Question

Income tax is an example of ______.

Options

• Direct tax

• Indirect tax

• Social tax

• Goods and service tax

Answer 1

Income tax is an example of direct tax.

Explanation:

Income tax is a direct tax, as it is paid directly by individuals or entities on their income to the government. The burden of the tax cannot be shifted to another person. In contrast, indirect taxes (like sales tax or GST) are paid by the consumer indirectly when purchasing goods or services.