1. Direct Tax: If a tax levied on the income or wealth of a person and is paid by that person (or his office) directly to the Government, , it is called direct tax, example Income – Tax, Wealth Tax, Capital Gains Tax, Securities Transaction Tax, Fringe Benefits Tax (from 2005), Banking Cash Transaction Tax (for Rs,50,000 and above – from 2005), etc. In India all direct taxes are levied and administered by Central Board of Direct Taxes.
2. Indirect Tax: If tax is levied on the goods or services of a person (seller). It is collected from, the buyers and is paid by seller to the Government. It is called indirect tax example GST.