Indian Tax Structure — Direct and Indirect Taxes

When your family pays income tax, the government knows exactly whose money it is taking and how much they earn. When you buy a packet of biscuits, the tax hidden in that price is paid by whoever happens to be holding the cash at the counter, rich or poor, and nobody keeps a personal record of it. That single difference — knowing who really bears the burden — is what separates direct from indirect taxes.

In two minutes

India's tax structure rests on the distinction between direct taxes, levied on and paid by the same person on their income or wealth, and indirect taxes, levied on goods and services and ultimately borne by the consumer regardless of who is legally liable to pay it.

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