1) Which of the following is/are true?
1) India becomes the second country after USA to propose a levy on digital economy.
2) It will be levied on all online advertisement services offered in the country by all people be they Indian or not as per the WTO norms.
a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
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Answer
Explanation
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ANSWER: Neither 1 nor 2
Explanation:
- India becomes the first country to propose a levy on digital economy.
- The government’s decision to levy an equalization tax of 6 per cent on online advertisement services offered in the country by non-resident entities will impact users, especially start-ups that rely almost entirely on the online world to popularize their services.
- Further, as the levy is not introduced as part of the Income Tax Act but as a separate legislation under the Finance Bill, global firms that offer such services in India cannot claim a tax credit in their home country under the double taxation avoidance agreements.
- In the absence of ability to claim credit, the non-resident service provider offering such online advertisement services may not absorb such deduction thus adding to the cost of the end-user here. Service providers may ask Indian firms to gross up the levy, adding to the cost of business, which would hurt many start-ups and medium-sized businesses using the service.
- The move may impact Indian businesses (that buy online advertisement space). Indian businesses use global advertising platforms extensively to reach out to their customers in India and overseas.
- In order to tap tax on income accruing to foreign e-commerce companies from India it is proposed that a person making a payment to a non-resident (global advertising platform), who does not have a permanent establishment, exceeding in aggregate Rs.1 lakh in a year, as consideration for online advertisement, will withhold tax at 6 per cent of gross amount paid, as equalization levy. The equalization levy looks at taxing online advertisements, provision of digital advertising space or any other facility or service for the purpose of online advertisements.
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2) Which of the following are included in “Digital India” program?
1. e-governance
2. Wi-Fi in All Universities
3. Boost to indigenous production of IT hardware and software
4. Offer free tablets to students.
5. Broad band connectivity at village level
a. 1,4,5
b. 1,3,4,5
c. 1,2,3,5
d. All
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Answer
Explanation
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ANSWER: 1,2,3,5
Explanation:
No explanation is available for this question!
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3) Which of the following are programs under Digital India scheme?
1. eSign framework
2. National Scholarships Portal
3. Bharat Net
4. eHospital application
a. 1,2,3
b. 2,3,4
c. 1,3,4
d. All
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Answer
Explanation
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ANSWER: All
Explanation:
The Digital India program aims to provide broadband highways, universal access to mobile connectivity, public Internet access program, e-governance: Reforming government through technology, eKranti - Electronic delivery of services, Information for all, Electronics manufacturing: Target net zero imports, IT for jobs and early harvest programs.
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