Question : Which of the following is referred to as "paper taxes"?
I. Wealth tax
II. Gift tax
Option 1: Only II
Option 2: Only I
Option 3: Both I and II
Option 4: Neither I nor II
Correct Answer: Both I and II
Solution : The correct option is Both I and II .
The term "paper taxes" refers to taxes that are levied but generate little to no actual revenue for the government. This is because they often apply to a narrow base of taxpayers or are easily avoided through loopholes.
A wealth tax was levied on the net wealth of individuals exceeding a certain threshold. It was abolished in India in 2015 due to its low revenue generation and complex administration.
A gift tax is levied on the value of gifts exceeding a certain limit. While it does generate some revenue, the amount is relatively small compared to other taxes. Additionally, there are ways to avoid the gift tax through legal loopholes.
Related Questions
Know More about
Staff Selection Commission Multi Tasking ...
Application | Cutoff | Selection Process | Preparation Tips | Eligibility | Exam Pattern | Admit Card
Get Updates Brochure
Your Staff Selection Commission Multi Tasking Staff Exam brochure has been successfully mailed to your registered email id “”.
