Question 17 of 21
Q.Distinguish between Direct Taxes and Indirect Taxes. (any 3)
Puducherry TnboardTamil Nadu HSC First Year (DGE) Commerce Board 2024Subjective· 3mImportance★★★★★
81% · 17/21 Questions
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Start your 14-day free trial to unlock the full solution →A direct tax falls on a person's income/wealth and its burden cannot be shifted; an indirect tax falls on goods and services and its burden can be passed on to the consumer — e.g., income tax vs GST.
In the Tamil Nadu HSC Commerce syllabus, taxes are classified into direct and indirect taxes based on whether the impact and incidence fall on the same person. The main distinctions (any three required) are:
| Basis | Direct Tax | Indirect Tax |
|---|---|---|
| Levy | Levied on the income or wealth of a person | Levied on goods and services |
| Shifting of burden | Burden cannot be shifted; impact and incidence fall on the same person | Burden can be shifted to the final consumer |
| Examples | Income tax, corporate tax, wealth tax | GST, customs duty, excise |
| Nature | Generally progressive (higher income, higher rate) | Generally regressive (same rate for rich and poor) |
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