A tax imposed on the profits earned by a private sector company is called:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Corporate tax
A tax on the earnings of firms (corporations) is the corporate tax.
Indirect and production taxes are linked to goods or to production, and personal tax payments, such as income tax, are paid by individuals.
NCERT (2026-27): Glossary: “Corporate tax – Taxes imposed on the income made by the corporations (or private sector firms).” “2.3 Some Macroeconomic Identities … Similarly, Corporate Tax, which is imposed on the earnings made by the firms, will also have to be deducted from the NI, since it does not accrue to the households. …” |