The correct answer is option 3 - Indian Income Tax is direct and progressive.

To understand this, let`s first clarify what direct and indirect taxes mean. Direct taxes are taxes that are imposed directly on the income or wealth of individuals or businesses. Indirect taxes, on the other hand, are taxes levied on the production or purchase of goods and services, which may be ultimately passed on to the consumer.

Next, let`s talk about progressive and proportional taxes. Progressive taxes are taxes that increase as the income or wealth of an individual or business increases. In other words, the tax rate increases as the income or wealth increases. Proportional taxes, on the other hand, have a fixed rate regardless of the income or wealth of the taxpayer.

Based on the above definitions, we can conclude that Indian Income Tax is direct and progressive. It is imposed directly on the income of individuals and businesses, and the tax rate increases as the income increases. This means that higher-income earners generally pay a higher percentage of their income in taxes compared to lower-income earners.