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What is Tax?

Tax is the money paid by public to Government.

It helps the government to provide public services like health, education, infrastructure etc.

 

Difference between Direct and Indirect Tax

Direct Tax

Indirect Tax

It is a tax which is paid by taxpayer from his own pocket

Person Collects Tax from customer and deposits to Government

Example

Income tax

Example

VAT/CST/Service Tax/Excise

Person who bears the incidence of tax and the person paying the tax are same

Person who bears the incidence of tax and the person paying the tax are different

It is Progressive in nature,

For Higher Income, higher tax

Lower Income less or no tax

It is Regressive in nature

All customers whether rich or poor have to pay same tax

What are Direct tax and Indirect tax?

 

Difference between  Direct and Indirect Taxes - Introduction to Indirect Taxes

  1. Taxation for CA,CS,CMA Bcom M Com Exams November December 2017
  2. Indirect Tax
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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
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