ICSE Class 10 Answered

Direct tax is imposed on the income, wealth and property. This tax is directly paid by the person on whom it is imposed hence the burden cannot be shifted.

Example of direct tax : a part of a person’s income is taxed by the government known as Income tax.

Indirect taxes are imposed on the goods and services which people consume. This tax is paid by one person but their burden is borne by another person.

Example of indirect tax: GST which is an indirect tax, is to be paid by a shopkeeper or retailer, who then shifts the tax burden to customers by charging tax on goods and services.