Define a Tax. Explain Briefly Two Merits and Two Demerits of Direct Taxes

By Mandeep Kumar|Updated : September 5th, 2022

Tax is defined as the obligatory contribution by entities or individuals to the governments in almost every country of the world. The different types of taxes are Direct Tax and Indirect Tax. Examples of Direct Taxes are Income Tax, Corporation Tax, Dividend Distribution Tax, Minimum Alternate Tax, and Security Transaction Tax. Examples of Indirect Tax are Service Tax, Sales Tax, Value Added Tax, Excise Duty, Customs Duty, etc.

Two Merits and Two Demerits of Direct Taxes

The tax paid by a person or organization directly to the entity that imposed it is called direct tax. Following are the two merits and two demerits of direct taxes:

Two Merits of Direct Taxes

Two Demerits of Direct Taxes

They are elastic and productive.

There are chances of tax evasion.

They have an educative value because they create a civic sense among the taxpayers.

They are inconvenient on the part of the taxpayers.

Related Questions:-

Comments

write a comment

FAQs

  • A compulsory charge that consumers have to pay to the government so that it can provide public services is called a tax.

  • A tax that an organization or person pays directly to the government is called direct tax.

Featured Articles

Follow us for latest updates