Single correct option
Consider the following statements about taxes in India:
1. Income tax is a direct tax.
2. Goods and Services Tax (GST) is an indirect tax.
Which of the statements given above is/are correct?
1. Income tax is a direct tax.
2. Goods and Services Tax (GST) is an indirect tax.
Which of the statements given above is/are correct?
- A. 1 only
- B. 2 only
- C. Both 1 and 2
- D. Neither 1 nor 2
Show answer and solution
Answer: (C) Both 1 and 2
Both statements are correct. A direct tax such as income tax is paid by the person on whom it is levied, and its burden cannot be shifted. GST, introduced from 1 July 2017, is levied on supply of goods and services and the burden can be passed on to consumers, which makes it an indirect tax.
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