Tag: income tax

Questions Related to income tax

Which of the following is direct tax?

civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

  1. Excise duty

  2. Sales tax

  3. Income tax

  4. None of the above

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Correct Option: C
Explanation:

Direct taxes are those which are those which are paid directly to the government by the taxpayer.These taxes are not paid deducted and paid on behalf of the taxpayer.Key examples of direct taxes are Income tax, Wealth tax and Corporation tax.

Find the tax which is Direct Tax among the following 

civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

  1. Personal income tax

  2. Excise Duty

  3. Sales Tax

  4. Service Tax

Show answer
Correct Option: A
Explanation:

A direct tax is paid by a person upon whom it is legally imposed; its effect is borne by the tax payer, for example, income tax. Income tax is paid by an individual, a Hindu undivided family, a company, a firm, and local bodies etc. on their incomes. The effect of this tax is borne by these tax payers themselves, the tax payer cannot shift the incidence of the tax upon somebody else. In other words a direct tax is demanded from the very person who it is intended or devised for.

Which of the following is treated as a direct tax?

civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

  1. Sales Tax

  2. VAT

  3. Income Tax

  4. All of these

Show answer
Correct Option: B,C
Explanation:

A direct tax is paid by an individual or organization to the entity that levied the tax. 


Direct taxes include income tax, property tax, corporate tax, estate tax, gift tax, value-added tax (VAT), sin tax, and taxes on assets.
Sales tax is paid by the seller or retailer which is nothing but an intermediary between customer and government and that is why sales tax is an indirect tax. 

According to the income tax rule in India depreciation is to be charged on the basis of which one of these.

civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

  1. Written down value method

  2. Accounting book-value method

  3. Discounted cash flow method

  4. Pay back method

Show answer
Correct Option: A
Explanation:

According to the income tax rule, 1961 depreciation is to be charged on the basis of written down value method in India which meant depreciation percentage charge would be applied on the written down value that came after all such depreciation from previous years. 

Estate duty was levied on the ____________.

civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

  1. incomes of the individual

  2. production of goods

  3. export and import of goods

  4. total property passing to the heirs on the death of a person

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Correct Option: D
Explanation:

Estate duty was levied on the total property passing to the heirs on the death of a person.

Custom duties are levied on _______.

civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

  1. incomes of the individual

  2. production of goods

  3. export and import of goods

  4. incomes of the corporate

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Correct Option: C
Explanation:

Custom duties are levied on export and import of goods and excise duty levied on production of goods.

At present, the marginal rate of income tax (i.e., tax for the highest slab) is _______.

civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

  1. $10$%

  2. $20$%

  3. $30$%

  4. $40$%

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Correct Option: C
Explanation:

Marginal rate of income tax means highest slab of income tax, i.e., $30$% for individuals having income above $Rs. 10,00,000$.

National income differs from net national product at market price by the amount of ____________.

civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

  1. current transfers from the rest of the world

  2. net indirect taxes

  3. national debt interest

  4. it does not differ

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Correct Option: B

Which one of the following is not a merit of direct taxes?

civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

  1. They are imposed according to the ability of the person to pay.

  2. These taxes create civil consciousness.

  3. The revenue is income elastic.

  4. They do not require maintenance of accounts.

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Correct Option: D
Explanation:

Direct taxes do need maintenance of accounts. For example for filing Income Tax returns, there needs to be proper maintenance of accounts so that the figures mentioned is proper and the tax calculated is error free.

Which of the following statements is correct?

civics direct taxes black money and tax evasion meaning of tax public revenue : direct and indirect taxes income tax

  1. Excise duty is levied on sales volume.

  2. Custom duties have been drastically cut down since $1991$.

  3. VAT has been adopted by only 3 states in India.

  4. Agriculture contributes the maximum to the direct tax revenues in India.

Show answer
Correct Option: B
Explanation:

The correct statement is that custom duties have been drastically cut down since 1991. Others are wrong because excise duty is levied on production, VAT has been adopted by some states in India and agriculture contributes nil to the direct tax revenues in India.