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Federal Finance System in India - General Knowledge Multiple Choice Questions and Answers

1 Which one of the following tax is within the jurisdiction of the State Governments as enumerated in List – II of the Constitution of India ?
A Taxes other than stamp duties on transactions in stock exchange and future markets
B Taxes on Railway freights and fares.
C Taxes on mineral rights subject to any limitations imposed by the Parliament.
D Rate of stamp duty in respect of certain financial documents.

Answer: Option [C]
2 Which of the following taxes is introduced in India in 1953 and abolished in 1985 ?
A Estate Duty
B Expenditure Tax
C Gift Tax
D Agricultural Income-tax

Answer: Option [A]
3 The Constitution of India provides for transfer of resources from Centre to States in the form of :
I. Tax sharing
II. Loans
III. Grants-in-aid
IV. Grants for implementation of Five Year Plans
A (i), (ii) and (iii) are correct
B (i) and (iii) are correct
C (i), (iii) and (iv) are correct
D All are correct

Answer: Option [A]
4 The share of the tax borne by the seller will be larger :
A if the demand for the product is less elastic
B if the demand for the product is inelastic
C if the demand for the product has greater elasticity
D if the elasticity of supply of the product is larger

Answer: Option [C]
5 The Sarkaria Commission has been appointed by the Government of India to report on :
A Child Development
B Centre-State relations
C Stabilize agricultural prices
D Study and report the representation of Backward Classes in the State public services

Answer: Option [B]


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