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Question
Which of the following advantageous features is common in direct tax and indirect tax?
Which of the following advantageous features is common in direct tax and indirect tax?
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Solution
The correct option is C Elasticity
Direct taxes are elastic in nature as the government revenue can be increased by raising the tax rates in times of crisis. Indirect taxes can be made elastic and productive, particularly when they are imposed on essential goods such as edible oils whose demand is inelastic.
Elasticity
Direct taxes are elastic in nature as the government revenue can be increased by raising the tax rates in times of crisis. Indirect taxes can be made elastic and productive, particularly when they are imposed on essential goods such as edible oils whose demand is inelastic.
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