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Questions
Explain the term Incidence of a tax.
What is meant by incidence of taxation?
What is the meaning of ‘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.
Notes
Students should refer to the answer according to their question.
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| Column I | Column II | ||
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| B. | Indirect tax | (ii) | Tax rate remains constant |
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| D. | Progressive tax | (iv) | Impact and incidence lie on the same person |
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