Tag: government and taxes

Questions Related to government and taxes

Which of the following holds true for an indirect tax _____.

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

  1. the tax is levied on wealth

  2. the tax is levied on all kinds of income

  3. point of impact and incidence are different

  4. the tax is levied on property

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Correct Option: C
Explanation:

Indirect tax is a type that is paid to government indirectly  i.e tax on goods and services rather than on income and profits. Examples of indirect tax include VAT, excise duty, service tax, customs duty etc. Point of impact and incidence is different for example we buy a commodity from shopkeeper(point of impact) and tax levied goes to government ( point of incidence).

Consider the following statements and identify the right one:
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.

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

  1. Only I

  2. Only II

  3. Both

  4. None of these

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Correct Option: B
Explanation:

Central government has exclusive power to impose tax which is not mentioned in state or concurrent list.

The tax levied on the interstate trade of goods is _____.

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

  1. sales tax

  2. excise tax

  3. service tax

  4. central sales tax

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Correct Option: D
Explanation:

The tax levied on the interstate trade of goods is the central sales tax.

Consider the following statements and identify the right ones.
I- Wealth tax is collected from productive as well as unproductive assets
II- Estate duty was a type of large estates

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

  1. Only I

  2. Only II

  3. Both

  4. None

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Correct Option: B
Explanation:

Wealth tax is collected from unproductive assets only. Estate duty was abolished in 1985.

The tax on net income of companies is _______.

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

  1. personal income tax

  2. interest tax

  3. wealth tax

  4. corporation tax

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Correct Option: D
Explanation:

The tax on net income of companies is corporate. Tax rates are uniform for categories of companies.

Which of the following taxes is/are withdrawn or abolished?

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

  1. Interest tax

  2. Estate duty

  3. Gift tax

  4. All the above

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Correct Option: D
Explanation:

Interest tax was withdrawn in 2000-01, estate duty abolished in 1985 and gift tax in 1998-99.

The most important source of revenue to the states is _______.

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

  1. sales tax

  2. service tax

  3. excise duty

  4. none of the above

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Correct Option: A
Explanation:

Sales tax is the tax on sale of goods and is influenced by the value added tax system.

_________ is an example of direct tax.

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

  1. Excise duty

  2. Wealth tax

  3. Sales tax

  4. Gifts

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Correct Option: B
Explanation:

Wealth tax is an example of direct tax since the burden of tax cannot be transferred to different person. Wealth tax refers to the tax levied on personal capital.

When tax is charged on the basis of value of the goods being taxed it is called __________.

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

  1. Ad valorem taxes

  2. CENVAT

  3. tariff value

  4. regressive tax

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Correct Option: A

Which of the following is NOT true about indirect tax?

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

  1. Wealth tax is direct tax

  2. It is imposed by the central government but collected by the state government and handed over to central govt.

  3. In the budget of 2016-17, income tax collection was more than non tax revenue

  4. In the budget of 2016-17, income tax collection was 14% of total revenue of the central government

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Correct Option: B