A Buoyancy Coefficient Measures the Income Responsiveness of a Tax Yield Due to the Combined Effects of the Automatic and the Discretionary Changes Made In the Tax System. the Yield of a Tax May Also Go Up on Account of an Extension of Its Coverage or a Revision In the Tax Rates. Such a Characteristic Features of a Tax Related System Is Referred to As Its Elasticity. In Other Words, the Elasticity of a Tax Refers to Its Responsiveness to Steps Taken By the Tax Authorities In Increasing the Tax Yield Through an Extension of Its Coverage or Through a Revision of Its Tax Rates. an In Depth Analysis Has Been Carried Out to Study the Sensitivity of a Tax System By Computing Buoyancy and Elasticity Coefficients of Taxes. a Buoyancy Coefficient Measures the Income Responsiveness of a Tax Yield Due to the Combined Effects of the Automatic and the Discretionary Changes Made In the Tax System. the Yield of a Tax May Also Go Up on Account of an Extension of Its Coverage or a Revision In the Tax Rates. Such a Characteristic Features of a Tax Related System Is Referred to As Its Elasticity. In Other Words, the Elasticity of a Tax Refers to Its Responsiveness to Steps Taken By the Tax Authorities In Increasing the Tax Yield Through an Extension of Its Coverage or Through a Revision of Its Tax Rates.