https://padlet.com/19e2144/1gw8y6xsfze9zdtx ASSIGNMENT: write about direct and indirect taxes en-us 2021-09-01 09:30:27 UTC 2026-01-15 07:12:39 UTC hello@padlet.com 19e2144 https://padlet.com/19e2144/1gw8y6xsfze9zdtx/wish/1709547701 It is a tax levied directly on a taxpayer who pays it to the Government and cannot pass it on to someone else.

Some of the important direct taxes are mentioned below:

• Income Tax- It is imposed on an individual who falls under the different tax brackets based on their earning or revenue and they have to file an income tax return every year after which they will either need to pay the tax or be eligible for a tax refund.
• Estate Tax– Also known as Inheritance tax, it is raised on an estate or the total value of money and property that an individual has left behind after their death.
• Wealth Tax– Wealth tax is imposed on the value of the property that a person possesses.

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It is a tax levied by the Government on goods and services and not on the income, profit, or revenue of an individual and it can be shifted from one taxpayer to another.
Earlier, an indirect tax meant paying more than the actual price of a product bought or a service acquired. And there was a myriad of indirect taxes imposed on taxpayers.
Goods and Service Tax (GST) is one of the existing indirect taxes levied in India. It has subsumed many indirect tax laws.

• Customs Duty- It is an Import duty levied on goods coming from outside the country, ultimately paid for by consumers and retailers in India.
• Central Excise Duty– This tax was payable by the manufacturers who would then shift the tax burden to retailers and wholesalers.
• Service Tax– It was imposed on the gross or aggregate amount charged by the service provider on the recipient.
• Sales Tax– This tax was paid by the retailer, who would then shifts the tax burden to customers by charging sales tax on goods and services.
• Value Added Tax (VAT)– It was collected on the value of goods or services that were added at each stage of their manufacture or distribution and then finally passed on to the customer.

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Direct taxation is one of the main sources of income for the government.

It also affects inflation, demand and supply within the economy by regulating disposable incomes across the board.

Luxury goods and services are the most affected by this regulation and so, the tax rates have to strike a balance between providing administrative funds, limiting inflation and leaving enough disposable income to encourage consumption.

Deductions on certain services such as insurance or some types of loans will attract individuals and organizations to invest in the Indian economy and generate usable capital.

This will allow for greater stability in the economy while also providing stakeholders with a greater degree of financial security.

More capital flowing into the country will increase revenue and in turn affect tax collection, providing the government with a higher budget for expenditure on developing the nation’s infrastructure, as well as its natural, man made and human resources.

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Indirect taxes have been put in place to ensure that resources are used efficiently by individuals and organizations as lower expenditure on raw materials will mean lower margins lost on taxes.

In turn, lowered costs of production will raise profits and foster healthy competition among rival organizations thereby developing the economy.

This also provides consumers with a wider variety of options catered to their needs, facilitating improvements in standards of living.

The burden of taxation falls on the consumers in the end, as most retailers, manufacturers and service providers will attempt to recover taxes on initial expenses in the sales price itself.

Hence the importance of taxes of this kind lies in how it incentivizes organizations to make their operations as efficient as possible.

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