Taxes In India

Taxes in India are levied by both the Central Government and State Governments in India. Each and every citizen pays taxes to the governments in some or the other way.

Direct Taxes In India

Direct tax is something which is Directly paid by to the Government. The Direct taxes are governed by the CBDT (Central Board of Direct Taxes). Incase of a Direct Taxes the taxes cannot be passed on to any other tax payer. Income Tax Paid is a Direct Tax.

List of Direct Taxes.

  • Income Tax
  • Capital Gain Tax
  • Securities Transaction Tax
  • Corporate Tax
  • Dividend Distribution Tax.

Income Tax

Income Tax is a Tax Imposed on every Individual or an HUF (Hindu Undivided Family) for the Income earned by the Tax Payer. The are Different Tax Slabs and deductions that are applicable depending on Tax Payers age, gender, etc…

Tax Slabs and Deductions for each and every financial year may vary depending on the Finance Bill that is passed every year.

Income Slab for the Financial Year 2018 – 2019 is mentioned in the link.

Capital Gain Tax

Capital Gain Tax is applicable on every Income Received through Sale of an Asset.

Capital Gains its classified under two different types

  1. Long Term Capital Gain (LTCG)
  2. Short Term Capital Gain (STCG).

Securities Transaction Tax

Securities Transaction Tax are taxes levied when there is any sale or Purchase of a listed Shares, Mutual Funds, Derivatives  from any recognised Stock Exchanges in India. STT Rate depends on the type os Asset purchased. For Example if there is a Purchase or Sale of a Share 0.1% is charges on the Value of the Transaction.

Corporate Tax

Corporate Tax are taxes levied on the profits generated by the Company. Corporate Tax is levied on Private Limited, Limited Liability Partnerships, One man Company, Public Limited Companies. Incase of zero tax paying companies then there is MAT (Minimum Alternate Tax) that is levied for companies operating in Special Economic Zones.

Dividend Distribution Tax

Dividend Distribution tax is a tax levied on Companies or Investments which pay dividend to its Investors. Dividend Distribution tax is not Taxed in the hands of the Investor but its taxed on the Company or Investments declaring dividends. Dividend Distribution Tax is Taxed at 15%.

In Direct Taxes In India

Indirect Tax is a tax which is paid by every person in India. Indirect taxes are taxes which are paid Indirectly on the good and services purchased or Sold. Incase of the Indirect Tax the Seller of the goods and services passes on the Tax to the consumer.

Indirect Tax are nothing but GST (Goods and Service Tax), Stamp Duty, Entertainment Tax, etc…

Earlier there were many Types of Indirect taxes like Customs Duty, VAT, Service Tax, etc…. which is replaced by a Single Tax as GST which is uniform across the country on products and Services.


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