***** TYPES OF TAXES IN INDIA *****
I. DIRECT TAXES :
These types of taxes are directly imposed & paid to Government of India. There has been a steady rise in the net Direct Tax collections in India over the years, which is healthy signal. Direct taxes,
which are imposed by the Government of India, are:
(1) Income Tax :-
Income tax, this tax is mostly known to
everyone. Every individual whose total income
exceeds taxable limit has to pay income tax
based on prevailing rates applicable time to
time.
(2) Capital Gains Tax :-
Capital Gain tax as name suggests it is tax on
gain in capital. If you sale property, shares,
bonds & precious material etc. and earn profit on
it within predefined time frame you are supposed
to pay capital gain tax. The capital gain is the
difference between the money received from
selling the asset and the price paid for it.
(3) Securities Transaction Tax :-
A lot of people do not declare their profit and
avoid paying capital gain tax, as government can
only tax those profits, which have been declared
by people. To fight with this situation
Government has introduced STT (Securities
Transaction Tax ) which is applicable on every
transaction done at stock exchange. That means
if you buy or sell equity shares, derivative
instruments, equity oriented Mutual Funds this
tax is applicable.
(4) Perquisite Tax :-
Earlier to Perquisite Tax we had tax called FBT
(Fringe Benefit Tax) which was abolished in
2009, this tax is on benefit given by employer to
employee. E.g If your company provides you
non-monetary benefits like car with driver, club
membership, ESOP etc. All this benefit is taxable
under perquisite Tax.
(5) Corporate Tax :-
Corporate Taxes are annual taxes payable on the
income of a corporate operating in India. For the
purpose of taxation companies in India are
broadly classified into domestic companies and
foreign companies.
II. INDIRECT TAXES :-
(6) Sales Tax :-
Sales tax charged on the sales of movable
goods. Sale tax on Inter State sale is charged by
Union Government, while sales tax on intra-State
sale (sale within State) (now termed as VAT) is
charged by State Government.
(7) Service Tax :-
Most of the paid services you take you have to
pay service tax on those services. This tax is
called service tax. Over the past few years,
service tax been expanded to cover new services.
(8) Value Added Tax :-
The Sales Tax is the most important source of
revenue of the state governments; every state
has their respective Sales Tax Act. The tax rates
are also different for respective states.
(9) Custom duty & Octroi (On Goods) :-
Custom Duty is a type of indirect tax charged on
goods imported into India. One has to pay this
duty , on goods that are imported from a foreign
country into India. This duty is often payable at
the port of entry (like the airport). This duty rate
varies based on nature of items.
(10) Excise Duty :-
An excise or excise duty is a type of tax charged
on goods produced within the country. This is
opposite to custom duty which is charged on
bringing goods from outside of country. Another
name of this tax is CENVAT (Central Value
Added Tax).
(11) Anti Dumping Duty :-
Dumping is said to occur when the goods are
exported by a country to another country at a
price lower than its normal value. This is an
unfair trade practice which can have a distortive
effect on international trade. In order to rectify
this situation Central Govt. imposes an anti
dumping duty not exceeding the margin of
dumping in relation to such goods.
III. OTHER TAXES :
(12) Professional Tax :-
If you are earning professional you need to pay
professional tax. Professional tax is imposed by
respective Municipal Corporations. Most of the
States in India charge this tax.
(13) Dividend distribution Tax :-
Dividend distribution tax is the tax imposed by
the Indian Government on companies according
to the dividend paid to a company’s investors.
Dividend amount to investor is tax free. At
present dividend is 15%.
(14) Municipal Tax :-
Municipal Corporation in every city imposed tax
in terms of property tax. Owner of every property
has to pay this tax. This tax rate varies in every
city.
(15) Entertainment Tax :-
Tax is also applicable on Entertainment; this tax
is imposed by state government on every
financial transaction that is related to
entertainment such as movie tickets, major
commercial shows exhibition, broadcasting
service, DTH service and cable service.
(16) Stamp Duty, Registration Fees, Transfer
Tax :- If you decide to purchase property than in
addition to cost paid to seller. You must
consider additional cost to transfer that property
on your name.
(17) Education Cess , Surcharge :-
Education cess is deducted and used for
Education of poor people in INDIA. All taxes in
India are subject to an education cess, which is
3% of the total tax payable. The education cess
is mainly applicable on Income tax, excise duty
and service tax.
(18) Gift Tax :-
If you receive gift from someone it is clubbed
with your income and you need to pay tax on it.
This tax is called as gift tax.
(19) Wealth Tax :-
Wealth tax is a direct tax, which is charged on
the net wealth of the assessee. Wealth tax is
chargeable in respect of Net wealth
corresponding to Valuation date.Net wealth
means all assets less loans taken to acquire
those assets. Wealth tax is 1% on net wealth
exceeding 30 Lakhs (Rs 3,000,000). So if you
have more money, assets you are liable to pay
tax.
(20) Toll Tax :-
At some of places you need to pay tax in order
to use infrastructure (road, bridge etc.) build
from your money given to government as Tax.
This tax is called as toll tax. This tax amount is
very small amount but, to be paid for
maintenance work and good up keeping.
