Giving reasons, categorise the following into direct of tax and indirect tax:
- Corporation tax.
- Sales tax.
- Wealth tax.
- Service tax.
Download our app for free and get started
- Corporation tax is a direct tax paid by the companies on their profit earned. Here the liability to pay and the burden falls on the same entity i.e. the given Company which earns the profit.
- Sales tax is an indirect tax- The liability to pay it is on the seller but he passes on the burden to the buyer of the product. Thus it is an indirect tax because the liability to pay and the burden falls on different entities.
- Wealth tax is a direct tax, as it is directly levied on the wealth of a person. Thus the liability to pay and the burden of the tax falls on the same person, who thereby pays it.
- Service Tax is an indirect tax, It is a tax levied on sale of certain services. It is indirect tax because the liability to pay and the incidence (burden) of this tax falls on different entities.
Download our appand get started for free
Experience the future of education. Simply download our apps or reach out to us for more information. Let's shape the future of learning together!No signup needed.*
Similar Questions
- 1View SolutionDefine capital receipts of government. Describe briefly the groups in which these are classified.
- 2View SolutionWhat are implications of fiscal deficit?
- 3View SolutionDistinguish between revenue expenditure and capital expenditure.
- 4View SolutionHow are capital receipts different from revenue receipts? Discuss briefly.
- 5View SolutionWhat is fiscal deficit? What are its implications?
- 6View SolutionWhat are non-debt creating capital receipts? Give two examples of such receipts.
- 7View SolutionWe suppose that C = 70 + 0.70Y D, I = 90, G = 100, T = 0.10Y.
- Find the equilibrium income.
- What are tax revenues at equilibrium income?
- 8View SolutionSuppose marginal propensity to consume is 0.75 and there is a 20 percent proportional income tax. Find the change in equilibrium income for the following (a) Government purchases increase by 20, (b) Transfers decrease by 20.
- 9View SolutionWhich of the following is/ are included in the capital budget of the government? Give reasons for your answer.
- Borrowings from the public.
- Loans received from foreign government.
- Expenditure on acquisition of assets like roads, buildings, machinery etc.
- Loans and advances granted to the States Government.
- 10View SolutionRead the passage given below and answer the following questions from 1 to 4.
In the Government of India's budget for the year 2013 - 14, the Finance Minister proposed to raise the Goods and Services Tax (GST) on cigarettes. He also proposed to increase income tax on individual earning more than rupee one crore per annum.- Identify the taxes proposed to be increased by the Budget 2013 - 14. The taxes proposed are:
- Goods and Services tax on cigarettes.
- Income tax on individuals earning Rs. 1 crore or above.
- Both [a] and [b]
- None of the above
- What was the objective(s) behind the proposals put forth in the Budget 2013 - 14?
- Revenue generation
- Social welfare
- Both [a] and [b]
- None of these
- What welfare objective the government wishes to achieve by increasing GST on cigarettes?
- This will discourage their cigarettes
- This will encourage their cigarettes
- Both [a] and [b]
- None of the above
- What would be the effect of increase in direct tax on the rich?
- It will reduce the gap between rich and the poor, thereby reducing inequalities in income
- It will increase the gap between rich and the poor
- Both [a] and [b]
- None of the above