Question
Classify the following into direct and indirect tax. Give reasons.
(i) Wealth tax, (ii) Entertainment tax, and (iii) Income tax.
Solution
(i) Wealth tax is a direct tax as liability of its payment and burden fall on the same person.
(ii) Entertainment tax is an indirect tax because its burden can be shifted.
(iii) Income tax is a direct tax because its liability to pay and its burden fall on the same person.
