taxes types, methods & budgeting process section 1 MCQ Questions & Answers Detailed Explanation

Question : 1

Which of the following best explains the cascading effect of taxation?

1. When tax imposition leads to a disproportionate increase in prices by an extent more than the rise in the tax.
2. When tax imposition leads to a disproportionate decrease in prices by an extent more than the rise in the tax.
3. When tax imposition leads to a disproportionate decrease in imports.
4. When tax imposition leads to a disproportionate decrease in exports.

a) 4 only

b) 1 only

c) 2 and 3 only

d) 3 and 1 only

Question : 2

Indicate the sequence of the following in terms of the implementation.

1. Income Tax
2. Expenditure Tax
3. Value Added Tax
4. Fringe Benefits Tax

a) 2, 3, 4, 1

b) 1, 3, 2, 4

c) 1, 2, 3, 4

d) 3, 4, 1, 2

Question : 3

Which one of the following statements regarding the levying, collecting and distribution of Income Tax is correct?

a) The Union levies, collects and keeps all the proceeds of income tax to itself

b) The Union levies and collects the tax, but all the proceeds are distributed among the states

c) The Union levies, collects and distributes the proceeds of income tax between itself and the states

d) Only the surcharge levied on income tax is shared between the Union and the States

Question : 4

PAN card issued by the Income Tax Department can’t be used for which of the following purpose?

a) proof of registered tax payer

b) proof of address

c) proof of identity

d) proof of date of birth

Question : 5

Which of the following are part of capital budget of Govt. of India?

1. Issuance of Sovereign Gold Bonds
2. Receipt from Gold Monetization

a) (ii) only

b) Both (i) & (ii)

c) (i) only

d) Neither (i) nor (ii)

Question : 6

Which among the following are the sources of revenue for the central Government?

1. Corporate Tax
2. Profit from Public Enterprises
3. Sale of National Savings Certificates
4. Loans received from the World Bank
5. Excise duties

a) 2, 3 and 4

b) 3, 4 and 5

c) 1, 2 and 3

d) All of the above