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Distinguish between the following concept: Direct tax and Indirect tax. - Economics

Distinguish Between

Distinguish between the following concept:

Direct tax and Indirect tax.

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Solution

Direct tax Indirect tax
It is levied on income and activities conducted. It is levied on products or services.
The burden of tax cannot be shifted in the case of direct tax. The burden of tax shifted for indirect taxes.
It is paid for directly by the person concerned. It is paid by one person but he recovers the same from another person i.e. person who actually bears the tax ultimate consumer.
It is paid after the income reaches the hands of the taxpayer It is paid before goods/service reaches the taxpayer.
Tax collection is difficult. Tax collection is relatively easier.
Example Income tax, wealth tax, etc. Example GST, excise duty custom duty sale tax service tax
Concept: Structure of Public Finance - Public Revenue
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APPEARS IN

Balbharati Economics 12th Standard HSC Maharashtra State Board
Chapter 8 Public Finance in India
Exercise | Q 2. (5) | Page 79
SCERT Maharashtra Question Bank 12th Standard HSC Economics Maharashtra State Board 2021
Chapter 8 Public Finance in India
Distinguish Between | Q 3
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