Two merits of Direct Tax are :
1. Economical : Direct taxes are economical because the cost of collecting these taxes is relatively low as they are collected at source and paid to the government by the tax payers.
2. Certainty : Direct tax satisfy tax payers as they have the knowledge of correct assessment of tax and the government is fully aware of the amount of tax revenue they will receive.
Two demerits of Direct Tax are:
1. Possibility of evasion : The collection of direct tax is dependent on the honesty and good intentions of the tax-payers. Hence, there is a great possibility of tax evasion.
2. Inconvenience : Direct taxes are considered highly inconvenient by the taxpayers. The tax-payers have to maintain accounts and submit statements of their income with other relevant details. This creates inconvenience to the taxpayers.
