#1
Which of the following is a direct tax?
Value Added Tax (VAT)
Income Tax
Sales Tax
Excise Duty
#2
In the context of taxation, what does the term 'tax credit' refer to?
A reduction in taxable income
A dollar-for-dollar reduction in the actual tax owed
An exemption from paying taxes
A fixed amount added to taxable income
#3
What is the purpose of a tax return?
To request a tax refund
To report income and calculate the amount of tax owed or refund due
To pay taxes in advance
To apply for tax exemptions
#4
What is the purpose of a Value Added Tax (VAT) in a taxation system?
To tax the value of personal assets
To tax only luxury goods
To tax the added value at each stage of production and distribution
To tax only imported goods
#5
What is the purpose of a tax treaty between two countries?
To increase tax rates for individuals and businesses
To eliminate all taxes between the two countries
To prevent tax evasion and provide guidelines on taxing rights
To merge their respective tax systems into a unified framework
#6
What is the purpose of Form W-2 in the United States tax system?
To report interest income
To report wage and salary income
To report capital gains
To report rental income
#7
What does the term 'tax deduction' mean?
Reducing taxable income by subtracting eligible expenses
Increasing taxable income by adding eligible expenses
Exempting certain income from taxation
Taxing income at a lower rate
#8
What is the purpose of the Goods and Services Tax (GST) in India?
To tax only luxury goods
To tax only essential commodities
To replace multiple indirect taxes with a unified tax
To eliminate all forms of taxation
#9
What is the difference between a tax credit and a tax deduction?
They are interchangeable terms
A tax credit directly reduces the amount of tax owed, while a tax deduction reduces taxable income
A tax deduction directly reduces the amount of tax owed, while a tax credit reduces taxable income
They both refer to exemptions from paying taxes
#10
Which of the following statements about progressive taxation is correct?
Higher-income individuals pay a lower percentage of their income in taxes
Lower-income individuals pay a higher percentage of their income in taxes
Tax rates are the same for all income levels
Taxation is based solely on wealth, not income
#11
What is the role of the Comptroller and Auditor General (CAG) in the Indian taxation system?
Setting tax rates
Auditing government accounts and ensuring financial transparency
Collecting taxes from individuals and businesses
Adjudicating tax disputes
#12
Which of the following is a regressive tax?
Progressive Income Tax
Property Tax
Sales Tax
Corporate Income Tax
#13
What is the purpose of the Financial Accounting Standards Board (FASB)?
Setting accounting standards for private companies
Enforcing tax regulations
Regulating stock exchanges
Monitoring inflation rates
#14
Which of the following is an example of an indirect tax?
Property Tax
Corporate Income Tax
Excise Duty
Personal Income Tax
#15
What is the role of the Internal Revenue Service (IRS) in the United States?
Enforcing immigration laws
Collecting federal taxes and administering the Internal Revenue Code
Regulating the stock market
Issuing currency
#16
Which tax form is commonly used by individuals in the United States to report their income and claim deductions?
Form 1040
Form W-2
Form 1099
Schedule C
#17
What is the difference between a fiscal year and a calendar year for tax purposes?
They are interchangeable terms
A fiscal year starts in January and ends in December, while a calendar year can start at any month
A fiscal year is based on the government's financial calendar, while a calendar year follows the standard January to December timeline
There is no difference; both terms refer to the same period