What are the Differences Between Direct and Indirect tax?

Let’s understand how direct taxes are different from indirect taxes.


Direct Tax	Indirect Tax
We pay a percentage of the income we earn to the government every year. That is direct tax.	We pay a percentage of the total price of goods and services we buy to the government. That is indirect tax.
The individual or company generating the income will pay direct tax.	The company selling the goods or services will collect and pay indirect tax.
Examples: Income Tax, Corporate Tax	Examples: CGST, SGST, IGST, Stamp duty, Customs duty

Here’s a list of people or entities that are liable to pay income tax and the ones who have to pay professional/corporate tax.

Income tax is generally paid by:

Professional/ Corporate tax is paid by:

Let's look at the different types of direct and indirect taxes now