Legal Terms — Set 3

Correct Answer: D. Goods and Services Tax

• **Goods and Services Tax** = It is an indirect tax used in India on the supply of goods and services. • **July 1, 2017** — This tax system was implemented on this date. • 💡 Wrong-option analysis: 'General Sales Tariff': This is an incorrect full form for GST; 'Government Standard Tax': This is an incorrect expansion for GST; 'Global Securities Trade': This is an incorrect expansion for GST and irrelevant to taxation.

Correct Answer: A. Value Added Tax

• **Value Added Tax** = It is a consumption tax placed on a product whenever value is added at a stage of production. • **State governments** — VAT was a major source of revenue for state governments before GST. • 💡 Wrong-option analysis: 'Verified Account Transaction': This is an incorrect expansion for VAT; 'Volume and Trade': This is not the correct full form for VAT; 'Variable Asset Tariff': This is an incorrect expansion for VAT.

Correct Answer: C. Special Economic Zone

• **Special Economic Zone** = It is an area where business and trade laws differ from the rest of the country to attract investment and boost exports. • **Tax incentives** — Companies operating in SEZs often receive tax incentives. • 💡 Wrong-option analysis: 'Systematic Entry Zone': This is an incorrect expansion for SEZ; 'Secured Equity Zone': This is an incorrect full form for SEZ; 'Standard Export Zone': This is an incorrect expansion for SEZ.

Correct Answer: B. Employees' Provident Fund

• **Employees' Provident Fund** = It is a retirement benefit scheme available to all salaried employees. • **EPFO** — This fund is managed by the Employees' Provident Fund Organisation (**EPFO**). • 💡 Wrong-option analysis: 'Equity Protection Fund': This is an incorrect expansion for EPF; 'External Payment Facility': This is not the correct full form for EPF; 'Employment Pension Folder': This is an incorrect expansion for EPF.

Correct Answer: D. Foreign Exchange Management Act

• **Foreign Exchange Management Act** = It is a law governing foreign exchange, enacted to liberalize foreign trade and payments. • **1999** — This act was enacted in **1999**, replacing the FERA. • 💡 Wrong-option analysis: 'Financial Equity Market Association': This is an incorrect expansion for FEMA; 'Foreign Entry and Movement Act': This is an incorrect full form for FEMA; 'Federal Energy Management Agency': This is a known abbreviation but incorrect for FEMA in Indian law.

Correct Answer: A. Tax Deducted at Source

• **Tax Deducted at Source** = It is a means of collecting income tax by having the person making a payment deduct tax at a specific rate. • **Government** — The deducted amount is deposited with the **government**. • 💡 Wrong-option analysis: 'Total Debt Status': This is an incorrect expansion for TDS; 'Term Deposit System': This is not the correct full form for TDS; 'Transfer of Digital Shares': This is an incorrect expansion for TDS and unrelated to tax deduction.

Correct Answer: C. Real Estate (Regulation and Development) Act

• **Real Estate (Regulation and Development) Act** = It aims to protect home-buyers and boost investments in the real estate sector. • **2016** — This act was passed in **2016**. • 💡 Wrong-option analysis: 'Rural Energy and Resource Agency': This is an incorrect expansion for RERA; 'Regional Employment and Revenue Authority': This is an incorrect full form for RERA; 'Residential Equity Reform Act': This is an incorrect expansion for RERA.

Correct Answer: C. Permanent Account Number

• **Permanent Account Number** = It is a 10-digit alphanumeric code issued by the Income Tax Department for taxpayers. • **10-digit alphanumeric code** — PAN is a **10-digit alphanumeric code**. • 💡 Wrong-option analysis: 'Personal Access Node': This is an incorrect expansion for PAN; 'Primary Authorization Number': This is not the correct full form for PAN; 'Public Assets Network': This is an incorrect expansion for PAN.

Correct Answer: A. Know Your Customer

• **Know Your Customer** = It is a process used by financial institutions to verify the identity of their clients. • **Mandatory requirement** — KYC is a **mandatory requirement** to prevent money laundering, fraud, and identity theft. • 💡 Wrong-option analysis: 'Key Yield Calculation': This is an incorrect expansion for KYC; 'Keep Your Credentials': This is an incorrect full form for KYC; 'Kinship Yield Code': This is an incorrect expansion for KYC.

Correct Answer: D. Limited Liability Partnership

• **Limited Liability Partnership** = It is a business structure where partners have limited liability for the company's debts. • **Professional service firms** — This business form is popular among **professional service firms**. • 💡 Wrong-option analysis: 'Legal License Period': This is an incorrect expansion for LLP; 'Large Logistic Project': This is not the correct full form for LLP; 'Long Level Protocol': This is an incorrect expansion for LLP and unrelated to business structures.