Indirect Tax vs Direct Tax

Tax Glossary Definition

Indirect Tax vs Direct Tax

Direct taxes are imposed on the income or profits of individuals and organizations and are paid straight to the government by the taxpayer. Indirect taxes, on the other hand, apply to the sale of goods and services and are collected by sellers or service providers, who then remit the amount to the government. Example: Income Tax is a direct tax, whereas GST charged on products or services is an indirect tax.

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