What is a basis of classification of taxes into direct tax and indirec

1.	What is a basis of classification of taxes into direct tax and indirect tax? Explain the value behind its imposition.
Answer» Basis of classification of taxes into direct and indirect taxes : whether the burden of the tax can be shifted to others or not. If it cannot be shifted it is a direct tax. If burden of the tax can be shifted it is a indirect tax. Direct tax is a tax whose impact (liability to pay) an incidence (actual burden) lie on the same person for e.g. Personal income, tax, corporation tax etc. Value : Reducing the inequality of income Indirect tax is a tax whose impact(liability to pay) and incidence (actual burden) lie on the different person. For e.g. Sales tax ,excise tax etc. Value : To make some lines of production more or less attractive for producers.

What is a basis of classification of taxes into direct tax and indirect tax? Explain the value behind its imposition.

Answer»

Basis of classification of taxes into direct and indirect taxes : whether the burden of the tax can be shifted to others or not. If it cannot be shifted it is a direct tax.

If burden of the tax can be shifted it is a indirect tax.

Direct tax is a tax whose impact (liability to pay) an incidence (actual burden) lie on the same person for e.g. Personal income, tax, corporation tax etc.

Value : Reducing the inequality of income

Indirect tax is a tax whose impact(liability to pay) and incidence (actual burden) lie on the different person. For e.g. Sales tax ,excise tax etc. Value : To make some lines of production more or less attractive for producers.

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What is a basis of classification of taxes into direct tax and indirect tax? Explain the value behind its imposition.

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