Question

Distinguish between Direct tax and Indirect tax with suitable examples.

Hint:

Direct taxes are paid by individuals or corporations based on income or profit, while indirect taxes are levied on goods and services.

Answer 1

Direct Tax: A direct tax is levied directly on individuals or organizations and is paid directly to the government. Examples include:
Income Tax: Levied on the income earned by individuals or organizations.
Corporate Tax: Paid by corporations on their profits. Indirect Tax: An indirect tax is levied on goods and services and is collected by an intermediary (e.g., a retailer) from the consumer. Examples include:
Goods and Services Tax (GST): Levied on the sale of goods and services.
Excise Duty: Paid on the manufacture of goods. 
Conclusion: Direct taxes are based on the taxpayer's income or profits, while indirect taxes are levied on consumption and are passed on to consumers.