Direct taxes are those where the incidence and impact fall on the same person or entity. Examples include Income tax, Wealth tax (abolished), Corporation tax, and Gift tax (abolished). Indirect taxes are those where the incidence falls on one person (e.g., seller or service provider) but the impact is passed on to another (the consumer) in the form of higher prices. Examples include Sales tax, Excise duty, Customs duty, Service tax, Value Added Tax (VAT), Goods and Services Tax (GST), and Entertainment tax. Among the options, Income tax, Wealth tax, and Gift tax are/were direct taxes, while Entertainment tax is an indirect tax (now subsumed under GST in most cases).
Which of the following is not a direct tax in India?
Asked in WBCS Main Paper 5 2023 · Topic: Fiscal Policy & Revenue (Taxation System in India: Direct, Indirect taxes, and Tax Reforms (including GST))
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