JAIIB · AFM · Chapter 30

KYC-AML Case Studies (Chapter source content; filename labelled 30D GST)

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.

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One-liners from this chapter

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Q

What is Direct Tax?

A

is the tax imposed directly on a taxpayer and is required to be paid by that taxpayer to the government — its burden cannot be shifted to another person.

Q

Levied on — Direct Tax / Indirect Tax?

A

Direct Tax: Income & profits of the taxpayer; Indirect Tax: Goods & services at the point of supply

Q

Paid to government — Direct Tax / Indirect Tax?

A

Direct Tax: Directly by the taxpayer; Indirect Tax: Indirectly through an intermediary (seller / supplier)

Q

Burden of tax — Direct Tax / Indirect Tax?

A

Direct Tax: Cannot be shifted — paid by the assessee; Indirect Tax: Can be shifted to the end consumer via price

Q

Probability of tax evasion — Direct Tax / Indirect Tax?

A

Direct Tax: Higher — depends on voluntary disclosure; Indirect Tax: Lower — built into the price at supply

Q

Impact on inflation — Direct Tax / Indirect Tax?

A

Direct Tax: Helps reduce inflation by curbing disposable income; Indirect Tax: Adds to inflation — gets added to the price of goods & services

Q

Progressive vs Regressive — Direct Tax / Indirect Tax?

A

Direct Tax: Progressive — higher income pays higher %; Indirect Tax: Regressive — same rate for rich and poor

Q

Impact on inequality — Direct Tax / Indirect Tax?

A

Direct Tax: Helps reduce inequality; Indirect Tax: Enhances inequality — same burden on all consumers

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