This document provides information about direct and indirect taxes in India. It defines taxes as amounts of money collected by governments according to income or property value. Direct taxes are paid directly to the government and include income tax, property tax, and corporate tax. Indirect taxes are included in the prices of goods and services and paid to sellers, who then pay the tax to the government. Examples provided are GST, customs duty, VAT, and excise duty. Key differences between direct and indirect taxes are also outlined, such as how direct taxes vary based on income while indirect taxes have flat rates.

1. SHRI RAMSWAROOP MEMORIAL
UNIVERSITY
LUCKNOW DEVAROAD, UTTAR PRADESH
INDIRECT TAXES
(BCM 4005)
PPT ON TAX
Session (2023- 2024)
Submitted to: Submitted by:
Lt. Dr. Nancy Gupta Name: Suryanshu Panday, Akshat Gupta, Rohnit Singh
Roll No: 202110701110003, 202110701110010, 202110701110026
Course: B. Com (H) 31

2. Define Taxes
An amount of money that a government
requires people to pay according to their
income, the value of their property, etc.,
and that is used to pay for the things done
by the government.

3. Types of Taxes
• Direct Taxes- A direct tax is a tax that a person or
organization pays directly to the entity that imposed it.
Examples include income tax, real property tax, personal
property tax, and taxes on assets, all of which are paid by an
individual taxpayer directly to the government.
• Indirect Taxes- Indirect tax is the tax levied on the
consumption of goods and services. It is not directly levied on
the income of a person. Instead, he/she has to pay the tax
along with the price of goods or services bought by the seller.

4. Types of Direct Taxes
• Income Tax- Income tax, levy imposed on individuals (or family units) and
corporations. Individual income tax is computed on the basis of income
received. It is usually classified as a direct tax because the burden is
presumably on the individuals who pay it.
• Salary Income Tax- Sub Section (1) of Section 17 of the Income tax Act
provides an inclusive definition of Salary. It is a much broader term than it
is usually understood. In a financial year, the amount received by the
employee from his employer in any of the following will be considered
“Salary” for income tax purposes:-
 Wages
 Annuity or pension
 profit in lieu of salary of wages
 Grativity
 Fees
 Commission
 The advance Salary etc.

5. • House Property Income Tax- Under the Income tax Act, 1961, income from house
property is subject to taxation. The Annual value of any property is its taxable value and
the owner who receives the income from the property is liable to pay to applicable tax.
• Capital Gain- Any profit of gain that arises from the sale of capital assets comes under
the category income from capital gains and hence you will need to pay tax for that
amount in the year in which the transfer of the capital assets taxes place. This is called
capital gain tax.
• Wealth Tax- Wealth tax is a tax levied on the value of held assets. A wealth Tax is a
applicable to a variety of assets types including cash, Bank deposits, share, fixed assets
.
• Corporate Tax- A corporate tax is a levy which the government imposes on the income
of a company.

6. Types of Indirect Tax
• GST- GST is a single tax on the supply of goods and services right from the manufacturer to
the consumers. The goods and services tax is a tax on goods and services domestically for
consumption.
• Custom Duty- Custom duty are charge levied on goods when they cross international
borders.
• VAT- The Government charges sales tax on the selling price of an item, which is included in
the bill. This added tax is known as value.
• Excise Duty- Excise Duty is a tax levied on domestic sale produce goods generally, it is
charged on their production and sale and is also known as central value added tax
• CST Tax- The CST Act, 1956 Act provides for declaration of certain goods to be of special
importance in inter- state trade of commerce and lay- the restrictions on the taxation of such
items.

7. Difference between Direct and
Indirect Tax
Context Direct Tax Indirect Tax
Meaning Paid directly to the government
Paid to the government via
intermediary
Levied on Profits and income Goods and services
Taxpayer Individuals, HUFs and businesses
End-consumers of products, goods
and services.
Tax Rate
Directly depends on income and
profits
Same for everyone
Tax Burden Progressive
Rate of tax is flat so tax burden is
regressive
Transfer of liability Not transferable Can be transferable
Tax Collection Complex Quite convenient
Types Income Tax and STT Goods and Services Tax (GST)
Evasion Possible Not possible

8. Features of Indirect Tax
•Tax liability: The service provider or seller pays indirect taxes to the government, and the
liability is transferred to the consumer.
•Payment of tax: The seller pays indirect taxes to the government and the same is
transferred to the consumer.
•Nature: Indirect taxes were initially regressive in nature, but thanks to the
implementation of the Goods and Services Tax, they are now pretty progressive.
•Saving and investment: Indirect taxes are generally growth-oriented considering the fact
that they encourage consumers to save and invest.
•Evasion: It is difficult to evade indirect taxes because they are now implemented directly
through products and services.

9. Advantages of Indirect Tax
• The poof can contribute.
• Convinent
• Hidden in the prices of Goods and Services.
• Tax eviasion are less.
• Broad Based.
• Easy to collect.
• Equitable
• Check Harmful / consumption.

10. Disadvantages of Indirect Tax
• Regressive in Nature
• Uncertain
• Rising price Unduly
• uneconomical
• Harmful to Industry