taxes types, methods & budgeting process section 2 Practice Questions Answers Test with Solutions & More Shortcuts

Answer: (d)

The Aadhaar (Targeted Delivery of Financial and other Subsidies, Benefits and Services) Act 2016 is an Act to provide for, as good governance, efficient, transparent, and targeted delivery of subsidies, benefits and services, the expenditure for which is incurred from the Consolidated Fund of India or Consolidated Fund of States (States were allowed to transfer benefit through an amendment done 2019) to individuals residing in India (for more than 182 days) through assigning of unique identity numbers.

As per section 7 of the Aadhar Act:

“The Central Government or, as the case may be, the State Government may, for the purpose of establishing the identity of an individual as a condition for receipt of a subsidy, benefit or service for which the expenditure is incurred from, or the receipt therefrom forms part of, the Consolidated Fund of India, require that such individual undergo authentication, or furnish proof of possession of Aadhaar number or in the case of an individual to whom no Aadhaar number has been assigned, such individual makes an application for enrolment: Provided that if an Aadhaar number is not assigned to an individual, the individual shall be offered alternate and viable means of identification for delivery of the subsidy, benefit or service.”

Pursuant to the Act, the government made Aadhaar Regulations 2016:

“Any Central or State department or an agency which requires an individual to undergo authentication or furnish proof of possession of Aadhar number as a condition of receipt of any subsidy, benefit or service pursuant to Section 7 of the Aadhar Act, shall ensure enrolment of its beneficiaries who are yet to be enrolled, through appropriate measures.”

Answer: (b)

Answer: (b)

Indian Company means a company registered in India under The Company’s Act 2013. A Foreign Company means a company registered outside India.

A Domestic Company means an Indian Company or it can be a Foreign Company but it should have made arrangements for the declaration and payment of Dividends in India under the Income Tax Act 1961.

The 25.17% tax rate is applicable to Domestic Companies only.

Standard Tax Rate = 22%

Surcharge = 10% of 22% = 2.2%

Cess = 4% of (22% + 2.2%) = 0.968%

Effective Tax Rate = 22% + 2.2% + 0.968% = 25.168% = 25.17%

This rate of 25.17% is applicable to those companies which do not opt for various exemptions provided by the government (and hence there will be no MAT). Govt. gives a lot of tax exemptions because of which even if the official tax rate was 30% plus cess and surcharge, effectively the tax rate was 25-26% after claiming various exemptions.

But it was giving a wrong image to the outside world that India has such a high rate of 30%. So, govt. removed the exemptions and brought the official tax rate down to 25.17%.

To promote manufacturing, for new manufacturing firms set up after 1st October 2019 and commencing its operations before 31st March 2023, the Standard Corporate Income Tax is 15% (after Cess and Surcharge it will be 17.01%).

Answer: (c)

Answer: (d)

India's external debt includes the debt of the Central Government, State Governments, companies (ECB), NRI deposits, debt investments in India like FPIs purchasing bonds etc.

So, all the statements are true.