Question

Income Tax is an example of ____________.

• A. direct tax
• B. indirect tax
• C. Both (a) and (b)
• D. Neither (a) nor (b)

Answer 1

Answer: (A)

direct tax

$\Rightarrow$ A direct tax is one that the taxpayer pays directly to the government. These taxes cannot be shifted to any other person or group.

$\Rightarrow$ 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.

$\therefore$ Income Tax is an example of direct tax.