Tuesday, April 25, 2023

Classification of tax based on direct and indirect?

 Yes, taxes in India can be classified into two broad categories - direct taxes and indirect taxes.


1. Direct Taxes: Direct taxes are those taxes that are levied directly on the income or wealth of individuals or organizations. The tax amount cannot be shifted to someone else. Some examples of direct taxes in India are:


- Income tax

- Wealth tax

- Corporate tax

- Capital gains tax


2. Indirect Taxes: Indirect taxes are those taxes that are levied on the consumption or sale of goods and services. The tax amount can be shifted to someone else, such as the customer. Some examples of indirect taxes in India are:


- Goods and Services Tax (GST)

- Customs duty

- Excise duty

- Value Added Tax (VAT)


So, direct taxes are directly paid by the taxpayers to the government, while indirect taxes are paid by the customers when they purchase goods or services.

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