What Is The Difference Between Indirect Taxation And Direct Taxation?

Direct taxation is defined as the tax which is directly levied on the citizens of a country. All individuals and business concerns have to pay direct taxes to the government on a regular basis. These direct taxes are calculated on every source of income that accrues to the business of individual.

On the other hand, the citizens of a country are charged certain levies indirectly as well. These indirect levies are known as indirect taxes. These are the taxes payable on an activity or a commodity. Some common examples of indirect taxes are sales tax and excise tax.

Even though direct taxation is a perfectly legal form of taxation, some critics of income tax laws in some countries are of the opinion that governments of those countries are using fair means to extort huge sums of money that has been earned. However, it is important to pay direct taxes in order to be able to avail the infrastructure facilities of the country and is also necessary to avoid the vicious cycles of black money and tax evasion.

In points difference between direct and indirect taxes?