corporate companies contribute to the Corporate Tax and the general public does not contribute to this tax.

It is the regressive tax.
The regressive tax is the tax in which the rate of tax decreases with the increase in income. Thus, the poor with less income pays a proportion of income as tax and are left with little money. So, it may be said to be the most unjust tax for the poor to pay.

It is not an objective of fiscal policy.
The balance of payments is the record of all transactions made between one country and all other countries during a specified period of time. To achieve its desirable level is not an objective of fiscal policy, as it cannot be achieved through taxes or government spending alone.

It is correct.
The word 'Fisc' means state treasury, and fiscal policy refers to the policy concerning the use of state treasury or the government finance to achieve the macroeconomic goals.

It is not an instrument of fiscal policy, but of monetary policy.
The monetary policy is concerned with the regulation of money in the hands of public. The bank rate is increased, and hence the interest on loan is increased and people are discouraged to take loan as they have to pay more interest on loan. Hence, it controls money in the hands of public.

This tax is not to be paid on transferring ownership of property.
This tax is not to be paid on transferring ownership of property. But municipal tax is levied by the municipal corporate body of the city on the property owned by a person. It is not concerned with transferring ownership of property.

It is professional tax.
The professional tax is paid by persons who are professionals like chartered accounts, advocates, and doctors. It is a direct tax and is paid on income earned through their profession and it cannot be shifted to any other person. Hence, the professional tax burden is felt by the person who pays it in the first instance.

It is not considered by fiscal policy.
The regulation of money supply is considered by monetary policy, not fiscal policy. The money supply in the hands of public is regulated by instruments like increasing bank rate, open market operations etc. which is considered by monetary policy, not fiscal policy.

It is depression.
The depression refers to the state of economy when there is high unemployment and falling price levels and people have less purchasing power. Hence, if taxes are reduced at the time of depression, the people will be left with more purchasing power and they will demand. Hence, the prices will rise or come to normal level. This will also boost employment.

It is not applicable on gift tax.
The education cess is not to be paid on gift tax payable. The gift tax is to be paid on the gift received from another person, if it exceeds a certain limit.

It is not a method of reducing inequality.
If the equal rates of taxes are imposed on the rich as well as the poor, the burden of tax will be more on the poor as they earn less. On the other hand, the rich will not pay more and hence they will become richer and the gap between the haves and have-nots will not decrease.

It is an example of direct tax.
The Securities Transaction Tax is the tax payable on the value of the taxable securities transaction. The tax is to be paid by the person who sells or purchases the securities and the burden of this tax cannot be shifted to any other person. Hence, it is an example of direct tax.

It is Rs. 2, 00,000.
The annual income till Rs. 2, 00,000 is exempted from tax for the general tax payer, i.e. up to income of Rs. 2, 00,000, no tax is to be paid for the current assessment year 2012 - 2013.

It is not levied by the Parliament.
The Value Added Tax is the tax charged on the value added in goods and services at each stage. The Value Added Tax is the tax, which is levied by the respective state governments and hence it is not levied by the Parliament.

It is based on the length of the cigarettes.
The excise duty, which is to be paid on cigarette, depends on its length. For instance, excise duty of Rs. 15 per 1000 cigarettes is levied on cigarettes up to length of 60 mm.

It is based on weight of sugar.
The excise duty on sugar is based on the weight of sugar. It is charged according to the quintal, which is the weight of sugar.

It is known as non-dutiable goods.
The non-dutiable gods are the goods, which have a rate of duty as zero. This means that no duty is charged on manufacture of such goods, or it is exempted from any duty to be levied.

It means the goods are manufactured and used within factory.
Captively consumed goods mean that the goods are manufactured and used within factory. For instance, tyres are manufactured in a factory and then are used to be fitted in the vehicles.

It is cement.
On cement, the excise duty is levied at the rate of per tonne, i.e. according to weight. Hence, excise duty is charged according to the weight of cement, which comes under specific rate of duty.

It is by adopting deficit financing.
When deficit financing is resorted, the government has to issue new currency notes to meet the deficit. When the new currency notes are issued, it increases supply of money in the market as compared to demand. Therefore, the price increases, and the value of rupee decreases.

Increasing the bank rate is not a method to adopt deficit financing.
Increasing the bank rate is an instrument of monetary policy, not the method of deficit financing. The bank rate is increased and hence the interest on loan taken by common public is also increased. Thus, public is discouraged to take loan. Hence, it reduces the purchasing power. This policy is adopted to leverage pricing mechanism.

It is not an adverse effect of deficit financing.
In a country like India, government grants subsidies to encourage manufacturers to produce a particular type of product, especially the essential goods. The common people cannot pay such high price and thus government pays to the manufacturer to bridge the deficit between the cost paid and the price charged from public. Therefore, the government has to resort to deficit financing; thus granting of subsidies does not have an adverse effect, rather it gives advantage.

It is not an objective of deficit financing.
When the deficit financing is adopted, the new currency notes are issued and it leaves more cash in the hands of people. Thus, people demand and consume more, and this pushes up prices. Therefore, reducing inflation is not the objective of deficit financing. In fact, it is resorted to for overcoming depression.