MCQs
Total Questions : 217
| Page 20 of 22 pages
Answer: Option D. -> Wealth Tax
Answer: (d)Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
Answer: (d)Direct tax is a tax levied directly on the person or company that has to pay it. These taxes are paid directly to the tax authority.
Answer: Option A. -> Expenditure tax
Answer: (a)
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending.
This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit of this type of tax scheme is the removal of double taxation.
Answer: (a)
Expenditure tax is a taxation plan that replaces the income tax (a direct tax). Instead of applying a tax based on the income earned, tax is allocated based on the rate of spending.
This is different from a sales tax, which is applied at the time the goods or services are provided and is considered a consumption tax. The major benefit of this type of tax scheme is the removal of double taxation.
Answer: Option D. -> 4 only
Answer: (d)
Proportional tax is one by which the revenue collected rises proportionally with income.
A tax system could be made approximately proportional by having a uniform rate of income tax with very few exemptions, and indirect taxes levied at similar rates on as many goods and services as possible
Answer: (d)
Proportional tax is one by which the revenue collected rises proportionally with income.
A tax system could be made approximately proportional by having a uniform rate of income tax with very few exemptions, and indirect taxes levied at similar rates on as many goods and services as possible
Answer: Option B. -> regressive
Answer: (b)
An indirect tax is one in which the burden can be shifted to others. The taxpayer is not the tax bearer. The impact and incidence of indirect taxes are on different persons.
Since most of the indirect taxes are not progressive in nature, individuals may not mind paying them. In other words, indirect taxes are generally regressive in nature.
Therefore, individuals would not be de-motivated to work and to save, which may increase investment.
Answer: (b)
An indirect tax is one in which the burden can be shifted to others. The taxpayer is not the tax bearer. The impact and incidence of indirect taxes are on different persons.
Since most of the indirect taxes are not progressive in nature, individuals may not mind paying them. In other words, indirect taxes are generally regressive in nature.
Therefore, individuals would not be de-motivated to work and to save, which may increase investment.
Answer: Option C. -> falls
Answer: (c)
Cross Price Effect refers to the effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity.
When the price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at the same price.
It leads to a rightward shift in the demand curve of the given commodity. With the decrease in the price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards the left.
Answer: (c)
Cross Price Effect refers to the effect on the demand for a given commodity due to a change in the price of a substitute commodity. A change (increase or decrease) in the price of substitutes directly affects the demand for a given commodity.
When the price of substitute goods (say, coffee) rises, demand for the given commodity (say, tea) also rises at the same price.
It leads to a rightward shift in the demand curve of the given commodity. With the decrease in the price of substitute goods (coffee), demand for the given commodity (tea) also decreases. It shifts the demand curve of the given commodity towards the left.
Answer: Option B. -> A B C D
Answer: (b)
11th Finance Commission was appointed in 1998 under chairmanship of AM Khusro, 12th in 2002 under C Rangarajan, 13th in 2007 under Dr Vijay Kelkar and 14th in 2013 under Yaga Venugopal Reddy.
Answer: (b)
11th Finance Commission was appointed in 1998 under chairmanship of AM Khusro, 12th in 2002 under C Rangarajan, 13th in 2007 under Dr Vijay Kelkar and 14th in 2013 under Yaga Venugopal Reddy.
Answer: Option B. -> Statement showing Short term Fiscal Policy
Answer: (b)The Act requires the government to lay before the parliament three policy statements in each financial year namely Medium Term Fiscal Policy Statement; Fiscal Policy Strategy Statement and Macroeconomic Framework Policy Statement.
Answer: (b)The Act requires the government to lay before the parliament three policy statements in each financial year namely Medium Term Fiscal Policy Statement; Fiscal Policy Strategy Statement and Macroeconomic Framework Policy Statement.
Question 198. Consider the following recommendations of The Shome Committee which were appointed to look into the guidelines of General Anti-Avoidance Rules (GAAR):
Choose the correct option from the codes given below:
- To correct anomalies in the statutes of tax laws
- To protect the tax base from abusive tax planning schemes with the purpose to avoid tax
- To correct technical/procedural defects that impair a substantive law
Choose the correct option from the codes given below:
Answer: Option D. -> 1, 2 and 3
Answer: (d)
The Shome Committee which was appointed to look into the guidelines of General Anti-Avoidance Rules (GAAR) has recommended retrospective application of tax law only in rarest of rare cases.
It recommends:
To correct anomalies in tax laws,
to protect the tax base from abusive tax planning schemes with a purpose
to avoid tax
to correct technical/ procedural defects.
Answer: (d)
The Shome Committee which was appointed to look into the guidelines of General Anti-Avoidance Rules (GAAR) has recommended retrospective application of tax law only in rarest of rare cases.
It recommends:
To correct anomalies in tax laws,
to protect the tax base from abusive tax planning schemes with a purpose
to avoid tax
to correct technical/ procedural defects.
Answer: Option D. -> 4 only
Answer: (d)
A currency is said to be convertible when it can be freely exchanged for another currency at market rates.
Transaction of current account includes dealing with payments relating to foreign trade, travel and other services. Capital account deals with transactions in financial assets.
While India has made the Indian rupee fully convertible on the current account, it is yet to accept capital account convertibility as a goal.
Broadly, capital account convertibility would mean freedom for firms and residents to freely buy into overseas assets such as equity, bonds, property, and acquire ownership of overseas firms besides free repatriation of proceeds by foreign investors
Answer: (d)
A currency is said to be convertible when it can be freely exchanged for another currency at market rates.
Transaction of current account includes dealing with payments relating to foreign trade, travel and other services. Capital account deals with transactions in financial assets.
While India has made the Indian rupee fully convertible on the current account, it is yet to accept capital account convertibility as a goal.
Broadly, capital account convertibility would mean freedom for firms and residents to freely buy into overseas assets such as equity, bonds, property, and acquire ownership of overseas firms besides free repatriation of proceeds by foreign investors
Answer: Option A. -> On all stages between production and sale
Answer: (a)
Value Added Tax (VAT) is imposed on the value added to each commodity by a firm during all stages of production and distribution.
In simple terms, it is a fee assessed against businesses at each step of the production and distribution process, usually whenever a product is resold or value is added to it.
Value-added taxation in India was introduced as an indirect value-added tax (VAT) into the Indian taxation system from 1 April 2005.
Answer: (a)
Value Added Tax (VAT) is imposed on the value added to each commodity by a firm during all stages of production and distribution.
In simple terms, it is a fee assessed against businesses at each step of the production and distribution process, usually whenever a product is resold or value is added to it.
Value-added taxation in India was introduced as an indirect value-added tax (VAT) into the Indian taxation system from 1 April 2005.
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