Question

Which of the following is not indirect tax?

• A. Sales tax
• B. Excise tax
• C. Custom tax
• D. Gift tax

Answer 1

Answer: (D)

Gift tax

$\Rightarrow$ Indirect taxes are those taxes that can be shifted from one individual to another. It is not levied directly on the income of the taxpayer, but is levied on the expenses incurred by them.

$\Rightarrow$ A direct tax is one that cannot be shifted by the taxpayer to someone else. Gift tax is a direct tax.

Sales Tax :

Sales tax is an additional amount of money you pay based on a percentage of the selling price of goods and services that are purchased.

Excise Tax :

Excise Tax is a form of tax imposed on goods for their production, licensing and sale.

Excise Tax is a form of indirect tax which is generally collected by a retailer or an intermediary from its consumers and then paid to the government.

Customs Tax :

Customs Tax is a form of indirect tax which is imposed at the time of both import and export of goods and services.

Gift Tax :

A gift tax is a federal tax applied to an individual giving anything of value to another person. For something to be considered a gift, the receiving party cannot pay the giver full value for the gift, though they may pay an amount less than its full value.

Hence, gift tax is not an indirect tax.