Find Net National Product at Market Price. Contents (Rs. in Crores) (i)
Personal Taxes 200 (ii) Wages and Salaries 1,200 (iii) Undistributed Profit
50 (iv) Rent 300 (v) Corporate Tax 200 (vi) Personal Income 2.000 (vii)
Interest 400 (viii) Net Indirect Tax 300 (ix) Net Factor Income from
Abroad 20 (x) Profit 500 (xi) Social Security Contribution by Employers
250 *
Answers
Answer:
Both tax credits and tax deductions lower the amount of income tax you pay.
• Credits reduce your bottom-line tax bill dollar for dollar.
• Deductions reduce the amount of income used to calculate your tax burden.
When you’re looking for ways to lower your income tax burden, tax credits and tax deductions are your best friends. But they shouldn’t be confused—a $500 tax credit and a $500 tax deduction are very different things. And understanding the difference is key to estimating how much you’ll owe in taxes this year.
Tax credits directly reduce your tax bill. A $500 tax credit means you owe $500 less in taxes.
By contrast, tax deductions reduce your taxable income. A $500 tax deduction lowers your taxable income by $500, which could indirectly lower your tax burden, depending on the situation.
Both deductions and credits are designed by lawmakers to reward certain behaviors by taxpayers—or nudge them to take certain actions