Difference of direct tax and indirect tax?

 Direct Tax is Collected from the Persion on which Its Imposed but Incase of Indirect Tax Payer Trasfer His Liability to Consumer

Dear Umavali,

A direct tax is one paid directly to the government by the persons (juristic or natural) on whom it is imposed (often accompanied by a tax return filed by the taxpayer). Examples include some income taxes, some corporate taxes, and transfer taxes such as estate (inheritance) tax and gift tax.

An indirect tax (such as sales tax, value added tax (VAT), or goods and services tax (GST)) is a tax collected by an intermediary (such as a retail store) from the person who bears the ultimate economic burden of the tax (such as the customer)

Regards,

RAJESH CHOUDHARY

Thanks Mr.Rajesh.

Don't copy the wikipedia or other web.

I need subject wise (in deep) not basic.

1.Direct Tax is a tax, which directly imposed on person

Eg. Income Tax, Wealth tax, this taxes directly assesable on persons

2. Indirect Tax means, tax that indirectly charged.

means not directly on person ,but on the goods and services, which are consumed by peoples

it is easy method to collect, their no fight for levy tax with persons(human beings), tax is simply levied on goods and services with no any fight with goods and services (Non human)

Eg. Excise duty ,custom duty, ST,VAT etc.

Originally posted by : Atul
	Dt afects ur pocket and ID does not

sorry but i do not agree with..both affects your pocket..the difference is "one is a direct levy and the other is indirect levy"

let me explain with the help of an example

take the case of INcome tax which is a form of direct tax.here the individual is required to compute his tax liabilty and pay directly to the govermeny..

however , now look into excise duty(indirect tax)..once a manufacturer produces excisable goods,he is required to pay excise duty to the govt on removal of goods..this excise duty is added to the cost price of the commodity and ultimately recovered from the ultimate user..the consumer in this case is indirectly paying the excise duty.

i hope it would be of help

Originally posted by : CA Pooja Agarwal
	Originally posted by : Atul Dt afects ur pocket and ID does not sorry but i do not agree with..both affects your pocket..the difference is "one is a direct levy and the other is indirect levy" let me explain with the help of an example take the case of INcome tax which is a form of direct tax.here the individual is required to compute his tax liabilty and pay directly to the govermeny.. however , now look into excise duty(indirect tax)..once a manufacturer produces excisable goods,he is required to pay excise duty to the govt on removal of goods..this excise duty is added to the cost price of the commodity and ultimately recovered from the ultimate user..the consumer in this case is indirectly paying the excise duty. i hope it would be of help

Agreed..

basically named given direct & indirect on the basis of "flow of payment by end use consumer/assesse to government"

in dt , person directly paying tax to govt. so called direct tax

in indirect tax ultimate burden of tax payment on consumer but he or she paying this tax to govt thru many intermederies. means flow is indirect ,so called indirect tax

Direct tax means-Directly affected

  Example:Income tax,wealth tax.

Indirect tax Means-Indirectly Affected.

  Example:Sales tax

Indirect Tax Do Not Effect Pocket of Dearler bcoz he Collect the Same From Consumer..... A Dealer, Supplier, Business man pay tax in government account and work as a intermidiary between Government and Consumer....

Dear Uma,

Both are taxes which need to pay by tax payers to Gov(Dept) but if you pay indirect tax you will get credit of that, when you pay direct tax you will not get any credit for that.

Your are not getting credit mean it will effect you directly.

if u  are getting credit mean it will not effects you directly.