Tax is defined as the obligatory contribution by entities or individuals to the governments in almost every country of the world. The different types of taxes are Direct Tax and Indirect Tax. Examples of Direct Taxes are Income Tax, Corporation Tax, Dividend Distribution Tax, Minimum Alternate Tax, and Security Transaction Tax. Examples of Indirect Tax are Service Tax, Sales Tax, Value Added Tax, Excise Duty, Customs Duty, etc.
Two Merits and Two Demerits of Direct Taxes
The tax paid by a person or organization directly to the entity that imposed it is called direct tax. Following are the two merits and two demerits of direct taxes:
Two Merits of Direct Taxes
Two Demerits of Direct Taxes
They are elastic and productive.
There are chances of tax evasion.
They have an educative value because they create a civic sense among the taxpayers.
They are inconvenient on the part of the taxpayers.