MCQ on Public Finance

This blog post contains a multiple choice quiz on the topic of public finance. The quiz is based on the material covered in a recent lecture on public finance.

Question 1: Consider the following important sources of tax revenue for the Central Government in India.

1. Union Excise Duty
   
2. Corporation Tax
   
3. Income Tax
   
4. Service Tax

Which of the following is the correct descending order in terms of Gross Tax Revenue?

(A) 1, 2, 4, 3

(B) 2, 4, 1, 3

(C) 2, 3, 1, 4

(D) 4, 1, 2, 3

Question 2: The largest sources of tax revenue to Central Government of India are __________.

(A) Union excise duties and corporate tax

(B) Custom duty and corporate tax

(C) Union excise duty and custom duty

(D) Custom duty and income tax

Question 3: From which of the tax following direct taxes gives maximum net revenue to the Government?

(A) Corporation Tax

(B) Income Tax

(C) Wealth Tax

(D) Gift Tax

Question 4: Corporation Tax is on __________.

(A) production of a company

(B) sale of goods

(C) income of a company

(D) stock of goods

Question 5: Which of the following is not a direct tax in India?

(A) Income Tax

(B) Wealth Tax

(C) Estate duty

(D) Sales Tax

Question 6: Which of the following are the indirect tax?

(A) Sales tax and Income tax

(B) Income tax and Wealth tax

(C) Sales tax and Excise tax

(D) Income tax and Excise tax

Question 7: When was the Wealth tax first introduced in India?

(A) 1991

(B) 1976

(C) 1957

(D) 1948

Question 8: Chelliah committee is related to ___________.

(A) Reforms in direct and indirect tax systems

(B) Reforms in Banking system

(C) Import-Export policy

(D) None of the above

Question 9: Service tax was introduced in India on the recommendation of __________.

(A) Kelkar Committee

(B) Raja J. Chelliah Committee

(C) Manmohan Singh Committee

(D) Yashwant Sinha Committee

(E) None of the above/More than

Question 10: Corporation tax  __________.

(A) is levied and appropriated by the states

(B) is levied by the Union and collected and appropriated by the states

(C) is levied by the Union and shared by Union and the states

(D) is levied by the Union and belongs to it exclusively

Question 11: Agricultural Income Tax is assigned to the State Government by ___________.

(A) The Finance Commission

(B) The National Development Council

(C) The Inter-State Council

(D) The Constitution of India

Question 12: Of the following taxes which one is not levied by State Governments?

(A) Entertainment Tax

(B) State Excise Duty

(C) Agricultural Income Tax

(D) Corporation Tax

Question 13: Which of the following taxes does not directly increase the price of a commodity to buyers?

(A) Income Tax

(B) Trade Tax

(C) Import Duty

(D) Excise Duty

Question 14: Which among the following are the sources of revenue for the central Government?

1. Corporate Tax
   
2. Profit from Public Enterprises
   
3. Sale of National Savings Certificates
   
4. Loans received from the World Bank
   
5. Excise duties

Select the correct answer from the codes given below.

(A) 1, 2 and 3

(B) 2, 3 and 4

(C) 3, 4 and 5

(D) All of the above

Question 15: The recommendation of the Kelkar Task Force related to ___________.

(A) Trade

(B) Banking

(C) Taxes

(D) Foreign Investment

Question 16: Kelkar Committee, in its second report, has recommended to reduce corporate tax to _________.

(A) 15%

(B) 20%

(C) 25%

(D) 30%

Question 17: The Kelkar proposals which were __________.

(A) recommendations for reforms in the power sector

(B) recommendations for tax reforms

(C) guidelines for the privatisation of public sector undertakings

(D) guidelines for reducing vehicular pollution and the promotion of CNG use

Question 18: Which of the following statements are true for the Income Tax in India?

1. It is a progressive tax
   
2. It is a direct tax
   
3. It is collected by the state Governments
   
4. It is a proportional tax

Choose the correct answer from the codes given below.

(A) Only 1 is correct

(B) Only 1 and 2 are correct

(C) 1, 2 and 3 are correct

(D) 2, 3 and 4 are correct

Question 19: Which one of the following is correctly matched?

(A) Income Tax – Indirect Tax

(B) Custom Duty – Indirect Tax

(C) Excise Duty – Highest source of tax revenue to the centre

(D) Entertainment Tax – Highest source of tax to revenue states

Question 20: Which one of the following sets of sources of revenue belongs to the Union Government alone?

(A) Gift tax, Holding tax

(B) Sales tax, Income tax

(C) Custom duties, Corporation tax

(D) Wealth tax, Land revenue

Question 21: Which one of the following is not related with income from corporate sector in India? 

(A) Fringe Benefit tax

(B) Minimum alternate tax

(C) Capital Gain tax

(D) Tax on company profit

Question 22: Value Added Tax was first introduced in India in _________.

(A) 2007

(B) 2006

(C) 2005

(D) 2008

Question 23: Which among the following are true for Central Sales Tax?

1. It is levied on interstate trade.
   
2. It is levied in the Union Territories.
   
3. It is levied in the SEZ.

Select the correct answer from the codes given below.

(A) Only 1 and 2

(B) Only 2

(C) Only 2 and 3

(D) All of these

Question 24: The objective of SEZ is ________.

(A) Promotion of Goods and Services

(B) Promotion of Regional Trade

(C) Promotion of MSME’s

(D) Promotion of Government Schemes

Question 25: Which of the following taxes is levied and collected by the Union but distributed between Union and
States? 

(A) Corporation Tax

(B) Tax on income other than on agricultural income

(C) Tax on railway fares and freight

(D) Customs