Distinguish between direct tax and indirect tax



Direct tax A tax, which is paid by the same person on whom it has been imposed, is termed as direct tax. In case of direct tax, burden cannot be shifted on other party, e.g. income tax, etc.
Indirect tax A tax, which is paid by one person and imposed on other person is called an indirect tax. In case of indirect tax, burden is generally shifted on to the other party, e.g. excise duty, etc.