Question

Read the following statements – Assertion (A) and Reason (R). Choose the correct alternative from the options given below:
Assertion (A): Direct taxes are imposed on income/profits of individuals/companies.
Reason (R): The burden of payment of direct taxes cannot be shifted to any other entity.

• A. Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
• B. Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
• C. Assertion (A) is true, but Reason (R) is false.
• D. Assertion (A) is false, but Reason (R) is true.

Hint:

Remember, direct taxes like income tax or corporate tax are non-transferable. The taxpayer bears the full burden of such taxes.

Answer 1

The Correct Option is A

Assertion (A) is true because direct taxes are taxes levied on individuals and companies based on their income and profits, such as income tax and corporate tax.
Reason (R) is also true because direct taxes, by nature, are paid directly by the entity on which they are imposed, and this burden cannot be shifted to others. For instance, an individual cannot pass on the income tax liability to another person. Therefore, Reason (R) correctly explains Assertion (A).