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GK Quiz and answer on Indian Economy Tax System in India

19-MAY-2017 10:41

    Jagaran Josh is presenting a set of 10 questions and answers based on the "Tax system in India" for aspirants preparing for various competitive examinations such as IAS / PCS / SSC / CDS etc. We hope this will be helpful in your success.

    gk quiz on Indian Economy

    1. Which of the following "tax" is levied at every stage of production?

    (A) VAT

    (B) Income tax

    (C) Custom duty

    (D) None of the above

    Ans. a

    Explanation: VAT is levied on the every stage of production .

    2. Which of the following is indirect tax?

    (A) Income tax

    (B) Wealth tax

    (C) Corporation tax

    (D) Sales tax

    Ans. D

    Explanation: Income tax, wealth tax and corporation tax are all direct taxes and levied by the central government. Sales tax, Excise duty and custom duty are indirect taxes.

    3. Which of the following tax will be abolished by the Goods and Services Tax.

    (A) Property tax

    (B) Corporation tax

    (C) VAT

    (D) All of the above

    Ans. C

    Explanation: The Goods and Services Tax (GST) will only eliminate indirect taxes such as sales tax, excise duty and customs duty. There will be no impact on direct taxes.

    50 GK Questions on Union Budget & Economic Survey

    4. If 'Tata Company' imports a product from abroad, then which tax will be levied on it?

    (A) VAT

    (B) Custom duty

    (C) Income tax

    (D) Corporation tax

    Ans. B

    Explanation: Custom duty is imposed on imported and exported goods.

    5. Which of the following tax is imposed by the Central Government but the state government collects it?

    (A) VAT

    (B) Income tax

    (C) Corporation tax

    (D) Stamp Duty

    Ans. D

    Explanation: The right to impose stamp duty lies with Central Government, but the state government has the right to collect it.

    6. What is called Tax heaven?

    (A) A country which gives tax exemptions to the foreign citizens that there will be no tax  on investing the money in their country.

    (B) Subsidy given by the government in taxes

    (C) Tax evasion in the domestic country

    (D) To impose equal taxes on domestic producers and foreign producers

    Ans. A

    Explanation: A country that gives foreign citizens the facility to invest in their country and do not pay any tax on the profit earned by the invested money. Mauritius and Cyprus provide this facility.

    7. What kind of tax system is found in India?

    (A) Progressive

    (B) Degressive

    (C) Proportional

    (D) None of the following

    Ans. B

    Explanation: There are three rates of  income tax  are applicable in India i.e. 5%, 10%, 20% and 30% which is progressive in nature initially but later on it becomes Proportional which is called degressive rate .

    8. Which of the following statements is wrong?

    (A) Indian government receives highest income from Corporation tax.

    (B) According to budget 2017-18, the government spends 19% of its total income as interest payment.

    (C) Economy of Maharashtra is the largest among all states in India

    (D) According to Budget 2017-18, those peoples are earning 5 lakh to 10 lakh per annum have to pay income tax at the rate of 10% per annum.

    Ans .d

    Explanation: According to Budget 2017-18, those peoples are earning 5 lakh to 10 lakh per annum have to pay income tax at the rate of 20% per annum.

    9. According to budget 2017-18, which is the correct decreasing order of the government tax revenue? (A) Income Tax> Corporation Tax> Service Tax.

    (B) Income tax> Corporate tax> product tax

    (C) Corporate tax> income tax> product tax

    (D) Corporate tax> product tax> income tax

    Ans. C

    Explanation: According to budget 2017-18, the largest share of government's income is Corporation tax (19%), Income tax (16%) and Excise duty (14%).

    10. Which of the following is not imposed by the Central Government?

    (A) Agricultural tax

    (B) Corporation tax

    (C) Custom duty

    (D) Sales tax

    Ans. A

    Explanation: Agriculture comes under the jurisdiction of the state government; hence state can impose tax on it.

    500 +Economics Quiz

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