Taxation MCQ Quiz in తెలుగు - Objective Question with Answer for Taxation - ముఫ్త్ [PDF] డౌన్‌లోడ్ కరెన్

The correct answer is Angel Tax.

Key Points

• Section 56(2)(viib) of the Income Tax Act, 1961, deals with the taxation of income received under the head "Income from other sources," specifically targeting investments in closely-held companies.
• It is commonly known as "Angel Tax" because it impacts the investments made by angel investors in startups.
• Under this provision, if a startup raises funds at a valuation higher than its fair market value, the excess amount is treated as income and taxed accordingly.
• The tax is levied on the amount that exceeds the fair market value, which is considered as income from other sources for the recipient company.
• The aim is to curb money laundering through the overvaluation of shares, but it has faced criticism for impacting genuine investments in startups.

Additional Information

• Fair Market Value (FMV)
  • It is the estimated price at which an asset would trade in a competitive auction setting.
  • For taxation purposes, FMV is used to determine the value of the shares issued by the company.
• Startup India Initiative
  • Launched by the Government of India in January 2016, the initiative aims to build a strong ecosystem for nurturing innovation and startups in the country.
  • It offers various benefits, including tax exemptions, to promote the growth of startups.
• Income Tax Act, 1961
  • It is the statute under which taxes are collected by the Government of India.
  • Section 56(2)(viib) was introduced as an anti-abuse measure to prevent the laundering of funds through inflated valuations.
• Angel Investors
  • They are affluent individuals who provide capital for startups, usually in exchange for convertible debt or ownership equity.
  • Angel investors are crucial for the early-stage funding of startups.

The correct answer is New Delhi.

Key Points

• The Secretariat of the Goods and Services Tax (GST) Council is located in New Delhi, India.
• The GST Council Secretariat was established to assist the GST Council in the discharge of its functions.
• It plays a crucial role in coordinating between the central government and various state governments regarding GST matters.
• The Secretariat provides administrative and logistical support for the GST Council meetings and other related activities.

Additional Information

• Goods and Services Tax (GST)
  • GST is an indirect tax that has replaced many indirect taxes in India such as excise duty, VAT, services tax, etc.
  • It is a single tax on the supply of goods and services, right from the manufacturer to the consumer.
  • GST is a destination-based tax, meaning it is collected from the point of consumption rather than the point of origin.
  • There are three types of GST in India: CGST (Central GST), SGST (State GST), and IGST (Integrated GST).
• GST Council
  • The GST Council is a constitutional body for making recommendations to the Union and State Governments on issues related to GST.
  • The Council is chaired by the Union Finance Minister and includes the Union Minister of State for Finance and the Finance Ministers of all the states.
  • Decisions in the GST Council are taken by a three-fourth majority of the votes cast, with the central government having one-third of the votes and the state governments having two-thirds.
• GST Network (GSTN)
  • GSTN is a non-profit organization established to manage the entire IT system of the GST portal, which is the common and shared IT infrastructure between the central and state governments, taxpayers, and other stakeholders.
  • It facilitates the registration, payment, and return filing processes under GST.
  • GSTN ensures data security and confidentiality of taxpayer information.
• Impact of GST
  • GST has simplified the tax structure by subsuming various indirect taxes under a single regime.
  • It has helped in reducing the cascading effect of taxes, thereby lowering the overall tax burden on goods and services.
  • GST has improved the ease of doing business by providing a common national market and reducing complexities related to tax compliance.

The correct answer is Capital gains tax.

Key Points

• Capital gains tax is a direct tax levied on the profits earned from the sale of assets or investments.
• It is imposed directly on the income or profit of individuals or entities.
• The tax is applicable to both short-term and long-term capital gains, depending on the holding period of the asset.
• Examples of assets subject to capital gains tax include real estate, stocks, bonds, and precious metals.

Important Points

• Direct taxes are those that are paid directly to the government by the individual or organization on whom they are imposed.
• Other examples of direct taxes include income tax, corporate tax, and wealth tax.

Additional Information

• Value Added Tax (VAT): VAT is an indirect tax that is imposed on goods and services at each stage of production or distribution. It is ultimately borne by the end consumer.
• Goods and Services Tax (GST): GST is an indirect tax levied on the supply of goods and services, replacing several former indirect taxes. It is a comprehensive, multi-stage, destination-based tax.
• Customs Duty: Customs duty is an indirect tax imposed on goods imported into or exported from a country. It is typically levied at the time of import/export and is borne by the importer/exporter.