Introduction – CS Executive Tax Laws MCQ

Going through the Introduction – CS Executive Tax Laws MCQ Questions with Answers you can quickly revise the concepts.

Introduction – Tax Laws CS Executive MCQs

Question 1.
The word tax is based on the Latin word “taxo” which means:
(a) To charge
(b) To levy
(c) To estimate
(d) To apply
Answer:
(c) To estimate

Question 2.
The taxes collected by the Govern¬ment have been used to carry out many functions:
The following are the functions except:
(a) Expenditure on war
(b) Enforcement of law and public order
(c) Social engineering
(d) Giving loan to foreign countries
Answer:
(d) Giving loan to foreign countries

Question 3.
The Government can use taxes to fund welfare and public services which include-
(a) Education system
(b) Health care system
(c) Pension for the elderly
(d) All of the above
Answer:
(d) All of the above

Question 4.
What are the sources of revenue for Government to finance its expenditures
(a) Tax collection
(b) Loan from Central Bank or abroad
(c) Sale of publicly owned assets
(d) All of the above
Answer:
(d) All of the above

Question 5.
The objectives of taxation include:
(a) Means for economic development
(b) Enforcing Government policy
(c) Redistribution of income & wealth
(d) All of the above
Answer:
(d) All of the above

Question 6.
The following are the characteristics of tax except:
(a) Tax is compulsory
(b) Tax is for public benefit
(c) Tax is cost of the benefit
(d) Tax is for economic growths & public welfare
Answer:
(c) Tax is cost of the benefit

Question 7.
A good tax system must have which of the following characteristics?
(a) Equity & certainty
(b) Economy & redistribution
(c) Convenience & flexibility
(d) All of the above
Answer:
(d) All of the above

Question 8.
Canons of taxation are related to the following except:
(a) Rate
(b) Amount
(c) Certainty
(d) Method of levy & collection of tax
Answer:
(c) Certainty

Question 9.
The fundamental canons of taxation are the canon of:
(a) Economy, equity, certainty & convenience
(b) Equity, certainty, flexibility & convenience
(c) Economy, equity, certainty & flexibility
(d) Economy, equity, redistribution & convenience
Answer:
(a) Economy, equity, certainty & convenience

Question 10.
The canons have been added by modern economists like to update & expand the basic principle of taxation.
(a) Charles F Bastable, Keynes
(b) Charles F Bastable, H. Dalton
(c) H. Dalton, Marshall
(d) H. Dalton, Adam Smith
Answer:
(b) Charles F Bastable, H. Dalton

Question 11.
Horizontal equity implies:
(a) Taxpayer with equal ability to pay more tax
(b) Taxpayer with greater ability to pay same tax
(c) All taxpayer to pay same tax
(d) Taxpayer with equal ability to pay equal tax.
Answer:
(d) Taxpayer with equal ability to pay equal tax.

Question 12.
Canon of certainty specifies all of the following except:
(a) When tax is to be paid
(b) How tax is to be paid
(c) How the amount to be paid is to be determined
(d) All of the above.
Answer:
(d) All of the above.

Question 13.
The canon of convenience:
(a) Helps in ensuring compliance
(b) It makes tax payment convenient to the taxpayer
(c) Both (a) & (b)
(d) None of the above
Answer:
(c) Both (a) & (b)

Question 14.
Canon of economy:
(a) Is closely related to the principle of simplicity
(b) It implies decreasing the administra-tive cost of collection at the highest level
(c) It implies decreasing the administra-tive cost of collection at the lowest level
(d) Both (a) & (c)
Answer:
(d) Both (a) & (c)

Question 15.
Which one of the following is not an advantage of direct tax
(a) As compared to indirect tax, it is easy to extract from public
(b) Based on principle of equity & certainty
(c) Convenient to taxpayer
(d) Acts as automatic stabilizer.
Answer:
(a) As compared to indirect tax, it is easy to extract from public

Question 16.
The following are demerits of direct taxes except:
(a) Tax evasion rises
(b) Uneconomical
(c) Disincentive to work hard and earn more or save more after reaching a level of income
(d) Not based on principle of equity.
Answer:
(d) Not based on principle of equity.

Question 17.
The tax system has been in force even in the ancient times, there are references in-
(a) Manu Smriti
(b) Arthashastra
(c) Both (a) &(b)
(d) Vedas
Answer:
(c) Both (a) &(b)

Question 18.
The agricultural income was first defined and exempted from tax liability in the Income-tax Act,
(a) 1860
(b) 1886
(c) 1918
(d) 1922
Answer:
(b) 1886

Question 19.
The flexibility to revise rates through Finance Acts, and not by amending Income-tax Act was given for the first time in Income-tax Act,
(a) 1860
(b) 1886
(c) 1918
(d) 1922
Answer:
(d) 1922

Question 20.
The Constitution of India provides that “No tax shall be levied or collected except by the Authority of law” is given under-
(a) Article 246
(b) Article 265
(c) Article 289
(d) Article 272
Answer:
(b) Article 265

Question 21.
The distribution of legislative powers between the Parliament of India and the State legislature is given under of the Constitution
(a) Article 265
(b) Article 285
(c) Article 246
(d) Article 272
Answer:
(c) Article 246

Question 22.
The power to legislate has been enumerated under three lists which are, the union list, the legislative list and the concurrent list as given in
(a) Schedule V
(b) Schedule VI
(c) Schedule VII
(d) Schedule VIII
Answer:
(c) Schedule VII

Question 23.
Central Government can impose taxes on all of the following except:
(a) Taxes on Income
(b) Corporation tax
(c) Taxes on agricultural income
(d) Taxes on inter-state consignment of goods.
Answer:
(c) Taxes on agricultural income

Question 24.
The state may levy taxes on all of the following except-
(a) Octroi or entry tax
(b) Tax on professionals, trades, callings & employees
(c) Tax on advertisements other than that in newspapers.
(d) Customs including export duties
Answer:
(d) Customs including export duties

Question 25.
The apex body charged with the administration of taxes is:
(a) The Central Board of Direct taxes
(b) The Central Board of Revenue or Department of revenues
(c) Ministry of Finance
(d) Central Board of Excise & Customs
Answer:
(b) The Central Board of Revenue or Department of revenues

Question 26.
The Central Board of Direct Taxes(CBDT) provides essential inputs for policy and planning of direct taxes in India and is a functioning under the Central Board of Revenue Act, 1963.
(a) Constituted Authority
(b) Revenue Administration Authority
(c) Statutory Authority
(d) Central Authority
Answer:
(c) Statutory Authority

Question 27.
The India’s official “Financial Action Task Force” (FATF) unit is
(a) The Central Board of Revenue
(b) The Central Board of Direct tax (CBDT)
(c) The Central Board of Excise & Custom
(d) The GST council
Answer:
(b) The Central Board of Direct tax (CBDT)

Question 28.
The Central Board of Direct Taxes is headed by chairman and comprise of:
(a) 3 Members
(b) 4 Members
(c) 5 Members
(d) 6 Members
Answer:
(d) 6 Members

Question 29.
The members hold the rank of
(a) Secretary to Government
(b) Special Secretary to Government
(c) Additional Secretary to Government
(d) Joint Secretary to Government
Answer:
(c) Additional Secretary to Government

Question 30.
The member of CBDT are all except:
(a) Member (Income Tax)
(b) Member (Personal & Vigilance)
(c) Member (Investigation)
(d) Member (Medical)
Answer:
(d) Member (Medical)

Question 31.
The CBDT Chairman & member are appointed by:
(a) Government of India
(b) President of India
(c) Selection from Indian Revenue Service (IRS)
(d) Prime Minister of India
Answer:
(c) Selection from Indian Revenue Service (IRS)

Question 32.
The Central Board of Direct Taxes (CBDT) is headed by Chairman and also comprises of six members. The Chairman and all the Members of the CBDT are being selected:
(a) By Finance Minister
(b) From IRS
(c) By Prime Minister
(d) By Chief Justice of India
Answer:
(b) From IRS

Question 33.
The income tax department is responsible for administering or enforcing all except:
(a) The Income-tax Act, 1961
(b) Various Finance Acts passed every year
(c) Double Taxation Avoidance Agreements
(d) Goods and Service Tax
Answer:
(d) Goods and Service Tax

CS Executive Tax Laws MCQ