WBCS.LIVE practice question

Which of the following taxes is within the Jurisdiction of the Central Government?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Corporation Tax
  2. Professional Tax
  3. Land Revenue
  4. Excise on alcoholic liquors

Correct answer and explanation

Correct answer: Corporation Tax

Explanation: The Corporation Tax is a Central Government tax, levied on the profits of companies operating in India. 📚 Other Information: ▪️ Mentioned under Union List (Entry 85) of the Seventh Schedule. ▪️ Levied and collected by the Central Government only. ▪️ It applies to domestic and foreign companies earning income in India. ▪️ The rate and rules are determined by the Finance Act passed every year. ▪️ The tax is managed by the Central Board of Direct Taxes (CBDT) under the Ministry of Finance. ▪️ It is a major source of direct tax revenue for the Union Government. ▪️ The Income Tax Act, 1961, governs the taxation process. ▪️ Companies also pay surcharge and cess along with the basic tax rate.