Question

What is the difference between income tax and excise duty?

Answer 1

Excise duty is an indirect tax that is levied on production of good and that manufactured within India.

It should not confuse between excise tax and custom duty as well as income tax.

They are levied on goods so that it able to deliver custom duty that is charged on goods productions.

Answer 2

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$\rm{\boxed{Income\: tax:}}$

• Income tax is levied on annual personal income of individual.

• Income tax is a direct tax.

• The tax burden will be on the same person on whom the tax is levied.

• Income tax does not affect the prices of goods.

$\rm{\boxed{Excise\:Duty:}}$

• Excise duty is levied on the production or manufacturer of goods.

• Excise duty is an indirect tax.

• Excise duty is charged from the factory itself but the burden is shifted to those who buy the goods.

• These taxes raise the overall prices of goods.

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