10 Taxes You Should Know About - Business Standard News
10 Taxes You Should Know About - Business Standard News
10 Taxes You Should Know About - Business Standard News
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PFPrimers Tax
10taxesyoushouldknowabout
Throughthisarticle,wewilltrytofigureoutdifferenttypesoftaxesleviedinIndianfinancialsystem
andtheireffects
InvestmentYogi|Hyderabad
April11,2014LastUpdatedat08:49IST
52
11
22
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Taxes,alongwithtaxationrulesareoneofthemost
complexandconfusingtopicsofanyfinancialsystem.
Thiscomplexityarisesbecauseofdifferenttypesoftaxes
withdifferenttaxratesandcontinuousamendmentsinthe
taxationruleswhichareretrospectiveandprospectiveat
times.Throughthisarticle,wewilltrytofigureoutdifferent
typesoftaxesleviedinIndianfinancialsystemandtheir
effects.
ALSOREAD
Odishamonthlycommercialtax
collectionsinks10%inNov
TypesofTaxes
Taxesrepresenttheamountofmoneywepaytothe
6importantaspectstohelpyou
duringtaxplanningforFY14
Governmentatpredefinedratesandperiodicity.Taxesare
FinMinofficialssaybringing
overseasdealundertaxnet
createsuncertainty
whichitprovidesvariouskindsofservicestothetax
thebasicsourceofrevenuetotheGovernmentusing
payers.TherearemainlytwotypesofTaxes,directtax
Ourconfusingtaxcode
andindirecttaxwhicharegovernedbytwodifferent
OdishaCommercialtax
collectionup14%inApril
boards,CentralBoardofDirectTaxes(CBDT)and
October
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Letsdiscussthetwotypesoftaxesindetail.
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DirectTaxes
Directtaxesarethepersonalliabilityoftaxpayer.These
arecollecteddirectlyfromthetaxpayersandtheyhaveto
bepaidbythepersonsonwhomitisimposed.Important
directtaxesarelistedbelow:
IncomeTax
Thisismostimportanttypeofdirecttaxandalmosteveryoneisfamiliarwithit.TDSisitsfamous
synonymandwhosoeverisearningaboveaminimumamount(taxexemptionlimit)hastopay
incometax.
WealthTax
ThisisinadditiontotheincometaxandisleviedifyournetwealthexceedsRs30Lakhattherate
of1%ontheamountexceedingRs30Lakh.
*NoteInBudget20132014FinanceMinisterMrP.Chidambaramintroducedasurchargeof10
percentontaxpayerswithanannualtaxableincomeofmorethan1crore(10million)rupees.
PropertyTax/CapitalGainsTax
Thisisleviedonthecapitalgainsarrivedbysellingpropertyandstocks.Taxratesaredifferentfor
longtermandshorttermcapitalgains.
GiftTax/InheritanceorEstateTax
AmountexceedingRs.50000receivedwithoutconsiderationbyanindividual/HUFfromany
personissubjectedtogifttaxasincomeunderothersources.Thereareexemptionslikemoney
receivedfromrelativesisnottaxable.Marriagegiftsandmoneyreceivedthroughinheritanceare
alsoexemptfromgifttax.Inheritancetaxwasearlierinpracticebuthasbeenrepealedbythe
government.
CorporateTax
CompaniesoperatinginIndiaaretaxedasperthecorporatetaxrateontheirincome.Thistaxis
oneofthemajorsourcesofrevenueforgovernment.
IndirectTax
ImpactandincidenceofindirectTaxesfallondifferentpersonsasopposedtodirecttaxeswhere
impactandincidenceisonthesameperson.Thesetaxesarerecoveredfromdifferentgroupsof
peoplebuttheliabilityremainswiththepersonwhocollectsit.Taxpayerrecoverstheindirect
taxespaidfromtheirconsumersandclientsandfinallypaysittogovernment.
Forexample,whenwepurchaseanyproductwepayVAT,whenweeatinrestaurantswepay
servicetaxwhichareultimatelydepositedingovernmentskittybytheserviceproviders.Brief
aboutvarioustypesofindirecttaxesisgivenbelow:
ServiceTax
ServiceprovidersinIndiaaresubjecttoservicetax,whichischargedontheaggregateamount
receivedbytheserviceprovider.Serviceslikeleasing,internet/voice,transport,etcaresubjectto
servicetax.
CustomDuty
Customdutiesareindirecttaxeswhichareleviedongoodsimportedto/exportedfromIndia.There
aredifferentrulesfordifferenttypesofgoodsandsectors.Governmentkeepsonchangingthese
ratessoastopromoteimport/exportofspecificgoods.
ExciseDuty
ExcisedutiesareindirecttaxeswhichareleviedongoodsmanufacturedinIndiafordomestic
consumption.Likecustomduty,thereareanumberofruleswhichkeeponchangingasper
governmentdiscretion.
SalesTaxandVAT
SalestaxisleviedbythegovernmentonsaleandpurchaseofproductsinIndianmarket.As
customers,whateveryoubuyfromthemarket,youpaysalestaxonit.Now,salestaxis
supplementedwithnewValueAddedTaxsoastomakeituniformacrosscountry.
SecurityTransactionTax(STT)
STTisleviedontransactions(sale/purchase)donethroughthestockexchanges.STTis
applicableonpurchaseorsaleofvariousfinancialproductslikestocks,derivatives,mutualfunds
etc.
FindingInformation
Ihaveintentionallynotpresenteddetailsofvarioustaxratesandtaxslabsastheykeepon
changingatregularfrequency.Fordetailsregardingcorrectratesandslabsitsrecommendedto
visitgovernmentsincometaxwebsite.
Source:investmentyogi.com
READMOREON
INCOMETAX
PERSONALFINANCE
VAT
EXCISEDUTY
TAX
TAXPLANNING
CAPITALGAINSTAX
PREVIOUSSTORY
Lowercosts,bevigilantof
riskyassets,SebitellsAMCs
SALESTAX
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PF
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