Question

Find the tax which is Direct Tax among the following

• A. Personal income tax
• B. Excise Duty
• C. Sales Tax
• D. Service Tax

Answer 1

Answer: (A)

Personal income tax

A direct tax is paid by a person upon whom it is legally imposed; its effect is borne by the tax payer, for example, income tax. Income tax is paid by an individual, a Hindu undivided family, a company, a firm, and local bodies etc. on their incomes. The effect of this tax is borne by these tax payers themselves, the tax payer cannot shift the incidence of the tax upon somebody else. In other words a direct tax is demanded from the very person who it is intended or devised for.