Question

Which of the following contributes to the highest share of revenue earned by the Government of India?

• A. Income Tax
• B. Excise Duty
• C. Value Added Tax
• D. Corporate Tax

Answer 1

The Correct Option is D

To determine which element contributes the most to the Government of India's revenue, we should analyze each option provided:

• Income Tax: A tax imposed on individuals or entities based on their earnings. It is a significant source of revenue but not the highest.
• Excise Duty: A tax levied on the manufacture of goods within a country. Its contribution is substantial but has been relatively reduced over the years due to the Goods and Services Tax (GST) reform.
• Value Added Tax (VAT): A type of indirect tax levied at each stage of production; however, in India, it has been largely replaced by GST.
• Corporate Tax: A tax on the profits of corporations. Historically, this has been the largest source of revenue for the Government of India as it directly targets business earnings.

Upon evaluation, Corporate Tax consistently contributes the highest revenue to the government due to the taxation of corporate profits. Therefore, the correct answer is:

Corporate Tax