what is the difference in direct expenses and indirect
expenses?
Answer Posted / danny deb
When the INCIDENCE and IMPACT is on the same person, then it
is called Direct Tax.
INCIDENCE- When?
IMPACT- On Whom?
Eg: When a person get salary then he has earned some income.
Then, he has to pay taxes on his income, i.e for his income.
Hence both the incidence and impact is on the same person.
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When the INCIDENCE and IMPACT is on different persons, then
it is called Indirect tax.
Eg: As soon as goods are manufactured and brought out of the
factory gate, a tax by the name TAX DUTY will be be paid by
the manufacturer. But the consumer of the goods will
ultimately pay tax along with the price of the goods. So the
impact is on the consumer.
_________________________________________________________
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