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Questions
Explain the term Impact of a tax.
What is meant by impact of taxation?
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Solution
The term impact is used to express the immediate or original imposition of tax. The impact of tax is on the person on whom it is imposed first i.e., the person who is liable to pay tax to the government.
RELATED QUESTIONS
______ are those taxes which are paid by the same person on whom they have been imposed.
Instrument of monetary policy is:
Observe the relationship of the first pair of words and complete the second pair:
Tax paid by person on whose it is imposed : Direct tax.
A tax is paid by some person and the final burden is born by some other person : ______.
The state can promote economic development by ______.
The following table indicates:
| Tax Base in ₹ | Rate of tax in % |
| 10,000 | 8 |
| 20,000 | 8 |
| 30,000 | 8 |
| 40,000 | 8 |
Define direct tax
An indirect tax can be made progressive by imposing higher tax rates on luxuries. Justify the above statement.
State two differences between income tax and commodity tax.
Explain the following with examples:
Progressive tax
Explain briefly two merits of indirect tax.
