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Question
State the difference between income tax and expenditure tax.
Distinguish Between
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Solution
| S. No. | Aspect | Income Tax | Expenditure Tax |
| 1. | Tax Base | Based on the income of the individual or corporation. | Based on what an individual or entity spends. |
| 2. | What is Taxed | Earnings include salaries, corporate profits, and investment income. | Amount spent on consumption or specific expenses. |
| 3. | Purpose | Income tax encourages saving and investing. | Encourages savings by taxing spending, not income. |
| 4. | Common Examples | Individual income tax, corporate tax. | Some countries have expenditure taxes like luxury tax. |
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Role of State in Economic Development
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RELATED QUESTIONS
The government imposes tax ______.
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 |
Which of the statement is true for income tax?
Classify the following type of tax into direct and indirect taxes:
Sales tax
What is meant by regressive taxation?
Explain how indirect taxes can be inflationary.
Explain clearly tour ways by which the state can promote economic growth and development.
Discuss four fiscal policy objectives with reference to India.
Explain the state's role in achieving the objective of social justice in less developed countries.
