Direct and Indirect

Taxes in India
Presentation by (Group 5)-
Harshvardhan Joshi 20021321046
Hitanshi Vajirani 20021321049
Jayaditya Joshi 20021321057
 Direct Taxation in India

Direct Taxes are the taxes which are levied directly on a

person or a corporate entity and cannot pass it onto
someone else. Examples for direct taxes are as follows:
● Corporate tax
● Income tax
● Wealth tax
● Property tax
● Gift tax
 Advantages and Disadvantages of Direct Taxes

Advantages Disadvantages

It Curbs inflation Psychological Resistance

Social and Economic balance Inconvenient to pay

Alleviate regional disparity Disincentivize savings and

investments
 Indirect Taxation in India

Indirect taxes are levied by the Government on goods and

services and not on the income of any individual and can be
shifted from one taxpayer to the other. Examples include:
● Goods and Services tax
● Securities Transaction tax
● Custom duty
● Road tax
 Advantages and Disadvantages of Indirect
Taxes

Advantages Disadvantages
Tax evasion is less Regressive in nature

Collection costs are less Often perceived as inflationary

Convenient to pay Are not industry friendly

Indirect taxes abolished after introduction
of GST

● Service Tax
● Central Excise duty
● Additional duties of excise
● State VAT
● Purchase tax
● Luxury tax
 Purposes of a taxation system
Direct taxes-
• Main source of income for the government
• Regulates disposable incomes
• Major driver of government expenditure
Indirect taxes-
• Encourage consumption of “good” products
• Discourages consumption of “harmful” products
• Generate tax revenue for the government
 Scenario of the taxation system in India

Major Central taxes Major State taxes

- Income Tax - SGST
- CGST - Stamp duty
- IGST - Property tax

- Customs Duty
 References

• https://cleartax.in/s/direct-indirect-taxation-india-explain
ed
• https://www.canarahsbclife.com/tax-university/articles/
what-are-the-importance-of-taxes-in-india.html
• https://www.edupristine.com/blog/direct-indirect-taxes