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“Tax revenue… (Class 12 Economics SQP 2024-25, Q12)

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EconomicsCBSE Class 12 · Sample paper, session 2024-25 · 3 marks · Short answer

CBSE Class 12 Economics sample paper 2024-25: question 12

From the official CBSE sample question paper for 2024-25, section A, question 12, for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q12 · 3 marks · Short answerGovernment Budget and the Economy

“Tax revenue collection of the government may be categorized under two heads.”
State and explain the two heads of tax revenue.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Who finally bears the tax?

Hint 2

Can a shopkeeper pass GST to the customer?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Direct taxes:

    ½ mark

  2. the impact (who pays first) and incidence (who finally bears it) are on the same person, so the burden cannot be shifted. Example: income tax, corporation tax.

    1 mark

  3. Indirect taxes:

    ½ mark

  4. the impact and incidence can fall on different persons, so the burden can be shifted (for example, from the seller to the buyer). Example: GST, customs duty.

    1 mark

Answer: Direct taxes (burden cannot be shifted, e.g. income tax) and indirect taxes (burden can be shifted, e.g. GST).

Where the marks are

  • Each head named (½) and explained (1)

Revise the chapter

Practise this chapterBoard-style questions from Government Budget and the Economy, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.