From the sale of capital assets tax is levied on profits. What this tax is called ?
Correct answer: B. Capital gains tax
- A. Profit tax
- B. Capital gains tax
- C. Excise duty
- D. Capital taxEconomics
Explanation
Capital gains tax is charged on the profit earned when a capital asset is sold for more than its acquisition cost. Excise duty is an indirect tax on selected goods and services, not specifically on asset-sale profits.
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Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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