Distinguish between Direct Taxes and Indirect Taxes.
These are differences between Direct Taxes and Indirect Taxes:
Base of Difference |
Direct Taxes |
Indirect Taxes |
1. Base of Taxation 2. Scope 3. Flexibility 4. Equity 5. Nature of Taxes 6. Certainty 7. Possibility of Tax evasion |
1. The base of direct tax is income. 2. The scope of direct taxes is limited. 3. Direct taxes are less flexible. 4. Direct taxes have the feature of equity. 5. Direct taxes are progressive. 6. Direct taxes are certain. 7. There is more possibility of tax-evasion. |
1. The base of indirect taxes is expenditures. 2. The scope of indirect taxes is unlimited. 3. Indirect taxes are more flexible. 4. Indirect taxes lack the element of equity. 5. Indirect taxes are proportional 6. Indirect taxes are uncertain. 7. There is less possibility of tax-evasion. |