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IAI Actuarial Core Principles · Business Finance · Personal and corporate taxation

Which of the following is an indirect tax in India?

Goods and Services Tax is an indirect tax because it is levied on the supply of goods and services and collected by suppliers, with the burden passed to the consumer. Taxes on salary, company profit, capital gains and dividends fall directly on the taxpayer's income.

  1. AIncome tax on an employee's salary
  2. BTax on the profits of a company
  3. CGoods and Services Tax on the supply of goodsCorrect
  4. DTax on long-term capital gains of an individual
  5. Dividend income taxed in the shareholder's hands

Explanation

Indirect taxes are levied on transactions in goods and services and are collected by an intermediary who passes them to the government. GST is such a tax. The other options are levied directly on the income or gains of the taxpayer.

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