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 civics introduction to gst fundamentals of gst tax journal

A registered taxable person is eligible to claim refund in respect of export of goods and services in the following cases _________________.

  1. Under bond, without payment of IGST and claim refund of unutilized input tax credit.

  2. On payment of IGST and claim refund of IGST paid on such goods and services.

  3. None of the above

  4. Both (a) and (b)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under GST law, exporters can claim a refund either by exporting under bond without paying IGST and claiming a refund of unutilized input tax credit, or by paying IGST and claiming a refund of the tax paid. Both methods are valid legal procedures for exporters.

Multiple choice civics introduction to gst fundamentals of gst tax journal

In GST, the eligible Refund amount otherwise ineligible due to some prescribed reasons are credited _______________.

  1. To the declared bank account of the dealer automatically

  2. To the Cash Deposit Ledger of the dealer

  3. To the ITC Credit Ledger Account

  4. To the Consumer Welfare Fund
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Under the GST framework, if a refund claim is found to be ineligible or if there is an excess amount that cannot be directly refunded to the taxpayer, the law mandates that such amounts be credited to the Consumer Welfare Fund to prevent unjust enrichment.

Multiple choice civics introduction to gst fundamentals of gst tax journal

When an e-commerce operator is required to register under GST?

  1. When he is required to collect tax at source u/s 52

  2. When his aggregate turnover exceeds the threshold limit

  3. When he is required to discharge tax on the taxable supply or services made by the supplier through him u/s 9(5)

  4. It is mandatory to register irrespective of the threshold limit.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

E-commerce operators are required to register under GST mandatorily, regardless of their aggregate turnover, because they are responsible for collecting tax at source (TCS) or discharging tax on specific supplies made through their platform.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Custom Duties are levied on ______________.

  1. Exports and Imports

  2. Manufacture of excisable goods / commodities

  3. Services Rendered

  4. Sale made by a Dealer in the course of inter-state or intra-state or commerce
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Custom Duties are levied on exports and imports. Custom duty can also be defined as a type of tax which should be paid by people for exporting to foreign countries and importing goods from foreign countries.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which one of the following taxes belong exclusively to the State Governments?

  1. Income Tax

  2. Agricultural Tax

  3. Excise Tax

  4. Wealth Tax
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Agricultural tax belong exclusively to the State Governments. This means that tax from agricultural sector or primary sector of the economy is collected only by the state government. Central government has no authority of collecting agricultural tax.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which of the following is an objective of VAT?

  1. To avoid double taxation effect or cascading effect

  2. To promote cost-efficiency, by permitting credit on inputs

  3. To ensure equitable distribution of tax impact amongst Dealers

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation
VAT stands for Value Added Tax. Enactment of VAT on goods has certain objectives:
a) To avoid double taxation effect or cascading effect
b) To promote cost-efficiency, by permitting credit on inputs
c) To ensure equitable distribution of tax impact amongst Dealers
Multiple choice social science food security in india need for nregs rural development and employment guarantee scheme food security and nutrition

Process of reviewing official records and determining whether state reported expenditures reflect the actual monies spent on the ground is called ___________.

  1. property tax

  2. social audit

  3. flat tax

  4. gift tax
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Social audit is a process of reviewing official records and determining whether state reported expenditures reflect the actual monies spent on the ground. The basic objective of a social audit is to ensure public accountability in the implementation of projects, laws and policies.

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

Which of the following is TRUE about the sole trader form of business?

  1. A sole trader is liable to pay income tax on his/her earnings

  2. Sole traders must have to prepare books of accounts by law

  3. Sole traders must register the name of their business with the Registrar of Companies

  4. All of the given options
Reveal answer Fill a bubble to check yourself
D Correct answer
Multiple choice economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

What is the consequence of non-return of semi-finished goods within the specified period?

  1. Job worker pays GST on return of goods

  2. Principal Manufacturer pays back the input tax credit claimed on such goods

  3. Principal manufacturer pays GST on return of goods

  4. Job worker claims credit of goods received on job work
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

If goods sent for job work are not returned within the prescribed time limit, the transaction is treated as a supply, and the principal manufacturer must reverse the input tax credit previously claimed.

Multiple choice economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

Principal entitled for input tax credit on capital goods if sent for job work __________________________.

  1. If goods sent are returned within one year

  2. If goods sent are returned within three years

  3. If goods sent are returned within six months

  4. If goods sent are returned within nine months
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under GST regulations, capital goods sent for job work must be returned within three years to maintain the entitlement to the input tax credit.

Multiple choice economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

Transfer of Possession of Goods is ______________.

  1. Actual Tax Point

  2. Basic Tax Point

  3. Either of the above

  4. None of the Above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In tax law, the transfer of possession is often considered the basic tax point, as it marks the moment when control over the goods shifts, triggering potential tax liability.

Multiple choice economics ancient indian economic concepts goods, wealth and welfare major definitions of economics wealth, capital and money

There was increase in tax rate from 20% to 24% w.e.f. 1.6.2018. Which of the following rate is applicable when invoice was issued after change in rate of tax in June 2017 but payment received and goods supplied in April 2017 __________________.

  1. 20% as it is lower of the two

  2. 24% as it is higher of the two

  3. 20% as payment was issued in the period during which the supply was effected

  4. 24% as invoice being one of the factors was issued after rate change
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

According to the time of supply rules under GST, when the payment is received and goods are supplied before the change in tax rate, the original tax rate applies regardless of when the invoice is issued.