Distinguish between direct tax and indirect tax with examples

Difference between direct tax and indirect tax

Direct tax

Income and profits are subject to direct taxation.
These taxes are paid to the government directly.
Individual tax rates are determined by the individual's income bracket.
When the window opens, taxes are paid to the Income Tax Department.
Examples- Securities Tax, Income Tax,

Indirect tax

Goods and services are subject to indirect taxation.
Customers pay indirect taxes as part of the price of the product or service.
As a result, the tax is paid to the intermediary, and it is the middleman's responsibility to pay the taxes to the government. Everyone pays the same amount of tax.
These taxes are simply paid to the middleman when the commodity or service is purchased.
Examples- VAT, Excise duty

Advantages of Indirect tax

Convenient: Indirect tax is usually charged in modest amounts and is only paid when making purchases. The amount of the indirect tax is included in the final price of the goods or service. Tax is collected when products are sold and purchased. It also necessitates little effort on the part of the government.

Know more, main types of indirect taxes in India

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Procedure for GST Registration

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