| Question | 9. Distinguish between Direct Tax and Indirect Tax |
| Class | Class 12 |
| Subject | Economics (Macroeconomics) |
| Category | Class 12 Economics Solutions Sandeep Garg |
Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Short Questions – Q.9 Distinguish between Direct Tax and Indirect Tax.
Solution:-
| Basis | Direct Taxes | Indirect Taxes |
| Levy | Direct taxes are levied on persons and corporates | Indirect taxes are levied on goods and services. |
| Burden to pay | Burden to pay cannot be shifted. | Burden to pay can be shifted. |
| Reach | They have limited reach as it does not cover all sections of society. For example, not everyone is supposed to pay income tax. |
They have wide reach and cover all sections of society. For example, everyone is supposed to pay GST on purchase of goods and services. |
Short Questions – Sandeep Garg Macroeconomics Class 12 Solutions Government budget and the Economy
- State three objectives of a government budget
- Explain objective of stability of prices of government budget
- How can a government budget help in reducing inequalities reducing inequalities of income? Explain.
- Explain the ‘allocation of resources’ objective of Government budget.
- What is a government budget? Name two sources each of non-tax revenue receipts and capital Receipts.
- What is a government budget? Give the meaning of: (a) Revenue deficit; (b) Fiscal deficit.
- What are the two broad divisions of receipts of the government budget? Name two sources of each kind of receipt.
- Define tax revenue. What are the two kinds of tax revenues? Give two examples of each.
- Distinguish between Direct Tax and Indirect Tax
- Explain with the help of suitable examples the basis of classifying taxes into direct and indirect taxes
- Distinguish between revenue receipts and capital receipts
- Give meanings of Capital receipts and Revenue receipts with an example of each.