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Question
Which of the following is an advantage of direct taxes?
Options
Convenient to pay
Wide coverage
Levied according to the taxable capacity
No Evasion
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Solution
Levied according to the taxable capacity
Explanation:
- One of the key advantages of direct taxes is that they are levied according to the taxable capacity of the taxpayer.
- This means that individuals or entities are taxed based on their ability to pay, ensuring that those with higher incomes or wealth contribute more to the public revenue than those with lower incomes.
RELATED QUESTIONS
Under ______ the rate of tax increases with rise in tax payer's income.
Fiscal policy means public expenditure and tax policy of the government.
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 |
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Give two examples of direct taxes.
Citing reasons state the superiority of Progressive tax over regressive tax.
Citing reasons state the superiority of Fostering civic consciousness by direct tax over the same by indirect tax.
