What is the effective incidence of tax?

A person or entity who actually bears the burden of tax is known as the effective incidence of tax. A person or entity which is obliged to pay the tax is known as a formal incidence of tax. You can read about the Taxation in India – Direct taxes & Indirect Taxes, Features of Taxation System in the given link.

Incidence of tax means an entity or person who bears the burden of taxation. 

Further readings:

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

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