We posted 7 questions in 10 PM Daily Quiz on 11th April, 2016. Thanks for the amazing response. These questions will help you polish concepts based on current affairs. In case you have not attempted them, please attempt them by clicking below.
Q.1) The RV Easwar Committee gave recommendations on:
a) Simplification of income tax laws
b) Goods and Services Tax in India
c) Banking reforms
d) Crude oil and gas pricing
Answer: a
Explanation:
Expert Committee to simplify income tax laws headed by Justice (retired) R.V. Easwar has submitted its report to Union Finance Ministry.
- The 10 member committee has recommended simplifying provisions related to tax deduction at source (TDS), tax refunds and claims of expenditure for deduction from taxable income.
- It also has suggested several taxpayer-friendly measures to improve the ease of doing business in the country, accelerate process of tax dispute resolutions and reduce litigation.
Key recommendations are
- Deferring the contentious Income Computation and Disclosure Standards (ICDS) provisions and making the process of tax refunds faster.
- Deletion of a clause in IT Act, 1961 that allows the IT department to delay tax refund due beyond six months. In case of delay in refunds levying higher interest.
- IT department should stop the practice of adjusting tax demand of a taxpayer against legitimate refunds due whose tax return is under assessment.
- Treat stock trading gains of up to 5 lakh rupees as capital gains and not business income. TDS rates for individuals must be reduced to 5 per cent from current 10 per cent. Dividend income should be treated as part of total income.
- Exempting non-residents not having a Permanent Account Number (PAN), but seeking to provide their Tax Identification Number (TIN) for the applicability of TDS at a higher rate.
- Most of the working processes of the IT departments should be conducted electronically in order to minimize direct human interface.
- Eligibility criteria under the presumptive tax scheme to be increased to 2 crore rupees from 1 crore rupees to make it easy for small businesses. Such scheme should be also for professionals.
Background
- Union Government had constituted this committee in October 2015 by following up on a promise to provide a fair and predictable tax regime. The committee was tasked to suggest recommendations to overhaul the IT Act, 1961 to remove ambiguities that cause unnecessary litigation and update the laws based on various judgements.
Q.2) RBI and the Securities and Exchange Board of India (Sebi) are set to launch cross-currency derivatives trading, Which of the following statements is/are true about cross currency derivative trading?
- Cross currency trading will help bypass first converting the Rupee to US dollars.
- Trading timings will only cover Japanese and European markets.
Select the correct answer using the codes below
a) 1 only
b) 2 only
c) Both are correct
d) Neither are correct
Answer – a
Explanation
‘Cross Currency’ trading
A pair of currencies traded in forex that does not include the U.S. dollar. One foreign currency is traded for another without having to first exchange the currencies into American dollars.
Historically, an individual who wished to exchange a sum of money into a different currency would be required to first convert that money into U.S dollars, and then convert it into the desired currency; cross currencies help individuals and traders bypass this step
The cross-currency derivatives markets will be open from 9 am to 7:30 pm, so as to cover Japanese and European market timings and the first hour of the US markets.
Q.3) Consider the following statements regarding features of Differentiated Bank
- These are highly specialised banking entities focusing on target group of customers.
- An entity with a Differentiated Bank License will have to engage in basic banking activities and they also have to adhere to priority sector obligations.
Select the correct answer using the codes below
a) 1 only
b) 2 only
c) Both are correct
d) Neither are correct
Answer- a
Explanation:- FEATURES OF DIFFERENTIATED BANKS
- These are banks for serving different segments of customers.
- These are highly specialised banking entities focusing on target group of customers.
- These are driven by innovation and technology perspectives
- The products and range of services provided by these banks are also differentiated keeping in view the customised needs of the customers
- These serve the purpose of different segments of society e.g. women bank opened in Mumbai is one such example and similarly there may be banks for physically challenged people, students, younger employees and professional
- The rates of interest charged will depend upon the nature of the clientele the banks will possess
- An entity with a Differentiated Bank License need not engage in basic banking activities nor do they need to adhere to priority sector obligations.
Q.4) Consider the following statements regarding Clearing Corporation of India Ltd (CCIL)
- It provide guaranteed clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange and Derivative markets.
- CCIL acts as a central counterparty in various segments of the financial markets regulated by the SEBI.
- It provides non-guaranteed settlement for Rupee interest rate derivatives and cross currency transactions through the Continuous Linked Settlement (CLS) Bank.
Select the correct answer using the codes below:
a) 1 and 2
b) 2 and 3
c) 1 and 3
d) 1, 2 and 3
Answer- c
Explanation:-
- The Clearing Corporation of India Ltd. (CCIL) was set up in April, 2001 to provide guaranteed clearing and settlement functions for transactions in Money, G-Secs, Foreign Exchange and Derivative markets.
- The introduction of guaranteed clearing and settlement led to significant improvement in the market efficiency, transparency, liquidity and risk management/measurement practices in these market along with added benefits like reduced settlement and operational risk, savings on settlement costs, etc.
- CCIL also provides non-guaranteed settlement for Rupee interest rate derivatives and cross currency transactions through the CLS Bank.
- CCIL’s adherence to the stringent principles governing its operations as a Financial Market Infrastructure has resulted in its recognition as a Qualified Central Counterparty (QCCP) by the Reserve Bank of India in 2014.
- It has also set up a Trade Repository to enable financial institutions to report their transactions in OTC derivatives.
- CCIL acts as a central counterparty in various segments of the financial markets regulated by the RBI viz. the government securities segment, collateralised borrowing and lending obligations (CBLO) – a money market instrument, USD-INR and forex forward segments.
Q.5) Consider the following pairs
Crops Season
- Mustard Kharif
- Peas Rabi
- Pumpkin Zaid
Which of the following are correctly matched?
a) 1 and 2
b) 1, 2 and 3
c) 2 only
d) 2 and 3
Answer- d
Explanation:- Rabi, Kharif and Zaid Crops in India
Kharif crops
The Kharif crop is the summer crop or monsoon crop in India.
Kharif crops are usually sown with the beginning of the first rains in July, during the south-west monsoon season. Major Kharif crops of India include Millets (Bajra & Jowar), Cotton, Soyabean, Sugarcane, Turmeric, Paddy (Rice), Maize, Moong (Pulses), Groundnut, Red Chillies, etc.
Rabi Crops
The Rabi crop is the spring harvest or winter crop in India . It is sown in October last and harvested in March April every year. Major Rabi crops in India include Wheat, Barley, Mustard, Sesame, Peas etc.
Zaid Crop
This crop is grown in some parts of country during March to June. Prominent examples are Muskmelon, Watermelon, Vegetables of cucurbitacae family such as bitter gourd, pumpkin, ridged gourd etc.
Q.6) Puttingal Devi temple in Kerala’s Kollam district was in news recently for a tragedy. What is the meaning of “Puttu”?
a) Ant hill
b) Light and fire
c) Banyan tree
d) A type of grain
Answer-a
Explanation:- Puttingal Temple is a Hindu temple in the coastal town of Paravur, India. The temple was founded after the presence of the goddess was experienced on an ant hill; “Puttu” being the Malayalam word for ant Hill.
Q.7) Consider the following statements
1.These banks specialize in large and complex financial transactions such as underwriting.
2.These banks act as an intermediary between a securities issuer and the investing public, facilitating mergers and other corporate reorganizations.
- These banks act as a broker and/or financial adviser for institutional clients.
Above statements are referred to which of the following type of bank?
a) Payment bank
b) Investment bank
c) Custodian bank
d) Wholesale bank
Answer-b
Explanation:- Investment banks
- An investment bank (IB) is a financial intermediary that performs a variety of services.
- Investment banks specialize in large and complex financial transactions such as underwriting, acting as an intermediary between a securities issuer and the investing public, facilitating mergers and other corporate reorganizations, and acting as a broker and/or financial adviser for institutional clients.
- Some investment banks specialize in particular industry sectors. Many investment banks also have retail operations that serve small, individual customers.
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