Tax Structure in India

Taxes are an important source of income for the government. It’s the income of the government imposes on an individual or corporates directly or indirectly so as to generate revenue or to keep in check any black money activities in India. The tax on incomes, customs duties, central excise, and service tax is levied by the Central Government. The State Government levies agricultural income tax (income from plantations only), VAT/ Sales Tax, Land Revenue, Luxury Tax, Stamp Duty, State Excise, and Tax On Professions. The local bodies have the authority to levy taxes on properties, octroi/entry tax, and tax for utilities like water supply, drainage, etc.

DIRECT TAXES

Direct taxes are levied directly on the person. These contribute a major chunk of the total taxes collected in India.

INCOME TAX

This is a type of tax levied on individuals whose income falls under the taxable category (more than 3 lakhs per annum). CBDT and the Department of Revenue under the Ministry of Finance, Govt. of India governed the Indian Income Tax Department.

Corporate Income Tax – It’s the tax levied on the profits a corporate house earned in a year. In India, the Corporate Income tax rate is a tax collected from companies.

Securities Transaction Tax

Securities Transaction Tax introduced in 2004, It is levied on the sale and purchase of equities (ie Shares, any other security). more clearly, The income an individual generates through the securities market be it through reselling of shares or through debentures is taxed by the government of India, and the same tax is called Securities Transaction Tax.

Banking Cash Transaction Tax

A bank transaction tax is a tax levied on debit (and/or credit) entries on bank accounts. Banking Cash Transaction Tax can be automatically collected by a central counterparty in the settlement or clearingprocess.

Capital Gains Tax

Capital Gain tax as the name suggests is a tax on the gain in the capital. When you sell property, shares, bonds & precious materials, and earn a profit on it then you are supposed to pay capital gain tax.
• PROPERTY TAX
• GIFT TAX
• HOUSE TAX
• PROFESSIONAL TAX
• DTC

INDIRECT TAXES

You go to a supermarket to buy goods or to a restaurant to have a mouthful there at the time of billing you often see yourself robbed by some more amount than what you enjoyed of, these extra amounts are indirect taxes, which are collected by the intermediaries and when govt tax the income of the intermediaries this extra amount goes into government’s kitty, hence as the name suggests these are levied indirectly on common people.

Indirect Taxes

• SALES TAX
• VAT(VALUE-ADDED TAX)
• CUSTOM DUTY
• OCTROI
• EXCISE DUTY
• ANTI-DUMPING DUTY

• ENTERTAINMENT TAX
• TOLL TAX
• SERVICE TAX
• GST-GOODS & SERVICE TAX

Sales Tax: Sales tax is charged on the sales of movable goods.

Value Added Tax: When we pay an extra amount of price for the goods and services we consume or buy, that extra amount of money is called VAT. This tax is about to be replaced by Goods and Services Tax.

Customs Duty: Customs Duty is a type of indirect tax levied on goods imported into India as well as on goods exported from India. In India, the basic law for levy and collection of customs duty is Customs Act, 1962. It provides for levy and collection of duty on imports and exports.

Custom duty & Octroi (On Goods): Custom Duty is a type of indirect tax charged on imported goods into India. One has to pay this duty, on goods that are imported from a foreign country into India
Octroi is a tax applicable on goods entering from one state to another for consumption or sale. In simple terms, one can call it Entry Tax.

Excise Duty: An excise duty is a type of tax charged on goods produced within the country. Another name of this tax is CENVAT (Central Value Added Tax).

Service Tax: Service Tax is a tax imposed by the Government of India on services provided in India. The service provider collects the tax and pays the same to the government. Service tax is charged on all services except the services in the negative list of services.

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