Question:
Which of the following is an example of direct tax?
Which of the following is an example of direct tax?
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Ask: “Can the payer pass it on by charging a higher price?” If yes, it’s usually an \textbf{indirect} tax.
Updated On: Sep 1, 2025
- Sales tax
- Customs duty
- Individual income tax
- Excise tax
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The Correct Option is C
Solution and Explanation
Step 1: Definition. A direct tax is borne and paid by the same person; the liability cannot be shifted (e.g., income tax, wealth tax). Indirect taxes can be shifted to others through prices (e.g., sales/GST, customs, excise).
Step 2: Evaluate options. Sales tax, customs duty, and excise are indirect; individual income tax is direct.
Final Answer: (C) Individual income tax
Step 2: Evaluate options. Sales tax, customs duty, and excise are indirect; individual income tax is direct.
Final Answer: (C) Individual income tax
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