AIBE Taxation Law PYQs: Most Repeated Questions

What is Taxation Law in AIBE 21 Exam?

Taxation Law contributes around 4 questions out of 100 in the AIBE 21 Exam 2026, accounting for approximately 4% of the total paper. It is a scoring subject that primarily tests candidates on fundamental tax concepts and statutory provisions.

Taxation Law deals with the legal framework governing the levy, collection, and administration of taxes in India. For AIBE, candidates should focus on key concepts relating to Income Tax, Goods and Services Tax (GST), direct and indirect taxes, tax authorities, and constitutional provisions related to taxation. Questions are generally straightforward and based on fundamental legal principles and statutory provisions.

Most Repeated Taxation Law PYQs

Given below are the most frequently asked Taxation Law Previous Year Questions (PYQs) based on past AIBE exam trends and important topics for AIBE 21 2026 preparation.

1. Which of the following is a Direct Tax?

(a) Goods and Services Tax (GST)
(b) Customs Duty
(c) Income Tax
(d) Excise Duty

Answer: (c) Income Tax

Solution: A direct tax is imposed directly on the income or wealth of a person and is paid by the same person on whom it is levied. Income Tax is a classic example of a direct tax. GST, Customs Duty, and Excise Duty are indirect taxes.

2. Which Constitutional Article provides that no tax shall be levied or collected except by authority of law?

(a) Article 14
(b) Article 19
(c) Article 265
(d) Article 300A

Answer: (c) Article 265

Solution: Article 265 of the Constitution of India ensures that taxes can only be imposed through a valid law enacted by a competent legislature. This provision protects citizens from arbitrary taxation by executive authorities.

3. GST stands for:

(a) General Sales Tax
(b) Goods and Services Tax
(c) Government Service Tax
(d) Gross Service Tax

Answer: (b) Goods and Services Tax

Solution: GST is a comprehensive indirect tax introduced to replace multiple indirect taxes in India. It aims to create a unified national market by simplifying the taxation system and reducing cascading effects of taxes.

4. Which authority is empowered to levy Income Tax in India?

(a) State Governments only
(b) Municipal Authorities
(c) Central Government
(d) Gram Panchayats

Answer: (c) Central Government

Solution: Under the Constitution, the power to levy taxes on income (other than agricultural income) rests with the Union Government. Income Tax is administered by the Income Tax Department under the Ministry of Finance.

5. Which of the following taxes is generally classified as an Indirect Tax?

(a) Income Tax
(b) Corporate Tax
(c) GST
(d) Wealth Tax

Answer: (c) GST

Solution: Indirect taxes are collected from one person but ultimately borne by another, usually the consumer. GST is charged on the supply of goods and services and is ultimately paid by the end consumer.

6. The GST Council is constituted under which Article of the Constitution?

(a) Article 246A
(b) Article 279A
(c) Article 356
(d) Article 368

Answer: (b) Article 279A

Solution: Article 279A provides for the constitution of the GST Council. The Council recommends tax rates, exemptions, and other important matters relating to GST to ensure coordination between the Centre and States.

7. Which of the following is the primary objective of taxation?

(a) Punishing citizens
(b) Raising revenue for public purposes
(c) Restricting trade completely
(d) Regulating marriages

Answer: (b) Raising revenue for public purposes

Solution: The primary purpose of taxation is to generate revenue for the government to fund public services, infrastructure, welfare schemes, and administration. Taxes are essential for the functioning of the State.

8. Agricultural income is generally exempt from Income Tax under:

(a) State List
(b) Constitutional scheme relating to taxation
(c) Criminal Procedure Code
(d) Consumer Protection Act

Answer: (b) Constitutional scheme relating to taxation

Solution: Agricultural income is exempt from Central Income Tax. The Constitution grants States the power to tax agricultural income, distinguishing it from other forms of income taxable by the Union Government.

9. Input Tax Credit (ITC) under GST refers to:

(a) Tax paid by exporters only
(b) Credit available for tax already paid on inputs
(c) Refund of customs duty only
(d) Exemption from all taxes

Answer: (b) Credit available for tax already paid on inputs

Solution: Input Tax Credit allows businesses to reduce their tax liability by claiming credit for GST already paid on purchases used in business. This mechanism prevents the cascading effect of taxes.

10. Which of the following statements regarding tax evasion is correct?

(a) It is a lawful method of reducing tax liability
(b) It involves illegal non-payment or underpayment of tax
(c) It is encouraged under tax laws
(d) It has no legal consequences

Answer: (b) It involves illegal non-payment or underpayment of tax

Solution: Tax evasion involves deliberately concealing income or providing false information to avoid tax liability. It is illegal and may result in penalties, prosecution, and other legal consequences under tax laws.

Why Taxation Law Matters in AIBE 21?

• Contributes Around 4 Marks: Taxation Law accounts for approximately 4 questions out of 100 in the AIBE 21 Exam 2026, making it a valuable scoring subject.

• Frequently Tested Concepts: Questions are commonly asked on Income Tax, GST, direct and indirect taxes, constitutional provisions, and tax authorities. Students can also check Top 10 Repeated Topics in AIBE Question Papers.

• Concept-Based and Straightforward: Most Taxation Law questions in AIBE are direct in nature and can be answered easily with a clear understanding of fundamental concepts.

• Important for Legal Practice: Tax laws play a significant role in commercial, corporate, and financial matters, making them relevant for aspiring advocates.

• Easy to Score with PYQs: Practising AIBE Taxation Law Previous Year Questions (PYQs) helps candidates identify recurring topics, improve accuracy, and secure quick marks in the examination.

Students can also check other AIBE 21 Most Repeated PYQs,

• AIBE Evidence Act and Bhartiya Sakshya Adhiniyam PYQs.

• AIBE Family Law PYQs

• AIBE Criminal Law PYQs

• AIBE Constitution Law PYQs

• AIBE Environmental Law PYQs

• AIBE Company Law PYQs