Direct tax is a tax you pay on your income directly to the government. Direct Taxes are broadly classified as:
Income Tax: Income tax is a tax levied by the Government of India on the income of every person.
Corporate Tax: Tax paid by companies on the profits made from the business is known as corporate tax.
Indirect Taxes (Goods and Services Tax)
Indirect tax is a tax levied on goods and services that is paid to the government. For instance, restaurants recover taxes from you on the food you purchase or a service you avail and pay this to the government. Most indirect taxes have been replaced in India by the Goods and services tax (GST), which has recently been introduced is a unified tax that has replaced all the indirect taxes that business owners have to deal with.
Some indirect taxes apart from GST which are still collected include taxes on petroleum products, alcoholic drinks and electricity are separately collected by each state government.