Public Revenue MCQ Questions and Answers for Practice

1. The objective of taxation by the Government are

1. Raising revenue for the state
2. To maintain economic stability
3. To remove disparities in the distribution of income
4. All of the above

2. Which of the following is not a direct tax?

1. Personal Income Tax
2. Service tax
3. Wealth Tax
4. Corporate Income Tax

3. Transfer Payments include

1. Old Age Pension
2. Subsidies
3. Wealth Tax
4. Corporate Income tax

4. The following is an example of commercial non-tax revenue

1. Gifts and Grants
2. Fees
3. Fines
4. Surpluses

5. The following is an example of administrative non-tax revenue

1. Surplus of public undertaking
2. Gifts
3. Fees
4. Grants

6. On what broad aspect of commodities are indirect taxes imposed

1. Production
2. Sales
3. Movement
4. All of the above

7. The following is not a characteristic of a tax

1. It is a compulsory payment
2. Every tax involves a sacrifice by tax payer
3. There is a quid-pro-quo between the tax payer and the Government
4. Refusal to pay tax is a punishable offence

8. The following is a characteristic of indirect tax

1. The impact and incidence are not on the same person.
2. It is levied on income.
3. Taxes are progressive in nature.
4. All of the above

9. The following is a characteristic of a direct tax

1. Incidence may be shifted
2. Imposes more burden on poor
3. The impact and incidence are on the same person
4. All of the above

10. In India service tax was introduced in

1. 1991-92
2. 1994-95
3. 1999-2000
4. 2005-06

11. Special assessment is also known as

1. Tax Revenue
2. Battement Levy
3. VAT
4. None of the above

12. Impact of a tax refers to

1. Final money burden
2. Immediate money burden
3. Indirect real burden
4. None of the above

13. After levying of a tax, if the price does not rise at all, it means that

1. Incidence of the tax remains with producer
2. Tax has been shifted backward
3. Shifting has taken place
4. Any of the above

14. Which factor has no role in the shifting of a tax?

1. Change in prices
2. Elasticity of demand and supply
3. Nature of Demand
4. Income of the consumer

15. Pick out the statement which is not true with regard to tax shifting

1. A purely local tax can be shifted if it is heavy.
2. A purely local tax shifted if it is light
3. Shifting becomes difficult if the people purchase from outside the locality
4. None of the above