Distinguish between Direct Tax and Indirect Tax

Question 9. Distinguish between Direct Tax and Indirect Tax
Class  Class 12
Subject Economics (Macroeconomics)
Category Class 12 Economics Solutions Sandeep Garg

Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Short Questions Q.9 Distinguish between Direct Tax and Indirect Tax.

Solution:-

Basis Direct Taxes Indirect Taxes
Levy Direct taxes are levied on persons and corporates Indirect taxes are levied on goods and services.
Burden to pay Burden to pay cannot be shifted. Burden to pay can be shifted.
Reach They have limited reach as it does not cover all sections of society.
For example, not everyone is supposed to pay income tax.
They have wide reach and cover all sections of society.
For example, everyone is supposed to pay GST on purchase of goods and services.




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