Question
Define tax. Give three differences between direct taxes and Indirect taxes.
| Direct Taxes | Indirect Taxes |
| 1. Direct tax is imposed income and wealth of people | 1. Indirect tax is imposed on goods and services. |
| 2. Direct tax is paid by the person on whom it is imposed. Hence, shifting of burden is not possible. | 2. Indirect tax is paid by the person other than on the whom it is imposed. |
| 3. Direct tax is generally progressive i.e. rate of tax increases with increase in income. | 3. Indirect tax is generally regressive i.e., rate of tax decreases with increase in income. |
| 4. Direct tax reduces inequality of income. | 4. Its burden falls more on the poor. |
| 5. Income tax is an example of direct tax. | 5. GST is an example of indirect tax. |
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| Price in(₹) | Consumer 1 Demand in (kgs) | Consumer 2 Demand in (kgs) | Consumer 3 Demand in (kgs) | Market Demand |
| 10 | 1 | 2 | (i) _______ | 6 |
| 8 | 2 | (ii) _______ | 4 | 9 |
| 6 | 3 | 4 | 5 | 12 |
| 5 | 4 | 5 | 6 | (iii)______ |
Based on the above hypothetical schedule answer the following questions
(a) What is the demand of Consumer 3 priced at ₹10(i)?
(b) What is the demand of Consumer 2 Priced at 18 (ii)?
(c) Calculate the total market demand priced at 24 (iii)?
(d) From the above given table examine the relationship between price and demand.
(e) Mention any one exception to the law of demand.