{"id":84618,"date":"2025-06-01T02:41:28","date_gmt":"2025-06-01T02:41:28","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=84618"},"modified":"2025-06-01T02:41:28","modified_gmt":"2025-06-01T02:41:28","slug":"which-of-the-following-statements-are-correct-ability-to-pay-princ","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/","title":{"rendered":"Which of the following statements are correct ?\n  Ability to pay princ"},"content":{"rendered":"<p>Which of the following statements are correct ?<\/p>\n<ul>\n<li>Ability to pay principle of taxation holds that the amount of taxes people pay should relate to their income or wealth<\/li>\n<li>The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes<\/li>\n<li>A progressive tax takes a larger share of tax from poor families than it does from rich families<\/li>\n<li>Indirect taxes have the advantage of being cheaper and easier to collect<\/li>\n<\/ul>\n<p>Select the correct answer using the code given below:<\/p>\n<p>[amp_mcq option1=&#8221;1 and 3 only&#8221; option2=&#8221;2 and 4 only&#8221; option3=&#8221;1, 2 and 4 only&#8221; option4=&#8221;1, 2, 3 and 4&#8243; correct=&#8221;option3&#8243;]<\/p>\n<div class=\"psc-box-pyq-exam-year-detail\">\n<div class=\"pyq-exam\">\n<div class=\"psc-heading\">This question was previously asked in<\/div>\n<div class=\"psc-title line-ellipsis\">UPSC CDS-1 &#8211; 2016<\/div>\n<\/div>\n<div class=\"pyq-exam-psc-buttons\"><a href=\"\/pyq\/pyq-upsc-cds-1-2016.pdf\" target=\"_blank\" class=\"psc-pdf-button\" rel=\"noopener\">Download PDF<\/a><a href=\"\/pyq-upsc-cds-1-2016\" target=\"_blank\" class=\"psc-attempt-button\" rel=\"noopener\">Attempt Online<\/a><\/div>\n<\/div>\n<section id=\"pyq-correct-answer\">\nStatement 1 is correct as the ability to pay principle suggests that individuals with higher income or wealth should contribute a larger proportion of taxes. Statement 2 is correct as the benefit principle proposes that individuals should pay taxes based on the government services they benefit from. Statement 4 is generally correct; indirect taxes like GST are often easier and cheaper to collect compared to assessing income tax for every individual or corporation. Statement 3 is incorrect; a progressive tax takes a larger share of tax from richer families than from poorer families. Therefore, statements 1, 2, and 4 are correct.<br \/>\n<\/section>\n<section id=\"pyq-key-points\">\nUnderstanding the basic principles and types of taxation (ability to pay, benefit principle, progressive, indirect taxes) is crucial.<br \/>\n<\/section>\n<section id=\"pyq-additional-information\">\nA regressive tax takes a larger share from poor families, while a proportional tax takes the same percentage from all income levels. Indirect taxes (like GST, customs duty) are levied on goods and services, while direct taxes (like income tax, corporate tax) are levied on income and wealth.<br \/>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>Which of the following statements are correct ? Ability to pay principle of taxation holds that the amount of taxes people pay should relate to their income or wealth The Benefit Principle of taxation states that individuals should be taxed in proportion to the benefit they receive from Government programmes A progressive tax takes a &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Which of the following statements are correct ?\n  Ability to pay princ\" class=\"read-more button\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/#more-84618\">Detailed Solution<span class=\"screen-reader-text\">Which of the following statements are correct ?<br \/>\n  Ability to pay princ<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1087],"tags":[1098,1120,1196],"class_list":["post-84618","post","type-post","status-publish","format-standard","hentry","category-upsc-cds-1","tag-1098","tag-economic-development","tag-fiscal-policy-revenue","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Which of the following statements are correct ?  Ability to pay princ<\/title>\n<meta name=\"description\" content=\"Statement 1 is correct as the ability to pay principle suggests that individuals with higher income or wealth should contribute a larger proportion of taxes. Statement 2 is correct as the benefit principle proposes that individuals should pay taxes based on the government services they benefit from. Statement 4 is generally correct; indirect taxes like GST are often easier and cheaper to collect compared to assessing income tax for every individual or corporation. Statement 3 is incorrect; a progressive tax takes a larger share of tax from richer families than from poorer families. Therefore, statements 1, 2, and 4 are correct. Understanding the basic principles and types of taxation (ability to pay, benefit principle, progressive, indirect taxes) is crucial.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Which of the following statements are correct ?  Ability to pay princ\" \/>\n<meta property=\"og:description\" content=\"Statement 1 is correct as the ability to pay principle suggests that individuals with higher income or wealth should contribute a larger proportion of taxes. Statement 2 is correct as the benefit principle proposes that individuals should pay taxes based on the government services they benefit from. Statement 4 is generally correct; indirect taxes like GST are often easier and cheaper to collect compared to assessing income tax for every individual or corporation. Statement 3 is incorrect; a progressive tax takes a larger share of tax from richer families than from poorer families. Therefore, statements 1, 2, and 4 are correct. Understanding the basic principles and types of taxation (ability to pay, benefit principle, progressive, indirect taxes) is crucial.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2025-06-01T02:41:28+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"Which of the following statements are correct ?  Ability to pay princ","description":"Statement 1 is correct as the ability to pay principle suggests that individuals with higher income or wealth should contribute a larger proportion of taxes. Statement 2 is correct as the benefit principle proposes that individuals should pay taxes based on the government services they benefit from. Statement 4 is generally correct; indirect taxes like GST are often easier and cheaper to collect compared to assessing income tax for every individual or corporation. Statement 3 is incorrect; a progressive tax takes a larger share of tax from richer families than from poorer families. Therefore, statements 1, 2, and 4 are correct. Understanding the basic principles and types of taxation (ability to pay, benefit principle, progressive, indirect taxes) is crucial.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/","og_locale":"en_US","og_type":"article","og_title":"Which of the following statements are correct ?  Ability to pay princ","og_description":"Statement 1 is correct as the ability to pay principle suggests that individuals with higher income or wealth should contribute a larger proportion of taxes. Statement 2 is correct as the benefit principle proposes that individuals should pay taxes based on the government services they benefit from. Statement 4 is generally correct; indirect taxes like GST are often easier and cheaper to collect compared to assessing income tax for every individual or corporation. Statement 3 is incorrect; a progressive tax takes a larger share of tax from richer families than from poorer families. Therefore, statements 1, 2, and 4 are correct. Understanding the basic principles and types of taxation (ability to pay, benefit principle, progressive, indirect taxes) is crucial.","og_url":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/","og_site_name":"MCQ and Quiz for Exams","article_published_time":"2025-06-01T02:41:28+00:00","author":"rawan239","twitter_card":"summary_large_image","twitter_misc":{"Written by":"rawan239","Est. reading time":"1 minute"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/","url":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/","name":"Which of the following statements are correct ? Ability to pay princ","isPartOf":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#website"},"datePublished":"2025-06-01T02:41:28+00:00","dateModified":"2025-06-01T02:41:28+00:00","author":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/#\/schema\/person\/5807dafeb27d2ec82344d6cbd6c3d209"},"description":"Statement 1 is correct as the ability to pay principle suggests that individuals with higher income or wealth should contribute a larger proportion of taxes. Statement 2 is correct as the benefit principle proposes that individuals should pay taxes based on the government services they benefit from. Statement 4 is generally correct; indirect taxes like GST are often easier and cheaper to collect compared to assessing income tax for every individual or corporation. Statement 3 is incorrect; a progressive tax takes a larger share of tax from richer families than from poorer families. Therefore, statements 1, 2, and 4 are correct. Understanding the basic principles and types of taxation (ability to pay, benefit principle, progressive, indirect taxes) is crucial.","breadcrumb":{"@id":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-statements-are-correct-ability-to-pay-princ\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/exam.pscnotes.com\/mcq\/"},{"@type":"ListItem","position":2,"name":"UPSC CDS-1","item":"https:\/\/exam.pscnotes.com\/mcq\/category\/upsc-cds-1\/"},{"@type":"ListItem","position":3,"name":"Which of the following statements are correct ? 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