How are taxes paid in India?

There are three different ways of paying Income taxes in India. Voluntary payment of taxes by citizens, tax collected at source, and tax deducted at source are the three ways in which the Government collects the income tax. You can read about the Tax Administration Reform Commission – TARC. Mandate, Report, Recommendations in the given link.

In India, the direct taxes are levied on the earnings of the corporates and individuals; whereas the indirect taxes are levied on the provision and sales of goods and services. 

Further readings:

1. Tax Policy Council & Tax Policy Research Unit: Notes for UPSC
2. Taxation in India – Direct taxes & Indirect Taxes, Features of Taxation System