| Direct Tax | Indirect Tax |
| Direct tax is imposed directly on the taxpayer and is paid by the taxpayer directly to the government. The incidence and impact of the tax is on the same person. | Indirect tax is tax collected by intermediaries (e.g. retailers) from the ultimate taxpayer i.e. consumers. The incidence and impact of the tax is on different persons. |
| Its burden cannot be transferred to other person. | Its burden can be shifted from one person to other. e.g. manufacture shifts the burden of tax to retailers who in turn shift it to consumers. |
| It doesn't affect the prices. | Indirect tax may affect prices, as generally, consumers pay high prices which are inclusive of taxes. |
| For example, Income tax, property tax etc. | For example, VAT, customs duty etc. |
