Tag: tax

Questions Related to tax

Which of the following statements is correct?

meaning and importance of taxes government and taxes tax civics economics

  1. Income tax was abolished in India in $1991$.

  2. Gift tax was abolished in India in $1998$, but income tax on gift (received) without adequate consideration was partially reintroduced in April $2004$.

  3. No states have adopted VAT system of indirect taxation.

  4. Estate duty was abolished in $1995$.

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Correct Option: B

As part of the Taxation Reforms in 1991, the rates of taxation were reduced in respect of_______________.

meaning and importance of taxes government and taxes tax civics economics

  1. Corporate Income Tax

  2. Personal Income Tax

  3. Customs Duties

  4. All of the above

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Correct Option: D

The VDIS-Voluntary Disclosure of Income Scheme was the brainchild of ______________.

meaning and importance of taxes government and taxes tax civics economics

  1. P.Chidambaram

  2. Ram Jethmalani

  3. Atal Behari Vajpayee

  4. Sonia Gandhi

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Correct Option: A
Explanation:

Voluntary Disclosure of Income Scheme (VDIS) was the brainchild of P Chidambaram. Chidambaram introduced the scheme in the 1997-98 budget, had actually targeted an ancient mindset : a man pays tax only when he is bludhgeoned.

In $2011-12$ direct taxes are around ______% of GDP.

meaning and importance of taxes government and taxes tax civics economics

  1. $5.48$

  2. $15.26$

  3. $12.83$

  4. $7.75$

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Correct Option: A
Explanation:

In 2011-12 direct taxes were around 5.48% of GDP where as for indirect taxes it was 4.4% 

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

meaning and importance of taxes government and taxes tax civics economics

  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

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Correct Option: C

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?

meaning and importance of taxes government and taxes tax civics economics

  1. $Rs. 32,000$

  2. $Rs. 8000$

  3. $Rs. 4,000$

  4. $Rs. 20,000$

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Correct Option: A
Explanation:

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

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

meaning and importance of taxes government and taxes tax civics economics

  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

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Correct Option: C

Transfer payment includes:

meaning and importance of taxes government and taxes tax civics economics

  1. Old age pensioin

  2. Tax payments

  3. Consumer's debt interest

  4. All of the above

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Correct Option: D
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.

________ is not a Direct Tax.

meaning and importance of taxes government and taxes tax civics economics

  1. Income Tax

  2. Wealth Tax

  3. Gift Tax

  4. Entertainment Tax

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Correct Option: D
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.

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

meaning and importance of taxes government and taxes tax civics economics

  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

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Correct Option: D