Government and Taxes: Brief Answers | 10th Social Science Economics Ch 4

Government and Taxes | Economics

Chapter: 10th Social Science : Economics : Chapter 4 : Government and Taxes

VI. Brief Answer

1. Explain some direct and indirect taxes.

i. Direct Taxes:

A tax imposed on an individual or organisation, which is paid directly, is a direct tax. The burder of a direct tax cannot be shifted to others.

Income Tax:

• The most common and most important tax levied on an individual.

• It is charged directly based on the income of a person.

• The rate at which it is charged varies depending on the level of income.

Corporate Tax:

• It is levied on companies that exist as separate entities from their shareholders.

• It is charged on royalties and interest gains from sale of capital assets

Wealth Tax:

• It is charged on the benefits derived from property ownership.

• The same property will be taxed every year on current market value.

• It is levied onthe individuals and companies.

ii. Indirect Taxes:

If the burden of the tax can be shifted to others, it is an indirect tax.

Stamp Duty:

It is a tax paid on official documents. (Marriage registration, documents of property, agreements of contract)

Entertainment Tax:

It is a duty charged by government on any source of entertainment provided. (Movie tickets, amusement parks, exhibitions and sports)

Excise Duty:

• Any duty on manufactured goods levied at the movement of manufacture, rather than at sale.

• It is imposed in addition to an indirect tax (sales tax)

• GST is also an indirect tax

2. Write the structure of GST.

State Goods and Services Tax (SGST):

• Intra state (within the state)

• VAT/Sales tax, purchase tax, entertainment tax, luxury tax, lottery tax and state surcharge and cesses.

Central Goods and Services Tax (CGST):

• Intr state (within the state)

• Central Excise Duty, service tax, countervailing duty, additional duty of customs, surcharge, education and secondary/higher secondary cess.

Integrated Goods and Services Tax (IGST):

• Inter state (integrated GST)

• There are four major GST rates: 5%, 12%, 18% and 28%.

• Almost all the necessities of life like vegetables and food grains are exempted from this tax.

3. What is black money? Write the causes of black money.

Black money is funds earned on the black market on which income and other taxes have not been paid. The unaccounted money that is concealed from the tax administrator is called black money.

Causes of black money:

• Shortage of goods

• Licensing proceeding

• Contribution of the industrial sector.

• Smuggling

• Tax structure

VII. Activity and Projects

1. Collect information about the local taxes (water, electricity and house tax etc).

2. Students purchase some goods on the shop. The teacher and students discuss those goods, maximum retail price, purchasing price or GST.

Government and Taxes | Economics Class 10 | Short Answers

Government and Taxes

10th Social Science : Economics : Chapter 4

V. Give Short Answers

1. Define tax.

Taxes are compulsory payments to government without expectation of direct return or benefit to the tax payer.

or

According to Prof. Seligman "Tax is a compulsory contribution from a person to the government to defray the expenses incurred in the common interest of all, without reference to special benefits conferred."

2. Why we pay tax to the government?

We pay tax to the government because the government needs money to carry out many functions for the welfare of the people.

A money collected are spent for the following purposes.

To carry out many functions.

(i) Expenditures on economic infrastructure (transportation, sanitation, education, healthcare, public safety) (ii) Military (iii) Scientific research (iv) culture and the arts (v) public works and public insurance

3. What are the types of tax? Give examples.

(i) Direct Taxes (Income tax, Wealth tax and Corporate tax)

(ii) Indirect Taxes (Stamp duty, Entertainment tax, Excise duty and GST)

4. Write short note on Goods and Service Tax.

The GST is an indirect tax.

The motto of the GST is one nation, one market, one tax. It was passed in the Parliament on 29 March 2017 and it came into effect on 1 July 2017.

It is a one point tax.

5. What is progressive tax?

Progressive tax rate is one in which the rate of taxation increases (multiplier) as the tax base increases (multiplicand).

In the case of progressive tax, when income increases, the tax rate also increases.

6. What is meant by black money?

Black money is funds earned on the black market on which income and other taxes have not been paid.

The unaccounted money that is concealed from the tax administrator is called 'Black money'.

7. What is tax evasion?

Tax evasion is the illegal evasion of taxes by individuals, corporations and trusts.

Tax evasion activities include:

Under reporting income.

Inflating deductions or expenses.

Hiding money

Hiding interest in offshore accounts.

8. write any two difference between tax and payments?

Tax

(1) Tax is a compulsory payment

(2) Tax payer does not expect any direct benefit. Examples: Income tax, Wealth tax etc.

Payments

(1) Fee is a voluntary payment.

(2) Fee payer can get direct benefit for paying fee. Examples: Stamp fee, Driving license fee etc.

Government and Taxes | Economics MCQs for Class 10 Social Science

Government and Taxes | Economics | Social Science

10th Social Science : Economics : Chapter 4 : Government and Taxes - One Mark Questions and Answers

Chapter: 10th Social Science : Economics : Chapter 4 : Government and Taxes

I. Choose the correct answer

1. The three levels of governments in India are

a) Union, state and local

b) Central, state and village

c) Union, municipality and panchayat

d) None of the above

Ans: (a)

2. In India, taxes are including

a) Direct taxes

b) Indirect taxes.

c) Both (a) and (b)

d) None of these

Ans: (c)

3. Which is the role of government and development policies?

a) Defence

b) Foreign policy

c) Regulate the economy

d) all of above

Ans: (a)

4. The most common and important tax levied on an individual in India is

a) Service tax

b) Excise duty.

c) Income tax

d) Central sales tax

Ans: (c)

5. Under which tax one nation, one uniform tax is ensured

a) Value added tax (VAT)

b) Income tax

c) Goods and service tax

d) Sales tax

Ans: (c)

6. Income tax was introduced in india for the first time in the year __________ .

a) 1860

b) 1870

c) 1880

d) 1850

Ans: (a)

7. __________ tax is charged on the benefits derived from property ownership.

a) Income tax

b) Wealth tax

c) Corporate tax

d) Excise duty

Ans: (b)

8. What are identified as causes of black money?

a) Shortage of goods

b) High tax rate

c) Smuggling

d) All of above

Ans: (d)

II. Fill in the blanks

1. Tax is levied by government for the development of the state’s economy.

2. The origin of the word ‘tax’ is from the word Taxation.

3. The burden of the Direct tax cannot be shifted to others.

4. The Goods and Service Tax act came into effect on 1 July 2017.

5. The unaccounted money that is concealed from the tax administrator is called Black Money.

III. Choose the correct statement

1. Which of the following statement is correct about GST?

i) GST is the ‘one point tax’.

ii) This aims to replace all direct taxes levied on goods and services by the Central and State governments.

iii) It will be implemented from 1 July 2017 throughout the country.

iv) It will unified the tax structure in India.

a) (i) and (ii) are correct

b) (ii), (iii) and (iv) are correct

c) (i), (iii) and (iv) are correct

d) All are correct

Ans: (c)

IV. Match the following

First, try to match the items in Column A with the items in Column B. Then, click below to check your answers.

1. Income Tax

2. Excise duty

3. VAT

4. GST

5. Black money

- Value added tax

- 1 July 2017

- Smuggling

- Direct tax

- Indirect tax

Click to see the answers

1. Income Tax - Direct tax

2. Excise duty - Indirect tax

3. VAT - Value added tax

4. GST - 1 July 2017

5. Black money - Smuggling