Direct and Indirect taxes :

Taxes are broadly classified into Direct taxes and Indirect taxes.

Direct Taxes

Indirect taxes

Direct Taxes are taxes which are levied on persons for the income earned or activities conducted, the incidence of which is to be borne by the person himself on whom it is levied.

Indirect taxes are the taxes which are levied on a product or a service the incidence of which is borne by the consumers who ultimately consume the product or the service, while the immediate liability to pay the tax may fall upon another person such as a manufacturer or provider of service or seller of goods. Since the cost of indirect taxes is on the ultimate consumer and therefore even the economically challenged bear the brunt equally.