"Direct tax" is called direct because of which of the following reason?
Answer & explanation
Correct answer: option 3
The correct ansqwer is option 3: Tax is collected directly on the income of the consumer
Direct taxes are called "direct" because they are levied directly on the income of the individual or business. This means that the taxpayer is responsible for paying the tax, rather than it being passed on to others through the price of goods or services.
Examples of direct taxes include:
Income tax
Corporate tax
Property tax
Capital gains tax