Economics · General Awareness

Indian Taxation System

2,347 Questions

The Indian taxation system comprises direct and indirect levies including income tax, goods and services tax, and property tax. Understanding these tax structures is crucial for general awareness sections in banking and government exams. The practice set covers central and state tax collections, exemptions, and capital gains rules.

Goods and Services TaxIncome tax rulesProperty tax assessmentsTax exemptionsCentral versus state taxes

Indian Taxation System Questions

Multiple choice commerce goods and services tax goods and service tax study of gst goods and services tax (gst)

Who cannot opt for Composition Scheme under GST?

  1. Taxpayer supplying exempt supplies.

  2. Supplier of services other than restaurant related services.

  3. Casual taxable person or a non-resident taxable person.

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
The following people cannot opt for the scheme:

Supplier of services other than restaurant related services
Manufacturer of ice cream, pan masala, or tobacco
Casual taxable person or a non-resident taxable person
Businesses which supply goods through an e-commerce operator
Multiple choice commerce goods and services tax goods and service tax study of gst goods and services tax (gst)

Exemptions of Goods under GST apply to which of the following?

  1. Animal feeds and supplements

  2. Fresh milk and pasteurized milk

  3. Khadi garments /goods and made-ups

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

List of Exempted Goods under GST includes:

Animal feeds and supplements, Fresh milk and pasteurized milk,Khadi garments /goods and made-ups

Multiple choice commerce goods and services tax goods and service tax study of gst goods and services tax (gst)

Disadvantages of GST include _______.

  1. increased costs due to software purchase

  2. smaller businesses, especially in the manufacturing sector will face difficulties under GST.

  3. GST came into effect in the middle of the financial year

  4. all of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Disadvantages of GST include:

  • Increased costs due to software purchase
  • Being GST-compliant
  • GST will mean an increase in operational costs
  • GST came into effect in the middle of the financial year
  • GST is an online taxation system
  • SMEs will have a higher tax burden

Multiple choice organisation of commerce and management structure of business e-tailing e-advertising, e-marketing and e-security e-commerce and mobile commerce

The Tax Collected by E-Commerce Operators from the actual Suppliers of Goods is termed as ___________.

  1. TDS

  2. TCS

  3. Service tax

  4. All of the Above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under GST law, e-commerce operators are required to collect Tax Collected at Source (TCS) on the net value of taxable supplies made through them by other suppliers.

Multiple choice organisation of commerce and management structure of business e-tailing e-advertising, e-marketing and e-security e-commerce and mobile commerce

What if an e-commerce operator having no physical presence in the taxable territory, does not have a representative in the taxable territory?

  1. His will have to discharge his tax liability in foreign currency

  2. He will not be liable to tax

  3. He has to appoint a person in the taxable territory for the purpose of paying tax on his behalf

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

If a foreign e-commerce operator has no physical presence or representative in India, they are legally required to appoint a person in the taxable territory to discharge their tax liabilities.

Multiple choice organisation of commerce and management structure of business e-tailing e-advertising, e-marketing and e-security e-commerce and mobile commerce

When can a supplier making supplies through E-commerce operator opt not to register?

  1. Always

  2. When the e-commerce operator is not required to collect tax at source u/s 52

  3. When the supplier doesn't cross the threshold limit specified under section 22.

  4. Option (b) and (c), cumulatively fulfilled
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Suppliers using e-commerce platforms can avoid registration if they do not meet the mandatory registration threshold under Section 22 AND the e-commerce operator is not required to collect TCS under Section 52.

Multiple choice social science prices and cost of living value and price utility, value and price price rise/inflation

Value that customers give to get benefits of products or services is classified as ______.

  1. Discount

  2. Value added tax

  3. Price

  4. Tax
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
  • A value that will purchase a finite quantity, weight, or other measure of a good or service.
  • As the consideration given in exchange for transfer of ownership, price forms the essential basis of commercial transactions. It may be fixed by a contract, left to be determined by an agreed upon formula at a future date, or discovered or negotiated during the course of dealings between the parties involved.
Multiple choice economics agriculture sector profile of indian agriculture and agricultural marketing role of agriculture sector foreign trade in india

The direct contribution of agricultural taxes to the revenues of centre and state is _______.

  1. significant

  2. not significant

  3. medium

  4. none of above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Agricultural income in India is largely exempt from direct income tax, and the revenue collected from other agricultural taxes is minimal compared to total government revenue.

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

Income tax in India is :
1. Progressive and anti-rich
2. Proportional and pro-poor
3. Regressive and anti-poor
Select the answer using the code given below:

  1. Only 1

  2. Only 2

  3. 1 and 3

  4. 1,2 and 3
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Income tax in India is progressive, meaning higher income earners pay a higher percentage of their income as tax.

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

Which tax is not shared by the central government with the states?

  1. Union excise duties

  2. Customs duty

  3. Income tax

  4. Estate duty
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation
Customs and Central Excise duties are not shared by the Centre with the states directly. But indirectly, through allocations of Central funds to States even these are shared.
Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

Corporate Tax is imposed by ________.

  1. state government

  2. local government

  3. central government

  4. both centre and state government
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Corporate tax is a kind of direct tax imposed by a jurisdiction on the income or capital of corporations or analogous legal entities. Corporate income tax rates are mandated by the central government.

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

Consider the following statements and identify the right ones.
i. Central government does not have exclusive power to impose tax which is not mentioned in state or concurrent list.

ii. The constitution also provides for transferring certain tax revenues from union list to states.

  1. i only

  2. ii only

  3. both

  4. none
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Among the two options, only second one is true because first one says that only central government has exclusive powers to levy taxes which is not true. Taxes in India are levied by the Central Government and the state governments. The constitution also provides for transferring certain tax revenues from union list to states list.