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VisionIAS - Online Self Test
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Questions for practice
1)

Consider the following statements:
1. In India a proportional system of income tax is followed.
2. Reducing direct taxes & increasing indirect taxes fuel inflation in the economy.
3. Indirect taxes are regressive in India.
Which of the statements given above is/are correct?

(a)1 and 2 only                        

(b)1 and  3 only

(c) 2 and 3 only                        

(d)1, 2 and 3 only

2)

Consider the following taxes:

  1. Corporation tax.
  2. Customs duty.
  3. Wealth tax.
  4. Excise duty

How many of these is/are indirect taxes?

(a)Only one

(b)Only two

(c)Only three

(d)All four

3)

With reference to Minimum Alternative Tax (MAT), consider the following statements:

  1. It is a form of service tax levied on companies.
  2. It is a step taken by the government towards companies that avoid paying taxes through various loopholes in the taxation system.
  3. It is the biggest source of revenue collected from corporations and companies.

How many of the statement(s) given above is/are correct?

(a)Only one

(b)Only two

(c)All three

(d)None

4)

Consider the following taxes:

1. Corporation tax

2. Customs duty

3. Wealth tax

4. Excise duty

Which of these is/are direct taxes?

(a)1 only

(b)1 and 3 only

(c)2 and 3 only

(d)2 and 4 only

5)

The budget deficit can be reduced by:

  1. Decreasing the direct taxes
  2. Increasing expenditure on subsidies and welfare programs
  3. Proper implementation of GST

Select the correct answer using the code given below.

(a)1 and 2 only

(b)2 and 3 only

(c)1 and 3 only

(d)3 only

6)

Effective Revenue Deficit excludes which among the following component from the Revenue deficit? 

  1. Interest payments by the government
  2. Grants made to states that are used for capital expenditure

Select the correct answer from the codes given below: 

(a)1 only

(b)2 only

(c)Both 1 and 2

(d)Neither 1 nor 2

7)

Which of the following pairs are correctly matched?

  Type of Tax Description
1. Progressive Irrespective of income, everyone pays the same percentage of tax
2. Regressive With the increase in income, the percentage of income in taxes decreases
3. Proportional With an increase in income, the percentage of income in taxes increases.
4.  Digressive Taxes that are initially progressive and later proportional

Choose the correct answer from the codes below :

(a)1 and 2 only

(b)2 and 3 only

(c)2 and 4 only

(d)1 and 4 only

8)

Consider the following statements

Statement I- Revenue Deficit is the most dangerous form of deficit out of Fiscal deficit, Primary deficit, etc.

Statement II- Revenue deficit means either asset is decreasing or Liability is increasing and for day-to-day transactions, governments need to borrow.

Which one of the following is correct in respect of the above statements?  

(a)Both Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I

(b)Both Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I

(c)Statement-I is correct but Statement-II is incorrect

(d)Statement-I is incorrect but Statement-II is correct

9)

What is Specific tax and ad valorem tax? Give examples. (150 words|

10)

Write short notes on (150 words/10 marks)

1. Escape Clause

2. Effective Revenue Deficit



Answers
1) c
2) b
3) a
4) b
5) d
6) b
7) c
8) a