Direct & Indirect Taxes

Q.

Which of the following is a major source of revenue for the government?

1. Personal income tax

2. Entertainment tax

3. Corporate tax

4. Legal fees

Q.

Give two examples of direct tax.

Q.

Customs duty is imposed on:

1. Domestic sales

2. Entertainment services

3. Imported goods

4. None of the above

Q.

Direct tax is called so because it is collected directly from: (choose the correct alternative)

1. The producers on goods produced

2. The sellers on goods sold

3. The buyers of goods

4. The income earners

Q.

An ad valorem duty is a tax on the basis of:

1. The price of a commodity

2. The value added

3. The advertisement expenditure

4. The unit of the commodity

Q.

Companies pay Corporate Tax on their:

1. Profits

2. Sales proceeds

3. Investment

4. Production

Q.

What is value added tax?

Q. Excise duty tax is levied on the _______.

1. production of goods
2. import of goods
3. sale of goods
4. export of goods

Q.

Explain why the tax multiplier is smaller in absolute value than the government expenditure multiplier.

Q. Giving reasons, classify the following as direct and indirect taxes:
(i) IncomeTax
(ii) Goods and Services Tax
(iii) Corporate Tax
(iv) Capital GainsTax

Q.

What type of tax is direct tax?

Q. Distinguish between specific and ad-valorem taxes.

Q. Which tax is not shared by the central government with the states?

1. Estate duty
2. Customs duty
3. Union excise duties
4. Income tax

Q. Central excise duty was imposed on , but the burden often fell on .

1. consumers
2. manufacturers
3. sellers
4. retailers

Q. In an economy, investment increased by 1, 100 and as a result of it, income increased by 5, 500. Had the marginal propensity to save been 25 percent, what would have been the increase in income?
(Increase in Income = 4, 400)

Q. Excise duties are levied on _______________.

1. Incomes of the individual
2. production of goods
3. export and import of goods
4. Incomes of the corporate

Q.

Income tax, corporate tax, inheritance tax etc. are incident on the person or organisation. These taxes are called:

1. Local tax

2. Indirect tax

3. Direct tax

4. None of the above

Q.

In a country’s income tax system, an individual can earn Rs. 20, 000, before paying taxes. The marginal rate of tax is 25% on income up to Rs. 50, 000 and 50% on income greater than that. How much tax will an individual pay if she earns Rs. 1, 00, 000?

1. 25, 000

2. 7, 500

3. 32, 500

4. 50, 000

Q. Long answer type questions:
Explain the basis of classifying taxes into direct and indirect tax. Give two examples of each.

Q.

State the basic difference between direct and indirect taxation. Give an example.

Q.

Income earned by government from the sources other than taxes is called ______.

1. private funds
2. public funds
3. non-tax revenue
4. none

Q. Indirect taxes are paid directly by people to the government.

1. True
2. False

Q. If the total increase from Rs. 5000 crores to Rs. 6000 crores and saving increases from Rs. 1000 crores to Rs. 1500 crores, calculate MPC.

Q. An ad valorem duty is a tax on the basis of ________.

1. The price of a commodity
2. The value added
3. The advertisement expenditure
4. The unit of the commodity

Q. Name the enterprise involving single ownership.

Q. With reference to the taxation policy, differentiate between 'progressive' and 'regressive' taxes giving an example for each.

Q. With reference to the taxation policy, mention three differences between direct taxes and indirect taxes.

Q. Find the synonym of the underlined word.
The new government regulation disallows disclosure of personal tax information.

1. Announcement
2. Opening
3. Public revelation
4. Closing
5. Discredit

Q. With reference to contribution from taxes, consider the following statements:
1- Contribution from direct taxes is more than that from indirect taxes.
2- Corporation tax is the largest contributor.

1. Only 1
2. Only 2
3. Both 1 and 2
4. Neither 1 nor 2

Q.

Which of these is the one-for-all tax that replaced every other indirect tax?

1. Sales tax

2. VAT

3. GST

4. Customs duty