Which of the following canon of taxation is also known as 'ability to pay’ principle of taxation?

Correct option is C

The correct answer is (c) Canon of equity.
Key Points:
· The Canon of Equity, also known as the "ability to pay" principle, suggests that taxes should be levied based on an individual's or entity's ability to pay. This ensures a fair distribution of the tax burden.
· According to this principle, individuals with higher incomes or greater wealth should contribute more in taxes compared to those with lower incomes, promoting fairness in the tax system.
· This canon emphasizes justice and equality in taxation by aligning tax liabilities with the taxpayer's financial capacity.
Information Booster:
· Canon of Economy: Focuses on minimizing the cost of tax collection, ensuring that the process is cost-effective.
· Canon of Certainty: Ensures that taxpayers are certain about the amount, time, and manner of tax payment, reducing ambiguity.
· Canon of Convenience: Suggests that taxes should be collected in a manner that is convenient for the taxpayer, such as timing and methods of payment.