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Write the differences between Direct Tax and Indirect Tax?

Direct taxes:

1.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.

2.Its burden cannot be transferred to other person.

3.It doesn't affect the prices.

Examples : income tax,property tax.

Indirect tax :

1.Indirect tax is tax collected by intermediaries (for e.g. retailers) from the ultimate taxpayer i.e. consumers.The incidence and impact of the tax is on different persons.

2.Its burden can be shifted from one person to other.For e.g. manufacturer shifts the burden of tax to retailers who shifts it to consumers.

3.Indirect tax may affect prices, as generally consumers pay high prices which are inclusive of taxes.

Examples : VAT,custom duty.

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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)

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