The most common example of a direct tax in India is the income tax, where individuals and businesses are required to pay a percentage of their earnings to the government. Indirect taxes, on the ... Guide to Direct Tax vs Indirect Tax. Here we discuss differences between Direct Tax and Indirect Tax with infographics and comparison table. Taxes consist of direct tax or indirect tax, and may be paid in money or as its labour equivalent (often but not always unpaid labour). India has a well developed taxation structure. The tax system in India is mainly a three tier system which is based between the Central, State Governments and the local government organizations. Direct tax falls under the ambit of the Central Board of Direct Taxes and is typically levied directly on individuals and entities depending on their income. Indirect tax is not levied on income but is charged on goods and services. It is governed by the Central Board of Indirect Taxes and Customs.
