Direct tax is a tax that is paid by the assesses to the government directly, whereas the indirect tax is one which is paid by the assesses indirectly to the government.
What is the difference between direct taxes and indirect taxes?
A direct tax is one that is paid by the person directly to the government, here the burden of tax is not shifted to anyone.
Example: Income tax, wealth tax, gift tax, etc.
An Indirect tax is one that is paid by the person indirectly to the government, here the burden of tax is shifted to any person.
Example: Goods and Services Tax, custom duty, excise duty, etc.
Therefore, the direct tax is paid to the Central Board of Direct Tax and the indirect tax is paid to the Central Board of Indirect Tax.
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