Tax is a general term used for collecting a certain amount by government bodies from individuals and corporations. Tax is an involuntary fee paid by individuals or corporations enforced by local, state or central government in order to finance the government activities for the betterment of public.
There are certain documents which are required to file taxes in India, which includes Pan Card, Aadhaar card, details of cash deposited during demonetization period, bank accounts details, TDS details, etc.
Direct tax is the tax which is paid by an individual or an organization directly to the tax collecting authority or department. I.e. Income tax.
As the name suggests, indirect taxes are levied on the goods and services used by individuals for their consumption, instead of their income.
Indirect tax, the slab of tax goes higher with a higher income that helps in diminish inequality, whereas the poor has to pay for their necessity in indirect taxes. Direct taxes are also certain from the revenue point of view, the government can analyze it in advance, while in indirect tax, the consumption in uncertain which lacks in giving an approx figure of tax collection.
Indirect Tax is convenient in terms of paying tax, as an individual has to pay tax only if he buys goods or services, where in direct tax it’s compulsory to pay the tax depending upon the income. Indirect taxes are universal in terms of collection as it’s paid by all the consumers, whereas in direct tax, there are exemptions granted to pay tax.
Thinking form the taxpayer’s’ viewpoint, he/she has to pay both direct and indirect taxes, which at the end results into the financial burden of the taxpayers.