How do you calculate tax incidence?

The tax incidence on the sellers is calculated by finding the difference between the initial equilibrium price and the price that the sellers receive after introduction of tax. Tax incidence on consumers is calculated by finding the difference between price paid and the initial equilibrium price. You can read about the Taxation in India – Direct taxes & Indirect Taxes, Features of Taxation System in the given link.

Further readings:

  1. Economics Notes For UPSC Examination
  2. UPSC Mains General Studies Paper-III Strategy, Syllabus & Structure

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