Consider the following statements regarding Wealth Tax in India:
Statement-I: Wealth tax was repealed in India because it generated significant revenue but created socio-economic inequality.
Statement-II: Wealth tax is a direct tax levied on an individual’s net worth, which includes immovable assets, luxury items, and financial holdings exceeding a specified threshold.
Which one of the following is correct in respect of the above statements?
1
Both Statement-I and Statement-II are correct, and Statement-II is the correct explanation for Statement-I.
2
Both Statement-I and Statement-II are correct, but Statement-II is not the correct explanation for Statement-I.
3
Statement-I is correct, but Statement-II is incorrect.
4
Statement-I is incorrect, but Statement-II is correct.