MCQs with answers on “Tax Reforms in India: Direct and Indirect Taxes” suitable for the Civil Services Examination

Which of the following is a direct tax in India?
- A) Goods and Services Tax (GST)
- B) Income Tax
- C) Customs Duty
- D) Excise Duty
- Answer: B) Income Tax
The Goods and Services Tax (GST) was implemented in India in which year?
- A) 2015
- B) 2016
- C) 2017
- D) 2018
- Answer: C) 2017
Which tax reform aimed at replacing multiple indirect taxes with a single tax?
- A) GST
- B) Income Tax Act
- C) Wealth Tax Act
- D) Excise Tax
- Answer: A) GST
The Income Tax Act of India was enacted in which year?
- A) 1961
- B) 1956
- C) 1971
- D) 1982
- Answer: A) 1961
Which body is responsible for the administration of the GST in India?
- A) Central Board of Direct Taxes (CBDT)
- B) Central Board of Indirect Taxes and Customs (CBIC)
- C) Reserve Bank of India (RBI)
- D) Securities and Exchange Board of India (SEBI)
- Answer: B) Central Board of Indirect Taxes and Customs (CBIC)
Which of the following is not a feature of the GST system in India?
- A) Dual GST structure
- B) Zero-rated GST
- C) Multiple tax slabs
- D) Single tax rate for all goods and services
- Answer: D) Single tax rate for all goods and services
Which direct tax is levied on the income of individuals and corporations?
- A) Corporate Tax
- B) Capital Gains Tax
- C) Income Tax
- D) Wealth Tax
- Answer: C) Income Tax
Under GST, the term ‘input tax credit’ refers to:
- A) Credit available on capital investments
- B) Credit available on tax paid on inputs used for providing taxable supplies
- C) Credit available on sales tax
- D) Credit available on direct tax paid
- Answer: B) Credit available on tax paid on inputs used for providing taxable supplies
Which tax is levied on the value added at each stage of production or distribution?
- A) Excise Duty
- B) VAT
- C) GST
- D) Customs Duty
- Answer: C) GST
Which tax reform was introduced by the Finance Act of 2019 concerning corporate taxation?
- A) Introduction of Long-Term Capital Gains Tax
- B) Reduction in Corporate Tax Rates
- C) Introduction of Tax on Digital Services
- D) Repeal of Wealth Tax
- Answer: B) Reduction in Corporate Tax Rates
Which indirect tax is imposed on goods imported into India?
- A) Excise Duty
- B) Customs Duty
- C) VAT
- D) Service Tax
- Answer: B) Customs Duty
The ‘Rera’ (Real Estate Regulation and Development Act) has impacts on which type of tax?
- A) Income Tax
- B) Property Tax
- C) GST
- D) Excise Duty
- Answer: C) GST
Which of the following taxes was abolished with the introduction of GST?
- A) Income Tax
- B) Wealth Tax
- C) Service Tax
- D) Property Tax
- Answer: C) Service Tax
Which tax is charged on the sale of goods and services under the GST regime?
- A) VAT
- B) Sales Tax
- C) Central GST (CGST) and State GST (SGST)
- D) Excise Duty
- Answer: C) Central GST (CGST) and State GST (SGST)
The concept of ‘tax deducted at source’ (TDS) is primarily associated with which type of tax?
- A) Direct Tax
- B) Indirect Tax
- C) Customs Duty
- D) Excise Duty
- Answer: A) Direct Tax
Which of the following is a feature of the Direct Taxes Code (DTC)?
- A) It replaced the GST Act
- B) It was aimed at simplifying direct tax laws
- C) It introduced new indirect taxes
- D) It deals with the administration of customs duties
- Answer: B) It was aimed at simplifying direct tax laws
Which authority is responsible for the collection of direct taxes in India?
- A) Reserve Bank of India (RBI)
- B) Central Board of Direct Taxes (CBDT)
- C) Central Board of Indirect Taxes and Customs (CBIC)
- D) Securities and Exchange Board of India (SEBI)
- Answer: B) Central Board of Direct Taxes (CBDT)
The ‘National Goods and Services Tax (GST) Council’ is chaired by:
- A) The President of India
- B) The Prime Minister of India
- C) The Union Finance Minister
- D) The Chief Justice of India
- Answer: C) The Union Finance Minister
Which tax is levied on services provided in India?
- A) Income Tax
- B) Service Tax (prior to GST)
- C) Excise Duty
- D) VAT
- Answer: B) Service Tax (prior to GST)
Which reform aimed at integrating the state and central taxation systems into a unified framework?
- A) The Direct Taxes Code
- B) The National Tax Reforms
- C) The GST Reform
- D) The Financial Act
- Answer: C) The GST Reform
Which of the following is NOT included in the GST tax structure?
- A) Central GST (CGST)
- B) State GST (SGST)
- C) Integrated GST (IGST)
- D) Capital Gains Tax
- Answer: D) Capital Gains Tax
The term ‘reverse charge mechanism’ under GST refers to:
- A) Tax collected by the supplier
- B) Tax collected by the consumer
- C) Tax collected by the government
- D) Tax collected by the recipient of goods or services
- Answer: D) Tax collected by the recipient of goods or services
Which tax is levied on the transfer of property, such as land and buildings?
- A) Wealth Tax
- B) Stamp Duty
- C) Capital Gains Tax
- D) Income Tax
- Answer: B) Stamp Duty
Which of the following reforms was aimed at reducing tax litigation and disputes?
- A) Introduction of GST
- B) Implementation of the Direct Taxes Code
- C) Adoption of the Dispute Resolution Scheme
- D) Increase in Tax Rates
- Answer: C) Adoption of the Dispute Resolution Scheme
Under GST, the term ‘input tax credit’ helps in:
- A) Reducing tax on exports
- B) Adjusting taxes paid on inputs against taxes on outputs
- C) Increasing the tax rate for luxury items
- D) Eliminating all indirect taxes
- Answer: B) Adjusting taxes paid on inputs against taxes on outputs
Which tax was levied on goods manufactured within India but not yet removed from the factory premises before the introduction of GST?
- A) VAT
- B) Excise Duty
- C) Service Tax
- D) Customs Duty
- Answer: B) Excise Duty
Which tax reform aimed to eliminate tax evasion through digital transactions?
- A) Implementation of GST
- B) Introduction of PAN Card
- C) Digital Payment Incentives
- D) Introduction of TDS
- Answer: C) Digital Payment Incentives
Which act governs the levy and collection of income tax in India?
- A) Income Tax Act, 1961
- B) GST Act, 2017
- C) Central Excise Act, 1944
- D) Customs Act, 1962
- Answer: A) Income Tax Act, 1961
The ‘Integrated GST’ (IGST) is applicable on:
- A) Goods and services within a state
- B) Goods and services between states
- C) Exports only
- D) Imports only
- Answer: B) Goods and services between states
Which of the following is an example of a direct tax?
- A) Excise Duty
- B) Sales Tax
- C) Income Tax
- D) GST
- Answer: C) Income Tax

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