GK Quiz on Tax System of India

Jagaran Josh has brought 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.
Created On: Aug 11, 2021 18:54 IST
Modified On: Aug 12, 2021 12:52 IST
GK Quiz on tax structure in India
GK Quiz on tax structure in India

Take the quiz below based on questions from Tax system in India. The aspirants preparing for various competitive exams such as IAS / PCS / SSC / CDS etc must go through each question along with the explanation given below it.

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

  1. VAT
  2. Income tax
  3. Custom duty
  4. GST

Ans. a

Explanation: VAT  stands for value added tax and is levied on the every stage of production .

2. Which of the following is a form of indirect tax?

  1. Income tax
  2. Wealth tax
  3. Corporation tax
  4. 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 mostly in the hands of the state government. 

3. Which of the following taxes are abolished by the Goods and Services Tax.

  1. Property tax
  2. Corporation tax
  3. VAT
  4. All of the above

Ans. c

Explanation: The Goods and Services Tax (GST), which has replaced the Central and State indirect taxes such as VAT, excise duty and service tax, was implemented from 1st July 2017.

4. If 'Tata' imports a product from abroad, then which  kind of tax would be levied on it?

  1. VAT
  2. Custom duty
  3. Income tax
  4. Corporation tax

Ans. b

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

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

  1. VAT
  2. Income tax
  3. Corporation tax
  4. 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 meant by Tax haven?

  1. A country which gives tax exemptions to the foreign citizens that there will be no tax  on investing the money in their country.
  2. Subsidy given by the government in taxes
  3. Tax evasion in the domestic country
  4. 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?

  1. Progressive
  2. Degressive
  3. Proportional
  4. None of the above

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 . Digressive tax is a mix of between the progressive tax and proportional tax.

8. Under this system of taxation, the tax rate diminishes as the taxable amount increases. Which system are we talking about?

  1. Progressive Taxation
  2. Regressive Taxation
  3. Degressive Taxation
  4. Proportional Taxation

Ans . b

Explanation. In regressive taxation, the tax rate diminishes as the amount increases.

9. Which model of GST has been chosen by India?

  1. USA
  2. Canada
  3. UK
  4. China

Ans. b

Explanation: India has chosen the Canadian model of dual GST.

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

  1. Agricultural tax
  2. Corporation tax
  3. Custom duty
  4. Sales tax

Ans. a

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

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