Question

Budget 2024 outlined the sources of government revenue which comprised 19% from Income Tax, 18% from Goods and Service Tax and the remaining from borrowings.

Categorise the two types of taxes mentioned above. State any one difference between them.

Answer 1

Categorisation of Taxes:

1. Income Tax – Direct Tax
2. Goods and Services Tax (GST) – Indirect Tax

Direct Tax	Indirect Tax
The tax burden cannot be shifted; it is paid directly by the individual or entity on whom it is levied.	The burden of the tax can be shifted from one person to another, usually from producers to consumers.
Example: Income Tax	Example: GST