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Direct tax is called direct because it is directly collected form : 1) the producers on goods produced 2) the sellers on goods sold 3) the buyers of goods

4) the income earners


Any tax whose burden falls on the same person on whom it is legally imposed, is called a direct tax.

For e.g if you pay a tax to a government in the first instance but you spread its burden by increasing the price of your good/service,than it won't be termed as a direct tax.A direct tax requires that the burden of the tax falls on the same person on whom it is legally imposed.
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