Tag: civics

Quizzes (292) Questions (3031)

Questions Related to civics

Multiple choice meaning and importance of taxes government and taxes tax civics economics

Which of the following is not an effect of simplification of procedural aspects in Taxation?

  1. Improvement in tax compliance

  2. Increased revenue generation for the Government

  3. More work for Tax Authorities and Taxpayers

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

Simplification of tax procedures is intended to reduce the burden on taxpayers and authorities, thereby improving compliance and revenue. It does not result in more work for them.

Multiple choice meaning and importance of taxes government and taxes tax civics economics

Suppose a shopkeepers buys inputs worth $Rs. 2,00,000$ and his sales are worth $Rs. 4,00,000$ in a month. The input tax rate is $4$% and output tax rate is $10$%. What is value added tax here after set off of input tax credit?

  1. $Rs. 32,000$
  2. $Rs. 8000$
  3. $Rs. 4,000$
  4. $Rs. 20,000$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Output tax $= 10$% of $400000 = Rs. 40000$;
Input tax $= 4$% of $200000 = Rs. 8000$ 
Hence,  Value Added Tax $= 40000 - 8000 = Rs. 32000$.

Multiple choice meaning and importance of taxes government and taxes tax civics economics

Which of the following is not part of the Taxation Reforms in 1991?

  1. Increase in Basic Exemption Limits for Individuals & Hindu Undivided Families (HUFs)

  2. Reduction & rationalization of Income Tax Rates

  3. Compulsory filing of returns in respect of Individuals having income below Basic Exemption Limits

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

Taxation reforms in 1991 focused on rationalizing rates and improving compliance. Compulsory filing for those below the exemption limit contradicts the goal of simplifying the process for small taxpayers.

Multiple choice meaning and importance of taxes government and taxes tax civics economics

Transfer payment includes:

  1. Old age pensioin

  2. Tax payments

  3. Consumer's debt interest

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

Transfer payments are those payments which are made without production. These payments are characterized with transfer of money in exchange for no direct receivables in terms of products or services.

Multiple choice meaning and importance of taxes government and taxes tax civics economics

________ is not a Direct Tax.

  1. Income Tax

  2. Wealth Tax

  3. Gift Tax

  4. Entertainment Tax
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Income tax, wealth tax and gift tax are all direct taxes. Entertainment tax is an indirect tax. It is a tax on any kind of entertainment activities. It might include cinema, theaters etc. Entertainment falls in List 2 of the Seventh Schedule of the Constitution of India and is exclusively reserved as a revenue source for the state governments.

Multiple choice meaning and importance of taxes government and taxes tax civics economics

Which of the following is not part of the Taxation Reforms in 1991?

  1. General policy for introduction of State-level VAT

  2. Rationalisation of Excise Duties towards CENVAT concept

  3. Reduction in the peak rate of Customs Duties

  4. Increase in Customs, Excise and Sales Tax Rates
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The 1991 reforms aimed to reduce the tax burden to stimulate the economy. Increasing customs, excise, and sales tax rates would be contrary to the liberalization and rationalization policies of that era.

Multiple choice meaning and importance of taxes government and taxes tax civics economics

Which one of the following sources of Central revenue belongs to the category of Indirect taxes?

  1. Corporation tax

  2. Customs

  3. Wealth tax

  4. Interest Receipts
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Custom Duty is a indirect tax for goods when import or export. The tax is collected by Central Board of Indirect Taxes and Customs.

Multiple choice meaning and importance of taxes government and taxes tax civics economics

If final goods attracts an excise duty of Rs. 8000 and Rs. 1050 has already been paid on inputs then the firm will pay the 7000 towards excise duty. It is paying tax according to

  1. VAT

  2. CENVAT

  3. MODVAT

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

The firm pays tax according to the MODVAT system. MODVAT means Modified Value added tax.This was an excise duty scheme introduced in 1986 for allowing relief to final manufacturers on the excise duty borne by their suppliers of raw material. This scheme has now been replaced by the CENVAT Scheme.