Taxes are sums of money that the government levies on people or businesses directly or indirectly in order to raise money or rein in any black money operations in India.
DIRECT TAXES-Tax system
- These taxes are imposed straight on the people.
- These make up a sizable portion of all taxes paid in India.
Some of the direct taxes are-
- Income Tax:
People whose income falls into the taxable category are subject to this form of tax (2.5 lakhs per annum). CBDT oversees the Indian Income Tax Department, which is under the Ministry of Finance’s Department of Revenue. from India. The primary source of funding for the government’s operations and provision of public services is income tax.
Corporate Income Tax :
This tax is imposed on the profits a corporate entity made within a certain year. The corporate income tax rate is a tax that is levied against businesses in India. Its amount is determined by the net profits businesses make from operating their businesses, often over the course of one fiscal year.
Securities Transaction Tax:
STT was implemented in 2004 and is assessed on equity sales and purchases. To put it more plainly, the government of India taxes any revenue that an individual derives from the securities market, whether it comes from the resale of shares or the purchase of debentures. This tax is known as the Securities Transaction Tax.
Banking Cash Transaction Tax :
A tax imposed on debit (and/or credit) entries on bank accounts is known as a bank transaction tax. It may be automatically gathered during the clearing or settlement process by a central counterparty.
INDIRECT TAXES-Tax system
When you go to a supermarket or restaurant to buy something or have a meal, you frequently find that you have been overcharged. These extra amounts are indirect taxes that are levied indirectly on ordinary people because they are collected by intermediaries and added to the government’s coffers when the government taxes the income of those intermediaries.
Some examples of Indirect Taxes are-
- value added Tax:
VAT is the name for the additional amount of money we pay for the goods and services we use or purchase. The Goods and Services Tax is about to take the place of this tax.
- custom duty:A sort of indirect tax known as customs duty is imposed on both imported and exported products in India. The Customs Act of 1962 governs the levying and collecting of customs duties in India. It specifies how import and export duties will be assessed and collected.
- Excise duty:A tax on a good manufactured for sale or sold domestically, or a charge on permits for particular activities, is known as an excise or excise tax. It is an inland tax on these activities. Excises differ from customs duties, which are import taxes.
- Service Tax:The government of India levies a tax known as the service tax on services rendered in India. The tax is collected by the service provider and given to the government. Except for the services on the negative list of services, it is charged on all services.
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