What is the difference between direct tax and indirect tax? Explain the role of government budget in influencing allocation of resources.
CBSE OUTSIDE DELHI - SET 1 2016
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Direct tax is bthe tax whose liabilty to and incidence lies on the same person on whom it is levied. Indirect tax is the tax whose liability to pay and incidece lie on the different person.
The govt. can influence allocation of resources for production of different goods and services through its budget. When the govt. wants that more resources be used in the production of some goods, it provides incentives to the producers in the form of tax concessions and subsidies.
The govt. can influence allocation of resources for production of different goods and services through its budget. When the govt. wants that more resources be used in the production of some goods, it provides incentives to the producers in the form of tax concessions and subsidies.
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