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Income Tax System in India |
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The tax structure of India is quite well organized with a clear demarcation system between Central and State Governments and local bodies. Central Government levies taxes on income except tax on agricultural income, which the State Governments can levy customs duties, central excise and service tax. Value Added Tax (VAT) stamp duty, State Excise, land revenue and tax on professions are levied by the State Governments. Local bodies are empowered to levy tax on properties, octroi and for utilities like water supply, drainage etc.
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In last 10-15 years, Indian taxation system has undergone tremendous reforms. The tax rates have been rationalized and tax laws have been simplified resulting in better compliance, ease of tax payment and better enforcement. The process of rationalization of tax administration is ongoing in India.
The Central Government of India has levied several forms of taxes. Grossly it can divided into several parts such as: Direct Taxes, Indirect taxes and Taxes Levied by State Government and Local Bodies. All these main sections can be classified into several other parts. For instance:
The Direct Taxes:
- Tax on Corporate Income
- Capital Gains Tax
- Personal Income Tax
- Tax Incentives
- Double Taxation Avoidance Treaty
Indirect Taxes:
- Excise Duty
- Customs Duty
- Service Tax
- Securities Transaction Tax
Taxes Levied by State Government and local Bodies:
- Sales Tax/VAT
- Other Taxes which include:
Stamp duty on transfer of assets
Property/building tax levied by local bodies
Agriculture income tax levied by State Governments on income from plantations
Luxury tax levied by certain State Government on specified goods
Due to this highly organized and scientifically proved system the system of tax collection is pretty strict in India and the government of India is collecting a huge amount of revenue out of that. The factor which has made the Income Tax System in India a special one is the focus on the intricate details, making it logically and legally more corruption proof. If you are interested in getting more relevant information on the Income Tax System in India, then click on the following Hyperlinks:
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