Difference between Direct Taxes and Indirect Taxes

Direct Taxes

Indirect Taxes

Payer of tax and sufferer of tax one and same (i.e. impact and incidence on the same person)

Payer of tax not sufferer of tax whereas sufferer of tax is not paying directly to the Government (i.e. impact on one head and incidence on other head)

Income based taxes

Supply based taxes

Rate of taxes are different from person to person

Rate of duties are not differ from person to person

Entire revenue goes to Central Government of India

Revenue source to Central Government of India as well as State Governments (i.e. CGST and SGST)

Previous year income assessed in the assessment year

There is no previous year and assessment year concept

Central Board of Direct Taxes (CBDT) is an important part of Department of Revenue.

Central Board of Excise and Customs (CBEC) is an important part of Department of Revenue.

The Central Board of Excise & Customs is being renamed as the Central Board of Indirect Taxes & Customs (CBIC), after getting legislative approval.

Progressive nature.

Regressive nature.