Basics of Taxation

Taxes are important and largest income sources for the government. The government used the money collected from taxes for various projects for the development of the nation. The Indian tax system is well structured and has a three-level federal structure. There are two ways to classify various types of taxes in India: Taxes are collected by the Central Government and state government 

By the Central Government: This includes income tax (exception is tax on agricultural income), customs, corporate tax, customs, land duties, and more 

By the State Government: Taxes on agrarian revenues, VAT (additional taxes), electricity consumption and sales tax, land income, toll roads and more 

By local civil bodies: city companies and other local government agencies collect taxes such as property taxes 

What is Direct Tax? Direct taxes imposed on corporate entities and individuals. These taxes cannot be transferred to others. For individual taxpayers like you, the most important type of direct tax is income tax. This tax is collected for each year of assessment (April 1 to March 31). In accordance with the income tax law, 1961, is mandatory for you to pay income tax if your annual income is above the minimum liberation limit. You can get tax benefits under various parts of the Act. Before we talk about tax benefits, it is important for you to understand the income tax slab. 

What is indirect tax? The meaning of the tax does not directly reflects the type of taxation that applies to the sale of goods and services. Thus, this is different from the direct tax charged to the income you get. In indirect taxes, people where the load falls and people who pay different taxes. The seller is required to pay this tax to the government (eg, manufacturers, retailers,). But because they sell goods to consumers, they pass the burden of paying taxes to you. Thus, when you buy goods, you pay the amount of tax for the seller. The seller then pays taxes to the government. 

Other taxes Another tax is a small income generator and is a small CESS tax. Various other sub-categories of tax are as follows: 

Property Tax: This is also called real estate tax or city tax. Residential and commercial property owners submit to property taxes. This is used for maintenance of several fundamental civil services. Property tax is collected by city bodies based in every city. 

Professional tax: This work tax is collected in those who practice profession or earn money income such as lawyers, rented accountants, doctors, etc. This tax is different from the state to the country. Not all declare professional tax retribution. 

Entertainment tax: This is tax imposed on television series, films, exhibitions, etc. Tax is collected in the gross collection of income. Entertainment tax is also referred to as entertainment tax. 

Registration fee, stamp duty, transfer tax: This is collected in addition or as a supplement to property tax when buying property. 

Education Cess: This is collected to fund education programs launched and maintained by the Indian government. 

Tax Entry: This is a tax collected on products or items that enter the country, specifically through e-commerce companies, and apply in the state of Delhi, Assam, Gujarat, Madhya Pradesh, etc. 

Road tax and toll tax: This tax is used for road maintenance and toll infrastructure. 

Tax benefit. Tax objectives are to provide funds for expenses without inflation. Taxes are used by the government for various purposes, some of which are: Public infrastructure funding Development and Welfare Projects Defense expenses Scientific research Public insurance Civil servant and government salaries Government operation Public transport Unemployment advantage Retirement scheme Law enforcement Public health Public education Public utility