Canons of Taxation: Equity, Certainty, Economy

Q. Explain the difference between direct and indirect taxes.

Q. The canon of certainty states that a tax-paying citizen should know the answer to certain questions. Identify those questions.

1. How much tax is to be paid?
2. How does the government use the tax?
3. How do you pay the taxes?
4. When should the taxes be paid?

Q. Identify the canon followed in the progressive system of taxation.

1. Canon of certainty
2. Canon of convenience
3. Canon of equity
4. Canon of economy

Q. Every year, the government announces the tax rates in its union budget. Which canon of taxation is applied in this situation?

1. Canon of equity
2. Canon of certainty
3. Canon of economy
4. Canon of productivity

Q. Certain taxes are deducted when we receive income, and certain taxes are paid at the end of the year by filing a form known as the income tax return, thereby reducing the cost of paying and collecting taxes. Identify the canon that is followed in this situation.

1. Canon of equity
2. Canon of equality
3. Canon of economy
4. Canon of convenience

Q. The canon of answers the following questions for a taxpayer:
How much tax is to be paid?
How can the taxes be paid?
When are the taxes to be paid?

1. economy
2. convenience
3. equity
4. certainty

Q. Match the canons with their purpose.

1. Canon of equity
2. Canon of certainty
3. Canon of elasticity
4. Rich pays more
5. Flexible taxes
6. Taxpayer's knowledge