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Types of Taxes: Direct and Indirect

Description: This quiz is designed to test your understanding of the various types of taxes, with a focus on direct and indirect taxes. Direct taxes are those that are levied directly on individuals or businesses, while indirect taxes are those that are levied on goods and services.
Number of Questions: 15
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Tags: taxes direct taxes indirect taxes indian economics
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Which of the following is an example of a direct tax?

  1. Sales Tax

  2. Income Tax

  3. Value Added Tax

  4. Excise Duty


Correct Option: B
Explanation:

Income Tax is a direct tax because it is levied directly on the income of individuals and businesses.

Which of the following is an example of an indirect tax?

  1. Property Tax

  2. Wealth Tax

  3. Service Tax

  4. Capital Gains Tax


Correct Option: C
Explanation:

Service Tax is an indirect tax because it is levied on the provision of services.

Direct taxes are generally considered to be more _____ than indirect taxes.

  1. Progressive

  2. Regressive

  3. Proportional

  4. Neutral


Correct Option: A
Explanation:

Direct taxes are generally considered to be more progressive than indirect taxes because they are levied at a higher rate on higher incomes.

Indirect taxes are generally considered to be more _____ than direct taxes.

  1. Progressive

  2. Regressive

  3. Proportional

  4. Neutral


Correct Option: B
Explanation:

Indirect taxes are generally considered to be more regressive than direct taxes because they are levied at a higher rate on lower incomes.

Which of the following is a characteristic of a good tax system?

  1. Equity

  2. Efficiency

  3. Simplicity

  4. All of the above


Correct Option: D
Explanation:

A good tax system should be equitable, efficient, and simple.

Which of the following is a type of direct tax that is levied on the value of property?

  1. Income Tax

  2. Property Tax

  3. Sales Tax

  4. Excise Duty


Correct Option: B
Explanation:

Property Tax is a type of direct tax that is levied on the value of property.

Which of the following is a type of indirect tax that is levied on the sale of goods and services?

  1. Income Tax

  2. Property Tax

  3. Sales Tax

  4. Excise Duty


Correct Option: C
Explanation:

Sales Tax is a type of indirect tax that is levied on the sale of goods and services.

Which of the following is a type of direct tax that is levied on the income of individuals and businesses?

  1. Income Tax

  2. Property Tax

  3. Sales Tax

  4. Excise Duty


Correct Option: A
Explanation:

Income Tax is a type of direct tax that is levied on the income of individuals and businesses.

Which of the following is a type of indirect tax that is levied on the production of goods?

  1. Income Tax

  2. Property Tax

  3. Sales Tax

  4. Excise Duty


Correct Option: D
Explanation:

Excise Duty is a type of indirect tax that is levied on the production of goods.

Which of the following is a type of indirect tax that is levied on the import of goods?

  1. Income Tax

  2. Property Tax

  3. Sales Tax

  4. Customs Duty


Correct Option: D
Explanation:

Customs Duty is a type of indirect tax that is levied on the import of goods.

Which of the following is a type of direct tax that is levied on the wealth of individuals?

  1. Income Tax

  2. Property Tax

  3. Wealth Tax

  4. Excise Duty


Correct Option: C
Explanation:

Wealth Tax is a type of direct tax that is levied on the wealth of individuals.

Which of the following is a type of indirect tax that is levied on the transfer of property?

  1. Income Tax

  2. Property Tax

  3. Sales Tax

  4. Stamp Duty


Correct Option: D
Explanation:

Stamp Duty is a type of indirect tax that is levied on the transfer of property.

Which of the following is a type of direct tax that is levied on the profits of businesses?

  1. Income Tax

  2. Property Tax

  3. Sales Tax

  4. Corporate Tax


Correct Option: D
Explanation:

Corporate Tax is a type of direct tax that is levied on the profits of businesses.

Which of the following is a type of indirect tax that is levied on the use of goods and services?

  1. Income Tax

  2. Property Tax

  3. Sales Tax

  4. Excise Duty


Correct Option: D
Explanation:

Excise Duty is a type of indirect tax that is levied on the use of goods and services.

Which of the following is a type of direct tax that is levied on the capital gains of individuals and businesses?

  1. Income Tax

  2. Property Tax

  3. Sales Tax

  4. Capital Gains Tax


Correct Option: D
Explanation:

Capital Gains Tax is a type of direct tax that is levied on the capital gains of individuals and businesses.

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