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NDA 2016 GAT · General Knowledge · Indian Economy · hard

2. Excise duty is a direct tax.

Single correct option

Consider the following statements:
1. Income tax is a direct tax.
2. Excise duty is a direct tax.
Which of the statements given above is/are correct?
  1. A. 1 only
  2. B. 2 only
  3. C. Both 1 and 2
  4. D. Neither 1 nor 2
Show answer and solution

Answer: (A) 1 only

A direct tax is levied on a person's income or wealth and cannot be passed on, as with income tax. Excise duty is charged on manufacture of goods and the burden can be shifted to consumers, so it is an indirect tax. Statement 1 alone is correct.
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Original question written in the NDA 2016 GAT pattern and checked twice for the correct answer. Not an official question paper. How we write and check questions · Corrections policy · Report a mistake