In this blog I am going to talk about the taxation structure in India. Basicily the Indian tax structure is divided into two majar parts. The part are
1 Direct Taxes
2 Indirect taxes
The classifications of tax can be based on who levies the taxes. In our Constitution it is clearly described that which work is to be done by whom? It means all the state duties are divided into three categories
1 Central Government duty
2 State Government duty
3 The duties done by both of the government jointly.
Accordingly the source of income for both of the government is also divided.
Direct Taxes
Direct tax means where the taxpayer directly involved to submit the tax as their liability otherwise they may be punished.
In India Direct Taxes were governed by two major acts.
Income Tax Act, 1961
Wealth Tax Act, 1957.
The government wants to make a new law to replace the two existing above mentioned acts from Direct Taxes Codes (DTC), but the idea of DTC was dropped by the government.
Income Tax is the major source of direct tax in India.
Income Tax
The Income tax rules is being enactment in India as per the Income Tax Act, 1961.
According to this act the government imposes tax on the personal income.
The tax is to be imposed on the personal income under the following five category
Income from house property
Income from business and profession
Income from salaries
Income from capital gains
Income from other sources
As per the Income Tax Act, 1961, the persons who are include to pay the tax category are as under
Individual
Hindu Undivided Family (HUF)
Association of Persons (AOP)
Company
Firm
Local authority
The tax rate is prescribed every year by Parliament in the Finance Act, popularly called the Budget.
Indirect Taxes
Indirect tax is the tax where a individual does not involve to pay the tax directly. It includes
Service tax
It is a tax levied on services provided in India, except the State of Jammu and Kashmir. The responsibility of collecting the tax with the Central Board of Excise and Customs(CBEC). Ptesently thr service tax is imposed on all services, except those which are specifically exempted under law. The rate of service tax is also fixed by the government.
Excise and Customs
The is levied under Central Excise Act, 1944, which imposes a duty of excise on goods manufactured or produced in India.
Customs Act, 1962, which imposes duties of customs on goods imported in India
Central Sales Tax, 1956, which imposes sales tax on goods sold in different parts of the country.
State tax
Value Added Tax
VAT is a major source of revenue for States govenment.
Other state level taxes include
Entertainment tax,
Entry Tax , Toll Tax and Octroi.
1 Direct Taxes
2 Indirect taxes
The classifications of tax can be based on who levies the taxes. In our Constitution it is clearly described that which work is to be done by whom? It means all the state duties are divided into three categories
1 Central Government duty
2 State Government duty
3 The duties done by both of the government jointly.
Accordingly the source of income for both of the government is also divided.
Direct Taxes
Direct tax means where the taxpayer directly involved to submit the tax as their liability otherwise they may be punished.
In India Direct Taxes were governed by two major acts.
Income Tax Act, 1961
Wealth Tax Act, 1957.
The government wants to make a new law to replace the two existing above mentioned acts from Direct Taxes Codes (DTC), but the idea of DTC was dropped by the government.
Income Tax is the major source of direct tax in India.
Income Tax
The Income tax rules is being enactment in India as per the Income Tax Act, 1961.
According to this act the government imposes tax on the personal income.
The tax is to be imposed on the personal income under the following five category
Income from house property
Income from business and profession
Income from salaries
Income from capital gains
Income from other sources
As per the Income Tax Act, 1961, the persons who are include to pay the tax category are as under
Individual
Hindu Undivided Family (HUF)
Association of Persons (AOP)
Company
Firm
Local authority
The tax rate is prescribed every year by Parliament in the Finance Act, popularly called the Budget.
Indirect Taxes
Indirect tax is the tax where a individual does not involve to pay the tax directly. It includes
Service tax
It is a tax levied on services provided in India, except the State of Jammu and Kashmir. The responsibility of collecting the tax with the Central Board of Excise and Customs(CBEC). Ptesently thr service tax is imposed on all services, except those which are specifically exempted under law. The rate of service tax is also fixed by the government.
Excise and Customs
The is levied under Central Excise Act, 1944, which imposes a duty of excise on goods manufactured or produced in India.
Customs Act, 1962, which imposes duties of customs on goods imported in India
Central Sales Tax, 1956, which imposes sales tax on goods sold in different parts of the country.
State tax
Value Added Tax
VAT is a major source of revenue for States govenment.
Other state level taxes include
Entertainment tax,
Entry Tax , Toll Tax and Octroi.
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