Question

Which of the following belong to the category of direct tax:

• A. Goods and Services Tax
• B. Excise duty and customs duty
• C. Income tax and gift tax
• D. All of the above

Hint:

Direct tax = taxpayer pays directly (no shifting). Indirect tax = burden shifted to consumer.

Answer 1

The Correct Option is C

Step 1: Understanding direct vs indirect tax.
- Direct tax: Paid directly by the taxpayer to the government, e.g., Income Tax, Gift Tax, Wealth Tax.
- Indirect tax: Collected through intermediaries, e.g., GST, Excise, Customs.

Step 2: Analysis of options.
- (A) GST: Indirect tax.
- (B) Excise and Customs: Indirect taxes.
- (C) Income tax and Gift tax: Correct, both are direct taxes.
- (D) All of the above: Wrong, because only (C) fits the category.

Step 3: Conclusion.
Only Income Tax and Gift Tax are direct taxes among the given options.