In this study an attempt has been made to estimate the incidence of federal taxes, for the fiscal year 1978-79, on households belonging to different incomebrackets. All the major direct and indirect taxes have been studied. The tax system turns out to be slightly progressive for the country as a whole. For urban areas, it is slightly progressive, and for rural areas it is slightly regressive. Indirect taxes, a major source of the federal government tax revenue, are generally slightly regressive.