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

Taxes on production is usually ___________.

  1. direct taxes

  2. indirect taxes

  3. both (a) & (b)

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

Taxes on production, such as excise duty or sales tax, are collected from producers but passed on to consumers, making them indirect taxes. They are not levied directly on the income or wealth of the taxpayer.

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

Which of the following are indirect taxes?
(i)Custom duties
(ii)Excise duties
(iii)Sales-tax
(iv)Estate duties

  1. (i), (ii), (iii) & (iv)

  2. (ii), (iii) & (iv)

  3. (i), (ii) & (iii)

  4. (i), (ii) & (iv).
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Custom duties, excise duties, and sales tax are all indirect taxes. Estate duty is a direct tax levied on the estate of a deceased person.

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

What does the term 'incidence of taxation' suggest about?

  1. The rate of taxation is high.

  2. The one who bears the ultimate money burden of the tax.

  3. The one who is immediately responsible to pay the tax.

  4. The effect produced by the tax.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Incidence of taxation refers to the final resting place of the tax burden. While the impact is the initial payment, the incidence is who ultimately pays the cost.

Multiple choice business organisation and correspondence joint stock company 3 - promotion and formation of a company formation and promotion of a company promoter promotion and formation of a company

Which of the following taxes has reduced the net earnings of companies?

  1. Sales tax

  2. Capital gains tax

  3. Wealth tax

  4. Corporate income tax
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

An assessment levied by a government on the profits of a company. The rate of corporate income tax paid by a business varies between countries, although since corporations are legal entities distinct from their owners and operators, they are typically taxed as if they were people.

Therefore corporate income tax has reduced the net earnings of companies.

Multiple choice commercial studies company final accounts forms of statements of profit and loss operating profit (ebit) meaning, need and format of profit and loss account

In a sole traders profit and loss account firm taxation accounts are not present because ______________.

  1. the proprietor of such a business pays income tax in his private capacity

  2. the Income tax department has not made laws regarding the taxation of firms

  3. as sole trader has a simple business so tax paying is not required

  4. the business is separate undertaking for the purposes of tax
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In a sole proprietorship, the business is not a separate legal entity for tax purposes. The proprietor is personally liable for income tax on the business profits.

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

Income from sale of second hand property should be included in national income.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The sale of second-hand goods is not included in national income because the value was already counted when the item was originally produced. Including it again would lead to double counting.

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

Mixed income of the self employed means __________.

  1. gross profits received by proprietors

  2. rent, interest and profit of an enterprise

  3. combined factor payments, which are not distinguishable

  4. wages due to family workers
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Mixed income of the self employed means combined factor payments of rent, wages, interest and profits received by the self-employed professional, which are not distinguishable.

Multiple choice business economics and quantitative methods measurement of national income methods of national income methods of measuring national income national income analysis

Income Method does not include _____________.

  1. rent

  2. mixed incomes

  3. pensions

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

Pensions are considered transfer payments rather than factor income, as they are not earned through current productive services. Therefore, they are excluded from the Income Method.