Various Types of Taxes in India
Taxes in India are levied in India by the central government, state government and the local governing bodies like the Municipality and the Local Council. In a developing country like India, the government has to make fiscal policies to promote the economic growth and development of the country. In order to materialize these policies the government needs capital and for this taxes are levied from individuals and businesses. So it is very important that every citizen should pay tax to the government.
There are different types of taxes; they are as follows:
Direct Tax
•Income Tax: This is one of the most common types of tax and most of you would be familiar with it. This tax is deducted directly from your income if your income exceeds the taxable limit.
•Capital Gains Tax:This tax is levied if you sell your property, bonds, shares, jewelry, or anything that gives you profit. The profit can be calculated by deducting the total amount you get by selling your asset and the amount you paid for it. You have to pay tax on the profit.
•Securities Transactions Tax: When you buy or sell a stock form the share market, you have to pay Securities Transaction Tax. This tax is imposed by the Government because the most of the people who earn their profits from the share market do not declare their assets. As a result, they can avoid paying capital gain tax, as the government can levy tax only on the profits they earn, if these are not declared. The Securities Transactions Tax or STT is levied on derivative instruments, equity shares, equity oriented mutual funds etc.
•Perquisite Tax: Perquisite Tax (earlier Fringe Benefit Tax or FBT) is levied to employees for the non-monetary benefits given to them by their employers. For example, if your company gives you non-monetary benefits life a rented apartment, a car with a driver, you would have to pay tax for it. This tax was earlier borne by the employers.
•Corporate Tax: These taxes are paid by the companies to the
There are different types of taxes; they are as follows:
Direct Tax
•Income Tax: This is one of the most common types of tax and most of you would be familiar with it. This tax is deducted directly from your income if your income exceeds the taxable limit.
•Capital Gains Tax:This tax is levied if you sell your property, bonds, shares, jewelry, or anything that gives you profit. The profit can be calculated by deducting the total amount you get by selling your asset and the amount you paid for it. You have to pay tax on the profit.
•Securities Transactions Tax: When you buy or sell a stock form the share market, you have to pay Securities Transaction Tax. This tax is imposed by the Government because the most of the people who earn their profits from the share market do not declare their assets. As a result, they can avoid paying capital gain tax, as the government can levy tax only on the profits they earn, if these are not declared. The Securities Transactions Tax or STT is levied on derivative instruments, equity shares, equity oriented mutual funds etc.
•Perquisite Tax: Perquisite Tax (earlier Fringe Benefit Tax or FBT) is levied to employees for the non-monetary benefits given to them by their employers. For example, if your company gives you non-monetary benefits life a rented apartment, a car with a driver, you would have to pay tax for it. This tax was earlier borne by the employers.
•Corporate Tax: These taxes are paid by the companies to the