Tag: main feature of tax

Questions Related to main feature of tax

GST is an  _________.

social science tax and its importance taxation : need, principles and importance main feature of tax public revenue and taxation

  1. direct tax

  2. indirect tax

  3. hybrid tax

  4. not a tax at all

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Correct Option: B

GST was introduced in year _________.

social science tax and its importance taxation : need, principles and importance main feature of tax public revenue and taxation

  1. 2016

  2. 2017

  3. 2018

  4. 2019

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Correct Option: B

Direct taxes being progressive in nature, it is help to  ___________.

social science tax and its importance taxation : need, principles and importance main feature of tax public revenue and taxation

  1. reduce inequality

  2. reduce poverty

  3. reduce price

  4. reduce poverty and prices

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Correct Option: A

Consider the following statements related to the tax litigations in the country and select the correct ones using the code given below:
1. The tax department of the country is the largest litigant at every level of the judicial hierarchy. 
2. The tax department of the country loses around $65$ per cent of the cases. 
3. There is serious need of enhancing the tax administration and pushing for legal sector reforms in the country. 

economics tax and its importance taxation : need, principles and importance main feature of tax public revenue and taxation

  1. 1 and 2

  2. 2 and 3

  3. 1 and 3

  4. 1, 2 and 3

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Correct Option: D
Explanation:

India needs to simplify and enhance the effectiveness of her tax administration together with pushing in favour of needful kinds of legal sector reforms ( as was promised in the second generation of economic reforms in 1999−20001999−2000.)

Chairman of Tax Reform Committee was ________.

economics tax and its importance taxation : need, principles and importance main feature of tax public revenue and taxation

  1. Pranab Mukherjee

  2. KP. Narsimham

  3. S. Janakiraman

  4. Raja Chelliah

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Correct Option: D
Explanation:

The Government appointed a Tax Reforms Committee under Prof Raja Chelliah to lay out agenda for reforming India’s tax system. This TRC came up with three reports in 1991, 1992 and 1993 with several measures.

Kelkar Committee report is related to _______.

economics tax and its importance taxation : need, principles and importance main feature of tax public revenue and taxation

  1. tax reforms

  2. financial sector reforms

  3. trade reforms

  4. administrative reforms

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Correct Option: A
Explanation:

Impetus to direct tax reforms in India came with the recommendations of the Task Force on Direct & Indirect Taxes under the chairmanship of Vijay Kelkar in 2002. The main recommendations of this task force related to the direct taxes related to increasing the income tax exemption limit, rationalization of exemptions, abolition of long term capital gains tax, abolition of wealth tax etc.

Which of the following add to governments non tax revenue?

economics tax and its importance taxation : need, principles and importance main feature of tax public revenue and taxation

  1. Administrative revenue

  2. Profit from state enterprises

  3. Gifts and grants

  4. All the above

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Correct Option: D
Explanation:

Administrative revenue, profit from state enterprises, revenue from gifts and grants come under non-tax revenue of government. 

Receipts in budget can be capital or revenue. Which of these is/are capital receipts?
1- Loan recoveries
2- Provident funds deposits
3- Grants

economics tax and its importance taxation : need, principles and importance main feature of tax public revenue and taxation

  1. Only 1 and 2

  2. Only 1 and 3

  3. Only 2 and 3

  4. 1, 2 and 3

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Correct Option: A
Explanation:

Loan recoveries are the money, which the government had lent out in past, their capital comes back to the government when the borrowers repay them as capital receipts. long-term capital accruals to the government through the Provident Fund (PF), Postal Deposits, various small saving schemes (SSSs) and the government bonds sold to the public (as Indira VIkas Patra, Kisan Vikas Patra, Market Stabilization Bond, etc.) are also capital receipts. Grants are revenue receipts.

With reference to contribution from taxes, consider the following statements:
1- Contribution from direct taxes is more than that from indirect taxes.
2- Corporation tax is the largest contributor.

economics tax and its importance taxation : need, principles and importance main feature of tax public revenue and taxation

  1. Only 1

  2. Only 2

  3. Both 1 and 2

  4. Neither 1 nor 2

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Correct Option: C
Explanation:

Since 2007-08, the contribution of direct tax has been more than indirect tax. Before this, the trend was opposite. Corporation tax is the largest contributor among the taxes.

Gross capital formation will increase if which of the following takes place?
1- Gross domestic saving increases
2- Gross domestic consumption increases
3- GDP increases

economics tax and its importance taxation : need, principles and importance main feature of tax public revenue and taxation

  1. only 1

  2. only 1 and 2

  3. only 1 and 3

  4. none of above

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Correct Option: D
Explanation:

Gross capital formation, in simple terms is equivalent to investment made. It was earlier called gross domestic investment. The part of GDP that is used is called gross domestic consumption, while the part that is saved is gross domestic savings (GDS). Some part of this GDS will be re-invested back, and that is called gross capital formation. Now, an increase in GDP or GDS will not necessarily lead to an increase in capital formation. Because how much in invested back will depend on many other factors.