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Questions
Explain the term Incidence of a tax.
What is meant by incidence of taxation?
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Solution
Incidence means the final resting place of a tax. The incidence is on the person who ultimately bears the money burden of the tax.
RELATED QUESTIONS
The government imposes tax ______.
Which of the following is an advantage of direct taxes?
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 |
The tax whose rate remains unchanged irrespective of the income of the taxpayer is called as ______.
Which of the statement is true for income tax?
Define direct tax
Differentiate between direct and indirect taxes.
An indirect tax can be made progressive by imposing higher tax rates on luxuries. Justify the above statement.
Three demerits of an Indirect tax.
Differentiate between progressive and regressive taxes giving an example for each.
