There are 2 types of taxes in India – Direct tax and Indirect tax.
Direct tax is a tax that is calculated and paid directly on your Income. Income tax is a direct tax. Direct Tax is proportional to the income of the person.
Indirect tax is a tax that is indirectly charged to you on purchase of goods or use of service Goods and Services Tax (GST) is an important and significant Indirect Tax.
Everyone who earns income above a certain amount is subject to income tax. Your income could be from salary, interest income from savings, income from mutual funds, sale of property or business or professional income. Income tax rates are pre-decided at the start of the year in the Union Budget (in the Parliament of India). The tax paid or deducted on these incomes is called the income tax.