Multiple choice

Which of the following taxes is the most elastic in nature in India?

  1. Income Tax

  2. Value Added Tax

  3. Sales Tax

  4. Service Tax
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A Correct answer
Explanation

Income tax is the most elastic tax in nature. The income tax is paid annually in India. At the time of emergency like war, floods etc, the rate of income tax can be increased quickly so that the government has adequate financial resource to meet the emergency. The rates of other types of taxes are not so easy to increase.

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