Acme Ai
A
अ
GS Paper IUPSC Prelims 2012
Fiscal Policy & Public Finance
Question No. 216Interactive Test Mode
00:00
+2-0.66

Q216. Under which of the following circumstances may ‘capital gains’ arise? 1. When there is an increase in sales of product 2. When there is a natural increase in the value of the property owned. 3. When you purchase a painting, there is a growth in its value due to an increase in its popularity. Select the correct answer using the codes given below:

Under which of the following circumstances may ‘capital gains’ arise?

  1. When there is an increase in sales of product
  2. When there is a natural increase in the value of the property owned.
  3. When you purchase a painting, there is a growth in its value due to an increase in its popularity.

Select the correct answer using the codes given below:

Select the correct option below (or cross out options to eliminate)
PrevNext Question

Official Answer Key & Detailed Solution

3D PYQ Realm

Ready to check the official UPSC Answer Key?

Click any option above to test yourself under exam conditions, or reveal the explanation directly.

Official UPSC Answer KeyUPSC Prelims 2012 • Indian Economy

Correct Answer: Option (B) — 2 and 3 only

Concept & Option Breakdown

Standard Reference Verified
  • Statement 1 is incorrect: An increase in sales of regular goods/products yields business income/revenue profits, not capital gains.
  • Statements 2 and 3 are correct: Capital gains refer to the financial gain realized from the appreciation and disposal of capital assets (such as real estate, land, paintings, jewelry, or shares) over their acquisition cost.
Elimination Heuristic & Exam Approach

Regular sales of commercial products produce operational business revenue, not capital gains. Eliminating statement 1 immediately yields option B.

Reviewed by Avinash Sir & Acme AI Research Team

Practice Full-Length & Sectional Prelims Mocks on this Interface

50 simulated tests in the APT Prelims Test Series (₹1,493) or 1-on-1 Mentorship with Avinash Sir.

1-on-1 MentorshipOpen Test Platform

Question Specifications & Syllabus Mapping

Examination & YearUPSC Civil Services Preliminary Examination 2012 (Q216)
Paper & Marking SchemeGS Paper I • 2 Marks (-0.66 Negative for incorrect response)
Syllabus Subject & TopicIndian Economy → Fiscal Policy & Public Finance
Official Answer KeyOption (B) — 2 and 3 only

Related & Repeated Prelims PYQs (4)

Questions from other UPSC Prelims years testing the same or closely linked concept.

View Cluster in 3D Graph
2013 • Q13182% Match

A rise in the general level of prices may be caused by: 1. An increase in the money supply 2. A decrease in the aggregate level of output 3. An increase in the

Indian Economy • Indian Economic Planning & GrowthSolve
2016 • Q23481% Match

Which of the following is/are included in the capital budget of the Government of India? 1. Expenditure on acquisition of assets like roads, buildings, machiner

Indian Economy • Indian Economic Planning & GrowthSolve
2022 • Q30381% Match

With reference to the Indian economy, what are the advantages of “Inflation-Indexed Bonds (IIBs)”? 1. The government can reduce the coupon rates on its borrowin

Indian Economy • Indian Economic Planning & GrowthSolve
2012 • Q13280% Match

Which of the following measures would result in an increase in the money supply in the economy? 1. Purchase of government securities from the public by the Cent

Indian Economy • Indian Economic Planning & GrowthSolve

More PYQs from Indian Economy (Fiscal Policy & Public Finance)

Master the Indian Economy syllabus cluster by practicing these related previous year questions.

View All Indian Economy PYQs
2022 • Q212Fiscal Policy & Public Finance

Which one of the following situations best reflects “Indirect Transfers” often talked about in media recently with reference to India?

Indian EconomyPractice
2018 • Q214Fiscal Policy & Public Finance

Consider the following items: 1. Cereal grains hulled 2. Chicken eggs cooked 3. Fish processed and canned 4. Newspapers containing advertising materia

Indian EconomyPractice
2017 • Q215Fiscal Policy & Public Finance

What is/are the most likely advantages of implementing ‘Goods and Services Tax (GST)’? 1. It will replace multiple taxes collected by multiple authori

Indian EconomyPractice
2011 • Q217Fiscal Policy & Public Finance

Which one of the following is not a feature of “Value Added Tax”? (a) It is a multi-point destination-based system of taxation (b) It is a tax levied

Indian EconomyPractice
2010 • Q218Fiscal Policy & Public Finance

In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly declined in the last five years?

Indian EconomyPractice
2009 • Q219Fiscal Policy & Public Finance

Consider the following: 1. Fringe Benefit Tax 2. Interest Tax 3. Securities Transaction Tax Which of the above is/are Direct Tax/Taxes?

Indian EconomyPractice
2004 • Q220Fiscal Policy & Public Finance

Which of the following is not a recommendation of the task force on direct taxes under the chairm-anship of Dr. Vijay L. Kelkar in the year 2002?

Indian EconomyPractice
2003 • Q221Fiscal Policy & Public Finance

Consider the following statements: In India, stamp duties on financial transactions are: 1. Levied and collected by the State Government 2. Appropriat

Indian EconomyPractice

Frequently Asked Questions — UPSC Prelims 2012 Q216

What is the official answer for UPSC Prelims 2012 GS Paper I Question 216 (Indian Economy)?

The official UPSC answer key for this 2012 Indian Economy (Fiscal Policy & Public Finance) question is Option (B): "2 and 3 only". Correct attempts carry 2 Marks with -0.66 Negative penalty for wrong answers.

Which UPSC Prelims syllabus topic does this 2012 question belong to?

This question belongs to GS Paper I under the subject "Indian Economy" and micro-topic "Fiscal Policy & Public Finance". You can explore all repeated questions from Fiscal Policy & Public Finance in Acme AI's 3D Prelims PYQ Realm or practice 50 full-length and sectional tests in the APT Prelims Test Series.

How can I solve this Fiscal Policy & Public Finance UPSC Prelims question using option elimination?

Regular sales of commercial products produce operational business revenue, not capital gains. Eliminating statement 1 immediately yields option B.

Beyond Previous Year Questions

Structured Prelims Practice & Mentorship

Pair previous year question analysis with full-length simulated mock tests and 1-on-1 faculty guidance.

APT 2027 • 50 Prelims Tests17% OFF

Acme Prelims Test Series (APT)

Built to eliminate 1/3rd negative marking losses and 50–50 option traps through structured simulation and NCERT-backed keys.

  • 50 High-Yield Tests: Subject Sectionals, Current Affairs, CSAT Paper II & Full-Length Simulators
  • 1/3rd Penalty & Trap Analytics: Identify whether marks are lost to over-attempting or conceptual gaps
  • Option-by-Option NCERT Keys: Detailed distractor analysis and elimination logic for every question
  • Custom PDF-to-Mock Generator: Convert your revision notes or current affairs PDFs into practice tests
Complete 50-Test Package
₹1,493₹1,799• Valid till Prelims 2027
Explore APT Test SeriesTry Free Mock
1-on-1 Personal MentorshipCapped at 10 Seats

1-on-1 UPSC Mentorship with Avinash Sir

Weekly 1-on-1 strategy reviews, daily study accountability, and personalized MCQ attempt audits with an experienced UPSC mentor.

  • Weekly 1-on-1 Sessions: Direct mentorship with Avinash Sir (Former Plutus IAS Mentor, UPSC & UPPCS Mains Written)
  • APT 50-Test Series Included: Full Prelims GS1 & CSAT test series bundled at no additional cost
  • Mock Attempt & Elimination Audit: Question-by-question review to calibrate your risk and attempt accuracy
  • Prelims & Integrated Tracks: Available as dedicated Prelims mentorship or end-to-end Prelims + Mains guidance
Prelims & Integrated Tracks
17% OFF• Includes APT 50-Test Series
Explore 1-on-1 MentorshipCompare Tracks
Previous QuestionConsider the following statements: If there were no phenomenon of capillarity 1. It would be difficult to use a kerosene lamp. 2. One would not be able to use a straw to consume a soft drink. 3. The blotting paper would fail to function. 4. The big trees that we see around would not have grown on the Earth. Which of the statements given above are correct?
Next QuestionWhich of the following are included in the original jurisdiction of the Supreme Court? 1. A dispute between the Government of India and one or more States. 2. A dispute regarding elections to either House of the Parliament or that of Legislature of a State. 3. A dispute between the Government of India and a Union Territory. 4. A dispute between two or more States. Select the correct answer using the codes given below: