Question

Which among the following is a demerit of direct tax?

• A. Certainty
• B. Equity
• C. Arbitrary
• D. Elasticity and productivity

Hint:

Understanding the rationale behind direct tax structures can help mitigate percep tions of arbitrariness.

Answer 1

The Correct Option is C

Direct taxes, while equitable and certain, can sometimes be perceived as arbitrary due to the subjective nature of tax slabs and rates. For example, taxpayers in higher income brackets may feel that the progressive nature of tax rates disproportionately burdens them, leading to perceived inequity and discouragement