Distinction between a direct tax and indirect tax.
Direct taxes |
Indirect Taxes |
(1) They are directly paid to the government by the person on whom it is imposed. |
(1) They are paid to the government by one person but their burden is borne by another person. |
(2) They are a generally progressive rate
The rate of tax increases with increase in income. |
(2) They are generally regressive. The tax decrease as income increases. |
(3) They cannot be shifted on to others. |
(3) They can be shifted on to others. |