Question

What are the types of tax? Give examples.

Answer 1

Taxes are of various types and are generally classified into two main categories:

1. Direct Tax: A direct tax is a tax that an individual or organisation directly pays to the government. It is based on income, wealth, or property and cannot be transferred to others.
   For Example: Income tax, Wealth Tax, Corporate Tax, etc.
2. Indirect Tax: An indirect tax is a tax that is collected by an intermediary (like a shopkeeper) from the consumer and then paid to the government. It is included in the price of goods or services, so it can be passed on to others.
   For Example: Goods and Services Tax, Value Added Tax, etc.