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
