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Giving reasons classify the following into direct tax and indirect tax: (i) Wealth tax, (ii) Entertainment tax and (iii) Sales tax |
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Answer» Solution :(i) WEALTH tax is a direct tax because its LIABILITY to pay tax and burden of tax falls on the same person. (ii) Entertainment tax (like the one included in CINEMA ticket) is an indirect tax because the liability to deposit tax LIES with the owners of cinema-house but the burden falls on the viewers. (III) Sales tax is an indirect tax because the liability lies with the seller but the burden falls on the buyers. |
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