Question

Income Tax is a tax on ______________.

• A. income of an individual or an entity
• B. wealth or assets owned by an individual or an entity
• C. specified gifts and donations
• D. total property passing to the heirs on the death of a person.

Answer 1

Answer: (A)

income of an individual or an entity

$\Rightarrow$ Income tax is a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction. By law, taxpayers must file an income tax return annually to determine their tax obligations.

$\Rightarrow$ Income taxes are a source of revenue for governments. They are used to fund public services, pay government obligations, and provide goods for citizens.

$\therefore$ Income Tax is a tax on income of an individual or an entity.