Tag: tax and its importance

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Questions Related to tax and its importance

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

Consider the following statements and identify the right ones.
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.

  1. i only

  2. ii only

  3. both

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

Among the two options, only second one is true because first one says that only central government has exclusive powers to levy taxes which is not true. Taxes in India are levied by the Central Government and the state governments. The constitution also provides for transferring certain tax revenues from union list to states list.

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

The war reparations paid by the defeated Central Powers after the First World War is a best example of _______.

  1. tax revenue

  2. non-tax revenue

  3. both A and B

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

The war reparations paid by the defeated Central Powers after the First World War is a best example of non-tax revenue which is revenue receipts that are not generated by taxing the public.

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

The following is an example of commercial non-tax revenue ______. 

  1. Gifts and grants

  2. Fees

  3. Fines

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

Among the following options, the commercial non-tax revenue is the surpluses. For instance, the central government runs railways. Surplus from railway earnings can be normally contributed to the revenue budget of the central budget.

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

Which of the following is considered a capital receipt?

1. Loan recoveries

2. Provident funds deposits

3. Grants

  1. 1 and 2 only

  2. 1 and 3 only

  3. 2 and 3 only

  4. 1, 2 and 3
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Capital receipts: This is the income flow from one of the following sources. Cash from the sale of fixed assets, Cash from the sale of shares in the business, Cash from the issuance of a debt instrument which includes loans and bonds and also grants. Among the given options, provident fund deposits are not included under capital receipts.

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

Entrance fee of Rs. 2000 received by social club is _____.

  1. capital expenditure

  2. capital receipts

  3. revenue expenditure

  4. revenue deficit
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Entrance fee of Rs. 2000 received by social club is an example of capital receipt. This is the income flow from one of the following sources. 

1.  Cash from the sale of fixed assets
2. Cash from the sale of shares in the business
3. Cash from the issuance of a debt instrument which includes loans and bonds. 
This should result either the reduction in government assets (sale of share, disinvestment) or increase in some liability (government borrowings).

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

Money obtained through the issues of debenture is ______.

  1. revenue receipt

  2. capital receipt

  3. revenue profit

  4. capital profit
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Money obtained through the issues of debenture is capital receipt. It is the amount received from the sale of assets, shares and debentures. Nature of the capital receipt is that it is non-recurring. This should result either in the reduction in government assets (sale of share, disinvestment) or increase in some liability (government borrowings).

Multiple choice social science government budget and taxation indian taxation system taxation : need, principles and importance tax and its importance

Amount received from IDBI as a medium-term loan for augmenting working capital is _____.

  1. capital expenditure

  2. revenue expenditure

  3. capital receipts

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

Amount received from IDBI as a medium-term loan for augmenting working capital is a capital receipt. Cash from the sale of fixed asset; cash from the sale of shares in the business; cash from the issuance of a debt instrument which includes loans and bonds are also included in capital receipts.