Which of the following taxes is/are withdrawn or abolished?a)Interest ...
Interest tax was withdrawn in 2000-01, estate duty abolished in 1985 and gift tax in 1998-99.
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Which of the following taxes is/are withdrawn or abolished?a)Interest ...
**Explanation:**
All of the above-mentioned taxes, namely the interest tax, estate duty, and gift tax, have been withdrawn or abolished in various countries.
**Interest Tax:**
- An interest tax is a tax levied on the interest earned from savings accounts, fixed deposits, bonds, and other interest-bearing investments.
- In many countries, interest tax has been withdrawn or abolished to encourage savings and investment and to stimulate economic growth.
- The rationale behind this decision is to incentivize individuals and businesses to save and invest more, which in turn leads to increased capital formation and economic development.
**Estate Duty:**
- Estate duty, also known as inheritance tax or estate tax, is a tax levied on the transfer of property or assets from a deceased person to their heirs or beneficiaries.
- Estate duty is usually calculated based on the value of the estate and may vary depending on the relationship between the deceased and the recipient.
- Many countries have abolished estate duty due to various reasons, such as administrative burdens, economic implications, and concerns about double taxation.
- The abolition of estate duty aims to simplify the process of transferring assets and wealth to the next generation and reduce the tax burden on heirs and beneficiaries.
**Gift Tax:**
- Gift tax is a tax imposed on the transfer of assets or property from one person to another without receiving anything in return.
- The purpose of gift tax is to prevent tax evasion and ensure that individuals cannot avoid estate duty by gifting their assets before death.
- However, gift tax has been abolished in several countries as it was considered to be complex, difficult to enforce, and burdensome for individuals.
- The abolition of gift tax aims to simplify the tax system and remove the disincentive for individuals to make gifts or transfers of assets.
Overall, the withdrawal or abolition of the interest tax, estate duty, and gift tax is aimed at promoting economic growth, simplifying tax systems, and reducing the tax burden on individuals and businesses.