taxes types, methods & budgeting process section 6 Practice Questions Answers Test with Solutions & More Shortcuts

Answer: (d)

Bihar is the first state to impose agricultural income tax in India. Agricultural income tax is levied on the income from Agriculture. At present agriculture is subjected to two direct taxes and they are Agricultural Income-tax and Land Tax.

Agricultural Income-tax treatment: It is characterised as a valid source of income from sources that comprise Agriculture land, buildings on or related to Agricultural land card commercial product from an Agriculture land.

Answer: (d)

Answer: (b)

The government’s fiscal policy has a big role in stabilizing the economy during business cycles. The two important phases of business cycles are boom and recession. A recession should not be allowed to grow into a deep recession.

Similarly, a boom should not explode bigger. We may say that amplifying the business cycle is dangerous (growing boom and deepening recession).

Practically fiscal policy responses using taxation and expenditure can go in two ways in response to the business cycle: Countercyclical and pro-cyclical.

Business Cycle Fiscal Policy Boom Recession Pro-Cyclical Expenditure increases Tax decreases Expenditure decreases Tax increases Counter-Cyclical Expenditure decreases Tax increases Expenditure increases Tax decreases

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Answer: (c)

The government of India is disinvesting its share from public sector undertakings. Most of the government undertakings were incurring losses during the pre liberalization period.

Hence, after the introduction of new economic policy in 1991, the government started downsizing its share in PSU. But the process of disinvestment is very slow due to a host of legal and political hurdles.

Answer: (d)

Basel III is basically a regulatory accord designed specifically for the banking sector. It aims to improve the supervision, regulation and risk management within the sector. It also targets at strengthening the transparency of the banks.