taxes types, methods & budgeting process section 1 MCQ Questions & Answers Detailed Explanation
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The following question based on Taxes Types, Methods & Budgeting Process topic of indian economy mcq
- Treasury Bills
- External Commercial Borrowing (ECB)
- NRI deposits
- Foreign Direct Investment in India (FDI)
(a) (i) & (iii) only
(b) (i), (ii) & (iii) only
(c) (i) only
(d) (ii) & (iv) only
The correct answers to the above question in:
Answer: (c)
Public Debt of Govt. of India is Central Government's internal and external debt.
Treasury Bill is Govt. of India's debt because these are bonds issued by GoI.
ECB and FDI relates to companies and PSUs. And NRI deposits are in banks and it is not a debt of Govt. of India.
So, only (i) statement is correct.
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Question : 1
Which department decides the outlay for Centrally Sponsored Scheme (CSS)
a) Public Finance Division under department of Expenditure
b) Economic Division under department of Economic Affairs
c) NITI Aayog
d) None of the above
Answer »Answer: (a)
Public Finance (Central) Division under Department of Expenditure, Ministry of Finance in consultation with the Budget Division, Department of Economic Affairs, Ministry of Finance decides the outlay for Centrally Sponsored Schemes (CSS) and Central Sector Schemes.
Question : 2
Of the following taxes which one is not levied by State Governments?
a) State Excise Duty
b) Agricultural Income Tax
c) Entertainment Tax
d) Corporation Tax
Answer »Answer: (d)
Question : 3
Agricultural Income Tax is assigned to the State Government by
a) The National Development Council
b) The Inter-State Council
c) The Finance Commission
d) The Constitution of India
Answer »Answer: (d)
Question : 4
Which of the following statements are true regarding “Deficit Financing”?
- It raises aggregate demand in the economy
- It may result in inflation in the economy
- It is used as a developmental tool by developing countries
- It is done by issuing government bonds
a) (i), (ii) & (iii) only
b) (iii) & (iv) only
c) (i) & (ii) only
d) All of the above
Answer »Answer: (d)
Deficit financing is the budgetary situation where expenditure is higher than the receipts.
The expenditure revenue gap is financed by either printing of currency or through borrowing. Nowadays most governments both in the developed and developing world are having deficit budgets and these deficits are often financed through borrowing.
Hence the fiscal deficit is the ideal indicator of deficit financing. Deficit financing is very useful in developing countries like India because of revenue scarcity and development expenditure needs.
Since government spends more than receipts, it leads to an increase in demand and may result in inflation also.
Question : 5
Which of the following taxes fall under the state list of Indian Constitution?
- Entertainment tax
- Luxury tax
- Stamp Duty
- Custom Duty
a) 2, 4 and 5
b) 1 and 2
c) 1, 3 and 4
d) 1, 2 and 4
Answer »Answer: (b)
Customs duties-Export duty and import duty are levied by Central Government.
Question : 6
When was the Wealth tax first introduced in India?
a) 1976
b) 1957
c) 1991
d) 1948
Answer »Answer: (b)
GET Taxes Types, Methods & Budgeting Process PRACTICE TEST EXERCISES
taxes types, methods & budgeting process section 1
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taxes types, methods & budgeting process section 5
taxes types, methods & budgeting process section 6
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