1.

Elucidate the differences between direct taxes and indirect taxes with examples.

Answer»
S.NoDirect TaxesIndirect Taxes
1.Direct taxes are levied and paid by individuals (tax payer) directly to the government.Indirect taxes are those which are imposed on one  person but the burden of the tax is borne by another.
2.Direct taxes help in reducing inflation.Indirect taxes may enhance inflation.
3.Direct taxes help in reducing inequalities.Indirect taxes increase inequality and are considered to be regressive.
4.Example of direct taxes : Excise Duty, Custom Duty, etc.Examples of indirect taxes : Sales Tax, VAT, etc.
 


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