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Difference between direct and indirect taxes

Direct tax
Indirect tax
Incurred and paid directly by the concerned person
Paid by one person (dealer/assesee) and recovered from another person (consumer)
Imposed on economic/wealth of the taxpayer
Imposed on purchase/sale/manufacture of goods and provision of services
Tax burden does not shift collected after the income for the year is earned
Tax burden shifts to subsequent users collected at the time of sale or purchase or rendering of service
Includes income tax, wealth tax
Includes excise duty, customs duty, service tax, sales tax, purchase tax, entry taxes

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