UPSC Prelims Practice Questions — Govt. lists Bill to replace FII tax exemption Ordinance

Q1. The President's power to promulgate an Ordinance under Article 123 of the Constitution becomes available under which one of the following conditions?

  • A. When at least one of the two Houses of Parliament is not in session
  • B. Only when both Houses of Parliament are simultaneously not in session
  • C. Only when the Lok Sabha stands dissolved
  • D. At any time, so long as the Council of Ministers has tendered its advice

Q2. While it is in operation, an Ordinance promulgated under Article 123 has the same force and effect as which one of the following?

  • A. An Act of Parliament
  • B. An amendment to the Constitution
  • C. A statutory rule or regulation framed by the executive
  • D. A Money Bill pending before the Lok Sabha

Q3. The doctrine that repeated re-promulgation of Ordinances is a 'fraud on the Constitution' was first laid down by the Supreme Court in which one of the following cases?

  • A. D.C. Wadhwa vs. State of Bihar
  • B. Kesavananda Bharati vs. State of Kerala
  • C. R.C. Cooper vs. Union of India
  • D. Minerva Mills vs. Union of India

Q4. With reference to the fate of an Ordinance that is not replaced by an Act of Parliament, consider the following statements: 1. It ceases to operate on the expiry of six weeks from the date Parliament reassembles, unless approved earlier. 2. It ceases to operate if resolutions disapproving it are passed by both Houses of Parliament. 3. An Ordinance can never be given retrospective effect. 4. Rights and liabilities that arose while the Ordinance was in force are, in every case, automatically extinguished the moment it lapses. Which of the statements given above is/are correct?

  1. It ceases to operate on the expiry of six weeks from the date Parliament reassembles, unless approved earlier.
  2. It ceases to operate if resolutions disapproving it are passed by both Houses of Parliament.
  3. An Ordinance can never be given retrospective effect.
  4. Rights and liabilities that arose while the Ordinance was in force are, in every case, automatically extinguished the moment it lapses.
  • A. 1 and 2
  • B. 1, 2 and 3
  • C. 3 and 4
  • D. 2 and 4 only

Q5. With reference to the Income-tax (Amendment) Ordinance, 2026, consider the following statements: 1. It exempts interest income on Government Securities from tax. 2. It exempts capital gains from the sale or transfer of such Government Securities from tax. 3. Its beneficiaries include Foreign Institutional Investors and the Bank for International Settlements. 4. The exemption applies to income arising on or after 1 April 2020. Which of the statements given above is/are correct?

  1. It exempts interest income on Government Securities from tax.
  2. It exempts capital gains from the sale or transfer of such Government Securities from tax.
  3. Its beneficiaries include Foreign Institutional Investors and the Bank for International Settlements.
  4. The exemption applies to income arising on or after 1 April 2020.
  • A. 1 and 4
  • B. 2 and 3
  • C. 1, 2 and 3
  • D. 3 and 4

Q6. The exemption granted to FIIs and the BIS under the Income-tax (Amendment) Ordinance, 2026 covers how many distinct categories of income arising from Government Securities?

  • A. One
  • B. Two
  • C. Three
  • D. Four

Q7. As per its current membership, how many member central banks does the Bank for International Settlements (BIS) have?

  • A. 30
  • B. 60
  • C. 95
  • D. 188

Q8. Which one of the following is regarded as the world's oldest international financial institution?

  • A. International Monetary Fund
  • B. World Bank (IBRD)
  • C. Bank for International Settlements
  • D. Asian Development Bank

Q9. With reference to the inclusion of Indian Government Securities in global bond indices, consider the following statements: 1. The JP Morgan GBI-EM Global Diversified Index began including Indian bonds from June 2024. 2. The Bloomberg Emerging Market Local Currency Government Index began including India's FAR bonds from January 2025. 3. The FTSE Russell Emerging Markets Government Bond Index (EMGBI) began including Indian bonds from September 2025. 4. The FTSE World Government Bond Index (WGBI) included Indian bonds from 2024. Which of the statements given above is/are correct?

  1. The JP Morgan GBI-EM Global Diversified Index began including Indian bonds from June 2024.
  2. The Bloomberg Emerging Market Local Currency Government Index began including India's FAR bonds from January 2025.
  3. The FTSE Russell Emerging Markets Government Bond Index (EMGBI) began including Indian bonds from September 2025.
  4. The FTSE World Government Bond Index (WGBI) included Indian bonds from 2024.
  • A. 1 and 4
  • B. 2 and 3 only
  • C. 1, 2 and 3
  • D. 1, 3 and 4

Q10. On full phased inclusion, Indian bonds' weight in the JP Morgan Government Bond Index-Emerging Markets (GBI-EM) Global Diversified was capped at what maximum percentage?

  • A. 1 per cent
  • B. 5 per cent
  • C. 10 per cent
  • D. 15 per cent

Q11. The registration and regulation of Foreign Portfolio Investors (FPIs) in India is carried out by which one of the following authorities?

  • A. Reserve Bank of India
  • B. Securities and Exchange Board of India
  • C. Central Board of Direct Taxes
  • D. Insurance Regulatory and Development Authority of India

Q12. Under the Constitution of India, the final authority to certify whether a Bill is a Money Bill within the meaning of Article 110 rests solely with whom?

  • A. The President of India
  • B. The Speaker of the Lok Sabha
  • C. The Chairman of the Rajya Sabha
  • D. The Union Finance Minister