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

Question : 1

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 : 2

When was the Wealth tax first introduced in India?

a) 1976

b) 1957

c) 1991

d) 1948

Question : 3

Which of the following taxes fall under the state list of Indian Constitution?

1. Entertainment tax
2. Luxury tax
3. Stamp Duty
4. Custom Duty

a) 2, 4 and 5

b) 1 and 2

c) 1, 3 and 4

d) 1, 2 and 4

Question : 4

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 : 5

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 : 6

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