Economics · General Awareness

Indian Taxation System

2,325 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 maths gst (goods and service tax) more about gst commission, brokerage and vat taxation, calculation of income tax

In the format of GSTIN there are ...... alpha-numerals.

  1. $15$
  2. $10$
  3. $16$
  4. $9$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

GSTIN contains 2 digits of state code, followed by 10 alpha-numeric characters of owner's PAN number, then State registration number and letter Z, last digit or alphabet is the checksum. So in total there are 15 alpha-numerals. 

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.

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

This is an example for direct taxation ________________.

  1. Customs-Imports

  2. Wealth-Profits

  3. Excise-Manufacturing

  4. Turn-over -sale
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A government levy on the income, property, or wealth of people or companies. A direct tax is borne entirely by the entity that pays it, and cannot be passed on to another entity. The rest all are indirect taxes.

Multiple choice legal studies government and taxes types of tax types of taxes government budget and taxation

The salary/emoluments of which of the following is exempted from income tax?

  1. The President

  2. The Chief Justice of India

  3. The Election Commissioner

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

The President is the first citizen of the country and also the highest official. The salary and emoluments is decided by the President's (Emoluments and) Pensions Act, $1951$ which was amended recently where the President's salary was hiked to five lakhs and is tax free. 

Multiple choice social science government and taxes types of tax types of taxes government budget and taxation

Direct tax is called direct because it is collected directly from __________________.

  1. The producers on goods produced

  2. The sellers on goods sold

  3. The buyers of goods

  4. The income earners
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A direct tax is the tax, the final burden of which is borne by the person on whom it is imposed. For example: Income tax is a direct tax. Thus, direct tax is called direct tax as it is collected directly from the income earners and the burden of the tax cannot be shifted to different persons.