If indirect taxes are ₹130 crore and subsidies are ₹45 crore, what are net indirect taxes?
Answer and explanation
Correct answer: ₹85 crore
Net indirect taxes are calculated by subtracting subsidies from indirect taxes: Net Indirect Taxes = Indirect Taxes − Subsidies. Therefore, ₹130 crore − ₹45 crore = ₹85 crore. Option B is correct. ₹130 crore is only the gross indirect-tax amount, while ₹175 crore would result from incorrectly adding taxes and subsidies. ₹75 crore reflects an incorrect subtraction and is not the required net value.
Frequently asked questions
What is the correct answer to this question?
₹85 crore
Why is this the correct answer?
Net indirect taxes are calculated by subtracting subsidies from indirect taxes: Net Indirect Taxes = Indirect Taxes − Subsidies. Therefore, ₹130 crore − ₹45 crore = ₹85 crore. Option B is correct. ₹130 crore is only the gross indirect-tax amount, while ₹175 crore would result from incorrectly adding taxes and subsidies. ₹75 crore reflects an incorrect subtraction and is not the required net value.
Which subject and chapter does this question cover?
This is a Class 12 Economics question. Chapter: National Income and Related Aggregates. Topic: Aggregates related to national income - Market price and factor cost.
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