Tax in India

Overview of Tax

What is Tax?
Tax, in general, is the imposition of financial charges upon an individual or a company by the Government of India or their respective state or similar other functional equivalents in a state. The computation and imposition of the varied taxes prevalent in the country are carried on by the Ministry of Finance’s Department of Revenue. During the year of 2010 – 2011, the gross collection of tax amounted to around INR. 7.92 trillion, where the direct tax has got 56 % contribution and the indirect tax has got 44 % contribution. In 2014-15 the gross tax collection was up by 5,46,661 crores or by a percentage of 12.93% as compared to what is was in the fiscal year 2013-14.

About Tax System in India.

The taxation system in the Republic of India is quite well structured. The Department of Revenue of the Finance Ministry of the Government of India is responsible for the computation; levy as well as collection of most the taxes in the country. However, some of the taxes are even levied solely by the Local State Bodies or the respective governments of the different states in the nation.

Changes in the Indian Taxation System.

Over a period of 10 years to 15 years, the tax system in the nation has undergone some significant changes. The entire system has been tremendously reformed. The slabs for the imposition of taxes have been modified. Besides that, the rates at which any particular tax is being levied have been restructured as well as the various laws that govern the levying of taxes were being simplified. All of these reformations have resulted in the following:
• Better compliance
• Better enforcement
• Easy payment of the levied taxes

The date of 1st April of the year 2005 is marked as the date of the implementation of the V. A. T. or the Value Added Tax by almost all the State Governments as a replacement of the earlier Sales Tax. Some of the states in the Indian Republic, where V. A. T. has not been implemented yet, still levy Sales Tax though. Apart from these, the process of rationalization of the tax laws is still in progress.

Taxes Levied in India

Taxes Levied by the Central Government of India

The Central Indian Government that is officially named as the "Union Government" is responsible for the imposition of both direct taxes as well indirect taxes. Listed below are some of the taxes that are levied by the India Government:

Direct Taxes
• Banking Cash Transaction Tax
• Capital Gains Tax
• Corporate Income Tax
• Fringe Benefit Tax
• Personal Income Tax
• Securities Transaction Tax
• Indirect Taxes
• Customs Duty
• Excise Duty
• Service Tax

Taxes Imposed by the State Governments

Though the majority of the taxes are levied by the Central Government of the country, there are some taxes, which cannot be levied by them. These kinds of taxes are the one of the sole responsibilities of the governments of the individual states. To name a few of such taxes in India are:
• Dividend Tax
• Endowment Tax
• Estate Tax
• Gift Tax
• Flat Rate Tax or Flat Tax
• Fuel Tax
• Inheritance Tax
• Transfer Tax
• Payroll Tax
• Poll Tax
• S. E. T. or Self Employment Tax
• Social Security Tax
• Usage Tax
• Value Added Tax or Sales Tax
• Wealth Tax

Tax Incentives in India

The India Government offers tax incentives that are subject to some specified conditions. Such incentives are provided for the following:
• Allowance for accelerated depreciation
• Corporate profit
• Certain expense deduction on the basis of some particular conditions
• A tax incentive is available for any fresh investment in any of the below mentioned sectors
• Companies involved in Research and Development
• Development of housing projects
• Development by undertakings
• Food processing industry
• Infrastructure
• Mineral oil production and refining
• Operating industrial places
• Organisations handling food grains
• Power distribution
• Hospitals located in the rural areas

More About Tax

Tax Planning in India

Tax Planning in India

Tax Planning in India is an application to reduce tax liability through the finest use of all accessible allowances, exclusions, deductions, exemptions, etc to trim down income and/or capital profits.
Salaried individuals in India are not fully aware of the tax planning exercise which is why they rush at the end of the tax-planning season and make investments to reduce their tax liability.

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Tax Saving Options in India

Tax Saving Options in India

Most delay this till the last moment and then invest without giving serious thought to the tax-saving instruments at hand. That's why we thought we should warm you up well in advance so that you can make the best use of all the options.
You can claim a deduction of up to Rs 1 lakh under Sections 80C, 80CCC and 80CCD.

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Types of Taxes in India

Types of Taxes in India

Here is list of different types of taxes including brief description.
Direct Taxes
It is names so because it is directly paid to the Union Government of India. As per a survey, the Republic of India has witnessed a consistent rise in the collection of such taxes over a period of past years.

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