Post by sudesh on Jan 30, 2017 2:03:20 GMT -5
Taxation is a source of income of the Government. In turn, the tax payers receive certain benefits from the government.
The entire taxation system can be broadly categorized into the following heads,along with introduction to each category and a brief description:-
1.Income Tax - This is the most common type of tax and everyone knows about it. Any person who has an income above a particular amount has to pay this tax. Sometimes, this tax is also referred to as TDS.
2.Wealth Tax - This is an additional tax that one has to pay if his net-worth exceeds 30 Lakhs. Under such circumstance, the concerned person needs to pay 1% of the amount that is in excess to 30 Lakhs. For example, if someone's net worth is 40 Lakhs, he has to pay Rs. 10,000 /- as wealth tax. Currently it has been abolished in India.
3.Property Tax/Capital Gains Tax - Upon selling property or stocks,this tax is levied on the capital gains thus made. The rates depend upon whether the gain is categorized as Short Term Capital Gain (STCG) or Long Term Capital Gain(LTCG).
Note: For equities and related items, if the tenure exceeds 12 months, it is classified as long term. For other categories it requires to exceed 36 months to be classified as long term.
4.Gift Tax/ Inheritance or Estate Tax - Amount exceeding Rs.50,000 received without consideration from any person by an individual / HUF(*) is subjected to gift tax.Money received from relatives, through inheritance and marriage gifts are exempted from tax. Inheritance tax however,has now been abolished in India.
5.Corporate Tax - Companies operating in India are taxed under this head and hence its a major source of Government income.
1.Service Tax - Service providers like transport,restaurants etc. are subjected to service tax by the Government. These service providers collect the amount from their customers and finally transfer the same to the government.
2.Custom Duty - These are levied on goods imported / exported across the country.
3.Excise Duty -These are levied on goods manufactured in India for domestic consumption.
4.Sales Tax and VAT - These are levied on sale and purchase of products in the country.
5.Security Transaction Tax (STT) - These are levied on transactions done through stock exchanges. This includes purchase and sales of stocks,mutual funds,derivatives etc.
* HUF -Hindu Undivided Family
The entire taxation system can be broadly categorized into the following heads,along with introduction to each category and a brief description:-
(A) Direct Taxes - It contains within itself the following sub - categories :
1.Income Tax - This is the most common type of tax and everyone knows about it. Any person who has an income above a particular amount has to pay this tax. Sometimes, this tax is also referred to as TDS.
2.Wealth Tax - This is an additional tax that one has to pay if his net-worth exceeds 30 Lakhs. Under such circumstance, the concerned person needs to pay 1% of the amount that is in excess to 30 Lakhs. For example, if someone's net worth is 40 Lakhs, he has to pay Rs. 10,000 /- as wealth tax. Currently it has been abolished in India.
3.Property Tax/Capital Gains Tax - Upon selling property or stocks,this tax is levied on the capital gains thus made. The rates depend upon whether the gain is categorized as Short Term Capital Gain (STCG) or Long Term Capital Gain(LTCG).
Note: For equities and related items, if the tenure exceeds 12 months, it is classified as long term. For other categories it requires to exceed 36 months to be classified as long term.
4.Gift Tax/ Inheritance or Estate Tax - Amount exceeding Rs.50,000 received without consideration from any person by an individual / HUF(*) is subjected to gift tax.Money received from relatives, through inheritance and marriage gifts are exempted from tax. Inheritance tax however,has now been abolished in India.
5.Corporate Tax - Companies operating in India are taxed under this head and hence its a major source of Government income.
(B) Indirect Taxes - Sub Categories :
1.Service Tax - Service providers like transport,restaurants etc. are subjected to service tax by the Government. These service providers collect the amount from their customers and finally transfer the same to the government.
2.Custom Duty - These are levied on goods imported / exported across the country.
3.Excise Duty -These are levied on goods manufactured in India for domestic consumption.
4.Sales Tax and VAT - These are levied on sale and purchase of products in the country.
5.Security Transaction Tax (STT) - These are levied on transactions done through stock exchanges. This includes purchase and sales of stocks,mutual funds,derivatives etc.
* HUF -Hindu Undivided Family