Question

Which of the following is an indirect tax?

• A. Wealth tax
• B. Excise tax
• C. Income tax
• D. None of these

Hint:

Classify taxes to understand who bears the tax burden directly or indirectly.
Excise tax is an indirect tax; income tax is direct.

Answer 1

The Correct Option is B

An indirect tax is one that is collected by an intermediary (such as a retailer) from the consumer. Excise tax is imposed on the manufacture or sale of goods and is included in the product price.
Step 1: Direct vs indirect taxes
- Direct taxes (Income tax, Wealth tax) are paid directly to the government by the individual.
- Indirect taxes (Excise tax, VAT, GST) are included in the price and paid indirectly.
Step 2: Explanation
Excise tax increases the cost of goods, and consumers pay it when buying products.
Thus, option (B) is correct.