1. Which one of the following is NOT an example of Indirect Tax ?
1. Sales tax
2. Excise duty
3. Custom duty
4. Expenditure tax
Ans : 4 - Expenditure Tax
2. Which amidst the following taxes collected by the Union is not mandate to be assigned to the states ?
1. Terminal taxes on goods or passengers carried by railway ,sea or air
2. Taxes on railway fares and freights
3. Taxes on consignment of goods
4. Service tax
Ans : 4 - Service tax
3. Which of the following taxes is exclusively and totally assigned to the Central Government by the Constitution ?
1. Estate duty
2. Sales Tax
3. Taxes on railway fares and freights
4. Corporation tax
2. Sales Tax
3. Taxes on railway fares and freights
4. Corporation tax
Ans : 4 - Corporation tax
4. If the tax rate increases with the higher level of income it shall be called :
1. Proportional tax
2. Progressive tax
3. Lump sum tax
4. Regressive tax
Ans : 2 - Progressive tax
5. The report of Vijay Kelkar Committee related to :
1. Trade Reforms
2. Centre-State Financial Relations
3. Disinvestment in Public Sector Enterprises
4. Tax Reforms
Ans : 4 - Tax Reforms
6. Which one of the following is NOT the source of revenue of Central Government ?
1. Income tax
2. Corporate tax
3. Agriculture Income tax
4. Excise Duty
Ans : 3 - Agriculture Income Tax
7. Which one of the following is NOT a source of tax revenue in Indian States ?
1. Land revenue
2. Motor Vehicle Tax
3. Entertainment tax
4. Corporate tax
Ans : 4 - Corporate Tax
8. Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to states ?
1. Expenditure Tax and Gift Tax
2. Additional Duties of Excise in lieu of Sales Tax
3. Stamps and Ragistration
4. Tax on Advertisements
Ans : 4 - Tax on Advertisements
9. Which of the following is NOT a tax / duty levied by the Govt. of India ?
1. Income Tax
2. Education Tax
3. Service Tax
4. Custom Tax
Ans : 4 - Custom Tax
10. Which of the following taxes is collected by the Govt. on sale of goods and service in the country ?
1. NAT
2. GET
3. SAT
4. VAT
Ans : 4 - VAT
11. As we all know Govt. of India collects tax revenue on various activities in the country. Which of the following is a part of the tax revenue of the Government ?
1. Tax on Income
2. Tax on Expenditure
3. Tax on Property or Capital Assets
4. Tax on Goods and Services
1. Only 1 & 3
2. Only 2 & 4
3. Only 2 & 3 & 4
4. All 1 & 2 & 3
5. None of these
Ans : 4 - All 1 & 2 & 3
12. Which of the following is NOT a source of tax revenue collected by the Government of India ?
1. Custom Duty
2. Excise Duty
3. Service Duty
4. Income Tax
5. Dividends and Profits
Ans : 5 - Dividends and Profits
13. Which of the following taxes is not levied by the Union Government ?
1. Customs
2. Corporate Tax
3. Land Revenue
4. Income tax
5. Surcharge on Income Tax
Ans : 3 - Land Revenue
14. Service Tax was introduced in India for the first time in the year.
1. 1980 - 1981
2. 1990 - 1991
3. 1991 - 1992
4. 1994 - 1995
5. 2000 - 2001
Ans : 4 - 1994 - 1995
15. Which of the following commission set up the President of India decides the distribution of tax incomes between the Central and State Government ?
1. Central Law Commission
2. Pay Commission for Government Employee
3. Administration Reform Commission
4. Planning Commission
5. Finance Commission
Ans : 5 - Finance Commission
16. Which of the following is true about Value Added Tax ( VAT ) ?
1. It is a consumption tax levied on value added to the product on every stage of its production
2. VAT is levied by the union government and only a small part goes to state government
3. The income tax on retailers is now decided no the basic of their VAT collection in a year
1. Only 1
2. Only 2
3. Only 3
4. All 1 ,2 & 3
5. None of these
Ans : 1 - Only 1 - It is a consumption tax levied on value added to the product on every stage of its production
17. Many a time we read in financial newspapers about public debt. which of the following is / are the components of public debt ?
1. Market loans
2. External loans
3. Outstanding against saving schemes / provident
1. Only 1
2. Only 2
3. Both 1 & 2
4. All 1 , 2 & 3
Ans : 3 - Both 1 & 2
18. Which of the following is / are the Non- Tax Revenue components of the union Budget of India ?
1. Custom duties
2. Interest receipts
3. Dividends and profits
1. Only 1
2. Only 2
3. Only 3
4. Only 2 & 3
5. All 1 , 2 & 3
Ans : 4 - Only 2 & 3
19. Which among the following is the Exclusive jurisdiction of the state government ?
1. Corporation tax
2. Custom duty
3. Sales tax
4. Income tax
Ans : 3 - sales tax
20. The Indian Income Tax is :
1. Direct and proportional
2. Indirect and proportional
3. Direct and progressive
4. Indirect and progressive
Ans : 3 - direct and progressive
21. Which is the tax that is imposed by the central government of India but its revenue is divided between centre and States ?
1. Custom duty
2. Central excise duty
3. Corporation tax
4. None of these
Ans : 2 - Central excise duty
22. Which two of the following taxes are indirect taxes ?
1. Sales tax and income tax
2. Income tax and wealth tax
3. Sales tax and excise tax
4. Income tax and excise tax
Ans : 3 - sales tax and excise tax
23. Modvat is related to :
1. Sales Tax
2. Wealth tax
3. Income tax
4. Excise duty
Ans : 4 - Excise duty
24. Which one of the following taxes is levied and collected by the union but distributed between Union and State ?
1. Corporation tax
2. Tax on income other than on Agricultural Income
3. Tax on railway fares and freights
4. Customs
Ans : 2 - Tax on income other than on Agricultural Income
25. Which one of the following group of taxes collected by the Central Government and shared with the states ?
1. Income tax , corporate tax , custom duty
2. Income tax , corporate tax , excise duty
3. Excise duty , Cess on income , corporate tax
4. Excise duty , cess on income , custom duty
Ans : 2 - Income tax , corporate tax , excise duty
26. The latest committee to submit its report on tax reforms is known as :
1. Kelkar Committee
2. Chelliah Committee
3. Narsimhan Committee
4. Vaghul Committee
Ans : 1 - Kelkar Committee
27. The recommendations of the Kelkar Tax Force relate to :
1. Trade
2. Banking
3. Foreign Investment
4. Taxes
Ans : 4 - Taxes
28. Under which of the following taxes the total amount payable by an individual is limited by the constitution ?
1. Corporation Tax
2. Estate Tax
3. Tax on Profession , trade and callings
4. Succession Duty
Ans : 2 - Estate Tax
29. Which of the following statements are true for the Income tax in India ?
1. It is progressive tax.
2. It is a direct tax.
3. It is collected by the state government.
4. It is a proportional tax .
1. Only 1
2. Only 1 & 2
3. 1 , 2 & 3
4. 2 , 3 & 4
Ans : 2 - Only 1 & 2
30. Which one of the following is NOT a function of Finance Commission in India ?
1. Devolution of Income Tax
2. Award of grants -in -aid
3. Devolution of Trade Tax
Ans : 3 Devolution of Trade Tax
31. Which one of the following sets of sources of revenue belongs to the Union Government alone ?
1. Gift Tax , Holding Tax
2. Sales Tax , Income Tax
3. Wealth Tax , Land Revenue
4. Custom Tax , Corporation Tax
Ans : 4 - Custom Tax , Corporation Tax
32. Which one of the following is NOT related with income from corporate sector in India ?
1. Fringe benefit Tax
2. Tax on company profit
3. Minimum alternative Tax
4. Capital gains Tax
Ans : 4 - Capital Gains Tax
33. Tha tax on import and export is known as :
1. Income tax
2. Trade tax
3. Custom tax
4. Excise duty
Ans : 3 - Custom Tax
34. VAT is imposed :
1. Directly on consumer
2. On final stage of the production
3. On first stage of the production
4. On all stages between production and final sale
Ans : 4 - On all stages between production and final sale.
35. The extent of money transfer to the states out of sharable pool of tax collection according to the 12th Finance commission has been fixed at :
1. 29.0 %
2. 29.5 %
3. 30.5 %
4. 32.5 %
Ans : 3 - 30.5 %
36. Who had suggested an imposition of expenditure tax in India for first time ?
1. Kalechi
2. Kaldor
3. R. J. Chelliah
4. Gautam Mathur
Ans : 2 - Kaldor
37. When was the wealth tax first introduced in India ?
1. 1948
2. 1957
3. 1976
4. 1991
Ans : 2 - 1957
38. The recommendation of Kelkar task force is associated with :
1. Banking
2. Taxes
3. Foreign investment
4. Business
Ans : 2 - Taxes
39. Which of the following taxes / duties is NOT under the jurisdiction of the Central Government ?
1. Land Revenue
2. Personal Income Tax
3. Corporate Income Tax
4. Custom Duties
Ans : 1 - Land Revenue
40. Consider the following taxes :
1. Corporate Tax
2. Custom Duty
3. Wealth Tax
4. Excise Duty
Which of these is / are indirect taxes ?
1. 1 Only
2. 2 & 4
3. 1 & 3
4. 2 & 3
Ans : 2 - 2 & 4
41. Which of the following committees examined and suggested Financial sector reforms ?
1. Abid Hussain Committee
2. Bhagwati Committee
3. Chelliah Committee
4. Narsimhan Committee
Ans : 3 - Chelliah Committee
42. Which one of the following is not a future of value add it tax
1. It is a multipoint destination based system of taxation
2. It is a tax love you on value addition at each stage of transaction in the production distribution chain
3. It is a tax on the final consumption of goods or services and must ultimately be born by the consumer
4. It is basically a subject of the central government and the State government are only a facilitator for its successful implementation
Ans : 4 - It is basically a subject of the central government and the State government are only a facilitator for its successful implementation
43. Which of the following is among the noticeable feature of the recommendations of the 13th finance commission
1. A Design for the goods and services tax , and a compensation package linked to adherence to the proposed design
2. A Design for the creation of lakhs of jobs in the next 10 years in consonance with India's demographic dividend
3. Devolution of specified share of Central taxes to local bodies as grants
Select the correct answer using the codes given below :
1. 1 only
2. 2 and 3 only
3. 1 and 3 only
4. 1 , 2 and 3
Ans : 1 - 1 only - A Design for the goods and services tax , and a compensation package linked to adherence to the proposed design
44. The kelkar proposal which were in the news recently were the :
1. Recommendation for reforms in the power sector
2. Recommendation for tax reforms
3. Guidelines for the privatisation of public sector undertaking
4. Guidelines for recuing vehicular pollution and the promoting of CNG use
Ans : 2 - Recommendation for tax reforms
45. Consider the followings :
1. Fringe Benefit Tax
2. Interest tax
3. Securities transaction tax
Which of the above mentioned is / are direct tax .
1. Only 1
2. Only 1 & 3
3. Only 2 & 3
4. 1 , 2 & 3
Ans : 4 - 1 2 & 3
46. Which among of the following is direct tax ?
1. Sales tax
2. Excise tax
3. Wealth tax
4. Entertainment tax
Ans : 3 - Wealth Tax
47. Which among the following is largest source of income for Central Government ?
1. Direct taxes
2. Custom duty
3. Excise duty
4. Entertainment tax
Ans : 1 - Direct Taxes
48. Which among of the following is not direct tax ?
1. Income tax
2. Property tax
3. Gift tax
4. Sales tax
Ans : 4 - sales tax
49. The example of sales tax is :
1. Corporate tax
2. Direct tax
3. Indirect tax
4. Welfare tax
Ans : 3 - indirect tax
50. Which of the following tax is imposed by State Government ?
1. Entertainment tax
2. Property tax
3. Income tax
4. Corporate tax
Ans : 1 - entertainment tax
51. Texes are called as Regressive when
1. None of these
2. It causes same burden on rich and poor
3. Less burden on poor as compared to rich
4. More burden on poor as compared to rich
Ans : 3 - Less burden on poor as compared to rich
52. In case of direct tax , impact of tax and incidence of tax is :
1. On two different person
2. On same person
3. Any other person
4. On the department which called tax
Ans : 2 - on same person
53. Who was the chairman of 10th finance commission ?
1. Manmohan Singh
2. Vasant Seth
3. Shiv Shankar
4. K. C. Pant
Ans : 4 - K. C. Pant
54. Who was the chairman of 13th finance commission ?
1. Dr. Vijay L Kelkar
2. Dr. C Rangrajan
3. Dr. A. M. Khusro
4. Dr. C. Subbarao
Ans : 1 - Dr Vijay kelkar
55. For becoming chairman of finance commission which one is necessary ?
1. He should be from finance and banking sector
2. He should be high level economist
3. He should be specialist of Jurisdiction matters
4. In case of public matters , he should be a man of perfection
Ans : 4 - In case of public matters , he should be a man of perfection
56. Which among of the following is not a 'Canon of taxation' according to Adam Smith ?
1. Canon of certainty
2. Canon of simplicity
3. Canon of convenience
4. Canon of economy inefficiency
Ans : 2 - Canon of simplicity
57. VAT was firstly implemented in :
1. Germany
2. Spain
3. France
4. Russia
Ans : 3 - France
58. CENVAT is related with :
1. Service tax
2. Wealth tax
3. Excise duty
4. Selling tax
Ans : 3 - Excise Duty
59. Value - added is equal to :
1. Output minus the inputs
2. Reconstruction profit
3. Gross profit
4. Investment profit
Ans : 1 - output minus the input
60. Finance commission is organised.
1. Every year
2. After every 4 year
3. After every 2 year
4. After every 5 year
Ans : 4 - After Every 5 Year
61. Which of the statements is correct about India's national income ?
1. Percentage share of agriculture is higher than services.
2. Percentage share of industry is higher than agriculture
3. Percentage share of services is higher than industry
4. Percentage share of services is higher than agriculture and industry put together.
Ans : 4 - Percentage share of services is higher than agriculture and industry put together.
62. In centre - state financial relation in india , Gadgil formula is used in :
1. Division of tax revenue
2. Formulation of the policy for fresh borrowings
3. Writing off state's indebtedness to the centre
4. Allocating Central Plan assistance between states
Ans : 1 - Division of tax revenue
63. Which authority decides about the states share in central taxes ?
1. Finance commission
2. Planning commission
3. Election commission
4. Finance Ministry
Ans : 1 - Finance commission
64. The practice of selling goods in a foreign country at a price below their domestic selling price is called :
1. Diplomacy
2. Discrimination
3. Dumping
4. Double pricing
Ans : 3 - Dumping
65. Indirect taxes by nature are :
1. Degressive
2. Regressive
3. Progressive
4. Proportional
Ans : 2 - Regressive
66. Taxation is a tool of :
1. Monetary policy
2. Fiscal policy
3. Price policy
4. Wage policy
Ans : 2 - Fiscal policy
67. The Fringe Benefit Tax was introduced in the budget of :
1. 2003-04
2. 2004-05
3. 2005-06
4. 2006-07
Ans : 3 - 2005-06
68. The government set up a committee headed by the chairman. Central Board of Direct Taxes sometime back to go into :
1. Codification of tax laws
2. The entire structure of tax laws including the question of imposition of bank tax
3. The concerns of the foreign investors in India with regards to taxation matters
4. Aspects of generation of Black Money , its transfer abroad and bringing back such money into India's Legitimate financial system
Ans : 4 - Aspects of generation of Black Money , its transfer abroad and bringing back such money into India's Legitimate financial system
69. Which of the following taxes are levied and collected by the centre but their net proceeds are wholly transferred to States ?
1. Expenditure tax and gift tax
2. Additional duties of Excise in lieu of sales tax
3. Stamps and registration
4. Taxes on advertisement
Ans : 4 - Texas on advertisement
70. Which of the following is not the source of the revenue of central government ?
1. Income tax
2. Corporate tax
3. Agricultural income tax
4. Excise duty
Ans : 3 - Agricultural income tax
71. The report of Vijay Kelkar committee relates to :
1. Trade reforms
2. Centre-state financial relations
3. Disinvestment in public sector enterprises
4. Tax reforms
Ans : 4 - Trade Reforms
72. Which of the following taxes is not collected by the Central Government ?
1. Income tax
2. Customs Duty
3. Professional Tax
4. Excise Duty
Ans : 3 - Professional Tax
73. Excise duty on a commodity is payable with reference to its :
1. Production
2. Production and sale
3. Production and transportation
4. Production , Transportation and sale
Ans : 1 - Production
74. If the tax rate increase with the higher level of income , it shall be called :
1. Proportional tax
2. Progressive tax
3. Lump sum tax
4. Regressive tax
Ans : 2 - Progressive Tax
75. Which of the following sets belong to Central tax ?
1. Excise duty , Sales Tax and Customs duty
2. Excise duty , customs duty and income tax
3. Income tax , customs duty and House Tax
4. Customs duty , entertainment tax and Income tax
Ans : 2 - Excise Duty , Customs Duty and Income Tax
76. Which of the following taxes is not shared between the union and the states ?
1. Income tax
2. Excise duty
3. Corporation tax
4. Sales tax
Ans : 4 - Sales Tax
77. Which of the following taxes is levied by the union and appropriated and planned by the states ?
1. Service tax
2. Stamp duty
3. Property tax
4. Passenger and Freight duty
Ans : 2 - Stamp Duty
78. Interest on public debt is part of :
1. Transfer payments by the Enterprises
2. Transfer payments by the government
3. National income
4. Interest payments by households
Ans : 2 - Transfer payments by the Government
79. Which of the following taxes is such which does not cause rise in price ?
1. import duty
2. Income tax
3. Octoroi
4. Sales tax
Ans : 2 - Income Tax
80. Who among the following has suggested tax on expenditure ?
1. Dalton
2. Kaldor
3. Musgrave
4. Gautam Mathur
Ans : 2 - Kaldor
81. Which amidst the following taxes collected by the Union is not mandated to be assigned to the states ?
1. Terminal taxes on goods s or passengers carried by railway , sea or air
2. Texas on railway fares and freights
3. Texas on consignment of good
4. Service tax
Ans : 4 - Service Tax
82. The main source of revenue for a state government in India is :
1. Sales tax
2. Excise duty
3. Income tax
4. Property tax
Ans : 1 - sales tax
83. The proceeds of income tax go to :
1. Central government
2. State government
3. Centre and States
4. Corporation authorities
Ans : 3 - centre and States Government
84. How does the consumer benefit with VAT ?
1. It remove text on tax and thus reduces price rise
2. Reduces the cost of production
3. With the abolition of the sales tax
4. Due to the exemption of small businesses from the tax within certain limits prescribed by the state
Ans : 1 - it removes tax on tax and thus reduces price rise
85. The receipts on which of the following taxes / duties are not shared with the states ?
1. Tax on income except agriculture
2. Corporation tax
3. Surcharge on income tax
4. Capital gain tax
Ans : 1 - Tax on income except agriculture
86. Corporation tax is a tax imposed on :
1. The net incomes of the companies
2. The corporate properties
3. The utilities provided by the Corporation
4. Tax imposed by the Corporation on individual properties
Ans : 1 - The net incomes of the companies
87. The duties levied on alcoholic liquors , narcotic drugs and opium come under :
1. Central excise duty
2. Land revenue
3. State excise duty
4. General sales tax
Ans : 1 - Central Excise Duty
88. State which amongst the following is not true about VAT ?
1. All States have uniform VAT for the same product
2. State have discretion to fix the rate of tax within the 4 rates prescribed
3. It will promote production efficiency of investments
4. It will make our experts more competitive
Ans : 2 - State have discretion to fix the rate of tax within the 4 rates prescribed.
89. The most important source of revenue for the states in India is ?
1. Corporation Tax
2. Income Tax
3. Excise Duties
4. Sales Tax
Ans : 4 - Sales Tax
90. Parallel Economy emerges due to :
1. Tax Avoidance
2. Tax Evasion
3. Tax Compliance
4. Tax Estimation
Ans : 2 - Tax Evasion
91. The tax levied on gross sales revenue from business transactions is called :
1. Turnover tax
2. Sales tax
3. Capital gains tax
4. Corporation tax
Ans : 1 - Turnover Tax
92. A tax is characterised by horizontal equity if its liability is :
1. Proportional to the income of tax payers
2. Similar for tax payers in similar circumstances
3. Proportional to the expenditure of tax payers
4. The same for every tax payer
Ans : 1 - Proportional to the income of tax payers
93. Which authority recommends the principles governing the grants in aid of the revenues of the states out of the Consolidated Fund of India ?
1. Public Accounts Committee
2. Union Ministry of Finance
3. Finance Commission
4. Inter-State Council
Ans : 3 - Finance Commission
94. Buoyancy of a tax is defined as :
1. Percentage increase in tax revenue / percentage increase in tax base
2. Increase in tax revenue / percentage increase in tax coverage
3. Increase in tax revenue / increase in tax base
4. Percentage increase in tax revenue / increase in tax coverage
Ans : 3 - Increase in tax revenue / increase in tax base
95. Which one of the following is not an example of Indirect Tax ?
1. Sales Tax
2. Excise Duty
3. Customs Duty
4. Expenditure Tax
Ans : 4 - Expenditure Tax
96. 'Quota' is :
1. Tax levied on imports
2. Imports of capital goods
3. Limit on the quantity of imports
4. Limit on the quantity of exports
Ans : 3 - Limit on the quantity of imports
97. Taxation is a tool of :
1. Monetary policy
2. Fiscal policy
3. Price policy
4. Wage policy
Ans : 2 - Fiscal Policy
98. Which is the biggest tax paying sector in India ?
1. Agriculture sector
2. Industrial sector
3. Transport sector
4. Banking sector
Ans : 2 - Industrial Sector
99. Value of output and value added can be distinguished if we know :
1. The value of intermediate consumption
2. The value of net indirect taxes
3. The value of the sales
4. The value of consumption of fixed capital
Ans : 1 - The value of intermediate consumption
100. What is value Added Tax ( VAT ) ?
1. A simple , transparent , easy to pay tax imposed on consumers
2. A new initiative taken by the government to increase the text-burden of high income groups
3. A single tax that replaces state taxes like surcharge , turnover tax etc
4. A new tax to be imposed on the producers of capital goods
Ans : 3 - A single tax that replaces state taxes like surcharge , turnover tax etc
101. The incidence of tax refers to :
1. Who pays the tax ?
2. Who bears the burden of rax ?
3. How taxes can be shifted ?
4. Who transfers the tax burden ?
Ans : 2 - Who bears the burden of Tax ?
102. Ad Valorem Tax is levied :
1. According to value added by the government
2. According to value addition to a commodity
3. According to value given by producers
4. According to value added by the Finance ministry
Ans : 3 - According to value given by producers
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