The mechanism by which a business can reduce its tax liability by claiming credit for taxes paid on purchases is called: MCQ with Answer and Explanation

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The mechanism by which a business can reduce its tax liability by claiming credit for taxes paid on purchases is called:

A. Input Tax Credit (ITC)

B. Reverse Charge Mechanism (RCM)

C. Tax Deduction at Source (TDS)

D. Tax Refund

Answer: Option A

Solution (By JKSSB Mock Tests)

ITC avoids the cascading effect of taxes by allowing a set-off of tax paid on inputs against tax payable on output.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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The 'Data Analytics' in audit is used to:

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Correct Answer: Option A

Explanation:
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Correct Answer: Option B

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Correct Answer: Option A

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This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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