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Questions
Citing reason state the advantage of a direct tax over an indirect tax.
Mention three merits of direct taxes over indirect taxes.
Citing reasons state the superiority of A direct tax over an indirect tax.
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Solution
- Direct taxes cost less to collect than indirect taxes.
- Direct taxes are often progressive, which means they can more effectively reduce income and wealth inequities. Whereas, indirect taxes have a regressive pattern.
- Like indirect taxes, direct taxes are unlikely to cause product price increases.
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RELATED QUESTIONS
Under ______ the rate of tax increases with rise in tax payer's income.
Match the following and select the correct option:
| Column A | Column B | ||
| (i) | Taxes imposed on income and wealth | A. | Regressive |
| (ii) | Taxes imposed on goods and services | B. | Progressive |
| (iii) | A tax system where the rate of tax decreases with increase income | C. | Direct taxes |
| (iv) | A tax system where the rate of tax increases as income increase | D. | Indirect taxes |
Identify the tax which is most likely to faster civic conciousness.
Read the following statements carefully and choose the correct alternative:
Assertion (A): Income tax is a direct tax.
Reason (R): GST is an indirect tax.
What are progressive taxes.
State two drawbacks of direct taxes.
How does the state fulfil the following socio-economic objective?
Promoting industrial growth.
Define a tax.
State the four merits of a direct tax.
Explain the significance of taxes.
