MERITS OF DIRECT TAX:
1.Promotes equality:Since direct taxes are based on the person’s ability to pay,it promotes equality among payers and citizens.Everybody is charged a different amount depending on how much they make.
2.Promotes certainty: The good thing about direct taxes is that they are determined and made final before they are even paid.In the case of income tax,the annual tax is the same every year as long as the salary does not change.
3.Promotes elasticity: Taxes are the earnings of the government,and when they fluctuate the earnings also change.They can go higher or lower.
4.Saves time and money:The government does not need to spend on the collection of taxes because they are already taken right at the source of the income.Some companies use automatic payroll deduction system, which help save time and money.
5.Economical: The cost of collection of direct taxes is very low.They are mostly collected at the source.For instance,the income tax is deducted from the officer’s pay every month.This saves expense,the employer serves as an honorary tax collector.This means great economy.
6.Productive: Another virtue of direct tax is that they are productive.As a community grows in numbers and prosperity,the return from direct taxes expand automatically.The direct taxes yield a large revenue to the state.
7.A means of developing Civic sense:In the case of direct tax,a person knows he is paying a tax,he feels conscious of his rights.He claims the right to know how the government uses his money and approve or criticizes it.Civic sense is thus developed.He behaves as a responsible citizen.
DEMERITS OF DIRECT TAXES:
1.Inconvenient: The great disadvantage of a direct tax is that it pinches the payer.He squeaks when a lump sum is taken out of his pocket.The direct taxes are thus very inconvenient to pay.Nobody can help feeling the pinch.
2.Evadable: The assessee can submit a false return of income and thus evade the tax.That is why a direct tax is a tax on honesty.There is a lot of evasion.Many of those who should be paying tax go scot-free by concealing their incomes.
3.Arbitrary:If taxes are progressive, the late of progression has to be fixed arbitrarily;and if proportional they fall more heavily on the poor, thus both are bad.The rate of taxes depend on the whim of the finance minister.This is arbitrary.
4.Disincentive:If the taxes are too heavy,it discourages savings and investment.In that case, the country will suffer economically.A high level of taxation discourages investment and enterprise in the country.It inflicts a lot of damage,on business and industry.
I think the merits outweighs the demerit because it favours both the government and the citizens.But If the citizens responsibly adhere to their Civic duty by paying tax,it will help in generating a large revenue for the government and the government in turn provides infrastructures for the citizens for the betterment of the society.

Merits of Direct Tax:
1. Direct taxes ensure certainty. The government and the tax payer both know fairly definitely what amounts are to be paid.
2. Direct taxes are elastic. Whenever the government needs more revenue it may raise the rate of direct taxes. In case, the government desires to give relief to the tax payers, it may reduce the rate of taxes.
3. Direct taxes are progressive in nature. It increases with the increase in money income. In other words, those who have large income have to pay more taxes and others who have smaller income have to pay very small amount of tax. This also helps in equitable distribution of wealth.
4. Direct Taxes are supposed to have an educative effect. The tax payer is conscious that he provides funds to the government, and is interested in seeing that they are properly used.
5. Direct taxes are economical, these taxes are paid by the tax payers to the state authorities, therefore, the collection charges are very nominal.
Demerits of Direct Taxes:
1. Tax evasion is possible in case of direct taxes. People can evade a direct tax by preparing dubious and false accounts and furnishing wrong statements and information’s about their income and wealth.
2. It has a narrow base or limited area of functioning. Only a very few tax payers fall in the net of direct taxes. These are imposed on persons having income and wealth beyond a certain limit.
3. Direct taxes are often inconvenient, partly because numerous accounting and other formalities have to be observed and partly because large lump sum tax payments have to be made.
4. Another disadvantage of direct taxes is that they reduce the desire to work and save. The rate of direct taxes are usually high. Many business ventures are not undertaken on the ground that a large part of the income earned will have to be given to the government in the form of taxes. Thus, direct taxes reduce incen­tives to work hard and save.
To my own understanding the merits outweighs the demerits if the government and payers are able to consciously adhere to it properly.

Taxation is a system whereby the government imposes a compulsory levy on the working class citizens in a country.
Direct tax system is a method of taxation whereby the government imposes taxes on the people in a system whereby it can hardly be transferred to the consumers. It mainly follows a Pay As You Earn (P. A. Y. E).Direct taxes are one type of taxes an individual pays that are paid straight or directly to the government, such as income tax, poll tax, land tax, and personal property tax. Such direct taxes are computed based on the ability of the taxpayer to pay, which means that the higher their capability of paying is, the higher their taxes are or the higher their capacity, the lower their taxes or on proportional basis
It can be imposed in different ways like: Personal Income tax, Capital gains tax, Company tax,e.t.c.
Forms of direct tax: Progressive tax system, Proportional tax system, Regressive tax system.
Advantages of direct tax system:
1. Equity:
A direct tax is an equitable tax. Through it the rich can be made to pay more than the poor. In case of necessity, the poor people can be granted exemption from payment of such taxes.

A direct tax is equitable in the sense that it is levied according to the taxable capacity of the people. The rates of direct taxes, like the income tax, can be fixed in such a way that the higher the income of a man, the greater is the rate at which he has to pay the tax. Such a system is known as progressive taxation.

2. Certainty:A direct tax satisfies the canon of certainty. For instance, a person liable to pay income tax knows how much he will be required to pay; for that purpose he can appropriate steps beforehand.

3. Elasticity:
A direct tax has elasticity. It can be varied according to the needs of the government and changes in the income of the people. When the income of the people goes up, the rate of income tax can also be increased. If the income of the people falls, the rate of income tax can also be lowered.

4. Productivity:
Direct taxes constitute an important source of government revenue. Their collection charges are also low. There­fore, direct taxes are productive.

5. People’s Consciousness:
A direct tax increases the civic sense of the people. When the people are fully aware of the payment of taxes, they are also conscious of the way the government spends the money. They resent unproductive or wasteful expenditure. As a result, the government becomes careful in its expenditure.

(B) Demerits:
But direct taxes have certain demerits or defects, too.These are:

1. Lack of Popularity:
First, such taxes are not very popular, because the people have to bear the burden of such taxes directly. That is why, when the rate of a direct tax is raised, most people express their resentment against the government. For instance, when the rate of personal income tax or corporate profit tax is raised, criticism from those affected be­comes very strong.

2. Evasion:
The second disadvantages of a direct tax is that it is liable to be evaded. By submitting false returns, many people try to evade income tax. Unless the civic sense of the people is well — developed and there is spread of education among them, the admi­nistration of direct taxes is very difficult.

3. People’s IndifferenceThe third dis­advantage of a direct tax is that it does not develop the civic sense of those who do not pay such taxes. In the case of income tax, people with incomes below a certain level are not liable to pay tax. In a low-income country like India, the majority of the people are not required to pay income tax. When a man directly bears the burden of a tax, he tries to know how the government spends that money. Those who are not directly affected by the burden of taxation remain indifferent as to the way the public expenditure is incurred.

4. Disincentive to Work and Save:
Another disadvantage of direct taxes is that they reduce the desire to work and save. The rate of direct taxes are usually high. Many business ventures are not undertaken on the ground that a large part of the income earned will have to be given to the government in the form of taxes. Thus, direct taxes reduce incen­tives to work hard and save.

As the direct taxes have these defects, in a good tax system there should be indirect taxes, too.

My point of view is that the advantages are very well to the community at large and the disadvantages are to the employees and business owners at large who cannot transfer the tax to the consumers which may lead to small retained profit discouraging people to work.