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What is Tax?
Tax is the money paid by public to Government.
It helps the government to provide public services like health, education, infrastructure etc.
Difference between Direct and Indirect Tax
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Direct Tax |
Indirect Tax |
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It is a tax which is paid by taxpayer from his own pocket |
Person Collects Tax from customer and deposits to Government |
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Example Income tax |
Example VAT/CST/Service Tax/Excise |
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Person who bears the incidence of tax and the person paying the tax are same |
Person who bears the incidence of tax and the person paying the tax are different |
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It is Progressive in nature, For Higher Income, higher tax Lower Income less or no tax |
It is Regressive in nature All customers whether rich or poor have to pay same tax |
What are Direct tax and Indirect tax?
