Taxes are the main source of income of the government. The amount to be compulsorily paid by the public to the government is called tax.
There are two types of taxes. Direct tax and indirect tax.
| Direct tax |
Indirect tax |
| Tax is paid by the person on whom it is imposed. |
Tax is imposed on one person and paid by another. |
| Tax burden is felt by the tax payer |
Tax burden is not felt by the tax payer |
| Comparatively low expenditure is incurred for tax collection. |
Comparatively high expenditure is incurred for tax collection. |
