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

Question : 1

Which of the following is not a case of Centre’s Off Budget Borrowings?

a) Borrowing by HUDCO to fund the affordable housing programme

b) Borrowing by NABARD for govts’ irrigation projects

c) Borrowing by FCI to fund the food subsidy programme

d) Borrowing by NTPC for its power generation projects

Question : 2

Which of the following figures are presented as part of the Budget presentation in Parliament?

1. Budgeted receipts and expenses for the next Financial Year (FY)
2. Budgeted receipts and expenses for the current FY
3. Revised receipts and expenses for the current FY
4. Actual receipts and expenses for the last FY

a) (i) & (ii) only

b) (i), (ii), & (iii) only

c) (i) only

d) All of the above

Question : 3

When was the Wealth tax first introduced in India?

a) 1976

b) 1957

c) 1991

d) 1948

Question : 4

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 : 5

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 : 6

Consider the following statements:

1. Tax revenue as a per cent of GDP of India has steadily increased in the last decade.
2. Fiscal deficit as a per cent of GDP of India has steadily increased in the last decade.

a) Both 1 and 2

b) 1 only

c) 2 only

d) Neither 1 nor 2