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Public finance – MCQs with answers
- 28/05/2025
- Posted by: ecpgurgaon@gmail.com
- Category: ca foundation notes
Public finance - MCQs with answers
1. Which of the following is a union tax?
a. Corporation tax
b. Taxes on agricultural income
c. Capitation taxes
d. Land revenues
ANSWER: a. Corporation tax
2. Which of the following is not a union tax?
a. Taxes on railway freights and fares
b. Stamp duties on financial documents
c. Tolls
d. A and b only
ANSWER: d. a and b only
3. Consider the following statements and identify the right ones.
i. Central government does not have exclusive power to impose tax which is not mentioned in state or concurrent list.
ii. The constitution also provides for transferring certain tax revenues from union list to states.
a. i only
b. ii only
c. both
d. none
ANSWER; b ii only
4. The tax levied by the union government on income of individuals is known as
a. Personal income tax
b. Interest tax
c. Wealth tax
d. Corporation tax
ANSWER: Personal income tax
5. The tax on net income of companies is
a. Personal income tax
b. Interest tax
c. Wealth tax
d. Corporation tax
ANSWER;-corporation tax
6. Consider the following statements and identify the right ones.
i. Wealth tax is collected from productive as well as unproductive assets
ii. Estate duty was a type of inheritance tax of large estates
a. i only
b. ii only
c. both
d. none
ANSWER: ii only
7. Which of the following taxes is/are withdrawn or abolished?
a. Interest tax
b. Estate duty
c. Gift tax
d. All the above
answer : all the above
8. The most important source of revenue to the states is
a. Sales tax
b. Service tax
c. Excise duty
d. None of the above
ANSWER: Sales tax
9. The tax levied on the interstate trade of goods is
a. Sales tax
b. Excise tax
c. Service tax
d. Central sales tax
Answer: central sales tax
10. Consider the following statements and identify the right ones.
i. The 14th finance commission is headed by C. Rangarajan
ii. The recommendations of the commission will come into effect from April, 1, 2015
a. i only
b. ii only
c. both
d. none
Answer: ii only
11. The difference between revenue expenditure and revenue receipts is
a. Revenue deficit
b. Fiscal deficit
c. Budget deficit
d. Primary deficit
ANSWER: REVENUE DEFICIT
12. The difference between revenue deficit and grants for creation of capital assets is called
a. Fiscal deficit
b. Budget deficit
c. Effective revenue deficit
d. Primary deficit
ANSWER : c. Effective revenue deficit
13. The difference between total expenditure and total receipts is
a. Fiscal deficit
b. Budget deficit
c. Primary deficit
d. Revenue deficit
ANSWER: b. Budget deficit
14. The difference between total expenditure and total receipts except loans and other liabilities is called
a. Fiscal deficit
b. Budget deficit
c. Primary deficit
d. Revenue deficit
ANSWER: a. Fiscal deficit
15. The difference between fiscal deficit and interest payment during the year is called
a. Fiscal deficit
b. Budget deficit
c. Primary deficit
d. Revenue deficit
ANSWER: c. Primary deficit