Taxation PYQs

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1. Prelims 2025Q3TaxationAnswer disputed

   With reference to the Government of India, consider the following information :

   Organization	Some of its functions	It works under
   I. Directorate of Enforcement	Enforcement of the Fugitive Economic Offenders Act, 2018	Internal Security Division–I, Ministry of Home Affairs
   II. Directorate of Revenue Intelligence	Enforces the Provisions of the Customs Act, 1962	Department of Revenue, Ministry of Finance
   III. Directorate General of Systems and Data Management	Carrying out big data analytics to assist tax officers for better policy and nabbing tax evaders	Department of Revenue, Ministry of Finance

   In how many of the above rows is the information correctly matched?

   aOnly onebOnly twocAll the threedNone
2. Prelims 2025Q5Taxation

   Consider the following statements :

   Statement I :

   In India, income from allied agricultural activities like poultry farming and wool rearing in rural areas is exempted from any tax.

   Statement II :

   In India, rural agricultural land is not considered a capital asset under the provisions of the Income-tax Act, 1961.

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

   aBoth Statement I and Statement II are correct and Statement II explains Statement IbBoth Statement I and Statement II are correct but Statement II does not explain Statement IcStatement I is correct but Statement II is not correctdStatement I is not correct but Statement II is correct
3. Prelims 2022Q8Taxation

   Which one of the following situations best reflects “Indirect Transfers” often talked about in media recently with reference to India ?

   aAn Indian company investing in a foreign enterprise and paying taxes to the foreign country on the profits arising out of its investmentbA foreign company investing in India and paying taxes to the country of its base on the profits arising out of its investmentcAn Indian company purchases tangible assets in a foreign country and sells such assets after their value increases and transfers the proceeds to IndiadA foreign company transfers shares and such shares derive their substantial value from assets located in India
4. Prelims 2021Q9Taxation

   Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?

   aDiversion of resources to the purchase of real estate and investment in luxury housingbInvestment in unproductive activities and purchase of precious stones, jewellery, gold, etc.cLarge donations to political parties and growth of regionalismdLoss of revenue to the State Exchequer due to tax evasion
5. Prelims 2018Q8Taxation

   With reference to India's decision to levy an equalization tax of 6% on online advertisement services offered by non-resident entities, which of the following statements is/are correct ?

   1.It is introduced as a part of the Income Tax Act.

   2.Non-resident entities that offer advertisement services in India can claim a tax credit in their home country under the "Double Taxation Avoidance Agreements".

   Select the correct answer using the code given below :

   a1 onlyb2 onlycBoth 1 and 2dNeither 1 nor 2
6. Prelims 2018Q97Taxation

   Consider the following items :

   1.Cereal grains hulled

   2.Chicken eggs cooked

   3.Fish processed and canned

   4.Newspapers containing advertising material

   Which of the above items is/are exempted under GST (Goods and Services Tax) ?

   a1 onlyb2 and 3 onlyc1, 2 and 4 onlyd1, 2, 3 and 4
7. Prelims 2017Q81Taxation

   What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)' ?

   1.It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.

   2.It will drastically reduce the 'Current Account Deficit' of India and will enable it to increase its foreign exchange reserves.

   3.It will enormously increase the growth and size of economy of India and will enable it to overtake China in the near future.

   Select the correct answer using the code given below :

   a1 onlyb2 and 3 onlyc1 and 3 onlyd1, 2 and 3
8. Prelims 2016Q60Taxation

   The term 'Base Erosion and Profit Shifting' is sometimes seen in the news in the context of

   amining operation by multinational companies in resource-rich but backward areasbcurbing of the tax evasion by multinational companiescexploitation of genetic resources of a country by multinational companiesdlack of consideration of environmental costs in the planning and implementation of developmental projects
9. Prelims 2015Q4Taxation

   A decrease in tax to GDP ratio of a country indicates which of the following?

   1.Slowing economic growth rate

   2.Less equitable distribution of national income

   Select the correct answer using the code given below.

   a1 onlyb2 onlycBoth 1 and 2dNeither 1 nor 2
10. Prelims 2014Q27Taxation

    The sales tax you pay while purchasing a toothpaste is a

    atax imposed by the Central Governmentbtax imposed by the Central Government but collected by the State Governmentctax imposed by the State Government but collected by the Central Governmentdtax imposed and collected by the State Government
11. Prelims 2012Q76Taxation

    Under which of the following circumstances may 'capital gains' arise?

    1.When there is an increase in the sales of a product

    2.When there is a natural increase in the value of the property owned

    3.When you purchase a painting and there is a growth in its value due to increase in its popularity

    Select the correct answer using the codes given below :

    a1 onlyb2 and 3 onlyc2 onlyd1, 2 and 3
12. Prelims 2011Q16Taxation

    Which one of the following is not a feature of “Value Added Tax”?

    aIt is a multi-point destination-based system of taxationbIt is a tax levied on value addition at each stage of transaction in the production-distribution chaincIt is a tax on the final consumption of goods or services and must ultimately be borne by the consumerdIt is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation
13. Prelims 2010Q143Taxation

    In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in the last five years ?

    aService taxbPersonal income taxcExcise dutydCorporation tax
14. Prelims 2009Q49Taxation

    Consider the following :

    1.Fringe Benefit Tax

    2.Interest Tax

    3.Securities Transaction Tax

    Which of the above is/are Direct Tax/Taxes ?

    a1 onlyb1 and 3 onlyc2 and 3 onlyd1, 2 and 3
15. Prelims 2006Q107Taxation

    Which one of the following is the correct statement? Service tax is a/an

    adirect tax levied by the Central Governmentbindirect tax levied by the Central Governmentcdirect tax levied by the State Governmentdindirect tax levied by the State Government
16. Prelims 2004Q36Taxation

    Which of the following is not a recommendation of the task force on direct taxes under the chairmanship of Dr. Vijay L. Kelkar in the year 2002?

    aAbolition of Wealth TaxbIncrease in the exemption limit of personal income to Rs. 1.20 lakh for widowscElimination of standard deductiondExemption from tax on dividends and capital gains from the listed equity
17. Prelims 2003Q50Taxation

    Consider the following statements: In India, stamp duties on financial transactions are

    1.Levied and collected by the State Government

    2.Appropriated by the Union Government.

    Which of these statements is/are correct?

    aOnly 1bOnly 2cBoth 1 and 2dNeither 1 nor 2
18. Prelims 2003Q87Taxation

    The Kelkar proposals which were in the news recently were the

    arecommendations for reforms in the power sectorbrecommendations for tax reformscguidelines for the privatisationdguidelines for reducing vehicular pollution, and the promotion of CNG use
19. Prelims 2002Q66Taxation

    In the year 2001, the Prime Minister announced a five-year excise-duty holiday for industries in

    aCyclone-prone coastal Andhra PradeshbBorder states of the North-eastcEarthquake-ravaged Kutch districtdRecently formed states of Chhattisgarh and Jharkhand
20. Prelims 2001Q80Taxation

    The Union Budget, 2000 awarded a Tax Holiday for the North-eastern Region to promote industrialisation for

    a5 yearsb7 yearsc9 yearsd10 years
21. Prelims 2001Q82Taxation

    Consider the following taxes:

    I.Corporation tax

    II.Customs duty

    III.Wealth tax

    IV.Excise duty

    Which of these is/are indirect taxes?

    aI onlybII and IVcI and IIIdII and III
22. Prelims 2000Q7Taxation

    The Standing Committee of State Finance Ministers recommended in January 2000 uniform rates across the States in respect of

    avalue-added taxbsales taxcstamp duty and registration feesdagricultural income tax
23. Prelims 1997Q103Taxation

    The Minimum Alternative Tax (MAT) was introduced in the Budget of the Government of India for the year

    a1991-92b1992-93c1995-96d1996-97
24. Prelims 1995Q46Taxation

    Corporation tax

    ais levied and appropriated by the Statesbis levied by the Union and collected and appropriated by the Statescis levied by the Union and shared by the Union and the Statesdis levied by the Union and belongs to it exclusively