10 Taxes You Should Know About _ Business Standard News
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Search News Investment Yogi | Hyderabad April 11, 2014 Last Updated at 08:49 IST ALSO READ Odisha monthly commercial tax collection sinks 10% in Nov 6 important aspects to help you during tax planning for FY14 FinMin officials say bringing overseas deal under tax net creates uncertainty Our confusing tax code Odisha Commercial tax collection up 14% in April PF » Primers » Tax 10 taxes you should know about Through this article, we will try to figure out different types of taxes levied in Indian financial system and their effects Taxes, along with taxation rules are one of the most complex and confusing topics of any financial system. This complexity arises because of different types of taxes with different tax rates and continuous amendments in the taxation rules which are retrospective and prospective at times. Through this article, we will try to figure out different types of taxes levied in Indian financial system and their effects. Types of Taxes Taxes represent the amount of money we pay to the Government at predefined rates and periodicity. Taxes are the basic source of revenue to the Government using which it provides various kinds of services to the tax payers. There are mainly two types of Taxes, direct tax and indirect tax which are governed by two different boards, Central Board of Direct Taxes (CBDT) and BS APPS BS PRODUCTS BS SPECIALS SIGN IN TRENDING ON BS StartUps #BiharElections 52 11 7 22 Ad Monthly SIP Investments Invest as low as Rs 1000pm in Top SIPs in just 2mins. Start a ZipSIP. www.myuniverse.co.in/ZipSIP
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Transcript of 10 Taxes You Should Know About _ Business Standard News
Search News
Investment Yogi | Hyderabad April 11, 2014 Last Updated at 08:49 IST
ALSO READOdisha monthly commercial taxcollection sinks 10% in Nov
6 important aspects to help youduring tax planning for FY14
FinMin officials say bringingoverseas deal under tax netcreates uncertainty
Our confusing tax code
Odisha Commercial taxcollection up 14% in April
PF » Primers » Tax
10 taxes you should know aboutThrough this article, we will try to figure out different types of taxes levied in Indian financial systemand their effects
Taxes, along with taxation rules are one of the mostcomplex and confusing topics of any financial system.This complexity arises because of different types of taxeswith different tax rates and continuous amendments in thetaxation rules which are retrospective and prospective attimes. Through this article, we will try to figure out differenttypes of taxes levied in Indian financial system and theireffects.
Types of Taxes
Taxes represent the amount of money we pay to theGovernment at predefined rates and periodicity. Taxes arethe basic source of revenue to the Government usingwhich it provides various kinds of services to the taxpayers. There are mainly two types of Taxes, direct taxand indirect tax which are governed by two differentboards, Central Board of Direct Taxes (CBDT) and
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October Central Board of Excise and Customs (CBEC). Let’s discuss the two types of taxes in detail. Direct Taxes
Direct taxes are the personal liability of tax payer. Theseare collected directly from the tax payers and they have tobe paid by the persons on whom it is imposed. Importantdirect taxes are listed below:
Income Tax
This is most important type of direct tax and almost everyone is familiar with it. TDS is its famoussynonym and whosoever is earning above a minimum amount (tax exemption limit) has to payincome tax. Wealth Tax
This is in addition to the income tax and is levied if your net wealth exceeds Rs 30 Lakh at the rateof 1% on the amount exceeding Rs 30 Lakh.
*Note – In Budget 20132014 Finance Minister Mr P. Chidambaram introduced a surcharge of 10percent on taxpayers with an annual taxable income of more than 1 crore (10 million) rupees. Property Tax/Capital Gains Tax
This is levied on the capital gains arrived by selling property and stocks. Tax rates are different forlong term and short term capital gains. Gift Tax/ Inheritance or Estate Tax
Amount exceeding Rs. 50000 received without consideration by an individual/HUF from anyperson is subjected to gift tax as income under “other sources”. There are exemptions like moneyreceived from relatives is not taxable. Marriage gifts and money received through inheritance arealso exempt from gift tax. Inheritance tax was earlier in practice but has been repealed by thegovernment. Corporate Tax
Companies operating in India are taxed as per the corporate tax rate on their income. This tax isone of the major sources of revenue for government.
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Indirect Tax
Impact and incidence of indirect Taxes fall on different persons as opposed to direct taxes whereimpact and incidence is on the same person. These taxes are recovered from different groups ofpeople but the liability remains with the person who collects it. Tax payer recovers the indirecttaxes paid from their consumers and clients and finally pays it to government.
For example, when we purchase any product we pay VAT, when we eat in restaurants we payservice tax which are ultimately deposited in government’s kitty by the service providers. Briefabout various types of indirect taxes is given below:
Service Tax
Service providers in India are subject to service tax, which is charged on the aggregate amountreceived by the service provider. Services like leasing, internet/voice, transport, etc are subject toservice tax. Custom Duty
Custom duties are indirect taxes which are levied on goods imported to/exported from India. Thereare different rules for different types of goods and sectors. Government keeps on changing theserates so as to promote import/export of specific goods. Excise Duty
Excise duties are indirect taxes which are levied on goods manufactured in India for domesticconsumption. Like custom duty, there are a number of rules which keep on changing as pergovernment discretion.
Sales Tax and VAT
Sales tax is levied by the government on sale and purchase of products in Indian market. Ascustomers, whatever you buy from the market, you pay sales tax on it. Now, sales tax issupplemented with new Value Added Tax so as to make it uniform across country.
Security Transaction Tax (STT)
STT is levied on transactions (sale/purchase) done through the stock exchanges. STT isapplicable on purchase or sale of various financial products like stocks, derivatives, mutual fundsetc.
READ MORE ON PERSONAL FINANCE TAX TAX PLANNING SALES TAX
INCOME TAX VAT EXCISE DUTY CAPITAL GAINS TAX PROPERTY TAX PF
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Finding Information
I have intentionally not presented details of various tax rates and tax slabs as they keep onchanging at regular frequency. For details regarding correct rates and slabs it’s recommended tovisit government’s income tax website.
Source: investmentyogi.com
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