← GlossaryPolicy & Tax
Direct Tax
Direct taxes are levied on income, profits or wealth and paid directly by the person or company, mainly income tax and corporate tax. They are usually progressive, with higher rates on higher incomes.
Why It Matters
Direct taxes are paid by a small share of Indians but raise a large share of revenue.
In India
Only a small fraction of Indians pay income tax, because most earn below the threshold at which tax becomes payable.
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