Direct tax is levied and paid for by individuals, Hindu undivided Families (HUF), firms, companies etc. whereas indirect tax is ultimately paid for by the end-consumer of goods and services.
The burden of tax cannot be shifted in case of direct taxes while burden can be shifted for indirect taxes.
Lack of administration in collection of direct taxes can make tax evasion possible, while indirect taxes cannot be evaded as the taxes are charged on goods and services.
Direct tax can help in reducing inflation, whereas indirect tax may enhance inflation.
Revenue deficit is the excess of revenue expenditure over revenue receipts, whereas fiscal deficit is the excess of total expenditure over total receipts.
