More than 10 taxes collected at present time
Answers
Taxes generally fall into the following broad categories:
Income tax
Payroll tax
Property tax
Consumption tax
Tariff (taxes on international trade)
Capitation, a fixed tax charged per person
Fees and tolls
Effective taxes, government policies that aren't explicitly taxes, but result in income to the government through losses to the public
only 8 taxes are collected at that time
Answer:
Direct Taxes
Direct taxes are the personal liability of tax payer. These are collected directly from the tax payers and they have to be paid by the persons on whom it is imposed. Important direct taxes are listed below:
Income Tax
This is most important type of direct tax and almost everyone is familiar with it. TDS is its famous synonym and whosoever is earning above a minimum amount (tax exemption limit) has to pay income tax.
Wealth Tax
This is in addition to the income tax and is levied if your net wealth exceeds Rs 30 Lakh at the rate of 1% on the amount exceeding Rs 30 Lakh.
*Note – In Budget 2013-2014 Finance Minister Mr P. Chidambaram introduced a surcharge of 10 percent 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 for long term and short term capital gains.
Gift Tax/ Inheritance or Estate Tax
Amount exceeding Rs. 50000 received without consideration by an individual/HUF from any person is subjected to gift tax as income under “other sources”. There are exemptions like money received from relatives is not taxable. Marriage gifts and money received through inheritance are also exempt from gift tax. Inheritance tax was earlier in practice but has been repealed by the government.
Corporate Tax
Companies operating in India are taxed as per the corporate tax rate on their income. This tax is one of the major sources of revenue for government.
Indirect Tax
Impact and incidence of indirect Taxes fall on different persons as opposed to direct taxes where impact and incidence is on the same person. These taxes are recovered from different groups of people but the liability remains with the person who collects it. Tax payer recovers the indirect taxes 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 pay service tax which are ultimately deposited in government’s kitty by the service providers. Brief about 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 amount received by the service provider. Services like leasing, internet/voice, transport, etc are subject to service tax.
Custom Duty
Custom duties are indirect taxes which are levied on goods imported to/exported from India. There are different rules for different types of goods and sectors. Government keeps on changing these rates so as to promote import/export of specific goods.
Custom duties are indirect taxes which are levied on goods imported to/exported from India. There are different rules for different types of goods and sectors. Government keeps on changing these rates 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 domestic consumption. Like custom duty, there are a number of rules which keep on changing as per government discretion.
Sales Tax and VAT
Sales tax is levied by the government on sale and purchase of products in Indian market. As customers, whatever you buy from the market, you pay sales tax on it. Now, sales tax is supplemented 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 is applicable on purchase or sale of various financial products like stocks, derivatives, mutual funds etc.
Finding Information
I have intentionally not presented details of various tax rates and tax slabs as they keep on changing at regular frequency. For details regarding correct rates and slabs it’s recommended to visit government’s income tax website.