Practice Quiz set 2 - indian economy mcq Online Quiz (set-1) For All Competitive Exams
Q-1) Consider the following in relation with Corporate tax. - Total turnover of the company
- Profit after distribution of dividend
- Profit before distribution of dividend
- Capital employed in the company
Which one of the above is basis of corporate tax?
(a)
(b)
(c)
(d)
Q-2) Which of the following are included in the category of direct tax in India?- Corporation tax
- Tax on income
- Wealth tax
- Customs duty
- Excise duty
Select the correct answer using the codes given below
(a)
(b)
(c)
(d)
Corporation Tax, Wealth Tax and Income Tax are in the category of direct tax.
Q-3) The tax on Import and Export is known as
(a)
(b)
(c)
(d)
Q-4) The Minimum Alternative Tax (MAT) was introduced in the budget of the Government of India for the year?
(a)
(b)
(c)
(d)
The Minimum Alternative Tax (MAT) was introduced for the first time in the Budget for the year 1996-97.
Minimum alternate tax or MAT is a tax levied on firms/ companies or limited liability partnerships (LLPs) making abundant profits as well as distributing dividends to its shareholders who leveraging on the features of the Indian Taxation system do not contribute towards the government’s taxation kitty.
Thus, for such corporates, a minimal tax amounting to some fixed percentage of book profits i.e. profits according to accounting records is charged as minimal alternative tax (MAT).
Q-5) Which of the following is not a direct tax in India?
(a)
(b)
(c)
(d)
Q-6) Consider the following important sources of tax revenue for the Central Government in India.- Union Excise Duty
- Corporation Tax
- Income Tax
- Service Tax
Which of the following is the correct descending order in terms of Gross Tax Revenue?
(a)
(b)
(c)
(d)
Q-7) Tax revenue collection in our country mainly depends on which of the following:
- Nominal GDP
- Real GDP
Select the correct answer using the code given below:
(a)
(b)
(c)
(d)
Most of the taxes in the country are imposed on value (Quantity X Price) and not on quantity.
So, tax revenue collection depends on the value of production i.e. Nominal GDP
Q-8) Which of the following are part of India’s External Debt?
- External Commercial Borrowing (ECB)
- NRI Deposits
- Investments made by Portfolio Investors in debt securities
- Portfolio Investors purchasing government securities
Select the correct answer using the code given below:
(a)
(b)
(c)
(d)
India's external debt includes the debt of the Central Government, State Governments, companies (ECB), NRI deposits, debt investments in India like FPIs purchasing bonds etc.
So, all the statements are true.
Q-9) Consider the following statements regarding the Goods and Services Tax Network (GSTN):
- It is a non-government, private limited company
- It is a not for profit company
Select the correct answer using the code given below:
(a)
(b)
(c)
(d)
Goods and Services Tax Network (GSTN) is a Section 8 (under new companies Act, not for profit companies are governed under section 8), non-Government company.
(But cabinet has approved a decision to make it a wholly-owned govt. company).
It was incorporated on March 28, 2013. The Company has been set up primarily to provide IT infrastructure and services to the Central and State Governments, taxpayers and other stakeholders for implementation of the Goods and Services Tax (GST).
Q-10) Consider the following statements regarding the Fifteenth Finance Commission (FFC) recommendations:
- It has recommended 41% devolution from Central taxes to States in 2020-21
- It has recommended 1% devolution from Central taxes to the Union Territories of J&K and Ladakh 2020-21
Select the correct answer using the code given below:
(a)
(b)
(c)
(d)
The Finance Commission recommends for devolution of taxes (from the divisible pool) from Centre to States only (called Vertical devolution) and is not meant for UTs, whether they have their own assembly/legislature or not.
The Fifteenth Finance Commission (FFC) recommendations will be applicable for six years period from 2020-21 to 2025-26. For the year 2020-21, the recommendations have been submitted and the final recommendations for the five-year period 2021-22 to 2025- 26 will be submitted by October 2020.
FFC quoted:
“The State of Jammu & Kashmir was reorganised into the Union Territories (UT) of Ladakh and Jammu & Kashmir through the Jammu & Kashmir Reorganisation Act, 2019. Article 280 of the Constitution, along with the Jammu and Kashmir Reorganisation Act puts the newly-created UTs of Ladakh and Jammu and Kashmir outside the purview of the Finance Commission's award.
Since UTs are the responsibilities of the Union, they are within the purview of the Union budget. We have notionally estimated that the share of the erstwhile State of Jammu & Kashmir would have come to around 0.85 per cent of the divisible pool. We believe that there is a strong case for enhancing this to 1 per cent of the divisible pool in order to meet the security and other special needs of the Union Territories of Jammu and Kashmir and Ladakh.
Since this enhancement has to be met from the Union' Government's resources (through Ministry of Home Affairs), we recommend that aggregate share of States may be reduced by 1 percentage point to 41 per cent of the divisible pool.”
So basically, FFC has not recommended the transfer of taxes to Jammu & Kashmir and Ladakh Union Territories for the period 2020-21.