What is the difference between direct tax and indirect tax?

Direct tax is the tax paid directly to the government by an individual or organization. Examples include income tax, corporate tax, and wealth tax. It is imposed based on the ability to pay, meaning higher-income individuals or companies pay more. The burden of direct tax cannot be shifted to others. On the other hand, indirect tax is imposed on goods and services. It is collected by intermediaries (like shopkeepers or service providers) and passed on to the government. The burden of indirect tax can be shifted, as it is included in the price of goods or services. Examples include Goods and Services Tax (GST), excise duty, and customs duty.