Question

Statement: The Union Government has decided to withdraw existing tax relief on various small savings schemes in a phased manner to augment its tax collection.
Assumptions:
I. People may still continue to keep money in small savings schemes and also pay taxes.
II. The total tax collection may increase substantially.

• A. Only assumption I is implicit
• B. Only assumption II is implicit
• C. Either I or II is implicit
• D. Neither I nor II is implicit
• E. Both I and II are implicit

Answer 1

The correct option is E Both I and II are implicit

The statement mentions that withdrawing tax relief on small savings schemes would help increase tax collection. This implies that the government would then earn tax on income derived from small savings schemes. So, I is implicit. Besides, II follows directly from the statement and so it is also implicit.