Question

Statement I: In India, the direct tax rate is uniform for all citizens.

Statement II: In India, a higher indirect tax is charged from wealthy and lower indirect tax from the poor.

• A. Both statements I and II are true.
• B. Statement I is true, but statment II is false.
• C. Statement I is false, but statment II is true.
• D. Both statements I and II are false.

Answer 1

The correct option is D Both statements I and II are false.

In India, direct tax increases with an increase in income so that the poor are not burdened. However, all the citizens pay the same amount of indirect tax, that is, GST, on the products they purchase. The difference is in the rate of GST. Luxury goods have higher GST rates than essential goods. This means that if a rich person buys essential goods, he will pay the same GST as paid by the poor on the same. So statement II is false as the same GST rates are charged from a wealthy person and a poor person.