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Important Questions from Union Budget 2019

Published on Tuesday, July 16, 2019



Which statement is correct in terms of PAN and Aadhaar interchangeability, as introduced in union Budget 2019?
a. The person filing IT returns by quoting Aadhaar number doesn’t need to make PAN card
b. The Aadhaar number can be used for a cash transaction of more than Rs 50,000
c. Aadhaar can substitute PAN, only in cases of IT returns
d. A person can’t file ITR by using Aadhaar if he already has a PAN card 


The faceless e-assessment introduced by the government, is to eliminate face to face interaction between whom?
a. The Government and the beneficiary receiving govt. subsidies
b. The Police and the trafficked female victim
c. Taxpayer and the IT department officer
d. Seller and buyer on e-commerce platform 


For what amount of cash withdrawal from the bank account in a financial year, the budget 2019 has allowed 2% TDS (tax deduction at source) on cash withdrawals?
a. Cash withdrawal of Rs 1 lakh and above
b. Cash withdrawal of Rs 1 crore and above 
c. Cash withdrawal of Rs 50 lakh and above
d. Cash withdrawal of Rs 2 crore and above 


Mega Investment in Sunrise and Advanced Technology Areas is a new initiative announced in the Budget 2019 for what purpose?
a. To invite global companies to set up IT companies in India
b. To invite global companies to invest in water purification technology in India
c. To invite global companies to invest in solar energy production in India
d. To invite global companies to set up mega-manufacturing plants in India


In Union Budget 2019, minimum public shareholding in the listed companies has been increased from 25% to _____.
a. 30%
b. 35% 
c. 40%
d. 45%


To what amount of company’s turnover, the corporate tax slab of 25% is extended by the government in the budget 2019?
a. 250 crore
b. 400 crore
c. 500 crore
d. 200 crore


Which is new in the series of coins, the government is going to issue as announced in the budget 2019?
a. 50 rupees coin
b. 100 rupees coin
c. 20 rupees coin
d. 40 rupees coin


For what number of years, the government has provided deduction of 100% of profit for IFSC (International Financial Services Centre) in budget 2019?
a. 15 years
b. 10 years
c. 25 years
d. 5 years


To ease startups and resolve angel issue, the Government has exempted which category/categories of Alternative Investment Fund (AIF) from scrutiny in Budget 2019?
a. Category-I and category-III Alternative Investment Funds
b. Category-II Alternative Investment Funds
c. Category-III Alternative Investment Funds
d. Category-II and Category-III Alternative Investment Funds


The government has introduced the Legacy Dispute Resolution Scheme for?
a. Solve NBFCs investment issue
b. Solving issues of income tax payers
c. Quick closure of Central Excise and Service tax litigation in pre-GST regime
d. Solve litigation in post-GST regime


The budget 2019 has proposed to return the regulation authority over the Housing Finance sector to whom?
b. National Housing Bank
c. RBI


With respect to which sector, “One Nation, One Grid” Model is announced to be made by the government in Budget 2019?
a. National Housing sector
b. Power sector
c. Bridge connectivity
d. Aviation MRO sector


In order to deepen the corporate debt market, Budget 2019 announced to enable Stock exchanges to allow which bonds as collaterals?
a. AA rated bonds
b. AAA rated bonds
c. BB+ rated bonds
d. BBB rated bonds


The government has announced to hold an annual meet using NIIF (National Infrastructure Investment Fund) to attract foreign investment. The name of the meet is?
a. Foreign Investment Meet
b. Global Foreign Meet
c. Global Investors Meet
d. NIIF global Meet


Pradhan Mantri Matsya Sampada Yojana was announced in the Budget 2019, is to be launched by the government for whom?
a. To provide MSMEs credit facility
b. Free regular check-up for pregnant women
c. Pregnant women and malnutrition child
d. Fisheries production and Management


Answer 1: (B)

a. According to the proposed rules, the Income Tax Department shall suo moto allot PAN to such person on the basis of Aadhaar after obtaining demographic data from the Unique Identification Authority of India (UIDAI). Both the I-T department and the UIDAI have linked their PAN and Aadhaar databases. It means the person shall have to create PAN
b. Aadhaar can be quoted for cash transactions of more than Rs 50,000 and all other purposes where traditionally income tax PAN number was a must ex. ITR, Banks and other institutions
c. Same explanation as b
d. If a taxpayer has already linked his Aadhaar with his PAN, he or she has the choice to use Aadhaar instead of PAN under the Income Tax Act.

Answer 2: (C)

Faceless e-assessment is to eliminate human interface to avoid face to face interaction between the taxpayer and the IT department officer. The central cell will be the only point of contact between the taxpayer and the department to avoid any harassment to the taxpayer by the IT officer.

Answer 3: (B)

Budget 2019 has proposed to levy tax deduction at source (TDS) of 2 per cent on the cash withdrawal of more than Rs 1 crore from a bank account in one financial year to discourage business payments in cash.
Former finance minister, P. Chidambaram, had introduced a banking cash transaction tax in the 2005 budget. The tax was payable by individuals and Hindu Undivided Family (HUF) if they withdrew cash over Rs 50,000 on a single day from a bank account other than savings bank account. It was fixed at 0.1 per cent on cash withdrawals from bank. For entities other than individuals and HUF, tax was levied on withdrawal of Rs 1 lakh and above on a single day.

Answer 4: (D)

Mega Investment in Sunrise and Advanced Technology Areas is a scheme to invite global companies to set up mega-manufacturing plants in areas such as Semi-conductor Fabrication (FAB), Solar Photo Voltaic cells, Computer Servers, Laptops, Lithium storage batteries, etc.

Answer 5: (B)

SEBI to consider raising the threshold from 25% to 35% for minimum public Shareholdings in the listed companies.

Answer 6: (B)

  • Corporation tax is a tax imposed on the net income of the company. Companies, both private and public which are registered in India under the Companies Act 1956, are liable to pay corporate tax.
  • The government has extended the minimum Corporate tax rate of 25%, to companies with annual turnover of up to Rs 400 crore from earlier Rs250 crore. The move aimed at making India an investor-friendly country
  • Now companies with turnover 400 crore will pay 25 per cent corporate tax than 30 per cent earlier
  • Nirmala Sitharaman said, this will cover 99.3% of the companies. Now only 0.7% of companies will remain outside this rate.
  • Last year, the then Finance Minister Arun Jaitley had cut the corporate income tax rate to 25 percent for companies with a turnover of up to Rs 250 crore.

Answer 7: (C)

The government has announced to issue Coins of One Rupee, Two Rupees, Five Rupees, Ten Rupees and Twenty Rupees, which would be identifiable by visually impaired.

Answer 8: (B)

At present, a unit in the IFSC is allowed deduction of 100 per cent of profits for the first five consecutive years and 50 per cent for the next five consecutive years from the year of commencement. FM has now proposed to provide for 100 per cent deduction for 10 consecutive years and also to provide that the unit may claim the said deduction, at its option, for any 10 consecutive years out of 15 years from the year of commencement.

Answer 9: (B)

  • AIFs typically collect money from high-net-worth individuals to invest in unlisted companies and start-ups
  • Angel tax is applicable to unlisted companies that have raised capital through sale of shares at a value above their fair market value
  • At present, start-ups are not required to justify fair market value of their shares issued to certain investors, including Category-I Alternative Investment Funds (AIF), the Finance Minister has proposed to extend this benefit to Category-II Alternative Investment Funds also.

Answer 10: (C)

Even two years after the indirect tax regime was replaced by GST, the litigation doesn’t seem to die down and there is a huge pendency the announcement relates to the legacy dispute resolution scheme, which intends to reduce the pending service tax and excise litigation of the pre-GST regime. It is expected that the scheme will support businesses where there are various ambiguous issues pending before the tribunals.

Answer 11: (C)

  • The government has taken away the powers of the National Housing Bank (NHB) to regulate housing finance companies (HFCs) and handed them to the Reserve Bank of India (RBI).
  • However, HFCs, which so far have conducted business with light-touch regulation, will likely face intense scrutiny. This also enables the RBI to directly give liquidity support to the ailing HFC sector.
  • There are three kinds of lenders — NBFCs, banks and HFCs. NBFCs and banks were already being regulated by the RBI. Anyway, NHB used to follow the RBI in issuing regulations. This move will bring HFCs also under the central bank and make the implementation of regulations simpler.

Answer 12: (B)

The Finance minister shed light on the plan on "one nation one grid" for affordable power to states. According to the government data, with 100 per cent electrification target being achieved, the government's focus is now to provide consistent electricity at affordable rates.

Answer 13: (A)

  • The government said that measures will be taken to deepen corporate tri-party repo market in corporate debt securities.
  • The government will work with RBI and SEBI to enable stock exchanges to allow AA rated bonds as collaterals, Finance Minister Nirmala Sitharaman said presenting the Union Budget 2019-20
  • The introduction of a tri-party repo was part of the recommendations of the H.R. Khan committee’s report on the development of the corporate bond market.
  • Last year, the National Stock Exchange and the BSE had launched an electronic platform for repos. However the securities allowed include only AAA category bonds, A+ rated commercial papers and certificates of deposits. 
  • The Reserve Bank of India (RBI) had introduced repos in corporate bonds in 2010, but the response had been lukewarm because of non-availability of guaranteed settlement and an electronic dealing platform.

Answer 14: (C)

  • The government is contemplating organising an annual Global Investors Meet in India, using National Infrastructure Investment Fund (NIIF) as the anchor, to get all three sets of global players-top industrialists/corporate honchos, top pension/insurance/sovereign wealth funds and top digital technology/venture funds.
  • To become part of the global financial system to mobilise global savings, mostly institutionalised in pension, insurance and sovereign wealth funds," said Sitharaman.

Answer 15: (D)

Union Budget for 2019-20, Sitharaman said the government proposes Pradhan Mantri Matsya Sampada Yojana to address critical infrastructure gap in fisheries sector, aimed to turn India into a hotspot for fish and aquatic products through appropriate policy, marketing and infrastructure support.

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