Direct taxes are levied on taxpayer’s income and profits; however, indirect taxes are charged on goods and services. Let's understand in detail about tax system.

The income tax is a direct tax, so it’s obvious — but you fund your government all year long through the slow, steady drip of indirect taxes, too.

Unlike direct taxes, indirect taxes are generally collected from the end consumer through an intermediary. The intermediary is then responsible to pass on the tax to the government.