Question:medium
Which among the following is a demerit of direct tax?
Which among the following is a demerit of direct tax?
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Understanding the rationale behind direct tax structures can help mitigate percep tions of arbitrariness.
Updated On: Feb 11, 2026
- Certainty
- Equity
- Arbitrary
- Elasticity and productivity
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The Correct Option is C
Solution and Explanation
Although direct taxes are considered fair and predictable, their perceived arbitrariness stems from the subjective determination of tax brackets and rates. Higher-income earners, for instance, might view progressive tax rates as unfairly burdening them, resulting in a sense of inequity and reduced incentive.
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