Define the following term: (economy)

Tax incidence:  Tax incidence is the entity on whom tax is imposed. It is the distribution of the overall tax burden between sellers and buyers in an economy.

 

 

Tax burden:       It is the total amount of tax paid by a particular group of people, an industry etc especially as compared to what other groups, industries etc pay.

 

Progressive tax:         The progressive tax means tax as a percentage of income rises as income rises. It is good for reducing inequality in a country.

 

Tax buoyancy: It refers to the percentage change in tax revenue with the growth of national income. It is growth based increase in tax collections.

 

Tax elasticity: Tax elasticity is defined as the percentage change in tax revenues with the growth of national income. It is growth based increase in tax collections.

 

Minimum Alternate tax:    Some companies do not show tax liability under Income Tax act but they show book profits as per their profit and loss account in accordance with Companies act. To tax these zero tax companies Minimum alternate tax was introduced.

 

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