India is a country surmounted by about 100 types of taxes but if we try to classify them then two broad categories are there i.e. Direct tax and Indirect tax. The basic difference between the two is the pinch that is felt by the giver. In case of direct tax the pinch is directly felt by assesses whereas in case of indirect taxes pinch is not directly felt. It is also felt that collection of indirect taxes is comparatively easier for the government rather than collecting direct taxes. As far as chances of tax evasion are concerned tax evasion in case of direct taxes is more rather than tax evasion in case of indirect taxes. Systematic maintenance of records is required in case of indirect taxes but no such recording is required in case of direct taxes. From the time we are born till the time we are dead we are not aware of the fact that how much we have paid up till now. On the packets of goods it is written in bracket of price tag inclusive of all taxes. Indirect taxes are inflationary in nature. They are applied on some value of a commodity which is generally known as Assessable value. On this Assessable value it is applied at a particular rate that is why it is known as Ad valorem duty.