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Difference between direct tax and indirect tax .

Answer»

Distinction between a direct tax and indirect tax.

Direct taxesIndirect 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.



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